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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Secretary of State For Employment, Ex Parte Seymour Smith and Another, R v. [2000] UKHL 12; [2000] 1 All ER 857; [2000] 1 WLR 435 (17th February, 2000)
URL: http://www.bailii.org/uk/cases/UKHL/2000/12.html
Cite as: [2000] 1 WLR 435, [2000] WLR 435, [2000] UKHL 12, [2000] 1 All ER 857, [2000] ICR 244

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Secretary of State For Employment, Ex Parte Seymour Smith and Another, R v. [2000] UKHL 12; [2000] 1 All ER 857; [2000] 1 WLR 435 (17th February, 2000)

HOUSE OF LORDS

Lord Slynn of Hadley Lord Goff of Chievley Lord Jauncey of Tullichettle Lord Nicholls of Birkenhead Lord Steyn

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE

REGINA

v.

SECRETARY OF STATE FOR EMPLOYMENT

(ORIGINAL APPELLANT AND CROSS-RESPONDENT)

EX PARTE SEYMOUR SMITH (A.P.) AND ANOTHER

(ORIGINAL RESPONDENTS AND CROSS-APPELLANTS)

ON 17 FEBRUARY 2000

LORD SLYNN OF HADLEY

My Lords,

The respondents to this appeal who were dismissed from their employments in May 1991 claimed before an Industrial Tribunal that they had been unfairly dismissed and were entitled to compensation pursuant to section 54(1) of the Employment Protection (Consolidation) Act 1978. The Tribunal refused to register their claims because they had not been continuously employed for the minimum period specified in section 64(1)(a) of that Act which at all material times was two years by virtue of the Unfair Dismissal (Variation of Qualifying Period) Order 1985. They sought judicial review of the 1985 Order on the grounds that it indirectly discriminated against women, since fewer women than men were able to comply with it and therefore it was contrary to Council Directive 76/207/EC ("The Equal Treatment Directive").

The Divisional Court dismissed their application ([1995] I.C.R. 889) on the basis that it had not been shown that the proportion of women who could comply with the qualifying period was "considerably smaller than the proportion of qualifying men". The Court of Appeal allowed the claimants' appeal in respect of the Equal Treatment Directive ([1995] I.C.R. 919). After a detailed review of the Authorities and the statistics, they held that:

They further held that the Secretary of State had not on the evidence established objective justification for the discriminatory impact of the two-year qualifying period. They allowed the applicants to raise for the first time the complaint that the 1985 Order was also in breach of Article 119 of the EC Treaty, but made no ruling on this, since they did not think it sufficiently clear that compensation for unfair dismissal was "pay" within the meaning of Article 119, which would have required a reference to the European Court of Justice under Article 117 of the Treaty. In view of their decision as to the Directive, they made no reference to the Court. They held that it would have been inappropriate to make an order quashing the Order of 1985, but the applicants were entitled to "a declaration" that at the time of their dismissals (1991) the Order of 1985 was indirectly discriminatory and that there was no objective justification for that discrimination.

Your Lordships' House [1997] 1 WLR 473 held that such a declaration was inappropriate, since it did not enable the claimants to claim compensation for unfair dismissal, the Directive not being enforceable against the employers in domestic law, either directly or indirectly as the claimants sought to do. Nor did it indicate to the Government that the Order was incompatible with Community law in 1995, so that it ought to be changed. The House, however, accepted in the circumstances of the case that it was right to deal with the claim under Article 119 even though it would have been more appropriate for the claim to have been made before an Industrial Tribunal. As a preliminary issue, however, questions were referred to the European Court of Justice relating to the construction of Article 119.

It is with the response to these questions contained in the European Court's Judgment of 9 February 1999 (Case C-167/97 [1999] 2 AC 554) that your Lordships are now concerned in order to dispose of the appeal in relation to Article 119. In the light of the Court's judgment, it does not seem to be necessary to consider earlier European Court or United Kingdom cases.

The House asked first whether compensation for breach of the right not to be unfairly dismissed, such as that provided in the Act, constituted "pay" within the meaning of Article 119. The Court answered that it did and nothing further turns on that point.

The Court held, secondly, that in a case where, as here, the dismissed employees are claiming compensation, the conditions determining whether they are so entitled, because they have been unfairly dismissed, fall within the scope of Article 119 rather than Directive 76/207. The latter applies where the claimant seeks re-instatement or re-engagement because of unfair dismissal.

This is clearly a claim for compensation and there is no issue as to this point remaining. The claim falls within Article 119.

It is with the answers to the remaining questions that the House is now concerned, questions 3 and 4 dealing with the issue of indirect discrimination and question 5 with objective justification if there is such discrimination.

Question 3 asked:

Question 4 asked generally at what time the appropriate legal tests fell to be applied to a measure adopted by a Member State and, in particular, whether it was when the measure was adopted, when it was brought into force or when the employee was dismissed.

In answer to the third question, the Court set out the rival positions adopted before it. Thus, (a) the applicants contended that where there are significant statistics covering the entire workforce which cannot be regarded as fortuitous, "anything more than a minimal difference" in impact could be a breach; (b) the United Kingdom contended for "a markedly different impact"; (c) the Commission proposed a test by which "the existence of statistically significant" evidence is enough to establish disproportionate impact.

The Court then indicated its conclusion as to the proper approach. The first question is whether the measure has "a more unfavourable impact on women than on men". The best approach to the comparison of statistics relevant to that 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": [1999] 2 AC 554, 597, para. 59.

The Court continued.

Enderby v. Frenchay Health Authority

[1994] ICR 112

As to the fourth question the Court replied that Community law must be complied with at all times but "the point in time at which the legality of a rule of the kind at issue in this case is to be assessed by the national Court may depend on various circumstances, both legal and factual." It is for the national Court to determine the point in time at which the legality is to be assessed (p. 596, paragraphs 46 and 50). The Court said:

ultra vires

If regard is had first to the validity of the Order when made and brought into force in 1985, it is to be noted that the Divisional Court, on an analysis of the evidence, found that the percentage of men working for 16 or more hours a week, who had been employed for two years or more (i.e. a man who qualified to claim for unfair dismissal) was 77.4 per cent and the percentage of women who qualified was 68.9 per cent. Of the workforce of 18.73 million persons, 61 per cent were men, 39 per cent were women. In the Divisional Court, Balcombe L.J. [1995] I. C.R. 889, 904-905 took the view that it was right first to look at those who can qualify and to see whether the proportion of women was "considerably smaller". If the proportions of men and women who can qualify was very small, then it would be right to go on to consider whether the proportion of those who could not qualify showed that the percentage of women was considerably smaller. The figures showed that the proportion of women who qualified in comparison with men was 89:100. If one began the other way round by asking the percentages of men and women who did not qualify, the figure for women was 31.1 per cent and for men was 22.6 per cent. This gave a ratio of women to men of 3:2.

When Balcombe L.J. looked at the figures between 1985 and 1993 (the latest available) the range was between 72.5 to 78.4 per cent for men and from 63.8 to 74.1 per cent for women. He found that the ratio of the proportion of men to women who qualified between 1985 and 1991 was about 10:9, reducing by 1993 to 20:19. Balcombe L.J., thus found that the figures did not show that the proportion of women qualifying is "considerably smaller" than the proportion of qualifying men.

McCullough J., at pp. 915-916, found that the percentages who could not qualify ranged from 22.7 to 28.8 per cent, average 26.0 per cent, for men and 32.5 to 38.3, average 35.6 per cent, for women. The female percentage as a percentage of the male percentage varied from 68.5 to 75.2, giving an average of 72.8 per cent. After a detailed analysis of the figures, McCullough J. concluded that "this degree of disparity is less than considerable and, whether objectively justifiable or not, is compatible with the requirements of [the Directive], and this is so whatever year or period is taken".

This conclusion of the Divisional Court was rejected by the Court of Appeal, though they found the matter "a most difficult issue to resolve" (page 952(g)). The conclusion was:

The European Court has, as I read it, accepted that the starting point is to look at the percentage of those who do qualify and to ask, do these figures cover enough individuals, are they purely fortuitous or significant or are the figures "relevant and sufficient for the purposes of resolving the case before [the national Court]." If these figures are not sufficient or significant, it may be necessary to look elsewhere, including, as the Divisional Court accepted, the figures of those who do not qualify.

If the question is then asked whether in 1985 the percentage of women who could qualify was considerably smaller (the test used in this case, and in earlier cases, which rejects the tests proposed to the Court to which I have referred) one has the guidance of the European Court of Justice, though the decision applying the appropriate test is ultimately in the national Court to decide. In paragraph 64, the Court said:

[1999] 2 AC 554

As far as 1985 is concerned, I do not consider that it has been established that these statistics are insufficient or fortuitous; on the contrary, I accept, as the Divisional Court accepted, that these figures were appropriate. In my view, these figures are "relevant and sufficient for the purposes of resolving the case" (paragraph 62). They do not show that in 1985 a considerably smaller percentage of women than men was able to fulfil the requirement.

The European Court contemplates that a percentage which is "lesser" than "considerably smaller" may yet be evidence of indirect discrimination if it is "persistent and relatively constant". There thus remains the important question as to whether "the statistical evidence revealed a lesser but persistent and relatively constant disparity over a long period between men and women". The European Court did not give guidance on this question as it had on the 1985 figures.

Starting from the basis that the 1985 percentage for women was not in itself "considerably smaller" for the purposes of the rule, it must thus be asked whether it was such that if it continued, it could be said to be "consistent and relatively constant"? This is no doubt the most difficult aspect of this part of the case, in view of the numbers (rather than the percentage) of women involved. As has been seen, the Divisional Court was satisfied that, looking at the period from 1985 to 1993 as a whole, the figures were not "considerably smaller". They do not expressly consider whether, although less than considerably smaller, the figures were sufficiently persistent and constant as to indicate indirect discrimination.

The Court of Appeal, on the other hand, were impressed by the "persistency and consistency" of the figures from 1985 to 1991, though they accepted that there was a narrowing of the gap in 1992 and a "more marked narrowing of the gap in 1993." They concluded that it had been shown that "for the period leading up to the dismissals of the two applicants, there had been and continued to be a considerable and persistent difference between the numbers and percentages of men and women in the group" who did and did not qualify.

It seems to me clear from their conclusion that in the period "there had been" a considerable difference that the Court of Appeal were proceeding on the basis that the percentage of women who qualified in the beginning was considerably smaller; that considerable difference "continued".

If the starting point is, on the other hand, that the percentage of women qualifying in 1985 was not "considerably smaller", the conclusion does not necessarily follow. Accordingly, although your Lordships are reluctant to interfere with the assessment of the Court of Appeal on issues of fact, it seems to me that the matter has to be looked at from the different starting point indicated in the European Court's judgment. Since the figures are agreed, it seems to me open to your Lordships to resolve this issue without the matter being referred back to the Court of Appeal or the Divisional Court.

The figures which are agreed between the parties are as follows:

	Unqualified	Unqualified	Qualified	Qualified
Year	% Males with less than 2 Years	% Females with less than 2 years	% Males with more than 2 Years	% Females with more than 2 Years
1985	22.6	31	77.4	68.9
1986	22.9	31.6	77.2	68.4
1987	24.7	32.9	75.3	67.1
1988	26.6	34.5	73.4	65.6
	1989	28	36.2	72	63.8
1990	27.6	35.8	72.5	64.1
1991	25.5	32.6	74.5	67.4
1992	22.1	27.9	77.9	72.1
1993	21.6	25.9	78.4	74.1

Although the percentage of women who can comply may be "less" than "considerably smaller" than the percentage of men who can comply if the percentage is persistent and relatively constant, I do not read the Court as saying that any difference between men and women which continues over a period itself establishes discrimination contrary to Article 119. The difference is evidence that "could" establish such discrimination, but it is "for the national Court to determine the conclusion to be drawn from such statistics". It seems to me that the disparity, even if not establishing a "considerably smaller" percentage of women able to qualify must still be significant so as to satisfy the Court that it would be right to find indirect sex discrimination.

As can be seen, the percentage of both men and women qualifying between 1985 and 1989 fell (so that necessarily the percentage of both men and women who did not qualify rose in the same period). In 1990, the percentage of both men and women qualifying rose and it rose again more sharply in 1991 (men 72.5 to 74.5 and women 64.1 to 67.4 per cent - a marginally higher increase for women), and again in 1992 (a sharp increase for both) and again in 1993.

Although the percentage figures of both men and women qualifying has fallen between 1985 and 1991, it still remains a fact that the ratio of women to men qualifying had slightly increased from 89:100 to 90.5:100.

I leave aside the 1992 and 1993 figures, as they relate to the period after the dismissals, though they confirm the trend already begun in 1989 to 1990 and 1991, and, to that extent, but only to that extent, may be of some relevance in considering whether there is a persistent and constant disparity which is evidence of sex discrimination.

For the purposes of this issue, it is right in my view to leave out of account that before 1985, the qualifying period had been one year and that it has since the relevant period in this case been reduced again to one year. The question is whether, at the relevant times, the discrimination is established on the relevant figures.

The Court of Appeal [1995] I. C.R. 889, 952 were impressed by the fact that in 1985 "there were 370,000 fewer women in the advantaged group than predicted", though no figures are relied on by the Court of Appeal for later years and they do not say whether there were less men in the advantaged group than "predicted". In any event, the European Court of Justice knew of this figure from the Court of Appeal judgment and did not suggest that it was sufficient "on the face of it" to require a finding in respect of 1985 that there was a considerably smaller percentage of women who qualify. In my view, in the light of the numbers quoted by the Divisional Court on which the percentages are based, it is clear that the percentages can be relied on for the purposes of considering this issue in accordance with the judgment of the European Court.

In all the circumstances in the light of the European Court's judgment, I am satisfied that the percentages of those qualifying in 1985 do not establish discrimination, contrary to Article 119 and that the percentages of those qualifying in and leading up to 1991 do not establish discrimination at the time of dismissal. Although the 1985 Order did prevent a higher percentage of women than men from claiming compensation, it cannot be said that it "actually affects a considerably higher percentage of women than men" (paragraph 67 of the European Court's judgment). It would in any event, however much the result could be justified logically, be odd if there was no discrimination in 1985, but in 1991 on a slightly higher percentage of women qualifying (and one as part of a rising trend) there was discrimination.

On these percentages it does not seem to me to be necessary or helpful to consider separately the figures for those who did not qualify.

The fifth question asked what, for the purposes of indirect discrimination, were the legal conditions for establishing the objective justification for a measure adopted by a Member State in pursuance of its social policy and what material a Member State needed to adduce in support of its grounds for justification.

On the basis of my opinion that there was here no indirect discrimination, this question does not fall to be answered. I would accordingly on the indirect discrimination ground allow the appeal, dismiss the cross appeal and restore the Order of the Divisional Court dismissing the application.

LORD GOFF OF CHIEVELEY

My Lords,

I have had the opportunity of reading in draft the opinions of my noble and learned friends Lord Slynn of Hadley and Lord Nicholls of Birkenhead. For the reasons given by Lord Nicholls, I too would allow the appeals.

It is on the first issue in the case, viz. whether the available statistics indicated that a considerably smaller percentage of women than men was able to satisfy the condition of two years' employment, that a difference of opinion has developed between my noble and learned friends; and I think it only right to explain why, on this issue, I prefer the reasoning of Lord Nicholls. It is plain that, having regard to the view expressed by the European Court of Justice (see para. 64 of the judgment of the Court) that the relevant statistics as at 1985, the date when the two-year period was established, did "not appear, on the face of it, to show that a considerably smaller percentage of women than men [was] able to fulfil the requirement", it would not be open to your Lordships now to hold to the contrary. In your Lordships' House, however, it was accepted that the relevant date for present purposes is 1991, and that the central question is therefore whether by that date the statistical evidence had revealed "a lesser but persistent and relatively constant disparity over a long period" between men and women who satisfy the two years' requirement sufficient to satisfy the test that a considerably smaller percentage of women than men satisfied the condition. This test (as to which, see para. 61 of the judgment of the European Court) presupposes that, in the specified circumstances, a lesser disparity is sufficient to establish that a "considerably smaller percentage of women than men" satisfied the two-year requirement. My noble and learned friend Lord Nicholls considers, like the Court of Appeal, that on the statistics in the present case this test is fulfilled.

It is on this point that my noble and learned friends part company, and it is necessary for me to explain why I respectfully prefer the reasoning of Lord Nicholls. First I observe that the European Court did not, as it did in relation to the statistics as at 1985, give guidance as to the conclusion to be reached on the statistics as at 1991. However in para. 61 the Court expressly left it to the national court to determine the conclusions to be drawn from statistics revealing a "lesser but persistent and relatively constant disparity". It follows, in my opinion, that the absence of any guidance from the Court on the conclusion to be reached on the relevant statistics in the present case is consistent with the Court having formed the view that on these statistics the national court was entitled to conclude, if it so wished, that the test was satisfied. Second, and more important, I do not, with all respect, share the understanding of my noble and learned friend Lord Slynn of the passage in which the Court of Appeal expressed their conclusion on this point. They said (see [1995] I.C.R. 889 at p. 953B):

My noble and learned friend concludes that the Court of Appeal were proceeding on the basis that the percentage of women who qualified in the beginning was considerably smaller, and that that considerable difference "continued"; and comments that, if in the beginning that was not so, the conclusion does not necessarily follow. I very respectfully suggest that this is reading too much into the Court of Appeal's judgment. The Court of Appeal stressed that they were impressed by the "persistency and consistency of the figures from 1985 to 1991 inclusive" (see p. 952D). If they had believed that the statistics as at 1985 were sufficient of themselves to justify the considerable disparity, they would doubtless have said so; moreover it would have been unnecessary for them to invoke the persistence and consistency of the figures from 1985 to 1991 unless they considered that, in such circumstances, a lesser disparity over that period would satisfy the "considerably smaller" requirement. It is therefore my understanding that the Court of Appeal regarded the persistence and consistency of the disparity as essential to their decision and so concluded, on the statistics over the period leading up to the dismissals, that (to adopt the words of the European Court) a "lesser but persistent and relatively constant disparity" existed over that long period. I strongly suspect (I can say no more) that the European Court interpreted the Court of Appeal's judgment in the same way.

It follows that, in my opinion, the approach of the Court of Appeal was entirely in accordance with the test laid down in paragraph 61 of the judgment of the Euorpean Court. It is true that the Divisional Court did not reach the same conclusion; but they did not consider the matter, as with hindsight they should have done, in accordance with that test. In these circumstances, I am most reluctant to depart from the finding of fact by the Court of Appeal on this point. In any event, like my noble and learned friend Lord Nicholls, I would unaided have myself reached the same conclusion.

I should add that, on the second issue of objective justification, I find myself to be in agreement with the reasoning and conclusion of my noble and learned friend Lord Nicholls.

LORD JAUNCEY OF TULLICHETTLE

My Lords,

I have had the advantage of reading in draft the speeches prepared by my noble and learned friends Lord Goff of Chieveley and Lord Nicholls of Birkenhead. I agree with them, and for the reasons which they have given I, too, would allow this appeal.

LORD NICHOLLS OF BIRKENHEAD

My Lords,

An employee's right not to be unfairly dismissed by his employer is an established part of the employment law of this country. It was introduced into English law by the Industrial Relations Act 1971, and is now to be found in section 94 of the Employment Rights Act 1996. But this right does not apply to every unfair dismissal. In order to qualify for protection an employee must have been working for his employer for a prescribed minimum period.

The length of the qualifying period has been changed several times. Initially the period was two years, then it became six months, then one year. The period was changed again in October 1980. Under the Employment Act 1980 the period was lengthened from one year to two years in cases of employers employing fewer than twenty employees. On 1 June 1985 the position changed yet again, by virtue of the Unfair Dismissal (Variation of Qualifying Period) Order 1985 (S. I. 1985 No. 782). The effect of this Order was to extend the qualifying period to two years' continuous employment in all cases.

This last change is under challenge in these proceedings. The 1985 Order, on its face, prevented Ms. Seymour-Smith and Ms. Perez from pursuing claims for unfair dismissal against their respective employers. They were both dismissed in 1991, at a time when each had worked for her employer for more than one year but less than two years. Were it not for this Order, the employment tribunal would have had jurisdiction to hear their claims.

Since 1991 the length of the qualifying period has been changed once more. In 1999 the period was reduced to one year: see S. I. 1999 No. 1436. This change applied only where the effective date of termination was after 1 June 1999, so it did not help Ms. Seymour-Smith or Ms. Perez.

The court proceedings initiated by Ms. Seymour-Smith and Ms. Perez have been protracted. The history is summarised in the speech of my noble and learned friend Lord Slynn of Hadley. This further hearing of this appeal to your Lordships' House concerns the impact of European Community law on this legislation. As is well known, article 119 (now re-numbered as article 141) of the E C Treaty enshrines a right of equal pay for equal work. The Court of Justice of the European Communities has now confirmed that a judicial award of compensation for breach of the right not to be unfairly dismissed constitutes pay within the meaning of article 119. The European Court has also held that the conditions governing entitlement to obtain compensation for unfair dismissal fall within article 119. The question which now has to be decided is whether the extension of the qualifying period effected by the 1985 Order was compatible with article 119.

This is not a case of direct discrimination. The 1985 Order drew no distinction between men and women. The contention of Ms. Seymour-Smith and Ms. Perez is that the Order was indirectly discriminatory, because it introduced a qualifying condition which bore more hardly on women than men. Women were treated less favourably than men, because the proportion of women who could comply with the two year qualifying period was smaller than the proportion of men. Before your Lordships two issues arise for decision. The first is whether, at the time of the dismissal of Ms. Seymour-Smith and Ms. Perez in 1991, the 1985 Order did have a disparately adverse impact on women. If it did, the second issue calling for decision is whether the differential impact was objectively justified.

Disparately adverse impact

One of the questions referred by your Lordships' House to the European Court sought guidance on the legal test for establishing whether a measure adopted by a member state has such a degree of disparate effect as between men and women as to amount to indirect discrimination for the purposes of article 119. The view of the European Court is set out in paragraphs 60 to 65 of its judgment: [1999] 2 AC 554, 597-598. These paragraphs are reproduced in the speech of my noble and learned friend Lord Slynn of Hadley. These paragraphs, especially the relationship between paragraphs 60 and 61, were much analysed and debated before your Lordships. The European Court, it was submitted, wavered uncertainly between what must be established as a substantive criterion and the evidence needed for that purpose. In paragraph 60 the court referred to statistical evidence that 'a considerably smaller percentage of women than men is able to satisfy the condition', and treated this as evidence of apparent sex discrimination calling for justification. However, in the next paragraph the court observed that statistical evidence revealing 'a lesser but persistent and relatively constant disparity over a long period' could also be evidence of apparent sex discrimination. In paragraph 61, unlike paragraph 60, the court gave no guidance on the extent of statistical disparity required to establish apparent sex discrimination. Nor did the court spell out, in so many words, how these two approaches fit together. Nor, on its face, does the answer given by the court to the referred question in paragraph 65 leave any room to apply the 'lesser disparity' approach envisaged in paragraph 61.

As I see it, the reasoning underlying these paragraphs is that, in the case of indirect discrimination, the obligation to avoid discrimination does not consist of applying requirements having precisely the same impact on men and women employees. The obligation is to avoid applying unjustifiable requirements having a considerable disparity of impact. In this regard the European Court has adopted an approach similar to that provided in section 1(1)(b) of the Sex Discrimination Act 1975. A considerable disparity can be more readily established if the statistical evidence covers a long period and the figures show a persistent and relatively constant disparity. In such a case a lesser statistical disparity may suffice to show that the disparity is considerable than if the statistics cover only a short period or if they present an uneven picture.

Having set out the applicable principles, the European Court addressed the facts in the present case. In doing so the court focused exclusively on the 1985 statistics: see paragraphs 62 to 65. This may have been because the court had foremost in mind the contention that the making of the 1985 Order was ultra vires. The relevant date for the purpose of deciding that issue was 1985, being the date when the Order was made. The 1985 statistics showed that 77.4 per cent. of men and 68.9 per cent. of women satisfied the extended qualifying period introduced by the 1985 Order. The court commented that, on its face, those statistics did not appear to show that a considerably smaller percentage of women than men was able to fulfil the extended requirement. In its formal answer to the referred question in paragraph 65, the court repeated the considerably smaller percentage test already stated in paragraph 60. However, I cannot believe that in doing so the court intended to repudiate the approach stated in paragraph 61. Nor do I think this can be taken as an indication by the court that the paragraph 61 approach was inapplicable in this case if a date later than 1985 was the appropriate date.

Before your Lordships it was common ground that 1991, not 1985, was the relevant date for the purpose of the issue now being considered. The position at this later date was not considered by the European Court. I turn to the available statistics, covering the period from 1985 to 1993, extracted from the annual labour force surveys.

Year	Percentage of men with more than 2 years	Percentage of women with more than 2 years	Disparity
1985	77.4	68.9	8.5
1986	77.2	68.4	8.8
1987	75.3	67.1	8.2
1988	73.4	65.6	7.8
1989	72	63.8	8.2
1990	72.5	64.1	8.4
1991	74.5	67.4	7.1
1992	77.9	72.1	5.8
1993	78.4	74.1	4.3

These figures show that over the period of seven years, from 1985 up to and including 1991, the ratio of men and women who qualified was roughly 10:9. For every ten men who qualified, only nine women did so. This disparity was remarkably constant for the six years from 1985 to 1990, but it began to diminish in 1991.

These figures are in borderline country. The question under consideration is one of degree. When the borderline is defined by reference to a criterion as imprecise as 'considerably smaller' it is inevitable that in some cases different minds may reach different conclusions. The decisions of the two courts below illustrate this. My own impression differs from the majority of your Lordships. I find myself driven to the conclusion that a persistent and constant disparity of the order just mentioned in respect of the entire male and female labour forces of the country over a period of seven years cannot be brushed aside and dismissed as insignificant or inconsiderable. I agree with the Court of Appeal that, given the context of equality of pay or treatment, the latitude afforded by the word 'considerably' should not be exaggerated. I think these figures are adequate to demonstrate that the extension of the qualifying period had a considerably greater adverse impact on women than men.

The reduction in the disparity, which started in 1991, continued in 1992 and 1993. By 1993 the ratio of men and women qualifiers was about 20:19. But, looking at the overall picture, I do not think the diminished disparity after 1991 is sufficient to displace the message of the figures for the earlier years. Accordingly it is for the government to show that the extension of the qualifying period was justified, to use the accepted nomenclature, by objective factors unrelated to any discrimination based on sex. On this issue I agree with the Court of Appeal.

Qualifiers and non-qualifiers

Before turning to justification I must mention a point which was debated before your Lordships. In paragraph 59 of its judgment the European Court described the approach which should be adopted to the comparison of statistics:

This statement appears to envisage that two comparisons should be made: a comparison of the proportions of men and women able to satisfy the requirement ('the qualifiers'), and a comparison of the proportions of men and women unable to satisfy the requirement ('the non-qualifiers'). Thereafter in its judgment the court considered only the proportions of men and women who were qualifiers.

Some of the ramifications involved in looking at the composition of the disadvantaged group, as well as the composition of the advantaged group, were explored by the Divisional Court and the Court of Appeal in the present case. Suffice to say, I do not understand the European Court to have rejected use of the figures relating to the non-qualifiers in a suitable case. Indeed, the European Court has looked at the composition of the disadvantaged group in several cases, although in none of them was there an issue on this point: see, for instance, Bilka-Kaufhaus GmbH v. Weber von Hartz (Case 170/84) [1987] ICR 110, 125, paragraph 31, Nimz v. Freie und Hansestadt Hamburg (Case C-184/89) [1991] E.C.R. 1-297, 319, paragraph 12, and Kowalska v. Freie und Hansestadt Hamburg (Case C-33/89) [1990] E.C.R. 1-2591, 2611, paragraphs 13-16. Having regard to the conclusion I have expressed above on the issue of disparate impact, it is unnecessary to reach a firm conclusion on this point. I prefer to leave this question open for another occasion.

Objective justification: the introduction of the 1985 Order

Objective justification falls to be determined as at 1991. That was the date when the 1985 Order was applied to the two claimants and, in consequence, they were disqualified from making claims for unfair dismissal. But objective justification cannot be assessed in 1991 without regard to how the situation in 1991 came about. Thus, in the present case, objective justification has to be approached in two stages. The first stage is to consider whether the government was justified in introducing the 1985 Order. This calls for examination of the factual position in 1985. The second stage is to consider whether the government was justified in keeping the Order in force six years later. This involves consideration of the position from 1985 to 1991.

The Divisional Court and the Court of Appeal [1995] I.C.R. 889 held that the Secretary of State had failed to discharge the burden of proving that the 1985 Order was objectively justified. In reaching this conclusion the test applied by both courts was whether the Order was shown to be a suitable and requisite means to achieve the admittedly legitimate aim of encouraging employment. Thus, the test applied by the Court of Appeal was whether the threshold of two years had been 'proved to result' in greater availability of employment than would have been the case without it. The Court of Appeal declined to incorporate into this formulation any margin of appreciation: see [1995] I.C.R. 955.

The answer given by the European Court to the fifth question referred to the court by this House ([1999] 2 AC 554, 599) has now shown that this test was too stringent. The burden placed on the government in this type of case is not as heavy as 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 European Court 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 proceeding in 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.

There is no difficulty with the first two requirements. The object of the 1985 Order was to encourage recruitment by employers. This was a legitimate aim of the government's social and economic policy, and this aim was unrelated to any sex discrimination. Whether the third requirement was satisfied in 1985 is more debatable. In March 1985 the Secretary of State, Mr. Tom King, stated with regard to the proposed change in the qualifying period:

The relevant question is whether the Secretary of State was reasonably entitled to consider that the extension of the qualifying period should help reduce the reluctance of employers to take on more people.

This question raises an issue of fact, to be decided on the basis of the extensive documentary evidence adduced by the parties. The Secretary of State relied on several reports. These are itemised in the judgment of Balcombe L.J. at [1995] I.C.R. 907F-H. One report, 'Burdens on Business', was published by the Department of Trade and Industry in March 1985. This report identified, as one of the available options, increasing employees' qualifying periods in unfair dismissal cases from one year to two years in firms employing more than twenty employees:

This is the high watermark of the Secretary of State's evidence. I think it is fair to say that overall, echoing the words of Balcombe L.J., these reports indicated that various small percentages of employers considered that employment protection legislation in general, and the provisions relating to unfair dismissal in particular, might inhibit the recruitment of employees.

On balance, I consider the Secretary of State discharged the burden of showing his view was reasonable. It is apparent that obtaining hard evidence, including evidence of employer perceptions, is essentially a difficult task in this field. But this is not a case of a mere generalised assumption, as occurred in Rinner-Kuhn v. F.W.W. Spezial-Gebaudereinigung GmbH & Co. K.G. (Case 171/88) [1989] E.C.R. 2743. Here, there was some supporting factual evidence. To condemn the minister for failing to carry out further research or prepare an impact analysis, as recommended in 'Burdens on Business', would be unreasonable.

Objective justification: the continuing operation of the 1985 Order

The requirements of Community law must be complied with at all relevant times. A measure may satisfy Community law when adopted, because at that stage the minister was reasonably entitled to consider the measure was a suitable means for achieving a legitimate aim. But experience of the working of the measure may tell a different story. In course of time the measure may be found to be unsuited for its intended purpose. The benefits hoped for may not materialise. Then the retention in force of a measure having a disparately adverse impact on women may no longer be objectively justifiable. In such a case a measure, lawful when adopted, may become unlawful.

Accordingly, if the government introduces a measure which proves to have a disparately adverse impact on women, the government is under a duty to take reasonable steps to monitor the working of the measure. The government must review the position periodically. The greater the disparity of impact, the greater the diligence which can reasonably be expected of the government. Depending on the circumstances, the government may become obliged to repeal or replace the unsuccessful measure.

In the present case the 1985 Order had been in operation for six years when the two claimants were dismissed from their jobs. The Divisional Court and the Court of Appeal noted there was no evidence that the extension of the qualifying period in 1985 led to an increase in employment opportunities. Ought the government to have taken steps to repeal the 1985 Order before 1991? In other words, had the Order, lawful at its inception, become unlawful by 1991?

Here again, the matter is debatable. As time passed, the persistently adverse impact on women became apparent. But, as with the broad margin of discretion afforded to governments when adopting measures of this type, so with the duty of governments to monitor the implementation of such measures: the practicalities of government must be borne in mind. The benefits of the 1985 Order could not be expected to materialise overnight, or even in a matter of months. The government was entitled to allow a reasonable period to elapse before deciding whether the Order had achieved its objective and, if not, whether the Order should be replaced with some other measure or simply repealed. Time would then be needed to implement any decision. I do not think the government could reasonably be expected to complete all these steps in six years, failing which it was in breach of Community law. The contrary view would impose an unrealistic burden on the government in the present case. Accordingly I consider the Secretary of State discharged the burden of showing that the 1985 Order was still objectively justified in 1991.

I too would allow this appeal.

LORD STEYN

My Lords,

I have had the advantage of reading the speech of my noble and learned friend, Lord Slynn of Hadley. I agree with it. I would also make the order which Lord Slynn of Hadley proposes.