United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR J HAND QC And MR J CAVANAGH QC (of Counsel) Instructed By: Mr David Fox The Treasury Solicitor Queen Anne's Chambers 28 Broadway London SW1H 9JS
For the Respondent	MISS K MONAGHAN (of Counsel) Instructed By: Mr K Harvey Principal Litigation Officer Commission for Racial Equality Elliott House 10/12 Allington Street London SW1E 5EH


 


MR JUSTICE LINDSAY (PRESIDENT):

1. On the 19th March 1998 the Employment Tribunal received an IT1 from Miss Marlene Morgan, a black barrister who was then, as now, employed by the Commissioners of Inland Revenue ("the CIR") in their Solicitors' Department. It was directed against the CIR and against Mr Brian Cleave C.B., the Solicitor of Inland Revenue and head of the Solicitors' Department. The claim as summarised in Box 1 of the form was for "Race Relations Act". On the 17th April 1998 both Respondents to that IT1 put in an IT3; discrimination was denied. Miss Morgan's complaint, they said, was then still being investigated by an independent investigator appointed under the CIR's Equal Opportunities Policy. In May 1998 the Respondents gave "additional grounds for resistance".
2. On the 22nd December 1998 the Tribunal received a second IT1 from Miss Morgan. It, too, was directed against the CIR and Mr Cleave. Box 1 of the second form was for "Victimisation contrary to section 2, Race Relations Act 1976". On the 18th January 1999 both Respondents to the second IT1 put in a second IT3; victimisation was denied.
3. Between the 12th and 23rd April 1999 the two IT1s were heard by the Tribunal at London (North) under the Chairmanship of Mrs E. Prevezer. On the 22nd June 1999 its unanimous decision was sent to the parties. It was:-

"1. The applicant was discriminated against contrary to sections 1 (1) (a) and 4 (2) of the Race Relations Act 1976; and

2. Was victimised contrary to section 2 (1) (d) of the Race Relations Act 1976.

3. We award compensation for the discrimination and victimisation in the sum of £6,681.20p."

Both the CIR and Mr Cleave appealed. Before us now we have an amended conjoined appeal of the CIR and Mr Cleave (for whom Mr Hand Q.C. leads Mr Cavanagh Q.C.) and a cross-appeal from Miss Morgan (for whom Ms Monaghan appears). Mr Cavanagh also appeared below, where Miss Morgan had been in person. As the argument before us has fallen out it can usefully be divided into 6 headings namely:-

(i) The time bar;

(ii) Direct racial discrimination under section 1 of the Act;

(iii) Victimisation under section 2 of the 1976 Act;

(iv) "Institutional racism";

(v) The monetary award and the cross-appeal;

(vi) Conclusion.

The Time Bar

4. Section 68 of the 1976 Act requires that for a complaint to be within the Tribunal's jurisdiction the IT1 must in general be presented within 3 months after the event complained of. However sub-section (6) provides:-

"(6) A Court or Tribunal may nevertheless consider any such complaint .... which is out of time if, in all the circumstances of the case, it considers that it is just and equitable to do so."

Sub-section (7) provides that any act extending over a period should be treated as done at the end of that period.

5. To the extent that Miss Morgan's original IT1 of the 19th March 1998 complained of the promotion of a white rather than of herself on the 23rd December 1997 it was presented within the required 3 months. On 21st September 1998 the Employment Tribunal indicated, as we shall revert to below, that the original IT1 could be treated as having been a complaint not only as to the event of the 23rd December 1997 but of a "course of treatment over a period". Miss Morgan was thereby seeking to bring her case as to earlier events within section 68 (7). On the issue of whether Miss Morgan could bring herself within sub-sections (6) and (7) the Employment Tribunal directed itself by reference to Sougrin -v- Harringay [1992] IRLR 416 C.A.; Littlewoods Organisation -v- Traynor [1993] IRLR 154; Barclays Bank -v- Kapur [1991] ICR 208 and Owusu -v- London Fire and Civil Defence Authority [1995] IRLR 574 EAT. That last case, like Miss Morgan's, concerned a failure of a claimant to progress upwards within an organisation. At paragraphs 21 and 22 of the Judgment of the EAT delivered by Mummery J. one finds:-

"The position is that an act does not extend over a period simply because the doing of the act has continuing consequences. A specific decision not to upgrade may be a specific act with continuing consequences. The continuing consequences do not make a continuing act. On the other hand, an act does extend over a period of time if it takes the form of some policy, rule or practice in accordance with which decisions are taken from time-to-time. What is continuing is alleged in this case to be a practice which results in consistent decisions discriminatory of Mr Owusu. It would be a matter of evidence for the Tribunal as to whether such a practice as is alleged in [the argument of Counsel for the employee] in fact exists. It may be that, when explanations are given by the Respondents, it would be shown that there is no link between one instance or another, no linking practice but a matter of one-off decisions with different explanations which cannot constitute a practice."

6. Mr Hand draws our attention to Commissioners of Police for the Metropolis -v- Hendricks, EAT unreported, in which the Employment Appeal Tribunal under His Honour Judge Serota reviewed a large number of cases including some of those cited above. There the question of the time bar had arisen, as it very commonly does, as a preliminary issue; the totality of the evidence in the Hendricks complaint, which was of both race and sex discrimination, had not been heard. The act there said to have continued over a period was that there had been "a generalised policy of discrimination against women and ethnic minorities in any way" - see para 57 of Hendricks. Unlike Miss Morgan's case, where there were allegations by her as to race discrimination by the CIR ranging beyond her own treatment and, indeed, beyond the racial discrimination of blacks, the Employment Appeal Tribunal in Hendricks held that the allegations made were all specific to Miss Hendricks - para 39. There had been no allegation in Hendricks of a discriminatory policy - para 7. The Employment Tribunal in Hendricks had nonetheless found a policy rule or practice resulting in the less favourable treatment of officers from ethnic minorities - para 12. At para 40 in Hendricks the Employment Appeal Tribunal said:-

"We take the view that the decision of the Employment Tribunal in inferring such a widespread and general practice goes far beyond anything in any other reported case. Generally, an "act extending over a period", as interpreted by previous authority relates to something concrete within defined and limited parameters as to place, extent and time; a practice, rule or policy will generally, as Mr Cavanagh submitted, requires some co-ordination or concerted action to link the actions from which such a policy, rule or practice can be inferred. No inference can be drawn if the matters are unconnected. A "practice" requires some consistent course of conduct, or habitual action. Although the Employment Tribunal was right to look at matters in the round there is still no justification that we can see for the inference of such a generalised vague and ill-defined continuing act, or even the somewhat more tightly drawn, but equally wide, policy, rule, practice, regime or climate, propounded by [Leading Counsel for Miss Hendricks]."

Mr Hand argues that the Morgan case also was a case in which nothing truly specific by way of policy, rule or practice was "pleaded" by Miss Morgan in the sense of having been set out in her IT1s. Miss Monaghan, however, argues that the conclusion in the Hendricks case was very much a conclusion on the facts of that particular case; a policy can nonetheless be a policy notwithstanding that it was only informal; there is nothing that requires it to be set out, for example, in some acknowledged writing. The practice alleged by Miss Morgan was far less general than was the case in Hendricks. A series of incidents had been given in evidence in the Morgan case, she asserted, relating to Miss Morgan and to others within the same or other ethnic minorities. The statistics, to which we shall return, also related to others than Miss Morgan alone and they, too, were consistent with a discrimination practice. Accepting the need for there to be some nexus between the various acts relied upon as indicative of a practice, Miss Monaghan pointed to the fact that all had been done under Mr Cleave's management and had been subject to his somewhat laissez faire attitude to complaints of racial discrimination. She urges that, the Tribunal not having misdirected itself on the law, the matter came down to one of fact and that, that being so, the rôle of the Employment Appeal Tribunal was circumscribed unless it had been demonstrated to it that the Employment Tribunal could not have come to the decision at which it arrived on the evidence laid before it.

7. In Miss Morgan's case the Tribunal, after citing a short passage from Owusu supra said:-

"We find that it is a continuous act within that definition and that there was a practice in accordance with which decisions were taken that amounted to continuous discrimination."

Quite what the "it" was that was found to be a continuous act the Tribunal does not explain, nor is it identified by grammar or context. However, the Tribunal plainly intended that its finding of "a practice" was sufficient to enable Miss Morgan to complain not only of the non-promotion on the 23rd December 1997 but also of earlier events. The vagueness of the Tribunal's conclusion causes us some unease but not so great that we feel that we have to set the decision aside as being a decision not open to the Tribunal on the facts which it heard or as being otherwise wrong in law. Mr Hand's assault on the time bar conclusion thus fails.

Direct Racial Discrimination

8. The Tribunal understood Miss Morgan's claim to be that she had "systematically" been treated less favourably than white employees in terms of career progression, culminating in her not being promoted at the end of 1997. The Tribunal held:-

"Having heard the evidence we find that there were continuous acts culminating in the progression of a white lawyer in January 1998 and the non-progression of the Applicant."

The Tribunal described the system by which periodic assessments were made of employees. There was nothing, as it seems to us, about the system itself that can be seen inherently to have prejudiced blacks or to have favoured whites. The word "systematically" as used by the Tribunal to describe the complaint would thus seem to mean only that the complaint was of less favourable treatment over a period but which did not generally consist of any deliberate or conscious acts of discrimination. At one point in her evidence Miss Morgan indicated she was not asserting that there had been conscious discrimination. Consistent with that, Miss Morgan's case below had relied in part on a statistical comparison between the progress of whites and the progress of those within ethnic minorities in the Solicitors Department.

9. Quite apart from statistics the Tribunal had before it a good deal of material consisting of reports, appraisals and assessments of lawyers other than Miss Morgan in the Solicitor's Department. The CIR had attempted, by reference to such material, to counter the charge of discrimination by shewing that others, whites, who had made faster progress, had done so on merit. The Tribunal declined to assess such material. At its para 35 it said:-

"It was accepted by the Respondents that the appraisal system they had in place was always subjective, based on the report of the line manager, and this Tribunal is not prepared to assess the reports as the line managers are the obvious proper persons to make that assessment on her workload during a given period."

There is force in Mr Hand's criticism that such unwillingness of the Tribunal deprived the CIR of a main line of defence to Miss Morgan's case so far as it was based on a few white comparators, namely that Miss Morgan's progress was dictated not by colour but by fairly-assessed comparative merit. It would have been preferable if that defence (involving assessments of some 7 lawyers) had been more fully dealt with but the fact that it was not does not deny force to the Tribunal's response to Miss Morgan's alternative or additional form of complaint based on statistics.

10. Miss Monaghan reminds us of W. Midlands Transport -v- Jaquant Singh [1988] ICR 614 C.A. where, delivering the judgment of the Court, Balcombe L.J. shewed that it was open to an applicant to point to certain facts which, if unexplained, were consistent with his being less favourably treated than others on racial grounds (at p. 618 g-h), that it then became incumbent on the respondent to satisfy the Tribunal that there was an innocent explanation ( at p. 619 a), that statistics might establish a discernible pattern in the treatment of a particular group (at p. 619 d-e) and that, whilst they may not be conclusive, the statistics might shew a racial imbalance and indicate areas of racial discrimination (at p. 619 f). As to the statistical approach the Tribunal held:-

"37. It appears that out of the lawyers recruited at the same time as the Applicants and put on probation, 9 who were white were progressed to B2 at 12 months or less and only one ethnic minority lawyer, lawyer HH Mr Saius, was progressed in less time than 12 months.

38. Of the 9 ethnic minority lawyers, who joined between 1988 and 1996 only one was regraded at 12 months and of the 21 white lawyers who joined during this period only one was not regraded at the end of 12 months.

39. It appears that out of the lawyers recruited at the same times as the Applicant 4 lawyers did not complete their probation period and they were all from the ethnic minority group. ......."

It is not clear to us whether the Tribunal had full material as to all 21 or more of those lawyers from which to adjudge whether each of their cases was explicable or not by reference to comparative and fairly-assessed merit. The fact (supposing it to be one) that the CIR could have adequately defended a case based on a comparative look at the 7 does not weaken the Tribunal's conclusion as to a statistical approach to the 21 or more, especially if a fully informed comparative view of their respective merits was not possible on the material which the Tribunal had.

11. The Tribunal's conclusion on that statistical approach, described by it as one of the "primary facts on which we base our decision" was:-

"It is clear that proportionately more lawyers of ethnic minorities had to wait longer than 12 months before being re-graded from the probation grade to Grade B2."

That was one fact as to which an explanation from the CIR was going to be needed. Another of the so-called "primary facts" was:-

"60 (3). In 1994 the Applicant's application for funding for her LLM was refused and the application by the white lawyer, lawyer FO, was granted. Only after this was pointed out to Mr Cleave did he change his mind and the Applicant commenced her LLM course in October 1994."

Yet another "primary fact" was:-

"60 (4). The Applicant's rate of progression to B1 was slower than the white comparators that have been brought to our attention."

That comparison depended principally upon a comparison between Miss Morgan's progress and that of three whites identified as "P", "G" and "L". The relevant stages of progress were from the very beginning of employment to the end of probation, then, if appropriate, from the end of probation to a grading as a B3, then (if appropriate) the length of time of the spell as a B3 until becoming a B2 and then the time spent as a B2 before going to the more senior rôle of B1.

12. Miss Morgan reached B1 some 8 years after commencing employment; she had not become graded as a B3 until some 5 months after ending her probation. She had next been a B2 for about 6½ years. In her last 2 years as a B2 she had been described in the material assessments as being fit for promotion to B1. Depending on whether one looked at overall time before Grade B1 was achieved or the length of service between the end of probation and a grading as a B3, or the length of service as a B3 before becoming B2 or as a B2 before becoming a B1, different comparisons emerge between Miss Morgan's progress and that of her comparators but the Employment Tribunal's conclusion at its 60 (4) supra, as a generalisation, was in our view open to it to make. That there was a racial difference between Miss Morgan and her comparators was, of course, undeniable so that Employment Tribunal was entitled to look to the CIR and to Mr Cleave for an explanation as to why the less favourable treatment which the Tribunal had found had occurred.
13. The Tribunal deals with such explanations in its paragraph 79 which begins:-

"79. We then considered the evidence that we heard on behalf of the Respondents as to the explanation as to why all these matters mentioned by the Applicant had happened. The explanations given are not satisfactory or adequate."

Paragraph 79 then continues with three sub-paragraphs. It cannot be pretended that the sub-paragraphs deal with everything of which explanation was either required or given or even that the Employment Tribunal's reasoning is beyond criticism. Thus sub-paragraph (1) reads:-

"(1) There is no satisfactory explanation as to why the Applicant was retained as a grade B3 for an extra five months when many of her comparators were regraded after 12 months. Mr Bousher gave the explanation that the Applicant had a disastrous appeal that destroyed her confidence but it is clear that not being regraded would not boost her confidence in these circumstances."

It can be said that it is not clear whether, by dealing only with Miss Morgan's five- months spell after completing her probation before being graded as a B3, the Tribunal was accepting that all other prolongations she complained of were sufficiently explained away. However, other references by the Tribunal shew that not to be the case. The reference to the "disastrous appeal" is, though, curious; it was a reference to a Revenue Tax Appeal which Miss Morgan had been required to handle but which, so-to-speak, went wrong, thus damaging her self confidence. One might think that her consequential lack of self confidence was a reason for not immediately grading her B3. A grading as B3 could, surely, properly be regarded as an acknowledgement by the CIR of an existing sufficient self confidence rather than as a fillip so as to create it.

14. Whilst the reasoning in 79 (1) may be weak, the Employment Tribunal's rejection of the explanation of the failure at first to give Miss Morgan funding for her LLM (the Tribunal's paragraph 79 (2)) cannot, in our judgment, be seen to be a conclusion unsupported by evidence given.
15. Sub-paragraph (3) of para 79 dealt with a conflict which arose because it was suggested by the CIR that line managers reported as to suitability for promotion upon the employees within their charge without reference to their predecessors in the rôle and without taking into account the views of others. In the case of "L", the white of whose promotion Miss Morgan chiefly complained, she was moved from being regarded as "ready" for promotion to being "strong" for promotion by way of a degree of collaboration between her line manager and another, a collaboration which was not made in Miss Morgan's case and which disproved to some extent the evidence about such reports always being drawn up wholly independent of the views of anyone but the line manager making the report. Whilst the detail given in sub-paragraph (3) was flawed, the conclusion it drew was, as it seems to us, open to the Tribunal.
16. Although we would have undoubtedly preferred to have seen a more thoughtful and detailed dealing by the Tribunal with the explanations given by the Revenue and by Mr Cleave, and although, as we have mentioned, we do feel some unease at the Tribunal's dealing with such detail as it condescended to deal with, we do not feel able to hold that its conclusion that the explanations given on the employer's side were not satisfactory or adequate was not a permissible option.
17. The Tribunal said:-

"73. We find that the Applicant was discriminated against directly because she was treated less favourably by the Respondents in that she failed to be progressed at the same rate as her comparators and that includes the extra length of time she was kept on the probation grade and that she failed to get the funding [for the] LLM."

That was not a mere intuitive hunch - compare Chapman -v- Simon [1994] IRLR 124 at para 43 - and is a conclusion which we cannot describe as having been reached in error of law. The appeal as to direct discrimination is thus dismissed.

Victimisation

18. In her second IT1, presented on the 22nd December 1998, Miss Morgan complained firstly that Mr Cleave's circulation within the Solicitors' Department of a Memorandum of the 7th October 1998 represented victimisation within section 2 (1) (a) of the 1976 Act.
19. The Memorandum was addressed by Mr Cleave to "All lawyers". It went to some 50 people, the lawyers in the Department. It spoke briefly of Miss Morgan's complaint of racial discrimination and that its hearing was imminent. It gave "a general warning" that because of Miss Morgan's references to comparators and of the fact that her case had been extended to run back as far as 1992, details of personnel records might possibly become public knowledge. Mr Cleave said he had attempted to anonymise information but that Miss Morgan's Counsel was pressing for names to be supplied and that anonymity might be lost. Personal details could thus appear in the Press. We will quote its last paragraph later.
20. Secondly, she alleged that another form of less favourable treatment - the circulation by either or both of the Commissioners of Inland Revenue and Mr Cleave of false and misleading statements about her - was done by reason of her having launched her first IT1.
21. The subject was mainly dealt with by the Tribunal in four widely-spread paragraphs namely:-

"32. Mr Cleave on learning that the Applicant was asking for discovery of certain documents for the hearing on 8 October sent a memorandum to all the solicitors in the office informing them of the case and warning them that their personal details, as on their personal files, might be revealed to the Applicant and the public. This caused difficulty for the Applicant especially as it was quite clear that at that stage that no order for the discovery of documents had been made and if they were going to be made at the hearing in October then the actual hearing would not progress. This is the basis of the Applicant's second claim of victimisation."

"62. It is accepted that the memoranda written by Mr Cleave was directly related to the fact that the Applicant had presented her Application under the Race Relations Act 1976 to this Tribunal and the subsequent treatment of the Applicant, including the difficulties with Ms Shearer, flow [from] that."

"74. We also find that she was discriminated by way of victimisation as it is clear that the memorandum that was sent by Mr Cleave directly related to the proceedings that the Applicant had brought under the Race Relations Act and the interpretation of that memorandum is that other people would view her less favourably than they would view white lawyers......"

"80. It is clear that the memorandum, which has been admitted was sent by Mr Cleave, was directly in relation to the Applicant bringing a claim which brings it within section 2 and it obviously had an adverse effect on the attitude of the colleagues of the Applicant to her bearing in mind the wording of the memorandum."

22. To deal first with the second part of the victimisation complaint, the only specific ground Miss Morgan which had asserted for the view that misleading statements had been circulated about her was that a fellow but more senior employee in her department, her line manager Miss Shearer, had said to her "I resent being called a racist". Miss Morgan had continued:-

"The only way that Miss Shearer could have arrived at her apparent belief that the Applicant was accusing her of being a racist was from information supplied by the Respondents."

The Tribunal does not find any facts that relate to there having been false or misleading statements circulated by reason of the Tribunal proceedings and, as to the Shearer remark, the Tribunal, after setting out the nature of Miss Morgan's inference on the issue, says:-

"59. We are not satisfied that Ms Shearer said those words in the way that the Applicant has stated, but we are certain that Ms Shearer had a copy of those memoranda before her by 12 October when the alleged statement was made."

23. That would seem to be a finding that, in its context, Miss Shearer's remark had not contained within it a tacit accusation or understanding by Miss Shearer that Miss Morgan had been alleging that Miss Shearer was a racist. In turn, Miss Shearer's remark could not therefore support the otherwise unsupported allegation that, independent of the Memorandum of the 7th October 1998, detrimental allegations or rumours about Miss Morgan were being spread by the Commissioners of Inland Revenue or by Mr Cleave. This second part of the victimisation claim must, as it seems to us, have failed; there is no stated contrary conclusion of the Tribunal and it was plain enough that relations between Miss Morgan and her line manager were poor before the date of the Memorandum.
24. As for the first part of the victimisation claim, did either Respondent treat Miss Morgan less favourably than in the relevant circumstances they would have treated others "by reason that" she had brought the first IT1 proceedings against those Respondents?
25. Looking to questions arising out of the phrase "by reason that", the proper nature of that type of question is discussed in Chief Constable of the West Yorkshire Police -v- Khan [2001] 1 WLR 1947. Lord Nicholls paraphrases the question as "Why did the alleged discriminator act as he did?" - p. 194 d. It was, he said, a subjective test, not a test properly describable as being one of legal causation of the usual kind. Lord Hoffmann at p. 1960 b-d was content to describe the question as one of causation but in similar terms asked whether the fact that the "victim" had brought proceedings was a reason why the alleged discriminator had treated him less favourably. Lord Scott, like Lord Nicholls, was expressly of the view that the statutory language was not that of strict legal causation - p. 1964 c-d - and held that what had to be asked was what was the core reason, the motive, for the treatment complained of. If only because of the specific exception we shall come on to below, the phrase "by reason that" is not necessarily satisfied by showing only that "but for" the launch of the earlier proceedings the claimant would not have been less favourably treated in the way he or she claimed - see Khan p. 1960 para 57.
26. Mr Hand argues that the circulation was not "by reason that" Miss Morgan had launched her proceedings but was by reason that the CIR and Mr Cleave were responding to the need to protect themselves as parties to the litigation - see Khan supra at 1961 c-f.
27. There plainly cannot be any universal or absolute rule that an employer cannot circulate his employees in relation to a racial claim brought against that employer. To give an obvious example, questions such as "Did any of you witness the events complained of?" plainly have to be capable of being asked. In Khan supra at 1955 Lord Nicholls said:-

"Employers, acting honestly and reasonably, ought to be able to take steps to preserve their position in pending discrimination proceedings without laying themselves open to a charge of victimisation. This accords with the spirit and purpose of the Act. Moreover the statute accommodates this approach without any straining of language. An employer who conducts himself in this way is not doing so because of the fact that the complainant has brought discrimination proceedings. He is doing so because, currently and temporarily, he needs to take steps to preserve his position in the outstanding proceedings. Protected Act (a) ("by reason that the person victimised has - (a) brought proceedings against the discriminator ... under this Act") cannot have been intended to prejudice an employer's proper conduct of his defence, so long as he acts honestly and reasonably. Acting within this limit he cannot be regarded as discriminating by way of victimisation against the employee who brought the proceedings."

Lord Hoffmann at p. 1961, says, with our emphasis:-

"The existence of that adversarial relationship may reasonably cause the employer to behave in a way which treats the employee less favourably than someone who had not commenced such proceedings. But the treatment need not be, consciously or unconsciously, a response to the commencement of proceedings. It may simply be a reasonable response to the need to protect the employers' interest as a party to the litigation."

28. Was the 7th October Memorandum nothing but an honest and reasonable step in the employer's and Mr Cleave's proper conduct of their defences?
29. If it was, then, even though it would not have been distributed "but for" Miss Morgan's first IT1 proceedings, it could escape section 2 (1) (a) as being a reasonable step which the victimisation provisions, on the authority of Khan, were not intended to prohibit or penalise. This is the specific exception to which we referred.
30. In Khan it was relatively easy to see the employers' declining to give a reference, the "less favourable treatment" held to have been meted out to Mr Khan, as a step that could reasonably be regarded as necessary or desirable to be taken by the employer in order to preserve its position in pending discrimination proceedings. Had there been an unfavourable reference it could have fuelled the case that the employer was racially prejudiced; had there been a favourable one it could have undone the employer's case that it was on a fair assessment of his merits but Mr Khan had not been promoted. The employer was faced with a Morton's fork - see Lord Scott at p. 1965 d-e. But there is no such clear position in Miss Morgan's case. The Memorandum might or might not have been desirable as a step in staff relations, taken to make Miss Morgan's staff colleagues aware that in some form some details of their performance and their assessments might be examined in public, but it would not, in our view, have truly harmed the CIR or Mr Cleave in the proceedings if the Memorandum had not been circulated, nor did it materially advance their position in proceedings that it had been. It was not, in our view, a step "to preserve their position in pending discrimination proceedings", to use Lord Nicholls's phrase, or a response "to protect the employer's interest as a party to the litigation", to use Lord Hoffmann's. If we are right in reading Khan as creating a specific exception even where the "but for" test is satisfied, the circulation of the Memorandum in our view falls outside it. In its paragraph 80 which we have cited above (".... the Memorandum ... sent by Mr Cleave, was directly in relation to the Applicant bringing a claim ...") the Tribunal came to a conclusion, as it seems to us, intended to indicate that the Memorandum was sent "by reason that" Miss Morgan had brought her first IT1. We do not see that as being in error of law.
31. However, it does not follow that the circulation of the Memorandum represented "less favourable treatment". By analogy with Brightman L.J.'s dictum as to "detriment" in Ministry of Defence -v- Jeremiah [1980] ICR 13 at 31 C.A., less favourable treatment of the kind here in issue is, in our view, to be found when a reasonable employee would or might take the view that the events complained of consisted of less favourable treatment than would have been applied to colleagues who had not launched such proceedings - see also Khan at p. 1954 para 27.
32. The attack on the Memorandum, as constituting less favourable treatment, as Miss Morgan's case would have it, was in part as to the motive that lay behind it and in part as to its effect.
33. We approach the Memorandum on the basis that Mr Cleave, its author, believed the facts within it to be true (if only because there was no finding to the contrary) and also, but in opposition to Miss Monaghan's argument before us, that at the time Mr Cleave had reasonable grounds for that belief. The Tribunal made no finding that he had not and, absent any such finding, it cannot be assumed that he was without such belief. We add that the very next day Mr Cleave circulated a second Memorandum (not complained of in the second IT1) saying:-

"I should correct one point in yesterday's note. I had misinterpreted something in the application for discovery when I said that [Miss Morgan's] Counsel was pressing for actual names to be supplied. This was not correct. It is agreed that all information about individuals is to be supplied in anonymised form. However, it may still be possible for people to be identified from the details supplied. I shall therefore be warning individually the 29 members of the office concerned whose reports and assessments are required to be disclosed."

Had Mr Cleave not had a genuine belief in the facts he had asserted in his first Memorandum it seems to us unlikely that he would so promptly have issued the second corrective one.

34. As for the motive behind the Memorandum, Miss Morgan's complaint was that it contained a number of misleading and false assertions "designed to undermine [her] standing in the eyes of her colleagues". In her supplementary witness statement she said that the timing of the Memorandum was inexplicable unless its real purpose was to make her look bad in the eyes of her colleagues. She commented that on any footing it had been unnecessary to include all the 50 or so lawyers in the office as recipients of the Memorandum as her lawyers were not seeking the records of everyone in the office. She added that by doing so Mr Cleave had made very public the fact of her Tribunal complaint and that he had, in effect, been suggesting that her complaint had nothing in it and that she was trying to stir things up for her colleagues. However, the Employment Tribunal make no finding that Memorandum did contain anything misleading or false or that the CIR or Mr Cleave had any intent or hope that its circulation would undermine Miss Morgan either generally or in relation to her proceedings in the first IT1. There is no reason to believe that the Employment Tribunal held the attack on Mr Cleave's motives to have succeeded.
35. As for the effect of the Memorandum, Miss Morgan said that she was horrified by it. As we have seen, the Tribunal held in its paragraph 32 that the circulation caused difficulty for the Applicant but what the difficulty was is not identified and no evidence given to the Tribunal illuminates what it might have been if it meant anything other than that an adjournment for time seemed imminent. Nor was there any evidence or concession that the unidentified "subsequent treatment of the Applicant" or "difficulties with Ms Shearer" referred to in paragraph 62 which we have cited above were in any way consequences of the circulation of the Memorandum.
36. The CIR's witnesses said nothing on the issue. Nor did Miss Morgan's evidence or that of the three colleagues or erstwhile colleagues of hers who gave evidence on her behalf relate to the attitude of her colleagues in response to the Memorandum. The conclusion of the Tribunal in its paragraph 74 cited above that "the interpretation of that Memorandum is that other people would view her less favourably than they would view white lawyers" is, of course, completely inept in relation to a victimisation claim where it was not white lawyers who were the comparators by whom "less favourable treatment" was to be adjudged but "other persons", being, in this context, those who had not issued such proceedings as Miss Morgan had. The Tribunal's conclusion in its paragraph 80 that the Memorandum "obviously had an adverse effect on the attitude of the colleagues of the Applicant to her" was not a conclusion based on direct evidence given either by Miss Morgan or by colleagues of hers as to the attitude of colleagues. It is true that in her final written submissions Miss Morgan said that the circulation of the Memorandum inevitably resulted in the rest of the office viewing her unfavourably. She said in such submissions that it inevitably resulted in managers in the office viewing her as a trouble maker. It was on that basis that she had contended in her written final submissions that the circulation of the Memorandum constituted less favourable treatment of her by comparison with colleagues of hers who had not brought proceedings under the 1976 Act. Had the Tribunal been properly able to rely on her submissions as if they were evidence we would readily have seen that there was direct evidence given which supported the Tribunal's conclusions as to the effect of the attitude of colleagues. But it would, of course, be wrong to treat final submissions as if they were evidence. By the time they emerged, labelled as submissions, evidence properly-so-called had been completed and the CIR and Mr Cleave had no ability to test submissions by cross-examination such as would have been appropriate had Miss Morgan's views been put earlier in evidence.
37. However, the conclusion of the Tribunal in its paragraph 80, whilst not supported by any direct evidence given as to the attitude of colleagues, was a conclusion that the Tribunal came to "bearing in mind the wording of the Memorandum". Direct evidence as to the effect of the Memorandum circulation apart, could disadvantageous effect be reasonably inferred from the wording of the Memorandum? We see force in Miss Monaghan's argument that the Memorandum's wording tended to create a "her and us" attitude in the office and that it was significant that the Memorandum was written not by an outside firm of solicitors but by Mr Cleave himself. It thus appeared to be a step taken by management as opposed to being plainly taken on more objective outside legal advice or as a staff-relations exercise by a Human Relations department. It did not have a sufficient appearance, she said, of neutrality. The Memorandum concluded:-

"I very much regret that this case is going forward and that the Office and some of its members may well receive unwelcomed publicity as a result. However all the allegations made by Marlene have been investigated by the Board's Equal Opportunities Officer and found to be without substance. In the circumstances the Board and I feel that we have no option but to defend the reputation of the Department and of this office and resist the claim that is being made."

Although the Tribunal's conclusion would have been, of course, more readily defensible had there been specific evidence as to the effect of the Memorandum on Miss Morgan or her colleagues, we hold that, even absent such evidence, it is not improper for an Employment Tribunal exercising its rôle, as is it frequently described, as that of "an industrial jury", to draw inferences from experience as to the likely effect of the circulation of such a Memorandum in an office. We cannot say that the Tribunal's conclusion, by way of inference from the terms of the document, that it obviously had an adverse effect on the attitude of colleagues was in error of law. A reasonable employee might take the view that the circulation of the Memorandum represented less favourable treatment than others, who had not launched proceedings, would have received. There was, therefore, less favourable treatment of Miss Morgan within the meaning of section 2 (2) of the 1976 Act; indeed, if we understood him correctly, Mr Hand accepted that that was the case. That being so, all the necessary ingredients for a successful claim by of victimisation were found by the Tribunal. We must therefore dismiss the appeal on the victimisation part of the case.

"Institutional Racism"

38. In its paragraph 84, the last of its paragraphs dealing with liability, the Tribunal says:-

"There appears to be "institutionalised" racism in the Department. The Department, run mainly by white old-established University educated persons, had a practice based on values which did not embrace wholly ethnic minority lawyers."

It is difficult to exaggerate how unsatisfactory that conclusion is. The first sentence, unlike the second, is cast in the present tense - "there appears to be" - which suggests that this form of racism still existed at the time of the hearing before the Tribunal, a view hard to reconcile with the applause given in its very next sentence by the Employment Tribunal to the CIR's Equal Opportunities Policy and its implementation. The Tribunal thus opens itself to a charge of inconsistency or, at the very least, of a want of clarity. But matters do not stop there. There is no statutory or other offence consisting of a body being institutionally racist. Neither of Miss Morgan's IT1s makes any allegations of the CIR being "institutionally" racist, no doubt for the good reason that as a barrister she knew that no such an offence existed. Had there been a complaint in the IT1s that the CIR was institutionally racist it would not improbably have been met with an application that the complaint should be struck out as being a wholly immaterial averment.

39. It is not as if in some informal way "institutional racism" had been identified as an issue. At an interlocutory hearing on 23rd July 1998 the Employment Tribunal specified the issue between the parties as being ".... whether [the CIR and/or Mr Cleave] unlawfully discriminated against [Miss Morgan] by failing to promote her at the end of 1997 contrary to section 1 (1) (a) and 4 (2) (c) of the Race Relations Act 1976". The Tribunal on that day added (in relation to the first IT1):-

"The Applicant clarified that the other matters mentioned in the Originating Application are not relied on as founding a free-standing complaint."

40. On 10th September 1998 Miss Morgan's Solicitors wrote to the Tribunal to make it clear that it was not just one act of discrimination that was relied upon. They added:-

"We do not think it is appropriate to amend the IT1 to reflect this, as we think the IT1 is clear enough as it stands but we do not wish to amend the record to show that the issues in this case concern a course of treatment over a period, and not merely one act."

41. Remarkably, that indication that it was believed to be inappropriate to amend was met on 21st September 1998 by the Tribunal saying "Your letter is accepted as amending the Originating Application". The form of words for the unrequested amendment thus granted was never framed. The later second IT1 was framed with comparative precision and again made no complaint of "institutional" racism.
42. The CIR, not finding such a claim made against it, had no reason to defend itself against one. It is not as if any such claim clearly emerged in the course of oral evidence. At first, in cross-examination, Miss Morgan, asked to identify the individuals whom she accused of discriminating against her on the grounds of race, replied that the discrimination was "systematic, institutional". She then said she was not accusing individuals, that it was "institutionalised". But when she had it put to her that "There must be a human being" she replied "I then accuse individuals" and proceeded to identify 8 of them. The Respondents below could well have thought that no claim as to "Institutional racism" was being run. So the Tribunal here arrived at a conclusion which could fairly be taken by the CIR to be serious and wounding without there having been a claim in that regard which it knew was being made and without the claim being one which, had it been made, was one known to the law.
43. In any event what did the Tribunal mean by "institutionalised" racism? Surely it was not that everyone in the "institution", the Solicitors' Department, save for Miss Morgan, was racist? Nor was it said that the "institution" had rules or was organised in such a way that there could not but be racial discrimination. The Tribunal did not explain what they had in mind. There is a familiar definition of institutional racism in a passage in the MacPherson Report but there is no suggestion that this Tribunal had that definition in mind (it was not put to them) and, even if they had, as that definition concerned attitudes of an official body - there the Police - to members of the public with whom it dealt, it would have been inappropriate to apply in Miss Morgan's case, a case concerned with attitudes of an official body to its own members. Whatever the Tribunal had in mind as the meaning, which is left quite unexplained and incapable of being inferred, the ground which the Employment Tribunal gives for its conclusion apparently was that the Solicitors' Department:-

"Had a practice based on values which did not embrace wholly ethnic minority lawyers."

But what does that mean, even taking the word "wholly" to relate to the embrace rather than to the ethnicity of the lawyers concerned? There is no legal requirement of the common law or of any statute which requires employers, either of lawyers or of anyone else, to base themselves on "values" which "wholly embrace" such of them as are within some ethnic minority, however desirable that might be as a moral precept. The Tribunal do not indicate what was the evidence or what were the facts they relied upon for their conclusion. How was it proved and, importantly, how could it have been disproved? Did the Tribunal think it sufficed to look only at the conduct of one manager in order to ground a criticism of the whole institution and, if not, at whose conduct and to what specific evidence did they look? The only matter mentioned as related directly to the conclusion appears to be that the Department was "run mainly by white old established University educated persons". The remark is not explained; Mr Cleave went to Exeter University, Mr Bousher to Southampton. Only one, more junior, person was identified as having gone to "Oxbridge". But even if were true that the Department was "mainly run" by whites from Universities which had not recently been polytechnics, which may be what the Tribunal meant, even whites educated at such "old established Universities" cannot be assumed, merely on that account, to be incapable of acting free of conscious or unconscious racial prejudice; one does not prove an institution to be institutionally racist (whatever that means) merely by asserting that it is "run mainly by white old established University educated persons" (wherever the commas or hyphens go in that phrase).

44. Mr Hand understandably argues that this deeply unsatisfactory conclusion vitiates the whole judgment. We would accept that, like the 13th chime of a clock, it throws doubt on what has gone on before but the unsatisfactory sentence which we have quoted is immediately preceded by this one, namely:-

"From these facts and for those reasons we find that the applicant succeeds in both her claims."

That suggests that, independent of the Tribunal's later-given views as to institutional racism in the Solicitors' Department, Miss Morgan's claims of direct racial discrimination and of victimisation had already succeeded. Unfortunate as the Tribunal's conclusion on this subject was, in the circumstances we do not feel that it represents an error of law material to the success of Miss Morgan's claims.

45. Tribunals have quite enough to do in race cases determining whether the requirements of the statute are met or not without their venturing, as this Tribunal did, into serious and wounding conclusions based on charges not advanced and unknown to the law.
46. We are not saying that something reasonably describable as institutional racism can never be required to be examined into by Tribunals. It would be possible to imagine a body whose habitual rules or practices were such that one could fairly say of the body that as an institution it was racist. Forms of indirect discrimination would, perhaps, be the more likely to bring about some such case. But the charge would be relevant only as a step in the reasoning toward a conclusion that the body was or was not guilty of some unlawful discrimination that fell within the Act. In the case before us the charge, placed as it was, appears extraneous to the earlier-given conclusion. The sentence we have cited should not have appeared in the Tribunal's Extended Reasons but, as an extraneous observation, it is not such, in our judgment, as of itself to vitiate the other conclusions at which the Tribunal arrived.

The Monetary Award and the Cross-Appeal

47. As we have mentioned, the Employment Tribunal awarded Miss Morgan £6,681.20 of which £1681 (and not the £6681 which the Employment Tribunal mentions) was truly for loss of wages. The Tribunal made a mistake in its calculation. In consequence, interest should have been computed on £1681 and not on the £6681 on which the Tribunal computed it. That was another mistake and it reduces interest from the £269.37 awarded to a correct figure of £90.64. In these two respects the CIR's amended appeal succeeds, unopposed by Miss Monaghan.
48. Correcting the Employment Tribunal extended reasons to take out the mistake we have just described, their paragraph 88 should read:-

"For those reasons we award the sum of [£1681] being agreed loss of wages from January 1998 to June 1998 (the time difference in the time of promotion for a comparator) and £5,000 injury to feelings. We make this award having considered the chance that the Applicant would not have been promoted until the date that she was in July 1998. We find that assessing the chances of when she would have been promoted she would have been most likely to have been promoted in January 1998 if it had not been for the continual discrimination because of her race and for these reasons we do not reduce the award given for the loss of wages."

Miss Monaghan argues that the £5,000 ascribed to injury to feelings was fixed by the Employment Tribunal on the basis of injury suffered to feelings not over the whole period over which the Tribunal found discrimination but only as from January 1998 until July 1998. We do not accept that. The Tribunal in the same paragraph 88 speaks clearly of "continual discrimination because of her race", a phrase which suggests it had in mind, in our view, the whole period over which discrimination by way of non-promotion or delay in promotion had occurred. The Tribunal's, conclusion like many of its others, could have been more clearly expressed but, given that we take "continual discrimination" to have been in mind, we do not feel able to ascribe the £5,000 injury to feelings only to the 6 months period to which Miss Monaghan would wish to limit it. The cross-appeal is therefore dismissed.

Conclusion

49. In his comprehensive argument Mr Hand frequently indicated that he had to criticise the lack of structure, the vagueness or the ineptness of the Tribunal's extended reasons; one should not have to "decode" a decision, he says, and that this one was ill-thought out, illogical and unclear. Such criticism was far from all being forensic hyperbole. We, too, in this judgment have at points also spoken critically of the reasoning. This was not a case where the Tribunal below had to grapple with a hurried or incompetently presented case. We regret to say that the extended reasons are of a quality materially lower than the parties and their advocates could reasonably have expected; at the simplest of levels there are mistakes, with arithmetic errors, headings not fitting their contents and with a same heading confusingly repeated. However, despite some unease, we have to respect findings of fact which are not devoid of evidential support. Accordingly, save for our comments on "institutional racism" and save for the CIR's and Mr Cleave's minor successes as to the monetary award and the cross-appeal, which we have dismissed, the rest of the amended appeal is dismissed. For all the criticisms made of the Tribunal's decision, we have not felt able to describe it as being in material error of law.