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	England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Hottak & Anor, R (on the application of) v The Secretary of State for Foreign and Commonwealth Affairs & Anor [2015] EWHC 1953 (Admin) (08 July 2015) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2015/1953.html Cite as: [2015] IRLR 827, [2015] WLR(D) 297, [2015] EWHC 1953 (Admin)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		08/07/2015

Lord Justice Burnett:

Introduction

1. The claimants are both Afghan nationals who served as interpreters with the British Forces in Afghanistan. There are two policies in place to provide protection and benefits to Afghan nationals who worked for the British Government ["HMG"] in Afghanistan. Between them they comprise the Afghan Scheme. One is known as the Intimidation Policy and the other as the Redundancy (or Ex Gratia) Policy. They offer financial benefits and relocation opportunities including, in limited circumstances, to the United Kingdom, to those who qualify. During the engagement of British Forces in Iraq many members of staff (including interpreters) were employed locally. A different scheme was put in place at the end of that engagement. The claimants' case is that the Iraq Scheme was more generous.
2. These judicial review proceedings rely upon the Equality Act 2010 ["the 2010 Act"]. They have a substantive and a procedural element:

i) Substantively, the claimants contend that they are excluded from the more generous benefits of the Iraq Scheme on grounds of nationality which amounts to direct, alternatively indirect, discrimination contrary to:

a) Section 39(2) of the 2010 Act, which governs discrimination in relation to employee benefits; or

b) Section 29(6) of the 2010 Act, which governs discrimination in relation to public functions.

ii) Procedurally, the claimants contend that the defendants failed to comply with the Public Sector Equality Duty ["PSED"] contrary to section 149(1) of the 2010 Act.

The claimants additionally argue their discrimination claim under the common law.

3. We granted anonymity to the second claimant, who remains in Afghanistan, to avoid exposing him to any risk by virtue of these proceedings.

Outline Facts

4. This is a broad challenge to the Afghan Scheme on discrimination grounds. The individual circumstances of the claimants provide the background to the claim; but there is no individual public law challenge to its application to them. Therefore the precise details surrounding the claimants' employment, about which there is some controversy, are not central to the arguments. In the papers before the court there is much evidence relating to the nature and degree of risk of retaliation from the Taleban to which Afghan nationals are exposed as a result of having worked locally for HMG. That stems, at least in part, from evaluations of the experience of that group of people generally. Some of that evidence comes from the defendants and is based upon their understanding of events and their records. The claimants rely upon the evidence of informed experts, generic reports and press reporting as well as their own experience. The claimants' evidence suggests that there have been more attacks on such staff than is either recorded or accepted by the defendants. There has been no cross-examination of any witness or detailed factual inquiry as would have happened as part of a discrimination claim in an Employment Tribunal or County Court. That said, I do not consider that the factual disputes bear upon the legal issues at large in these claims.
5. Much is common ground. The British Forces operating in Afghanistan could not have functioned without the assistance of locally employed staff, including interpreters. Those engaged by HMG (and others in the coalition of forces which operated in Afghanistan) exposed themselves to considerable personal risk. The Taleban have exacted revenge against some of those it sees as having collaborated with forces of occupation. Locally employed staff, including interpreters, have been subject to intimidation, some have been attacked and killed (although there is a dispute about how many and, in particular whether there have been recent incidents). The risks may extend to their families. Those like the claimants, in working for the HMG, were principled and brave. The defendants recognise that conditions in both Iraq and Afghanistan have been such that locally engaged staff have run significant risks and, so far as Afghanistan is concerned, that the state and effectiveness of civil government is such that proper protection cannot be provided in all cases. They accept that insurgents in Afghanistan will view Afghan locally employed staff as legitimate targets.
6. Mr Hottak was engaged by HMG as an interpreter in 2006. In November 2007 he was injured whilst on patrol in Helmand Province. He undertook different work thereafter. In the autumn of 2009 he reported that he had been the subject of intimidation, including death threats. Mr Hottak resigned from his employment with effect from 6 November 2009. Thereafter he worked at an establishment called Fort Hunter. Although he suggests that he was again working for HMG, the evidence suggests he was engaged by the Afghan authorities. He was subject to further intimidation and left Fort Hunter in the late spring of 2011. Family members were threatened. Mr Hottak continued to receive threats. He fled to the United Kingdom where he was granted asylum.
7. AL was first employed as an interpreter by the Americans, but worked for British Forces between 2006 and June 2009. He too worked in front-line duties. Thereafter he was employed at Fort Hunter in a similar way as was Mr Hottak. Both AL and members of his family have been subject to threats. AL resigned from his employment at Fort Hunter in 2012 to protect his family. The Intimidation Policy was applied to AL after he raised his concerns about threats in early 2013. It is sufficient to record that he is dissatisfied with the assessment made of the risks he faces.

The Afghan Scheme

8. The security situation in Afghanistan was, throughout the period of engagement of British Forces, variable and complex. The strength of the Taleban waxed and waned and, in particular, its influence was limited in its geographical spread. The evidence of the defendants is that the level of intimidation of locally employed staff was on a much smaller scale than occurred in Iraq, both in absolute but also pro rata terms. There have been very few verified instances of death or injury. It was also possible, by contrast with Iraq, to investigate effectively allegations of intimidation and threats. The Afghan government continued to function. For these reasons HMG considered that it was possible to relocate threatened local staff to safe areas within Afghanistan.
9. 647 former staff have received offers under the ex gratia element of the Afghan Scheme. More than 200 claims of intimidation have been made, but most have not withstood scrutiny. In 96% of cases they have been dealt with by security advice. In a small number of cases the conclusion was that the person concerned should either move house or change his car, in which case the costs were borne by HMG. The overall assessment of HMG is that only in very few cases has there been an imminent risk to life consequent upon a person's former employment by HMG. By contrast with Iraq, their conclusion was that there was no justification for a large-scale offer of relocation to the United Kingdom.
10. The Intimidation Policy was adopted in November 2010 following its being agreed by the National Security, International and Defence Group which was a cross-governmental body of officials leading on Afghan issues. The policy was revised in 2013. It applied to all locally employed staff from 2001 and is not limited to Afghan nationals. It followed a framework for dealing with intimidation claims which had been adopted in January 2010. Before that, claims of intimidation were assessed and risks mitigated locally on a more informal basis. The aim of the policy is to keep former locally employed Afghan staff safe in Afghanistan in the event of risk arising from their former employment. Relocation to the United Kingdom is an option where the assessment is that in-country measures cannot meet the risk. The Intimidation Policy is separate from the redundancy arrangements found in the ex gratia scheme. The policy requires intimidation claims to be investigated with a graduated series of potential responses colloquially known as green, amber and red. If the assessment reaches Amber funding can be made available to relocate the person concerned, and his family, elsewhere in Afghanistan. If the assessment is Red then cases can be referred for relocation to the United Kingdom. The Immigration Rules were changed to facilitate this. Relocation to other countries was also an option available in these circumstances but the financial support was limited to the costs of relocation within Afghanistan (£15,000, save in exceptional circumstances).
11. The departure of British Forces from Afghanistan, unlike from Iraq, was announced long in advance. It was known as "drawdown". HMG had both the desire and wish to develop a redundancy scheme which properly reflected service. Ministers considered various options, including a combined scheme for intimidation and redundancy, a quota system for entry to the United Kingdom and variations on the relationship between length and type of service. The defendants' evidence suggests that amongst the considerations in play were (a) the need to avoid well-qualified individuals leaving Afghanistan; (b) the need for continued engagement of local staff by HMG in Kabul following drawdown; and (c) the need to be generous especially for those who had run physical risk. The details of the ex gratia redundancy policy were announced by the Secretary of State for Defence on 24 October 2013. It applied only to those who were employed by HMG on 19 December 2012, who were made redundant thereafter with at least 12 months' service, and also to those who left before 19 December 2012 as a result of sustaining serious injury in combat. Save for the relocation aspect of the policy (see 12(v) below) it applied to anyone locally employed.
12. In addition to any contractual entitlements, the financial package had two options:

i) 18 months' salary payable in instalments;

ii) The provision of training or education for up to five years with financial support.

Relocation to the United Kingdom formed part of the redundancy package if, subject to some exceptions not material to this claim, the following conditions were met:

iii) The person concerned had been made redundant on or after 19 December 2012 with at least 12 months' service or had left his employment as a result of being seriously injured in combat;

iv) He was engaged in the most dangerous tasks which took him regularly outside protected bases and onto the front line in Helmand;

v) He satisfied the requirements of paragraphs 276BA1 et seq of the Immigration Rules, which included that he was an Afghan national.

Where relocation was authorised, leave to enter the United Kingdom would be granted for five years with the possibility of applying for indefinite leave to remain thereafter. Relocation to the United Kingdom would be underpined by a support and financial package.

The Iraq Scheme

13. The Iraq Scheme was introduced in 2007 at a time when Iraq was in a state of civil war. It applied to locally employed staff who were Iraqi nationals. It was an ex gratia scheme which provided benefits beyond those contractually agreed. HMG's assessment was that up to June 2007, 28 locally employed staff had been killed in Iraq as a direct result of their employment, and others wounded. From 2003, a total of about 20,000 Iraqis were employed by HMG in various roles. Instances of intimidation were dealt with on an ad hoc basis. It was possible to provide protection for locally employed staff whilst they were at work but it was very difficult to do anything for them elsewhere. Conditions on the ground in Iraq made it nigh on impossible to assess or verify claims of alleged intimidation. No system was in place to deal with what was a very serious problem. The Iraq Scheme was designed as a remedy in the context of the inability to make qualitative judgements about the threat and risks to any individuals who had been employed locally by HMG, or to provide local support. Qualifying serving Iraqi staff were entitled to relocate to the United Kingdom if they considered themselves to be in danger, or to receive a lump sum. A key feature was that the qualifying staff self-assessed their own risk.
14. The Iraq scheme provided for redundancy payments determined by length of service with the maximum being 12 months' salary. Many received much less. Additional payments were made for dependents calculated at 10% for each (up to a maximum of five) of the basic award to the ex-employee. In those circumstances it was possible for a long-serving staff member with a large family to secure a payment of up to 18 months' salary. The relocation option applied to those directly employed by HMG and some who were employed by local contractors with a close association with the United Kingdom. They had to be in employment on or after 8 August 2007 and to have been employed for at least 12 months. They qualified if they were made redundant or were forced to resign in exceptional circumstances. Exceptional leave to enter the United Kingdom was made available to this category. The last date for applications for serving staff was identified as 16 January 2011. The 12 months' service had to have been accumulated by 16 October 2010.
15. The opportunity to relocate to the United Kingdom was also available to a small category of former staff (and their dependents), in practice interpreters and translators, who were employed after 1 January 2005 but had left before 8 August 2007 and completed at least 12 months' service. They could apply for resettlement in the United Kingdom via what was known as the Gateway programme if they were located in a third country (many were in Jordan) by making a claim for asylum there via the UNHCR. The asylum claim was on the hypothesis that they would be subject to persecution if returned to Iraq. The United Kingdom agreed to accept successful asylum seekers in this category. A quota was applied. Former staff within this limited category could also apply for some financial assistance as an alternative. The last date for applications for former staff was 19 May 2009.
16. Those who left their employment before 2005 were excluded altogether from the Iraqi Scheme. The cut off date was linked to the time when intimidation of locally employed staff began in Iraq.

Summary of differences between the two schemes

17. The Iraqi Scheme was designed to deal both with risk to locally employed staff and also to reward service. It was not possible to disentangle the two because of the difficulties in assessing risk. The Afghan Scheme comprised the two policies (intimidation and ex gratia).
18. Under the Iraqi Scheme the financial benefits were available only to Iraqi nationals, but under the Afghan Scheme to any locally employed staff. The redundancy payment was more generous under the Afghan Scheme, in that all were entitled to 18 months pay, whereas the Iraqi Scheme provided that as a maximum. The additional option of training with financial support was available under the Afghan but not the Iraqi Scheme.
19. Those who were employed at the date of drawdown and remained in Afghanistan were treated more generously financially than Iraqi nationals who remained in Iraq. By contrast, the ex gratia policy in Afghanistan was not applied to former employees who were located outside Afghanistan.
20. The Intimidation Policy continues to be available to benefit anyone locally employed by HMG in Afghanistan since 2001. Nothing comparable was available to locally employed Iraqi staff and, in any event, the Iraqi Scheme has long since closed.
21. The relocation options were different. Under the Iraqi Scheme those employed on 8 August 2007 and who had been employed for at least 12 months were able to relocate to the United Kingdom, as were a number (via the Gateway programme for asylum) who did not otherwise qualify. The Afghan Scheme allows relocation to the United Kingdom as part of the ex gratia scheme to those made redundant in December 2012 with 12 months' service who satisfy the relevant criteria. There is no quota. There is no arrangement in place with the UNHCR and a third country equivalent to the Gateway programme for asylum. Relocation to the United Kingdom under the Intimidation Policy is available in extreme circumstances.

Legislation

22. The 2010 Act is concerned to prevent direct discrimination against individuals "because of a protected characteristic" (section 13) and indirect discrimination on account of a provision, criterion or practice which discriminates in relation to a relevant protected characteristic (section 19). Race is a protected (and relevant protected) characteristic for both forms of discrimination. For these purposes race includes nationality (section 9). Part 3 is concerned with Services and Public Functions. Section 28 limits the application of part 3 and section 29 identifies the scope of the obligations under part 3:

"28 Application of this Part

1) …

2) This Part does not apply to discrimination, harassment or victimisation –

(a) that is prohibited by Part 4 (premises), 5 (work) or 6 (education), or

(b) that would be so prohibited but for an express exception."

It is apparent from the terms of section 28 that the scheme of the 2010 Act contemplates that a person should not be able to rely upon part 3 if he can rely upon the other parts, or would have been able to do so but for an exception found within the applicable part.

23. The prohibitions against discrimination relating to services and public functions are found in section 29 with relevant definitions in section 31:

"29 Provision of services, etc.

1) A person (a "service-provider") concerned with the provision of a service to the public or a section of the public (for payment or not) must not discriminate against a person requiring the service by not providing the person with the service.

2)…

3)…

4)…

5)…

6) A person must not, in the exercise of a public function that is not the provision of a service to the public or a section of the public, do anything that constitutes discrimination, harassment or victimisation.

7)…

8) …

9) In the application of this section, so far as relating to race or religion or belief, to the granting of entry clearance (within the meaning of the Immigration Act 1971), it does not matter whether an act is done within or outside the United Kingdom.

10) Subsection (9) does not affect the application of any other provision of this Act to conduct outside England and Wales or Scotland.

31 Interpretations and exceptions

1) …

2) …

3) …

4) A public function is a function that is a function of a public nature for the purposes of the Human Rights Act 1998.

5) …

6) …

7) …

8) …

9) …

10) Schedule 3 (exceptions) has effect."

24. Schedule 3 contains a wide range of exceptions to the application of section 29. It is common ground that, for present purposes, the material exception is found in paragraph 17 of schedule 3 which has the effect of authorising discrimination on grounds of nationality when that is required by the Immigration Act and Immigration Rules.
25. Part 5 of the 2010 Act is concerned with work. Section 39 governs its application to employees:

"39 Employees and applicants

(1) An employer (A) must not discriminate against a person (B) –

(a) in the arrangements A makes for deciding to whom to offer employment;

(b) as to the terms of which A offers B employment.

(2) An employer (A) must not discriminate against an employee of A's (B) –

(a) as to B's terms of employment;

(b) in the way A affords B access, or by not affording B access, to opportunities for promotion, transfer or training or for receiving any other benefit, facility or service;

(c) by dismissing B;

(d) by subjecting B to any other detriment.

(3) An employer (A) must not victimise a person (B) –

(a) in the arrangements A makes for deciding to whom to offer employment;

(b) as to the terms on which A offers B employment;

(c) by not offering B employment.

(4) An employer (A) must not victimise an employee of A's (B) –

(a) as to B's terms of employment;

(b) in the way A affords B access, or by not affording B access, to opportunities for promotion, transfer or training or for any other benefit, facility or service;

(c) by dismissing B;

(d) by subjecting B to any other detriment.

(5) A duty to make reasonable adjustments applies to an employer.

(6) Subsection (1)(b), so far as relating to sex or pregnancy and paternity, does not apply to a term that relates to pay –

(a) unless, were B to accept the offer, an equality clause or rule would have effect in relation to the term, or

(b) if paragraph (a) does not apply, except in so far as making an offer on terms including that term amounts to a contravention of subsection (1)(b) by virtue of section 13, 14 or 18.

(7) In subsections (2)(c) and (4)(c), the reference to dismissing B includes a reference to the termination of B's employment –

(a) by the expiry of a period (including a period expiring by reference to an event or circumstances);

(b) by an act of B's (including giving notice) in circumstances such that B is entitled, because of A's conduct, to terminate the employment without notice.

(8) Subsection (7)(a) does not apply if, immediately after termination, the employment is renewed on the same terms."

Schedule 9 governs exceptions to the application of Part 5, but none is of direct relevance for the purposes of this claim.

Territorial Reach of Section 39 of the Equality Act 2010

26. The claimants' argument under section 39 proceeds upon a number of propositions. First, each was an employee in Afghanistan of HMG. Secondly, both measures taken under the Intimidation Policy and benefits under the Ex Gratia policy fall within section 39(2). Thirdly, that the section applies to their employment in Afghanistan. Fourthly, that in providing different and better benefits to Iraqis in a similar position, albeit years before, there has been unlawful discrimination.
27. In the event that section 39 does not apply to the claimants' employment, they submit that section 29 applies because in devising and applying the scheme HMG were performing a public function. They recognise that the immigration aspects of the Afghan Scheme would fall outside the scope of section 29 by virtue of the exception found in paragraph 17 of schedule 3. That is a significant restriction because the complaint in these claims does not relate to financial benefits available in Afghanistan but to the limited scope afforded to those in the position of the claimants to relocate to the United Kingdom.
28. The logical first question is to consider whether section 39 of the 2010 Act governs the claimants' employment in Afghanistan. The act itself is silent about the territorial reach of both of the sections upon which the claimants rely. The 2010 Act applies to England and Wales. Almost all of it applies to Scotland but it does not apply to Northern Ireland (save a handful of minor provisions), section 217. Section 30 restricts the application of Part 3 to ships and hovercraft. Sections 81 and 82 introduce similar restrictions to the application of Part 5, and also to seafarers and offshore work. Each section contains a proviso that the restriction does not affect the application of any other provision to conduct outside England and Wales or Scotland. The selective restriction of the application of Parts 3 and 5 to activities outside Great Britain does not lead to the conclusion that they cannot have extra-territorial effect.
29. Paragraph 15 of the Explanatory Notes contains what can reasonably be inferred was the Parliamentary intent regarding territorial reach:

"As far as territorial application is concerned, in relation to Part 5 (work) and following the precedent of the Employment Rights Act 1996, the Act leaves it to tribunals to determine whether the law applies, depending for example on the connection between the employment relationship and Great Britain … In relation to the non-work provisions, the Act is again generally silent on territorial application, leaving it to the courts to determine whether the law applies."

30. The territorial scope of section 94(1) of the Employment Rights Act 1996 ["the 1996 Act"], which gave employees the right not to be unfairly dismissed, was considered by the House of Lords in three cases heard together in November 2005: Lawson v Serco Ltd [2006] UKHL 3; [2006] ICR 250 and then again by the Supreme Court in Duncombe v Secretary of State for Children, Schools and Families (No 2) [2011] UKSC 36; [2011] ICR 1312 and Ravat v Halliburton Manufacturing Services Ltd [2012] UKSC 1; [2012] ICR 389. The analysis on each occasion was by reference to the nature of the connection of the employment in question with the United Kingdom. Although concerned with unfair dismissal, the reasoning would apply to redundancy (subject to appropriate exceptions which apply to Crown employment) and other rights under that Act, for example the right not to suffer deduction of wages and the right to parental leave. Other employment rights are subject to express territorial restrictions by the terms of the legislation which confers them. For example, the National Minimum Wage Act 1948 applies only to those ordinarily working in the United Kingdom; the Working Time Regulations 1998 extend to Great Britain; and the Social Security Contributions and Benefits Act 1992 limits sick pay to those gainfully employed in Great Britain.
31. Both Mr Jaffey, for the claimants, and Mr Swift QC, for the defendants, developed their arguments on the application of section 39 of the 2010 Act to the claimants' employment by reference to these cases, at least tacitly accepting that the approach should be read across to section 39 of the 2010 Act. In his reply, Mr Jaffey perhaps shifted the claimants' ground by submitting that the statutory tort found in section 39 of the 2010 Act was "more fundamental" than ordinary employment rights. He at least hinted that the territorial reach of section 39 might be greater than that of the Employment Rights Act. Mr Swift did not suggest that the reach of section 39 should be narrower than under the Employment Rights Act.
32. It should not be forgotten that section 39 applies not only to those who are in work, but those seeking work (subsection (1)). It applies to victimisation (subsection (4)), and imposes a duty to make reasonable adjustments (subsection (5)). This case is concerned only with section 39(2) which prohibits discrimination against an employee with regard to benefits of employment. It might, however, immediately appear extravagant to suppose that Parliament intended the law relating to reasonable adjustments to be applied to employees who are engaged in a foreign country and work exclusively abroad, and indeed those seeking work exclusively abroad.
33. Of the three appeals heard together in Lawson two concerned expatriate workers whose work had strong connections with the United Kingdom and one an employee of an overseas company who was based in Great Britain. Mr Lawson worked for Serco Ltd as a security supervisor on Ascension Island, where the company had the contract servicing the Royal Air Force base. He was a former RAF policeman. He resigned after six months and claimed constructive unfair dismissal. Ascension Island is a volcanic outcrop in the South Atlantic with no local resident population but on which, at the time of the proceedings, about 1,100 people worked in defence or communications. It is a dependency of St Helena, a British Overseas Territory. In the second appeal, Mr Botham had worked for the Ministry of Defence since 1988 starting as a "UK-Based youth worker" with the British Forces Germany Youth Service. He worked at various British bases in Germany. Under the relevant NATO agreement he was part of the civilian component of British Forces in Germany. He was treated as resident in the United Kingdom, including for tax purposes. He was dismissed and claimed that his dismissal was unfair. Mr Crofts worked for Veta Ltd, a subsidiary of Cathay Pacific Ltd. Both were Hong Kong companies. Veta Ltd employed aircrew on behalf of Cathay Pacific who were then assigned a home base, which could be outside Hong Kong. Mr Crofts' home base was Heathrow, which enabled him to live in Great Britain.
34. In para 6 of his opinion Lord Hoffmann, with whom all members of the Appellate Committee agreed, noted the general principle that legislation is ordinarily territorial. However, section 94(1) provided an employee with a statutory remedy in an environment which, whilst contractual in origin, was capable of having contact with different jurisdictions. The question was one of construction:

"As Lord Wilberforce said in Clark v Oceanic Contractors Inc [1983] 2 AC 130 at 152 it requires –

'an inquiry to be made as to the persons with respect to whom Parliament is presumed, in the particular case, to be legislating. Who, it is to be asked, is within the legislative grasp, or intendment, of the statute under consideration?'"

35. The practical impact of deciding whether the employee in question could rely upon section 94(1) of the 1996 Act was that if the answer were yes, he could bring a claim for unfair dismissal in the Employment Tribunal.
36. The "standard, normal or paradigm" case was of an employee working in Great Britain, para 25. The base of a peripatetic employee, for the purposes of the statute, would be the place of his employment, paras 29 and 34. That provided the answer in Mr Crofts' appeal. Lord Hoffmann next considered expatriate employees. He noted that "the circumstances would have to be unusual for an employee who works and is based abroad to come within the scope of British labour legislation", but it was not impossible, para 36. He continued:

"I hesitate to describe such cases as coming within an exception or exceptions to the general rule because that suggests a definition more precise than can be imposed upon the many possible combinations of factors, some of which may be unforeseen. Mr Crow submitted that in principle the test was whether, despite the workplace being abroad, there are other relevant factors so powerful that the employment relationship has a closer connection with Great Britain than with the foreign country where the employee works. This may well be a correct description of the cases in which section 94(1) can exceptionally apply to an employee who works outside Great Britain, but like many accurate statements, it is framed in terms too general to be of practical help. I would also not wish to burden tribunals with inquiry into the systems of labour law of other countries. In my view one should go further and try, without drafting a definition, to identify the characteristics which such exceptional cases will ordinarily have."

Having indicated his support for the formulation advanced by counsel (albeit whilst noting its practical limitations), Lord Hoffmann gave examples of circumstances in which section 94(1) might apply to expatriate employees. Working abroad for a business based in Great Britain would be necessary but not sufficient. It would not be sufficient for the employee to be British, or that he was recruited in Britain. Something more was needed to take the case outside the general rule that "the place of employment is decisive", para 37. The fact that an employee is posted abroad by a British employer for the purposes of the business carried out in Great Britain may provide more, by contrast with working for a business conducted abroad that happens to belong to British owners or is a branch of a British business. The foreign correspondent of a British newspaper would be an example, even though he lived and worked abroad, para 38. The second example he gave was of an expatriate employee of a British employer who was operating within "what amounts for practical purposes to an extra-territorial British enclave in a foreign country", para 39. He considered that covered Mr Botham's circumstances working for the Army in Germany. He thought that Mr Lawson's case was less strong, but it was "unrealistic to regard him as having taken up employment in a foreign community in the same way as if Serco Ltd were providing security services to a hospital in Berlin". On Ascension Island there was no local community. "In practice, as opposed to constitutional theory, it was a British outpost … Although there was a local system of law, the connection between the employment relationship and the United Kingdom was overwhelmingly stronger." Lord Hoffman continued, para 40:

"I have given two examples of cases in which s 94(1) may apply to an expatriate employee: the employee posted abroad to work for a business conducted in Britain and an employee working in a political or social British enclave abroad. I do not say that there may not be others, but I have not been able to think of any and they would have to have equally strong connections with Great Britain and British employment law."

37. Before stating that conclusion Lord Hoffmann had approved the decision in Bryant v Foreign and Commonwealth Office [2003] All ER (D) 104 (May); 2003 WL 1935335. That held that section 94(1) did not apply to a British national locally engaged to work in the British Embassy in Rome.
38. Duncombe concerned teachers employed by HMG to work in European schools abroad. These are institutions which have been established by the European Union and whose operation is governed by EU obligations. They were employed in an international enclave, not a British enclave, but their employment had no connection with the country in which they happened to work. Lady Hale, giving the judgment of the court, observed, para 9:

"It is therefore clear that the right will only exceptionally cover employees who are working or based abroad. The principle appears to be that the employment must have much stronger connections both with Great Britain and with British employment law than with any other system of law. There is no hard and fast rule and it is a mistake to try and torture the circumstances of one employment to make it fit one of the examples given [by Lord Hoffmann], for they are merely examples of the application of the general principle."

The court concluded that the circumstances of these teachers were such that the 1996 Act applied:

"In our view, these cases do form another example of an exceptional case where the employment has such an overwhelmingly closer connection with Britain and with British employment law than with any other system of law that it is right to conclude that Parliament must have intended that the employees should enjoy protection from unfair dismissal. This depends upon a combination of factors. First, as a sine qua non, their employer was based in Britain; and not just based here but the Government of the United Kingdom. This is the closest connection with Great Britain that any employer can have, for it cannot be based anywhere else. Second, they were employed under contracts governed by English law; the terms and conditions were either entirely those of English law or a combination of those of English law and the international institutions for which they worked. Although this factor is not mentioned in Lawson v Serco, it must be relevant to the expectation of each party as to the protection which the employees would enjoy. … Third, they were employed in international enclaves, having no particular connection with the countries in which they happened to be situated and governed by international agreements between the participating states. They did not pay local taxes. The teachers were there because of commitments undertaken by the British government … Fourth, it would be anomalous if a teacher who happened to be employed by the British government to work in the European School in England were to enjoy different protection from the teachers who happened to be employed to work in the same sort of school in other countries." Para 16.

39. Lady Hale considered that the second and third factors were particularly telling. She added, para 17:

"This very special combination of factors, and in particular the second and third, distinguishes these employees from the "directly employed labour" of which Mrs Bryant was an example. There, the closer analogy was with a British, or indeed any other company, operating a business in a foreign country and employing local people to work there. These people are employed under local labour laws and pay local taxes. They do not expect to enjoy the same protection as an employee working in Great Britain, although they do expect to enjoy the same protection as an employee working in the country where they work. They do, in fact, have somewhere else to go. (It would indeed be contrary to the comity of nations for us to assume that our protection is better than any others'.)"

40. In Ravat the appellant was a Scottish company, a subsidiary of a United States parent company. Mr Ravat was employed by the respondent to work in Libya to which he commuted. Whilst in Libya he worked for a German subsidiary of the US company. His pattern was 28 days work in Libya followed by 28 days at home in Great Britain, where he had no obligation to work. It was effectively a job share because another employee worked the mirror image. The company paid his travel costs to and from his home and Libya. His human resources contact was with the company's department in Scotland. His benefits were preserved whilst he was working abroad in the same way as if he were working in Great Britain. His pay and pension structure was the same as those who worked in Great Britain. He was paid in sterling and paid United Kingdom tax and national insurance. He was told explicitly that his contract of employment would be governed by United Kingdom employment law. Mr Ravat was dismissed for redundancy and was able to invoke the internal grievance procedure, which took place in Scotland. An Extra Division of the Outer House of the Court of Session concluded that the Employment Tribunal had jurisdiction under section 94(1) of the Employment Rights Act to bring a claim for unfair dismissal. The Supreme Court agreed.
41. Lord Hope, with whom all the other justices agreed, restated the correct approach at paras 27 to 29:

"27. Mr Cavanagh drew attention to Lord Hoffmann's comment in Lawson, para 37, that the fact that the relationship was "rooted and forged" in Great Britain because the respondent happened to be British and he was recruited in Great Britain by a British company ought not to be sufficient in itself to take the case out of the general rule. Those factors will never be unimportant, but I agree that the starting point needs to be more precisely identified. It is that the employment relationship must have a stronger connection with Great Britain than with the foreign country where the employee works. The general rule is that the place of employment is decisive. But it is not an absolute rule. The open-ended language of section 94(1) leaves room for some exceptions where the connection with Great Britain is sufficiently strong to show that this can be justified. The case of the peripatetic employee who was based in Great Britain is one example. The expatriate employee, all of whose services were performed abroad but who had nevertheless very close connections with Great Britain because of the nature and circumstances of employment, is another.

28. The reason why an exception can be made in those cases is that the connection between Great Britain and the employment relationship is sufficiently strong to enable it to be presumed that, although they were working abroad, Parliament must have intended that section 94(1) should apply to them. The expatriate cases that Lord Hoffmann identified as falling within its scope were referred to by him as exceptional cases: para 36. This was because, as he said in para 36, the circumstances would have to be unusual for an employee who works and is based abroad to come within the scope of British labour legislation. It will always be a question of fact and degree as to whether the connection is sufficiently strong to overcome the general rule that the place of employment is decisive. The case of those who are truly expatriate because they not only work but also live outside Great Britain requires an especially strong connection with Great Britain and British employment law before an exception can be made for them.

29. But it does not follow that the connection that must be shown in the case of those who are not truly expatriate, because they were not both working and living overseas, must achieve the high standard that would enable one to say that their case was exceptional. The question whether, on given facts, a case falls within the scope of section 94(1) is a question of law, but it is also a question of degree. The fact that the commuter has his home in Great Britain, with all the consequences that flow from this for the terms and conditions of his employment, makes the burden in his case of showing that there was a sufficient connection less onerous. Mr Cavanagh said that a rigorous standard should be applied, but I would not express the test in those terms. The question of law is whether section 94 (1) applies to this particular employment. The question of fact is whether the connection between the circumstances of the employment and Great Britain and with British employment law was sufficiently strong to enable it to be said that it would be appropriate for the employee to have a claim for unfair dismissal in Great Britain."

42. The contracts of employment of the claimants do not suggest that they are subject to English law or give any support for the proposition that domestic employment law might apply. Indeed, many of the terms of the contracts would not be compatible with domestic employment law. For example, the contract reserves the right unilaterally to change the terms and conditions and provides for what might be regarded as peremptory powers in the employer over dismissal and redundancy. It has not been suggested that the contracts were governed other than by Afghan law. Payment was to be in $US. As a result of a concession from the Afghan government, no income tax was payable. There was an express term that required locally employed staff to give the British forces their undivided loyalty.
43. Mr Jaffey submits that the circumstances are such that this is another exceptional case that would be recognised as conferring British employment rights upon locally employed Afghan staff. He relies, in particular, on the fact that they were exempt from local income tax and that they owed contractual obedience and loyalty to their employer. Their employer was not a British business or diplomatic mission, but the British forces engaged in a counter-insurgency exercise. The claimants were line-managed by British personnel in Afghanistan, were subject to security screening and were the beneficiaries of a policy that insisted upon United Kingdom standards of health and safety. They worked alongside British forces and were provided for security purposes with clothing to make them indistinguishable from soldiers. Whilst working, they were based in Camp Bastion and the British Embassy in Kabul.
44. The starting point in considering whether the claimants' employment was governed by British employment law, so that they could bring claims for unfair dismissal etc., is that they were not expatriate workers or peripatetic workers however widely those terms might be understood and were described in the cases to which I have referred. They had no physical contact or connection with Great Britain at all. They were staff locally engaged by HMG to provide local support, albeit vital support and in roles that exposed them to danger. Such staff covered a wide range of tasks. The connection with Great Britain was, in truth, limited to the identity of their employer albeit engaged in vital work. In my judgment, the factors relied upon by the claimants fall far short of being so powerful as to support the contention that the employment relationship has a closer connection with Great Britain than with Afghanistan. They do not have stronger connections with Great Britain and with British employment law than with Afghanistan and Afghan law. Their contracts were not governed by English law. True it is that they worked in and from both Camp Bastion and the British Embassy, but that was far removed from operating in an international enclave of the sort discussed by Lady Hale in Duncombe. There is, to my mind, no analogy with Ascension Island. When not working, the claimants (and those in a similar position) did or could go home in Afghanistan. They continued to live and work in Afghanistan. I do not consider that their position can be distinguished as a matter of law from the locally employed member of staff in a British Embassy, as considered in Bryant. It is difficult to imagine that the reach of the 1996 Act could embrace an employment relationship in which a person was engaged, albeit by HMG, in a foreign country to work exclusively in that foreign country.
45. It follows that if the reach of section 39(2) of the 2010 Act is the same as that of the 1996 Act it has no application to the claimants' circumstances. I do not accept the submission that an intention can be imputed to Parliament that because discrimination on grounds of protected characteristics would be in issue, rather than unfair dismissal or other employment rights, it intended the territorial scope of the provision to be wider. There is much to be said for symmetry between the two statutory provisions because the Employment Tribunal has jurisdiction both for claims under the 1996 Act and for claims under Part 5 of the 2010 Act (section 120); and commonly claims are brought under both legislative schemes in that tribunal. We heard no argument that the reach of section 139(2) should be narrower. I am content to proceed on the basis that the reach is the same, and not narrower, but do so with some hesitation. As a result of domestic legislation, European Union legislation and judicial interpretation of article 14 of the European Convention on Human Rights, discrimination law in the United Kingdom (and throughout Europe) has been transformed in recent decades. Behaviour once commonplace, lawful and widely accepted in many respects is no longer lawful. Laws have been changed to reverse legislative discrimination. It is unnecessary to give examples, many of which will come to mind readily. Nonetheless, the 2010 Act itself recognises many exceptions to the basic non-discrimination rules which reflect sensibilities and traditions in the United Kingdom. There are many countries in the world where different views are taken on matters which are no longer the subject of serious debate in Western Europe. In the case of expatriate and peripatetic workers, it is not difficult to imagine circumstances where the application of the 2010 Act to their employment could conflict with local laws and customs. Should such a case arise, the issue will need consideration. In Duncombe the Supreme Court heard submissions about the need for international comity. That could become a live issue in other foreign discrimination cases which it is said are governed by Part 5 of the 2010 Act.

Section 29 of the 2010 Equality Act

46. I have foreshadowed Mr Jaffey's argument under section 29(6) of the 2010 Act. It is that if the claimants cannot rely upon section 39(2) their claim can be made under section 29(6), albeit that those aspects of their complaints which relate to relocation in the United Kingdom are excluded from consideration by schedule 3 paragraph 17.
47. There is a fundamental difficulty with this part of the claim. Section 28 is framed to ensure that no claim can be made under Part 3 of the 2010 Act if there is, or would be but for an express exception, a claim under Part 5 (work). If my conclusion on the reach of section 39(2) is correct, the reason why the claimants fail under Part 5 is not because of an express statutory exception, but because no intention can be imputed to Parliament to apply that provision to the claimants' employment. Can Parliament have intended that a claim which relates to terms and conditions of employment which is outside the territorial reach of Part 5 is nevertheless within the territorial reach of Part 3? Such a result would be at least anomalous and in my judgment cannot have been within the contemplation of Parliament.
48. Understandably, Mr Swift did not argue that the introduction and application of the Afghan Policy were not "public functions" for the purposes of section 29(6) of the 2010 Act. It was not suggested that any help might be derived in determining its geographical reach from the reference in section 31(4) to the Human Rights Act. It is possible to envisage an argument that a function of government (or other public function of a body subject to the Human Rights Act) which falls outside the jurisdiction of the Convention is also outside the territorial reach of section 29(6). But the question is whether the application of a scheme devised and approved in London to provide non-contractual benefits to individuals employed in Afghanistan was something which Parliament intended should be governed by section 29(6). We raised the question whether section 29(6) governed the activities of the Foreign Office abroad, foreign policy in general and (for example) the distribution of aid by the Department for International Development. It does not appear that there is any clear answer. Express exemptions in schedule 3 relating to the combat readiness of the Armed Forces and the activities generally of the intelligence agencies shed no light on the territorial reach of section 29(6) of the 2010 Act in connection with activities of HMG which are carried out abroad, some of which, by their nature, are likely to involve discrimination.
49. It is nonetheless clear that Parliament cannot have intended that employment related issues which are not subject to Part 5, because it lacks the necessary territorial reach, nevertheless fall within section 29(6). The contrary conclusion would produce a nonsense. That can be tested by having regard to the many exceptions which apply by virtue of schedule 9 to discrimination under Part 5 which find no echo in schedule 3 relating to claims brought under Part 3. Were the claimants right in their submissions, an exemption that could be relied upon to defend a claim under Part 5, upon which it was unnecessary to rely because Part 5 had no application, would not be available under Part 3.

Further arguments on discrimination

50. The claimants advanced a subsidiary argument that their treatment is unlawful at common law. The point merited a passing mention in the claimants' skeleton argument but was not developed orally. It is based on the proposition that like cases should be treated alike. It is submitted that the position of locally employed staff in Iraq is indistinguishable from locally employed staff in Afghanistan so that precisely the same terms should have been applied to both.
51. Whilst it is correct to say that locally employed staff provided assistance to British forces in both theatres and that in doing so many exposed themselves to risk, it cannot be said that the circumstances were the same. The security considerations were different; the ability to investigate threats was different; the possibility of differentiating between an intimidation policy and ex gratia benefits to reflect service arose only in Afghanistan. The two schemes were developed to reflect the circumstances prevailing at different times in different countries. This is in reality a Wednesbury challenge. It cannot prosper on the facts.
52. In view of the conclusion that the claimants cannot rely upon either of the two statutory provisions in the 2010 Act, it is strictly unnecessary to explore the further arguments about whether those in the claimants' position have been the subject of direct or indirect discrimination. I will do little more than state briefly my conclusions on those questions.
53. The claimants' case is that there has been direct discrimination against them by virtue of their nationality because they have been excluded from, or from taking the benefit of, the Iraqi Scheme. That is an unreal way of putting the claim, because the Iraqi scheme applied only to locally employed staff in Iraq, subject to conditions as to periods of employment of no relevance at all to Afghanistan and which, in any event, has long been closed even to Iraqis. It is more accurate to characterise the complaint as being that HMG did not replicate precisely the features of the Iraqi scheme when devising the two policies which comprise the Afghan Scheme.
54. The central concern of the claimants is the perceived difference between the opportunities for relocating to the United Kingdom. Although the claimants were not employed by HMG at the date of drawdown, the thrust of the argument is that those who were (and had been employed for at least 12 months) should have been able to come to the United Kingdom without more. So far as the claimants themselves are concerned, they would need to rely upon a hypothetical parallel provision as applied in Iraq for those who had ceased to be employed, but had been employed within a period of about two and half years before December 2012 for at least 12 months. It is unclear how they suggest that the opportunity for ex-employees who were outside Iraq to make an asylum application to the UNHCR, which would if successful have resulted in relocation to the United Kingdom, should have been replicated. A feature of Iraq was that many former locally employed staff had fled with their families, particularly to Jordan, something for which there was no parallel in Afghanistan.
55. For the purposes of direct discrimination the claimants would need to show that HMG discriminated against them by treating them less favourably because of their nationality; see section 13(1) of the 2010 Act. Section 23 provides:

"Comparison by reference to circumstances

(1) On a comparison of cases for the purpose of section 13, 14 or 19 there must be no material difference between the circumstances relating to each case.

(2) …

(3)…"

These claims are concerned not only with section 13 but with section 19 (indirect discrimination). Section 14 (combined characteristics) is not in play in these claims.

56. The claimants are, in my view, right to suggest that, in so far as the two schemes provide opportunities to relocate to the United Kingdom, the Iraqi one was more generous to locally employed staff than the Afghan. However, the reason why the schemes provide for different opportunities to relocate to the United Kingdom is not because of the nationality of those who provided services to HMG. It is because they did so in different countries, at different times, with different levels of threat and risk and in circumstances which generated different opportunities to investigate that risk. For that reason, I do not accept that there was direct discrimination on grounds of nationality. Furthermore, for both the purposes of direct and indirect discrimination there were material differences between the circumstances in the two countries and in the circumstances of locally employed staff in each.

The Public Sector Equality Duty

57. No assessment was made for the purposes of section 149 of the 2010 Act before the Afghan Scheme was formulated and announced. In response to this litigation an equality analysis was undertaken. The claimants submit that the defendants have failed in their statutory duty to have due regard to the PSED whilst devising the Afghan Scheme, with the result that it should be quashed. As material section 149 provides:

"149 Public sector equality duty

(1) A public authority must, in exercise of its functions, have due regard to the need to –

(a) eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under this Act;

(b) advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it;

(c) foster good relations between persons who share a relevant protected characteristic and persons who do not share it.

(2) …

(3) …

(4) …

(5) …

(6) …

(7) The relevant protected characteristics are –

…

Race;

…

(8) A reference to conduct that is prohibited by or under this Act includes reference to –

(a) a breach of an equality clause or rule;

(b) a breach of a non-discrimination rule.

(9) Schedule 18 (exceptions) has effect."

Schedule 18 provides, in relation to the exercise of immigration functions, that section 149(1)(b) does not apply to nationality. We have seen that in exercising public functions there are exceptions relating to immigration which has the result that section 149(1)(a) is also not engaged in relation to immigration decisions dictated by legislation and the rules.

58. In considering the PSED ground of challenge there are two immediate factors that limit its scope. First, if I am right in concluding that neither section 39(2) nor 29(6) of the 2010 Act is in play in these proceedings, then section 149(1)(a) has no relevance. Secondly, section 149(1)(b) could have no application to the immigration aspects of the Afghan Policy. So much was accepted by Mr Jaffey. Nonetheless, he submits that section 149(1)(b) and section 149(1)(c) apply to the Afghan Scheme, the former to its financial aspects, because the defendants were public authorities performing a function. He submits that neither has a territorial limitation, whereas section 149(1)(a) imports whatever territorial limitations are applicable to the non-discrimination provisions of the legislation. He submits that the ex post facto analysis conducted by the defendants does not cure the failure to have due regard to the statutory factors in the formulation of the policy which the provision requires: see the summary in the judgment of McCombe LJ in R (Bracking) v Secretary of State for Work and Pensions [2013] EWCA Civ 1345; [2014] Eq LR 60 at para 25.
59. A public authority for these purposes is defined in schedule 19 of the 2010 Act as including a Minister of the Crown and a government department (excluding the intelligence agencies) and the Armed Forces. A public function is defined by section 150(5) as "a function of a public nature for the purposes of the Human Rights Act 1998". I have already observed that Mr Swift did not suggest, in relation to the argument under section 29(6), that the formulation and application of the Afghan Policy fell outside that definition. Section 150(3) provides:

"A public authority in Schedule 19 is subject to the duty imposed by section 149(1) in relation to the exercise of all of its functions unless subsection (4) applies."

Subsection (4) provides:

"A public authority specified in that Schedule in respect of certain specified functions is subject to that duty only in respect of the exercise of those functions."

60. The scheme of section 149 is to apply the PSED by reference to the functions of the relevant body. In the formulation of policy it does not matter, in my view, that the policy may have an impact wholly or partly outside Great Britain. The territorial limitations implicit in section 149(1)(a) follow the application of the substantive parts of the act but otherwise there are no territorial limitations. Although Mr Swift's written material suggested otherwise, I did not understand him to press the point in his oral argument.
61. It follows that, in the formulation of the Afghan Policy, the defendants should have had due regard to the matters identified in section 149(1)(b) and (c) of the 2010 Act. The principal focus of the claimants' case throughout has been on the relocation aspects of the scheme. The Intimidation Policy does not raise any issues that might be touched by those subsections. It applies to anyone who was employed by HMG in Afghanistan without reference to any relevant protected characteristics. It is designed to respond as necessary and appropriate to threats. The assessment carried out in February this year identified the differences between the Afghan and Iraqi policies including on the scope for relocating to the United Kingdom. It concluded that the financial package available to locally employed staff in Afghanistan was more generous that that available to Iraqis. Mr Jaffey complains that the analysis did not adequately consider alternative policies to minimise the differences, albeit that his concern was centred on the relocation options. By contrast, Mr Swift submits that the work done recently, had it been done as the policy was developed would have satisfied the PSED. That submission is, in my view, correct.
62. It would not be appropriate to quash the Afghan Scheme (or either of the policies comprised within it) on account of the failure to undertake an equality analysis before it was put in place. On any view, quashing the scheme would have an adverse impact on those who might wish to take advantage of the Intimidation Policy or who are currently in receipt of the training package with continuing financial support. Something temporary would have to be put in place immediately. Furthermore, given the analysis that has now been done, which additionally covered aspects of the scheme which I have concluded fall outside the scope of the PSED, it does not seem to me that, as a matter of discretion, a quashing order is necessary. Equally, a mandatory order requiring a fresh analysis limited to the aspects which should have been covered would serve no useful practical purpose. The appropriate remedy for the failure to have due regard to the matters in section 149(1)(b) and (c) of the 2010 Act is a declaration to that effect.

Conclusion

63. The discrimination claim founded upon section 29(6), alternatively section 39(2) of the Equality Act 2010 fails because the territorial reach of those provisions is not such as to include the claimants' circumstances. The common law claim has no substance. The claim relating to the Public Sector Equality Duty is made out to the extent that, subject to paragraph 2 of schedule 18, the defendants failed to have regard to the matters set out in section 149(1)(b) and (c) of the Equality Act 2010 when formulating the Afghan Scheme. To that extent only, if my Lord agrees, the claim for judicial review succeeds.

Mr Justice Irwin

64. I agree.