Joint Committee on Statutory Instruments Twenty-First Report

1 Draft Employment Equality (Sexual Orientation) Regulations 2003: doubtful vires and uncertain effect

Draft Employment Equality (Sexual Orientation) Regulations 2003

1.1 The Committee draws these draft Regulations to the special attention of both Houses on the grounds that there is a doubt as to whether regulation 7(3) is intra vires and that there is uncertainty about the effect of regulation 7.

Background

1.2 These Regulations are proposed to be made under section 2(2) of the European Communities Act 1972, in partial implementation of Council Directive 2000/78/EC establishing a general framework for equal treatment in employment and occupation. The structure and form of the regulations have their origins in the Sex Discrimination Act 1975 and the Race Relations Act 1976, but the subject matter of the regulations is confined to discrimination on the grounds of sexual orientation.

The Directive

1.3 Article 1 of the Directive states that its purpose is to lay down a general framework for combating discrimination on the grounds of religion or belief, disability, age or sexual orientation as regards employment and occupation, with a view to putting into effect in the Member States the principle of equal treatment. Article 2.1 of the Directive defines the principle of equal treatment as meaning that there shall be no direct or indirect discrimination whatsoever on any of the grounds referred to in Article 1. Article 2.2 of the Directive defines direct and indirect discrimination for the purposes of Article 2.1.

1.4 Article 4.1, however, provides an exception. Under Article 4.1, "Member States may provide that a difference of treatment which is based on a characteristic related to any of the grounds referred to in Article 1 shall not constitute discrimination where, by reason of the nature of the particular occupational activities concerned or the context in which they are carried out, such a characteristic constitutes a genuine and determining occupational requirement, provided that the objective is legitimate and the requirement is proportionate".

1.5 Article 4.2 provides a further exception for occupational activities within churches and other public or private organisations the ethos of which is based on religion or belief. But this further exception is limited to a difference of treatment based on a person's religion or belief. It is stated that such difference of treatment should not justify discrimination on another ground.

The draft Regulations

1.6 Part 2 of the draft Regulations contains provision about discrimination in employment and vocational training on the grounds of sexual orientation. Regulation 6 of the draft Regulations makes it unlawful for an employer to do certain discriminatory acts in relation to employment by him at, and persons employed by him at, an establishment in Great Britain. In particular, the employer may not discriminate by refusing to offer employment; in the terms on which he does offer employment; in opportunities for promotion etc. for employees; or by dismissal.

1.7 Regulation 7(1) disapplies specified provisions of regulation 6 where regulation 7(2) or 7(3) applies. Regulation 7(2) is limited to cases where, having regard to the nature of the employment or the context in which it is carried out:

· "being of a particular sexual orientation is a genuine and determining occupational requirement";

· it is proportionate to apply that requirement in the particular case; and

· the person concerned does not meet it (or the employer reasonably is not satisfied that the person does).

1.8 Regulation 7(3) applies only where the employment is "for the purposes of an organised religion". It applies where:

· the employer applies a requirement "related to sexual orientation" either so as to comply with the doctrines of the religion, or, because of the nature of the employment and the context in which it is carried out, so as to avoid conflicting with the strongly held religious convictions of a significant number of the religion's followers; and

· the person concerned does not meet the requirement (or the employer reasonably is not satisfied that the person does).

1.9 This provision bears a resemblance to section 19(1) of the Sex Discrimination Act 1975, which disapplies Part 2 of that Act where employment is limited to one sex so as to comply with the doctrines of the religion or avoid offending the religious susceptibilities of a significant number of its followers.

1.10 Regulation 7 is extended by the Regulations to cover various other situations, such as contract workers (regulation 8(3)), office holders (regulation 10(5)), partnerships (regulation 14(4)), vocational training (regulation 17(3)), employment agencies (regulation 18(3)) and educational establishments (regulation 20(3)). Regulation 7(3) is also reflected in regulation 16(3) (qualifications bodies).

The doubt as to vires

1.11 The Committee considered that regulation 7(2) was justified by Article 4.1 of the Directive, but that regulation 7(3) might permit difference of treatment based on a characteristic related to sexual orientation where the characteristic could not be said to be a "genuine and determining occupational requirement" which was proportionate, as envisaged by the Directive. In particular, regulation 7(3) might allow the employer to impose a discriminatory requirement on an employee or prospective employee whose functions or proposed functions did not promote the core activities of the organised religion concerned. In response to a request from the Committee, the Department of Trade and Industry provided a memorandum for the Committee (at Appendix 2) and Departmental witnesses gave oral evidence (at Ev 1-8, Qq 1-56).

1.12 The Department considers that any requirement imposed in accordance with regulation 7(3) must necessarily be a genuine and determining occupational requirement applied proportionately, and so be permitted by Article 4.1 of the Directive.

1.13 Amongst the points made by the Department are these:

· The terms "organised religion" and "for the purposes of an organised religion" are comparatively narrow (paragraph 2 of the Department's memorandum).

· A requirement imposed so as to comply with the doctrines of the religion will in practice always be imposed because of the nature of the post or the context in which it is carried out, and will necessarily always be proportionate.

· A requirement imposed so as to avoid conflicting with the strongly held religious convictions of a significant number of the religion's followers is, under regulation 7(3)(b)(ii), within that provision only if applied because of the nature of the post or its context; and if applied for that reason it will necessarily always be proportionate.

· Because of the reasons permitted for their imposition, the requirements can only be "genuine and determining" in the sense of being crucial or decisive to the post in question.

· Regulation 7(3) as a whole is proportionate.

· Recital (24) in the Directive acknowledges the special position of churches and religious associations or communities, and refers in particular to Declaration No. 11 annexed to the final Act of the Amsterdam Treaty.

· If there is any doubt, the courts must in any event construe regulation 7(3) in a way which makes it comply with the Directive rather than contravene it.

1.14 The Committee considers that Article 4 of the Directive must be construed strictly, both as a matter of established principle and because Recital (23) talks of "very limited circumstances" in which a difference of treatment may be justified. To be compatible with Article 4.1 a provision must not merely itself be proportionate, but must also secure that differences of treatment can take place under it only where the particular characteristic is a genuine and determining occupational requirement and the requirement is proportionate. The religious context is relevant to these issues. But though there is a general reference in Article 2.5 to "the protection of rights and freedoms of others", the body of the Directive affords no special position to religious organisations in the context of sexual orientation, age or disability discrimination (contrast religion or belief discrimination, for which Article 4.2 makes special provision).

1.15 Against this background, the Committee is not persuaded that the only acts permitted by regulation 7(3) are those permitted by Article 4.1. Organised religions vary considerably in their structure; the identity of the employer will vary according to the structure of the religion. It seems to the Committee wholly within the bounds of possibility that, for example, an employer considering employing a custodian who would, as part of his or her duties, have care of religious artefacts might determine not to employ a worker solely on a ground related to his or her sexual orientation in order to avoid conflicting with the strongly held religious beliefs of a significant number of the religion's followers. Even if those beliefs were held only by a minority of the religion's followers, and by those located at only one of several places where the post holder might be required to work, the discrimination would seem to the Committee apparently to be allowed by regulation 7(3).

1.16 Yet it is open to question whether either the intention or effect of Article 4.1 is to allow the personal beliefs (even of a majority within an organisation) to determine the position, on the basis that they are part of the context in which the work is to be carried out and, in the view of the employer, the factor is decisive. Even if a characteristic of the worker could be said to be a "genuine and determining occupational requirement" in these circumstances there seems to the Committee to be a doubt as to whether the requirement is proportionate as the Directive requires.

1.17 The Committee of course recognises that regulation 7(3) must be construed, so far as possible, to give effect to the Directive. The arguments used by the Department in support of regulation 7(3)'s compatibility with the Directive might or might not succeed, if the Regulations were approved and made in their current form and were tested in the courts. But the Committee's function is to draw attention to doubts; it cannot resolve them. In the Committee's view the doubt about the compatibility of regulation 7(3) with the Directive should be brought to the attention of both Houses. Since the regulations rely solely on section 2(2) of the European Communities Act 1972, there is therefore a doubt as to whether regulation 7(3) is intra vires and the Committee reports accordingly.

Regulation 7 - uncertainty

1.18 The Committee was concerned that employers and employees would find it hard to establish their position under regulation 7 without the need for litigation before a court or tribunal. Regulation 7(2) uses wording very similar to that in the Directive. While this makes it clear how the provision relates to the Directive, it suffers from the same uncertainties as Article 4 which, as one of the Departmental witnesses accurately put it, is "in some respects somewhat unclear".

1.19 Regulation 7(3), whilst seeking to define what is considered to be proportionate and a genuine and determining occupational requirement, carries with it the difficulties to which we have referred above. There is clearly a degree of overlap with regulation 7(2); and, were it not for the possibly wider wording "related to sexual orientation" in regulation 7(3), it would not be apparent why, if the Department's understanding of the limitations of regulation 7(3) were correct, there would be any need for it.

1.20 In the Committee's view, the position of those affected by regulation 7(2) and (3) is uncertain. Whilst acknowledging that a significant element of the uncertainty stems from the Directive, the Committee draws the position to the attention of both Houses.

Regulation 7 - adequate consultation

1.21 The Department was asked whether any significant amendments had been made to regulation 7 between the issue of the draft Regulations for consultation in October 2002 and the laying of the final draft before Parliament on 8 May 2003. The Department has identified four amendments (set out in paragraph 11 of Appendix 2). It considered that three of these amendments were either technical in nature or did not amount to significant changes in substance which required further consultation.

1.22 In its memorandum the Department has set out in greater detail its approach to consultation on the new regulation 7(3).[1] The issue was also explored in the Committee's examination of Departmental witnesses, who explained that the decision to insert regulation 7(3) was taken on the basis of evidence gathered during the course of the three separate consultation exercises held on the draft regulations in the period 2000 to 2003. These consultations generated almost 4,000 formal responses, and in addition a broad range of opinion was gathered through informal discussions.[2]

1.23 The Government has taken the view that the Regulations should not interfere in matters of religious doctrine. The Department stated that regulation 7(3) was therefore designed to address comments received in response to the October 2002 consultation, "when it became clear that the exception in regulation 7(2) could cause practical difficulties in relation to employment for the purposes of an organised religion."[3] Having taken the decision to insert the amendment, in line with the Government's policy, the Department then met "a small number of representatives from churches" to discuss how the practical difficulties which had been identified could be addressed within the scope of the Regulations.[4]

1.24 While the Department has acknowledged that the impact of regulation 7(3) would be important, it considered that it would be strictly limited and would fall upon only a small number of persons who were employed for the purposes of an organised religion.[5] It therefore believed that no further consultation was necessary with those likely to be adversely affected.[6]

1.25 The Committee recognises that, in the Department's view, an appropriate degree of consultation had already taken place with those likely to be affected by the new regulation. It also recognises the extensive consultations which have been undertaken on the overall implementation of the Directive. But as the Committee believes the precise extent of regulations 7(2) and (3) is uncertain, it cannot share the Department's confidence that regulation 7(3) will be strictly limited in its impact and extent.

1. The Committee considers that, in the light of the uncertain effect of regulation 7(3), the Department would have been prudent to undertake further consultation with representatives of persons likely to be adversely affected by regulation 7(3) before the draft Regulations were laid before Parliament.

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1   Appendix [ ], para 13 Back

2   Q36 (Ms McCarthy-Ward) Back

3   Appendix [ ], para 13 Back

4   Ibid., and Q 36 (Mr Magyar) Back

5   Appendix [ ], para 13 Back

6   Q37 (Ms McCarthy-Ward) Back

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Prepared 13 June 2003