England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
APPLICATION FOR PERMISSION TO APPEAL

		Royal Courts of Justice Strand London WC2 Friday, 27th September 2002

1. LORD JUSTICE KEENE: This is a renewed application for permission to appeal against a decision of the Employment Appeal Tribunal, permission having been refused on the documents. The applicant had been employed by the respondent as an administrative officer. He brought a complaint that he had been the victim of discrimination on the ground of race, his complaint being that he had not received as good a rating in his annual appraisals as he should have done. This was claimed to be both direct and indirect discrimination, the latter being based on the contention that -

"a requirement or condition has been imposed that in order to qualify for a higher performance related pay increase, it is necessary to achieve a box A or B1 assessment. Fewer ethnic minority employees than white employees can achieve such assessments ..... "

2. That is a quotation from his originating application to the tribunal.
3. The respondent admitted that direct discrimination had been suffered by the applicant in the manner in which his annual appraisals had been conducted by his line manager over the period 1992 to 2000 and that, in consequence of this, his performance related pay was lower than it might otherwise have been. Thus, and to that extent, the respondent admitted liability.
4. The applicant was also claiming indirect discrimination and he sought a determination from the Employment Tribunal on this. The tribunal dealt with this aspect of the case as a preliminary matter. It did so on the basis of what it described as "the agreed facts", those being facts contained in witness statements lodged on behalf of the applicant which the tribunal treated for this purpose as if those had been made out. The tribunal concluded that while there could be a claim covering elements of both direct and indirect discrimination, in the present proceedings the case of direct discrimination -

"was substantially intertwined and overlapping with the alleged case of `indirect' discrimination."

5. What they meant by that was made clear in paragraph 21 of their extended reasons, part of which I shall quote:

"The case actually presented by Mr Jaffrey we find has correctly and obviously been presented as a claim of direct discrimination because of the various problems identified by Dr Stewart in the appraisal by him of his white line manager. It is perfectly clear that the applicant and his advisors and his witnesses accept that if operated fairly and without racial bias the appraisal system is fair. The appraisal system is the sole route to the performance related pay and is directly linked to it."

6. At paragraph 23 they said:

" ..... since the applicant was not complaining that the appraisal system was inherently discriminatory or contained any sort of general adverse impact on ethnic minorities his claim was limited to a claim of direct discrimination."

7. They therefore rejected the applicant's submission that there were here two entirely separate causes of action, rejecting it "simply on the facts".
8. In consequence, the Employment Tribunal concluded that the applicant's case of indirect discrimination was unarguable and was thus frivolous within the meaning of rule 13 (2) (d) of the Employment Tribunal Rules of Procedure 1993 and should be struck out. They also concluded that, in any event, on the agreed facts and hypothesis the claim of indirect discrimination had not been established.
9. Before the Employment Appeal Tribunal it was argued on behalf of the applicant that he had been deprived, by the tribunal's approach, of a finding by it as to whether the respondent's pay system as opposed, it seems, to the appraisal system was discriminatory. The Employment Appeal Tribunal in a very careful and well structured decision considered a number of authorities and accepted a claim might be based on a mixture of direct discrimination, for example by a racially biased line manager, and indirect discrimination because the system, for example, required a person to demonstrate a high degree of fluency in spoken colloquial English. Theoretically, one could postulate a situation where essentially the same facts might give rise to both forms of discrimination. They directed themselves to whether, on the facts of this particular case, there could be claims for both direct and indirect discrimination. With some hesitation, they concluded that there could not. At paragraph 30 of their judgment they said:

"If the manager had approached making an appraisal fairly, there would have been no unfairness in the system (the tribunal found in paragraph 21 that: `it is perfectly clear that the applicant and his advisors and his witnesses accept that if operated fairly and without racial bias the appraisal system is fair', and Mr Cavanagh QC reminded us in his submissions that Miss Drew, for the appellant, did not allege that any aspect of the appraisal system created any systematic unfairness)."

10. The disadvantage suffered by the applicant was, the Employment Appeal Tribunal said, entirely the consequence of the way a fair system was operated unfairly by the line manager concerned. The statistics put forward were entirely consistent with such an analysis.
11. As for the distinction between the pay system and the appraisal system, the Employment Appeal Tribunal concluded that the tribunal below had been entitled to conclude that as the appraisal system was the sole route to performance related pay the only arguable case was that pay disparity was a consequence of the appraisal system complained of. Therefore the Employment Tribunal had been entitled to conclude that the applicant simply could not succeed on his complaint of indirect discrimination.
12. On the argument now advanced on behalf of the applicant, it is said that a distinction is to be drawn between the respondent's pay system and its appraisal system. It is contended that racial discrimination in pay is capable of founding a claim under the 1976 Act because it is capable of being racially discriminatory treatment in itself and not merely a consequence of racial discrimination. Yet, submits Miss Drew, here the tribunal failed to determine the claim insofar as it related to the pay system. She contends that this has deprived her client of the opportunity of getting a declaration that the pay practice of the respondent was inherently discriminatory and in breach of Section 1 (1) (b) of the 1976 Act. It is also argued that the applicant was entitled to seek to show that having a performance related pay system was in itself indirectly discriminatory. Nonetheless, it is accepted expressly in argument by Miss Drew that the appraisal system itself of the respondent was not inherently discriminatory and also accepted that that appraisal system is the sole route to the performance-related pay received by employees.
13. For my part, I accept that there could be distinct claims made about, on the one hand, an employer's appraisal system and, on the other, a pay system. Whether there are such distinct claims is largely a question of the facts in a particular case. In the present case the applicant's form IT1, his originating application, seems to me to relate to the pay system only insofar as it reflected performance-related increases and those, in turn, depended, and depended solely, on the appraisal system. The same is true of his witness statement which I have read in full. The complaint which he sets out there is about the way in which his performance was assessed and how, as a result, he did not get performance-related pay increases to which he was entitled. We have to bear in mind that there was this express finding of fact by the tribunal that the appraisal system is the sole route to the performance-related pay.
14. Miss Drew, in the course of argument, acknowledges that the discrimination against Mr Jaffrey in pay practice only arose because of the direct discrimination via the line manager operating the appraisal system. The way in which Miss Drew has sought to put the case this morning in a sense differs from the way in which Mr Jaffrey's complaint to the tribunal had been formulated in his IT1. But, in any event, it cannot stand in the light of the findings and the concessions as to the fairness of the appraisal system. That was at the heart of the performance-related pay system. It seems to me that once the appraisal system has been conceded to be non-discriminatory, directly or indirectly, it must follow that there is no chance of showing that the pay system was inherently discriminatory; and nor was it discriminatory therefore to have a performance-related pay system in any particular year. So in this particular case the complaint about the pay system was not separate from that of the appraisal system. It was, in effect, the same complaint. Certainly, the Employment Tribunal and the Employment Appeal Tribunal were entitled to arrive at that conclusion as they did.
15. I fully accept the point that an Employment Tribunal should be slow to determine issues of racial discrimination without hearing the witnesses. It would be unusual for them to be able to act as they did in the present case. But here the Employment Tribunal was, in substance, accepting for the purpose of their ruling the evidence given by and on behalf of the applicant. The essential facts of the case were not in dispute. In those circumstances I conclude that the tribunal was entitled to follow the procedural course which it did. I can see no basis on which it can be argued realistically that the Employment Appeal Tribunal and the Employment Tribunal went wrong in law. I can see no real prospect of a successful appeal. In those circumstances I would dismiss this application.
16. LORD JUSTICE MUMMERY: I agree. In those circumstances the application is refused.
Order: Application refused