United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR JEFFREY BURKE (One of Her Majesty's Counsel) and MISS JANE McNEILL (of Counsel) Instructed By: Messrs Doyle Clayton Solicitors 69-70 Mark Lane London EC3R 7HS
For the Respondent	MR M S PANESAR (of Counsel) Instructed By: The Commission for Racial Equality Elliot House 10-12 Arlington Street London SW1E 5EH


 


MR JUSTICE CHARLES:

General Introduction

1. We have before us appeals against decisions of an Employment Tribunal sitting at London North relating to liability and quantum. The decision relating to liability (the Liability Decision) was sent to the parties on 11 November 1999. The hearing had taken place over six days in March and July 1999 and the Employment Tribunal had then considered the case on two days in Chambers in August and October 1999.
2. The decision relating to quantum (the Quantum Decision) was sent to the parties on 19 November 1999. The hearing had taken place on 18 November 1999.
3. The hearing of these appeals was estimated to last one day. That estimate was a substantial under-estimate and after the first day the hearing had to be adjourned. This resulted in a long adjournment because of the difficulties of reconstituting this Tribunal. We regret this delay and the length of time it has taken for us to prepare and hand down this judgment.

The appeal against the Liability Decision

Introduction

4. The unanimous decision of the Employment Tribunal was that DSG Retail Ltd (DSG) the Respondent before the Employment Tribunal and the Appellant before us, discriminated against the Applicant before the Employment Tribunal (Mr Bawa) on racial grounds and victimised him contrary to the Race Relations Act 1976.
5. The claim for direct racial discrimination was based on one act, namely the move of Mr Bawa from DSG's Tottenham store.
6. The claim for discrimination by way of victimisation was based on protected acts relating to that move and the following matters:

(a) the visits on 9 and 11 September 1998 by a Mr Farnworth (Mr Bawa's new Area Manager) to the store then managed by Mr Bawa at Enfield and Mr Farnworth's letter to Mr Bawa of 15 September 1988,

(b) the visit of Mr Gilbert (DSG's Managing Director) to the Enfield store on 30 September 1998, and

(c) the issuing to Mr Bawa on 13 October 1998 (by Mr Farnworth), upheld on appeal on 27 October 1998 (by Mr Alexander), of a disciplinary warning.

In respect of (a) the only protected act relied on was Mr Bawa's letter of 7 August 1998 complaining of direct racial discrimination in respect of his move from the Tottenham store. In respect of (b) and (c) the issuing of a questionnaire under the Race Relations Act 1976 on 10 September 1998 was also relied on as a protected act. It was accepted that these were protected acts. Issues arose as to whether the relevant employees and officers of DSG were aware of their existence.

The general nature of DSG's case before the Employment Tribunal

7. In paragraph 67 of the Extended Reasons the Employment Tribunal summarised the submissions of DSG's counsel as follows:

"The tenor of her submissions as to why the Applicant should not succeed was that the Respondent had good grounds for taking the actions it took."

8. In the helpful skeleton argument put in by leading and junior counsel before us on behalf of DSG the case of the company before the Employment Tribunal was summarised as follows:

"DSG's case in relation to direct discrimination was that Mr Bawa's transfer from the Tottenham store relating solely to his management of that store. It was quite normal for managers to be transferred from a store where there were management problems, not least to give the managers the opportunity for a change and to refresh their management skills. The transfer was not a disciplinary penalty; and the past employment history of the transferee never played any part when decisions to transfer were made. The decision to transfer in this case had nothing to do with race.

DSG's case in relation to victimisation was that the matters complained of had no connection with Mr Bawa's complaint of discrimination or the service of the questionnaire. Mr Farnworth's management of Mr Bawa was caused by Mr Bawa's seriously unsatisfactory management of the Enfield store and in particular the appearance of the store, described by one of Mr Bawa's witnesses, Mr Marsh, as 'clearly unacceptable'. This was also the cause of the disciplinary warning. Mr Gilbert's visit to the store was a perfectly ordinary unannounced visit such as took place from time to time at all DSG's stores. Neither Mr Farnworth nor Mr Gilbert knew about Mr Bawa's complaint of discrimination or the questionnaire."

Junior counsel who appeared before us represented DSG before the Employment Tribunal. This summary shows that there were issues of fact before the Employment Tribunal that were essential issues.

9. As is apparent from the summaries DSG's case was that the reasons for the actions the company (through its relevant employees and officers) took, and which constituted the acts complained of by Mr Bawa, were related to Mr Bawa's performance and justified the actions of DSG.
10. In our judgment it is important to remember when considering the reasoning of the Employment Tribunal and the grounds of appeal that this was DSG's case and that at its heart were disputed issues of fact
11. Further in this context it is relevant to remember that as a consequence of the written and oral submissions made to the Employment Tribunal in paragraphs 70 and 71 of the Extended Reasons:

(i) the Employment Tribunal refer to King v Great Britain-China Centre [1991] IRLR 513 and Nagarajan v London Regional Transport [1999] IRLR 572, and

(ii) the Employment Tribunal quote from the well known passage in the judgment of Neill J in the King case when he sets out points in numbered paragraphs. Point (4) is as follows:

"(4) Though there will be some cases where, for example, the non-selection of the applicant for a post or for promotion is clearly not on racial grounds, a finding of discrimination and a finding of difference in race will often point to the possibility of racial discrimination. In such circumstances the Tribunal will look to the employer for an explanation. If no explanation is then put forward or if the Tribunal considers the explanation to be inadequate or unsatisfactory it will legitimate for the Tribunal to infer that the discrimination was on racial grounds. This is not a matter of law but as, May LJ put it in North West Thames Regional Health Authority v Noone [1988] ICR 813, 822, 'almost common sense'."

Additionally the Employment Tribunal said in paragraph 71 of the Extended Reasons (and this was in our judgment correct and not criticised by DSG:

"71 In Nagarajan, which confirms that victimisation can be both unconscious and conscious, it appeared to the Tribunal that the language used in the judgments of their Lordships reflected that the guidance provided in King had some relevance in victimisation cases."

The general stance of DSG on the appeal

12. It is clear that DSG do not accept that (i) the findings of fact, and (ii) the assessment by the Employment Tribunal of their witnesses and thus of the reasons advanced by DSG for their actions, are correct.
13. However, naturally and properly DSG accepted through their counsel that (i) the Employment Tribunal is the fact finding Tribunal, (ii) DSG cannot reargue the facts before us, and (iii) to successfully challenge a finding of fact DSG has to show perversity or that there was no evidence to support that finding. Such challenges are categorised as errors of law for the purposes of an appeal for this Tribunal and are accordingly grounds of appeal before us.
14. Thus DSG mount this appeal on (i) alleged errors of law, and (ii) an attack on some of the findings of fact on the above-mentioned bases.
15. The main errors of law relied on are (i) failure to properly ask and answer the relevance statutory questions, and (ii) failure to adequately explain the reasons for the decision (a "Meek attack"). As if often the case there was some overlap between those grounds and between them and the attack on the findings of fact on the bases mentioned above. Further, and as appears later in connection with the appeal against the decision on the victimisation claims, there is a connection between the attack made on some of the findings of fact and a failure to explain and the point that fairness requires a party to have a proper opportunity of being able to deal with a point or issue relied on by an employment tribunal in their reasoning.
16. In respect of the approach to be taken by us we were referred to decisions of this Tribunal, which I chaired, namely Lindsay v Alliance & Leicester plc (25/1/200); Dione v DSG Retail Ltd (10/11/2000) and Sands v Greater Manchester Passenger Transport Executive (11/1/2001). In those cases I referred to earlier authority on (i) the need to pose and answer the relative statutory questions and the making of a comparison, and (ii) the "Meek attack" (see in particular Lindsay, paragraphs 29 to 50, 51 to 55, 62 and 81, Dione, paragraphs 7 to 10, 23 and 25 and Sands, paragraphs 18 to 27).
17. It was common ground before us that those cases correctly set out the general approach to be adopted by this Tribunal. Additionally, and particularly in respect of the claim of direct discrimination DSG placed particular reliance on the passages therein which quote authority as to the need to make a comparison. Also in respect of the claim for victimisation DSG placed particular reliance on the passages therein as to the need to consider and analyse the separate issues of (i) less favourable treatment, and (ii) the causative link between such treatment and the protected acts or act. DSG also argued (and we accept) that the explanation given by an Employment Tribunal to the parties must be sufficient by reference to those issues (and indeed the other issues in the case) to explain why they have won or lost.
18. At the time that this appeal was argued before us the decision of the House of Lords in Chief Constable of West Yorkshire Police v Khan was expected shortly. We agreed that if either party thought that the decision of the House of Lords in that case had a bearing on this appeal that they would so inform us. Following the hearing we were informed by counsel for DSG that they were of the view that the decision of the House of Lords in the Khan case had no bearing on the issues in this appeal. In response I invited counsel for DSG to inform counsel for Mr Bawa that unless we heard from him we would proceed on the basis that neither side wished to make any submissions to us based on the decision in the House of Lords in the Khan case. This is the course we have adopted. Further, during the hearing we were told that the difference between the approach in the Khan case in the Court of Appeal and in the Lindsay case relating to taking into account a "race connection" (see the Sands case at paragraph 26) was not considered by the parties to be a relevant factor in this case. We have therefore not considered the decision of the House of Lords in the Khan case in this respect or otherwise in reaching our decision on this appeal.

The finding of direct discrimination

19. The headings of argument in DSG's skeleton and oral argument relating to this finding were:

(a) "the Comparison", and it was argued that the Employment Tribunal erred in law:

"in (a) comparing Mr Bawa's position to that of Mr Jobson who was not a proper comparator (b) failing, as was required generally and by Section 3(4) of the Race Relations Act 1976, to make a comparison with the true comparators whose circumstances were the same or not materially different."

(b) "the Respondent's central case", and it was argued that the Employment Tribunal erred in law in failing to consider or make findings of fact upon DSG's central case that the transfer of Mr Bawa was for sound business reasons, and

(c) "inference of racial discrimination", and it was argued that the Employment Tribunal wrongfully drew an inference of discrimination in the absence of any findings or material which supported such an inference, that the Employment Tribunal could only so infer if it made findings of primary fact from which it could properly infer that an actual of hypothetical comparator of a difference race would have been treated differently and further the Employment Tribunal wrongly confused the issue of reasonableness with the issue of differential treatment.

20. In our judgment none of these grounds of appeal are valid.
21. Before turning to deal with each of them in turn we comment that these grounds demonstrate, as do paragraphs 72 to 77 of the Extended Reasons, that the Employment Tribunal posed themselves the relevant parts of the relevant composite statutory question and went through that question answering:

(a) whether there was less favourable treatment (see paragraph 72 of the Extended Reasons),

(b) whether this was on the grounds of race (see paragraph 73 to 76 of the Extended Reasons) and

(c) in answering (b) the Employment Tribunal recognised that their rejection of the reasons advanced by DSG could reflect mere inadequacy (or we would add unreasonableness or unfairness) on Mr Fuller's and DSG's part and they had to go on to consider whether there had been discrimination on the grounds of race.

22. We pause to add that in our view the progression of reasoning in paragraphs 74 and 75 of the Extended Reasons shows that the Employment Tribunal considered the reasons advanced by DSG as constituting sound business reasons and rejected them with the result that in respect of DSG's case the Employment Tribunal found and considered that (i) the treatment Mr Bawa complained of was not justified as DSG alleged, and (ii) was unreasonable and unfair. These were findings of fact going to the heart of DSG's case. We repeat our acknowledgement that DSG do not accept that they are correct But when considering the Extended Reasons as a whole and the attacks that DSG make on them we repeat that we consider that it is important to remember that after hearing a considerable amount of evidence directed to the issues as advanced (and thus the issues then seen by the parties to be the most relevant issues) these are the conclusion of fact reached by the Employment Tribunal.

The comparison

23. Under this heading we were referred in particular to Effa v Alexandra Healthcare NHS Trust (CA 5.11.99) in particular pages 4 and 5 and to Marks and Spencers plc v Martin [1998] ICR 1005 (which is quoted in the cases referred to in paragraph 16 hereof). It was said on behalf of DSG and we quote from the skeleton argument put in on behalf of the company:

"It was necessary in law for the Employment Tribunal, in considering whether there was less favourable treatment on racial grounds to consider the comparator issue i.e. was Mr Bawa, who is Asian, treated less favourably than an actual comparator or comparators in the same circumstances or, in the absence of an actual comparator or comparators, with a hyopthetical white comparator in the same circumstances."

24. We accept that there is such a need. However, in our judgment both the cases and the relevant statutory language show that the need to make a comparison is directed, or primarily directed, to whether there has been less favourable treatment and thus to the first part of the composite statutory question and, as the quotation from DSG's skeleton argument shows, an actual comparator or comparators may not be of a different race. However, as for example the cases referred to in paragraph 16 hereof indicate the answer to the first part of the statutory question (i.e. less favourable treatment) may go a long way towards answering the second part (i.e. causation and whether the less favourable treatment was on racial grounds). As to this the comparisons made will be relevant and in particular whether the circumstances of the comparators are very similar apart for their race.
25. Additionally, the resolution of the primary factual issues between the parties can go a long way to answering the composite statutory question or a part of it. For example if, as in this case, (i) an employer advances valid business reasons which relate to criticisms of an employee's performance for the removal of that employees from a post which constitutes a detriment, and (ii) those assertions of the employer are rejected by the Employment Tribunal, it is likely that it would not difficult to see that the employee has been "less favourably treated". This is because on those findings a "like for like" comparison would be with an employee who had not been so criticised and who had not performed in a way that could be reasonably so criticised. This progression of reasoning does not lead to the same result on the issue of causation because the reasons for the invalid criticisms could be unreasonableness or otherwise nothing to do with the race. Thus if it applies causation has to be considered separately and this could be done when in the circumstances of the case there is no actual close comparator of a different race.
26. It was argued before us on behalf of DSG that Mr Bawa's predecessors as managers of the Tottenham store and who had been transferred were the proper comparators. Alternatively it was said that the examples of managers transferred from other stores for poor performance (or alleged poor performance) referred to by Mr Alexander in his witness statement were proper comparators. In contrast it was argued that Mr Jobson (the manager who was moved to the Tottenham store to replace Mr Bawa) was not a proper comparator.
27. Naturally we agree that the previous managers of the Tottenham store could be the most relevant or appropriate, comparators. However, to test this in our judgment comparisons would have to be made between the stores to which they were moved and the circumstances of the moves including whether they were agreed to and the reasons behind them. In this context it has to be remembered that, as we understand it, before the Employment Tribunal these predecessors were not advanced by either side as the appropriate comparators.
28. We accept that it was for Mr Bawa to prove his case. But as appears from the quotation of Neill LJ in the King case set out in paragraph 11 hereof, when an employer advances reasons for its actions it falls to the employer to provide the evidence, and thus the details, it relies on in respect of those reasons. The business reasons advanced on behalf of DSG were not that after the departure of Mr Marsh as the relevant area manager DSG through Mr Fuller (or anyone else) approached and dealt with Mr Bawa in the same way and for the same reasons as Mr Marsh (and thus DSG) dealt with Mr Bawa's predecessors. For example, and although we were referred to a lot of the evidence given before the Employment Tribunal, we were not referred to any evidence as to (i) the stores which Mr Bawa's predecessors were moved to, (ii) whether those moves could be regarded as promotions or demotions or moves sideways, or (iii) whether those moves were consensual.
29. The main witness on behalf of DSG in respect of the claim for direct discrimination was Mr Fuller (who was seconded to replace Mr Marsh as the relevant area manager on a temporary placement). Mr Alexander, the relevant division manager, also gave evidence of examples of other managers who had been moved for poor performance (or alleged poor performance). Additionally in argument before us DSG relied on findings made by the Employment Tribunal as to (i) the problems at the Tottenham store, (ii) Mr Bawa's predecessors as the managers of that store and (iii) Mr Bawa's earlier performance at Tottenham. It seems that those findings were based primarily on the evidence of Mr Marsh. We understand that he was called by Mr Bawa but that before the Employment Tribunal DSG relied on parts of his evidence to support their case.
30. The findings in respect of (i) the Tottenham store, (ii) Mr Bawa's predecessors as managers of that stores, (iii) Mr Bawa's proposed move in early March 1998 when Mr Marsh was the area manager and (iv) Mr Bawa's removal from the Tottenham store after Mr Fuller had become the relevant area manager include the following:

(a) there were problems at the Tottenham store that were inherent problems (see paragraph 72 together with paragraphs 16 and 18 of the Extended Reasons for this finding and the reasons for it),

(b) previous managers had become disillusioned or demoralised because of those problems and this had affected their performance as managers (see paragraphs 16, 21 and 72 of the Extended Reasons,

(c) prior to the absences of Mr Bawa for his trip to India following the death of his father and the birth of his son Mr Bawa had also in Mr Marsh's view become disillusioned and had had problems at Tottenham with the result that Mr Marsh decided that he should be moved and suggested a move to Chingford (a slightly larger store) which would have been a small promotion (see paragraph 21 of the Extended Reasons),

(d) Mr Bawa's predecessors had done well after transfer (see paragraph 16 of the Extended Reasons),

(e) Mr Bawa had initially done well at the Tottenham store which was in line with his past performance as a manager (see paragraphs 17 and 18 of the Extended Reasons),

(f) like the two predecessors Mr Bawa became disillusioned or demoralised because of the Tottenham store and this was the reason for the criticisms of his performance by Mr Marsh and the proposed move and small promotion that was initially suggested in early 1998 and included in the action plan of 1 May 1998 (see paragraphs 21, 26 and 72 of the Extended Reasons),

(g) Mr Fuller visited the Tottenham store during Mr Bawa's absence on special leave in India and did not get a good impression on that visit. Thereafter, he made criticisms of Mr Bawa's performance as manager which were not linked by him to the inherent problems at the Tottenham store (indeed, they were not so linked by Mr Fuller in his statement) (see paragraphs 23, 28, 29, 32, 33 and 34 of the Extended Reasons),

(h) Mr Fuller was told by Mr Alexander that Mr Bawa would not agree to a move to the Stratford store because it was a smaller store (see paragraph 33 of the Extended Reasons),

(i) when Mr Fuller suggested a move from the Tottenham store Mr Bawa refused because he said it would amount to a demotion (see paragraph 35 of the Extended Reasons),

(j) on 22 July 1998 Mr Bawa attended work and found both Mr Fuller and Mr Jobson at the Tottenham store and Mr Fuller told Mr Bawa that he had to go to Stratford which Mr Fuller said was not a demotion (see paragraph 38 of the Extended Reasons),

(k) on 28 July 1998 Mr Alexander agreed that Mr Bawa need not go to the Stratford store (see paragraph 39 of the Extended Reasons).

31. In our judgment the findings relating to the moves of Mr Bawa's predecessors from the Tottenham store and Mr Bawa's suggested move from that store to the Chingford store are to the effect that the problems relating to the performance of the managers were caused by the inherent problems at the Tottenham store and the disillusionment and demoralisation that they caused.
32. There is no finding as to whether the moves of the predecessors were consensual or small promotions as a move to Chingford for Mr Bawa would have been (and we repeat that we were not pointed to any evidence that was given as to these matters).
33. In contrast the findings of the Employment Tribunal in respect of the removal of Mr Bawa at the end of July 1998 from his position as the manager of the Tottenham store and, indeed, the overall tenor of the statements and evidence of Mr Fuller and Mr Alexander are that the removal from Tottenham and the proposed move to Stratford were based on criticisms of Mr Bawa's performance and attitude that were unrelated to (or at least were not caused or largely caused by or attributed to) the inherent problems at the Tottenham store and that a move to Stratford would be a demotion or could properly be regarded by Mr Bawa as a demotion even though Mr Fuller told Mr Bawa that this was not so.
34. In the summary of DSG's case included in the skeleton argument put in on behalf of DSG it is said that "the transfer was not a disciplinary penalty". It was not explained what was being referred to as "the transfer" and thus whether it was the proposed transfer to Stratford (see paragraph 38 of the Extended Reasons), or the temporary move to Chelmsford to an unidentified role (see paragraph 39 of the Extended Reasons) or the move to Enfield (see paragraph 43 of the Extended Reasons). We shall assume in favour of DSG that at the end of the day the transfer of Mr Bawa to be the manager of the Enfield store did not involve a disciplinary penalty (or a demotion). However, the less favourable treatment and detriment found by the Employment Tribunal was Mr Bawa's removal from the Tottenham store accompanied by the threat of a transfer to the smaller store at Stratford (see paragraphs 72 and 73 of the Extended Reasons). In our judgment it is clear from the findings of the Employment Tribunal that this removal and threatened transfer involved (i) personal criticism of Mr Bawa's performance, (ii) was an action of DSG which would cause the workforce of DSG to consider that Mr Bawa was being criticised and (iii) a threatened demotion or something that Mr Bawa was reasonably entitled to consider to be a threatened demotion, and that therefore it constitutes a detriment. Indeed it was not argued that on those findings and thus on the basis of the rejection by the Employment Tribunal of DSG's case that it was warranted by Mr Bawa's performance that it did not constitute a detriment.
35. In our judgment there is a very real difference between;

(a) an enforced removal of Mr Bawa from the Tottenham store coupled with a proposal or threat that he should be transferred to a smaller store at Stratford (and thus justifiably in his eyes demoted) on the basis of criticisms of his management without reference to his past history or that of other managers at the Tottenham store and the problems inherent at the Tottenham store, and

(b) moves from the Tottenham store of his predecessors as manager because the problems inherent in that store had caused those managers to become disillusioned or demoralised.

Those differences between the treatment of Mr Bawa and his predecessors would be increased if the moves of his predecessors were consensual and if those moves (like the proposed move of Mr Bawa to Chingford) involved a small promotion or at least did not involve demotion.

36. In our judgment the indications from the findings made by the Employment Tribunal as to the treatment of Mr Bawa as compared with the treatment of his predecessors as managers of the Tottenham store are that if the Employment Tribunal had taken those predecessors as comparators this would have favoured Mr Bawa's case rather than that of DSG. However, we accept that this is not relevant because (i) the Employment Tribunal did not treat those predecessors as comparators, and (ii) in our view before they could properly do so at the very least it is arguable that further evidence should have been given about them and further findings made based thereon e.g. as to the nature of the moves made by Mr Bawa's predecessors.
37. Turning to the examples given by Mr Alexander of other managers moved for poor performance, the Extended Reasons contain few findings in respect of them. Again (i) the Employment Tribunal did not treat them as comparators, and (ii) in our view before they could properly do so at the very least it is arguable that further evidence should have been given about them and further findings made based thereon.
38. In our judgment it follows from the fact that the Employment Tribunal did not treat as comparators either (i) Mr Bawa's predecessors as managers of the Tottenham store, or (ii) the examples given by Mr Alexander of other managers who, he said, were moved because of their poor performance, that the first issue to determine in respect of the comparison made by the Employment Tribunal with Mr Jobson is whether it was, as DSG argue, an impermissible comparison. If we consider that it was a permissible comparison, as we do, the next issue is whether the Employment Tribunal erred in law in respect of either or both parts of the statutory question by not additionally considering either or both of Mr Bawa's predecessors at Tottenham or the examples given by Mr Alexander as additional comparators or further than they did. We shall deal with this issue under the next headings of DSG's argument namely "the Respondent's central case" and "inference of racial discrimination".
39. As we understand it Mr Bawa advanced Mr Jobson as a comparator. Certainly, and as appears from his letter of complaint dated 7 August 1998, Mr Bawa's complaint was based on his replacement by Mr Jobson. This is understandable. It appears from paragraph 16 of the Extended Reasons that he may well have known little about the difficulties experienced by his predecessors as managers of the Tottenham store or their moves before Mr Marsh gave his evidence and it is likely that he would have known little about the examples given by Mr Alexander.
40. In his letter of complaint Mr Bawa said, amongst other things:

"I am compelled to write to you to express my deep dissatisfaction at the way I have been treated and the distress this has caused me after 16 years of service with the Group.

… I have had a successful time as my track record shows. I was managing the Tottenham Superstore until two weeks ago when I was abruptly removed from my position without being given a valid reason.

I arrived at work on the morning of Wednesday 22 July 1998 to find Alec Fuller and Tom Jobson at the store to the bewilderment of myself and the staff. What a way of handling a sensitive situation and what a way of dealing with a senior management!!!

I was told by Alec that he wanted me to go to the Stratford branch …

My great grievance is that I have been removed from my position without any reason. The branch is being extended marginally and remains on the same site. I am in the best position to manage it as I have successfully dealt with all the difficult issues within the store as well as achieving the key branch objectives.

Tom Jobson who was running West Thurrock has fewer credentials. Incidentally West Thurrock was one of the worst performing stores in the area. Therefore I fail to see how he could be promoted at my expense.

I strongly believe that I have been discriminated against and have been removed from my position to accommodate someone of lesser experience and a lesser track record. It is known for instance that Tom Jobson used to be Alec Fuller's deputy manager."

Mr Bawa's ET1 is in line with this.

41. When that complaint is considered in the knowledge of the background against which it was made, which was not simply that Mr Bawa had been removed as manager of the Tottenham store but that the proposal or threat was that he should transfer to a smaller store at Stratford (albeit that he refused to do so and initially went to Chelmsford and then to Enfield), the thrust of the complaint is that Mr Bawa was being unjustly removed as manager of Tottenham and demoted (or threatened with demotion) whereas Mr Jobson, whose track record was not as good as his, was being promoted from a store which was one of the worst performing stores in the area.
42. In paragraph 72 of the Extended Reasons the Employment Tribunal say this:

"72 … By contrast Mr Jobson was known by Mr Fuller not to have been entirely successful at West Thurrock since it was the worst store for targets and he had also heard that Mr Jobson was not well thought of. Notwithstanding this, Mr Fuller removed the Applicant (Mr Bawa), threatening to move him to a smaller store while effectively promoting Mr Jobson from the West Thurrock store. The Tribunal was satisfied that this amounted to a difference in treatment. It is also clear that there was a difference in race in that the Applicant [Mr Bawa] is Asian and Mr Jobson is white."

43. Paragraph 63 of the Extended Reasons record that Mr Bawa carried out a stock take at the Tottenham store in November 1998 and that in December 1998 Mr Jobson resigned as the manager of that store. However the Extended Reasons make no findings in respect of Mr Jobson's abilities and performance as a manager either at West Thurrock or at Tottenham or in respect of the evidence given by Mr Fuller and Mr Alexander as to their views concerning the abilities and promise of Mr Jobson as a manager.
44. However, paragraph 72 of the Extended Reasons contains findings that West Thurrock was the worst store for targets when Mr Jobson was its manager and that Mr Jobson was effectively being promoted. It is not argued that there was no evidence for those findings or that they were perverse.
45. Those findings relate back to the way in which Mr Bawa put his case and taken with the findings made as to the Tottenham store were to the effect that Mr Bawa had been removed (and threatened with demotion) from a store that had inherent problems which had demoralised or disillusioned Mr Bawa and his predecessors as managers, whereas (and in contrast) Mr Jobson had effectively been promoted from a store which was the worst one for targets in its area and therefore had some problems.
46. It seems to us that as was found by the Employment Tribunal that amounts to a clear difference in treatment and we see no reason why the Employment Tribunal should not have taken it into account and used Mr Jobson as a comparator on that basis. The fact that Mr Jobson was not being moved because of poor performance or alleged poor performance (either by him or at his store) does not mean as asserted by DSG before us that he was not a proper comparator. This is because the reasons why Mr Jobson was accepted as a comparator by the Employment Tribunal did not relate to and did not analyse DSG's reason for moving him.
47. The basis of the choice of Mr Jobson as a comparator was because he was effectively promoted from a store with problems whereas Mr Bawa was effectively demoted from a store with problems without on the evidence of DSG and the findings made by the Employment Tribunal any close examination of the history of the performance of either man at their respective stores (i.e. West Thurrock and Tottenham) or as to their general history.
48. In our judgment that is a perfectly permissible comparison for the Employment Tribunal to make by reference to the case advanced by Mr Bawa. Further in our judgment and subject to, and in the light of the defence of DSG, that comparison can properly lead to a finding of direct discrimination.
49. The next stage therefore is to consider whether having regard to the defence advanced by DSG the Employment Tribunal erred in law (i) by not making findings as to other possible comparators, (ii) in failing to deal properly with that defence or (iii) more generally in respect of either or both parts of the statutory question by not additionally considering either or both of Mr Bawa's predecessors at Tottenham or the examples given by Mr Alexander as additional comparators or further than they did. As mentioned in paragraph 38 hereof we shall deal with this issue under the next heading.

The Respondent's central case and inference of racial discrimination

50. As appears above Mr Bawa's complaint was not simply that he was removed from the Tottenham store but that in addition he was so removed without good reason and on the basis that he should move to a smaller store. It was not argued before us that the conclusion of the Employment Tribunal that Mr Fuller's proposal that Mr Bawa should move to Stratford was a threat of demotion was a finding that was perverse or not supported by any evidence. Additionally in our view the findings of the Employment Tribunal as to the manner in which this removal took place (which again were not challenged) clearly left much to be desired and we note that an apology was offered as to this at the Remedies Hearing (see paragraph 12 of the Extended Reasons for the Quantum Decision).
51. DSG's case was that they had sound business reasons for the "transfer" and it was not in any way connected with Mr Bawa's race. As mentioned earlier in this judgment in argument before us DSG did not define what they meant by "transfer".
52. In our judgment the threat of demotion cannot be ignored or swept up in a description of the events as a transfer from Tottenham. The summary of DSG's case quoted in paragraph 8 above seems to carry the implication that the move was prompted by, and was in accordance with, a normal occurrence or practice relating to the movement of a manager from a store at which there were management problems and we quote "not least to give the managers the opportunity for a change and to refresh their management skills". As we understand it this is why in argument before us DSG put such stress on the moves of Mr Bawa's predecessors at Tottenham and referred to the examples of the moves of managers for poor performance given by Mr Alexander.
53. But DSG did not through Mr Fuller (or Mr Alexander) put their case before the Employment Tribunal on the basis that Mr Bawa was being treated like his predecessors at Tottenham, or by reference to and like the examples given by Mr Alexander, and for that purpose invite the Employment Tribunal to consider the detail of those examples. Indeed, Mr Fuller's evidence was that he was driven by what he saw (see paragraph 4 of the Extended Reasons) and the reasons given for his (and thus DSG's) treatment of Mr Bawa as set out in the ET3, Mr Fuller's statement (and in particular paragraph 8 thereof where he says:

"Mr Bawa was not managing the store effectively and not giving the staff strong enough direction to ensure standards were maintained."

but also the paragraphs that follow) and the notes of his oral evidence, in particular at page 55 of those notes where it is recorded that Mr Fuller said:

"Moving him because way running store – knew in that position with that level of experience then something seriously wrong with mental state ie not thinking clearly and not able to cope with job and father's death – recognised not to take dp [disciplinary procedure] but look after Mr Bawa and remove from stressful situation rather than lose manager."

Thus DSG's case was that without reference to Mr Bawa's history at Tottenham or his more general history Mr Fuller's views as to Mr Bawa's performance warranted his (and thus DSG's) treatment of Mr Bawa.

54. We pause to comment that the concern expressed by Mr Fuller for Mr Bawa in the above quote from the notes of his oral evidence is at odds with the manner in which he effected the removal of Mr Bawa as manager of the Tottenham store (see paragraph 38 of the Extended Reasons) and the finding in paragraph 74 of the Extended Reasons (which was not challenged before us) that:

clearly Mr Fuller had no compunction about antagonising the Applicant (Mr Bawa).

55. It was thus in the context that DSG's case was that Mr Fuller's reasoning was based (or based primarily) on what he saw after his appointment as area manager that the Employment Tribunal, to our minds very properly, examined the evidence before it as to Mr Bawa's past history generally and the history of Mr Bawa and his predecessors at the Tottenham store and considered whether the reasons given by Mr Fuller and the bases for them warranted the treatment of Mr Bawa and constituted the real reasons for that treatment.
56. We therefore accept that, as submitted on behalf of DSG, that in considering DSG's case the Employment Tribunal had to consider whether the reasons advanced by Mr Fuller were true and thus whether the reasons for Mr Bawa's treatment were Mr Fuller's views as to his performance as a manager and were not connected with Mr Bawa's race.
57. In our judgment a fair and proper reading of paragraphs 74 and 75 of the Extended Reasons in their context shows that:

(a) the Employment Tribunal concluded that Mr Fuller did not act properly and that the matters relating to Mr Bawa's performance that he put forward did not warrant or provide sound business reasons for Mr Bawa's treatment, and

(b) although the Employment Tribunal are expressly less critical of Mr Fuller than they are later of Mr Farnworth the Employment Tribunal did not accept his evidence that the reasons he gave for his (and thus DSG's) treatment of Mr Bawa were the true reasons for that treatment.

58. The submission made on behalf of DSG that Mr Fuller stuck to his guns in cross examination does not mean that the Employment Tribunal had to accept his evidence.
59. If as he alleged Mr Fuller was motivated purely by his views as to Mr Bawa's performance, like the Employment Tribunal we cannot understand why he did not consult Mr Bawa's record or discuss matters with Mr Marsh further than he did and thus take into account the history of the Tottenham store and Mr Bawa's history more generally. We can see that an initial judgment as to Mr Bawa's performance could well be, and perhaps should be, based simply on what Mr Fuller himself observed, but we agree with the Employment Tribunal that a properly informed decision as to what should be done by reference to such observation both in respect of a decision to remove Mr Bawa as the manager at Tottenham, and as to the store he should go to, could not be properly made without a consideration of the relevant background and history.
60. In paragraph 74 of the Extended Reasons the Employment Tribunal say this:

"It did not appear to the Tribunal, having regard to its industrial experience, that a person in such a position would have taken such drastic action without considering the matter properly."

It is not clear to us whether by that sentence the Employment Tribunal were rejecting or simply commenting upon Mr Fuller's evidence as to the very limited consideration he gave to the relevant background and history. If it had to be considered in isolation the question whether the Employment Tribunal rejected that evidence given by Mr Fuller would be important. However, in the context of the overall rejection by the Employment Tribunal of Mr Fuller's evidence as to the reasons for the treatment of Mr Bawa, in our judgment the question whether this passage constitutes a rejection of, or a comment on, is not important because on either basis on a proper reading of the Extended Reasons the Employment Tribunal were of the view that Mr Fuller had not acted properly because either:

(a) if he had not consulted others and considered the history further than he alleged the problems he identified having regard to the findings made in respect of them (and in particular the point made in paragraph 74 of the Extended Reasons that Mr Fuller was aware that his first adverse impression of Tottenham was gained while Mr Bawa was absent on four weeks' compassionate leave) did not warrant Mr Fuller's (and thus DSG's) treatment of Mr Bawa, and

(b) if he had given greater consideration to the relevant background and history than he alleged this would have confirmed this view.

61. In argument DSG made a number of points by reference to the statements and notes of evidence to the effect that the Employment Tribunal had not properly understood DSG's case as to the importance of matters relied on by Mr Fuller and thus DSG (eg as to Mr Bawa's responsibility as the manager to replace the carpet in the staff room and the delay that occurred before this was done). We do not propose to go through each of these examples but we record that in our judgment none of them found an argument based on perversity or lack of any evidence in respect of the findings that were made.
62. As we have already mentioned, having concluded that Mr Fuller (and thus DSG) did not act properly the Employment Tribunal then go on in paragraph 75 of the Extended Reasons to expressly address whether that conduct reflected inadequacy. The Employment Tribunal thus expressly recognise the difference between the issue of reasonableness with the issue of differential treatment and we reject the argument that in considering it the Employment Tribunal confused the issue of reasonableness with the issue of differential treatment.
63. We agree that inferences have to be based on findings of primary fact which in turn have to be based on the evidence. In this case the findings and the reasoning of the Employment Tribunal which lead to their conclusion on causation are found primarily in paragraphs 74 and 75 of the Extended Reasons.
64. As to both the findings in paragraph 75, namely (i) the alleged disparity of treatment between Mr Bawa and Mr Jobson, and (ii) the points made as to Mr Fuller's evidence that he would take action very quickly if he thought there might be discrimination and as to his failure to take action upon complaints that Mr Bawa had discriminated in favour of Asians, DSG made submissions that the Employment Tribunal did not properly deal with the evidence by omitting reference to some of Mr Fuller's (and Mr Alexander's) evidence or by being selective. We do not accept that these arguments found a conclusion that these findings are perverse or not based on any evidence or, indeed, that they demonstrate a fundamental misunderstanding of DSG's case and of the evidence given on their behalf.
65. It was argued that paragraphs 74 and 75 do not hang together or lead to the conclusion reached that:

"Mr Fuller decided to remove the Applicant from Tottenham and threatened to place him in the Stratford store because of the Applicant's race."

We do not agree.

66. These paragraphs have to be read in the context of the citation from the judgment of Neill LJ in the King case which we have referred to earlier and the rejection by the Employment Tribunal of DSG's case that it had sound business reasons for the treatment of Mr Bawa. On the assumption in favour of Mr Fuller and DSG that the Employment Tribunal do not reject his evidence as to the consideration he gave to Mr Bawa's history generally and the history at the Tottenham store in our judgment the factors listed below properly found the conclusion reached by the Employment Tribunal. If the Employment Tribunal did reject that evidence this would be an added factor. The factors are:

(a) the Employment Tribunal found Mr Fuller's explanation to be unsatisfactory,

(b) the Employment Tribunal concluded (i) that Mr Fuller had not been acting properly and thus clearly in our view (ii) that contrary to DSG's case it did not have sound business reasons based on Mr Bawa's performance as manager at the Tottenham store for the treatment of Mr Bawa,

(c) in reaching the conclusions referred to in (b) the Employment Tribunal had regard to the history at Tottenham and thus the effect of the problems inherent at that store on its managers and the decisions made by Mr Marsh relating to them and his suggested move for Mr Bawa,

(d) Mr Fuller did not link his reasoning to either the examples given by Mr Alexander (or the one of them in respect of whom Mr Fuller had been a relevant decision maker) or with Mr Bawa's predecessors at Tottenham as to whom in any event for the reasons we have given there are, on the findings of the Employment Tribunal differences between the treatment of Mr Bawa and his predecessors at Tottenham, if as those findings indicate their problems were attributed to disillusionment or demoralisation based on the inherent problems at Tottenham,

(e) the finding that Mr Fuller had no compunction about antagonising Mr Bawa, which was a clear rejection of some of Mr Fuller's evidence as to his approach,

(f) the disparity of treatment of Mr Jobson who we have found to be a proper comparator. In this respect the disparity was between the effective promotion of Mr Jobson and the effective demotion of Mr Bawa, and

(g) the matters mentioned in paragraph 75 relating to Mr Fuller's evidence on his attitude towards discrimination and his stance in respect of his observation that the makeup of staff at the Tottenham store seemed weighted in favour of Asians.

67. We now return to the questions posed in the last paragraph under the heading "The comparison" above (paragraph 49) namely whether having regard to the defence advanced by DSG the Employment Tribunal erred in law (i) by not making findings as to other possible comparators, (ii) in failing to deal properly with that defence or (iii) more generally in respect of either or both parts of the statutory question by not additionally considering either or both of Mr Bawa's predecessors at Tottenham or the examples given by Mr Alexander as additional comparators or further than they did.. In our judgment the Employment Tribunal did not so err in law.
68. As to both Mr Bawa's predecessors at Tottenham and the examples given by Mr Alexander (and indeed other managers) we repeat that DSG did not advance them by way of justification for the treatment of Mr Bawa by comparing the complaints made in respect of them as to poor management, the reasons for such complaints or the nature of the moves. Indeed, it does not seem that DSG advanced their case by reference to Mr Bawa's predecessors at Tottenham and it seems to us that the examples given by Mr Alexander effectively go to what we would regard as the uncontroversial point that managers would be and were moved for poor performance and we would add (as is confirmed by the treatment of Mr Bawa's predecessors at Tottenham) from problem stores.
69. As to Mr Bawa's predecessors at Tottenham this history seems to be have been introduced (or introduced primarily) by Mr Bawa by reference to his assertion that there were no good reasons for his treatment based on his management of the Tottenham store. Naturally we accept that this evidence led to, and founded, the conclusion of the Employment Tribunal that Mr Bawa had had problems at Tottenham (see for example paragraph 72 of the Extended Reasons). Also we accept that if it is taken in isolation this finding provides some support for Mr Fuller's evidence and view that Mr Bawa was having problems in managing the Tottenham store. However in our judgment the force and effect of this finding has to be considered in the light of the totality of the findings and conclusions contained in the Extended Reasons relating (i) to the Tottenham store, its inherent problems and the disillusionment or demoralisation those problems had caused both to Mr Bawa's predecessors and to Mr Bawa, and (ii) to the move that was proposed by Mr Marsh for Mr Bawa which was a slight promotion. In addition it is to be noted that in his statement (see paragraph 10) Mr Alexander describes this proposed move as a surprising one. This description is in line with the case put by DSG before the Employment Tribunal and is a confirmation of the difference between the proposed treatment of Mr Bawa by Mr Marsh and Mr Bawa's treatment by Mr Fuller. This evidence of Mr Alexander therefore accords with a conclusion that the problems identified by Mr Marsh and their cause would not warrant the treatment of Mr Bawa by Mr Fuller.
70. In our judgment, having regard to the way in which the issues were put before the Employment Tribunal the relevance of the evidence and findings relating to the Tottenham store and the performance, as its manager, of Mr Bawa and his predecessors went to the issue whether the management problems identified and relied on by Mr Fuller justified his treatment of Mr Bawa. In our judgment the conclusions reached in respect of the Tottenham store and its managers support the conclusion reached by the Employment Tribunal that the problems relied on by Mr Fuller did not justify the treatment of Mr Bawa.
71. As we have said once that conclusion is reached in our judgment a comparison with Mr Jobson is a proper one by reference to the effective demotion of Mr Bawa and the effective promotion of Mr Jobson. Further, and in any event, once that conclusion is reached it seems to us that there is no need to go on to make detailed investigations as to other potential comparators within the examples given by Mr Alexander or by reference to Mr Bawa's predecessors.
72. Turning to causation, albeit that Mr Alexander in his statement expressly states in respect of all but one of his examples that the manager was white and we understand that the manager in the other example was also white as were Mr Bawa's predecessors at the Tottenham store DSG did not present their case by reference to the detail of Mr Bawa's predecessors or the examples given by Mr Alexander (or indeed by reference to the non-white managers set out in a schedule referred to by Mr Alexander or the managers referred to in paragraph 26 of Mr Fuller's statement) and therefore this did not form part of the reasoning advanced by DSG. In those circumstances it seems to us that a detailed analysis of the position relating to Mr Bawa's predecessors at Tottenham or the examples given by Mr Alexander, or indeed other managers who were moved for the purposes of comparing their circumstances and treatment with that of Mr Bawa was not necessary to enable the Employment Tribunal to resolve the issue of causation which turned on the assessment by the Employment Tribunal of the reasons given by DSG (an d thus the alleged thinking and approach of primarily Mr Fuller) for the treatment of Mr Bawa in all the circumstances of his case against a background that if those reasons had been accepted they would accord with the unsurprising contention that managers had been and could be moved (and demoted or sent for further training) as a result of management problems. Further and in any event:

(a) with the exception of Mr Black who is referred to in paragraphs 26 and 27 of Mr Fuller's statement and is one of the examples given by Mr Alexander, Mr Fuller was not a decision-maker in respect of the examples given by Mr Alexander.

(b) in his statement Mr Fuller records that Mr Black had accepted what he was saying as to his problems in management (which Mr Fuller said were similar to those being suffered by Mr Bawa) and agreed that if he took less responsibility and became a deputy manager for a limited period he could then learn under a more experienced general manager and he could then get his career back on track. Accordingly there are obvious differences between the position of Mr Black as advanced by Mr Fuller and that of Mr Bawa, and

(c) as we have pointed out there are differences between a move attributed to problems caused by disillusionment or demoralisation of a manager caused by inherent problems of a store and a move based on criticisms of management that are not so attributed and between a threatened demotion and a slight promotion or move sideways.

Overall conclusion on the claim for direct discrimination

73. The appeal against the finding of direct discrimination is dismissed.

The victimisation claims

74. Apart from the unannounced visit of the managing director to the Enfield store the acts complained of all relate to Mr Farnsworth's management of Mr Bawa. Mr Farnworth was the relevant area manager in respect of the Enfield store. As appears earlier in this judgment an essential part of DSG's case was that Mr Bawa's management at Enfield was seriously unsatisfactory and this was the reason why Mr Farnworth acted as he did. Accordingly, as with the claim of direct discrimination (DSG's case in respect of the claim of victimisation was that their conduct (in respect of these claims through Mr Farnworth and Mr Alexander who dealt with the appeal against the disciplinary warning given to Mr Bawa) was justified by reference to Mr Bawa's performance.
75. As to the visit of the managing director it was part of DSG's case that the unannounced visit had nothing to do with the protected acts and was simply an example of an unannounced visit which the managing director made from time to time at various stores.
76. Additionally it was argued on behalf of DSG that Mr Farnworth had no knowledge of the protected acts. An issue in respect of knowledge also arose in connection with the visit of the managing director.
77. Mr Alexander's evidence was relevant on the issues of knowledge of the relevant persons of the protected acts, namely (i) Mr Bawa's letter of 7 August 1998, and (ii) his questionnaire.
78. It follows that in respect of all the acts complained of DSG disputed both limbs of the composite statutory question. They said that the matters complained of did not amount to less favourable treatment and in any event they said that they were not caused by or related to the protected acts. An important and discreet alternative limb of the argument on causation was that even if the Employment Tribunal was against DSG on their case that there were sound business reasons for their conduct the acts complained of could not have been because of, or related to the protected acts because the relevant employees and officers of DSG did not know of the protected acts.
79. Mr Bawa's case was (i) that the conduct and actions of Mr Farnworth were not justified by reference to his performance and amounted to less favourable treatment, and (ii) that a significant reason for such treatment was one or more of the protected acts. So far as the visit of the managing director was concerned Mr Bawa contended that a significant reason for this was one or more of the protected acts and in particular (as we understand it) the sending of the questionnaire.
80. It therefore follows that although these claims were dealing with different matters there was an echo of the earlier claim of direct discrimination because there were significant issues between the parties relating to the performance of Mr Bawa and whether that performance warranted and was the cause of acts complained of. However, as we understand it, the claims were not put in the alternative as claims of direct racial discrimination and in any event they were not so dealt with by the Employment Tribunal. It follows that (and it was common ground) that different issues as to causation arose in respect of these claims in that a causal link had to be established between the acts complained of and the protected acts.
81. The need to link the acts complained or the protected acts introduces the issue of knowledge of those acts by the relevant people. In the claim for direct discrimination those people knew Mr Bawa's racial origin.
82. In our judgment a fair reading of the Extended Reasons shows that when they were dealing with the issue of knowledge the Employment Tribunal understandably did so by reference to knowledge of a complaint of racial discrimination and not simply by reference to knowledge that a complaint had been made. Thus the issue whether knowledge that Mr Bawa had made a complaint rather than one of racial discrimination and thus the issue whether there was a sufficient "race connection" (see paragraph 18 hereof) did not enter into the fact finding process, or the reasoning of the Employment Tribunal.
83. As with the claim for direct discrimination the Employment Tribunal do not accept the explanations and reasons advanced by DSG for the acts complained of and find against DSG on their case that the seriousness of the alleged misconduct warranted the actions taken. The Employment Tribunal also find against DSG on causation (and thus on knowledge).
84. In making their findings the Employment Tribunal record that they found Mr Farnworth to be an unreliable witness (see paragraph 80 of the Extended Reasons). In that paragraph the Employment Tribunal refer to inconsistencies in the accounts given by Mr Farnworth.
85. Further in our judgment when they are read as a whole paragraphs 82 to 84 and 89 of the Extended Reasons contain a finding of conscious discrimination by way of victimisation against Mr Farnworth. This is a serious finding which clearly involves a rejection of his evidence. The nature and effect of those findings is that Mr Farnworth consciously embarked upon an unjustified campaign against Mr Bawa and that a significant reason for this was the existence of one or more of the protected acts and in particular the letter.
86. Paragraph 87 of the Extended Reasons contains a finding that the Employment Tribunal did not believe evidence given by Mr Alexander as to his knowledge that Mr Bawa had sent a questionnaire and the knowledge of others as to this. This is a serious finding that related particularly to the visit of the managing director and the issue whether the sending of the questionnaire prompted, or was a significant reason for, that visit.
87. Further it is clear that Mr Alexander's evidence as to his knowledge of Mr Bawa's letter of 7 August, and more importantly what he told Mr Farnworth about it was relevant because in paragraph 81 the Employment Tribunal reached their conclusion that Mr Farnworth was aware of the letter and the subsequent questionnaire because (and we quote):

"It appeared to the Tribunal inevitable that Mr Farnworth's own manager, Mr Alexander, would have discussed a matter as serious as a complaint of race discrimination with Mr Farnworth in respect of a manager who had newly moved to Mr Farnworth's area. The Tribunal simply does not accept that there would have been no communication in respect of such matters of importance between Mr Farnworth and Mr Alexander."

The effect of this conclusion is a rejection of evidence given by Mr Alexander to the Employment Tribunal as to the content of his discussions with Mr Farnworth. It is thus a serious finding not only as against Mr Farnworth but also Mr Alexander. It is also an indication that the Employment Tribunal's approach to the issue of knowledge was whether Mr Farnworth knew that Mr Bawa had complained of racial discrimination rather than that he had made a complaint. Also it is an indication that it was accepted that Mr Farnworth had not seen the letter (or the questionnaire).

88. Mr Alexander gave evidence as to what he had discussed with Mr Farnworth. We were referred to passages in the notes of Mr Alexander's evidence at pages 92, 102 and 109 (by reference to the internal numbering of the notes rather than the bundle numbering) and to paragraphs 20 and 32 of his statement. Those passages show that Mr Alexander accepted that he had received Mr Bawa's letter of 7 August by 20 August 1998 and that he had had some discussions with Mr Farnworth to the effect that there had been problems in the Tottenham store over general standards with particular regard to merchandising and displays. In his statement Mr Alexander said that he was not aware of any allegations of race discrimination until he saw a copy of the letter Mr Bawa had written on 7 August 1998. As we have just mentioned the effect of his evidence is that he accepted that he received that by 20 August 1998 which was the day after his meeting with Mr Bawa when he offered him the appointment at the Enfield store. Indeed (at page 109 of the notes of his oral evidence – internal numbering) it is recorded that Mr Alexander said that at the time of the meeting on 19 August he had not received the letter although he was told by Mr Bawa that he had written it and that Mr Alexander got the letter the next day. Mr Alexander is further recorded as saying that during his discussion with Mr Bawa there was no mention of racial discrimination. We were not referred to any evidence that Mr Bawa had contradicted this. Mr Alexander further gave evidence that he thought he had dealt with the matter, that Mr Bawa was happy with a move to Enfield and so far as he was concerned that was the end of the complaint. The notes then go on to record the following:

"I would have asked if meant racial discrimination – when got letter did not think racial discrimination but that Mr Jobson been favoured which had been as got job – did not think racial discrimination.

Statement para 32 not aware of race discrimination until received that letter – because went to see Ms Irving and she said in her view was race discrimination – as far as I concerned I had dealt with issue."

The Chairman then said that he did not understand and the note continued:

"That was when I considered what may have been in Mr Bawa mind once Ms Irving made that point – I said had long conversation with Mr Bawa and appointed him to Enfield and he told me very happy with Enfield appointment and way dealt with and still upset with was Mr Jobson got it but I have left him on good terms."

Exchanges then continue between the Chairman and Mr Alexander to the effect that after Mr Alexander had discussed the letter with Ms Irving (and a date is not given for that discussion) he appreciated that the letter was making a claim of race discrimination but that after Mr Bawa had sat down with him and the appointment to Enfield had been agreed Mr Bawa was happy and there was no further cause of complaint and he did not wish to pursue any complaint of race discrimination.

89. This record of the evidence is fairly confusing and unclear and it may be that this was the case when the totality of the evidence was considered. We also have sympathy for the apparent view of the Chairman that the letter was fairly obviously making a claim of racial discrimination. But this record of the evidence shows that there were issues of fact before the Employment Tribunal as to whether:

(a) Mr Alexander thought that the letter contained a complaint of racial discrimination before he discussed it with Ms Irving and before his discussion with Mr Bawa concerning the move to Enfield, and

(b) Mr Alexander's view of the letter and the nature and continuing existence of Mr Bawa's complaint when he spoke to Mr Farnworth and particularly at the times that the Employment Tribunal conclude that he must have told him that Mr Bawa was making (and thus had made and was pursuing) or had made a complaint of racial discrimination.

90. Further we mention that in the notes of evidence (internal page 102) Mr Alexander says that Mr Farnworth did not know anything about the questionnaire. The notes then go on to deal with evidence relating to Mr Alexander providing information to answer that questionnaire. This is issue and therefore this evidence is dealt with in paragraph 86 of the Extended Reasons. The notes of evidence contain the following:

"Q Provided all this without having any idea that providing it in response to questionnaire under RRA.

Yes – When gave information to Ms Irving she had had various communications from Mr Bawa and I asked to give account of my involvement in whole situation to Ms Irving department which did through my personnel – I was not aware of questionnaire and did not know that procedure anyway.

I asked to give account of my involvement in proceedings to remove Mr Bawa from Tottenham.

At this stage thought everything resolved as he expressed happiness with move to Enfield."

Grounds of appeal

91. As in the case of the claim for direct discrimination DSG through their counsel properly recognised that findings of fact had been made against DSG the limitations of the jurisdiction of this Tribunal. In particular DSG recognised that a serious finding of fact had been made against Mr Farnworth. It seems to us that in respect of the issue of causation this is also the case in respect of Mr Alexander because the conclusion reached by the Employment Tribunal as to Mr Farnworth's knowledge of the letter (and the subsequent questionnaire) was that he must have been informed of it by Mr Alexander and this was contrary to Mr Alexander's evidence particularly if as in our judgment is the case the effect of the finding of the Employment Tribunal on knowledge is that Mr Farnworth knew that Mr Bawa had made a complaint of racial discrimination.
92. As with the claim for direct discrimination DSG addressed arguments as to both limbs of the composite statutory question and these included:

(a) an alleged failure to make a proper comparison,

(b) an alleged failure to properly explain the decision in respect of both aspects of the statutory question,

(c) allegations that there was a failure to base inferences on findings of primary fact and proper reasoning by reference to them and, in any event, that some of the reasoning was defective or inconsistent,

(d) allegations that the Employment Tribunal failed to deal properly with DSG's central case both as to their reasons for the acts complained of and as to knowledge, and

(e) argument that some of the findings of fact were perverse or unsupported by the evidence.

93. We do not propose to deal with all these arguments. We will concentrate on three of the arguments. These relate to:

(a) the finding in paragraph 81 rejecting Mr Farnworth's evidence that he was not aware of either Mr Bawa's letter of complaint or of the subsequent questionnaire, and thus as we read the Extended Reasons the conclusion of the Employment Tribunal that Mr Farnworth knew that Mr Bawa had made a complaint of racial discrimination, which is clearly an important conclusion in respect of causation,

(b) the conclusion in paragraph 82 of the Extended Reasons that (and we quote):

"The Tribunal is satisfied that Mr Farnworth felt able to do this as he works in a company which maintains a glass ceiling through which managers from ethnic minorities have only rarely in the past been able to break and above which there have not been any ethnic minority managers for some time."

(c) The following sentence in paragraph 84 of the Extended Reasons:

"Sending the memorandum by a deliberately slow means appears to the Tribunal to be little more than a crude attempt to set the Applicant up for failure."

94. Having regard to the conclusions we have reached by reference to these matters we have not in preparing this judgment re-visited the close detail of the other arguments advanced by DSG. However we record that at the end of the hearing and thus subject to their further examination in the preparation of this judgment we were of the view that they should all be rejected. In particular, and notwithstanding Mr Marsh's oral evidence on the photographs taken early in the morning at the Enfield store on 1 October 1998, we were of the view that the rejection by the Employment Tribunal that the acts complained of by Mr Bawa were warranted by reference to his poor performance as manager were not vulnerable to attack. We were of this view albeit that we accept that the three points referred to above have to varying degrees some relevance to this part of DSG's grounds of appeal.
95. However we of course accept and recognise (as in our view did the Employment Tribunal) that as in respect of the claim for direct discrimination that such rejection by the Employment Tribunal of DSG's case that their actions were justified by reference to Mr Bawa's performance and thus conclusions that DSG's actions and treatment of Mr Bawa were unfair or unreasonable and Mr Bawa was less favourably treated do not mean that he suffered discrimination by way of victimisation. It follows that if DSG can show that the Employment Tribunal erred in law in respect of, for example, the causative element of the statutory question DSG is entitled to succeed on this appeal.

The glass ceiling

96. In his IT1 and in paragraph 15 of his statement Mr Bawa complained that he was denied promotion. In paragraph 15 of his statement he said:

"But the company has a very poor record of promoting people from ethnic minorities. There is a relatively high percentage of sales people and junior managers (up to store managers) of Asian ethnic origin. They work hard and help the company successful (sic). However, there is a much lower proportion of superstore or megastore managers and I believe that there are no managers of Asian origin at the level of area managers and above. I find it suspicious that as one of the very few Asian origin people to have made it through the ranks, someone who could possibly apply for the post of area manager, I was removed in the way that I was. In my last 16 years with the company I have not seen any Asian or black people go on to become area managers and above."

This assertion was made (or made primarily) in respect of the claim of direct discrimination relating to Mr Bawa's removal from the Tottenham store. We were not directed to any evidence or arguments put on behalf of Mr Bawa that it was part of his case that these matters motivated Mr Farnworth to take the course that he did, or that they were relied on in respect of his claim for victimisation other than by way of background.

97. Paragraphs 7 and 8 of the Extended Reasons are in the following terms:

"7 The Respondent has a written equal opportunities policy (R1/165). However it was clear that the Respondent had not complied with suggestions contained in the Commission for Racial Equalities' Code of Practice. For example no training has been provided to managers at any level to implement the Equal Opportunities Policy. Furthermore no instructions are given to managers responsible for transfers, training, disciplinary matters and appraisals to ensure that they do not discriminate. The Respondent does not advertise vacancies for senior management posts. There are no written criteria set down for consideration of promotion, transfer and training.

8 At the time of the hearing and, as far as the Tribunal can make out, for some years before there were no senior managers above store manager levels from any of the ethnic minorities. However, in the past there had been three namely a Mr Iden or Idun, an Afro-Caribbean, who was a Personnel Manager who was appointed to the position of Regional General Manager which was the equivalent to what is now the Divisional Manager, Mr Kassan who was a Divisional Sales Manager and a Mr Paul who was an Area and then a Divisional Sales Manager. There are some Asian Store Managers. The Respondent provided two lists regarding promotion of employees said to be Asian or, in one case, Afro Caribbean (R2/2-3). Page R2/2 shows that Mr Farnworth had promoted three Asian employees from Deputy Manager to Manager in February 1999, November 1998 and March 1999, all after the Applicant had presented this complaint to the Tribunal. He also promoted three employees to higher positions in February 1998, June 1997 and September 1998 in respect of one individual and November 1998 in respect of the last person. The details at R2/3 show one promotion to store manager by Mr Farnworth (referred to on R2/2). Mr Alexander promoted one Asian employee to manager."

As paragraph 8 shows some information by way of schedule was provided by DSG. That paragraph is also directed to Mr Farnworth and Mr Alexander rather than Mr Fuller (and his predecessor Mr Marsh). By the phrase "so far as the Tribunal can make out" the Tribunal indicate that the information they had on these matters was limited.

98. By reference to evidence given by Mr Marsh and Mr Alexander DSG submitted that as a matter of fact the finding of a glass ceiling was perverse. Mr Marsh's evidence relating to Mr Idun, Mr Kassan and Mr Paul is reflected in paragraph 8 of the Extended Reasons but his evidence in cross examination (see page 42 of the notes of evidence) that in his view DSG was very much a multi-racial company and he would not tolerate discriminatory treatment of non-white members of staff is not referred to in paragraph 8 of the Extended Reasons or elsewhere.
99. The notes of Mr Alexander's evidence (see pages 97 and 98 – internal numbering of the notes of evidence) show that he was cross examined on this issue. The following question and answer is noted:

"Q ethnic minority clearly under represented in these posts – what is policy – what does Respondent do about under representation.

As there – what do I can comment on my division – we recognised under rep of female field representation – have taken steps and appointed one female area manager my division – from personnel appointed 4 female area personnel managers and one man – my divisional personnel manager is male but other 2 in Currys female.

Re ethnic minority I think figures show that at senior level there is under representation – what we are doing is actively seeking out talent that we can develop and promote – Basil Patel particularly good eg – very talented deputy manager – given significant development and opportunity – he has grasped the opportunity in face of some adversity from training point of view – now at very next level below area manager – flagship with £10m business – in store from which appointed most recent albeit white area manager – Chavda working in head office in senior position in partnership with Sun Alliance responsible for £50m business – promoted Chavda from publicity point of view into that position – will develop into very senior person.

It is not ideal but taking steps to improve situation.

Figures show picture not happy with – do not agree appalling – do not know if Tribunal should consider shocking.

Business many years – in time Asians and ethnic minorities have held senior positions in business.

Partly need to know past performance and personal interaction and seeing how run business."

This evidence is not referred to in the Extended Reasons. We were not referred to any other evidence relating to the policy of DSG concerning the promotion of members of ethnic minorities.

100. A finding that there is a glass ceiling in respect of ethnic minorities is a serious one and in our judgment this is a factor to be taken into account in considering (i) the adequacy of the reasoning contained in the Extended Reasons and thus whether it is based on sufficient findings of primary fact and reasoning, and (ii) the issue whether the company has been given a fair opportunity to deal with it.
101. In our judgment in making the findings that DSG maintains a glass ceiling and Mr Farnworth felt able to act as he did because of this the Employment Tribunal erred in law in that:

(a) they do not deal with the evidence of Mr Alexander (and less importantly Mr Marsh) as to the approach and policy of DSG at various levels having regard to the information relating to the race of senior employees of the company and do not explain why they have rejected that evidence in reaching this conclusion. This is an important matter for Mr Alexander personally and for DSG,

(b) although we do not agree or go so far as to say that the finding was perverse or that it was supported by no evidence in our judgment in the absence of an explanation as to why the evidence before the Employment Tribunal to the effect that the company did not maintain a glass ceiling was rejected and albeit that the conclusion is one of fact the Employment Tribunal have failed to properly explain why they reached this conclusion. The use of the expression a glass ceiling in paragraph 82 of the Extended Reasons is in addition to the reference to the few promotions of managers from ethnic minorities and in our view the findings in paragraphs 7 and 8 are not enough albeit that they provide a starting point for the finding that there was a glass ceiling. This is reinforced by the points made in paragraph 102 because they indicate that the Employment Tribunal did not use the expression glass ceiling to simply record the points made in paragraphs 7 and 8 of the Extended Reasons, and further and in any event

(c) the Employment Tribunal failed to give DSG a full and fair opportunity to deal with the issue before relying on it in the manner that they did as part of their reasoning in respect of the victimisation claims.

Point (c) was not expressly argued by DSG but was inherent in their other arguments.

102. We add that the finding is not simply that there was a glass ceiling but that Mr Farnworth felt able to rely on it. By implication this is a finding that Mr Farnworth (and perhaps other area managers) knew of the glass ceiling and acted by reference to it in their day to day dealings with managers. As to this and having regard in particular to the evidence of Mr Alexander and Mr Marsh in our judgment in concluding that Mr Farnworth felt able to act as he did because of the existence of the glass ceiling the Employment Tribunal further erred in law in the manner set out in paragraph 101 in that:

(a) they reached that conclusion without (so far as we are aware) the point being put to Mr Farnworth), and in any event

(b) without explaining why they reached this conclusion.

103. It was submitted to us on behalf of Mr Bawa that this part of the reasoning could be severed and ignored. We see force in, and have sympathy with, this submission because (i) as explained earlier it did not form part of Mr Bawa's case (other than by way of background), and

(ii) if one examines the progression of events after Mr Bawa left Tottenham and then after he arrived at the Enfield store in the context of the rejection of DSG's case that Mr Bawa's performance justified his treatment we see force in the argument that it was open to the Employment Tribunal to reach the conclusion that he acted as Mr Farnworth did because Mr Bawa had made his complaint of racial discrimination without any reference to the existence of a glass ceiling. Additionally it seems to us that the alternative argument advanced by DSG that there could be no rational connection between a glass ceiling beyond the position of manager and Mr Farnworth's treatment of Mr Bawa, which related to store standards and not to promotion, can also be said to be a factor which supports a conclusion that this part of the reasoning of the Employment Tribunal can be severed.

104. However, and albeit with some reluctance because of the rejection of DSG's case based on Mr Bawa's performance, we have concluded that a fair reading of the Extended Reasons shows that the reference to a glass ceiling is an integral part of the overall reasoning as to motivation that cannot be severed without doing violence to that reasoning and thus that it cannot be said that if the last sentence of paragraph 82 of the Extended Reasons is removed from that reasoning it is sufficiently clear that the Employment Tribunal would have reached the same conclusion particularly on the motivation of Mr Farnworth and thus on causation.

Mr Farnworth's knowledge

105. We accept that the finding that Mr Farnworth said to Mr Bawa "we won't talk about Tottenham" can be said to be an indication that Mr Farnworth knew that there had been problems at, or relating to, Tottenham but in our judgment as a free standing expression:

(a) it does not identify what is being referred to, and thus what the problems were and in particular that Mr Farnworth (as the Employment Tribunal found) "knew that the applicant ...Mr Bawa) had complained that his move from Tottenham had been discriminatory" in circumstances when it was not found that he had seen the letter written by Mr Bawa or discussed Mr Bawa's complaint with him and his source of information as to the complaint made by Mr Bawa was Mr Alexander, and

(b) it can be said to be consistent with the conclusion reached by the Employment Tribunal, or with the evidence given by Mr Farnworth and Mr Alexander.

Thus it seems to us that the critical analysis as to what Mr Farnworth knew and thus what he was referring to by saying this to Mr Bawa relates to the discussions he had with Mr Alexander.

106. We have referred earlier to evidence given by Mr Alexander about this and that it gave rise to the issues of fact referred to in paragraph 89 hereof namely whether:

(a) Mr Alexander thought that the letter contained a complaint of racial discrimination before he discussed it with Ms Irving and before his discussion with Mr Bawa concerning the move to Enfield, and

(b) Mr Alexander's view of the letter and the nature and continuing existence of Mr Bawa's complaint when he spoke to Mr Farnworth and particularly at the times that the Employment Tribunal conclude that he must have told him that Mr Bawa was making (and thus had made and was pursuing) or had made a complaint of racial discrimination.

These are not dealt with expressly in the Extended Reasons and the essential finding and reasoning is in paragraph 81 thereof which starts with the Employment Tribunal recording that they were understandably troubled by Mr Farnworth's evidence that he was not aware of the letter or the questionnaire. As to both (and in particular the letter) he would not have to have known of its existence to know that Mr Bawa had made a complaint of racial discrimination; indeed the finding is not that he knew of the letter but in our view is to the effect that Mr Alexander must have told him that a complaint of racial discrimination had been made because he would have discussed with Mr Farnworth "a matter as serious as a complaint of racial discrimination". The Employment Tribunal then go on to say that:

The Tribunal simply does not accept that there would have been no communication in respect of matters of importance between Mr Farnworth and Mr Alexander

It was not disputed that Mr Alexander had some discussions with Mr Farnworth and thus, as we understand it, they covered matters which Mr Alexander accepted he considered to be of importance. Rather DSG's case was that these discussions did not cover the points that Mr Bawa (i) had written a letter of complaint or made a complaint of racial discrimination, and (ii) had later sent a questionnaire. If it had been accepted Mr Alexander's evidence would have provided reasons as to why (i) he did not so inform Mr Farnworth, and (ii) he did not regard the complaint as of continuing importance, and thus an explanation for the comment of Mr Farnworth to Mr Bawa that was relied on by the Employment Tribunal by reference to matters other than a complaint of racial discrimination.

107. As we have said the finding in paragraph 81 of the Extended Reasons involves a rejection of both Mr Alexander's and Mr Farnworth's evidence. It does so in respect of an important aspect of DSG's case on causation. Although the finding is one of fact it seems to us having regard to the approach to be adopted by this Tribunal to the consideration of Extended Reasons (see paragraphs 16 and 17 hereof) and the nature and importance of the issue of Mr Farnworth's knowledge that by not dealing more fully with Mr Alexander's evidence (and indeed that of Mr Farnworth and Mr Bawa) on this issue the Employment Tribunal erred in law, in that:

(a) they failed to properly explain their conclusion,

(b) they failed to make sufficient findings of primary fact as to the content and dates of the relevant conversations upon which to base their conclusion that Mr Alexander must have told Mr Farnworth that Mr Bawa had made a complaint of racial discrimination (and later sent a questionnaire), and

(c) they failed to properly address an important element of DSG's case on causation.

The sending of the memorandum by a deliberately slow means

108. The memorandum was sent by internal post. The evidence before the Employment Tribunal as to the time for delivery if that method was used was about 2 or 3 days.
109. We accept that there was no evidence before the Employment Tribunal that by sending the memorandum by internal post Mr Farnworth chose a slow method for its delivery.
110. If this point is looked at in isolation we are of the view that it would not found an appeal and could be severed or ignored on the basis that it was an error that made no effective difference to the overall reasoning and result. However in our view it is supportive of the points made by reference to the glass ceiling and Mr Farnworth's knowledge that the Employment Tribunal have erred in law because it is another example of the Employment Tribunal making a finding without basing it on a finding of primary fact (i.e. as to the length of time taken by the internal post).

Overall conclusion on the victimisation claims

111. The three matters we have referred to relate directly to the acts complained of other than the visit of the managing director (i.e. those identified in paragraphs 6(a) and (c) hereof).
112. In our judgment the first two (i.e. the errors of law relating to the glass ceiling and Mr Farnworth's knowledge) mean that the reasoning and decision of the Employment Tribunal on causation in respect of the acts complained of identified in paragraphs 6 (a) and (c) are flawed and cannot stand.
113. We have considered whether the decision relating to the visit if the managing director can still stand. As to this in our judgment the lack of any direct evidence from DSG as to the circumstances in which, and thus the reason why, the managing director visited on the day he did was unfortunate. This evidence did not have to come from the managing director although a confirmatory statement from him could well have been appropriate. It could have been given by someone in his office or as hearsay after a discussion with the managing director. Indeed it may not have been the knowledge of the managing director that was relevant because he may have visited on the suggestion of someone else who had knowledge of the questionnaire and/or Mr Bawa's complaint and because of that made the suggestion of the visit.
114. If, as occurred, DSG's case relating to Mr Bawa's performance was rejected the lack of evidence explaining why the visit took place other than the evidence as to general practice made DSG vulnerable to the finding made on knowledge and causation.
115. We are unclear whether the phrase "the Tribunal did not believe this" at the beginning of paragraph 87 of the Extended Reasons relates only to that last sentence of paragraph 86 or the last two sentences thereof and therefore contains an express rejection of Mr Alexander's evidence relating to the questionnaire. But on either basis we have concluded that it cannot be said with any certainty that the Employment Tribunal would have reached the conclusion they did in respect of the visit of the managing director if they had not also reached the conclusions which we have concluded are flawed as to causation in respect of the other acts complained of. Therefore, in our judgment, the finding in respect of the visit of the managing director cannot stand and remain by itself.
116. DSG submitted that if we found in their favour on all their arguments we could decide the case ourselves and dismiss the claims. In our view that was a hopeless submission having regard to the issues of fact.
117. We remit the victimisation claims to a differently constituted Employment Tribunal. In our view the Employment Tribunal that heard the case will now not recall the detail and in any event if they hear the remitted case it could be said with some force that justice was not being seen to be being done.

The Quantum Decision

118. Having regard to our conclusion this cannot stand because it does not deal with the two claims separately. This absence of apportionment was a ground of appeal if we had dismissed the whole of the appeal against the liability decision. We make no findings on that ground of appeal but indicate that subject to further consideration when preparing this judgment we did not accept it. However (and on the same basis) we did see force in the ground that the Employment Tribunal compensated Mr Bawa for matters which did not form part of their findings on liability and could not have been caused by the direct discrimination or the victimisation found. That is not to say that on a reassessment of damages the effect and relevance of the "eggshell skull" principle should not be considered. The other ground related to evidence and the parties will have to consider what evidence they should advance on any reassessment of damages.

Conclusion on the appeal against the Quantum decision

119. We allow this appeal. We have considered whether it should be remitted to the same Employment Tribunal if Mr Bawa does not pursue his victimisation claims further but have decided that this would over complicate matters and for that reason and the reasons set out in paragraph 117 modified to the context of an assessment of damages for direct discrimination (as to which the same Employment Tribunal would have the difficulty of ensuring that they were not influenced by their previous award in respect of both claims) we remit the assessment of damages to a differently constituted Employment Tribunal. If Mr Bawa pursues his claims for victimisation the Employment Tribunal that hears those claims should deal with compensation for direct discrimination as well. It was in our judgment correctly not argued that the recommendations contained in the decision could stand if the award of compensation did not.

Miscellaneous

120. Although the reference to a glass ceiling seems to have been introduced by Mr Bawa in the context of the claim for direct discrimination it was not expressly referred to in the reasoning of the Employment Tribunal on this claim and in our view correctly DSG did not rely on the reference by the Employment Tribunal to it in their arguments against the finding on direct discrimination.
121. We note the apology offered by DSG as to the manner of Mr Bawa's transfer from Tottenham and that DSG told the Employment Tribunal that they took the case seriously and that procedures had been improved (see paragraphs 12 and 13 of the Extended Reasons for the Quantum Decision). Although it is not part of our role we express the hope that both parties will carefully consider the ending of this litigation by agreement.