United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Lord Chancellor and The Lord Chancellor's Department	SIR SIDNEY KENTRIDGE QC and MR RICHARD McMANUS QC Employment Litigation Team The Treasury Solicitor Room 544 Queen Anne's Chambers 28 The Broadway London SW1H 9JS
For Ms J Coker For Ms M Osamor	MS JANE DEIGHTON (Solicitor) Messrs Deighton Guedella Solicitors Top Floor 30/31 Islington Green London N1 8DU MS KARON MONAGHAN (of Counsel) Messrs Deighton Guedella Solicitors Top Floor 30/31 Islington Green London N1 8DU


 


LORD JOHNSTON: This appeal is at the instance of the Lord Chancellor and his department against the decision of the Employment Tribunal that in the selection of a special adviser he contravened the provisions in respect of the first respondent, as she now is, the Sex Discrimination Act 1975 and in respect of the second respondent, as she now is, both that Act and the Race Relations Act 1976.

1. As will be seen a number of issues arise but there are no separate issues as between the two pieces of legislation. It is therefore appropriate to consider the various questions as a unit in each case.
2. The concept of special advisers to Government Ministers has been developed over the years since the late 1960's. They are appointed under Article 3(2) of the Civil Service Order in Council 1995, to serve a particular Minister as a special adviser so long as that Minister remains in his particular post and only for the duration of a particular Government. It therefore follows the appointment lapses when either the Minister in question leaves his post for whatever reason or a general election or both. There is therefore no security of tenure. Accordingly, the appointment process is not subject to the general rules that apply to the appointment of civil servants since special advisers are not civil servants. They are in a special category designed to give advice and guidance to the Minister in question from not only a policy but also a political standpoint and it follows that one ingredient essential for the job, apart from whatever personal skills may be required, is a commitment to the political understanding of the particular Minister.
3. In this particular case the documents disclose that up to the appointment with which this case is concerned, the Lord Chancellor in each successive administration since the 1960's has not had a special adviser.
4. The appropriate starting point in relation to the appointment process in this case is a Minute to be found in supplementary bundle (SB) No.2 at page 156 from which it is revealed that the Lord Chancellor was minded to appoint a Mr Garry Hart who was a second senior partner in a firm of solicitors, Herbert Smith, to be his special adviser. Any such appointment requires the approval of the Prime Minister and by letter dated 21st August 1997 (SB 2 – 159) the Lord Chancellor wrote to the Prime Minister seeking his approval for his appointment. That letter was followed by a further letter dated 25th September 1997. The necessary approval having been given, the letter of appointment of Mr Hart is to be found at pages 168 onwards of SB 2. His contract starts at SB 2 –170.
5. It therefore follows and this is not disputed at the Bar, that the Lord Chancellor having determined generally on the notion of appointing a special adviser, settled on a particular person well known to him and in due course appointed him without reference to any form of advertisement or other form of job application process. In simple terms no other person was considered for the post and this is at the core of this case since both the respondents claimed that that was discriminatory in terms of the relevant legislation against them. They rely upon the Sex Discrimination Act 1975, the Race Relations Act 1976 and the Equal Treatment Directive 76/207/EEC.
6. The relevant provisions are as follows:

Section 1 of the Sex Discrimination Act 1975 ["SDA"] and the Race Relations Act 1976 ["RRA"] define discrimination (in so far as is material to these cases).

Section 1(1)(a) of the SDA (direct discrimination) provides that:

"A person discriminates against a woman in any circumstances relevant for the purposes of any provision of this Act if-

(a) on the ground of her sex he treats her less favourably than he treats or would treat a man …"

Section 1(1)(a) of the RRA (direct discrimination) provides that:

"A person discriminates against another in any circumstances relevant for the purposes of any provision of this Act if-

(a) on racial grounds he treats that other less favourably than he treats or would treat other persons …"

Section 1(1)(b) of the SDA (indirect discrimination) provides that:

"A person discriminates against another in any circumstances relevant for the purposes of any provision of this Act if –

…

(b) he applies to her a requirement or condition which applies or would apply equally to a man but-

(i) which is such that the proportion of women who can comply with it is considerably smaller than the proportion of men who can comply with it, and

(ii) which he cannot show to be justifiable irrespective of the sex of the person to whom it is applied, and

(iii) which is to her detriment because she cannot comply with it."

Section 1(1)(b) of the RRA (indirect discrimination) provides that:

"A person discriminates against another in any circumstances relevant for the purposes of any provisions of this act if-

…

(b) he applies to that other a requirement or condition which applies or would apply equally to persons not of the same racial group as that other but-

(i) which is such that the proportion of persons of the same racial group as that other who can comply with it is considerably smaller than the proportion of persons not of that racial group who can comply with it, and

(ii) which he cannot show to be justifiable irrespective of the colour, race, nationality or ethnic or national origins of the person to whom it is applied, and

(iii) which is to the detriment of that other because he cannot comply with it."

The relevant circumstances for the purposes of these appeals are set out in section 6(1) of the SDA and section 4(1) of the RRA. Section 6(1) of the SDA provides that:

"It is unlawful for a person, in relation to employment by him … to discriminate against a woman-

(a) in the arrangements he makes for the purpose of determining who should be offered that employment …"

Section 4(1) of the RRA provides that:

"It is unlawful for a person, in relation to employment by him … to discriminate against another-

(a) in the arrangements he makes for the purpose of determining who should be offered that employment …"

Article 1 of the Council Directive "on the implementation of the principle of equal treatment for men and woman as regards to employment, vocational training and promotion, and working conditions", 76/207/EEC ["the Equal Treatment Directive"] provides that:

"The purpose of this Directive is to put into effect in the Member States the principle of equal treatment for men and women as regards access to employment … This principle is hereinafter referred to as "the principle of equal treatment"".

Article 3 provides that:

"Application of the principle of equal treatment means that there should be no discrimination whatsoever on grounds of sex and the conditions, including selection criteria for access to all jobs or post whatever the sector or branch of activity, and to all levels of occupational hierarchy."

7. After sundry procedure, some of which is important, the Employment Tribunal sustained a claim of discrimination on grounds of sex in respect of Ms Coker but dismissed the claim in respect of Ms Osamor in relation to the SDA and RRA. The Lord Chancellor and his department have appealed against that decision and Ms Osamor has cross-appealed.
8. The main thrust of the respondent's position was indirect discrimination but there was also a claim of direct discrimination which was dismissed by the tribunal. We shall leave that issue to the end.
9. The parties were at issue on a number of questions which we will deal with seriatim. They are as follows:

(1) The nature of the requirement in terms of section 1(1)(b) of both sets of legislation.

(2) The issue of disproportionate impact in terms of section 1(1)(b)(i) of the legislation.

(3) Assuming a prima facie case of discrimination has been made out whether such can be justified in terms of section 1(1)(b)(ii), and

(4) whether in the final analysis either or both respondents suffered a detriment by reason of their inability to comply with the requirement in terms of section 1(1)(b)(iii).

10. We deal with each of these in turn:
11. The requirement

In this respect the decision of the Employment Tribunal is in the following terms:

"59. We have set out the full terms of the letter written on 21 August 1997. The Lord Chancellor there set out the many qualities which he identified in Mr Hart. He refers to the fact that those who had approached him previously with a view to becoming his Adviser had been rejected by him because they were not of sufficiently high quality. He does not, in that letter, refer to the trust and confidence which he reposes in Mr Hart, based on long experience, as being the key factor for the appointment, or even a significant factor, expressed in those terms.

60. The Lord Chancellor chose not to attend the hearing of the case to give evidence. He is said to have taken that decision for reasons which were set out in a letter dated 19 February 1999 from the Treasury Solicitor to the Applicants' Solicitors. The Tribunal has see those reasons, and insofar as they reflect upon the way in which the hearing of the case might be conducted, the Tribunal does not agree with them. However, we are not concerned to become involved in an argument about the reasons for non-attendance, because the simple fact is that there is an absence of evidence from the Lord Chancellor. We must arrive at our findings on the basis of the evidence which is in fact before us. The best evidence we have about what was in the mind of the Lord Chancellor in the relevant respects is what is set out in the contemporaneous correspondence to which we have referred.

61. Additionally, in the exercise of the power conferred by rule 4(3) of the Rules of Procedure, the Tribunal required the Lord Chancellor to furnish a written answer to a question. Rule 4(4) requires the Tribunal to take account of the written answer furnished pursuant to that question in the same way as it takes account of representations in writing presented by a party pursuant to Rule 8(5). The question was:

"Of all those people from whom you would have considered selection of a Special Adviser, during the period of time when you were minded to appoint Garry Hart, to carry out the functions which you were minded to entrust to Garry Hart, what proportion of them were women, and what proportion were apparently of African, Caribbean or Afro-Caribbean ethnic origin?".

62. The answer given to the question was as follows:

"As explained in paragraph 2 of the skeleton argument for the Lord Chancellor, he decided that, because of the nature of the post of Special Adviser, and the close personal relationship it involves, he would only appoint someone of whom he had long experience and in whom, on that basis, he had complete trust and confidence ("the condition"). The Lord Chancellor did not in fact consider anyone other than Garry Hart for this post, because he did not know of anyone who satisfied the condition and who was available at the time. He wrote declining the applications of those who applied, without regard to their gender or race, solely because no one satisfied the condition. If (which he did not) he had considered those people whom he knew, the pool he would have considered would have included white men and women; and men and women of African and Caribbean or Afro-Caribbean ethnic origin. The Lord Chancellor accepts that his area of association is such that, in these hypothetical circumstances, he would have considered more white men than women, and that those of African, Caribbean or Afro-Caribbean ethnic origin would have been in a very small minority. The Lord Chancellor cannot be more precise than that. For the avoidance of any doubt, however, the Lord Chancellor emphasises that he did not and does not believe that any of the persons in this hypothetical pool both satisfied the condition and were available at the material time.

63. The Tribunal therefore notes that on his own admission, the Lord Chancellor was only concerned to appoint someone from a circle of people well-known to him. We find that he thereby imposed a condition or a requirement as contended for by the Applicants, namely that the successful candidate must be personally known to the Lord Chancellor."

12. Sir Sidney Kentridge QC appearing for the Lord Chancellor basically submitted that the tribunal had misdirected itself by limiting the definition of 'requirement' only to the effect that a candidate should be personally known to the Lord Chancellor. He submitted that properly understood from the evidence there should be at least an additional aspect of the requirement to the effect that the candidate must enjoy the trust and confidence of the Lord Chancellor and that meant at the time of the appointment rather than in a developing relationship once the appointment was made. He submitted that this was a self-evident part of the requirement disclosed indeed by the letter dated 21st August 1997 referred to by the tribunal. While that letter does not refer to the issue of trust and confidence it was submitted that it was self-evident that it was necessary that it was part of the process.
13. Sir Sidney went on to submit that in any event since in the case of Ms Coker no application having been made by her nor any interest expressed in the job, and it does appear on the evidence that some people, albeit the Lord Chancellor could not remember who they were, had expressed some interest, she was not therefore even potentially a person against whom discrimination could be made out. In this respect reliance was placed upon an unreported case of the EAT London Borough of Croydon v Kuttapan (18th January 1999), where, in an interlocutory decision, this tribunal determined that in order for there to be an issue of discrimination in respect of a particular job there had to be a vacancy in respect of that job and the case was apparently remitted back to the Employment Tribunal to determine that as a matter of fact. In this case it was submitted there never was a vacancy in as much that the Lord Chancellor was determined to appoint only one person and if that was discrimination in the general terms it was discrimination against everybody, men or women.
14. Sir Sidney was critical of the tribunal's approach in respect of the non-attendance of the Lord Chancellor as a witness which he maintained was not necessary having regard to the fact that the Lord Chancellor had replied to the questions posed to him at interlocutory stages, the relevant answer in question being set out in paragraph 62 of the judgment which we have already quoted. The tribunal also failed to take proper account of the very important evidence from Sonia Phippard submitted in writing to the tribunal and to be found in SB 1 – 290 etc. Accordingly the tribunal have imposed a requirement which was too general and failed to take account of the essential elements of the job not least upon the issue of trust and confidence quite apart from ability and the relevant political knowledge and acumen. The decision was therefore perverse.
15. Ms Monaghan who represented both respondents on the main arguments, replied to the effect that the tribunal were more than entitled upon the evidence to define the requirement as limited to a person known to the Lord Chancellor. He not having given evidence, the tribunal had to make the best it could upon the evidence in question and the issue of trust and confidence did not feature anywhere in the papers until evidence of Ms Phippard was submitted to the tribunal. It therefore came at a late stage and did not properly reflect the initial position taken up by the Lord Chancellor when embarking upon the appointment process. She concentrated upon the phrase "area of association" which she said defined in general terms the relevant pool of people eligible for the job and that tribunal accordingly reached the right decision in determining that the Lord Chancellor "was only concerned to appoint someone from a circle of people well known to him", thus defining the requirement in terms of legislation that the successful candidate must be personally known to the Lord Chancellor.
16. In determining this issue we are satisfied that the tribunal was entitled to reach its conclusion upon the evidence before it without adding the important assertion that the appointed person must enjoy the trust and confidence of the Lord Chancellor. While that is obviously a desirable feature, we see no reason to dispute or at least are not prepared to interfere with the finding of the tribunal on the factual issue of requirement to the effect that the Lord Chancellor in selecting Mr Hart was at the same time before making the selection limiting the people eligible for the job to those personally known to him. However we consider that when he was only selecting one person the real issue is that of disproportionate impact. If we are wrong in that approach in as much that it should also be read into the requirement an issue of trust and confidence, we do not consider that that precludes the respondents before us from challenging a part of the requirement, namely the issue of personal knowledge and from asserting that that in itself laid the basis for discrimination against the respondents.
17. In these circumstances we conclude that the tribunal were entitled reach its conclusion that the requirement imposed in terms of the legislation in fact was simply that the person to be appointed must be personally known to the Lord Chancellor.
18. Disproportionate impact

In this respect the decision of the Employment Tribunal is in the following terms:

"64. For the Applicants, it was submitted that a number of alternative pools were available for consideration. They included all adults; all labour party voters; political advisors, who had been appointed to local authorities; senior officers in local authorities; and the whole of local government.

65. Mr McManus submitted that the pool consisted of all those potentially eligible for the post. However, it was defined, the proportion of men in the pool who are personally known to and trusted by the Lord Chancellor as a result of long experience was going to be very small indeed. Therefore the proportion of women in the pool who could comply with the condition of being personally known to and trusted to the Lord Chancellor on the basis of long experience could not be considerably smaller. So too under the Race Relations Act: the proportion of white people in the pool who were personally known to and trusted by the Lord Chancellor as a result of long experience was going to be very small indeed. Therefore, the proportion of any ethnic minority in the pool who could comply with the condition could not be considerably smaller. Statistics concerning other Special Advisors appointed by the Government had already been found by the Chairman at an interlocutory stage to be of marginal relevance. The Lord Chancellor was not involved in or responsible for appointments made by the Ministers. Applying the principles stated by the European Court in Seymour-Smith the statistics relied upon by the Applicants were insufficient to substantiate an allegation of indirect discrimination: they do not cover enough individuals and they illustrate purely fortuitous or short-term phenomena. Mr McManus therefore submitted that the reality of the present case was that the condition applied by the Lord Chancellor excluded from consideration everyone other than the successful candidate because it was the judgement of the Lord Chancellor that only Mr Hart satisfied the condition and was available. It was entirely artificial to analyse such an appointment as having a disparate impact on women or on members of any ethnic minority.

66. The conclusion of the Tribunal is that we agree that the situation in this case is artificial, and indeed wholly unusual. We consider that the legal principles afford us a degree of latitude to meet the circumstances of this case in a straight-forward and common-sense way. Given the requirement which we have set out, we have to ask ourselves whether that requirement had a disproportionate impact as between men and women. Given the answer by the Lord Chancellor to the question posed by the Tribunal, the answer is clearly that it did. The basis of comparison, the pool, is those people who were eligible for the position given the criteria set out in the letter of 21 August which were being applied by the Lord Chancellor to justify his appointment of Mr Hart."

19. This is the key part of the case, focussed upon correctly in some detail by both parties.
20. Sir Sidney submitted that the test to be applied to assess disproportionate impact in terms of section 1(1)(b) was set out by Ralph Gibson LJ in University of Manchester v Jones [1993] ICR 474 where the learned judge states on page 493 at G:

"We have been told that section 1(1) has not before been considered by this court with reference to the concept of the pool. The language of the section has been set out above. In order to compare the proportion of women who can comply with the requirement with the proportion of men who can comply with it, it is necessary to determine the relevant total. In my judgment, the relevant total is the number of men and women referred to in the subsection, i.e., those men and women to whom the person – in this case, the employer – applies or would apply the requirement. In this case, that means all men and women graduates with the relevant experience. I do not accept that the relevant total is all men and women: the employer would have no occasion to apply the requirement to any men or women other than those who are able to comply with the requirements of the advertisement other than the requirement in question …

Further, I do not accept that the relevant total is merely of those men and women who can comply with the requirement. The section refers not to the number of men and the number of women who can comply with the requirement but to the proportion of men and of women. That shows, in my judgment, that those men and those women who can comply with the requirement are to be considered as a proportion of another number, and that that number must be the relevant total of men and women to whom the requirement is or would be applied."

21. He followed this analysis up by reference to R v Secretary of State for Employment ex parte Seymour-Smith and another No. 2 [2000] 1 WLR 435 and in particular the speeches of Lord Slynn of Hadley at page 439 to 441 and the speech of Lord Nicholls of Birkenhead at page 449 where he adopts the decision of the European Court of Justice in the same case [1999] 2 AC 554 at 597 as follows:

"the best approach to the comparison of statistics is to consider, on the one hand, the respective proportions of men in the workforce able to satisfy the requirement of two years' employment under the disputed rule and of those unable to do so, and, on the other, to compare those proportions as regards women in the workforce. It is not sufficient to consider the number of persons affected, since that depends on the number of working people in the member state as a whole as well as the percentages of men and women employed in that state."

22. Sir Sidney recognised that in some cases statistics may not be available or indeed the outcome of a comparison as between men and women affected by the relevant requirement might be so obvious that a relevant conclusion could be drawn (London Underground v Edwards [1995] ICR 574) but in general terms it was for the person claiming discrimination to prove his or her case and the evidence required therefore to be produced which if not statistical was at least relevant to allow an inference to be drawn against the relevant test set out particularly by Ralph Gibson LJ in Jones supra.
23. In the present case it was submitted that the tribunal had not even embarked upon the exercise. They had simply compared the likely impact upon men and women as a whole and this was not only applying the wrong test but it was not achieving a balanced result to determine disproportionate impact as a matter of fact. The situation was similar to that that obtained in Barry v Midland Bank [1999] ICR 319. Here there was no way an inherent disproportionate impact could be achieved and even if the test admitted some degree of flexibility or even a rule of thumb, he submitted there must be a basis for a conclusion to be drawn. Reliance by the tribunal on the answer given by the Lord Chancellor which it quotes, was no more than a general indication of how the Lord Chancellor viewed the matter and could not yield in itself an inherent conclusion of disproportionate impact as between men and women eligible for the post but disproportionally affected by the requirement. In essence, he submitted, the tribunal have not even directly assessed the correct pool before embarking upon the disproportionate exercise against the test of Ralph Gibson LJ and thus they totally failed to address the proper issue.
24. Ms Monaghan rightly recognised that this was central to her case but she submitted, as indeed Sir Sidney had accepted, that in general terms establishing disproportionate impact did not depend upon statistics if it could be done by other means of which the clearest example was Edwards supra, although there were other clear indications in other cases. The real question she submitted was whether the matter was being approached by the Lord Chancellor from a pool which was skewed as between men and women so as to disadvantage women and if the evidence so revealed such a disproportionate impact, section 1(1)(b) was satisfied. She accepted the approach in both Seymour-Smith and Jones but said it was only one way of setting about the matter.
25. She referred specifically to Mandla v Dowell Lee [1983] ICR 385, Commission for Racial Equality v Dutton [1989] IRLR 8 and Thlimmenos v Greece [2000] EctHR Application No 34369/97. All these cases she submitted were examples where there was inherent discrimination self evident from the facts which did not require the statistical analysis or even the production of statistics. The proper approach was to consider the pool as being within the Lord Chancellor's area of association and in that respect in her corrected skeleton argument the amended paragraph 37(a) listed a number of statistics in relation to various aspects of the life of the Lord Chancellor which by definition indicated that if the requirement was limited to persons known to them the predominance would be a male rather than a female applicant or candidate and no person of ethnic minority at all.
26. We are unable to agree amongst ourselves on this aspect of the case. The minority view of Ms Switzer is to be found in paragraph 32. What follows immediately is therefore the view of the majority which accordingly prevails.
27. In seeking to resolve this aspect of the matter we agree at once with Sir Sidney that the analysis or reasons given by the tribunal in paragraph 66 of its decision are inadequate and do not apply the proper test. They have simply looked at what they considered to be the likelihood of impact as between men and women and left the matter at that, which is precisely what, as we understand it, the Court of Appeal stated in Jones should not happen.
28. We are therefore immediately satisfied that the tribunal's reasoning in this respect is flawed and thus the issue is open for our consideration de novo.
29. We agree with Ms Monaghan to the extent that the authorities do not require the issue of disproportionate impact to be addressed purely by statistics. Such would be an unreasonable demand in as much that in some cases they might not simply be available. But at the end of the day, the test to be applied is whether or not as between men and women the impact of the requirement would have a disproportionate effect as against one or other within the relevant pool, as between those who can satisfy the requirement and those that cannot, and that, and this is very important, disproportionate impact must be on the basis that if it is against women the number of such persons must be considerably smaller than those of the opposite sex.
30. It is at this point that we consider the reasoning of Ms Monaghan breaks down in as much despite her valiant efforts in relation to the various statistics relating to the area of association of the Lord Chancellor, it does nothing to identify that necessarily, even if there are considerably more men in that so-called pool than women, there is a considerably smaller disproportionate reaction as between the two when it comes to the compliance which the general requirement of personal acquaintance with the Lord Chancellor. We do not consider that it is legitimate to draw such an inference and we are fortified in this by the fact that in any event the Lord Chancellor determined upon only one person and thus can be said to discriminate against everybody else, (our emphasis) be they men or women, and accordingly there is no relevant pool. This is a very special case because of the nature of the post of special adviser.
31. Our conclusion on this branch of the case by a majority is that although we do not accept the approach of the tribunal, we are unable to hold upon the evidence that the disproportionate impact necessary to establish a breach of section 1(1)(b)(i) has been made out by the respondents upon whom the onus of proof lies. It is essential to bear in mind that at the end of day what requires to be satisfied is that there was discrimination as between a man and a woman or men and women and not just an arbitrary selection process, however disagreeable that may be to some people. We do not therefore consider it relevant to rely upon the hypothetical answer to the question posed to the Lord Chancellor, which is quoted by the tribunal, because it ignores the reality of the situation, namely the intention on the part of the Lord Chancellor from the outset to appoint a single specific person. That, in our opinion, must be a freestanding right to make an appointment not least because a woman could (our emphasis) equally have been appointed.
32. The Minority View

I do not agree and reject Sir Sidney's argument that the Employment Tribunal conclusion is perverse. The Lord Chancellor through a natural thought process must have had in mind additional criteria to that of a person known to him otherwise he could have appointed anyone that he knew personally, therefore this could not have been his only criteria. This is shown in his own submission and in his letter to the Prime Minister of 21 August where the Lord Chancellor mentioned, for example, an ability to assess situations, experience of the law and commitment to New Labour. He went through a process, however unconsciously, to select Gary Hart. See paragraph 13 of the Employment Tribunal decision.

Given the lack of evidence that explained precisely the additional criteria it was not possible for Coker to come up with statistical data in relation to the pool for comparison but we know that the Lord Chancellor's pool was skewed in relation to both sex and race on his own admission. See paragraphs 62, 65 and 66 of the Employment Tribunal decision and the statistics produced by Coker. It cannot be assessed with any certainty what the additional criteria were and therefore the Employment Tribunal was entitled to make a finding of fact that there was Disproportionate Impact on Coker and Osamor. The Lord Chancellor's pool comprised people known to him and met the other criteria that he unconsciously applied in the process of selecting Gary Hart. The pool for comparison therefore is people who satisfied the additional criteria whether known to the Lord Chancellor or not. The Employment Tribunal was entitled to reach the conclusion, from the available evidence, that there was Disproportionate Impact on grounds of both sex and race.

33. In these circumstances we propose to allow the appeal in this respect, which thus disposes of both applications. However we require to deal with the remaining issues.
34. Justification

In this respect the tribunal's findings are as follows:

"67. It is clear to the Tribunal that to be appointed to the position would be a significant career enhancement and would bring a large measure of personal satisfaction to the job holder. Being deprived of those advantages is the true measure of the discriminatory effect of the condition as we have identified it.

68. Applying the Hampson test, we then go on to consider the reasonable needs of the party who applies the condition. The contention, as we have already set out, is that the Lord Chancellor was only prepared to consider appointing someone whom he knew very well indeed. He took the view that such was the only possible basis for the trust and confidence which he would need to repose in an Adviser. The Tribunal does not accept that that was a reasonable need on the part of the Lord Chancellor. We do not accept that it is justifiable to appoint someone you know where the reasonable need is to appoint a person on merit and it must be apparent that appointment on the basis of personal knowledge will result in a consideration of men rather than women.

69. Amongst the fifteen hundred pages of documents put before the Tribunal, there were all the documentary procedures relied upon by the Lord Chancellor's department for recruitment. They represent, in the view of the Tribunal, the best possible practice designed to ensure that open and fair recruitment results in the appointment of people to positions solely on merit, and the persons of the highest merit being appointed. It was clear to the Tribunal that the more the Department demonstrated the benefits of its procedures, the more it put into sharp relief the inadequacies of the Lord Chancellor's personal way of proceeding in respect of the appointment under scrutiny. We accept the Respondent's evidence that the Lord Chancellor has expressed support for equal opportunity policies and practices. In the absence of his testimony, we have not been able to equate or value that support in the context of Mr Hart's appointment.

70. The Respondents rely upon the long practice of appointment of Special Advisors and the Orders in Council as part of their case of justification. For the avoidance of doubt, we state our express finding that the Lord Chancellor was clearly advised that he could properly appoint Mr Hart in the way in which he did so, and he did follow that advice. That is clear from the correspondence.

71. The Tribunal must, however, consider the justification relied upon objectively.

72. We do not accept that long practice is a justification in itself. Indeed, we tend to the opposite view. It is clear that the practice concerned arose long before the discrimination legislation was enacted. It therefore carried with it the risk that it would not comply with discrimination legislation. There is no evidence before us that anyone has taken seriously the possibility that the appointment of Special Advisors might be discriminatory.

73. It is furthermore not a justification that a practice is enshrined in legislative form. That has been clearly demonstrated by the challenge to the two years' qualification in the Seymour-Smith litigation; and it is also true of the challenge to the long-standing legislative provision that enabled pregnant service women to be compulsorily discharged from the Armed Forces.

74. The Applicants relied upon the evidence of Dr Parkin as an expert that analogous posts in local government are recruited for in the 'normal' i.e. open manner of public invitation for applications, although carrying the same need for a very high level of trust and confidence in politically sensitive areas of activity. We regret to say that we were not convinced of the reliability of her "statistical" evidence. However, we accept as an obvious truth that in many areas of employment, relationships are successfully created between strangers by such 'normal' recruitment procedures, who are then bound together in very close relations of confidence and interdependence. We also accept as obvious another part of her evidence that "word of mouth" recruitment tends to perpetuate discriminatory situations and is therefore undesirable.

75. The Tribunal is of the opinion that a Minister relying upon the Order in Council should take account of the imbalance of gender or race in the circles in which he is minded to find someone for an appointment. We do not say that all such posts should be subject to Civil Service recruitment standards, only that the particular Minister should ensure that his selection is free from discrimination. In that sense, we adopt the argument which was put forward by Ms Monaghan to meet the contention by Mr McManus that to find in favour of the Applicants would be to out-law the head hunting method of recruitment."

35. In this respect Sir Sidney submitted that the tribunal had applied the wrong test by relying upon the case of Hampson v Department of Education and Science [1989] ICR 179, since that case had been overtaken by events in form of Seymour-Smith No. 2 Supra, and in particular in the speech of Lord Nicholls of Birkenhead at page 450F, where his lordship says:

"The answer given by the Court of Justice [1999] 2 AC 554, 599 to the fifth question referred to the court by this House has now shown that this test [Hampson our interpolation] was too stringent. The burden placed on the government in this type of case is not as heavy a previously thought. Governments must be able to govern. They adopt general policies, and implement measures to carry out their policies. Governments must be able to take into account a wide range of social, economic and political factors. The Court of Justice has recognised these practical considerations. If their aim is legitimate, governments have a discretion when choosing the method to achieve their aim. National courts, acting with hindsight, are not to impose an impracticable burden on governments which are proceedings with good faith. Generalised assumptions, lacking any factual foundation, are not good enough. But governments are to be afforded a broad measure of discretion. The onus is on the member state to show (1) that the allegedly discriminatory rule reflects a legitimate aim of its social policy, (2) that this aim is unrelated to any discrimination based on sex, and (3) that the member state could reasonably consider that the means chosen were suitable for attaining that aim."

In this context the phrase "Member State" should be read as the Lord Chancellor.

36. Sir Sidney went on to submit that given the fact that the Tribunal had applied the wrong test, its reference to Seymour-Smith not being in this context, their reasoning could not stand and in any event if paragraph 75 in the Judgment is looked at, it did not meet the lower test which allowed greater flexibility to Government and Government Ministers which obviously included, he submitted, the selection of a Special Adviser on an agreed policy of express trust and confidence. Thus, he effectively submitted. that to categorise this particular method of selection in this case if not free from discrimination as not justified was perverse.
37. Miss Deighton handled this part of the case on behalf of both respondents, submitting that the issue was essentially a jury one to be determined against an objective test of whether the policy in this particular case could properly be justified where the decision was to select a single male person which inevitably must discriminate against women. This supported the Tribunal's conclusion that the selection process here was therefore suspect and that was enough even to meet the lower test of Seymour-Smith.
38. We do not find this particular issue easy since we consider that the Tribunal's approach to the matter is somewhat convoluted and it is certainly the case that they have relied on Hampson rather than the lower test of Seymour-Smith. However, in our opinion, they have concentrated upon the question of whether or not, by definition in this stage of the process, contrary to our own findings on the question of disproportionate impact, the discriminatory act could be justified simply on the basis that the Minister wished to select as his Special Adviser, a particular male person. If the matter is looked at in that context we are of the opinion that, given the question is now academic before us in view of our decision of the main point, nevertheless, against the background of the decision taken by the Tribunal, we consider that they did address the question objectively and reached a conclusion that they were entitled to reach in paragraph 75 of their decision, although it might not be one with which we might have agreed. Despite the level of tests now reduced by Seymour-Smith No. 2 we still consider that if there is a prima facie discriminatory situation, clear and cogent reasons must be given to justify it. Essentially the Tribunal appear to have held that the Lord Chancellor failed to discharge the burden of proof in this respect and upon that basis if this matter was still live before us we would not have interfered with the Tribunal's approach.
39. Detriment

In this respect the decision of the Employment Tribunal is in the following terms:

"76.In determining whether the requirement was to the detriment of each Applicant because she could not comply with it, we conclude that since each Applicant was not known to the Lord Chancellor, she could not comply with that requirement. In determining whether in each case that was a state of facts which was to her detriment, we must look to the criteria which the Lord Chancellor was applying in deciding who to appoint. We know the criteria which he set out in his letter to the Prime Minister, as the matters which persuaded him that Mr Hart was someone he wished to appoint. We have suffered the disadvantage evidentially that although the Lord Chancellor referred to people who had approached him for the same position, and whom he had refused, he has not been able to specify who they were. In answer to requests for information in the interlocutory stages, he has stated that he could not remember who they were. Although he has stated that he wrote to them, no copies of any such correspondence have been put before the Tribunal. Therefore we do not know what criteria he applied in practice.

77. Ms Coker is a lawyer with twenty years' experience. She is well-known. She has experience of legal aid matters, community matters, immigration law, and law centre and legal policy matters. She has run her own firm of solicitors for some years. She has broad experience. She has been short-listed and interviewed for an Assistant Recordership, which may well show that she is regarded as having a degree of judgement. She is committed to New Labour. In the course of cross-examination, she accepted that the role of the Special Adviser was presentational, and that it would therefore involve presenting the Lord Chancellor's policies to others. She was, we find, willing and able to take on such a role.

78. Ms Osamor stands in a very different position to that of Ms Coker. She is an adviser (but not a lawyer) in a law centre. Over the years she has been much more politically active than Ms Coker. She has been a Councillor and a candidate for Parliament. She has been described as a Black Activist. It is perfectly clear from her evidence that she does not have a commitment to New Labour, and would be unwilling to accept any presentational role on behalf of the Lord Chancellor. Her interest in fulfilling the role of Special Adviser would be to persuade him to her own point of view. It was clear from her testimony that she could not see beyond that point.

79. Applying the principles which we set out in respect of the legal meaning of "detriment", earlier in these reasons, it is perfectly clear to us that Ms Osamor was not remotely appointable to the position of Special Adviser to the Lord Chancellor. She did not meet fundamental requirements of it.

80. We take a different view as to Ms Coker. We do not say that the Lord Chancellor would have wished to appoint her. We simply find that she suffered a detriment in being deprived of the opportunity of applying for the position. She could properly have done so with some prospect that her application would receive consideration on its merits.

81. It follows that we find that in the case of Ms Coker, all the elements of liability on the basis of indirect discrimination on the grounds of sex are present, and her complaint on that basis is well-founded.

82. It follows form our findings that we would also find her case established on the basis of breach of the Equal Treatment Directive, although we do not consider that it adds anything to the finding under the Sex Discrimination Act.

83. Given that the requirement to show detriment is applicable under the Race Relations Act as well as under the Sex Discrimination Act, it follows from our findings that both of those complaints by Ms Osamor must be dismissed."

40. We consider this is an extremely important part of this case and we note at once that from the Tribunal's findings they distinguished between the two respondents inasmuch that they came to the conclusion in paragraph 79 that Ms Osamor was not remotely appointable to the position and therefore she did not suffer any detriment. However, with regard to Ms Coker they took the opposite view and that leads to the appeal in this respect on behalf of the Lord Chancellor and the Cross-Appeal on behalf of Ms Osamor.
41. In that Cross-Appeal, Miss Monaghan's position was simple and straight forward. It was that a proper understanding of section 1(b)(1) of the Sex Discrimination Act 1975 and the equivalent position in the Race Discrimination Act was to the effect that the detriment in question arose simply by reason of the factual failure to be able to comply with it. She said nothing more need be shown. She based this submission to some extent, though not entirely because she was looking at the matter as one of statutory construction, on Barclays Bank v Kapur No.2 [1995] IRLR 87, where she pointed to the fact that the Employment Appeal Tribunal in that case had addressed the matter in summarising the evidence without in fact mentioning the word "detriment" at all, implying, she submitted, that the failure to comply was enough. That of course was not the approach of the Tribunal and she recognised that but she went on the say that in any event it was legitimate for the Tribunal to look at the general position of Ms Osamor and it should not have simply looked at what factual consequences might have arisen which of course the Tribunal held to be none.
42. Sir Sidney, in dealing with this matter, submitted essentially that the construction put upon the subsection by Ms Monaghan was plainly wrong on the face of it. In any event his position was that Barclays Bank v Kapur which supported the proposition on the face of the case that a sense of emotional grievance was not sufficient to found a detriment, plainly supported that position, and therefore favoured him. The case was being misconstrued, he submitted, by Ms Monaghan.
43. Again in this part of the case we are unable to agree, and accordingly the view immediately below is that of the majority. The minority view is to be found in paragraph 46.
44. We are quite unable to accept the proposition of construction advanced by Ms Monaghan in respect of the subsection. To do so would render it otiose by reason of the fact that if discrimination is established by reason of the failure to comply with the requirement there would be no need to put in the subsection mentioning detriment. In our opinion, Kapur plainly vouches the fact that an emotional sense of grievance is not enough and we would endorse that to the extent of asserting that there has to be some physical or economic consequence as a result of discrimination to constitute a detriment in this context, which is material and substantial. We construe the phrase "because of" in the subsection as meaning "as a result of" and we are reinforced in this view by the fact that there are authorities which would suggest that even if there is a physical detriment if it is sufficiently trivial not to be material it does not apply. It is to be noted in the case of Kuttapan supra that the case was only remitted back to the Tribunal of first instance to determine whether in fact there was a job vacancy and we take from that case the fact that if eventually it was not established that there was a job vacancy there could be no detriment however strong the discrimination had been in the handling of the applicant's case by the potential or actual employer.
45. In these circumstances we do not consider that either of these respondents suffered any detriment in terms of the legislation whatever be the position on discrimination, inasmuch that neither of them knew about the consideration of the post until it was appointed. If their complaint is essentially that the post was not advertised, and we suspect that that may well be the case, that bears not on the question of detriment but back to the question of discrimination in terms of the previous parts of the subsection.
46. The Minority View

As we recognise in paragraph 5 there was a vacancy. On the evidence Coker but not Osamor met the criteria except for the discriminatory condition of being known personally to the Lord Chancellor. Therefore Coker sufferred a detriment because she was denied the opportunity to apply for the post and thereby lost the opportunity to be considered for the post.

47. In these circumstances we consider by a majority that in the appeal by the Lord Chancellor the finding of the Tribunal that there was a detriment in relation to Ms Coker, is unsound in law and will be quashed. For the same reason the Cross-Appeal by Ms Osamor is refused.
48. Direct Discrimination

In this respect the decision of the Employment Tribunal is in the following terms:

"84.The case for the Applicants was set out by Ms Monaghan in her written submissions. We seek to summarise it and to explain where we disagree with it. It refers to Ms Osamor but is applicable to both Applicants.

(1) She contended that there was a difference of treatment between Mr Hart and Ms Osamor because he was approached and offered a job and she was not. We find that unrealistic. No relevant difference in treatment arises. The offer to Mr Hart was unique.

(2) She contended that the alleged difference in treatment was accompanied by a difference in race and gender, and explanations were called for; and the explanations put forward were unsupported by evidence or not credible. We have set out our findings that the contemporaneous documents refer to the reasons for the choice of Mr Hart, related to the Lord Chancellor's personal knowledge of his abilities. Therefore they show a non-discriminatory explanation.

(3) She contended that there was a failure to answer questionnaires. That is true, but it is offset by a very substantial disclosure of information in other forms, e.g. discovery of correspondence.

(4) She contended that there was a failure to abide by the Codes of Practice. That is true, and we have noted its significance for the issue of justification in respect of the indirect discrimination complaint. But in the present context, it would be unjust to draw an inference because it is clear that the Lord Chancellor understood that he was acting outside normal procedures: he was so advised.

(5) Other contentions were directed at the Lord Chancellor's "world" predominantly male and white. That broad characterisation is borne out by his written answer to the Tribunal's Rule 4 question. In our view, it does not constitute a gender based or racially based criterion. It is a consequence of a neutral criterion (someone I know) that it is more likely to be a white male than not.

85. We do not accept that the relevant statutory provisions of either the Sex Discrimination Act or the Race Relations Act can be applied to the circumstances of this case as a basis for a finding of direct discrimination. It would be completely unrealistic in our judgement to conclude that the Lord Chancellor treated either Ms Coker or Ms Osamor less favourably on the grounds of sex or race than Mr Hart where it is perfectly clear that he neither knew them nor knew of them and indeed was not contemplating any sort of choice or comparison of any kind at the time he decided that he wanted to appoint Mr Hart. We accept that his choice of Mr Hart was a purely personal one, concerned exclusively with the qualities of Mr Hart with which he was acquainted. We do not accept the submission for the Applicants that the statutory provisions apply to such a situation. We have accepted that this is a set of circumstances to which the law relating to indirect discrimination applies and our view is that the intention of Parliament in the purpose of the legislation was to provide for such a situation in the way in which we have set it out."

49. In this respect the submission was simply that the tribunal had found in error that there were no relevant differences in treatment as between the applicants and Mr Garry Hart such as would identify any direct discrimination. It was sufficient, it was submitted, that there was inference to be drawn of less favourable treatment causing for an explanation from the general circumstances of the case – King v Great Britain China Centre [1992] ICR 516.
50. We are content to deal with this matter by reference to paragraph 85 of the tribunal's decision, the reasoning of which we adopt. We do not therefore consider that the direct discrimination has been made out in either case.
51. There remains one subsidiary matter which was raised in submission by Ms Monaghan namely the question of arrangements under section 6 of the SDA and section 4 of the RRA. This was essentially based on the fact that we were obliged to take into account the Codes of Practice in respect of Commission for Racial Equality: Code of Practice for the Elimination of Racial Discrimination and the Promotion of Equality and Opportunity in Employment [1983] paragraph 110 and Equal Opportunities Commission: Code of Practice on Sex Discrimination Equal Opportunity Policies, Procedures and Practices in Employment [1985] paragraph 19, both of which were designed to if not prohibit at least hold in disfavour 'word of mouth' applications which this present case was clearly one.
52. We recognise this but we do not in itself consider that it amounts to a sufficient basis to determine this appointment as discriminatory even if it is an "arrangement" in terms of the relevant legislation. Word of mouth applications while disapproved of, could apply equally to men or women. We recognise that the way the Lord Chancellor proceeded in the appointment of Mr Hart in the present case was concerned with access to employment, but that is merely one of the ingredients and not conclusive. We offer therefore no further view on this matter.
53. In reaching this conclusion however we would wish to emphasise that we consider it is only in the rarest of cases that a failure on the part of an employer or potential employer to follow a relevant Code of Practice should be ignored in the assessment process with regard to his or her conduct. While obviously not having the status of legislation, Codes of Practice are a very important element in the employment legal context. Because of the nature of the appointment in this case, we consider this to be one of those exceptional cases.
54. In all the circumstances accordingly, the appeal at the instance of the Lord Chancellor will be allowed to the extent we have outlined and the cross-appeal will be refused. The result of this is that both applications at the instance of Ms Osamor and Ms Coker to the Employment Tribunal will be dismissed.