The High Court held (among other things) that the rate of Statutory Sick Pay (SSP) was not a PCP which placed certain categories of employees at a particular disadvantage, even if female and BAME employees were disproportionately represented in the lowest earning groups. A claim for indirect sex and race discrimination under EU law therefore failed, without having to consider whether the level of SSP was justified.
[2020] EWHC 1554 (Admin), High Court. Full judgment www.bailii.org/ew/cases/EWHC/Admin/2020/1554.html
Claims
This was a challenge to the furlough scheme and Statutory Sick Pay (SSP) measures during the Covid pandemic. The claims related to alleged discrimination under the European Convention of Human Rights and under EU law.
The claimants challenged the government’s Coronavirus Job Retention Scheme (furlough scheme) for failing to include ‘workers’ who were not employees. Adiatu himself was a private hire driver with Uber and others. The claimants argued this was discrimination contrary to the European Convention of Human Rights (ECHR).
The claimants also argued that it was discriminatory for the government to amend the scheme for Statutory Sick Pay (SSP) as a response to the Covid pandemic without (a) including within the scheme workers other than employees, (b) raising the level of SSP, and (c) removing the lower earnings limit (§36). This claims was based on EU discrimination law, and in the case of (a) human rights law (§101-117).
There were also claims under the Public Sector Equality Duty (PSED).
On this page I deal mainly with the court’s decision that the rate of SSP was not a PCP ((b) above). For more on the decision as a whole, see:
- Judgment handed down by Divisional Court in significant challenge to the Coronavirus Job Retention Scheme (11kbw.com) and
- at greater length, the Equality Law Blog.
Rate of Statutory Sick Pay (SSP)
The claimants argued that it was indirect sex and race discrimination contrary to EU law not to raise the level of SSP (§36).
The claimants submitted that the PCP was the SSP rate itself. Given that female and BAME employees were disproportionately represented in the lowest earning groups, they were disproportionately likely to be unable to have the resources to manage with such a low income, and were accordingly disadvantaged by the rate of SSP (either losing income or going to work when they ought not to do so). This disadvantage was exacerbated, in the case of BAME workers, in light of their poorer outcomes for coronavirus (§140).
In summary, indirect discrimination under the EqA involves applying a provision, criterion or practice (PCP) which is apparently neutral but has the effect of creating a barrier for those with a particular characteristic. It is unlawful unless the PCP is justified. (The present claim was based on EU law, but so far as relevant here that should be similar).
The court rejected the claim (as discussed further below). The rate of SSP was not a PCP which placed certain categories of employees at a particular disadvantage (§141).
Rate of SSP was not a barrier or gateway
The court said the classic PCP which places certain categories at a particular disadvantage is a requirement that must be satisfied in order for persons to qualify for a particular opportunity or benefit, such as a height requirement in order to be permitted to join a police force, or the requirement to be a full-time worker in order to qualify for a pension. These place women at a particular disadvantage as they are likely to be less tall, and are more likely to be part-time workers (because of child-care responsibilities). (§141)
However the rate of SSP was not a barrier or gateway in this sense. It was a sum paid, in exactly the same way, to everyone who receives SSP, regardless of their protected characteristics. It did not place women or BAME employees at a particular disadvantage: everyone was treated the same (§141). The court quoted a statement by Baroness Hale in Secretary of State v Rutherford (bailii.org) [2006] UKHL 19: “… First, the concept [of comparative advantage or disadvantage] is normally applied to a rule or requirement which selects people for a particular advantage of [sic] disadvantage. Second, the rule or requirement is applied to a group of people who want something. The disparate impact complained of is that they cannot have what they want because of the rule or requirement, whereas others can.” (§142)
Shillcock and Barry cases
A similar issue to the present case was considered, said the court, in Trustees of Uppingham School Retirement Benefits Scheme for Non-Teaching Staff v Shillcock (bailii.org) [2002] EWHC 641 (Ch). This concerned an occupational pension scheme which excluded salary below the lower earnings limit applicable to state pensions, for the purpose of assessing pensionable salary for those in the scheme. This meant that those who, like Mrs Shillcock, earned less than the lower earnings limit, were not admitted to the scheme at all. Mrs Shillcock contended that lower earners were likely to be women and they were therefore more likely to end up with no occupational pension at all, and so that the scheme operated a PCP which placed women at a particular disadvantage. The court in Shillock rejected this argument, saying: “…. subtracting the lower earnings limit from the earnings of every employee for the purpose of assessing pensionable salary involves a consistent, not a discriminatory, approach to all categories of employee.” (§143-144) [More on Shillock: Court rules on ‘integrated’ pension schemes thompsonstradeunion.law), 2002.]
In Barry v Midland Bank (bailii.org) the bank’s method for calculating an employee’s severance payment for voluntary redundancy took account of the salary at termination date. Mrs Barry had been a full-time worker for most of her service but had gone part-time. The House of Lords rejected her claim that it was indirectly discriminatory against women to take account only of salary at termination date. The court in Shillcock “accepted a submission that the correct interpretation of the House of Lords’ judgment in Barry was that the majority of the House of Lords had held that there was no difference in treatment which placed particular employees at a particular disadvantage, and so there could be no indirect discrimination. In Barry, everyone received a severance payment calculated by reference to their current pay. There was no precondition or requirement which was harder for women to satisfy than for men.” (§145)
Conclusion in this case
The court said (§146) that Shillcock was an exact parallel with the present case. There was a benefit (SSP) which is the same for everyone. The fact that women and/or BAME employees are less likely to have access to other financial resources, and so are more likely than male or white employees to depend upon SSP (if it is a fact) was beside the point. The court added:
146. …If it were otherwise, then it would be possible for indirect discrimination challenges to be made in relation to the rate of pay for a particular job, even if all job-holders were paid the same. It could be said that employees with a particular protected characteristic ‘needed’ the money more and so were placed at a particular disadvantage. This is not how the law of indirect discrimination works. …
The claimants’ lawyer acknowledged that he could not point to any reported case which concerned a PCP consisting of the level of a benefit, rather than the requirements for access to a benefit (§146).
Disadvantage: Essop case
The claimants relied on the Supreme Court decision in Essop v Home Office, an indirect discrimination claim where an assessment process for promotion in the Civil Service resulted in lower pass rates for BAME candidates than white candidates. No-one knew why. The Supreme Court held that the PCP could place BAME candidates at a disadvantage even though the reason was not known. However, said the court in the present case, Baroness Hale in Essop made clear that the law of indirect discrimination was intended to prohibit PCPs which caused the particular disadvantage. Indirect discrimination dealt with hidden barriers which were not easy to anticipate or to spot. (§148)
In relation to the rate of SSP, said the court, there is no “hidden barrier”. Essop is not authority for the proposition that something places those with protected characteristics at a particular disadvantage because their circumstances, unconnected with the PCP, are less favourable than those of others. The government was right to submit that the claimants did not rely upon any disadvantage that is caused by the rate of SSP itself. Rather, they relied upon an alleged disadvantage, the absence of other financial resources, which is not caused or related to the rate of SSP in any way. This did not turn the rate of SSP into a PCP which places women or BAME employees at a particular disadvantage. The EU law challenge to the rate of SSP was wholly unsustainable. (§149)
SSP: limited to employees, and to those above lower earnings limit
The court said these other challenges fitted more closely with the classic type of indirect discrimination case. There were PCPs, namely that you must be taxed via PAYE to qualify for SSP, and that you must earn at least the lower earnings limit to qualify for SSP, which the claimants contended placed women and BAME workers at a particular disadvantage. (§150).
However, very briefly, the court held that even if these PCPs put women and BAME workers at a particular disadvantage, the PCPs were justified. The indirect discrimination claim therefore failed. (§150-194).
My comment
This case concerned indirect discrimination under EU law rather than the Equality Act as such. However it refers to some cases on the EqA (and predecessor legislation). Also at least in R (Efthimiou) v The City of London, 2022, it has itself been referred to as authority in an EqA case.
See my comments on Ethimiou, including on concerns judges may have on “opening the floodgates”, and on technical issues.
The issue mainly discussed on this page was whether the level of SSP should have been higher. Remember though that there have been many other claims challenging social security benefit rules which (unlike the rate of SSP) have been found to be potential discrimination, usually under human rights law, though the government is often able to show the rules were sufficiently justified. As well as the limits on scope of SSP above, examples include Burnip v Birmingham City Council (2012, receiving housing benefit at the one-bedroom rate even though a second bedroom is needed a for carer), and R (SC) v Secretary of State for Work and Pensions (2021, tax credit limited to the first two children in a household).
