England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM EMPLOYMENT APPEAL TRIBUNAL
HIS HONOUR J R REID QC, MS P TATLOW AND MR D CHADWICK

		Royal Courts of Justice Strand, London, WC2A 2LL
		12th March 2010

Lord Justice Pill:

1. This is an appeal by Anglian Windows Limited (the appellants) against a judgment of the Employment Appeal Tribunal ("the EAT"), HHJ Reid QC presiding, dated 15 June 2009. The second to fifth appellants are employees of Anglian Windows Limited and their appeals stand or fall with that of the first appellants.
2. The EAT allowed an appeal by Ms Prowes-Piper (the respondent) against a decision of an employment tribunal dated 3 September 2008. The respondent first worked for the appellants in 1998 and had been continuously employed by them from 23 November 1992. They had between 3000 and 4000 employees during the relevant period. The respondent was appointed National Telecan Manager in 1995; the employment ended on 20 October 2007 following dismissal. The employment tribunal held that the respondent had been unfairly dismissed by the appellants and had suffered harassment and direct sex discrimination. The EAT ordered that the matter be remitted to the same employment tribunal for rehearing to determine a single issue.
3. In July 2007 there was a restructuring of the appellant's organisation aimed at saving costs. It was proposed to make the respondent redundant. The employment tribunal ("the tribunal") held in the appellant's favour that the redundancy was not a scam to disguise a discriminatory dismissal. The dismissal was not an act of sex discrimination. However, the respondent was unfairly dismissed because the appellants had, in the circumstances, which included the respondent's long service, failed to make a proper search for suitable alternative employment within their organisation. Complaints of sex discrimination succeeded on substantial grounds but failed on others. The practical importance of the present issue is that, if the tribunal finds on a remittal, the failure to offer suitable alternative employment was an act of sex discrimination, the respondents claim for compensation for financial loss would be uncapped in amount.
4. The EAT stated at paragraph 31 that the issue for remittal was:

"…[a] fairly limited point, namely whether the failure to make any genuine attempt to offer alternative roles was itself discriminatory and flowing from that the extent, if any, that that impacted on the decision to dismiss."

5. The appellants submit that the appeal turns on a single question: did the respondent claim that the appellants' failure to offer her suitable alternative employment was an act of unlawful sex discrimination? That issue was not determined by the tribunal. The appellants submit that the respondent had not raised any such claim. The appellants accept that, in important respects, the respondent's complaints of sex discrimination on the grounds of her pregnancy and periods of maternity leave had succeeded before the tribunal (paragraph 233). The tribunal referred to:

"…Mr Troughton's discriminatory treatment of the respondent since her return from maternity leave and his dismissive and disrespectful approach to her as National Telecan Manager."

Mr Troughton is the appellants' marketing director.

6. The EAT, at paragraph 26, summarised the tribunal's conclusion about a possible alternative role in the appellants' organisation for the respondent. The employment tribunal concluded, at paragraph 263, that it was satisfied that the appellants had not taken reasonable steps to explore whether suitable alternative roles existed, and held:

"We do not judge that to be a reasonable way within a redundancy process for an employer of this magnitude to take steps to find alternative employment for such a senior employee.

We are therefore satisfied that the failure to properly communicate with the claimant regarding that potential alternative suitable employment creates unfairness to the claimant such that the decision to dismiss was unfair."

The EAT then accurately commented that what the tribunal had not done was to "deal with the question of whether that failure was connected with discrimination". That is common ground. The appellants' short point, summarised by Rimer LJ who granted permission to appeal, is:

"The applicant wishes to appeal against the order for such remission on the basis that the reason why the employment tribunal made no finding on any such issue was that it was at no stage any part of the respondent's case that the applicant had discriminated against her on that basis."

It is submitted that the EAT should not have permitted the respondent:

"…to take a fresh point on appeal and to have a second bite of the cherry before the employment tribunal."

7. The respondent submits that, on a consideration of the material before the tribunal and its own findings, the tribunal ought to have made a finding on the point and should now be required to do so.
8. The parties have referred to documents placed before the tribunal by the respondent. Ms Shepherd, for the respondent, referred to paragraph 1 of the Particulars of Claim, ET1:

"The claimant was dismissed as part of a chain of discriminatory treatment following the announcement of her pregnancy in February 2005"

9. Other complaints have been made about the manner in which alternative employment was approached by the appellants. There is no doubt that the respondent's primary case before the tribunal on redundancy was that the claim of redundancy was a sham -- a submission rejected by the tribunal. However, in her witness statement the respondent said:

"As soon as I announced that I was pregnant with my second child the attitude towards me changed and I felt cast out and worthless. From that point I was not what they wanted and I was left out of the loop until they decided to remove me altogether."

10. In paragraph 36 of her written statement the respondent stated:

"I told Andy Wilson that I could not earn any less and I said that I thought I was being penalised for having children."

Mr Wilson is the managing director of the appellants' retail sales and marketing division.

11. In paragraph 45 of his witness statement the respondent said:

"Both the Company and Andy Wilson knew that I would not be able to take this job [that is Retail Sales Manager in Brighton] as I have three small children and I lived in Devon. I felt that this was all part of the plan to remove me and it was their intention to make it impossible for me to stay."

12. The respondent had also claimed that Mr Troughton had formed a negative view of the respondent from the start and it is submitted that the appellants were never serious about finding suitable alternative employment for the claimant. No serious efforts were made to find an alternative role.
13. These submissions were substantially accepted by the tribunal. The respondent also adopts the expression used by Sir Richard Buxton when refusing permission to appeal on a consideration of the papers. He said that the respondent's case was that the whole history of what had happened to her was "shot through with discrimination".
14. When considering the discrimination claim, the tribunal stated:

"3. The claim is that from the announcement of her pregnancy in 2005 until her employment terminated by way of dismissal in October 2007, that the claimant suffered an ongoing state of discriminatory affairs in that, throughout that period, both whilst at work and whilst on maternity leave, she suffered less favourable treatment and harassment on the grounds of her pregnancy and maternity leave. Further the claimant's claim is that she is ultimately dismissed because of her pregnancy and periods of maternity leave."

15. At paragraph 9 the tribunal drew attention to the respondent's argument:

"…that the redundancy process was a sham and the decision to dismiss her was a continuation of the pregnancy discrimination that she had been suffering."

16. Strong findings were made by the tribunal, not only in relation to the discriminatory manner in which the respondent had been treated but also about the failure to offer suitable alternative employment. Paragraph 169:

"Pausing there, we are satisfied that the failure by Mr Wilson in that meeting or thereafter to inform the claimant of the essential remuneration characteristics of that alternative employment is unexplained. If the respondents were serious in wishing the claimant to consider that role as an alternative to the redundancy, it seems to us that they needed to give her all the appropriate information to enable her to properly assess whether or not it was a suitable alternative."

17. At paragraph 174 the tribunal stated:

"We are therefore satisfied on the evidence that there was no offer of any suitable alternative employment made to the claimant. A role was floated in the vaguest terms. This was, in our judgment, simply a window dressing exercise by the [appellants], designed to give the semblance of an offer of what on its face is a suitable alternative."

18. At paragraph 262, the tribunal stated:

"We are therefore satisfied, as the claimant submits, that no serious efforts were made to find the claimant an alternative role by properly exploring what on its face appears to be a suitable alternative. Beyond mentioning it in the vaguest terms in the meeting of 7 August, the role of South West DPM is simply never revisited with the claimant and in fact once she raises her grievance regarding sex discrimination on 7 August, [it] is thereafter simply offered elsewhere."

19. Mr Laddie, for the appellants, relies on the tribunal's findings at paragraph 251:

"Although we are satisfied that by 31 July Mr Troughton had developed a difficult working relationship with the Claimant due to his discrimination of her since her return from maternity leave -- on the basis of the evidence we accept that it was a business decision to restructure in a broad sense that prompted the redundancy of the Claimant and that the decision to dismiss her redundancy was not a sham to disguise a discriminatory decision to dismiss."

Not only was that a finding in favour of the appellants on the genuineness of the redundancy scheme,. Mr Laddie submits, but the tribunal there separated the decision to dismiss for redundancy from the earlier discrimination found to have been the present.

20. However, at paragraph 257, under the heading "Unfair Dismissal Generally", the tribunal stated:

"Although we are satisfied that there was a genuine redundancy process underway and that the requirements of the statutory discipline procedure are complied with, we are also satisfied that -- on the basis of Mr Troughton's discriminatory treatment of the claimant since her return from maternity leave and his dismissive and disrespectful approach to her as National Telecan Manager -- that he had no particular desire to maintain her within the business in the light of the redundancy process. In particular we do not accept his evidence, nor that of Mr Wilson, that they were keen to find ways of keeping the claimant within the business."

21. In reaching its conclusion to remit, the EAT stated, at paragraph 27:

"In our judgment when one looks at the totality of what was before the Tribunal, although it was not the primary case (because the primary case was that there was no genuine redundancy anyway), the case that the failure to offer alternative work was discriminatory was nonetheless raised in the passages we have looked at in particular from the ET1. It was a secondary case which was there and required to be dealt with."

22. The EAT concluded at paragraph 30:

"In our judgment it seems to us that it cannot be said that when one looks at the totality of the judgment it is implicit in there that there is a finding that the failure to find alternative employment was not on the ground of sexual discrimination. The difficulty that we have is that although there is no finding that it was not, there is no finding that it was. There is simply a [lacuna]"

They added that it was not a lacuna that could be filled by the EAT.

23. Thus the tribunal found in the respondent's favour that there had been prolonged sexual discrimination, in the appellants' favour that it was a genuine redundancy situation, and in the respondent's favour that, in such a situation, no serious attempt was made to offer suitable alternative employment so that the dismissal was unfair. I agree with the EAT that there is on those findings a lacuna: did the sexual discrimination infect the failure to offer alternative employment? The issue before the court is whether there should be a remittal to allow that lacuna to be filled.
24. For the appellants, Mr Laddie submits that no such opportunity should be given to the respondent. He accepts that the limited point raised in this appeal is purely a pleading point. Mr Laddie accepts that there were, in advance of the hearing, complaints of sex discrimination and a claim that dismissal was an act of sex discrimination; but there was no complaint, he submits, of sex discrimination relating to the offer of alternative employment. On the contrary, he submits, the respondent's claim was that:

"she believed that the act of removing her position was the final act of a chain of discriminatory treatment which culminated in her removal."

25. That claim preceded the sex discrimination now sought to be complained of, that is, the failure to offer alternative employment. The complaint of sex discrimination in relation to the dismissal was whether the reason given by the appellants was a sham, and it was not claimed that the failure to offer alternative employment was motivated by sexual considerations. He submits also that the allegations of sex discrimination were limited to the reason for the decision to dismiss her, that is, to select her for redundancy, and did not extend to failure to offer alternative employment. The allegation that the dismissal was an act of sex discrimination did not cover a complaint of sex discrimination in relation to an offer of alternative employment. Extensive submissions had been made by the respondent alleging sex discrimination in the context of dismissal. These did not include an allegation that the failure to offer suitable alternative employment was discriminatory. It is illustrative of the respondent's case before the tribunal, it is submitted, that the comparator chosen for the purposes of the claim of sex discrimination was appropriate only as a comparator up to, and including, communication of the decision to dismiss, and not a comparator as to suitable alternative employment.
26. There is a conceptual distinction, Mr Laddie submits, between the reason for dismissal (in this case redundancy) and the failure in a process of offering suitable alternative employment that might have avoided a dismissal. I agree with Underhill J's reference in London Borough of Hackney v Distant UKEAT 0487/08 at paragraph 10(2) to a similar analytical distinction.
27. On the basis of that, Mr Laddie submits that it was insufficient for the respondent to have complained simply that her dismissal was an act of sex discrimination. If the present point was to be taken, particulars were required of the point when the relevant sexual discrimination is alleged to have occurred: that is the point at which alternative employment was offered.
28. The respondent had put her case on the basis of a sham redundancy. There is force in Mr Laddie's submission that specific allegations in relation to sex discrimination in the offer of suitable alternative employment have not been made, although the references in the prehearing documents do demonstrate an awareness of the issues arising from the need to establish an offer of suitable alternative employment.

Conclusions

29. I find nothing conceptually difficult about a finding that a redundancy situation may be genuine, but there may be sex discrimination in the manner in which it is implemented, including in the employer's approach to an offer, or offers, of suitable alternative employment. I do not accept the submission initially made by Mr Laddie that it is extremely unlikely that the tribunal would have found against the appellants on the second issue having found for them in the first. The tribunal scrupulously and thoroughly considered the question of the genuineness of the redundancy situation which had arisen. It by no means follows that there was an absence of sex discrimination in the manner in which subsequent action was taken.
30. The decision to remit was made by an expert tribunal whose expertise includes an appreciation of the relationship between the various issues which may arise in circumstances such as the present, including the fairness of the procedure adopted before dismissal, whether there was a genuine redundancy situation, sex discrimination and sexual harassment. These issues may be intertwined in a fairly complex way, as they were in this case. The issue considered expressly by the EAT was a case management decision within the area of the EAT's expertise. Such a decision should not readily be overturned in this court.
31. In my judgment the EAT was entitled to conclude that the presence of the lacuna and the failure of the tribunal to find whether the inadequacy of the appellants' approach to alternative employment was motivated by sexual considerations amounted to an error of law which entitled the EAT to take the action it did. Comprehensive allegations of sex discrimination had been made and these covered a substantial period of time and a variety of conduct. It had been alleged that the dismissal was:

"part of a chain of discriminatory treatment following the announcement of the respondent's pregnancy in February 2005."

32. What was denied by the appellants in their pleading, ET3, were allegations "as part of a chain of discriminatory conduct". The tribunal recorded that the respondent had alleged "an ongoing state of discriminatory affairs". Such offer of alternative employment as was made failed to have regard, the respondent had submitted, to her family responsibilities as a mother of young children. The conduct in relation to the offer of alternative employment may have been overshadowed by the general submission that the entire redundancy process was a sham, but the generality and persistence of sex discrimination was expressly asserted.
33. The EAT was entitled to conclude that, given the general allegations made, the absence of an allegation of sex discrimination specifically stated to relate to the offer of alternative employment, does not, in the context described, disentitle the respondent from taking the point now. The combination of findings by the tribunal, already analysed, may not with hindsight have been surprising, but it is not altogether surprising that, given their respective positions, neither party concentrated on the consequences of serious findings of sex discrimination upon the appellants' approach to offering alternative employment.
34. I find paragraph 257 of the tribunal's decision, already cited, under the heading "Unfair Discrimination Generally", to be important. In that paragraph the tribunal linked Mr Troughton's discriminatory treatment of the respondent with his lack of desire to maintain her within the business in the light of the redundancy process. This point was taken by the tribunal. Having established that link, and fully appraised of the facts, the tribunal ought to have had considered whether the serious and persistent sexual discrimination, examples of which had been found to have been proved, carried forward into the approach to suitable alternative employment.
35. We are asked to reverse the finding of an expert tribunal on a case management decision involving a pleading point. I would be slow to do that. However, in any event, I agree with the conclusion of the EAT on the particular facts of the case. The interests of justice require that the issue be remitted to the tribunal and resolved. I would dismiss this appeal.

Lord Justice Hooper:

36. I agree.

Lord Justice Pitchford:

37. I also agree.

Order: Appeal dismissed