Introduction

The case Jivraj v Hashwani ([2011] Bus LR 1182) addressed a pivotal issue within the framework of UK employment equality law, specifically the applicability of the Employment Equality (Religion or Belief) Regulations 2003 ("the Regulations") to arbitration agreements. Mr. Jivraj and Mr. Hashwani, both members of the Ismaili community, entered into a Joint Venture Agreement (JVA) that mandated dispute resolution through arbitration by arbitrators who were respected members of their religious community. A dispute arose when Mr. Hashwani appointed Sir Anthony Colman, a retired judge not belonging to the Ismaili community, as the sole arbitrator, challenging the original arbitration clause on the grounds of unlawful religious discrimination.

The central legal question was whether the arbitration agreement became void under the Regulations due to its religious discrimination in selecting arbitrators. This commentary delves into the judicial reasoning, analysis of precedents, and the broader implications of the Supreme Court's decision.

Summary of the Judgment

The Supreme Court ultimately ruled in favor of Mr. Jivraj, determining that the arbitration clause in the JVA did not fall within the scope of the Employment Equality (Religion or Belief) Regulations 2003. The key reasoning hinged on the classification of arbitrators not as employees but as independent service providers. Consequently, the requirement for arbitrators to be members of the Ismaili community was deemed a genuine occupational requirement, justifying the arrangement without constituting unlawful discrimination.

Analysis

Precedents Cited

The judgment extensively referred to both domestic and European Union (EU) precedents to elucidate the nature of employment and the applicability of discrimination laws. Notable cases include:

• Allonby v Accrington and Rossendale College (Case C-256/01): Clarified the definition of a "worker" within EU law, emphasizing objective criteria over formal job titles.
• Lawrie-Blum v Land Baden-Wurttemberg (Case C-66/85): Defined the essential features of an employment relationship.
• Kurz v Land Baden-Wurttemberg (Case C-188/00): Reinforced the broad interpretation of "worker" within the EU context.
• Percy v Board of National Mission of the Church of Scotland [2006]: Addressed whether certain roles qualify as employment under discrimination statutes.
• Firma Feryn NV (Case C-54/07): Concerned direct discrimination in employment recruitment, highlighting the broad policy objectives of anti-discrimination directives.

These precedents collectively reinforced the court's approach to interpreting employment relationships and the scope of discrimination regulations, ensuring alignment with broader EU objectives even post-Brexit considerations.

Legal Reasoning

The crux of the Supreme Court's reasoning rested on the interpretation of what constitutes "employment" under the Regulations. The Court distinguished arbitrators from employees by emphasizing the independent and adjudicative nature of their role, free from the direction or control typically associated with employment contracts. Unlike employees who perform duties under the guidance of an employer, arbitrators operate as quasi-judicial figures whose mandate is to impartially resolve disputes.

The Court rejected the Court of Appeal's view that arbitrators fall within the definition of employees under the Regulations. It highlighted international legal perspectives, including Lord Clarke's reference to arbitration being a sui generis contract, further supporting the notion that arbitrators are not akin to traditional employees.

Moreover, the Court scrutinized the application of genuine occupational requirement (GOR) exceptions. Recognizing the unique ethos of the Ismaili community, the Court found that requiring arbitrators to be respected members of this community was both a genuine and proportionate requirement, aligning with the community's long-standing practices in dispute resolution.

Impact

The Supreme Court's decision in Jivraj v Hashwani has significant implications:

• Autonomy in Arbitration: Reinforces the ability of parties to structure arbitration clauses according to their specific needs, including religious considerations, without falling foul of discrimination regulations.
• Clarification of Employment Definitions: Provides a clear distinction between employees and independent service providers, aiding future cases in determining the applicability of employment laws.
• Community-Led Dispute Resolution: Acknowledges and validates the role of religious or community-based organizations in defining their dispute resolution mechanisms, promoting cultural autonomy.
• Influence on Future Legislation: May guide legislative bodies in refining employment equality statutes to account for specialized roles like arbitrators, ensuring laws are neither overly broad nor restrictive.

Complex Concepts Simplified

Employment Definition Under the Regulations

Employment: Defined as a contract of service, apprenticeship, or a contract personally to do any work. This includes individuals who perform duties under the direction and control of another party.

Independent Service Providers: Individuals who offer services without being under the direct control or direction of another party, such as freelancers, consultants, or arbitrators.

Genuine Occupational Requirement (GOR)

Genuine Occupational Requirement: A legal exception that allows employers to specify certain characteristics for a job if they are essential, proportionate, and necessary for the effective performance of that role.

In this case, the requirement for arbitrators to be respected members of the Ismaili community was deemed a GOR, considering the community's ethos and longstanding practices in internal dispute resolution.

Sui Generis Agreement

Sui Generis Agreement: A unique or special type of contract that does not fit into conventional categories like employment, agency, or service provision. Arbitration agreements are considered sui generis due to their distinct adjudicative nature.

Conclusion

The Supreme Court's judgment in Jivraj v Hashwani underscores the nuanced interpretation of employment and discrimination laws within specialized contexts. By distinguishing arbitrators from traditional employees and recognizing the legitimacy of community-based dispute resolution mechanisms, the Court balanced regulatory intent with cultural autonomy. This decision not only clarifies the boundaries of the Employment Equality (Religion or Belief) Regulations 2003 but also affirms the importance of respecting diverse governance structures in international and community agreements.

Moving forward, parties drafting arbitration agreements can confidently incorporate culturally or religiously specific provisions without fear of infringing upon employment equality laws, provided such requirements are justifiable and proportionate. Additionally, this case serves as a benchmark for courts in assessing the applicability of discrimination regulations to various forms of contractual relationships.