United Kingdom Employment Appeal Tribunal

Appeal No. UKEAT/0290/15/DM

 

 

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8AE

 

 

At the Tribunal

On 5 May 2016

Judgment handed down on 28 July 2016

 

 

 

Before

HER HONOUR JUDGE EADY QC

(SITTING ALONE)

 

 

 

 

 

 

MR T FENNELL   APPELLANT

 

 

 

 

 

FOOT ANSTEY LLP RESPONDENT

 

 

Transcript of Proceedings

 

JUDGMENT

 

 

 

 

 

 

 

 

 

 

APPEARANCES

 

 

 

 

 

For the Appellant	MR ALLAN ROBERTS (of Counsel) Instructed by: Kitsons Solicitors The Forum Barnfield Road Exeter EX1 1QR
For the Respondent	MR CASPAR GLYN QC (of Counsel) Instructed by: CMS Cameron McKenna LLP 2 College Square Anchor Road Bristol BS1 5UE

 

 

SUMMARY

AGE DISCRIMINATION

 

Direct Age Discrimination - section 13 Equality Act 2010 - burden of proof

The Claimant was a solicitor who had not been offered a new partnership under a restructuring exercise carried out by the Respondent firm, in which he had been a limited equity partner (“LEP”).  He complained this was because of his age (being aged over 45) and also made various other complaints about his earlier treatment by the Respondent in terms of an earlier decision that his poor performance meant he should leave the partnership (this decision being reversed after the Claimant had objected) and in respect of the subsequent performance process applied to him, the target set and the feedback the Respondent had given.

 

The ET rejected the Claimant’s complaints about this earlier treatment.  As for the Respondent’s decisions as to which of the former LEPs should be offered the new partnerships, although the ET accepted that the statistics relied on by the Claimant showed that “the prospect of obtaining equity membership diminishes with the age of the candidate”, it did not consider that the statistical picture did sufficient to shift the burden of proof to the Respondent.  It accepted the Respondent’s evidence that it had applied a multi-factorial approach to the question of selecting new partners and tested the Respondent’s case in respect of each of the LEPs relied on by the Claimant as actual (statutory) and hypothetical comparators.  Having done so, the ET accepted that decisions were made on an individual basis.  It did not accept that any of the other LEPs could serve as statutory comparators (there were material differences in circumstances).  Asking itself why the Claimant had not been offered one of the new partnerships, the ET was satisfied that this was unrelated to his age but was due to concerns as to his performance and a lack of confidence that he would be able to take the business forward.  The Claimant appealed.

Held: dismissing the appeal.

 

The ET had been entitled to conclude that the statistical picture alone did not shift the burden of proof to the Respondent.  It had then considered whether the Claimant had made out a prima facie case in terms of the comparisons he relied on but concluded that there were material differences between his case and those of the other LEPs.  It had not thereby erred in its approach to the burden of proof but had reached a permissible conclusion that the Claimant had not shown facts from which an ET could conclude that there had been unlawful discrimination.  Equally, in reaching that conclusion, the ET had not erred in its approach to the question of comparison: it had understood that it was having to assess the question of less favourable treatment - a comparative exercise - but did not consider that the actual comparisons relied on by the Claimant were apt.  Allowing for the possibility of a hypothetical comparator, the ET had referred back to its findings as to why the Respondent had taken the decisions it had in respect of the Claimant and the other LEPs.  Having tested the Respondent’s explanation, the ET was entitled to conclude that the Respondent had made good an explanation for its decisions that was wholly unrelated to age.

 

HER HONOUR JUDGE EADY QC

 

Introduction

1.                  I refer to the parties as the Claimant and Respondent, as below.  This is the Claimant’s appeal against a Judgment of the Cardiff Employment Tribunal (Employment Judge Beard, sitting with Mrs Kiely and Ms Lovell over six days in May and June 2015; “the ET”), sent out on 1 July 2015.  Representation below was as now.  By that Judgment, the ET dismissed the Claimant’s claim of unlawful age discrimination.  After an Appellant-only Preliminary Hearing, the Claimant’s appeal was permitted to proceed on the following grounds:

(1) whether the ET erred by failing to adopt the two-stage approach to the burden of proof as required by section 136 Equality Act 2010 (“EqA”);

(2) to the extent that the ET adopted a two-stage approach but found that the Claimant had failed to make out a prima facie case (such as to shift the burden to the Respondent), whether it thereby erred: (a) in applying too high a test for the Claimant, requiring him to show facts from which the ET would infer discrimination rather than could have done so, (b) in failing to properly address the Claimant’s case, and/or (c) in reaching a perverse conclusion;

(3) whether, in any event, the ET adopted the wrong approach in analysing the Respondent’s explanation;

(4) related to that, whether the ET reached a perverse conclusion in holding that the Respondent had provided an adequate explanation, specifically in relation to two named evidential/statutory comparators and aspects of that explanation;

(5) generally, whether the ET erred in failing to carry out a comparative exercise.

The Respondent resists the appeal, essentially relying on the reasons provided by the ET.

 

The Background Facts

2.                  The Respondent is a limited liability partnership of solicitors based in the West Country.  The Claimant is a solicitor with an expertise in corporate law who joined the Respondent as a limited equity partner (“LEP”) in 2011, when he was aged 49.  He subsequently retired from the partnership in July 2014, aged 52. 

 

3.                  During the Claimant’s time with the Respondent, his performance became an issue, specifically his low level of individual billing.  At an appraisal in May 2012, his performance had been considered excellent, but was seen as having “gone off a cliff” in the year that followed and the Respondent’s partners did not have confidence that he could improve.  The decision was taken that the Claimant should be removed from the partnership, leading to a meeting with him on 16 May 2013, when the Respondent expected he would agree to go.

 

4.                  That, however, is not what happened; the Claimant disagreed with the suggestion that he should leave the partnership.  There was a further meeting on 24 May 2013, when the Claimant took issue with the performance matters raised against him, albeit not making any complaint of age discrimination.  In the light of this response, the Respondent changed its position, instead determining that a performance review process should be followed, with targets set for the Claimant.  The ET rejected the Claimant’s contention that these had been deliberately set too high; rather they demonstrated flexibility on the part of the Respondent (paragraph 16.8). 

 

5.                  Thereafter, although the Claimant did not achieve the major target set, he was within what the ET described as the soft target range he had negotiated (paragraph 16.10).  It further found that he received feedback commensurate with that performance.

 

6.                  Meanwhile, and unrelated to the Claimant’s individual case, the Respondent had embarked upon a restructuring exercise.  As part of this, in January 2014, the Respondent determined it would no longer have LEPs; there would, instead, be a new grade of equity partner and employed legal directors.  Accordingly, on 4 February, the Respondent’s board met to determine how to place each of the LEPs.  The ET accepted the Respondent’s case that it adopted a multi-factorial approach, taking into account financial performance but also the partnership criteria, areas of practice, personal circumstances and, as a key factor, the potential for business development (ET paragraphs 19.3 and 23.3).  In considering these factors, the board had billing data for each LEP from 2011 to 2013, group leader assessments, each LEP’s last appraisal and a 360-degree feedback document (see the ET at paragraph 19.1).

 

7.                  In the Claimant’s case, the decision taken (communicated to him on 14 February 2014) was that he should be offered a role as a legal director, not one of the new partnerships.  That, the ET found, was based on the Respondent’s view of the Claimant’s performance, which it considered had been woeful for 2012/13 and that had undermined its confidence in him; a view not sufficiently repaired by the Claimant’s performance up to December 2013.  The Claimant objected to that decision, although it had been made clear that if he did not accept the legal director role offered he could no longer remain an LEP and, ultimately, would have to leave the Respondent.  That was indeed the decision confirmed to the Claimant on 14 March 2014, when he received a letter giving notice that the Respondent would be ending his partnership, placing him on garden leave until 12 July 2014.

 

The Case Before the ET and the ET’s Conclusions and Reasoning

8.                  The Claimant lodged an ET claim of direct age discrimination, arguing that, as someone falling in the category of those aged over 45, he was treated less favourably when compared to others in comparable positions aged under 45.  Specifically, he complained that this was the case in respect of allegations made by the Respondent that he was underperforming, in the setting of an unwarranted performance target, in giving unduly negative feedback, subjecting him to a performance process after initially attempting to remove him from the partnership, declining to offer him the new position of equity partner and ultimately in removing him from the partnership.  It was the Claimant’s case that the Respondent’s decision regarding the new roles to be given to the LEPs was based on age, not performance: it was, he submitted, telling that only one person aged under 45 was not offered equity partnership, whereas only one person over that age was offered it.

 

9.                  Whilst the ET found it was hard to see the relevance of the use of any particular age as a cut off point for these purposes, it accepted (paragraph 33.4) that “the prospect of obtaining equity membership diminishes with the age of the candidate” and allowed that:

“33.4. … the claimant has shown that he is of a particular age group and that he has been treated differently to others not within that age group.”

 

10.              By itself, however, the ET did not consider that shifted the burden to the Respondent:

“33.5. … this is not sufficient of itself to support a prima facie conclusion that the decisions were made on the grounds of age; more is required.  The claimant must demonstrate the Shamoon [v Chief Constable of the Royal Ulster Constabulary [2003] IRLR 285 HL] linkage.”

 

11.              More specifically, the ET found the Claimant was relying on a false syllogism: there was a greater risk of not being offered an equity partnership once over a certain age; the Claimant was over that age; that was thus the reason why he was not offered the partnership.  The ET considered there were other potential factors that could equally explain the decisions made; in the Claimant’s case, for example, that would include his individual billing performance in 2012/13.  On this aspect of the Claimant’s case, the ET concluded:

“33.6.5. In our judgement unless there is other evidence, either direct or inferential, from which we can see that the decision not to offer the claimant was because of the claimant’s age (whether that was the only reason or just a partial but operative reason) the statistics will not assist him.”

 

12.              The ET then stated that it needed to remind itself that it was not:

“34. … making a decision about whether anyone in the comparator group relied upon was treated more or less favourably than the claimant. …”

 

13.              On that basis, the ET considered (see paragraph 34.1) that the comparator group of LEPs relied on by the Claimant simply provided evidence relating to two questions.  First, was there a comparison?  Second, was there a difference in treatment because of age?  The ET did not consider that the other LEPs could amount to statutory comparators: having accepted the evidence of the Respondent that it considered each LEP as an individual and differing factors applied in respect of the decision in each case, the other LEPs could not meet the requirements of section 23 EqA 2010; there were material differences between their cases and that of the Claimant (see paragraph 34.2.1).  It had, further, already found (when considering the assessments made in respect of each individual LEP) that the evidence did not demonstrate that age was a factor in respect of any of these decisions (see paragraph 25).

 

14.              Turning specifically to the treatment of the Claimant and the “reason why” question posed in Shamoon, the ET was satisfied that the evidence made good the Respondent’s case that its decision to offer the Claimant a legal directorship rather than equity partnership had been based on its concern about his ability to generate business.  Whilst it still considered the Claimant was technically able, it had lost a measure of confidence in his ability to take the business forward.  These considerations were not related to the age group to which the Claimant belonged but had arisen from the Claimant’s performance in 2012 in terms of billing, his failure to achieve the specific figure required in the performance process of 2013/14 by the time of the review meeting and concerns about his ability to work with others, as raised in the report from Mr Worrell, the relevant group leader for the Claimant (see paragraph 34.3.3).

 

15.              Rejecting the Claimant’s complaints, the ET concluded the concerns about his performance raised in May 2013 had not been false, the earlier decision that he should be asked to leave the partnership was based on a genuinely held belief that he was unlikely to make significant improvement.  Following the Claimant’s entreaties, the Respondent had been dissuaded from its initial decision and had instead implemented a performance review process, by which the Claimant had the opportunity to convince it that he should remain a partner.  Age had not influenced either decision.  The performance targets set for the Claimant had not been unwarranted and were not due to his age.  The same was true of the feedback given when he had not achieved the target set (albeit meeting the softer target he had been allowed); it was not unduly critical and related to the Respondent’s view of the Claimant’s performance, not his age.  The decision to offer the Claimant a role as a legal director rather than partner was for the reasons set out above; it, too, was not made because of the Claimant’s age.  As for his removal from partnership, that was because he would not accept the new role of legal director and the previous role of LEP no longer existed; again, nothing to do with age.

 

The Parties’ Submissions

The Claimant’s Case

16.              Central to the Claimant’s case were the following three facts, accepted by the ET:

(1) Of the 24 LEPs, only one over the age of 45 was successfully appointed to the new equity partner position.  Of those under 45, only one was unsuccessful (see the finding at paragraph 33).

(2) In relation to financial performance, the Claimant was as good as, or better than, some LEPs younger than 45 who were selected for the new partnership (see paragraph 23.2).

(3) That was also true of three other LEPs, also over 45, who had also been unsuccessful.

 

17.              Turning to the first ground of appeal, the Claimant contends the ET adopted the wrong approach to the burden of proof, as defined by section 136 EqA.  Specifically, it failed to adopt a two-stage test, instead focusing on the Respondent’s explanation.  Whilst an ET can be entitled to move straight to the “reason why” question (Shamoon), it must then assume a prima facie case has been shown by the Claimant and proceed on that basis.  The ET had not done that here.  Moreover, in Anya v University of Oxford [2001] ICR 847 the Court of Appeal warned that the shortcut approach would not be appropriate in all cases, and, if adopted, the ET would need to specify it was taking that exceptional course, which this ET had not.  If that was what the ET had done (not entirely clear), it was not the appropriate course in this case.

 

18.              That led into the second ground of appeal, that the ET erred in finding that no prima facie case had been made out.  The Claimant’s case was not solely one of a difference of age and difference of treatment.  The Claimant was here relying on the striking statistical picture, which, together with the size of the pool in this case, meant that the statistics alone were sufficient to shift the burden.  The ET’s rejection of the Claimant’s case on the statistics as a false syllogism illuminated its error.  It had required him to show a logical and complete case that his treatment was because of age.  That was not the burden upon him.  The ET had been wrong to approach the statistics, as it seemed to have done, as insufficient to establish a prima facie case for an individual employee; see Essop v Home Office (UK Border Agency) [2015] IRLR 724, at paragraph 65, where the Court of Appeal appeared to be prepared to accept that statistics were in principle sufficient to establish a prima facie case of discrimination in each individual case. 

 

19.              In any event, the ET wrongly failed to engage with the prima facie case it had effectively identified - the older you were, the less likely you were to obtain equity membership - let alone the case the Claimant was putting forward, that the older you were the more likely you were to face criticisms of performance. 

 

20.              More than that, however, the Claimant was relying on a comparison with LEPs whose performance was equal or less good than his and others falling within the older age group.  Those were evidential comparators relied on in constructing the hypothetical comparator. 

 

21.              The Claimant had also relied on certain comments that were euphemistically about age and on the Respondent’s dishonesty in its treatment of him in respect of the various meetings relating to his performance.  The test that the ET had to apply was whether there were facts from which discrimination could be found, whereas the ET concentrated on whether it could reach a definitive determination that the prima facie case would lead to that conclusion (see paragraph 33.5).  Had the ET approached this exercise in the correct way - properly considering, first, the Claimant’s case as to why an ET could infer unlawful discrimination without focusing on the Respondent’s explanation - it would properly have understood what it had to test the Respondent’s explanation against.  Without approaching its task in the correct way, the ET was unable to do this.  To the extent that the Respondent was now contending that there was no evidence that the relevant decision makers knew of the Claimant’s age, (1) that was not a factor that informed the ET’s reasoning, and (2) age was not the same as disability, a general idea of someone’s age was sufficient, and that is what the evidence showed.

 

22.              Taking the third and fourth grounds of appeal together, the Claimant contended the ET adopted the wrong approach to analysing the Respondent’s explanation.  If the Claimant is right on grounds 1 and 2, he must also win on ground 3.  Separately, and in any event, whilst the ET might have accepted the truthfulness of the Respondent’s account, that was insufficient; it did not allow for the possibility of subconscious discrimination.  Simply concluding that the Respondent had a genuine belief in the reason it had put forward was not enough; the ET had to test whether there was a basis for that explanation.  The ET’s reasons did not demonstrate a sufficient degree of scrutiny of the Respondent’s case or engage with the question whether age was in no sense whatsoever a factor in its decision making.  What the ET was obliged to do - per HHJ Peter Clark in Bhadhuri v Doncaster MBC UKEAT/986/01, at paragraph 17(2) - was to go beyond looking simply at the credibility of the Respondent’s witnesses and to test the explanations given, not simply against the documentary evidence but also against the case advanced by the Claimant.  Whilst the ET recorded what might have been logical reasoning in individual cases, it needed to test that on a comparative basis: was it logical as compared to the decision taken in the cases of other LEPs, for example, the Claimant?

 

23.              In the fourth ground of appeal this point was taken forward more specifically in respect of two particular LEPs, LEPs 6 and 21.  Mr Roberts did not shy away from the characterisation of this ground of appeal as a perversity challenge.  He says there simply was no evidential basis for establishing the reason why the Respondent offered LEP 6 equity partnership; effectively, the ET assumed a reason on the Respondent’s behalf.  Although LEP 21 was not a statutory comparator, his case was evidentially relevant, and there was again an absence of evidence adduced by the Respondent; the ET assumed reasons for his non-selection.  Effectively, the ET constructed a reason for the Respondent in each case.

 

24.              By the fifth ground of appeal, the Claimant complains that the ET erred in not carrying out a comparative exercise and thus considered the reason relied on by the Respondent in a vacuum and, inevitably, failing to subject it to the appropriate level of scrutiny.  The ET’s direction at paragraph 34 was simply wrong in stating that it was not making a decision as to whether anyone in the comparator group relied upon was treated more or less favourably than the Claimant.  Moreover, when looking to see if the ET had considered any hypothetical comparator, there was some suggestion that the ET had, in constructing such a comparator, required it to be the same age as the Claimant, which was plainly wrong.

 

The Respondent’s Case

25.              On behalf of the Respondent it was contended that this was a carefully reasoned Judgment, dismissing a claim the ET found to be a construct.  The ET had considered each individual statutory comparator’s case; that meant that the statistics went nowhere - addressing grounds 3, 4 and 5 would be dispositive of the appeal.  It was, further, worth bearing in mind that there were five parts of the case before the ET: (1) the initial decision to remove the Claimant, (2) putting the Claimant into a performance process, (3) setting targets, (4) the feedback given to the Claimant and (5) the decision regarding partnership.  The appeal was only against the fifth issue thus raised. 

 

26.              The Claimant was recruited when he was already over 45.  As to his performance, the ET had addressed that (see paragraph 11) and found his individual billing had been under 25% of target (and expressly rejected his contention that individual billing was not relevant for partners).  It was, further, relevant that the Claimant had already been subjected to a decision that he should be removed from the partnership, had been subjected to a performance process and failed to meet the higher target set, and there had already been attempts to recruit a senior corporate partner at the Bristol office (where the Claimant was based), who would thus be above him.

 

27.              As for whether an ET could move straight to the “reason why” question: in Anya the Court of Appeal had warned that it was only appropriate in an extreme case to simply rely on the evidence of a witness accepted to be honest (see paragraphs 24 and 25 of that decision).  That was not this case: specifically, the ET accepted the Respondent’s evidence concerning LEPs in circumstances - in contrast to Anya - where the Claimant had given no contrary evidence (see paragraph 23).  Moreover, the multi-factorial approach - which the ET accepted the Respondent had adopted - had included four factors: (1) financial performance; (2) area of practice; (3) personal circumstances; and, key, (4) potential for business development.  Having disposed of finance (which the ET had in its background findings and by paragraph 23.6, which referred to the Respondent’s view of the Claimant’s billing in 2012/13 as woeful), then the only other point the Claimant had was the statistics; he was not able to challenge the other factors relied on by the Respondent.  Still, however, the ET had not simply relied on what the Respondent asserted; it went through the case of each individual LEP (LEPs 1-18 were relied on as statutory comparators, LEPs 19-24 as evidential comparators).

 

28.              Turning to the specific grounds of appeal, on ground 1 - which concerned the approach to the burden of proof - the ET had properly directed itself in accordance with the two-stage test; alternatively, it had used the “reason why” approach, which was permissible in the circumstances of this case.  Specifically, the ET had correctly directed itself as to the approach as a matter of law (see paragraph 29 of its Reasons, where it referred to whether it might consider there had been discrimination; it did not suggest it had to do so).  As for the Respondent’s explanation, the case law allowed that the ET might have regard to this at the first stage (see Madarassy v Nomura International plc [2007] ICR 867 CA, paragraphs 70 and 71).  That was what the ET was doing here, and, even if it had been required to apply the two-stage test and was found to have failed to do so, its findings would still be sufficient to dispose of the appeal (Gay v Sophos plc UKEAT/0452/10/LA).

 

29.              By ground 2, the Claimant contended the ET erred in concluding that he had not made good a prima facie case such as to shift the burden of proof, but the ET had been entitled to reach its view that no primary case had been made out.  Alternatively, the positive findings of fact entitled it to hold either that the burden of proof was not shifted or that it was duly discharged: it was obvious why the Claimant was treated as he was, and it was obviously not because of his age.  Relevant in this respect was the absence of any finding that the decision takers knew of the Claimant’s age as opposed to that of the comparators (see IPC Media Ltd v Millar [2013] IRLR 707 EAT).

 

30.              Ground 3 contended the ET had adopted the wrong approach to the Respondent’s explanation of its treatment of the Claimant, but the ET had not merely found that the Respondent was telling the truth but - in a series of evaluative paragraphs - had analysed the explanations, considered the Claimant’s case, and then found as a fact that the reasons why the Respondent acted as it did were based on multiple factors that had nothing to do with age. 

 

31.              Ground 4 contended the ET erred in finding that the Respondent had provided adequate explanation in relation to two specific LEPs.  There had, however, been evidence before the ET as to comparators LEPs 6 and 21 on which the ET had made entirely permissible findings.  LEP 21 was an evidential comparator and was treated similarly to the Claimant; the ET made an appropriate finding on the evidence.  As for LEP 6, the ET had not just reached a finding regarding the figures but also on the basis of the group leader report in his case.

 

32.              Ground 5 criticised the ET for failing to carry out the requisite comparative exercise, but it plainly had done so, focusing on the statutory language of section 13 EqA, namely whether the Claimant was treated less favourably than the relevant comparators.  That must be right, because, at paragraph 34, the ET expressly stated it was looking at whether the Claimant’s treatment was less favourable and that must have been in respect of the comparators.  The first sentence of paragraph 34 could only have been making the point that the ET was concerned with the Claimant’s case and not the cases of others.  It was appropriately looking at whether there was less favourable treatment of the Claimant because of age, using the statutory language, and was simply reminding itself that it was not concerned with individual cases of comparators.  At paragraph 34.2.1 the ET made clear it rejected any statutory comparison, and it was entitled to do so.  That was a question of fact and degree for the ET, and it was not for the EAT to interfere in this regard (specifically, see paragraph 22 of Hewage v Grampian Health Board [2012] ICR 1054 SC).

 

The Relevant Legal Principles

33.              The starting point is provided by section 13 EqA:

“(1) A person (A) discriminates against another (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others.

(2) If the protected characteristic is age, A does not discriminate against B if A can show A’s treatment of B to be a proportionate means of achieving a legitimate aim.”

 

34.              The requirement of less favourable treatment imports the notion of a comparison, which may be with an actual (“treats”) or hypothetical (“would treat”) comparator.  In constructing a hypothetical comparator and determining how they would have been treated, evidence that comes from how individuals were in fact treated is likely to be material.  The individuals thus used to construct the hypothetical comparator are often described as evidential comparators; they are part of the evidential process of drawing a comparison and are to be contrasted with actual - statutory - comparators.  Whether considering an actual or hypothetical comparator, section 23(1) EqA requires that there must be no material difference between the circumstances relating to their case and that of the complainant. 

 

35.              Although direct discrimination thus requires a (real or hypothetical) comparison, the existence of less favourable treatment will not be determinative of the existence of direct discrimination; it still needs to be because of the relevant protected characteristic, albeit the two issues will often be intertwined and sometimes the less favourable treatment cannot be resolved without at the same time deciding the “reason why” question (see Shamoon v Chief Constable RUC [2003] IRLR 285, HL).

 

36.              In the earlier case of Anya v University of Oxford [2001] ICR 847 CA, it had been warned that, where the Respondent’s explanation was in issue, taking a shortcut - moving straight to the “reason why” - would only be appropriate in an extreme case (see paragraph 21) and would require the ET to state that it was adopting that course and why (see paragraph 22).  It is, in any event, common ground before me that, when moving straight to the “reason why” question an ET would need to do so on the assumption that the burden may have shifted to the Respondent (see paragraph 81 of Madarassy v Nomura [2007] ICR 867 CA, and, to similar effect, paragraph 76 in Laing v Manchester City Council [2006] ICR 1519 EAT); it is that assumption that should mean there is no prejudice to the Claimant in adopting this course.

 

37.              An ET’s determination of these questions must demonstrate proper application of the burden of proof as laid down by section 136 EqA, so that:

“(2) If there are facts from which the court could decide, in the absence of any other explanation, that a person (A) contravened the provision concerned, the court must hold that the contravention occurred.

(3) But subsection (2) does not apply if A shows that A did not contravene the provision.”

 

38.              Although guidance as to how to approach the burden of proof has been provided by this and higher appellate courts, all judicial authority agrees that the wording of the statute remains the touchstone.  That was made clear by the Court of Appeal (see the Judgment of Peter Gibson LJ) in Igen Ltd v Wong [2005] ICR 931, where guidelines were set out in an annexe to the judgment with the express caveat that this was not a substitute for the statutory language. 

 

39.              As to the way in which the ET is to approach its task under section 136, in Laing it was allowed that:

“73. No doubt in most cases it will be sensible for a tribunal formally to analyse a case by reference to the two stages.  But it is not obligatory on them formally to go through each step in each case. …

74. Another example where it might be sensible for a tribunal to go straight to the second stage is where the employee is seeking to compare his treatment with a hypothetical employee.  In such cases the question whether there is such a comparator - whether there is a prima facie case - is in practice often inextricably linked to the issue of what is the explanation for the treatment, as Lord Nicholls pointed out in Shamoon … paras 7-12, it must surely not be inappropriate for a tribunal in such cases to go straight to the second stage.

75. The focus of the tribunal's analysis must at all times be the question whether or not they can properly and fairly infer race discrimination.  If they are satisfied that the reason given by the employer is a genuine one and does not disclose either conscious or unconscious racial discrimination, then that is the end of the matter.  It is not improper for a tribunal to say, in effect, “there is a nice question as to whether or not the burden has shifted, but we are satisfied here that, even if it has, the employer has given a fully adequate explanation as to why he behaved as he did and it has nothing to do with race”.”

 

 

40.              As for the initial burden on the Claimant, in Madarassy Mummery LJ opined:

“56. … The bare facts of a difference in status and a difference in treatment only indicate a possibility of discrimination.  They are not, without more, sufficient material from which a tribunal “could conclude” that, on the balance of probabilities, the respondent had committed an unlawful act of discrimination.

57. “Could … conclude” in section 63A(2) must mean that “a reasonable tribunal could properly conclude” from all the evidence before it.  This would include evidence adduced by the complainant in support of the allegations of sex discrimination, such as evidence of a difference in status, a difference in treatment and the reason for the differential treatment.  It would also include evidence adduced by the respondent contesting the complaint.  Subject only to the statutory “absence of an adequate explanation” at this stage …, the tribunal would need to consider all the evidence relevant to the discrimination complaint; for example, evidence as to whether the act complained of occurred at all; evidence as to the actual comparators relied on by the complainant to prove less favourable treatment; evidence as to whether the comparisons being made by the complainant were of like with like as required by section 5(3) of the 1975 Act; and available evidence of the reasons for the differential treatment.

58. The absence of an adequate explanation for differential treatment of the complainant is not, however, relevant to whether there is a prima facie case of discrimination by the respondent.  The absence of an adequate explanation only becomes relevant if a prima facie case is proved by the complainant.  The consideration of the tribunal then moves to the second stage.  The burden is on the respondent to prove that he has not committed an act of unlawful discrimination.  He may prove this by an adequate non-discriminatory explanation of the treatment of the complainant.  If he does not, the tribunal must uphold the discrimination claim.

…

65. There has been a debate in the cases and on this appeal as to what evidence from the respondent is relevant at the first stage.  It was observed in Igen … para 24, that the language of section 63A(2) points to the complainant having to prove facts, but there is no mention of evidence from the respondent.  The court added that it would be unreal if the employment tribunal could not take account of evidence from the respondent, if such evidence assisted the employment tribunal to conclude that, in the absence of an adequate explanation, unlawful discrimination by the respondent on a proscribed ground would have been established.  The court referred to the examples given in Barton [v Investec Henderson Crosthwaite Securities Ltd] [2003] ICR 1205 of unsatisfactory conduct of the respondent being relevant to the drawing of inferences at the first stage: for example an unsatisfactory response to the statutory questionnaire or a breach of the code of practice by the respondent.”

 

41.              Where an ET is satisfied the burden has shifted to the Respondent, it is required to scrutinise the explanation provided and to ask whether the Respondent has given a fully adequate explanation that has nothing to do with the protected characteristic in question (Laing at paragraph 75).  An ET will not find a Respondent has satisfied the burden upon it simply because it genuinely believed in the reasons upon which it relies: its scrutiny must allow for the reluctance to admit, even to oneself, any unlawfully discriminatory reason for one’s conduct and for the possibility of subconscious discrimination; it requires the ET to demonstrate it has gone beyond simply looking at the credibility of the Respondent’s witnesses and has tested the explanations given not only against any documentary evidence but also as against the case put by the Claimant (see Anya and Bhadhuri v Doncaster MBC UKEAT/986/01).

 

Discussion and Conclusions

42.              The first ground of appeal requires consideration of the approach adopted by the ET in relation to section 136 EqA.  The Claimant contends that the ET was obliged to adopt a two-stage approach or, at least, properly explain why it had not done so.  Not unrelated to this, by ground 5 the Claimant further complains that the ET erred in failing to carry out the comparative exercise required. 

 

43.              It is fair to say there is a difficulty in this case in determining precisely how the ET went about its task in this regard.  It appears to start by adopting a two-stage approach.  Thus, in respect of the statistical picture relied on by the Claimant, the ET plainly asked itself whether this was sufficient to demonstrate a prima facie case (see paragraph 33.6.5) and determined that it was not.  In then turning to the remaining matters relied on by the Claimant - the comparisons with other LEPs - the ET equally plainly (as I read its reasoning) moved to the reason why, the Respondent’s explanation for its treatment of the comparators and the Claimant (paragraph 34).

 

44.              Contrary to the Claimant’s argument, I would not hold that the ET was necessarily obliged to adopt a two-stage approach when determining the question of discrimination in this case.  I have, however, been troubled by what appears, at times, to be confused and unstructured reasoning on the part of the ET, in particular when considering the Claimant’s case on the various comparators.  Accepting (as I do; see further below) that the ET had been entitled to conclude that the statistical picture was not sufficient to shift the burden, it needed to consider the remaining elements relied on by the Claimant, specifically his comparisons with other LEPs.  In this regard I initially found it hard to understand why the ET considered it was:

“34. … not making a decision about whether anyone in the comparator group relied upon was treated more or less favourably than the claimant. …”

 

Allowing for the infelicities of expression that may arise in an ET’s Judgment, however, I consider that the ET was here seeking to distinguish between the approach it might need to adopt in considering actual, statutory, comparators and that required in respect of a hypothetical comparator constructed from a number of evidential comparators.  Although the route through the reasoning is not well signposted, I further read that as informed by the ET’s conclusion that none of the specific individuals relied on could meet the requirement of section 23 EqA (paragraph 34.2.1 of the Reasons).  It was thus approaching this case as one involving hypothetical rather than actual comparisons.  As allowed in Laing, that might well be a case where it is appropriate to move straight to the second stage of the ET’s task; it would not be an error of law for an ET to do so.

 

45.              By his fifth ground of appeal, the Claimant takes issue with the ET’s approach, contending it failed to carry out the comparative approach required by sections 13 and 23 EqA.  If paragraph 34 of the reasoning is read alone and out of context, I can see why the Claimant might be troubled in this respect.  The ET is, however, entitled to expect its reasoning to be read as a whole and for its conclusions to be read in the light of its earlier findings of fact.  Adopting that approach, it is apparent that the ET had considered the individual circumstances of the Claimant and of the individual LEPs relied on before it, and had concluded that, applying section 23(1) EqA, the material circumstances were not the same.  That was not a failure of comparison but a proper consideration as to whether the comparisons were apt.

 

46.              Whilst I consider that the ET’s reasoning might thus have been more clearly explained, ultimately I am not persuaded that it reveals an error of approach.  Properly read, the ET - on the basis of the findings of fact it had made earlier (see specifically paragraph 24) - rejected the Claimant’s case that there were any actual, statutory, comparators.  That was not adopting a shortcut to its task under section 136, moving straight to the reason why, in so far as the Claimant was putting his case on the basis of a comparison with actual comparators; it was a permissible conclusion when considering whether he had made out a prima facie case in this respect, given the ET’s earlier findings of fact.  Having thus determined that the case before it could only be put on the basis of a hypothetical comparison, the ET permissibly moved to the reason for the treatment in issue.

 

47.              That leads me to the second ground of appeal: whether the ET erred in concluding no prima facie case had been made out by the Claimant.  On the statistical material I was initially troubled as to whether the ET had required too much of the Claimant: had it required him to show that an ET would - rather than simply could - conclude that the statistics established that age discrimination had been demonstrated in this case?  Had it focused on the possibility of other explanations and required the Claimant demonstrate why those were not made out?

 

48.              On a proper reading of the ET’s reasoning, however, I have concluded this would be an unfair reading of the Judgment.  Statistics can help in establishing a prima facie case of discrimination, but the ET was entitled to question their significance in this case: because it was not convinced by the selection of age ranges (see paragraphs 33.2 and 33.3); but, more substantively, because it was not satisfied that it could infer discrimination simply from the statistical picture alone (paragraphs 33.4 to 33.6).  The Claimant had effectively shown a difference of treatment and a difference of age, but he had not thereby shown the “something more”, the link between those two factors, that could allow a reasonable ET to conclude that the treatment of the Claimant was because of age.

 

49.              As for the Claimant’s case in terms of the comparators, it is apparent that the ET did not find that a prima facie case had been made out because it had considered the case of each comparator and concluded that there were material differences between their circumstances and those of the Claimant.  That conclusion was based upon the ET’s detailed findings at paragraph 24.  In seeking to challenge those findings the Claimant has relied on specific individual cases, observing that he and others falling within his age group who were similarly treated were (on the ET’s own findings) as good, if not better, in terms of financial performance compared to some LEPs younger than 45 who were selected for the new partnership.  The Claimant’s arguments in this regard descend, however, into an attempt to reargue the points below and fail to engage with the bigger picture as found by the ET, namely that financial performance was simply one of the matters taken into account by the Respondent in making its decisions on the basis of a multi-factorial approach (see paragraph 23).

 

50.              Having been taken through a number of the individual cases, I am satisfied that the ET reached a permissible view in this regard.  It was entitled to accept the evidence before it that cases had been considered on a bespoke, individual basis, tested not just against financial performance but also the partnership criteria, the individual’s area of practice, their personal circumstances and, as a key factor, the potential for business development.  It was equally entitled to find, as it did, that these factors had been considered in the case of each of the individual LEPs relied on and, having undertaken the exercise of considering each of the cases, to conclude this demonstrated that the material circumstances were not the same.

 

51.              That brings me to grounds 3 and 4, which seek to challenge the ET’s approach to the Respondent’s explanation in this case.  Whilst the ET certainly states that it “accepted the respondent’s evidence concerning the LEP’s”, I do not accept that it failed to subject that evidence to scrutiny.  It, relevantly, noted that the Claimant had not given contrary evidence (paragraph 23), but it then went on to test the Respondent’s explanation against the Claimant’s case that the reasons given were not in fact true (paragraph 23.1).  In respect of the Claimant’s financial performance, the ET had made earlier relevant findings of fact to which it was entitled to have regard.  More than that, however, the ET tested the Respondent’s explanation against each comparator, carrying out a detailed examination of the reasoning and evidence in respect of each.  That was not simply a test of the credibility of the Respondent’s witnesses.

 

52.              Moreover, I do not consider that the ET lost sight of the potentially more subtle point, that decisions relating to assessments of potential and personal circumstances might be tainted by subconscious age discriminatory considerations.  It reached an unchallenged conclusion that the Respondent’s assessment of the Claimant’s performance was in no sense related to considerations of age.  It did not simply accept what the Respondent said about other individual LEPs, but had before it material that had been used in the decision making process including the group leaders’ reports and the individuals’ appraisals.  The detailed reasoning provided by the ET does not evidence an abdication by it of its responsibility in this regard.  It did not take the Respondent’s case at face value but looked behind what it was told.  I do not agree that any fair reading of the ET’s Reasons permits a conclusion that it failed to adopt the correct approach to determining whether the Respondent had met the burden upon it.

 

53.              Again, it seems to me that the Claimant’s submissions on appeal have essentially amounted to attempts to reargue the case as put below.  Specifically, in putting what was essentially a perversity argument in respect of LEPs 6 and 21, the Claimant contends that there was no evidential basis for establishing why LEP 6 was offered a new partnership and an absence of evidence as to why LEP 21 was not.  The Respondent, however, took me to material that demonstrated why LEP 6’s circumstances were not the same as the Claimant’s (namely the group leader’s report in his case), which had been taken into account by the Respondent in making its decision.  It, further, pointed to the particular circumstances of the Claimant’s case: the background billing issues, the fact that he had been the subject of an earlier expulsion decision that had then been reversed, the absence of a similarly positive group leader’s report, etc.  The ET had been entitled to reach the conclusion that it had in respect of LEP 6; this was not simply based upon an untested acceptance of the Respondent’s stated explanation.  As for LEP 21 - an evidential comparator in the same upper age group and similarly treated to the Claimant - the ET had permissibly found there were individual circumstances in his case that needed to be taken into account.  His speciality was in an area involving individual rather than corporate clients, and he was unlikely to be able to develop significant business for the Respondent beyond those existing clients.

 

54.              In these and the other comparison cases the ET has provided detailed reasons for accepting the Respondent’s explanation for the partnership decisions made, which were not based merely on questions of financial performance.  The Claimant’s case does not, in truth, engage with the ET’s reasoning but seeks to reargue matters before me.  That does not provide a proper basis of challenge at this stage, and, for all the reasons given, I dismiss the appeal.