United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR DAVID STEPHENSON (of Counsel) Instructed by: TMP Solicitors LLP One Canada Square London E14 5DY
For the Respondent	MR JAKE DAVIES (of Counsel) Instructed by: London Borough of Ealing (Legal and Democratic Services) Percival House 14-16 Uxbridge Road London W5 2HL


 


SUMMARY

RACE DISCRIMINATION / DIRECT

An ET dismissed complaints that the Claimant had been discriminated against on the grounds of race. It did not when doing so distinguish between direct discrimination, harassment, and victimisation, under each of which heads the claim had been advanced. Although no appeal was made as to the conclusions in respect of direct discrimination or harassment, the Claimant appealed on the basis that he had referred often during his employment to having been discriminated against, and said he had suffered detriment as a result of doing so. Since, however, he had not used the word "discriminated" in any sense other than that he had been unfairly treated, never linked it to race or another characteristic protected by the 1976 or 2010 Acts, and when given the opportunity to say it was on the ground of race effectively explained it was not, there was no complaint which could be understood as one of race discrimination and hence his claim for victimisation had rightly been dismissed.

An argument that the Tribunal should not have dismissed Ealing Borough Council as a Respondent to the proceedings because it was potentially vicariously liable for acts of discrimination which had allegedly been committed by someone who had been a co-employee of the Claimant in the service of Ealing Homes at the time of the acts, but had subsequently become an employee of Ealing Council pursuant to a transfer of undertaking, such that the Council was liable as her successor employer, had not been advanced to the ET, and could not properly be entertained on appeal.

The appeals were dismissed.


 


THE HONOURABLE MR JUSTICE LANGSTAFF (PRESIDENT)

1. At common law, an employer will be liable for the torts of his employee which have a sufficiently close connection to his employment whereas, in cases where discrimination is alleged, the liability of an employer for prohibited conduct alleged to have been committed by one of its employees is defined by section 109 of the Equality Act 2010. Although the most interesting question which arises in the grounds of this appeal asks which employer is liable for discrimination committed by an employee in the course of her employment, where, after the act has been performed, her employment is transferred under TUPE from one employer to another it does not require a conclusive answer, for reasons set out below.
2. In reasons delivered on the 19^th July 2012 Employment Judge Liddington explained why, at a preliminary hearing review at Watford, the proper Respondent to claims of disability discrimination and of suffering detriment as a result of having made protected public interest disclosure was held to be the employer of both the Claimant and the alleged perpetrator, at the time the acts were committed, although the contract of the alleged perpetrator had subsequently been transferred under TUPE.
3. This was not the only issue on appeal. The Appellant represented by Mr Stephenson of Counsel, raised seven grounds, which divided into three general topics: the first of which was whether in striking out complaints of race discrimination the Employment Tribunal had been so fixated upon direct discrimination and harassment on racial grounds as effectively to fail to consider the case which had been raised of victimisation, contrary to Section 2 of the Race Relations Act 1976 or Section 27 of the Equality Act 2010. It is argued it should not have struck out the victimisation claims along with the other two types of claim under the heading of Race Discrimination (in respect of the striking out of which there is now no appeal); or insufficiently explained why it did so (Ground 7). The second group of grounds argued were grounds 3 and 4, raising the issues with which this judgment began; and the third and related group, that the Tribunal failed properly to determine the issues applicable to the Claimant (as opposed to the alleged perpetrator) which arose under TUPE.

The Facts

4. It is necessary to set these contentions in their factual context.
5. In 1991, the Claimant began to work as a Housing Benefits Visiting Officer (a member of the Tenancy Support Team) for the London Borough of Ealing ("Ealing"). He had a second job, also for Ealing, as a canvasser for Electoral Services, which was both part-time and voluntary.
6. On 6^th September 2004, the Claimant's employment as a Housing Benefits Visiting Officer was transferred under TUPE, along with the contract of others in the Tenancy Support Team, to Ealing Homes ("Homes"). On 1^st April 2011, some staff who had been working for Homes were transferred (in some cases, back) to the employment of Ealing. The Claimant was not, however, re-transferred: on the day before the transfer might otherwise have taken effect, the Claimant was dismissed by reason, purportedly, of redundancy.
7. His employment had latterly, however, been under the shadow both of accusations and illness. On 16^th April 2009 it was alleged that whilst working as a canvasser he had forged a number of canvass forms and submitted a canvass certificate which he knew to be false. He was prosecuted, and on 1^st February 2010 acquitted. Notwithstanding, he was subject to discipline at a hearing on 2^nd June 2010. He was given a final written warning, effective for three years. An appeal was rejected. Shortly after that, on 23 July 2010, a complaint was made by a tenant that the Claimant had taken rent receipts from her, which he had refused to return. When that allegation was investigated, she alleged also that he had asked her to make a false statement to help him defend the criminal charges against him, and had offered her an inducement to do so. He was suspended from work on 8^th November 2010. On 3^rd December 2010, whilst suspended, he suffered a heart attack and never returned to work: he was disabled from that date.
8. On 23^rd December he was told that his employment was liable to be terminated by reason of redundancy with effect from 31^st March 2011. Funding, known as the Supporting People Funding, which went to support the work of the Tenancy Support Team, was to cease after that date. As part of discussions around the redundancy, the Claimant was invited to consider the descriptions of four alternative jobs. He was not appointed to any.
9. A disciplinary meeting to consider the allegations made by the tenant was scheduled for 26^th January 2011: the Claimant was asked to obtain medical evidence if he claimed he was unfit to attend. He did so. There was no hearing.
10. He submitted a lengthy grievance on 18^th March alleging bullying and harassment. That remained unresolved at the termination of his employment.
11. In his ET1, the Claimant maintained that his dismissal was not truly by reason of redundancy, but for a prohibited reason (race, disability, TUPE transfer, or protected disclosure); it was unfair; he had been dismissed or subjected to a detriment for exercising rights under the Public Interest Disclosure Act – he identified eight separate disclosures – and that he had been harassed on racial grounds and subjected to less favourable treatment on the grounds of his colour, race or ethnic origin or because he made a complaint about discrimination: (he is British, of Pakistani origin). He set out 17 separate detriments to which he alleged he had been subject.
12. The Tribunal rejected allegations of direct race discrimination, and harassment. There was insufficient to show that any act or omission had been connected with his race. It reasoned that although the Claimant had relied upon race discrimination in his ET1, the "very considerable documentary evidence" did not provide any support for discrimination on the grounds of race:

"On the contrary, the evidence is that the claimant did not attribute any treatment to the fact that he is British of Pakistani origin even when specifically invited to do so… at his Appeal Hearing, nor in his detailed grievance of 16 March 2011."

The Tribunal dealt with the three different heads under which race discrimination could be asserted – direct discrimination, harassment, and victimisation – in a portmanteau fashion. It did not separately analyse the evidence in respect of each. After having dealt with the fact that the race discrimination complaint was based only upon the Claimant's "perception", which was unsupported by any evidence, the judge concluded at paragraph 25:

"Having considered the evidence, I am convinced that the respondents to those allegations would be able to satisfy a tribunal of a non-discriminatory reason for their actions. For example, there were grounds for R1 to report what it believed to be the claimants' fraudulent acts to the police, notwithstanding the fact that the claimant was ultimately found not guilty in the criminal court. There is no evidence to support the contention that the claimant's race was the reason for R1's actions in this respect. Similarly, R2's decision to discipline the claimant for bringing the respondent into disrepute was not because of his race nor can the claimant point to any comparator in similar circumstances who had been treated more favourably nor to any evidence that R1 "aided and abetted" R2 in this. Later, it was NM's complaint which led to R2 commencing a disciplinary investigation against the claimant. He can produce no evidence that, as he alleges, R1 or R2 or any of their employees encouraged or enticed NM to raise her complaints and that it or they did so on the grounds of the claimant's race. The claim that the claimant's dismissal was for a reason related to his race is not supported by any evidence.

26. I therefore find that the claimant's complaint of race discrimination should be struck out as having no prospect of success under Rule 18 (7) B of the Regulations…"

13. The Tribunal held that the removal of the support from Supporting People Funding was the reason for the dismissal as redundant of the Claimant. It found that the Claimant was dismissed by Homes, albeit on the day before the transfer took effect:

"…for a reason not connected with a transfer but rather for the reason of redundancy resulting from the withdrawal of the Supporting People Funding"

Since the Claimant had never been in the employment of Ealing at any time relevant to the claims he made, having been made redundant from the service of Homes without being transferred to Ealing, it held that the Claimant had no right which he could assert against Ealing, and that Ealing should be discharged from the proceedings.

Grounds of Appeal

14. Mr Stephenson argued that although the Claimant had alleged victimisation, and the same Employment Judge had, at a case management discussion on 8^th November 2011, identified four protected acts, in response to which the Claimant said he was treated to his detriment, the Tribunal in its conclusions had not separately dealt with each, but had focussed instead upon direct discrimination to the exclusion of dealing with victimisation. Victimisation is prohibited conduct, defined by Section 27 of the Equality Act 2010:

"(1) A person (A) victimises another person (B) if A subjects B to a detriment because -

(a) B does a protected act, or

(b) A believes that B has done or may do a protected act."

15. It is not necessary for there to be victimisation that the Tribunal finds that A has acted on the grounds of race, or because of race (if that be different): the causative link to be established under the statute is between the act detrimental to B and his having earlier done a protected act. The four protected acts which were relied upon were:-

(i) a complaint in February 2008 to his line manager that Homes had no interest in dealing with issues of harassment and bullying in the workplace;

(ii) a written complaint to a manager of R2 around, May 2010, about the outcome of the criminal and internal disciplinary processes to which the Claimant had been subject;

(iii) a complaint to the chief executive of Homes during the appeal in September 2010 that he had been racially discriminated against;

(iv) a complaint of being "tortured and persecuted" in November 2010 in the course of a disciplinary meeting.

In addition to those which had been identified at the CMD he had complained orally of discrimination in June 2010 at the disciplinary hearing of June 2010; and had written of it in a grievance on 16^th March 2011. The Tribunal had simply failed to consider his complaints that he had been victimised on those grounds. It failed (ground 2) to identify why his victimisation claim was held to have no reasonable prospect of success – particularly since it had thought that it was arguable that whistle-blowing complaints may have led to acts detrimental to the Claimant (see paragraph 37 of the Reasons). The reasons given for rejecting the claim of victimisation were not compliant with Meek v City of Birmingham District Council [1987] IRLR 250, nor with Rule 30 (6) of the Employment Tribunal Rules which prescribe the necessary contents of a judgment, including how the relevant findings of fact and applicable law had been applied in order to determine the issues.

16. As to the dismissal of Ealing from the proceedings, Mr Stephenson raised an argument which, it appears was not raised below. He submitted that most of the actions which were complained of by the Claimant were those of Peta Caine. She had been a senior manager working in Tenancy Support. On 1^st April she moved from Homes, where she had been employed as the Claimant's superior, to Ealing. In Section 109 of the Equality Act 2010 it is provided under the heading of 'Liability of Employers and Principals':

"(1) Anything done by a person (A) in the course of A's employment must be treated as also done by the employer

(2) Anything done by an agent for a principal, with the authority of the principal must be treated as also done by the principal

(3) It does not matter whether that thing is done with the employer's or principal's knowledge or approval

(4) In proceedings against A's employer (B) in respect of anything alleged to have been done by A in the course of A's employment it is a defence for B to show that B took all reasonable steps to prevent A –

(a) from doing that thing or

(b) from doing anything of that description."

17. Regulation 4 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") provides materially as follows: -

"(1) Except where objection is made under paragraph (7), a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to the relevant transfer, which would otherwise be terminated by the transfer, but any such contract shall have effect after the transfer as if originally made between the person so employed and the transferee.

(2) Without prejudice to paragraph (1), but subject to paragraph (6)… on the completion of a relevant transfer –

(a) all the transferor's rights, powers, duties and liabilities under or in connection with any such contract shall be transferred by virtue of this regulation to the transferee; and

(b) any act or omission before the transfer is completed, are or in relation to the transferor in respect of that contract for a person assigned to that organised grouping of resources or employees, shall be deemed to have been an act or omission of or in relation to the transferee."

18. The transferor had a liability under or in connection with the contract of employment of Ms Caine, because under Section 109 it was liable for her actions. That liability transferred to Ealing under the transfer. It had been decided in Bernadone v Pall Mall Services Group and others [2000] IRLR 487, C.A. that the liability in tort of a transferor to an employee transfers to the transferee under what is now regulation 4 (2) (a) of TUPE. Although such a tortious liability did not arise under the contract of employment, the court held that it arose "in connection with" that contract. Council Directive 2000/43/EC, implementing the principle of equal treatment between persons in respect of racial or ethnic origin, provided by Article 15 for sanctions applicable to infringements of national provisions adopted pursuant to the directive to be effective proportionate and dissuasive. One of those remedies under Section 124 (2) of the Equality Act 2010 is that a Tribunal should make "an appropriate recommendation". If, for instance, the Tribunal here felt that Peta Caine required equality training, and wished to recommend it, this would not be effective unless it were addressed to her current employer – the transferee. This reasoning supported a conclusion that liability for her act toward the Claimant, if established, passed to Ealing from Homes such that Ealing should not have been discharged from the proceedings.
19. The Claimant relied upon the Court of Appeal judgment in Jones v Tower Boot Co. Ltd. [1997] ICR 254. That took a purposive approach to the provisions contained in Section 32 of the Race Relations Act 1976. Those provisions are materially the same as those in Section 109 of the Equality Act 2010. That case considered the scope of the statutory equivalent to the common law principle of vicarious liability. The statutory words "in the course of his employment" were accepted by the Appeal Tribunal as invoking the same principles as would have applied if the matter had been one of vicarious liability of the employer at common law. The acts complained of as being acts of racial discrimination included burning the arm of the Claimant with a hot screw-driver, whipping him on the legs with a piece of welt, throwing metal bolts at him, and trying to put his arm in a lasting machine. Offensive and denigrating terms of racial abuse had been used. On the test then thought to be applicable to cases in which vicarious liability was asserted, an employer was not liable for acts which might be regarded as a mode, albeit an improper mode of doing the work for which the tortfeasor employee was blamed. In short, the acts were so bad that it was asserted they could not be regarded as within the scope of the employee's employment at all^[1]. Mr. Stephenson argued that in accepting that the scope of the Race Relations Act should be more widely construed (anticipating in effect, the developments there have since been in the common law) a purposive construction was adopted, and should be adopted here to the Equality Act. He relied particularly on a passage in the judgment of Waite LJ at 263H to 264B:

"(The submission that Parliament must have intended the liability of employers to be kept within reasonable bounds) I would reject… it cuts across the whole legislative scheme and underlying policy of Section 32 (and its counterpart in sex discrimination) which is to deter racial and sexual harassment in the workplace through a widening of the net of responsibility beyond the guilty employees themselves, by making all employers additionally liable for such harassment and then supplying them with the reasonable steps under Section 32 (3) which will exonerate the conscientious employer who has used his best endeavours to prevent such harassment and will encourage all employers who have not yet undertaken such endeavours to take the steps necessary to make the same defence available in their own workplace."

Respondent's Submissions

20. Mr Jake Davies of Counsel submitted that the judgment dealt clearly with each of the alleged protected acts. If the Claimant had the perception that he had been treated as he had been because of his race, it was a perception which was unexpressed at the time. In none of the protected acts was there any such expression. In none did he say that he had referred to race; and although he mentioned the word "discrimination" he had made it clear, in response to his employer's questions, that by that word he did not mean to suggest racial discrimination, but merely unfair treatment.
21. Homes had accepted that it would be liable for any discriminatory act performed by Ms Caine, or other employees who had been in its service and transferred to Ealing on 1^st April 2011. There was thus no good policy reason for maintaining Ealing as a Respondent. But in any event Regulation 4 of TUPE focuses not on the contract of the tortfeasor: it is the contract of the Claimant which one should focus on. A common law duty of care is owed to the Claimant: so, too, are the equivalent duties under equality legislation. Moreover, it was not argued at the pre-hearing review that Ealing should be kept in the case as a Respondent on the basis that it was liable as transferor of the contracts of those who had committed acts against the Claimant whilst they had been in the employment of Homes. The argument by reference to the position of Ms Caine had not been advanced below. In Glennie v Independent Magazine (UK) Ltd [1999] IRLR 719, the Court of Appeal adopted the principle set out by Arnold J in Kumchyk v Derby City Council [1978] ICR 116, to the effect that it would in almost every conceivable case be unjust to permit the consideration of a new point of law on appeal where it had not been taken below: and it was certainly not enough that the point was not taken owing to what was, or turned out to be, a wrong tactical decision by the Appellant or his advocate. As Laws LJ said (paragraph 18):

"It is a general principle of the law that it is a party's duty to bring forth the whole of his case at the proper time… a new point ought only to be permitted to be raised in exceptional circumstances…"

Nor, submitted Mr Davies could the facts in this case be brought within the exceptional principles recognised by Robert Walker LJ in Jones v Governing Body of Burdett Coutts School [1998] IRLR 521, to which the court in Glennie made reference, since it could not be said that this court was in possession of all the material necessary to enable it to dispose of the matter fairly without injustice to the other party and without recourse to a further hearing below, since the extent of the alleged wrong doing of Peta Caine had not been set out.

Discussion

22. A Tribunal decision must be read as a whole. The question posed by the argument that the Tribunal did not deal in its conclusions explicitly with victimisation, as distinct from the issues of direct discrimination and harassment, has no weight if the facts found by the Tribunal, earlier in its decision, justified the conclusion that the claims of race discrimination should be dismissed. The reason why they were dismissed (viewed broadly) is that there was no evidence to support them. But it was also that the Claimant at no time during the extensive history on which he relied had raised racial discrimination as a complaint. If that finding of fact is justified then there could be no victimisation under Section 27 of the Equality Act – each of the protected acts referred to in Section 27 (2) is made referable to this Act. The complaint must be of conduct which interferes with a characteristic protected by the Act, such as race, not to a matter not protected by the Act, such as public interest disclosure. The only relevant protected characteristic asserted here was the Claimant's race. Similarly, insofar as the claim alleged acts to which the Race Relations Act 1976 applied, victimisation under Section 2 is defined entirely by reference to the 1976 Act. I would accept that it is not necessary that the complaint referred to race using that very word. But there must be something sufficient about the complaint to show that it is a complaint to which at least potentially the Act applies. As Mr Davies points out, the Tribunal found as a fact that the Claimant did not attribute any treatment (at the time) to the fact that he is British of Pakistani origin. That finding of fact alone means that there is no evidence that an employer, seeking to cause detriment to the Claimant as a result of making the complaints he did, could have been victimising him for a complaint made by reference to, under, or associated with the relevant Act. At his appeal in respect of the final written warning in September 2010 it was not disputed that when the Claimant said, as he did, that he had been discriminated against, the chief executive who was chairing the meeting asked him on what grounds he had been discriminated against. His response was that it was because another manager believed he had committed the offence even after he was acquitted. The Claimant did not suggest there was anything wrong about the conclusion made by the chief executive when rejecting the appeal when she said (see paragraph 12 of the Tribunal Rules):

"You have said that you feel discriminated against. After questioning, I understand that you meant not that you had been discriminated against on grounds of your ethnicity or any other protected characteristic but rather that you felt generally that you had been unfairly treated."

23. The Tribunal here thus expressly recognised that the word "discrimination" was used not in the general sense familiar to Employment Tribunals of being subject to detrimental action upon the basis of a protected personal characteristic, but that of being subject to detrimental action which was simply unfair.
24. Mr Stephenson set out the evidence which there was in respect of the disciplinary meeting on 2^nd June 2010, which it is agreed was referred to before the Tribunal. In the course of that the Claimant had complained that he felt discriminated against even though he had been found not guilty of the criminal charges. He was asked:

"Q: You feel discriminated, on what grounds?

A: I'd say discrimination – victimised on the grounds that I have worked for the organisation for eighteen years. I have done canvassing for a long time.

Q: What do you mean by discrimination? How have we victimised you as an organisation?

A: I refer to my solicitor's letter where my solicitor approached the prosecution and said I feel you have been very heavy handed.

Q: I understand, I can imagine it must be horrendous for you and your family. When you say 'discrimination' I want to find out why.

A: I know discrimination has different meanings

Q: It's not discrimination but victimisation you feel?

A: OK, it is a victimisation issue. I go completely blank… I have been on anti-depressants; my mind is completely blank, what they have done to me, what London Borough Ealing has done to me. I have done this job for so many years, I know you will get checked when the forms are handed in. Why would I forge 36% of the forms?"

This does not support any suggestion that the Claimant was advancing a case that he had been discriminated against or victimised on the grounds of race,or complaint of discrimination on such a ground.

25. In his grievance of 16^th March, the Claimant again used the word "discrimination". Mr Stephenson tells us that he that he said that he had been discriminated against by being used as a scapegoat. He did not, according to his submissions, then use the word "race", or any word which might suggest that.
26. In short, the Tribunal could have dealt separately and distinctly with the heads of direct discrimination, harassment, and victimisation rather than rolling them together. But it is sufficiently plain that it considered the acts which were said to be complaints of discrimination. It concluded that they had no express relationship to race. It therefore concluded that if any act was proved to have been taken in response by the employer to those complaints, it would not amount to victimisation under either of the applicable statutes.
27. This case should not be taken as any general endorsement for the view that where an employee complains of "discrimination" he has not yet said enough to bring himself within the scope of Section 27 of the Equality Act. All is likely to depend on the circumstances, which may make it plain that although he does not use the word "race" or identify any other relevant protected characteristic, he has not made a complaint in respect of which he can be victimised. It may, and perhaps usually will, be a complaint made on such a ground. However, here, the Tribunal was entitled to reach the decision it did, since the Claimant on unchallenged evidence had been invited to say that he was alleging discrimination on the ground of race. Instead of accepting that invitation he had stated, in effect, that his complaint was rather of unfair treatment generally.
28. In short, sufficient was said by the Tribunal in its decision, taken as a whole, to justify the conclusion of the Tribunal that he had no reasonable prospect of success in a claim for victimisation for having raised a complaint relating to racial discrimination. Its reasoning was clear enough to meet the requirements of Meek and r.30 (6).
29. Turning to the question of discharge of Ealing from the proceedings, the principle recognised in Glennie, and Jones v Burdett Coutts is that it will be in exceptional cases only that an Appellant may complain about the decision of a Tribunal on a ground not argued below. Here, it might be said that the argument that Ealing remained liable for such discriminatory actions as were proved to have been committed by Peta Caine is a pure point of law, turning upon the interpretation and application of TUPE. However, the argument does involve factual enquiries which the Tribunal could have, but did not make, because it was not alerted to the specific need to make them. Thus the argument depends upon Peta Caine being the person responsible for acts of discrimination (race, disability, and public interest disclosure) against the Claimant, and her having been transferred as part of a transfer of undertaking to Ealing. The need for more facts is underlined by a submission made by the Claimant that the Tribunal should have but did not, examine the question whether there was an organised grouping of employees, or resources which had been transferred under Regulation 3, of which Peta Caine was part. Ground 6 requires such findings of fact to be made.
30. The objection taken by Mr. Davies to this new argument is thus well-founded. I accept his arguments. It would in my view be contrary to principle to allow it to be taken now especially since further findings of fact would have had to be made (or at least the opportunity offered to the parties to address them evidentially).
31. For those reasons, interesting though the point is, and although it was canvassed extensively in argument before me, de bene esse, I have to decline the tempting invitation to pronounce upon it.
32. No point properly arises in relation to the Claimant's own position under TUPE. The Tribunal found as a fact that the transfer was no part of the reason for his dismissal. That conclusion was not even arguably perverse and must stand. Accordingly, Ealing owed no duty nor inherited any liability directly to the Claimant at any relevant time.

Conclusions

33. It follows that the appeal must be dismissed. The Claimant had no arguable case of victimisation, since the Tribunal found he had raised no complaint which was to be understood as alleging treatment contrary to the Race Relations Act 1976 or Equality Act 2010 and thus could not have been victimised for doing so. Ealing was not to be kept in the proceedings on the basis of an argument that given the provisions of TUPE 2006 it was liable for discriminatory actions taken by an employee of Homes whose contract of employment had subsequently transferred to Ealing.

Note 1   The law has moved on since then: see in particular Lister v Hesley Hall Ltd [2001] UKHL22, the test adopted (see, eg paragraph 28) now being whether the tort of the employee is so closely connected with his employment that it would be fair and just to hold the employer vicariously liable.     [Back]