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Direct or Indirect Discrimination – a Tribunal Mix-Up

The Employment Tribunal in Lasdas v Vanquis Bank plc incorrectly concluded that the claimant had brought a claim for direct discrimination – but how do you distinguish between direct discrimination and indirect discrimination?

While “discrimination” is often used as a blanket term to describe a variety of different employment claims, it is important to distinguish between direct discrimination and indirect discrimination.

Direct discrimination occurs where a person is treated less favourably than others because of a protected characteristic, such as their race, sex, disability, or sexual orientation. For example, if a person with a disability was repeatedly passed over for a promotion because of their disability, that would be direct discrimination.

Indirect discrimination is more concerned with general policies or practices which, while not intended to treat anyone less favourably, have the effect of disadvantaging people with a particular protected characteristic. An example of this might be an employer requiring that all employees work full-time – this might put women at a disadvantage, as women in society are generally expected to take on more of the burden of childcare responsibilities.

In Lasdas v Vanquis Bank plc, Vanquis Bank made an offer of employment to Mr Lasdas, subject to him passing background checks. As part of these checks, Vanquis Bank asked its recruitment agency, Rethink, to obtain credit rating checks from Experian. Experian refused to give a report, on the grounds that Mr Lasdas’ Greek ID was not an acceptable form of identification. Consequently, Vanquis Bank withdrew the job offer.

Mr Lasdas, without legal representation, brought claims of race discrimination against Vanquis Bank and Rethink, arguing that the refusal to accept his Greek ID amounted to discrimination based on nationality. Crucially, he did not specify whether this was direct or indirect discrimination.

After a preliminary hearing, the Employment Tribunal found that Mr Lasdas’ claims against each of Vanquis Bank and Rethink were claims of direct race discrimination. On the basis that Mr Lasdas had little chance of success with these claims, the Tribunal made a deposit order, requiring Mr Lasdas to deposit a sum of money with the Tribunal as a condition of continuing the claim. When Mr Lasdas failed to make this deposit, his claims were struck out. Mr Lasdas appealed to the Employment Appeal Tribunal (EAT).

The EAT found that the Tribunal was wrong to characterise Mr Lasdas’ claims as direct discrimination claims. The Tribunal had adopted a “technical construction” of the words used by Mr Lasdas in his claim form and had found that the words “discrimination on the basis of nationality” meant that Mr Lasdas intended to bring direct discrimination claims.

The EAT explained that the Tribunal should have instead considered what had occurred in practice, rather than being beholden to the claim form wording – Vanquis Bank and Rethink had applied a practice of requiring all employees to pass Experian’s checks, which had the effect of indirectly discriminating against Mr Lasdas due to his only having Greek ID. As the deposit order was based on the Tribunal’s mischaracterisation of Mr Lasdas’ claims, this was overturned along with the strike out for non-payment.

This case illustrates what can sometimes be a narrow distinction between direct and indirect discrimination – it is quite easy to see how the Employment Tribunal could have felt that Mr Lasdas was arguing that Vanquis Bank and Rethink had treated him less favourably because he was Greek. This is one of the reasons why claimants will often bring multiple claims to the tribunal, to ensure that at least one of these catches the employer’s actions.

This case also demonstrates why obtaining legal representation might be advisable when bringing tribunal claims, to ensure that you accurately state your claims in your claim form, and to avoid any misinterpretation by the presiding tribunal. However, it should also serve as a warning to employers that tribunals can be somewhat sympathetic towards unrepresented litigants in person and may construe the wording of claim forms in a way that will ensure that claimants bring the claims they should be bringing – a poorly worded claim form from an unrepresented claimant may not be the saving grace that some employers think it is!

If you would like assistance with defending a tribunal claim, or you require legal advice regarding managing, disciplining, or dismissing your employees, please get in touch at [email protected]