United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR DANIEL OUDKERK (One of Her Majesty's Counsel) Instructed by: Messrs Allen & Overy LLP Solicitors 1 Bishop's Square London E1 6AD
For the Respondent	MR DANIEL STILITZ (One of Her Majesty's Counsel) Instructed by: Messrs Stewarts Law LLP 5 New Street Square London EC4A 3BF


 


SUMMARY

AGE DISCRIMINATION

REDUNDANCY – Protective award

The Tribunal did not err in law in concluding that in the age discrimination claim the burden of proof passed to the Appellant nor that the Respondent had failed to discharge it.

In making a protective award, the Tribunal did not err in law in not including a discretionary bonus scheme as part of a week's pay where the date for paying or considering whether to pay such a bonus had not yet occurred.


 


THE HONOURABLE MR JUSTICE WILKIE

1. By a decision of the Employment Tribunal dated 21 December 2009, after a hearing between the 14 and 22 September 2009, the Tribunal, sitting at London South, found, amongst other things, that: 1. the Claimant was unfairly dismissed; 2. the Appellant was in breach of section 188A of the Trade Union and Labour Relations Consolidation Act 1992 (TULRCA); 3. the Claimant was entitled to a protective award under section 189 of TULRCA assessed at 90 days; 4. the amount of a week's pay for that purpose did not include the amount referable to any discretionary bonus; 5. the Claimant's claims of direct and indirect race discrimination failed; and 6. the Claimant's claim for discrimination on the grounds of his age succeeded.
2. This is the appeal by the Appellant against conclusion number 6 - the finding of discrimination on the grounds of age - and the hearing of a cross appeal by the Claimant against the finding number 4 - excluding from the calculation of a week's pay any amount referable to a discretionary bonus. In the course of submissions it was suggested that the EAT ought to give this case particularly detailed consideration because potentially large sums were involved. We wish to make it clear that we have given this case detailed consideration but not because of the sums involved but because that is our approach to all appeals involving large or small amounts.

Factual background

3. The Claimant was employed by the Appellant as head of marketing from 15 June 2007 until his dismissal with effect from 8 May 2008. At the date of his dismissal he was aged 42. The Appellant is a Canadian retail and investment bank operating in London solely as an investment bank. The Claimant had worked in derivatives marketing for a number of banks since 1992. He was hired as managing director in the Appellant's debt capital market (DCM) and equities and commodities structured products (ECSP) divisions. His basic salary was £125,000. For the first year he was guaranteed a minimum bonus of £775,000 to be paid in December 2007, thereafter he was entitled to be considered for a discretionary bonus.
4. In the summer of 2007 a Mr Risler was appointed head of London ECSP. The Claimant and Mr Risler did not get on. Mr Risler was in his mid thirties. They disagreed over how deals should be priced and had a different approach to risk. The Claimant thought Mr Risler too cautious. Mr Risler felt the Claimant had not adapted his approach to the new realities within banking. Mr Risler stopped many of the IRD trades the Claimant wanted to do. The Claimant's unchallenged evidence was that Mr Risler did not appreciate the challenge to his authority represented by the Claimant. The Claimant had made a complaint to Mr Risler, copied to Mr Meloche, about an instruction that the Claimant should not discuss matters of pricing direct with his traders.
5. In January 2008 there was a restructuring after which the Claimant worked more closely with Mr Risler. The Claimant felt that Mr Risler did not understand IRD products and disagreements continued.
6. In February 2008 Mr Meloche was appointed global head of marketing and in February he flew to London for 3½ days to be introduced to the marketing team. They were told that he and Mr Risler were developing a revised business plan for the IRD business and they needed to come up with a new strategic plan for marketing. The Tribunal found that, by this stage, Mr Risler was already against the Claimant. He told Mr Meloche that:

"It sounds like we both believe that drastic actions are required. There are some serious business issues and some serious people issues, some of our employees seem to be in absolute denial of CIBC strategy and keen to do whatever the hell they wish without much concern for the resulting future performance…or the poor past performance they have generated."

7. This was the only occasion when Mr Meloche met the Claimant. The Tribunal found that, in forming his view of how the marketing team and the Claimant performed, Mr Meloche relied heavily on Mr Risler's views. Mr Meloche, in cross examination, was uncomfortable about the extent of his knowledge of the Claimant but was clear that Mr Risler had expressed strong negative views about the Claimant.
8. On 20 March 2008 Mr Meloche and Mr Risler presented their proposal for a re-structuring plan, which included proposals to exit the Claimant and other members of his marketing team. On the 25 March Mr Meloche in an e-mail to higher management said as follows:

"…the fundamental issue underpinning our recommendation is that the team is not high quality and don't have good client relationships. As you pointed out they are simply not right for the future direction of the business, Franck has the benefit of witnessing the development of this group first hand in London. After reviewing the team and business with a fresh perspective I have to concur, we need to rebuild."

On 28 March Mr Meloche e-mailed his boss to say that:

"We are downsizing the derivatives marketing team substantially including Achim Beck. We will re-hire some senior marketers with different client relationships to reflect a different target client base and product suite."

Mr Howard had understood by this that Mr Meloche wanted to "upgrade" the marketing team but did not support the plan. He suggested that staff be upgraded over time but Mr Meloche responded:

"We thought through a more gradual turnover as you suggested but we could probably achieve quicker success with a radical change of strategy and team."

9. From that point the Tribunal found that the Appellant conducted a sham exercise in dismissing the Claimant, purportedly by reason of redundancy. We need not, for the purposes of this appeal, rehearse the details of that sham. Concurrently with that process, the Appellant was advancing its proposed recruitment for a different team. On the 20 March 2008 they put forward a restructuring plan reducing the then size of the team from 12 to 8, one of whom would be Head of Marketing and, on 11 April 2008, Mr Meloche identified for the purposes of a recruitment assignment the attributes of the person whom they wished to recruit as head of European derivatives marketing. They set out a series of attributes which included the following:

"Seeking younger, entrepreneurial profile (not a headline profile rain maker)"

The Tribunal found, on the evidence of the Claimant which was uncontested, that he met all these criteria except for the requirement to be "younger". By 18 April 2008 a recruitment agency, Brookleigh Search and Selection, had been engaged to conduct this exercise. They received a brief which repeated the attributes of the head of marketing position set out above. At some point before Brookleigh were formally appointed Ms Marshall, head of HR Europe, was asked for her comments on the briefing document. Her response was that it would be inappropriate to search for a candidate who was "younger". The briefing document went through a series of drafts but the reference to the requirement for a "younger" candidate remained. Mr Meloche apparently told Ms Marshall that "younger" did not refer to age but referred to a less "senior" individual who would be less expensive, hence the reference to "not a headline profile rainmaker". The final agreed assignment for Brookleigh dated 5 June again included the requirement for "a younger, entrepreneurial profile (not a headline profile rainmaker)".

10. The Claimant appealed unsuccessfully against his dismissal on 13 June 2008. On 13 July Mr Meloche came to London to interview some 10 to 12 candidates for the position of head of European derivative marketing. On the 16 July Mr Meloche e-mailed his boss saying that he would hire one particular candidate on the spot but that he would be "too expensive and tough to close". On 17 July he stated that another candidate was "awesome but a low probability of landing him". The candidate identified by Mr Meloche as one whom he would hire on the spot was at least 50, British and a headline profile rainmaker. In fact by 2 September the recruitment process had been put on hold and the replacement for the Claimant was not appointed until April 2009.

The Tribunal's findings on the various claims

Unfair dismissal

11. The Appellant contended before the Tribunal that the Claimant's dismissal was by reason of redundancy. The Claimant disputed this. At paragraph 90 of the decision the Tribunal stated that it was satisfied that the Claimant's role was not redundant and it goes on to say as follows:

"The evidence overwhelmingly suggests that Mr Risler and Mr Meloche felt that the claimant and his team were not "high quality" and, in Mr Howard's words, had decided to upgrade the marketing team. Mr Meloche told us that he took the view that the London derivative marketing business was not well managed or organised. There appeared to be no sustainable business plan in place.

"Even if this was Mr Meloche's genuine view it was not the case that the position was redundant…"

12. The Tribunal went on to conclude: that the plan was to replace the Claimant with another individual who had the same key skills as the Claimant; the proposed new head of marketing would be for a job which was, to all intents and purposes, the same job that the Claimant was doing; the capabilities/skill set was substantially that of the Claimant; and the Respondent's insistence, despite the documentation, that there was in fact a redundancy situation had not assisted their credibility in the proceedings. The Tribunal concluded that, since the Appellant had not established a potentially fair reason for dismissal, the dismissal was unfair.

Collective redundancy

13. The Appellant's case before the Employment Tribunal proceeded on the footing that the Claimant was redundant. It took certain points, both as to his standing to bring such a claim and as to the extent of any failure and whether it was deliberate. The Tribunal reminded itself of the relevant statutory provisions, in particular section 190 of TULRCA which provides:

"(1) Where an employment tribunal has made a protective award every employee of a description to which the award relates is entitled subject to the following provisions…to be paid remuneration by his employer for the protected period.

(2) The rate of remuneration payable is a week's pay for each week of the period and remuneration in respect of a period less than one week shall be calculated by reducing proportionately the amount of a weeks pay.

(5) Chapter II of part xiv of the Employment Rights Act 1996 applies with respect to a week's pay for the purposes of this section."

Section 221(2) of the Employment Rights Act 1996 provides:

"…the amount of a week's pay is the amount which is payable by the employer under the contract of employment in force on the calculation date if the employee works throughout his normal working hours in a week."

14. The Tribunal concluded that the Appellant was in breach of the statutory provisions and that a protective award of 90 days was appropriate. The Tribunal had to decide whether the protective award should be calculated by reference to basic salary only (which would give a protective award of some £45,000) or should include an assessment of what the Claimant's true remuneration was at the date of the dismissal. It was pointed out that the Claimant's monthly salary represented only a small part as to his expectation of remuneration, though any bonus, as a matter of contract, was "entirely at the discretion of the company who will decide this by reference to individual performance and the firm's profitability". Further the bonus did not accrue monthly as "to be eligible for bonus you must be in employment and not under or served with notice of termination on the date such discretionary bonuses are usually paid." Furthermore, a proportion of the bonus was payable in the form of CIBC common share equivalents and subject to vesting provisions.
15. The Tribunal concluded that at the time of the termination of his employment the only amount payable under the contract of employment was the monthly salary. The Tribunal indicated that whilst it accepted that an employer who considered the payment of discretionary bonus must do so rationally and in good faith as a matter of contract, it recorded that Mr Stilitz did not suggest that the bonus was in reality contractual. At the time the Claimant was dismissed his entitlement to bonus had not crystallised. The only amount payable under the contract of employment was the monthly salary. The Tribunal went on to conclude that:

"We accept that (given the parties expectations as to remuneration) this does not reflect the reality of what his remuneration was likely to have been. In this context a 90 day award may not provide a sufficiently deterrent effect. Nonetheless the wording of section 190(5) coupled with the definition of a weeks' pay is clear and we do not consider we can go behind it."

16. This conclusion is the subject of the cross appeal to which we will turn below.

Race discrimination

17. The Tribunal reminded itself of the relevant statutory provisions and the relevant case law which included reference to the dictum of Lord Nicholls in Nagarajan v London Regional Transport [1999] IRLR 572 that the discriminatory reason need not be the sole or even the principal reason for the discrimination. It is sufficient that it is a contributing cause in the sense of a significant influence.
18. It also reminded itself of the decision of Bahl v The Law Society [2003] IRLR 640 namely that unreasonable conduct is not in itself sufficient to justify a finding of direct discrimination, although racial bias may be inferred if there is no explanation for the unreasonable behaviour. Where treatment is unreasonable then a tribunal was more likely to reject the employer's explanation for less favourable treatment that would be if the conduct was reasonable.
19. The Tribunal came to its conclusions on this issue. In paragraph 133 it stated as follows:

"In our view the appropriate hypothetical comparator was a senior individual whom Mr Risler and Mr Meloche…considered was not right for the business and should be "upgraded". The claimant was not genuinely redundant, the reason for the claimant's dismissal was that Mr Risler and Mr Meloche had taken against the claimant. In Mr Howard's words they wanted to upgrade the team…this is reflected most clearly in the e-mail of 25 March (already referred to).

134. We considered whether the reason that the claimant was not thought of highly was influenced by his race particularly given our findings as to the general culture. Here again we found Mr Howard's evidence persuasive. He despite his clear views about the general culture did not consider that the decision was influenced by the claimant's non Canadian status. This was a hire and fire attitude without any concern for fairness or good industrial relations."

The Tribunal therefore concluded in paragraph 135 that:

"Despite the gross unfairness of the dismissals and the evidence of a closer concern for Canadians in the run off exercise, we do not find that the claimant has established facts from which we could conclude the decision to dismiss him was substantially influenced by the fact that he was not Canadian."

20. The Tribunal went on to consider the question of indirect discrimination with which we need not deal in this appeal.

Age discrimination

21. The Tribunal reminded itself of the statutory provisions and in particular of the Employment Equality (Age) Regulations 2006. It reminded itself of regulation 37 which provides:

"Where, in the hearing of the complaint the complainant proves fact from which the Tribunal could apart from this regulation conclude in the absence of an adequate explanation that the respondent –

(a) has committed against the complainant an act to which regulation 36 applies or

(b) is by virtue of regulation 25…to be treated as having committed against the complainant such an act

the Tribunal shall uphold such a complaint unless the respondent proves that he did not commit or as the case may be is not to be treated as having committed that act."

22. Before we turn to the Tribunal's conclusions we remind ourselves of the way in which this particular claim came to be made. It was not included in the original ET1. It was contained in an amendment made on 18 February 2009 when, some six months into the proceedings, the Appellant, after a great deal of resistance, disclosed the Brookleigh briefing document which contained the person specification for the head of marketing position. The amended ET1 at paragraph 44 reads as follows:

"Age discrimination

44. The claimant believes that his dismissal was also on grounds of his age. The claimant is 42 years of age. It is apparent from the respondent's internal memorandum of 11 April 2008 that the respondent was seeking someone with "a younger…profile" than the claimant to undertake the claimant's role. The claimant was, accordingly, less favourably treated by the respondent on grounds of his age by being dismissed and/or not being considered for the role of (head of marketing)…contrary to regulation 3(1)(a) of the Employment Equality (Age) Regulations 2006."

23. In his witness statement the Claimant had stated that he comfortably satisfied all the person specification requirements, except for the fact that he could not be described as "younger". He expressed the opinion that Mr Risler had wanted to dismiss him and replace him with somebody younger in the hope that a younger person would be more placid and less likely to challenge him.
24. In the course of submissions to the Tribunal, the Claimant, through counsel, focussed on the Brookleigh briefing and in particular on that element of the person specification describing them as "seeking younger, entrepreneurial profile…". He also submitted that the Claimant met all the criteria apart from being younger and that Mr Risler wished to have a head of marketing who would not stand up to him. The Appellant submitted that, having been recruited at the age of 41 and dismissed at the age of 42 the argument that he was dismissed by reason of age was contrary to common sense. Furthermore, in due course, the Appellant had recruited a person aged 38 to the job. Mr Meloche had explained the choice of the word "younger" to distinguish the candidate from a "headline profile rainmaker", that many of the candidates put forward by Brookleigh were of the same age or older than the Claimant and the preferred candidate had been expressed to be aged 50, thus Brookleigh had understood the brief in the same way was Mr Meloche had explained it.

The Tribunal's conclusions

25. The Tribunal's conclusions on this issue are set out between paragraphs 147 and 160. It stated that, initially, it considered it was inherently unlikely that Mr Risler would seek to dismiss someone six years older in order to recruit someone over whom he could pull rank and who would not stand up to him in the manner that the Claimant did. Initially, it seemed to them unlikely that Mr Risler would be concerned of the age of those who reported to him (147).
26. But it considered the use of the word "younger" in the briefing called for an explanation, particularly given the evidence that the word had been used despite advice that it was inappropriate. The Tribunal concluded that the striking use of that word was enough to shift the burden of proof to the Respondent (148).
27. The Tribunal then looked to the Respondent for an explanation. It had not heard from Mr Risler, and had not heard why not, but the evidence suggested that Mr Risler and Mr Meloche had taken against the Claimant and there was no obvious explanation for this. The Tribunal stated that it was unconvinced by the reasons given by Mr Meloche (149).
28. It then set out the explanation for use of the word "younger" given by Mr Meloche and Mr Howard in evidence (150, 151).
29. It made a finding that Mr Meloche's view of the Claimant was based on and roundly influenced by Mr Risler's views who was the driving force in the restructuring exercise and who did not like the Claimant (152).
30. The Tribunal found that Mr Meloche felt that the Claimant was "simply not right" for the future of the business. Mr Meloche in his witness statement had given evidence for the reasons for his selection as "redundant". The Tribunal recorded that the Claimant, in his supplemental witness statement, had refuted the evidence of Mr Meloche in this regard. The Tribunal referred to the fact that the Claimant was clear that he had met his targets and was within budget in the IRD business (153).
31. The Tribunal stated that Mr Meloche was unimpressive as a witness, that he did not seem to know much about the Claimant's performance, for example, he had made an incorrect assertion that the Claimant and his team had not booked any trades, and he accepted that he had not given the Claimant any feedback that he thought the Claimant's approach was unrealistic. By contrast the Tribunal found the Claimant to have come across well in cross examination. The detailed explanation given by Mr Meloche for the Claimant's selection in his witness statement did not appear in the voluminous contemporaneous documentation. The Tribunal found that Mr Meloche was rationalising after the event (154).
32. The Tribunal concluded that the reasons given for the conclusion that the Claimant was not right for the job were not convincing; this was a decision made on inadequate information by Mr Meloche and had been influenced by Mr Risler (155).
33. The Tribunal found the explanation for the use of the word "younger" unconvincing. If it meant "less senior" it should have said so, in particular in the light of Ms Marshall's advice. The recruitment assignment briefing referred to the word "senior" in a different context as they were looking for three senior marketers, which did not support the contention that they were looking for a less senior head of marketing. The Tribunal concluded that, if it meant "not an expensive senior figurehead" then it added nothing to the requirement for someone who was "not a headline profile rainmaker". The Tribunal concluded that the Claimant fitted the brief, apart from being younger. Given that the word "younger" survived several drafts and Ms Marshall's advice the Tribunal concluded that the word was not intended to be otiose. Mr Howard, in his evidence, had said that it meant "less experienced" as opposed to "older and staid" (156).
34. The Tribunal went on to consider the fact the Claimant had been 41 when hired and that his replacement, when eventually hired, was 38. The Tribunal rejected those as relevant factors because different individuals had been involved in those decisions. The Tribunal said:

"We were concerned with the grounds for the treatment of the claimant and that involved examining the motivation even only if sub-conscious of those that took the decision to dismiss." (157).

35. The Tribunal said as follows:

"158. We looked to the respondent to show on the balance of probabilities that the decision to dismiss the claimant was not influenced to any significant extent by his age. The memorandum indicated that the respondent sought someone "younger". The reason for the dismissal of the claimant appears to stem from Mr Risler's antipathy to the claimant. We accept that Mr Meloche considered that the claimant was not right but we find that the driving force was Mr Risler. We have not heard from him. This makes it difficult to assess whether he was influenced by the claimant's age bearing in mind the inherent difficulties of proving discrimination. The credibility of the respondent was seriously undermined by there continuing insistence that the claimant was genuinely redundant and their failure to disclose the recruitment brief until February, well after the date set for general disclosure.

159. The fact that Mr Risler and Mr Meloche were willing to recruit older more experienced individuals who did not fit the Brookleigh brief was a factor which tended to show that the treatment of the claimant was not in the ground of age but the issue was what influenced the decision to dismiss at the time of dismissal. It is clear that the preferred candidate did not fit the recruitment brief in many respects (he was for example a headline profile rainmaker) and as Mr Stilitz submits employers expectations may change in the light of what is available. This is not enough to discharge the burden of proof.

160. We find that the respondent had not discharged the burden on it to show on the balance of probability that the decision to dismiss the claimant was not significantly influenced by his age. We find that the claim of age discrimination succeeds."

The grounds of appeal and our conclusions

36. The first ground of appeal is the main ground. It is that the Tribunal erred in law by failing to follow the guidance of EAT and Court of Appeal in The Law Society v Bahl by failing to take any, or any proper, account of its own clear findings of fact as to the reasons for the Claimant's treatment which, it is said, were inimical to the age discrimination claim that the Claimant had advanced. Had it properly directed itself it would have been bound to conclude that its own findings of facts stood in direct contradiction to the age discrimination claim as formulated and advanced by the Claimant. In particular we are asked to focus on paragraph 97 of Bahl in the EAT, cited with approval at paragraph 101 in the Court of Appeal, and in particular the following passage:

"The inference may also be rebutted – and indeed this will we suspect be far more common – by the employer leading evidence of a genuine reason which is not discriminatory and which was the ground of his conduct. Employers will often have unjustified, albeit genuine, reasons for acting as they have. If these are accepted and show no discrimination there is generally no basis for the inference for unlawful discrimination to be made. Even if they are not accepted, the Tribunal's own findings of fact may identify an obvious reason for the treatment in issue other than a discriminatory reason."

The Court of Appeal entirely agreed with that analysis.

37. We were also reminded of the conclusions of the EAT in Bahl at paragraphs 239 and 240: that the Tribunal in that case had failed to take account of the obvious explanation for any detrimental treatment and that:

"We do not think that the Tribunal has in truth stepped back to consider the implications of its conclusions notwithstanding that it expressly stated that it looked at the totality of the matter. Of course it is possible that someone may discriminate in relation to a particular disciplinary process in certain respects but not in others but if there is unconscious discrimination operating one would not expect it to surface in such an apparently arbitrary and piecemeal way. The Tribunal has not considered why these discriminatory motives would have influenced some decisions but not others." (Para 240).

38. The Appellant's contention is that the Tribunal failed to recognise that its own findings of fact had identified an obvious reason for the treatment in issue other than the discriminatory one with which they were concerned. The Appellant invites us to focus on the Tribunal's conclusions that "the evidence overwhelmingly suggests that Mr Risler and Mr Meloche felt that the claimant and his team were not high quality and, in Mr Howard's word, had decided to upgrade the marketing team" (para 90) which, whether justified or not, was the genuine reason and was inconsistent with age being an influencing factor. This finding was repeated at paragraph 133 in connection with the race discrimination claim "the reason for the claimant's dismissal was that Mr Risler and Mr Meloche had taken against the claimant, in Mr Howard's words they wanted to upgrade the team….this is reflected most clearly in the e-mail of 25 March".

That e-mail cited in the decision at paragraph 20 read:

"The fundamental issue underpinning our recommendation is that the team is not high quality and don't have good client relationships. As you pointed out they are simply not right for the future direction of the business…"

39. The Appellant's submissions focussed, on this ground, on the statement of opinion by the Claimant in his witness statement that he believed that Mr Risler wanted someone who was younger, more compliant, less experienced whom he could "steamroller". The Appellant contends that, if this were the case it would run counter to the Tribunal's finding that the reason for the dismissal was that Mr Risler and Mr Meloche felt that the Claimant and his team were of insufficient quality and that they wanted to upgrade. The desire to have someone who was more compliant, it is argued, is so contradicted by the findings of the Tribunal as to the reason for the dismissal that we should conclude that the Tribunal has failed adequately to have regard to this finding and, in so doing has fallen into the trap which the EAT identified and the Court of Appeal endorsed in the case of Bahl.
40. It is said that the clue to how this error came about was the failure on the part of the Tribunal explicitly to have regard to a hypothetical comparator in relation to this claim. Had a hypothetical comparator been constructed namely, a senior individual whom Mr Risler and Mr Meloche considered not right for the business and should be "upgraded" but was younger than the Claimant, it is contended that such a person would have suffered the same fate as the Claimant. In that case the Tribunal could only have reached the same conclusion as it did in relation to the race discrimination claim – to dismiss it.
41. The Appellant also suggests that the Tribunal erred in failing to have regard to all the evidence before deciding whether the burden of proof shifted though, in fairness, this was not at the forefront of its arguments because the main thrust of its contention was that the same error infected the Tribunal's reasoning, whether at the stage of the Tribunal considering whether or not the burden had shifted, and at the stage at which it considered whether, it having shifted, the Appellant had discharged it on the balance of probabilities.
42. In our judgment these arguments do not succeed. It is clear from paragraph 147 that the Tribunal had regard to the totality of the evidence and the picture which it painted before concluding that the briefing document was so potent that it served to shift the burden, notwithstanding the fact that the Tribunal's initial view was that the allegation of age discrimination was an unlikely one given the context which they described. As Mr Stilitz put it, the deliberate adoption by the Appellant, notwithstanding expert advice, of the description of the person being sought as "younger," it having survived a number of different drafts, constituted such a flagrant instance of potential age discrimination that the Tribunal was entitled to conclude that the Claimant, by placing this document before the Tribunal had proved facts from which the Tribunal could conclude, in the absence of an adequate explanation, that the Respondent was responsible for a discriminatory act on the grounds of age.
43. In our judgment it is wrong for the Appellant to suggest that the Tribunal failed to have regard to its findings about the reasons for the dismissal which it had set out at various stages in its decision. The Tribunal was entitled, indeed obliged, to look at its findings, and to look at the evidence, in order to consider whether, in forming the subjective views which Mr Risler and Mr Meloche had formed, they were significantly influenced by the Claimant's age having regard to the stark terms of the person specification. The Tribunal had gone through that exercise in respect of the race discrimination claim. In relation to the age discrimination claim, the Tribunal meticulously went through the reasons given in evidence by Mr Meloche for his view that the Claimant was "simply not right" and it concluded that Mr Meloche's evidence was not genuine and that he was rationalising after the event. The Tribunal was encumbered, as it noted, by the fact that Mr Risler was not called to give evidence so, other than what might appear from him on the documentation, and the evidence given by the Claimant about the nature of the disagreements between them and what, in his view, lay behind them, they were not helped in relation to Mr Risler's thinking and what may have influenced his conclusion about the Claimant.
44. In addition, the Tribunal was entitled to have regard to its view about the credibility of the Appellant both because of the way in which it had steadfastly continued to argue for redundancy despite all the documentation which suggested to the contrary, and the way in which it had conducted the litigation by not disclosing the crucial document on this issue for reasons which the Tribunal found were unconvincing.
45. In our judgment, where there was, in the form of the person specification in the briefing, the clearest possible evidence of potential age discrimination, the Tribunal would have erred in law had it not gone deeper in order to consider whether the explanation given for the assessment of the Claimant by Messrs Risler and Meloche, which was said not to amount to discrimination but which supported a genuine, though perhaps mistaken, view, was inconsistent with the discrimination alleged. Having done so, meticulously; having concluded that the evidence presented by Mr Meloche did not reveal a genuine belief but amounted to a rationalisation; and being denied any evidence directly from Mr Risler; the Tribunal, in our judgment, carefully and correctly concluded that the Respondent had not discharged the burden upon it to show that the decision to dismiss was not significantly influenced by his age.
46. We remind ourselves that, as has been described in Pothecary Witham Weld v Bullimore [2010] IRLR 572, this Tribunal (the President presiding) has stated the principle that, where a claimant has raised a prima facie case in the discrimination context, it must, in principle, be enough to say that the Tribunal was not persuaded that the explanation was right rather than it reject it and that a Tribunal may reasonably prefer to go no further than to say that the burden of proof has not been discharged. We observe that that is the approach which is taken by this Tribunal in this case at paragraph 160.
47. In our judgment therefore this ground of appeal does not succeed.
48. Ground 2 is that the Tribunal erred in law and misdirected itself in relation to the effect and relevance of its finding of fact that, of the four candidates short listed for the position, all were aged 40 or over and the preferred candidate was 50.
49. In our judgment this ground does not succeed. The Tribunal specifically took this factor into account. It accepted that it did tend to show that the treatment of the Claimant was not on the ground of age. It correctly identified the issue with which it was concerned - what influenced the decision to dismiss at the time of dismissal - and was entitled to conclude that events which subsequently transpired and which resulted in the views expressed some 4 months later were not sufficient, in all the circumstances, to discharge the burden of proof which was upon the Appellant. In our judgment this was a view to which this Tribunal was entitled to come. It falls a long way short of evidencing an error of law and, in truth, this ground is really one alleging perversity which is ground 3. In our judgment the Appellant falls a long way short of establishing perversity.
50. Ground 4 contends that the Tribunal erred in law in directing itself that the fact that Mr Risler did not give evidence entitled it to draw an adverse inference.
51. In our judgment this cannot be sustained on a proper analysis of the decision. In paragraph 149 the Tribunal said:

"Mr Risler against whom the allegation was primarily levelled, was not called to give evidence. We have not heard why not. Discrimination cases require us to consider the reason why -difficult enough at the best of times, but even more so when a crucial witness is not called."

52. At paragraph 158 the Tribunal limited itself to saying the following:

"We find that the driving force was Mr Risler. We have not heard from him. This makes it difficult to assess whether he was influenced by the claimant's age bearing in mind the inherent difficulties of proving discrimination."

There is nothing in this which amounts to any misdirection that they were entitled to draw any adverse inference from Mr Risler's non-attendance at the Tribunal. It is simply a statement of fact that he didn't give evidence and that this makes difficult an assessment of whether he was significantly influenced by age. The Tribunal does refer to the credibility of the Appellant being seriously undermined, but that was not by reference to their failure to call Mr Risler. In our judgment this ground of appeal does not succeed.

53. Ground 5 contends that the Tribunal erred in directing itself that it was irrelevant that the only person who has been hired to a marketing role since the Claimant was dismissed in May 2008 was in effect the same age as the Claimant.
54. This is a reference to the hiring of Mr Sweeting in April 2009 who was aged 38. The Tribunal had discounted this as irrelevant at paragraph 157 where they said:

"We did not consider the fact that the claimant had been 41 when hired or that Mr Sweeting was 38 when hired were relevant factors as different individuals had been involved in those decisions."

55. In our judgment that statement contained no error of law or misdirection and ground 5 does not succeed.
56. Ground 6 submits that the Tribunal erred in law in that it improperly assumed that a recruit who was younger than the Claimant would not "stand up to Mr Risler." This ground ignores the fact that the Tribunal did not make any finding about the correctness, or otherwise, of the opinion which the Claimant had expressed about what lay behind the explicit potentially age discriminatory person specification. The Tribunal's finding was based, as we have indicated, upon its conclusion that the content of the briefing was so flagrant that it satisfied the requirements for the shift in the burden of proof, notwithstanding the inherently unlikely nature of the claim of age discrimination, and that, the burden of proof having shifted, the Respondent had not discharged it.
57. In our judgment, this ground goes to a decision made on a different basis than that upon which the Tribunal decided the case and does not succeed.
58. Accordingly we dismiss the appeal.

The cross appeal

59. The cross appeal is based exclusively on what is said to be the proper application to the facts of this case of the approach of the ECJ in the Commission v UK [1994] ICR 664 and, in particular, paragraphs 38 to 43 of the judgment of the court. In that case the UK Government was the subject of a complaint by the Commission in respect of the then protective award provisions enacted as part of the Employment Protection Act 1975, by which the amount of a protective award could be set off against any amounts which the employer was required to pay his employee. The effect of that may have been to have swallowed up entirely the sum which would otherwise have been awarded as a protective award. The ECJ concluded that that set of arrangements did not enable the UK to fulfil its obligations under Article 5 of the EC Treaty because, in that form, they did not constitute a sufficient deterrent. In particular in paragraph 40 the court said:

"Article 5 of the Treaty requires the member states to take all measures necessary to guarantee the application and effectiveness of community law. For that purpose while the choice of penalties remain with their discretion they must ensure in particular that infringements of community law are penalised under conditions, both procedural and substantive, which are analogous to those applicable to infringements of national law of a similar nature and importance and which in any event make the penalty effective, proportionate and dissuasive."

And at paragraph 42:

"By providing that a protective award may be set off in full or in part against any amounts otherwise payable by an employer to an employee under the latter's contract of employment or in respect of breach of that contract the UK legislation largely deprives that sanction of its practical effect and its deterrent value, moreover an employer will not be penalised even moderately or lightly by the sanction except and only to the extent to which the amount of the protective award which he is ordered to make exceeds the sums which he is otherwise required to pay to the person concerned."

60. The argument of the Claimant is that, in many employment contexts, but in particular in banking, it is common for the basic salary to constitute only a small part of the remuneration package, the bulk being made up of a bonus which may be couched, as here, in entirely discretionary terms. If that bonus is not to be included in the concept of "a week's pay" under the protective award regime then, it is argued, the deterrent value of the protective award is largely deprived of practical effect.
61. The argument is that section 221(2) should be construed so that the words "under the contract" cover both basic salary and discretionary bonus where there is already a contractual obligation to take decisions in respect of a discretionary bonus which are not irrational or perverse. (See Clark v Nomura International plc [2000] IRLR 766).
62. As an alternative route, reliance is placed on EBR Attridge LLP v Coleman [2010] ICR 242 in which this Tribunal (the President) was prepared to add words to domestic legislation in order to give effect to EU law, adopting the approach to construction which found favour in the House of Lords, in the context of the Human Rights Act 1998, in Ghaidan v Godin-Mendoza [2004] 2 AC 557. The suggestion is that words may be inserted into section 221(2) so that it would read:

"The amount of a weeks pay is the amount which is payable by the employer under or in respect of or in relation to the contract of employment…"

63. In effect the argument is that, by drafting the statute in a way which excludes the inclusion of any sum by way of a discretionary bonus, which is yet to become payable, from the computation of a week's pay for the purposes of calculating a protective award, the UK Government has failed to give effect to Article 5 of the treaty by failing to take all measures necessary to guarantee the application and effectiveness of Community law.
64. In our judgment, applying this principle to the present case, it cannot be said that the employer would not be penalised even moderately or lightly by the sanction. The basic annual salary of £125,000 is not an insignificant sum. It may be much less than potentially the Claimant might ultimately have received as a remuneration package in respect of that year had he remained in employment, but at the time he was dismissed he wasn't even yet entitled to have any decision made as to whether or not he should receive any bonus and if so how much or in what form. In our judgment the Tribunal was right to say that the discretionary bonus in this case did not fall to be included as part of a week's pay payable by the employer under the contract of employment. Nor does the fact that this outcome results from the statutory scheme, in the circumstances of this case and other like cases, cause the statutory scheme to fail to give effect to Community law by largely depriving the sanction intended by the protective award regime of its practical effect and deterrent value.
65. There might be cases in which the basic salary is so small and the bonus, or commission, arrangements so discretionary that it might be said that failing to include them in a week's pay would deprive a protective award of any effective deterrent effect. But we have not been referred to any and, in our judgment, it would be a speculative exercise for us to conclude that there might be. We have to decide the case which is before us. The case which is before us does not, in our judgment, provide evidence that the protective award scheme, as properly construed by the Tribunal, does fall foul of EU law.
66. The fact that Mr Stilitz has found cases decided in 1977, on wholly different facts, in which a bonus arrangement was held to be part of a week's pay does not assist us or him, because the facts of those cases were wholly different, and the conditions said to circumscribe the inclusion of such bonus arrangements in a week's pay are a long way removed from the facts of this case.
67. Accordingly the cross appeal is dismissed.

Summary

68. We dismiss both the appeal and the cross appeal.