Balancing immigration compliance and equality obligations in the workplace

A recent case has highlighted that immigration-related pay differences may be discriminatory unless employers can clearly justify them. How can organisations balance immigration compliance and equality obligations? Our experts explore the issue.

As well as other developments, we discussed the recent Employment Tribunal decision in Gharabli v Cedar Hope Care Services Ltd during our most recent business immigration update webinar. This decision provides an important reminder that compliance with immigration law does not remove an employer’s obligations under the Equality Act 2010.

In particular, this case highlights the discrimination risks associated with pay structures that differentiate between employees based on immigration status. It also examines whether such disparities can be justified as reasonably necessary and proportionate, particularly where employees are performing materially similar roles.

Gharabli v Cedar Hope Care Services Ltd

Mrs Gharabli was employed by Cedar Hope Care Services as a Support Worker and was later promoted to a Senior Support Worker role. Shortly after her promotion, she became aware of a pay disparity between herself and colleagues performing the same role. Domestic workers were paid approximately £10.50 per hour, while overseas workers sponsored under the Skilled Worker visa route were paid around £12.31 per hour.

Mrs Gharabli alleged that this disparity amounted to unlawful discrimination.

The employer sought to justify the differential treatment on the basis that immigration rules required sponsored workers to meet a minimum salary threshold, whereas domestic workers were not subject to the same requirement. It was also argued that overseas workers undertook additional duties, such as community work and report writing.

However, the Tribunal focused on the reality of the roles in practice, and whether the duties carried out by domestic and sponsored workers were materially the same.

Tribunal findings: Why the pay disparity could not be justified

The Tribunal found that the employer’s pay structure constituted a provision, criterion or practice (PCP) that placed domestic workers at a particular disadvantage when compared with their overseas counterparts. As such, the claim of indirect discrimination was established.

The Tribunal accepted that compliance with immigration salary thresholds could amount to a ‘legitimate aim’ that justified the difference in treatment. However, this did not automatically justify the disparity. This is because employers are also required to demonstrate that the differential treatment is a proportionate means of achieving that legitimate aim.

This is where the employer’s defence failed. The Tribunal found that there was insufficient evidence to show that it was necessary to maintain lower pay for domestic workers. In particular, the employer had not demonstrated that it could not afford to increase domestic workers’ pay to match that of sponsored workers, nor had it adequately considered less discriminatory alternatives.

As the employer failed to demonstrate that the pay disparity was a ‘proportionate means of achieving a legitimate aim’ its defence failed, and the indirect discrimination claim succeeded.

What is the significance of this case?

This decision reinforces the principle that compliance with one legal regime does not override obligations under another. Employers must ensure that decisions driven by immigration requirements are also compliant with equality legislation.

While immigration compliance may constitute a legitimate aim, it will not automatically render a discriminatory practice lawful unless the employer can demonstrate that the measure is proportionate, and that less discriminatory alternatives have been properly considered.

In practice, this means that employers cannot rely solely on regulatory requirements to justify pay disparities where employees are performing comparable roles.

What does this mean for employers when considering immigration compliance and equality obligations?

This decision has significant implications, particularly for employers who rely on sponsored workers. Organisations in this position should consider the following:

Review Pay Structures Carefully

Employers should ensure that any differences in pay are objectively justified. Where disparities exist, they must be able to demonstrate that these are necessary and proportionate.

Consider less discriminatory alternatives

Employers should actively consider whether disparities can be avoided, for example, by equalising pay or restructuring roles so that differences are genuinely reflective of responsibilities.

Cost alone is unlikely to justify discrimination

The Tribunal made clear that a general assertion of financial constraint is insufficient. Employers must provide additional evidence to support any justification based on cost.

Document decision-making

Employers should retain clear records of the rationale for pay decisions, any alternative approaches considered and the financial or operational factors relied upon.

This case serves as a clear warning that immigration compliance must be balanced with equality obligations. While employers may face genuine constraints arising from visa requirements, these do not override the need to treat employees fairly and lawfully. Employers should ensure that remuneration strategies are assessed in accordance with discrimination law. Failure to do so may expose organisations to significant legal risk, even where decisions are made in response to external regulatory requirements.

If you would like to receive further updates on immigration compliance, please subscribe to our employment law and business immigration e-newsletter, Dispatches or get in touch with our team of experts via the link below. You can also subscribe to be the first to hear about our autumn webinar series covering upcoming changes under the Employment Rights Act, with dates to be published in due course. 

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