In R (on the application of Z and another) (AP) (Appellants) v Hackney London Borough Council and another (Respondents) UKSC 2019/0162, the Supreme Court held that it was lawful for a housing association to provide social housing only to Orthodox Jews, in its first ever ruling on positive action. In this blog, Charlotte Goodman, an equality law barrister at Cloisters, considers the importance of the judgment.

The Supreme Court has made its first ever ruling on positive action under the Equality Act 2010 (“EqA”), finding that it was lawful for a housing association to provide social housing only to Orthodox Jews.

This finding is important for charities, service providers, and employers alike, who would like to take positive action as part of diversity measures, but who have so far been nervous about where the legal limits are drawn. It adds to the very limited body of case law exploring how far positive action measures can go; and, in allowing for broad positive action policies, it gets to the very heart of what social outcomes are intended by the positive action provisions. It also raises a separate but interesting issue on the definition of race in the context of ethno-religious groups. This blog will focus on positive action, and will not deal with the race discrimination issue – mainly because the race argument came up late in the day and did not get full treatment – but it is worth noting that the Supreme Court’s approach to Jewishness and race in this case is arguably inconsistent with its 2009 judgment R (E) v Governing Body of JFS (United Synagogue intervening) [2009] UKSC 15.

The case concerns Agudas Israel Housing Association (“AIHA”), a housing association with a small stock of social housing that makes up about 1% of the social housing available to Hackney Council. AIHA has a policy to provide properties only to members of Hackney’s Orthodox Jewish (Haredi) community who have been identified by Hackney Council as having a priority need for housing. Z was a single mother of four children. She was not Haredi. She had a priority need for a large Council property but faced a long waiting period. While Z was waiting, large properties owned by AIHA were allocated to Haredi families.

Z brought a claim of religious discrimination. AIHA defended it on the basis that its policy to allocate housing only to Haredi applicants was lawful positive action. The Supreme Court agreed with AIHA. Haredi people suffered real and substantial disadvantages and had different needs to people who did not share their religion. The policy existed to address those needs and disadvantages and, to the extent that there was a proportionality requirement, it did this proportionately.

Positive action: the legal framework

AIHA sought to justify its policy under both section 158 (general positive action) and section 193 (the charities exemption).

Section 158 provides for positive action in employment, benefits, or services, to address needs or disadvantages experienced by persons which are connected to a protected characteristic.

Section 193 permits charities to restrict benefits to those with a protected characteristic if the restriction is a proportionate means of achieving a legitimate aim or if the restriction seeks to prevent or compensate for a disadvantage linked to the characteristic.

When is positive action lawful?

The Supreme Court’s guidance on positive action focussed on the issue of proportionality: how far can a measure go to combat a legitimate disadvantage suffered by a protected group?

Compare groups with other groups: a ‘bright line’ approach

Whenever positive action provides an advantage to one protected group, it causes a disadvantage to another. When deciding if this is proportionate, the Supreme Court emphasised that organisations can take a group-based approach. That is, the disadvantage to the individual (here, Z) should not be weighed up against the benefit to the group (here, the Haredi community). Instead, the benefits of the Haredi community as a group should be weighed up against the disadvantages to other applicants for social housing in Hackney as a group. The EHRC Code of Practice on Services, Public Functions & Associations suggests the same approach, and previous case law on housing allocation has found it acceptable to place people in broad needs-based categories rather than undertaking a detailed (and resource-intensive) comparative exercise of each individual’s needs. Given that the state itself is generally allowed to use ‘bright line’ criteria to decide who is provided with social welfare benefits – even where there is little difference between individuals at the margins – a charity need not be held to a higher standard. Charities are less responsible than the state for the equal treatment of persons.

‘Blanket policies’ are lawful if they meet a legitimate need

The allocation policy was not an unjust blanket policy. In fact, it was reactive to the needs of the Haredi community and, therefore, flexible. If the need for social housing by Haredi families in Hackney is ever (theoretically) met, AIHA’s housing would then be open to non-Haredi applicants. The need is, in fact, unlikely to be met in the near or medium future; but what matters is that in the event that AIHA’s aim of alleviating disadvantage to the Haredi community was ever met, the ‘blanket’ policy would be lifted.

Equality of outcome, not just opportunity

Positive action can aim for equality of outcome. It does not need to limit itself only to equality of opportunity. The Framework Directive, in Article 7, refers to achieving ‘full equality in practice’, and the Supreme Court took this to mean that outcomes and not just opportunities can be equalized in the social welfare context. While the Supreme Court did not define those terms (‘opportunity’ v. ‘outcome’), it did dismiss Z’s argument that it should follow cases involving the Equal Treatment Directive which have dealt with equality between the sexes in the workplace. Those cases found that measures should aim to secure equality of opportunity, such as opportunities for promotion, but not go as far as equality of outcome, such as automatically recruiting or promoting women (for example, via quotas). The Supreme Court declined to adopt this approach, noting that s159 EqA deals separately with positive action in ‘recruitment and promotion’ in the workplace and that this is the area where Equal Treatment Directive case law might apply. There is nothing in the legal framework (including by reference to EU law) to forbid a policy aiming to equalise outcomes in the context of social housing provision.

Will this encourage organisations to take more positive action?

The guidance on proportionality should encourage organisations to be bolder about positive action than they have previously been and more confident about a group-based analysis to proportionality assessments. Of course, every case will turn on its facts: in this case there was a sound evidential basis for the community’s need and disadvantage, and a housing stock of less than 1% of the council’s stock. However, it is heartening that the courts will be permissive about broad policies that aim for equality of social outcomes. The only exception, of course, will be recruitment and promotion at work, which still requires the more restrictive approach of equality of opportunity for advancement, or a ‘tie-break’ approach, built into the wording of s159 EqA itself.

There are some limitations to the Supreme Court’s guidance on the scope of section 158. Because Z conceded that the Haredi community does suffer disadvantage, this necessarily reduced the strength of her case that AIHA’s policy was disproportionate in alleviating this disadvantage, and the Supreme Court did not give full guidance on the question of where this balance would lie.

In a sense, the judgment gets to the very heart of the sometimes ill-defined aims of equality law (a question best framed as ‘equality of what?’). While there is no single formal concept of social equality underpinning the European and UK legal frameworks, it is comforting to see that a proportionate attempt to redistribute social advantages can aim for any or all of the mainstream political theories of social equality – such as equality of resources, equality of welfare, or equality of capabilities.