United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Mr S Rice-Birchall (Solicitor) Messrs Eversheds LLP Solicitors Cloth Hall Court Infirmary Street Leeds LS1 2JB
For the Respondents	Mr T Kanyimo Miss N Nare (The Respondents in Person)


 


SUMMARY

Practice and Procedure – Bias, misconduct and procedural irregularity

Race Discrimination – Comparison

At a CMD and a PHR, a Tribunal Chairman decided that the claims to be heard would be of indirect discrimination on the grounds of race. During the course of evidence the full Tribunal itself indicated that a claim of direct discrimination could be heard. Although the Tribunal was not as a matter of jurisdiction precluded from raising this matter, in the circumstances it was unfair for it to be dealt with immediately given that the Respondent was unrepresented. The Tribunal further erred in failing in the circumstances of this case to construct a hypothetical comparator. The finding that there was no indirect discrimination was not appealed by the Claimant's. The case was remitted for rehearing on direct discrimination only, to a different Tribunal.


 


HIS HONOUR JUDGE McMULLEN QC

1. This case is about how a Tribunal should act when it decides a point not raised previously by the parties and not identified at a previous CMD or PHR when both have taken place. It also involves an issue as to when a proper hypothetical comparison should be made in any given case. The judgment represents the views of all three members. We will refer to the parties as the Claimants and the Respondent. Although the evidence is slightly different in respect of the two Claimants, the Tribunal treated them as the same and no distinction was drawn by the Respondent today. A distinction may become relevant because there is a clear mistake by the Respondent in respect of Miss Nare.

Introduction

2. It is an appeal by the Respondent in those proceedings against a judgment of an Employment Tribunal sitting at Leeds on 8 May 2006, Chairman Mr E P Morgan, registered with reasons on 15 August 2006. The Claimants were represented by an advice worker and the Respondent effectively was in person being represented by its operations manager. The Claimants claimed unlawful race discrimination on the ground that they were Zimbabwean. The Respondent contended it ended the engagement of the Claimants as they did not present adequate material to show that they were entitled lawfully to work in the UK.

The issue

3. The essential issue as defined by the Employment Tribunal at a PHR with all parties in attendance was in these terms as we have corrected the judgment by agreement of the parties to make grammatical sense:-

"1. On the basis that these claims are advanced by way of indirect race discrimination claims they are allowed to proceed to a full hearing."

4. As will become apparent, the issue changed during the course of the hearing for the Tribunal at the full hearing described the issue as this:-

"5.2 Whether or not the Claimants had been subjected to less favourable treatment on the grounds of their race."

It seems that that paragraph encompass both direct and indirect race discrimination.

5. The Tribunal decided that the Claimants succeeded on their principal claim, as it then became, of direct discrimination and dismissed their claims of indirect discrimination. The Respondent appeals against the adverse judgment. There is no appeal by the Claimants against the dismissal of the claim of indirect discrimination as originally tailored. Directions sending the appeal to a preliminary hearing were given in chambers by HHJ Ansell and at that preliminary hearing by HHJ Peter Clark and members to a full hearing.

The legislation

6. The relevant legislation as now applicable on appeal ears section 1(1)(a) of the Race Relations Act 1976:-

"1 Racial discrimination

(1) A person discriminates against another in any circumstances relevant for the purposes of any provision of this Act if -

(a) on racial grounds he treats that other less favourably than he treats or would treat other persons."

The Tribunal did not cite this section but noted that by section 3 racial grounds are within the scope of the Act if they comprise colour, race, nationality or ethnic or national origin. It is common ground that the Claimants' case of discrimination on the grounds that they were Zimbabwean constitutes nationality or national origin within the meaning of the Act. Section 54(a)(2) deals with the reverse burden of proof which the Tribunal alluded to.

7. The background to this case is formed by the legislation affecting employers of persons who are subject to restrictions on the right to work. Also indirectly relevant is the Gangmasters (Licensing) Act 2004 legislation which is invoked in this case. Section 8 of the Asylum and Immigration Act 1998 requires employers to satisfy themselves that there is adequate documentation to allow them to employ persons who are lawfully in the United Kingdom. A statutory defence is available to an employer provided it has taken steps to obtain appropriate documents. The documents listed in Home Office materials include what is known as an IND document because that is the language used on the front, but it is actually an application registration card. This is applicable to an asylum seeker and it states that the holder is permitted to take up employment. Other documents recognised by the Home Office and providing a defence to the statutory offence include the passport or travel document indicating that the holder can stay indefinitely in the United Kingdom.

The facts

8. The facts are not in dispute in this case and have been accepted by the parties as being encompassed by the Tribunal's findings which are as follow:-

"4. Having had the opportunity of listening to those witnesses and upon the balance of probability the Tribunal finds the following principal facts in this case:-

4.1 The Claimants are both Zimbabwean nationals having sought and successfully obtained political asylum to remain within the United Kingdom.

4.2 The Respondent is concerned with the deployment of workers to a variety of third party contracts on behalf of client companies. Within this arrangement the Respondent administers such matters as wages, PAYE and the physical deployment of personnel so as to ensure appropriate discharge of the contractual obligations on behalf of their client companies.

4.3 In or about June 2005 the Claimants entered into relations with the Respondent and thereafter were deployed to a variety of contracts on behalf of various clients.

4.4 In or about September 2005, however, the Respondent became concerned with regard to an imminent Immigration Audit. In short, the Respondent took steps to ensure that all individuals "on their books" held appropriate Home Office documentation and were lawfully present and permitted to work within the United Kingdom.

4.5 For reasons which are not entirely clear the Respondent, or at least the personnel acting on its behalf, became particularly concerned that all members of staff should produce either Visas or IND cards. Their pre-audit enquiries caused them to focus upon the status of both Claimants.

4.6 The Tribunal accepts the evidence of the Claimants to the effect that in all subsequent dealings relative to immigration status and documentation, the Claimants were required to deal with an employee known only as "Joanne". Unfortunately, however, the Respondent has not produced that individual as a witness in these proceedings. In the events, therefore, insofar as there is any conflict of evidence between the Claimant and the Respondent with regard to the ensuing process concerning immigration status, the Tribunal accepts and prefers the evidence of the Claimants; being the only individuals directly involved.

4.7 The Tribunal accepts the evidence of the Claimants to the effect that: (i) on applying for work with the Respondents they had been requested to and indeed did provide relevant documents so as to satisfy recruiting personnel of their legitimate presence within the United Kingdom and their ability to carry outwork; and (ii) within the process that took place in September 2005, it was made clear that they did in fact enjoy indefinite leave to remain within the United Kingdom. Accordingly, the natural consequence of their status was such that they were not entitled to, nor could they produce any form of IND card or Visa.

4.8 It is common ground between the parties that the relationship between them was terminated 17 weeks after its inception. That is on 23 September 2005. It is equally common ground that the reason for such termination was solely concerned with the immigration status of the Claimants. In short, that they were unable to produce the documents required of them. It is clear on the evidence of the Claimants that the only documents which they were requested to provide were in fact IND cards. No other documents were identified with them as alternative.

4.9 Immediately following the decision to terminate the contractual relationship, both Claimants reduced a number of concerns into writing and submitted them by way of grievance to the Respondent. It is common ground that no action was taken on the part of the Respondent to deal with those grievances or otherwise address the concerns. The Respondent was unable to provide any answer or explanation as to why that situation had been allowed to develop.

4.10 From first to last and regardless of what policies or practices were intended to be in operation within the Respondent organisation, the reality of the position was that the Claimants were being expected to produce IND cards. In short, their fate within the Respondent organisation was entirely dependent upon them doing so. It would appear that all representations made by the First Claimant with regard to immigration status and permanent leave to remain were disregarded.

4.11 At one stage of the proceedings it was suggested on behalf of the Respondent that the documents in fact produced by the Claimants were disregarded or perceived as being inadequate by reason of their "age". When more closely examined, however, the Respondent was required to concede that there was no policy or practice that defined a cut off period or age requirement with regard to documents which could be relied upon.

4.12 Had it not been for the immigration issue and the inability of the Claimants to produce the documents which were requested by the Respondent's employees, there is no doubt that the relationship would have continued and the Claimants would have been able to continue to work on projects to which the Respondent deployed personnel. The Tribunal was satisfied that there was no abatement of work during this period. Accordingly, if and insofar as the Claimants had remained upon the Respondent's "books" they would have been in a position to earn a comparable sum to that which they had earned prior to the termination of the relationship itself.

4.13 Whilst there was at one stage a suggestion on behalf of the Respondent to the effect that the Claimants were in fact permitted to adduce a number of documents and were not solely confined to the production of an IND card, the Tribunal rejects that evidence. The Claimants were left in no doubt that unless and until they could produce an IND card, their fate was sealed in the perception of the Respondent."

9. The Tribunal dealt with an issue which arose during the course of the proceedings in the following way:-

"8. However, during the course of evidence and before calling upon the parties to make submissions to the Tribunal, the Tribunal raised a further issue, namely: whether or not there had in fact been a direct act of discrimination as against the Claimants with regard to the failure to address the grievances which had been articulated to the Respondent following the termination of the contractual relation ship in September 2005. Mr Emsley agreed that he sought to rely upon the evidence as an alternative basis for the discrimination claim. The factual material relied upon in support of that allegation had been raised by the Claimants from the very outset. In those circumstances the Tribunal accepted and agreed that it was a species of claim available to the Claimants and upon which the Tribunal was entitled to adjudicate. No representation was made by the Respondent on this issue."

10. The Tribunal went on to dismiss the indirect discrimination case and we need say no more about it since it is not a live issue. But it descended into the answer to its question about direct discrimination in the following way:-

"17. However, there remains the claim for direct discrimination. In this respect the Claimants contend that their grievance was submitted following circumstances which resulted in an enquiry as to their race and national origin, and which caused them to feel a sufficient sense of grievance to articulate their concerns to those for whom they worked. In the words of Mr Emsley, they were inextricably linked with the matters of immigration status and nationality. Accordingly, he has contended that insofar as the Respondent failed to address that grievance, it did so on racial grounds.

18. Section 3 of the Race Relations Act 1976 defines racial grounds as any of the following, namely: "Colour race, nationality or ethnic or national origin". Against the backdrop of the evidence as the Tribunal has found the facts in this case, the Tribunal is satisfied that it is open to a Tribunal properly directing itself to infer that the failure to respond to this grievance was on the grounds of race, with the result that the requirements of Section 54A(2) of the Race Relations Act 1976 are satisfied.

19. No evidence was adduced on behalf of the Respondent to deal with or otherwise resolve the issue of the grievance procedure. Accordingly, the Tribunal is satisfied that the burden of proof having transferred, the Respondent has not discharged that burden. Accordingly the Tribunal finds and declares that the Respondent was guilty of direct discrimination as against both Claimants. Such discrimination being limited to a failure to deal with the grievances articulated by the Claimants following the termination of the contractual relationship."

It went on to award the Claimants respectively the sums of £6850 and £5550. It was accepted by the Respondent that it had made unlawful deductions from pay.

The Respondent's case

11. The Respondent submitted that the Tribunal had no jurisdiction to consider a claim of direct discrimination. Alternatively, if it did have such a jurisdiction this litigant in person was ambushed by the new point being raised by the Tribunal. The new point should have been adjourned. We were told by Mr Simon Rice-Birchall Solicitor representing the Respondent today that he had advised Mr Godfrey, who appeared at the Employment Tribunal, on the legal implications prior to and following the PHR and for the saving of costs it was decided by the Respondent that it would not be legally represented at the Tribunal. Armed with the advice of Mr Rice-Birchall, Mr Godfrey felt able to represent his company himself. Mr Rice-Birchall contended that Mr Godfrey was overawed and confused when the Tribunal changed tack. It should not have allowed the issue to have been raised live but if it did it should have allowed an adjournment.
12. The second point is that the Tribunal did not construct a hypothetical comparator. While accepting that this is not always required, there is a risk in analysis if it is not constructed, see in particular the judgment of Elias J and members in The Law Society v Bahl [2003] IRLR 640 and the approval given to that by Peter Gibson LJ in Igen v Wong [2005] IRLR 258 as follows:

"17 The statutory amendments clearly require the Employment Tribunal to go through a two-stage process if the complaint of the complainant is to be upheld. The first stage requires the complainant to prove facts from which the Employment Tribunal could, apart from the section, conclude in the absence of an adequate explanation that the respondent has committed, or is to be treated as having committed, the unlawful act of discrimination against the complainant. The second stage, which only comes into effect if the complainant has proved those facts, requires the respondent to prove that he did not commit or is not to be treated as having committed the unlawful act, if the complaint is not to be upheld."

34 We also heard argument on the need for there to be a comparator in the ingredient of less favourable treatment which the complainant must prove for there to be sexual or racial discrimination. However there was no real dispute before us on this point. That a comparison must be made is explicit in the language of the definition of discrimination. In s.1(1)(a) of the SDA one finds 'he treats that other less favourably than he treats or would treat a man'. In s.1(1)(a) of the RRA one finds 'he treats that other less favourable than he treats or would treat other persons'. The comparison must be such that the relevant circumstances of the complainant must be the same as or not materially different from those of the comparator. It is trite law that the complainant need not point to an actual comparator. A hypothetical one with the relevant attributes may do. Our attention was drawn to what was said by Elias J, giving the judgment of the EAT in The Law Society v BahI (2003) IRLR 640 at paragraphs 162 and 163. There it was held that it is not obligatory for ETs formally to construct a hypothetical comparator, though it was pointed out that it might be prudent to do so and that the Employment Tribunal might more readily avoid errors in its reasoning if it did so. Similarly, when Bahl went to appeal, this court ([2004] IRLR 799 at paragraph 156) said that it was not an error of law for an Employment Tribunal to fail to identify a hypothetical comparator where no actual comparator can be found. However, this court also said that not to identify the characteristics of the comparator might cause the Employment Tribunal not to focus correctly on what Lord Nicholls in Shamoon v Chief Constable of the RUC (2003] IRLR 285 at paragraph 7 called 'the less favourable treatment issue' (viz whether the complainant received less favourable treatment than the appropriate comparator) and 'the reason why issue' (viz whether the less favourable treatment was on the relevant proscribed ground). The importance of a failure to identify a comparator or the characteristics of the comparator may vary from case to case, and may be thought to be a particular relevance to the appeal in Emokpae v Chamberlin Solicitors."

On the basis of that, the error identified in this case, he submits, is that the Tribunal has moved straight to a but for analysis, the language of causation, and has not relied upon the reason why approach required in a discrimination case. This infects its judgment and it must be set aside.

The Claimant's case

13. On behalf of the Claimants it is contended that the Tribunal had not ordered at the PHR that their direct discrimination claim be struck out. They were effectively not represented by a skilled adviser since at the PHR the representative accepted what was put to him by the Chairman Mr Burton that the claim should be of direct discrimination. The door was still open to them to raise direct discrimination. As to the substantive point, it is contended in this case that the management was wrong in the way it treated the Claimant's grievance and thus the Tribunal reached a proper conclusion.

The legal principles

14. The legal principles in this case appear to us to be as follow:-

1) A Tribunal should deal only with the issues which are identified as live before it. If it is to deal with another issue it must give the parties a full opportunity to consider it and to make submissions both upon the admissibility of such issue and upon the substance of it. If necessary and if appropriate an adjournment should be given.

2) The Tribunal is under a statutory duty to enquire into the matters before it and if it comes up with a point which had not occurred to the parties and was not vouchesafed by previous case management or pre-hearing reviews it should take particular care, especially when the parties are not legally represented. To ensure that a full opportunity is given for the point to be considered. Again this may require an adjournment. Silence by a litigant in person should not be taken as unequivocal acceptance of the correctness of the introduction of a new point.

3) When a hypothetical comparison rather than an actual comparison is relied on, a Tribunal should take particular care, as is made clear by the judgment in Bahl. If it is to make a decision in the absence of the construction by it of such a hypothetical comparison it must pay careful attention to the guidance given by Elias J in Bahl.

Conclusions

15. We uphold the submissions of the Respondent and will allow the appeal. We will remit the point to a Tribunal.
16. The Tribunal should not have dealt with the claim of direct discrimination. However, we are clear that this claim had not been expressly ruled out. Although a PHR had tailored the shape of the hearing we do not accept that it had struck-out the claim of direct race discrimination. Much has been made by Mr Rice-Birchall of the fact that his client was effectively unrepresented, but the same is true of the Claimants in this case, hearing as we have of the experience and position of their representative. It is going too far to say that the PHR struck-out a claim of direct race discrimination. Nevertheless the tram lines upon which the case was to be conducted were firmly laid down.
17. It was open to the Tribunal when it saw that a point had arisen that had not occurred to the parties for it to make that known to the parties. Indeed it would stultify a Tribunal if it did not have that power. We hold that no error was committed by the Tribunal when it ventilated the matter which had occurred to it during the course of the evidence. The proper course was to consider what to do about that. We know that legal advice was available in the background to this employer, from experienced employment solicitors. Had Mr Godfrey said that he was overrawed or confused as is put to us, or that he needed an opportunity to consult his solicitors, no doubt that would have been made available by the Tribunal and an adjournment would have been called for. However, nothing was said.
18. Just looking at the way in which the material on this point is presented to us by the Tribunal in paragraph 8 it appears to have been put that the Tribunal agreed with itself that the claim was available to it to adjudicate and that at that stage no representation was made.
19. While not accepting on the evidence that we have that Mr Godfrey was overawed or confused, we do not accept that he indicated his agreement to this approach. The Tribunal ought to have considered more carefully when it itself took the point whether time should be allowed and whether Mr Godfrey should be asked if he would like more time and if he needed any advice. The Tribunal did not do that. Since the Tribunal had not struck-out at the PHR a direct discrimination claim but had simply shaped the way in which the hearing should go on, raising it was a matter for discretion and not of direct legal obligation. We should not be taken to be saying that when guidance is given in directions or a PHR they can be departed from. But, particularly where the parties are not professionally represented, a three person Tribunal at a full hearing during the course of evidence will be better informed of the issues than a single Chairman at a PHR. It is not an error for a Tribunal having seen a point to raise it with the parties, indeed we consider that justice would require it to do that rather than standing by idly watching matters develop. However, the exercise of discretion in this case was, we hold, wrong in principle, for the Respondent was not given the opportunity to do what we consider it would have done, which was to take advice on what to do. This is particularly important because it is held against the Respondent in the findings by the Tribunal that it had no explanation.
20. Presented to us is the evidence which was available to the Tribunal at least in the written form, which includes nothing about the way in which the point which subsequently became the single issue was developed by the Respondent, that is, its response to the grievance. It must be borne in mind that the principle attack by the Claimants in the claim, as it was depicted of indirect discrimination, related to matters during the course of employment, whereas what became the finding by the Tribunal of unlawful direct discrimination occurred after.
21. As far as we can tell from our brief look at the written evidence the relevant witness Mr Browley does not deal with this matter and thus the Tribunal was unfair to criticise the Respondent for not having produced an explanation as to that matter which had not been properly identified as an issue. We also accept the submission that in this unusual circumstance the Tribunal was hampered in its search for a hypothetical comparator. We make it clear that this was precisely the kind of case where a hypothetical comparator had to be constructed. There are some candidates. It is not sufficient simply to say that the correct hypothetical comparator is a white employee or former employee raising a grievance. It may be that the Respondent wishes to rely upon its own mistake, the mistake being that, as is found by the Tribunal, the Claimants were at all times entitled to stay indefinitely and to work in the UK, and that the Respondents were wrong to insist on other forms of identification which were not available to them, the IND and Visa. In other words the passports or the documents they held were perfectly satisfactory, in which case it might rely on a mistake, or what Burton P graphically described as "the duff employer syndrome" in Brunel University v Webster [2005] IRLR 258. However, we have decided to allow the appeal and to send the matter to an Employment Tribunal for it to consider the claim now of direct discrimination arising out of the lodging of a grievance. The terms of the reference will be paragraphs 8 and 17 of the employment tribunal judgment.
22. It will not be necessary to re-examine the findings of fact in relation to indirect discrimination. The Tribunal must construct a hypothetical comparator following submissions of the parties and then must then make a judgment as to whether there was race discrimination. It is not sufficient for there to have been a background of nationality status since that is the application of a but for test. The correct test is that given by Lord Nicholls in Chief Constable of Merseyside v Khan [2001] IRLR 830 at paragraph which focuses upon the reason why and the mental processes of the relevant manager. With those directions in mind therefore this case will go to an Employment Tribunal.
23. Having canvassed the views of the parties our judgment is that it is appropriate for this to go to a differently constituted Tribunal. The original hearing was only one day. It will be a shorter case now, the Tribunal having made errors which we have identified we consider it would be in the interests of justice that this go to a freshly constituted Tribunal for it to make the decision.