United Kingdom Employment Appeal Tribunal

Appeal No. UKEAT/0512/10/ZT

 

 

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

 

 

At the Tribunal

On 24 May 2011

 

 

 

Before

MR RECORDER LUBA QC

MRS J M MATTHIAS

MR R LYONS

 

 

 

 

CITY INDEX LTD APPELLANT

 

 

 

 

 

 

MS S KURT RESPONDENT

 

 

Transcript of Proceedings

 

JUDGMENT

 

 

 

 

 

 

 

 

 

 

 

APPEARANCES

 

 

 

 

 

For the Appellant	MR MOHINDERPAL SETHI (of Counsel) Instructed by: Edwards Angell Palmer & Dodge UK LLP Dashwood 69 Old Broad Street London EC2M 1QS
For the Respondent	MS JILL BROWN (of Counsel) Instructed by: Bindmans LLP 275 Grays Inn Road London WC1X 8QB

 

 

SUMMARY

RACE DISCRIMINATION - Direct

HARASSMENT

 

This was an employee’s claim that she had been subjected to race discrimination and harassment on grounds of her nationality and/or national origins.  Of 24 discrete allegations tried by the Tribunal only five were upheld.  Despite a six-day hearing, the Tribunal’s findings of fact on those five matters were limited and the reasoning and conclusions were collapsed into two short paragraphs each addressing whether the five matters taken together amounted respectively to discrimination and/or harassment. The EAT allowed the employer’s appeal as the Tribunal’s Judgment (of which no party had been able to obtain a complete coherent copy) had failed to make the essential linkage between factual findings, reasons and conclusions in respect of each one of the allegations upheld.  The claims in respect of the five allegations were remitted to a differently constituted Tribunal.

MR RECORDER LUBA QC

Introduction

1.             This is an employer’s appeal against the finding of an Employment Tribunal that it had discriminated against an employee and had subjected her to harassment on the grounds of her race.

 

The facts

2.             Ms Seherda Kurt is a white German female of Turkish descent.  She began working for City Index Ltd, to which we shall refer as ‘the company’, in June 2008 as a permanent employee, having previously been engaged as an agency worker by the company.  The company has over 400 employees worldwide, more than half of whom are based in the United Kingdom.  It is engaged in the financial services industry, dealing primarily with client investments and other financial transactions.  Ms Kurt was employed by the company as an associate in the company’s New Accounts Department.

 

3.             In September 2009 Ms Kurt began a period of sick leave, and in December 2009 she lodged with the Employment Tribunal service a number of claims arising out of the course of her employment.  Those that were heard by the Employment Tribunal in London Central over six days in June 2010 were concerned with discrimination, victimisation and harassment on the grounds of race.

 

4.             The Employment Tribunal’s Judgment, delivered in August 2010, contains a recital of some 24 specific allegations, upon which it was invited to make determinations in order to resolve the claims.  The 24 allegations spanned a period from January 2008 to September 2009.  In reaching its conclusions on those allegations the Employment Tribunal heard the evidence of Ms Kurt and two witnesses whom she called, who were former colleagues in the New Accounts Department.  The Tribunal also heard the evidence of four witnesses for the company, and that evidence was in addition to substantial documentary material.  The Employment Tribunal held that it had no jurisdiction to determine the first 4 of the 24 allegations raised by Ms Kurt as they were brought out of time, and it found that a further 15 allegations were not, on the evidence, made out.

 

5.             Ms Kurt does not seek to disturb those findings which, among other consequences, included the rejection of her complaint of victimisation.  The company, however, appeals from the decision of the Employment Tribunal, holding that complaints of race discrimination and harassment were made out in respect of the remaining five matters.

 

The Tribunal’s findings

6.             Ms Kurt’s case was that she had been the victim of racial discrimination and harassment on the grounds of her nationality and/or national origins.  During the bulk of the period of her employment, the New Accounts Department had constituted a manager and eight staff.  Of those eight, four were British and four were non‑British.  All five of the matters upon which the Employment Tribunal upheld Ms Kurt’s allegations referred to the acts or omissions of a Ms Julie Shaw, who was from February 2009 the Manager of the New Accounts Department in which Ms Kurt was working.

 

7.             The Employment Tribunal accepted evidence that, on her arrival, Ms Shaw had immediately bonded with the British staff in the department, and had appeared to favour them over their non-British colleagues (see paragraph 5(6) of the Tribunal’s Judgment).  That was not only the evidence of Ms Kurt, but evidence also to that effect was received from two of the other former non‑British employees on whose evidence the Employment Tribunal felt itself able to rely.  The Employment Tribunal noted that Ms Shaw had admitted to an affinity with the British staff.  The Tribunal found that Ms Shaw did side with these staff and was lenient about their actions towards the Claimant and the non‑British staff (see paragraph 5(8)).  In paragraph 5(9) the Tribunal found a “lack of cultural awareness on Ms Shaw’s part”.

 

8.             Turning to the five specific allegations that the Tribunal found to be upheld, these were respectively allegations 7, 8, 11, 20 and 22 of the original 24.  The Tribunal took allegations 7 and 8 together; those were framed in these terms:

 

“(7) Ms Shaw ignoring the contributions of the Claimant and non‑English colleagues, and giving the example of printing World Check, in about March 2009 and June 2009, said to be direct discrimination and harassment.

(8) Ms Shaw ignoring the contribution of the Claimant over the credit check score below 100 issue, in March or April 2009, said to be direct discrimination or harassment.”

 

9.             The Tribunal deal with those two allegations, numbered 7 and 8, in paragraph 5(10) of their Judgment:

 

“Two graphic examples were given to us, which we accept, of inequality of treatment by Ms Shaw of the British and the non-British staff.  These are numbers 7 and 8 in the agreed table of allegations.  There was a dispute about the policy over whether an application with a credit check score below 100 should continue or not.  Ms Carrillo said that she thought the policy was to reject in any circumstances, but Mrs Robinson said this was not the policy.  The Claimant recommended Ms Shaw to contact the head of compliance who had previously advised her that the client should always be rejected if their credit score was below 100.  This information was not well received by Ms Shaw who immediately looked at the Claimant as if to say, ‘Who are you to give advice?’  Ms Shaw accepted that she went with Ms Robinson’s view until she contacted the head of compliance, and then on his advice presumably reversed the process, in effect acknowledging that the Claimant had been right.  A similar situation occurred over the identity checks on clients, which were saved directly under the clients’ accounts rather than printing them out.  The British staff denied that this was the policy, and Ms Shaw initially went with the British staff on this, but it turned out that in fact the Claimant was right and an email was received from Ms Shaw which advised that they no longer needed to print out the results of the credit checks.”

 

10.         Allegation 11 was framed in these terms:

 

“Ms Shaw ignoring the Claimant’s complaints about the build up of work and blaming the non-English staff, discussed with Ms Shaw on 31 July by the Claimant, said to be direct discrimination and harassment.”

 

11.         The Tribunal address that allegation in paragraph 5(8) of their Judgment:

 

“We find that Ms Shaw did side with these staff and was lenient about their actions towards the Claimant and the non‑British staff.  What was required by Ms Shaw was a much firmer hand, and strong action to deal with the on-going difficulties between the sets of staff.  One of the allegations that is made is that the British staff would cherry pick the new accounts they wished to deal with, and then pass on those that took time or were difficult to the Claimant and to Ms Ayala and Ms Carrillo.  When this was brought to her attention, it is fair to say that Ms Shaw did try to put some mechanism in place, by way of computer screening and the request to IT to ensure that the work was more evenly distributed from the outset.  However, she did not warn the perpetrators there and then that if they continued disciplinary action would be taken, which would have been the appropriate way to deal with the situation.  It is fair to say that Ms Shaw spoke to two of the non‑British staff who were doing this and it did stop for a time between February and July 2009. Ms Shaw clearly recognised that there was a division between what she called the old staff, in other words those who had been there longest, who were all British, and the new staff who were non‑British.  She discussed this with Ms Kassardijan and put in place team building events in February 2009 and a team social in September 2009.  However, we find that neither she nor Ms Kassardijan really did enough to stop what was going on and the problems continued.”

 

12.         Allegation 20 was as follows:

 

“Ms Shaw stating on the telephone to somebody else and about somebody else that ‘her first language is not even English’; on 26 August 2009, said to be harassment and victimisation.”

 

13.         The Tribunal deal with that allegation in paragraph 5(9) of their decision:

 

“We find that Ms Shaw had a natural affinity with the British staff and a background which she did not share with the Claimant and the other non‑British staff.  She may also have been somewhat intimidated by the British staff, and it was recognised by the Respondent that this was a difficult and problem department to manage.  However, there was a lack of cultural awareness on Ms Shaw’s part, and we find that she did make comments such as on the telephone about someone else in front of everyone in the department that she did not even speak English; and describing a Chinese client, rather than just the application he made, as dodgy by reference to the part of London that he came from or lived in.  This lack of awareness in this way was not remedied by any equal opportunities training within the Respondent at this time, and Ms Shaw never appeared to have received such.”

 

14.         The fifth and final allegation, number 22, was in these terms:

 

“Ms Shaw asking the Claimant: ‘Do you do the audits yourself?’ on 10 September 2009, said to be direct discrimination, victimisation and harassment.”

 

15.         The Tribunal deal with that allegation in paragraph 5(11) of their Judgment:

 

“On 10 September 2009, a member of the audit team came to the department to ask Ms Shaw if her team did the audits themselves, as some applications were audited by the same people who had processed the application.  The audit team member made it clear that this should not happen.  Ms Shaw, who had apparently authorised the IT team to do the automatic auditing in the ordinary use of the manual auditing, called over to the Claimant and asked her, ‘Do you do the audits yourself?’ That request was not directed to anybody else in the room, and the Claimant felt humiliated as Ms Shaw appeared to be blaming her in front of the team for something that was not her error.”

 

16.         As will be evident, we have thus far mentioned how the allegations are each addressed in sub‑paragraphs of paragraph 5 of the Tribunal’s Judgment.  Paragraph 5 is the paragraph in which the Tribunal seek to give their findings of fact.  The conclusions of the Tribunal on the five allegations are however contained in paragraph 9 of their Judgment.  Sub‑paragraph (2) thereof deals with the allegations in so far as it is said that they amount to harassment, and paragraph 9(3) deals with those allegations and the assertion that they amount to direct discrimination.  On the conclusions expressed in those two sub‑paragraphs, the Tribunal uphold the claims in relation to each of them.  They read:

 

“9(2) However, with regard to the claim of harassment, we find in relation to the complaining against Ms Shaw, that the allegation of harassment is made out by reference specifically to complaints numbers 7, 8, 11, 20 and 22, but we also bear in mind the evidence we have heard about the behaviour of Ms Shaw in the workplace to the Claimant and to her non-English colleagues, the favouritism towards English staff, the inappropriate remarks etc.  We conclude that that treatment had the effect of creating a humiliating, degrading and offensive environment for the Claimant.  It has not been established that Ms Shaw did this on purpose, and we believe that equal opportunities training and the like would have assisted Ms Shaw to recognise and moderate her behaviour.  The Respondent organisation failed to fulfil their obligations in this regard at the material time.  We find that the Claimant was not over-sensitive to the situation.  The comments made by Ms Shaw from time-to-time were not meant as a joke and the Claimant did not take them in the wrong way.  We bear in mind the case of Reed v Stedman.

9(3) We also conclude that the allegations for harassment that has been established are also made out as claims of direct discrimination.  We apply the burden of proof test as is appropriate under section 54A, as this is a case that is clearly based on national origins rather than simply on the nationality of the Claimant.  We conclude that the Claimant has established a prima facie case and less favourable treatment on the grounds of her national origins, burden of proof test as is appropriate under section 54A, as this is a case that is clearly based on national origins rather than simply on the nationality of the Claimant.  We conclude that the Claimant has established a prima facie case and less favourable treatment on the grounds of her national origins, supported as it is by her witnesses.  The Respondent has not established on the evidence that the reason for the less favourable treatment was not discriminatory.”

 

The Grounds of Appeal

17.         Before turning to the grounds set out in the Notice of Appeal before us, Mr Sethi took what could accurately be described as a pleading point.  He sought to demonstrate, by reference to the Claimant’s substituted particulars of claim and her further and better particulars (which she had, on request, given of those substituted particulars) that the complaints, or at least some of them, were of harassment on the grounds of nationality and, moreover, in some cases appeared to relate to the nationality of others.

 

18.         As he correctly submitted, in contrast to a claim of direct race discrimination, which may relate to either nationality or national origins, a claim of harassment may only relevantly relate to “national origins” (see sections 1 and 3A, contrastingly, of the Race Relations Act 1976 as amended).  He accordingly submitted that, on the pleaded case, the Employment Tribunal had erred in law.  It was only when in the course of her reply Ms Brown indicated that nothing to the effect of this submission appeared in the grounds of appeal; that Mr Sethi initially gave notice that he would seek to apply to amend the Notice of Appeal.  Such an application was not however pursued, and we need, at this stage in our Judgment, to say nothing further about it.

 

19.         We return therefore to the grounds of appeal proper.  They contain what can be summarised as four grounds of appeal: (1) misdirection in law; (2) a conclusion in relation to allegation 11 that cannot be sustained; (3) perversity; and (4) want of reasons.  The grounds have been developed by Mr Sethi in his skeleton and in his oral submissions before us today.  For Ms Kurt we have had a helpful skeleton argument and succinct oral submissions from Ms Brown, essentially supporting the Employment Tribunal’s decision, and maintaining that it had directed itself faithfully to the law and had given adequately reasoned and sustainable conclusions.

 

20.         As the argument for the company advanced by Mr Sethi developed, it became clear that there was very considerable overlap in the four grounds.  In essence Mr Sethi’s submission was that the Employment Tribunal had not adequately discharged its proper function in determining these sensitive claims of discrimination and harassment and, most particularly, had failed to meet the requirements of rule 30(6) of the Employment Tribunals Rules of Procedure.  It will be recalled that rule 30(6) specifies what it is that written reasons for a Judgment shall include, and at sub-paragraph (e) provides that the Judgment shall explain:

 

“how the relevant findings of fact and applicable law have been applied in order to determine the issues.”

 

21.         Almost every discrete aspect of the grounds of appeal as developed by Mr Sethi collapsed in the end to the proposition that even if, contrary to his discrete submissions, the Tribunal had directed itself correctly on the law and the evidence, one could not see from the Judgment precisely how, on each of the five allegations, the Employment Tribunal had come to the conclusion that there was discrimination or harassment in relation to each of them.

 

22.         The Employment Tribunal’s self-directions of law contained in part 6 of their Judgment were the subject of no criticism by either party, and we are satisfied that it cannot be said that the Employment Tribunal failed to identify the correct legal provisions.  Everything turns on the way that a Tribunal deploys and applies the law to the facts.  In relation to the claims of harassment brought under section 3A of the Race Relations Act 1976, the Judgment in Richmond Pharmacology Ltd v Dhaliwal [2009] IRLR 336 provides a model example of how a Tribunal should go about its task.  In the Judgment of this Employment Appeal Tribunal, given in that case by Underhill P, the Tribunal carefully analysed section 3A and explained how it broke down into necessary elements of liability and how a Tribunal might sensibly approach a determination of whether there had been harassment or not, contrary to the terms of section 3A.

 

23.         That was a case of a single allegation of harassment; this case presently before us involved, as we have indicated, a multiplicity of allegations and at the end of the day some five allegations were sustained.  We accept Ms Brown’s submission that it was not necessary, in a case of multiple allegations, to take the point-by-point approach in relation to each and every one in the manner suggested in the Richmond Pharmacology case.  In some circumstances, closely related allegations can be sensibly treated together.

 

Discussion and conclusion

24.         With greatest respect to this Employment Tribunal we have, from our very first separate individual readings of this particular Judgment, been anxious about its ability to sustain the decision or order that the Employment Tribunal made.  Our concerns range from, at one level, the Employment Tribunal’s inability to supply either the parties or ourselves with a single coherent corrected copy of its full Judgment.  At the other end of the spectrum, we have a real anxiety that the findings of fact, reasoning and conclusions simply do not coalesce into a coherent whole.  Having now had the benefit of hearing the Judgment analysed by both counsel, and having stepped back, re-read and considered it afresh, we are not satisfied, sadly, that this is a Judgment we can properly uphold.

 

25.         Ms Brown understandably relied on the omnibus words used by the Tribunal to introduce their conclusions in paragraph 9.  Those words are:

 

“Having regard to our relevant findings of fact, applying the appropriate law, and taking into account the submissions of the parties, the Tribunal has reached the following conclusions: [...]”

 

26.         In our judgment, that sort of introductory observation will not suffice to sustain two very short sub‑paragraphs of conclusions in relation to serious and sensitive allegations of race discrimination and racially-based harassment.  The Tribunal heard and read extensive evidence; they were provided with submissions both orally and in writing by counsel on each side.  In our judgment, this Employment Tribunal has not done justice to the evidence, the case or the submissions in expressing itself in the terms it here has. 

 

27.         By way of illustration only of our underlying concerns, we would mention the following examples.  First, there are various unexplained mismatches between the pleaded case of Ms Kurt and the basis upon which the claims were in the end decided.  Secondly, there is a failure by the Employment Tribunal to address the obvious point that, having found adversely to Ms Kurt on credibility in relation to the vast majority of allegations, it needed to take account of that in reaching a judgment on the others, and to state that it was doing so.  Thirdly, allegation 11 was that Ms Shaw had:

 

“[…] ignored the Claimant’s complaints about the build up of work and blamed the non-English staff.”

 

28.         Essentially that was an allegation of a failure to respond to a concern expressed by a member of staff to a manager about the unfair distribution and build up of work.  The Tribunal’s consideration of allegation 11, dealt with at paragraph 5(8) of their findings of fact, in the event records that Ms Shaw did recognise that there was a division between these staff and in relation to the distribution of work, and that matters were put in hand to address it.  Ms Brown urges upon us that a reading of that sub‑paragraph could support an allegation that, having taken up the matter in response to the Claimant’s complaints, the Manager did not see it through to an appropriate conclusion.  But that appears to us to be very different from “ignoring” the complaints, which is the matter Ms Kurt alleged.  The Employment Tribunal, in our judgement, were bound to go on to explain how they were satisfied that whatever was left of that allegation amounted to discrimination and/or harassment.

 

29.         Fourthly, we refer to allegation 20. That was the allegation about what Ms Shaw was overheard saying to another person about another person by use of the words “her first language is not even English.”  It will be recalled that the Tribunal found that to be an instance of direct discrimination even though it was not directed to Ms Kurt at all.  Very sensibly, Ms Brown was driven to concede that on that point the appeal would have to be allowed; it had not, as she reminded us, been part of the Claimant’s case that that incident amounted to direct discrimination, but was, rather, confined to harassment alone.  However, on the face of it Mr Sethi’s submissions to us that such a remark was not capable, taken in context, of amounting to harassment, are attractive, if not compelling.

 

30.         Fifthly, the central character in the five allegations upheld by the Tribunal was Ms Shaw, Ms Kurt’s manager.  In relation to each of the five allegations upheld there is sparse, if any, reference to what the Employment Tribunal made of Ms Shaw’s evidence and her account of each matter.  As Mr Sethi reminded us, there are no adverse findings made by the Tribunal in relation to Ms Shaw’s credibility on any of the five matters.  That is particularly important, it seems to us, where an issue is the grounds or reasons why an alleged discriminator appears to have acted as they are alleged to have done.  The point in Mr Sethi’s submissions is, he says, driven home by what he alleges is an internal inconsistency in paragraph 9(2) of the Tribunal’s conclusions.  There, at one point, the Tribunal say that it had not been established that Ms Shaw had done what she was said to have done “on purpose,” but at the end of the same sub‑paragraph the Tribunal find that Ms Shaw’s comments were “not meant as a joke.”  One has to ask in those circumstances what precisely it was the Tribunal were finding Ms Shaw was doing and why, not in the sense of motive but motivation.

 

31.         Sixthly, Mr Sethi reminded us that it had been an essential part of the submissions made to the Tribunal that the allegations that were found and upheld were either wholly or mainly minimal.  We can, having set out those five allegations in our Judgment and having given them careful consideration, understand why that might have been a submission made.  The Tribunal’s Judgment wholly fails to address or deal with that submission.  Again, we do not consider this a case in which the generic words opening paragraph 9 of the Tribunal’s Judgment can sustain it.

 

Outcome

32.         We have given six examples.  We could go on.  There are several, if not many, others.  It is not, however, necessary to labour this Judgment by doing so.  We are satisfied, and have reached a clear and unanimous conclusion, that this Employment Tribunal’s Judgment cannot sustain the orders or ultimate decisions that it made.  It follows that this appeal must be allowed.  We have been invited to consider what course to take consequent upon that decision.

 

33.         As we have already indicated, Ms Brown was driven to concede that at least one part of one allegation would lead to the appeal being allowed.  Mr Sethi urged in his written submissions that this was so clear a case that we ought to be able to decide it for ourselves, and to find that none of the five matters were capable of amounting to racial discrimination or harassment on the grounds of national origins.  We reject that invitation.  It seems to us that, in Mr Sethi’s own words, these are cases and allegations of considerable sensitivity, on which the proper findings of fact and consideration of the evidence will be all.  It seems to us that the proper place for such consideration is in an Employment Tribunal.  We therefore reject the invitation to determine the matter ourselves.

 

34.         The next question is whether we should remit the matter to a newly‑constituted Tribunal or to the same Tribunal.  We had the benefit of a written note from Mr Sethi encouraging us to remit to a differently‑constituted Tribunal.  We do not consider it necessary to provide Ms Brown with an opportunity to respond to that submission.  As we have already indicated, we consider this Tribunal’s Judgment upon the claims of Ms Kurt unsatisfactory in a large number of respects.  It seems to us that it would not in those circumstances be fair to either party to remit the matter to a Tribunal of the same constitution.  In those circumstances, we shall remit for further consideration by a differently‑constituted Tribunal the five numbered allegations which have thus far been referred to in our Judgment.