In October, the Supreme Court handed down a landmark ruling in a case involving Agudas Israel Housing Association (AIHA), cementing the position that restricting a charity’s beneficiary class based on protected characteristics can be permitted if the aim is to alleviate social injustice.
The case involved a non-Jewish single mother of four who issued proceedings against AIHA after she was not offered vacant properties while waiting for a home on Hackney Council’s waiting list. During the time she had been on the list, six suitable properties owned by AIHA had become vacant, however these were not offered to her as she was not a member of the Orthodox Jewish community.
AIHA had an allocations policy prioritising the Orthodox Jewish Community and argued it was necessary as a direct counter to discrimination suffered by the Orthodox Jewish community in seeking to obtain housing. They argued that members of the Orthodox Jewish community tend to have large families and so have a greater need, as a community, for larger properties. AIHA’s stock of social housing had been developed with that in mind. It was also argued the needs of the Orthodox Jewish community are different due to levels of poverty and anti-Semitism faced due to traditional manners of dress and language.
The appellant’s lawyer argued that she had suffered unlawful direct discrimination on the grounds of race and religion contrary to the Equality Act 2010 (EA 2010) and that the policy “smacked of ‘no blacks, no dogs, no Irish’,” a reference to signs pinned up by some landlords decades ago.
However, the High Court, the Court of Appeal and now the Supreme Court all held that AIHA’s actions were legal and that charities are able to restrict their beneficiary class under the EA 2010 even if it would be otherwise discriminatory. The judgment found that AIHA’s allocation policy is proportionate and lawful under the EA 2010.
So how does this decision sit alongside the requirements of the EA 2010? We know all forms of discrimination are generally unlawful under UK legislation, however the EA 2010 does allow for “positive action” and this is set out in Section 158 of the EA 2010.
Section 158 allows organisations to take positive action where it is a proportionate means of helping people with a protected characteristic by:
On the facts of the case the courts found that AIHA’s actions were proportionate in helping members of the Orthodox Jewish community in their housing needs and overcoming the discrimination they face.
Section 193 also provides charities with an exemption allowing them to restrict their beneficiaries to those sharing a protected characteristic if it is doing so in accordance with its governing document and;
This second limb does not require any additional proportionality assessment.
Again, the courts found that AIHA’s allocations policy was a proportionate means of achieving a legitimate aim. This is especially as AIHA’s stock represented around 1% of the total housing stock in Hackney so the impact on those not from the Orthodox Jewish community was minimal. The Court found the needs of the community were “many and compelling” and allocation to those who were not from the Orthodox Jewish community would “fundamentally undermine” AIHA’s charitable objects.
This is a landmark decision by the Supreme Court on Sections 158 and 193 of the EA 2010 and so is significant for all charitable and non-charitable organisations who are looking to restrict their objects and benefits to certain protected characteristics.
A considerable spotlight has been shone on inequalities within our society this year as a result of the resurgence of the Black Lives Matter movement as well as the unequal impact of the Covid-19 pandemic. This ruling gives charities and non-charities (including housing organisations) flexibility to be able to serve and benefit those with protected characteristic without falling foul of discrimination against other groups.
However, it is important to note that each case would be decided on its own facts and merits and so the evidence of impact and disadvantage faced by a protected group will be important. There are also questions over size and if in that case that AIHA’s stock represented a larger proportion of the housing stock in the area then the outcome of the case may have been different.
We can assist organisations in reviewing governing documents and ensuring that, where the organisation is looking to provide services to a specific group, these documents appropriately deal with this.