United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR DAVID MASSARELLA (of Counsel) Instructed by: Messrs Nelsons Solicitors Provincial House 37 New Walk Leicester LE1 6TU
For the Respondent	MR SEAN JONES (of Counsel) Instructed by: Nottingham County Council Legal Services (Litigation Team) Centenary House 1 Wilford Lane West Bridgford


 


HIS HONOUR JUDGE ANSELL

1. The Appellant appeals from part of a decision of an Employment Tribunal who sat at Nottingham for 14 days in March, June and July 2002 to hear two claims brought by the Appellant and whose decision, running to some 39 pages, was sent to the parties on 23 October 2002. There is also a cross-appeal relating to one aspect of that decision.
2. The Appellant is an experienced teacher, particularly in the subjects of textiles and cookery, who for some years has suffered from eye problems and who became sight disabled in around 1993. The disability was thought to be the result of a viral or fungal infection of her eyes over twenty years ago; and she also had pain from knees and hips which date back to the onset of the eye problems and was thought possibly to be associated with the infection she had suffered at that time.
3. In 1999 she brought proceedings against the Respondents alleging that they had failed to make adjustments to her workplace and conditions so as to accommodate her disability, that they had treated her less favourably for reasons relating to her disability; and in the second case presented in 2000 that they had constructively dismissed her.
4. The Employment Tribunal found that the Appellant was subject to unlawful discrimination, namely less favourable treatment and a failure to make reasonable adjustments, contrary to the Disability Discrimination Act 1995, under 11 separate heads of complaint. These are set out in Schedule A of the Decision at page 40.
5. The Tribunal, however, rejected certain further allegations of failure to make adjustments and also went on to find that the Appellant was not constructively dismissed, either for the purposes of the Employment Rights Act 1996 (unfair dismissal) or under the relevant section of the Disability Discrimination Act 1995. Consequently they also dismissed the claim for wrongful dismissal.
6. The Appellant had initially issued proceedings against the present Respondents as First Respondent with the Head Teacher of the School, Malcolm Lamb, as Second Respondent. Mr Lamb was dismissed as Second Respondent following correspondence in which the present Respondents accepted that they were vicariously liable for his actions, although the Employment Tribunal still referred to him throughout its Decision as the Second Respondent. Mr Lamb did not attend the hearing before the Tribunal owing to ill health, but submitted a lengthy statement to which the Employment Tribunal "gave little weight".
7. The unlawful discrimination found by the Tribunal can be summarised as follows:

(a) they found that there was a failure which went back to 1993 to provide the Appellant with enlarged documents, and in particular an enlarged cover timetable which was provided to all teachers on a daily basis to indicate in particular whether they were required on that day to cover for absent colleagues and take extra lessons;

(b) from around 1998 instead of teaching in adjacent classrooms the textile classroom was some distance away and the Tribunal found that there was a failure to make any adequate adjustments to the timetable to avoid the disadvantages that she had suffered as a result of the relocation of her classes to that distant room. There were further failures in connection with that room in relation to a failure to provide adequate lighting or a permanent electric socket to enable her particularly to use her CCTV and other specialist equipment which she needed to enlarge and read documents.

(c) The third major failure was to provide her with additional and adequate "non-contact time", in other words, non-teaching time, where she could complete paperwork at school and in daylight; and further the Respondents failed to reduce the amount of time she was required to provide cover for other teachers.

8. The Tribunal further found that the Respondents had failed consistently to implement any adequate temporary measures within a reasonable time, pending discussion of or implementation of the above adjustments; that any adjustments which they undertook were not made in a reasonable time and that they had adopted a negative and unhelpful attitude towards the Appellant's difficulties.
9. In relation to the second Originating Application, they repeated the failures set out in the first application in relation to failure to enlarge documents and a failure to provide additional non-contact time; and that they had failed to take further steps between September 1999 and May 2000 to make further adjustments and that no proposals were made to the Appellant as to adjustments during that period; and further that they suspended the Appellant from duty.
10. We will refer to this particular incident later, but it followed a period of absence which had commenced on 13 June 1999, because of the Appellant's eyestrain and stress and culminated in the suspension on 10 September 1999, allegedly pursuant to a Department of Education procedure in relation to physical and mental fitness to teach.
11. During the first half of 2000 there were a considerable number of meetings and correspondence in an effort to resolve the outstanding problems relating to adjustments. We will refer later to details, particularly of the correspondence, but the outcome was that in a letter of 31 May 2000 addressed to the Respondents' solicitors the Appellant's solicitors concluded;

"Under the circumstances our client has no alternative but to conclude that there has been a complete breakdown of mutual trust and confidence between her and her employer, leaving her with no alternative but to resign from her position with immediate effect."

12. By letter of 30 May 2000 the Appellant had informed the headmaster in the following terms:

"Dear Mr Lamb,

Please accept this letter as written confirmation that I am treating your actions as both a breach of the implied contractual term of mutual trust and confidence and unlawful disability discrimination in response to which I am tendering my resignation with immediate effect."

13. The major ground of appeal relates to the Tribunal's failure to find that there was a course of conduct amounting to a breach of the implied term of trust and confidence, such as would entitle the Appellant to resign and claim constructive dismissal; and the resulting failure to find that she was also wrongfully dismissed. There is a further complaint in relation to the Tribunal's failure to find that the Respondent was in breach of its duty to make adjustments by failing to ensure that she remained on full pay whist off sick, despite the fact that the Respondents' conduct was the cause of her absence; and also a failure to find that putting her on half pay during her period of long-term sickness was less favourable treatment contrary to section 5 (1) of the Disability Discrimination Act 1995.
14. The cross-appeal is pursued only in circumstances in which this court decides to remit the claim to the Tribunal for consideration of limited issues arising out of the appeal and it is a challenge to the finding that the Respondents had failed to make any or any adequate adjustments to the school timetable to avoid the disadvantage suffered by the Appellant as a result of the relocation of her textile classes to DT6 (the new and further distant classroom).

Constructive Dismissal

15. Mr Massarella for the Appellant submitted to the Tribunal and repeats to us that the course of conduct found by the Tribunal covering a period of discrimination from 1993 onwards, particularly the ongoing failure to deal with the issues of timetable and non-contact time could only have led to one inevitable conclusion, namely that such conduct on the part of the employer was likely to destroy or seriously damage the degree of trust and confidence that an employee is reasonably expected to have in his employer, in particular he contends that there should have been a finding that the decision and the circumstances concerning the suspension of the Appellant in 1999 was in itself a breach which, whilst not acted upon immediately by the Appellant that year was effectively reactivated by the events of May 2000 – the so-called "last straw" doctrine.
16. The Tribunal, having dealt with the history of the case and their findings in relation to the particular acts of discrimination alleged in considerable detail and in our view with considerable skill, dealt with the important issue of constructive dismissal, effectively in one paragraph in their decision. In paragraph 100 they set out their conclusions as follows:

100 "The Tribunal found that the applicant resigned because of the first respondent's failure to agree to terms which her solicitors stated had to be met before she would return to work. These were set out in their letter dated 15 May 2000. That failure did not constitute a breach of contract. Even when it considered the course of events from 1993 the Tribunal did not decide that the first respondent's actions were such that the applicant was entitled to resign from her employment without notice. In reaching that conclusion the Tribunal rejected Mr Massarella's submission that the implied term may be broken even if subjectively the employee's trust and confidence was not undermined in fact. Almost immediately after her resignation the applicant successfully applied to re-enter the first respondent's employment. In her originating application she asked for re-engagement. These matters demonstrated that the relationship of trust and confidence still subsisted. It was her relationship with the second respondent which had broken down. He was not her employer. She did not resign as a result of the first respondent's conduct. It could not, therefore, be said that she had been constructively dismissed under the provisions of section 95(1)(c) of the 1996 Act. Accordingly, the Tribunal decided to dismiss the complaint."

17. Mr Massarella raises a number of complaints in relation to this paragraph:

(a) Objective or Subjective Test

18. An employer must be in breach of contract for a claim of constructive dismissal to succeed and that breach must be sufficiently important to justify the employee resigning. It must be a repudiatory breach and the employee must leave in response to that breach: see Western Excavating (ECC) Ltd v Sharp [1978] QB 761.
19. In support of her claim of constructive dismissal the Appellant relied on a breach of the implied term of trust and confidence. It is accepted that any breach of that term would be a repudiatory breach of contract: see Morrow v Safeway Stores Plc [2002] IRLR 9 EAT. The term was defined by the House of Lords in Malik and Mahmud v Bank of Credit and Commerce International SA [1977] ICR 606 as follows:

"the employer shall not:

"without reasonable and proper cause, conduct itself in a manner…likely to destroy or serious damage the relationship of confidence and trust between employer and employee.""

See Lord Steyn at page 621.

20. Mr Massarella contends that contrary the approach taken by the Employment Tribunal who applied a subjective test, the correct test is an objective one focusing on the conduct of the employer and asking whether the employer had, without reasonable cause, conducted itself in a manner likely to destroy or seriously damage the relationship of trust and confidence between employer and employee.
21. In Malik Lord Nicholls said at pages 610-611:

"The [employer's] conduct must, of course, impinge on the relationship in the sense that, looked at objectively, it is likely to destroy or seriously damage the degree of trust and confidence the employee is reasonably entitled to have in his employer. That requires one to look at all the circumstances.

…

The objective standard just mentioned provides the answer to the liquidator's submission that unless the employee's confidence is actually undermined there is no breach. A breach occurs when the prescribed conduct takes place…Proof of a subjective loss of confidence in the employer is not an essential element of the breach, although the time when the employee learns of the misconduct and his response to it may affect his remedy.

22. The immediate past President of this court, Lindsay J, in an article on this topic entitled "The Implied Term of Trust and Confidence" (Industrial Law Journal, Vol. 30 No. 1, March 2001) contended that Lord Nicholls' words meant that regard should be paid to what were, objectively adjudged, the proper, natural and ordinary consequences of the act or omission in question.
23. Mr Massarella therefore contends that it was wrong for the Tribunal to speculate into the state of mind of the employee rather than to conduct objective enquiries into the nature of the employer's conduct; and the only question which the Tribunal should have asked themselves was whether the resignation was in response to the conduct relied on as being a breach of contract. In particular he contends it was wrong for the Tribunal to highlight the fact that the Appellant sought re-engagement in order to show there was no breach of the implied term, since Parliament has provided that re-engagement and re-instatement are remedies available for an Applicant bringing a claim of unfair dismissal whether she was directly or constructively dismissed; and in the particular circumstances of this employee wishing to continue as a teacher in the area which she lived there was little alternative other than to continue working for the local authority.
24. Further support for this contention was found in Lindsay J's article at page 13.

"Another aspect of 'remedies' will be as to reinstatement or re-engagement for unfair dismissal. The current description of the implied term, whilst requiring the damage to the relationship of trust and confidence to have been serious, does not require it to have been irreparable or irredeemable…The employee's argument would also be likely to include that the employer should not be able to rely on his own wrongs to escape reinstatement or re-engagement…It may be that the close association thus far between breach of the implied term and the ending of the employment relationship may be diluted. Claim for damages may become more common as a sought-after remedy following breach. It was, after all, damages that were being sought in Malik."

25. Further, in Gogay v Hertfordshire County Council [2000] IRLR 703 CA an employee sought damages for breach of the implied term of trust and confidence, even though she remained throughout the employment of the Council against whom she was bringing proceedings. Her remaining in employment was a factor which was irrelevant to the question of whether there had been a breach of the implied term.
26. Mr Jones for the Respondents submits that whilst accepting that the appropriate test pursuant to Malik is an objective one; the Appellant's express admission in evidence that trust and confidence continued to subsist between herself and the Respondents was the best evidence as to whether the conduct relied upon was likely to destroy or seriously damage the relationship of trust and confidence.
27. However, we are by no means satisfied that there was such an express admission. It was not referred to by the Tribunal in their findings and the notes of evidence that were produced to us indicated (page 341 of the appeal bundle) that the Appellant was saying that by the middle of May she had "lost trust in everyone including the County Council."
28. Secondly, he contends that the Appellant did not resign in response to the breach and relies on the Tribunal's finding that the Appellant resigned because of the Respondents' failure to agree to the terms which her solicitors stated had to be met before she would return to work. Both Counsel took us through the letters that passed between the parties during the month of May 2000 and whilst it is right that the solicitors were imposing certain conditions in relation to the payment of compensation to the Appellant and also a requirement that the Head and Deputy Head were sent on a course to learn about disability discrimination the Appellant's solicitors were still requiring confirmation that appropriate adjustments would be made to deal with the issues of enlargement of materials and additional non-contract time. Indeed, in paragraph 71 of the Tribunal's decision they made a finding that the Appellant was right to conclude that on her return to work there would be little if any difference in the arrangements for cover.
29. Mr Jones sought to distinguish Gogay on the basis that it had been decided before Morrow and that at the time of Gogay it was not clear that every breach of the implied term of trust and confidence would inevitably mean that there was a fundamental or repudiatory breach.
30. For the reasons that Mr Massarella advances, we are quite satisfied that the Tribunal did adopt the wrong test by applying a subjective rather than an objective test; and in particular it was wrong to consider the Appellant's actions of seeking reinstatement or re-engagement, which were two of her statutory remedies in the event of unfair dismissal as evidence that trust and confidence still subsisted.
31. The second ground of complaint in relation to how the Tribunal dealt with constructive dismissal was that, having found that trust and confidence in Mr Lamb had broken down, they failed to apply the principle of vicarious liability.
32. Whilst we accept that, unlike claims under the Disability Discrimination Act 1995, he could not be made a party to a claim under the Employment Rights Act 1996 alleging unfair dismissal, the Respondents had explicitly accepted liability for his acts in a letter dated 5 November 1999:

"Should liability result as a consequence of anything done or omitted to be done by Mr Lamb whilst acting in the capacity of manager, the Respondent will of course be vicariously liable."

33. Mr Jones takes a point which we accept, that the fact that a manager acts in such a manner does not automatically necessitate inclusion that his actions are likely to cause the employee to lose trust and confidence in their common employer; for instance, when the employer had done their best to counter any such behaviour on the part of its employee. This was envisaged by Lindsay J in his article where he set out the position as follows:

"A company may perhaps avoid the attribution to it of the behaviour complained of if it promptly apologises for it or counters it. It will be necessary in some cases to consider how far the foreman…was doing acts…authorised by the Company? Was he acting within the general control of the Company? Was he acting for the benefit of the Company? Was he acting contrary to the instructions given by the Company?"

34. However, in this case, none of the above exceptions could apply, particularly in the light of the concession made by the Respondents; and thus in the circumstances of this case we accept that the Tribunal was bound to find that the Respondents had breached the implied term by virtue of the Headmaster's breaches; and thus, if the Appellant resigned in response to Mr Lamb's conduct, she was in law resigning in response to the Council's conduct.
35. In any event, as we have commented above, there was clear evidence before the Tribunal from the Appellant that by the middle of May 2000 she had lost trust and confidence in the Council; and Mr Massarella reminds us that a significant number of the findings of discrimination made against the Respondents related to action in which neither the School nor Mr Lamb had any involvement, e.g. after November 1998 all physical adjustments to the new classroom were being carried out by departments within the Council and had been taken out of the hands of the School; and, secondly, the decision to suspend the Appellant was taken by Mrs McMillan, Education Officer Personnel within the Council, and without reference to the Headmaster or the School.
36. Further, we also accept Mr Massarella's submissions that, even if a subjective perception of the relationship of trust and confidence was relevant, a finding that that relationship still subsisted was perverse. We have already made reference to the following matters:

(i) the continuing failure to deal with enlargements and non-contact time leading the Tribunal to conclude that were she to return to work there would be little if any difference in the arrangements for cover.

(ii) the oral evidence given by the Appellant in regard to her state of mind as at May 2000.

37. Mr Jones suggested there was evidence in the form of the Appellant seeking re-employment with the Respondents and indeed in due course being prepared to return to work at the same school, once previous senior staff involved in this matter had moved on. However, as we have already commented, it cannot be right that the Appellant's acts in pursuance of her statutory remedies could be said to contradict what was overwhelming evidence as to her state of mind as at the date of her resignation.
38. The next ground relates to the Tribunal's findings that there was no course of conduct amounting to a breach of the implied term such as to entitle the Appellant to resign; and in particular, their failure to give any or any adequate reasons why, having found that 11 separate heads of discrimination had been made out, those actions were not such that the Appellant was entitled to resign from her employment without notice.
39. The leading authority on this area is Lewis v Motorworld Garages Ltd [1986] ICR 157. The position was summarised by Neill LJ at page 167:

"On the other hand, it is now established that the repudiatory conduct may consist of a series of acts or incidents, some of them perhaps quite trivial, which cumulatively amount to a repudiatory breach of the implied term of the contract of employment that the employer will not, without reasonable and proper cause, conduct himself in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence between the employer and employee…"

40. At page 170 Glidewell LJ again repeats the principle and sets out the process which an Employment Tribunal should go through in determining the issue:

"This case raises another issue of principle which, so far as I can ascertain, has not yet been considered by this court. If the employer is in breach of an express term of a contract of employment, of such seriousness that the employee would be justified in leaving and claiming constructive dismissal, but the employee does not leave and accepts the altered terms of employment; and if subsequently a series of actions by the employer might constitute together a breach of the implied obligation of trust and confidence; is the employee then entitled to treat the original action by the employer which was a breach of the express terms of the contract as a part – the start – of the series of actions which, taken together with the employer's other actions, might cumulatively amount to a breach of the implied terms? In my judgment the answer to this paragraph is clearly "yes".

It follows, in my judgment, then in the present case the industrial tribunal should have asked themselves the question whether the employer's treatment of the employee starting with the demotion in November 1981 including reduction in pay, the loss of the use of the use of an office and the various memoranda of complaint in 1982, culminating in that of 2 August 1987, cumulatively constituted a breach of the implied obligation of trust and confidence of sufficient gravity to justify the employee in leaving his employment in August 1982 and claiming that he had been dismissed. Did the Tribunal ask themselves this question, and if so how did they answer it? In so posing the question, I realise that I am, with respect, disagreeing with the approach of the appeal tribunal."

41. Mr Massarella firstly complains that the Tribunal were in error in seeking to consider whether the Respondents' failure to agree to the terms set out by the Appellant's solicitors constituted a breach of contract. Under the "last straw" doctrine there was no need to find that the final act complained of amounted to a breach, but merely the last in a succession of wrongs that had been perpetrated against the Appellant.
42. Mr Jones, however, argues that in the next sentence the Tribunal, albeit briefly, found that the pattern of behaviour since 1993 did not amount to a breach of the implied term of trust and confidence, although in reading the Tribunal's decision, their approach to this topic appears to be dominated by the Appellant's subjective reaction which, as we have already indicated, was not a correct approach.
43. Mr Massarella argues, correctly in our view, that bearing in mind the very detailed approach that the Tribunal had taken to the specific areas of discrimination and the careful and serious findings they had made against the Respondent recording a catalogue he suggests of incompetence and sensitivity, carelessness and lack of consideration, spreading over a number of years, with a continuing failure to deal with two particular adjustments, that it was incumbent upon the Tribunal to go through the detailed process suggested by Glidewell LJ; and that their decision contained insufficient reasoning to enable this court to see whether they had applied the right test in law, and that in reaching its conclusions it asked itself the correct questions of law, and further to enable the parties to know why they had reached such a finding or conclusion: see Meek v City of Birmingham District Council [1987] IRLR 250
44. In particular he argues that the Tribunal in the light of their previous findings on the aspect of discrimination should have given reasons why the suspension of the Appellant as unfit to teach did not amount of itself to a breach of the implied term.
45. The background facts of this aspect were that the Appellant, as we have indicated above, was suspended in September 1999 as "unfit to teach". The Respondents maintain that it was required to suspend her pursuant to a 1993 Department of Education circular which stated that a teacher who had been off sick for more than three months with a psychiatric disorder had to be suspended.
46. The Tribunal found that the circular had in fact been superseded by new guidance at the time when the Respondent applied it to the Appellant; and that new guidance did not contain the same requirement. In any event the Tribunal found that the Respondents acted outside the terms of that circular in the following manner:

91 "It should have waited until the applicant had been absent for three months. There was no need to suspend the applicant any earlier. The applicant was still on sick leave and she was not anxious to return to work. On any reasonable analysis, the respondent could not have concluded from the sick note and/or Dr Thompson's report that the applicant had a psychiatric disorder. There was no diagnosis of stress disorder. Mrs MacMillan ought not to have suspended the applicant without asking Dr Thompson for more information. The circumstances of the applicant's absence and her condition did not amount to material and substantial reasons justifying the decision to suspend. That decision was irrational and there was no justification for it. Accordingly, the Tribunal decided that the complaint under this head was well founded."

47. The Tribunal also found that apart from the "shock and upset" at being suspended as "unfit to teach" the suspension would be placed on the Appellant's personnel record and could affect her future promotion and job prospects.
48. We were shown the letter of suspension sent to the Appellant, which contains the following paragraph:

"As you have now been absent for more than three months on account of nervous disorder (this term includes conditions such as nervous illness, depression, anxiety etc), I have to advise you of the steps you should take when you feel fit to resume duty.

…

It may be that, in your case, referral to a consultant psychiatrist was considered necessary…"

49. Mr Massarella had referred the Tribunal to the case of Bliss v South East Thames Regional Health Authority [1987] ICR 707 as authority for the proposition that inappropriate action taken against an employee on medical grounds may amount to breach of the implied term. That authority was cited in closing submissions and referred to in the decision when the Tribunal list the authorities to which they had been referred. No mention is made of it in the section of the decision relating to constructive dismissal. At page 714 Dillon LJ set out the position thus:

"It follows that I agree with the judge that the authority was in breach of contract in requiring the plaintiff to submit himself to medical examination and in suspending him when he refused to do so. I have no doubt that the breach was a continuing breach, so long as the suspension lasted.

Was it then a repudiatory breach, which would entitle the plaintiff to treat the contract as at an end and claim damages on that footing?

It is common ground on the pleadings that it was an implied term of the plaintiff's contract that the authority would not without reasonable cause conduct itself in a manner likely to damage or destroy the relationship of confidence and trust between the parties as employer and employee. There is ample authority in employment cases to warrant the implication of such a term. The authority was in breach of that term, and the question is whether that breach was fundamental, or repudiatory, or not."

Later at page 715 he continued thus:

"There must be some breaches at least of such an implied term which are fundamental and repudiatory and go to the root of the contract, and if ever there was a breach of such a term going to the root of the contract, it was this. It would be difficult in this particular area of employment law to think of anything more calculated or likely to destroy the relationship of confidence and trust which ought to exist between employer and employee than, without reasonable cause, to require a consultant surgeon to undergo a medical, which was correctly understood to mean a psychiatric examination, and to suspend him from the hospital on his refusing to do so."

50. Mr Jones seeks to distinguish Bliss on the grounds that in this case the Appellant was already on sick leave and she was not anxious to return to work and the impact of the suspension would be considerably lessened. However, it seems to us that the suspension of the Appellant, effectively on the basis of a psychiatric disorder, was in itself a very serious matter and required the Tribunal to make findings as to whether it was in itself a breach of the implied term. Indeed, we can go further and find that the suspension itself plainly amounted to a breach of the implied term and that it was perverse of the Tribunal not to so find.
51. In the light of that particular finding coupled with the previous history to which we have made reference, it was therefore only necessary for the Tribunal to find that the events of May 2000 were further wrongs, not necessarily breaches, which caused the Appellant to say to herself that enough was enough – the "last straw" doctrine. We do not accept that the events of May 2000 were simply an attempt by the Appellant to impose extra conditions in relation to compensation and training for the senior staff, but that there was a continuing failure to deal with the two outstanding areas of discrimination and the Tribunal found that those failures would have continued had she not resigned but returned to work. Those findings in themselves were plainly sufficient in our view to amount to the "last straw" and to find other wise was perverse.
52. In those circumstances, and with the greatest respect to a Tribunal who clearly for the most part had dealt with the issues in considerable detail and with great care, we would propose to substitute a finding that the Appellant was constructively dismissed and thus she was also wrongfully dismissed.

Constructive Dismissal - Disability Discrimination Act 1995

53. The Tribunal concluded that a constructive dismissal could not amount to a discriminatory act within the meaning of the Disability Discrimination Act 1995, considering that they were bound by the decision of this court in Commissioner of Police v Harley [2001] IRLR 263 which held that a constructive dismissal could not be a discriminatory act within the meaning of section 4 (2) (d) of the Disability Discrimination Act 1995. Mr Massarella argues that this decision has now been expressly disapproved by a different division of this court in Catherall v Michelin Tyre Plc [2003] IRLR 61 and invites us to follow the more recent decision.
54. Section 4 of the Disability Discrimination Act 1995 provides that:

4 (1) "It is unlawful for an employer to discriminate against a disabled person –

(a) in the arrangements which he makes for the purpose of determining to whom he should offer employment;

(b) in the terms on which he offers that person employment; or

(c) by refusing to offer, or deliberately not offering, him employment.

(2) It is unlawful for an employer to discriminate against a disabled person whom he employs –

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

(b) in the opportunities which he affords him for promotion, a transfer, training or receiving any other benefit;

(c) by refusing to afford him, or deliberately not affording him, any such opportunity; or

(d) by dismissing him, or subjecting him to any other detriment."

55. There is a similar provision in both the Sex Discrimination Act 1975 and the Race Relations Act 1976. Prior to 1986 the term 'dismissal' was not defined in any of these three statutes; and the issue is whether constructive dismissal is included within the term 'dismissal' in these three acts.
56. The concept of constructive dismissal was introduced by the Redundancy Payments Act 1965 5.3 (1), but was not repeated in the Industrial Relations Act 1971. However, in Sutcliffe v Hawker Siddeley Aviation Ltd [1973] IRLR 304 Sir John Donaldson held that not withstanding the omission in drafting he had no doubt that there could be constructive unfair dismissal. The concept of constructive dismissal was re-introduced by the Trade Union and Labour Relations Act 1974, Schedule 1, paragraph 5 and has appeared in employment legislation since that time.
57. In Marshall v Southampton and South-West Hampshire Area Health Authority (Teaching) [1986] IRLR 140 the European Court decided that dismissal of a woman solely because she had obtained the qualifying age for a state pension, which age is different for men and women under national legislation, constituted discrimination on the grounds of sex, contrary to Article 5 (1) of the Equal Treatment Directive 76/207. In paragraph 31 of the judgment of the European Court, after referring to Article 5 (1) the court stated as follows:

31 "In his judgment in the Burton [1982] IRLR 116 case the Court has already stated the terms "dismissal" contained in that provision must be given a wide meaning. Consequently, an age limit for the compulsory dismissal of workers pursuant to an employer's general policy concerning retirement falls within the term "dismissal" construed in that matter, even if the dismissal involves the grant of a retirement pension."

58. As a result the Sex Discrimination Act 1975 was amended in 1986 and section 82 (1A) of that Act was inserted in these terms:

82 (1A) "References in this Act to the dismissal of a person from employment or to the expulsion of a person from a position as partner include references –

(a) to the termination of that person's employment or partnership by the expiration of any period (including a period expiring by reference to an event or circumstance), not being a termination immediately after which the employment or partnership is renewed on the same terms; and

(b) to the termination of that person's employment or partnership by any act of his (including the giving of notice) in circumstances such that he is entitled to terminate it without notice by reason of the conduct of the employer or, as the case may be, the conduct of the other partners."

No equivalent amendments were made to the Race Relations Act 1976 and when Parliament enacted the Disability Discrimination Act 1985 it did not include an equivalent definition of dismissal.

59. In Derby Specialist Fabrication v Burton [2001] IRLR 69 this court, Mr Justice Keene presiding, held that constructive dismissal came within the term 'dismissal', as used in section 4 (2) (c) of the Race Relations Act, notwithstanding that Parliament had specifically amended the Sex Discrimination Act so as to include constructive dismissal. They held there was no reason to give the word 'dismissal' a narrow meaning so as to exclude constructive dismissal. At paragraph 16 the court set out the position thus:

16 "We can see some force in the reasoning in Harrold, but in the end we are not persuaded by it. There may be a number of reasons why Parliament chose to make an amendment to the Sex Discrimination Act 1975, not least its wish to ensure that there could [be] no doubt whatsoever about the Act's compliance with Community law, as the judgment in Harrold indicates. It cannot be taken as an indication by Parliament that, in other legislation with which it was not dealing, 'dismissal' was to be given a restricted meaning. We emphasis that because, if one approaches the meaning of 'dismissal' in the Race Relations Act without that extraneous influence, there is no reason why it should be so construed as to exclude constructive dismissal. Whether the employer deliberately dismisses the employee on racial grounds or he so acts to repudiate the contract by racially discriminatory conduct, which repudiation the employee accepts, the end result is the same, namely the loss of employment by the employee. Why should Parliament be taken to have distinguished between these two situations?"

60. A contrary view was taken by this court in the case of Commissioner of Police of the Metropolis v Harley [2001] IRLR 263, Mr Justice Charles presiding. Although that decision reviewed the statutory and case law history, to which we have made brief reference, unfortunately it appears that the case of Burton was not cited to them. That court held that, as a matter of ordinary language, the term 'dismissal' is a termination of a contract of employment by a unilateral act of the employer, whether it is terminated with or without notice, as opposed to a constructive dismissal which involves an act of election by the employee based on a repudiatory breach by the employer.
61. The court was also mindful of the fact that Parliament when enacting the Disability Discrimination Act had not chosen to include the wider definition that had been inserted into the Sex Discrimination Act in 1986.
62. We should point out that this issue is of some relevance, both in relation to the level of damages for injury to feelings that might be awarded in a case of constructive dismissal, as opposed to the individual acts of discrimination; and also it might affect the time limits for presenting complaints. The three month time limit for presenting complaints of constructive dismissal if included in the phrase 'dismissal' would run from the date that the employee decides to treat the repudiatory breach as putting an end to the contract of employment, rather than from the dates of the acts of discrimination, if constructive dismissal was not included.
63. The conflict between these two decisions was resolved earlier this year in the case of Catherall v Michelin Tyre Plc [2003] IRLR 61, Mr Justice Nelson presiding; a decision which post-dated the date of the Tribunal decision in this case. Both Harley and Burton were cited to them, and whilst that court did not again set out the full statutory and case law history of this issue, they dealt with the matter in this way in paragraph 32:

32 "We have considered the cases of Harley and Burton. They are both cogently argued, but for out part we prefer the reasoning in the case of Burton as set out in paragraphs 7-16 of that judgment. The wording of the relevant sections is identical and we see no reason why the term 'dismissal' should be narrowly construed so as to exclude constructive dismissal. Direct dismissal and constructive dismissal are both means by which employment is terminated and both have the same effect. A purposive construction is in our view necessary and appropriate and we consider that the amendment to the Sex Discrimination Act 1975 to include a definition of dismissal to include constructive dismissal does not alter our opinion as to the true construction of the section. Such an amendment can be made for the avoidance of doubt rather to add an extra limb to an original definition. We conclude that 'dismissal' under the Disability Discrimination Act 1995 includes constructive dismissal."

64. Mr Massarella further contends that the purposeful approach adopted by this court in Catherall has been recently re-emphasised by the House of Lords in Relaxion Group Plc v Rhys-Harper [2003] UKHL 33. The principal question raised by the appeals in that case is whether discriminatory acts done by an employer after termination of an employee's contract of employment were outside the scope of the anti-discrimination legislation.
65. The three appeals raised the issue in the context of the three discrimination Acts, namely the Sex Discrimination Act 1975, the Race Relations Act 1976 and the Disability Discrimination Act 1995. One of the issues in the case concerned slightly different wording in the three statutes. The 1975 and 1976 Acts used the phrase "employed by him", whereas the later Act used the phrase "whom he employs".
66. Lord Hobhouse of Woodborough dealt with this issue in paragraph 134 as follows:

134 "I agree that these statutes should be read as contributions to a developing scheme of anti-discrimination law and such words should not without good reason be given a different reading as between one of the statutes and another. They are not statutes to be formerly 'read with' each other but they are statutes which reflect a consistent (though developing) legislative policy. The wording of the 'employment field' provision in the 1975 and 1976 Acts is in a relevant respect slightly different from the 1995 Act which, instead of using the phrase "employed by him", uses the phrase "whom he employs". None of the counsel in these appeals submitted that a distinction should be made between the Acts on this ground. I consider that they were right."

67. Mr Jones suggests that the differences between the statutes in relation to constructive dismissal are more substantial than the relatively minor differences highlighted by the House of Lords in the Relaxion case and urges us to adopt the reasoning in Harley, particularly as it was a judgment that set out in considerable detail the statutory and case law history of this issue and compares that to the somewhat briefer approach taken by this court in the Catherall case.
68. We do not agree. It is quite clear from Catherall that both Harley and Burton were cited to them and they gave consideration to both cases. We share the view that in the area of discrimination law a purposive construction is indeed necessary and has been approved of by the House of Lords. In particular, it seems to us that the amendment made to the Sex Discrimination Act 1975 was required so as to ensure that our legislation was compliant with European law; but this does not mean that it should be automatically assumed that it was not so compliant. Indeed, the facts of the Marshall case before the European Court did not relate to constructive dismissal. The amendment was enacted so as to ensure that dismissal, as defined in the Equal Treatment Directive, could be given a wide meaning.
69. We therefore propose to substitute a finding that the Appellant's constructive dismissal was a discriminatory act within the meaning of the Disability Discrimination Act 1995.

Sick Pay - Detriment

70. As stated above, the Appellant was off sick from June 1999 up to the time of her resignation in May 2000. Under the terms of her employer's sick pay policy she received full pay for the first six months of absence and thereafter half pay. She had argued that she was under a substantial disadvantage by comparison with a person without a disability since she was in receipt of half pay; and that the Respondents could have made a reasonable adjustment by putting her back onto full pay, as they had done in 1987 when, because of an accident at work, unconnected with her disability, which caused a leg injury, Mr Lamb had written to the Director of Education to ensure that she would remain on full pay over and above her strict contractual entitlement pending her recovery. Further, the Respondents had not shown that the failure was justified for a reason which was material and substantial.

The Law

71. Disability Discrimination Act 1995:

5 "Meaning of Discrimination

(1) For the purposes of this Part, an employer discriminates against a disabled person if –

(a) or a reason which relates to the disabled person's disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply; and

(b) he cannot show that the treatment in question is justified.

(2) For the purposes of this Part, an employer also discriminates against a disabled person if –

(a) he fails to comply with a section 6 duty imposed on him in relation to the disabled person; and

(b) he cannot show that his failure to comply with that duty is justified."

(3) Subject to subsection (5), for the purposes of subsection (1) treatment is justified if, but only if, the reason for it is both material to the circumstances of the particular case and substantial.

(4) For the purposes of subsection (2), failure to comply with a section 6 duty is justified if, but only if, the reason for the failure is both material to the circumstances of the particular case and substantial.

(5) If, in a case falling within subsection (1), the employer is under a section 6 duty in relation to the disabled person but fails without justification to comply with that duty, his treatment of that person cannot be justified under subsection (3) unless it would have been justified even if he had complied with the section 6 duty.

6 Duty of Employer to Make Adjustments

(1) Where—

(a) any arrangements made by or on behalf of an employer, or

(b) any physical feature of premises occupied by the employer,

place the disabled person concerned at a substantial disadvantage in comparison with persons who are not disabled, it is the duty of the employer to take such steps as it is reasonable, in all the circumstances of the case, for him to have to take in order to prevent the arrangements or feature having that effect.

(2) Subsection (1) (a) applies only in relation to –

(a) arrangements for determining to whom employment should be offered;

(b) any term, condition or arrangements on which employment, promotion, a transfer, training or any other benefit is offered or afforded.

(11) This section does not apply in relation to any benefit under an occupational pension scheme or any other benefit payable in money or money's worth under a scheme or arrangement for the benefit of employees in respect of –

(a) termination of service;

(b) retirement, old age or death;

(c) accident, injury, sickness or invalidity; or

(d) any other prescribed matter."

17 Occupational Pension Schemes

(1) Every occupational pension scheme shall be taken to include a provision ("a non-discrimination rule")—

(a) relating to the terms on which—

(i) persons become members of the scheme; and

(ii) members of the scheme are treated; and

(b) requiring the trustees or managers of the scheme to refrain from any act or omission which, if done in relation to a person by an employer, would amount to unlawful discrimination against that person for the purposes of this Part.

(2) The other provisions of the scheme are to have effect subject to the non-discrimination rule.

(3) Without prejudice to section 67, regulations under this Part may –

(a) with respect to trustees or managers of occupational pension schemes make different provision from that made with respect to employers; or

(b) make provision modifying the application to such trustees or managers of any regulations made under this Part, or of any provisions of this Part so far as they apply to employers.

(4) In determining, for the purposes of this section, whether an act or omission would amount to unlawful discrimination if done by an employer, any provision made under subsection (3) shall be applied as if it applied in relation to the notional employer.

18 Insurance Services

(1) This section applies where a provider of insurance services ("the insurer") enters into arrangements with an employer under which the employer's employees, or a class of his employees –

(a) receive insurance services provided by the insurer; or

(b) are given an opportunity to receive such services.

(2) The insurer is to be taken, for the purposes of this Part, to discriminate unlawfully against a disabled person who is a relevant employee if he acts in relation to that employee in a way which would be unlawful discrimination for the purposes of Part III if –

(a) he were providing the service in question to members of the public; and

(b) the employee was provided with, or was trying to secure the provision of, that service as a member of the public.

(3) In this section –

"insurance services" means services of a prescribed description for the provision of benefits in respect of –

(a) termination of service;

(b) retirement, old age or death;

(c) accident, injury, sickness or invalidity; or

(d) any other prescribed matter; and

"relevant employee" means—

(a) in the case of an arrangement which applies to employees of the employer in question, an employee of his;

(b) in the case of an arrangement which applies to a class of employees of the employer, an employee who is in that class.

(4) For the purposes of the definition of "relevant employee" in subsection (3), "employee" , in relation to an employer, includes a person who has applied for, or is contemplating applying for, employment by that employer or (as the case may be) employment by him in the class in question."

72. The Tribunal found that the Respondents' sick pay arrangements fell within "benefit payable….under a scheme or arrangement" and was therefore excluded from the employer's duty under section 6 to make adjustments.
73. Mr Massarella argues that the Tribunal failed to have regard to London Clubs Management Ltd v Hood [2001] IRLR 719 which was cited in argument, though not referred to in the Tribunal's reasoning. In paragraph 27 of the decision Miss Recorder Elizabeth Slade QC set out the position thus:

27 "In our judgment, s.6 plainly applies to monetary benefits as well as to other arrangements. Were this not so, there would have been no need for s.6(11). This provision excludes from the application of s.6 any benefit under an occupational pension scheme and other benefits payable in money or money's worth under a scheme or arrangement for the benefit of employees in respect of specified events including sickness. Further, para.3(2) of the Disability Discrimination (Employment) Regulations 1996, clearly contemplates that financial benefits fall within s.6. Paragraph 3(2) provides:

'Arrangements consisting of the application to a disabled person of a term or practice of the kind referred to in paragraph (1) above (performance related pay) are not to be taken to place that disabled person at a substantial disadvantage of the kind mentioned in s.6(1) of the Act.'

28 In our judgment, the natural meaning of 'scheme or arrangement for the benefit of employees' does not include payment of sick pay by an employer to an employee under a contract of employment. Such payments are made by the employer to rather than 'for the benefit of' the employee. Further, they are made pursuant to the contract of employment, an expression used in s.4(3), rather than 'under an arrangement' the expression used in s.6(11). In our judgment s.6(11) is not ambiguous or obscure, neither does its literal meaning lead to an absurdity. Thus the conditions enabling us to rely on the extracts of Parliamentary material laid down by Lord Browne-Wilkinson in Pepper v Hart [1993] IRLR 33 at p.44 are not met. Even if they were, the Parliamentary material supports a construction of s.6(11) which does not include benefits paid to an employee by the employer pursuant to the contract of employment."

Mr Massarella therefore argues that the Tribunal were bound to follow the Hood case in this decision.

74. Mr Jones firstly seeks to distinguish Hood on its facts. In this case the Appellant's entitlement to sick pay is determined by reference to a nationally-negotiated scheme applied as a result of its incorporation by reference into her terms and conditions. We see no reason to distinguish Hood on that ground. Whether the terms were actually contained in the contract or by reference to an incorporated document, they were still made pursuant to the contract of employment and were payments made by the employer to the employee.
75. Mr Jones then argues that the term 'arrangements', as defined by section 6 (1) and 6 (2), clearly include terms on which certain benefits are to be offered or afforded and thus an arrangement for employee's rate of sick pay would, on any sensible reading, be an "arrangement for the benefit of the employee", as defined in section 6 (11). We do not agree with this interpretation. When one combines section 6 (11) with sections 17 and 18 the purpose was clearly to exclude occupational pension schemes and benefits provided under third party insurance services from the employer's duty to make adjustments under section 6 and to replace them with obligations imposed under sections 17 and 18, but not to exclude contractual payment of sick pay by employers.
76. An interesting argument was set out before us as to whether an employer who had the ability to set out the terms under which pensions or other insurances would be provided by a third party had a duty to make adjustments, but it is not necessary for us to decide that issue since we are quite satisfied that London Clubs was correctly decided insofar as it related to contractual sick pay as opposed to a third party insurance arrangement.
77. We are therefore satisfied that the Tribunal were in error in holding that the section 6 duty did not apply to contractual sick pay arrangements. We are satisfied that the Respondents failed to make reasonable adjustments and that they did not show that that failure was justified for a reason which was both material and substantial.
78. The Appellant had also complained that by putting her on half pay during her period of long-term sickness absence was less favourable treatment, contrary to section 5 (1) of the Disability Discrimination Act 1995. The Respondents have accepted that this was less favourable treatment for a disability-related reason and that the Appellant was subject to a detriment, but they relied on justification.
79. The Tribunal accepted that there were material and substantial reasons supporting the defence of justification relying on paragraph 5 (ccc) of their findings which had set out the position as follows:

5 (ccc) "After the applicant had been absent from work for more than 100 days the first respondent reduced her pay to half pay. It had a policy whereby absence for that period resulted in a reduction in sickness benefit. The first respondent did consider applications for exercises of discretion not to implement the reduction. The applicant did not make such an application. It was usual for reductions to be implemented in other cases of absences relating to workplace stress where applications for an exercise of discretion had not been made."

80. Mr Massarella complains that the Tribunal did not go on to consider whether the less favourable treatment of putting her on half pay would have been justified had adjustments been made, as required by section 5 (5) of the Disability Discrimination Act 1995. He contends that the Tribunal had to consider, for the purposes of section 5 (5) not only the particular adjustment relating to sick pay but the other adjustments that the Tribunal had found the Respondents were under a duty to make. He argues that if all those adjustments had been made the Appellant would not therefore have been on long-term sick leave and there therefore would have been no reason, material, substantial or otherwise, to put her on half pay. Further, even if the adjustment referred to by section 5 (5) is the particular adjustment the subject matter of the complaint, since under section 6 we have found that there was such a duty on the employer to make an adjustment, we do not accept that the failure can then be justified by reason of the Appellant failing to ask for an increase in pay whilst she was sick.
81. Mr Jones contends that section 5 (5) should be given its narrow meaning, but even so it seems to us that that would require the court to consider justification even if he had complied with the section 6 duty, i.e. that a reduction in pay had been avoided, in which case the issue of justification would not arise.
82. We are therefore satisfied that the Tribunal did err in law in that it failed to apply section 5 (5) properly or at all; and had they applied it they would not have been able to come to the conclusion that the less favourable treatment was justified. We therefore propose to substitute a finding that the Appellant by being put on half pay during her period of long-term sickness was treated less favourably.

Cross-Appeal

83. In paragraphs 20-32 of its decision the Tribunal considered an allegation and found that the Respondent had failed to make any or any adequate adjustments to the school timetable to avoid the disadvantage suffered by the Appellant as a result of the relocation of her textile classes to room DT6.
84. The Disability Discrimination Act 1995 only imposes an obligation on an employer to make reasonable adjustments in circumstances where a particular arrangement places the disabled person at a substantial disadvantage in comparison to persons who are disabled. It followed therefore for the purposes of this finding that the Appellant's mobility difficulties were clearly directly connected with her disability. Mr Jones argues that there had to be an explicit link between the disability and the disadvantage and that the report from Dr Platts did not make that connection.
85. Paragraph 30 of the Tribunal's findings set out the position thus:

30 "The Tribunal doubted whether the applicant had to establish a connection between her disability and her mobility. The first respondent knew that the applicant was sight disabled and that she had other difficulties which on a commonsense approach were likely to exacerbate the effect of the disability. In any event the Tribunal decided that the applicant's mobility was connected with her eyesight because in his report Dr Platts made that connection."

86. We are quite satisfied that the Tribunal's approach in this paragraph was correct. As we have already indicated in this decision, Dr Platts had associated the problems with the Appellant's knees and hips back to the onset of her eye problem and to the possible infection that she suffered at that time. The Respondent throughout was aware of that link. For example, in a letter of 2 November 1998 they spoke of the Appellant having been diagnosed as having a degenerative fungal condition which affects both her eyes and her joints. Further, even where a direct link between disability and the disadvantage cannot be established, it is clear from the Code of Practice and the guidance issued under the Disability Discrimination Act 1995 that a disabled person may rely on the indirect consequences of a disability in support of her claim.
87. Accordingly, we can find no fault in the Tribunal's approach on this issue and would dismiss the cross-appeal.