United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MS TRACEY MOSS (Representative) Vale of Glamorgan CAB West House Cottage Stanwell Road Penarth CF64 2ZA
For the Respondents	MR MARTYN WEST (Representative) Peninsula Business Services Riverside New Bailey Street Manchester M3 5PB

SUMMARY

4C

Sex Discrimination – indirect

Indirect sex discrimination. Did the Employment Tribunal properly analyse whether there was objective justification? Request for job sharing turned down by employers.


 


THE HONOURABLE MR JUSTICE ELIAS

1. This is an appeal against a decision of the Employment Tribunal sitting in Cardiff in which it held that the complaint of sex discrimination failed. The allegation was one of indirect discrimination and not direct sex discrimination. The relevant findings of the Tribunal can be briefly summarised. They were as follows.
2. The Claimant had a long standing friendship with David and Michelle Evans. The Evans' were effectively the proprietors of the Respondent company. Indeed, the Complainant, Mrs Mitchell, was the godmother to one of the Evans' children and they were close friends. The Claimant commenced employment on 6 July as a part-time administrator. It was a difficult decision for her to make to accept that job because she was concerned about the potentially adverse effect on her general income because she was in receipt of state benefits. Initially things went well but there were a series of incidents that ultimately led to her losing her job. There was one on 3 February 2005 where she was criticized for putting a phone call through to the workshop because it interrupted the flow of work. Then on 8 February there was another incident. Mrs Evans told the Claimant that she and her husband had come to the conclusion that they needed someone full time to work in the office. The Tribunal resolved a dispute of fact before them that it was not the intention of the parties at the commencement of the employment that this should occur. The Claimant was upset by this. She explained that she had child-care problems. She said her husband could not always take the children to school, and her mother could not do so either because of heart problems.
3. Then on 10 February, Mrs Mitchell raised with Mrs Evans the question of a job share. Mrs Evans said that it would not work and Mr Evans then joined the conversation. He said that he could not afford to pay Mrs Mitchell what she would be seeking for a full time position. He said he it would mean he would have to go out of business. The upshot of this was that the husband of the Claimant went to the office. There was what the Tribunal delicately described as, a "forceful discussion" between Mr Mitchell and Mrs Evans. Mr Mitchell lost his temper, was abusive to Mrs Evans and the parties were somewhat agitated.
4. On 14 February the Evans' wrote a letter to the Claimant which was delivered to her home. It terminated her contract. The relevant paragraph of the letter said this:

"Further to our recent discussions when you were offered the above position which you subsequently declined, so you have been made aware that the part time position has now been closed"

5. The Evans' in fact contended that this was not the true reason for the dismissal. They said the real reason was the fact that Mrs Evans was afraid of Mr Mitchell and that was why they dismissed his wife. The Claimant did not have sufficient continuity of employment to claim unfair dismissal. It was a sex discrimination claim. In the context of that the Tribunal referred to the amended definition of indirect discrimination which had come into force in October 2005. They identified the first question as whether the Respondent had applied a provision, criterion or practice, given that the claim was one of indirect discrimination.
6. The minority took the view that there was no such application here because the real reason for the dismissal was the fear of further abuse from Mr Mitchell, but the majority found that there was the application of a provision criterion or practice, namely the requirement to work full time. They also considered, unanimously this time, that it was to the detriment of a considerably larger proportion of women than to men.
7. They do not refer to any statistics specifically about that but it was plainly a justified conclusion. It is well known that, currently at least, it is more difficult for women to work full time when they have childcare responsibilities.
8. They then considered the issue of justification. They did so in three paragraphs, paragraphs 16 to 18, in the following terms:

"16.

Then the panel move on to the question of justification. We ask ourselves can the Respondent justify applying the provision. Here the approach of the Tribunal is this: although the panel were split in reaching the decision whether there had been an application of a provision criterion or practice the minority member has contributed to this discussion by saying that had he taken a different view then he has evaluated whether or not justification would apply. In looking at the question of justification we have reminded ourselves, as is set out in the skeleton argument of the Claimant, that what we have to look at is whether it is objectively justifiable regardless of sex and related to the real business need whether it is objectively justifiable in economic or other terms such as administrative efficiency. We have had particular regard to the Bilka Kaufhaus case.

17.

Applying the law to the facts and vice versa it is the unanimous judgment of the Tribunal in relation to the issue of justification that the justification argument submitted by the Respondent does succeed. We make a finding that there was justification which is completely gender neutral for the Respondents to have a requirement for a full-time member of staff undertaking the role. One of the many reasons for that is that there had been the introduction of a new computer system which the Respondents expected to take them to another level of business operations and efficiency. They had a justifiable requirement for greater administrative efficiency. They had recently won a new contract to supply tractors made by another company. They had a justifiable need to have greater consistency with customers, a justifiable need to have telephone answering by one person rather than a group of individuals, particularly in view of the fact that the Respondent is a small company offering a bespoke service to its customers.

18.

For those reasons it was justified for the Respondents to require that the role in the future be a full-time one. For the same reasons it was justifiable for the Respondents not to consider the question of job share, although had this been an unfair dismissal the outcome may have been different because the Respondents chose not to apply their own procedure in relation to consideration of job share. But the Tribunal are satisfied that the justification for not implementing job share is very similar to the reasons given for the justification in requiring a full-time appointment."

9. The appeal is directed to the finding on justification. Essentially the Appellant submits that if one looks at these paragraphs there is an inadequate assessment of the questions which the Tribunal has to ask itself. Merely considering in short form whether the decision of the employers was objectively justifiable in the way done here was, it was submitted inadequate. The Respondents say that in truth this is merely a case about reasons. Mr West, for the Respondents, accepts that the Tribunal has outlined its conclusions relatively briefly but he submits that it is none the worse for that. There was a very detailed Skeleton Argument put in by the Claimant which identified the case law which referred to the principle of proportionality and he submits that it is plain that the Tribunal had these principles in mind. Although the reasoning is relatively brief, nonetheless he says it is sufficient for the employee to know clearly why she failed in her claim for indirect sex discrimination.
10. It is necessary to refer briefly to one or two authorities which were relied upon by Ms Moss in this case. The starting point, is the well known decision of the European Court of Justice in the Bilka-Kaufhaus GmbH v Weber Von Hartz [1987] ICR 317. In that case the Court said this:

"…If the national court finds measures chosen by Bilka correspond to a real need on the part of the undertaking, are appropriate for the view to achieving the objective's pursuit and are necessary to that end, the fact that the measures affect a far greater number of women than men is not sufficient to show that they constitute an infringement of Article 119."

11. That decision was cited and relied upon in the case of Allonby v Accrington and Rossendale College [2001] IRLR 364. That was a case where part-time lecturers of a college had their contracts terminated and their services were instead retained through a sub-contracting arrangement. In giving the leading judgment in the Court of Appeal, Sedley LJ analysed various decisions on indirect discrimination and in particular he said this, between paragraphs 27 and 29, a passage relied upon by Ms Moss

"27 The major error, which by itself vitiates the decision, is that nowhere, either in terms or in substance, did the tribunal seek to weigh the justification against its discriminatory effect. On the contrary, by accepting that 'any decision taken for sound business reasons would inevitably affect one group more than another group', it fell into the same error as the EAT in Brook and Enderby and disabled itself from making the comparison.

28 Secondly, the tribunal accepted uncritically the college's reasons for the dismissals. They did not, for example, ask the obvious question why departments could not be prevented from overspending on part-time hourly-paid teachers without dismissing them. They did not consider other fairly obvious measures short of dismissal which had been canvassed and which could well have matched the anticipated saving of £13,000 a year. In consequence, they made no attempt to evaluate objectively whether the dismissals were reasonably necessary - a test which, while of course not demanding indispensability, requires proof of a real need.

29 In this situation it is not enough that the tribunal should have posed, as they did, the statutory question 'whether the decision taken by the college was justifiable irrespective of the sex of the person or persons to whom it applied'. In what are extended reasons running to 15 closely typed pages, there has to be some evidence that the tribunal understood the process by which a now formidable body of authority requires the task of answering the question to be carried out, and some evidence that it has in fact carried it out. Once a finding of a condition having a disparate and adverse impact on women had been made, what was required was at the minimum a critical evaluation of whether the college's reasons demonstrated a real need to dismiss the applicant; if there was such a need, consideration of the seriousness of the disparate impact of the dismissal on women including the applicant; and an evaluation of whether the former were sufficient to outweigh the latter. There is no sign of this process in the tribunal's extended reasons. In particular, there is no recognition that if the aim of dismissal was itself discriminatory (as the applicant contended it was, since it was to deny part time workers, a predominantly female group, benefits which Parliament had legislated to give them) it could never afford justification."

12. We note in particular, at paragraph 29, Sedley LJ observing how there must be at "the minimum a critical evaluation of whether the college's reasons demonstrated a real need to dismiss the applicant; if there was such a need, consideration of the seriousness of the disparate impact of the dismissal on women including the applicant; and an evaluation of whether the former were sufficient to outweigh the latter."
13. The third case to which we make reference is the recent decision of the Court of Appeal in Hardys & Hansons plc v Lax [2005] IRLR 726. This was in some ways similar to this case in that it concerned a woman who had become pregnant and who had requested to be allowed to work part-time or on a job share on return from maternity leave. This request was rejected. The Employment Tribunal found that there was no objective justification for refusing to allow the job to be split. The Employment Appeal Tribunal dismissed an appeal against the decision and the Court of Appeal dismissed the further appeal from the Employment Appeal Tribunal.
14. In the judgment of Pill LJ, he analysed the authorities, including an analysis by Lord Nicholls in Barry v Midland Bank [1998] IRLR 138; the Allonby case, to which we have just reference, in which he referred amongst other paragraphs to those to which we have drawn attention; and to an observation of Bean J, in this Tribunal, in the case called Banner Business Supplies Ltd v Grieves [2005] AER(D) 26 (Feb), in which the EAT criticised the decision in that case because it "simply treats justifiability as an industrial jury question without undertaking the analysis which Bilka requires".
15. Pill LJ then made his own observations on what is required to establish justification. (Paragraphs 32 to 34):

"32 Section l(2)(b)(ii) requires the employer to show that the proposal is justifiable irrespective of the, sex of the person to whom it is applied, It must be objectively justifiable (Barry) and I accept that the word 'necessary' used in Bilka is to be qualified by the word 'reasonably', That qualification does not, however, permit the margin of discretion or range of reasonable responses for which the appellants contend, The presence of the word 'reasonably' reflects the presence and applicability of the principle of proportionality. The employer, does not have to demonstrate that no other proposal is possible. The employer has to show that the proposal, in this case for a full-time appointment, is justified objectively notwithstanding its discriminatory effect. The principle of proportionality requires the tribunal to take into account the reasonable needs of the business, But it has to make its own judgment upon a fair and detailed analysis of the working practices and business considerations involved, as to whether the proposal is reasonably necessary, I reject the appellants' submissions (apparently accepted by the EAT) that, when reaching its conclusion, the employment tribunal needs to consider only whether or not it is satisfied that the employer's views are within the range of views reasonable in the particular circumstances.

33 The statute requires the employment tribunal to make judgments upon systems of work, their feasibility or otherwise, the practical problems which mayor may not arise from job sharing in a particular business, and the economic impact, in a competitive world, which the restrictions impose upon the employer's freedom of action, The effect of the judgment of the employment tribunal may be profound both for the business and for the employees involved. This is an appraisal requiring considerable skill and insight. As this court has recognised in Allonby and in Cadman, a critical evaluation is required and is required to be demonstrated in the reasoning of the tribunal. In considering whether the employment tribunal has adequately performed its duty, appellate courts must keep in mind, as did this court in Allonby and in Cadman, the respect due to the conclusions of the fact finding tribunal and the importance of not overturning a sound decision because there are imperfections in presentation. Equally, the statutory task is such that, just as the employment tribunal must conduct a critical evaluation of the scheme in question, so must the appellate court consider critically whether the employment tribunal has understood and applied the evidence and has assessed fairly the employer's attempts at justification.

34 The power and duty of the employment tribunal to pass judgment on the employer's attempt at justification must be accompanied by a power and duty in the appellate courts to scrutinise carefully the manner in which its decision has been reached. The risk of superficiality is revealed in the cases cited and, in this field, a broader understanding of the needs of business will be required than in most other situations in which tribunals are called upon to make decisions."

16. Thomas LJ in the same case said this at paragraph 55:

"55 Where the economics of the business of the enterprise or its working practices forms part of the justification, then I would expect the reasons to set out at least a basic economic analysis of the business and its needs; the emphasis in Bilka was on 'objectively justified economic grounds'. Although the extent of the analysis of the economics of the business and its working practices must depend on the nature of justification advanced and of the enterprise being considered, the analysis must be through and critical and show a proper understanding of the business of the enterprise."

17. We are of the view that when analysed in the light of these authorities, the decision of the Tribunal here is inadequate. We do not accept Mr West's contention that it is merely a matter of inadequate reasoning. We accept, as Ms Moss says, that in a case of this kind it is not enough for the Tribunal in relatively cursory form simply to identify the factors which they said amounted to objective justification. A proper analysis required the Tribunal to assess the reasonable needs of the business and to make its own judgment upon a fuller analysis, we think, than was carried out here, namely considering whether the proposal is reasonably necessary and also applying the proportionality test to consider whether it could be justified notwithstanding its discriminatory effect, in this case against Mrs Mitchell. That was not done by the Tribunal in this case, or at least if it was there is no demonstration of that in the reasoning of the Tribunal.
18. We have therefore come to the conclusion that the decision cannot stand. We have considered what steps it would be appropriate to take in the circumstances. Ms Moss initially sought to have the matter remitted to the same Tribunal but in her Skeleton she subsequently asked for it to be remitted to a different Tribunal. In fairness to her, in her submissions before us, she recognized there were some advantages to the Appellant also in going back to the same Tribunal.
19. We have borne in mind the case of Sinclair Roche & Temperly v Heard [2004] IRLR 763 and the criteria set out in the judgment of Burton J in that case. This is not a case where the sums of money involved are likely to be significant and we bear in mind the cost if the matter had to be re-heard all over again. It seems to us there are real advantages in this case going back to the same Tribunal. We are confident that they will demonstrate the professionalism which one would expect and, that they will consider this issue of justification afresh in the light of the principles which have been identified in the cases to which we have made reference. It goes back solely on the issue of justification. It may be that the Tribunal may wish to hear additional evidence about that matter but that is entirely a matter for the Tribunal. In any event they will no doubt be wanting to hear further submissions from the parties.
20. We only add this. It is particularly distressing when friends fall out in the way in which this Claimant and the Evans' have here. We do not know whether at this very late stage even there is some possibility of some settlement which will save additional legal costs being incurred in a further hearing; and maybe bring an end to what must have been an unpleasant experience for all parties concerned.