On 16 October 2020, the Supreme Court ruled that in certain circumstances, charities are able to restrict their beneficiary class under the Equality Act 2010 (“the Act”) even if it would otherwise be discriminatory.  The case will be of interest to faith-based organisations and other charities that provide services to limited groups of beneficiaries – as it confirms that such restrictions are lawful, provided they can be justified under the Act. Agudas Israel Housing Association Ltd (“AIHA”) is a charitable housing association which aims to make social housing available, primarily for members of the Orthodox Jewish community (the “Community”). AIHA works with Hackney London Borough Council (the “Council”) to help those in need of social housing and AIHA’s properties make up around 1% of the Council’s social housing. The Council assesses applicants for social housing on a points-based system and whilst the Council has nomination rights for AIHA properties, applications also have to meet AIHA’s criteria for selection. As the demand for social housing for the Community far outweighs the supply, in practice AIHA allocates all of its properties to members of the Community.  

In 2018, a single mother of four children, who had been waiting on the Council’s housing list for a long time, brought a claim against the Council and AIHA after properties which were made available by AIHA, and would have been suitable for her and her family, were allocated to members of the Community. This meant that she had to wait longer than families in the Community to be allocated to a property, although fortunately, suitable housing has now been found for the family. The claim was brought for unlawful conduct – in particular for unlawful direct discrimination on the grounds of religion and race.

The Supreme Court considered sections 158 and 193 of the Act:

  1. Under s.158 it is lawful to take action to compensate for disadvantage that it is reasonably believed is faced by people connected to a protected characteristic that they share – this is known as ‘positive action’; and
  2. Under section 193 a charity is able to restrict its benefits to those who share a protected characteristic if (i) it is doing so in accordance with its governing document, and (ii) it is a proportionate means of achieving a legitimate aim or is for the purpose of preventing or compensating for a disadvantage linked to the protected characteristic.  

The Supreme Court noted that members of the Community did suffer disadvantage particularly when it came to housing, and that AIHA’s allocation policy is not an illegitimate “blanket policy” as there is flexibility to allocate properties to non-members of the Community if AIHA has properties surplus to demand from that Community (although, in practice, this was not the case). Therefor, AIHA’s allocation policy was found to be proportionate and lawful under the Act, Lord Sales noted that the allocation policy ‘operates as a direct counter to discrimination suffered by the Orthodox Jewish community in seeking to obtain housing in the private sector’.

This case provides reassurance to charities which limit their activities – in line with their governing document – to particular groups of people, but charities must ensure they can show that those people suffer a particular disadvantage, or that the policy is a proportionate means of achieving a legitimate aim.

You can find full details of the judgment here.

Please contact our Stephanie Biden and Leona Roche in our faith-based group, or Mindy Jhittay in our dispute resolution team, for advice on how your charity’s activities may be affected by the decision.

Article written by Stephanie Biden and Jess Neville