The Claimants, who were Afghan nationals, sought judicial review of a 'failure' by the Secretaries of State for Foreign and Commonwealth Affairs and for Defence 'to extend to the claimants and similarly placed Afghan LES [locally employed staff] a scheme of assistance similar to or comparable with the Iraq LES scheme.' They asserted that the scheme put in place for Afghan LES was unlawfully discriminatory because of their nationality. The court granted declaratory relief in respect of the defendants' failure when formulating the Afghan scheme to have regard to the provisions of section 149(1)(b) and (c) of the Equality Act 2010 (which concern the public sector equality duty, or 'PSED') but otherwise dismissed the claim and ordered the claimants to pay half the defendants' costs. The court gave the claimants permission to appeal on grounds other than that relating to the PSED issues, on which it refused permission. On the PSED issues the claimants wished to argue that substantive rather than merely declaratory relief should have been granted and a renewed application for permission to appeal was allowed.

The appeal was dismissed. The Claimants were Afghan nationals. They lived in Afghanistan. They were recruited in Afghanistan. Their employment contracts were governed by Afghan law. They worked exclusively in Afghanistan and there was no UK, international or peripatetic element to their employment. There was no provision either in their contracts or in any inter-state agreement that they were to be treated as resident in the UK for any purpose. Their contracts provided that, at least initially, their pay was to be exempt from local taxes, the result of a concession by the Afghan government. Their contracts did not provide for their pay to be subject to UK taxation. Their contracts included express statements of undivided loyalty to their employer, but there was nothing materially special about that for present purposes: employees ordinarily owe duties of fidelity to their employers. Whilst they worked at what may be regarded as British enclaves in Afghanistan, they were also part of an indigenous Afghan community, where Afghan law applied; and they could and would return to their Afghan homes when on leave. They were not employed on the same footing as British staff or British Service Personnel.

______________

Neutral Citation Number: [2016] EWCA Civ 438

Case No: C1/2015/2348

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMINISTRATIVE COURT

Lord Justice Burnett and Mr Justice Irwin

[2015] EWHC 1953 (Admin)

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 9 May 2016

Before:

LADY JUSTICE ARDEN

**LORD JUSTICE DAVID RICHARDS

**and

SIR COLIN RIMER

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Between :

R o/a MOHAMMED RAFI HOTTAK and AL (Claimants/Appellants)

- and -

(1) THE SECRETARY OF STATE FOR FOREIGN AND COMMONWEALTH AFFAIRS

(2) THE SECRETARY OF STATE FOR DEFENCE (Defendants/Respondents)

• - - - - - - - - - - - - - - - - - - - -

Ben Jaffey and Nikolaus Grubeck (instructed by Leigh Day) for the Appellants

Jonathan Swift QC and Nicholas Moss

(instructed by *the Government Legal Department) for the Respondents*

Hearing date: 22 March 2016

• - - - - - - - - - - - - - - - - - - - -

Approved Judgment

Sir Colin Rimer:

Introduction

1. By a judicial review claim form issued on 2 May 2013, Mohammed Hottak, AL and AP, all Afghan nationals, sought judicial review of a 'failure' by the Secretaries of State for Foreign and Commonwealth Affairs and for Defence 'to extend to the claimants and similarly placed Afghan LES [locally employed staff] a scheme of assistance similar to or comparable with the Iraq LES scheme.' They asserted that the scheme put in place for Afghan LES was unlawfully discriminatory because of their nationality. AP's claim was settled following his institution of private proceedings and no further reference need be made to him. AL is the subject of anonymity orders and so I shall refer to him only by initials.

1. The claim was heard by the Divisional Court (Burnett LJ and Irwin J) in May 2015. The court's reserved judgment followed on 8 July 2015, Burnett LJ delivering the lead judgment with which Irwin J agreed: [2015] EWHC 1953 (Admin). The result was an order by which the court granted declaratory relief in respect of the defendants' failure when formulating the Afghan scheme to have regard to the provisions of section 149(1)(b) and (c) of the Equality Act 2010 (which concern the public sector equality duty, or 'PSED') but otherwise dismissed the claim and ordered the claimants to pay half the defendants' costs. The court gave the claimants permission to appeal on grounds other than that relating to the PSED issues, on which it refused permission. On the PSED issues the claimants wished to argue that substantive rather than merely declaratory relief should have been granted and, on a renewed application, Underhill LJ gave them permission to do so.

1. Burnett LJ's judgment provided a succinct explanation of the background and I have gratefully drawn upon it, in part verbatim. The claimants served as interpreters with the British Forces in Afghanistan. Afghan nationals who worked as LES for the British Government were or might be entitled to benefit from one or both of two policies put in place by the Government: the 'Intimidation Policy' and the 'Redundancy Policy' (also known as the 'Ex Gratia Policy'). They were together known as the Afghan Scheme. The Scheme offered financial benefits and relocation opportunities, including, in limited circumstances, to the United Kingdom ('the UK') to those qualifying under it.

1. The proceedings were brought because the claimants regarded the Afghan Scheme as less generous than the Iraq Scheme that had been put in place by the British Government for the benefit and protection of LES during the engagement of British Forces in Iraq. They asserted that: (i) the Afghan Scheme's shortcoming in that respect amounted to direct discrimination against the Afghan LES because of their nationality, alternatively to indirect discrimination, and so was contrary to section 39(2) of the Equality Act 2010 ('the 2010 Act'), which prohibits discrimination in relation to employee benefits; alternatively (ii) that such discrimination was contrary to section 29(6) of the 2010 Act, which prohibits discrimination in the exercise of public functions; alternatively (iii) that such discrimination was contrary to the common law. They also asserted that, in formulating the Afghan Scheme, the defendants had failed to comply with the section 149 PSED.

Basic facts

1. Burnett LJ explained that the challenge to the lawfulness of the Afghan Scheme was broadly advanced and did not depend on the details of the claimants' employment, as to which there was some controversy. There was much evidence about the nature and degree of risk of retaliation from the Taliban to which LES were exposed as a result of having worked for the British Government, with the claimants' evidence suggesting that there had been more attacks on LES than the defendants accepted. There was, however, no cross-examination on the matters of difference, which Burnett LJ considered did not bear upon the legal issues.

1. Burnett LJ explained that there was also much common ground between the parties. The British Forces in Afghanistan could not have operated without LES, including interpreters. Those engaged by the British Government, as well as those engaged by the other coalition forces in Afghanistan, exposed themselves to considerable personal risk, and the Taliban had exacted revenge on some of those it saw as having collaborated with the occupying forces. LES, including interpreters, had been intimidated, attacked and killed, although there is a dispute about numbers and whether there have been recent such incidents. The risks extended to the families of LES. Burnett LJ said that;

'5. … 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 [LES] run significant risk 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 [LES] as legitimate targets.'

1. Of the two claimants, Mr Hottak was engaged by the British Government as an interpreter in 2006. He was injured in 2007 whilst on patrol in Helmand Province, after which he undertook different work. In 2009 he reported that he had been the subject of intimidation, including death threats. He resigned from his employment with effect from 6 November 2009. He was subject to further intimidation and left Fort Hunter in the spring of 2011. He and his family continued to receive threats. He fled to the UK where he was granted asylum.

1. AL worked first as an interpreter for the Americans, and then for the British Forces between 2006 and June 2009. Like Mr Hottak, he did front-line duties and was also employed at Fort Hunter. Both he and his family have been subjected to threats. He resigned from his Fort Hunter employment in 2012 in order to protect his family. The Intimidation Policy was applied to him in 2013 after he raised his concerns about threats. He is dissatisfied with the assessment of the risks he faces. He remains in Afghanistan.

1. Burnett LJ described the Afghan and Iraqi Schemes, and the differences between them, clearly and succinctly. I can do no better than to quote him;

'The Afghan Scheme

1. 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 extent. The evidence of the defendants is that the level of intimidation of [LES] 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.

1. 947 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.

1. The Intimidation Policy was adopted in November 2010 following its being agreed by the National Security, International and Defence Group which was a cross-government body of officials leading on Afghan issues. The policy was revised in 2013. It applied to all [LES] 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 the 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).

1. 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 where 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.

1. 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 underpinned by a support and financial scheme.

The Iraq Scheme

1. The Iraq Scheme was introduced in 2007 at a time when Iraq was in a state of civil war. It applied to [LES] 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 [LES] 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 [LES] 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.

1. 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 dependants 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.

1. The opportunity to relocate to the United Kingdom was also available to a small category of former staff (and their dependants), 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.

1. 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 [LES] began in Iraq.

Summary of differences between the two schemes

1. 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).

1. Under the Iraqi Scheme the financial benefits were available only to Iraqi nationals, but under the Afghan Scheme to any [LES]. 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.

1. 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.

1. 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.

1. 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.' **

1. As the claim is founded on alleged discriminatory treatment by the defendants in relation to the claimants' working conditions as LES in Afghanistan, the first question for the Divisional Court was whether the court had jurisdiction to entertain it. The primary basis for the claim was the 2010 Act and so the court had to decide whether the reach of its relevant provisions extended to claims by LES engaged and working in Afghanistan. The court held that it did not, which marked the end of the statutory claims, but the claimants have challenged that conclusion. The first head of their claim is based on their status as employees and I shall consider the foundation for that claim first.

A. The claimants' employment based claim

1. The 2010 Act's preamble sets out the broad nature of its objectives, which include the reform and harmonisation of equality law and the restatement of the enactments relating to discrimination. Part 2 of the 2010 Act is headed 'Equality: Key Concepts' and Chapter I introduces the so-called 'protected characteristics', the importance of which is that the 2010 Act is directed at prohibiting discrimination because of, or in relation to, any such characteristic. Section 4 lists the characteristics, of which the relevant one is 'race' and which section 9 defines as including 'nationality' and 'ethnic or national origins'.

1. Chapter 2 of Part 2 is headed 'Prohibited Conduct' and sub-headed 'Discrimination'. The only provisions in it to which I need to refer are the material parts of the definitions of 'Direct discrimination' in section 13 and of 'Indirect discrimination' in section 19, and section 23.

1. Section 13 provides:

'(1) A person (A) discriminates against another (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others. ….'

1. Section 19 provides:

'(1) A person (A) discriminates against another (B) if A applies to B a provision, criterion or practice which is discriminatory in relation to a relevant protected characteristic of B's.

(2) For the purposes of subsection (1), a provision, criterion or practice is discriminatory in relation to a relevant protected characteristic of B's if –

(a) A applies, or would apply, it to persons with whom B does not share the characteristic,

(b) it puts, or would put, persons with whom B shares the characteristic at a particular disadvantage when compared with persons with whom B does not share it,

(c) it puts, or would put, B at that disadvantage, and

(d) A cannot show it to be a proportionate means of achieving a legitimate aim.

(3) The relevant protected characteristics are –

…

race;

….'

1. Under the sub-heading 'Discrimination: supplementary', section 23, headed 'Comparison by reference to circumstances', provides materially:

'23. On a comparison of cases for the purposes of section 13, 14 or 19 there must be no material differences between the circumstances relating to each case. ….'

1. The function of the provisions just referred to is to identify the different ways in which discrimination may take place. They do not explain the contexts in which it will be unlawful. One such context is explained in Part 5 of the 2010 Act, headed 'Work'. Chapter 1, 'Employment, etc', provides materially in section 39:

'(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.'

1. The claimants' primary case is that the Afghan Scheme subjected them to unlawful discriminatory detriment in breach of section 39(2) by failing to provide them with the benefit of relocation terms as generous as those of the Iraq Scheme. They say that Part 5 of the 2010 Act therefore entitles them to bring a work-related discrimination claim in England. Ordinarily, any such claim must be brought in an employment tribunal (see sections 113(1) and 120) but section 113(3)(a) provides that section 113(1) does not prevent the bringing of a claim for judicial review, which is what the claimants have done.

1. The first question, therefore, is whether the work-related provisions in Part 5 of the 2010 Act extend extra-territorially to discrimination claims brought by workers like the claimants who were engaged as LES in Afghanistan. The claimants assert that they do. They say that: (i) they were employed by Her Majesty's Government in Afghanistan, where they worked in UK military bases; (ii) the prohibition in section 39(2) outlawed the allegedly discriminatory terms of the Afghan Scheme; and (iii) the closeness of their employment with the UK and British labour law is such that they are entitled to pursue their section 39(2) complaint in England. The Divisional Court disagreed, holding it had no jurisdiction to entertain the claim. Was it correct?

1. Section 217 of the 2010 Act, 'Extent', explains that the Act forms part of the law of England and Wales, that with some exceptions it also forms part of the law of Scotland and that certain of its provisions extend to Northern Ireland. What, as regards its provisions relating to 'work', it does not explain is whether, and if so in what circumstances, they apply to an employment carried on outside the jurisdiction. Paragraph 15 of the Explanatory Notes to the 2010 Act has this to say on the subject:

'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. …'.

1. That statement reflects that prior to the enactment of the 2010 Act, the courts had been presented with, and had answered, questions as to the circumstances in which employees working overseas will be entitled to bring unfair dismissal claims in employment tribunals in England and Wales (and, in one case, Scotland) under section 94(1) of the Employment Rights Act 1996, which provides that 'An employee has the right not to be unfairly dismissed by his employer.' Such questions arose because the 1996 Act is similarly silent as to the extent to which it has any extra-territorial application. Subject to a special point advanced by the claimants based on the fact that their work-related claims are for alleged discrimination **rather than for unfair dismissal, it is agreed that the principles explained in those decisions in relation to section 94(1) of the 1996 Act apply equally to the claimants' work-related claims under section 39 of the 2010 Act. Whereas, however, the claimants assert that the correct application of those principles points to the English court having jurisdiction to entertain their claim, the defendants assert the contrary.

The authorities relating to the jurisdiction issue

1. The authorities to which we were referred all deal with claims for unfair dismissal, that is for breach of the right conferred by section 94(1) of the 1996 Act. The leading case is the decision of the House of Lords in Lawson v. Serco Ltd [2006] ICR 250, the name of the first of three similar appeals before the House. Lord Hoffmann gave the only substantive speech, with which Lord Woolf, Lord Rodger of Earlsferry, Lord Walker of Gestingthorpe and Baroness Hale of Richmond agreed.

1. Lord Hoffmann explained that the 1996 Act contained no geographic limitation but that it was inconceivable that Parliament intended it to confer rights upon employees working abroad and having no connection with Great Britain. The general principle of construction is that legislation is prima facie territorial and the parties to the appeals agreed that some territorial limitations in the reach of the 1996 Act must be implied. What was more difficult was to identify them. The paradigm case for the application of section 94(1) is that where the employee is working in Great Britain, and so the circumstances in which British labour law will apply to an employee working and based abroad would have to be unusual. Lord Hoffmann considered, however, that there would be some cases in which it will so apply and he said, at [36], that one should try to identify the characteristics which such exceptional cases will ordinarily have.

1. In elaboration, Lord Hoffmann said, at [37], that it would be unlikely that someone working abroad would be within the scope of section 94 unless he was working for an employer based in Great Britain. But by itself that would not be enough:

'37 … Many companies based in Great Britain also carry on business in other countries and employment in those businesses will not attract British law merely on account of British ownership. The fact that the employee also happens to be British or even that he was recruited in Britain, so that the relationship was "rooted and forged" in this country, should not in itself be sufficient to take the case out of the general rule that the place of employment is decisive. Something more is necessary.'

1. Lord Hoffmann then explained, in [38], that 'something more' may be provided by the fact that the employee is posted abroad by a British employer for the purposes of a business carried on in Great Britain. Such an employee will be working as a representative of a business conducted at home, and Lord Hoffmann gave as an example a foreign correspondent on the staff of a British newspaper posted to Rome or Peking and who may remain for years living in Italy or China. He concluded the material part of his judgment as follows:

'39. Another example is an expatriate employee of a British employer who is operating within what amounts for practical purposes to an extra-territorial British enclave in a foreign country. This was the position of Mr Botham working in a military base in Germany. And I think, although the case is not quite as strong, that the same is true of Mr Lawson at the RAF base on Ascension Island. While it is true that Mr Lawson was there in a support role, employed by a private firm to provide security on the base, I think it would be 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 for a hospital in Berlin. I have no doubt that Bryant v. Foreign and Commonwealth Office (unreported) 10 March 2003, in which it was held that section 94(1) did not apply to a British national locally engaged to work in the British Embassy in Rome, was rightly decided. But on Ascension Island there was no local community. In practice, as opposed to constitutional theory, the base was a British outpost in the South Atlantic. Although there was a local system of law, the connection between the employment relationship and the United Kingdom was overwhelmingly stronger.

1. I have given two examples of cases in which section 94(1) may apply to an expatriate employee: the employee posted abroad to work for a business conducted in Britain and the 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. For the purposes of these two appeals [the Lawson and Botham appeals], the second of these examples is sufficient. It leads to the conclusion that the appeals of both Mr Lawson and Mr Botham should be allowed.'

1. Of the three appeals before the House, the Lawson appeal concerned a British national employed by a company registered in England as a security supervisor at an RAF base on Ascension Island. The Botham appeal concerned a British national employed by the Ministry of Defence as a youth worker at various military bases in Germany. As part of the 'civil component' of the British Forces in Germany, he was treated as a resident of the United Kingdom and paid UK tax and national insurance contributions. The Crofts appeal **concerned rather different circumstances: Mr Crofts was a pilot employed by a subsidiary of a Hong Kong airline but was based at Heathrow under the airline's 'permanent basings policy'. The House held that section 94(1) extended also to the case of peripatetic employees who might spend much of their time outside Great Britain but who were nevertheless based here: see Lord Hoffmann's speech, at [31].

1. The Bryant case, which Lord Hoffmann held was correctly decided, was a decision of the Employment Appeal Tribunal (Burton J, the President, Miss C. Holroyd and Ms G. Mills), 10 March 2003, Appeal No EAT/174/02/RN, in which the EAT held that section 94(1) of the 1996 Act did not extend extra-territorially to a British national employed locally in Italy to work in the British Embassy in Rome. The employment tribunal's findings in relation to her employment, as summarised by Burton J in his judgment for the EAT, were that:

'3. … she was engaged and employed at all times outside the United Kingdom; her post did not … involve reporting back to or taking instructions from the Respondent's offices in the United Kingdom; her duties were carried out entirely in Italy; she was paid at local rates, and employed on local terms and conditions, and the conclusion of the Tribunal was that her employment was subject to Italian law.'

That Mrs Bryant was a British national did not make her case any different from that of a locally resident Italian national engaged to work in the embassy.

1. Lawson v. Serco Ltd has been applied in subsequent cases, including twice in the Supreme Court, which has clarified its underlying principles. In [Duncombe v. Secretary of State for Children Schools and Families (No 2)]() [2011] UKSC 36; [2011] ICR 1312, the judgment of the court was delivered by Lady Hale (who was also a party to the decisions in Lawson). The appeal related to an unfair dismissal claim brought by a teacher appointed by the Secretary of State at a school in Germany that was one of a group of European schools for children of parents working in European institutions, and the Supreme Court's judgment dealt with the status of such teachers generally. Lady Hale said it was agreed that the teachers' employment did not fall within either of Lord Hoffmann's specific examples in Lawson of people employed by British employers to work outside Great Britain who would be protected by section 94(1) of the 1996 Act from unfair dismissal. The question was whether there were other examples of the principle, of which the case under appeal was one. After summarising the decision in Lawson, Lady Hale continued:

'9. It is therefore clear that the right [not to be unfairly dismissed] 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, for they are merely examples of the application of the general principle.

1. The employment tribunal rightly held that neither of Lord Hoffmann's specific examples applied to teachers employed by the British Government to work in European Schools abroad. The tribunal thought that their employment was much more firmly rooted in the European Schools than in Great Britain. However, the teachers' argument is that, although their actual work might have strong connections with the particular school in which they were employed, their employment relationship had virtually no connection with the system of law in the country to which that particular school happened to be. They were not employed in a British enclave but they were employed in an international enclave. There is no applicable international system of employment law to which they can turn. In this respect they are very similar to Mr Lawson and Mr Botham, where there was a local system of law, but "the connection between the employment relationship and the United Kingdom was overwhelmingly stronger".'

1. The court upheld the appellant teacher's claim. Lady Hale explained why as follows:

'16. 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. That 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 Ltd, it must be relevant to the expectation of each party as to the protection which the employees would enjoy. The law of unfair dismissal does not form part of the contractual terms and conditions of employment, but it was devised by Parliament in order to fill a well known gap in the protection offered by the common law to those whose contracts of employment were ended. 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; the husbands in the Wallis case [2011] ICR 617 were there because of commitments undertaken by the British Government; and the wives were there because the British Government thought it beneficial to its own undertaking to maximise the employment opportunities of their husbands' dependants. 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; just as it would be anomalous if wives employed to work for the British Government precisely because their husbands were so employed, and sacked because their husbands ceased to be so employed, would be denied the protection which their husbands would have enjoyed.

1. 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. Those people are employed under local labour law 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'.) To admit the cases before us as another example of the principle laid down in Lawson v. Serco Ltd [2006] ICR 250 is scarcely to extend those exceptional cases very far or to offend against the sovereignty and equality of nations.'

1. Duncombe therefore turned on a 'very special combination of factors', including in particular that the contracts were governed by English law and that the teachers were employed in 'international enclaves, having no particular connection with the countries in which they were situated …', being facts which distinguished the cases from those like Mrs Bryant's.

1. The other Supreme Court decision to apply Lawson v. Serco Ltd is [Ravat v. Halliburton Manufacturing & Services Ltd]()  [2012] UKSC 1; [2012] 2 All ER 905. The appeal was from the Court of Session and raised the question of whether section 94(1) of the 1996 Act extended to an employee who was a British national, was resident in Great Britain and was employed by a British company but who travelled overseas in order to work for short periods there, usually for 28 days at a time. At the time of his dismissal, he was working in Libya. Was he entitled to claim under the 1996 Act for unfair dismissal?

1. The judgment of the court was delivered by Lord Hope of Craighead. After referring to Lord Hoffmann's speech in Lawson, he said it would be difficult to fit Mr Ravat's case into any of Lord Hoffmann's examples: he was not a peripatetic employee, he was not working abroad as an expatriate in a political or social British enclave, nor had he been posted abroad to work for a business conducted in Great Britain. Lord Hope cited [9] of Lady Hale's judgment in Duncombe and explained the careful examination he had made of Lord Hoffmann's speech in order to identify the statements of general principle that Lord Hoffmann was enunciating. Lord Hope then summarised as follows the principles as to when section 94(1) will apply to a particular case, notwithstanding its foreign elements:

'27 … 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.

1. 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 s. 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.

1. 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 s. 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 [leading counsel for the employer] said that a rigorous standard should be applied, but I would not express the test in those terms. The question of law is whether s. 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.'

1. The court's decision was that the employment tribunal, the primary fact-finder, had arrived at a conclusion that was not, as a whole, open to criticism, namely that s.94(1) must be regarded as applying to the employment, although Lord Hope said it would have been better if the tribunal had asked itself whether the connection with Great Britain was sufficiently strong to enable it to be said that Parliament would have regarded it as appropriate for the tribunal to deal with the claim; in that context, he referred to what he had said in [28] (quoted above).

1. The only other decision in this line of authority to which we were referred was that of this court in [Dhunna v. CreditSights Ltd ]()[2014] EWCA Civ 1238; [2015] ICR 105, in which the court allowed an appeal against a decision of the Employment Appeal Tribunal and so re-established the decision of the employment tribunal that the circumstances of the employment in Dubai of an employee of a British subsidiary of an international company based in New York did not show a sufficiently strong connection with Great Britain and British employment law to justify a presumption that Parliament had intended section 94(1) to apply to his employment. The court applied the principles found in Lawson, Duncombe and Ravat. It also referred to the decision of this court in [Bates van Winkelhof v. Clyde & Co LLP ]()[2013] ICR 883, at [90], in which Elias LJ (with whom Richards and Lloyd LJJ agreed) noted that Duncombe emphasised the broader principle underlying the concept of jurisdiction and that Lord Hoffmann's examples in Lawson were just that, namely practical examples. Elias LJ also said that Ravat marked a similar distancing from too rigorous an emphasis on the specific examples given by Lord Hoffmann in favour of the adoption of a broader test. In Dhunna, this court also rejected the employee's submission that part of the 'sufficiently strong connection' inquiry required a comparison between the system of employment legislation in Great Britain and that available in the jurisdiction where the employee was working at the time of his dismissal, with a view to determining which was the better system of law: see [40] of Rimer LJ's judgment, with which Floyd and Macur LJJ agreed.

The decision of the Divisional Court on the jurisdiction issue

1. Burnett LJ referred to paragraph 15 of the Explanatory Notes to the 2010 Act (the relevant part is cited at [19] above) and to the decisions in Lawson, Duncombe and Ravat. He summarised what Lord Hoffmann had explained in [37] to [40] of his speech in Lawson; cited [9], [16] and [17] of Lady Hale's judgment in Duncombe and [27] to [29] of Lord Hope's judgment in Ravat. He then considered whether the circumstances of the claimants' employment in Afghanistan brought them within another exceptional case entitling them to the benefit of British employment law rights.

1. As to that, Burnett LJ noted that the claimants' contracts of employment contained no suggestion that they were subject to English law, nor did they support any suggestion that domestic employment law might apply to them. He said no suggestion had been made that the contracts were governed other than by Afghan law. He noted the claimants' points that they were exempt from local income tax, that their employer was the British Forces engaged in a counter-insurgency exercise, that they were line managed by British personnel, that they worked alongside British forces, that they were provided for security purposes with clothing making them indistinguishable from soldiers and that, whilst working, they were based in Camp Bastion and the British Embassy in Kabul. He then gave his reasons for rejecting the submission that the claimants' case was of the exceptional nature sufficient to justify the conclusion that the reach of section 39(2) of the 2010 Act extended to their employment. He said:

'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 had 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 employment 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. 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 Enbassy, 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.'

1. Burnett LJ then said that, if the reach of section 39(2) of the Act was the same as that of the 1996 Act, it did not apply to the claimants' circumstances. He rejected a submission that, because the 2010 Act was concerned with outlawing discrimination, there was a basis for attributing to Parliament an intention that its territorial reach should be wider than that of the provisions relating to unfair dismissal in the 1996 Act. He said that, on the contrary, there was much to be said for jurisdictional symmetry between claims under the 1996 Act and under Part 5 of the 2010 Act, given that claims of both types fall within the jurisdiction of employment tribunals and are often brought together. He said the court had had no argument that the reach of section 39(2) of the latter Act should be narrower but that he was content to proceed on the basis that it was not, albeit with some hesitation, the reasons for which he explained. Their kernel was that:

'45. … 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.'

The appeal on the jurisdiction issue

1. We were shown a copy of Mr Hottak's employment contract. The employer is 'British Forces Afghanistan'. Clause 4 provides that the monthly pay of $600 will 'Initially … be paid in US Dollars but the Employer reserves the right to pay your monthly salary in the local currency, at the exchange rate directed by the Ministry of Defence. … Initially you will receive pay free of National Taxes. This is subject to change.' Clause 5 deals with working hours, clause 7 with leave entitlement, clauses 8 and 9 with absence for sickness and clause 10 provides for a 42-day probationary period. Clause 11 provides that, after the probationary period, one month's notice from either party is required to terminate the employment, save that the employer is entitled to determine it immediately for disciplinary reasons or sub-standard work. Clause 14 requires the employee to submit to security checks. Clause 16 reserves a right to the employer to change the contractual terms at any time. The contract includes a 'Loyalty Declaration' by way of a promise of exclusive fidelity to the British forces. The contract includes no choice of law or jurisdiction clause.

1. Mr Jaffey identified in his written argument for the appellants a number of features of their employment relationship that he said collectively made their case sufficiently exceptional to come within the reach of section 39 of the 2010 Act.

1. First, British compounds in Afghanistan where the claimants worked were under the full and exclusive control of the UK. They were thus employed within 'what amounts for practical purposes to an extra-territorial British enclave in a foreign country' (see Lawson, per Lord Hoffmann, at [39]). Whether or not the Divisional Court was correct to conclude that this provided no analogy with the RAF base on Ascension Island, where Mr Lawson had worked, it did provide an analogy with the UK military base in Germany, where Mr Botham had worked, and he was one of the appellants in Lawson whose appeal was allowed. Mr Jaffey submitted that the point was even stronger in relation to the claimants' workplaces in Afghanistan, where the UK military bases were subject to strict security perimeters directed at ensuring their physical separation from the local community.

1. Second, although the Divisional Court had held that the claimants' connection with Great Britain was limited to the identity of their employer, the UK Government, this overlooked the importance attached to the identity of such employer by Lady Hale in Duncombe, where at [16] she said that:

'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.'

1. The importance in the present case of the identity of the employer was said to lie in the fact that, unlike most employees, the UK Government's staff cannot vindicate their rights in a foreign court, including the Afghan courts, since any claim would automatically fail by reason of the state immunity that the UK Government would be entitled to plead. As compared with Afghan employees of other employers, the claimants would therefore face a serious disadvantage.

1. Third, various factors relating to the claimants' employment contracts evinced an intention to link their employment to the UK and to exclude it from Afghan law and ordinary Afghan structures. They were that: (i) the claimants were recruited and line managed by UK military personnel and civil servants; (ii) their contracts were drawn up and signed by British military personnel, with matters relating to the claimants' employment, dismissal and pay being expressly reserved to UK personnel; (iii) their employment was preceded by UK security screening and an express requirement that the LES promise their 'undivided allegiance' and loyalty to the service of the British armed forces (for a citizen of a foreign state in a state of civil war, this was said to be a significant pledge of loyalty and further manifested a close link with the UK); (iv) they were paid by the UK Government and were exempt from Afghan income tax; (v) they were paid in US dollars, but at an exchange rate directed by the British Ministry of Defence (I believe this to be inaccurate: their contractual pay was stated to be US dollars and such direction only applied if they were instead to be paid in local currency); (vi) the defendants' policy relating to the employment of LES required that they be protected to the same health and safety standards as they would have been had they been working in the UK (see paragraph 60 of the policy); and (vi) all policy and guidance issues regarding their employment were resolved in the UK.

1. Fourth, Mr Jaffey referred to provisions in other employment related legislation providing expressly that they were to have effect only within the UK (he referred to legislation relating to the national minimum wage, the Working Time Regulations, statutory sick pay and pensions auto-enrolment). His submission was that the contrasting silence in Part 5 of the 2010 Act as to any territorial limitation in its operation was no accident and he invited us to conclude that it was implicitly intended to have a broader territorial reach, so reflecting the importance of a general prohibition of discrimination.

1. In his oral argument, Mr Jaffey repeated and developed these points save that referred to in the preceding paragraph, as to which he merely again emphasised that the claimants' case is based on the statutory tort of discrimination. He pointed out that Camp Bastion, where the claimants worked, was territory to which the European Convention for the Protection of Human Rights and Fundamental Freedoms applied; that when the claimants were taking part in military activity outside the secure locations, the defendants' policy relating to LES required them to wear UK pattern military clothing in order to prevent them from being identified and specifically targeted (see paragraph 61 of the policy). He placed emphasis upon the exemption of the claimants from local taxation, although the employment contract indicated that such exemption might be removed.

1. Overall, and taking account of all these factors, Mr Jaffey submitted that they added up to an exceptionally close relationship between the Afghan LES and the UK and British labour law that was sufficient to entitle the court to conclude that the reach of Part 5 of the 2010 Act extended to the claimants. He said the Divisional Court was wrong to conclude otherwise.

Discussion and conclusion on the Part 5 jurisdiction issue

1. Mr Jaffey advanced the claimants' appeal on the Part 5 jurisdiction point with clarity and force but he did not persuade me that the claimants' case is one that shows a sufficiently strong connection between Great Britain and the claimants' employment relationship to justify a presumption that Parliament must have intended Part 5 of the 2010 Act to apply to the Afghan LES (see Lord Hope's summary of the applicable principle in Ravat, at [28]).

1. First, it is said that, because Part 5 of the 2010 Act is directed at outlawing discrimination and so concerns matters viewed by this jurisdiction as going to the very essence of man's humanity to man, Part 5 should be regarded as having a wider territorial reach than domestic legislation directed merely at outlawing the unfair dismissal of an employee. I would reject that submission. If the proposition goes to the length of suggesting that Parliament must be assumed to have intended its anti-discrimination provisions in Part 5 of the 2010 Act to operate on a world-wide basis, I regard it as wrong. Had that been Parliament's intention, it would have said so. If the proposition amounts to no more than a submission that an overseas employee's complaint of work-related discrimination should and will have an easier territorial passage through the eye of the needle than his complaint of unfair dismissal (a complaint that might also be brought in the same proceedings), it amounts to reading into Parliament's silence on the question of territoriality a subtly nuanced variance of legislative intention as between the two types of case. There is no warrant for that. Parliament's silence has made the application of the law quite difficult enough. The most recent word from the Supreme Court on the topic is that it is a matter of 'fact and degree' as to whether an overseas employment will have a sufficient connection with Great Britain to entitle the employee to the benefit of section 94(1) of the 1996 Act. To impute to Parliament an intention to engraft on to that test an unidentified qualification to the effect that a more generous standard is to be applied when the relevant inquiry is the availability of the discrimination provisions in Part 5 of the 2010 Act is a course I would regard as artificial, unjustified and unwise. I would decline to do it.

1. I would, therefore, reject the submission that, because these are discrimination claims, the court should look upon the territoriality problems with greater sympathy than if they were unfair dismissal claims. I would uphold the Divisional Court's decision on this part of the claimants' case. In my view, the principles applicable to claims for unfair dismissal by employees engaged abroad, as explained in the authorities I have referred to, provide the relevant guidance. I turn to whether it enables the claimants to overcome the jurisdictional difficulties in which their overseas employment prima facie lands them.

1. In advancing the claimants' case to this end, Mr Jaffey emphasised that the claimants' employer was the UK Government and he pointed to Lady Hale's observation in Duncombe, at [16], that the employer in that case too

'… 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.'

Having so underlined the solidity of the employer's British connection, Lady Hale plainly did not, however, regard that feature as, by itself, a case-winning consideration – for the reason that the need for a British employer is, as she had also said in [16], a sine qua non in claims such as those mounted by the present claimants. These cases are about whether British labour law applies to employees working abroad. In the case, however, of Afghan nationals employed locally under a contract governed by Afghan law it is obvious that, unless at the very least they are employed by a British employer, Part 5 of the 2010 Act can have no arguable application to their case.

1. These claimants did of course have a British-based employer. It is, however, clear from the authorities that, by itself, that does not manifest a sufficient connection with Great Britain and British employment law to justify an inference that Parliament intended to extend the reach of section 94(1) of the 1996 Act (or, therefore, of Part 5 of the 2010 Act) to foreigners employed overseas. As Lord Hoffmann said in [37] of Lawson, 'something more is necessary' before such an inference may be drawn; and that 'more' will not (for example) be provided either by the fact that the employee was recruited in Great Britain or that he/she is British, neither of which applies in this case. Lord Hoffmann accepted, in [38], that it may be provided by the fact that the employee is engaged abroad for the purposes (and thus to act as a representative) of a business carried on in Great Britain. But that is also not this case.

1. The cases in which section 94(1) (and therefore Part 5) will extend to the employment contract of the foreign based employee are therefore truly exceptional. Lord Hoffmann's other example in which it may so extend, which he explained in [38], is that of 'an expatriate employee of a British employer who is operating within what amounts for practical purposes to an extra-territorial enclave in a foreign country.' Mr Botham was in that class. He was a British subject working at various Ministry of Defence establishments in Germany, where:

'3. … in accordance with the NATO Status of Forces Agreement of 1951 he was part of the "civil component" of the British Forces in German and treated as resident in the UK rather than Germany for various purposes, including taxation.'

Lord Hoffmann also regarded Mr Lawson as falling within this type of case, although he did not regard his case as strong as Mr Botham's. Mr Lawson had been engaged by a UK company to work as a security supervisor on Ascension Island, where the company had a contract to service an RAF base. Lord Hoffmann described Ascension Island as a 35 square mile volcanic island in the South Pacific with no indigenous population (see Lawson, at [2]). This was not, therefore, in Lord Hoffmann's view the taking up by Mr Lawson of an employment in a foreign community. There was no local community and so:

'39. … in practice, as opposed to constitutional theory, the base was a British outpost in the South Atlantic. Although there was a system of law, the connection between the employment relationship and the United Kingdom was overwhelmingly stronger.'

1. The essence of these exceptional types of case is that each concerned a British citizen, recruited in Great Britain by a British employer to work in a British enclave or outpost. In one case, the employee was regarded by the terms of a NATO agreement as resident in the United Kingdom rather than in Germany. In the other, weaker case, whilst there was a local system of law in Ascension Island, there was no indigenous community and so overall the employment had a greater connection with Great Britain than with the place of employment.

1. Lord Hope pointed out in Ravat, at [29], that the question whether, on given facts, a case falls within (on that case) section 94(1) of the 1996 Act is a question of law, but that it is also a question of degree, and he repeated the latter point at [35]. In his consideration of the expatriate examples to which Lord Hoffmann had referred, he pointed out, at [28], that Lord Hoffmann had referred to these as 'exceptional cases' (see Lawson, at [36]). Lord Hope said that this was because, as Lord Hoffmann had said:

'28 … 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 exceptionally strong connection with Great Britain and British employment law before an exception can be made for them.'

1. The Ravat appeal did not concern a truly expatriate employee and so Mr Ravat's burden of showing a sufficient connection with Great Britain and British employment law was less onerous than that to which the truly expatriate employee was subject. By contrast, the present appellants were and are subject to the heaviest burden. They are not British citizens: they are Afghan nationals. They lived in Afghanistan. They were recruited in Afghanistan. Their employment contracts were governed by Afghan law. They worked exclusively in Afghanistan and there was no UK, international or peripatetic element to their employment. There was no provision either in their contracts or in any inter-state agreement that they were to be treated as resident in the UK for any purpose. Their contracts provided that, at least initially, their pay was to be exempt from local taxes, the result of a concession by the Afghan government. Their contracts did not provide for their pay to be subject to UK taxation. Their contracts included express statements of undivided loyalty to their employer, but there is nothing materially special about that for present purposes: employees ordinarily owe duties of fidelity to their employers. Whilst they worked at what may be regarded as British enclaves in Afghanistan, they were also part of an indigenous Afghan community, where Afghan law applied; and they could and would return to their Afghan homes when on leave. They were not employed on the same footing as British staff or British Service Personnel and various material differences as to the nature of their employment were explained by Jonathan Iremonger, an Assistant Chief of Staff in a division whose responsibility included the implementation of the Afghan Scheme, in paragraphs 12 to 19 of his witness statement of 20 March 2015. There is no need to detail them, but since Mr Jaffey highlighted the provision to LES whilst operating outside secure locations of UK military pattern clothing, I add that Mr Iremonger points out that this was to stop them being readily identifiable as civilians, that the equipment which they were provided was not identical to that of the soldiers, and that, except when on such patrol, they were required to wear either Afghan civilian clothing or the blue overalls provided as an LES uniform.

1. As for the point that any claim the LES might bring against the UK Government in local courts would be likely to be met with a plea of state immunity, Mr Swift QC, for the defendants, submitted that this will always be the case for employees engaged abroad locally by the UK Government but that it is not a factor which, without more, can bring their employment contracts within the exceptional type of case to which section 94(1) of the 1996 Act, or Part 5 of the 2010 Act, can be assumed to be intended to apply. He said that the same consideration would also have applied to Mrs Bryant. I agree.

1. Overall, I consider that the case of these appellants is not materially different from the Bryant case, which Lord Hoffmann held was rightly decided. That is what the Divisional Court concluded and I consider it was correct to do so. As Lord Hope explained, whilst it is a question of law as to whether Part 5 of the 2010 Act does or does not apply to the claimants' contracts, it is also a question of fact and degree as to whether the connection with Great Britain and British employment law is sufficiently strong to overcome the general rule that the place of employment is decisive. The assessment of this factual inquiry was a matter for the Divisional Court and, unless it can be said that that court materially misdirected itself in carrying it out, I would have doubts as to whether it is open to this court simply to decide the matter afresh. We were not in fact addressed with any arguments to this effect, no doubt because the essence of Mr Jaffey's submission was that the Divisional Court's analysis was flawed from beginning to end. I disagree with that submission. I consider that the court's analysis correctly identified the principles, correctly assessed the relevant facts, was soundly based and arrived at a conclusion that was not only open to it on the evidence, but was one that I consider was correct.

1. I would uphold the Divisional Court's decision that the court had no jurisdiction to entertain the claimants' claim insofar as it sought to invoke the employment-related discrimination provisions in Part 5 of the 2010 Act.

B. The claimants' 'public functions' based claim

1. Part 3 of the 2010 Act is headed 'Services and Public Functions'. Section 29, 'Provision of Services, etc.', provides materially:

'(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 …

(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. …

(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 without 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.'

The claimants' alternative case relies on section 29(6). They say that the promulgation of the Afghan Scheme was a discriminatory exercise of a public function.

1. Section 31, 'Interpretation and exceptions', applies for the purposes of Part 3. Section 31(4) provides that 'A public function is a function that is a function of a public nature for the purposes of the Human Rights Act 1998.' Section 31(10) provides that 'Schedule 3 (exceptions) has effect.' The most relevant of the many exceptions in Schedule 3 is in paragraph 17, which disapplies section 29 in relation to discrimination on the grounds of nationality or ethnic or national origins in the course of the application by a 'relevant person' of provisions of the Immigration Acts and Rules.

1. The claimants' section 29 case is an alternative to their case under Part 5. If they succeed under Part 5 (which in my view they do not), they do not need Part 3. If they fail under Part 5, they rely in the alternative on Part 3. There are, however, difficulties as to whether Part 3 can lend them any succour. A limitation on their bid to invoke it is introduced by section 28, headed 'Application of this Part', ie Part 3. Section 28(2) provides:

'(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.'

1. As Burnett LJ correctly said in the Divisional Court, section 28 shows 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. He then rejected the claimants' alternative case under Part 3 for the following reasons:

'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 any 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.

1. 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 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.

1. 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 Part 3. 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.'

The appeal against the Divisional Court's conclusion on section 29(6)

1. In his written argument, Mr Jaffey criticised the first sentence of [49] of Burnett LJ's judgment. It is said that there is no reason in principle why the jurisdictional reaches of Parts 5 and 3 should be identical; and that 'where a UK public body (such as HM Government) discriminates on the basis of a protected characteristic in the carrying out of a public function, there is strong reason for supposing that Parliament would not permit that.'

1. It is also said that the conclusion in [49] is inconsistent with the Divisional Court's analysis of the jurisdictional limits relating to the PSED. The point there is built on Burnett LJ's conclusion in [60] and [61]:

'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 substantive parts of the Act but otherwise there are no territorial limitations. Although Mr Swift's written material suggests otherwise, I did not understand him to press the point in his oral argument.

1. It follows that, in the formulation of the Afghan Policy, the defendants should have had regard to the matters identified in section 149(1)(b) and (c) of the 2010 Act. ….'

Mr Jaffey's point is that the same reasoning can be applied to Part 3 of the 2010 Act. The fact that the potential recipient of a public service is located outside the UK does not mean that Parliament intended to permit the service provider to provide the service in a discriminatory manner.

1. In his oral argument, Mr Jaffey developed this submission by saying that the Divisional Court had failed to identify the relationship between the PSED and the substantive cause of action under section 29(6). He said that the point of the PSED is to avoid the infringement of section 29(6) in the exercise of a public function. His response to Burnett LJ's point in [49] based on the exceptions to Part 5 contained in Schedule 9 was that, whilst the existence of different exceptions in relation to Parts 3 and 5 respectively was a fact, it was not one that provided an answer.

1. Mr Swift's responsive written argument for the defendants was to the effect that the Divisional Court's conclusion on the territorial range of the section 149 duty (in Part II of the 2010 Act) provides no assistance to the claimants' case on the territorial range of Part 3. I shall come later to the PSED issue more fully, but the essence of Mr Swift's point is that the Divisional Court gave full reasons for concluding that, in contrast to the territorial limitations that it had found applied to the reach of Parts 3 and 5 of the Act, there were no like territorial limitations in relation to the discharge by the defendants of the procedural duties imposed upon them by section 149(1)(b) and (c), a conclusion informed by the fact that section 150(3) provides that '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' (my emphasis). There is no cross-appeal against the Divisional Court's conclusion in that respect but Mr Swift submits that there is anyway no internal inconsistency in the court's interpretation of the respective territorial limits of Parts 3 and 5 on the one hand (which create substantive causes of action) and of section 149 on the other (which creates only a procedural 'due regard' duty).

1. Mr Swift also submitted that to interpret section 29(6) as giving a cause of action in discrimination to individuals in foreign states in respect of the full range of public functions that might have impacts abroad would be surprising. Direct discrimination is ordinarily incapable of being justified. It would, he said, be extraordinary if the exercise of public functions abroad could give rise to discrimination claims: for example, the grant of foreign aid to one state rather than another, or the imposition of sanctions on the leaders of one state rather than another. He also said that it was anyway not open to the claimants to complain under section 29(6) about alleged nationality discrimination with regard to their right to enter the UK (which was the primary aspect of the Afghan Scheme they were complaining about) since a complaint under that head is excluded by paragraph 17 of Schedule 3, a point to which Burnett LJ referred to in [46] of his judgment. I understood Mr Jaffey to accept this last point, but his riposte was that it did not exclude the claimants' complaints about other allegedly discriminatory aspects of the Afghan Scheme, for example its financial and training provisions.

1. In his oral argument, Mr Swift submitted that the essence of the complaints advanced by the claimants relates to their circumstances as employees, that is to say a case within Part 5. If the claimants are unable to establish a sufficiently close connection with Great Britain and British labour law to entitle them to invoke Part 5, they cannot have an alternative basis of claim under Part 3. There must be a territorial limit to the operation of Part 3, and Mr Swift submitted that the measure of its scope is confined to the exercise of public functions in Great Britain. He said there is nothing in section 29(6) that warrants it having a wider territorial operation. He also developed his point as to why the Divisional Court's conclusion in relation to the territorial limits of the PSED under section 149(1)(b) and (c) did not undermine its narrower conclusion as to the reach of section 29(6). The former duty goes only to the decision making process, it does not go to substantive outcomes and it says nothing about the geographic reach of Part 3.

Discussion and conclusion on the Part 3 jurisdiction issue

1. Mr Jaffey's submission that the Divisional Court's conclusion in relation to the territorial reach of the PSED under section 149(1)(b) and (c) meant that its different conclusion as to the territorial reach of Part 3 of the 2010 Act was wrong is, in my view, fallacious. Burnett LJ knew what he was deciding, and why he was deciding what he did, and gave rational reasons for his conclusions. His conclusion as to the reach of section 149(1)(b) and (c) is not the subject of a cross-appeal and so this court must proceed on the basis that it was correct. It does not, however, follow that his different conclusion in relation to the reach of Part 3 was incorrect.

1. Not only does it not follow, in my view his conclusion in relation to the reach of Part 3 was correct. Section 28 provides that Part 3 of the 2010 Act does not apply to discrimination that is prohibited by Part 5. That means that a work-related discrimination claim can be brought only under Part 5 and not under Part 3. If (as I would hold) the claimants are not entitled to invoke Part 5 in pursuit of their work-related discrimination claim (because Parliament did not intend Part 5 to extend to their employment in Afghanistan) then, in agreement with the Divisional Court, I would regard it as surprising if Parliament must nevertheless have imputed to it an intention that the claimants can instead invoke the provisions of Part 3. Quite apart from the point that Burnett LJ made in [49] as to many of the schedule 9 exceptions (relating to Part 5) having no counterpart in the schedule 3 exceptions (relating to Part 3), my intuitive sense as to Parliament's presumed intention is that (a) if a work-related discrimination claim can be brought, it can only be brought under Part 5; and (b) if, for jurisdictional reasons, a work-related discrimination claim cannot be brought under Part 5, it cannot be brought at all. But if that is to put the matter too broadly, I would anyway accept Mr Swift's submission that section 29(6) should not be interpreted as extending to claims other than in respect of the exercise of public functions in Great Britain. I would not accept that there is any warrant for imputing to Parliament an intention to extend it to claims based on the extra-territorial effect of exercise of public functions.

1. I would therefore uphold the Divisional Court's decision in relation to the claim based on section 29(6) of the 2010 Act.

C. Is the claimants' direct, alternatively indirect, discrimination claim under the 2010 Act established?

1. In light of my conclusions that the English court has no jurisdiction to entertain the claimants' discrimination claims under the 2010 Act, it is strictly unnecessary to say anything about this. There is little value in considering claims that the court has no jurisdiction to hear. The substantive basis of the claims was, however, argued both below and before us and the Divisional Court dealt with it. I shall therefore consider it too.

1. The direct discrimination claim is based on the complaint that, insofar as the Afghan Scheme treated Afghan LES less favourably than the Iraq Scheme treated Iraqi LES (particular reliance being placed on the different relocation provisions), it amounted to unlawful discrimination against Afghan LES because of their nationality as Afghans. In Regina (European Roma Rights Centre and others) v. Immigration Officer at Prague Airport and another (United Nations High Commissioner for Refugees intervening) [2004] UKHL 55; [2005] 2 AC 1, at [73], Lady Hale provided a succinct summary of the required ingredients of (inter alia) a direct race discrimination claim:

'… (i) a difference in treatment between one person and another person (real or hypothetical) from a different … racial group; (ii) that the treatment is less favourable to one; (iii) that their relevant characteristics are the same or not materially different; and (iv) that the difference in treatment is on … racial grounds.'

1. As for point (i), the hypothetical comparator for the purposes of the present claim is an Iraqi LES, although presumably not an Iraqi national who was resident in Afghanistan and engaged there by Her Majesty's Government as an LES for the purposes of the Afghan conflict. That is because such a comparator would (so it seems to me) have been entitled only to the benefits of the Afghan Scheme (as modified, if necessary, so as to give him like rights as were given to Afghan LES). Thus, for the claimants to invoke his aid as a comparator would undermine their nationality-based case. Their preferred hypothetical comparator would, therefore, presumably be an Iraqi LES entitled to the benefit of the Iraq Scheme, their case being that the defendants' failure to give Afghan LES a scheme as favourable as the Iraq Scheme was because of their Afghan nationality. All that said, the need to identify a comparator is not an essential part of the relevant inquiry as to whether there has been direct discrimination. In Coll v. Secretary of State for Justice [2015] EWCA Civ 328, Elias LJ, at [24], (in a judgment with which Sharp LJ and Lord Dyson, Master of the Rolls, agreed) explained the doubtful value of endeavouring to identify a comparator and concluded by saying:

'… It is not, therefore, necessary to identify the appropriate comparator at all and it is usually better not even to engage in the exercise. The point was put with his customary lucidity by Lord Nicholls in Shamoon v. Chief Constable of the Royal Ulster Constabulary (Northern Ireland) [2003] UKHL 11; [2003] ICR 337, paras 7-11.'

As for Lady Hale's point (iii), that reflects the provision now contained in section 23 of the 2010 Act.

1. If, for the purposes of section 23 of the 2010 Act, there were no material differences between the local conditions and circumstances in Iraq and Afghanistan in which the two schemes came respectively to be formulated, there might be much to be said for the view that there was at least a presumption of less favourable treatment of the Afghan LES because of their nationality. The case is, however, more difficult than that because the defendants' evidence went to considerable lengths to explain how the Iraq and Afghan Schemes came respectively to be formulated and why the local conditions and circumstances in which the Afghan Scheme came into being differed materially from those in which the earlier Iraq Scheme did. The evidence was that of Patrick Lamb, who spoke as to Iraq, and Dr Liane Saunders, who spoke as to Afghanistan. In this context it is relevant to refer back to [9] above for Burnett LJ's description of the Afghan and Iraq Schemes, but he then again briefly summarised as follows the essence of the differences relating to the genesis of the two Schemes when explaining his view that it followed that the Afghan Scheme was not unlawfully discriminatory:

'51. Whilst it is correct to say that [LES] 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 time in different countries. …

1. 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 the purposes of direct and indirect discrimination there were material differences between the circumstances in the two countries and in the circumstances of [LES] in each.'

1. The essence of that was, therefore, that the relevant local circumstances relating to the engagement of LES in Iraq and Afghanistan respectively were materially different; and that the reason for the differences in the Afghan Scheme as compared with the Iraq Scheme was because the different conditions in Afghanistan satisfied the architects of its Scheme that it was appropriate to formulate the different scheme for Afghan LES that they did.

1. The central difference between counsel as to whether the differing local conditions and circumstances in the two countries provided an answer to the discrimination charge was this. Mr Jaffey submitted that these differences went merely to the motive for the less favourable treatment of the Afghan LES, not to the ground for such treatment, whereas it is only the ground that is relevant, not the motive, and here nationality is an express part of the Afghan Scheme. By contrast, Mr Swift submitted that the different local conditions and circumstances in each country were not the motive for the different Afghan Scheme but instead represented the facts that operated on the mind of those formulating the scheme. They were the facts that caused the less favourable treatment of Afghan LES. Quite apart from that, he said that anyway the relevant Iraq/Afghan local circumstances were materially different so that section 23 showed that a comparison between the treatment of Afghan LES as compared with Iraqi LES was an invalid one.

1. This distinction (as between motive for the less favourable treatment and the ground for it) underlying the primary part of the rival arguments is well recognised and an exposition of it is contained Lady Hale's judgment in Regina (E) v. The Governing Body of JFS and another (United Synagogue and others intervening) [2009] UKSC 15; [2010] 2 AC 728, at [55] to [66]. Having just reviewed the authorities, Lady Hale there explains that whilst the alleged discriminator's motive for acting as he did is irrelevant, the reason that caused him to act **as he did is highly relevant; and it is the answer to that latter 'reason why' question that is essential for the purpose of deciding whether the less favourable treatment complained of was because of, or on the ground of, a protected characteristic.

1. In my view, the most lucid and helpful explanation of the relevant distinction is to be found in the speech of Lord Nicholls of Birkenhead (to which Lady Hale referred) in Nagarajan v. London Regional Transport [2000] 1 AC 501, at 510, 511. Transposing Lord Nicholls's observations on the Race Relations Act 1976 to section 13 of the 2010 Act, he explained that in order for it to be within section 13 the less favourable treatment must be on racial grounds (which in this case includes grounds of nationality). He continued:

'Thus, in every case it is necessary to inquire why the complainant received less favourable treatment. This is the crucial question. Was it on grounds of race? Or was it for some other reason, for instance, because the complainant was not so well qualified for the job? Save in obvious cases, answering the crucial question will call for some consideration of the mental processes of the alleged discriminator. Treatment, favourable or unfavourable, is a consequence which follows from a decision. …

The crucial question just mentioned is to be distinguished sharply from a second and different question: if the discriminator treated the complainant less favourably on racial grounds, why did he do so? The latter question is strictly beside the point when deciding whether an act of racial discrimination occurred. For the purpose of direct discrimination … as distinct from indirect discrimination … the reason why the alleged discriminator acted on racial grounds is irrelevant. Racial discrimination is not negatived by the discriminator's motive or intention or reason or purpose (the words are interchangeable in this context) in treating another person less favourably on racial grounds. In particular, if the reason why the alleged discriminator rejected the complainant's job application was racial, it matters not that his intention may have been benign. For instance, he may have believed that the applicant would not fit in, or that other employees might make the applicant's life a misery, If racial grounds were the reason for the less favourable treatment, direct discrimination … is established.'

1. In this case, I interpret the Divisional Court as having concluded in [56] (without in terms so expressing it) that the answer to the crucial question as to why the Afghan LES were (in certain respects) treated less favourably than the Iraqi LES by the promulgation of the different Afghan Scheme is that, as compared with the conditions earlier experienced in Iraq, the different conditions prevailing in Afghanistan either required, or justified, such a different scheme. It was of course a scheme that applied to Afghan LES but the reason why its provisions were in some (but not all) respects less favourable than those of the Iraq Scheme was not because of the nationality of its beneficiaries. It was because of the different conditions relating to the theatre of war in which they were engaged. In addition (although it really comes to the same point) the comparison with Iraq was unhelpful because there were anyway material differences for section 23 purposes between the circumstances there and in Afghanistan.

1. Another way in which the like conclusion as to the ground for the alleged discrimination might be rationalised would be to ask whether 'but for' the Afghan LES's nationality, they would have been given a scheme comparable to the Iraq Scheme. As Lady Hale noted in JFS, at [59], the 'but for' test was endorsed by the House of Lords in James v. Eastleigh Borough Council [1990] 2 AC 751 (see at 765D, per Lord Bridge of Harwich). The answer to that question would, I consider, be firmly in the negative. That is because the Iraq Scheme had been fashioned in light of the different conditions prevailing in Iraq and was exclusively for those LES serving in Iraq. It was not available to LES serving in Afghanistan in the different conditions prevailing there. This way of approaching the case appears to me to underline that, for section 23 purposes, Iraqi LES are simply not relevant comparators.

1. In my judgment, Burnett LJ's conclusions on this part of the inquiry were correct. I respectfully agree with them. There was here no direct discrimination because of nationality. I would reject the claimants' contrary arguments.

1. As regards the claimants' alternative case based on alleged indirect discrimination, this appears to have been something of a late afterthought on the part of the claimants and I admit to having failed to understand its basis. If a case of indirect discrimination is to be made out, a claimant must identify the provision, criterion or practice ('PCP') relied upon for the purposes of section 19(1) of the 2010 Act. To that end, the appellants' skeleton argument does no better than to say that 'the difference in the [Iraq and Afghan] schemes is indirectly discriminatory because it amounts to a [PCP] that puts Afghans at a particular disadvantage compared to others who do not share their nationality.' That, however, is simply another way of asserting that the Afghan Scheme is directly discriminatory because it is less favourable than the Iraq Scheme. The difference between the two schemes cannot be a PCP for section 19 purposes. The oral argument was, so far as I was concerned, no more enlightening. Mr Swift, in addition to questioning the identification of the PCP, submitted that any indirect discrimination was objectively justified by reason of the different relevant circumstances prevailing in Iraq and Afghanistan respectively.

1. The Divisional Court did not deal separately with the indirect discrimination claim, and I shall say no more about it than that, even if the court did have jurisdiction to entertain it, I was not persuaded that it has any substance.

D. The common law claim

1. This claim is said to be based on the common law prohibition of discrimination. I understand it in fact to be based on the proposition that like cases should be treated alike and, in the present context, it amounts to the assertion that it was irrationally wrong for those promulgating the Afghan Scheme to include in it the less favourable treatment for Afghan LES than did the Iraq Scheme for Iraqi LES.

1. The Divisional Court dismissed this line of attack summarily. Burnett LJ said:

'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 [LES] in Iraq is indistinguishable from [LES] in Afghanistan so that precisely the same terms should be applied to both.

1. Whilst it is correct to say that [LES] 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 time in different countries. This is in reality a Wednesbury challenge. It cannot prosper on the facts.'

1. The court therefore rejected the common law claim. I consider it was right to do so for the reasons it gave. I would uphold its decision.

E. The public sector equality duty [PSED] claim

1. Section 149 of the 2010 Act, 'Public sector equality duty', and section 150, 'Public authorities and public functions,' provide materially:

'149. A public authority must, in the 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. …

(7) The relevant protected characteristics are –

…

race;

…

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

150.

…

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

(4) 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.'

1. Burnett LJ explained that no PSED assessment was made for the purposes of the Afghan Scheme before it was formulated. The claimants' assertion was that it followed that the Scheme should be quashed.

1. In dealing with this claim, Burnett LJ explained, in [58], that, if he was right in holding that neither section 39(2) nor section 29(6) of the 2010 Act was in play (as I would hold he was), section 149(1)(a) had no relevance. Nor could section 149(1)(b) have any application to the immigration aspects of the Afghan Scheme and he recorded Mr Jaffey's acceptance of his conclusion in that respect. He then explained that the claimants nevertheless asserted that both section 149(1)(b) and (c) applied in relation to the Afghan Scheme, albeit that the former applied only to its financial aspects. After referring to section 150(3) and (4), he continued:

'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.

1. It follows that, in the formulation of the Afghan Policy, the defendants should have had due regard to the matters identified in section 149(b) and (c) of the 2010 Act. …'

1. Having found, however, that no assessment was made for the purposes of section 149(1)(b) and (c) before the Afghan Scheme was formulated and announced, the Divisional Court simply made a declaration:

'a. That the provisions of section 149(1)(b) and (c) of the [2010 Act] were applicable to the decision taken by the Defendants to make the Afghan Scheme, save to the extent they are dis-applied by paragraph 2 of schedule 18 to the 2010 Act; and

b. That, contrary to section 149(1)(b) and (c) of the [2010 Act], the Defendants failed to have regard to those provisions when formulating the Afghan Scheme.'

The court made no order quashing the Afghan Scheme or requiring the defendants to re-perform the PSED.

1. There is no cross-appeal by the defendants against the Divisional Court's order in this respect, nor any appeal by the claimants against the court's holding either as to the inapplicability of section 149(1)(a) or as to the limited application of section 149(1)(b). The claimants do of course challenge the court's order but only on the basis that they say that the court was wrong to grant merely declaratory relief as to the breach of the relevant PSED and should instead have quashed the Afghan Scheme.

1. The defendants' response to the institution of the present proceedings was to institute an equality analysis. That assessment was a material factor in the Divisional Court's decision to refuse substantive relief and grant merely declaratory relief. Burnett LJ explained his approach as follows:

'61. … The Intimidation Policy does not raise any issue that might be touched by those subsections [section 149(1)(b) and (c)]. 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 [LES] in Afghanistan was more generous than 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.

1. 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 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.'

1. In support of the claimants' appeal against the granting of merely declaratory relief, Mr Jaffey's argument was to the following effect. He said the ordinary judicial response to a finding of a breach of the PSED is, or should be, a quashing order, and he referred to this court's decision in Bracking and others v. Secretary of State for Work and Pensions [2013] EWCA Civ 1345; [2014] Eq LR 60. In that case the Secretary of State (by the Minister of State in the department) had failed to discharge the PSED when making a decision to close 'The Independent Living Fund', which provided assistance to disabled people enabling them to live their lives with an enhanced degree of independence. McCombe LJ said that:

'67. … if a decision is reached without due regard to the PSED then it is an unlawful decision and, subject to any overarching discretionary features, the decision should be quashed. That is the course that I would adopt in this case.'

Kitchin and Elias LJJ agreed, each adding short judgments.

1. That decision reflected, as Mr Jaffey submitted, that the PSED is not a matter of 'mere form or box ticking'. It must be performed with 'vigour and an open mind' (see Hammett v. Essex County Council [2014] EWHC 246 (Admin), per Singh J, at [45]). That is because the whole point of the PSED is that proper compliance with it has the potential to alter the substantive outcome.

1. As for Burnett LJ's reasons in [62] for refusing substantive relief, Mr Jaffey said the first reason was groundless, as nothing in a quashing order need prevent the Afghan Scheme's continued operation on an interim basis pending the performance of the PSED. The second reason was inadequate. The defendants' ex post facto analysis was in March 2015, thus post-dating the policies making up the Afghan Scheme by several years. This court in Regina (Elias) v. Secretary of State for Defence [2006] EWCA Civ 1293; [2006] 1 WLR 3213 made it clear, however, that public bodies to whom the PSED applies are required 'to give advance consideration to issues of race discrimination before making any policy decision that may be affected by them' (see [274], per Arden LJ), and not merely (like the March 2015 assessment) what amounts to a rearguard action following a concluded decision (see Bracking, supra, per McCombe LJ, at [26], referring in turn to Kaur & Shah v. LB Ealing .

1. Mr Jaffey placed his main reliance on this court's decision in Regina (C (A Minor)) v. Secretary of State for Justice [2008] EWCA Civ 882; [2009] QB 657. That was a case in which the Secure Training Centre (Amendment) Rules 2007 included in rule 2 an amendment to rule 38(1) of the Secure Training Centre Rules 1998. The 2007 Rules were laid before Parliament and debated in the House of Lords, which did not resolve to annul them, and so they took effect by virtue of the negative resolution procedure. The claimant, a trainee at a secure training centre, sought their quashing by way of judicial review on the grounds that the Secretary of State had unreasonably failed both to consult the Children's Commissioner for England and to carry out a race equality assessment ('REIA'), which was required by section 71(1) of the Race Relations Act 1976, before laying them before Parliament. This court allowed an appeal against the Divisional Court's refusal to quash the 2007 Rules despite those two failures.

1. Buxton LJ, in opening his discussion on 'The relevant law on relief', said:

'40. At its para 48 the Divisional Court cited, and apparently were much influenced by, some observations of Webster J in R v. Secretary for Social Services, Ex p Association of Metropolitan Authorities [1986] 1 WLR 1, 15. The passage was strongly relied on by the Secretary of State before us. It reads:

"it is not necessarily to be regarded as the normal practice, where delegated legislation is held to be ultra vires, to revoke the instrument, but … the inclination would be the other way, in the absence of special circumstances making it desirable to revoke that instrument … in principle I treat the matter as one of pure discretion."

1. It has proved difficult to find other authority on the specific point. Webster J's dictum does not seem to be discussed, much less adopted, in any of the standard works on administrative law, and for my part I would not wish to endorse it. As with any administrative decision, the court has discretion to withhold relief if there are pressing reasons for not disturbing the status quo. It is, however, wrong to think that delegated legislation has some specially protected position in that respect. If anything, the imperative that public life should be conducted lawfully suggests that it is more important to correct unlawful legislation, that until quashed is universally binding and used by the public as a guide to conduct, than it is to correct a single decision, that affects only a limited number of people.'

1. Re C was, like the present case, one in which an REIA was only produced after the relevant decision (or rather, in that case, the making of the change in the Rules), and I shall come to what the court said about that. First, however, and as to the general importance of due compliance with duties such as the PSED, Buxton LJ said:

'49. Leading judges have stressed the importance of REIAs as an instrument in guarding against race discrimination. They include Arden LJ in R (Elias) v. Secretary of State for Defence [2006] 1 WLR 3213, para 274 and Sedley LJ in R (BAPIO Action Ltd) v. Secretary of State for the Home Department [2007] EWCA Civ 1139. In the latter case Sedley LJ said, at para 3, that the decision in that case not to interfere with the trial judge's decision not to quash the alteration of the Immigration Rules that had taken place without an REIA does not in any way diminish the importance of compliance with section 71, not as a rearguard action following a concluded decision but as an essential preliminary to any such decision. Inattention to it is both unlawful and bad government. I respectfully agree. In the present case, absence of an REIA was the result not of inattention but of a mistake made by the Secretary of State. It was however a mistake that the Divisional Court found very surprising: see para 38 above. In my view it sent out quite the wrong message to public bodies with responsibilities under section 71 to allow that deficit to be cured by a review only undertaken eight months after the Amendment Rules had been laid, and in the face of an adverse court decision; and only completed a year after the Amendment Rules were laid, and four days before the hearing in this court. That process has also produced the result that the REIA needed to come to a particular conclusion in order to preserve Regulations that the court has found to have been introduced unlawfully. I do not of course in any way doubt the good faith of the grade seven civil servant who produced an REIA that demonstrates that PCC is not applied in a discriminatory fashion. But as a matter of principle it cannot be right that a survey that should have been produced to inform the mind of government before it took the decision to introduce the Amendment Rules was only produced in order to attempt to validate the decision that had already taken place.

1. I therefore consider that the reasons given by the Divisional Court for not quashing the Amendment Rules were mistaken. That court should have quashed those Regulations.'

1. Buxton LJ then turned to whether the Court of Appeal should quash the Regulations. He opened his discussion by saying that:

'51. Although much is said about the decision of the lower court in this matter being one of "discretion", it was not suggested that it was an exercise of discretion with which this court can only interfere on Wednesbury grounds. We have to make up our own mind as to the proper course now to be followed.'

1. In coming to his decision, which was that the Regulations should be quashed, Buxton LJ referred to the production of the REIA four days before the hearing before the Court of Appeal and, after referring to further submissions, said this:

'53. … As I have indicated when discussing the position before the Divisional Court, the present issue is as to the procedural legality of the Amendment Rules, and not as to the merits of the regime they introduced. A change in the latter will not cure the former defect. The only issue is, therefore, whether quashing remains an appropriate remedy in view of events that have occurred in the five months since the hearing before the Divisional Court.

1. In considering that issue I am strongly influenced by the failure to produce an REIA. Although here characterised as a procedural defect, it is a defect in following a procedure that is of great substantial, and not merely technical, importance, as the observations of Arden and Sedley LJJ make clear. It continues to be of the first importance to mark that failure by an appropriate order. That an REIA has now been produced, more than a year after it should have been, is by no means conclusive on this issue of principle, granted the unsatisfactory conditions under which that work was done. Miss Lieven [leading counsel for the Secretary of State] pointed out that despite this court's strictures in the BAPIO case [2007] EWCA Civ 1139 it did not interfere with the refusal of the trial judge to quash the Regulations. But that was a case where the mistake had been realised and corrected before the matter came to court, and was the subject of a proper apology. Neither of those things is true in this case.'

1. Tuckey LJ agreed with Buxton LJ's judgment. Keene LJ added a firm endorsement of what Buxton LJ had said in [41] (quoted above). He also said he would have been more hesitant about the exercise by this court of its quashing power, given what had happened since the Divisional Court decision, but for his consideration of two particular matters, namely those arising under articles 3 and 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, being considerations special to the case.

1. I must refer to the BAPIO decision. It concerned a judicial review challenge to a change in the Immigration Rules that had not, as it should have, been preceded by the making by the Home Office of an REIA. An REIA was, however, subsequently produced – and it is important to note that it was produced before the hearing before the Administrative Court. One ground of challenge to the validity of the change in the Rules was based on this failure, and it was held in the Administrative Court to be established. But Stanley Burnton J then said (see The Queen o/a BAPIO Action Limited and another v. Secretary of State for the Home Department and another [2007] EWHC 199 (Admin)):

'70. It does not however justify the quashing of the rules change. In any event, there was a subsequent [REIA] the sufficiency of which has not been challenged. In these circumstances there will be a declaration [as to the Secretary of State's relevant failure].'

The case went to the Court of Appeal (see [2007] EWCA Civ 1139), where Sedley LJ (in [2] of his judgment) said that:

'… The judge declared that there had been a failure to comply with the duty but, in the light of the unchallenged [REIA] which was subsequently made, declined to hold that the rule change was vitiated by the omission. This conclusion, which was essentially an exercise of discretion to withhold relief, is not challenged.'

1. Mr Jaffey noted that in this case too, as in BAPIO, the belated PSED assessment was produced before the Divisional Court considered the claim, but he said this still did not justify that court in dealing with the matter in the way it had. He said that this could only be appropriate in a case in which the court is satisfied that a fresh decision would inevitably be the same, whereas he said it was far from clear that a fresh PSED assessment would come to the same conclusion. He said that, in the rapidly changing security environment in Afghanistan, a fresh analysis with all options on the table may yield new information and conclusions regarding the situation of former Afghan LES and how that compares with the situation of former Iraqi LES. This could in turn lead to a different substantive outcome. He also said that there is a wider public interest in ensuring that Government decisions are made, and seen to be made, in a lawful and procedurally fair manner.

1. Mr Swift responded that whilst the making of a quashing order in consequence of a non-compliance with the PSED may well be appropriate, the court still retains a discretion as to whether to make such an order, whereas the thrust of Mr Jaffey's case was to emasculate that discretion. The critical feature of the present case is not only that a PSED assessment was carried out before the hearing in the Divisional Court (compare BAPIO), its consequence was that changes were then made to the Afghan Scheme to reflect the outcome of the assessment. The assessment that was done in fact went further than the Divisional Court later held it needed to go, in that it considered the matters raised in all three paragraphs of section 149(1). Dr Liane Saunders put the assessment in evidence and explained that Ministers had considered it and had concluded as a result that: (a) neither the Ex Gratia Scheme nor the Intimidation Policy directly discriminated on the ground of any protected characteristic; (b) nine areas of potential negative impact had been identified, which were all considered to be justifiable; (c) the definition of 'family' in the Scheme and Policy referred to in (a) above would be amended to include same sex civil partnerships, which was consistent with the UK Immigration Rules, which already applied with relocating Afghan LES to the UK; and (d) a stand-alone definition of 'dependant' would be included in the Scheme and Policy aforesaid in line with the Immigration Rules. Dr Saunders added that officials in the department were unaware of any Afghan LES who are affected by these proposals.

1. This is, said Mr Swift, therefore a case in which, by the time it came before the Divisional Court the relevant work had been done, and the Divisional Court was in consequence satisfied that there was no need to quash the Afghan Scheme. In addition, as the Divisional Court also noted, the real focus of the claimants' complaints had always been on the relocation aspects of the Scheme, in respect of which it was accepted that section 149 could have no application. This was a case in which the Divisional Court concluded, as it was entitled to, that no practical purpose would be achieved by requiring a fresh analysis and that a declaratory order was sufficient.

Discussion and conclusion on the PSED issue

1. I would not in any way depart from the clear and firm judicial statements to which I have referred that underline the importance of the PSED. I respectfully agree with the observation in Bracking that, in a case where the PSED has not been performed, that will ordinarily result in the quashing of the resultant decision. That said, the making of a quashing order is still not an automatic judicial response. The appropriate remedy in a successful judicial review application is a matter of discretion, to be exercised in all the relevant circumstances. Buxton LJ expressly recognised this in Re C, at [41], where he also recognised that it may be more important to correct unlawful legislation by an appropriate form of order (which was in point in that case) than 'to correct a single decision, that affects only a limited range of people' (which is perhaps closer to the present case). BAPIO is a decision where, despite the failure to precede the rule changes by an REIA, Stanley Burnton J declined to grant a quashing order, an REIA having subsequently been carried out, and before the hearing in the Administrative Court. That was, therefore, a case which was perhaps closer in nature to the issue in Re C, although the analogy cannot be pressed too far since Stanley Burnton J correctly recognised that the Immigration Rules are not strictly in the nature of delegated legislation and he explained their somewhat special nature (see [2007] EWHC 199 (Admin), at [38]). In the Court of Appeal, Sedley LJ also referred to their unique constitutional nature (see [2007] EWCA Civ 1139, at paragraph 28). BAPIO is, however, an important case for present purposes, since it is one in which the court concluded that, whilst the 'after the event' production of a proper REIA did not undo the prior procedural wrong, it could, and in that case did, provide a proper basis upon which the court could conclude that the remedy on the judicial review application should be limited to a declaration.

1. In the present case, the Divisional Court refused a quashing order for essentially two reasons. First, that such an order would have an adverse impact on those who might wish to take, or were currently taking, advantage of what the Afghan Scheme offered. But, 'furthermore', because given the assessment since carried out in performance of the PSED (one that in fact went beyond the limits of the section 149(1) obligations), a quashing order was not necessary; and a mandatory order requiring a fresh assessment limited to the narrower range of section 149 obligations that should have been carried out 'would serve no practical purpose'.

1. I am not convinced that the first reason was a sound one and, had that been the only ground for refusing a mandatory order, I might well have had doubts as to whether the refusal was justified. But I interpret the second reason as a freestanding additional one for the refusal of relief, and in my view it reflected a proper, rational and correct ground for doing so. Whilst Burnett LJ did not spell it out in terms, it is implicit that he was satisfied that the assessment was a proper one and we were told that Mr Jaffey accepted at the hearing that its making had been approached with an open mind. Not only was the assessment carried out, it also resulted in changes to the Afghan Scheme. It is obvious from the way in which Burnett LJ dealt with this matter that he was satisfied that, the further assessment having been carried out and resulting in the changes it did, no practical purpose was to be served by quashing the Afghan Scheme and requiring the PSED to be re-performed.

1. In my judgment, the Divisional Court's decision to do no more than grant declaratory relief was an exercise of the court's discretion that cannot be faulted. I would dismiss the claimants' appeal against the refusal to make a quashing order.

Disposition

1. I would dismiss the appeal.

Lord Justice David Richards:

1. I agree.

Lady Justice Arden:

1. I also agree.