United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR GARY SELF (of Counsel) Instructed by: Messrs Preston Redman Solicitors Hinton House Hinton Road Bournemouth Dorset BH1 2EN
For the Respondent	MR PETER DOUGHTY (of Counsel) Instructed by: Messrs Paris Smith & Randall LLP Solicitors 1 London Road Southampton Hampshire SO15 2AE


 


SUMMARY

SEX DISCRIMINATION: Burden of proof

VICTIMISATION DISCRIMINATION: Other forms of victimisation

The Employment Tribunal made findings of fact that an Equal Pay Act questionnaire was linked to earlier dissatisfaction and so played a part in the Respondent's decision to dismiss. This was a protected act. The Employment Tribunal correctly applied the burden of proof.


 


HIS HONOUR JUDGE McMULLEN QC

1. This case is said to raise an issue as to the correct interpretation of the test for victimisation contrary to the Sex Discrimination Act 1975. The judgment represents the view of all three members. We will refer to the parties as the Claimant and the Respondent.

Introduction

2. It is an appeal by the Respondent in those proceedings against the judgment of an Employment Tribunal sitting over three days at Southampton, registered with reasons on 31 December 2007 under the Chairmanship of Employment Judge Matthews. The parties, as here, were represented by Mr Peter Doughty and Mr Gary Self of Counsel.
3. The Claimant made a number of claims only one of which is relevant to our proceedings today and that is of victimisation. She succeeded in her claims of unfair dismissal and for contract damages. Remedies in respect of unfair dismissal and victimisation are yet to be determined and we understand payment of the damages claim has already been made.
4. The Claimant claimed that she had been victimised for raising an Equal Pay Act 1970 questionnaire. The Respondent denied that the action which it took, which was to dismiss her by reason of redundancy, was anything to do with that. The essential issue for the Employment Tribunal on this aspect of the case, therefore, was to determine the reason for the action of the employer. The Tribunal decided that the Respondent did victimise her, and the Respondent now appeals.
5. When the case came before Mr Justice Bean on the sift on an original Notice of Appeal, the Judge gave the following opinion:

"Even if – which I doubt – the differences between the Claimant and Ms Hodges were enough to disqualify Ms Hodges as a comparator, the hypothetical comparator remained available and was correctly described by the Tribunal in paragraph 50.1. The last sentence of ground (b) of the Notice of Appeal is an entirely tendentious way of putting the case, and both grounds (b) and (c) are disguised challenges to the Tribunal's findings of fact. As to ground (d), the Tribunal correctly applied Igen v Wong and Madarassy v Nomura, and the submission that Re H (Minors) was anything to do with the present case appears to me to be unsustainable."

6. Exercising its right under rule 3 the Respondent made an application in open court before His Honour Judge Reid QC. During the course of exchanges, Mr Self agreed to draft an amended Notice of Appeal on what he told us were matters which interested the Judge. Thus there are only two grounds of appeal, other grounds having been abandoned. Sadly there is not a judgment or a note taken by the Judge to assist us as to what it was caused him to form a different opinion from that of Mr Justice Bean save that the legal question has been reduced into the two paragraph Notice of Appeal which Judge Reid approved as an amendment and which has not been disputed by the Claimant.

The legislation

7. The relevant provisions were set out by the Employment Tribunal in paragraphs 45 and 46, as to most of which there is no dispute.

"45. Section 4 of the SDA provides

"(1) A person ("the discriminator") discriminates against another person ("the person victimised") in any circumstances relevant for the purposes of any provision of this Act if he treats the person victimised less favourably than in those circumstances he treats or would treat other persons, and does so by reason that the person victimised has …

(c) otherwise done anything under or by reference to this Act or the Equal Pay Act 1970 … in relation to the discriminator or any other person, or

(d) alleged that the discriminator or any other person has committed an act which (whether or not the allegation so states) would amount to a contravention of this Act or give rise to a claim under the Equal Pay Act 1970 …

"46. Section 63A of the SDA sets out provisions relating to the burden of proof in relation to relevant complaints, of which this is one. The application of that section has been examined in some detail by the Court of Appeal. The effect is that, in a case such as this, it is for the claimant to prove on the balance of probabilities facts from which the Tribunal could conclude, in the absence of an adequate explanation, that the respondent has committed an act of discrimination against the claimant which is unlawful by virtue of the SDA. We are reminded that it is important to bear in mind in deciding whether the claimant has proved such facts that it is unusual to find direct evidence of discrimination. In deciding whether the claimant has proved such facts, it is important to remember that the outcome at this stage of the analysis will usually depend on what inferences it is proper to draw from the primary facts found by us. If the claimant proves facts from which the conclusion can be drawn that the respondent has treated the claimant less favourably on the ground of sex (here the ground is the service of an EPA questionnaire) then the burden of proof moves to the respondent. It is then for the respondent to prove, on the balance of probabilities, that the treatment was in no sense whatsoever on the ground of sex (in this case on the ground of the protected act). Madarassy (see paragraph 49 below) clarified that "could conclude" must mean that "a reasonable tribunal could properly conclude from all the evidence before it". The Tribunal needs to consider all the evidence relevant to the discrimination complaint. Although section 63A involves a two stage analysis of the evidence, it does not expressly or impliedly prevent the tribunal at the first stage from hearing, accepting or drawing inferences from evidence adduced by the respondent disputing and rebutting the claimant's evidence of discrimination."

8. The challenge is as to the extent to which the use of the words "no sense whatsoever" represents the correct law.

The facts

9. The Tribunal briefly set out the relationship of the parties and the issue in the following way:

"1. This claim is brought by Ms Carey Drysdale. Ms Drysdale says that she was discriminated against by way of victimisation under section 4 of the Sex Discrimination Act 1975 (the "SDA"). Ms Drysdale also says that she was unfairly dismissed and is owed a bonus. The company accepts that there was a "protected act" by Ms Drysdale in that she did something in relation to the company by reference to the Equal Pay Act 1970 (the "EPA") and alleged that the company had committed an act which would give rise to a claim under the EPA (subsections 4(1)(c) and (d) SDA) but denies that any less favourable treatment resulted. The company also says that the dismissal was fair and the reason for it was redundancy or some other substantial reason and that no bonus is owing.

4. As at 18 April 2006 the company operated 168 fitness clubs. It is a large operation and its response in these proceedings records 4,600 employees. Ms Drysdale started work for the company on 6 January 2003 as Estates Manager with responsibility for the general estate management of the company's property portfolio and the management of the consultants used for outsourced property portfolio work. Ms Drysdale was based at the company's Fleets Point offices in Poole. Again, as at 18 April 2006 Ms Drysdale was one of the Property Team of four made up of Ms Sally Griffiths (team manager and UK Property Executive), Miss Hodges, a team secretary/administrator and Ms Drysdale. Although Miss Hodges, like Ms Drysdale, looked after her own portfolio of clubs, Ms Drysdale was the more senior and second to Ms Griffiths in terms of the hierarchy. Miss Hodges' evidence was that Ms Drysdale was her line manager although this seems to have been an informal arrangement. Ms Griffiths reported to Mr. Newman."

10. The company had been listed on the Stock Exchange, but it was the subject of a management buy-out. Those participating in the company's equity were thought to include the Claimant, but when told that she would not be participating she indicated she might take legal advice. In due course another buy-out took place, and the Claimant was told she would receive a payment of £14,502; but she was unsure about how it had been arrived at for herself and others within her grade and had a lingering suspicion that she had been short-changed. She asked for full disclosure of the other allocations so that she herself could judge the fairness of it. This was refused on the basis that the information was confidential. Then she was told that the allocation was discretionary and fairness did not come into it. She did not accept this explanation and asked for clarification of the process because, as the Tribunal found, she was anxious to know that the process had been regulated to ensure that no discrimination took place against her in particular.
11. As the Tribunal found, there then followed a series of discussions. The Claimant had a meeting, at which she was told that she had to accept the position of the shares as then allocated from the Respondent. She was "devastated". She asked the company to consider matters further and, in due course, having obtained legal advice, served a questionnaire on the Respondent. People were tasked with dealing with this and, as the Tribunal concluded, it was a matter of a sequence of events for the Tribunal said this:

"15. …Around the same time as the exchanges about the share allocations were reaching their climax in the service of the EPA questionnaire, the company was seeking a replacement for [another employee]."

12. Talks went on for several months with a view to a reorganisation being conducted by the Respondent, and for reasons with which we are not concerned on this appeal the Claimant was earmarked for redundancy. No suitable alternative vacancies were identified and she was made redundant on 25 August 2006. A grievance was lodged which was rejected, and an appeal failed, and thus she arrived at the Employment Tribunal.
13. The Tribunal's conclusions in relation to what it set out as being the nub of the case were as follows:

"50.2 The nub of the victimisation claim is that it was the respondent's intention to be rid of Ms Drysdale because she had filed the EPA questionnaire. To succeed in her victimisation claim, however, Ms Drysdale does not have to get that far in terms of the statutory tests. Mindful that it is unusual to find direct evidence of discrimination, we have no difficulty in concluding that the claimant has, in establishing the factual matrix referred to above and on the balance of probabilities, proved facts from which we could infer or conclude that the company has treated Ms Drysdale less favourably than the comparators (hypothetical or Miss Hodges) that we have identified. In reaching this conclusion we rely on the whole factual matrix but, in particular, on the following.

50.2.1. Ms Dillon's references to the consequences of Ms Drysdale's actions (paragraph 18 above) and her "straight out" comment (paragraph 19). These comments were made at times when we are satisfied that Ms Dillon knew Ms Drysdale had filed an EPA questionnaire. The first comment was made in the context of a conversation about that subject and, although the second does not seem to have been, we find on the balance of probabilities that it related to it. We think that Ms Dillon probably had in mind the history of Ms Drysdale's campaign to secure an equity interest in the company rather than just the EPA questionnaire, but the two are inextricably linked. We find that these comments showed an awareness on Ms Dillon's part that Ms Drysdale might be viewed as a trouble maker and that, notwithstanding assurances to the contrary, this played a part in Ms Dillon's later decision making.

50.2.2. On a balance of probabilities, we conclude from the facts that Ms Dillon did not want the outcome of the reorganisation that she embarked upon to include Ms Drysdale being left in post. Ms Dillon did not want a trouble maker, who had made a fuss over the allocation of shares, filed an EPA questionnaire and was still not satisfied, in her team. There is a developing pattern which we have dealt with in our findings of fact but it is the events on and after 19 July 2006 which lead us inexorably to this conclusion. Having not accepted Miss Hodges volunteering for redundancy on 19 July (paragraph 30), Ms Dillon was faced with Ms Hodges confirming her position on 24 July (paragraph 31). That afternoon Ms Dillon told Ms Drysdale that she no longer wanted an estates manager but someone of a lesser standing at a much lower salary. The same afternoon, notwithstanding an earlier e-mail to Miss Hodges asking for confirmation that she was going, Ms Dillon sent an e-mail to Miss Hodges which encouraged her to apply for the lesser job. When Miss Hodges did not do so but on 28 July confirmed she was going, Ms Dillon mover her ground again and decided that the lesser job was not required either. Without responding to Ms Drysdale's letter of 31 July 2006 setting out Ms Drysdale's reasons why she thought that no redundancy existed, Ms Dillon called Ms Drysdale into her office on 1 August, told her that she had decided there was now no position to fill at all and effectively dismissed her. Various alternative explanations have been offered for these events and we will come to these. There has been a debate about whether or not explanations can be considered at this first stage of the discrimination test or must be postponed to the second stage. Madarassy made it clear that reasons for differential treatment can be considered at the first stage. We are clear that, whatever the stage at which the explanations are considered, it would make no difference to our judgment."

14. That then concluded the Tribunal's fact finding functions as to the relationship between the redundancy and the protected act, but the Tribunal had of course heard explanations from the Respondent as to the reason for the redundancy: four were put forward. We need not take time to explain them for they were all dismissed (no appeal has been lodged against them) in the following terms:

"We are quite clear that whatever the stage at which the explanations are considered, it would make no difference to our judgment."

15. And so, with those rejections in mind, the Tribunal made its final conclusion:

"50.4 Next we must consider whether the company has proved, on the balance of probabilities, that the treatment was in no sense whatsoever on the grounds of the protected act. It has not done so. We have no doubt that Ms Drysdale filing the EPA questionnaire and raising the share allocation issue marked her as a trouble maker in Ms Dillon's eyes and this had a significant influence on Ms Dillon's not wanting Ms Drysdale in her team. The explanations that we have considered above are in point here and our observations are the same. There is scant evidence that either the company or Ms Dillon set up the reorganisation to be rid of Ms Dillon. However, the re-organisation was handled in such a way as to produce that result. In producing that result Ms Dillon's perception of Ms Drysdale as a trouble maker who had made a fuss over the share allocation and filed an EPA questionnaire was a significant influence."

The Respondent's case

16. The central claim made by Mr Self on behalf of the Respondent is that the approach by the Employment Tribunals throughout England, Wales and Scotland constitutes a judicial fudge to circumvent the Equal Treatment Directive and possibly the burden of proof, as Mr Self put it, "in my view". What was sought by this appeal was to change fundamentally how tribunals discharge their functions. The issue was one of causation; and the question was whether or not the treatment, the subject of the claim, is meted out solely by reason of the protected act. Expressly what must not occur is an examination of whether in no sense whatsoever the protected act affected the relevant decision. This Employment Tribunal had muddied the test and failed to isolate the protected act so as to obfuscate its thinking as to where the significance of the protected act lay and what influence it had. It was submitted that the correct approach is to take a factual analysis, separate out the protected act from any other influences in the multi-facetted challenge and describe whether that had a significant influence. Without a further amendment being sought to the Notice of Appeal he supposed "in a rather round about way he was making a submission of perversity" about the Tribunal's findings. It was submitted on both of the grounds of appeal that the Tribunal must consider the full amount of the causation of the decision of the employer and whether or not a protected act was involved.

The Claimant's case

17. On behalf of the Claimant it was submitted that the Tribunal had given an unexceptionable judgment based upon the authorities Igen Ltd v Wong [2005] IRLR 258, Madarassy v Nomura International Plc [2007] IRLR 246 and the approach of the Employment Appeal Tribunal in looking at the difference between "trivial" and "significant" influences examined by Mr Justice Elias President and members in Villalba v Merrill Lynch & Co. Inc EAT [2007] ICR 469. We are told that aspects of this case went to the Court of Appeal but our researches this morning find no record of such. However, there appears to be no doubt as to the correctness of the EAT's approach in Villalba.

The legal principles

18. In our judgment the legal principles to be applied are those set out by the Court of Appeal in Barton v Investec. Our case will not involve a detailed exegesis of the law relating to the burden of proof for the simple question is whether the act of the employer, in this case selection for redundancy, was affected by the submission of the Equal Pay Act questionnaire.

Discussion and conclusions

19. As is to be expected in an employment tribunal claim of discrimination, the tribunal hears all the evidence and then may approach the question of the burden of proof in two stages by asking whether the claimant has shown a prima facie case from which it could conclude that discrimination had occurred. That involves more than simply a difference of treatment and a difference of status, see Madarassy. But it will often occur that the explanations of the respondent are before the employment tribunal at its putative stage one: see the illustration given by Mr Justice Elias in Network Rail Infrastructure Ltd v Griffiths-Henry [2006] UKEAT/0642/05 2305. In this case, none of this matters because the explanations offered by the Respondent all failed, and they failed at whatever stage they would have been raised. Broadly speaking employers who have a story to give would like to give it at the stage of the prima facie case. So, to take a simple example given by Mr Justice Elias, a man and a woman receive different amounts of pay for one day of work. The respondent is itching to give its explanation that on this day the woman was on strike and so got no money. If a mechanistic approach is taken to the burden of proof that will not arise until the second stage. But it is permissible for a Tribunal to look at that in the context of all the evidence and to decide that no prima facie case has been raised because there is forthcoming a very sensible explanation for it.
20. Such sophistication does not matter in this case in the light of the explanations failing. All reasons put forward by the employer for the treatment of the Claimant failed. That left open the doorway to the Claimant's explanation. As the Tribunal found, she did not have to put it as high as proving what the intention was of the Respondent in taking the action it did but the Tribunal made some critical findings of fact. The most important is that the Tribunal found that the raising of questions by the Claimant long before she submitted the Equal Pay Act questionnaire was to do with her dissatisfaction about the share allocation. When she received no answers whatever from the Respondent, and having taken legal advice, she submitted the questionnaire. The Tribunal made a finding which is not attacked before us, as we have indicated, from paragraph 15 of its Reasons, that the cross-fire between the Claimant and the Respondent about the share allocations reached its climax in the questionnaire, that means a single chain of causation. The Tribunal uses similar imagery by describing the issues as inextricably linked in the passages which we have cited.
21. Those are findings for it to make, to decide what it was, as a matter of inference, in the Respondent's mind when it decided. In this case there is only one answer. It is not a question of allocating on a scale of 1 to 100 per cent where the questionnaire lay because, as Mr Self accepted before us, if it were only the questionnaire then the action would be unlawful. It follows that since the questionnaire is the culmination of the earlier grievances that she had expressed, or put neutrally, the exchanges that had gone on, and since there is a finding in the Claimant's favour that they are inextricably linked, there is indeed only one issue. And the Tribunal's finding that the questionnaire played a part, the questionnaire and the raising of the issues of her dissatisfaction being inextricably linked, in the Respondent's decision making, is enough to dispose of this case without any problems of allocating percentages or use of adjectives such as "significant" "important" and so on as to what the approach is.
22. This case was a simple case which required a Tribunal to make simple findings of fact. It did so having applied the law we hold correctly and we see no error in its approach. We will not cause the earth to move in the employment law domain by issuing a judgment on the lines Mr Self invites us to do for we do not consider this Tribunal erred; nor is it appropriate for us to issue further guidance so quickly after authoritative steps have been set out by the Court of Appeal and by this Court.
23. We would very much like to thank both Counsel for their succinct submissions this morning. The appeal is dismissed.