United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR ROBIN ALLEN QC and MS HARJIT GREWAL (of Counsel) Instructed by: Mr M Javaid Commission for Racial Equality Elliott House 10-12 Allington Street London SW1E 5EH
For the Respondents	MR DAVID GRIFFITH-JONES (of Counsel) Messrs Hammond Suddards Solicitors Moor House 10-19 London Wall London EC2Y 5ET


 


JUDGE PETER CLARK: These are appeals by three applicants before the Stratford Industrial Tribunal against parts of that tribunal's decision entered with full reasons on 20th January 1997.

Background

Each appellant is a British National, formerly holding a senior position in the first respondent company's London branch. Quick is a Japanese corporation. The second respondent, Mr Nakajima, was joint senior General Manager of the London branch. He was a Japanese National working in London on secondment from Quick Japan.

For present purposes it will suffice if we summarise the employment history of Mr Wakeman. He was well-qualified and experienced in the field of electronics and computers, particularly in connection with financial markets, the area in which Quick operated.

He joined Quick on 10th July 1989. Following a series of promotions he was appointed Deputy General Manager, Terminals Development in April 1994. He held that position until he was earmarked for redundancy on 15th July 1994. His annual appraisals described him as having excellent knowledge and experience in both hardware and software areas. His employment ended by dismissal on 30th September 1994.

Mr Solanki and Mr Mitchell were also dismissed by reason of redundancy on that date.

The complaints

Following their dismissals each appellant presented a complaint to the Industrial Tribunal alleging:

(1) Unfair dismissal.

(2) Unlawful direct racial discrimination in relation to:

(a) the pay package received in comparison with Japanese employees at the same and even lower levels in the London branch.

(b) Promotion.

(c) Dismissal.

In addition, Mr Wakeman alleged:

(i) Victimisation by Mr Nakajima.

(ii) Racial harassment by Mr Nakajima.

The Tribunal decision

The tribunal heard the above liability issues over some 13 days. It found in favour of the appellants on the following issues:

(1) Unfair dismissal. This was admitted.

(2) Dismissal on the grounds of race.

The tribunal found that when selecting for redundancy Quick excluded from the selection pool those managers who had been seconded from Japan. It concluded that the selection of the appellants for dismissal was on the grounds of their race, and was unlawful.

However, the tribunal rejected the appellant's cases that:

(a) Quick had unlawfully discriminated against the appellants in relation to their levels of pay ["the pay issue"] and

(b) Quick had unlawfully discriminated against the appellants in relation to promotion as a matter of policy ["the promotion issue"].

(c) Mr Nakajima had victimised Mr Wakeman.

Finally, the tribunal held that although the failure by Mr Nakajima to promote Mr Wakeman to the level of General Manager was on the grounds of his race, that complaint was time-barred.

The Appeals

Each appellant appeals against the tribunal's findings in relation to the pay issue.

Mr Wakeman alone appeals in relation to the promotion issue.

There is no cross-appeal by the respondents against any of the findings adverse to them.

The Pay Issue

In presenting this part of the appeals Mr Allen QC has highlighted the following features of the evidence:

Secondment

Quick Japan seconded managers from its Japanese Head Office to work in the London branch. All the secondees were Japanese Nationals. Quick was a Japanese company with a Japanese management culture. In short, he submits, secondment was racially tainted.

Work Permits

United Kingdom immigration laws require that an employer who wishes to transfer key workers from outside the European Economic Area to work in this country must obtain a work permit for such workers. Key workers are overseas nationals having technical or specialised skills and expertise essential to the day to day operation of the company. Wages and conditions for such workers are expected to be equal to those offered to United Kingdom employees for doing similar work.

Examples of Quick's work permit applications for secondees were before the tribunal. They were formulated on the basis that the secondees would be paid a comparable wage to United Kingdom staff. The tribunal found as a fact that the wages information provided on those applications was false. The secondees were paid more than was disclosed, and more than their United Kingdom comparators.

Wage comparisons

The appellants prepared calculations which were placed before the tribunal in an attempt to show how much more the secondees were paid than their United Kingdom comparators, and particularly the appellants, after stripping out items which were attributable to the fact of secondment; for example, the additional expenses directly connected with living in a foreign country. Such comparisons show that significantly higher wages were paid to the secondees when compared with United Kingdom equivalent staff and the figures shown on the work permit application forms.

The statutory provisions

The following provisions of the Race Relations Act 1976 are material:

"(1) A person discriminates against another in any circumstances relevant for the purposes of any provision of this Act if-

(a) on racial grounds he treats that other less favourably than he treats or would treat other person;"

"3 ... (4) A comparison of the case of a person of a particular racial ground with that of a person not of that group under section 1(1) must be such that the relevant circumstances in the one case are the same, or not materially different, in the other."

"4 ... (2) It is unlawful for a person, in the case of person employed by him at an establishment in Great Britain, to discriminate against that employee-

(a) in the terms of employment which he afford him;"

The submissions

Mr Allen submits that the tribunal fell into error in failing to carry out a proper analysis of the evidence in order to determine the true extent of the pay differential between the appellants and the Japanese secondees with whom they were compared. Only when such an exercise was completed could the tribunal identify the less favourable treatment meted out to the appellants.

In our judgment that complaint fails. In paragraph 35 of the reasons the tribunal acknowledge the admission by the respondents that the secondees were paid more than the appellants. They find that they were paid three or four times as much. That was the case advanced on behalf of the appellants and accepted by the tribunal.

The critical issues raised by the respondents were first, whether the treatment complained of was on the grounds of race, and secondly, whether the circumstances of the secondees were materially different from those of the appellants, other than the difference of race.

Considerable play has been made in this appeal of the changes in the respondents' pleaded case. That was a feature which the tribunal plainly had in mind. However, it had to evaluate the case advanced on behalf the respondents at trial, which came down to this. The reason why more favourable treatment was accorded to the secondees was because they were temporarily seconded to the United Kingdom with all that that entailed. It was not because they were Japanese. The fact that they were Japanese was, to use the Latin tags, the causa sine qua non, not the causa causans, of the disparate treatment. That was the case which the tribunal accepted. There was a material difference between the secondees and the appellants, other than the difference of race.

We have been referred to a number of the authorities during the course of submissions. Ultimately we have concluded that the tribunal adopted a permissible approach as a matter of law, and we consider that support for that approach is to be found in a decision of the Court of Appeal to which we were not expressly referred, that of Barclays Bank Plc v Kapur (No.2) [1995] IRLR 87.

Kapur (No.1) was concerned with the question of limitation. Finally, the House of Lords decided that the complaints were presented within time. [1991] ICR 208.

Kapur (No.2) was concerned with the merits of the complaints brought by former employees of Barclays Bank DCO in Kenya. Following "africanisation" in Kenya a number of Asian local contract staff transferred to employment with Barclays Bank in the United Kingdom. The issue was whether less favourable treatment meted out by Barclays Bank to Asian transferees in relation to pension rights, when compared with local employees, amounted to unlawful racial discrimination.

The tribunal found that the applicants, in not being able to count service in Kenya towards their pensionable service on retirement, had been discriminated against on grounds of their race. That finding was reversed by the Employment Appeal Tribunal, and that decision was in turn upheld by the Court of Appeal.

In giving the leading judgment of the Court, Balcombe LJ held that the reason for the Bank's refusal to credit the applicants' East African service for pension purposes was because they had in fact already been compensated for the loss of pension rights related to that service. Although motive is irrelevant, as the House of Lords held in James v Eastleigh Borough Council [1990] ICR 554, the offending criterion applied must be race, or in that case, gender-based. The Court of Appeal held that it was not on the facts as found in Kapur.

Reverting to the instant case, the tribunal found that the criterion applied for awarding the difference in pay was not that of race, that the higher paid staff were Japanese and the lower paid British Nationals, but that they were secondees from abroad. Subject to the question of perversity, that is a permissible ground on which it was open to the tribunal to decided the pay issue in favour of the respondents.

Before dealing with the question of perversity we should refer to the issue of causation. We accept Mr Allen's submission that the appropriate causation test is that identified by Mummery J in O'Neill v Governors of St Thomas More Roman Catholic School Voluntarily Aided Upper School [1997] ICR 33, 43F-H. In short, what is the "effective and predominant cause" or the "real and efficient cause of the act complained of"? Here, the tribunal found that it was the fact of secondment, not the fact that the secondees were Japanese.

As to perversity, the common thread which runs throughout Mr Allen's submissions is that the tribunal was bound to find, on the evidence, that secondment was racially tainted. That secondee is shorthand for Japanese. Accordingly, the very ground upon which the respondent contended that the difference in pay was not on the grounds of race, and which presented a material difference between the secondees and the appellants, was itself race-based and thus could not be relied upon.

The ground upon which the tribunal held that secondment was not a race based criterion were first, that the whole pay package of the secondees was affected by the fact of secondment; secondly, secondees need not necessarily be Japanese, although in fact they were and thirdly that locally recruited Japanese staff were paid at comparable rates to comparable indigenous employees. Despite Mr Allen's detailed submissions we are unable to conclude that such findings, and the conclusion drawn therefrom by the tribunal, can be characterised as perverse.

In these circumstances we have reached the conclusion that no error of law has been demonstrated in the tribunal's approach to the pay issue.

The promotion issue

Although the tribunal found that the non-promotion of Mr Wakeman to the post of General Manager in April 1993 was due to Mr Nakajima's antipathy towards him, which itself had a racial component, it rejected the appellant's case that this formed part of a policy by Quick of non-promotion on racial grounds. In these circumstances it rejected Mr Wakeman's complaint of non-promotion against Quick.

In attacking this part of the tribunal's decision Mr Allen relies principally upon the evidence and findings in relation to the Work Permit scheme, and contends that the finding that Quick had no policy of non-promotion for non-Japanese senior managers was inconsistent with the tribunal's findings in relation to racially discriminatory dismissals where it asked itself whether the respondents considered, as they were obliged to do under the scheme, whether the appellants could have carried out the jobs being done by the secondees - a question which it had answered in the negative.

In our judgment this tribunal showed great care in identifying and sifting the evidence and its materiality to the various issues which it was required to consider.

It does not follow from the finding that selection for redundancy was on racial grounds, that the respondent had a general policy of not promoting British Nationals to the highest managerial positions on racial grounds. Nor does it necessarily follow from the finding that Quick gave false information in the Work Permit applications.

We have concluded that the tribunal's findings in relation to Quick's promotion policy, or lack of it, was a permissible option.

Accordingly, we can see no grounds for interfering with that part of the tribunal's decisions.

Conclusion

It follows, in our judgment, that these appeals fail, and must be dismissed.