United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MISS KATRINE SAWYER (Of Counsel) Instructed by Messrs Anderson's Solicitors 871 High Road North Finchley London N12 8QA
For the Respondent	MISS REBECCA TUCK (Of Counsel) Instructed by Messrs Dalton Barrett Solicitors 58 Britton Street London EC1M 5UP


 


MR RECORDER LANGSTAFF QC

1. This Appeal is an appeal by Ms Lana against the decision of the London (North) Employment Tribunal promulgated on 23 December 1999. The essential facts as found by the Employment Tribunal were these. Ms Lana was placed by the Respondent with a firm known as Walker Management as a trainee quantity surveyor. She was expected to be a trainee from 1 October 1998 until 30 September 1999. This placement was effected by two contracts. The first contract was one between the Appellant and the Respondent. The second contract was one between the Respondent and Walker Management.
2. It is of relevance that pursuant to the agreement made between the Appellant and the Respondent, the Respondent agreed by Clause 1 to provide the trainee with a work experience placement with Walker Management.
3. By Clause 3 the trainee-ship was subject to successfully completing a probationary period of three months. By Clause 4 the progress and performance of the trainee was to be reviewed at the end of each quarter against performance criteria which included standard of work, attendance and performance and conduct. Clause 10 provided that every two weeks there would be a meeting of at least one and a half hours duration with a designated supervisor in order to monitor progress and for the trainee to receive counselling if difficulties should arise.
4. The work experience programme was to be reviewed and developed in the light of her progress as reviewed at such meetings. Moreover, the same clause provided that the Appellant would have every six to eight weeks a meeting with a trainee support officer to discuss and review progress and work experience and receive counselling if any difficulties should arise.
5. The agreement between the Respondent and Walker Management provided that Walker Management there described as the employer agreed to pay to the Respondent the sum of £10,000 towards the trainee's allowance by four instalments. At clause 7, if Walker Management decided to terminate its engagement of the trainee it had to give period of notice as set out therein.
6. The relationship as a matter of fact between the Appellant, the Respondent and Walker Management necessarily therefore appears to be this. The Respondent was agreeing to provide the Appellant with training and was going to fulfil that obligation by placing her with Walker Management. Walker Management had agreed to fulfil that obligation effectively on behalf of the Respondent.
7. It therefore seems to us to be an ineluctable conclusion that Walker Management were properly to be regarded as the agent of the Respondent for the purposes of fulfilling the training obligations which the Respondent had entered into with the Appellant. After a period during which the Appellant had satisfactorily completed her probationary period and worked for some five months the events happened which have given rise to her claim and to this Appeal.
8. In February 1999 she realised that she was pregnant. She informed the Respondent that and was told that she should forthwith inform Walker Management of the fact. She did so. Upon her doing so she was told by a Director of Walker Management in evidence recited at paragraph 4 of the Employment Tribunal's Extended Reasons that she was in the wrong firm that she was not acquiring the relevant experience and that her performance had not been satisfactory. The Tribunal continue:

"According to Ms Lana, this Director informed her that the firm was too small to provide resources to train her and the Director was also not aware when she took her on that she was an undergraduate. The Applicant was also told at that meeting that they will be unable to renew her contract after the expiration of the first year."

The Tribunal continue;

"This appears to have coincided with the fact that Walker Management was informed that the Applicant was pregnant and expecting her baby in September, by which time her contract with Walker Management would have been completed."

9. The reasons advanced by Walker Management are open to obvious criticism. As to performance the Employment Tribunal accepted that the Appellant's evidence that no shortcomings in her performance had been discussed with her previously. It is a matter of surprise that performance could have been of any significant concern if:

(a) that the Appellant had successfully completed a probationary period when one would expect her performance to be under the most critical review

(b) that she had no doubt had each of the supervision half hours and meetings to which her contracts referred but had not been given any indication that her conduct was other than entirely satisfactory

(c) she had been given no counselling nor advice as to how to improve her performance if that was indeed an issue and

(d) this was in any event a matter raised contemporaneously with, and therefore open to the suspicion causatively related to, her telling Walker Management of her pregnancy.

As to telling her that she was in the wrong firm, again one would have normally have expected such an observation to have been made earlier it was to be made at all and indeed for it to have been apparent to the Appellant and there was nothing to suggest that it was.

10. Similarly the suggestion that she was not acquiring the relevant experience is open to the criticism that the relevance of the experience should have become apparent long before five months, almost half way through a placement had elapsed. One could well understand anyone let alone an Employment Tribunal well used to specious reasons as a cover for discrimination to conclude that the real reason was something different.
11. If it had indeed been said to her (and she alone gave evidence as to the conversation) that the firm was too small to provide resources to train her one wonders what it was that Walker Management had been doing for the previous five months. Nor does it seem to us to have any obvious relevance as a reason for terminating her engagement that it had not been understood that she was an undergraduate, particularly since the placement contracts make reference to continuing further education.
12. Moreover, there does not appear to have been on the Appellant's accounts any suggestion that any of these defects might be remedied in any positive and constructive manner other than by the Appellant forthwith leaving the premises of Walker Management.
13. We are conscious that much of what we have set out in the foregoing paragraphs may draw an observer to the conclusion that we are of the view that Walker Management had some other reason for seeking to dispense with the training of Ms Lana. We should therefore say at once, that we have endeavoured to recite the facts as they appear to us from the Employment Tribunal's Extended Reasons and it should be noted that no person in the employment of Walker Management gave evidence. Walker Management was not a party to the Employment Tribunal case. Accordingly, if anyone seeks to draw any criticism of them or conclusion as to their true motive from what we have said they should bear in mind that Walker Management have not themselves had the opportunity directly of answering any such allegations and we are troubled that that should be the case.
14. The Appellant understandably discussed what had happened with the Respondent. The Respondent for reasons, which are summarised at paragraph 17 of the Employment Tribunal's reasons, felt that they should terminate the contract between her and them. The reasons which the Employment Tribunal found were three:

"(a) the placement contract had been terminated by Walker Management for reasons beyond the Respondent's control;

(b) the respondents had no funding for the continuing of the Applicant's training contract; and

(c) the Respondents had no alternative placement for the Application to go to, as Walker Management was the only Quantity Surveyor Firm that they had on their books."

15. For those reasons the Respondent parted company with the Appellant. It is plain that what then follows as we read the Employment Tribunal's decision at paragraph 18 is by way of reference to the reasoning which the Respondent had for the termination of the Respondent's contract. At paragraph 18 the Tribunal says this:

"For those reasons (that is the three reasons in paragraph 17) we find that the Applicant's training contract was terminated; not because of her pregnancy and therefore her sex discrimination fails and is dismissed."

16. The Employment Tribunal appear to have concluded as they were fully entitled to do that so far as the Respondent was concerned it did not intend to discriminate against the Appellant nor did it consciously adopt any discrimination against her which Walker Management might have been guilty of.
17. The Employment Tribunal was in our view focussing upon the conduct of the Respondent viewed on its own in isolation from the conduct of Walker Management. The reasoning which was adopted began with the recitation of the submissions made to the Tribunal at paragraphs 12 – 13 and their view of that which section 14 of the Sex Discrimination 1975 required.
18. In short, they took the view that section 14 required a focus upon the Respondent's conduct alone and did not permit the Respondent to be made responsible for acts which were not its own acts but those of another albeit another,with whom they were linked in the contractual manner that we have described. It needs to be said because of what will follow in this judgment that any suggestion that the Respondent were themselves directly discriminating against the Appellant is falsified by the findings of the Tribunal.
19. Indeed it may be that any person, particularly an organisation which seeks to be a benefactor as we understand the Respondent does, may be in a difficult position if the law should make that organisation responsible for acts which are not its own and over which it has indirect control at best.
20. With that introduction we have therefore to consider the central issue in this case. It is whether the Employment Tribunal were right to focus upon the conduct of the Respondent in isolation from the conduct of Walker Management and whether they were right to conclude, as in effect they did, that whatever the reasons for the behaviour or indeed whatever an objective view of the behaviour Walker Management might be the Respondent was not liable for it because the law did not impose liability.
21. The Tribunal themselves observe that the Appellant might have pursued a claim against Walker Management but did not do so. The Tribunal reached no finding which is clear to us as to the nature of the true reason for the termination of the engagement at Walker Management. It may have been discriminatory, it may not have been. But we cannot see that the Employment Tribunal asked and answered that question in clear terms. We think this was because their focus was not upon the conduct of Walker Management at all given the view that they had taken of Section 14.
22. With that introduction accordingly we turn to the law. Section 14 of the Sex Discrimination Act which is headed "Persons concerned with Provision of Vocational Training" provides by Sub section 1 as follows:

"It is unlawful, in the case of a woman seeking or undergoing training which would help fit her for any employment, for any person who provides or makes arrangements for the provision of, facilities for such training to discriminate against her …..

In so far as is relevant

(c) by terminating her training

or

(d) by subjecting her to any detriment during the course of her training."

Sub section 2 effectively excludes people who are in training as employees. The Tribunal determined that the Appellant here was not an employee of Walker Management.

23. Miss Sawyer who appeared for the Appellant and who put her submissions cogently, persuasively and with enthusiasm urged upon us that Section 14 should be read so that any person in the position that she described as a principal, as was the Respondent in this case, should be liable for any discrimination that befell an individual trainee in the course of training albeit that that training was provided by others. This, she said, could be understood by a reading of Section 14 purposively bearing in mind that the Sex Discrimination Act 1975 is consonant with the Sex Discrimination directives and in particular 76/207, and she reminded us that cases decided before the European Court of Justice require an adequate remedy and a purposive and effective interpretation. In that light she referred us to the well known principles in Marleasing.
24. If however, Section 14 upon a purposive interpretation did not achieve this object then Section 14 read with Section 50, she said, would do so. Section 50 provides as follows, under the heading "Indirect Access to benefit etc":

"(1) References in this Act to the affording by any person of access to benefits, facilities or services are not limited to benefits, facilities or services provided by that person himself but include any means by which it is in that person's power to facilitate access to benefits, facilities or services provided by any other person, ("the actual provider")."

25. She pointed to the case before this Tribunal of Iske v P&O European Ferries (Dover) Ltd [1997] IRLR 401. That was a case in which a seagoing stewardess working for P&O on the Dover Calais route fell pregnant. She could not under the law be employed at sea beyond the 28^th week of her pregnancy (without her employers committing an offence). She sought work on shore but was denied it on the basis that her employers did not do that any more "the reason for that being that they had contracted out the catering work on shore to agency staff." This led to submissions made by Mr Bowers on behalf of the Respondent (see paragraph 31):

"Mr Bowers submits that the temporary catering assistants posts which the Tribunal found could have been filled by the Applicant were filled by agency and not by the Respondent directly. Accordingly the Respondent did not discriminate against the Applicant in the way he afforded her access to opportunities for transfer."

26. The Tribunal went on to reject that point on the basis set out in paragraph 36:

"In our view Section 50(1) is inserted for the avoidance of doubt where access to benefits, facilities or services are provided indirectly by the employer through a third party. It follows that the same principle applies to access to opportunities for permission, transfer or training."

and they go on to say (paragraph 37):

"In our judgment an employer cannot avoid the effect of Section 6(2)(a) of the Sex Discrimination Act by contracting out a job to which the employee could be transferred."

That rejection of the argument that the focus ought to be upon the principal's discrimination on its own is, Miss Sawyer says, echoed by the approach of the Employment Tribunal in the present case and equally wrong.

27. Miss Tuck, in her clear and frank submissions on behalf of the Respondent pointed out that the evidence accepted by the Tribunal in the Iske case was that there were other posts to which the employer in that case could have transferred the seagoing stewardess. On that basis she asked us to distinguish Iske because there it was plain that the employer had control over the opportunities which were denied the employee.
28. She observes that the in the course of her submissions Miss Sawyer accepted that Section 50 applied where the actions of a third party were within the scope of the control of the principal and that once it was accepted, if it was, that the activities here of Walker Management were outside the scope of the control of the Respondent no liability would follow under Section 50.
29. We consider there is considerable force in Miss Tuck's criticism of the use in the present context of Section 50. It is plain that Section 50 seeks to widen the scope of any provision which relates to discrimination in the provision of access to benefits, facilities or services from direct provision to indirect provision. But that does not answer the question whether the acts of discrimination have to be by the person who is indirectly providing the access to benefits, facilities or services just as they would have to be (under a restrictive reading of Section 14) to anyone providing such access directly.
30. Accordingly we think that Section 50 is not a provision which would on its own permit Miss Sawyer to succeed upon the construction which she advances of Section 14. However, Section 41(2) of the 1975 Act provides as follows:

"Liability of Employers and Principals …

Anything done by a person as agent for another person with the authority (whether express or implied, and whether precedent or subsequent) of that other person shall be treated for the purposes of this Act as done by that other person as well as by him."

31. If, therefore, as we have already indicated is our view, the relationship which any Tribunal would be bound to find in the present case between the Respondent and Walker Management that was that in the relevant respects Walker Management was acting as the agent of the Respondent then the Respondent would be liable for any discrimination, provided that that discrimination was done with the authority "whether expressed or implied whether precedent or subsequent" of the Respondent. Authority to commit discrimination was, Miss Tuck rightly observed, not something which the Employment Tribunal here found that the Respondent had conferred on Walker Management.
32. However, to read this subsection in that way would be to place an almost impossible restriction upon its utility. It is difficult if not impossible to conceive any situation in which a contract could lawfully provide an agent with the authority to discriminate. It seems to us that the proper construction of section 41(2) is that the authority referred to must be the authority to do an act which is capable of being done in a discriminatory manner just as it is capable of being done in a lawful manner.
33. It was within the authority of Walker Management to terminate the engagement of the Appellant under the provisions to which we have already referred. If that act was done in circumstances in which it constituted discrimination then it seems to us to fall full-square within the scope of Section 41(2). Indeed, this point having arisen in response to questioning from the bench it is fair to say that Miss Tuck herself could not suggest any way in which the section might be construed other than by an unrealistic constriction of the scope of the authority. The inevitable consequence is that Section 14 provides that where a person who agrees to provide or make arrangements for the provision of facilities for training discharges any obligation to make those arrangements by using another agency he will be liable for any act of discrimination which falls within the scope of that agency.
34. Taking the view that we do upon the interaction of Section 14 and Section 41(2) it is we think unnecessary to resolve the question whether Section 14 on its own would permit the interpretation for which Miss Sawyer contends. We can see that there are some difficulties with such a construction, but we accept the force of her point that if either on its own or in combination with Section 41(2) it did not cover a situation such as the present, then there would be a gap in the protection to which the 1975 Act aspires. There is ample scope for invoking a purposive approach. We do not need to invoke it upon the construction we have taken but we simply note that there would be lacuna in the protection to which we have referred if it were the case that an individual selected by another to provide training might discriminate. The lacuna would not necessarily be that that individual himself or itself could not be sued but there are or may be rather difficulties in enforcement, and as Miss Sawyer pointed out in part of her submissions it may perhaps be only natural for someone in the position as was the Appellant here of having a contract with a training provider to look to the training provider for redress if the training provided fell short of her entitlement.
35. Taking the view that we do on the statute as a whole and in particular of the interaction of Section 14 and Section 41(2) we think that the relevant question which the Employment Tribunal should have addressed was why it was that the engagement of the Appellant was terminated by Walker Management. If they had asked and answered that question they might well have concluded that it was terminated for a reason which by inference fell foul of the Sex Discrimination Act 1975. Have they done so then they would inevitably have been bound to find the Respondent liable, however well meaning the Respondent itself might have been when viewed in isolation.
36. Accordingly, the next question which we have to address is what order this Tribunal should make. We have (as perhaps the earlier part of this judgment might suggest) been tempted to exercise the discretion which we have to determine the issues before us for ourselves, upon the basis that all the evidence had been heard below. We have been urged by Miss Sawyer to do so on the basis that the application to the Industrial Tribunal made it clear that the circumstances and reasons for Walker Management's decisions were in issue at a time when there was no reference to the statutory framework by which that was to be made relevant. She points out that submissions were made to the Employment Tribunal as to the discrimatory nature of the reasons for that conduct.
37. Nonetheless, we are conscious that the conduct which is impugned is that of a third party. We are conscious that because of the focus which the Employment Tribunal took, wrongly concentrating as we see it upon the acts of the Respondent in isolation and taking as we understand it too narrow a view of the scope of the Sex Discrimination Act 1975, they did not perhaps investigate the circumstances as they might otherwise have done. And we have in the end been persuaded by Miss Tuck's submissions that the proper course would be to remit this case to an Employment Tribunal for determination of the facts in accordance with the law as we have stated it. We think that the appropriate order would be remit to a differently constituted Tribunal and would be happy to hear Counsel upon any further consequential order which they think might be necessary. For those reasons and to that extent this Appeal will be allowed.