United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR DANIEL STILITZ (of Counsel) Instructed by: Messrs Lewis Silkin Solicitors LLP (Employment Dept) 5 Chancery Lane Cliffords Inn London EC4A 1BL
For the Respondent	MR DANIEL OUDKERK (of Counsel) Instructed by: Messrs Allen & Overy LLP Solicitors 1 Bishops Square London E1 6AD


 


SUMMARY

PRACTICE AND PROCEDURE: Disclosure

Disclosure of specific documents is necessary where evidence in a different employee's grievance, of a "smoking gun" supporting the Claimant's case of race discrimination, is found and sought to be pursued. Employment Judge's refusal set aside and a fresh narrower application granted.


 


HIS HONOUR JUDGE McMULLEN QC

1. This case is about disclosure in a race discrimination case. I will refer to the parties as the Claimant and the Respondent.

Introduction

2. It is an appeal by the Claimant in those proceedings against a refusal by Regional Employment Judge Hildebrand to order disclosure as sought. The multiple claims include a claim of race discrimination, the subject of this appeal. The Judge refused to accede to an application made by the Claimant for disclosure. The Claimant then sought to have the order revoked or varied within the framework of the original order, which I will call the "Hildebrand Order", and that went for a hearing on the telephone, both parties represented by Counsel before Employment Judge Freer. He rejected the application. Directions sending this appeal to a full hearing were given in chambers by Mr Justice Wilkie. The parties are represented by Mr Daniel Stilitz and Mr Daniel Oudkerk respectively of Counsel.

The legislation

3. The relevant provisions of the legislation and the approach are not in dispute. An Employment Judge has power to order disclosure and to give directions in advance of a hearing. The Employment Judge refused the application in short form but entirely properly since he accepted in full the resistance of the Respondent to the application and incorporated by reference the Respondent's grounds into his own judgment. When the matter came on before Judge Freer no new material had been introduced such as a tailoring of the request as is now conceded following the hearing before Judge Freer to be appropriate. The material therefore before the Judge is the same as before me, at least at this stage of the appeal.

The facts

4. I will briefly state the facts as they appear to emerge from the claim and response. The Respondent describes itself and the Claimant in the following terms:

"1. Canadian Imperial Bank of Commerce is an international bank providing financial services throughout the world with headquarters in Toronto, Canada. The Respondent, Canadian Imperial Bank of Commerce, London Branch, operates in London providing investment banking services to the wholesale market, currently employs approximately 240 people and is authorised and regulated by the UK Financial Services Authority.

2. The Claimant commenced employment with the Respondent on 15 January 2007. He was the Head of Marketing for the Respondent's Debt Capital Markets and Equity and commodity Structured Products divisions, at the level of a Managing director.

…

4. The Claimant's employment with the Respondent terminated by reason of redundancy on 8 May 2008.

5. The Claimant has brought claims for unfair dismissal, race discrimination and a protective award in connection with the termination of his employment. The Claimant has also brought a claim for breach of contract in connection with the payment of the guaranteed bonus in his contract of employment. All of the Claimant's claims are denied by the Respondent for the reasons set out below."

5. The Claimant as part of his claims makes an allegation under the Race Relations Act 1976 which is an agreed issue before the Employment Tribunal as follows:

"1. ii. Was the Claimant discriminated against by the Respondent on the grounds of his nationality and/or national origin contrary to section 1 of the Race Relations Act 1976 by being dismissed? There are two claims, one of direct discrimination in respect of comparators Mr Alex Tchernitsar, Mr Milton Bolenos, Mr Darcy Hall and Mr Mark Hardisty. There is also a hypothetical comparator having all the characteristics of the Claimant but being of Canadian national origin. There was also an indirect discrimination claim set out in paragraph 38 of the particulars of claim on the basis that treatment of employees by reference to where they were hired was a provision, criterion or practice which affected the treatment and which put the Claimant and others of non Canadian and [sic] nationality and/or national origins at a disadvantage and is incapable of justification."

6. That and the other issues will be tried before an Employment Tribunal sitting for seven days due to start on Tuesday 10 March 2009 and a subsequent remedy hearing if so advised to follow shortly thereafter.
7. The issue to be tried therefore has been tightly circumscribed by the written case of the Claimant, the Respondent and their respective approaches to a statutory questionnaire. In broad terms, the claim can be described as an allegation that the Respondent had a policy of discrimination in favour of those with a Canadian connection, and did so discriminate against the Claimant for he is German and in the category of people who are neither Canadian nor recruited in Canada. That group I will describe as "Canada connected". The claim was proceeding but material came into the hands of the Claimant which indicated support, as he says, for his contention that there was a culture of favouring Canada connected employees when it came to job losses. The way in which the material came into the possession of the Claimant is not a matter for me to deal with today but it is sufficient to say that it concerned another employee, Mr Nsouli, who in an unrelated redundancy exercise obtained material which the Claimant wishes to put before the Employment Tribunal as supporting his contention that there was a culture. The material arose during the course of Mr Nsouli's grievance about his treatment and his appeal. It consists of the following, as extracted by the Claimant's solicitors in their initial application to the Respondent for specific disclosure, and it says this:

"We draw your specific attention to an email from Ian Howard to Steve Gardner dated 7 August 2008 (subject: Re: Aboud Nsouli) in which Mr Howard states that "it would be fair to say that Ron felt a moral obligation to find jobs for the returning Canadians rather than the rest of us."

In addition, the notes of Steve Gardner's interview with Mr Howard recorded that:

"Ian made a number of comments in support of Aboud's allegation that Canadians tend to be 'looked after' at CIBC and mentioned a number of examples of Canadian employees who had not been made redundant or who had been offered senior roles over non-Canadians."

And

"Ian said that Aboud certainly had a difficult relationship with Michael Bresges and that in his view Michael had treated all non-Germans differently from Germans (i.e. including Ian himself)."

8. In the light of that material the Claimant sought documents in the following categories and they are set out as follows:

"all documents relating to Mr Nsouli's grievance and appeal, including all handwritten interview notes and electronic correspondence between Steve Gardner and any person interviewed as part of Mr Gardner's investigation (including Ian Howard); and

all correspondence (either handwritten notes or email correspondence) between senior management (including Ron Lalonde) regarding the decision to offer guarantees and/or redeployment opportunities to employees of the Bank since January 2007."

9. The Respondent objected in a letter of 4 December 2008, which is incorporated by reference into the Judge's Reasons, and amongst other things its solicitor said this:

"In any event it should be noted that the comment of Mr Howard that "it would be fair to say that Ron felt a moral obligation to find jobs for the returning Canadians rather than the rest of us" in his email of 7 August 2008 along with the related extracted comment made by Mr Howard in his cal with Mr Gardner later that day, were investigated by CIBC within the context of Mr Nsouli's grievance and appeal. The results of the investigation were set out in CIBC's response of 24 September 2008 the relevant section of which reads as follows:

"We have investigated this …and can confirm that the two Canadian nationals who were involved in the London run-of exercise and remain employed by CIBC were employed out of Canada and on temporary assignment to the London office. Under the terms of their assignment, CIBC has a contractual obligation to send them back to Canada in the event of a restructuring taking place during their assignment."

…

With respect to the second request for disclosure, namely "all correspondence between senior management (including Ron Lalonde) regarding the decision to offer guarantees and/or redeployment opportunities to employees of the Bank since January 2007", we would point out that Mr Beck's claim relates to an allegation of direct and/or indirect discrimination in relation to the proposal to make him redundant in April 2008. The redundancy proposal which affected Mr Beck was made by Franck Risler and Jim Meloche and the relevant correspondence has already been included within CIBC's disclosure documents. Ron Lalonde was not in any way involved in this redundancy proposal and is not responsible for the conduct of the Fixed Income and Currencies Division of which Mr Beck formed a part. We therefore do not accept that our client has any obligation to carry out a search for and/or provide any correspondence which may exist in respect of the second request."

10. That triggered an application to be made to the Employment Tribunal on the basis that it was the Claimant's case that the documents requested were clearly relevant to the proceedings and specifically the Claimant's case was that his national origin was related to the decision to make him redundant in May 2008.
11. The Respondent contended again that the material was not relevant, for it replied on 15 December 2008 in similar terms and those reasons were adopted by the Employment Judge. The contention was principally that the disclosed materials were irrelevant to the issue before the Employment Tribunal. The question for me is whether there was an error of law in the Judge's refusal to accede to the application.

The Claimant's case

12. On behalf of the Claimant it is contended that the refusal to so accede was irrational and perverse: irrational in the Wednesbury [1948] 1 KB 223 CA sense, wherein good burghers in Wednesbury are forever condemned for a decision they reasonably made. It is contended that the Nsouli material was adventitious but it did provide a trigger for further disclosure. The reasons adopted by the Judge include the relevance of the documents, the outcome of the investigation and the relationship of one of the actors in this drama, Mr Ron Lalonde, to the events in the present case. It is contended that it is necessary for the disposal fairly of these proceedings for these documents to be disclosed for otherwise there is a risk of real injustice. Any lateness in the disclosure can be coped with during the envelope of the preparation and trial. Nor is the application now disproportionate to the material sought. If it is to be contended that the documents were confidential there is a way of dealing with them so that confidentiality is protected. Where an Employment Judge has gone seriously wrong in the exercise of a discretionary power it is susceptible to appeal.
13. Since the majority of the cases with which I have been concerned today were decided, the burden of proof has changed, requiring the claimant on the one hand to meet an easier burden but on the other to at least present material which could without an explanation from the respondent give rise to a claim of unlawful discrimination.

The Respondent's case

14. On behalf of the Respondent it is contended that the authorities caution against interference with an Employment Judge's exercise of discretion in granting or refusing applications for disclosure, it would be to open the floodgates on discrimination claims for there to be allowed a general trawl of other grievances and disciplinary hearings in order to attempt to find therein some evidence to support the contention being advanced in any given case. Mr Nsouli, the subject matter of the first set of disclosure applications, was not one of the comparators nor affected by the dismissal of staff in May 2008.

The legal principles

15. Helpfully both Counsel agree on the legal principles which are as follows. In Medallion Holdings Ltd v Birch [1985] ICR 578, which had been approved by the Court of Appeal in Ashmore v British Coal Corporation [1990] IRLR 283, Waite P for the EAT said the following:

"We therefore reject the argument that the Employment Appeal Tribunal has power to review the [interim] decisions of [employment] tribunals upon their merits, regardless of whether any error of law is involved. [Interim] directions on matters such as discovery or the granting or refusal of an adjournment or the striking-out of [a claim] or [response] or any part thereof are wholly within the discretion of the [employment] tribunal. It is a discretion with whose exercise we have no jurisdiction to interfere unless it can be shown to have been contrary to some established principle of law or to have involved a result at which no reasonable tribunal exercising the same discretion could have arrived."

16. That approach was continued in Noorani v Merseyside TEC Ltd [1999] IRLR 184 CA where Henry LJ for the Court said this:

"32. …contrary to what the Employment Appeal Tribunal found, the ET were here exercising the classic discretion of the trial judge in the issue of witness summonses and in like matters. Such examples of such a discretion lie not only in the issue of witness summonses but whether to grant an adjournment or whether to order the trial of a preliminary issue etc. These decisions are entrusted to the discretion of the court at first instance. Appellate courts must recognise that in such decisions different courts may disagree without either being wrong, far less having made a mistake in law. Such decisions are, essentially, challengeable only on what loosely may be called Wednesbury grounds, when the court at first instance exercised the discretion under a mistake of law, or disregard of principle, or under a misapprehension as to the facts, where they took into account irrelevant matters or failed to take into account relevant matters, or where the conclusion reached was "outside the generous ambit within which a reasonable disagreement is possible", see G v. G [1985] 1 WLR at 647."

17. To those statements of authority I add my own which is that I appreciate the difficult task faced by Employment Judges dealing on the papers with defended applications for interim steps to be taken such as disclosure. They operate on very limited material. They do not have the luxury which I have of hearing from counsel on either side and they have to make robust decisions in the light of what they then know. It is not for me to substitute my view for theirs just because I have heard more argument. I have to be satisfied that a decision was made which was wrong. I also bear in mind that this is a race discrimination case; they are hard to prove and support is given by legislation (see the change in the burden of proof), and by the authorities, see for example the statement of principle set out by the Court of Appeal in Anya v University of Oxford [2001] IRLR 377. It is rare indeed for there to be found direct evidence of discrimination in paper form. And so with those limitations in mind applications which are supported by some credible grounds are the more likely to succeed.

Discussion and conclusions

18. I accept the argument of the Claimant preferring it to that of the Respondent on both of the subject matters of the application. I do hold that the Employment Judge made an error in his approach to these documents. Careful attention should be given to them. The first relates not simply to what Mr Nsouli said in his grievance or what his grievance was about. In order to show that there is a culture of discrimination, in statutory terms that there is a provision criterion or practice, it is relevant to look at what leading lights within the Respondent say and do. In this case, to use Mr Oudkerk's graphic imagery, the Claimant appears to have found a "smoking gun" for he has found a statement by a former employee, who had occupied the senior position of Managing Director of an organ of the bank, which supports his case as set out in the letter from the Claimant's solicitors on 27 November 2008. It was plainly enough to cause the Respondent some anxiety for an investigation was called for and a reference has been made to the approach of Mr Steve Gardner.
19. It cites from a document which I am told is the bank's response of 24 September 2008 to the allegation based upon Mr Nsouli's case that there was unfair treatment of non Canada connected people. This document has not been disclosed. An edited extract from it has been quoted. It seems to me, therefore, that that document was bound to be disclosed since it does include at least in part an admission by the Respondent of a differential treatment of Canadians. The Respondent is of course most anxious, as it was to Mr Nsouli, to demonstrate that there was a reason for that different treatment. In part it relates, it appears from the document, to Canada connected employees' different status under Canadian law. But doing the best I can at this stage, this at least has the makings of a prima facie case which calls for an answer from the Respondent and in order to do that I consider that these documents are relevant. It is no answer to say that following this paper trail Mr Howard has now been summoned to appear at the Employment Tribunal and his witness statement is before me which was not before the Judge. Mr Howard may well want to look at documents. There may be other documents relating to interviews which he has had. The result of an investigation carried out by a senior officer of a bank into an allegation of unfavourable treatment of an employee who is different by race from others is one that is disclosable. If individual names are resisted on the grounds of confidentiality a redaction process can be put in place. This document relates to the allegation of differential treatment. It contains a statement by senior officers of the Respondent and there is at least more to this than this simple extract sent by the solicitors and thus it is wrong in law not to include disclosure of all that material.
20. I turn then to the second request. As the Respondent's solicitors themselves acknowledge there is a connection between the two requests. That should say it all. Mr Ron Lalonde, the "Ron" referred to in the original email correspondence, is a senior manager and since it is acknowledged that there is a connection between the two that at least ought to be grounds for eliciting the same answer. If there has been correspondence indicating that in certain circumstances, where, for example, there is to be a shrinkage of staff, there will be a different approach taken to those Canada connected from those not, those documents should be disclosed. Lest it be said that now in the open floodwaters of employment practice a fishing expedition has now been let loose, it is simple to respond that in this case most unusually there is evidence by senior officers of the Respondent of the differential approach to employees who are Canada connected from those who are not. It is relevant to the claim the Claimant makes as is clear from the depiction of the issue by the Employment Judge.
21. Thus for those reasons the Judge did err when he did not make the connection which this document plainly points to and so I will allow the appeal. It is now for me to exercise my discretion. I have not been addressed in detail about it but I have been minded to order it in terms of the narrowed approach now commending itself to the Claimant but I will hear further argument about that.
22. No difficulty having been presented in respect of an Order in the terms of bullet point one on page 102 of the bundle nor as to completion of this exercise by Wednesday 4 March at 4 pm. I will make an Order in those terms which Counsel will kindly draw up for me.
23. As to the second bullet point I will make the Order as sought - Friday 4 pm. Liberty is given to the parties to apply to the Employment Tribunal if difficulties emerge in relation to MrRisler and Mr Phillips for I acknowledge that there are different circumstances attending upon them from those of the other employees or former employees who are giving evidence. It may well be that the material is easily exigible but I will give an allowance to the parties to make an application to the Employment Tribunal and to explain such difficulties as there are and I see no reason why that cannot be done by the beginning of the hearing on Tuesday. I am probably looking at the Respondent here so if you substantially complied and the other side are still not happy then you can apply for relief from sanctions and for a change in my Order I will leave that entirely to the Tribunal.

Appeal

24. Permission is refused to appeal to the Court of Appeal. The judgment appealed is one of case management and discretion together with a finding that there has been an error of law. The appeal it seems to me invokes the more demanding test for interim appeals from the High Court said to be appropriate by Maurice Kay LJ in North Glamorgan NHS Trust v Ezsias [2007] EWCA Civ 330. This case cannot be said to raise an important point of principle or practice. Although I have referred to the change in the burden of proof since it was argued before me the principles upon which this case was decided were those which were agreed to be the relevant law by both counsel and the established principles set out in Anya that recognised the difficulty of finding direct evidence of discrimination and did not turn on the change in the burden of proof. I see no reason why this issue should justify the attention of the Court of Appeal, and since it is an interim appeal I bear in mind that what is at stake here is the sacrifice of the elaborate directions for hearing this case over the next seven days or so.