United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR THOMAS KIBLING (of Counsel) Instructed by: Messrs DLA Piper UK LLP 3, Noble Street London EC2V 7EE
For the Respondent	(Debarred)


 


SUMMARY

RACE DISCRIMINATION

Post employment

Burden of Proof

In determining a claim of post termination victimisation under the Race Relations Act 1976 the Employment Tribunal did not fail to consider the reason why the employer gave a different form of reference to the Claimant than they would have given to a comparator. They did not fail to have regard to the need for the decision maker to have knowledge of the Claimant's protected act, the making of a claim under the RRA. The burden of proof provisions in section 54A do not apply to claims of victimisation under the RRA. The Tribunal correctly applied the approach in King v Great Britain China Centre [1991] ICR 516 to the victimisation claim (Oyarce v Cheshire County Council [2008] IRLR 653).

The parties assumed that the post-termination provisions of RRA, section 27A, apply to victimisation claims. This issue may have to be determined in a case in which it arises. In finding unlawful post termination discrimination under section 27A(2)(a) the Employment Tribunal erred in failing to consider whether the Claimant had suffered a detriment. Finding of victimisation set aside. Victimisation claim remitted to the same Employment Tribunal to determine whether the employer's act of sending the reference subjected the Claimant to a detriment. Victimisation claim to be determined in accordance with the Tribunal's decision on detriment.


 


THE HONOURABLE MRS JUSTICE SLADE

1. Pricewaterhouse Coopers LLP ('PwC') appeal from the judgment of an Employment Tribunal, ('ET'), Employment Judge Mr Hodgson and members (the 'ET'), entered in the Register on 16 October 2009 in which the ET held that a claim of victimisation under the Race Relations Act 1976 ('RRA') by Mihaela Popa ('Ms Popa'), who is of Romanian nationality, succeeded. The claim was in respect of a reference sent by PwC on 27 June 2008 to Kroll Background Worldwide Limited ('Kroll') who provided background screening services. The reference was for employment of Ms Popa by Credit Suisse (the 'second reference'). The ET awarded Ms Popa compensation of £750 which together with interest amounted to £805.85. The compensation was for injury to feelings. The ET dismissed two other claims of victimisation under RRA and claims of direct discrimination and harassment under that Act. In this judgment references to paragraphs are to the judgment of the ET unless otherwise indicated.

Introduction

2. PwC had standard form references including those described as code 1 and code 2. Ms Popa claimed that the sending on 27 June 2008 of a code 1 rather than a code 2 reference letter to Kroll was an act of victimisation for bringing race discrimination claims against PwC. The first set of proceedings issued by Ms Popa against PWC commenced on 1 March 2007 and were determined by Employment Judge Potter and members (the 'Potter Tribunal') by a judgment of 4 December 2007 after a hearing in November 2007. A code 2 letter includes the words:

"[name of employee] was of a satisfactory standard and we have no reason to doubt their honesty or integrity."

A code 1 letter does not include those words.

3. In September 2009 amongst other claims the ET considered three claims of victimisation under the RRA. Two were in respect of the letters of reference for Ms Popa provided by PwC to Kroll. One was the code 2 letter dated 12 January 2007 for her employment by UBS and the other the code 1 second reference letter dated 27 June 2008 for her employment by Credit Suisse. Mrs Mitton, who has the title of Human Capital Leader, gave evidence for PwC.
4. The ET dismissed all Ms Popa's claims save for that of victimization in relation to the reference dated 27 June 2008 which is the subject of this appeal.
5. An appeal by Ms Popa from the dismissal of her claims by the Hodgson Tribunal was dismissed on 2 June 2010 following a EAT rule 3(10) hearing before His Honour Judge Hand QC.
6. Ms Popa has been debarred from participating in this appeal for failure to serve a Respondent's Answer.

The grounds of appeal

7. PwC were granted leave to amend their Notice of Appeal to clarify the ground of appeal raising what was described as 'the detriment issue'. Mr Kibling for PwC advanced the following grounds of appeal before us:

(1) The ET failed to consider and determine whether the person or persons who decided that a code 1 reference for Ms Popa should be sent to Kroll in connection with the employment of Ms Popa by Credit Suisse knew that she had brought race discrimination claims against PwC in 2007 and whether the reason for sending that form of reference was that she had made such claims (the 'causation issue');

(2) The ET failed to apply the approach in King v Great Britain China Centre [1991] ICR 516 in that they did not determine whether Ms Popa had established her case on a balance of probabilities. Instead they applied the reverse burden of proof in RRA section 54A as explained in Igen Ltd v Wong [2005] IRLR 258 (the 'burden of proof issue');

(3) The ET in exercising their discretion to extend time for presentation of the claim erred in determining that PwC had not suffered prejudice by the delay and their decision to extend time was perverse ('prejudice issue');

(4) The ET failed to have regard to the need to determine whether the issuing of the code 1 reference was a detriment taking into account also the tests identified in Derbyshire v St Helens MBC [2007] ICR 841 (the 'detriment issue')

There was no challenge to the award of compensation.

Summary Grounds of resistance to the victimisation claim before the Hodgson Tribunal

8. The reason advanced by PwC for sending a code 1 letter was that the administrator who generated the reference for Ms Popa exercised his or her discretion to send it because what was being requested by Kroll was confirmation of dates of employment, job title and whether Ms Popa had held a permanent position with PwC. The additional sentence in the code 2 letter was not needed to respond to the enquiry. PwC resisted Ms Popa's victimisation claim on the basis that the person who changed the coding for the reference was an administrator. An administrator would not have access to the personnel file and would be unaware that Ms Popa had made a race discrimination claim against PwC in the past. Accordingly the sending of the code 1 reference was not an act of victimisation.
9. PwC contended that the second reference did not cause Ms Popa to suffer a detriment. It did not prevent her from being employed by Credit Suisse. Accordingly the sending of the second reference was not an act of victimisation within the meaning of RRA.
10. It was also contended on behalf of PwC that the victimisation claim was out of time and the ET should not exercise their discretion to enable it to be heard.

The judgment of the Hodgson Tribunal

Relevant findings of fact

11. Ms Popa is of Romanian national origin.
12. Ms Popa was employed by PwC from 27 September 2004. Initially she worked for a year in Bucharest as an assistant auditor. Following completion of her MBA at the University of Illinois as a Fulbright scholar Ms Popa worked for PwC US as an associate in the financial advisory service in the Chicago office. She then worked as an executive in the advisory department in the London Plumtree Court office of PwC. Ms Popa resigned from her employment and left PwC on 2 December 2006.
13. After leaving PwC Ms Popa was employed by UBS from 5 December 2006. In January 2007 Kroll acting for UBS asked PwC for a reference for Ms Popa. Their letter specifically requested comments on Ms Popa's honesty, integrity and ability to carry out duties.
14. PwC operate a rigid system for giving references.
15. When an employee leaves they are given a specific code. All requests for references are forwarded to the Employee Service Centre. A relatively junior administrator at the Employee Service Centre, who could be a temporary member of staff, obtains the leaving code through the software system. If the code is a 1 or 2 the administrator obtains the related standard reference letter through the system. A code 3 or 4 indicates that the request for a reference should be referred by the administrator to someone of appropriate seniority, which could be an individual in the policy and legal department, for decision.
16. PwC sent a code 2 reference for Ms Popa's employment by UBS. The letter from PwC dated 12 January 2007 included the following standard wording for code 2:

"Mihaela's work was of a satisfactory standard and we have no reason to doubt their honesty or integrity."

17. On 1 March 2007 Ms Popa presented an ET1 alleging constructive dismissal, victimisation and race discrimination by PwC. On 1 June 2007 she presented a second ET1 against PwC alleging sex discrimination and victimisation. That claim was abandoned on 12 June 2007.
18. In November 2007 Ms Popa's claims against PwC were heard by Employment Judge Potter and members (the 'Potter Tribunal'). By judgment of 4 December 2007 the Potter Tribunal dismissed all Ms Popa's claims. On 1 February 2008 Elias P (as he then was) rejected her appeal on the papers under Employment Appeal Tribunal rule 3(7). This decision was confirmed after a hearing under rule 3(10).
19. On 29 May 2008 Ms Popa was interviewed for a role in Credit Suisse. On 20 June 2008, Kroll sent a further request for a reference. This was in a different format to the previous request. The request asked for confirmation of employment dates, position held and the type of work whether permanent and full-time. It also has the words 'additional comments:' there is then a space for any additional comments. This request did not specifically ask for comments on honesty, integrity and ability to carry out duties.

The reference sent by PwC on 27 June 2008 (the 'second reference') did not include the sentence included in the reference sent to Kroll for Ms Popa's employment by UBS. The second reference which was for employment by Credit Suisse was a code 1 not a code 2 reference.

20. The employment of Ms Popa by UBS terminated on 22 August 2008.
21. On 26 August 2008 Ms Popa commenced employment with Credit Suisse.
22. The time limit for bringing a victimisation claim under RRA in respect of the second reference expired on 26 September 2008.
23. Ms Popa raised a grievance with Credit Suisse in December 2008 in which she suggested that her previous employers may have given her poor references. Her employment with Credit Suisse ended on 14 December 2008.
24. After enquiry by her, on 22 January 2009 PwC provided Ms Popa with a copy of the second reference.
25. On 23 March 2009 Ms Popa presented an ET1 alleging race discrimination and victimisation, sex discrimination, disability discrimination, sexual orientation discrimination, religion or belief discrimination and age discrimination by PwC.
26. In paragraph 5.38 the ET recorded that at some point Ms Popa's coding was changed to 4. Mrs Mitton assumed that this was a relatively recent event and was not current in June 2008, the date of the second reference. They observed that Mrs Mitton had not satisfied herself of this by reference to the information contained on the PeopleSoft software. The ET found that Mrs Mitton assumed but did not know that Ms Popa's coding at the time of the second reference was code 2 and that the operator would have a choice as to whether to send a code 1 or a code 2 letter.
27. PwC did not adduce evidence from anyone who worked in the Employee Service Centre with direct experience of whether an administrator could change the coding for a reference. Mrs Mitton had observed administrators at work but did not have experience of working with the production of references.
28. Mrs Mitton gave evidence that the administrator who processed the second reference had been identified but was a temporary employee and had left. In any event by reason of the large number of references which each administrator would produce each day it was unlikely that they would remember generating one for Ms Popa. Mrs Mitton did not contact the administrator.
29. Administrators would not have access to personnel files on which information such as whether an individual had presented a claim to an ET would be recorded.
30. Mrs Mitton confirmed that every change of coding is recorded on PeopleSoft, it remains on PeopleSoft and the date of the change itself is recorded. Mrs Mitton confirmed that the relevant information could probably be printed. The printout was not produced at the hearing before the ET.
31. The ET held:

"5.33 We were unable to obtain satisfactory evidence from Mrs Mitton as to whether or not the administrator can chose to select a code '1' or code '2' letter. She simply did not know sufficient detail of how the system works to be able to say with any certainty.

5.34 What is clear is that there are standard letters. What is not clear is whether the coding on the system prevents a code 1 letter being sent if a code 2 is recorded.

5.35 Similarly, a code 4 indicates that the matter should be referred back to, for instance, the policy and legal department. However, it is simply not clear whether such a coding would prevent a standard letter being generated at all. We simply do not have the detail of how the system actually operates; Mrs Mitton did not know in detail how the system worked. In particular, we do not know if an administrator could generate a code 1 letter if the coding was for a code 2.

…..

5.40 In her evidence in chief, Mrs Mitton opines that the administrator on receiving the request, took the view that there was no need to provide the additional comments which would have been contained in a code 2 letter and therefore simply processes the code 1 letter to deal with the factual matters. This is possible on the face of it. However, we have some reservations as we have not received any proper evidence as to the way the system works. Therefore, it is not even clear to us that the action was a possibility open to the administrator. Ultimately, Mrs Mitton is simply speculating. She has not spoken to the administrator."

32. The ET held that the second reference did not prevent Ms Popa from obtaining employment or cause her to lose it. The impact of the references was not referred to in her witness statement which was over 40 pages long. The ET note in paragraph 8.14 that Ms Popa referred to the issue of the references as 'trivial'.

Reasoning and Conclusions

33. It was agreed by PwC that the protected act for the purposes of the victimisation claim was 'the bringing of proceedings'. These were the proceedings commenced by the ET1 lodged on 1 March 2007 and heard by the Potter Tribunal. Ms Popa claimed that the second reference was an act of victimisation since it was a code 1 rather than a code 2 letter.
34. The ET held that there was a difference in treatment between that of Ms Popa and that of someone who had not carried out a protected act in that:

"7.37. …. An ex-employee who left in the same circumstances as the claimant but who did not undertake the protected act would on the face of it have continued to receive a code 2 reference. …"

35. At paragraph 7.45 the ET held that the giving of a reference without the paragraph concerning honesty, integrity and standards was less favourable treatment. Further at paragraph 7.43 they observed:

"It is clear that the treatment was motivated by the protected act and that it was less favourable because it was unwelcome."

36. The ET directed themselves to consider the reason why Ms Popa did not receive code 2 reference. They considered the explanation advanced by PwC that it was an administrator who had decided to give a code 1 reference although she was a code 2 employee.
37. The ET held:

"7.27 We have received no proper evidence to demonstrate that the administrator could act in this way against a code 2 or whether it is normal for the administrator to exercise such discretion.

7.28 We accept that Mrs Mitton honestly attempted to investigate this matter. In her evidence before us she has been entirely open and helpful. However, there are significant gaps in the investigative process.

7.29 The administrator was identified but no attempts were made to interview him or her. The team leader was not approached in order to explain the operation of any discretion."

38. The ET observed that PwC were in a position to produce evidence to show when the code was changed from a 2 to a 4 and whether this was after the date of giving the reference letter. However they chose not to do so. The ET found at paragraph 7.31 that the explanation that the administrator had discretion to send a code 1 letter for a code 2 employee was pure speculation. Further the ET noted that the possibility of the letter having been sent by mistake raised on behalf of PwC at the hearing before them was not advanced in the witness statements.
39. The ET found in paragraph 7.41 that:

"The exercising by an administrator is the least likely of the available explanations."

40. From what they regarded as the inadequacy of the explanation for sending a code 1 rather than a code 2 reference, the ET drew the inference that the reason for the less favourable treatment of Ms Popa was that she had made a race discrimination claim against PwC. The ET concluded from the evidence that:

"7.42 …. The respondent's reason is inadequate and unsatisfactory. In this case we have no doubt that it is appropriate to draw an inference from the factual findings we have set out. Having regard to all matters, we consider that victimisation is made out in this case."

41. If and insofar as the ET dealt with whether Ms Popa had established that the less favourable treatment was a detriment the ET held at paragraph 7.44:

"To the extent that it has been suggested that there cannot be victimisation because the claimant did not know about the reference at the time and further that it did not affect her employment with Credit Suisse, again we reject this."

42. In deciding whether it was just and equitable to exercise discretion to extend time to enable Ms Popa's victimisation claim to be heard, amongst other matters the ET considered general prejudice caused by the delay in instituting the proceedings. At paragraph 7.67 they held:

"We should consider general prejudice. We are not satisfied that the respondent has been prejudiced by the claim being brought late. The respondent has relevant evidence on its computer system. Further, the evidence of the administrator and any relevant team leader has not been produced because the respondent did not make the appropriate investigation; there was no specific attempt to contact the administrator."

43. Taking all the factors into account the ET concluded that it was just and equitable to extend time to enable the victimisation claim in respect of the second reference to be heard.

The relevant statutory provisions

Race Relations Act 1976

44. Section 2

"(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-

(a) brought proceedings against the discriminator or any other person under this Act;"

45. Section 3

"(3) In this Act-

(a) references to discrimination refer to any discrimination falling within section 1 or 2; and

(b) references to racial discrimination refer to any discrimination falling within section 1,

and related expressions shall be construed accordingly."

46. Section 4

"(2)It is unlawful for a person, in the case of a person employed by him at an establishment in Great Britain, to discriminate against that employee-

(c ) by …. subjecting him to any other detriment."

47. Section 27A

"(2) Where a relevant relationship has come to an end it is unlawful for the relevant party-

(a) to discriminate against another party, on grounds of race or ethnic or national origins, by subjecting him to a detriment….

where the discrimination …. arises out of and is closely connected to that relationship."

48. Section 68

"(6) A … tribunal may …. consider any such complaint which is out of time if, in all the circumstances of the case, it considers it just and equitable to do so."

Submissions of the Appellants

49. It is to be noted that perversity is not alleged as a ground of appeal save in relation to the exercise of discretion to extend time to enable the out of time victimisation claim to be heard.

The causation issue

50. Under the rubric of 'the causation issue', Mr Kibling for PwC contended that the ET erred in its consideration and application of section 2 RRA in that they failed 'to address the question of causation required in a victimisation claim'. They had failed to consider adequately or at all the third stage of the three stage approach in Baroness Hale's analysis in Derbyshire and others v St Helens MBC [2007] ICR 841 and that of Lord Nicholls in West Yorkshire Police v Khan [2001] ICR 1065. Was the reason for the less favourable treatment the fact that the Claimant had carried out a protected act? He contended that the ET did not engage with the issue of whether the reason for the less favourable treatment which they found had been given to Ms Popa was her previous race discrimination claim against PwC. Absent knowledge of the protected act there can be no victimisation. In order to establish victimisation the person who changed the coding of the reference for Ms Popa to 1 would have to know of her earlier claim against PwC under the RRA and to have decided to give her a code 1 reference for that reason.
51. The statement made by Mrs Mitton for the purpose of the hearing before the ET was in our bundles as were notes of her evidence taken by the legal representatives of PwC. Mr Kibling relied on the note of unchallenged evidence given to the ET by Mrs Mitton that the administrator who processed the reference for Ms Popa would not have had ready access to the personnel file containing information that she had made a race discrimination claim and would have been 'oblivious' to it.
52. The administrator who processed the reference for Ms Popa was identified and had left PwC but not contacted. It was said by Mr Kibling that having regard to the evidence of Mrs Mitton that there was a high turnover of administrators responsible for generating references and the high numbers each would deal with in a day, it was unreasonable to suppose that an administrator would recall Ms Popa's reference after such a long period of time. Mr Kibling pointed out that the ET held in paragraph 7.28 that Mrs Mitton had been entirely open and helpful in her evidence. Accordingly the ET erred in relying on their failure to contact the administrator in drawing an adverse inference against PwC that the reason for sending a code 1 reference was that Ms Popa had previously made a claim against them under the RRA.

The burden of proof issue

53. Mr Kibling submitted that although the ET had been informed that the reverse burden of proof in RRA section 54A did not apply to victimisation claims, nonetheless the ET applied the reverse burden of proof and the guidance to section 54A in Igen Ltd v Wong [2005] IRLR 258. The ET should have applied the approach prior to the enactment of that provision as explained in King. The ET failed to remind themselves that it is for a complainant who complains of race discrimination to make out his or her case.
54. It was said that the ET failed to adopt the correct approach to whether it was proper to draw the inference from the facts that the reason PwC gave Ms Popa a code 1 reference was that she had brought race discrimination proceedings against them. It was said that the ET wrongly proceeded to rely on what they regarded as an inadequate explanation by PwC for giving the code 1 reference to infer that the reason for it was the protected act. However, as was referred to at the hearing before us, there is no ground of appeal contending that the drawing of such an inference was perverse.

The prejudice issue

55. Mr Kibling contended on behalf of PwC that the ET erred in exercising their discretion to extend time for presentation by Ms Popa of her complaint of victimisation in relation to the second reference. It was submitted that the ET failed to pay proper regard to items c) and e) in the checklist of factors listed in section 33 of the Limitation Act 1980 referred to in British Coal Corporation v Keeble [1997] IRLR 336 as relevant to the exercise of discretion whether to extend time for presenting a discrimination complaint.
56. Mr Kibling contended that the ET had reached the conclusion that it was just and equitable to extend time in part on the basis that no prejudice would be caused to PwC. The ET failed to have proper regard to the prejudice PwC would suffer in having to deal with an out of time complaint and the extent to which their ability to obtain evidence was likely to be affected by the delay in bringing proceedings.
57. The ET erred in failing to hold that prejudice was suffered by inability of PwC to obtain evidence from the administrator who processed the second reference. Further it was said that the conclusion of the ET was inconsistent with the evidence before the ET that the answer to the question who decided to give a code 1 rather than a code 2 reference did not lie in the computer system.
58. Mr Kibling pointed out that the claim of victimisation in respect of the reference of 27 June 2008 was presented on 23 March 2009, some six months out of time. A copy of the second reference was provided to Ms Popa on 22 January 2009. By the time the ET1 was presented on 23 March 2009 the administrator who produced the reference for Ms Popa who was temporary member of staff was no longer employed by PwC. Even if the administrator had still been working for PwC it would have been extremely unlikely that after the passage of time and the number of references dealt with they would have remembered that produced for Ms Popa.
59. Mr Kibling relied on the findings of the ET that Ms Popa believed prior to 22 January 2009 that an inappropriate reference had been provided for her by PwC to be passed to Credit Suisse, that she was aware of the applicable time limits and that she delayed in bringing her claim. She should have taken appropriate advice and could have presented her claim even before 22 January 2009. Further he contended that the ET were wrong to consider that PwC had failed fully to co-operate in providing information relating to the claim. Taking these matters into account together with the erroneous view the ET took that PwC were not prejudiced by the delay, Mr Kibling contended that the decision to exercise discretion to extend the time for presentation of the complaint of victimisation was perverse and wrong.

The detriment issue

60. It was submitted by Mr Kibling that the ET failed to have regard or proper regard to whether Ms Popa had suffered a detriment within the meaning of RRA section 4(2)(c). It was necessary for Ms Popa to establish this ingredient of the claim. In accordance with the guidance given by Lord Neuberger in Derbyshire, whilst considering the question primarily from the perspective of alleged victim, the view that the victim has suffered a detriment must be objectively reasonable in all the circumstances. The ET should focus on the word 'detriment'.
61. Mr Kibling submitted that the ET does not appear to have considered whether Ms Popa had suffered a detriment as a result of the sending of the code 1 reference. On the evidence no detriment was occasioned to Ms Popa. She secured employment with Credit Suisse. Ms Popa did not mention in her forty page witness statement any adverse impact made by the reference. The ET record in paragraphs 8.4 and 8.14 that Ms Popa regarded the references as only a small part of her case and that she considered the second reference, the subject of this appeal, as 'less problematic' than the first.

Discussion and conclusion

Preliminary observations

62. The act alleged by Ms Popa to be victimisation which is the subject of this appeal occurred on 27 June 2008, eighteen months after the termination of her employment with PwC. As she was no longer an employee on the date of the act of alleged victimisation her claim fell to be considered under RRA section 27A. Subject to certain conditions, section 27A renders it unlawful for a former employer to discriminate on grounds of race or ethnic or national origins against a former employee by subjecting him to a detriment. This provision was inserted by the Race Relations Act 1976 (Amendment) Regulations 2003 SI 2003/1626. A similar provision although arguably wider in scope was inserted into Sex Discrimination Act 1975 ('SDA') as section 20A by Sex Discrimination Act 1975 (Amendment) Regulations 2003 SI 2003/1657. These amendments were made after judgment of the House of Lords in Rhys-Harper v Relaxation Group plc [2003] ICR 867 and of the European Court of Justice in Coote v Granada Hospitality [1999] ICR 100.
63. There is a difference between the wording of RRA section 27A and SDA section 20A in that RRA section 27A(2)(a) renders it unlawful in specified circumstances for the relevant party to a relevant relationship which has come to an end 'to discriminate against another party on grounds of race or ethnic or national origins' whereas SDA section 20A in similar context refers to 'discriminate' simpliciter. The definition in RRA section 3 of discrimination 'on racial grounds' does not include victimisation, whereas 'discrimination' refers to any discrimination falling within section 1 and section 2 and includes victimisation as it does in the SDA. Considering a similar difference in language between the burden of proof provisions in section 54A RRA and section 63A SDA, the Court of Appeal in Oyarce v Cheshire County Council and Equality and Human Rights Commission [2008] IRLR 653 concluded that the Directive 2000/43, (race and ethnic origin) did not require RRA section 54A to be construed so as to apply to victimisation claims.
64. As far as we are aware the issue of whether RRA section 27A is to be construed as applicable to victimisation claims by reason of Article 9 of Directive 2000/43 has not been decided. The issue was not raised by PwC and accordingly will not be considered in this appeal. The case has proceeded on the basis that section 27A applies to victimisation claims. For the purposes of this appeal but without expressing a view on the point we construe that section as if the words 'on grounds of race or ethnic or national origins' were deleted. Were this not so there would be no cause of action for an act of victimisation carried out after the employee had left employment.

The causation issue

65. Although described on behalf of PwC as 'the causation issue' we would prefer to describe this as 'the reason issue'. The two are different.
66. Mr Kibling contended that the ET failed 'to address the question of causation required in a victimisation claim'. In context we treat the reference to 'causation' as 'the reason why'.
67. Mr Kibling contended that the ET erred in determining the reason for the giving of the code 1 reference, in that they did not consider whether the person who decided to give the code 1 reference knew that Ms Popa had taken race discrimination proceedings against PwC. The train of reasoning deployed by Mr Kibling to indicate an error in approach by the ET was that an administrator would not have access to personnel files containing information that a race discrimination claim had been made. Therefore the person making the change in coding would be unaware Ms Popa had made a race discrimination claim and his or her act could not be victimisation within the meaning of RRA.
68. Mr Kibling rightly did not challenge as perverse the finding by the ET that the exercise of discretion by an administrator is the least likely of the available explanations for the sending of the code 1 reference.
69. In Derbyshire Baroness Hale identified three relevant questions raised by a victimisation claim under the SDA. These are equally applicable to the RRA:

"36. …. First, did the employer discriminate against the woman in any of the ways prohibited by the Act? In this particular case, the alleged discrimination was by 'subjecting her to any other detriment' (contrary to section 6(2)(b) of the 1975 Act). Secondly, in doing so, did the employer treat her less favourably than …. He treats or would treat other persons' (section 4(1))? Thirdly, did he do so 'by reason that' she had asserted or intended to assert her equal pay or discrimination claims or done any of the other protected acts set out in section 4(1) of the Act?'

41. The third question focuses upon the employers' reasons for their behaviour. Why did they do it? Was it, in the terms of the Directives, a 'reaction to' the women's claims? As Lord Nicholls of Birkenhead explained in Chief Constable of the West Yorkshire Police v Khan [2001] ICR 1065, 1072, para 29, this

'does not raise a question of causation as that expression is usually understood …. The phrases 'on racial grounds' and 'by reason that' denote a different exercise: why did the alleged discriminator act as he did? What, consciously or unconsciously, was his reason? Unlike causation, this is a subjective test. Causation is a legal conclusion. The reason why a person acted as he did is a question of fact.'"

Thus in considering a victimisation claim an ET must consider the reason why the alleged discriminator acted as he did.

70. In order to establish that the conscious or unconscious reason for the act complained of is the protected act the perpetrator must have knowledge of that act. Lord Hoffman in Khan held at paragraph 56:

"There are parallels between the purposes of sections 1 and 2 of the Race Relations Act 1976 (and between the corresponding sections 1 and 4 of the Sex Discrimination Act 1975): see Nagarajan v London Regional Transport [1999] ICR 877. But the causal questions which they raise are not identical. As Mr Hand, who appeared for Mr Khan, readily accepted, one cannot simply say that Mr Khan would not have been treated less favourably if he had not brought proceedings. It does not follow that his bringing proceedings was the reason (conscious or subconscious) why he was treated less favourably. In Nagarajan's case Lord Steyn said, at p893, that section 2:

'contemplates that the discriminator had knowledge of the protected act and that such knowledge caused or influenced the discriminator to treat the victimised person less favourably than he would treat other persons …. But …. it does not require the tribunal to distinguish between conscious and subconscious motivation.'"

71. The ET directed themselves to consider the reason why Ms Popa was given a code 1 reference. They stated:

"7.4 We therefore have to determine in relation to each of the factual allegations, whether there was less favourable treatment and if such treatment was for a protected reasons (sic) under section 2(1) Race Relations Act 1976.

………

7.38 We have to consider the reason why in this particular case the claimant did not receive a code 2 reference. In considering this we have in mind the position as outlined in Khan. We must look at what motivated the decision. It must be the real reason, the core reason. It is not a simple 'but for' test."

72. The ET considered the facts relating to the reason why the coding for references given to Ms Popa was changed from 2 for the reference for UBS to 1 for the second reference and who was likely to have decided on the change.
73. The ET came to the following conclusions as to when and who changed the code for the second reference.

"7.18 At some point, we know not when, there was a change made to the coding. Mrs Mitton's evidence was that the coding was changed to 4 which meant that there would be a referral if a request for a reference was received. It follows that a further decision would be made as to what reference to send.

……….

7.24 We have looked at the policy in some detail and we take the view that it is reasonable to say the policy is prescriptive and rigid. As regards the policy, the only time a different reference should be sent is when there has been a specific referral to those individuals with appropriate seniority. This occurs when there is a code 3 or 4.

7.27 The reason advanced in evidence was a positive reason which was that the administrator exercised his or her discretion to send a code 1 letter. It is said that this occurred as the administrator noted that what was being requested was a confirmation of dates of employment, job title and whether it was a permanent position. We have received no proper evidence to demonstrate that the administrator could act in this way against a code 2 or whether it is normal for the administrator to exercise such discretion.

7.28 We accept that Mrs Mitton honestly attempted to investigate this matter. In her evidence before us she has been entirely open and helpful However, there are significant gaps in the investigative process.

7.29 The administrator was identified but no attempts were made to interview him or her. The team leader was not approached in order to explain the operation of any discretion.

7.30 Mrs Mitton made an assumption that it was possible for the administrator to exercise discretion. That assumption was based on the understanding the claimant was at the material time a code 2 on the PeopleSoft system and therefore it must have been possible to change the letter generated. We still do not know whether such action is possible. However, it is clear that Mrs Mitton was making an assumption.

7.31 This apparent discretion appears to fly in the face of the rigid and prescriptive system which is imposed by the respondent. The explanation we have received in relation to this is pure speculation.

7.32 We are satisfied that she did not properly satisfy herself that the claimant was a code 2 at the relevant time. Further, she took on trust the 'implication' that the change from code 2 to code 4 was after the material events. We simply do not have proper evidence of when the coding was changed or indeed whether it was changed more than once."

74. On this material, the witness statement of Mrs Mitton and the notes of her oral evidence we find the conclusion of the ET at paragraph 7.41 that:

"The exercising of discretion by an administrator is the least likely of the available explanations"

unsurprising and certainly not perverse. The factual basis for the contention by PwC that the person who changed the code was the administrator was not accepted.

75. Someone must have changed the code for Ms Popa to code 1. The ET found that evidence before them did not establish whether the change to a code 1 was from code 2 which was used in giving the reference in respect of UBS on 12 January 2007 or from code 4 which applied at the time of the hearing before them. In order to decide the reason for the change, the ET considered what evidence was put before them of when the code was changed and who changed it. The only explanation advanced on behalf of PwC that such a person would have been unaware of the race discrimination claim made by Ms Popa was that he or she was the administrator who generated the second reference. The ET carefully considered and rejected that hypothesis. Having considered the evidence, the ET concluded at paragraph 7.39 that 'the respondent's reason is inadequate and unsatisfactory'
76. In our judgment their self direction to consider the reason why the second reference was code 1 rather than a code 2 and the analysis by the ET of the evidence demonstrate that they properly considered the reason why the code 1 letter was sent. That included consideration of the contention that the person sending the reference, said to be an administrator, would not have been aware that Ms Popa had taken race discrimination proceedings against PwC. The ET did not err in 'failing to address the question of causation' as alleged on behalf of PwC.

The burden of proof issue

77. The Court of Appeal in Oyarce held that the statutory reverse burden of proof in RRA section 54A does not apply to victimisation claims under that Act. Mr Kibling referred the ET to Oyarce. At paragraph 6.4 the ET directed themselves:

"The reverse burden of proof does not apply to certain claims brought under the Race Relations Act 1976. In those circumstances we must apply, what we shall term the 'original approach' as set out in King v The Great Britain-China Centre [1991] IRLR 513 which can be summarised as follows: it is for the applicant who complains of racial discrimination to make out his or her case. It is important to bear in mind that it is unusual to find direct evidence of racial discrimination. Few employers will be prepared to admit such discrimination even to themselves. In some cases the discrimination will not be ill intentioned but merely based on an assumption that he or she would not have fitted in. The outcome of the case will therefore usually depend on what inferences it is proper to draw from the primary facts found by the tribunal. Such inferences may include those arising from an evasive or equivocal reply to a questionnaire. A finding of difference in treatment and a finding of difference in the race will often point to the possibility of racial discrimination. In such circumstances the tribunal will look to the employer for an explanation. If no explanation is then put forward or if the tribunal considers the explanation to be inadequate or unsatisfactory it will be legitimate for the tribunal to infer that the discrimination was on racial grounds. It is not necessary or helpful to introduce the concept of shifting evidential burden of proof. At the conclusion of the evidence it is for the tribunal to make its finding as to the primary facts and to draw such inferences as it considers appropriate from those facts. The conclusion should be reached on the balance of probabilities, bearing in mind both the difficulties which face a person who complains of unlawful discrimination and the fact that it is for the complainant to prove his or her case."

78. This passage accurately reproduces the principles and guidance set out by Neill LJ in King.
79. Mr Kibling contended that the case 'falls at the first limb' of the principles set out in King: the need of the ET to satisfy themselves that Ms Popa had made out her case on a balance of probabilities. Further Mr Kibling submitted that the ET erred by relying in drawing an inference of victimisation on criticisms of the failure of PwC to adduce certain evidence.
80. The ET held:

"7.39 …..We have particular regard to the fact that the respondent has not sought to put forward the evidence which it clearly has. Instead it has relied on a flawed investigation and the speculation of a witness.

7.40 In particular, there is a clear difference in treatment. The coding was at some point changed. The respondent has material evidence showing when it was changed. This has not been produced. No proper explanation has been given for this failure. The explanation advanced is opinion. We note that Mrs Mitton's opinion is based on speculation about the actions of an administrator, underpinned by an assumption about the actual coding, about which there is significant doubt.

7.41 This must be considered in the light of the Respondent's general policy on references which is prescriptive. The exercising of discretion by an administrator is the least likely of the available explanations.

7.42 It follows from what we have said that the respondent's reason is inadequate and unsatisfactory. In this case we have no doubt that it is appropriate to draw an inference from the factual findings we have set out. Having regard to all matters, we consider that victimisation is made out in this case."

81. The requirement that a claimant establish their case on a balance of probabilities put first by Neill LJ in the list of the principles and guidance in King at page 528F is an overarching principle and does not require satisfaction before progressing to consider the following four principles. The case does not 'fall at the first limb' before consideration of whether an inference of race discrimination is to be drawn from the facts. It is after all the evidence has been considered in accordance with the guidance in King that an ET will decide whether a claimant has established their case on a balance of probabilities.
82. Nor did the ET apply the approach in RRA section 54A as explained in Igen to the consideration of the burden of proof in the victimisation claim. The ET found that by giving Ms Popa a code 1 reference when she had originally been allocated code 2, PwC had treated Ms Popa less favourably than they would have treated a former employee who had not carried out a protected act. They held:

"7.39 Where there is on the face of it less favourable treatment following a protected act, we are entitled to look to the employer for an explanation. If we find that explanation inadequate or unsatisfactory, we may draw the inference of discrimination. We remind ourselves that we are not considering the reverse burden of proof; we are considering the 'original approach'. Here the explanation is inadequate and unsatisfactory."

The self direction on the permissive drawing of an inference of victimisation from an inadequate or unsatisfactory explanation for less favourable treatment of someone who has carried out a protected act is in accordance with the guidance given in King. If the ET had applied the approach to the burden of proof in RRA section 54A as explained in Igen the ET would have regarded themselves as bound to conclude that PwC had unlawfully victimised Ms Popa rather than having a discretion, 'may', to infer that they had done so.

83. In our judgment the ET made an accurate summary of the principles in King and applied them. They found the explanation for the giving of a code 1 reference unsatisfactory and based on speculation by Mrs Mitton. She said that Ms Popa was currently assigned code 4. A code 4 required an administrator to refer to a senior member of staff for guidance on the reference letter. Mrs Mitton said that she understood the change to code 4 for Ms Popa to be recent and that when the June 2008 reference letter was provided she was a code 2. If Ms Popa was a code 4 at the time the reference of 27 June 2008 was generated, a senior member of staff would have had to take a decision as to the type of reference letter to be sent. The evidence was that the PeopleSoft computer system would record when codes were changed. The record was kept. No evidence of the record was produced to the ET. Further, no witness was called who could give evidence as to whether an administrator had discretion as to what type of reference letter to generate. Such evidence would have been available to PwC. The explanation advanced by Mrs Mitton for the sending of a code 1 reference letter was that an administrator had exercised discretion to send a code 1 letter. However there was no evidence to support the suggestion that an administrator would have the discretion to send a code 1 letter for a code 2 employee assuming, which was not established, that Ms Popa was a code 2 and not a code 4 employee at the time the second reference was issued.
84. The ET did not err in their application of the burden of proof in considering the victimisation claim made by Ms Popa. On finding that the explanation advanced for sending a code 1 letter unsatisfactory, applying King, it was legitimate for the ET to infer that the less favourable treatment was because Ms Popa had made a complaint of race discrimination to an ET.

The prejudice issue

85. This Employment Appeal Tribunal will only interfere with the exercise of discretion by an ET to consider a claim out of time if the ET have erred in law in doing so or if their decision is perverse. Prejudice to the parties caused by the delay in issuing proceedings is one of the issues to be taken into account in deciding whether to consider an out of time complaint. The EAT in British Coal Corporation v Keeble [1997] IRLR 336 referred to guidance on the factors to be considered in exercising discretion to hear out of time complaints which may be derived from section 33 of the Limitation Act 1980. These include the extent to which the cogency of the evidence is likely to be affected by the delay and the steps taken by the claimant to obtain appropriate professional advice once she knew of the possibility of taking action.
86. The contention by Mr Kibling that the ET erred in holding that PwC were not prejudiced by the delay in issuing proceedings depended on establishing that the ET had erred in considering that there was relevant evidence available which had not been adduced. Although the administrator who produced the reference letter for Ms Popa had left the employment of PwC by the time the claim was made to the ET, the ET did not err in considering that there was other evidence which could have been adduced to seek to establish when and by whom the coding for Ms Popa had been changed to 1. We have referred to this evidence above. There was evidence that an entry on the computer records of PeopleSoft would show the date when codes for employees are changed and that it was likely that a printout could have been obtained. Further there could have been evidence from a witness who supervises administrators generating references to explain whether they have discretion to and can change the coding of reference letters.
87. Mr Kibling drew attention to passages in the statement of Mrs Mitton not referred to in the judgment of the ET in which she said that references were generated by the 'Life Events Team' of the PwC Employee Service Centre. There were approximately eight employees working in the Life Events Team and the team generate approximately 25 references per day. It appears from the note of Mrs Mitton's oral evidence that the administrator who handled the request for a reference for Ms Popa had left and she did not contact that person. Mrs Mitton concluded it was unlikely that anyone would remember producing the second reference for Ms Popa.
88. On the basis of Mrs Mitton's evidence as to the volume of references handled by administrators each day and her doubts as to whether they would be able to remember one, it cannot be said that the ET erred in failing to hold that PwC were materially prejudiced by proceedings brought after the expiry of the three month limitation period. On the basis of Mrs Mitton's evidence an administrator may not have been able to recall Ms Popa's reference even if asked within the limitation period.
89. The ET appear to have proceeded on the basis that Ms Popa could not be criticised for delay in lodging her claim before she received a copy of the second reference on 22 January 2009 but that some criticism could be levelled at her for not commencing proceedings promptly thereafter.
90. Mr Kibling contended, as he no doubt did before the ET, that Ms Popa should have acted sooner to pursue her claim as she believed prior to 22 January 2009 that an inappropriate reference had been given. He contended that the ET had failed to have regard to the steps taken by Ms Popa to obtain appropriate professional advice once she suspected that she had cause to bring a claim.
91. It may be that a different ET may have taken a different view as to whether to exercise their discretion hear Ms Popa's victimisation claim notwithstanding that it was presented out of time. However the ET did not err in holding that PwC were not prejudiced by the delay nor did they err or come to a perverse conclusion on the evidence in exercising their discretion to hear the victimisation claim notwithstanding that it was presented out of time.

The detriment issue

92. Section 27A(2)(a) requires a claimant to show that they have been subjected to a detriment by 'the relevant party', in this case Ms Popa's former employer, PwC. The language used is materially indistinguishable from that in RRA section 4(2)(c) which provides that it is unlawful for a person in the case of a person employed by him at an establishment in Great Britain to discriminate against that employee by, amongst other matters, subjecting him to 'any other detriment'. Thus detriment is an essential ingredient of the unlawful act under section 27A as it is under section 4(2)(c).
93. As was submitted by Mr Kibling, in Khan Lord Hoffman considered the meaning of the term 'detriment' in RRA section 4(2)(c). At paragraph 53 he held:

"…..Being subjected to detriment (or being treated in one of the other ways mentioned in section 4(2)) is an element in the statutory cause of action additional to being treated 'less favourably' which forms part of the definition of discrimination. A person may be treated less favourably and yet suffer no detriment. But, bearing in mind that the employment tribunal has jurisdiction to award compensation for injury to feelings, the courts have given the term 'detriment' a wide meaning. In Ministry of Defence v Jeremiah [1980] ICR 13, 31 Brightman LJ said that 'a detriment exists if a reasonable worker would or might take the view that the [treatment] was in all the circumstances to his detriment."

94. Baroness Hale in Derbyshire held at paragraph 37 that 'detriment' within the equivalent provision in the SDA has to be treatment which a reasonable employee would or might consider detrimental. As Lord Hope observed in paragraph 35 of Shamoon v Chief Constable of the Royal Ulster Constabulary [2003] ICR 337 'An unjustified sense of grievance cannot amount to 'detriment'. For this reason Lord Neuberger in Derbyshire held at paragraph 68:

"An alleged victim cannot establish 'detriment' merely by showing that she had suffered mental distress: before she could succeed, it would have to be objectively reasonable in all the circumstances."

95. We agree with Mr Kibling that it is not apparent from the judgment of the ET that they considered whether PwC subjected Ms Popa to a detriment. At paragraph 7.43 the ET held that the giving of the code 1 second reference 'was motivated by the protected act and it was less favourable because it was unwelcome.' At paragraph 7.44 the ET rejected the submission made on behalf of PwC that there could be no victimisation within the meaning of the RRA because the reference did not affect Ms Popa's employment with Credit Suisse.
96. In considering remedy for the victimisation which they found established, the ET noted that the second reference 'did not cause any actual problem with Credit Suisse' and that Ms Popa regarded the issue of the references as 'petty'. They noted that the impact of the references was not referred to in Ms Popa's witness statement of 40 pages.
97. The ET further held at paragraph 8.9 in considering remedy:

"We have found that in no sense whatsoever did the unlawful victimisation either prevent the claimant from obtaining employment, cause her to lose her employment, delay her from obtaining employment or prevent her from obtaining further employment."

98. Notwithstanding their careful consideration of other issues, the ET failed to consider an essential ingredient of Ms Popa's victimisation claim under RRA section 27A(2)(a). They failed to determine whether by providing a code 1 reference to Kroll in respect of her proposed employment by Credit Suisse, PwC had subjected Ms Popa to a detriment within the meaning of the RRA.
99. Accordingly the appeal is allowed. The finding of unlawful victimisation under the RRA is set aside. All findings of fact and all other conclusions are to stand. Having regard to the factors identified in Sinclair Roche and Temperley and ors v Heard and anor [2004] IRLR 763 Mr Kibling has indicated that PwC have confidence that, with the guidance set out in this judgment, the ET would be prepared to consider the issue of detriment free of preconceptions and determine the claim with an open mind. The victimisation claim is remitted to the same ET for them to determine on the evidence previously before them whether by providing by letter dated 27 June 2008 a code 1 reference to Kroll in respect of her proposed employment by Credit Suisse, PwC had subjected Ms Popa to a detriment within the meaning of RRA section 27A(2)(a) and on the basis of that decision, the outcome of the claim.