IN Jivraj v Hashwani [2011] UKSC 40, [2011] 1 W.L.R. 1872 the Supreme Court, in reversing the decision of the Court of Appeal, found that an arbitration clause contained in a commercial agreement between two Ismaili businessmen, which provided that any irremediable dispute arising between its parties would have to be resolved by arbitrators drawn exclusively from the Ismaili community, was not incompatible with the Employment Equality (Religion or Belief) Regulations 2003 (SI 2003/1660).

Lord Clarke, with whom the other Justices agreed, delivered the leading judgment which dealt with three extremely important interpretative questions pertaining to the Regulations, and to the Equality Act 2010 which revoked and restated the Regulations while at the same time introducing a single, harmonised and EU-compliant framework for UK equality law. These three questions pertain to (i) the personal scope of application of UK equal-treatment legislation as contained in reg. 2(3) of the Regulations and, now, in section 83(2) of the Equality Act 2010; (ii) the personal and material scope of application of Article 3(1) of EU Directive 2000/78; and (iii) the justifiable exceptions to discriminatory conduct by reason of a genuine occupational requirement as permitted by regulations 7(1) and 7(3) of the Regulations, now replaced by the similarly worded provisions contained in Schedule 9 of the Equality Act. This note is predominantly concerned with points (i) and (ii).

On point (i), the Supreme Court disagreed with the Court of Appeal decision that an arbitrator could be seen as an “employee” working “under a contract of service” (at [21]–[23]). In addition, it affirmed that the particular contract governing the relationship between an arbitrator and his clients could not even fall in the part of reg. 2(3) of the Regulations (now section 83(2) of the Equality Act) referring to a “contract personally to do any work”, since the services rendered did not amount to employment under such a contract. In effect, and this is confirmed by the reading and importance that the Supreme Court gave to the ECJ judgment C-256/01 Allonby (an equal pay case), it interpreted the scope ratione personae of UK and EU equal-treatment legislation as exclusively pertaining to subordinate work relations ([24], [39]–[41]) and excluding independent self-employed persons.

On point (ii), the Supreme Court interpreted the provision contained in Article 3(1)(a) of Directive 2000/78, which prohibits discrimination in relation to “conditions for access to employment, self-employment or to occupation, including selection criteria”, as essentially being concerned with “preventing discrimination from qualifying or setting up as [an] … arbitrator” (at [49]), and not being applicable to “the selection, engagement or appointment of arbitrators” (at [50]).

Given the apparent abundance of commercial agreements containing arbitration clauses with “nationality restrictions”, this decision was met with some relief in the world of private dispute resolution (see Dundas (2011) Arbitration 467). It should be noted that the same set of concerns could have been effectively addressed by means of a more generous use of the “genuine occupational requirement” defence, which the majority of the Supreme Court would have been willing to engage with ([51]–[71], with Lord Mance offering a potentially narrower reading of the defence in [79]–[82]), but for the fact that the arbitration clause was not found to be discriminatory in the first place.

By contrast Jivraj generated mixed feelings amongst employment and anti-discrimination lawyers (see Freedland and Kountouris (2012) I.L.J., forthcoming). There appears to be a general consensus in respect of the finding that arbitrators are indeed self-employed, but most (though not all, see McCrudden (2012) I.L.J., forthcoming) labour lawyers are likely to have been taken aback by the assertion that UK, let alone EU, anti-discrimination law does not protect those providing personal work or services other than “under” a subordinate employment contract (see Fredman (2004) I.L.J., 281, 285). This is particularly the case since, as noted above, EU anti-discrimination Directive 2000/78 applies to both “employment and occupation” and explicitly prohibits discrimination in relation to “conditions for access to … self-employment”, and the Directive is accompanied by a non-regression clause in paragraph 28 of its preamble.

The Supreme Court was correct in suggesting that the meaning of Article 3(1) of the Directive has not yet been interpreted by the ECJ (at [22]). But since the text of the Article explicitly includes “selection criteria” it is hard to see how the implementing Regulations “are not applicable to the selection … of arbitrators” (at [50]). In the absence of a specific ECJ precedent, the Supreme Court decided to rely on a number of ECJ judgments that clarify the personal scope of application of EU equal-pay law (for instance Allonby), without considering the possibility that EU anti-discrimination instruments, may have a different, and broader, scope ratione personae and ratione materiae.

Their Lordships considered but ultimately discarded the possibility of making a preliminary reference to the ECJ on any of these important questions on grounds that they were all acte clair (at [73]). But the acte clair test contained in paragraph [16] of Case 283/81, CILFIT, requires national courts to be convinced about the solution to the interpretative question beyond “any reasonable doubt” and that the matter is “equally obvious to the courts of other Member States and to the Court of Justice”. Most international anti-discrimination instruments applying to “employment and occupation” tend to cover self-employed workers, including ILO Convention No. 111 of 1958 (which has been ratified by the UK and is explicitly referred to in the Directive's preamble, see ILO Committee of Expert (1996), 78–79), and the European Social Charter (see Shrubsall (1989) I.L.J. 41). In addition, a number of national courts and tribunals appear to have taken a much broader approach to the one adopted by the Supreme Court in Jivraj (see Ordinanza Tribunale di Milano n.11461/11 of 12 August 2011, declaring null and void a nationality requirement contained in a job announcement for a collaborazione occasionale, formally – as claimed by the defendant employer – a type of self-employed work relation).

This decision has the immediate effect of excluding from the coverage of UK religion and belief anti-discrimination legislation all those, like arbitrators, who provide personal work or services by means of non-subordinate contracts for services (see [48]). But given the EU provenance of these domestic provisions, the Supreme Court judgment may have as a further consequence that of excluding self-employed persons from anti-discrimination legislation in respect of the other protected grounds covered by Directive 2000/78 (disability, age, and sexual orientation) and to affect the scope of other similarly phrased provisions, such as the ones covered by Directive 2000/43 (race and ethnicity), or even the entire domestic anti-discrimination framework, considering the unifying function of the “employment” definition contained in s. 83(2) of the Equality Act.