|At the Tribunal|
|On 22 April 2010|
HIS HONOUR JUDGE SEROTA QC
MRS A GALLICO
DR K MOHANTY JP
Transcript of Proceedings
|For the Appellant||MS EMMA SMITH
Messrs Beachcrofts Solicitors
|For the Respondent||MS ANNA BEALE
Messrs Leigh Day & Co Solicitors
25 St John's Lane
Disability related discrimination
Direct disability discrimination
The Employment Tribunal found that the Claimant, an Executive Director in Structured Credit and Sales, had not suffered disability related discrimination under s3A(1) of the 1995 Disability Discrimination Act, by reason of the fact that his disability limited his working hours and prevented him from widening his client base, when he was paid a lower bonus than appropriate and unfairly dismissed. The Employment Tribunal found that if a person in the employee's position had not been able to do the full hours and was limited to similar hours to the Claimant, that person would also have been dismissed where they had not sufficiently widened their client base. Nevertheless and despite that finding the Employment Tribunal appears to have found that those facts gave rise to a claim for direct discrimination under s3A(5) of the Act. The case was remitted to the Employment Tribunal to determine whether or not there were additional grounds for finding that the Claimant had suffered direct discrimination.
HIS HONOUR JUDGE SEROTA QC
The Factual Background
"By the year end the Claimant had earned approximately £25m in sales credits. In addition, he had sold £150m in bridge loans in respect of Account S which reduced the Respondent's level of risk and prevented the Respondent from losing almost £50m. The Claimant believed that this would be reflected favourably in his bonus. The Claimant also became increasingly involved in and acted as point person on the desk for insurance linked securities. The Claimant also transacted a lot of highly profitable business with Account H which removed further risk from the Respondent's balance sheet. On the other hand, two of the Claimant's biggest accounts, Accounts AV and WC, closed."
The Decision of the Employment Tribunal
"The Tribunal has on balance concluded that the dramatic decrease in the Claimant's bonus, particularly when compared with that of a person regarded by Mr Hayward as a comparator, albeit that the Tribunal does not know the circumstances of that person so that person is not a comparator for the purposes of the 1995 Act, suggest, in conjunction with the references to the Claimant's impairment from time to time, that the reason for the substantial decrease in the bonus was because he was disabled. Having regard to the explanation provided by the Respondent as to the basis on which it chose to award the bonus, the Tribunal has concluded that the Respondent has not proved that it did not treat the Claimant less favourably in any sense whatsoever on the ground of his disability. The Tribunal is of the view that the lack of a wider client base was a contributing factor to the decision but that equally the Claimant's disability also contributed to the decision for the reasons given above."
"The Tribunal has concluded that if the circumstances of Mr Chweidan had been the same but his limited hours had not been for a reason related to a disability, the result would have been the same. The Tribunal is satisfied that the Respondent's concern was the lack of a broad client base which the Claimant was not able to improve because, for example, he was not available in the evenings to entertain potential new clients. Accordingly, the Tribunal has concluded in any event that the Claimant was not treated differently to a hypothetical comparator and therefore the Respondent was not guilty of disability related discrimination."
"Accordingly, the burden of proof transfers to the Respondent to show that it did not treat the Claimant less favourably in any sense whatsoever on the ground of his disability. Although the Tribunal accepts that part of the reasoning for the Claimant's choice was that he did not have a sufficiently broad client base, being reliant so heavily on Client P, he was also to some extent prevented from broadening his client base because of his limitations regarding working in the evening when he would otherwise have been able to entertain possible new clients. As therefore his disability was a factor in the decision to dismiss the Claimant, the dismissal amounted to direct disability discrimination.""
"Dismissal Disability Related Discrimination
The Tribunal's conclusion is based on similar reasoning to that in respect of its decision regarding disability related discrimination in respect of the bonus. The Tribunal is satisfied that if a person in the employee's position had not been able to do the full hours and was limited to similar hours to the Claimant, that person would also have been dismissed where they had not sufficiently widened their client base. Accordingly, this complaint fails."
Notice of Appeal and Respondent's Submissions
"Not having that particular disability whose relevant circumstances including his abilities are the same as, or not materially different from those of the disabled person."
"Practically impossible for one (a claim for either direct or disability-related discrimination) to succeed where the other would not"
The Relevant Law
"…3A a person discriminates against a disabled person if –
(a) for a reason which relates to the disabled person's disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply, and
(b) he cannot show that that the treatment in question is justified."
"[A] person directly discriminates against a disabled person if, on the ground of the disabled person's disability he treats the disabled person less favourably than he treats or would treat a person not having that particular disability whose relevant circumstances, including his abilities, are the same as, or not materially different from, those of the disabled person."
"48..... The comparison which is invited by the words "treats her less favourably" lies at the heart of the entire sub-paragraph.
49 It is, I think, open to question whether the issue of less favourable treatment should be examined separately from the third issue with which the tribunal dealt under article 3(1)(a), which was whether the treatment which the applicant received was "on the ground of her sex". The third issue is the primary question. It directs attention to the question why the claimant was treated as she was. It calls for an examination of all the facts. If the two issues are to be examined separately, it may be helpful for this question to be addressed first. But, whichever approach is adopted, one must not lose sight of the fact that article 3(1) must be read as a whole and that it must be read together with article 7. A comparison of the cases of persons of a different sex under article 3(1)(a) must therefore be such that all the circumstances which are relevant to the way they were treated in the one case are the same, or not materially different, in the other."
"107 There has been, in my opinion, some confusion about the part to be played by comparators in the reaching of a conclusion as to whether a case of article 3(1) discrimination-or for that matter a case of discrimination under section 1(1) of the Sex Discrimination Act 1975, or under section 1(1) of the Race Relations Act 1976, or under the comparable provision in any other anti-discrimination legislation-has been made out. Comparators come into play in two distinct and separate respects.
108 First, the statutory definition of what constitutes discrimination involves a comparison: "treats that other less favourably than he treats or would treat other persons". The comparison is between the treatment of the victim on the one hand and of a comparator on the other hand. The comparator may be actual ("treats") or may be hypothetical ("or would treat") but "must be such that the relevant circumstances in the one case are the same, or not materially different, in the other" (see article 7). If there is any material difference between the circumstances of the victim and the circumstances of the comparator, the statutory definition is not being applied. It is possible that, in a particular case, an actual comparator capable of constituting the statutory comparator can be found. But in most cases a suitable actual comparator will not be available and a hypothetical comparator will have to constitute the statutory comparator. In Khan's case  ICR 1065 one of the questions was as to the circumstances that should be attributed to the statutory hypothetical comparator. It is important, in my opinion, to recognise that article 7 is describing the attributes that the article 3(1) comparator must possess."
"104 It is now clear following the decision of the House of Lords in the Shamoon case that whilst it is necessary that the tribunal should be satisfied both that there is less favourable treatment and that it is on discriminatory grounds, it is not obligatory for a tribunal to pose both these questions in sequential order. Nor is it necessary for it to construct an appropriate hypothetical comparator in order to test whether there is less favourable treatment. It will usually not be possible to distinguish the two issues in a cut and dried way. The reason is that if the relevant characteristics of the appropriate comparator are those which have actually influenced the mind of the alleged discriminator, they cannot be identified until the grounds for the decision have been determined. In a nutshell, it is not possible to state whether the chosen comparator would have been differently treated independently of knowing why the alleged victim was treated in the way in which he or she was. The reason why the two issues are so interrelated was described with conspicuous clarity by Lord Nicholls in the Shamoon case (paras 7-12):
implications of Shamoon.
111 We would make three observations about this decision. First, by requiring all the relevant circumstances to be taken into consideration when defining the hypothetical comparator in the context of answering the "less favourable treatment" issue, and not merely when asking the "reason why" issue, a tribunal which finds that the prohibited grounds have played no part in the decision will also thereby necessarily be concluding that there is no less favourable treatment. This is not, however, of any practical importance since the determination of the "reason why" issue against the applicant is itself enough to defeat the claim. Conversely, if the tribunal find that the reason was a prohibited reason then there will usually be no difficulty in inferring less favourable treatment, as Lord Nicholls indicated. Once it is shown that a discriminatory reason has had a causative effect upon the decision, it will almost inevitably be an adverse one resulting in the victim receiving less favourable treatment than that which would have been meted out to the hypothetical comparator. In other words, the finding that the treatment was on the grounds of race or sex will almost always involve a finding of less favourable treatment."
"While there was no obligation to construct a hypothetical comparator, the failure to do so might at least in a provisional way raise doubts as to whether the Employment Tribunal had properly considered all the potentially relevant explanations when identifying whether or not unlawful discrimination existed. It might raise a concern that the Tribunal had failed properly to consider the possible lawful non-discriminatory reasons for the conduct in issue [...]"
"33. The House of Lords construed the language of a section of the Act whose terms were substantially identical to s. 3A (1) in such a way as to render its scope for all practical purposes no different from that of direct discrimination. That is because it defined the comparator as a person whose case was in all respects identical to that of the claimant but who was not disabled: on that basis, less favourable treatment would in practice only be established where the disability constituted the ground for the treatment, i.e. in a case of direct discrimination."
"For the reasons given at para. 33 above, it does not seem to us to have been open to the Tribunal to find discrimination contrary to s.3A(1) in circumstances where disability contrary to s.3A(5) had not been established. The Tribunal acknowledged that the effect of Malcolm was to "significantly restrain" claims of disability-related discrimination; but it seems to us that on a proper analysis it is now practically impossible for the one to succeed where the other would not ……………."
"46. The Tribunal had correctly identified direct discrimination under s3A(5) as an issue. Having found in favour of the Claimant on disability-related discrimination, it "nevertheless went on" to consider direct discrimination. Treatment of a person "on the ground" of his or her disability is more exact and narrower in scope than treatment "for a reason which relates" to the disability. The treatment here is diagnosed as the dismissal. The first question is the identity of a comparator. No actual comparator was named and so the Tribunal correctly set about constructing a hypothetical comparator, in accordance with paragraph 4.1.3 of the code. The comparator may be, but need not be, the same comparator as is envisaged for the purpose of disability-related discrimination. For example, for direct discrimination, the comparator may be a person who does not have the Claimant's disability, and may not have a disability at all. The comparator might have a condition which falls short of the kind of impairment required to satisfy s1 of the Act. This is because s3A(5) focuses upon a person who does not have "that particular disability". The circumstances of the Claimant and of the comparator must be the same "or not materially different". One of the circumstances is the comparator's "abilities", but since this is prefaced by "including", it follows that more circumstances are relevant than simply the comparator's abilities.
47. The exercise is one of comparison for only then can there be a judgment that the treatment of one was "less favourable" than the treatment which would be afforded to the other."
"We do not consider that Malcolm requires us to make an absurd comparison between a disabled claimant being treated unreasonably by reason of his being perceived to be a commercial liability and an employee who is not disabled similarly unreasonably believed to be a commercial liability. The comparison (if one is required) must be between a disabled claimant unreasonably believed to be a commercial liability by reason of the reasonable adjustments and a fellow employee who is not disabled with similar adjustments in place in respect of whom it is reasonable to infer that the employer would not have behaved unreasonably."
"An appellate court should hesitate before it decides to reverse the decision of the tribunal on a matter of this kind. The question which was at issue here was a question of fact, and the tribunal had the advantage of seeing and hearing the witnesses. In a case such as this, where direct evidence of discrimination is absent and so much depends on inference, this is a crucial advantage which the appellate court does not share. It has also been recognised that a generous interpretation ought to be given to a tribunal's reasoning. It is to be expected, of course, that the decision will set out the facts. That is the raw material on which any review of its decision must be based. But the quality which is to be expected of its reasoning is not that to be expected of a High Court judge. Its reasoning ought to be explained, but the circumstances in which a tribunal works should be respected. The reasoning ought not to be subjected to an unduly critical analysis."