The Supreme Court has upheld a practice of restricting allocations of social housing stock to members of a particular religious community, rejecting the argument that this constitutes unlawful direct discrimination. Alexander Campbell analyses the judgment.
Housing lawyers and professionals will find the judgment in R (on the application of Z and another) v Hackney London Borough Council and another  UKSC 40 is important because of its finding that a housing association is entitled to reserve its housing stock for people sharing a protected characteristic without necessarily thereby committing unlawful direct discrimination.
In principle, the Supreme Court’s reasoning could apply beyond cases of religious belief and to other protected characteristics under the Equality Act 2010 (subject to a housing association/local authority being able to argue that people with that protected characteristic are at a particular disadvantage which calls for positive discrimination and/or that the preferential treatment is otherwise proportionate and in pursuit of a legitimate aim).
More generally, the decision is important for the fact that the Supreme Court stressed the limited circumstances in which an appellate court should interfere with a lower court’s assessment of the proportionality of an action for the purposes of deciding whether it is lawful under the Equality Act 2010. The Supreme Court emphasised that an appellate court should only reach its own conclusion on proportionality in place of the conclusion of the lower court where the lower court has misdirected itself or has reached a decision which is wrong.
Housing lawyers and professionals will want to take from this point the importance of running proportionality arguments effectively at first instance, given that there is such limited scope to reargue proportionality in the context of an appeal.
The Agudas Israel Housing Association Limited is a housing association which provides social housing primarily to people in the Orthodox Jewish community living in Hackney. In particular, the housing association provides social housing for members of the Haredi Jewish community.
The housing association offers accommodation via an online portal which is operated by Hackney London Borough Council. The council provides access to the online portal for people who have been identified by the council as having a priority need for housing.
The council has a practice of only nominating members of the Orthodox Jewish community for the housing association’s properties. This is due to the council being unable to compel the housing association to offer accommodation to people outside the Orthodox Jewish community. However, in any event, there is a significant surplus need for social housing in the Orthodox Jewish community in Hackney.
The appellant, Z, is a single mother with four small children. The council decided that she was in priority need for housing in a larger property. The allocation of a larger property to Z and her family took longer than it otherwise would have due to Z not being Orthodox Jewish and therefore not being eligible for one of the housing association’s vacant properties.
Z issued legal proceedings against the council and the housing association alleging unlawful direct discrimination under the Equality Act 2010. Z lost her case at first instance and in the Court of Appeal.
The Supreme Court’s decision
The Supreme Court unanimously dismissed Z’s appeal, noting that the Equality Act 2010 contains provisions which permit conduct which might otherwise constitute unlawful discrimination:
- Section 158 permits positive action which addresses in a proportionate manner needs or disadvantages connected to a protected characteristic.
- Section 193(2)(a) allows a charity to restrict benefits to persons with a protected characteristic if to do so is a proportionate means of achieving a legitimate aim.
- Section 193(2)(b) allows a charity to restrict benefits to persons with a protected characteristic if to do so seeks to prevent or compensate for a disadvantage linked to that characteristic.
The Divisional Court at first instance had found that the housing association’s allocations policy (restricting allocations to Orthodox Jewish people) was a proportionate means of achieving a legitimate aim, namely minimising disadvantages and discrimination experienced by the Orthodox Jewish community in the private housing market, as well as fulfilling housing needs particular to members of that community.
The Supreme Court held that the Divisional Court’s findings on proportionality could only be interfered with if the Divisional Court had misdirected itself or reached a decision which was wrong. The Supreme Court held that the Divisional Court had been entitled to reach the decision which it did.
Z argued that the exemption in section 193(2)(b) was subject to an implied requirement that its use be proportionate. The Supreme Court rejected this argument, holding that any proportionality requirement is satisfied by the structure of section 193 itself. The court held that even if there were an implied proportionality requirement, it would be satisfied on the facts of this case.
Finally, the Supreme Court rejected Z’s argument that she had been subject to unlawful discrimination on grounds of race or ethnic origin contrary to Council Directive 2000/43/EC of 29 June 2000 (the “Race Directive”). The court so held because the housing association was treating people differently based on religious observance, not race or ethnic origin.