England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
THE EMPLOYMENT APPEAL TRIBUNAL

		Royal Courts of Justice Strand, London, WC2A 2LL Thursday 24th May 2001

LORD JUSTICE WALLER:

1. On 23^rd August 1999 an Employment Tribunal dismissed the appellant's claim of racial discrimination by her employers the respondents. On 9^th February 2000 the Employment Appeal Tribunal dismissed her appeal concluding there was no error of law in the ET's decision. On 9^th May 2000 Mummery LJ refused permission to appeal on paper, but after an oral hearing before himself and Simon Brown LJ permission to appeal was granted. The ground on which permission was granted was a narrow one, not, it seems fair to say, articulated before the oral hearing.
2. The concern expressed in the judgment of Mummery LJ was as to whether there was an inconsistency between findings in two paragraphs of the ET reasons.
3. This is the hearing of the appeal.
4. Both sides accept that the decision of relevance is the decision of the ET, and not that of the EAT. The question is whether there is an error of law demonstrated in the reasoning of that decision.
5. The Tribunal directed itself in the following terms:-

"The Law

Section 1 of the Race Relations Act 1976 provide that:

1. A person discriminates against another in any circumstances relevant for the purposes of any provision of this Act if

a) On racial grounds he treats that other less favourably than he treats or would treat another person.

Section 4 of the Act provides:-

1. It is unlawful for a person in relation to employment by him at an establishment in Great Britain to discriminate against another:-

a) In the arrangements he makes for the purpose of determining who should be offered that employment or

b) on the terms on which he offers him that employment, or

c) by refusing or deliberately omitting to offer him that employment.

Section 32 of the Act deals with employers vicarious liability for their employees and agents.

5. It is well established law that the tribunal must make its findings of primary fact on the evidence before it. The burden of proving facts which are alleged by an applicant lie on that applicant. She has to prove those facts on the balance of probabilities. As to whether any discriminatory action shown by the primary facts is taken on racial grounds and is therefore unlawful, the Court of Appeal in King - v Great Britain China Centre 1991 1RLR 513, 518 gave guidance to tribunals as to the correct approach. We remind ourselves that we must look at all the evidence and that the applicant must show that it is more probable than not, that on racial grounds the respondent treated her less favourably than it treated or would have treated others. We remember that direct evidence of racial discrimination is rarely available and that evidence will normally be inferences from primary facts. We must ask ourselves on the primary facts found:

1 Did the respondent treat the applicant less favourably than others comparing like with like?

2. Was there a difference in race?

3. Was the treatment on racial grounds?

We remind ourselves that, if the answer to (1) and (2) above is "yes", it is commonsense to look at the respondent for an explanation. There is no question of shifting the burden of proof, but only the respondent can explain the reasons for his actions. If there is no explanation or the explanation is inadequate or unsatisfactory, the tribunal should be prepared to infer that the treatment was on racial grounds. We have to look critically at the respondent's explanations and not supply our own explanation. We note that it is unpalatable to decide that the treatment was on racial grounds in the face of the respondent's sworn evidence to the contrary, but we know that race discrimination does exist and that it is improbable that any respondent will admit it. We have to resolve conflicts of evidence by decision. It is not necessary to show that the respondent was ill-intentioned or prejudiced. The question at the end of the day is has the applicant shown that it was more probable than not that she was the victim of racial discrimination.

We also remind ourselves of the case of Glasgow City Council -v Zafar 1997 IRLR 229 CS where it was stated that it cannot be inferred, let alone presumed, only from the fact that an employer has acted unreasonably towards one employee, that he would have acted reasonably if he had been dealing with another in the same circumstances.

4. We further remind ourselves that we must look at the whole course of treatment of the applicant and in the present case the treatment prior to the non-selection of the applicant for the post of assistant manager."

6. That direction is impeccable provided the shorthand "comparing like with like" is properly understood. It reflects the requirement of the statute that what must be demonstrated for an applicant to succeed is a positive answer to two questions – has the applicant been treated less favourably than the employer treated or would have treated other persons in the same circumstances (the treatment issue); if so, was that unfavourable treatment on "racial grounds" (the causation issue)? [I take this phraseology from Mummery LJ in Marks & Spencer PLC v Martins [1998] ICR 1005 at 1008H-1009A].
7. The findings of the salient facts are set out in paragraph 5, page 30. They read as follows:-

"Findings of fact

5(a) The applicant has been employed as a supervisor in the respondent's retail outlet in Lincoln from 13 November 1996. She continues to be employed in this position.

(b) The respondents are a large retail organisation selling shoes and have over 280 shops nationwide. They have extensive administrative resources.

(c) The Branch Staff Rules and Procedures booklet is comprehensive and in addition to disciplinary and grievance procedures contains a section devoted to a sexual and racial harassment policy and complaints procedure. It also contains a statement of the respondent's Equal Opportunities Policy. The booklet is displayed on the staff notice board but little emphasis is placed on the need for management or staff to be familiar with its contents.

(d) After she had been working for the respondent for 6 months the applicant received an invitation to return to work for a former employer. She was persuaded to stay by an increase in pay from £3.60 to £4.00 per hour. Five months later, her hours were reduced from 38 hours to 30 hours. She was not given the relevant contractual notice of this change. Mr Sunderland, the branch manager, told her that the reduction applied to all supervisors across the board. The applicant checked with the Meadowhall branch to discover the supervisor there had not had her hours reduced. There is a conflict of evidence here. Mr Sunderland stating that the reduction applied to all supervisors within his area and that the Meadowhall shop was not included. In this instance, we accept his evidence.

(e) At the same time Mr Sunderland came to an arrangement with his sales assistant Elaine Veal and in order to retain her services agreed that she would be recorded as working 27 hours rather than 25 hours. Again there is a conflict of evidence but no evidence other than Mr Sutherland's denial has been produced by the respondents and taking into account this and the relative quality of the respective witnesses we prefer the evidence of the applicant.

(f) In the summer of 1998 the applicant requested 2 weeks holiday in late July but was only allowed one week beginning on Monday 27 July. On Saturday 1 August she telephoned Mr Sunderland to report that she had a dental abscess and would be off sick for a few days. She said that she had a medical certificate but her evidence is that Mr Sunderland told her that a private certificate was required. She obtained one at the cost of £7.50. Again, there is a conflict of evidence here and there have been a misunderstanding between the parties but what is clear is that there is no contractual requirement for an employee to produce a certificate unless she was absent for a period in excess of 7 days.

(g) During the weekend the applicant was seen out by a fellow employee who reported this to Mr Sunderland. This resulted in a heated telephone conversation on Monday 3 August. The applicant said that she would return to work on the Thursday. Mr Sunderland in response said that if he had his way, she would not come back. The conversation ended abruptly. Mr Sunderland was advised by personnel that his contribution to the conversation amounted to a dismissal. He was advised to telephone the applicant and apologise and he did this. He offered her the entire week off, but requested a medical certificate.

(h) On 23 October 1998 Miss Allen was interviewed for the position of assistant manager. This additional post came about due to the refitting of the Lincoln store. She was one of 6 applicants, all the others being external candidates. She was the only black candidate.

(i) We prefer the applicant's evidence that Mr Sunderland provided her with a list of the questions to be asked at the interview, taking into account the quality and detailed nature of the applicant's evidence. The applicant was also advised by Mr Sunderland that it would be to her advantage to prepare a presentation. In the event she did not do so.

(j) The interviewing panel consisted of Mr Sunderland and Miss Stephanie Hagman branch manager of the respondent's Hull branch. Mr Sunderland assumed the role of interviewer in connection with all the candidates with the exception of the applicant. Miss Hagman interviewed her and Mr Sunderland took notes.

(k) She was placed fourth in order of merit. Mr Hobson, who was selected, was considered to be an outstanding candidate. This was the decision of both members of the panel made on the day of the interview and we reject the suggestion that Miss Hagman wanted the applicant to be selected. The source of this suggestion is a hearsay one a number of times removed. The records of the interview are not available, having been lost or destroyed during the process of refitting the Lincoln branch. The result of the interview was transmitted to the applicant by telephone call from Mr Sunderland on 28 October. At the same time he informed her that a mystery shopper had visited the Lincoln store on Saturday 24 October whilst the applicant was acting manager and the assessment had been a poor one. The mystery shopper system is designed to assess the quality of service of a branch. The assessment took place after the decision to appoint Mr Hobson and did not play a part in the decision not to appoint the applicant. We find that the applicant was not told that the events were connected. The applicant was also informed that her pay was reduced from £4.00 to £3.70 per hour.

(l) In November the new assistant manager and 3 other employees, including the applicant were required to go for training to Barnsley. Mr Hobson arranged to take 2 sales assistants with him in his car. The applicant went by train, but this different mode of transport was necessary because of childcare commitments.

(m) In February 1999 Mark Hobson resigned to take a better paid position and the applicant was invited to reapply for the post of assistant manager. She declined to do so."

8. The conclusions of the Tribunal are set out from paragraph 8 onwards. It is necessary to quote the complete findings from paragraph 9 through to 16.

"9. We are satisfied in connection with the questions of the provision of a medical certificate, the reduction of hours and the non selection that there was less favourable treatment comparing like with like. We are not satisfied that the reduction in pay in October 1998 was other than a revision of an enhanced rate of pay which could no longer be justified.

10. The applicant has been treated insensitively in a number of ways by her immediate line manager, Mr Sunderland and we will address the examples of this. Before doing so we wish to deal with the main complaint of non selection for promotion. It is clear that Mr Sunderland wished the applicant to have every opportunity to succeed in her application and that he gave her advice and assistance in preparation for her interview. She was interviewed by Miss Hagman and the interview was observed by Mr Sunderland. Their joint assessment was to place her fourth out of six candidates. Miss Hagman presented as an honest and credible witness and we believe her assessment was a fair one. The short time that Mr Hobson appeared before us revealed him to be a mature and impressive individual and we do not find it at all surprising that he turned out to be the preferred choice of both interviewers. In the event the applicant was placed fourth. She was treated differently in that she was not selected and she was the only black candidate. The respondent's explanation is that there were a number of better candidates and in particular Mr Hobson and we find this to be the case. We are satisfied that the non selection was not on racial grounds.

11. The applicant has also been treated differently and suffered a detriment in other respects in connection with the provision of medical certificates, reduction of hours and pay. We have already dealt with the matter of pay and find that the reduction from an enhanced rate was a policy decision based upon performance and not on racial grounds.

12. The key to the tribunal's decision overall is our assessment of Mr Sunderland as a manager. He performed badly in the witness box in that he appeared to have grave difficulty in understanding many of the questions put to him. It was accepted by the respondent that his managerial performance exhibited regrettable lapses and the tribunal can only wholeheartedly agree. His approach to and his treatment of the applicant was inconsistent and insensitive. His request for a medical certificate was not in accordance with the applicant's conditions of employment and arose out of a spirit of pettiness and resentment. This was further manifested in his telephone conversation with the applicant while she was off sick which resulted in words which amounted to a dismissal and which had to be quickly retracted. His inconsistency is illustrated in the manner in which he then attempted to assist her in her preparation for her promotion interview.

13. His communication to the applicant which combined the news of her non selection, the mystery shopper result and a reduction in hours meant that these were necessarily connected in the applicant's mind. However, the decision to reduce her hours was a policy which affected all supervisors in the area and was not an example of racial discrimination.

14. To a great extent therefore Mr Sunderland's treatment of the applicant is certainly unsatisfactory and he cannot explain the breach of contract concerning notice of reduction of hours. Equally, the treatment relating to the medical certificate has no explanation. The applicant was adversely treated in both instances. However, we must be satisfied that the employer would have treated others of a different race more favourably.

15. The character and managerial shortcomings of Mr Sunderland do not allow us to come to that conclusion. There is no rule that in the absence of adequate explanations that an inference of unlawful discrimination should be drawn.

16. We are not satisfied in this case that the applicant's treatment was in any way a result of racial discrimination but rather because of the inherent shortcomings of Mr Sunderland which would have been applied to anyone in the same circumstances irrespective of their race."

9. The short point identified by Mummery LJ in the judgment granting leave to appeal in this case, as being arguable, relates to what is suggested as an inconsistency between paragraphs 9 and 16. At paragraph 4 Mummery LJ puts it this way:-

"Miss Braganza's point, quite shortly, is that paragraphs 9 and 16 of the extended reasons cannot both be right. The Tribunal made a clear finding that "there was less favourable treatment comparing like with like" in paragraph 9: how then could the Tribunal have come to the conclusion in paragraph 16 that the consequence of Mr Sunderland's shortcomings is that he would have treated everyone the same way in the same circumstances, irrespective of their race? She says that there is a finding that there was not less favourable treatment, but that could not stand with paragraph 9."

10. Not surprisingly it is to this suggested inconsistency that Miss Braganza has devoted her argument before us. There is no doubt that if by paragraph 9 the Tribunal were to be understood to have decided finally the "treatment issue" so far as each of the suggested complaints were concerned, there is an inconsistency between paragraph 9 and paragraph 16. The Tribunal would be saying in one place that there was as between the appellant and other like people a difference in treatment and in the other that there was not. But on a full reading of the reasons, my view is that it is unfair to so construe the Tribunal's reasoning. This in my view becomes apparent on an examination of their findings once they gave detailed consideration to each of the matters the subject of complaint.
11. First in considering the appellant's non-appointment to assistant manager, the Tribunal say in paragraph 10 "She was treated differently in that she was not selected and she was the only black candidate. The respondent's explanation is that there were a number of better candidates and in particular Mr Hobson and we find this to be the case. We are satisfied that the non-selection was not on racial grounds." That finding, as it seems to me, is a finding both that she was not treated differently from any other person in similar circumstances, and in particular she was not treated less favourably on the grounds of race i.e. the indication is that on this issue the Tribunal had not finally determined the treatment issue by their paragraph 9 finding. It also indicates possibly that the Tribunal were not at all stages distinguishing clearly between "being treated differently" or "adversely" simply because she did not get the job, and being treated "less favourably than another person in similar circumstances" which is the requirement of the legislation.
12. Paragraphs 11 and 12 lend further support to the view that the Tribunal had not intended finally to determine the "treatment issue" in paragraph 9, and were not at times clearly distinguishing between "adverse treatment" and "treatment that was less favourable as between the appellant and someone in similar circumstances". In paragraph 11 the Tribunal say that the appellant had been treated differently and suffered a detriment in relation to "medical certificates" and "reduction of hours and pay". In relation to pay however they record that by virtue of the second sentence of paragraph 9, they had decided the "treatment issue" against the appellant; the language "treated differently" and "suffered detriment" cannot thus have meant treated less favourably in the discrimination sense.
13. In relation to the medical certificate, in paragraph 12 the Tribunal say that the treatment was contrary to the terms of her contract, and arose "out of a spirit of pettiness and resentment", but that there was an inconsistency between that treatment and the assistance that Mr Sunderland gave for the interview. That points the way to a finding of no discrimination i.e. a resolution of the treatment issue against the appellant, although it is apparent from paragraph 14 that the Tribunal had not in paragraph 12 finally concluded what the position was on the medical certificate. But what is said in paragraph 12 indicates that paragraph 9 was not intended to resolve that aspect once and for all.
14. As regards the reduction in hours, by paragraph 13 there was a clear finding that this "affected all supervisors in the area". Although the paragraph continues "and was not an example of racial discrimination", the finding is in fact again against the appellant on the "treatment issue". Once again paragraph 9 cannot in the light of such a clear finding against the appellant on the treatment issue, be taken as the Tribunal's determination of the treatment issue in favour of the appellant.
15. In paragraph 14 the Tribunal deal with the lack of notice to reduce the hours and the asking for a medical certificate which had no explanation. They say the appellant was "adversely treated in both instances". Again, at that stage, they do not distinguish between simple adverse treatment and adverse treatment that would not have been inflicted on someone else in similar circumstances. One reason may be that the question whether "racial grounds" caused the appellant to be treated adversely, and the question whether someone else in similar circumstances would have been treated in the same way are in fact bound up together.
16. The Tribunal then deal with the whole question finally by paragraph 16. Their answer is that the reason for the appellant being treated the way she was, was not based on racial grounds because Mr Sunderland, through his shortcomings, would have treated "anyone in the same circumstances" the same irrespective of race.
17. In my view the Tribunal simply cannot have intended by paragraph 9 to determine the treatment issue on any of the aspects referred to in the first sentence of that paragraph as finally determined. Their findings in paragraphs 10 to 14 are quite inconsistent with that being so. Paragraph 16 is simply consistent with those succeeding paragraphs. If there is an inconsistency it is between paragraph 9 and all the succeeding paragraphs.
18. But, submits Miss Braganza, what about the language used by the Tribunal in paragraph 9? It is the language of decision and it uses the shorthand as if they were deciding finally the treatment issue as far as each complaint referred to in the first sentence of paragraph 9 is concerned.
19. My answer is as follows. First, it is possible that, despite having properly directed themselves, the Tribunal were thinking of any treatment which was adverse as being treatment that was less favourable comparing like with like. They then treated such adverse treatment as treatment calling for an explanation from the employers. That view of the matter is consistent with the use of language "adverse", "treated differently" etc in the succeeding paragraphs. If that is what the Tribunal did, it is of no disadvantage to the appellant. Furthermore, the succeeding paragraphs show that the Tribunal did in fact address both the treatment and the causative issues but they did so in one composite question. That is understandable because the issues are in fact very much intertwined.
20. The alternative is that the Tribunal simply intended to hold by paragraph 9, that the facts were consistent with the appellant having been treated less favourably than someone else in a comparable situation. That was thus consistent with the possibility of less favourable treatment on the ground of race. The circumstances thus called for an explanation, which the Tribunal then examined in the succeeding paragraphs.
21. Whichever be right, the important point is that the actual findings as to whether there was discrimination (the treatment issue), and in particular whether there was discrimination on the ground of race (the causation issue) are contained in the paragraphs which examine each of the complaints. It is to place too much weight on paragraph 9 to elevate it in the way that the appellant's argument has to do in order to produce an inconsistency. It is furthermore only by comparing paragraph 16 with paragraph 9 without the intervening paragraphs, that the appeal appears arguable. The reality is that if paragraph 9 is to be held inconsistent with paragraph 16, it has also to be held to be inconsistent with all the succeeding paragraphs which actually contain the real decision of the Tribunal.
22. The lesson perhaps to be learned is that albeit it is imperative that the Tribunal recognises that there are two issues, the treatment issue, and the causation issue, it is safer where there are a number of complaints, as in this case, to deal with the two issues only by reference to the individual complaints (i.e. not globally) because it is only on examination of the details that decisions can finally be made, and because examination of the details will often show how intertwined the two issue are.
23. In any event, although it is possible that an error of law could be said to have been disclosed in the reasoning of the ET, it was not to the disadvantage of the appellant, and I would dismiss the appeal.

LADY JUSTICE HALE:

24. I agree.

THE PRESIDENT:

25. I also agree.
ORDER: Appeal dismissed with Section II order against Legal Service Commission. (Order does not form part of approved Judgment)