Dr Michael Connolly is a Reader in Law at Portsmouth Law School. The author would like to thank Panos Kapotas and James Hand for their valuable comments in earlier drafts of this post.
1 Case 170/84 Bilka-Kaufhaus v Weber von Hartz  ECR 1607. See JA Lane, R Ingleby, ‘Indirect discrimination, justification and proportionality: are UK claimants at a disadvantage?’ (2018) 47(4) ILJ 531; and M Connolly, ‘Objective Justification, Less Discriminatory Alternatives, and the “Great Repeal Bill”’ (2017) 17 (3) IJDL 195.
2 In some ways, article 157 TFEU (‘single source of pay’) exceeds EA 2010, s 79(9) (allowing equal pay comparisons with ‘associated employers’. See Case C-43/75 Defrenne v Sabena (No.2),  ICR 547,  and South Ayrshire Council v Morton  ICR 956 (CSIH).
3 EU (Withdrawal) Act 2018, s 6(5). This is the Supreme Court's rule for overruling its own decisions: Practice Statement (Judicial Precedent)  1 WLR 1234 (HL); This practice transferred to the Supreme Court by Constitutional Reform Act 2005, s. 40. See Austin v Southwark London Borough Council  1 AC 355 (SC) . The Court of Appeal was added by the European Union European (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020 SI 2020/1525, reg 3, and can depart from EU law on the same basis (ibid reg 5). There is a similar provision for Scotland's High Court of Justiciary (EU (Withdrawal) Act 2018, s 6(5)).
4 Although the qualification period to acquire Unfair Dismissal rights was extended from 1 year to 2 years in 2012: 2012 SI 2012/989.
5 The Coalition Government proposed abolishing this, but recanted following consultation. Business was in favour of its retention because of the certainty it gave. See, BIS, ‘Government Response top Consultation’ (Sept 2013), p . 8.
The UK and EU has published the Trade and Cooperation Agreement (TCA), a summary (UK Government) and an explanatory brochure (EU Commission). In general, in exchange for tariff free access to the single market, the parties have agreed to maintain a ‘level playing field’.
For employment, this means that UK employers should not be able to lower employment rights and costs. This prevents them from gaining an unfair competitive advantage over EU businesses. This is achieved for Northern Ireland in a quite straightforward way, as it continues to be bound by EU law as before. The matter is more nuanced for the rest of the UK (‘Britain’).
By a ‘non-regression’ clause, Britain agreed not to reduce employment rights below the standards existing on 31 December 2020, but only if this affects trade or investment. Britain may diverge from EU employment laws but the EU may apply ‘rebalancing measures’ if it obtains proof of a material impact on trade or investment. This requires more than just conjecture or a theoretical possibility.
Commitment not to reduce employment rights
This ‘non-regression’ clause (TCA, Pt 2, Title X1, art 6.2) is not subject to the Agreement’s main dispute resolution mechanism. Instead, a panel of experts will decide whether either party has fallen short of this commitment. This means the European Court of Justice (ECJ) no longer has a direct role in Britain’s employment law. Nonetheless, the EU can still challenge legally any weakening of Britain’s employment rights, providing it has a material impact on trade or investment, material proof which would be required. This is a higher bar than what would have been the case before 2021, where the EU would only have to show an inconsistency between its law and UK law, typically this is where the UK has failed to implement fully an EU Directive. (See e.g. Case C-61/81 Commission v UK, on a failure to provide for equal value pay claims; Case C-165/82 Commission v UK, on the SDA 1975 not covering non-binding collective agreements, nor employers with fewer than six employees). If an EU challenge succeeds, it may introduce ‘rebalancing measures’, which include tariffs.
Existing ‘Retained’ EU Law
EU employment law made before 1 January 2021 was converted into domestic UK law, and will be known as Retained EU Law. It will continue in force as before. (EU (Withdrawal) Act 2018, s 7) Some subtleties lie in what the tribunals and courts might do, which are considered below.
- If a tribunal or court finds that existing domestic legislation falls short of this Retained EU Law, it may well find it has to read words into the legislation to conform with a pre-existing ECJ decision. This has not been unusual, see e.g. Falkirk Council v Whyte  IRLR 560 (EAT); Rowstock v Jessemey  1 WLR 3615 (CA) [45(5)]. Prior to Brexit, courts felt compelled to follow EU law and afforded themselves ‘broad and far-reaching’ discretion to read words into, or out of, non-compliant domestic legislation: Vodafone 2 v Revenue and Customs Commissioners  Ch 77 (CA) . This could have the effect of EU and UK law converging, rather than diverging. Examples could include the objective justification defence in the Equality Act 2010 (ss 19 & 69) which (arguably) falls short of the strict Bilka necessity test,1 and for equal pay liability where there is a ‘single source of pay’.2
- The Supreme Court and Court of Appeal can choose not to follow pre-2021 ECJ decisions if it ‘seems right to do so’.3 It is likely that only a dramatic decision would be enough to diverge from EU law to such a degree that it affects materially trade or investment, and so invoking rebalancing measures.
- ‘Any question as to the validity, meaning or effect of any retained EU law is to be decided …(a) in accordance with any retained case law and any retained general principles of EU law…’. (EU (Withdrawal) Act 2018, s 6(3)). The general principles of EU law are retained, although not the Charter of Fundamental Rights (EU (Withdrawal) Act 2018, ss 6(7), 5(4) respectively).
New ECJ Decisions
The starting point is that courts, and employment tribunals (ET), are no longer bound to follow new ECJ decisions (issued in 2021 and beyond) but may have regard to them (as well as ‘another EU entity or the EU’) where relevant (EU (Withdrawal) Act, ss 6(1) and (2)). The phrase ‘where relevant’ replaced the proposed phrase ‘where appropriate to do so’, which was criticised by the then President of the Supreme Court, Lord Neuberger, for lacking clarity. The new phrase does not appear any more concrete. After all, a tribunal is hardly likely to consider irrelevant decisions, while the whole matter remains optional (‘may have’).
Nevertheless, the ‘may have regard’ facility could cause disputes in any employment tribunal case on a topic where the ECJ hands down a new and potentially relevant judgment. One side might argue that it should be taken into account to maintain conformity, with the other side arguing that the tribunal is not obliged to do this. This argument could become bogged down in economic matters of the material effect on trade and investment and the risk of a decision triggering rebalancing measures. However, there are two reasons why this may not occur. First, arguments are likely to be speculative, when the trigger for divergence requires material evidence of the effect. Second, this is a policy matter that the tribunal (or court) may consider beyond its jurisdiction, and better addressed by Parliament.
New EU Employment Directives
Britain is free to ignore any new EU Directives, but, once again, if a failure to implement a Directive results in a significant divergence that materially impacts trade and investment, the EU may instigate rebalancing measures. There are three new EU employment Directives due to be implemented over the next two years. The UK is largely compliant with these. They concern Whistleblowing (Directive 2019/1937/EU, due for implementation by 17 December 2021 (art 26)), Transparent and Predictable Working Conditions (Directive 2019/1152/EU, 1 August 2022 (art 21)), and Work-Life Balance for Parents and Carers (Directive 2019/1158/EU, 2 August 2022 (art 20)). The EU Commission has proposed a Minimum Wage Directive (COM/2020/682 final), which would seek to align processes and implementation of a minimum wage, but not the amount paid. Again, the UK is largely in compliance already.
Employment rights that could be repealed without breaching the TCA
Some employment rights exist irrespective of EU membership, and so the UK is free to repeal them. Indeed, many were repealed in 2013 by the Coalition Government in an attempt to reduce business ‘red tape’ (see e.g. Enterprise and Regulatory Reform Act 2013). Significant rights surviving that reduction are Unfair Dismissal4 and the TUPE rights that extend to Service Provision Changes (enabling employees’ rights to be transferred when services are contracted out).5 Providing the EU does not legislate in these areas, there is nothing in the TCA to prevent the repeal of these rights.
On 19 February 2021 the European Commission published two draft adequacy decisions for transfers of personal data from the European Union to the United Kingdom (one under the General Data Protection Regulation (GDPR) and one under the Law Enforcement Directive (LED)).
The publication of the two draft adequacy decisions was the result of months of assessment of UK law and regulation regarding personal data by the European Commission, and the Commission’s conclusion that the UK’s domestic data protection framework guarantees an essentially equivalent level of data protection to that provided by the GDPR and the LED.
If approved, this would allow for personal data to continue to be transferred between the UK and the EU for both commercial and law enforcement purposes.
The draft adequacy decisions will now be reviewed by the European Data Protection Board (EDPB) and representatives of EU Member States before the European Commission is then given the opportunity to formally adopt them.
Why is adequacy important?
Following Brexit (i.e. the UK withdrawing from the European Union on 31 January 2020) and the end of the Brexit transition period (on 31 December 2020) the UK is now a “third country” for the purposes of the GDPR (i.e. a country that is not an EU Member State). As part of the UK-EU post-Brexit Trade and Cooperation Agreement, both sides agreed to treat the UK de facto as an EU Member State for the purposes of data transfers for a period (i.e., up to 6 months). Following the expiration of this additional period, data transfers from the EU to the UK will be prohibited unless the GDPR rules on data transfers are observed.
The GDPR provides that transfers of personal data from within the EU to third countries (i.e. transfers to outside the EU) are generally prohibited unless certain conditions regarding the protection of personal data are met. (Art.44 GDPR)
Significantly, as per Chapter 5 of the GDPR, transfers of personal data from the EU to the UK will only be permissible if one of the following criteria are met:
- The UK is deemed to have an “adequate” system of law and regulation for the protection of personal data that provides “essentially equivalent” standard of protection to the GDPR, and is formally accepted as an “adequate” third country by the European Commission (i.e. the UK is given an “adequacy decision”. (Art.45 GDPR)
- Recipient data controllers in the UK have established “appropriate safeguards” for any personal data received from the EU. For instance, transfers of personal data from the EU to the UK might be undertaken on the basis of binding corporate rules (BCRs) or standard contractual clauses (SCCs) issued by the European Commission which guarantee compliance with the substantive terms of the GDPR. (Art.46 GDPR)
- A derogation to the GDPR’s general international transfer restriction applies. For instance, where the transfer is necessary for the performance of a contract. (Art.49 GDPR)
The first of these three options would be by far the most advantageous and uncomplicated way forward. The adoption of an adequacy decision for the UK would create legal certainty and allow personal data to continue to flow between the EU and the UK without the need for any additional requirements or transfer mechanisms. The European Commission has already granted adequacy decisions to a range of non-EU countries, such as Japan, New Zealand, Switzerland and Uruguay, and negotiations are ongoing with South Korea.
The alternative, making transfers based on “appropriate safeguards”, would not be an optimum solution for many UK-based firms whose business involves or relies on transfers of data with the EU. BCRs require regulatory approval and can be extremely resource-intensive to construct and maintain. SCCs are unwieldy and inflexible and cannot be changed or adapted for specific needs or circumstances. More importantly, when determining the level of protection afforded by SCCs, the Court of Justice of the European Union held in Schrems II decision that if there are indications that surveillance regime of a third country may impact the effectiveness of ‘appropriate safeguards’ (see ‘European Essential Guarantees’ as issued by EDPB when assessing a surveillance regime), ‘supplementary measures’ must be adopted by data exporter and data importer (see the EDPB Guidance on supplementary measures). Transfers made on the basis of derogations are also not a viable long-term option, given how these are not intended to be used to justify regular or repeated transfers of data.
The upshot of all this is that if the UK were not to be granted an adequacy decision this would likely result in significant financial and administrative burdens for UK and EU firms whose operations rely on the smooth exchange of personal data with data controllers and data subjects in the EU. It would also likely be significantly disadvantageous to the maintenance of close trade ties between the UK and the EU more generally.
Similar data transfer rules can be found in LED when data transfer is sought for law enforcement purposes (Arts 35-40 LED). Any obstacle to information sharing for law enforcement purposes post-Brexit has been considered a threat to public safety in the UK and the UK government has been adamant to emphasise the importance of continuity of information exchange that would be built on an adequacy decision since it first set out the future partnership prospects post-Brexit. If approved, the draft adequacy decision on data transfer for law enforcement purposes would enable information sharing that is vital for the protection of public security and the UK-EU cooperation in criminal matters. Specific arrangements would still have to be made for the UK’s continued participation in a number of most significant EU databases, on top of a future UK adequacy decision, because there is no precedent for allowing access to some databases such as Schengen Information System and European Criminal Records Information System, from outside the EU (see the discussion on each database). Nevertheless, the prospect of an adequacy decision for the databases where there is a precedent for EU information sharing with a third country, such as Passenger Name Records data, is essential.
Looking to the future
As noted above, the publication of the draft adequacy decisions highlights the belief of the European Commission that the standard of protection established by the UK’s data protection framework, notably the Data Protection Act 2018, are “essentially equivalent” to those that apply in the EU under the GDPR. The confirmation and adoption of these proposals would help to bring certainty for many firms whose business models are constructed around the acquisition and processing of personal data, and those who because of Brexit have been left in a position of uncertainty regarding whether and when transfers of personal data to or from the EU will or will not be lawful. This is not a merely academic problem. As noted elsewhere, uncertainty regarding whether the European Commission would grant the UK an adequacy decision has forced some companies to postpone or abandon data innovation projects in order to save resources in anticipation of an adequacy decision never materialising. Though the proposed decisions still require approval and adoption, they are a cause for optimism for UK firms who rely on exchanging personal data with parties in the EU.
It is important to note, however, that even if the proposed adequacy decisions are adopted, this will not necessarily be the end so far as complications linked to EU/UK transfers of personal data are concerned. First and foremost, adequacy decisions are not permanent. They are subject to re-examination every four years and can be revoked at any time. Whilst the UK has committed itself to following the GDPR for the foreseeable future, following Brexit it now has the legislative freedom to diverge from EU data protection rules. In theory, this will include the ability to establish lower data protection standards than those that are currently demanded by the EU/GDPR. This is a possibility that is now being discussed and considered by some observers.
Were this to occur, and the UK adopted standards of data protection drastically different to the minimum required under the GDPR it is likely that any adopted adequacy decision would be revoked by the European Commission.
There is also a risk that, assuming the proposed adequacy decisions are confirmed and adopted, their validity may be subject to legal challenge. In the Schrems II case the CJEU invalidated the “Privacy Shield” partial adequacy decision awarded to the USA by the European Commission in 2016. This decision was taken on the basis that, in the view of the CJEU, the limitations on the protection of personal data arising from the USA’s domestic laws on the access and use of personal data transferred from the EU to the USA by US public authorities were not circumscribed in a way that satisfied the requirements that were essentially equivalent to those required under EU law (i.e. the GDPR). Put simply, the CJEU declared the Privacy Shield adequacy decision to be void as US law could not be guarantee the prevention of personal data of individuals transferred to the USA from the EU being disproportionately exposed to, and caught up in, the USA’s invasive surveillance initiatives. If an adequacy decision is awarded to the UK, there is a chance it may suffer the same fate as the US Privacy Shield. In a Tweet posted on 19 Feb, Max Schrems, the privacy activist behind the Schrems II litigation, hinted at the possibility of a legal challenge being made in respect of any future UK adequacy decision due to the invasive nature of surveillance initiatives of the UK government.
Is (In)Adequacy Evitable?
Certainly, UK surveillance regime has had its fair share of legal challenges both before the European Court of Human Rights (ECtHR) and the CJEU. In Big Brother Watch v UK, the Chamber of the ECtHR found parts of UK surveillance law on indiscriminate collection of metadata through automated selection process unlawful under the European Convention on Human Rights. This decision by the Chamber was followed by the CJEU’s Privacy International decision, where the Court considered that compelling by law communication service providers to forward data to security and intelligence agencies was unlawful under EU law. Both of these judgments have mobilised criticisms from commentators that UK law does not provide ‘essentially equivalent protection’ to personal data (see here and here). UK surveillance law is not the only reason that commentators argue for the UK’s (in)adequacy for personal data protection. The immigration exemption under the UK Data Protection Act 2018 according to which the government can restrict access to personal information (despite the High Court decision upholding the exemption), the UK-US arrangements on access to personal data which may allow easy access for US authorities to access to EU data citizens’ data when held in the UK, and the UK’s membership of the Five Eyes intelligence sharing are the other concerns for the UK’s data protection standards. Indeed, the two draft adequacy decisions have already been scrutinised and criticised for failing to address those concerns.
For now, however, all eyes are on the EBPD for its opinion on the proposals of the European Commission. Watch this space.
With the consumer credit market now saturated by online and payday lenders, it was perhaps no surprise when the Japanese-owned company Speedloan Finance abruptly announced that it was closing high street pawnbrokers Albermarle & Bond and Herbert Brown. The decision to close the 116 UK stores was reportedly due to significant losses.
The closure is more bad news in what’s already been a hard year for the pawnbroking industry, with The Money Shop also announcing its closure. While pawnbroking was once thought to be a business that always did well in hard times, the industry has seen a decline largely due to competition from online and payday lenders, who offer easy access to short-term credit (although usually at a very high cost). The recent decline in gold’s value has also been a blow.
Although pawnbrokers don’t offer the most competitive credit rates, and clients do run the risk of losing cherished or sentimental items, the value they still have can’t be overlooked. While high street pawnbrokers might seem like a relic of days past, today, perhaps more than ever, they provide access to credit for borrowers who otherwise struggle to access mainstream lending.
Simple and straightforward
Getting a loan from a pawnbroker is simple, straightforward, and unique among most other loan schemes. People wishing to take out a loan give a valuable item (known as a “pledge”) to the pawnbroker. Pledged items can be anything, but are typically jewellery, clothing or antiques
The pawnbroker values the pledge and agrees to lend the customer part of its value (typically around half the market value) over an agreed period of time. The customer can redeem the loan at any time during the loan period and have their pledge returned.
If the loan isn’t repaid by the deadline, the pawnbroker can sell the item, returning any excess funds above the outstanding loan amount to the customer. Unlike a payday loan arrangement, these loans can be settled quickly without consumers building up impossible levels of debt.
Although borrowing from a pawnbroker is fast and convenient, it isn’t the cheapest form of credit. Interest accrues daily, between 5-10% a month. High street banks might charge the same rate over a year. However, pawnbrokers offer a much better rate than payday lenders, whose annual interest rate can be anything up to 100%. The main advantage for using a pawnbroker is that because the loan is secured on goods, there’s no need for a credit check.
In the UK, pawnbroking is regulated by the Financial Conduct Authority (FCA). This means pawnbrokers have to meet and maintain strict standards of solvency and conduct, and that consumers who feel they haven’t been treated fairly aren’t left without a remedy. Consumers entering into a credit agreement with a pawnbroker are entitled to a 14-day cooling off period – which allows them to change their mind and walk away from the contract without a penalty up to 14 days from signing – just as borrowers from any other regulated business.
Under FCA rules, all authorised lenders offering unsecured access to cash – whether via a credit card, loan or overdraft – must conduct a creditworthiness assessment of the customer. The assessment is a key component of responsible lending and is designed to ensure that consumers don’t borrow more than they can manage to repay. However, pawnbrokers aren’t required to do creditworthiness assessments because their credit is tied to a valuable item.
Creditworthiness assessments used to be done via an interview with the local bank manager. Increasingly, these assessments are now conducted online using highly sophisticated software driven by artificial intelligence (AI). These assessments are found to be much more accurate than traditional models in predicting defaults.
AI assessments may take into account thousands of data points on a single consumer, harvesting information not only from bank statements and payslips, but also from social media, shopping habits and online browsing history. Because the algorithms used to assess a consumer’s creditworthiness are generated by AI, very often the lender itself is unaware of the criteria being used to assess a consumer. The conduct of the assessment may have a serious impact on financial inclusion for marginalised consumers.
Although regulations state that a creditworthiness assessment must be made, there are no clear guidelines on how the assessment should be conducted. Clearly, a thorough assessment of a consumer’s financial status is important not only to protect the consumer and lender, but also to avoid a repeat of the credit crunch of 2007-8 and the ensuing financial crisis.
However, assessments that are too restrictive may actually distort the market by unfairly discriminating against certain groups of consumers. An assessment based on the customer’s documented financial history, by reviewing bank statements and payslips, will automatically reject applicants who have never or only recently opened a bank account, or those who can’t provide proof of stable employment.
Although such applicants might represent a high risk for lenders, they may in fact be at low risk of default – some might have a thin credit history because they’re young, a recent immigrant, or employed on a zero-hours basis.
Many lenders now operate a rate-for-risk pricing model where the cost of credit is linked to the outcome of the creditworthiness assessment. Even if a high risk consumer is accepted for credit, they’ll typically be charged a higher interest rate because of the perceived risk resulting from the assessment. On the other hand, consumers who are rejected by mainstream lenders have few choices other than to borrow from friends and family, or to go without needed items.
This is where pawnbroking has a crucial role to play. Although it’s expensive and carries a risk of losing loved or sentimental items, it also offers several important advantages over payday lending.
For consumers whose credit histories (or lack thereof) would exclude them from mainstream credit sources, such as those without bank accounts, pawnbrokers represent a lifeline in terms of access to affordable credit – especially where that credit is used as a means of smoothing short term cash flow.
One of the FCA’s own criteria for a functioning credit market is inclusivity. Far from being obsolete, the pawnbroker is vital in combating financial exclusion. If the collapse of Albermarle and Bond is an indicator of an industry in decline, consumers who are excluded from mainstream credit will have fewer alternatives than ever.
On 13 June, 2019, the Vice-Chancellor gave staff and students the opportunity to make nominations for an award in recognition of an exceptional contribution to the university and local community.
The law in practice team was recognised for giving students the opportunity to provide free quality legal advice to the local community, providing those students with essential skills and helping the not for profit sector in Portsmouth fill the gap following legal aid reforms. Students, on successful selection, undertake the law in practice unit in level 6. It is a 40 credit unit, and requires a commitment of at least 100 hours in either the general legal advice or small claims clinic, together with 3 assessment pieces.
The awards attracted over 130 applications, and 14 winners were selected, a mixture of individuals and teams, staff and students.
The Ministerial and other Maternity Allowances Bill is designed, in the words of the Prime Minister’s Written Statement, to remedy the wrong of having to choose between “taking leave to recover from childbirth and care for a new-born child or resigning from office” which is clearly “not acceptable in modern times”.
The Paymaster-General, introducing the Bill in the House of Commons, while acknowledging it “is specific and limited in its aims” (col. 558), hailed it as “a landmark measure” (col. 526) making “an important and long overdue change to the law, enabling Ministers for the first time to take paid maternity leave from their job for an extended period” (col. 558). While some change is necessary, neither statement in isolation, accurately represents the Bill which has been unnecessarily rushed through Parliament and leaves many matters for later determination.
As may be expected from its name, the Bill focuses on the mechanism for pay rather than leave and on maternity rather than the more casually accommodated paternity leave or the more complex shared parental and adoption leave. The reason for fast-tracking the Bill, all three stages in the House of Commons having taken place on one day, is stated in the Explanatory Notes to be due to “a specific individual case of a female holder of an individual ministerial office wishing to take maternity leave [and w]ere the Bill not to get Royal Assent swiftly, this individual would lose out on the benefits provided by the Bill” (note 26). This need for speed is given as the reason why it is limited in focus. However, given the special status of the individual, a more tailored Bill could have been passed if necessary, allowing greater time for consideration of the Bill’s approach and of a more comprehensive package.
It is not the case that maternity leave for ministers has not been available in the past. As noted by the Prime Minister in his written statement, he made changes to the Ministerial Code on taking office in 2019 regarding maternity leave and other extended absence. Para 4.11 of the code states:
It is not the case that ministers have not taken paid maternity leave before that. In 2001, Yvette Cooper took paid maternity leave in line with Department of Health guidelines (following discussion with her Secretary of State) which provided then for 18 weeks paid leave. That is not an isolated example: Meg Hillier took paid leave in 2009 from the Home Office, Chloe Smith took six months leave from the Cabinet Office in 2019 and Kemi Badenoch was reshuffled from Education to the Treasury while on leave in 19/20.
It is also not the case that the Act will provide a right for ministers to take maternity leave – it remains at the discretion of the Prime Minister – and, under the terms of the Act, ministers must in fact leave their post and take up a new office as Minister on Leave, s.1(2)(b) holding that “the person ceases to hold a ministerial office (“the first ministerial office”) but remains a member of Her Majesty’s Government in the United Kingdom by virtue of immediately being appointed to another ministerial office (“the designated ministerial office”) for the purposes of being designated under this section.”
The rationale for this is that the caps on salaries and numbers of ministers under the Ministerial and Other Salaries Act 1975 (which limits the number of paid ministers (and the like) to 109) and the House of Commons Disqualification Act 1975 (which limits the number of ministers (and the like) who can sit in the Commons to 95) limit the capacity to create covering posts (and the designated ministerial office of Minister on Leave, is under s.3, not paid under the Ministerial and Other Salaries Act 1975 nor taken into account under the House of Commons Disqualification Act 1975). It is also said that this formulation allows Cabinet Ministers and Law Officers to be covered as their “constitutional role and the sheer volume and complexity of their workloads” has meant they cannot take advantage of the route previously available to ministers. If the House of Commons had taken longer than four hours over the Bill – a significant amount of time being devoted to the question of using gender-neutral language in a Bill about maternity – these arguments could have been subjected to greater scrutiny.
Under the Ministerial Code (quoted above), it is clear that the Minister must not exercise their functions as a minister during their period of absence unless this is agreed by the Permanent Secretary and the covering Minister, and so it is unclear why a minister has to vacate their office to go on leave if the problem is lines of authority. If a junior minister can be covered by a junior minister, a Cabinet minister could be covered by a Cabinet minister (or someone temporarily in that role) and thus discharge statutory functions (the discharge of which are stated to be the reason why the provisions for ministers are different from the provisions for the small number of opposition posts covered) so it may not be the constitutional issue that is the problem there but “the sheer volume and complexity of the workload”. If workload is the issue – and it cannot be shouldered by the junior ministers and a covering Cabinet minister – then the issue would seem to be the number of ministers whether at Cabinet or sub-Cabinet level. The solution to that being either to run the Government with enough headroom to appoint temporary ministers within the cap or, as per the Act, to change the cap. But it is unclear why the way round the 1975 Acts necessitates forcing a minister to leave their office (contrary to the concept of maternity keeping-in-touch days although as members of the government they can continue to be briefed on work) and take up the holding office of Minister on Leave, as opposed to designating an additional covering minister as a covering minister. There is under the Act, intentionally, no guarantee that the Minister on Leave would revert to their original position as who serves is a matter for the prime minister’s exercise of the prerogative (col. 593). However, as can be seen by Kemi Badenoch’s move from Education to Exchequer Secretary, someone can be shuffled while on leave under the existing route and they do not need to pre-vacate the position. In terms of generosity (of six month’s pay), a comparison is drawn with the armed forces and the civil service – both of which also feature an element of rotation of staff – but there is an expectation there that someone on leave for six months or fewer will return to the same position. The length of the designation as Minister on Leave is, similarly, for a maximum of six months. Men who take paternity leave, as it is shorter, are said not to need a special provision as the work can be covered. Adoption, shared parental leave, longer term sickness absence and the question of unpaid ministerial roles – as well as the position of backbench MPs (who can now take maternity leave but struggle with IPSA to get suitable expenses) are all set to be revisited before the Summer recess (col. 961).
This rushed provision, with its partial and in some ways retrogressive approach to maternity leave (in forcing the minister to leave their post), is attributable to the Attorney-General being set to take maternity leave within a month. While the considerations about alternative ways set out above may have benefited from further debate about, for example, the message that it sends and the practicalities of who should cover, the situation of the Attorney-General, the impetus for the general change, is atypical. Unlike the other ministers, the Attorney not only has a single, ready-made deputy in place but since the Law Officers Act 1997 the Solicitor-General can exercise any function of the Attorney-General. In stepping up to cover the Attorney’s work the Solicitor-General would offer continuity and an expectation that the substantive Attorney would return to the post, which may not be the case with a de novo appointment (unless, perhaps, an emeritus Attorney-General was re-employed). Given the workload of the Law Officers’ Department, it may be that some of the combined workload could not devolve onto officials in which case a small change providing for a temporary assistant solicitor-general may have been required but leaving the generally applicable scheme to have the parliamentary scrutiny it deserves.
This article is republished from UKCLA Blog under the author's license. Read the original article.
Since commercially available computers first arrived on the market in 1951, companies have been racing to produce the most powerful, technologically advanced machines possible.
In 1965, Gordon Moore made a prediction, now known as Moore’s Law, that the number of transistors per silicon chip in a computer would double every year, thereby doubling the power. Whilst this prediction was revised ten years later, in 1975, to a more conservative doubling of power every two years, this prediction remains largely accurate.
However, in October of 2019, Google proudly published a paper in the journal Nature stating that they had reached quantum supremacy using a processor known as ‘Sycamore’. Such a milestone would mean that a quantum computer had successfully solved a problem that would have taken the most powerful conventional computer thousands of years to solve. Whilst this has been the subject of much debate, the development has been disputed by one of Google’s main rivals, IBM, who argued that ‘…an ideal simulation of the same task can be performed on a classical system in 2.5 days and with far greater fidelity’. Thus, by the definition of quantum supremacy coined by John Preskill in 2012, that it is the point at which ‘quantum computers can do things that classical computers can’t’, this threshold has not been met.
Nevertheless, as will be discussed in this post, quantum computing has become a source of both concern and excitement for many. Whilst it has several potentially beneficial applications in sectors such as life sciences, machine learning, cryptography and cybersecurity, it is somewhat of a double-edged sword, as it also creates new forms of exposure, particularly in relation to the maths problems currently used in many common forms of encryption (IBM, 2018).
What is quantum computing?
Unlike conventional computing, which stores information in a form known as bits, encoded into a value of either a 1 or a 0, known as binary code, quantum computing is measured in quantum bits, or qubits. In contrast to conventional computers, a qubit is able to take a value of either 0, 1 or also all possible combinations of the two. This is a concept known as superposition.
Another distinguishing feature of quantum computing is that of entanglement, ‘a property in which measuring one qubit yields information about another qubit’ allowing quantum systems to measure large data sets using only one measurement, in contrast to the large number of measurements required by a conventional computer (Lamba et al, 2018).
In practical terms, this can be analogised as conventional computers operating in a very linear way and quantum computers operating in a far more complex and interconnected way, with some commentators suggesting it is akin to a conventional computer ‘operating in a straight line’ and a quantum computer ‘doing so in a web, with each point branching out into several other points’ (De Schrijver, 2019).
As a result, this allows quantum computers to benefit from increased calculation capacities, resulting in important innovations being realised at much greater speed than is currently possible, which, in turn will provide numerous practical applications.
What are the applications?
As mentioned above, quantum computing will provide numerous possibilities for advancement in a plethora of industries.
One such industry is life sciences which stands to benefit greatly from the advent of quantum computing, allowing scientists to perform faster comparisons between interactions and effects of medication on diseases to determine the most efficient treatments for use within the medical setting.
Further, the financial markets and trading sectors will likely see a boost in efficiency provided by the ability to create more powerful algorithms that can perform several calculations simultaneously, leading to a greater number of probabilities and predictions being made about how markets are likely to perform (Lehot, 2020).
Similarly, machine learning and artificial intelligence stand to benefit from quantum computing, as the rate at which machines learn can be accelerated. This is due to the possibility of multiple algorithms being run concurrently. Accordingly, quantum-based machine learning systems will be able to train on vast data sets at a faster rate than is currently possible.
Cybersecurity and cryptography
Another industry that has shown concern and excitement in equal measure at the prospect of quantum computing is that of cybersecurity and cryptography. From a positive standpoint, quantum computing stands to revolutionise cryptography as we know it, providing a platform for the development of exponentially more secure quantum communications networks (Harrow et al, 2020). These can be secured by a method known as quantum key distribution (QKD) ‘which… uses attenuated laser pulses to share a classical encryption key between two users’ (Buchholz et al, 2020).
This would mean that should a third party attempt to intercept communications encrypted using this method, should the quantum key be read by a malicious individual or a third party, the quantum state would collapse and the attempt to gain access would be notified to both parties to the quantum communication. Whilst this is not an impenetrable form of communication, it is significantly more secure than current communications networks. Nevertheless, when it is considered that the same technology could be used to break current forms of encryption, the potential problems become worryingly clear.
What are the cybersecurity risks?
At present, encryption is one of the most widely used ways of securing data and is used by governments to secure intelligence as well as individuals to secure devices such as phones and laptops. There are two primary forms of encryption, asymmetric encryption and symmetric encryption. The former is the most widely used form and is a common means of securing connections to the internet and providing secure payments to e-commerce websites (Council on Foreign Relations, 2018). In contrast, the latter is considerably more secure and cannot be easily decoded, even by quantum computers – although in time it will be prudent to greatly increase key sizes to reduce the likelihood of being decoded (IBM, 2018).
Combatting cybersecurity risks
In order to combat the risks involved with quantum computing from a technological standpoint, cryptographers and mathematicians have been working on a number of new forms of encryption, known as ‘post-quantum encryption’, including both lattice-based cryptography and fully homomorphic encryption. The former, which deduces its name form the use of extremely difficult mathematical problems involving lattices (Alwen, 2018) have so far proven extremely effective as no quantum algorithms known at present are able to solve lattice problems (Macciancio and Regev, 2008). A lattice problem, in its simplest form, relies upon a geometric grid of regularly spaced points which continues indefinitely (Alwen, 2018), producing a multi-dimensional lattice and often running to the multiple hundreds of dimensions. The goal of the problem is to find the nearest lattice point but doing so in a 500-dimensional lattice when you have only been provided with an arbitrary location is notoriously difficult (Wolchover, 2015). However, these are still regarded as being incapable of practical use. The latter allows the user to view, analyse or review the encrypted data without first having to decrypt it, thereby making it significantly less vulnerable to interception. However, at present, this is far too slow to be used in a practical way (Marr, 2019).
Despite the practical problems associated with both of the aforementioned forms of encryption, it is necessary to acknowledge that even when either or both of these forms of encryption become practically useful, there are a number of further complications to be overcome. In particular, the implementation of this technology is likely to prove cumbersome, necessitating the need to update encryption keys and add software patches, a process which can often take years if it is possible at all. When coupled with the likely need to entwine both conventional and post-quantum security measures on present systems, some commentators have suggested that post-quantum security should not be regarded as a ‘drop-in replacement for existing measures’ but rather an additional form of security that will coexist with current infrastructure.
In addition to the cybersecurity issues set out above, the arrival of quantum computing also raises questions in relation to the European Union’s General Data Protection Regulation (‘GDPR’) and its UK Counterpart, the Data Protection Act 2018 (‘DPA 2018’). Article 5(1)(f) of the GDPR provides that personal data is to be processed ‘in a manner that ensures appropriate security of personal data… using appropriate technical or organisational measures’; this criterion is unlikely to be met if organisations use conventional encryption methods in the quantum age. Consequently, as De Schrijver suggests, organisations will need to consider the implementation of ‘enterprise-wide procurement policies that require cryptographic flexibility and provide the ability to quickly switch to newer and more secure algorithms’.
Moreover, Article 5(1)(a) of the GDPR sets out the requirement that personal data must be processed in a transparent manner, something which may be affected by the predicted rise in automated decision making stemming from the introduction of quantum computing, a form of decision making that is currently prohibited by the GDPR. This is likely to lead to a renewed and strengthened requirement for decisions made to be both transparent and explainable (De Schrijver, 2019). Given this, it is next necessary to consider how such a powerful new technology should be regulated.
How can quantum computing be regulated?
Given the potential impact of quantum computing on present day cryptographic methods, any form of regulation that is adopted should aim to maximise the possible benefits and mitigate the negative consequences. Arguably the most effective first step in regulating quantum computing is to educate policy makers on what quantum technology is and how it works. In doing so, policy makers would be able to use this knowledge to highlight security concerns and assess the impact of these, facilitating a move toward creating an agile and adaptive regulatory strategy that creates global standards to reduce the risks arising from quantum computing.
To do so, it is important to find a balance between the interests of stakeholders and society, focussing on providing ‘...legal certainty, a favourable investment climate and... respecting democratic rights, fundamental freedoms... protecting wellbeing and safeguarding moral values’ (Kop, 2020). In relation to creating legal certainty, it is important to provide a common language comprising of mutually agreed definitions, something that the institute of Electronic and Electronics Engineers Standards Association is currently attempting to create.
Once uniform terminology has been established, policymakers can further elaborate on their concerns, enrolling the help of industry and academics to provide varying standpoints, thereby ensuring standardisation is carried out in a comprehensive and inclusive manner and facilitating open international discussion on regulatory perspectives.
Finally, it should be noted that whilst post-quantum encryption is currently in its early stages, the implementation of such an encryption into critical networks, such as healthcare and transportation, is vital to the smooth introduction of quantum technologies. As Johnson argues, the best way of achieving this outcome without stifling investment and innovation would arguably be the production of standards for post-quantum cryptographics and a push toward creating industry codes of conduct outlining ‘best practices and principles for responsible deployment’ (Johnson, 2019).
In conclusion, whilst quantum computing is an incredible technological feat, demonstrating a significant leap in what computers are capable of, it also poses a considerable threat to some of the technologies that we have become accustomed to. In particular, asymmetric encryption could be rendered useless when quantum computers become the norm, highlighting the need for the rapid development of effective post-quantum encryption, a global approach to regulation and a robust yet flexible regulatory strategy that can adapt to changing demands as and when they arise.
Moreover, organisations will need to carefully consider the ramifications of this advancement, reviewing their current security systems and contemplating ways in which they can be amended to ensure that they do not fall afoul of Article 5 of the GDPR.
Regardless of when quantum computers become commercially available, one thing is clear: that current cybersecurity systems will be largely inadequate, and these risks require immediate action from governments and industries alike. Afterall, as Rash rightly argues, ‘a reduction in computing time from 10,000 years to a little over 3 minutes is more than just a game changer – it redefines the whole concept of the game’.
James Davey obtained both his LLB and LLM from the University of Hertfordshire, focussing on commercial and e-commerce law. During his LLM studies, he utilised his interest in technology to write a dissertation on the criminalisation of hacking in the United States and the United Kingdom. Following completion of his undergraduate and post-graduate studies, James worked in two Top 200 law firms based in London. He has recently completed his Legal Practice Course at BPP and is due to start his Training Contract in March 2021.
It has been one year since the EU Directive on the protection of whistleblowers (hereinafter, the ‘Whistleblowing Directive’) entered into force.
This blog post summarises key aspects of this legal development, focusing on the conditions for qualifying as a whistleblower and conditions for granting protection to such individuals. Furthermore, it touches on some points that attract particular attention, such as whether it is desirable to introduce financial incentives to potential whistleblowers. Notably, this piece does not aim to offer an extensive commentary on this Directive; such commentary will follow in a future post.
The EU Whistleblowing Directive seeks to offer protection to persons who report breaches of EU law, commonly known as whistleblowers. It has been an overdue and most welcome initiative that aims to reinforce the fragmented (and at times non-existent) legal protection of whistleblowers across the EU Member States. Officially published on 26 November 2019, the Directive is due to be transposed into the national law of all Member States within less than a year from now; 17 December 2021.
Who may qualify as a whistleblower and what protection can be granted?
Persons that work for a private or public organisation, in any capacity, and report unlawful behaviour witnessed within said organisation fall within the definition of whistleblowers (Whistleblowing Directive, recital 1). Whistleblowers play a key role in exposing wrongdoing that may be harmful to the public interest and in safeguarding the welfare of society on a national and European level.
Eligible whistleblowers are protected against any form of direct or indirect retaliation from their employer including, but not limited to, termination of employment, demotion and/or lack of promotion, unjustified negative performance assessment, workplace transferring, harassment, discrimination, or unfair treatment. Moreover, this protection will be also extended to third parties that may be directly or indirectly connected to the whistleblower and might face consequences due to the latter’s decision to report on wrongdoing; such parties might include colleagues and/or relatives that were aware of the whistleblower’s intention and/or action.
Why protect whistleblowers?
Recent events, such as the Panama Papers and the Luxembourg Leaks (LuxLeaks), have shown that whistleblowers lack basic legal protection, despite their contribution to a more transparent society by exposing economic, political, and environmental scandals, amongst others. Such scandals would not have reached the general public if it weren’t for the people that blew the whistle. In the absence of sufficient legal protection, potential whistleblowers are discouraged from reporting wrongdoing as they fear retaliation within their organisation.
Within the institutional context of the EU, breaches of EU legislation are more likely to go undetected without whistleblowers, a status quo that neither serves nor promotes the European values and interests.
Why did the EU take action?
Having acknowledged that whistleblower protection within the EU is fragmented and uneven across the Member States, the EU decided to act with an aim to protect its interests and prevent any legislation breaches. It is worth noting that the Directive applies to breaches of EU law, though Member States wishing to extend the scope of protection by including breaches of national law may do so (Whistleblowing Directive, recital 5 and Article 2, para. 5). Breaches relating to public procurement, financial services, product and transport safety, environmental, consumer, and personal data protection as well as illegal activities entailing fraud and corruption, are areas where the reporting of whistleblowers can be crucial in safeguarding the public interest.
What are the conditions for granting protection to whistleblowers?
The Directive offers protection against any form of retaliation to any person reporting breaches of EU law only if certain conditions are met:
a) Whistleblowers must act in good faith
To begin with, whistleblowers must have reasonable ground to believe that the information included in their report is true at the time of their reporting, in the sense that the individual must be acting in good faith when submitting said report. This condition excludes any malicious or abusive reports from protection. However, protection is not lost if whistleblowers submit inaccurate reports unintentionally. Noticeably, any personal motive(s) of the reporting persons are irrelevant in the protection of these persons, provided that the information submitted is not intentionally false.
b) Whistleblowers must have some work affiliation with the relevant organisation
In addition, whistleblowers must be affiliated in any working capacity (past, present, or future) with the organisation concerned in their report; this capacity is as broad as possible and refers to any work-related activities, paid or unpaid. This also allows Member States to take into consideration this work-related context and adapt it into their national legislation accordingly. Protection shall be granted to persons in standard employment relationships, part-time workers, fixed-term contract workers, persons with a contract of employment with a temporary agency, as well as suppliers, consultants, self-employed persons, and others. Protection shall also be granted to workers that may not have a financial relationship with the organisation, like volunteers and unpaid interns.
c) Public disclosure as a last resort measure
Potential whistleblowers are encouraged under the Directive to submit any report via internal reporting channels, where and when possible. While it is up to each entity (private or public) to decide the type and structure of these channels, the Directive clearly indicates that all employees should have access to a system that will allow them to submit their report(s) in writing via mail, a physical complain box, an online platform, and/or a telephone hotline. If these are not possible, any report should be submitted via external channels provided through relevant public authorities within the Member States. It is important to note that public disclosure should be considered a last resort for whistleblowers (Whistleblowing Directive, Article 15). Whistleblowers that take that route will qualify for protection in the case where, despite internal and external reporting, their information remains unaddressed. Similarly, whistleblowers that act as sources for journalists will enjoy protection where their actions are aimed at enhancing the watchdog role of investigative journalism.
The fact that the Directive will also protect whistleblowers even if their actions result in a breach of confidentiality, gives rise to important ethical and competition-related concerns. Consider for instance the scenario where an employee leaves company A and thereafter is hired by a competitor company B and soon decides to report some misconduct of company A. Given that, under the Directive, the whistleblower’s motive is irrelevant when assessing the reporting process, the above mentioned scenario appears to be a grey area that requires further evaluation. It is likely that Member States may take steps to clarify and further specify this point within their national transposition laws.
Another interesting point is the role of financial incentives that is, yet again, dismissed in assessing the effectiveness of whistleblowing. While this Directive aims at increasing whistleblowing levels across the EU through safeguarding the legal protection of whistleblowers, it neglects the importance of financial incentives that could make another step towards the same end-goal. The United States of America are well known for their whistleblowing reward programmes, such as the Securities and Exchange Commission’s and the Internal Revenue Service’s Whistleblower Reward Programmes to name a few, and even though research underlines the importance of incentives in turning a potential whistleblower to an actual whistleblower, the EU has not taken any steps towards introducing financial incentives to encourage potential whistleblowers due to ethical concerns and the potential abuse of such schemes. It has been argued that whistleblowers should not report wrongdoing for their personal gain but rather for reasons related to their morals; offering financial incentives would shift the focus from the question of right and wrong towards a more cost and benefit analysis approach. In addition to that argument, it has been also said that reward programmes may increase reporting levels, including malicious and/or fictitious reports, which would in turn increase the resources needed to assess and investigate these false claims, thus abusing the system in hopes of monetary rewards.
What are Member States expected to do?
The EU Directive introduces new requirements both for the public and private sector. Each Member State is expected to designate a competent authority that will set up appropriate external reporting channels through which information will be received, assessed, and followed-up within a reasonable timeframe that will not exceed three months. The Directive provides that whistleblowers should be informed as regards the steps taken towards their report, the investigation’s progress, as well as its outcome.
At the same time, private companies are expected to establish internal reporting channels, regardless of the nature of their activities. Any information made available pertaining to the use of these channels must be clear and easily accessible to persons having any kind of working relationship with the organisation. Organisations with 250+ employees must comply with the EU Directive’s requirements by 17 December 2021. Smaller organisations employing between 50-249 individuals are granted more time, namely until 17 December 2023. Finally, businesses having less than 50 employees are encouraged to set up relevant channels but the Member States enjoy a wider degree of discretion in this respect (Whistleblowing Directive, recital 49, Article 8).
As of today, less than a year is left for Member States to transpose the EU Directive on whistleblowers’ protection. As of now, 17 Member States have started taking steps towards the transposition; these are Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, Germany, Greece, Ireland, Latvia, Poland, Portugal, Romania, Slovenia, Spain, Sweden, and the Netherlands. The progress across all Member States can be tracked via EU Whistleblowing Meter, developed by the Whistleblowing International Network.
By encouraging the reporting of breaches of EU law, this Directive is an important step towards safeguarding the legality of EU action and promoting good governance across the public and private sectors. It succeeds this by introducing clear and specific conditions for granting legal protection, hence reducing the regulatory uncertainty that often discourages potential whistleblowers.
Ms Stavroula Verda is a junior social scientist. She holds a BA in Sociology from Panteion University, Athens and an MSc in Counter Fraud & Counter Corruption and Intelligence from University of Portsmouth.
In the case of R (Z) v Hackney LBC and Agudas Israel Housing Association Ltd (AIHA)  UKSC 40 the Supreme Court ruled for the first time on the positive action provisions of the Equality Act 2010. It found that the positive action in giving priority to the housing needs of Haredi Orthodox Jews was lawful under s. 158. This post offers a summary and commentary on selective aspects of this significant judgment.
Agudas Israel Housing Association Ltd (AIHA), a housing charity dedicated to help practising Orthodox Jews, supplied houses to the local authority on the basis that priority will be given to practising (Haredi) Orthodox Jews, unless there was a surplus, in which case non-Orthodox Jews could be housed. In reality, there was never a surplus as Haredi demand outstripped supply.
This was challenged as directly discriminatory by Z, a mother of four children who was on Hackney Council’s priority list, but was not awarded a suitable (4 bed) house, it being allocated to a Haredi family. The policy meant that non-Haredi families would have to wait longer for suitable accommodation and Z challenged the policy as directly discriminating on grounds of religion and race under the Equality Act 2010, s. 13. (The Equality Act is applicable as s. 29 covers service providers and persons exercising public functions, which included the supplies of housing in this case.) The defence was that the policy amounted to lawful positive action under s. 158 (and s. 193, permitting charities to provide benefits for protected groups).
The Supreme Court’s findings
The Supreme Court rejected the claim. Writing the judgment for a unanimous Court, Lord Sales found that the allocation arrangement fell within s. 158, providing for positive action in cases other than employment (s. 159) and election candidates (s. 104).
Section 158(1) provides three triggers and corresponding aims that may be pursued. If a person ‘reasonably thinks’ that either:
(a) persons who share a protected characteristic suffer a disadvantage connected to the characteristic (‘disadvantaged’),
(b) persons who share a protected characteristic have needs that are different from
the needs of persons who do not share it (‘different needs’), or
(c) participation in an activity by persons who share a protected characteristic is disproportionately low (‘underrepresented’).
Correspondingly, s. 158(2) permits action which is a proportionate means of achieving the aim of:
(a) enabling or encouraging persons who share the protected characteristic to overcome or minimise that disadvantage,
(b) meeting those needs, or
(c) enabling or encouraging persons who share the protected characteristic to participate in that activity.
In this case, two triggers were met: ‘disadvantage’ and ‘different needs’. The Supreme Court endorsed these findings of the High Court at first instance:
(i) The disadvantages faced by Orthodox Jews are real and substantial;
(ii) Those disadvantages are ‘connected with’ the religion of Orthodox Judaism;
(iii) The needs of members of the Orthodox Jewish community are different from those who are not members of it.
The following findings of fact were identified, among others, as Disadvantages or Needs ():
- The Orthodox Jewish community is subjected to anti-Semitism, including racially aggravated harassment and assaults, criminal damage to property and verbal abuse.
- The Orthodox Jewish community face prejudice when trying to rent properties in the private sector, on account of their appearance, language and religion.
- The Orthodox Jewish community has a particular need for larger properties because of their large family sizes.
- Orthodox Judaism is not a lifestyle but a way of life, and that living as a community is a central part of this.
- The community had a need to live together in relatively close proximity ‘with a view to reducing apprehension and anxiety regarding personal security, anti-Semitic abuse and crime’ and benefit from the protection offered by volunteer security patrols.
- The Orthodox Jewish community has a particular need to live close to community facilities, such as schools, synagogues and suitable shops.
With the triggers satisfied, the main issue was the proportionality of the actions taken under s. 158(2).
Three arguments were advanced by the claimant. First, cases under the Equality Act 2010 should follow the European Court of Justice (ECJ) case law and its strict application of proportionality. Second, that a ‘bright line’ approach was inappropriate. Third, that the disadvantages should be compared with that of the claimant, rather than on a group basis.
(i) The relevance of ECJ case law
The first argument centred on the actual test to be applied. The claimant relied on the ECJ case law , this forming the basis of the present provisions, even though the ECJ cases were confined to sex discrimination within employment (thus more immediately relevant to s. 159). The claimant argued that ECJ employment cases had ruled against any automatic selection of persons from the protected group (Case C-407/98 Abrahamsson, EU:C:2000:367). In effect, that is what happened in these housing decisions, as demand by Haredi Jews outstripped supply (a waiting list of 700 against 470 homes). Thus, every available house went to a Haredi Jewish family. The Supreme Court preferred a more conventional objective justification test, identifying a legitimate aim and testing the scheme for proportionality. More generally, this is a division between equality of opportunity (generally acceptable) and equality of results. Equality of results is controversial as it invokes notions of hiring lesser qualified candidates to achieve a quota. The ECJ case law was based on the now-repealed Equal Treatment Directive 76/207, which permitted positive action to achieve ‘equality of opportunity’ (art. 2(4)). Its replacement, the Recast Directive 2006/54, now requires ‘equality in practice’ (art 3).
The Supreme Court was unimpressed by such a debate and took a different perspective, with Lord Sales holding that this approach ‘tells one nothing of any significance about the proper approach’ to s. 158. Instead, the question was whether the measures were ‘ameliorating the position of members of the Orthodox Jewish community.’ Hence, the aims of the policy relate to improving outcomes for that community, not merely equality of opportunity of the more limited kind discussed in the cases on the Equal Treatment Directive’ (-).
(ii) Blanket effect and ‘bright line’ rules
Given this, Lord Sales rejected the claimant’s second argument that the policy should be struck down because of its blanket effect. This argument related to another principle of the ECJ case law, that any positive action plan should be accompanied by a ‘savings clause’. This allows for the appointment or favouring of a man in exceptional circumstances. In this case, the only exception which would permit allocation to non-Jews would be the event the association had a surplus. And even this is a matter of form over substance; the excessive demand by Haredi Jews meant that this was unlikely ever to happen. The argument was again rejected by Lord Sales,
‘Unless and until the aim of elimination of such disadvantages is achieved, it would be proportionate for AIHA to operate a simple ‘blanket policy’ to allocate its properties to members of the Orthodox Jewish community as a means of promoting that legitimate aim.’ ().
The endorsement of this blanket effect was underlined by a deferment to a ‘bright line’ approach. Lord Sales cited two reasons to favour this bright line approach. The first is a ‘purely practical one’ and the second is legal certainty. Lord Sales () cited in support a case concerning the withholding of student loans to anyone falling under the broad category of ‘immigrant status’. On the practical reason, it was said,
‘...the circumstances in which people may have a claim on the resources of the state are too varied to be accommodated by a set of rules. There is, therefore, no realistic half-way house between selecting on the basis of general rules and categories, and doing so on the basis of a case-by-case discretion.’
And on legal certainty,
‘The advantages of a clear rule ...are significant. It can be applied accurately and consistently, and without the element of arbitrariness inherent in the discretionary decision of individual cases. By simplifying administration it enables speedy decisions to be made and a larger proportion of the available resources to be applied to supporting students.’
(R (Tigere) v Secretary of State for BIS  UKSC 57 - joint dissenting judgment of Lord Sumption and Lord Reed).
(iii) Individual or group assessment?
This logic would destroy also the claimant’s third argument, that her particular situation should be taken into account. But Lord Sales could point to another reason to reject it. Citing the Equality and Human Rights Commission Code of Practice (para. 10.22), he stated, ‘Parliament contemplated that the proportionality of measures falling within s. 158... should be assessed on a group basis, by comparing the advantages for groups covered by the measure in question with the disadvantages for groups falling outside it’. Otherwise, the ‘proportionality assessment would be distorted’ by comparing the worst affected non-Haredi individual with the least affected Haredi individual (-).
The Race Discrimination Claim
The claimant also argued that the priority allocation policy was directly discriminatory on racial grounds. She cited R(E) vGoverning Body of JFS  AC 728, where, it may be recalled, the Supreme Court held that the Jewish Free School’s (hereinafter ‘JFS’) policy of favouring Orthodox Jews in admissions amounted to unlawful direct racial discrimination. However, Lord Sales distinguished JFS because the school’s policy included those of Jewish descent no matter what their religious practice (-). It could favour, for example, an applicant who was a practising Roman Catholic, or indeed, an atheist. The housing association’s policy favoured only those practising Haredi Jews, hence it was restricted to differences of religion only.
This judgment signals that the courts will entertain far-reaching positive action programmes, at least under s. 158. The acceptance of the policy that seeks equality of outcomes, as opposed to equality of opportunity, makes this a radical judgment. Recruitment on the basis of equality of outcomes invokes notions of a quota-based system.
Not only does it go beyond the employment cases of the ECJ, it departs from the long-standing hostility to such policies by the United States Supreme Court. Indeed, the US courts will generally only accept positive action programmes that were ‘narrowly tailored’ to achieve an aim of diversity (Regents of the University of California v Bakke 438 US 265 (1978), Grutter v Bollinger 539 US 306 (2003)). This is in contrast to the housing association’s aim of bringing Haredi Jews into a close neighbourhood. However, it is not so clear whether this approach would apply to s. 159 and employment measures, which according to the CJ should be more strictly controlled.
The case makes important points about proportionality under s. 158, if not about its counterpart regarding employment, s. 159. The most significant one is that the courts need not follow the guidelines set out in the ECJ case law, which were in particular, (1) there should be no automatic selection of a ‘lesser qualified’ candidate, and (2) there must be a savings clause. In this case, the only exception was in form only (in the unlikely event that AIHA had a housing surplus).
It should be noted though, that the ECJ case law was concerned with employment and a particular trigger of ‘underrepresentation’, which was not used in this case. It might be that UK courts would follow the ECJ guidance in such cases (see e.g. Furlong v Chief Constable of Cheshire (14 February 2019, Employment Tribunal). This appeared to be Lord Sales’ view, as when distinguishing s. 158 from the ECJ employment cases, he noted that ‘separate provision’ for employment was provided by s. 159 (). But a more clearly expressed opinion would have been welcome for the sake of certainty. This is especially so as the Explanatory Note (512) to s. 158 states that, ‘This provision will need to be interpreted in accordance with European law which limits the extent to which the kind of action it permits will be allowed.’
The endorsement of the blanket or ‘bright line’ policy that swept away any concerns for an individual’s disproportionate hardship was perhaps more contentious. Lord Sales cited Tigere in support, but could only rely on the dissenting speech on this point. In Tigere, student loans were not available to those of immigrant status. The claimant, born in Zimbabwe, but brought up and schooled in England, had ‘discretionary leave to remain’ with the likelihood of this becoming permanent (there was little prospect of her returning to Zimbabwe). Until then, she fell into the category of immigrant status. The majority held that this blanket rule was discriminatory under the European Convention of Human Rights, Art. 14. It was too crude and should be refined for exceptional cases such as this. Although Tigere could be distinguished as a case on student loans under the European Convention on Human Rights, as well as not concerning positive action, it seemed strange for Lord Sales to cite its dissent in support of the notion rejected by the majority. That to one side, Lord Sales has made it clear that proportionality under s. 158 is somewhat more general than expected elsewhere.
The judgment also made the point that positive action is concerned with group, rather than individual, disadvantage, needs, and underrepresentation. This is undoubtedly correct. Not only does this accord with the Code of Practice, it is a fundamental purpose of positive action to address patterns of inequality, rather than individual cases. A normal consequence of positive action is that some individuals, not from the target group, will lose out, as happened in this case. The basis of positive action is that the ‘big picture’ advantages are more important.
The racial discrimination claim
The purpose of this argument was rather unfocused. As Lord Sales highlighted, it would raise a range of legal issues. It could bring the Race Directive 2000/43/EC into play, with its differently worded provision for positive action, which, unlike the framework Directive 2003/78/EC (covering Religion), extends to the provision of services. It was convenient for Lord Sales that JFS was so readily distinguishable. However, it would not be so easy to distinguish Mandla v Dowell Lee  2 AC 548, where, in the case predating dedicated religious discrimination law, the House of Lords stated that Jews (as well as Sikhs) qualified as a racial group by their ethnic origins under the Race Relations Act 1976. Thus, those Jews who could be defined by religious observance would fall under the Mandla definition of a racial group.
This rather awkward situation highlights a legacy problem of the Equality Act 2010 inheriting the same definition of ‘Race’ from the Race Relations Act 1976. No one considered that the intervening religious discrimination legislation (2003) should indicate a narrowing of the definition of Race.
Image republished with credit to the UK Supreme Court press office.
On Monday 15 June, the predominantly conservative United Sates Supreme Court surprised the world with a ground-breaking decision recognising that discrimination against homosexuals and transsexuals violated the prohibition against sex discrimination in the seminal 1964 Civil Rights Act. The essential logic of Bostock was that, although these grounds were not recognised in the Act, where such treatment involved an additional factor, such as sex, there was liability. Thus, the act of dismissing a worker because they were gay, or transsexual, also contained an element of ‘sex’: a man being attracted to men, or becoming a woman, involved factors of sex, as well as sexual orientation or gender identity, as the case may be.
There were in fact three cases before the Supreme Court. In the first, Clayton County dismissed Bostock for conduct “unbecoming” a county employee shortly after he began participating in a gay recreational softball league. In the second, an employee was dismissed after he mentioned being gay. In the third, an employee who presented as male when recruited, was dismissed after she informed her employer she planned to “live and work full-time as a woman.
The Legal-Techy Stuff
The decision was made possible by the American approach to direct discrimination, which focusses more on a discriminatory motive. By contrast, the UK and EU’s approach to direct discrimination mandates applying a comparative analysis, according to which a claim would succeed only if the discriminatory conduct is found to be less favourable.
Before dedicated sexual orientation legislation came into force in the UK in 2003 (EU Directive 2000/78/EC and The Employment Equality (Sexual Orientation) Regulations 2003) legal actions such as Bostock failed. For instance, where, a man was dismissed for having a same-sex relationship, the comparator used by the courts would be a woman in a same-sex relationship (Smith v Gardner Merchant, 1998, CA, IRLR 510); Case C-249/96 Grant v South West Trains). Likewise, where men and women would have both been the target of the same homophobic abuse, the ‘equally bad’ treatment test meant that neither men nor women would be considered to having been treated less favourably than each other (McDonald v Advocate General of Scotland, 2003, HL). Only if the treatment were also found to be sex-specific could a claim succeed. For example, abusive statements such as, ‘men like you spread AIDS and diseases’ (Smith v Gardner Merchant), or where a club would admit homosexual women but not men.
That said, there are examples of the strict comparator rule being recently relaxed in the UK and EU case law (Chief Constable of Norfolk v Coffey, 2019, CA; Case C-83/14 CHEZ Razpredelenie Bulgaria). This gives courts a little more leeway to develop the law, especially where comparisons prove difficult. The most obvious example is perceived discrimination, where the defendant, wrongly thinking that a person has a protected characteristic, treats him badly based on that mistake. This could be mistaking a turbaned Sikh man for a Muslim, for instance. As the victim has no relevant protected characteristic (in this example, not being a Muslim), it is pointless to suppose a comparator without the relevant protected characteristic (as one should for an orthodox comparison). As seen in Bostock, this loosening of the comparator rule enables the courts to adapt for new and seemingly meritorious cases.
The Controversial Stuff
The Court’s reasoning is canny, making it difficult for Congress to reverse. If Congress reversed the logic, reducing successful claims to where the only cause of the treatment was sex (or race, or religion), many meritorious cases would be lost. This would be where, say, an employer rejects an applicant because she is black and had a poor employment record (see Owen & Briggs v James, CA  ICR 618). An alternative method was deployed in the Civil Rights Act of 1991. Congress reversed part of Wards Cove v Atonio (1989, Sup Ct) by enacting that the matter ‘shall be in accordance with the law as it existed on 4 June 1989’ (the day before the judgment was given). But this would be unlikely to work in Bostock’s case because the Supreme Court had not previously ruled on the matter and the courts below were divided on it.
It is noticeable that the EU and UK courts were, until recently, reluctant to advance the law regarding discrimination on grounds of sexual orientation without dedicated legislation. In other words, unelected judges waited for the signal from elected legislators. While most liberal-minded people of the world would welcome the United States joining the late 20th century (let alone 21st) on these matters, it should not be forgotten that this decision was made by judges and not the people’s elected representatives in Congress, who have steadfastly refused to enact legislation outlawing discrimination on the grounds of sexual orientation and gender reassignment. There may be uproar from sections of Congress over Bostock, but as mentioned before, it might prove too difficult to reverse it.
This judgment signals that the courts will entertain far-reaching positive action programmes, at least under s. 158. The acceptance of the policy that seeks equality of outcomes, as opposed to equality of opportunity, makes this a radical judgment.
This judgment signals that the courts will entertain far-reaching positive action programmes, at least under s. 158. The acceptance of the policy that seeks equality of outcomes, as opposed to equality of opportunity, makes this a radical judgment.