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
		28 July 2005

Lord Justice Sedley:

History

1. Mr Ahsan, a Labour councillor in Birmingham, brought three successive race discrimination claims in the employment tribunal against the Labour Party (represented by its General Secretary) over his repeated non-selection for vacant candidatures. The first claim, relating to a decision made in 1997, was heard on a preliminary issue which was determined by an employment tribunal in Mr Ahsan's favour. The second claim, relating to a decision made in 1998, was stayed by agreement while the Labour Party appealed to the EAT on the preliminary issue. In July 1999 the EAT (Lindsay J, Mr Ezekiel and Mr Sanderson) dismissed the appeal and directed the employment tribunal, subject to any appeal, to hear the first claim on its merits. The EAT, without opposition, gave the Labour Party permission to appeal, but no appeal was lodged.
2. By this time a third claim, relating to two decisions made in 2000, had been made. All three were heard by the Birmingham employment tribunal (Mr S.J.Williams, Mrs M Hughes and Mr Corfield) over 15 days in mid-2001. The tribunal, however, withheld promulgation of its decision because of the decision of this court in unrelated proceedings, Triesman [subsequently McDonagh] v Ali, and the pendency of an application in it for leave to appeal to the House of Lords. On 7 February 2002 this court held that a political party was not acting as a qualifying body for the purposes of s.12 when it selected candidates for public office. The employment tribunal, having heard full argument on what ought to follow, concluded that their obligation, notwithstanding the decision in Ali, was to promulgate their decision as directed by the EAT, and this they did. Except in one respect, they found unanimously in Mr Ahsan's favour on all three claims. They held over the question of remedy.
3. The decision to proceed (which I will call the jurisdictional issue) and the tribunal's decision on the first of the substantive claims (which I will call the discrimination issue) were separately appealed (with marginal success only) to the EAT. It is these two decisions of the EAT which now come before this court by permission granted by Pill LJ and Mummery LJ. The Labour Party's marginal success derived from the concession made by counsel for Mr Ahsan that the second and third claims did not stand in the same relation as the first to the EAT's order for remission and continuance, and from the EAT's consequent decision that they were foreclosed by the decision in Ali.
4. If the appeal on the jurisdictional issue succeeds, the entire expenditure of public time and money involved in Mr Ahsan's employment tribunal proceedings will have been wasted, not because the discrimination of which he complained is non-justiciable but because the employment tribunal was not, as it turns out, the correct forum. The correct forum, following Ali, will have been the county court, where the judge will ordinarily sit with two specialist assessors, a format mirroring that of the employment tribunal where a legally qualified chairman sits with two experienced lay members. The reason why the blame for this waste of time and public money lies with the Labour Party is this. As long ago as 1996 the Labour Party lost and did not appeal an employment tribunal case, also on non-selection of candidates (Jepson v Labour Party [1996] IRLR 116), under the parallel provisions of the Sex Discrimination Act 1975. This was at least in part why Mr Ahsan's advisers chose the same forum. But over six months before the decision of the EAT in Mr Ahsan's favour on the preliminary issue, the Labour Party had been served with similar proceedings by Mr Ali, and by what must have been a deliberate choice used that case instead of Mr Ahsan's (in which it had without opposition been granted permission to appeal) as the vehicle by which to take the jurisdiction point to the Court of Appeal, where it succeeded. It was therefore entirely responsible for the invidious choice eventually presented to the employment tribunal: to comply with the unappealed direction of the EAT to hear and determine Mr Ahsan's claim, or to decline to do so because of a decision of the Court of Appeal in other proceedings.
5. The House of Lords, having granted provisional leave to appeal in Ali, refused final leave when it was explained by the Labour Party that the case did not affect the justiciability of race or sex discrimination in the selection of candidates (this was conceded, as it has been before us) but related only to the proper forum.

The law

6. Section 12(1) of the Race Relations Act 1976, against the shoulder-note "Qualifying bodies", provides:

It is unlawful for an authority or body which can confer an authorisation or qualification which is needed for, or facilitates, engagement in a particular profession or trade to discriminate against a person –

……

(b) by refusing, or deliberately omitting to grant, his application for it; …..

7. Section 2 of the Employment Tribunals Act 1996 provides:

"Employment tribunals shall exercise the jurisdiction conferred on them by or by virtue of this Act or any other Act, whether passed before or after this Act."

8. Section 12 of the Race Relations Act appears in Part II, which is entitled "Discrimination in the Employment Field". Part III, entitled "Discrimination in other fields" includes s.25 which protects members of certain associations from discrimination. Part VIII, entitled "Enforcement", contains s.54 which, against the shoulder-note "Jurisdiction of employment tribunals" provides, as amended, that "a complaint by any person ("the complainant") that another person ("the respondent") … has committed an act against the complainant which is unlawful by virtue of Part II … may be presented to an employment tribunal". The section goes on to exclude s.12(1) complaints where statute instead provides an appeal.
9. The first holding of this court in Ali v McDonagh [2002] ICR 1026 is reported as follows in the headnote:

"[C]onstruing section 12 of the Race Relations Act 1976 as a whole, the Labour Party, in selecting a candidate for local government elections or allowing a person to be nominated to the pool from which prospective candidates were to be selected, was not a body which "can confer an authorisation or qualification which is needed for, or facilitates, engagement in a particular profession" and it was not the type of body to which the section was intended to apply, since the party's activities were for its own political purposes; and that, therefore, it would be wholly artificial to treat the section as applying to the circumstances of the present case.

….

Sawyer v Ahsan [2000] ICR 1, EAT, overruled."

10. I will return (paragraph 24 below) to how the court expressed its findings and conclusions.

Issues

11. The first question is whether either the employment tribunal or, on appeal, the EAT (Burton P, Mr J Hougham and Dr K Mohanty) erred in law in holding the determination of the first claim by the employment tribunal not to have become barred in the circumstances which had arisen. The second question is whether, if the employment tribunal were entitled to adjudicate, they erred in law in holding that Mr Ahsan had been subjected to unlawful race discrimination. This issue was heard separately by the EAT (Silber J, Mr J Hougham and Mr D Welch) and was decided also in Mr Ahsan's favour.

Jurisdiction

12. I turn first to what has been canvassed in this court and before the EAT as the question of jurisdiction. So far I have deliberately not referred to it as such because it is its legal character which is at the centre of the first issue. But Sawyer v Ahsan [2000] ICR 1 was characterised by Lindsay J at §4 as "the Labour Party's appeal as to jurisdiction", and in Ali v McDonagh [2002] ICR 1026, §53, this court concluded that the originating applications raised complaints "outside the jurisdiction of the tribunal".
13. The argument for the Labour Party is that, as Ali now establishes, a claim that a political party has discriminated on grounds of race in a selection procedure falls outside s.12 of the Act because a political party is not a qualifying body within the meaning of that section. It follows, Gavin Millar QC argues, that the employment tribunal had no jurisdiction to hear Mr Ahsan's claims.
14. For Mr Ahsan, Robin Allen QC submits that all three of the claims were properly adjudicated on by the tribunal; but he has himself drawn attention to the fact that it was only the first of them which was the subject of the EAT's order to hear the case on its merits. The second had been stayed to abide the outcome of the appeal on the first claim, and the third postdated the EAT's order. In these circumstances the EAT held that its order for remission had covered only the first claim, and that "agreement, acquiescence or estoppel cannot clothe the employment tribunal with jurisdiction to hear" the other two claims. This is the subject of Mr Ahsan's cross-appeal; but the first question in relation to all three claims is whether the holding in Ali means that the employment tribunal truly lacked jurisdiction, or simply that they had made an error of law in the exercise of their jurisdiction.
15. The reason why this distinction is critical for Mr Millar's case is, as he accepts, that it is only by establishing that the employment tribunal promulgated a decision which it lay beyond its jurisdiction to promulgate that, having neglected to appeal the EAT's decision to remit the case, he can now undo its effect.

The meaning of jurisdiction

16. If the word jurisdiction has acquired a protean character, it is because the issues to which it relates frequently do not depend upon its precise meaning. For the purposes of the present question, however, it is necessary to distinguish carefully between what I shall call constitutive jurisdiction and adjudicative jurisdiction. By constitutive jurisdiction I mean the power given to a judicial body to decide certain classes of issue. By adjudicative jurisdiction I mean the entitlement of such a body to reach a decision within its constitutive jurisdiction.
17. Some examples may help. The constitutive jurisdiction of the Employment Appeal Tribunal does not permit it to entertain an appeal on fact, because s.21 of the Employment Tribunals Act 1996 says that an appeal lies to the EAT only "on any question of law". The constitutive jurisdiction of an employment tribunal does not allow it to entertain a claim for damages for personal injury: see section 3(3) of the same Act. If, by contrast, in the course of entertaining a claim for sex discrimination at work, an employment tribunal finds that direct discrimination has occurred but holds that it was justified, it has reached a decision which it had no power to reach (since no such defence is afforded by the Sex Discrimination Act), but it has not acted outside its constitutive jurisdiction. The most that can be said is that it has exceeded its adjudicative jurisdiction. In other words, it has made an error of law in deciding a case which it was empowered to decide.
18. In Anisminic v Foreign Compensation Commission [1969] 2 AC 147, 171, Lord Reid pointed out that the word jurisdiction had both a wide and a narrow sense. He went on:

"I have come to the conclusion that it is better not to use the term except in the narrow and original sense of the tribunal being entitled to enter on the inquiry in question. But there are many cases where, although the tribunal had jurisdiction to enter on the inquiry, it has done or failed to do something in the course of the inquiry which is of such a nature that its decision is a nullity."

Lord Reid instanced a variety of such errors, including addressing the wrong question. "But," he continued

"if [the tribunal] decides a question remitted to it for decision without committing any of these errors it is as much entitled to decide that question wrongly as it is to decide it rightly."

19. It was of constitutive jurisdiction that Diplock LJ was speaking when, in Garthwaite v Garthwaite [1964] P 356, 387, he said:

"The 'jurisdiction' of a validly constituted court connotes the limits which are imposed upon its power to hear and determine issues … by reference (1) to the subject-matter of the issue or (2) to the persons between whom the issue is joined or (3) to the kind of relief sought, or to any combination of those factors."

It can be seen that these are elements which can be read off the face of an application: they permit no further inquiry save as to whether they fit within the tribunal's prescribed power to hear and decide.

20. The category of jurisdictional fact fits unproblematically into this scheme. Where the power of a tribunal to embark upon an inquiry and reach a determination is dependent upon extrinsic facts – for example, where it is said to be just and equitable to let an application which is out of time proceed, pursuant to s.111(2) of the Employment Rights Act 1996 – the first stage of establishing the tribunal's constitutive jurisdiction involves a factual inquiry and (contingently) a value-judgment: is the application out of time? if so, is it just and equitable that it should proceed? The tribunal is given an adjudicative jurisdiction limited to trying these questions. If in answering them it miscalculates the time limit, it has made a mistake of law: it has not in any relevant sense exceeded its jurisdiction. But unless one of the two questions is answered in the claimant's favour, the tribunal's constitutive jurisdiction will be spent.
21. It was to this class of jurisdictional inquiry that Lord Esher MR was referring when (in the passage cited by Rimer J from R v Commissioners for the Special Purposes of the Income Tax (1888) 21 QBD 313, 319) he said:

"The legislature may intrust the tribunal or body with a jurisdiction, which includes the jurisdiction to determine whether the preliminary state of facts exists as well as the jurisdiction, on finding that it does exist, to proceed further …"

The principle is uncontroversial. So is the corresponding principle spelt out in the same passage by Lord Esher: that where jurisdiction depends not on the tribunal's own finding but on an objective state of fact, the tribunal may be deprived of its constitutive jurisdiction by proof before a supervisory court that no such state of fact existed. But, for reasons to which I will come, neither principle embraces the issue we are concerned with here.

22. Outside public law it continues to be fundamental that the only error of law which subverts jurisdiction is an error as to whether the tribunal is entitled to enter upon the inquiry at all: an excess, in other words, of constitutive jurisdiction. In a court of unlimited jurisdiction such as the High Court, not even such an error robs the court's orders of effect: Isaacs v Robertson [1985] AC 97. In a tribunal of limited jurisdiction, it may expose them to nullification by quashing as well as to appeal. But once it is acting within its constitutive jurisdiction, errors of law on the part of an inferior tribunal from which an appeal lies fall to be corrected, if at all, by appeal. Once a tribunal has decided a question of fact (including a question of jurisdictional fact confided to it by law) or a question of law within its constitutive jurisdiction, an issue estoppel arises on the decision.
23. It is axiomatic that the establishment of a tribunal's constitutive jurisdiction has no factual dimension beyond the facts asserted in the claim, and no legal dimension beyond the claim made for the legal consequences of those facts. Once the tribunal is considering whether the true facts are such as to attract liability in law, and therefore what the law actually is, it is by definition past this point and is exercising its adjudicative jurisdiction. That in my respectful view is the 'jurisdiction' of which the EAT on the first appeal in this case, and the Court of Appeal in Ali, were speaking. It is not the jurisdiction of which s.54 of the Race Relations Act 1976, nor therefore s.2 of the Employment Tribunals Act 1996, is speaking. These provisions use the word in its strict, constitutive, sense.
24. That this is so is borne out by the substance of this court's reasoning in Ali. Peter Gibson LJ, giving the judgment of the court, did not approach the question as one of jurisdiction. At §§23-27 he dealt with the question whether Parts II and III were mutually exclusive, concluding that there might in theory be cases falling within either part, and that the real question was whether s.25 applied to the material complaints and s.12 did not. At §§28-37 he sets out the court's reasons for concluding that "s.12 has no application to the present case". At §§38-52 he sets out the court's reasons for concluding that s.25 was capable of applying to such a case. It is only in the final paragraph that jurisdiction is mentioned:

"For these reasons, therefore, we would respectfully disagree with the conclusion reached by the appeal tribunal, allow the appeal and dismiss the applicants' originating application as raising complaints outside the jurisdiction of the tribunal."

There can be no question in the circumstances of this court's having decided in Ali that a complaint such as is before this court fell outside the constitutive juridiction of the employment tribunal. In my judgment, for the reasons I have given, it does not.

25. We are not assisted, in my judgment, by the argument which has been advanced by Mr Millar in reliance on Secretary of State for Employment v Globe Elastic Thread Co Ltd [ 1980] AC 506. The proposition that jurisdiction cannot be created by agreement or estoppel is uncontentious, so long as it is understood to relate to constitutive jurisdiction. Essex County Council v Essex Incorporated Congregational Church Union [1963] AC 808 was such a decision. But when Lord Wilberforce in Globe Elastic spoke of the tribunal acting outside its jurisdiction if it took continuity of employment with successive employers into account, he was manifestly speaking of the tribunal's adjudicative jurisdiction. The reason why it could not be conferred in that case by consent or estoppel –above all in relation to redundancy payments, which were owed by employers but underwritten by government – was that it arose, if at all, between employer and employee and could not implicate or bind government: see Lord Wilberforce's third proposition at 519. The House did not decide that as between employer and employee no such estoppel could arise.
26. In order to succeed in his argument that on resumption the employment tribunal were bound by the system of precedent to follow Ali, even if that meant rejecting a claim which the EAT had upheld and remitted for continued adjudication, Mr Millar accepts that he has to establish that to do otherwise was outwith the tribunal's jurisdiction. For the reasons I have given, and as to which I do not understand the court to be divided, this has to mean outwith its constitutive jurisdiction. Where we differ is as to whether an error on the tribunal's part as to the applicability of s.12 to the Labour Party in its selection process took it outside its constitutive jurisdiction. It follows logically from the submission that it did, as Mr Millar accepts, that the same would have been the case if the Labour Party had – as it should have done – sought an enlargement of its time for appealing in the light of Ali, but enlargement had been refused. In either case, he has to argue, the legal meaning of s.12, as it is now known to be, took away the employment tribunal's jurisdiction to complete its adjudication.
27. In response Mr Allen argues that the material error was an error of law (one, as it happens, which was widely shared, and was analytically as much a question of fact as of law) committed in the ordinary exercise of the tribunal's constitutive jurisdiction; and that to translate such an error into an excess of jurisdiction is not merely mistaken: it is to undermine the edifice which holds in place both the doctrine of precedent and the principle of res judicata. For reasons to which I now turn, I consider that he is right and, with the greatest respect, that the majority of this court are wrong. The argument is not simply an argument about jurisdiction: it affects basic principles of precedent, authority and finality.

Precedent, finality and appeal

28. Modern public law has progressively discarded the distinction between error of law within and outwith jurisdiction, starting with Anisminic (above) and culminating with Page v Hull University Visitor [1993] AC 682: see Craig, Administrative Law (5^th edition, 2003), 500-501, 511-513. Inferior tribunals are today subject in principle to judicial review for all errors of law. But the superior courts have been careful to ensure that this does not operate as a surrogate form of appeal. Faced with an endeavour to use judicial review to this end against a county court judgment, this court in R (Sivasubramanian) v Wandsworth County Court [2002] EWCA Civ 1738 set out a comprehensive set of principles, operable through the discretionary power to deny judicial review and designed to ensure that only true jurisdictional challenges could bypass the appeal process. The court confined such challenges (§56) to

"very rare cases where a litigant challenges the jurisdiction of a circuit judge … on the ground of jurisdictional error in the narrow, pre-Anisminic sense, or procedural irregularity of such a kind as to constitute a denial of the applicant's right to a fair hearing."

Where no appeal lies, of course, there will be no corresponding inhibition on public law remedies for error of law.

29. In this way public law and private law (where the present case lies) now march together on jurisdictional issues. In neither field may a jurisdictional challenge to the decision of an inferior court or tribunal act as proxy for an appeal. This is fundamental to the functioning of the legal system.
30. In considering the relationship in this system between the system of precedent, the appellate process and the principle of finality, it is, however, important that we should not confine ourselves to what Mr Millar concedes are the unattractive facts of the present case. What we decide has equally to cover a deserving litigant who, having lost, is financially unable to undertake the risk of an appeal, who indeed may have been advised that an appeal stood little chance of success, but who learns some time afterwards that an appellate court in another case has reached a conclusion of law which would have enabled him to succeed.
31. A decision made by a court or tribunal of competent jurisdiction (in the constitutive sense discussed above) binds the parties unless and until it is overset on appeal, at which point the appellate decision binds them. If there is no appeal, the decision stands unless, exceptionally, it is able to be quashed as a nullity by the High Court in the exercise of its supervisory jurisdiction. It is so even if in other proceedings the law is subsequently held to be such that the result would have been different. This is for two main reasons: first, the subsequent decision binds only the parties to it; secondly, and fundamentally, it does not follow from the fact that an error of law has been revealed in the first decision that the court or tribunal had no jurisdiction to make it. The means provided by law of seeking to take advantage of the second decision is to apply for permission to appeal, if necessary out of time, against the first. The enlargement of time in such circumstances, however, will be anything but a foregone conclusion. The court will want to be satisfied, among other things, that there is an adequate reason or excuse for not having sought permission to appeal in time. It is here that the relative merits of different applicants will matter. So, however, will the length of time that has elapsed and – importantly – the legitimate interest of the successful party in the finality of the judgment.
32. The principles are well illustrated by In re Waring [1948] Ch 221. A decision of the House of Lords had established that an earlier decision of the Court of Appeal on the liability of certain annuities to tax was wrong. Jenkins J held that the latter decision nevertheless continued to bind the annuitant who had been party to it. It did not, by contrast, bind the annuitant who had not been a party. And where a party sought leave to appeal out of time in reliance on an intervening decision of the House of Lords, this court made it clear that a change in the understanding of the law would not suffice in the absence of special circumstances: Property and Reversionary Investment Corporation v Templar [1977] 1 WLR 1223.
33. These interlocking principles of precedent, appeal and finality cannot coexist with a separate doctrine, founded on a catholic meaning of jurisdiction, which undercuts them. In agreement with the EAT, I consider that the effect of Mr Millar's argument is to erect such a doctrine. It is, in effect, an argument that an error of law on the part of a tribunal, although standing uncorrected by any superior court, invalidates all its subsequent proceedings not simply by exposing them to a successful appeal but by allowing them and their outcome to be disregarded or collaterally challenged. Such a proposition is serious enough when applied to an excess of a tribunal's constitutive jurisdiction, but there it is generally irresistible because the courts cannot ordinarily equip a nullity with the force of law. To apply it to an excess of a tribunal's adjudicative jurisdiction, by contrast, would be to supplant the entire edifice of finality and appeal by (to use a deliberate oxymoron) a retroactive system of precedent.
34. I have read with care and respect the draft judgments of Buxton LJ and Rimer J, but I am unable to agree with their reasons for holding that the applicability of s.12 was an issue going to the tribunal's constitutive jurisdiction. In particular, I do not understand why, as Rimer J holds, it followed from this court's decision in Ali that the ET had no jurisdiction to entertain Mr Ahsan's claim. Section 54 of the Race Relations Act 1976 is explicit in conferring jurisdiction on employment tribunals to entertain "a complaint … that another person … has committed an act … which is unlawful by virtue of Part II…" In other words, it is what the complainant asserts, not what he ultimately succeeds in establishing, that gives the tribunal its constitutive jurisdiction. Mr Ahsan's asserted case was precisely within the terms of s.54, and that (subject to any issue of jurisdictional fact) was all that was required to give the tribunal jurisdiction. The applicability of s.12 to the respondent's acts was a substantive question within that jurisdiction, and none the less so if it was taken as a preliminary point. To relax the concept of jurisdiction in private law so as to embrace an erroneous answer to such a question is, in my respectful view, to open up a near-infinity of challenges which, since they go to jurisdiction, will escape all the constraints of issue estoppel and finality: for, as Buxton LJ points out, an erroneous assumption of jurisdiction unravels everything that has followed. To revert to an example I gave earlier, if an employment tribunal hearing a direct sex discrimination claim allows a defence of justification to succeed, can the unsuccessful applicant ignore the need to appeal and simply issue fresh proceedings on the footing that the first decision, being in excess of the tribunal's jurisdiction, was a nullity? If the s.12 issue goes to the tribunal's constitutive jurisdiction, so must this issue and countless others too, in each instance with potential consequences of this kind.
35. Such merit as Mr Millar's argument possesses comes not from principle but from the particular, essentially fortuitous, conjuncture at which the present issue arose. The employment tribunal had prepared but had not yet promulgated their decision when this court handed down its judgment in Ali. Short of reopening the hearing, therefore, they could not change their mind on the justiciability of the claims. But Mr Millar points out that, by going on, they did exactly what this court, albeit in other proceedings, had held they could not do, which was to find in Mr Ahsan's favour. Moreover, if they were justified in taking that step they will be justified in resuming the proceedings in order to decide on remedies, and the Labour Party will then be required by law to implement remedies which ought never to have been granted.
36. All this is true. But it is equally true, though usually with less immediacy, in every other case which encounters a subsequent change in the understanding of the law. The loser in every such case has either been denied a remedy which (on the new understanding of the law) ought to have been granted, or has had to submit to a judgment which ought never to have been given. But the choice between certainty and adaptability is a policy choice which every legal system has to make, and the choice which ours has made is to prioritise stability within an appellate hierarchy over ongoing revision.
37. Moreover, Mr Millar's argument carries considerably more untoward consequences than Mr Allen's. If, by reason of the handing down of the decision in Ali, the employment tribunal in the present case were obliged to withhold their decision (and, by parity of reasoning, rewrite it after, again by parity of reasoning, reconvening for a fresh hearing), the same logic must operate to prevent a tribunal which has already adjudicated from proceeding to determine remedies despite an extant decision entitling the complainant to a remedy; or to prevent the enforcement of an award of compensation which has been made; or to permit the recovery of compensation which has been duly paid. And outside this particular class of case, wider consequences of the kind I have instanced above will also follow.
38. While therefore on the present facts Mr Allen's argument may be said to have allowed too little, Mr Millar's proves too much. But no middle way has been suggested and, because the choice is one of jurisprudential principle, none in my judgment exists. Like the employment tribunal and the EAT, each of whom recognised the choice that had to be made, I would hold that this court's decision in Ali did not permit the Labour Party to circumvent the need to appeal on the preliminary point of law decided in Mr Ahsan's favour by striking instead at the tribunal's jurisdiction. I would hold that the employment tribunal acted within its constitutive jurisdiction throughout, and that, no error of law having been found on appeal from its preliminary decision, it was bound to continue as the EAT had directed it to.

The second and third claims

39. This brings me back to the status of the second and third claims. It was assumed on all hands before the employment tribunal that the three claims stood or fell together in relation to the challenge to jurisdiction; but the EAT, having been alerted by Mr Allen to the point, held that the second and third fell outside Lindsay P's order for remission. No agreement, acquiescence or estoppel, the EAT held, could "clothe the employment tribunal with jurisdiction to hear them". This is right, but the continuing justiciability of the first claim, for reasons I have set out, did not depend on agreement, acquiescence or estoppel. It depended on the continuing justiciability of the claim before the employment tribunal. Mr Allen's argument is that the same is true of the second and third claims, albeit they were only waiting in the wings. Mr Millar's answer is that the second and third claims, unlike the first, were not the subject of an extant order to continue, made by a superior court and not appealed.
40. The problem with this is that, even if they had stood alone at the moment when Ali was decided in this court, the second and third claims would – just like the first - have been already tried out, and the tribunal would have reached their decision and have been waiting to promulgate it, as in the event they were.
41. Although, therefore, the three claims lacked the common characteristic of an order to continue, all three lay within the constitutive jurisdiction of the employment tribunal, all three had been tried and all three had been held on their facts to fall within s.12. All three therefore succeeded. I agree with Rimer J that the EAT's order to continue cannot be determinative of the employment tribunal's functions. What distinguished the second and third claims was that no right of appeal had been exercised in relation to them, whereas it had been used and exhausted in relation to the first.
42. It followed, in my judgment, that the proper challenge in relation to the second and third claims was by way of appeal to the EAT on the point decided in Ali. This was not attempted, apparently because the procedural distinction had not at that stage been noticed by anybody and the jurisdictional challenge appeared to embrace all three claims equally. But it follows, if I am right in my judgment thus far, that all three claims were equally within the jurisdiction of the employment tribunal. All three therefore were entitled to survive the jurisdictional challenge. Neither the jurisdiction appeal, with which I have so far been dealing, nor the discrimination appeal, to which I now turn, took the point decided in Ali. Had it been taken, it would have had to succeed; but it was not.
43. I would accordingly allow the cross-appeal.

Discrimination

44. The employment tribunal's decision is a model of careful fact-finding and reasoning. It is submitted, even so, by Mr Millar, that it errs in three respects, of which the most serious one – I venture to say the only serious one – is that the tribunal used an inapt comparator.
45. The background was a series of allegations of malpractice in Birmingham City Council and in the Birmingham Labour Party. Adverse publicity had been given to an allegation that councillors, Mr Ahsan among them, had been organising queue-jumping for constituents who wanted housing regeneration grants. It had subsequently been alleged that support was being organised within the party by or for Mr Ahsan, among others, by means of an influx of new members effectively all of whom were Pakistani and none of whom appeared thereafter to have become active in the party's work. Neither of the allegations was made out against Mr Ahsan. Indeed, after a full investigation the Commissioner for Local Administration laid the blame for the mismanagement of housing regeneration grants at the Council's door.
46. Mr Ahsan is of Pakistani origin. He has been a member of the Labour Party since 1982. In 1991 he was elected a councillor for Sparkhill ward, and in 1994 was re-elected. In 1998 he sought re-selection, but in the interim the constituency party – Sparkbrook - of which his ward formed part had been suspended in consequence of the press allegations mentioned above. So had the Ladywood, Perry Barr and Small Heath constituency parties. The last of these was merged, following boundary changes before the 1997 election, with Sparkbrook. The tribunal noted that the three suspended constituencies had high ethnic minority concentrations.
47. In September 1995 the National Executive Committee lifted four of the suspensions, but eight branches including Sparkhill remained suspended. A membership check revealed no irregularity. But the NEC decided in November 1997 that the selection or re-selection of candidates would be conducted by an outside panel under the direction of the West Midlands regional secretary, Fiona Gordon, and the National Constitutional Officer, Mike Penn. These two, with three others, constituted the panel which in December 1997 interviewed but declined to select Mr Ahsan as one of the eight ward candidates. Using a scoring system, they rated him below the successful eight – two of Pakistani origin, one of African Asian origin, one of Afro-Caribbean origin and three white candidates. Of the latter, one was Ian Jamieson, who was selected for the Sparkhill ward which Mr Ahsan had for some years represented. Mr Jamieson was a member of another branch, but in breach of the party's rules – as the tribunal found – he failed to verify his membership from a date which would have demonstrated that he had the requisite twelve months' membership of the party.
48. The tribunal went with great care into the selection procedure. It is sufficient for present purposes to say that they were seriously handicapped by the unexplained destruction of all the panel's notes; that they drew adverse inferences from this and from the tardiness and evasiveness of the party's answer to Mr Ahsan's pre-action questionnaire; that they found the selection procedure "haphazard in the extreme"; that they found the continued suspension of only the wards with high Pakistani populations to have "a racial dimension"; and that different rules were applied to the successful candidate, Mr Jamieson, because – in Mr Penn's own words – "he…was best placed to counter some of the problems which had arisen in the ward", a clear reference, in the tribunal's judgment, to the adverse publicity surrounding the housing grants and the membership allegations. These, in the tribunal's view, were

"both matters which were closely associated with the Pakistani community in the ward, of which the applicant was a natural spokesman and advocate. The respondent associated the applicant's continuing representation of that ward with a continuation of those two perceived problems…. They were both intimately associated with the Pakistani community…"

49. This was their conclusion:

55. The applicant is himself of Pakistani Muslim origin. The respondents identified him with that section of the community and with those perceived problems and with the embarrassment which the party and the city council had suffered as a result of them. A councillor not of the same racial group would not in the respondent's eyes be likely to identify with the Pakistani Muslim community in particular, or to pursue the same campaigns and perpetuate those problems for the party. That is why, as Mike Penn said, Ian Jamieson was seen to be "better placed to counter some of the problems which had arisen in the ward". His very lack of previous identification with the ward (a matter raised by the applicant in his originating application) was thus a positive advantage in the respondent's eyes.

56. It was perfectly plain to us on the evidence we heard that the respondent wanted the applicant off the council. There was more than one reason for that. However, the ethnic origins of the applicant, and of Ian Jamieson, were not irrelevant in the respondent's considerations. Considerations relating to the applicant's ethnic origins were a significant cause of his non-selection by the respondent in December 1997. The fact that the same considerations, or some of them, might not have applied in the case of other candidates of the same racial origins as the applicant does not in our view alter the fact that this applicant's ethnic origins had a significant influence on the outcome of the selection procedure carried out by the respondent.

50. It is Mr Millar's submission that, contrary to the requirement of s.3(4) of the Race Relations Act 1976, the use of Ian Jamieson as a comparator was not a like-for-like comparison. A true comparator, he contends, had to be a non-Asian person who, unlike Mr Jamieson but like Mr Ahsan, had served as a councillor for a similarly 'tainted' ward. If there was no such real-life comparator, he argues, it was for the tribunal to construct one and to ask how he or she would have been treated. The answer would not necessarily have been the same.
51. The unreality of the submission is evident in its formulation. The whole point, in the tribunal's judgment, was that the 'taint' had been attached to Mr Ahsan because he was a Pakistani councillor whose ward had a large Pakistani population. The corollary of the tribunal's finding is that if either Mr Ahsan or the majority of his constituents had not been Pakistani, he would have been selected. It needs to be observed that s.3(4) does not demand a comparator: it simply requires that if one is used the comparison should be a true one. The fundamental test of statutory discrimination is that which Lord Bridge spelt out in James v Eastleigh Borough Council [1990] 2 AC 751, namely whether but for the claimant's sex – or race - he or she would have experienced the same detrimental treatment. To this the tribunal added the principle that treating people less favourably not because of their race but because of the race of others (for example dismissing a white barmaid for refusing to turn away black customers: Zarczynska v Levy [1979] ICR 184) is also discrimination on grounds of race.
52. In my judgment, as in the judgment of the EAT, the finding set out above properly adopts and applies this dual test to the facts which the tribunal have found. Their legitimate conclusion is that but for his ethnicity and his association with others of the same ethnicity, Mr Ahsan would not have found himself marked down in favour of another – non-Pakistani – candidate.
53. The EAT considered that Mr Jamieson was in these circumstances an appropriate comparator, and Mr Allen has advanced the same argument in this court. Although, for reasons I have given, I do not consider that the decision required a named comparator, I agree that Mr Jamieson was not an inappropriate comparator if one was to be used. As Silber J said, "he, unlike the respondent, was first not a Pakistani Muslim and, second, a person who did not have the [ethnic] associations which we have described…" I agree with Mr Allen that to build into the hypothetical comparator, as Mr Millar contends one should, a similar set of associations to Mr Ahsan's is, given the facts found by the tribunal, to build into the comparison the grounds of discrimination and thereby to defeat the object of the exercise. In the end the simple fact, if the tribunal were right in their overall appraisal, was that but for his Pakistani origins and associations Mr Ahsan would not have been denied selection.
54. I do not want to leave this issue without noting the considerable difficulty with which any organisation is faced if it is seeking to deal with malpractice which is ethnically based. It is not one of the purposes of the Race Relations Act to block interventions in such situations, even interventions which involve making damaging distinctions. But, as this case illustrates, it requires forethought and procedural rigour in order to ensure that the racial dimension, which may well have to be addressed in ascertaining the facts, plays no part in the formation of value-judgments. The Labour Party's evidence to the tribunal demonstrated neither of these things. On the contrary, in the tribunal's judgment Mr Penn's answer, quoted above, demonstrated a conscious intrusion of ethnic bias into the decision-making process.
55. I am respectfully unable to accept the criticism made by Buxton LJ that the tribunal did not find "that the suspicion [of abuse within the Pakistani community] was itself formed on a racially discriminatory basis". If this requires more than the tribunal found, it seems to me to introduce an ancillary test for which there is no warrant in the statute or in the decided cases. In my judgment the employment tribunal asked and answered all the requisite questions. So far as its answers were based on inferences, it set out the evidential basis for them and explained carefully why it was drawing them. They amounted to a finding that but for the Pakistani element of his support, Mr Ahsan would or might have been selected. That is a finding of direct racial discrimination.
56. Mr Millar's second criticism is that the employment tribunal failed to pay proper regard to the evidence that Mr Ahsan was judged to be politically unsuitable for a candidacy because he was not New Labour. The tribunal dealt with this as follows:

53. A further theme in the evidence we heard concerned the question of whether the applicant was part of the "new Labour" thinking or, as Mr Dixon wrote in October 1997 "some of the more modern thinking that has informed party organisation" We did not ultimately give much weight to this because we regarded it as part of the ordinary cut and thrust of political life; a party is in our judgment entitled to debate the direction in which it wishes it to go, to decide on its chosen direction and to select candidates who are broadly in sympathy with that choice. There is nothing in that, in out judgment, which points to racial grounds being the reason for the respondent's actions.

57. It was thus Mr Ahsan who was complaining, albeit without success, about this issue. But accepting that it was equally part of the Labour Party's case, nothing in the tribunal's findings supports the submission that it alone could explain his non-selection; and even if it had played a part, this could not eclipse the part played by racial considerations. Racial grounds do not have to be the sole or even the main reason for the discrimination, so long as they have played a real part in it.
58. Thirdly Mr Millar submits that the tribunal inappropriately applied procedural standards drawn from employment law. I disagree. Over the last thirty years employment law has furnished the greater part of the law's experience of good practice designed to avoid both conscious and unwitting discrimination in interview and selection procedures. This tribunal (albeit Ali now holds that it was not the right forum) had the benefit of such experience and were right to adapt it to the selection of candidates. A county court judge, sitting with specialist assessors on a Part III claim based on similar facts, would be right to do likewise.

Conclusion

59. I would dismiss the appeals and allow the cross-appeal.

Mr Justice Rimer:

60. On 26 February 1998, Mr Ahsan presented his first application to the employment tribunal. He alleged race discrimination by the Labour Party by reason of his non-selection as a candidate for elections to Birmingham City Council. He relied on section 12(1) of the Race Relations Act 1976 ("the RRA"), his case being that the Labour Party was a body that could confer an authorisation or qualification that was needed for, or facilitated, the holding by him of the office of a councillor. The Labour Party took the preliminary defensive point that it was not such a body. If so, it would follow that Mr Ahsan's claim must be dismissed. Following a preliminary hearing held to decide that point, the ET ruled on 25 August 1998 that the Labour Party was such a body and that it had "jurisdiction to entertain [Mr Ahsan's] claim". It ordered that the application "be relisted to be heard on its merits."
61. The Labour Party appealed against that decision to the Employment Appeal Tribunal. On 22 September 1998, before the appeal was heard, Mr Ahsan presented his second application to the ET against the Labour Party, making further allegations of race discrimination and again relying on section 12(1). The Labour Party again took the same defensive point, but there was no preliminary ruling on it by the ET: the parties simply agreed to stay the second application pending the outcome of the appeal to the EAT.
62. On 14 July 1999, the EAT (Lindsay J, Mr I Ezekiel and Mr R. Sanderson) upheld the ET's decision, dismissed the appeal, gave leave to the Labour Party to appeal to this court and ordered that "if no Notice of Appeal is lodged … the matter is to be relisted at the Employment Tribunal to be heard on its merits." The decision is reported as Sawyer and Others v. Ahsan [2000] ICR 1. Like the ET, the EAT regarded the issue as going to the ET's jurisdiction to hear the complaint, holding (in paragraph 39) that the ET "has … jurisdiction to hear [Mr Ahsan's] complaint." The Labour Party did not take up the leave to appeal to this court. It followed that it accepted that the ET also had jurisdiction to hear Mr Ahsan's second, hitherto stayed, application.
63. On 26 May 2000, before the hearing of those applications on their merits, Mr Ahsan presented his third application to the ET against the Labour Party. That again raised allegations of race discrimination and also relied on section 12(1). On 12 June 2000, the ET ordered all three applications to be heard together on their merits, following which they were so heard and considered by the ET over 18 days between June and November 2001.
64. On 7 February 2002, before the ET had promulgated its reserved decision, this court (Peter Gibson, Mantell and Arden L.JJ) delivered its judgment in Ali and another v. McDonagh [2002] ICR 1026. Those were proceedings in which Mr Ali and Mr Sohal had alleged race discrimination against the Labour Party and had also relied on section 12(1) of the RRA. The ET had, as in Mr Ahsan's case, held at a preliminary hearing that the Labour Party was a body to which section 12(1) applied and the EAT (Lindsay J, Mrs J.M. Mathias and Mr R. Sanderson) had upheld that ruling. Whereas the Labour Party had not taken the EAT's decision in Mr Ahsan's case to this court, it had so appealed the EAT's Ali decision. This court's judgment was that the Labour Party was not a body within the meaning of section 12(1). It reversed the EAT's decision in Ali and overruled the EAT's earlier decision in Mr Ahsan's case. In paragraph 53, the court said it was dismissing Mr Ali's and Mr Sohal's originating applications "as raising complaints outside the jurisdiction of the tribunal."
65. Armed with the judgment in Ali, the Labour Party returned to the ET in Mr Ahsan's still pending claims and submitted that it had no jurisdiction to proceed further with its consideration of them, since it had now been held by this court that the Labour Party was not a section 12(1) body after all. Argument on the point was deferred until 10 July 2003 (to await the outcome of a petition in the Ali case for leave to appeal to the House of Lords, which was refused on 18 November 2002) and the ET promulgated its decision on Mr Ahsan's applications on 23 September 2003.
66. The ET held that, despite this court's decision in Ali, it still had jurisdiction to hear Mr Ahsan's cases on their merits. It was in part apparently influenced by what it regarded as the injustice at that stage of what had been very protracted proceedings of being invited to withhold its conclusions on the merits of the claims, although it was common ground before us that those considerations were irrelevant to the question of whether it still had jurisdiction to proceed further with the claims, which was one of sharp edged law. However, I interpret the ET's primary reason for concluding that it did have jurisdiction to rule on the three applications on their merits to be because the EAT had made an order requiring it to do so, being one which had not been the subject of an appeal and had not been set aside. The relevant order was that part of the EAT's order of 14 July 1999 which I have quoted. The ET appears to have overlooked that, even if it was right in attributing the weight it did to that order, the order was made only in Mr Ahsan's first application and no like order had been made in his second or third applications. On its face the ET's reasoning provided no justification for its decision that it also had jurisdiction to rule on the merits of those two applications.
67. The Labour Party appealed against the ET's decision on jurisdiction. On 24 February 2004, the EAT (Burton J, Mr J. Hougham CBE and Dr K. Mohanty) dismissed the appeal in so far as it challenged the ET's assertion of jurisdiction in the first application but allowed it in so far as the ET had asserted jurisdiction in the second and third applications. The EAT's reasoning for its conclusion in relation to the first application was much the same as the ET's, namely that the EAT's order in the Ahsan appeal had directed the ET to hear that claim on its merits and as that order had never been set aside it had to be complied with, which is what the ET had done (paragraphs 23 and 26 of the EAT's judgment). The EAT's reasoning for allowing the Labour Party's appeal in the case of the second and third applications was, as I interpret it, that the decision in Ali showed that the ET had no jurisdiction to hear either of the second or third applications and that no amount of agreement, acquiescence or estoppel on the part of the Labour Party in relation to the prior conduct of those two applications could clothe the ET with a jurisdiction it did not have.
68. In my judgment, the EAT was correct in its conclusion that, following the decision in Ali, the ET had no jurisdiction to consider further either of Mr Ahsan's second and third applications. But, with respect, I consider that it was wrong to conclude that, despite Ali, the ET had a continuing jurisdiction to hear Mr Ahsan's first application.
69. ETs have an exclusively statutory jurisdiction. It derives from the Employment Tribunals Act 1996 (section 2) and any other statute expressly conferring jurisdiction. They only have jurisdiction to consider complaints presented to them if they are complaints which statute provides may be so presented. There is a familiar list of such statutes, including the RRA. For example, section 94(1) of the Employment Rights Act 1996 ("the ERA") confers a right upon an employee not to be unfairly dismissed by his employer, and section 111 provides that "A complaint may be presented to an employment tribunal against an employer by any person that he was unfairly dismissed by the employer." Section 111 therefore confers a statutory jurisdiction on ETs to hear unfair dismissal complaints. By contrast, no statute empowers ETs to hear a claim by an employee for damages against his employer for a breach of an alleged duty of care. An ET which embarked on such a claim would do so without jurisdiction and its decision would be a nullity. It would make no difference that the parties had purported to consent to its having jurisdiction and nor could either party become estopped from disputing the tribunal's jurisdiction. This is well established law: see, for example, Essex County Council v. Essex Incorporated Congregational Church Union [1963] AC 808, at 820, 821, per Lord Reid; Secretary of State for Employment v. Globe Elastic Thread Co. Ltd. [1980] AC 506, at 519, per Lord Wilberforce; and Department of Health and Social Security v. Coy [1984] ICR 309, at 315, 316, per Browne-Wilkinson J.
70. Those contrasting examples are simple ones. But even if an ET is presented with a claim for relief ostensibly within its jurisdiction, it can still be faced with questions as to whether it has a jurisdiction to proceed to hear the claim on its merits. For example, section 111(2) of the ERA provides that an ET "shall not consider" an unfair dismissal complaint unless it is presented within a basic three month period beginning with the effective date of termination of the employment or an extended period satisfying the requirements of section 111(2)(b). That goes to the ET's jurisdiction, so that if the application is presented late the ET has no jurisdiction to hear the claim further and must dismiss it. There may, however, be an issue (usually arising under section 111(2)(b)) as to whether it was presented late, and what will usually then happen is that the ET will hold a preliminary hearing to decide the question. How it decides it will depend on whether it can continue to hear the claim on its merits. It is obvious that only the ET can decide that preliminary question and it is obviously implicit in section 111 that that is what the legislation intends. The statute is thereby impliedly conferring on the ET the power to make a preliminary finding as to whether it has jurisdiction to proceed with a hearing of the claim on its merits.
71. In Mr Ahsan's first application, the ET was presented with a similar preliminary issue going to its jurisdiction to hear the claim on its merits. The ETs' jurisdiction to entertain race discrimination complaints derives from section 54 of the RRA. That permits complaints to be made to ETs of the commission of an act which is unlawful by Part II of the RRA, section 12 being within Part II. Since it was of the essence of Mr Ahsan's claims that the Labour Party was an authority or body within the meaning of section 12(1), whereas the Labour Party disputed it, the ET had to decide that disputed question in order to determine whether it had jurisdiction to hear the claim on the merits: if the Labour Party was not a section 12(1) body, the complaint against it was not of an act made unlawful by Part II and the ET would have no such jurisdiction. It is again implicit in the RRA that it was conferring upon the ET that decision-making power.
72. In my judgment, therefore, what the ET was doing on 25 August 1998 when it ruled on the preliminary issue in Mr Ahsan's favour was to decide a question of mixed fact and law, the power to determine which was impliedly conferred upon it by the RRA. In The Queen v. The Commissioners for the Special Purposes of the Income Tax (1888) 21 QBD 313, Lord Esher MR said at 319:

"But there is another state of things which may exist. The legislature may intrust the tribunal or body with a jurisdiction, which includes the jurisdiction to determine whether the preliminary state of facts exists as well as the jurisdiction, on finding that it does exist, to proceed further or do something more."

73. That, in my view, is equally applicable to the jurisdiction conferred upon the ET in the present case, save that I would qualify it in relation to the present context by observing that the ET's task in deciding whether or not the Labour Party was a section 12(1) body was not a mere fact-finding exercise but required a determination of whether, as a matter of law, the Labour Party was or was not such a body.
74. A decision of an ET on a particular issue is capable of establishing an issue estoppel between the parties as to that issue (Green v. Hampshire County Council [1979] ICR 954). If the decision is appealed to the EAT and is reversed the latter decision is likewise so capable. It might therefore perhaps be thought that, in a case in which the ET has an implied jurisdiction to decide a preliminary question upon which its jurisdiction to hear the substantive claim depends, its decision on that question should itself constitute an issue estoppel between the parties which would prevent either of them (save by way of appeal) from subsequently challenging that jurisdiction. If so, then the Labour Party's challenge to the ET's jurisdiction in Mr Ahsan's case following the decision of this court in Ali might have been met (at least as regards the first application) with a plea of issue estoppel: namely, that the EAT had upheld the ET's decision that the ET had jurisdiction to hear the case on its merits, the EAT's decision had not been set aside and therefore there was a decision binding on both parties, which the ET had to respect, entitling Mr Ahsan to prosecute his first application on the merits. Logically, if there was any such estoppel between the parties in the first application, it might perhaps be thought that it would similarly bind them in the second and third applications, subject only to the consideration that Arnold and Others v. National Westminster Bank Plc [1991] AC 93 shows that in a proper case justice may permit the re-opening of an issue the subject of such an estoppel.
75. That is not, however, how either the ET or the EAT justified the conclusion that the ET had a continuing jurisdiction to hear Mr Ahsan's first application. Nor did Mr Allen advance any such argument before the EAT or to us. In my judgment, the ET and the EAT were correct not to justify their decisions as regards the first application on the basis of issue estoppel. The reason is that, even though the ET had an implied jurisdiction to answer the preliminary question as to whether or not the Labour Party was a section 12(1) body, its answer to the question, whichever way it went, still went to whether or not the ET had jurisdiction under section 54 to hear Mr Ahsan's claim on its merits. As it was ultimately a question of law as to whether the Labour Party was a section 12(1) body, there was only one right answer to that question. If (as this court held in Ali) the answer was that it was not such a body, then it followed that the ET in fact had no jurisdiction to entertain Mr Ahsan's claim, even though it and the EAT had earlier decided that it did have jurisdiction. The authorities to which I have earlier referred show that a party cannot be estopped from questioning a tribunal's jurisdiction and it follows that nor can a party be so estopped by that species of estoppel known as issue estoppel. Of course, in a case in which the question of jurisdiction has already been the subject of argument, decision and appeal, the scope for a party thereafter to re-open the question of jurisdiction will usually be nil: no tribunal will permit a party to re-run old points that have already been decided. But in the present case the Labour Party had the benefit of the exceptional circumstance (although one it had itself created) that, whilst Mr Ahsan's applications were still pending in the ET, this court had produced its decision in Ali showing that Mr Ahsan's applications did not fall within the jurisdiction provided by section 54 and that therefore the ET was not competent to hear them further. The Labour Party could not be estopped by the earlier decisions in Mr Ahsan's first application from re-opening the question of the ET's jurisdiction in the light of Ali and, once Ali was drawn to its attention, the ET was in my view anyway under a positive duty of its own to reconsider its jurisdiction. In my judgment, having done so, it ought to have concluded that it had no continuing jurisdiction to hear any of the three applications.
76. The reason it did not take this view was because, so it held, the EAT in the Ahsan appeal had made an order that, subject to any appeal to this court, "the [first application] is to be relisted at the Employment Tribunal to be heard on its merits." The ET regarded that as enjoining it to hear a claim which, as Ali had shown, it in fact had no jurisdiction to hear. The EAT agreed: its view was that the EAT "controls the employment tribunals", it had directed the ET to hear the claim and as its order had not been set aside, the ET was bound to respect it.
77. I respectfully disagree with that analysis, which appears to me to produce a surprising result. The point was made that the quoted part of the EAT's order was superfluous and amounted to no more than an unnecessary statement of the obvious consequence of the dismissal of the Labour Party's appeal. I agree but, superfluous or not, the order was made and cannot simply be ignored. In my judgment, however, it is incorrect to regard it as having enjoined (i) the parties to participate in a hearing on the merits before the ET, or (ii) the ET to hear the application on its merits. If the order did bear that literal meaning, it would presumably also mean that the parties could not settle the claim or that Mr Ahsan could not withdraw it. It would also mean, for example, that were Mr Ahsan to fail to comply with a case management order made by the ET under rule 4 of Schedule 1 to the then applicable Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001, the ET could not strike his claim out under rule 4(8)(b). In my judgment, these examples show that the suggestion that, come what may, the order amounted to some sort of injunction compelling the hearing of the first application on its merits involves reading into it more than it can reasonably bear. All the order was saying was that, subject to any appeal to this court, the matter must progress towards a merits hearing in the ET. But its progress in the ET towards a final decision was, as with any application pending in the ET, still in the ultimate control of the ET. I cannot accept that, were a subsequent development in the law to arise showing that the ET had no jurisdiction to continue to entertain the applications, the ET was bound by the EAT's order to disregard it and act without jurisdiction, any more than it would have been bound to proceed with the merits hearing if the parties had told it that they had come to terms.
78. I would allow the Labour Party's appeal against the EAT's decision dismissing the ET's decision that it had jurisdiction to hear Mr Ahsan's first application and would in consequence set aside paragraph 2 of the ET's decision promulgated on 23 September 2003 (the decision on the merits of the first application). I would dismiss Mr Ahsan's cross-appeals against the EAT's decision reversing the ET's decision that it had jurisdiction to entertain Mr Ahsan's second and third applications.

The ET's finding of discrimination

79. The final appeal is the Labour Party's appeal against the judgment of the EAT (Silber J, Mr J. Hougham CBE and Mr D. Welch) dated 21 June 2004 upholding the ET's decision on Mr Ahsan's first application that the Labour Party had discriminated against him on racial grounds. For reasons given, I consider that the ET should not have ruled on the merits of Mr Ahsan's first application at all. I have had the advantage of reading in draft the judgments of Sedley and Buxton L.JJ on the issues that this appeal raises. I agree with Buxton LJ's conclusions on them for the reasons he gives, to which I would wish only to add a brief footnote. I had for some time been attracted to the view that this was a case in which, in the circumstances explained by the ET, Mr Ahsan had established facts which gave rise to an inference of racial discrimination against him which the Labour Party had failed to rebut. But I agree with Buxton LJ that a consideration of the ET's findings shows that the ET did not go to lengths of finding racially discriminatory conduct or motivation by the Labour Party towards the Pakistani community and that Mr Ahsan did no more than prove facts that gave rise to the inference that the reason why he was not selected was because of his association with the grants and membership problems associated with that community, not being problems referable to race. In my judgment, in making the further finding that he was discriminated against on racial grounds, the ET took a step that its primary findings did not justify. I would therefore anyway allow the appeal against the EAT's decision of 21 June 2004 and set aside paragraph 2 of the ET's decision.

Lord Justice Buxton:

80. I have had the benefit of reading drafts of the judgments of Sedley LJ and Rimer J. In what follows, I gratefully adopt the accounts of the history of this matter that they both give. I regret that I find myself in disagreement with Sedley LJ on both issues in this appeal, and must therefore explain with some care why that is.

Jurisdiction

81. I respectfully agree with the distinction drawn by Sedley LJ in his paragraph 16 between constitutive jurisdiction and adjudicative jurisdiction. The latter expression often, indeed perhaps always, involves a misnomer, since as my Lord points out it is plainly erroneous to say that a court acts without jurisdiction when it makes a mistake of law in deciding an issue that is properly before it. I also respectfully agree that the true meaning of "jurisdiction" is in its constitutive sense, as described by Diplock LJ in Garthwaite v Garthwaite [1964] P 356 at p 387:

"The 'jurisdiction' of a validly constituted court connotes the limits which are imposed upon its power to hear and determine issues between persons seeking to avail themselves of its process by reference (1) to the subject-matter of the issue or (2) to the persons between whom issue is joined or (3) to the kind of relief sought, or to any combination of those factors. "

82. The distinction is of the first importance, because it is trite law that an objection as to jurisdiction, in the sense understood by Diplock LJ, can be taken at any stage of the proceedings, and not only can but should be taken by the court of its own motion: see for instance per Williams LJ in Norwich Corporation v Norwich Electric Tramways [1906] 2 KB 119 at p 125. Therefore, if the issue of whether the Labour Party was a qualifying person under section 12 went to the ET's jurisdiction to hear a complaint against it, as this court in Ali v McDonagh appears to have thought that it did, then it was the duty both of the ET and of the EAT to respect that decision as to jurisdiction, and give up further consideration of the substance of the complaint.
83. The EAT (Burton J presiding) does not appear to have had the issue put before it in quite that way; but the duty to respect rules of jurisdiction obtains irrespective of the nature of the argument addressed to the court, and irrespective of whether or not the point is taken in terms. The EAT however regarded as crucial the fact that the actual order in Sawyer v Ahsan had never been set aside, and accepted the submission of Mr Allen QC, reported by the EAT in its paragraph 23, that

"As a matter of principle, litigants who have lost cases where there is a law change cannot simply disregard the orders made against them, and can only seek to avoid the consequence of such orders if they are permitted, on application to the court, to review or appeal that order out of time".

84. That argument is, with respect, forceful and valid where the earlier case has simply decided an issue of fact or law between the same parties, that decision being res judicata until formally set aside. That is illustrated by the cases cited by Mr Allen and relied on by the EAT and before us, an example of which is Re Wareing [1948] Ch 221, to which my Lord refers in his paragraph 31. But that principle cannot apply in a case as unusual as the present, where in the course of the proceedings an issue arises as to the (constitutive) jurisdiction of the tribunal to hear the case at all. If it becomes apparent through a decision of a court of superior authority that the tribunal lacks that jurisdiction, then the obligation identified by Williams LJ in the Norwich Corporation case arises; and that obligation, it is trite law, cannot be offset by any previous determination between, or lack of action by, the parties themselves.
85. The short issue in this case is, therefore, whether the provisions in section 12 of the 1976 Act about qualifying bodies, and the decision of this court in Ali v McDonagh [2002] ICR 1026 that the Labour Party is not a qualifying body, related to the constitutive jurisdiction of the Employment Tribunal.
86. For that, we have to turn to section 54 of the 1976 Act, which is cross-headed "Jurisdiction of employment tribunals". It is not only permissible but necessary to have regard to that cross-heading: see e.g. per Buckley LJ in In re Phelps [1980] 1 Ch 275 at p281C, and also the opinion of the Appellate Committee in R v Montila and ors [2005] 1 Cr App R 26[33]. In his paragraph 22 my Lord characterises this provision as referring to constitutive jurisdiction, and I respectfully agree. What section 54 thus gives the employment tribunal jurisdiction to do is to entertain complaints that a person has committed an act that is unlawful by virtue of Part II of the Act. Mr Ahsan's complaint that the Labour Party had discriminated against him was only unlawful by virtue of Part II if the Labour Party was a qualifying body under section 12. That is one of the criteria of (constitutive) jurisdiction identified by Diplock LJ in Garthwaite v Garthwaite: the persons between whom the issue is joined. Accordingly, the enquiry entered upon by this court in Ali v McDonagh, as to whether the complaint of discrimination should be heard by an employment tribunal under Part II or by a county court under Part III, was an enquiry as to the jurisdiction of those respective tribunals, and was seen as such by the court; Peter Gibson LJ introducing the case in paragraph 1 of his judgment by saying:

"The central question on this appeal is whether such complaint falls within the scope of section 12(1)(c) of the Race Relations Act so that the employment tribunal has jurisdiction to hear the respondents' complaints"

87. When Peter Gibson LJ answered that question in paragraph 53 of his judgment by holding that the application raised complaints outside the jurisdiction of the tribunal, I cannot think that he was referring to anything other than constitutive jurisdiction. First, a question as to which of two tribunals should try a case is of the essence of constitutive jurisdiction. Second, it is hard to see how, when determining a preliminary issue as to "jurisdiction", the court would be speaking meaningfully if it merely concluded, in adjudicative jurisdictional terms, that the tribunal was entitled to reach a decision within its constitutive jurisdiction.
88. That in my view concludes this issue against the applicant, but I should, with deference, address two implications of that conclusion about which Sedley LJ has expressed concern. First, in his paragraph 33 my Lord says that it is what the complainant asserts, and not what he ultimately succeeds in establishing, that gives the tribunal its constitutive jurisdiction. But I am driven to think that a complainant cannot create jurisdiction in a tribunal by simply asserting what is not the case, whether in fact or in law: for instance, to take examples from paragraph 17 above, by asserting an issue of fact in the EAT or a complaint of personal injury in the employment tribunal. That does not mean, however, that a tribunal in such a case would be prevented from entering upon an enquiry as to jurisdictional fact, or even (which was not what happened in the present case) from entertaining an application simply for the purpose of determining that jurisdiction did not exist in order to enable a challenge to be made to that conclusion in a higher court. But the continuing responsibility of the court to confine its substantive determinations to matters falling within its jurisdiction means that substantive consideration of the case cannot continue when, as here, a change in the law takes one of the parties outside the category of qualifying bodies.
89. Second, my Lord expresses concern about the effect of reversing the determination of the EAT upon the important values of certainty and finality. That concern would certainly arise if the judgment of this court were to undermine or ignore the authority of cases such as Re Wareing, referred to above. But for the reasons there set out the present case does not have that effect. What it does however do is to require a tribunal, if an issue as to its jurisdiction should arise, to respect binding authority as to the limits of that jurisdiction.
90. Once Ali v McDonagh had been decided the ET had no jurisdiction to hear Mr Ahsan's complaints against the Labour Party, and the failure to appeal Sawyer v Ahsan was irrelevant to that objective position; which equally cannot be affected by the (justified) complaints about the way in which the Labour Party had conducted the case. I am satisfied that if the argument before the EAT had concentrated more closely on basic issues as to a court's jurisdiction it would rapidly have become clear that the proceedings could not continue. As it is, the decision of the EAT of 24 February 2004 cannot stand, and the decision of the EAT of 21 June 2004 must necessarily fall with it.

Discrimination

91. That suffices to dispose of the appeal, but I think that I should add that, with the benefit of further reflection after argument closed, I became increasingly doubtful whether the ET was justified in finding that the Labour Party had discriminated against Mr Ahsan, or the EAT in its judgment of 21 June 2004 (Silber J presiding) was justified in upholding that finding.
92. The whole case was dogged by the legal and verbal confusions that emanated from the suspicions of the Labour Party about the grants issue and the abuse of membership procedures. The Labour Party saw both of these problems as "intimately associated with the Pakistani community" [ET, paragraph 54]; Mr Jamieson was preferred to Mr Ahsan because "A councillor not of the same racial group would not in the respondent's eyes be likely to identify with the Pakistani Muslim community in particular, or to pursue the same campaigns and perpetuate those problems for the party" [ET, paragraph 55]; and thus "this applicant's ethnic origins had a significant influence on the outcome of the selection procedure" [ET, paragraph 56].
93. On their face, these findings are more than sufficient to ground a finding of discrimination. Whilst the Labour Party had objectives that were not discriminatory in themselves, it applied those objectives on racial grounds. All that is required is that the applicant's race should have been an effective cause of the decision taken against him. But the point in this case is not as simple as that. The complaint is that the Labour Party perceived the grants and membership problems as associated with the Pakistani community, and for that reason did not want a representative who would identify with, and would be seen to identify with, that community. Granted that the judgement, good sense or political nous of the decision-maker is no business of this jurisdiction, those were plainly legitimate objectives provided that the perception that the problem was predominantly a Pakistani one was itself legitimate.
94. Mr Allen therefore appreciated that he had to demonstrate that that perception itself not merely had involved an observation about the behaviour of a racial group, but had been based on racially discriminatory grounds: to put it crudely, that the judgement that the problems were particularly associated with the Pakistani community had been influenced at least in part by the racial make-up of that community. Mr Allen said that the case had been put to the ET on that basis, and that the ET had so found. I do not doubt the first of those propositions, but I have more difficulty with the second. As Mr Millar submitted, that finding, if made, would be one of very great gravity, impugning on one of the most serious of all grounds not just the Labour Party's conduct in relation to Mr Ahsan, but its fundamental management of the whole of its business. If such a conclusion were to form part of the tribunal's reasoning, it should be spelled out clearly.
95. The nearest that the ET came to such a finding was in its comparatively brief review of the history of suspension of branches in the wake of the housing grants and membership enquiries, which is to be found in paragraph 48 of its determination. The ET said that it had found no satisfactory reason why some branches remained suspended whilst others did not, but pointed to a significant difference in terms of racial make-up between the reinstated branches and those that continued suspended. The ET went on:

"We could not avoid the conclusion that there was a close correlation, though falling short of a complete overlap, between the suspended branches and those wards in which the Pakistani population was most concentrated. As has been noted above, the respondent suspected membership abuse particularly within the Pakistani population. There was clearly a racial dimension to the consideration to suspend those branches where Pakistani members were numerous and where it was suspected that some at least of those members were guilty of abuses of the membership system."

96. That account however merely repeats the ambiguity noted above. In paragraph 23 of its determination the ET had reported, and apparently accepted as truthful, that

"in 1995 the respondent entertained some suspicions concerning possible abuses of its membership system in certain of the inner city wards. The pattern of new membership appeared not to follow expectations. Unusually large numbers of people appeared to join the party at the same or within a short space of time; disproportionately large numbers of members appeared to be paying subscriptions at the lower level appropriate to unawaged people; a lower than expected proportion of new members were women and virtually all of the new members were of Pakistani origin. Notwithstanding the increases in membership there appeared to be a low level of active participation on important political issues."

On the basis of those facts, for there to be a "racial dimension" to branch suspension decisions was, or at least was potentially, a response to the objective nature of the abuse, rather than a decision taken on racially discriminatory grounds. If, as the ET found in its paragraph 48, "the [Labour Party] suspected membership abuse particularly within the Pakistani population", it has to be shown that that suspicion was itself formed on a racially discriminatory basis before the suspicion can be used to demonstrate that subsequent decisions taken on the basis of that suspicion were themselves racially discriminatory. That the ET never said or found.

97. Before the EAT, the case became involved with complaints about the use of Mr Jamieson as a comparator, and with the suggestion that reference to Mr Ahsan's status within the Pakistani community involved discrimination by association. The latter point was misconceived. Mr Ahsan was quite unlike, for instance, Mr Owens in the Showboat Centre case [1984] ICR 65, a white person who refused to support a policy of discrimination against black customers. Mr Ahsan's "association" with the Pakistani community was because he was a member of it, and his complaint is that he was directly the victim of discrimination against that community. So far as the comparator issue is concerned, Mr Jamieson's attraction for the Labour Party was that he was perceived as not having the "baggage", as Mr Millar put it, of the housing grant problem and, perhaps more particularly, of the history of membership abuse. If concerns about those problems were not discriminatory on racial grounds, then it could not be discriminatory to allow them to influence the selection of Mr Jamieson. If those concerns were discriminatory on racial grounds it was discriminatory to refuse to select Mr Ahsan because of them, irrespective of who was selected in his place. The comparator issue was, therefore, largely or entirely a red herring.
98. The EAT's attention does not seem to have been properly drawn to the singular difficulty in this difficult case that I have ventured to point out above; and therefore they did not solve, any more than the ET solved, the ambiguity that is inherent in the analysis of the Labour Party's motivation. The failure decisively to dispose of that point meant, in my view, that it was not open to the ET to make a finding of discrimination on grounds of race. I would allow the appeal on that ground also.