Appeal No.UKEAT/0904/03/ILB

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 21 & 22 June 2004
Judgment delivered on 5 August 2004

Before
HIS HONOUR JUDGE PETER CLARK
MR K EDMONDSON JP
MR F MOTTURE

NOTTINGHAM CITY COUNCIL	APPELLANT

(1)  MR R A GREEN 
(2) MR A ATKINS  
(3) MR I BAILEY	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MS S ROBERTSON
(of Counsel)
Instructed by:
Nottingham City Council
Legal Services Division
City Secretary’s Department
The Guildhall
Burton Street
Nottingham NG1 4BT

	
For the Respondents	MR D CHRISTIE
(of Counsel)
Instructed by:
Messrs Nelsons
Solicitors
Employment Unit
Pennine House
8 Stanford Street
Nottingham NG1 7BQ

SUMMARY

Race Discrimination

Direct discrimination - victimisation (RRA) - Unfair discrimination.  Need for proper case management.  Adequacy of ET reasoning.  Appeal allowed and case remitted for rehearing.

HIS HONOUR JUDGE PETER CLARK

1	This case graphically illustrates the need for careful case management by Tribunal Chairmen, clearly identifying the issues of fact and law for determination by the full Tribunal at the substantive hearing, particularly in a case involving Applicants, then effectively in person, conducting claims of direct and indirect discrimination and victimisation under the Race Relations Act 1976 (RRA) and unfair dismissal; a case which ran for 31 days, culminating in a Reserved Decision by a Tribunal sitting at Nottingham under the chairmanship of Mr J A Caborn, promulgated on 11 August 2003, almost one year after it began, with Extended Written Reasons (EWR) running to 65 pages.  

Background
2	In summary, the Applicants, who are each of black, African-Caribbean racial origin, were employed by the Respondent Council and its predecessor for many years.  They were experienced social workers, but without formal qualifications, working in the Youth Justice Service (YJS).  Following the passing of the Crime and Disorder Act 1998, a reorganisation took place; YJS was replaced by the establishment of the Youth Offending Team (YOT).  The Respondent decided initially that the new case manager posts in YOT, which the Applicants believed were of comparable status to the posts which they formally held in YJS, required post-holders to have formal professional qualifications.  That prima facie excluded the Applicants.  They did not apply for those posts, but opted for the redeployment route.  In the event alternative employment offered to them was rejected and each was dismissed in April 2001.  

3	In July 2000 Unison, on behalf of the Applicants Atkins and Bailey lodged a grievance arising out of the reorganisation under the Respondent’s harassment and discrimination procedure, alleging both direct and indirect race discrimination.  Mr Green was included in the grievance shortly thereafter.  It was investigated by Harris Joshua, a senior officer of the Respondent.  His report concluded that the Applicants experienced direct race discrimination while on the redeployment register.  There was, he found, no case of indirect discrimination.  

4	The Applicants commenced Tribunal proceedings prior to their dismissal.  All three Applicants, in their first Originating Applications lodged in February 2001, alleged race discrimination, that is, less favourable treatment than former colleagues on grounds of race during the redeployment process.  The particulars of complaint were identical in each case.  Those were followed by further Originating Applications, following dismissal, complaining of race discrimination, victimisation and unfair dismissal in July 2001.  

5	The claims were resisted and a directions hearing was held before a Chairman, Mr S Keevash, on 31 January 2002.  The Chairman, in a letter to the parties dated 31 January, asked that the following issues be addressed:

“1.  What are the events relied upon by the Applicants to support their complaints of unlawful discrimination and/or victimisation?  
2.  What are the events relied upon only as background information?
3.  Who are the comparitors (sic) relied upon by the Applicants?
4.  Is training an issue which forms part of the complaints of unlawful discrimination and victimisation?”

6	The directions hearing was, on that basis, adjourned until the first available date after 21 February 2002.  The restored directions hearing took place before Mr Keevash on 19 March.  By letter dated 22 March the Chairman directed that by 9 April the Applicants file and serve further and better particulars of their complaints (further particulars having earlier been served, in response to the Respondent’s request, by Messrs Green and Atkins only in September 2001).  Each Applicant provided further particulars, pursuant to that direction on or before 10 April 2002.  We see from paragraph 10 EWR of the Caborn Tribunal Reasons that a final pre-trial directions hearing was held on 17 April at which:
“it was confirmed that the further particulars provided by the Applicants “were satisfactory”.  It was further decided that although the Respondent raised limitation issues, no advantage would be gained from holding preliminary hearings.”

7	That was the state of preparation of the case when it first came before the Caborn Tribunal.  The issues had not been spelt out at the earlier directions hearings.  It was therefore essential that, at the outset of the substantive hearing, with the Applicants in person assisted by a friend, the Chairman clearly established with the parties the precise issues to be determined.  Instead, it is common ground before us, the Applicants were simply required to get on with the case.  They did so and it then occupied 31 days of hearing time.  

8	At the end Ms Robertson, appearing on behalf of the Respondent below as she does before us, prepared detailed written closing submissions running to 19 pages, addressing both the legal background and issues of fact and law which, on her case, arose for determination.  We have found that a helpful document when considering the principal questions in the appeal and cross-appeal by the Applicants before us.  

Direct discrimination
9	The Tribunal’s Decision records that each Applicant was subjected to unlawful direct discrimination on the grounds of race by the Respondent.  

10	The principal complaints raised by the Respondent in its grounds of appeal in challenging that finding relate to (a) the Tribunal’s failure to carry out the comparative exercise required by RRA sections 1(1)(a), read with section 3(4); (b) the Tribunal’s treatment of the limitation issue raised by the Respondent below; (c) the adequacy of the Tribunal’s reasoning.  
The comparison
11	In reaching their conclusion on direct discrimination the Tribunal was required to:
(i) identify the Applicant’s pleaded complaints;
(ii) Make findings of fact on those complaints.
(iii) Identify the relevant comparator(s), actual or hypothetical.
(iv) Make a finding as to the less favourable treatment afforded to the Applicants in comparison with the treatment which was or would have been afforded to the comparator(s).
(v) Having concluded that there was a difference in treatment and a difference in race, then consider what, if any explanation for that difference in treatment had been given by the Respondent and why it was considered inadequate or unsatisfactory.  
(vi) Explain their conclusion that the Applicants were less favourably treated on the grounds of their race.  

Instead, we find what is apparently their core reasoning at paragraphs 35 - 37 EWR.  Paragraph 35 reads:
“The Tribunal having taken all matters into consideration, including its findings of fact, the submissions of the parties and the authorities to which it has been referred has unanimously concluded that the applicants and each of them were treated less favourably on the grounds of their race in relation to the manner of their treatment that is in relation to lack of proper and effective management by in particular Mr J Seals, Mr C Wright, Ms M McKechnie and Mr P Snell in that the applicants' concerns about their difference in treatment which they attributed to their race were consistently ignored notwithstanding the problem being highlighted by Ms Ward in her memorandum of 13 July 2000 and which commenced in December 1997, and culminated in the letter of Angela Probert of 6 December 2000, the -findings of Harris Joshua in January 2000 following the applicants' grievance of July 2000, that is they were subjected to unlawful direct discrimination on the grounds of their race and the subsequent termination of their employment.”

Paragraph 36 contains a list of 17, seemingly random observations drawn from the evidence.  At paragraph 37 they say:

37 It is against this background that the Tribunal has unanimously concluded  that the applicants have established that they were subjected to less favourable treatment by the respondents. As was acknowledged in King- v -The Great Britain China Centre the outcome of a case may well depend on what inferences it is proper to draw from the primary facts. When considering the primary facts the Tribunal is led inevitably to the conclusion the applicants were subjected to less favourable treatment. Indeed, this is precisely the concern that Ms Ward had at the time she wrote her memorandum. Further, there is a difference in race - the applicants are black African Caribbean. Their managers J Seals, C Wright, Ms McKechnie and P Snell are white male/female.  Of those persons who transferred to YOT seven were unqualified of whom five were white male and who were or who have since undertaken the department sponsored DipSW qualification. In these circumstances it is appropriate to look to the respondents for an explanation of the less favourable treatment. The Tribunal is aware of and has noted what was said in Zafar -v - Glasgow Citv Council. Having listened to and taken account of the respondent's explanation and which includes much evidence by the respondent the Tribunal has concluded that there is no or no sufficient explanation from the respondent that they listened to and took on board and addressed the applicants' concerns at they were being treated less favourably on the grounds of their race.  This follows through from December 1997 when Mr Seals acknowledged in a memorandum to the applicants that racial issues were a matter of concern which had been discussed by managers and which were to be further addressed in the New Year (1998). Further, however, not only did the respondent not adequately and effectively address the applicants' concerns when raised by them but also they failed to have regard to the issues raised by Claire Ward and which supports the proposition that the applicants were being treated less favourably that there is a difference in race and that the reason for their difference in treatment is the applicants' race. Ms Ward, apparently, was supported in her view by Mr Wood. Finally, although the applicants addressed a complaint of race discrimination to the Director of Social Services in July 2000 and which he arranged to be investigated, notwithstanding a finding of race discrimination in his department and which ought to have been of serious concern to him, he chose not to involve himself in the outcome of the procedure.”

12	In advancing this part of the appeal Ms Robertson submits:

(1) The correct approach to the comparative exercise is that set out by Elias J in The Law Society -v- Bahl [2003] IRLR 640, see paragraphs 109 - 115.  Whilst we are aware that the EAT decision in Bahl is currently under review by the Court of Appeal, we see no reason to depart from his analysis in that case.
(2)  The Tribunal at paragraph 35 EWR reached no firm conclusions on the acts complained of by the Applicants.
(3) Similarly, they failed to identify the relevant actual or hypothetical comparators for the purposes of the comparative exercise in relation to the acts complained of and upheld.
(4)  The Tribunal fell into the Zafar trap of judging the reasonableness of the Respondent’s actions, rather than the statutory questions under RRA.

13	In response, Mr Christie, to whom we are particularly indebted for his grasp of a complicated case, not having appeared below, and his doughty defence of the Tribunal’s Decision, accepts that the Tribunal did not rule on each pleaded allegation as set out by the Applicants in their Originating Applications and further particulars.  They did not deal with each of the actual comparators relied on by the Applicant.  Whilst he acknowledged that the Tribunal’s Reasons were “irritatingly long-winded”, he contended that there was just enough to explain adequately why the Applicants won on this part of the case.  

14	We prefer the submissions of Ms Robertson.  It is we think significant that in setting out the relevant statutory provisions the Tribunal omit any reference to section 3(4) RRA.  They do not sufficiently address the specific acts complained of, their findings on those complaints, and identify who are the relevant comparators in respect of the particular complaints found proven.  They do not distinguish between actual comparators and hypothetical comparators, and if the latter, how they have constructed the same; they confuse reasonableness with the proper exercise under sections 1(1)(a) and 3(4) RRA;  they do not identify the Respondents’ explanation for the difference in treatment found, nor do they properly explain why they reject any such explanation and why they then have gone on to conclude that the less favourable treatment was on grounds of race.  Their reasoning at paragraphs 35 - 37 EWR is unnecessarily prolix and disordered, so that it is quite impossible to discern how the Tribunal has approached its task.  These Reasons are not Meek-compliant.  

Limitation
15	The Tribunal deal with the limitation issue raised by the Respondent in respect of the Applicants’ complaints of direct discrimination and victimisation at paragraphs 26 - 30 EWR.  Having set out the guidance from certain leading authorities, the Tribunal refer to the Applicants’ complaints of less favourable treatment on the grounds of their race from and since December 1997.  At paragraph 29 they hold that the complaints of victimisation were out of time and that it was not just and equitable to extend time; at paragraph 30 they find that the Applicants’ grievance notified in December 1997 was never addressed by the Respondents; there was a continuing act and thus the complaints of direct discrimination were in time.  That continuing act is identified by the Tribunal as the failure by four named managers to adequately and effectively manage the Applicants in respect of their concerns of discrimination from 1997.  Alternatively, the Tribunal state, without giving reasons, that it is just and equitable to extend time.  

16	As to the complaints found to be within time the Respondent contends before us that the Applicants did not rely on a continuing act below; alternatively the Respondent was not given an opportunity to deal with the eventual finding by the Tribunal as to what was the continuing act.  In any event that finding by the Tribunal bears no relation to the act or acts of discrimination complained of by the Applicants.  This is an area, in particular, where the conduct of the case below suffered from a failure, at the earlier directions hearings and at the start of the substantive hearing, to identify the limitation issues.  

17	In response, Mr Christie concedes that the particular continuing act found by the Tribunal at paragraph 30 EWR was not pleaded by the Applicants.  He poses a number of material questions in relation to events as they unfolded during the Applicants; employment in support of the proposition that the Tribunal’s reasoning “just gets there”, as he puts it.  

18	We are unable to accept that proposition.  The reasoning of the Tribunal at paragraphs 28 - 30 suffers from the same defects as that at paragraphs 35 - 37.  It is not tied in with the Tribunal’s findings as to the acts of discrimination complained of by the Applicants, and there is no explanation as to why the Tribunal found that it was just and equitable to extend time if there was no continuing act.  In these circumstances in our judgment the Tribunal’s findings as to limitation cannot stand.  

Adequacy of Reasons
19	It follows from what we have said that we accept Ms Robertson’s submission that the Tribunal have failed to give adequate reasons for their conclusion that the Applicants’ complaint of direct discrimination was both in time and made out.  

Indirect discrimination
20	At paragraph 38 EWR the Tribunal reject the Applicants’ claims of indirect race discrimination.  There is no cross appeal against that finding.  Accordingly we say no more about it.  

Victimisation
21	The Tribunal summarised their conclusions on this part of the Applicants’ claims at paragraph 39 thus:
“The Tribunal has also concluded that the applicants nor any of them has established a complaint of victimisation and which is in time. Each applicant has included reference to victimisation in the particularisation of their complaints but they have not established to the satisfaction of the Tribunal that any of the matters referred to arose by reason of the applicants having done a protected act.  Further, if the Tribunal is mistaken in this regard and the applicants were treated less favourably by reason of having done a protected act, it would still have concluded that the complaints should not succeed by reason of being out of time they being matters of individual complaint referred to by the applicants and which they did not pursue at the time.”

Against this conclusion the Applicants cross-appeal.  Mr Christie submits:
(1) the Tribunal failed to identify the relevant protected act(s).  
(2) They do not identify the complaints of less favourable treatment made by the Applicants, which differ between their respective cases.
(3) They do not identify relevant comparators, actual or hypothetical, that is persons who are similar in all material respects to the Applicants but who had not done the protected act(s).  
(4) They give no reasons explaining why the Applicants have failed to establish the causative link between the relevant acts complained of and the protected act(s).  
(5)  So far as limitation is concerned, they failed to consider whether the Applicants’ dismissals, themselves in time, were acts of victimisation.  

22	Ms Robertson argues only faintly in support of the Tribunal’s approach on this aspect of the case, conscious perhaps that the force of her submissions in connection with the Tribunal’s approach to matters forming part of her appeal resonate in the cross-appeal.  

23	We accept Mr Christie’s submissions.  Whilst the Tribunal mentions section 2 RRA in their section B, headed “THE LAW”, there is no real indication to us that they have grappled with the issues raised in this part of the claim in the respects advanced by Mr Christie.  Again, this is a glaring example of the consequences of lack of proper case management.  

Unfair dismissal
24	Although not a ground of appeal by the Respondent the Tribunal do not find what was the reason or principal reason for dismissal.  They find instead that it was a (potentially) fair reason, redundancy and/or some other substantial reason (EWR paragraph 48).  Pausing there, we think that that finding exemplifies all that is wrong with this Decision.  Section 98 Employment Rights Act 1996 (ERA) requires the Tribunal to find the reason or principal reason for dismissal.  It cannot be either or both of two potentially fair reasons.  

25	The attack in the Respondent’s appeal is directed towards the Tribunal’s finding that dismissal for whichever reason was unfair under section 98(4).  At paragraph 51 the Tribunal found that dismissal for the Respondent’s reason fell outside the band of reasonable responses.  

26	Ms Robertson points out that in arriving at that conclusion the Tribunal failed to consider the conventional factors, selection (for redundancy, if it was redundancy), consultation and the search for and offers of alternative employment, specifically raised at paragraph 61 of her closing written submissions below.  

27	Mr Christie acknowledges that such is the case, but argues that on the facts the Tribunal’s conclusion that dismissal fell outside the range of reasonable responses was plainly and unarguably correct.

28	We do not feel able to accept that necessarily extreme position (see Dobie -v- Burns [1984] ICR 812).  Again, the Tribunal has simply failed to ask itself and answer, logically and coherently, the statutory questions under section 98 ERA.  

Perversity
29	Ms Robertson, by reference to the evidence, has sought to persuade us that insofar as the Tribunal’s findings on direct discrimination and unfair dismissal are concerned, we should hold that not only did the Tribunal err in their approach as a matter of law; they reached conclusions which are legally perverse.  We have considered those submissions, but in the light of the high hurdle to be crossed (see Yeboah -v- Crofton [2002] IRLR 634) we are not persuaded that this part of her case is made out.  

Conclusion
30	It follows that we shall allow both the appeal and cross-appeal and remit for rehearing by a fresh Tribunal the Applicants’ claims of direct race discrimination, victimisation and unfair dismissal.  

31	For that purpose we direct specifically that a copy of this judgment be placed before the Regional Chairman.  He may wish, himself, to conduct a directions hearing so that the issues are clearly identified before appointing a fresh panel to rehear the case.