Unjustified pay disparity between sponsored and domestic workers amounted to indirect race discrimination

Background

In the case of Gharabli v Cedar Hope Care Services Ltd, the claimant worked as a support worker before being promoted to senior support worker. During her employment, she became aware that support workers sponsored under Skilled Worker visas were being paid £12.31 per hour, while domestic support workers were paid significantly less.

After raising concerns about the disparity, the claimant received a pay increase while working in her senior role. However, when she later stepped down and returned to a support worker position, her pay reduced to £11 per hour, whereas sponsored support workers continued to receive £12.31 per hour.

The claimant argued that domestic and sponsored support workers were performing substantially the same role and should therefore receive the same rate of pay. The employer maintained that the higher rate reflected minimum salary requirements imposed by the Home Office for sponsored workers and that those workers had additional responsibilities.

Tribunal decision

The Tribunal rejected the claimant's direct race discrimination claim, finding that the pay difference arose from visa status rather than race.

However, her indirect race discrimination claim succeeded. The Tribunal found that the employer operated a practice of paying sponsored workers more than domestic workers and that, in reality, both groups were performing essentially the same role.

Although compliance with immigration requirements was capable of being a legitimate aim, the employer failed to provide evidence showing why the resulting pay disparity was a proportionate means of achieving this legitimate aim, or why less discriminatory alternatives had not been considered. In particular, it produced no evidence demonstrating why it would be financially prohibitive to align domestic workers' pay with that of sponsored workers.

The Tribunal therefore concluded that the employer had failed to justify the pay disparity and upheld the indirect race discrimination claim.

Learning points

Employers who pay sponsored workers more than domestic workers because of immigration requirements should not assume that legal compliance alone will justify the resulting disparity. Where employees perform substantially the same work, employers should be prepared to demonstrate why any difference in pay is necessary and proportionate.

The decision is a first instance judgment, and therefore not binding on other Tribunals. It does however highlight the importance of evidencing a justification defence in defence of indirect discrimination claims. Assertions that alternative approaches would be unaffordable or impractical are unlikely to succeed without supporting evidence.

For more information please contact Khadija Khatun in our Employment team.