Two important employment law cases that reached the Supreme Court in 2017 seem to have very little in common, apart from their engagement with matters of employment rights, and employment relations. In Essop v Home Office, the Supreme Court confronted the contours of indirect discrimination. In Unison v the Lord Chancellor, the issue was the legality of Employment Tribunal Fees and their impact on access to justice.
Both claims were rejected in the lower courts, and in both cases, the appeals were accepted by the Supreme Court. But what is striking (to me) is that the similarities between the cases run far deeper, as the Court went well beyond legal doctrine and into the weight that courts should accord to social and economic reality when interpreting and constructing the law.
When one notes the impact of social and economic reality on legal decisions, the association is, almost immediately, to legal realism, the theory and paradigm developed in the early 20th century which provided the backdrop and foundations for Critical Legal Studies, Legal Feminism, Critical Race Theory, Postmodern Legal Theory, and more. For the basic tenets of legal realism allow the observer, scholar, critique and, indeed – judge (one of its foremost proponents was Oliver Wendell Holmes, Chief Justice of the U.S. Supreme court) to take the legal text as (at most) a starting point; to reflect on the effect of the law as it stands on different segments of society; that law is political, in the broad sense; to take into account the difficulties in realising formal rights and consideration of access to justice; to embrace, rather than be terrified of, the indeterminacy of law. All of the above were impressively present in the two judgments.
In Essop, the Court was asked to determine whether a Home Office requirement to pass a Core Skills Assessment as a condition for promotion within the civil service constituted indirect discrimination. The issue was raised following a report, commissioned by the Home Office and produced by a firm of occupational psychologists, which determined that the BME candidate pass rate was 40.3% of that of white candidates; and that of candidates aged 35 and older was 37.4% of the pass rate of younger candidates. The claimants were black, over 35 or, in some case, both black and over 35. They failed the test, and claimed that it constituted a discriminatory ‘provision, criterion or practice’, and thus – indirect discrimination. The Employment Tribunal and the Court of Appeal (unlike the EAT) did not agree, stating that, notwithstanding the report, to establish indirect discrimination, the claimants had to establish the causal relationship between their personal characteristics and their failure to pass the test. In other words, each claimant had to show that they failed they test because they were black or over 35. Of course, no claimant was able to establish that.
In Unison, the background is more straightforward, from a legal perspective. In 2013, the Coalition Government imposed fees in respect of claims to Employment Tribunals (ETs) and Employment Appeals Tribunals (EATs). The ‘Fee Order’ distinguished between two types of claims: Type A claims, which covered over 60 types, demand £160 as an issue fee and £230 as a hearing fee. Type B claims, which are deemed more complicated (examples include unfair dismissal and discrimination claims) require £250 as an issue, and £950 as a hearing fee. Challenges to the Fee Order failed in a previous round, immediately after the fees were imposed, with the court holding that the effects were not yet established, so the challenge is premature. Then the evidence became difficult to ignore, and Unison initiated a second judicial review.
This followed a report the Parliamentary Justice Committee (which I discussed in a previous post) that criticised government policy, noting that the imposition of fees had dramatic effect: an overall drop of 70% in employment tribunal claims, spread across all claim ‘types’. Moreover, and unsurprisingly, the effect was particularly significant in claims where the expectation of a substantial reward was lower. Thus, working time claims saw a 78% drop and breach of contract – a 75% drop. Moreover, even within Type B categories, a disparity was noted as the proportion of successful race discrimination claims resulting in awards of less than £3,000 is recorded as having fallen from 34% in 2012/13 to 8% in 2015/16. For awards of less than £5,000, the fall was from 52% to 19%. The logic is simple, of course, if your claim is not considerable, the fee barrier renders it irrational to pursue.
And yet, the Divisional Court and the Court of Appeal dismissed the claim, holding that it cannot conclude that the decline in the number of claims does not consist “entirely of cases where potential claimants could realistically have afforded to bring proceedings but have made a choice not to” (, emphasis in the original).
Enter Legal Realism
A sensitive reader may already have found the thread that links the two cases. Micro vs macro; individual vs social; personal circumstances vs statistics. In other words – what are the ‘relevant facts’ that should lead a court to its decision?
The Court of Appeal in both cases asked for evidence from the individual claimants: show me that you failed the test because you’re black, or because you’re over 35; show me that you can’t afford the fees, and not that you simply had other priorities. The claimants in both cases referred to the social evidence, to statistics: black and over-35 applicants have far less chances of passing the test; there is a 70% drop in applications, and low-value claims (which correspond to workers with low wages) have all but disappeared.
The Supreme Court agreed with the claimants, following a fundamental insight of legal realism: it’s not only that facts matter, they are often the only thing that matters. To be precise: deciding what the ‘relevant facts’ are, is the most important thing a court does. Often, this is done at the hearing stage, where witnesses are heard, and not on appeal. But in these cases, the Supreme Court was asked (albeit not phrased as such) to determine which facts will rule the case. If only personal circumstances are relevant – both (and similar, in the future) claims will fail. If statistics govern – then the path to success is paved. The Supreme Court in Essop addressed the matter directly (per Lady Hale): unlike cases of direct discrimination, “it is commonplace for the disparate impact, or particular disadvantage, to be established on the basis of statistical evidence … Statistical evidence is designed to show correlations between particular variables and particular outcomes and to assess the significance of those correlations” .
From here to a second precept of legal realism: rights that have no effect are merely ‘paper rights’. In Unison, Lord Reed does not waste much time to clarify the importance of this premise: “In order for the rights conferred on employees to be effective, and to achieve the social benefits which Parliament intended, they must be enforceable in practice” . Moreover, His Lordship later offers an even deeper understanding of the importance of the possibility of pursuing a claim, to wit – its value lies not only for those who would pursue it, but on the behaviour of those who, in the absence of remedy, would have no qualms denying individuals of their rights. He says: “Parliament does not envisage that every case of a breach of those rights will result in a claim before an ET. But the possibility of claims being brought by employees whose rights are infringed must exist, if employment relationships are to be based on respect for those rights” . Or, in the words of Oliver Wendell Holmes, in his seminal article The Path of Law, we have to look at rights from “the view of our friend the bad man”.
So now the ground is set. But a further question emerges: what should be the weight of the evidence supplied? What if we find a black claimant who passed the test, or one who failed because he didn’t prepare? What if it’s not clear if all 70% of the decline in claims can be attributed to the fees or to the impossibility to pay them? Lady Hale clarifies that it is a salient feature of indirect discrimination that “there is no requirement that the PCP in question put every member of the group sharing the particular protected characteristic at a disadvantage … The fact that some BME or older candidates could pass the test is neither here nor there. The group was at a disadvantage because the proportion of those who could pass it was smaller than the proportion of white or younger candidates. If they had all failed, it would be closer to a case of direct discrimination” . As for unmeritorious candidates ‘coat tailing’ claims of deserving ones – it is open for the respondent to show that there is no causal link between the PCP and the disadvantage suffered. In other words – the burden of proof is reversed. Lord Reed in Unison puts the point even stronger: “While the Review Report fairly states that there is no conclusive evidence that the fees have prevented people from bringing claims, the court does not require conclusive evidence: … , it is sufficient in this context if a real risk is demonstrated … The question whether fees effectively prevent access to justice must be decided according to the likely impact of the fees on behaviour in the real world. Fees must therefore be affordable not in a theoretical sense, but in the sense that they can reasonably be afforded” [91, 93, emphasis added]. This, we should immediately note, is not a necessary legal principle. It is a political one, and in this case (if we may) – the right one.
Legal realism is a broad church. It has been argued, with some justification that “we are all realists now”. And yet, in the vast majority of cases, courts (especially lower courts) simply apply the law in an uncomplicated manner. A driver is over the speed limit – sanction. Principled cases, that eventually reach higher courts, often offer more ‘meat’ for a realist analysis. But it is truly rare for a Supreme Court to explicitly embrace legal realism – politics and theory – and more so, in two cases, a few weeks apart, in the same field of law. In doing so, it offers students and scholars a more honest vision of the law, and hopefully – one that sheds a different light on other cases as well.
Amir Paz-Fuchs is a Senior Lecturer in Law at the University of Sussex.