United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MS LORNA FINDLAY (of Counsel) Royal College of Nursing 67-69 Harbourne Court Harbourne Road Edgbaston Birmingham
For the Respondent	MR TIM SHEPPARD (of Counsel) Instructed By: Messrs Irwin Mitchell Solicitors Imperial House 31 Temple Street Birmingham B2 5DB


 


MR RECORDER HAND QC:

1. This is an appeal, with the permission of a division of this Tribunal presided over by His Honour Judge Burke QC, against the decision of an Employment Tribunal sitting at Bristol on 17^th and 18^th April 2002, a written decision by way of extended reasons having been entered in the register and sent to the parties on 9^th May 2002. The decision was that the Respondent, Park View Rest Homes Limited, had not discriminated against the Appellant, Mrs Fanning, by reason of her race.
2. Mrs Fanning originates from the Philippines. She is a qualified nurse. She entered into a contract of employment with the Respondent in the year 2000 whilst she was still resident in the Philippines. The Respondent recruited another 5 nurses from the Philippines, as well as the Appellant. Their recruitment had been organised by an employment agency, under the auspices of a scheme agreed between the Governments of the Philippines and the United Kingdom to make it easier for qualified nurses to come and work in the United Kingdom.
3. Mrs Fanning, then Maila Teruel, started work on 28^th October 2000. In order to gain United Kingdom Central Council for Nursing, Midwifery and Health Visiting ("UKCC") accreditation she had to undergo a period of training; this she was able to do on the job at the residential care home in Swindon under the supervision of the Matron. Whilst training she was to receive a salary of £11,000 per annum. Once accredited as a Registered General Nurse (RGN), this salary would increase to £14,000 per annum. Ms Teruel received her accreditation in April 2001.
4. The greater salary of £14,000 was paid for a 40 hour week; this equates to £6.92 per hour. There was no additional payment for bank holidays but any overtime (ie hours worked additional to the 40 hour week) was paid at time and a half. Accommodation was provided and there was a deduction of £172 per month made on account of that and other benefits.
5. Nurses not recruited from the Philippines were paid more. Their hourly rate was £8.95 and they were paid double time for working bank holidays; they did work overtime but they were not paid any overtime premium.
6. By mid-2001 the Appellant had decided to marry Mr Fanning, who was a care assistant at the home. This she did at the end of September 2001, by which time she had moved out of the accommodation provided by the Respondent. By then she had developed low back pain and had taken sick leave; she also started to suffer from depression.
7. She resigned by a letter dated 3^rd November 2001 and commenced proceedings in the Employment Tribunal alleging unlawful deductions from wages, breach of contract, constructive dismissal and race discrimination. Her Originating Application asserts (amongst a number of other things which it is not necessary to detail for the purposes of this Appeal) that "her salary was not equal to that of her white nursing colleagues". This was one of three allegations on which her case of race discrimination rested. All three were rejected by the Employment Tribunal. This Appeal is confined, however, to the issue as to whether this admitted difference in salary arose because of the difference in race.
8. The Employment Tribunal identified the issue at paragraph 12 as follows:-

"Firstly, she complained that there was clear discrimination based upon race in the pay which she and the other Filipino nurses received in comparison with the pay received by other nurses in the home".

The ET addressed this point at paragraphs 13 to 16 of its decision. There, they reject the "swings and roundabouts" argument that there was really no differential and therefore no less favourable treatment because the Filipino nurses could be better off by working overtime. They regarded as disingenuous one of the explanations of the differential given by the Respondent, namely that the rate of pay had been fixed by the scheme agreed by the two Governments; they found that this was not so; all that had been agreed between the two Governments was a minimum rate of pay and employers were at liberty to pay more if they wished to do so.

9. The last argument (not only in order but chronologically) however, was accepted as valid by the Employment Tribunal. This was that there were costs associated with the recruitment, the training and the accommodation of the Filipino nurses, which costs explained the differential in pay. There were agency fees, air fares, the provision of training and the purchasing and furnishing of a house. Although there was a reduction from salary on account of the expense of providing these benefits, it did not cover the total costs, bearing in mind Council tax, utility charges and the capital costs. The Employment Tribunal expressed its conclusion on the matter at paragraph 14 in these terms:-

"The reason for the differential in pay was not therefore the nationality of the nurses, but the costs incidental to their recruitment and introduction to the United Kingdom".

At paragraph 15 they seemed to have tested that conclusion by a hypothesis; they say:-

"In considering the merits of that argument, we pose the following question: if the Applicant had come to the United Kingdom and had gained her UK Registration by some other means and had then simply applied to the Respondent for a position as the other non-Filipino nurses had done, would she have been paid at the rate of the other nurses who had been recruited locally? We could see no evidence to suggest that any attempt would have been made to restrict the Applicant to the lower rate of pay just because of her race; on the contrary, we thought it more likely than not that she would have been employed at the same rate as the other locally recruited nurses".

Having done so they expanded upon the conclusion at paragraph 14, which has been quoted above, by saying at paragraph 16:-

"On the whole of the evidence, we were unanimously satisfied that although the Applicant was paid at a lower rate than her non-Filipino colleagues, the Respondent had satisfied us that that less favourable treatment was not due to the Applicant's race, but to the substantial expenses incurred by the Respondent in their recruitment, transport to the United Kingdom, and provision of facilities no [sic] provided to – or required by – locally recruited nurses".

10. Ms Findlay of Counsel, who has appeared for the Appellant, submits that the Employment Tribunal erred in reaching that conclusion. In order to appreciate the full force of her argument, it is necessary to consider the chronological development of the Respondent's explanation. As we have said, the differential was clearly identified as a matter for complaint in terms of the Race Relations Act in the Originating Application, which is dated 6^th December 2001. The Appellant served a questionnaire more or less at the same time (dated 7^th December 2001). It asked for details of the rates of pay. The reply of the 11^th February 2002 said:

"This is privileged information and cannot be disclosed without the consent of the Registered Nurses employed by the Respondent".

Further and Better Particulars were requested by letter of 4^th March 2002 and in answer to that on 26th March 2002 did provide information as to rates of pay, which information would have enabled the Appellant to know, at that stage, that there was a significant differential between her rates of pay and that of other nurses. In a letter, dated 4^th July 2000, from the Recruitment Agency which had been involved in the Appellant's recruitment, some of the costs of recruitment were identified as follows:

"Our fee for making these arrangements will be £1,500 per nurse recruited. On top of this you will need to get a number of documents notarised by the Philippine Embassy. We will of course assist you in this process but unfortunately the Notary Public will require you to be present. There is generally at least one Notary Public in each major town. For budget purposes I would assume £100 per candidate for this. The other cost is the air fare. At the time of sending this letter the cost of a one-way ticket from Manila, bought through our agent, is $605 USD. You would also be responsible for transporting the nurses from Heathrow Airport to their place of work. All fees are due before the nurses leave Manila as we are required to pay all costs to the Philippines before the nurses are permitted to board their flight. If a nurse leaves before completing 3 months employment we would provide another nurse to you without charging our recruitment fee.

In terms of accommodation, I generally suggest that the new employer should arrange accommodation in a local area for the nurses. It is much easier for you [sic] provide the accommodation and deduct the cost of it from their wages. It is worth noting that most of the nurses prefer to share accommodation to keep costs down. In general the nurses have very little money when they arrive in the UK. You might therefore wish to consider giving the nurses an advance on their wages when they first arrive".

Mr Tranter, who we understand to have been, in effect, the owner of Park View at the time, made a witness statement, which we understand to have been read as his Evidence in Chief. Paragraph 8 gives some explanation of the differential in the following terms:

"It is accepted the Applicant was employed under different terms and conditions and this was because she had been employed as a staff nurse under supervision and during her period of training she was remunerated at a lessor [sic] salary until she had obtained entry to the UKCC Register. Until the Applicant had obtained entry to the UKCC Register and [sic] given a UKCC pin number she was unable to take charge of shifts. The UKCC pin number enables a nurse to register as an RGN in the United Kingdom and to take charge of shifts. Following 6 months of training and experience, the Applicant did receive her UKCC pin number and her salary was accordingly increased as stated in her letter of offer. Further, the Applicant [sic] terms and conditions differed to [sic] her nursing colleagues that were not recruited from overseas, in that the Applicant was provided with accommodation and it was made expressly clear to her in her letter of offer of employment that payments for example rent, services and any other additional expenditure incurred would be recovered from her salary by way of deductions. This clearly was not applicable to those nurses who were not employed from overseas where no accommodation was provided".

11. The final piece of this evidential jigsaw is to be found in the oral evidence of Mr Tranter, a note of which was agreed between the parties before the hearing of this Appeal. In cross-examination Mr Tranter, the former owner of the home, is recorded as having said that the cost of bringing the Applicant and her colleagues in terms of air fare and subsidised housing had been factored into the rate of pay. He said that the hourly rate reflected the costs of employing the Applicant; these he explained in broad terms as being agency costs of £25,000, air fares, buying one home and borrowing money to rent another. Miss Findlay points out that this latest and most cogent evidence is somewhat inconsistent with the earlier documentary evidence as to costs and came very late in the day, arising in the course of cross examination and subsequent questions from the Employment Tribunal.
12. She submitted that the Employment Tribunal had erred in law by not considering whether it should draw an adverse inference from the Respondent's refusal to supply information about rates of pay in its replies to the Race Relations Act questionnaire. Section 65(2)(b) of the Race Relations Act 1975 does not require the Employment Tribunal to draw an adverse inference but it does require the Employment Tribunal to consider whether or not to draw an adverse inference from such a failure. Here there was nothing in the Employment Tribunal's decision to indicate that they had ever considered whether or not to draw an inference from the failure to answer the questionnaire so far as rates of pay were concerned. As well as furnishing a basis for this specific point of appeal, Miss Findlay pointed out that the Employment Tribunal's silence upon this matter was symptomatic of the general inadequacy of reasoning in its decision.
13. Her second submission was allied to the first. The Employment Tribunal had failed to consider whether or not to draw any inference from the fact that the explanation, which the Employment Tribunal accepted as explaining the differential, had been articulated very late in the chronology of this litigation. It had arisen in the course of cross-examination of Mr Tranter; there were some earlier evidential indications but the point was not made with any degree of clarity until the actual hearing and then relatively late during the hearing. She submitted that when considering the explanation put forward by the employer, it was open to the Employment Tribunal to conclude that the explanation was incredible given the time at which it was articulated. This failure is all the more remarkable having regard to the fact that in her closing speech, the Solicitor then representing the Appellant, Ms Sherin Mazunder, had specifically drawn this point to the attention of the Employment Tribunal. Moreover, given that the Employment Tribunal had found one explanation put forward by the Respondent to be "disingenuous" (see paragraph 13), all the more reason for the Employment Tribunal to approach other explanations with scepticism.
14. Ms Findlay made a different, but again allied, point in relation to the Employment Tribunal's approach to the recruitment costs. The decision, she submitted, betrays a lack of critical analysis about those costs. The evidence, as well as coming late, was inconsistent. The costs set out in the letter from the Recruitment Agency appear to be at odds with those attested to by Mr Tranter in his oral evidence.
15. Ms Findlay's final complaint relates to the intellectual exercise carried out by the Tribunal at paragraph 15 of its decision. She argued that this was no more than a meaningless hypothesis without any grounding in the evidence and thus a piece of pure speculation. She submitted that this sort of speculation was condemned by the Court of Appeal in Anya v University of Oxford and Another 2001 IRLR 377; she pointed in particular to paragraph 14 of the judgment of Sedley LJ.
16. The whole theme of Ms Findlay's submission was that the Employment Tribunal had neither adequately stated its factual findings nor properly approached the task of analysing the evidence. For this general underlying submission she relied heavily on the Court of Appeal's decision in Anya. Here the Employment Tribunal has accepted uncritically what Mr Tranter said about the explanation for the differential. This Employment Tribunal, submitted Ms Findlay, has fallen into the trap of too readily accepting an explanation without looking behind it and subjecting it to a critical analysis. At paragraph 11 of his Judgment Sedley LJ reminded us that:

"Very little direct discrimination is today overt or even deliberate. What Keane and Qureshi tell Tribunals and cause to look for, in order to give effect to the legislation, are indicators from a time before or after the particular decision which may demonstrate that an ostensibly fair minded decision was, or equally was not, affected by racial bias".

In the particular factual context of Anya this is emphasised by the sentence in paragraph 14 of Sedley LJ's Judgment which reads:

"Such a conclusion was without doubt open to them, but only provided it was arrived at after proper consideration of the indicators which Dr Anya relied on as pointing to an opposite conclusion".

The matter is drawn together, in the factual context of the Anya case by Sedley LJ at paragraphs 19 to 21 of his Judgment, which read as follows:

"One has only to ask whether this would necessarily have been the outcome if Dr Anya's allegations of prior hostility had been made out in order to see what is lacking in this decision. The Industrial Tribunal, with all respect to them, have stated at the far end of the process of reasoning and have never returned to base. Having concluded that Dr Roberts was essentially truthful (we do not know whether or not they thought the same of Dr Anya), they have abandoned the remainder of the enquiry. They make no findings about the substance, much less the significance, of the inconsistencies which they have noted in his and Professor Cantor's evidence; no evaluation of the further inconsistencies which they had found between the University's documents and its evidence; no findings as to whether the Appellant had, as he contended, been repeatedly sidelined by Dr Roberts in the course of his research work; no finding about the significance of the differences in the way he and Dr Lawrence were treated; and no indication of the significance, if any, of the interview panel's departures from University policy or good practice. Nor, therefore, have they been in a position to decide when any hostility they might have found was in any significant degree racially motivated.

20. The arguments

Mr Underhill, in an impressive argument, has contended that a careful analysis shows that the Industrial Tribunal has found and stated all that was necessary for a rounded and defensible decision. He points, first, to the last part of the final sentence of the decision ('….in our view the evidence is not sufficient to justify us in drawing the inference of discrimination') and submits that this deals adequately, albeit briefly, with Dr Anya's entire account of manifestations of hostility. In a plain enough case he submits, where there is no evidence of race discrimination at the actual point of complaint (here, the interview), it is legitimate for the Tribunal of facts to decline to travel in detail through the prior history. Accordingly, so long as the Industrial Tribunal bore everything in mind but found Dr Roberts, as they did, to be an honest witness in his repudiation of any racial bias, they had no obligation to make any further findings.

21 This may be so in an extreme case – but an extreme case in this context is one which is capable of being dismissed in limine on the ground that the facts relied on, even if proved, could not justify an inference of race discrimination...".

17. Equally, submits Ms Findlay, this case is not one which could be "dismissed in limine". Here the Employment Tribunal has simply not been critical enough nor has it inquired carefully enough. At the very least, in order to properly evaluate the evidence that was being placed before it by Mr Tranter, the Employment Tribunal ought to have invited the then Applicant's Solicitor to explore the matter further and, if necessary, to apply for an adjournment whilst further consideration was given to the evidence and further enquiries made.
18. Mr Shepphard, who appeared for the Respondent both at the Employment Tribunal and before us, submitted that this case was of a very different order to Anya. Here the Employment Tribunal went straight to the question of belief and, in a nutshell, accepted that Mr Tranter was being truthful in his explanation and that the explanation was an adequate one. This, submitted Mr Shepphard, was the beginning and end of the matter. There were adequate findings of fact to support the Employment Tribunal's conclusions and the decision was properly reasoned. So far as the failure to answer the question posed about pay in the Race Relations Act questionnaire was concerned, that was a matter which did not go to the heart of this case. It would not be appropriate to draw any adverse inference from the circumstances; Mr Tranter may have misguidedly thought that questions of pay were so confidential that they ought not to be disclosed. In any event disclosure followed fairly rapidly after. Mr Shepphard did not accept that the explanation put forward by Mr Tranter arose as late in the Chronology as Ms Findlay had submitted there were indications of it in Mr Tranter's witness statement. In any event the Employment Tribunal had the point about lateness put before it and plainly was not discouraged from accepting Mr Tranter's evidence on this point.
19. Despite Ms Findlay's lucid and comprehensive submissions we have come to the conclusion that this appeal should be dismissed. We accept her submission that when a questionnaire is not answered and that failure is relied upon by an Applicant, the Employment Tribunal ought to consider whether or not to draw an adverse inference. Moreover we accept that there is nothing on the face of the Employment Tribunal's decision to indicate that it has given consideration to the submission, which was placed before it in respect of the failure to answer the question. Whilst this is regrettable, we accept Mr Shepphard's submission that it does not go to the heart of the decision. Moreover we feel confident that the Employment Tribunal must have considered this matter and must be taken to have declined to draw an adverse inference, even though they say nothing about it in their decision. In our judgment Mr Shepphard is correct to say that the Tribunal could not have drawn an adverse inference in the circumstances. Within a few weeks of declining to provide the information in the Race Relations Act questionnaire, the Respondent did provide, in the form of Further and Better Particulars, the information sought or at least sufficient of it for the Appellant to appreciate that there was a differential. In those circumstances we cannot conceive of any adverse inference which might be drawn. Accordingly, although we think it would have been preferable to deal with this matter expressly, we have come to the conclusion that the Employment Tribunal must have decided not to draw any adverse inference. In our judgment, whilst the failure to deal with this matter expressly might constitute a blemish on the Employment Tribunal's decision, it is not the kind of inadequate reasoning, which constitutes an error of law, in the way explained in the judgment of Sedley LJ (see, in particular, paragraph 12 at page 382).
20. So far as the criticism of the Tribunal for failing to scrutinise the explanation put forward by Mr Tranter more critically is concerned, we think that the Employment Tribunal did not fall into the same error as that identified by the Court of Appeal in Anya. It is tempting to regard Anya as a licence to criticise Employment Tribunals in respect of them having too easily accepted explanations. It is important to bear in mind that Anya is about:-

"The choice between….two comparably well qualified candidates….[which]…. depended entirely on how the panel viewed their personal and professional qualities".

[see paragraph 21 page 382]

Here Dr Roberts' view of Dr Anya was:-

"….not that he was a poor scientist but that he had, along with his strengths, weaknesses which placed him second….".

[see paragraph 18 at page 382]

Thus Dr Roberts' view of Dr Anya might be:-

"….a judgment….notoriously capable of being influenced, often not consciously by idiosyncratic factors….".

[see paragraph 21 on page 382]

Thus Dr Roberts might well honestly and sincerely hold the view about Dr Anya, which he explained in his oral evidence, but given the element of subjectivity involved that might not be the end of the matter. This is a subtle question involving issues of so called "unconscious" or, as we would prefer to put it, "subconscious" discrimination. That this was a factor in Anya is plain from the passages we have referred to, in particular paragraph 11 at page 381, where Sedley LJ refers to direct discrimination not being "deliberate".

21. The instant appeal does not seem to us to fall into this category. Mr Tranter told the Employment Tribunal what the explanation was. He told them about that matter at a very late stage. The Employment Tribunal had to decide something less subtle and, in a sense, less subjective, than the decision facing the Employment Tribunal in Dr Anya's case. It had to decide whether Mr Tranter was telling the truth about this matter or not. This could scarcely be anything to do with non-deliberate or subconscious discrimination. Either it was the explanation or it was a pack of lies. Whilst, again, we think it might have been preferable for the Employment Tribunal to deal explicitly with the lateness of the explanation by saying that despite the timing of it, the Employment Tribunal was confident that it had now heard the truth, nevertheless we have come to the conclusion that this must have been the Employment Tribunal's approach. This was fundamentally a question of fact and we can find no error of law arising from the Tribunal's decision.
22. Nor do we think that the Tribunal erred procedurally by not offering the Appellant's then Solicitor an opportunity to ask further questions or to seek an adjournment. As the note of her closing submissions shows, she was well aware of the importance of this point. We accept that she might have been put in a difficult position but nevertheless we think that the Tribunal was not in error. Where parties are represented and especially where they are represented by a qualified advocate, the Employment Tribunal is not to be criticised for failing to adopt any particular course when no application that it should adopt that course has been made to it. In all those circumstances, despite Ms Findlay's submissions, we conclude that the Employment Tribunal's decision contains no error of law and accordingly we dismiss this Appeal.