United Kingdom House of Lords Decisions

HOUSE OF LORDS

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE

Secretary of State for Trade and Industry (Respondent) v. Rutherford and another (FC) (Appellants) and others

[2006] UKHL 19

LORD NICHOLLS OF BIRKENHEAD

My Lords,

1.   Most people in this country who work as employees stop working by the time they are 65 years of age. The percentage of the workforce carrying on after that age is very small. One disadvantage suffered by those who do continue working is that they no longer have the benefit of redundancy pay or compensation for unfair dismissal. A higher proportion of men continue in employment after 65 than women. So, it is said, the cut-off age fixed by the employment legislation indirectly discriminates against men. An apparently neutral statutory provision has in fact a disparate impact on men. That is the claim in these proceedings. The legislative cut-off age, it is said, infringes the equal pay obligations imposed by article 141 of the EC Treaty.
2.   This summary over-simplifies the facts. The detailed facts are set out by my noble and learned friend Lord Walker of Gestingthorpe. But the summary suffices to identify the essential issue.
3.   My Lords, these facts seem to me to give rise in principle to an issue of indirect sex discrimination. Workers who retire under 65 have the statutory protection of redundancy pay and compensation for unfair dismissal throughout their working lives. Those who continue to work beyond that age do not. They lose that protection when they are 65. Of course most employees do not want, or are not able, to work beyond the age of 64. For present purposes that is nothing to the point. All employees wish to have the statutory protection so long as they are working. Those who retire under 65 have that protection, those who retire later do not. For present purposes, that is the appropriate characterisation of the impact of the statutory cut-off age.
4.   In my view, however, the claim in the present case founders at an early stage. The percentage of employees who are not adversely affected by the cut-off age is about 98.8%. In the make-up of this group there is virtually nothing to choose between men and women. The percentage of male employees not adversely affected is 98.6%. The corresponding figure for women is 99.0%. The percentage of employees who are adversely affected comprises the residual figures. This group comprises 1.2% of the workforce, and the split between men and women is 1.4% men and 1.0% women. This group comprises about 320,000 employees altogether.
5.   I do not think these figures show that the impugned legislation has an adverse impact on a substantially higher proportion of men than women. Substantial numbers of employees are involved. But the ratio of women and men who are adversely affected is 1:1.4. In the context of a national scheme applicable alike to men and women in an employed workforce of over 26 million workers, of whom only 1.2% are affected by the cut-off age, I consider this ratio does not suffice to establish the necessary degree of disparate impact as between men and women. For this reason, explored more fully in the speech of Lord Walker of Gestingthorpe, I would dismiss this appeal.

LORD SCOTT OF FOSCOTE

My Lords,

6.   These appeals raise a short point. Sections 109 and 156 of the Employment Rights Act 1996 impose, in their application to the two appellants, a cut-off age of 65 for "the right not to be unfairly dismissed…" (s.94(1) and s.109(1) of the 1996 Act) and for the right, on dismissal for redundancy, to a redundancy payment (s.156(1) of the 1996 Act). Mr Rutherford was dismissed when he was aged 67. He wants to claim a redundancy payment and compensation for unfair dismissal. Mr Bentley was dismissed when was aged 73. He wants to claim a redundancy payment. At first blush the statutory provisions appear to stand in their way. But both appellants contend that under EC law, Article 141, the statutory bar constitutes indirect discrimination against them on the ground of their sex and is therefore unlawful. They accept, of course, that the statutory bar does not constitute direct discrimination against men. The statutory provisions are neutral in their terms, expressed to apply to all men and all women in employment after the age of 65. The appellants point, however, to statistics that show that relatively more women than men leave employment under the age of 65 and, consequently, that relatively more men than women over the age of 65 are still in employment. This shows, they say, that relatively more men than women are prevented by the statutory bar from making unfair dismissal or redundancy claims and that this disparate effect constitutes indirect discrimination. The short point is whether they are right.
7.   This short point produced a judgment of some 14 pages by the Employment Tribunal (which held that the appellants' contention was right), a judgment of over 100 pages by the Employment Appeal Tribunal (which held it was not) and a judgment by Mummery LJ in the Court of Appeal, agreed to by the other members of the Court, that, in a mere 14 pages, upheld the EAT. Mummery LJ commented on the lamentable state of complexity and obfuscation which appeared to attend this area of employment law. In paragraph 3 of his judgment, set out by my noble and learned friend Lord Walker of Gestingthorpe in his opinion (para 37) which I have had the opportunity of reading in advance, one finds references to the "increasingly voluminous and incredibly intractable" legal materials on indirect discrimination, to the arguments becoming "more convoluted, while continuing to multiply" and to the "cascades of case law" from this House and from the European Court of Justice. Any judge who reads references of that character is likely instinctively to feel that something has gone awry with the jurisprudence about indirect discrimination.
8.   It is not that the concept of indirect discrimination on the ground of sex is difficult to express or to understand. The concept is succinctly defined in the Burden of Proof Directive (97/80/EC) -
"…indirect discrimination shall exist where an apparently neutral provision, criterion or practice disadvantages a substantially higher proportion of the members of one sex unless that provision, criterion or practice is appropriate and necessary and can be justified by objective factors unrelated to sex."

The text of the Directive that I have cited contains, first, a statement of the situation that must be found to exist - it must be shown that a substantially higher proportion of the members of one sex than the members of the other sex are disadvantaged by the provision in question - and, second, if that situation is shown to exist, a requirement that the need for the provision be justified. So, where a complaint of indirect discrimination is made two issues potentially arise. Both have been argued before your Lordships on these appeals but I want to concentrate for the moment on the first. Unless the requisite situation of relative disadvantage can be shown, the second issue, the issue of justification, does not arise.

9.   The Directive speaks of a "substantially higher proportion of the members of one sex" being disadvantaged. This is the language of comparison. It poses the question whether the proportion of men disadvantaged by the statutory bar is substantially higher than the proportion of women disadvantaged by it. The two proportions must be compared. Each proportion, expressed as a vulgar fraction, needs a numerator and a denominator. So the appropriate numerator and denominator must be identified.
10.   In relation to each of the fractions required by the Directive to be compared the numerator will be the number of the men (in the one case) and the number of the women (in the other case) who are disadvantaged by the statutory bar. There are two possible views as to who should be included in this disadvantaged group. One view is that the disadvantaged will be those employees over the age of 65 who are dismissed. If their employment is terminated for any reason other than dismissal, i.e. voluntary retirement or death (it is difficult to think of any other terminating event), it is not obvious that they are disadvantaged by a bar on claims for compensation for unfair dismissal or for redundancy payments. An alternative view is that everyone who is in employment over the age of 65 is disadvantaged by the statutory bar. He or she will be working under conditions that allow no remedy for unfair dismissal or for dismissal on redundancy grounds. These seem to me to be the only two possible alternatives for the numerator.
11.   The identification of the denominator depends on the choice of numerator. If the appropriate numerator is the number of over 65 year olds who have been dismissed, then the obvious denominator would be the total number of over 65 year olds in employment. The comparison would ask whether the proportion of over 65 year old men in employment who had been dismissed was substantially higher than the proportion of over 65 year old women in employment who had been dismissed. I will refer to this comparison as "comparison A".
12.   But if the correct numerator in each fraction is the total number of men, in the one case, and of women in the other case, over the age of 65 and still in employment, the identification of the correct denominator becomes more difficult. One view might be that the denominator should, as in comparison A, still be the total number of men, or of women (as the case may be), over 65 years of age and still in employment. If that is right, the denominator for each of the fractions that are to be compared will be equal to the numerator for that fraction. This choice of the denominator would, in effect, constitute a mathematical expression of the conclusion that this particular type of statutory provision cannot, if the disadvantaged group is to be taken to include all the over 65s still in employment, create a situation of indirect discrimination. This is a startling conclusion, but it should not on that account be discounted and I want to spend a moment or two in considering it.
13.   Let me start by emphasising, perhaps unnecessarily, that indirect discrimination is a type of discrimination. The adjective "indirect" has sometimes been criticised as insufficiently descriptive of the type. It has been suggested that "secret" or "concealed" might be more descriptive. But the adjective is less important than the noun. What is being looked for is discrimination. Has one sex been subjected to a disadvantage that the other sex is not subjected to? The Directive, entirely consistently, asks whether the provision in question "disadvantages" one sex proportionately more than the other.
14.   The leading case on the subject, R v Secretary of State for Employment ex parte Seymour-Smith which led to a European Court of Justice ruling ([1999] 2 AC 554) followed by a ruling from this House ([2000] ICR 244), was not a case of a provision imposing a disadvantage on some of those in employment but was the much more common case of a provision imposing a condition which those in employment had to satisfy in order to obtain a benefit. The case itself involved a condition requiring an employee to have had two years of continuous employment before becoming eligible to make a claim for unfair dismissal. This condition was neutrally expressed and all employees, regardless of age, had to satisfy it in order to qualify to bring unfair dismissal claims. Statistics, however, showed that proportionately fewer women employees than male employees were able to satisfy it and, accordingly, that a higher proportion of women than of men were disadvantaged by it. The issue turned in the end on whether the disadvantaged proportion of women was "substantially" higher than the disadvantaged proportion of men.
15.   I find it easy to see that a condition of the Seymour-Smith type is capable of being discriminatory in its effect. Similarly, contractual or statutory benefits available only to full time employees are capable of being, and have been held to be, discriminatory in their effect. If a proportionately higher number of women than of men work part time the ingredients for a discriminatory effect are present. But where the provision in question does not constitute a condition for obtaining a benefit that some employees are able to satisfy and some are not but imposes a disadvantage on those who remain in employment after a specified age, the situation produced presents a rather different picture.
16.   First, it is not possible to speak coherently of those who are "able to satisfy" the condition and those who are not able to do so. The only persons who will be affected by the age-related disadvantage will be those who decide to continue in employment after the specified age. Everyone who survives and for whom employment is available can decide, by not entering or continuing in employment, to be a person unaffected by the disadvantage. Indeed, the statistics wielded in the present case seem to show that proportionately more women than men decide to retire from employment before attaining the age of 65. The tendency appears to start from about the age of 50. The statistical evidence that relatively more women than men decide to retire from employment before they attain the age of 65, with the consequence that relatively more men than women are affected by the statutory bar, does not, in my opinion, constitute evidence of any cogency that the statutory bar discriminates against men. All that evidence shows is that the statutory bar applies to relatively more men than women. But since it applies to everyone over 65 years of age and can apply to nobody under that age, it is difficult to see how the Directive requirement that it disadvantages a higher proportion of the members of one sex than of the other can be satisfied. There are no proportions to compare. The conclusion I would draw is that a difference in treatment of individuals that is based purely on age cannot be transformed by statistics from age discrimination, which it certainly is, to sex discrimination.
17.   Some hypothetical examples might serve to illustrate the point I am trying to make. Suppose a taxing statute were to say that the salaries of those in employment over the age of 65 were to be taxed at a rate 5 per cent lower than the rate applicable to the salaries of those under that age. The respective tax rates would apply across the board to everyone in employment but those aged over 65 would have an advantage compared with those under that age. The former would pay less tax. Could the differential be said to be discriminatory against women on the ground that relatively fewer women than men continued in employment after the age of 65? The proposition would, in my opinion, be absurd.
18.   Now suppose a case in which the taxing statute said that the salaries of those in employment after the age of 65 were to be taxed at a rate 5 per cent higher than the rate applicable to the salaries of those under that age. This higher rate would, no doubt, discourage some, perhaps many, from continuing in employment after that age. It might discourage relatively more members of one sex than the other. But, so far as those who were not discouraged were concerned, the tax could not, in my opinion, be described as discriminatory against men on the ground that relatively more men than women were not discouraged.
19.   In both hypothetical examples there would be a disadvantaged group which would consist of everyone to whom the higher tax rate applied; in the former example, the group would consist of everyone under the age of 65; in the latter example the group would consist of everyone over that age. The composition of the respective groups would not depend upon an individual's ability or inability to satisfy some particular condition. It would depend, of course, on the individual's decision whether or not to continue in employment after the age of 65 and, also, on whether or not he or she survived to that age. The latter condition is essentially non-discriminatory, otherwise than on the ground of age. Age discrimination cannot be turned by statistics into sex discrimination.
20.   In each of the courts below the appropriate denominator was taken to be the number of men or women (as the case might be) in the population between the ages of 16 and 64. Each group included those assumed to be employed or to be available for employment. They were described, in contrast to the "disadvantaged" group, whose number would constitute the numerator, as the "advantaged" group. The description of the group as "advantaged" is misleading. The members of the "advantaged" group derive no advantage from the statutory bar applicable to the over 65 year olds. The statutory bar simply does not apply to them. A fraction of which the numerator is the number of male employees over 65 years of age and the denominator of which is the total number of males in the population cannot, in my opinion, be taken to represent the proportion of men disadvantaged by the statutory bar for the purposes of the Directive. The reason it cannot do so is that the two factors which take an individual from the so-called "advantaged" group into the over 65 years of age "disadvantaged" group, namely a decision to enter or continue in employment, and survival beyond that age, do not, whether taken singly or in conjunction with one another, have any sex discriminatory possibilities. In the Seymour-Smith case, the relatively higher proportion of women than men who were able to satisfy the two years continuous employment condition showed that the condition indirectly discriminated against women. It was more difficult for women than for men to satisfy the condition. But the fact that relatively more men than women are affected by the statutory bar that applies to all employees who have attained the age of 65 does not evidence any form of discrimination against men. It is simply a consequence of the fact that more men than women go on working after that age.
21.   Accordingly, the only respect, in my opinion, in which the statutory bar might be said to have an indirectly discriminatory effect would be if comparison A were the correct comparison (see para.11 above) and if the respective fractions showed that a substantially higher proportion of men than of women had their post 65 employment terminated by dismissal. But the appellants have not attempted to establish indirect discrimination by that route. The route they have chosen, rejected by the EAT and the Court of Appeal, involved, in my opinion, a misuse of statistics. Statistics are never more than a tool and the statistics deployed in the lower courts were not, in my opinion, an apt tool for identifying indirect discrimination on the facts of this case.
22.   The disadvantage of which complaint is made in this case is certainly a result of discrimination on the ground of age. Age discrimination is not yet unlawful. It will become so, I understand, under legislation to be introduced later this year. But the age discrimination cannot, in my opinion, be passed-off as sex discrimination on the ground that statistics show that relatively more men than women continue in employment after the age of 65.
23.   For these reasons, which I believe follow essentially the same line of reasoning as that of my noble and learned friends Lord Rodger of Earlsferry and Baroness Hale of Richmond, with both of whose opinions I agree, I would dismiss these appeals.
LORD RODGER OF EARLSFERRY

My Lords,

24.   People who work after the age of 65 have no right to compensation for unfair dismissal ("compensation") unless there is a higher normal retiring age for such employees in the undertaking where they work: section 109(1)(b) of the Employment Rights Act 1996 ("ERA"). Also, even if the normal retiring age in the business is higher than 65, after reaching that age they have no right to a redundancy payment ("redundancy pay"): section 156(1)(b) of the ERA. Only a relatively small percentage of men and women work after the age of 65, but, as the Secretary of State accepts, the proportion of men over 65 who work is higher than the proportion of women over 65 who work. It follows that a higher proportion of men over 65 than of women over 65 are working but have no right to compensation or redundancy pay.
25.   The appellants are men who worked on after reaching 65 in businesses where there was no higher normal retiring age. Mr Rutherford was dismissed when he was 67. He says that he was unfairly dismissed but, by virtue of the legislation, could not make a claim for compensation and that he was made redundant but, for the same reason, could not claim redundancy pay. Mr Bentley was dismissed at the age of 73 and says that he was made redundant but could not claim redundancy pay because of the Act. Both appellants allege that the provisions of the ERA removing the rights to compensation and redundancy pay are indirectly discriminatory against men, since they impose a detriment or disadvantage which has a very different impact on men as compared to women, whether looked at in numerical or proportionate terms. Since the discrimination cannot be objectively justified, it should be eliminated by disapplying sections 109(1)(b) and 156(1)(b) of the ERA.
26.   The Secretary of State does not dispute that a considerably higher proportion of men over 65 than of women over 65 work and have no right to compensation or to redundancy pay. But he says that this does not mean that the legislation discriminates against men. To see whether it does, the employment tribunal should not look at the statistics for those over 65 who are adversely affected by the provisions, but at the statistics for those under 65 who are able to fulfil the preconditions for having the rights to compensation and to redundancy pay. The Secretary of State's preferred statistics show that in 1998 98.79% of men and 98.69% of women could fulfil those requirements, while in 2001 98.88% of men and 99.01% of women could do so. The statistics preferred by the appellants would bring out comparable figures. There is therefore no considerable difference between the position of men and women in this respect and sections 109(1)(b) and 156(1)(b) have no indirectly discriminatory effect. Even if there were discrimination, it would be objectively justified.
27.   The House was thus presented with a battle of statistics. More particularly, Mr Allen QC for the appellants submitted that the correct approach was to have regard to all the statistics, both those for employees under 65 and those for employees over 65, but that in the circumstances of this case particular weight should be given to the statistics for those over 65. For the Secretary of State Mr Pannick QC argued that an employment tribunal should have regard to all the statistics, but in a case such as the present, where the percentages of men and women who could fulfil the preconditions for enjoying the relevant rights were so close, there was no need to look at the figures for those over 65 who could not. Counsel sought to support these rival submissions by reference to the decisions of the European Court of Justice and of your Lordships' House in R v Secretary of State for Employment ex parte Seymour-Smith [1999] ICR 447 and [2000] ICR 244.
28.   My Lords, if one were to proceed along those lines and have regard to what the Court of Justice said in Seymour-Smith, then it would point in favour of placing the emphasis on the statistics for those who could comply with the preconditions for having rights to compensation and redundancy pay. Which is essentially what Mummery LJ did in giving the judgment of the Court of Appeal, [2005] ICR 119, 192, at para 29. My noble and learned friend, Lord Walker of Gestingthorpe, has produced a more detailed analysis which leads to essentially the same result. Therefore, if I considered the statistics in the case to be relevant to the issue of indirect discrimination raised by the appellants, I would approach the matter in that way and dismiss the appeal. But, in my view, these statistics are actually irrelevant to that issue.
29.   The appellants' entire case is based on article 141(1) (ex 119(1)) EC which provides:
"Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied."

In terms of article 141(2) "pay" includes wages or salary "and any other consideration ... which the worker receives directly or indirectly, in respect of his employment, from his employer." It is accepted that the right to compensation for unfair dismissal and the right to redundancy pay are indeed part of the consideration which a worker receives in respect of his employment. Hence they are part of the worker's "pay" in terms of article 141(1).

30.   For the purposes of article 141, therefore, any employee who has worked for an employer for a year and who is under 65 receives as part of his or her "pay" a right to compensation and a right to redundancy pay. It is undisputed that in this respect men and women are to be treated equally. In other words, in return for "equal work or work of equal value" ("equal work"), these men and women under 65 are entitled to an equal package comprising wages or salary, a right to compensation and a right to redundancy pay. Such a man under 65 seeing such a woman under 65 alongside him doing equal work is therefore entitled to demand that he should have a pay package equal to hers, including the rights to compensation and redundancy pay.
31.   Under the ERA, however, those who work when over 65 have no right to compensation or redundancy pay. So their "pay" for the purposes of article 141(1) does not include those elements. This applies to both men and women. Therefore, under article 141, a man over 65 seeing a woman over 65 alongside him doing equal work is entitled to demand that he should have a pay package equal to hers, but that package will not contain the rights to compensation or to redundancy pay. Provided that he gets the same (smaller) pay package as the female worker over 65, he is receiving equal pay for equal work and there is no breach of article 141.
32.   What article 141 does not do is guarantee that a man over 65 will have the same (higher) level of pay as a woman under 65 doing equal work. Parliament has decided that a younger woman, who has worked for her employer for more than a year, should have rights which a man or woman over 65 does not have. The man over 65 can claim no more than to receive pay equal to the pay of a woman over 65 for equal work. In the usual jargon, the woman over 65 is the appropriate comparator.
33.   The statistics in the case simply demonstrate that a higher proportion of men over 65 than of women over 65 work and receive this reduced package of "pay". They are not refined enough to show why this is so but, for present purposes, that does not actually matter since article 141 is designed to ensure that the men and women who are in the workforce receive equal pay for equal work - not to ensure that equal proportions, or indeed any particular proportion, of the men and of the women in any age group will be members of that workforce. Crucially, however, the statistics do not point to indirect discrimination. To be relevant to that issue, they would have to deal with the position among men and women over 65 who work and who therefore wish to receive equal pay for equal work. More precisely, in order to raise an issue of indirect discrimination, they would have to show that a substantially higher proportion of the men over 65 who work than of the women over 65 who work receive merely the reduced pay package. In fact, however, the statistics show no such thing since, subject to section 156(1)(a) of the ERA, 100% of both groups receive it.
34.   The only conceivable way of putting the argument for the appellants would be to build on a suggestion which Lord Walker of Gestingthorpe advanced for discussion during the hearing. Since a higher proportion of women stop work before 65, it might be said that there was indirect discrimination against men because a substantially higher proportion of women than of men received pay which included rights to compensation and redundancy pay throughout their entire working lives. But there is no hint of such an approach in article 141. It does not guarantee equal pay over working lives which end at different ages. It has the more straightforward aim of ensuring that men and women who are in the same position, doing equal work, receive equal pay.
35.   The appellants have not even tried to show any respect in which, while they worked on after 65, they were receiving less by way of pay than any woman over 65 received or would have received for equal work. In particular, as my noble and learned friend, Baroness Hale of Richmond, pointed out during the hearing, the appellants neither have, nor could have, shown that any woman over 65 had or would have had those rights which the ERA denied to them. There is therefore no breach of article 141 and no discrimination. For these reasons, which are essentially the same as those of Baroness Hale, I would dismiss the appeals.
LORD WALKER OF GESTINGTHORPE

My Lords,

36.   This appeal is concerned with complaints of indirect discrimination in employment law. The appellants claim that sections 109(1)(b) and 156(1)(b) of the Employment Rights Act 1996 (which, as they apply in this case, exclude claims for unfair dismissal and redundancy payments by an employee who has attained the age of 65 years) are contrary to EU law as having a disproportionately adverse impact on male employees.
37.   At an early stage in his judgment in the Court of Appeal [2005] ICR 119, para 3, Mummery LJ (who has great experience in this field) observed:
"Although there is quite a simple answer to the indirect discrimination point, it has become virtually impossible and almost unacceptable to decide points of this kind in short form. The legal materials on indirect discrimination and equal pay are increasingly voluminous and incredibly intractable. The available arguments have become more convoluted, while continuing to multiply. Separating the wheat from the chaff takes more and more time. The short snappy decisions of the early days of the industrial tribunals have long since disappeared. They have been replaced by what truly are 'extended reasons' which have to grapple with factual situations of escalating complexity and with thicker seams of domestic and EC law, as interpreted in cascades of case law from the House of Lords and the European Court of Justice."

    It is impossible not to feel some sympathy with these observations. As Mummery LJ went on to point out, the litigation was still stuck at the most preliminary stage. Mr Rutherford, the first appellant, started his proceedings in the Employment Tribunal in December 1998; Mr Bentley, the second appellant, started his proceedings in May 2001; both are still waiting to learn whether the Employment Tribunal had jurisdiction to hear their claims for redundancy pay (and in Mr Rutherford's case compensation for unlawful dismissal as well).

38.   The appellants' claims do however have two unusual features. The first is simply stated: although throughout the development of EU law as to equal pay and equal treatment the aim has been to put an end to long-standing and deplorable discrimination against women, these are claims for indirect discrimination on the ground of gender brought by men. The other unusual feature (which to my mind negatives the notion that the appeal has quite an easy answer) is less simply stated, and a full explanation of it is better deferred. In general terms, however, it is that in the consideration of these claims the comparison of proportions (inherent in any assessment of indirect discrimination) produces startlingly different results depending on whether the comparison focuses on (i) proportions of advantaged men and women respectively ("advantage-led") or (ii) proportions of disadvantaged men and women respectively "("disadvantage-led"). Your Lordships were not referred to any decision of the Court of Justice of the European Communities in which either of these two unusual features was present. All the tribunals and courts which have considered this matter have therefore had to do so without any clear guidance from the Court of Justice (nevertheless, in common, as I understand it, with all your Lordships, I do not consider that a reference to the Court of Justice is necessary or appropriate in this case; it is a matter to be decided by the national court).

The facts and the proceedings below

39.   Mr Rutherford was dismissed by his employer, Harvest Town Circle Ltd ("Harvest"), on 25 October 1998 when he was aged 67. On 7 December 1998 he applied to the Employment Tribunal claiming against Harvest redundancy pay and compensation for unfair dismissal. In 2001 Harvest went into liquidation with Mr Rutherford's claims still unresolved.
40.   Mr Bentley was dismissed by his employer, Bodner Elem Ltd ("Bodner"), on 9 February 2001 when he was aged 73. At the same time Bodner went into administrative receivership, and it is insolvent. Mr Bentley commenced proceedings in the Employment Tribunal on 30 May 2001, claiming a redundancy payment.
41.   Neither of the appellants had a normal retiring age fixed by contract, and so the statutory default age of 65 (in sections 109 (1)(b) and 156 (1)(b) of the Employment Rights Act 1996) was applicable. The Secretary of State for Trade and Industry is responsible for both unsatisfied claims in consequence of Part XII of the Employment Rights Act 1996. In relation to Mr Bentley the Secretary of State has had that responsibility since his dismissal; in the case of Mr Rutherford it arose when Harvest went into liquidation.
42.   Mr Rutherford's claim was initially heard in the Stratford Employment Tribunal in January 1999. It was submitted on his behalf that the exclusion at age 65 was contrary to article 141 (formerly 119) of the Treaty. The case was stayed pending the reference to the Court of Justice made by this House in R v Secretary of State for Employment ex parte Seymour-Smith (the reference was made by the House on 13 March 1997, following decisions of the Divisional Court and the Court of Appeal reported at [1995] ICR 889; the Court of Justice gave judgment on 9 February 1999, [1999] 2 AC 554; when the matter returned to this House judgment was given on 17 February 2000, [2000] ICR 244).
43.   Following the judgment of the Court of Justice in Seymour-Smith, on 16 July 1999 the Employment Tribunal ruled that it did have jurisdiction to hear the claim, as the statutory exclusions were contrary to article 141. Harvest appealed successfully to the Employment Appeal Tribunal, which on 10 July 2001 allowed the appeal and remitted the case to the Employment Tribunal. In the judgement of the Employment Appeal Tribunal (sometimes referred to as "Rutherford 1") Lindsay J gave some guidance as to how the Employment Tribunal should approach the matter. By this time Harvest had gone into liquidation and the Secretary of State had taken over the defence of Mr Rutherford's claim. Soon afterwards the Employment Tribunal directed that Mr Bentley's claim should be heard together with Mr Rutherford's claim.
44.   The two cases were heard by the Employment Tribunal over eight days in June and July 2002, with expert evidence from statisticians called by both sides (and also oral evidence by two officials of the Department of Trade and Industry). By a written decision dated 22 August 2002 the Employment Tribunal again decided that it did have jurisdiction to hear the claims, and that the statutory exclusions must be disapplied. At later hearings it was determined that (unless the Secretary of State's appeal was successful) Mr Rutherford was entitled to a basic award of £990 and a compensatory award of £4,500 for unfair dismissal, and that Mr Bentley was entitled to a redundancy payment of just under £1,500.
45.   Meanwhile the Secretary of State had appealed and on 2 October 2003 the Employment Appeal Tribunal (presided over by Wall J) allowed her appeal. An appeal by Mr Rutherford and Mr Bentley was dismissed by the Court of Appeal on 3 September 2004, [2005] ICR 119.
Indirect discrimination
46.   Indirect discrimination (on the ground of gender, and in the context of equal pay and equal treatment under EU law) is defined in the Burden of Proof Directive (97/80/EC) as "where an apparently neutral provision, criterion or practice disadvantages a substantially higher proportion of the members of one sex unless that provision, criterion or practice is appropriate and necessary and can be justified by objective factors unrelated to sex." This definition is largely declaratory of the case law of the Court of Justice (see Recital (18) of the Directive and also the Opinion of the Economic and Social Committee, Official Journal C113 p.34, paras 3.1.1 to 3.1.3; also the judgment of the Court of Justice in Nikoloudi v Organismos Tilepikoinonion Ellados AE [2005] ECR I-01789, para 69).
47.   The definition has a broad scope. The "apparently neutral" measure may be formal and general or informal and particular, ranging from national legislation applicable to all employment in a member state to an administrative change in a single employer's shift system. The disadvantage may consist in less favourable terms of employment accorded to part-term workers as compared with full-term workers (a recurring theme in the Luxembourg jurisprudence, with numerous variations), or in benefits or opportunities not being available to employees above or below a specified age (or outside a specified age bracket) where such age limits bear harder on one gender than on the other. Similarly a requirement for a minimum qualifying period of service before an employee acquires statutory rights may indirectly discriminate against women because their family responsibilities make it more difficult for them to achieve stable long-term employment.
48.   The phrase "a substantially higher proportion of the members of one sex" is a rather compressed one which prompts several questions. The first question is: higher than what? The answer is reasonably obvious: higher than the corresponding proportion of the members of the opposite sex. The test looks at proportions rather than crude numbers for the reason stated by the Court of Justice in Seymour-Smith [1999] 2 AC 554, 597, para 59:
"It is not sufficient to consider the number of persons affected, since that depends on the number of working people in the member state as a whole as well as the percentages of men and women employed in that state."

    This leads on to the second and more difficult question: how are these proportions to be determined? The cases show that there must be a larger group (generally referred to, in authorities on our domestic anti-discrimination legislation, as a pool) for the purposes of comparison. Because Seymour-Smith was concerned with secondary legislation of very general application (the two-year qualifying period introduced by the Unfair Dismissal (Variation of Qualifying Period) Order 1985) it was in that case appropriate to look at the entire national workforce as the pool. The identification of the proper pool has been one of the contentious issues in this case, although as the argument has progressed through different courts it has, I think, become apparent that what I have called the advantage-led/disadvantage-led issue is the crucial point.

49.   The principles of EU law in regard to indirect discrimination have developed over the last twenty-five years, and may still have some way to go. One of the seminal cases was Jenkins v Kingsgate (Clothing Productions) Ltd [1981] ECR 911, a reference to the Court of Justice from the Employment Appeal Tribunal. The opinion of Advocate-General Warner is particularly instructive, especially as it differs from the views which had been expressed by the Commission. It makes a full examination of indirect discrimination, referring to the well-known American case of Griggs v Duke Power Company (1971) 401 US 424. Indirect discrimination was referred to in some of the early cases as "disguised" discrimination, but it was soon recognised that this term was inapposite (see Evelyn Ellis, EC Sex Equality Law, 2nd ed. (1998) pp.111-113). In cases during the 1980s the Court of Justice did not have to focus very closely on the details of the process of comparison inherent in the notion of disproportionate impact (the concept first spelled out, I think, in Advocate-General Warner's opinion in Jenkins at p.936). That is because in the early cases the disproportionate impact was perfectly obvious.
50.   For instance in Rinner-Kuhn v FWW Spezial-Gebaudereinigung [1989] ECR 2743 the Court of Justice was concerned with a statute of the Federal Republic of Germany under which an employer was not required to pay wages during sickness to a part-time worker. Unchallenged statistical evidence showed that in at least seven member states part-time workers were predominantly women (the percentages ranging from 89% in the Federal Republic to 62% in Italy; only in Denmark, at 54%, was there anything close to parity). So in the Federal Republic there was such a striking disparity between men and women that the question referred to the Court of Justice assumed that the proportion of women adversely affected was considerably greater than that of men, and the Court of Justice was concerned only with the issue of objective justification. Nine times as many women as men were disadvantaged, and no one was going to waste time in suggesting that the entire national workforce contained nine times as many women as men.

The Seymour-Smith case

51.   The particular importance of Seymour-Smith is that it was the first case in which the Court of Justice had to consider a situation in which the disparity was not obvious, but marginal and debatable. The case does therefore call for detailed examination. Ms Seymour-Smith had worked as a secretary for a firm of estate agents for fifteen months when she was dismissed in May 1991. She made a complaint to the Industrial Tribunal but was met by the two-year time limit. She applied for judicial review contending that the Unfair Dismissal (Variation of Qualifying Period) Order 1985 was invalid because incompatible with EU legislation (article 119 of the Treaty, as it then was, and the Equal Treatment Directive, 76/207/EEC). In 1995 the Court of Appeal, reversing the Divisional Court, granted the applicant limited declaratory relief, declined to make a reference to the Court of Justice, but granted leave to appeal to this House: [1995] ICR 889.
52.   This House did make a reference to the Court of Justice of five questions, of which the third is most relevant:
"What is the legal test for establishing whether a measure adopted by a member state has such a degree of disparate effect as between men and women as to amount to indirect discrimination for the purposes of article 119 of the EC Treaty unless shown to be based on objectively justified factors other than sex?"

53.   The Court of Justice's answer to the third question, [1999] 2 AC 554, 597-598, is contained in the following paragraphs which have been much discussed in later cases:
"58.  As regards the establishment of indirect discrimination, the first question is whether a measure such as the rule at issue has a more unfavourable impact on women than on men.

59.  Next, as the United Kingdom Government was right to point out, the best approach to the comparison of statistics is to consider, on the one hand, the respective proportions of men in the workforce able to satisfy the requirement of two years' employment under the disputed rule and of those unable to do so, and, on the other, to compare those proportions as regards women in the workforce. It is not sufficient to consider the number of persons affected, since that depends on the number of working people in the member state as a whole as well as the percentages of men and women employed in that state.

60.  As the Court has stated on several occasions, it must be ascertained whether the statistics available indicate that a considerably smaller percentage of women than men is able to satisfy the condition of two years' employment required by the disputed rule. That situation would be evidence of apparent sex discrimination unless the disputed rule were justified by objective factors unrelated to any discrimination based on sex.

61.  That could also be the case if the statistical evidence revealed a lesser but persistent and relatively constant disparity over a long period between men and women who satisfy the requirement of two years' employment. It would, however, be for the national court to determine the conclusions to be drawn from such statistics.

62.  It is also for the national court to assess whether the statistics concerning the situation of the workforce are valid and can be taken into account, that is to say, whether they cover enough individuals, whether they illustrate purely fortuitous or short-term phenomena, and whether, in general, they appear to be significant: see Enderby v Frenchay Health Authority (Case C-127/92) [1994] ICR 112, 161, para 17. It is, in particular, for the national court to establish whether, given the answer to the fourth question [relating to timing], the 1985 statistics concerning the respective percentages of men and women fulfilling the requirement of two years' employment under the disputed rule are relevant and sufficient for the purposes of resolving the case before it."

54.   When the case returned to this House [2000] ICR 244, it had to apply the guidance given by the Court of Justice. The House had before it statistics for nine consecutive years, 1985-1993, which showed a modest but persistent and relatively constant differential against women in the effect of the requirement for a two-year qualifying period. The full table is set out at p.252 of the report (and again, in a different and shorter form, at p.258). In terms of the percentage of the total workforce who had completed the two-year qualifying period (the test indicated in para 60 of the judgment of the Court of Justice) the largest differential was in 1986: 77.2% of men to 68.4% of women, that is roughly seven men to six women. The smallest differential was in 1993: 78.4% men and 74.1% women, or roughly sixteen men for fifteen women. These figures were (as my noble and learned friend Lord Nicholls of Birkenhead said at p.258) "in borderline country." They were also in borderline country if one were to look at the corresponding reciprocal figures for men and women who had not completed the qualifying period: 22.9% against 31.6% (about 7 to 10) for 1986, 21.6% against 25.9% (about 11 to 13) for 1993.
55.   Lord Nicholls referred to these two possible approaches in an important passage of his speech at p.259. After setting out most of para 59 of the judgment of the Court of Justice he observed,
"This statement appears to envisage that two comparisons should be made: a comparison of the proportions of men and women able to satisfy the requirement ('the qualifiers'), and a comparison of the proportions of men and women unable to satisfy the requirement ('the non-qualifiers'). Thereafter in its judgment the Court considered only the proportions of men and women who were qualifiers.

Some of the ramifications involved in looking at the composition of the disadvantaged group, as well as the composition of the advantaged group, were explored by the Divisional Court and the Court of Appeal in the present case. Suffice to say, I do not understand the Court of Justice to have rejected use of the figures relating to the non-qualifiers in a suitable case. Indeed the Court has looked at the composition of the disadvantaged group in several cases, although in none of them was there an issue on this point: see for instance, Bilka-Kaufhaus Gmbh v von Hartz (Case C-170/84) [1987] ICR 110, 125, para 31; Nimz v Freie und Hansestadt Hamburg (Case C-184/89) [1991] ECR I-297, 319, para 12, and Kowalska v Freie und Hansestadt Hamburg (Case C-33/89) [1992] ICR 29, 34-35, paras 13-16. Having regard to the conclusion I have expressed above on the issue of disparate impact, it is unnecessary to reach a firm conclusion on this point. I prefer to leave this question open for another occasion."

    Lord Goff of Chieveley and Lord Jauncey of Tullichettle agreed with Lord Nicholls. The other members of the House (Lord Slynn of Hadley and Lord Steyn) disagreed as to the result of the application of the Court of Justice's test to the statistics, but Lord Slynn (with whom Lord Steyn agreed) concentrated on the advantaged groups (while noting, at p.250, that the Court of Appeal had considered both groups).

The identification of the pool

56.   In order to determine this appeal your Lordships do have to look at the question which was left open in Seymour-Smith. There are as I see it two issues. One is the identification of the correct pool. The other is the choice (or balance) between what I have called the advantage-led approach and the disadvantage-led approach. The identification of the pool seems to have dominated the arguments below, but in my opinion it can now be seen as relatively uncontroversial and relatively straightforward. I shall therefore try to dispose of it at once.
57.   The relevant legislation applies generally to all employed persons on whom rights are conferred by the Employment Rights Act 1996. As a matter of general principle, therefore, the pool should be all those persons. There was argument below as to whether the pool should include (i) persons who had not yet completed their qualifying period of service and/or (ii) persons who were not employed but were seeking employment. But any such fine-tuning would have only the most marginal effect on the figures. That is apparent from two tables attached to the further witness statement of Dr Hotopp, the Secretary of State's expert statistician. The differences between the two sets of figures are insignificant (in the general, non-technical sense: as to the dangers of lawyers misunderstanding statistical significance see Douglas W. Vick, Statistical Significance and the Significance of Statistics (2000) 116 LQR 575).
58.   The controversy over the identification of the pool seems to have originated partly from Lindsay J's understandable wish (in "Rutherford 1" [2002] ICR 123) to give guidance to the Employment Tribunal to which the case was to be remitted. In his summary (para 18) he encouraged the use of more than one type of comparison, if only as a check. I see nothing obviously wrong with that general guidance, so long as it does not lead to over-elaboration. But in this case it unfortunately produced (in para 16 of the Employment Tribunal's decision) a long and (if I may say so) rather breathless and incoherent discussion about the appropriate methodology. Mr Allen QC (for the appellants) helpfully suggested that it should be read as four different paragraphs discussing different approaches to the problem. Read in that way, it becomes clear that the notion of "those for whom retirement by 65 has some real meaning" (language criticised by Mr Pannick QC for the Secretary of State as introducing "a sociological concept of considerable subjectivity and uncertainty") was only one of several possible approaches, and I respectfully think that the Court of Appeal was wrong to suppose (see para 19 of the judgment of Mummery LJ) that the Employment Tribunal had identified the pool as employed persons aged between 55 and 74. But in any event this is something of an irrelevance, since starting the pool with 55-year-olds makes the figures (slightly) less helpful for the appellants. The reason for that is apparent from the first three lines of each of the subsidiary tables in Table A1 annexed to the Employment Tribunal's decision: by age 55 large numbers of women have already left the labour market, and men outnumber them by about 9 to 8.

Advantage-led or disadvantage-led?

59.   Later in the discussion in paragraph 16 of the Employment Tribunal's decision there are two tables (for 1998 and 2001, the years in which Mr Rutherford and Mr Bentley respectively were dismissed). These tables seem to have carried a good deal of weight in the Employment Tribunal's final conclusion. They do treat the whole labour force (between the ages of 16 and 79) as the relevant pool. I reproduce that for 1998 (with a small addition clarifying the "gender ratio" column); that for 2001 is very similar. The decision drew particular attention to the final gender ratio (1.44: 1 for Mr Rutherford; the corresponding figure for Mr Bentley was 1.53: 1).

	Males	Females	Gender Ratio (M/F)
Advantaged (16-64)	13,588,800	12,546,400	1.08 : 1
Disadvantaged (65-79)	195,200	124,900	1.56 : 1
Disadvantaged as % of advantaged	1.44%	1.00%	1.44 : 1

60.   I have two comments on this table. One is that it is usual to regard the pool as consisting of the aggregate of the advantaged and the disadvantaged, and to express the proportions of the advantaged and the disadvantaged as percentages of the whole pool: then (as in the tables in the speeches of Lord Slynn and Lord Nicholls in Seymour-Smith) the percentages will always total 100, which is easier to understand. In the above table that modification makes almost no difference to the figures for the disadvantaged, because almost all the pool, men and women, are advantaged: the figures become men 1.42%, women 0.99% (with the ratio unchanged). The other (and more important) comment is that the table omits the corresponding figures for the advantaged, which (as proportions of the whole pool) are men 98.58%, women 99.01%, with a ratio (M/F) of 1:1.004. So when related to the pool as a whole, the advantage to women is barely perceptible. The revised table below shows the effect of making these changes.

	Males	Females	Gender Ratio (M/F)
Advantaged	13,588,800	12,546,400	1.08 : 1
Disadvantaged	195,200	124,900	1.56 : 1
Total pool	13,784,000	12,671,300	1.08 : 1
Disadvantaged as % of pool	1.42%	0.99%	1.44 : 1
Advantaged as % of pool	98.58%	99.01%	1 : 1.004

61.   This point was (as Lord Slynn noted when Seymour-Smith was before this House) discussed by the Divisional Court and the Court of Appeal in Seymour-Smith, but only as a curiosity, since the difficulties in that case were of a different character. The clearest comment was that of McCullough J in the Divisional Court [1995] ICR 889, 914 (though he was giving his view without the benefit of the guidance later obtained from the Court of Justice):
"My conclusion is that, in considering whether there is considerable disparity, the Court should look both at the relative percentages of those who meet the requirement and at the relative percentages of those who do not. Of these the most important group will be those who qualify. The following example makes the point. If 98% of men qualify and 2% do not, and if 96% of women qualify and 4% do not, it would not be right to conclude that the disparity was considerable. But if only 4% of men and only 2% of women qualified the opposite conclusion might well be correct."

62.   It may be helpful to some if I summarise this in algebraic form. If A and D denote the numbers of advantaged and disadvantaged persons, and M and W the numbers of men and women, the men's pool (PM) consists of AM + DM and the women's pool of AW + DW. The proportions to be considered can then be expressed as the percentages AM/PM % ("advantage-led") or DM/PM % ("disadvantage-led"); similarly with the women's pool. Mummery LJ has in para 25 of his judgment given a clear and detailed description of this advantage-led approach. In many cases (including Seymour-Smith) either approach will produce much the same result. But when the vast majority of each pool is classified as advantaged, the choice (or balance) between the two methods becomes critical. 1.44:1 is arguably a considerable difference, but 1: 1.004 is not.
63.   My Lords, the jurisprudence of the Court of Justice does not provide a clear answer to this question. The formulation in para 60 of its judgment in Seymour-Smith has been repeated in numerous later cases, including cases decided since the coming into full force of the Burden of Proof Directive. It is sufficient to mention the decision of the Grand Chamber in Allonby v Accrington and Rossendale College [2004] ICR 1328, 1361, para 79 (that case was decided on facts antedating the Directive, but it seems most unlikely that the Grand Chamber would not have referred to it if it had been thought to have made a significant change in the law). But (as already noted) none of these cases involved pools with a very large percentage of advantaged persons and a very small percentage of disadvantaged persons (or vice versa).
64.   Mr Allen placed great reliance on the Burden of Proof Directive, and submitted that in the face of the plain language of article 2 it would be "contra legem" to focus on a comparison of the advantaged percentages in the two groups. But the Burden of Proof Directive was intended to codify, not to alter, the jurisprudence of the Court of Justice. Article 2 defines indirect discrimination in terms of disadvantage, which is unsurprising, but (as Mummery LJ observed in para 35 of his judgment in the Court of Appeal),
"The definition describes when a certain state of affairs (ie indirect discrimination) exists: it does not, however, prescribe the methodology for assessing the statistical evidence in order to determine whether or not that state of affairs exists. No methodology has been laid down in the Treaty or in any Directive or in national legislation. It has been left to the national courts and tribunals, which hear and assess the evidence and find the facts, to work out from case to case a satisfactory method for assessing whether or not there is disparate adverse impact in the particular case."

65.   Your Lordships must therefore resolve this matter largely as a matter of principle. I must confess that my first reaction was that in this case an advantage-led approach could have the effect of masking a significant degree of disparate disadvantage, and that a demonstrable element of indirect discrimination should not be ignored merely because it affected relatively few people. Plainly that is the case with direct discrimination, whether on the ground of gender or on any other ground. To say that only a few individuals are disadvantaged is no excuse. But indirect discrimination is in my view different, especially where it is the type which may be produced by national legislation of general application, and which may be assessed on a purely statistical basis: see Allonby [2004] ICR 1328, 1362, para 80. In such cases the pool should be taken as it is, and the relevant statistics analysed, without regard to any underlying sociological or economic factors. Such factors may be highly relevant at the second stage of objective justification, but they are not relevant at the first stage. For that reason the Employment Tribunal was in my view wrong to ask itself (at the first stage) who had a real interest in retirement by 65 (though that point by itself made little practical difference to the outcome). The purpose of the analysis is to look for disproportionate impact on men as such and on women as such, as anonymous, characterless material for statisticians.
66.   Our domestic jurisprudence (concerned as it is with anti-discrimination legislation framed in much more detailed terms than EU law) has gone rather further than the Court of Justice in exploring the intricacies of indirect discrimination. It has recognised that the appropriate pool should not be narrowed by reference to qualifications or conditions which are not logically relevant to the statistical exercise in hand : see Perera v Civil Service Commission (No 2) [1982] ICR 350, 358-359 (proportion of late immigrants irrelevant; upheld by the Court of Appeal [1983] ICR 428 without mention of this point); University of Manchester v Jones [1993] ICR 474, 495 A-C and 505 E-H (proportion of "mature" graduates irrelevant); London Underground v Edwards (No 2) [1999] ICR 494, 508H-509A (proportion of single parents irrelevant); and Barry v Midland Bank plc in the Court of Appeal [1999] ICR 319, 334B and in this House [1999] ICR 859, 869H - 870A (pool incorrectly limited to one specialised department). This is certainly consistent with, and to my mind provides a little support for, an advantage-led approach which takes the unvarnished statistics as it finds them.
67.   I do not express the view that some element of disadvantage-led analysis may not be appropriate in some cases. But it must be recognised that there is a difficulty here: the more extreme the majority of the advantaged in both pools, the more difficult it is, with any intellectual consistency, to pay much attention to the result of a disadvantage-led approach. However I can imagine some (perhaps improbable) cases in which a disadvantage-led approach would serve as an alert to the likelihood of objectionable discrimination. If (in a pool of one thousand persons) the advantaged 95% were split equally between men and women, but the disadvantaged 5% were all women, the very strong disparity of disadvantage would, I think, make it a special case, and the fact that the percentages of the advantaged were not greatly different (100% men and 90.5% women) would not be decisive.
68.   But that is not this case. A proportion of disadvantage of 1.44: 1 is not such an extraordinary disparity as to make it necessary to resile from the absence of any significant disparity (1: 1.004) in the two advantaged groups. The Employment Tribunal erred in law in ignoring completely the effect of an advantage-led approach.
69.   For these reasons (which are largely but not entirely the same as those of the Court of Appeal) I would dismiss this appeal. Although your Lordships had full written and oral submissions on the issue of objective justification, I think it better not to express any views on that issue.
70.   I prepared this opinion without having had the advantage of considering in draft the opinions of my noble and learned friends Lord Scott of Foscote, Lord Rodger of Earlsferry and Baroness Hale of Richmond. They would dispose of this appeal on broader grounds and so avoid entanglement in arguments which many may regard as over-elaborate, artificial and inappropriate for a subject of such social and economic importance as discrimination in employment. I would very much prefer to find a simpler and more transparent principle on which to decide the appeal, and by which tribunals can be guided in future. But the grounds on which my noble and learned friends would decide the appeal were not argued below or in this House. Nor do I find it easy to extract from their opinions a single easily-stated principle.

BARONESS HALE OF RICHMOND

71.   The essence of indirect discrimination is that an apparently neutral requirement or condition (under the old formulation) or provision, criterion or practice (under the new) in reality has a disproportionate adverse impact upon a particular group. It looks beyond the formal equality achieved by the prohibition of direct discrimination towards the more substantive equality of results. A smaller proportion of one group can comply with the requirement, condition or criterion or a larger proportion of them are adversely affected by the rule or practice. This is meant to be a simple objective enquiry. Once disproportionate adverse impact is demonstrated by the figures, the question is whether the rule or requirement can objectively be justified.
72.   It is of the nature of such apparently neutral criteria or rules that they apply to everyone, both the advantaged and the disadvantaged groups. So it is no answer to say that the rule applies equally to men and women, or to each racial or ethnic or national group, as the case may be. The question is whether it puts one group at a comparative disadvantage to the other. However, the fact that more women than men, or more whites than blacks, are affected by it is not enough. Suppose, for example, a rule requiring that trainee hairdressers be at least 25 years old. The fact that more women than men want to be hairdressers would not make such a rule discriminatory. It would have to be shown that the impact of such a rule worked to the comparative disadvantage of would-be female or male hairdressers as the case might be.
73.   But the notion of comparative disadvantage or advantage is not straightforward. It involves defining the right groups for comparison. The twists and turns of the domestic case law on indirect discrimination show that this is no easy matter. But some points stand out. First, the concept is normally applied to a rule or requirement which selects people for a particular advantage or disadvantage. Second, the rule or requirement is applied to a group of people who want something. The disparate impact complained of is that they cannot have what they want because of the rule or requirement, whereas others can.
74.   What is the comparative advantage and disadvantage in this case? It cannot simply be being under or over the age of 65. That in itself is neither an advantage nor a disadvantage, until it is linked to what the people concerned want to have or not to have. If one wants to have a pension, then reaching pensionable age is an advantage. If one wants to go on working beyond pensionable age, then reaching that age may be a disadvantage.
75.   The advantage or disadvantage in question here is going on working over the age of 65 while still enjoying the protection from unfair dismissal and redundancy that younger employees enjoy. As Mr Allen QC for the appellants pointed out, that protection has an impact, not only when employment comes to an end, but also upon whether or not it is brought to an end, and if so, how.
76.   If that is so, it matters not that there are other men and women who have left the workforce at an earlier age and are thus uninterested in whether or not they will continue to be protected. The people who want the protection are the people who are still in the workforce at the age of 65. And the rule has no disproportionate effect upon any particular group within that group. It applies to the same proportion of women in that group as it applies to men. There is no comparison group who wants this particular benefit and can more easily obtain it.
77.   The appellants cannot object that this approach defines the advantage and disadvantage by reference to the very rule which is under attack; on the contrary, that is exactly what they have sought to do by treating the advantage and disadvantage as being under or over the age of 65. But the result is the same even if one defines the advantage and disadvantage without reference to the age limit. The advantage is to be able to enjoy protection against unfair dismissal and redundancy throughout one's working life. As my noble and learned friend Lord Walker of Gestingthorpe has demonstrated, the sex differential between those who can and those who cannot do this is negligible, even though there are more men in the group who cannot. But in my view one should not be bringing into the comparison people who have no interest in the advantage in question.
78.   This approach, defining advantage and disadvantage by reference to what people want, chimes with the definition of discrimination given by McIntyre J in the seminal Canadian case of Andrews v British Columbia [1989] 1 SCR 143:
". . . discrimination may be described as a distinction, whether intentional or not but based on grounds relating to the personal characteristics of the individual or group, which has the effect of imposing burdens, obligations or disadvantages on such individual or group not imposed upon others, or which withholds or limits access to opportunities, benefits and advantages available to other members of society." (Emphasis supplied)

It also chimes with Sandra Fredman's observation, in Discrimination Law (Clarendon Law Series, 2002, p 115), that "A disparate impact is not itself discriminatory. Unequal results are legitimate if no exclusionary barrier can be identified . . ." The sorts of cases where indirect discrimination can be established confirm this.

79.   Say members of both groups want a particular job, but age limits, educational qualifications, or size, height or physical strength requirements are applied (as in the progenitor of the indirect discrimination concept, Griggs v Duke Power 401 US 424). These may well have a disproportionate adverse impact upon one sex, or upon different racial, ethnic or national groups. The question then is whether they can be independently justified.
80.   Say members of both groups want compensation for the loss of their jobs, but length of employment criteria, or "last in first out" practices, or preference for full-timers over part-timers, apply. These too may well have a disproportionate adverse impact upon one sex, or upon different racial, ethnic or national groups. Again the question is whether they can be independently justified.
81.   Say members of both groups want various work-related benefits, such as occupational pensions, sick pay, holiday pay, bonuses of one sort or another, but there are length of employment criteria or differential treatment between full-timers and part-timers. These again may have a disproportionate adverse impact upon one sex, or upon different racial ethnic or national groups. Again the question is whether they can be independently justified.
82.   The common feature is that all these people are in the pool who want the benefit - or not to suffer the disadvantage - and they are differentially affected by a criterion applicable to that benefit or disadvantage. Indirect discrimination cannot be shown by bringing into the equation people who have no interest in the advantage or disadvantage in question. If it were, one might well wish to ask whether the fact that they were not interested was itself the product of direct or indirect discrimination in the past.
83.   For these reasons, which are essentially the same as those given by my noble and learned friends, Lord Scott of Foscote and Lord Rodger of Earlsferry, I too would dismiss these appeals without requiring the Department to justify the rule.