United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR J LADDIE (of Counsel) Instructed by: BUPA Legal Department BUPA House 15-19 Bloomsbury Way London WC1A 2BA
For the Respondent	THE RESPONDENT IN PERSON


 


SUMMARY Unfair dismissal – apparent bias

Sex discrimination – issue raised by Employment Tribunal Chairman – whether understood by respondent – whether amendment to claim sex discrimination should have been allowed in the light of limitation period and fairness – whether application to amend to include a claim for sex discrimination matter be remitted.

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THE HONOURABLE MR JUSTICE SILBER

I Introduction

1. Care First Health Care Limited ("the Appellants") appeal against a decision of the Employment Tribunal sitting in Manchester dated 16 April 2003, by which it held that (i) Mr. Neil McLaren ("the Respondent") had been unfairly dismissed by the Appellants, (ii) it was "just and equitable to grant leave to amend the originating application to include a claim of sexual discrimination" and (iii) the Appellants had discriminated against the Respondent on the grounds of his sex. By a subsequent decision made on 16 June 2003, the Tribunal awarded the Respondent £5,000 together with £1,475 interest in respect of his claim for sex discrimination and £2,245.94 in respect of his claim for unfair dismissal.
2. This appeal raises issues of (i) whether the Employment Tribunal improperly encouraged or permitted the Respondent to bring a claim for sexual discrimination at the hearing, (ii) whether the nature and extent of the Respondent's claim for sexual discrimination was fully explained to or understood by the Appellants, (iii) whether the Employment Tribunal's finding of discrimination by the Appellants on grounds of sex can stand and, if not, (iv) whether any (and if so which) parts of the decision of the Employment Tribunal relating to the unfair dismissal and sex discrimination claims should be remitted for further consideration.

II The Respondent's Employment

3. The Respondent was employed as a hobby therapist at Carders Court, a residential home owned and managed by the Appellants. His employment commenced on 21 February 1994 and the Appellants became his employer following the transfer of an undertaking in 1998. At all material times, the Respondent reported directly to the manager of the care home, Mrs. Gillian Walsh, who in turn reported to Mr. Chris McSharry, the Assistant Regional Director of the Appellant, whose office was situated in Carders Court. The Respondent resigned his employment on 5 June 2001 claiming unfair constructive dismissal.

III The application to the Employment Tribunal

4. On 7 June 2001, the Respondent made an application to the Employment Tribunal on the standard IT1 form. In answer to the section in the form in which applicants have to:-

"Please give the type of complaint you want the Tribunal to decide (for example, unfair dismissal, equal pay). A full list is available from the Tribunal office. If you have more than one complaint list them all".

The Respondent answered "constructive dismissal".

5. The Respondent was required to give details of the complaint on the IT1 form in box 11 and he wrote that:-

"Since being taken over by BUPA in 1998 the Home Manager Mrs. Gillian Walsh has waged a vendetta against me. This has included bullying, harassment, two physical assaults, one sexual assault. I have attempted to complain over many months, through the company's grievance procedure but to no avail. I have been documenting the various incidents, but now I am at the point where I cannot continue working under these awful conditions. I have all the relevant documentation and witnesses to my complaint".

6. The Appellants served a Notice of Appearance which indicated that they understood the general complaint to be one of constructive unfair dismissal, which they denied. On 1 August 2001, the Appellants sent the Respondent a request for further and better particulars, to which the Respondent did not reply. Eventually, on 8 March 2002, the Appellants sought an order that the Respondent provide the further better particulars and the Employment Tribunal listed the case for a directions hearing, the purpose of which was said to be, among other things, "to consider .. the issues and matters of dispute". At the directions hearing held on 4 June 2002, Counsel for the Appellants raised the question of the further particulars, which had been requested, to which the Respondent stated that details of his complaint were to be found in his grievance literature, which consisted of material relating to Mrs. Walsh and Mr. McSharry but none of it specifically alleged discrimination by them on grounds of sex.
7. The Chairman of the Employment Tribunal directed that Counsel for the Appellants to draft a Scott Schedule of the matters raised by the Respondent in his grievance literature, with a view to that schedule being agreed to by the Respondent before the full hearing. At that time, there was no suggestion that the Respondent's claim was anything other than for unfair dismissal. The Scott Schedule was duly drafted by the Appellants and it was agreed to by the Respondent. It contained the allegations raised by the Respondent in his grievance literature.

IV The Hearing before the Employment Tribunal

8. On 27 January 2003, the hearing of the Respondent's application commenced in Manchester and as on this appeal, the Appellants were represented by Mr. James Laddie of Counsel while the Respondent appeared in person. In order to understand what happened at the outset of that hearing, we have had the benefit first of an affidavit from Ms. Evelyn Nwajei, who is a barrister and the in-house legal adviser in the legal department of BUPA and second of detailed comments on that affidavit from the Chairman of the Employment Tribunal with whom one of the member of the Employment Tribunal expressly agreed while the other member had no comments to make on the affidavit.
9. The position that has emerged from this evidence is that at the start of the hearing:-

(a) the respondent indicated that he was happy with the Scott Schedule;

(b) the Chairman considered that "the grounds of complaint in box 11 of the original application raised a clear claim of sex discrimination". The Chairman asked the Respondent if he was bringing a claim for sex discrimination, to which he replied in the negative. Those words were recorded in Ms. Nwajei's notes but the Chairman said that she cannot recall those words. She is not disputing the notes as the words may well have been said because the Chairman's notes refer to someone who was not identified remarking "sex discrimination is not raised by the parties";

(c) the Chairman asked the Respondent if he knew what sexual discrimination was and he said that he did not. The Chairman's recollection is that she tried to explain to the Respondent that a claim such as his amounted to sexual discrimination and that this was highlighted by the claim that sexual assault had taken place. The Chairman's notes confirm her recollection that the respondent at that stage confirmed that he was claiming sexual discrimination "if that is what sexual assault means";

(d) at some stage on the first day Mr. Laddie objected to the course of proceedings by stating that (i) the claim of sexual assault did not necessarily include a claim for sexual discrimination, (ii) he objected to the claim stating sex discrimination had not been raised in the originating application, (iii) the Respondent had taken legal advice at that stage and that an allegation of sexual assault as a discrete event was out of time as it referred to an alleged incident in Summer 2000;

(e) someone, possibly the Chairman, indicated that the Respondent relied on the allegation of sexual assault as one incident in the course of conduct;

(f) Mr. Laddie referred to Hendricks v. Commissioner for Police for the Metropolis [2003] IRLR 96. The Chairman's notes indicated that Mr. Laddie said that in discrimination cases where the allegations are made which are out of time, they should be dealt with at the full hearing and

(g) the Chairman said that she agreed with Mr. Laddie and indicated that the Tribunal would hear all the evidence and decide at the end of the evidence whether the claim "includes a claim for sex discrimination after hearing the evidence and hearing representations".

10. There is one matter which is not agreed and that is that the Chairman stated that it was her:-

"recollection that I identified the potential claim of sex discrimination as relating to the entire complaint of the [Respondent] and that the sexual assault was part of an alleged course of conduct by the [Respondent's] female manager which led to his resignation. That was my understanding of a potential claim from Day One".

11. It is not clear if that identification of a potential sex discrimination claim was given publicly to the parties by the Chairman. Insofar as is contended that it was given to the parties, Mr. Laddie says that this contention is not supported by the Chairman's notes, the notes of Ms. Nwajei or his own recollection. He also contends that if it had been assumed that the Appellants might be facing a widely drafted claim of sex discrimination, consideration would then have had to have been given by him to making an application for an adjournment so as to enable the Respondent to formulate his claim properly and for the Appellants to marshal further evidence. We consider that there is substantial force in this point as we find it very difficult to believe that as the very competent lawyer and skilful advocate that he is, Mr. Laddie would not have taken these steps to protect the Appellants' position.
12. Unfortunately, no application setting out in writing the proposed amendment including the claim for discrimination on grounds of sex was formally made by the Respondent to the Employment Tribunal. Moreover, the Employment Tribunal did not require the Respondent to set out his amendment in writing; this is regrettable as if such a proposed written amendment had been produced, there could have been no scope for further misunderstanding of the kind which has now unfortunately arisen in this case. We stress that if an application is made to the Employment Tribunal for leave to amend to include a new claim, this amendment should be recorded in writing so as to ensure that there will be no subsequent misunderstanding. It is very regrettable that this was not done in this case because the Employment Tribunal should have insisted upon this. Moreover, the hearing continued with no discussion of comparators in respect of the sex discrimination claim and we will shortly explain the unfortunate consequence of this.
13. At the end of the evidence, Mr. Laddie on behalf of the Appellants made his closing submissions in the usual way and initially he made no submissions on the claim of sexual discrimination. Mr. Laddie only raised and commented on matters of evidence concerning the Respondent's claim of sexual assault, but at the end of his submissions, the Chairman invited Mr. Laddie to make further submissions concerning the complaint of sex discrimination. Mr. Laddie then indicated to the Employment Tribunal that he did not understand the basis upon which the Respondent was proceeding with the claim for sex discrimination. He therefore proposed to wait for an opportunity to respond if the Respondent persisted with this claim for discrimination on grounds of sex. The Respondent duly made submissions on the evidence and at the end of those submissions, he himself indicated that he did not understand the claim of sexual discrimination. Pausing at that point, it is very surprising and alarming that neither party at the end of the evidence and during final submissions understood what has now turned out to be a very important aspect of the claim which was only understood, we suspect, by the Chairman and possibly the lay members; that is perhaps not surprising as after all she was the person who had suggested it in the first place.
14. The Chairman cannot now recollect how she responded to the fact that the claim for sexual discrimination was not understood, but her notes merely stated that "Chair, explained why". The Respondent then stated that "I haven't thought about it. Does it mean going through the whole thing again?". The Chairman then pointed out to Mr. Laddie the difficulty that was faced by having an unrepresented applicant and that "the Tribunal would have to deal with it". Mr. Laddie then objected to being "asked to make a submission in relation to which a claim has not been made". He also made reference to "a claim of sexual harassment by Mr. McSharry" indicating that the case of Pearce v. Governing Body of Mayfield School showed that such a claim could not amount to a proper claim of sexual discrimination. Mr. Laddie then referred to the claim of sexual assault against Mrs. Walsh and he referred to the sexual discrimination claim being made out of time.
15. The Chairman's notes state that Mr. Laddie concluded by saying that "I cannot be required to make submissions in the absence of the Applicant giving an indication that he wants to pursue a claim of sex discrimination". According to the Chairman's notes, the Applicant replied "can I pursue a claim for sexual discrimination?" At that point, the Chairman's response was noted as being "that is what I understood the Applicant to mean from Day 1". According to the Chairman, Mr. Laddie indicated that he would then deal with it and he then proceeded to make some submissions concerning an amendment to the Originating Application so as to include a claim of sexual discrimination being out of time. The Chairman has stated that Mr. Laddie's comments were, however, restricted to the sexual assault allegation and the out-of-time points. The Chairman notes that Mr. Laddie's submissions were not that the only claim of sexual discrimination before the Tribunal related to the single allegation of sexual assault but the Chairman noted that Mr. Laddie did not ask the Chairman to clarify how she understood the claim to be from "Day 1". Mr. Laddie raised no other points. The Chairman has subsequently apologised in her written statement to this Appeal Tribunal if her understanding was incorrect but she considered that the Employment Tribunal had given Mr. Laddie ample opportunity to make appropriate submissions.
16. As we have explained in its determination, the Employment Tribunal held that the Appellants had discriminated against the Respondent on grounds of sex and it later awarded the respondent £6,475 (including interest) for this claim.

V The Grounds of Appeal and the Issues

17. Amongst his many criticisms of the Employment Tribunal's approach to the issue of discrimination against the Respondent on grounds of sex, Mr. Laddie contends that the Employment Tribunal erred first by suggesting that a claim of sex discrimination should be made, second by allowing such a claim to be introduced and third by expanding the claim beyond the parameters understood by the parties so that it was contended that the entirety of the conduct of Mrs. Walsh and Mr. McSharry constituted discrimination on grounds of sex. Mr. Laddie also submits that the Employment Tribunal should not have permitted the Respondent to amend his claim to allege discrimination on grounds of sex. He also submits that the Employment Tribunal's reasoning that the Appellants discriminated against the Respondent is flawed.
18. So, Mr. Laddie says that this Appeal Tribunal should now quash the finding of sex discrimination. He accepts that in the ordinary course of events, such an order would lead to the claim for discrimination on grounds of sex being remitted to an Employment Tribunal for reconsideration. Mr. Laddie nevertheless submits that this should not be done in this particular case because the sex discrimination claim is doomed to failure because it was time-barred and that in any event, it should not in the circumstances of this particular case have been introduced by an amendment at such a late stage of the proceedings. Thus, it is contended by the Appellants that the sex discrimination claim cannot and should not be remitted but that it should be dismissed now by this Appeal Tribunal.
19. Mr. Laddie further contends that because of the Employment Tribunal's "apparent bias", its decision that the Respondent had been unfairly dismissed should also be set aside but that this claim for unfair dismissal should be remitted to be considered by another Employment Tribunal.
20. We propose to comment on the issues raised on this appeal in the following order. First, we will decide whether the Employment Tribunal's finding that there had been discrimination on grounds of sex should be quashed and if it should be, we will then proceed to consider second, what effect that decision has on the finding of unfair dismissal. Finally we will decide whether the claim for discrimination on grounds of sex should be remitted or dismissed.

VI Should the Employment Tribunal's finding of discrimination on grounds of sex be quashed?

21. Mr. Laddie points to a number of reasons why this finding of sex discrimination should not be allowed to stand and we will start by considering two of those arguments, namely first, that by permitting the claim of sexual discrimination to be brought during the course of the hearing, there was a breach of natural justice so far as the Appellant was concerned and second, that the reasoning of the Employment Tribunal in upholding the claim of sexual discrimination is flawed. If we decide that we cannot quash the finding of discrimination on grounds of sex on either or both of these grounds, we will then proceed to consider Mr. Laddie's other submissions criticising the Employment Tribunal's introduction and general handling of the sex discrimination claim.

(i) Was it a breach of natural justice for the Employment Tribunal to permit the claim for sex discrimination to be pursued?

22. Mr. Laddie contends that the way in which the sex discrimination claim was introduced by the Chairman and then dealt with at the hearing amounts to a breach of natural justice. We have already explained how the claim for discrimination on grounds of sex was discussed at the outset of the hearing and again later, when submissions were being made by Mr. Laddie. Our task now is to ascertain whether the way in which the claim for discrimination on grounds of sex was allowed to proceed constituted breach of the rules of natural justice.
23. We are quite satisfied that during the hearing Mr. Laddie did not understand the way in which the Employment Tribunal would consider the claim for sexual discrimination. As we have explained, Mr. Laddie told the Employment Tribunal during his final submissions that he did not understand the claim and we can understand why he was in that position. The Chairman records that Mr. Laddie's submissions at the end of the hearing were restricted to the single allegation of sexual assault on which the Respondent's evidence was ultimately not accepted. It is abundantly clear that there was no clear or comprehensible statement from the Chairman during the hearing explaining her understanding and her intention that the Respondent's entire case would and should be considered on the basis of sex discrimination. If we had been in any doubt on this, we would have come to the same conclusion because it is clear that even the Respondent apparently did not understand that he was bringing a claim for sexual discrimination based on the entirety of Mrs. Walsh's conduct.
24. Thus, there was clearly a very serious misunderstanding between the Tribunal and those acting for the Appellant on the crucial issues of whether a claim for discrimination on grounds of sex was being pursued and if so, its ambit. The Chairman was the person responsible for suggesting the amendment and thus it was clearly her duty to ensure that both the parties knew both that the suggested claim for sexual discrimination was proceeding as well as the extent and nature of the claim. In consequence, we agree with Mr. Laddie that the Appellants were prejudiced in a number of significant ways because the Appellants would have conducted the proceedings in front of the Employment Tribunal very differently from the way in which they did if they had understood the case on sexual discrimination in the way in which it now appears that the Chairman did from "Day 1".
25. We are satisfied that if Mr. Laddie had understood that a claim was being made on the basis of discrimination on the grounds of sex, he would have undoubtedly sought to cross-examine the Respondent on whether he was really claiming first, that Mrs. Walsh had discriminated against the Respondent on grounds of sex or second, that Mr. McSharry treated him less favourably on the grounds of his sex. Indeed, bearing in mind that the claim for discrimination on grounds of sex was not contained in the IT1, there must have been a realistic chance that the Respondent would have said in evidence that he did not think that either of them treated him less favourably than others on grounds of sex, but that their reasons for treating the Respondent in the way that they did was because they disliked him for some reason or other. The second way in which the Appellants were prejudiced by not understanding the claim for sexual discrimination is that they themselves did not call any evidence from their management or staff to rebut the allegations of discrimination on grounds of sex or to seek an adjournment to do so. It must be very likely that at least Mrs. Walsh or Mr. McSharry could have given some helpful evidence for the Appellants on this issue.
26. Finally, it is very likely that if they had known that they were facing a case of sexual discrimination, the Appellants would have sought to rely on the defence under section 41(3) of the 1975 Act, which provides that:-

"In proceedings brought under this Act against any person in respect of an act alleged to have been done by an employee of his it shall be a defence for that person to prove that he took such steps as were reasonably practicable to prevent the employee from doing that act, or from doing in the course of his employment acts of that description".

27. The Employment Tribunal indeed noted that no defence had been raised by the Appellants under this section (see paragraph 33 of the Extended Reasons).
28. It is settled law that a party to any action has not had a fair hearing where he does not understand or could not reasonably be expected to have understood allegations made against him, which was the position in which the Appellants were placed. Lord Diplock has explained that:-

"The right of a person to be heard in support of his objection to a proposal to embark upon an investigation of his activities cannot be exercised effectively unless that person is informed with reasonable specificity what are the kinds of act to which the proposed investigation is to be directed and confined (R v. Commission for Racial Equality ex parte Hillingdon London Borough Council [1982] AC 779 at 787H-788A).

29. In this case, the Employment Tribunal failed to comply with this obligation and thus it failed to give the Appellants a fair hearing and it follows therefore that the finding of sex discrimination must be quashed.
30. We cannot leave this issue without explaining that we are disturbed by the way in which the Employment Tribunal conducted itself. We cannot over-emphasise the need for any proposed amendment to the IT1 of major importance to be formulated in writing so that everybody involved in the case, whether Tribunal members or the parties, knows and understands the precise ambit of the proposed amendment. Natural justice then requires that if the application for the amendment is not then summarily rejected by the Employment Tribunal, the opposing parties should be given an opportunity to consider the proposed amendment and then to make submissions on it before the Tribunal then gives its decision. In it, the Employment Tribunal must explain its thought process in reaching its decision, although this can be done briefly but as the discretion to grant leave is a judicial discretion, which must be exercised fairly and justly. It is very unfortunate and regrettable that these basic principles were not adhered to in this case. The inevitable consequence is that the finding in the Respondent's favour of discrimination by the Appellants on grounds of sex must be quashed.

(ii) The Correctness and Fairness of the finding of discrimination on grounds of sex

31. Even if the Employment Tribunal had been entitled to consider a claim based on sex discrimination against the Appellant, Mr. Laddie submits that the reasoning of the Employment Tribunal was so seriously flawed that the decision ultimately made to uphold the complaint would have to be quashed on those grounds. We will deal with this submission briefly as we have already explained why this decision has to be quashed because of the failure of the Employment Tribunal to give the Appellants a fair hearing.
32. A basic task in a sex discrimination case for an Employment Tribunal is to consider whether there has been less favourable treatment accorded to an appropriate comparator; that entails identifying a comparator either real or hypothetical with whom a comparison with the applicant can be made. Where an applicant is unable to point to an actual comparator, the Employment Tribunal may consider the question of a hypothetical comparator: Balamoody v. UK Central Council for Nursing, Midwifery and Health Visiting [2002] IRLR 288 [54]. In the light of the very unusual history of this claim for sex discrimination against the Appellants which unusually was initiated not by the Respondent but by the Employment Tribunal, it is not surprising that the Respondent did not rely on any particular comparator.
33. So far as the claim as Mrs. Walsh was concerned, the Employment Tribunal adopted as an actual comparator Ms. Heidi Carter, who like the Respondent, was a hobby therapist (see paragraphs 30 and 7.57 of the Extended Reasons). Unfortunately, the Appellants had no advance notice before reading the Extended Reasons that Ms. Heidi Carter was being relied upon or would be relied upon by the Employment Tribunal as a comparator and they were thus prevented from making any submissions on that point. In our view, in any discrimination case in which the Employment Tribunal were considering referring to an actual comparator, it is vital that it identifies that specific person so that all the parties can make worthwhile and relevant submissions on the validity and correctness of the choice of that comparator. A failure to do so might well lead to a successful submission being made the process was unfair. We add in passing that there are also strong arguments for suggesting that Heidi Carter was not an appropriate comparator, but in the light of our finding in the previous sentence, it is unnecessary for us to reach a conclusion on this point.
34. In relation to the allegations against Mrs. Walsh, with the exception of the assault incident, the Employment Tribunal appear to have determined that the appropriate comparator was a hypothetical person, but that approach is not entirely clear; in that paragraph, the Employment Tribunal was also apparently referring to an actual comparator. The Employment Tribunal was at fault for at least two reasons. Firstly, the Employment Tribunal had provided no notice to the Appellants that it was contemplating the use of a hypothetical comparator, with the result that the Appellants were denied the opportunity to make submissions on the appropriateness of the identity of the contemplated comparator. Second, as the Employment Tribunal had failed in its Extended Reasons to describe the attributes of the hypothetical comparator with the result that it is now impossible for this Appeal Tribunal to determine whether the hypothetical character was one whose circumstances were sufficiently similar to those of the Respondent. This serious omission amounts on the facts of this case to a failure by the Employment Tribunal to give proper reasons.
35. When examining the allegations concerning Mr. McSharry, the Employment Tribunal considered that the correct hypothetical comparator was a "heterosexual female" (paragraph 32 of the Extended Reasons), but the Appellants had no notice of this approach until they received the Extended Reasons. Accordingly, the Appellants were deprived of the opportunity of making any meaningful submissions, especially as the Respondent had not relied on any comparator actual or hypothetical.
36. We have come to the clear conclusion that the decision that Mrs. Walsh and Mr. McSharry discriminated against the Respondent on grounds of sex must be set aside, not merely because the Appellants were not given adequate notice of this, but also because the reasoning and methods used by the Employment Tribunal to reach its decision on this issue were flawed and/or were unfair.
37. Thus, it becomes unnecessary to consider many of the other complaints made by Mr. Laddie about the way in which the Tribunal initiated and pursued the claim for discrimination on grounds of sex, although our initial view is that there is quite possibly merit in them.

VII Can the finding that the respondent was unfairly dismissed stand as the finding on sex discrimination has been quashed?

38. Mr. Laddie contends that if, as has been found to be the case, the finding of the Employment Tribunal that the Appellants discriminated against the Respondent on the grounds of his sex has to be quashed, then it follows that the finding of unfair dismissal must also be quashed and that another Employment Tribunal will have to reconsider the decision that the Respondent was unfairly dismissed. He bases his case on the "apparent bias" of the Employment Tribunal, rather than contending that its members were actually biased.
39. To put this submission in context, it is necessary to mention at this stage that Mr. Laddie correctly in our view accepts four significant features of the unfair dismissal claim. First, he accepts that it is a discrete and self-standing claim independent of the sex discrimination claim. Second, Mr. Laddie agrees that there are no errors of law in that part of the decision of the Employment Tribunal which deals with unfair dismissal. Third, Mr. Laddie accepts that there was no procedural unfairness about the way in which the Employment Tribunal dealt with the unfair dismissal claim. Fourth, it is not suggested that the Tribunal's overt behaviour showed any form of bias. His case is that nevertheless, the Employment Tribunal made so many serious errors on the sex discrimination claim that the case for "apparent bias" is made out. This entails considering how apparent bias can be established.
40. Lord Phillips of Worth Maltravers MR giving the judgment of the Court of Appeal in R (PD) v. West Midlands and North West Mental Health Review Tribunal ([2004] EWCA Civ 311 [26] with his amendments noted in the text set out below), has recently accepted that the principles to be applied by a court in dealing with a claim for apparent bias are that:-

"(a) in order to determine whether there was bias in a case where actual bias is not alleged "the question is whether the fair-minded and informed observer, having considered the facts would conclude that there was a real possibility that the tribunal was biased" (per Lord Hope of Craighead in Porter v. Magill [2002] 2 AC 357 at 494 [103]). It follows that this exercise entails consideration of all the relevant facts as "the court must first ascertain all the circumstances which have a bearing on the suggestion that the judge was biased" (ibid [104]).

(b) "Public perception of a possibility of unconscious bias is the key. It is unnecessary to delve into the characteristics to be attributed to the fair-minded and informed observer. What can confidently be said is that one is entitled to conclude that such an observer will adopt a balanced approach. This idea was succinctly expressed in Johnson v. Johnson [2000] 200 CLR 488, 509 at paragraph 53 by Kirby J when he stated that "a reasonable member of the public is neither complacent nor unduly sensitive or suspicious"" (per Lord Steyn in Lawal v. Northern Spirit Limited [2003] ICR 856, 862 [14]).

(c) in ascertaining whether there is a case of unconscious bias, the courts may look at the matter by examining other similar analogous situations. "One does not come to the issue with a clean slate; on the contrary, the issue of unconscious bias has cropped up in various contexts which may arguably throw light on the problem" (Lord Steyn in Lawal v. Northern Spirit Limited (supra), 862 [15]).

(d) the approach of the court is that "one starts by identifying the circumstances which are said to give rise to bias .. [a court] must concentrate on a systematic challenge and apply a principled approach to the facts on which it is called to rule" (per Lord Steyn in Lawal v. Northern Spirit Limited (supra) 864-5 [20]).

(e) the need for a Tribunal to be impartial and independent means that "it must also be impartial for an objective viewpoint, that is it must offer sufficient guarantees to exclude any legitimate doubt in this respect" (Findlay v. United Kingdom (1997) 24 EHRR 221 at 224-245 and quoted with approval by Lord Bingham of Cornhill in R v. Spear [2003] 1 AC 734 [8])".

41. In support of his contention that this is an appropriate case in which to find apparent bias, Mr. Laddie points to the circumstances, which he contends "have a bearing on the suggestion that the [Tribunal] was not biased". He relies on the way in which the Employment Tribunal dealt with the issue of sex discrimination first which it had raised itself, second which it had pursued without any encouragement from the parties, third the ambit of which it had failed to explain to the parties and fourth, which it ultimately determined incorrectly in the respondent's favour. Mr. Laddie submits says that there is no other explanation for the Tribunal's behaviour other than that there was a real possibility that it was biased.
42. For the purpose of considering this submission of Mr. Laddie, we will assume that all Mr. Laddie's complaints about the Employment Tribunal's conduct of the proceeding are justified but the issue that has now to be considered is whether Mr. Laddie is correct in contending that all the Tribunal's errors complained of by Mr. Laddie would, in Lord Hope's words, indicate to the "fair-minded and informed observer … a real possibility that the Tribunal was biased". Although the Tribunal denies that it was biased, that is not relevant as Mr. Laddie's complaint is of apparent bias and not actual bias; in other words it is appearance of bias rather than actual bias which has to be considered.
43. Five reasons individually or cumulatively lead us to the conclusion that "the fair-minded and informed observer" would conclude that in particular circumstances of this case, there was not "a real possibility that the Tribunal was biased".
44. First, the Employment Tribunal dealt with the factual issues between the parties in a balanced way. It is significant that on a number of occasions, it preferred the Appellants' evidence to that of the Respondent on factual issues. Significantly, the Employment Tribunal rejected a very important complaint of the Respondent, which was the allegation that Mrs. Walsh had attempted to kiss him in May 2000 and which formed an important part of the Respondent's allegation in the IT1 of "sexual assault" (see paragraph 7.23 of the Extended Reasons). There are many other instances in which the Employment Tribunal preferred the Appellants' evidence to that of the Respondent on some matter as appears in, for example, paragraphs 7.7, 7.8, 7.10, 7.11, 7.31, 7.32 and 7.35 of the Extended Reasons.
45. Second, we are satisfied that the Employment Tribunal or at least its Chairman believed incorrectly on the opening morning of the hearing that she had identified and explained clearly to the parties that the claim of sex discrimination applied to all the Respondent's complaints. Although we consider that the Employment Tribunal was seriously at fault in not making clear to the Appellants the nature of the case, this was due to its inadvertent but culpable failure first to communicate and second to realise that it had not communicated the position clearly rather than bias.
46. Third, the errors of law made by the Tribunal in dealing with the sex discrimination claim were a consequence of inadvertently not informing the Appellants of the case they had to meet so that it did not receive submissions from Mr. Laddie on the correct approach to a sex discrimination case. We have no hesitation in considering that the "fair-minded and informed observer" would attribute this failing and that referred to in the previous paragraph to negligence, rather than to any deliberate campaign on bias of any form.
47. Fourth, the enthusiasm of the Employment Tribunal for including a claim for sexual discrimination was a consequence of the Chairman's wish to "do justice" for an unrepresented and uniformed applicant with a possible sex discrimination case. This point emerges from the Chairman's comments. Again, the "fair-minded and informed observer" would consider that this was due to inadvertence or negligence and not due to bias. Fifth, the fair-minded observer would note that there were no errors of law or procedural unfairness about the way in which the Employment Tribunal dealt with the unfair dismissal claim. As we have explained, Mr. Laddie accepts this to be true.
48. So, the "fair-minded observer" would conclude that this was not a case of apparent bias, but a case in which the Employment Tribunal made a number of serious mistakes but it did not do so deliberately or as a result of any form of bias. Thus, the claim for apparent bias fails and the finding of unfair dismissal is upheld.




VIII Should the claim for sex discrimination be remitted to an Employment Tribunal?

49. Having set aside the decision that the Appellants discriminated against the Respondent on grounds of sex because of the way in which that claim was handled by the Employment Tribunal, we must now consider how, it at all, this claim can still be pursued. Mr. Laddie contends that we should allow an appeal against the Employment Tribunal's decision to amend the IT1 which permitted the Respondent to pursue a claim for sexual discrimination. His further submission is that we should not now grant leave to amend ourselves and that also we should not remit this case to an Employment Tribunal because it would now have to refuse an application to amend. We believe and will assume that the Respondent would want to have the opportunity to pursue his sex discrimination claim in the Employment Tribunal.
50. We propose to start by determining whether the Employment Tribunal should have allowed the Respondent to add by amendment the claim for discrimination on grounds of sex. If we consider that the Employment Tribunal erred, we will then have to consider whether this Appeal Tribunal should give the Respondent leave to amend afresh.

(i) Should the Employment Tribunal have allowed the respondent to amend to include a claim for discrimination on grounds of sex?

51. Before dealing in greater detail with Mr. Laddie's submissions that the Employment Tribunal erred in allowing the Respondent to amend, it is worthwhile referring to the general principles applicable to applications to amend and they are that:-

(i) under Regulation 15(1) of the Employment Tribunals (Constitution and Rules Procedure) Regulations 2001, a Tribunal may regulate its own procedure. That procedure includes a right to allow amendments to an originating application;

(ii) "in deciding whether or not to exercise their discretion to allow an amendment, a Tribunal should in every case have regard to all the circumstances of the case. In particular, they should consider any injustice or hardship which may be caused to any of the parties including those proposed to be added if the proposed amendment were allowed, or as the case may be, refused" (British Newspaper Corporation Limited v. Kelly [1989] IRLR 223 [9]);

(iii) applications to amend vary greatly ranging from first, category (i) cases which deal with correction of clerical and typing errors, second category (ii) cases which encompass the additions of factual matters to existing allegations and the addition or substitution of other labels for facts already pleaded to and finally category (iii) cases which involve the making of entirely new factual allegations, which change the basis of the existing claim. The Employment Tribunal has to consider whether the amendment sought is one of the minor matters or it is a substantial alteration pleading a new cause of action (Selkent Bus Company Limited t/a Stagecoach Selkent v. Moore [1996] IRLR 661 [22];

(iv) if a new complaint or cause of action is proposed to be added by way of amendment, it is essential for the Tribunal to consider whether the complaint is being introduced outside a time limit and, if so, whether the time limit should be extended under the applicable statutory provisions (ibid [23]).

(v) an application to amend should not be refused solely because there has been a delay in making it. Delay is a discretionary factor and it is relevant to consider why the application was not made earlier and why it is now being made; for example, the discovery of new facts from documents disclosed or discovered (ibid [24]);

(vi) the paramount considerations are the relative injustice and hardship involved by refusing or granting an amendment. Questions of delay as a result of adjournments and additional costs, particularly if they are unlikely to be recovered by the successful party are relevant in reaching a decision [ibid] [24].

52. We agree with Mr. Laddie that it is not clear whether the Employment Tribunal determined into which of the three Selkent categories the proposed amendments claiming sexual discrimination fell. The Employment Tribunal referred to Selkent but it did not identify the category into which the proposed amendment fell. It seems likely that the Employment Tribunal considered that the amendment concerning Mrs. Walsh fell into what we have described as category (ii), (namely the addition of factual matters to existing allegations and the additional substitution of other labels for facts already pleaded to) because in paragraph 28 of the Extended Reasons, the Employment Tribunal said that:-

"On the face of the originating application, the [respondent] was asserting that he, a male employee, had been subjected to a continuing course of conduct by his female manager, Mrs. Walsh, including bullying and harassment, two physical assaults, one sexual assault. That is clearly a claim of sexual discrimination. The claims of constructive dismissal and sex discrimination are based on the same factual matrix".

53. We consider that this approach of the Employment Tribunal was flawed for three reasons as it was based on the premise that in this case, the claims of constructive dismissal and sex discrimination were "based on the same factual matrix". First, a claim of sex discrimination, unlike a claim for unfair dismissal, requires the Applicant to demonstrate that there has been less favourable treatment on the grounds of his or her sex. Second, for this to have been a Selkent category (ii) case, it would have been necessary for the original complaint to have been tantamount to an allegation that the Respondent was a victim of sex discrimination, even if the IT1 did not use the words "discrimination" or refer to the act because this would be a case of the "additional or substitution of other labels for facts already pleaded to".
54. Third, for this case to come into Selkent category (ii), there would have to have been an appropriate causative link between the original complaint and what was sought to be introduced by way of amendment. Thus, in Housing Corporation v. Bryant [1999] ICR 123, the Court of Appeal upheld a decision by a Tribunal Chairman to refuse to allow an amendment alleging victimisation where the original complaint had alleged sex discrimination and unfair dismissal. The reason for the Court of Appeal's decision was that to amount to a claim of victimisation, there had to be demonstrated a causative link between the making of the allegation of sex discrimination and the dismissal. Buxton LJ in a judgment with which Nourse and Peter Gibson LJJ agreed, said that:-

"It is not enough to say that the document [IT1] reveals some grounds for a claim of victimisation or indicates there is a question to be asked as to the linkage between the alleged sex discrimination and the dismissal. That linkage must be demonstrated, at least in some way, in the document itself"

[page 130] (italicisation added).

55. Buxton LJ later explained that the absence of such a linkage "must be fatal: because the issue of construction is whether the document makes a claim in respect of victimisation" (page 130). Applying those principles to the present case, we conclude that there was nothing in the Originating Application to suggest a "linkage" between his gender or the sexual assault or his alleged treatment at the hands of Mrs. Walsh. It might well be that in this case, the reason for the Employment Tribunal's mistake was its observation in the passage that we have quoted in paragraph 53 above to the effect that the claim was one of sex discrimination because the Respondent was male and Mrs. Walsh was female. We consider that comment to be incorrect because there are many cases in which an employer of one sex is treated badly by a representative of the employers of a different sex, but that is not because of discrimination on grounds of sex.
56. We must now consider whether the Employment Tribunal was right to grant the Respondent leave to amend the Originating Application so as to include a claim for sex discrimination. Significantly, the actual decision to give leave to amend was apparently only given and explained in paragraph 28 of the Extended Reasons. Mr. Laddie says that this decision of the Employment Tribunal was flawed because it failed to consider properly the paramount considerations of the relative injustice or hardship to the parties involved by refusing to grant an amendment. The Employment Tribunal explained that the Appellants were "not prejudiced by the amendment .. granting leave to amend would not expose [the Appellants] to any hardship other than exposing them to the risk of a decision and remedy against them".
57. We regret that we are unable to agree with this reasoning, which fails to take account of the fact that the Appellants had reasonable grounds for not appreciating even the broadest outline of the case that was being brought against them. Bearing in mind that the decision to give leave to amend was only contained in the Employment Tribunal's Reasons, the Appellants had been seriously prejudiced in at least four ways by this retrospective amendment.
58. First, if Mr. Laddie had known of the nature of the case on sex discrimination before the evidence was adduced, we accept that he would undoubtedly have sought to cross-examine the Respondent on whether he was claiming first, that Mrs. Walsh had discriminated against him on grounds of sex and second, that Mr. McSharry had treated him less favourably on the grounds of sex. Bearing in mind that prior to the hearing the Respondent had not made any claim of sex discrimination, there is a realistic chance that the Respondent would have said in evidence that he did not think either of them treated him less favourably than others on grounds of sex, but that he considered that their reasons for treating him in the way they did was because they disliked him for some other reason. If the amendment had been made at or before the hearing, Mr. Laddie would have been entitled to an adjournment if he had inadequate time to prepare for this cross-examination or to prepare to meet the claim for sex discrimination.
59. The second way in which the Appellants were prejudiced is that because the decision to give leave to amend had only been taken after evidence had closed, they had been unable to call any evidence to rebut the allegations of discrimination on grounds of sex or to seek an adjournment to do so. We agree with Mr. Laddie that it is probable that, for example, Mrs. Walsh or Mr. McSharry could have given some helpful evidence on this issue. In addition, it is very likely that Mr. Laddie would have been able to make useful and helpful submissions to the Appellants' case on the discrimination issue if he had known that leave to amend had been or was to be given and the full text of the amendment. He would then have been able to raise the question of who was an appropriate comparator and what attributes a notional comparator would have had.
60. Finally, it is very probable that the Appellants would, if they had had an opportunity to do so, sought to rely on the defence under Section 41(3) of the Act, which we set out in paragraph 26 above. Again, if the Appellants would have had inadequate time to take any of these steps because of the later amendment, they would have been entitled to an adjournment.
61. We add that even if this had been a Selkent category (ii) case, we would still have set aside the decision to amend because of the unfair prejudice to the Appellants by the late amendment. For all those reasons, we have concluded that because of the unfairness to the Appellants we should set aside the decision of the Employment Tribunal giving the Respondent leave to amend his Originating Application to add his claim for discrimination on grounds of sex.

(ii) Should this Appeal Tribunal now give leave to the respondent to amend his originating application so as to include a claim for sex discrimination?

62. Having decided that the Employment Tribunal had exercised their discretion incorrectly, it now falls to this Appeal Tribunal to decide if leave should now be given to the Respondent to amend his IT1 so as to include the claim for sex discrimination. Mr. Laddie says that we should not do so because on the established Selkent principles, leave should be refused.
63. We consider that any application to allege discrimination on grounds of sex by Mrs. Walsh and Mr. McSharry falls within category (iii) of the Selkent categories because it involves the making of entirely new factual allegations, which change the basis of the existing claim.
64. Mr. Laddie attaches importance to the fact that the Respondent's proposed amendment against the Appellants based as it is on discrimination on grounds of sex is time-barred. It is correct that Section 76(1) of the 1975 Act requires a complaint on grounds of sex discrimination to be presented "before the end of three months beginning when the act complained of was done". Nevertheless "the court .. 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" (s.76(5) of the 1975 Act). As the claim of discrimination on grounds of sex was not brought within the prescribed three-month period, our task is to consider if in spite of that fact "it is just and equitable to consider the claim".
65. There is a fundamental difference between the position of the parties now and when the Employment Tribunal considered at the end of the hearing whether to give the Respondent leave to amend because the grounds of prejudice caused to the Appellants by the proposed amendment in front of the Employment Tribunal all related to the inability of the Appellants to present their defence in front of that Tribunal for the reasons set out in paragraphs 25 and 26 above. This prejudice would not be of crucial importance or relevance if this Appeal Tribunal were now to give leave to the Respondent to amend to add a claim for discrimination on grounds of sex because the Appellants would then have adequate time to prepare their defence and to contest it properly at subsequent hearings in front of the Employment Tribunal.
66. This is only a provisional view because we have not heard submissions from the Appellants about any prejudice that might be caused to them by now having to contest a claim for discrimination on grounds of sex. For the present purposes, we cannot be satisfied that the claim for discrimination on grounds of sex is doomed to failure. There are arguments for saying that it would be just and equitable to extend the time limit. First, this is not a case in which the Respondent knew of his rights to make such a claim but did not take advantage of those rights; indeed he explained at the opening of the Employment Tribunal hearing during the submissions that he did not understand what a claim for discrimination on grounds of sex entailed. Second, although the Respondent had been represented for a short period of time earlier in the proceedings, he was not represented at the hearing or when the IT1 was filed. There is no evidence that he was previously aware of his right to bring a claim for discrimination on grounds of sex. Third, there is no evidence before us to show that the Appellants will now be prejudiced by the delay. Fourth, the claim for discrimination on grounds of sex appears does not appear to be totally vexatious and must have some prospect of success.
67. Thus, we cannot accept Mr. Laddie's submission that the Respondent's claim for sex discrimination is doomed to failure but at the same time, we cannot now give leave to the Respondent to amend to claim sex discrimination for two reasons.
68. First, we are concerned that the Appellants might not have had a full opportunity to explain the prejudice that will be suffered by them by having another hearing at which the question of amendment can be considered; that matter can be considered by the Employment Tribunal. Second, the Respondent must formulate his claim for discrimination on grounds of sex in writing so that it can be considered. We could not give leave to amend without first seeing a written draft.
69. The Employment Tribunal will have to consider if leave can be granted to pursue a claim for discrimination on grounds of sex when and if such a claim is properly formulated. We cannot and do not anticipate whether leave should be granted or refused.

IX Conclusion

70. We therefore conclude that

(i) the Employment Tribunal's finding that the Appellants discriminated against the Respondent on grounds of sex should be set aside;

(ii) the Appellants' appeal against the finding of unfair dismissal should be dismissed;

(iii) the Respondent's application to amend so as to include a claim for discrimination on grounds of sex should be remitted for consideration by an Employment Tribunal which should not include any of the members of the Tribunal that made the decision under appeal;

(iv) to that extent, the appeal is allowed.