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
MR JUSTICE ELIAS Presiding
EAT/0672/05/DA

		Royal Courts of Justice Strand, London, WC2A 2LL
		26/1/2007

Lord Justice Mummery :

1. This appeal in a race discrimination case was heard with the appeals Madarassy (a sex discrimination appeal from the Employment Appeal Tribunal) and Appiah (a race discrimination appeal from the county court). All three appeals raise points on the burden of proof in discrimination cases.
2. The instant appeal is from the order of the Employment Appeal Tribunal on 21 February 2006. It dismissed an appeal by Mr Everald Brown from the reserved judgment of the employment tribunal dated 23 June 2005. The employment tribunal had dismissed his claims for race discrimination, harassment and victimisation.
3. On 8 June 2006 Brooke LJ granted permission to appeal.

Outline facts

4. On 2 June 2003 the London Borough of Croydon (the Council) appointed Mr Brown, who is black and of West Indian parentage, to the newly created position of Business and Finance Officer (or Business Advisor) in the Council's Early Years and Child Care Department. He was on probationary terms for the first 6 months. His Manager was Mr David Johnston, who is the 2^nd respondent. He is white. Mr Brown still works for the Council as a Business Advisor, but Mr Johnston is no longer his line manager.
5. Three incidents are alleged to have occurred at meetings between Mr Johnston and Mr Brown between September and December 2003 and form the basis of Mr Brown's allegations of race discrimination, harassment and victimisation contained in three originating applications presented to the employment tribunal.
6. Mr Brown had invoked the Council's grievance procedures. A report was produced finding that some of his complaints of differential treatment were justified, though not on grounds of race.

Decision of employment tribunal

7. Mr Brown withdrew a number of allegations of discrimination and one which was not withdrawn was held to be out of time and the tribunal refused to extend time. For the purposes of this appeal three complaints of direct race discrimination are relevant.
8. The employment tribunal made findings of fact on each of the three complaints individually and then concluded at the end of the decision that, in respect of each of the complaints, the case failed, as race was not the ground of the offending treatment of Mr Brown.
9. The first claim was that Mr Johnston told him at a number of meetings in 2003, beginning on 18 September, that 2 female members of the staff, both white, had told him at Senior Team Management meetings that, when left alone with Mr Brown, they "felt vulnerable" and uncomfortable in his presence. There were no formal complaints, but comments were made on his manner of starting argumentative conversations with people when they were on their own and staying late at night without appearing to do any work.
10. Mr Brown relied on a hypothetical comparator. He claimed that Mr Johnston should have clarified and investigated the allegations before raising them with him. The complaints were never documented or formalised. No disciplinary procedure was ever invoked against Mr Brown.
11. The employment tribunal accepted the evidence of Mr Johnston that he raised these concerns with Mr Brown because he was worried about a breakdown in workplace relationships in his team. He was concerned that there should be good working relationships across the team and that Mr Brown, as a newcomer into the department, had to make efforts to restore relationships. The tribunal found that Mr Johnson was seeking to manage his department properly and that, if other staff were having the same difficulties, he would also have raised the issue with them irrespective of their race or colour.
12. The tribunal rejected Mr Brown's claim that there was a vendetta against him and that the Council and Mr Johnston had embarked on a conscious series of discriminatory acts. The position was that there were clearly difficulties in the working relations between Mr Brown and his colleagues such that individuals complained about his behaviour to Mr Johnston and other managers. It was incumbent on Mr Johnston to ensure that the department was operating smoothly and that difficulties with working relationships were dealt with.
13. The tribunal held that

"27.2 ….The tribunal being satisfied that Mr Johnston would have dealt with this type of complaint in the same way irrespective of the individual's race dismiss the Claimant's claim."

14. The second claim was that Mr Johnston had intended and sought at the meeting on 9 October 2003 to extend Mr Brown's probationary period "because he was not fitting into the team", but he had not provided Mr Brown with a written probationary report until required to do so subsequently. The probationary procedures required Mr Johnston to compile a report for signature by Mr Brown in December 2003. He had not confirmed the end of the probationary period until January 2005. He relied on two actual comparators who the tribunal found were materially different to Mr Brown in that neither was required to pass a probationary period and neither had problems with personal relationships within the team or with their work.
15. The tribunal found that the offending words about "not fitting into the team" had not been used by Mr Johnston at a meeting on 18 September as alleged. Mr Brown was in fact orally confirmed in his post on 18 December 2003, even though the written report was not completed by then.
16. The tribunal accepted Mr Johnston's evidence that he would be looking to extend the probationary period, as he had concerns about Mr Brown's relationships with other members of staff and as he did not know exactly what Mr Brown was doing in his role as Business Advisor and that he would have treated others the same in similar circumstances irrespective of race.
17. The tribunal held that Mr Johnston was entitled to consider whether the Claimant's probationary period could be extended. The tribunal continued

" 29.1 ….The Tribunal conclude that this was not related to the Claimant's race but to the difficulties that had been encountered in the first four months of his employment. The Tribunal further conclude that Mr Johnston would have taken the same action in relation to another employee in a similar situation irrespective of race. … "

18. The third claim was that at a meeting on 18 December 2003 Mr Johnston had falsely accused Mr Brown of working on his own account running a child minding business during working hours and of dishonesty in the mileage claimed on travelling expenses.
19. The tribunal found that Mr Johnston did not question Mr Brown further about the child minding when Mr Brown told him that he was not child minding any more. He had asked Mr Brown about the mileage expense claim, as he had completed the claim forms in a different way to other members of staff and had asked him whether he had made them up. After hearing Mr Brown's explanation he was satisfied that the mileage claimed was correct and told him to submit a final version of the form and he would authorise his expenses.
20. The tribunal held that the claim of race discrimination was unfounded.

"31.1 … The acts complained of were by Mr Johnston who, in his role as a manager quite properly asked the Claimant about his childminding activities as he was concerned that they may impinge on his work for the 1^st Respondent. Mr Johnston also quite properly questioned the Claimant as to how his mileage expenses were compiled. It is perhaps unfortunate that he asked the Claimant if he had made the mileage up, however the Tribunal can not find any evidence of any discrimination on the grounds of the Claimant's race."

21. Mr Bedford, who appeared for Mr Brown, criticised the conclusions of the tribunal as vitiated by error of law in the application of the burden of proof.

Burden of proof

22. I turn first to the statutory provisions on the burden of proof. As has been said by the Court of Appeal in interpreting these provisions and in giving guidance on how they work in practice, the judgments of the court on these matters are not a substitute for the relevant statutory section. Attention should be paid to the statutory language rather than to the detailed language used by the court in explaining its interpretation of the provision: see Igen v. Wong [2005] ICR 931 and the discussion of the burden of proof in discrimination cases in the judgment in Madarassy paragraphs 44-61.
23. Section 54A (2) of the Race Relations Act 1976, as amended, implements Directive 2000/43/EC and makes provision relating to the burden of proof in terms similar to the provisions of the Sex Discrimination Act 1975:

" (2) Where , on the hearing of the complaint, the complainant proves facts from which the tribunal could, apart from this section, conclude in the absence of an adequate explanation that the respondent-

(a) has committed such an act of discrimination ..against the complainant, or

(b) is by virtue of section 32 or 33 [vicarious liability] to be treated as having committed such an act of discrimination …against the complainant

the tribunal shall uphold the complaint unless the respondent proves that he did not commit or, as the case may be, is not to be treated as having committed, that act."

24. The tribunal directed itself on the burden of proof in the following terms

"12.3 The judicial guidance on the burden of proof in discrimination cases has recently been updated and is set out in the Court of Appeal judgment in the case of Igen Ltd &Ors v. Kay Wong and other cases [2005] EWCA Civ 142, CA on 18^th February 2005. The Court of Appeal guidance can be summarised as meaning that once an employee has established a prima facie case of discrimination by showing that there is prima facie evidence to the effect that he/she has been treated less favourably than a relevant comparator the burden of proof transfers to the employer. If he is to escape liability the employer must then prove on the balance of probabilities that the less favourable treatment complained of was not on the grounds of race."

25. Mr Bedford, who appeared for Mr Brown, accepted that this was a correct self direction on the burden of proof. His criticism of the employment tribunal's decision was that it did not correctly apply the law stated in paragraph 12.3. The court must apply the two stage test in all cases. It had not applied the two stage test in this case. Instead of considering what facts had been proved at the first stage and embarking on an analysis of them in order to get a clear picture of the facts which require an adequate explanation from the respondent, it had omitted the first stage altogether, and had collapsed the two stages into one by going straight to the second stage. It had then compartmentalised the allegations by treating each of the three relevant complaints individually rather than seeing them as instances in a single narrative. Further, it had not given adequate reasons for accepting the explanations given by the Council and Mr Johnston for the offending treatment.

The Employment Appeal Tribunal

26. In dismissing Mr Brown's appeal the Employment Appeal Tribunal (Elias J presiding) dealt with the criticisms on the burden of proof in an important passage which I should quote at length:

" 22. We were referred to the well-known case of Igen v. Wong [2005] ICR 931. As that decision makes clear, (and as is set out in paragraphs 9 to 11 of the Annex which set out the guidance for Tribunals in this area), there is a two stage test. The first is that the Claimant has to prove facts from which conclusions could be drawn that the employer has treated the claimant less favourably on the ground of race; if that is done then the burden moves to the employer and at this stage, it is for the employer to prove on the balance of probabilities that the treatment was in no sense whatsoever on the grounds of race. (Igen was a sex discrimination case but the same principles apply in the field of race).

23. Mr Bedford submits that the Tribunal has not made this clear distinction and, as such, has erred in law. Mr Sheldon, for the Respondent, says that although the Tribunal has not used that language, it is clear that in fact, in relation to the first two allegations in particular, it has concluded both that there was no less favourable treatment, and that in any event, the reason for any treatment had nothing to do with race.

24. It is not necessary for a Tribunal, in each and every case, specifically to identify the two stage process. In many circumstances an employee making a claim of this kind will identify a specific, actual comparator who has been treated less favourably. In those circumstances it is easy then to see that the burden must switch to the employer.

25. In other circumstances, where there is no actual comparator, the employee must rely on a hypothetical comparator. Again in some cases it may be relatively plain to a Tribunal that the burden switches to the employer. That is likely to occur for example where the employer acts in a way which would be quite atypical for employers. Conversely if the employer acts in a way which would appear perfectly sensible, and does the kind of thing which most employers would do, then the burden is unlikely to transfer. For example if an employer warns an employee for drunkenness at work, and it is not disputed that the employee was drunk, it is not likely in those circumstances in the absence of particular evidence demonstrating otherwise that that would create an inference of less favourable treatment so as to require some explanation for the employer.

26. But often particularly when dealing with the question of hypothetical comparators, it is both difficult and artificial to separate out the two limbs of both less favourable treatment and the reason why. This was made clear in the speech of Lord Nicholls of Birkenhead in Shamoon v. Chief Constable of the RUC [2003] ICR 337. In that case the applicant was a chief inspector who was female. She complained that on grounds of sex she had been denied the right to complete appraisals for junior staff. The employers contended the reason she had been denied the right to carry out those appraisals was because there had been complaints about the way she had done this and that her male comparators had not been subject to the same complaint. Lord Nicholls observed that in the normal case Tribunals will first consider whether the Claimant received less favourable treatment than the appropriate comparator and then go on to consider whether the less favourable treatment was on the relevant proscribed ground. But he then went on to say this:

"8. No doubt there are cases where it is convenient and helpful to adopt this two step approach to what is essentially a single question: did the claimant, on the proscribed ground, receive less favourable treatment than others? But, especially where the identity of the relevant comparator is a matter of dispute, this sequential analysis may give rise to needless problems. Sometimes the less favourable treatment issue cannot be resolved without, at the same time, deciding the reason why issue. The two issues are intertwined.

9. The present case is a good example. The relevant provisions in the Sex Discrimination (Northern Ireland) Order 1976 are in all material respects the same as those in the 1975 Act which, for ease of discussion, I have so far referred to. Chief Inspector Shamoon claimed she was treated less favourably than two male chief inspectors. Unlike her they retained their counselling responsibilities. Is this comparing like with like? Prima facie it is not. She had been the subject of complaints and of representations by Police Federation representatives, the male chief inspectors had not. This might be the reason why she was treated as she was. This might explain why she was relieved of her responsibilities and they were not. But whether this factual difference between their positions was in truth a material difference is an issue which cannot be resolved without determining why she was treated as she was. It might be that the reason why she was relieved of her counselling responsibilities had nothing to do with the complaints and representations. If that were so, then a comparison between her and her two male colleagues may well be comparing like with like, because in that event the difference between her and her two male colleagues would be an immaterial difference.

10. I must take this a step further. As I have said, prima facie the comparison with the two male inspectors is not apt. So be it. Let it be assumed that, this being so, the most sensible course in practice is to proceed on the footing that the appropriate comparator is a hypothetical comparator: a male chief inspector regarding whose conduct similar complaints and representations have been made. On this footing the less favourable treatment issue is this: was Chief Inspector Shamoon treated less favourably than such a male chief inspector would have been treated? But, here also, the question is incapable of being answered without deciding why Chief Inspector Shamoon was treated as she was. It is impossible to decide whether Chief Inspector Shamoon was treated less favourably than a hypothetical male chief inspector without identifying the ground on which she was treated as she was. Was it grounds of sex? If yes, then she was treated less favourably than a male chief inspector in her position would have been treated. If not, not. Thus, on this footing also, the less favourable treatment issue is incapable of being decided without deciding the reason why issue. And the decision on the reason why issue will also provide the answer to the less favourable treatment issue.

11. This analysis seems to me to point to the conclusion that employment tribunals may sometimes be able to avoid arid and confusing disputes about the identification of the appropriate comparator by concentrating primarily on why the claimant was treated as she was. Was it on the proscribed ground which is the foundation of the application? That will call for an examination of all the facts of the case. Or was it for some other reason? If the latter, the application fails. If the former, there will usually be no difficulty in deciding whether the treatment afforded to the claimant on the proscribed ground was less favourable than was or would have been afforded to others."

27. It follows from Lord Nicholls' analysis that there will be cases where the two issues are so intertwined that adopting the sequential analysis can give rise to needless problems. We think that is the case here. The Tribunal were fully entitled in the circumstances where the facts themselves were not in dispute in any fundamental way to focus on the reason why."

27. Thus the Employment Appeal Tribunal took the view that there was no error of law in not applying the two stage test in Igen v. Wong. There was no need to go through it any more than it was to go through the two stage analysis on the substantive question whether Mr Brown received less favourable treatment on the ground of race. It was permissible to go straight to the reason why question, on which the tribunal concluded that Mr Brown's race was not the reason why he was treated as he was.

Appellant's submissions

28. Mr Brown's appeal is based mainly on the submission that the employment tribunal failed to apply the two stage test in Igen v. Wong and that the Employment Appeal Tribunal compounded this error by wrongly ruling that it was not necessary to do so in this case. The failure of the employment tribunal to address the two stages of the Igen v. Wong test sequentially rendered its decision incurably bad. It was not saved by the reasoning of the House of Lords in Shamoon, which was not a case on the burden of proof and the reversal of it and it was decided before the new provisions implementing the directive came into force. This case should therefore be remitted for re-hearing by a differently constituted tribunal.
29. The insistent theme of Mr Bedford's forceful submissions on behalf of Mr Brown was that the appeal raised an important point of principle of practical importance, namely whether employment tribunals are required to go through a two stage test in accordance with Igen v. Wong when applying the burden of proof in a discrimination case; or whether, as Elias J had held, it was permissible to jump straight to stage two or conflate the two stages and merely focus on the issue of "the reason why." There was nothing in Igen v. Wong to suggest that the employment tribunal can dispense with the first stage altogether.
30. Mr Bedford criticised Elias J's reliance on the speech of Lord Nicholls in Shamoon, which was decided before the amendments were made to the discrimination acts in order to implement the Burden of Proof Directive. The changes applied to discrimination cases heard in the employment tribunal after 12 October 2001.
31. In this case the employment tribunal had erred in law in collapsing the distinction between the two stages in section 54A of the 1976 Act and in adopting a holistic approach to the determination of Mr Brown's complaint without regard to the statutory requirements. The tribunal had taken the Council's explanations into account at the first stage. This was completely contrary to the language of the section and the construction of it in Igen v. Wong.
32. The Council's explanations should have been left out of account at the first stage. It had benefited as a result of the tribunal jumping straight to the second stage of considering the Council's explanation of the treatment. The tribunal's summaries of Mr Brown's complaints had been skewed by the Council's explanations and had treated Mr Brown as having the burden of proving discrimination. If the two stage process had been followed it would have been clearer what Mr Brown's case was.

Discussion and conclusion

33. On this point I refer to the detailed discussion of the burden of proof in discrimination cases in my judgment in Madarassy paragraphs 44-61 and on the Shamoon point to paragraphs 80-84.
34. As Mr Sheldon, who appeared for the Council pointed out, the main argument advanced for Mr Brown is an "extremely odd" complaint to be made by a complainant in a discrimination case. As the Employment Appeal Tribunal (Elias J presiding) pointed out in Laing v. Manchester City Council [2006] IRLR 748 at paragraph 76.

" ….where the tribunal has effectively acted at least on the assumption that the burden may have shifted, and has considered the explanation put forward by the employer, then there is no prejudice to the employee whatsoever."

35. I agree with Mr Bedford that, despite its direction on a two stage approach laid down in Igen v. Wong, the tribunal did not clearly address the two stages in express terms.
36. It does not follow, however, that the tribunal made an error of law which would entitle an appellate tribunal or court to upset its decision. What matters is whether the tribunal placed the burden on the Council to explain the reason for the differential treatment of which Mr Brown complained and which the tribunal assumed in his favour established a prima facie case of discrimination for the Council to explain.
37. Far from prejudicing Mr Brown this approach relieved him of the obligation to establish a prima facie case based on facts from which the tribunal could infer, without regard to the Council's explanation for the treatment, an act of discrimination on the part of the Council.
38. The essential primary facts in the case were not in dispute apart from whether Mr Johnston made the "not fitting in" remark" on which the tribunal accepted the evidence of Mr Johnston that he had not said that. Apart from that point the focus was on the reason for the treatment and it was therefore natural to move from the evidence as to a prima facie case of discrimination to the explanation of the Council and Mr Johnston at the second stage. On that issue the tribunal accepted the non-discriminatory explanations given by the Council and by Mr Johnston that Mr Brown's race was not the ground and therefore concluded that the Council and Mr Johnston had proved that there was no discrimination on the ground of race.
39. This approach to the burden of proof is consistent with the approach laid down by the House of Lords in Shamoon to the substantive issues of less favourable treatment and to "the reason why" question posed by less favourable treatment.

Result

40. I would dismiss the appeal on the ground that there was no error of law in the decision of the employment tribunal. I agree with the reasoning of the Employment Appeal Tribunal that it was not necessary in this case for the employment tribunal expressly to address sequentially the two stage test in Igen v. Wong.
41. In general it is good practice to apply the two stage test and to require the claimant to establish a prima facie case of discrimination before looking to adequacy of the respondent's explanation for the offending treatment. But there are cases, of which this is one, in which the claimant has not been prejudiced in matters of proof of discrimination by the tribunal omitting express consideration of the first stage of the test, moving straight to the second stage of the test and concluding that the respondent has discharged the burden on him under the second stage of the test by proving that the offending treatment was not on the proscribed ground.

Lord Justice Laws:

42. I agree.

Lord Justice Maurice Kay

43. I also agree.