Gordons Legal Employment Update – 13 April 2017

In the last two weeks, the Supreme Court has overturned the findings of the Court of Appeal and has given two important judgments on the scope of indirect discrimination, there has been a useful decision on dismissals for “Some Other Substantial Reason” and the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 have come into force.

Indirect Discrimination

In Essop and Ors v Home Office, candidates were required to pass a “Core Skills Assessment” in order to be eligible for a promotion.  A report which was carried out by a firm of occupational psychologists found that BME candidates and those aged 35 and over had a lower pass rate than white and younger candidates. A number of employees who had failed the assessment brought claims for indirect discrimination on the grounds of race and/or age.  The Court of Appeal ruled that the individual claimants would have to show the reason why they had failed they test in order for the Tribunal to determine whether they had been put at the same disadvantage as the group.

In Naeem v Secretary of State for Justice, the Claimant, an imam, worked for the Prison Service as a full-time Chaplain and had done so since 2004.  In 2011, the average basic pay for Muslim Chaplains was £31,847, whereas Christian Chaplains were paid an average of £33,811.  The difference was due to the fact that pay progression was based upon length of service and because the Prison Service only began to employ permanent Muslim Chaplains from 2002, these Chaplains had on average a shorter length of service.  The Claimant argued that this was indirectly discriminatory on the grounds of religion and race.  The Court of Appeal ruled that it could not be said that the provision, criterion or practice (PCP) of linking basic pay with length of service put the Muslim Chaplains at a disadvantage, as the real reason for the pay disparity was for the neutral reason that Muslim Chaplains were not required prior to 2002.

Both cases were appealed to the Supreme Court.

• In respect of indirect discrimination claims generally, the Supreme Court said the following:
• There is no express requirement for an explanation as to why a PCP puts one group at a disadvantage when compared to others;
• There is no requirement for there to be a causal link between the protected characteristic and the treatment BUT there is a requirement for a causal link between the PCP and particular disadvantage suffered;
• Both the PCP and the reason for the disadvantage must be “but for” the causes of the disadvantage;
• There is no requirement that the PCP must put every member of the group who shared a particular protected characteristic at a disadvantage;
• It is always open to a Respondent to show that the PCP is justified.

In Essop the Supreme Court held:

• The disadvantage suffered by the Claimants was that BME and older candidates failed the Core Skills Assessment disproportionately when compared to white and younger candidates.  It did not matter that some BME and older candidates were able to pass the Core Skills Assessment;
• It would be open to the Respondent to show that a causal link between the PCP and the individual disadvantage was absent (for example, if a candidate had failed to prepare for or attend the test);
• The appeal was allowed and the case was remitted to the employment tribunal.

In Naeem, the Supreme Court held:

• The disadvantage was the pay scale was based upon length of service.  The reason for the disadvantage was the shorter average length of service for Muslim Chaplains, which was enough to establish that the PCP put the Muslim Chaplains at a particular disadvantage.
• However, the PCP was objectively justified, on the basis that the Prison Service was transitioning to a new scheme, under which length of service was determinative of pay over a shorter period.

Comment:   It is important that employers are conscious of potential indirect discrimination issues when seeking to impose employment practices, including policies, which apply to all employees but which have the potential effect of putting one particular group of employees at a particular disadvantage.  Examples of policies that can often potentially have an indirectly discriminatory effect are dress codes or sickness absence policies, which could indirectly discriminate against employees of certain religions or disabled employees respectively.  When considering the indirectly discriminatory effect of a policy, employers should not lose sight of the fact that it is possible to defend any claims for indirect discrimination provided that they can show that the policy can be objectively justified.

Dismissals for “Some Other Substantial Reason”

In the case of Ssekisonge v Barts Health NHS Trust, the EAT determined that there is not a particularly high threshold for employers to make a dismissal reasonable when dismissing an employee because of a ‘substantial reason’.

By way of background, when the Claimant came to the UK as a nurse she obtained indefinite leave to remain and then British citizenship.  The Claimant then had her citizenship revoked due to concerns over her true identity, but her indefinite leave to remain in the UK was unaffected.

Following a disciplinary process, the Respondent dismissed the Claimant due to concerns over her identity and her conduct.  The Claimant subsequently brought a claim for unfair dismissal.  The Employment Tribunal concluded that the principal reason for dismissal was due to the Respondent not being certain of the Claimant’s identity and that Respondent was entitled to conclude that the doubts it has about the Claimant’s identity and the risk that posed in the absence of a full background DBS checks were sufficient to justify her dismissal for “Some Other Substantial Reason”.

The EAT held that the Employment Tribunal’s assessment of the reasonableness of the Respondent’s approach, in those circumstances, cannot be challenged as in error of law. The EAT considered case law that in such circumstances there is no onerous requirement on employers to investigate too far beyond what official information they reasonably obtain about an employee from a responsible public authority.  However, it did note that the position of fairness might differ based on different facts. The EAT rejected the appeal and found that the Claimant’s dismissal was fair.

Comment:  We consider that this case should be dealt some caution because, as was identified by the Judge in the EAT, these cases are factually sensitive.  As the Claimant worked as a Nurse for an NHS Trust, it is likely to be considered to be much more important that there is absolute certainty about the persons’ identity than for an employee who, for example, works within the retail sector.

Gender Pay Reporting

The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 came into force last week.  The requirements of these regulations provide that those employers who employ at least 250 employees will be required to publish annual information to show whether there is a difference in average pay of male and female employees.  Under the regulations employers will have to publish their first figures before April 2018.

Comment:  It is important that employers begin preparing their data at the earliest possible stage so they can seek to (1) build a narrative to accompany the publication in order to provide an explanation to any discrepancies; (2) plan to address any gaps identified.

Save the Date!

Our next employment law seminar will be held from 2pm on Thursday 25th May at Cedar Court Hotel, Rooley Lane, Bradford – a formal invitation will be sent out in the next few days – please save the date!