United Kingdom Employment Appeal Tribunal

Appeal No. UKEAT/0272/16/LA

 

 

EMPLOYMENT APPEAL TRIBUNAL

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

 

 

                                                                                                             At the Tribunal

                                                                                                             On 3 March 2017

 

 

 

Before

HER HONOUR JUDGE EADY QC

(SITTING ALONE)

 

 

 

 

 

 

MR M I SHARFUDEEN                                                                               APPELLANT

 

 

 

 

 

T J MORRIS LTD t/a HOME BARGAINS                                                RESPONDENT

 

 

Transcript of Proceedings

 

JUDGMENT

 

 

 

 

 

 

 

 

 

APPEARANCES

 

 

 

 

 

For the Appellant	Written submissions
For the Respondent	MR DANIEL NORTHALL (of Counsel) Instructed by: JMW Solicitors LLP 1 Byrom Place Spinningfields Manchester M3 3HG

 

 

SUMMARY

UNFAIR DISMISSAL - Constructive dismissal

RACE DISCRIMINATION - Direct

UNLAWFUL DEDUCTION FROM WAGES

 

Constructive dismissal - section 95(1)(c) Employment Rights Act 1996 - whether breach of the implied term - Malik and Anor v BCCI SA [1997] ICR 606 HL

Race discrimination - sections 13(1), 23 and 136(2) Equality Act 2010 - direct discrimination - less favourable treatment - burden of proof

Paternity pay - section 171ZC Social Security Contributions and Benefits Act 1992 - Statutory Paternity Pay and Statutory Adoption Pay (General) Regulations 2002

The Claimant (an Indian national) had sought a lateral transfer as a Manager from one of the Respondent’s stores to a new store it was due to open in Romford.  There had, however, been four other applicants for the Romford position, including three external candidates, and the Respondent had applied a selection process, albeit (as the ET allowed) one that had been created for promotions rather than transfers.  The Claimant performed badly and was unsuccessful.  One of the external candidates, a British national, achieved the highest score and was offered the position.  Shortly after this, the Claimant’s Assistant, who was also a British national, was offered a Relief Manager position at another store, without being subject to the same kind of assessment process used for the Claimant.  The Claimant submitted a grievance about these matters, but this was rejected, and the Claimant resigned from his employment and brought ET proceedings, complaining that the rejection of his grievance had amounted to a fundamental breach of his contract, specifically it had destroyed the relationship of trust and confidence, thus entitling him to resign and claim constructive dismissal.  He also relied on these matters as acts of race discrimination because of his Indian nationality.  The Claimant further complained of an unauthorised deduction of wages in the failure to pay him paternity pay for the leave taken after the birth of his son.

The ET rejected the claims.  Although agreeing that the process used by the Respondent should not have applied to lateral transfers, the Respondent had reasonable and proper cause for its conduct given that it had to apply some kind of selection process and had thus been entitled to refuse the Claimant’s grievance.  Further rejecting certain allegations made by the Claimant, the ET did not consider the burden had shifted for the purpose of the complaint of race discrimination; the Claimant’s comparators were in different circumstances, and a difference in protected characteristic was insufficient to shift the burden.  In any event, even if the burden had shifted, the ET accepted the Respondent’s non-discriminatory explanation for why it had treated the Claimant as it had; specifically, it had permissibly applied the selection process when having to choose the best of the five candidates for the new Manager position.  As for paternity pay, the Claimant had failed to provide the requisite notification in writing at the relevant time and had, in any event, brought his claim out of time.

On the Claimant’s appeal

Held: dismissing the appeal

The ET had accepted the Claimant’s argument that the assessment used for the Romford Store Manager selection exercise had been created for promotions and not lateral transfers and it was further prepared to accept that his trust and confidence in his employer may have been destroyed by the decision not to offer him this position (and whilst his actual complaint before the ET relied on the rejection of his grievance, this was really a reiteration of the earlier decision not to offer him the Romford post).  The question for the ET was - applying Malik unvarnished, as the Claimant submitted - whether the Respondent had conducted itself in the way that it had without reasonable and proper cause (Malik and Anor v BCCI SA [1997] ICR 606 HL).  This was not - as the Claimant contended - the wrongful importation of the range of reasonable responses test; the ET was properly applying Malik, recognising that an employee’s loss of trust and confidence in their employer was not the only question: the ET also had to be satisfied this had happened as a result of conduct on the part of the employer that was without reasonable and proper cause, a question to be answered objectively, not by applying a range of reasonable responses test.  The ET had not lost sight of this and had reached a permissible conclusion on the basis of its findings of fact.

Similarly, in respect of the race discrimination claim, the ET had been entitled to find the burden of proof had not shifted, not least as it rejected allegations made by the Claimant that might otherwise have corroborated his case and had found the circumstances of his comparators were materially different to his.  In any event, the ET considered the Respondent’s explanation - on the basis that the burden had shifted - and found the conduct complained of was for reasons (see above) other than the protected characteristic (the Claimant’s nationality).

As for the paternity pay claim, this appeal was doomed to fail as the ET had found the claim had been brought out of time and no appeal against that finding had been permitted to proceed.  In any event, the appeal focused on the wrong Regulations (those concerned with the entitlement to leave, not pay); the ET had been entitled to find the Claimant had failed to comply with the written notification requirements laid down by the paternity Pay Regulations.

 

HER HONOUR JUDGE EADY QC

 

Introduction

1.               I refer to the parties as the Claimant and the Respondent, as below.  This is the Full Hearing of the Claimant’s appeal from a Judgment of the Watford Employment Tribunal (Employment Judge Southam sitting with members, Mr Lodge and Mrs Sood, on 13-16 April 2015; “the ET”), sent to the parties on 13 May 2015.  The Claimant represented himself before the ET, as he has on his appeal; the Respondent has at all times been represented by Mr Northall of counsel.  For medical reasons the Claimant was unable to attend today but did not seek an adjournment of this hearing and instead asked for his written representations to be taken into account, allowing that the Respondent still intended to be represented.  In support of that approach, the Claimant submitted additional written representations as well as his original skeleton argument, and I have taken both of those into account in reaching my decision.

 

2.               By its Judgment the ET dismissed the Claimant’s claims of constructive unfair dismissal, disability and race discrimination and in respect of paternity pay.  After initially being the subject of a ruling under Rule 3(7) of the Employment Appeal Tribunal Rules 1993 - HHJ Shanks considering that the Claimant’s proposed grounds of appeal disclosed no reasonable basis to proceed - the Claimant exercised his right for further consideration under Rule 3(10), and at that stage Slade J permitted the appeal to proceed on the following bases: (1) in respect of the constructive unfair dismissal claim, that the ET erred in finding the Respondent had not acted in fundamental breach of contract; (2) in respect of the race discrimination claim, if the ET had erred in respect of the finding on fundamental breach of contract (see (1)), then this arguably rendered its conclusion on race discrimination unsafe; and (3) as for the paternity pay claim, that the ET erred in requiring that the Claimant need to give notice to qualify for paternity pay when it had not found that the Respondent had made a request for that notice as would be required by regulation 6(8) of the Paternity Leave Regulations 2002 (“the Leave Regulations”).  The Respondent resists the appeal, relying on the reasoning of the ET.

 

The Relevant Background

3.               The Respondent, which trades under the name Home Bargains, operates stores across the UK, selling a range of discounted household goods.  It is a growing brand, having expanded from some 250 employees in the mid-1990s to over 15,000 by the time of the ET proceedings.  Its continued growth was also evidenced by the fact it had some 360 stores when it lodged its ET3, but more than 400 by the time of the ET hearing.

 

4.               The Claimant, who is an Indian national, had first been employed by the Respondent in 2007, but his relevant period of service for present purposes commenced in June 2009.  He was initially employed as an Assistant Store Manager at the Respondent’s store in Eccles but transferred to Bletchley as a Trainee Store Manager in May 2010 and was made a Store Manager in Stevenage in October 2010.  Subsequently, in December 2011, he was transferred to be Store Manager at Southall.  There had been no selection process or interview on any of these previous occasions of transfer or promotion.

 

5.               In April 2013 the Respondent generated a form of store management interview question and answer sheet, intended to be used for interviews for Store Managers, Assistant Managers and Supervisors.  That said, in July 2013 the Claimant had been invited to attend an interview at the Respondent’s Evesham store for the position of Relief Area Manager (which would have been a promotion), but, whilst some form of interview had taken place, the new question and answer process had not been used.

6.               Meanwhile, in February or March 2013 the Claimant had informed his Area Manager, Mr Jalwani, that his wife, who is a German national, was pregnant and that he would want to take paternity leave.  It was agreed the Claimant would take two weeks’ annual leave before the birth and then two weeks’ paternity leave from the birth itself.  The Claimant’s son was born on 20 August 2013.  The Claimant’s contract provided that paternity leave could be taken in accordance with the statutory scheme but the only form of paperwork between the parties relating to his leave at that time was in the form of an email in which the Claimant said he had some paperwork in relation to the birth of his son in German but he would forward his son’s birth certificate, which would be in German and English, once he had received it.  In fact, the Claimant took the leave but did not forward any documents at that stage, and the ET records:

“11.12. … The claimant agrees that he was asked to produce his son’s birth certificate, but he would not in fact send a copy of it to his employers until 30 June 2014; …”

 

7.               Returning to the narrative, on 28 January 2014, the Respondent’s Training Manager, Mr Wood, had issued a note to Area Managers, copied to Regional Managers, laying down in more detail the management recruitment procedure as follows:

“I have updated the management recruitment procedure to highlight where hourly paid staff are being promoted to a senior management position, a formal company interview must still be undertaken, even if they are the only internal candidate applying for a position.  As with all vacancies both internal and external a management appointment form must be completed to book the candidate into training and interview notes returned to HR prior the training [sic] (as soon as possible after interviewing/making the decision to recruit).  If a management position is to be filled by a current member of Home Bargain [sic] staff or management receiving an internal promotion the store management interview questions must still be completed.  As with external candidates they must meet the required score in section 3 of the interview for the position they are being promoted to.  They must not receive the promotion if they do not meet the required score.  The interview sheet should then be marked with Recruited/Not Recruited and returned to the HR department.  Management positions cannot automatically be given to employees who have not applied for/been interviewed formally for the role.”

 

8.               On 4 March 2014 the Claimant emailed his Regional Manager asking for a transfer to a new store that the Respondent was developing at Romford, where the Claimant wanted to settle.  He was told that if he wanted he could go for an interview, although that was not put in writing and there was nothing setting out the process for him.  In any event, the Claimant duly attended for an interview on 8 April 2014.  There were three external candidates for the Romford position and one other internal candidate, and they were all subjected to an assessment designed to analyse strengths, weaknesses, opportunities and threats (“SWOT”) as well as an interview.  The Claimant performed badly, scoring no more than 15; the required score for a Store Manager was 34.  One of the external candidates also assessed on the same day, a Mr Horsfield, scored 35 and was offered the position.  He is a British citizen.  By way of postscript, Mr Horsfield subsequently failed his training, and the offer of the Romford position was withdrawn from him.  In any event, as for the Claimant, it was the Respondent’s evidence that he had spent no more than five minutes undertaking the SWOT analysis and had then spent time in the canteen.  The Respondent took the view that the Claimant had appeared to think that because he was already a Store Manager elsewhere he did not need to perform well at the interview.  He was told the outcome of the assessment and that he had been unsuccessful.

 

9.               The Claimant submitted a grievance, complaining about not getting the Romford transfer, objecting to the Respondent’s use of the SWOT analysis and saying he had been told it was the interview that mattered.  In the first-stage grievance meeting the Claimant was asked if he had been made aware of the new directive, and he acknowledged he had been told there would be an interview and a refresher course.  When Mr Wood’s memo was read to him, the Claimant observed that the Romford position had not been a promotion for him; it would have been a lateral transfer; if there was to be a change of policy, it should have been made clear that it applied to internal transfers and not just promotions.  For its part, the ET agreed: referring to the memo from Mr Wood, it accepted that the Claimant’s reading was correct.

 

10.            The Claimant complained about the grievance meeting, which he did not feel had resolved matters.  At around the same time the Assistant Manager at his store, a Mr Muhammed, had accepted a promotion to take up a position as Relief Store Manager at Waltham Abbey, which left the Claimant without an assistant for a number of weeks.  It also raised a concern in the Claimant’s mind that his assistant - a British citizen - had been treated more favourably than he had: Mr Muhammed had not had to undertake a SWOT analysis, and the Claimant believed he had been assured he would be appointed without any assessment.

 

11.            Also in June 2014, the Claimant sent a number of emails to the Respondent about his paternity pay.  He was told that in order to backdate his paternity pay he would have to produce either an MATB1 certificate or his son’s birth certificate.  The Claimant forwarded a copy of the latter on 30 June.

 

12.            Meanwhile, on 16 June the Claimant’s second-stage grievance meeting took place, heard by a Mr Aslam, an Area Manager.  The substance of the Claimant’s complaint remained the process applied to him in relation to the Romford position, which he considered to have been race discrimination.  Specifically, he considered he had been treated differently to Mr Muhammed, a British citizen.  The Claimant had already entered into early conciliation with ACAS on 6 June, and during the grievance meeting said he was looking for a settlement so he could move to a better company; he did not feel he had any choice but to leave as he could not continue to work for the Respondent after what had happened.  Although seeking to persuade him to stay, Mr Aslam asked whether the Claimant wanted him to resolve the grievance or whether this was his final decision.  After a short adjournment the Claimant confirmed he wanted to settle and finish his relationship with the Respondent or to wait until he had another job.  As the Respondent was not prepared to offer compensation, the meeting ended with the Claimant saying he did not intend to give notice that day.  After a short delay Mr Aslam then investigated the Claimant’s grievance complaint, which he rejected by letter of 3 July 2014.

13.            Also in early July 2014, the Respondent was considering the Claimant’s paternity pay request.  Mr Jalwani confirmed that the Claimant had not provided a paternity leave certificate and had given no written notice save that he had given the baby’s due date and said he would like to take two weeks’ paternity leave.  He said that despite a request for paperwork none had been provided and so the Claimant had been allowed one week as paid holiday and one week unpaid.  Mr Jalwani further said that the paperwork had been requested from the Claimant on several occasions on his return but none had been provided.

 

14.            Meanwhile, the Claimant had appealed the decision on his grievance and attended a further hearing before Mr Walsh, a Regional Manager, on 15 July 2014.  Mr Walsh rejected the grievance appeal, relevantly noting that the Respondent’s policy allowed that other employment information could be considered, the Respondent had considered that it was important that the strongest management team was recruited for any new store and the Romford process had been fair for both internal and external candidates.  On receipt of Mr Walsh’s decision, communicated by letter of 4 August 2014, the Claimant resigned his employment; he submitted his claim to the ET on 10 August 2014.

 

The ET’s Decision and Reasoning

15.            On the Claimant’s complaint of race discrimination, although accepting that there had been no previous assessment of the Claimant and he had not had to undertake any selection process on earlier internal transfers - for example between Stevenage and Southall - the ET largely rejected the corroborating matters of which the Claimant had complained.  Specifically, it rejected an allegation made by the Claimant to the effect that he had been told he would not fit in at Romford.  Further, although the Claimant had identified two British nationals whom he said had been treated more favourably than he had - Mr Muhammed and Mr Horsfield - the ET did not accept that this was sufficient to shift the burden of proof: the difference in nationality alone was insufficient.  More particularly, the ET found that Mr Muhammed had been the only candidate for the Waltham Abbey position, which was a temporary post that the Respondent was in a haste to cover, and was aware that Mr Muhammed had scored well in training some 11 months earlier.  Even if the burden of proof had shifted, the ET was satisfied that two non-discriminatory explanations had been made out by the Respondent in respect of its treatment of the Claimant in relation to the Romford position:

“25. … The first of these is that there was competition for the position.  The claimant was not the sole candidate, so it was necessary for the respondent to choose someone to go to Romford.  The claimant could not simply be transferred.  Secondly, Mr Wood had developed the interview question and answer sheet and process including SWOT analysis for a purpose.  Why should the respondent not utilise that process in order to determine the best candidate for the Romford store. …”

 

16.            As for the constructive dismissal claim, the Claimant complained of the rejection of his grievance in respect of the procedure followed in relation to the Romford position.  The ET allowed that on a strict reading of the January 2014 memo his view had some justification; the memo did not appear to require a candidate for a lateral transfer to undergo an interview.  That said, the ET observed that the position had been advertised and had attracted four other applicants; the Respondent had to choose and thus had to devise a method for selecting the best candidate.  The Respondent had dealt with the Claimant’s grievance in this respect, which was the obligation upon it; it was not obliged to accept the grievance, and had not done so.  That may well have destroyed the Claimant’s trust and confidence in his employer, but it was a decision to which the Respondent was entitled to come after due process.  It had reasonable and proper cause both for the decision in relation to Romford and then to reject the Claimant’s grievance.  By itself, this matter was insufficient to amount to a fundamental breach of contract.  In any event, the Claimant resigned because he did not get the Romford job, not because of the rejection of his grievance or because of any of the other matters specifically identified as breaches of contract for the purpose of the constructive dismissal claim.

17.            Lastly, the ET addressed the Claimant’s claim for paternity pay.  He had been granted two weeks’ leave but paid for only one, it being treated as holiday, which gave him more than he would have been entitled as paternity pay.  The ET concluded that the Claimant did not qualify for paternity pay because he had not given the appropriate notice in writing.  As a consequence, he lost a week’s holiday, but he was paid for it; there was no financial loss.  In any event, the claim was out of time, as it related to a payment due by the end of September 2013 and the claim was only submitted in August 2014.

 

Submissions

The Claimant’s Case

18.            The Claimant submits that having found that he had been correct in his interpretation of the Wood memo - which did not apply to a lateral move such as that he was seeking to make to the Romford store - and also that his trust and confidence had been undermined, the ET had wrongly rejected his claim of constructive unfair dismissal on the basis that the Respondent had reasonable and proper cause.  That was importing a range of reasonable responses test that the ET ought properly to have eschewed (see Malik and Anor v BCCI SA [1997] ICR 606 HL).  The ET had found that the Claimant’s trust and confidence “was undermined to the point where he felt that he had to leave his employment” (paragraph 31).  That, the Claimant submits, was a finding that there had been a fundamental breach of the implied term.  In the alternative, the Claimant contends the ET erred in failing to have regard to other factors relevant to his case.  Those were not, however, points that had been permitted to proceed at the Rule 3(10) Hearing and do not properly arise to be considered on this appeal.

 

19.            As for the race discrimination claim, the Claimant observes that the ET had found there was a difference in status (nationality) and a difference in treatment as between him and his comparators but failed to find the burden of proof had shifted.  As the EAT, at the Rule 3(10) Hearing, had seen this as arguable, the Claimant contends this must show that sufficient had been established to shift the burden; the only way the ET had been able to avoid this conclusion was by having regard to the Respondent’s explanation, which was not the right approach.

 

20.            As for paternity pay, the Claimant noted that the Respondent had accepted that this claim had real reasonable prospects of success - a concession made on its subsequent costs application - which should be taken as an acknowledgement of its merit.  In any event, relying on the Statutory Paternity Pay and Statutory Adoption Pay (General) Regulations 2002 (“the Pay Regulations”), the requirement on the Claimant had only been to give notice of the date from which he expected the liability to pay him statutory paternity pay to begin.  He had done that orally and so met the notice requirements.  As for the time limit issue, the Respondent had delayed in its response to the Claimant and had only refused to pay him after July 2014; so, his claim should have been seen as having been made in time.

 

The Respondent’s Case

21.            In respect of the constructive unfair dismissal and the race discrimination claims, both challenges depended on the ET’s treatment of its finding that the Claimant had been correct in his interpretation of Mr Wood’s memo (see paragraph 11.26 of the ET’s Reasons).  When the ET’s reasoning was properly considered, however, this finding provided no basis for doubting its conclusions in either respect.  Prior to the events in question, the Respondent had developed internal guidance on management recruitment procedures - the subject of Mr Wood’s memo. 

 

22.            Whilst not challenging the ET’s interpretation of that memo as applicable only to promotions and not lateral transfers, so far as the race discrimination claim was concerned the ET had found this, of itself, was insufficient to shift the burden of proof.  Moreover, the ET had then gone on to find that even if the burden had shifted the Respondent’s failure to transfer the Claimant into the Romford Store Manager position was for non-discriminatory reasons.  In reaching those conclusions the ET had correctly directed itself as to the burden of proof, applying Madarassy v Nomura International plc [2007] IRLR 246 CA, and had not lost sight of its earlier finding as to the construction of the email, returning to that within its conclusions section and conscious that meant the Claimant had been subjected to a process not strictly required.  Reaching this decision, the ET had properly taken into account other matters, including its findings of fact: (1) that the Claimant had not been the only candidate for the position (there had been four others, three of whom were external), and it followed that the Respondent had to adopt some method of selection (the ET did not find, and the Claimant had not alleged, that he should simply have been given the job); (2) that the Respondent had developed the interview question and answer process as a template and thus had to hand a structured process that it could deploy to select the most suitable candidate; and (3) the Claimant’s comparator, Mr Muhammed, was not in like circumstances (he had been appointed to the Waltham Abbey store as the only candidate and had also scored highly in training only 11 months earlier).  The ET had also rejected other matters relied on by the Claimant to support his claim of race discrimination.

 

23.            As for the claim of constructive unfair dismissal, it was to be noted that the Claimant had identified five matters as entitling him to claim constructive dismissal (as clarified at an earlier Preliminary Hearing before Employment Judge Manley).  The ET considered but rejected each matter individually and had then looked at the cumulative effect of those matters but still did not find that the Claimant had demonstrated the required fundamental breach of contract.  Although the non-appointment of the Claimant to the Romford position had formed part of the relevant background, this was only to the extent it formed part of his grievance: it was the rejection of the grievance that was relied on as a basis for the constructive dismissal claim, but the ET had found the real reason for the Claimant’s resignation had been his non-appointment to the Romford position.  In any event, the ET permissibly found the Respondent had reasonable and proper cause to reject the Claimant’s grievance: (1) because there was a competitive recruitment process that required objective selection; and (2) the interview process used, adopting the recommendations of Mr Wood’s memo, was a proper approach.

 

24.            As for the paternity pay claim, regulation 6 of the Leave Regulations - referenced at the Rule 3(10) Hearing - could not assist the Claimant; his complaint was about paternity pay, not leave.  He had been given leave; that was not an issue.  Regard was therefore to be had to the Social Security Contributions and Benefits Act 1992 (“the 1992 Act”) section 171ZC and the Regulations made thereunder, specifically the Pay Regulations, for the right to pay for paternity leave.  Having regard to those Regulations, it was apparent that the notice requirements did not first depend on the employer having made a prior request in writing.  The ET had properly rejected the Claimant’s claim because he did not qualify for paternity pay as he had not given the appropriate written notice.  It should, in any event, further be noted that the ET had also found that there was no financial loss and yet further that his claim was out of time, a point that was fatal to the appeal as he had not been given permission to challenge that.

 

The Relevant Legal Principles

25.            The Claimant’s claim of unfair dismissal depended upon his establishing that he had been constructively dismissed for the purposes of section 95 of the Employment Rights Act 1996; that is, that he had terminated the contract under which he was employed in circumstances in which he was entitled to terminate it without notice by reason of the Respondent’s conduct.  In this regard it is common ground that the ET had correctly identified the issues it had to determine at paragraph 9.4 of its reasoned Judgment as follows:

“9.4.1. Did the Respondent commit a repudiatory breach of the Claimant’s contract of employment?  The Claimant has identified the following matters as amounting to a fundamental breach or breaches - a) the outcome of his grievance; b) removing his assistant manager and leaving him without adequate management; c) asking him about his right to work in the UK; d) asking him for a DBS check; e) asking him to sign an opt out from 48 hour working week;

9.4.2. If the answer to 9.4.1 is “yes”, did the Claimant resign in response to the alleged breach or breaches?

9.4.3. If the answer to 9.4.1 is “yes”, did the Claimant delay in accepting the breach or breaches?”

 

Only the first of the issues identified at paragraph 9.4.1 is relevant to this appeal.

 

26.            In determining whether there has been a fundamental breach of contract, unreasonable conduct alone is not sufficient (see Claridge v Daler Rowney Ltd [2008] IRLR 672 EAT); it has to amount to a breach of contract that fundamentally undermines the employment relationship, something to be determined objectively by the ET.  That does not, however, import a range of reasonable responses test (as applied when determining the fairness of any dismissal).  Rather, when determining whether an employer has acted in fundamental breach of the implied obligation to maintain trust and confidence, what has been described as the unvarnished Malik test is to be applied: that is, whether the employer has, without reasonable and proper cause, conducted itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between the employer and employee.

 

27.            The Claimant’s complaint of race discrimination was brought as one of direct discrimination under section 13(1) of the Equality Act 2010 (“EqA”), which provides:

“(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.”

 

28.            The requirement of less favourable treatment imports the notion of a comparison, as to which section 23(1) and (2) EqA provides:

“(1) On a comparison of cases for the purposes of section 13, 14, or 19 there must be no material difference between the circumstances relating to each case.

(2) The circumstances relating to a case include a person’s abilities if -

(a) on a comparison for the purposes of section 13, the protected characteristic is disability;

(b) on a comparison for the purposes of section 14, one of the protected characteristics in the combination is disability.”

 

29.            In approaching its task in this regard, the ET was further required to apply the shifting burden of proof laid down by section 136(2) as follows:

“(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.”

 

30.            The ET reminded itself of the approach it was to adopt in this regard as described in the guideline case of Madarassy, which the ET summarised, without objection from either party, at paragraph 10.6 of its Judgment as follows:

“10.6. … the burden of proof does not pass to the employer simply on the claimant establishing a difference in status, such as sex, and a difference in treatment.  Those bare facts 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.  The phrase “could conclude” must mean that “a reasonable tribunal could properly conclude” from all the evidence before it that discrimination had occurred.  This would include evidence adduced by the claimant in support of the allegations of 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 needs to consider all the evidence relevant to the discrimination complaint, such as evidence as to whether the act complained of occurred at all, evidence as to the actual comparators relied on by the claimant to prove less favourable treatment, evidence as to whether the comparisons being made by the claimant were of like with like and available evidence of the reasons for the differential treatment.”

 

31.            As for the paternity pay claim, the starting point is section 171ZC of the 1992 Act, which, relevantly, provides that:

“(1) A person shall be entitled to payments of statutory paternity pay in respect of any period only if he gives the person who will be liable to pay it notice of the week or weeks in respect of which he expects there to be liability to pay him statutory paternity pay.

(1A) Regulations may provide for the time by which notice under subsection (1) is to be given.

(2) The notice shall be in writing if the person who is liable to pay the statutory paternity pay so requests.

(3) The Secretary of State may by regulations -

…

(b) provide that subsection (1) above shall not have effect, or shall have effect subject to prescribed modifications, in such cases as may be prescribed;

(c) impose requirements about evidence of entitlement;

…”

 

32.            The Leave Regulations then make provision for formal requirements before an employee is entitled to a period of paid paternity leave, and the Pay Regulations then prescribe the conditions for entitlement to pay for paternity leave, which, as permitted by section 171ZC(3)(b) and (c) of the 1992 Act, lay down more stringent notifications than might initially have been anticipated by reading section 171ZC(1), specifically:

“9. Evidence of entitlement to statutory paternity pay (birth)

(1) A person shall provide evidence of his entitlement to statutory paternity pay (birth) by providing in writing to the person who will be liable to pay him statutory paternity pay (birth) -

(a) the information specified in paragraph (2);

(b) a declaration that he meets the conditions prescribed under section 171ZA(2)(a) of the Act and that it is not the case that statutory paternity pay (birth) is not payable to him by virtue of the provisions of section 171ZE(4) of the Act.

(2) The information referred to in paragraph (1)(a) is as follows -

(a) the name of the person claiming statutory paternity pay (birth);

(b) the expected week of the child’s birth and, where the birth has already occurred, the date of birth;

(c) the date from which it is expected that the liability to pay statutory paternity pay (birth) will begin;

(d) whether the period chosen in respect of which statutory paternity pay (birth) is to be payable is a week.

(3) The information and declaration referred to in paragraph (1) shall be provided at least 28 days before the date mentioned in sub-paragraph (c) of paragraph (2) or, if that is not reasonably practicable, as soon as is reasonably practicable thereafter.

(4) Where the person who will be liable to pay statutory paternity pay (birth) so requests, the person entitled to it shall inform him of the date of the child’s birth within 28 days, or as soon as is reasonably practicable thereafter.”

 

Discussion and Conclusions

33.            I start with the constructive unfair dismissal claim and with how the issues in this regard had been identified at the earlier Preliminary Hearing before Employment Judge Manley, as recorded by the ET at paragraph 9.4.1 (see above).  Although the ET did not unpack the point further at that stage, it seems it proceeded on the basis that these matters, whether taken individually or when assessing their cumulative effect, gave rise to a breach of the implied obligation identified in Malik.  That is:

“10.14. … that the employer shall not without reasonable and proper cause conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. …” (ET’s emphasis)

 

34.            The ET had found the Claimant had been correct in his interpretation of the Wood memo - it was applicable to promotions and not to lateral transfers such as he was seeking to make to the new Romford store - and the ET was further prepared to accept that the Claimant’s trust and confidence in his employer was affected and may well have been destroyed by its decision not to appoint him to the Romford position (see its finding at paragraph 28).  I take Mr Northall’s point that the constructive dismissal complaint was not founded upon the failure to appoint the Claimant to the Romford Store Manager position but on the rejection of his grievance in that regard.  That said, the ET was clear that the rejection of the Claimant for the Romford job was at the heart of his grievance: to refuse his grievance was, at least in some respects, a reiteration of the reason why he had not been given the Romford position.  The real question for the ET was (applying Malik unvarnished, as the Claimant contends): had the Respondent conducted itself in the way that it had without reasonable and proper cause?  The Claimant complains that by focusing on this question the ET wrongly imported a range of reasonable responses test, but I do not accept that.  The ET was, rather, properly applying the test laid down in Malik, a test that recognises that an employee’s loss of trust and confidence in their employer is not the only question; the ET must be satisfied that the employee has lost that trust and confidence as a result of conduct on the part of the employer that was without reasonable and proper cause; a question that is to be answered by the ET objectively, not simply by applying a range of reasonable responses test.

 

35.            I do not think the ET in this case lost sight of that.  It understood the Claimant’s position and accepted his construction of the Wood memo, but it was also satisfied that the Respondent had reasonable and proper cause for its conduct, specifically:

“28. … His good record and the fact that he was already a store manager, however, do not take into account the fact that the position had been advertised and that there were four other applicants, so that the respondent had to choose and had to devise a method for selecting the best candidate. …”

 

36.            Thus, when addressing the Claimant’s grievance - which the Respondent was obliged to deal with, although not simply to find in the Claimant’s favour - the Respondent was entitled to have regard to the reasoning that had led to the decision in respect of the Romford post. 

 

37.            Much the same can be said in respect of the rejection of the Claimant’s race discrimination claim.  The ET did not find that the burden of proof had shifted, and it is apparent that its conclusion in this regard was in part informed by its rejection of matters alleged by the Claimant that might otherwise have allowed for the burden to shift.  It was, further, satisfied that the comparators relied on by the Claimant did not assist him.  Specifically, in relation to Mr Muhammed, he was not in like circumstances for the purpose of section 23 EqA: there were no other candidates for the position for which he was being considered, which was a temporary position that the Respondent wished to fill in some haste.  That was not the position in respect of the Romford job for which the Claimant desired to be considered.

 

38.            Even if the ET had been wrong in finding that the burden of proof had not shifted, in any event it went on to consider whether - even if the burden had shifted - the Respondent’s failure to transfer the Claimant into the Romford Store Manager position was for non-discriminatory reasons.  In this regard the ET correctly directed itself as to the burden of proof, applying Madarassy.  I am satisfied, as the Respondent contends, that it did not lose sight of its earlier finding as to the construction of the Wood memo; indeed, it returned to that issue when setting out its conclusions and was plainly conscious that this meant, on the ET’s own finding, that the Claimant had been subjected to a process that should not strictly have been required.  The ET had, however, permissibly been swayed by other factors, which included the fact that the Claimant had not been the only candidate for the position in question, that the Respondent had to hand a selection process that it was entitled to use to select the most suitable candidate in those circumstances, that the Claimant’s comparator Mr Muhammed was not in like circumstances (for the reasons I have already cited), that there were material differences between the Claimant’s case and that of his other comparator (Mr Horsfield, who had scored more highly than the Claimant), and that the ET had also rejected the other matters that the Claimant had relied on to support his claim of race discrimination.  On the basis of its primary findings of fact - which the Claimant was not entitled to challenge on this appeal - the ET had permissibly concluded that his claim of race discrimination was not made out.

 

39.            As for the paternity pay claim, the short and fatal point is that the appeal cannot go anywhere given the ET’s finding that the claim had been brought out of time (and there is no ground of appeal before me in against this finding).  In addressing the substance of the appeal, however, I agree with the Respondent that the ground permitted to proceed at the Rule 3(10) Hearing focuses on the wrong Regulations, citing the Leave Regulations rather than the Pay Regulations; it is the latter that are actually applicable to the claim in question.  Having regard to the Pay Regulations (see above), it is apparent that the information required did indeed have to be provided in writing, something the ET found the Claimant had not done.

 

40.            For all of those reasons, therefore, I dismiss this appeal.