United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR J CAVANAGH QC (Of Counsel) Instructed by: Messrs Nabarro Nathanson Solicitors 1 South Quay Victoria Quays Sheffield S2 5SY
For the Respondent	MR M McDONOUGH (Representative) Messrs McDonough & Associates Linburn House 342 Kilburn High Road London NW6 2QJ


 


MR RECORDER LANGSTAFF QC:

1. By Extended Reasons promulgated on the 1^st March 2000, an Employment Tribunal sitting at London South found that the Respondents ("Centuryan") had unlawfully discriminated against Ms. Kelly on the grounds of her sex. The appeal against that decision is based on two discrete issues: first, whether the Tribunal had addressed the evidence before it properly; and, secondly, whether it adopted the proper test by which to determine (as it did) that Centuryan had victimised Ms. Kelly. For reasons which we shall explain in detail below, we shall dismiss the appeal on the first basis, but allow it on the second. However, it was conceded at the outset by Mr Cavanagh, Queen's Counsel, who appeared on behalf of Centuryan that in the circumstances of this case, a reversal of the finding in respect of victimisation would make no difference in any respect to the compensation awarded by the Tribunal to Ms. Kelly.

THE FACTS

2. Ms. Kelly became the Manager of the Enfield and Staines Branches of the Appellant security company in July 1998. She resigned on the 9^th October 1998. She did so for more than one reason. The major factor, in the view of the Employment Tribunal, was the reaction of Centuryan to complaints that she had made about sexual harassment from a customer of the Appellant, to which she was exposed during the course of her duties.

3. However, her letter of resignation gave one month's notice. Four days later she was subject to a disciplinary hearing at the conclusion of which she was summarily dismissed with effect from the 13^th October, without notice or payment in lieu of notice. The reason given for that dismissal was that Ms. Kelly had "..informed a new and important client falsely that the Staines branch team had walked out and that you had resigned."

4. The essence of Ms. Kelly's claim to the Employment Tribunal was that a building services manager employed by a client of Centuryan had complained to Ms. Kelly that a female security guard should wear a skirt, not trousers, so that he could see up her skirt when she climbed the stairs. He also wanted her to wear a ribbed jumper so that he could see the shape of her breasts.

5. She was subsequently told that the same manager had remarked that she, Ms. Kelly, had lovely legs. On each occasion that she met the manager between July and October he continued to make sexist remarks: the Employment Tribunal found that in respect of each she had complained to the general manager or to the finance manager of Centuryan, but on each occasion was told to get on with it. Matters came to a head on Thursday 1^st October when, at a meeting attended by Centuryan's general manager, the building services manager of whose sexist behaviour she had complained on earlier occasions touched her bottom and thigh. She said she had later complained, but had had no support: and again complained on the 7^th October when although it was agreed that the man's behaviour was disgusting she was told that the contract with the client was in jeopardy and that Centuryan could not afford to lose it.

6. At the same time, three senior members of staff reporting to Ms. Kelly were contemplating leaving the employment of Centuryan. They were dissatisfied with the management structure, and complained of lack of support from management. On the 8^th October, two of them told Ms. Kelly they were resigning. The response of the Appellant's management was to decide that Ms. Kelly should no longer manage both the Staines and Enfield branches, but be restricted to the Enfield branch. This upset Ms. Kelly, and she determined to resign.

7. What the Tribunal then found happened is expressed in the decision at paragraph 23:-

"Over the weekend (9^th to 12^th October) Stephen Phillips, the Managing Director of Centuryan informed Mr Bradley (the General Manager) that Nigel Carpenter the security consultant retained by Amoco on a site serviced by Centuryan had informed him that the Staines branch management team had walked out and that Ms. Kelly had resigned. Mr Phillips clearly took a dim view of the fact that the internal troubles of Centuryan should be broadcasted to clients. The question therefore arose as to how as to (sic) the route through which that information had been passed to Mr Carpenter. From an internal memorandum dated 1^st March 1999 which was an draft reply to a request by the Applicants for Further and Better Particulars, and from a careful examination of the Further and Better Particulars given, we have concluded that the person who passed the information was known to Centuryan to be Steve Pascoe. Mr Pascoe is referred to as the Amoco site supervisor, but is in fact employed by Centuryan. Ms. Kelly may well have told Mr Pascoe what had happened but we cannot see that that is in breach of her contract, for the site supervisor above all should know that his branch would have considerable problems in servicing the contract."

8. Ms. Kelly met Mr Bradley. He did not believe that the only person to whom she had spoken was Mr Pascoe. He said that she had commercially undermined the company and dismissed her with immediate effect for gross misconduct. The Tribunal found that she was given "no opportunity to state her case" and that Mr Bradley refused to discuss the matter any further.

THE TRIBUNAL DECISION

9. Against this background of fact, the Tribunal determined that Centuryan had known that sexual harassment of their employee, Ms. Kelly was taking place, and had not acted reasonably to prevent it: rather, they had failed to act. They thus found direct discrimination against her in failing to protect her from further acts by the building site manager responsible for the sexual harassment.

10. The Tribunal went on to find that the discriminatory conduct which this lack of support constituted was the major factor in her decision to resign. There being no valid dismissal for misconduct (because there was both no misconduct in the first place, and a flawed disciplinary procedure in the second), a causal link between the discriminatory conduct and the dismissal is apparent from the Tribunal decision.

11. The Tribunal dealt with the claim in respect of victimisation, pursuant to Section 4 of the Sex Discrimination Act 1975, in a passage which has taken on some importance. The Tribunal said this, at paragraphs 39 and 40:-

"39 Mr Bradley claims that he dismissed her because he understood that she had told Amoco of the troubles at Staines. But in cross-examination he had to admit that he had no evidence for this. Nobody told him who had passed the information to the Amoco security consultant. All he knew was that an Amoco officer had told his director that the Applicant had resigned and the management had walked out. It was therefore an unjustified assumption that Ms. Kelly had done it. We therefore believe that that allegation was the opportunity to dismiss her without notice and not the reason for doing so. The reason was that she had just resigned and he wanted an excuse to get rid of her.

40 That leads us to the following conclusions. He dismissed her because she resigned, she resigned because he had done nothing about W's harassment, he knew she had complained about W's harassment and the fact that he was doing nothing about it. It follows that if she had not complained about harassment she would not have resigned and he would not have dismissed her. In those circumstances we find victimisation proved."

THE APPEAL

12. The appeal against the finding of direct discrimination is centred upon the way in which the Tribunal dealt with a memorandum produced in evidence.

13. The occasion for its production was that Mr Bradley, in cross-examination did not accept that he knew that Ms. Kelly had spoken to Steve Pascoe, a Centuryan employee, rather than an Amoco official, and that he did not believe her protestations at the disciplinary hearing that this was all that she had done. Mr McDonough, who appeared for Ms. Kelly before the Tribunal as he had done before us, recalled that these assertions arose at a time when Mr Bradley was being asked about the Further and Better Particulars which Centuryan had supplied to the Tribunal. A memorandum, which Ms. Kelly claimed to have been handed by Mr Handley, and the existence of which she had told Mr McDonough of prior to the hearing, was then produced in evidence. In its material parts it purported to relate to a Request for Further and Better Particulars of the Respondent's Notice of Appearance, at Paragraph 7, in which Centuryan had said:-

"It came to the Respondent's knowledge that the Applicant had spoken to a major Client of the Respondent about their inability to provide the relevant service.

The Respondent carried out an investigation into the matter and after a disciplinary hearing on the 13^th October 1998 the Applicant was dismissed for Gross Misconduct."

14. The Request was for Further and Better Particulars of who it was who supplied the knowledge and precisely what was alleged to have been said by the informant, and when; and also what form the investigation had taken. The answer provided was (in its material part):-

"BP Amoco's Security Consultant, Mr Nigel Carpenter, informed the Respondent that Marie Kelly had spoken to his Site Supervisor on the morning of 12 October 1998 and informed him that all of the Centuryan branch management in Staines had walked out and that she too had resigned.

(b)On the morning of 12 October 1998 the information was passed to Stephen Phillips, Managing Director of Centuryan."

The investigation was said in these Further and Better Particulars to have been conducted by Arnold Bradley and it was alleged that he had spoken during the course of the investigation to:

"the client's Site Supervisor, Steve Pascoe. A verbal statement was made that was subsequently not documented."

15. On the face of the Further and Better Particulars, it thus appeared that the person to whom Ms. Kelly had spoken was Steve Pascoe: but that Mr Pascoe was identified (wrongly) as "his Site Supervisor" or "the client's Site Supervisor". The natural inference is that the expression "his Site Supervisor" in answer 1(a) was intended to be one and the same person as "the client's Site Supervisor" referred to in the answer under 2.

16. The memorandum produced purported to be an internal document passed by Mr Bradley to "Nicky" (a Ms. Contractor) for the purpose of completing a draft of these Further and Better Particulars. The answer indicated in the memorandum as appropriate under paragraph 1(a) of the Request was to the effect that Steve Pascoe had telephoned Marie Kelly with some operational concerns; that Marie Kelly had told him that all of the Staines branch management team had walked out and that Marie Kelly had resigned, and that Steve Pascoe the Amoco Site Supervisor had passed on the information to Nigel. It was confirmed that Arnold Bradley had spoken to Steve Pascoe on the telephone, and that Steve Pascoe had made a verbal statement confirming that course of events.

17. Although the Chairman's notes of evidence are of little assistance, it appears that the memorandum was produced because Mr Bradley's evidence seemed at odds with the interpretation put upon the Further and Better Particulars by Mr McDonough on behalf of Ms. Kelly. The memorandum clearly supported that interpretation.

18. However, what then happened was that Mr. Bradley (and Centuryan) disputed the authenticity of the memorandum.

19. Ms. Kelly gave evidence that she had been given it by a Mr Handley. Centuryan's representative then asked for an adjournment, so that he could speak to Ms. Nicky Contractor about the memorandum. The case was adjourned. When it resumed, despite the purpose of the adjournment, there was no evidence from Ms. Contractor, either orally, or in written form. However, a Mrs Hughes, Mr Bradley's secretary, submitted a written statement in which she denied typing the memorandum (although she was the person who typed memoranda for Mr Bradley); and Mr Handley denied having passed the document to Ms. Kelly. However, when Mr Bradley was recalled he now accepted that the Further and Better Particulars actually given were correct to the best of his knowledge. He acknowledged that Steve Pascoe was "our" site supervisor (i.e. a Centuryan employee) and (it appears, therefore, though this is in some doubt) that the word "client's" in the expression "the client's site supervisor – Steve Pascoe" was a mistake.

20. Despite having heard Ms. Kelly assert the authenticity of the memorandum, supported by the evidence of her sister, despite having heard Mr Bradley dispute it, supported by the written evidence of Mrs Hughes and the oral evidence of Mr Handley, and despite the surprising absence of any response from Ms. Contractor after an adjournment had been granted so that she might be contacted, the Tribunal said nothing conclusive about the authenticity of the internal memorandum. It dealt with it in paragraph 9:

"We have to record that attempts have obviously been made by one side or the other, possibly both, to deceive us. We do not say this lightly. Anonymous cards were received by the Respondent's witnesses, reminding them of their duty to tell the truth, and an internal document said to be from the Respondents came into the Applicant's possession after she had left, and although it had been in her possession from an early date was not produced to the Tribunal until the Respondent's case was nearing its completion. We listened to explanations and allegations surrounding these events, and could only conclude that the case was being presented to us in a partial light. We say no more."

In fact, more was said, as already recorded at Paragraph 7 above. The Tribunal added:

"We also record that the assertions made by Mr Bradley before us did not stand up to cross-examination."

They did not, however, immediately proceed to identify the assertions to which they were referring.

SUBMISSIONS

21. Mr Cavanagh Q.C. argued that the authenticity of the memorandum was critical. If it had been produced, for the purposes of litigation, by Ms. Kelly (as Centuryan alleged) then it threw into doubt her assertions that she had complained to Mr Bradley about sexual harassment, and that he had indicated to her in reply that she should get on with it (a matter he denied). If, on the other hand, Mr Bradley had lied about it, it showed that he had known all along that it was Mr Pascoe who had passed the information to Amoco, and therefore that his evidence that he believed that Ms. Kelly had spoken directly to someone in Amoco's employment was discredited. So central was it, that the Tribunal should have dealt with it in their decision. A failure to do so was a failure of law. He pointed out that the Court of Appeal in Flannery v. Halifax Estate Agencies Limited [2000] 1 WLR 377, @ 381C-382C had emphasised that this was a freestanding ground of appeal.

22. In the course of the judgment of the Court of Appeal in that case, Henry LJ emphasised the need to give reasons for a conclusion essential to the decision (381A-B). He observed (382A-C):-

"The extent of the duty, or rather the reach of what is required to fulfil it, depends on the subject matter. Where there is a straightforward factual dispute whose resolution depends simply on which witness is telling the truth about events that he claims to recall, it is likely to be enough for the Judge (having, no doubt, summarised the evidence) to indicate simply that he believes X rather than Y; indeed there may be nothing else to say. But where the dispute involves something in the nature of an intellectual exchange, with reasons and analysis advanced on either side, the Judge must enter into the issues canvassed before him and explain why he prefers one case over the other. This is likely to apply particularly in litigation where as here there is disputed expert evidence; but it is not necessarily limited to such cases.

This is not to suggest that there is one rule for cases concerning the witness's truthfulness or recall of events, and another for cases where the issue depends on reasoning or analysis (with experts or otherwise). The rule is the same: the Judge must explain why he has reached his decision. The question is always, what is required of the Judge to do so; and that will differ from case to case. Transparency should be the watch word."

23. He reminded us, also, of that which is said by Sedley LJ giving the judgment of the Court in Anya v. University of Oxford [2001] EWCA Civ 405, at paragraphs 24 and 25, referring in particular to that which Robert Goff LJ said in Armagas Limited v. Mundogas S.A. [1985] 1 Ll Rep 1, 57:

"It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence…reference to the objective facts and documents, to the witness' motives and to the overall probabilities, can be of very great assistance to a Judge in ascertaining the truth."

24. Mr. Cavanagh anticipated reliance by Mr McDonough upon Martin v. MBS Fastenings [1983] IRLR 198, in which at paragraph 19 Sir John Donaldson, MR said:

"So far as the.findings of fact are concerned, it is helpful to the parties to give some explanation for them, `but is not obligatory"

He suggested there was no conflict between that approach and the approach taken in Anya. In Martin, the challenge had been on the ground of perversity. It was authority for the suggestion that not every piece of evidence has to be reviewed in detail, a principle which was not in dispute: Mr Cavanagh submitted that here there was by contrast a crucial matter upon which a decision was required, rather than merely one piece of the picture which might, but need not, be recorded. Moreover, the decision in Martin was heavily reliant upon the view that the duty to give reasons had the purpose of enabling a party to know whether he had an appeal or not and that, since there is no appeal on a matter of fact from an Employment Tribunal to the Employment Appeal Tribunal there was no corresponding obligation to set out the facts in such detail. Mr Cavanagh pointed out that that approach preceded both the Human Rights Act, and the decision of Flannery. The latter case demonstrated that the duty to give reasons is freestanding, and this was adopted in the employment sphere by the Court of Appeal in Anya.

25. Mr Cavanagh still had to deal with a passage in the judgment of the Employment Appeal Tribunal, Mr Justice Morison, in Chief Constable of the Thames Valley Police v. Kellaway [2000] IRLR 170. At paragraph 48 is said:

"Whilst we would not condone a Tribunal decision which does not set out the relevant legal position and does not make findings of fact on all the principal submissions made, this does not amount to an automatic ground of appeal. It has to be shown that omitting to set out the legal principles or key submissions made has led to a consequent error of law or incorrect finding of fact."

26. Mr Cavanagh submitted that this formulation (relied on by Mr McDonough) was contrary to the reasoning of the Court of Appeal in Flannery v. Halifax Estate Agencies (see especially page 381-2), from which it appears that a ground of appeal is complete (or "automatic" in the words of Mr Justice Morison) even where it cannot be shown that there has necessarily been a consequent error of law or incorrect finding of fact, and should not be followed.

27. We accept the submissions of Mr Cavanagh insofar as they set out the applicable legal principles. We are, however, unable to accept that those principles require us to allow the appeal on this ground.

28. When it came to applying the principles, set out above, to the facts Mr Cavanagh was, in effect, inviting us to decide that the Tribunal was obliged to make a general finding of credibility. His argument was that a finding as to who was to be believed in respect of the memorandum would inexorably lead to a finding that that party's evidence should be believed on the other matters in dispute (whether Mr Bradley did, or did not know that Amoco management had been told by Mr Pascoe of the position at Staines, rather than by Ms. Kelly directly; whether or not Ms. Kelly had complained to Mr Bradley of sexual harassment; and whether or not Mr Bradley had been dismissive of her complaints). Yet this invitation to hold the Tribunal in error for not establishing general credibility (or lack of it) was the direct converse of the approach in Anya: where it was observed that a Tribunal was in danger of error where it simply made a finding of general credibility and determined the merits in accordance with that finding.

29. The Employment Tribunal had to determine the principal facts upon which his decision depended. On each of the critical matters of fact in issue, the Tribunal made specific findings. For instance, it set out the facts in some detail in three pages and in 17 paragraphs (from 11 to 28). In the course of these it indicated with particularity where it did not accept the evidence of Mr Bradley. These facts did not depend (directly, at any rate) upon the authenticity of the internal memorandum, save possibly for one matter. This was where the Tribunal said

"From an internal memorandum dated 1^st March 1999 which was a draft reply to a request by the Applicant for Further and Better Particulars, and from a careful examination of the Further and Better Particulars given, we have concluded that the person who passed the information was known to Centuryan to be Steve Pascoe."

This requires further consideration.

30. We have already set out the relevant terms of the answer to the Request for Further and Better Particulars. They show that the information came to Amoco from Amoco's site supervisor ("his" i.e. the Amoco manager's supervisor). It was not, therefore, passed to Mr Carpenter directly by Ms. Kelly. The answer to Part 2 describes "the Client's site supervisor" as Steve Pascoe. In the absence of any suggestion that there was more than one site supervisor the Further and Better Particulars would seem on their own to justify the factual conclusion to which the Employment Tribunal came without need for the memorandum. There is nothing inconsistent between the Further and Better Particulars and the memorandum in this respect.

31. Further, we have come to the conclusion that Mr Cavanagh's argument has, for its success, to assume a centrality of significance for the disputed memorandum which it simply does not deserve. Save for it being more explicit as to Mr Bradley speaking directly to Mr Pascoe before the disciplinary hearing, its terms are very similar to those of the Further and Better Particulars given. So far as the ability to make a finding as to whether or not Ms. Kelly had made complaints of sexual harassment, and been rebuffed, before the events of 7^th October, there was ample to support the Tribunal's finding. Thus, the Originating Application alleged that Ms. Kelly had complained to the company about remarks made to her on a number of occasions. In the Respondent's Notice this was acknowledged: "The Applicant did inform the company about some remarks made to her by a Client", and (from the penultimate paragraph) these appear to have been remarks related to sexual misconduct. However, the Chairman's Notes of Evidence show that Mr Bradley was claiming that the first complaint of harassment had been on the 7^th October, and there had been no earlier complaint (save in relation to "operational matters").

32. In short, on the matters which were essential to the conclusion which the Tribunal reached in respect of discrimination (i.e. the complaints made by Ms. Kelly, and the lack of response to them by the Respondent) there was evidence given by the parties, each in contradiction to the other; the Tribunal made specific findings of fact; those findings of fact are in themselves sufficient to explain to the parties why in respect of each they won, or lost; but in any event there was material quite apart from the memorandum to support the Employment Tribunal decision and it could not be said to be perverse. The cases demonstrate that the sufficiency of the reasons to be given in each case has to be judged in the light of the particular circumstances of each case. Desirable as it may have been to reach a concluded view as to the authorship of the disputed memorandum, we do not consider that it was essential for the reasoning of this case that that should have been done. We do not consider that the reasoning is deficient for failure to reach one.

Victimisation

33. Section 4 of the Sex Discrimination Act 1975 provides as follows:

"(1) A person ("the discriminator") discriminates against another person ("the person victimised") ... if he treats the person victimised less favourably than in those circumstances he treats or would treat other persons, and does so by reason that the person victimised has -

…

(d) alleged that the discriminator or any other person has committed an act which (whether or not the allegation so states) would amount to a contravention of this Act …".

34. This therefore requires a Tribunal to determine at least (a) that the less favourable treatment alleged was "by reason" of one of the matters thereafter specified; and (b) that one of the paragraphs (a) to (d) ((d) being relevant here) was relevant.

35. What the Employment Tribunal did, here, as our quotation from their paragraphs 39 and 40 at the outset of this judgment demonstrates, is take an approach which was entirely one of causation: in effect, it applied a "but for" test whereby it asked merely if the less favourable treatment (the dismissal) was caused by the harassment. Yet if one were to focus on the reason in the mind of the employer for the dismissal, the Tribunal found that that was because she (Ms. Kelly) had just resigned and he (Mr Bradley) wanted an excuse to get rid of her. There was nothing in the reasoning to link Mr Bradley's knowledge of Ms. Kelly's complaint about the harassment she had suffered, and the fact that he was doing nothing about it, to his decision to dismiss her.

36. As Lord Nicholls of Birkenhead pointed out in Chief Constable of the West Yorkshire Police v. Khan [2001] ICR 1065, at paragraph 29, the question is why did the alleged discriminator act as he did? What, consciously or unconsciously was his reason? Unlike causation, that is a subjective test. He added: "Causation is a legal conclusion. The reason why a person acted as he did is a question of fact." Lord Scott in his speech (paragraph 77) concluded that the words "by reason that" suggested that it was the "real reason, the core reason, the causa causans, the motive, for the treatment complained of that must be identified".

37. The only subjective reason in this sense for the dismissal of Ms Kelly which was identified here was that she had resigned. That is insufficient in our view to provide the necessary link between Section 4(1)(d) and the less favourable treatment. Nor did the Tribunal establish that the treatment given was less favourable than it might have been compared to others who had resigned; nor did it clearly apply the words of the section to the facts which it had to consider.

38. We have some sympathy with the Employment Tribunal, who may have misled by the way in which the decision in Nagarajan v. London Regional Transport [2000] 1 AC 501, HL, was appreciated prior to the decision in Chief Constable of West Yorkshire Police v. Khan (which was not available to the Tribunal at the time of its decision). Nonetheless, the passage demonstrates an error of law. Mr McDonough attempted to uphold the Tribunal decision on this point, notwithstanding the difficulties in his way, and accepting (in the course of those submissions) that there was a fault in at least in the way the decision was drafted. He contended that as a matter of principle it could not be right that a woman who is entitled to resign because of discrimination against her by her employer, and who is then dismissed, by reason of that resignation, could not claim that she had been victimised thereby. This submission, however, missed the point: the Employment Tribunal had already found that but for the direct discrimination there would have been no dismissal. Accordingly, on that basis (as Mr Cavanagh conceded at the outset) Ms. Kelly was in any event entitled to an award of damages to compensate her for the dismissal. This answers his argument. Moreover, a generalised appeal on the grounds of justice might assist if there was a finely balanced issue of statutory interpretation. There is none here: the statute must be applied, and Mr McDonough's argument rejected.

39. We have considered whether it would be right to remit the issue of victimisation to the Tribunal for reconsideration in the light of the law as we have stated it. However, we would see no useful purpose in doing so given that on the basis of our decision the financial award will remain undisturbed. Accordingly, we shall allow the appeal to the extent only that Ms. Kelly's claim that she was victimised by her dismissal stands dismissed. Otherwise this appeal fails, and the award of compensation made to Ms. Kelly by the Employment Tribunal stands.