Factual and Procedural Background
The Equal Opportunities Commission ("EOC") challenged the Government's implementation of Directive 2002/73/EC, which amended Council Directive 76/2007/EEC, through the Employment Equality (Sex Discrimination) Regulations 2005 ("the Regulations"). These Regulations amended the Sex Discrimination Act 1975 ("the 1975 Act") effective 1 October 2005. The EOC contended that the Government failed to comply with its obligations as a Member State in certain respects. Despite extensive consultation and a detailed protocol letter before action sent to the Secretary of State for Trade and Industry, the Government did not amend the legislation. The proceedings were brought by the EOC against the Secretary of State for Trade and Industry, the progenitor of the legislation. The EOC pursued six key aspects of the legislation in this judicial review.
Legal Issues Presented
- The proper interpretation of the phrase "on the ground of her sex" in the new harassment provision (section 4A of the 1975 Act) and whether it improperly imports a causation requirement.
- Whether harassment should be defined as conduct "related to sex" rather than "on the ground of sex," affecting the scope of harassment protection.
- The appropriateness of the objective test introduced by section 4A(2) for determining harassment.
- Whether the legislation lawfully imposes or enables employer liability for harassment by third parties in the workplace.
- The lawfulness of requiring a comparator (non-pregnant female) to establish discrimination on grounds of pregnancy and maternity leave under section 3A of the 1975 Act.
- The legality of the exceptions to discrimination claims during maternity leave introduced by section 6A, particularly concerning the compulsory and additional maternity leave periods.
Arguments of the Parties
Claimant's Arguments (Equal Opportunities Commission)
- Section 4A(1)(a) improperly requires a causation link ("on the ground of her sex") for harassment, which should instead be defined as conduct "related to sex" per the Directive.
- The distinction between harassment and discrimination is blurred by the legislation, as harassment should not require causation but only association with sex.
- The objective test in section 4A(2) is inappropriate as it may exclude genuine claims of harassment based on subjective perception.
- The legislation fails to impose employer liability for harassment by third parties, contrary to the Directive's aim to eliminate workplace discrimination.
- Section 3A unlawfully requires a comparator (non-pregnant woman) to establish discrimination on grounds of pregnancy, contrary to European case law forbidding regression in protection.
- Section 6A excludes claims for certain benefits during compulsory and additional maternity leave periods, which amounts to unlawful regression and fails to comply with European Court decisions (notably Lewin v Denda and Land Brandenburg v Sass).
Defendant's Arguments (Secretary of State for Trade and Industry)
- Accepted "on the ground of sex" implies causation for discrimination but contended harassment may be interpreted associatively through purposive construction.
- Argued the objective test in section 4A(2) is supported by the European Commission's Code of Practice and is appropriate to balance subjective and objective elements.
- Maintained that employer liability for third-party harassment is limited but that liability could arise for failure to take reasonable steps to prevent ongoing harassment.
- Confirmed section 3A is intended as the sole route for pregnancy/maternity discrimination claims, emphasizing comparator use is consistent with European law and supported by case law including Madarassy v Nomura.
- Asserted that claims excluded during compulsory maternity leave by section 6A(1) do not exclude claims for discretionary bonuses, and that the distinctions during additional maternity leave are lawful and consistent with prior case law.
- Relied on the distinction between statutory and non-statutory maternity leave in European case law to justify exclusions during additional maternity leave.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Nagarajan v London Regional Transport [1999] ICR 877 |
Emphasizes causation in discrimination ("on the ground of") interpretation. |
Used to contrast the causation requirement in discrimination with the associative nature of harassment. |
| Shamoon v Chief Constable of the RUC [2003] ICR 337 |
Clarifies the "reason why" test in discrimination cases. |
Supported the argument that causation is inherent in discrimination but inappropriate for harassment. |
| Pearce v Governing Body of Mayfield Secondary School [2003] ICR 937 |
Employers not vicariously liable for third-party discrimination; failure to act insufficient. |
Confirmed employer liability limits in harassment context. |
| Webb v EMO Air Cargo (UK) Ltd [1994] ICR 770 and Webb v EMO Air Cargo (UK) Ltd [1995] ICR 1021 |
Prohibits requirement of male comparator in pregnancy discrimination claims. |
Supported the Claimant’s argument against comparator requirement in section 3A. |
| Gillespie v Northern Health Board [1996] ICR 498 |
Pregnant women require special protection; not comparable with men or working women. |
Used to argue against comparator requirement and for protection during pregnancy. |
| Lewin v Denda [2000] IRLR 67 |
Claims for discretionary bonuses during compulsory maternity leave are justiciable. |
Supported Claimant’s submission that s6A unlawfully excludes such claims. |
| Land Brandenburg v Sass [2005] IRLR 147 |
Discrimination law prohibits less favourable treatment in statutory additional maternity leave. |
Supported argument against exclusions in s6A during additional maternity leave period. |
| R (Amicus – MSF) v Secretary of State for Trade and Industry [2004] IRLR 430 |
Principles governing lawful and adequate implementation of EU Directives. |
Framework for assessing whether the Regulations comply with Directive obligations. |
| Marleasing SA v La Comercial Internacional de Alimentacion SA [1990] ECR 1-4135 |
National law must be interpreted as far as possible in light of the Directive’s wording and purpose. |
Considered for purposive interpretation arguments but found limited by clarity and certainty requirements. |
| Litster v Forth Dry Dock Co Ltd [1991] AC 546 |
Allows implication of words to achieve Directive compliance. |
Referenced in discussion of possible reading down of legislation. |
| Madarassy v Nomura International plc [2007] EWCA Civ 33 |
Clarifies the evidential role of comparators in pregnancy discrimination claims. |
Used to support Defendant’s position on comparator use in s3A. |
| Commission v France [1997] ECR 1-1489 |
Member States must ensure legal certainty in implementing Directives. |
Supported the Court’s emphasis on clarity and certainty in legislation. |
| Driskel v Peninsula Business Services Ltd [2000] IRLR 151 |
Confirms objective test for sexual discrimination claims including subjective perception. |
Supported the objective test in s4A(2) as lawful and appropriate. |
| Re S [2002] AC 291; Sheldrake v DPP [2005] 1 AC 264 |
Limits on reading down statutes to comply with rights. |
Used to argue limits on purposive interpretation of s4A. |
| Hardman v Mallon t/a Orchard Lodge Nursing Home [2002] IRLR 516 |
Employer’s failure to conduct risk assessments can amount to discrimination during pregnancy. |
Referenced in discussion of comparator and pregnancy discrimination claims. |
| Boyle and Others v Equal Opportunities Commission [1999] ICR 360 |
Non-statutory additional maternity leave provisions lawful to treat differently. |
Distinguished from Sass; used by Defendant to justify s6A exclusions. |
| Porcelli v Strathclyde Regional Council [1996] ICR 564; Brumfitt v Ministry of Defence [2005] IRLR 4 |
Examples illustrating difference between discrimination and harassment. |
Used by Claimant to demonstrate conduct related to sex may not amount to discrimination but may be harassment. |
| Litster v Forth Dry Dock Co Ltd [1991] AC 546 |
Allows implication of words to achieve Directive compliance. |
Referenced in discussion of possible reading down of legislation. |
| Commissioner of European Communities v United Kingdom [1997] 1 ECR 2649 |
Pre-emptive challenge to legislation's compatibility with Directives. |
Referenced in the context of legislative interpretation and compliance. |
| Reed & Bull Information Systems Ltd v Steadman [1999] IRLR 299 |
Supports objective test for harassment claims. |
Referenced in discussion of objective test in harassment. |
Court's Reasoning and Analysis
The Court undertook a detailed examination of each challenged aspect of the legislation against the Directive and relevant case law. The Court recognized that the Directive distinguishes harassment from discrimination by defining harassment as unwanted conduct related to sex, without requiring causation. The Court found that the wording "on the ground of her sex" in section 4A(1)(a) improperly imports a causation requirement inconsistent with the Directive’s definition of harassment. The Court noted that this causation requirement restricts the scope of harassment protection and excludes conduct that the Directive intended to prohibit.
Regarding the objective test in section 4A(2), the Court accepted that the Member State has discretion in implementation and that an objective test is consistent with the Directive and supported by case law. Thus, this challenge was dismissed.
On employer liability for third-party harassment, the Court observed that existing case law (Pearce) precludes vicarious liability for third parties but acknowledged that liability might arise for an employer’s failure to take reasonable steps to prevent harassment. However, the current statutory wording, requiring causation, makes it difficult to impose liability for knowing failure to act. The Court linked resolution of this issue to the first aspect relating to the definition of harassment.
In respect of pregnancy and maternity leave discrimination, the Court acknowledged the Directive and case law forbid regression in protection. The Court found that section 3A’s comparator requirement conflicts with this principle and that the comparator test cannot be elevated to a strict requirement. The Court accepted that the comparator may be used as an evidential tool but not as a barrier to claims.
Regarding section 6A’s exceptions during maternity leave, the Court identified that exclusion of claims for discretionary bonuses during compulsory leave and restrictions during additional leave constitute unlawful regression, contrary to European Court decisions in Lewin v Denda and Land Brandenburg v Sass. The Court rejected the Defendant’s reliance on distinctions between statutory and non-statutory leave as insufficient to justify regression.
The Court emphasized the importance of clarity and certainty in legislation for employers and employees, concluding that the extensive reading down or purposive reinterpretation required to cure the defects is neither appropriate nor effective. The Court noted that although the Government could remedy these defects by secondary legislation, the current statutory provisions are incompatible with the Directive as they stand.
Holding and Implications
The Court held that the challenged provisions of the Sex Discrimination Act 1975, as amended by the Employment Equality (Sex Discrimination) Regulations 2005, fail to lawfully implement Directive 2002/73/EC in respect of:
- The definition of harassment in section 4A(1)(a), which wrongly imposes a causation requirement.
- The requirement of a comparator in section 3A for pregnancy and maternity discrimination claims.
- The exclusion of certain claims during maternity leave under section 6A, constituting unlawful regression.
The Court declined to make an immediate order striking down the provisions but granted the Defendant an opportunity to consider the judgment’s effect and to bring forward fresh regulations. The Court indicated it would hear further submissions on the form of order.
The decision directly affects the parties by identifying statutory defects requiring amendment to comply with EU law. No new precedent beyond the interpretation of the Directive’s implementation was established.