England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
(JUDGE J REID QC)

		Royal Courts of Justice Strand London WC2A 2LL Thursday 30 May 2002

1. LORD JUSTICE MUMMERY: These are renewed applications for permission to appeal. Dr Al-Azzawi ("the applicant") is represented by Miss Burnham. He wishes to have permission to appeal against the judgment of the Employment Appeal Tribunal given on 5 December 2001 following a hearing of the appeal on 8 October 2001. The Employment Appeal Tribunal dismissed the applicant's appeal against a decision of the Employment Tribunal, which had, in extended reasons dated 30 November 1999 following a 9-day hearing, dismissed the applicant's complaints of unfair dismissal and race discrimination.
2. The Employment Appeal Tribunal allowed an appeal by the London Borough of Haringey which was the respondent to three applications before the Employment Tribunal. Their appeal was against an award to the applicant of £8,000 in respect of an act of race discrimination by an employee of the council. The Employment Appeal Tribunal held that there was an error of law in the decision of the Employment Tribunal in respect of the application to the facts of the provisions of section 32(3) of the Race Relations Act 1976, which gives a defence to an employer, who is otherwise vicariously liable, for acts of race discrimination committed in the course of employment.
3. The applications for permission were first considered on paper on 14 May 2002. I refused permission to appeal in case No 2205729/97, in which the council had successfully cross-appealed to the Employment Appeal Tribunal. I also refused permission to appeal which had been sought in respect of the two other cases, 6001211/99 and 6003039/99, which had been referred to in Miss Burnham's skeleton argument and in oral argument as IT1A and IT1B. I refused permission on the basis that there was no error of law in the decisions of the Employment Tribunal dismissing the applicant's complaints. It now appears on further examination that there was no appeal in the case of IT1B to the Employment Appeal Tribunal. Having taken further instructions, Miss Burnham has established with her solicitor and client that that appeal had not been pursued in the Employment Appeal Tribunal. That fact is stated by the Employment Appeal Tribunal in the judgment given on its behalf by His Honour Judge Reid QC in which he says at paragraph 2:

"Before the Tribunal there was also another case, number 6003039\99 in which Dr Al-Azzawi made further complaints of discrimination and victimisation. It was dismissed and there is no appeal in that case before us."

4. This renewed application has proceeded on the basis of the IT1A case and the case in which the council's cross-appeal to the EAT succeeded.
5. It is necessary to refer briefly to the background. The applicant was employed by the council from 5 August 1985 until 31 March 1999. He was a senior architect in the council's design partnership department. He is a British citizen and of Iraqi/Arabic ethnic origin. Over the years he made a number of complaints about race discrimination. The two that are relevant for the purposes of today's application are that, first, he made a complaint in respect of the racist remark directed at the ethnic group to which he belongs. The remark was made by fellow council employee, Mr Leslie Armstrong, on 8 September 1997. On 23 September 1997 the applicant made a complaint in respect of which the Employment Tribunal found that disciplinary action had been taken against Mr Armstrong, in which he had had a case of gross misconduct reduced to one of misconduct. As a consequence of that he was not liable to dismissal. The penalty imposed on Mr Armstrong was a two months' written warning, not a final written warning, as stated in the decision of the Employment Tribunal. That two months' warning had, in effect, operated for a period of two weeks, because it was backdated. Mr Armstrong also made an apology to the applicant, as he was required to do in the disciplinary proceedings.
6. In respect of that incident, the applicant commenced proceedings in the Employment Tribunal on 5 December 1997. In those proceedings he complained that he had suffered from racial comments and that he would not have been treated in that fashion if he were a white person. He said he instituted grievance procedures in respect of an incident by Mr Leslie Armstrong on 8 September 1997, and that the disciplinary hearing was far from satisfactory. He said:

"I feel that Haringey Council again discriminated against me when they reinstated Mr Leslie Armstrong by reducing the charge of gross misconduct to just misconduct prior to the hearing, and also by refusing to consider another allegation of verbal abuse on 4 October 1995 which is also documented."

7. In respect of that incident, the Employment Tribunal found, and it was accepted by the council, that it was liable, pursuant to section 32(1) of the 1976 Act, for the actions of its employee, Mr Armstrong. But the council then relied on the defence under section 32(3) of the same Act that it had taken such steps as are reasonably practicable to prevent the employee from doing that act, or from doing in the course of his employment acts of that description.
8. The conclusion of the Employment Tribunal on that defence was that the council had not fulfilled the obligation to protect its employees from race discrimination, racial harassment and racial discriminatory remarks and that it had not complied with section 32(3) of the Act. The applicant had therefore been racially discriminated against and the Tribunal awarded him a total of £32,000 compensation.
9. When the council cross-appealed against that decision, the Employment Appeal Tribunal allowed the appeal on the basis that the Employment Tribunal had misdirected itself in law on the basis of the facts found. It accordingly allowed the cross-appeal and dismissed the claim for racial discrimination against the council.
10. It appears from the findings of fact by the Employment Tribunal that the council was an equal opportunities employer. It employed people of many different ethnic origins, in particular there was a high proportion of employees of ethnic origin in the very department in which the applicant worked. The Tribunal found that the council had undertaken training courses in racial awareness for employees and that Mr Armstrong had attended such a course on 18/19 November 1996. The Employment Tribunal also considered statements in council policy documents relating to racial awareness and as to the appropriate action which should be taken in respect of acts of racial discrimination and racial harassment, ranging from informal to formal disciplinary actions. Serious cases of racial harassment and discrimination were considered to be gross misconduct which could lead to dismissal. That was a condition in the Disciplinary Code. The Tribunal also stated in paragraph 46 of the extended reasons that the council did not, as the applicant had maintained, pay "lip service" to the issue of racial equality.
11. Miss Burnham contended in her submissions that that statement was not a general one in relation to the whole decision, but was applicable only to the reasoning of the Employment Tribunal in dealing with the third application (the IT1B application). I agree that the statement of paragraph 46 is made in that part of the extended reasons which deals with the IT1B case but, as I read it, it is a general finding of fact in favour of the council that in issues of racial equality it was not simply paying "lip service" and there was certainly no finding of fact in paragraphs 13 to 19 of the decision of the Employment Tribunal which cast any doubt on the genuineness or authenticity of the measures that were taken by the council in dealing with race discrimination and racial harassment.
12. It appears from the reasoning of the Employment Tribunal that the basis for rejecting the section 32(3) defence was not the lack of preventive measures in place, but the over lenient treatment of Mr Armstrong in the disciplinary proceedings. The charge against him had been reduced from gross misconduct and he was given what the Tribunal said was a derisory penalty of only two weeks written warning for his record. The Employment Tribunal said at paragraph 18 of their extended reasons that their conclusion was that:

"Such a penalty would not give clear indications to employees that racially discriminatory remarks were unacceptable."

13. The Employment Appeal Tribunal held that the Employment Tribunal had misdirected itself in relation to section 32(3) because it had misled itself on this point by looking only at events after the relevant incident. Had it properly directed itself on the facts that it had found, it would inevitably have come to the conclusion that the council had made out its defence under section 32(3).
14. Miss Burnham has criticised this reasoning of the Employment Appeal Tribunal. She sought to detach the finding in paragraph 46 from the findings in relation to section 32(3). She has also made submissions that the EAT had acted erroneously allowing the council's cross-appeal for these reasons. She submitted that it was trite law that, in determining whether a complaint in racial discrimination was made out, evidence relating to events both before and after the act or acts complained of is relevant may be of great probative value. In this case she pointed to earlier incidents which had led to complaints of racial discrimination by the applicant. These were incidents in 1981 involving Mr J Smith and again in 1995 involving a Mr Corder.
15. Miss Burnham then proceeded to submit that, whilst it is clear that, in respect of the reasonable steps defence, the preventive measures adopted by the council would be paramount, that is by no means the end of the matter. The proper approach to the defence was that set out in Canniffe v East Riding of Yorkshire [2000] IRLR 555 at p 558 para 14. That is:

"(i) to identify whether the respondent took any steps at all to prevent the employee, for whom it is vicariously liable, from doing the act or acts complained of in the course of employment; and

(ii) having identified what steps, if any, they took, to consider whether there were any further acts which they could have taken which were reasonably practicable."

16. She submitted that the Tribunal is entitled to draw an inference from the failure to impose a less than derisory sanction upon the individual discriminator that reasonable steps were not being taken to prevent the discriminatory act from occurring. A disregard for the substance of any equal opportunities policy could be inferred from the failure to impose sufficiently punitive sanctions for default. Moreover, a failure to punish wrongdoers adequately may be evidence of an enduring failure to take other reasonable steps which may have avoided such discrimination, thereby creating or facilitating a workplace culture in which such actions are regarded as acceptable. In those circumstances, she submitted that the Employment Appeal Tribunal were wrong to state that "events taking place after the act of discrimination are irrelevant to this case". She also submitted that in the circumstances the Employment Appeal Tribunal were not entitled to interfere with the decision of the Employment Tribunal.
17. On this point I am unable to accept the submissions of Miss Burnham. In my judgment the Employment Tribunal did not correctly apply section 32(3) of the 1976 Act to the facts that they had found. In looking at what steps it is reasonably practicable to take to prevent an employee from doing an act, it is necessary to focus on what has been done by the council before the act which has given rise to the complaint of discrimination has occurred. If one focuses on those acts, as found in paragraphs 14 to 17 of the extended reasons, no criticism of the council can be found in relation to its policy, to its disciplinary procedure and to its Code of Practice. In paragraph 18 the focus is on the treatment of Mr Armstrong for the act which he had committed.
18. In my judgment, it is possible in some cases to conclude that an act which is committed, and the way with which it is dealt, throws light on how reasonable and effective the steps are that are taken by the council to prevent the commission of the act. But, in this case, the Employment Tribunal were not relying upon that to cast any doubt on the validity of the preventive steps which the council had taken.
19. I would agree with the Employment Appeal Tribunal that, having found that the council were not simply paying lip service to the policies that had been put in place, it was not a legitimate conclusion for the Employment Tribunal to reject the defence under section 32(3). The Employment Appeal Tribunal were not in error of law by saying that events taking place after the act of discrimination are irrelevant in this case. They may be relevant in another case, but, in my view, they were not relevant in this case because they did not in any way affect the validity of the preventive steps.
20. For those reasons, I would not grant permission to appeal against the decision of the Appeal Tribunal reversing the Employment Tribunal's award of £8,000. That appeal has no real prospect of success because the Employment Appeal Tribunal were correct in finding an error of law on the part of the Employment Tribunal.
21. I turn to the application in relation to the IT1A case. In this case the complaint of the applicant to the Employment Tribunal, which was lodged on 1 March 1999, was that he had been unfairly dismissed in what was accepted by him to be a redundancy situation when his department was restructured because of losses. He also complained of discrimination against the provisions of the 1976 Act. The acts of discrimination relied upon were that he had unsuccessfully applied for various positions with the council, that he had been unfairly selected for redundancy and that he had been refused requests for transfer.
22. The Employment Tribunal dealt with these complaints in a detailed and careful set of reasons between paragraphs 21 and 38 of their decision. Their conclusion was that the applicant had been fairly dismissed, that there was no racial element in his selection for redundancy and no inferences of race discrimination could be made in respect in relation to applications for posts and refusal of the requests for transfers.
23. Miss Burnham said that there was an error of law in the decision of the Employment Tribunal in its approach to the complaints. On this part of her argument she focused, in particular, on paragraphs 27, 28 and 33 of the extended reasons. In those paragraphs the Employment Tribunal were considering what the reasons were for the applicant's section for redundancy and for his non-appointment to various positions. In paragraphs 27, 28, 33 and 34 the Tribunal said:

"It was maintained by the [council] that Dr Al-Azzawi failed to address the questions asked of him at interviews and failed to focus on the candidate specifications for the particular job in question.

28. Dr Al-Azzawi maintained that he was more highly qualified and had greater experience and expertise than the colleagues who were so appointed. However...."

24. This is the sentence which Miss Burnham particularly criticised:

".... this is not for us to say and it was management's responsibility to put in place the most suitable candidate. We note that over the years there had been many redundancy exercises and that Dr Al-Azzawi had survived these exercises and, indeed, his qualities were praised by the witnesses. The criticisms appeared to be that he was slower and more meticulous than other employees and that more finances had to be expended upon his projects.

33. From these primary facts we cannot find, as a fact or draw an inference, that Dr Al-Azzawi was racially discriminated against and\or victimised when he was selected to be made redundant and not given one of the positions to which he aspired. It was management's decision that Dr Al-Azzawi was not the best of the candidates who were successful in the positions to which they were appointed. There were only three such positions, one of them was given to Dr Al-Azzawi's line manager, Mr Nadaraju, who is South African of Indian ethnic origin, the PO5 position. The PO4 position was given to Ms Helen Mayer, who is of white European ethnic origin, and whom the Respondent considered more suitable for the position. The PO3 position was given to Mr Ali Kiziltug, who is of Turkish Cypriot ethnic origin. He was considered adequately qualified for the position and had many years' experience with the Council.

34. We note that Haringey Local Authority employs many employees of varying ethnic origins. We note, in particular, that the Haringey Design Team, the team in which Dr Al-Azzawi was employed, had a particularly high proportion of employees who were of minority ethnic origins."

25. The Tribunal went on to conclude that the applicant had been fairly dismissed by reason of redundancy and rejected the reasons of racial discrimination.
26. I am unable to detect in the any of those paragraphs, which were identified by Miss Burnham, any misdirection of law in relation to either the finding that the dismissal was fair or in the rejection of the claims of race discrimination. An appeal can only be brought to the Employment Appeal Tribunal and to this court on a point of law. Findings of fact, inferences of fact and findings of primary fact are matters for the Employment Tribunal, which would only be interfered with on an appeal if it were shown that there was no evidence to support the finding or the finding was contrary to uncontradicted evidence; in other words, a case of perversity.
27. It seems to me that on the IT1A case, there is an attempt to appeal against a finding of fact, which was reached without any misdirection of law on the relevant provisions of the 1976 Act. The references to suitability, qualifications and experience are relevant to non-discriminatory factors which are legitimate in any exercise of deciding whether to make somebody redundant or whether to appoint somebody to a particular position. In my judgment, the Employment Tribunal were entitled to reach the decisions of fact which they did. There is no error which could be corrected, either by the Employment Appeal Tribunal or by this court.
28. For those reasons, I do not think this application has any real prospect of success, there being no error of law which I can identify. I would therefore refuse the application for permission. In my view, both applications for permission to appeal should be refused.
29. LORD JUSTICE DYSON: I agree.
Order: Applications dismissed.