Case update (2): Indirect discrimination – wider implications

Summary: Does the concept of indirect discrimination (as set out in EU law) permit claims to be brought by individuals who are not actually part of the protected group disadvantaged by a policy, if they “suffer alongside” that group?

Yes, says the CJEU in CHEZ Razpredelenie Bulgaria AD v Komisia za zashtita ot diskriminatsia, available here.

Background: UK law on discrimination (as set out in the Equality Act 2010) currently prohibits associative direct discrimination (e.g. associative disability discrimination where an employee is dismissed because he has a disabled son) but does not prohibit associative indirect discrimination (e.g. where a policy of requiring full-time work disadvantages an employee who cares for and so is ‘associated with’ a disabled person). Under UK law, the claimant in an indirect discrimination case must show he is a member of the protected group which is disadvantaged by a policy and that he suffers that disadvantage. However, this recent ECJ decision relating to a discrimination claim arising out of the supply of goods and services has potentially significant ramifications in relation to indirect discrimination claims in the context of an employment relationship.

Facts: The claimant ran a grocery shop in a district of a Bulgarian town which was inhabited mainly by persons of Roma origin. In that district Chez Razpredelenie Bulgaria (CRB) is the electricity supplier and has fixed electricity meters (which show customers their usage) approximately six metres up the district’s electricity poles, whereas it installed electricity meters in other districts at a much lower height of 1.7 metres and usually on the consumer’s own property.

The claimant complained that the height of the electricity meter meant she was unable to check her electricity meter for the purposes of monitoring her own consumption. CRB explained that the reason for the difference was that there had been a large number of cases of tampering with electricity meters and the “frequent occurrence of unlawful connections to the electricity network in those districts”. The claimant complained that her electricity bills were excessive compared to her actual consumption and suspected that CRB applied an excessively high consumption value to compensate for losses elsewhere in the district.

The claimant brought a discrimination claim on the basis that the reason for the practice of installing meters at such a height was that most of the inhabitants of her district were of Roma origin and that she accordingly suffered direct or indirect discrimination on the grounds of nationality – even though she was not of Roma origin.

The CJEU held that the indirect discrimination provisions of the EU Race Directive were intended to benefit persons who, although not themselves a member of the race or ethnic group concerned, nevertheless suffered less favourable treatment, or a particular disadvantage, on the grounds of race or ethnicity. It was enough that a person suffers the same disadvantage alongside those of a certain ethnic origin provided the treatment stems from a measure based on the ethnic origin.

The CJEU acknowledged that the practice was capable of objective justification; ensuring security of electricity supply and providing consumers with the ability to properly monitor electricity consumption were legitimate aims.

The national courts, however, had to determine whether the measures used by the electricity company to pursue those legitimate aims were appropriate and necessary. The prejudice suffered by the people living in the district would have to be weighed in the balance.

Implications: This is an important decision that employers should take into account when dealing with employee relations issues and when putting together rules and policies. Employers may now face claims from individuals who ‘suffer’ from a policy which disadvantages a group with a protected characteristic such as gender, race, religion etc, even where the individual is not a member of that group. One such example would be a working father who may claim that he too suffers from a policy to require full-time work which is indirectly discriminatory against working mothers.

There will no doubt be legal arguments as to how exactly this CJEU decision will be interpreted and applied in UK law, but overall the potential for indirect discrimination claims has definitely been increased by this ruling.