Case Law Update - Indirect Discrimination exceptions

The case of Heskett v Secretary of State of Justice is a reminder to businesses to be mindful of the reasons (i.e. legitimate aims justification) they make decisions which could be viewed as indirectly discriminatory.

The Court of Appeal has recently upheld the ‘cost plus’ basis for seeking to justify indirect discrimination, i.e., cost savings alone cannot be a legitimate aim and will rarely succeed as a defence, although it may be a factor where there is ‘something else’ (including where an employer is subject to financial constraints and is required to reduce its costs). 

 The Secretary of State for Justice operated a policy which limited pay increases across the public sector after the Treasury announced a public sector pay freeze. The claimant was a probation officer and argued that the policy was indirectly discriminatory on the ground of age. The policy disadvantaged younger employees, such as the claimant, as it now took significantly longer to reach the top of the applicable pay range. By comparison, his older colleagues were much closer to the top band and would earn significantly more than any younger colleagues. 

Although not changing established principles, this case acts as a reminder that cost in itself should not be relied upon to rationalise potentially discriminatory practices. Incidentally the court also said that the phrase ‘cost plus’ should be avoided as inelegant.

Will this go to the Supreme Court for the final judgment? Watch this space.

For more information or to speak with Roy Magara,  a specialist employment lawyer at Magara Law, please call 01869 325 883 or email roy@magaralaw.co.uk. Magara law is an employment law firm based in Bicester, Oxfordshire, and services clients nationwide.