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United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Bungay & Anor v Saini & Ors (Race Discrimination : Vicarious liability) (Rev 1) [2011] UKEAT 0331_10_2709 (27 September 2011)
URL: http://www.bailii.org/uk/cases/UKEAT/2011/0331_10_2709.html
Cite as: [2011] UKEAT 0331_10_2709, [2011] UKEAT 331_10_2709
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EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
At the Tribunal
Judgment handed down on 27 September 2011
Before
THE HONOURABLE MR JUSTICE SILBER
MR T STANWORTH
(2) MR J CHANDEL
(3) ALL SAINTS HAQUE CENTRE (IN COMPULSORY LIQUIDATION) RESPONDENTS
Transcript of Proceedings
JUDGMENT
APPEARANCES
|
MR T MUMAN (of Counsel) Instructed by: Aspect Law Ltd Globe House 3 Bradford Place Walsall WS1 1PL |
|
|
For the Second Respondent
For the Third Respondent |
(of Counsel) Instructed by: Hatton James LLP Avon House 435 Shirley Road Solihull B90 4AA
MISS K DONNELLY (of Counsel) Instructed by: The Wilkes Partnership 41 Church Street Birmingham B3 2RT
Debarred |
SUMMARY
RACE DISCRIMINATION
Vicarious liability
Post employment
The Appellants were members of the board of a Centre. As a result of decisions of the Employment Tribunal and the Employment Appeal Tribunal, it was held that the Appellants had unfairly dismissed the Respondents, who were employees of the Centre and that they had unfairly discriminated against them on the grounds of their faith.
At a remedies hearing, it was held that the Appellants and the Centre were jointly and severally liable for the discrimination damages payable to the Respondents and that those damages could also take account of the post-employment conduct of the Appellants.
The Appellants appealed.
Held: dismissing the appeal because:-
(a) the Appellants were agents of the Centre within Regulations 22 and 23 of the Employment Equality (Religion or Belief) Regulations 2003 as they were acting within their authority when managing the Centre and the regulations had to be construed in a purposive manner (Jones v Tower Boot [1997] ICR 254 followed) and all that needed to be shown to make the Appellants liable was that they were authorised to manage the centre in a way which was capable of being done in a lawful manner (Lana v Positive Action Training Housing (London) [2001] IRLR 501 applied). On that basis, the Employment Tribunal was entitled to find the Appellants liable under those regulations;
(b) The Appellants were jointly and severally liable as they contributed to the same damage to the Respondents (London Borough of Hackney v Sivanandan and others [UKEAT/0075/10] applied and Way v Crouch [2005] IRLR 603 disapproved); and
(c) The aggravated damages could take account of the post–employment conduct of the Appellants (Zaiwalla v Walia [2002] IRLR 697 applied).
THE HONOURABLE MR JUSTICE SILBER
Introduction
(a) Finding the Appellants to be “agents” within Regulations 22 and 23 of the Employment Equality (Religion or Belief) Regulations 2003 (“the 2003 Regulations”);
(b) Ordering both Appellants to be jointly and severally liable in respect of the damages payable to both the Respondents; and
(c) Having regard to the post-employment conduct of the Appellants in assessing the aggravated damages payable to the Appellants.
“are responsible for steering through the claims of gross misconduct against [him] (and fabricating evidence in support of those claims) to disguise the real reason behind [his] dismissal being that he is of a different religious belief” (Mr Chandel’s Statement of Case paragraph 5 [67]).
a. Mr Bungay and Mr Paul had told Mr Dass (a fellow director) that they wanted to get rid of Mr Chandel because “he is not one of us, he is bloody Hindu (“Barber”)” (a pejorative reference) (paragraph 14). The Tribunal then explained that “The reference to ‘Barber” is pejorative; barbers are found amongst the lowest caste of Hindu”;
b. The disciplinary hearing on 19 June 2006 “was an opportunity to subject [Mr Chandel] to humiliation and ridicule” had been “orchestrated by” Mr Bungay (paragraphs 26-7);
c. Mr Bungay’s letter sent to Mr Chandel on 27 June 2006 “clearly indicated that [Mr Bungay][had no interest in conducting a fair hearing but merely concluding the disciplinary process to Mr Chandel’s disadvantage”;
d. “In Mr Chandel’s case the evidence was that he as a Manager had been subjected to a disciplinary process which was open to severe criticism…The prime movers in this exercise had been [Mr Bungay and Mr Paul], both Ravidassi…” (emphasis added, paragraph 68);
e. “…the tribunal found that [Mr Bungay and Mr Paul] had been aggrieved not simply that their employment relationship (in the case of Mr Paul) or voluntary post (in the case of [Mr Bungay]) had been terminated but also that Mr Chandel had not been prepared to take steps to ensure that they were retained in post if necessary at the expense of non-Ravidassi staff. They had then set out on a course of action designed to ensure that Mr Chandel was removed from his post.” (emphasis added, paragraph 68); and that
f. “…the fact of Mr Chandel’s belief was a substantive and effective cause for the action that was orchestrated by [Mr Bungay and Mr Paul] together with the other members of the board” (emphasis added, paragraph 68).
11. The Employment Appeal Tribunal founding respect of Mr Sani that:-
“30.. it is plain from the Tribunal’s conclusions that they were readily satisfied that the reason why the [appellants] mistreated [Mr Saini] and that the way they did was not simply their desire to get rid of Mr Chandel but their desire to get rid of him because he was Hindu. Their animosity to Mr Chandel was, on the Tribunal’s findings, solely because his was Hindu the extent of their determination to bring to bear against the Hindu element at the Centre and to further the cause of Ravidassis was, on the Tribunal’s findings really quite profound. In these circumstances the desire to get rid of Mr Chandel cannot be separated from its impetus namely the [appellants’] anti Hindu policy. Thus, if, as the Tribunal found, the way in which [Mr Saini] was treated was because of the wish to remove Mr Chandel it was also because of that policy. That policy was a discriminatory one and the only conclusion that can, in all the circumstances, follow is that the [appellants’’] treatment of the Claimant was harassment, that it was on grounds of religion and that it was contrary to Regulation 5.”
13. After the remedies hearing lasting three days, the Employment Tribunal awarded Mr Saini:-
(a) £21,984.08 compensation for unfair dismissal to be paid by the Centre;
(b) Damages of three weeks notice pay of £1164.42, arrears of holiday pay in the sum of £396.16 and arrears of wages in the sum of £18.12 to be paid by the Centre;
(c) £9,000 plus interest of 1023.05 as damages for injuries to his feelings claim for harassment on the grounds of religion or belief to be jointly and severally paid by the Centre and the Appellants;
(d) Damages of £6,500 plus interest of £334.03 as aggravated damages to be jointly and severally paid by the Centre and the Appellants.
(a) £62,750.20 as compensation for unfair dismissal to be paid by the Centre;
(b) £7033.95 as ten weeks pay in lieu of notice also to be paid by the Centre;
(c) £12,000 plus interest of £1,386.77 as compensation for direct discrimination on grounds of religion or belief to be jointly and severally by the Centre and the Appellants;
(d) Aggravated damages of £6,500 plus interest of £334.03 to be jointly and severally paid by the Centre and the Appellants.
Whether the Tribunal was wrong in law to find the Appellants to be “agents” within regulations 22 and 23 of the 2003 regulations
16. Regulations 22 and 23 of the 2003 Regulations provide insofar as is material that:-
“Liability of employers and principals
22.—(1) Anything done by a person in the course of his employment shall be treated for the purposes of these Regulations as done by his employer as well as by him, whether or not it was done with the employer’s knowledge or approval.
(2) Anything done by a person as agent for another person with the authority (whether express or implied, and whether precedent or subsequent) of that other person shall be treated for the purposes of these Regulations as done by that other person as well as by him.
Aiding unlawful acts
23.—(1) A person who knowingly aids another person to do an act made unlawful by these Regulations shall be treated for the purpose of these Regulations as himself doing an unlawful act of the like description.
(2) For the purposes of paragraph (1) an employee or agent for whose act the employer or principal is liable under regulation 22 (or would be so liable but for regulation 22(3)) shall be deemed to aid the doing of the act by the employer or principal.”
17. The Employment Tribunal concluded that:-
“6. That liability could be established under Regulation 22(2) where the two [appellants] concerned had been acting in their capacity as directors as agents for the [Centre]. The effect that Regulation 23(2) was that it created liability as though under Regulation 23(1) that is to say that the [appellants] are deemed by Regulation 23(2) to have aided the [Centre] to discriminate and so by virtue of Regulation 23(1) to have acted unlawfully themselves if liable as agents.”
21. Mr de Mello, counsel for the Appellants, complains that they were acting as Directors of the Centre acting on their behalf in their capacity as Directors and were therefore not acting as agents for the Centre and also that there has been no finding of agency. He contends that in the absence of any allegation of fraud, all the actions of the Appellants attributed to the Centre and he relies on the statement in Tesco Supermarkets Ltd v Natrass [1972] AC 153 at 170 that:-
“It must be a question of law whether, once the facts have been ascertained, a person in doing particular things is to be regarded as the company or merely as the company's servant or agent. In that case any liability of the company can only be a statutory or vicarious liability.”
“Agency is the fiduciary relationship which exists between two persons, one of whom expressly or impliedly assent that the other should act on his behalf so as to affect his relations with third parties, and the other of whom similarly manifests assent so to act or so acts pursuant to the manifestation. The one on whose behalf the act or acts are to be done is called the principal. The one who is to act is called the agent. Any person other than the principal and the agent may be referred to as a third party.”
24. Thus the test of authority is whether when doing a discriminatory act the discriminator was exercising authority conferred by the principal (which in this case was the Centre) and not whether the principal had (namely the centre) in fact authorised the Appellants to discriminate. Indeed in Lana v Positive Action Training Housing (London) [2001] IRLR 501 Mr Recorder Langstaff QC (as he then was) giving the judgment of this Appeal Tribunal had to consider a provision identical to that in Regulation 22(2) contained in section 14 of the Sex Discrimination Act 1975 when he said in respect of an argument that a party would only be liable for an act of discrimination which was done with the authority “whether expressed or implied whether precedent or subsequent to commit discrimination”:-
“The proper approach was to consider whether, when doing the discriminatory act, the discriminator was exercising authority conferred by the respondent” [23].
28. Miss Kathleen Donnelly counsel for Mr Chandel makes the very valid point that this conclusion is fortified by the fact that to hold that a director acting in the course of a disciplinary process as the Appellants were, were not then acting as agents within the 2003 Regulations would defeat the purpose of the legislation. She pointed out that in Jones v Tower Boot [1997 ICR 254] it was held that in a provision in the Race Relations Act 1976, which was in identical terms to Regulation 22(2), neither a linguistic construction nor its legislative purpose justified an interpretation that applied the doctrine of an employer’s vicarious liability at common law to the words “in the course of his employment”.
“A purposive construction accordingly requires section 32 of the Race Relations Act 1976 and the corresponding section 41 of the Sex Discrimination Act 1975 to be given a broad interpretation. It would be inconsistent with that requirement to allow the notion of the "course of employment" to be construed in any sense more limited than the natural meaning of those everyday words would allow.”
30. Later Waite LJ said at page 265 that:-
“The tribunals are free, and are indeed bound, to interpret the ordinary, and readily understandable, words "in the course of employment" in the sense in which every layman would understand them. This is not to say that when it comes to applying them to the infinite variety of circumstance which is liable to occur in particular instances - within or without the workplace, in or out of uniform, in or out of rest-breaks - all laymen would necessarily agree as to the result. That is what makes their application so well suited to decision by an industrial jury. The application of the phrase will be a question of fact for each Industrial Tribunal to resolve, in the light of the circumstances presented to it, with a mind unclouded by any parallels sought to be drawn from the law of vicarious liability in tort.”
Was the Employment Tribunal wrong to order joint and several liability in respect of damages?
“9… the Tribunal had found the [respondents] had been the prime movers in the campaigns of discriminatory behaviour which had resulted in the dismissal of both [the respondents] and that they had been instrumental in causing both [respondents] to be arrested. It was entirely appropriate that joint and several liability should be awarded in such cases.”
36. In response, the case for the Respondents is that the Tribunal was correct to conclude that there should be joint and several liability. Miss Donnelly relies on the decision of the Court of Appeal in Gilbank v Miles [2006] IRLR 538 in which it upheld a finding of the Employment Tribunal that the appellant’s salon manager was jointly and severally liable to pay compensation for acts of pregnancy discrimination against the claimant, notwithstanding that some of the acts of discrimination were carried out by other managers in circumstances in which the appellant’s salon manager could be regarded as having unlawfully aided the discriminatory acts by consciously as she had “consciously fostered and encouraged a discriminatory culture”.
37. The Court of Appeal was apparently not referred to an earlier case of Way v Crouch [2005] IRLR 603 in which this Appeal Tribunal held that an Employment Tribunal had not erred in making an award for sex discrimination on a joint and several basis against the respondent company and its managing director, but that the Tribunal had erred in making the whole of the compensation payable jointly and severally to both respondents. Judge Birtles giving the judgment of this Appeal Tribunal explained that:-
“23…(3) if an Employment Tribunal considers it necessary to make a joint and several award of compensation it must have regard to the language of section 2(1) of the Civil Liability (Contribution) Act 1978… In other words, it is not appropriate in almost any case for an Employment Tribunal to make a joint and several award which is 100% against each respondent. That is to do violence to the language of s2(1) of the 1978 Act which specifically directs the attention of the Employment Tribunal “to the extent of that person’s responsibility for the damage in question.”
“33. We confess to having very considerable doubts about the part of the decision in Way v Crouch which suggests that as between a Claimant and a Respondent or Respondents the percentage of liability of the Respondents is relevant in the way in which that Tribunal determined. We consider the appropriate principle is that where there is an award of joint and several liability the Respondents or any one of them is liable for the full extent of the damages to the Claimant. As between the Respondents a Respondent may have a right to seek contribution from a co-Respondent, depending upon the relative contribution and responsibility of each of the Respondents to the wrong which has been done, but we do not see how that affects the position of the Claimant, who is entitled, if the award is joint and several, to receive the full extent of his award from any such of the Respondents as he chooses”
“16..(1) Where the same, “indivisible”, damage is done to a claimant by concurrent tortfeasors – i.e. either tortfeasors who are liable for the same act (joint tortfeasors) or tortfeasors who separately contribute to the same damage – each is liable for the whole of that damage. As between any particular tortfeasor and the Claimant no question of apportionment arises (leaving aside the question of contributory negligence). The classic statement is that of Devlin LJ in Dingle v Associated Newspapers Ltd [1961] 2 QB 162, at p 189….
17. We have said that those rules should apply to compensation for the statutory tort of discrimination “other things being equal”. Mr. Clayton was not able to suggest any special features of the law of discrimination which required a different approach, nor can we see any. It is our view, therefore, that the Tribunal had no power to conduct the exercise which the Council claims that it should have conducted. It is not, for the avoidance of doubt, being said that it should have apportioned liability on the basis that the Claimant’s loss was divisible, i.e. that different acts of discrimination as between the Council Respondents and the HARE Respondents caused different damage: Ms. White, through whom the Council was liable, was party to all the acts complained of. Rather, what Mr. Clayton on behalf of the Council seeks is an apportionment of liability on the basis of the Council Respondents’ and the HARE Respondents’ relative degrees of responsibility for the Claimant’s loss. That submission is misconceived: as explained above, the relative responsibility of the tortfeasors may be relevant to contribution as between them but it is not relevant to their liability, in a case like the present, to the claimant.”
“22… Although Way v Crouch appear to rely on the 1978 Act that is, with respect a red herring: as we have sought to explain, the Act has no bearing on the liability of concurrent tortfeasors to the claimant.”
Was the Tribunal wrong in law to have regard to post-employment conduct in assessing aggravated damages?
48. The grounds of appeal are that the Employment Tribunal:-
i. Erred in law in making an award of aggravated damages in relation to both Respondents on the grounds of post-employment treatment because the Appellants did not discriminate against the Respondents under Regulation 12 and to award damages on this basis for the acts of the police, who exercised an original jurisdiction is wrong in principle;
ii. There was no relevant relationship between the Appellants as directors of the Centre and the Respondents, and no findings were made in relation to that relationship. In addition the arrests of the Respondents by the police were an independent exercise of power under which the Appellants’ complaints made to them about the Respondents and which led to their arrests came about outside the scope of their employment relationship, and were therefore outside the scope of Regulation 21;
iii. To award the Respondents damages in this context was to make an award of damages for false imprisonment for which the Appellants were not directly responsible because the false imprisonment was brought about by the police. For there to be a false imprisonment, there normally has to be some positive act of the party committing the wrong but no such positive act existed here;
iv. The Respondents had a separate cause of action namely to sue the Appellants for malicious falsehood or false imprisonment if the facts justified this course rather than for the Employment Tribunal to make an award for what was in effect false imprisonment or malicious falsehood. Those torts do not extend to disciplinary proceedings and therefore there was no reason why the Employment Tribunal should award damages for malicious falsehood or false imprisonment under Regulation 21;
v. Regulation 31(3) did not confer jurisdiction on the Employment Tribunal to award aggravated damages separately from and additionally to damages for injuries to feelings;
vi. There is no evidence to support the finding that the Appellants made malicious allegations to the police and any assertions of false criminal allegations attract the remedy of wrongful arrest or malicious prosecution which allow for an award of aggravated damages. Thus the Employment Tribunal took into account an irrelevant factor in awarding aggravated damages and the award was accordingly wrong in principle as the arrest and detention of the Respondents by the police are not matters capable of a remedy under Regulation 31(3); and that
vii. Any allegation of falsehood advanced by a party must be specifically pleaded and provided with cogent evidence but that has not occurred here.
“prime movers in the manner in which the Centre’s disciplinary process was subverted in order to promote a discriminatory anti-Hindu policy. The fact that that policy was then continued after the termination of the employment relationship through the malicious allegations of dishonesty against Mr Saini demonstrated to the Tribunal that there had been a causal link between the two events which had directly involved the [appellants]”. (paragraph 7.15)
53. A clear answer to the grounds of the Appellant is that there is authority that post-dismissal behaviour can lead to an aggravated award. Thus in Zaiwalla & Co v Walia [2002] IRLR 697 Maurice Kay LJ sitting in this Appeal Tribunal explained that:-
57. For all those reasons we have come to the conclusion that this appeal must be dismissed.