A1/2000/3703
Neutral Citation Number: [2001] EWCA Civ 399
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL

								Royal Courts of Justice
								Strand
								London WC2

								Thursday 15th March, 2001

B e f o r e:

LORD JUSTICE MUMMERY

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LETITIA STENNING
Appellant/Respondent

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(1) NICHOLAS JARMAN
(2) LONDON BOROUGH OF HACKNEY
Respondents/Applicants

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(Computer Aided Transcript of the Palantype Notes of
Smith Bernal Reporting Limited, 190 Fleet Street,
London EC4A 2AG
Tel: 020 7421 4040
Official Shorthand Writers to the Court)
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MR K BRYANT (Instructed by Messrs Thomas Eggar Church Adams, Chichester PO19 1TS) appeared on behalf of the Applicants

THE RESPONDENT did not appear and was not represented

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J U D G M E N T
1.	LORD JUSTICE MUMMERY: This is a renewed application for permission to appeal. The application is made by Mr Bryant on behalf of Mr Nicholas Jarman, who was at one of the respondents to a complaint of race discrimination brought by Miss Letitia Stenning in the Employment Tribunal by a complaint presented by her on 21st July 1998. 
2.	Miss Stenning had been appointed Directorate Personnel Officer in the Education Directorate of the London Borough of Hackney. She worked there from 4th December 1990 until 31st July 1998. She is black and of African origin. 
3.	Mr Nicholas Jarman was in 1997 appointed Temporary Acting Director of Education in the London Borough of Hackney. The complaint of race discrimination against him and against the London Borough of Hackney arises from a reference given by Mr Jarman on 21st April 1998 to a prospective employer of Miss Stenning. The unfavourable nature of that reference led to the complaint in the IT1. In Miss Stenning's own words, in box 10, the details of her complaint were these: 
“I have strong reason to believe that Mr Nick Jarman's unsupported judgement that I did not yet have `the breadth of experience: 
	(i) to operate at Assistant Director level; or 
	(ii) of the scope of the job, as outlined.' 
This judgement prevented me from being appointed to the post of Assistant Director of Education by Birmingham City Council. 
I further believe that Mr Jarman's actions were due to my race, contrary to the provisions of the Race Relations Act. 
Hackney failed to ensure that the reference issued truly and fairly reflected my experience and competency during my 7½ years service.” 
4.	The claim was disputed in the notice of appearance, which denied that Miss Stenning had been discriminated against or otherwise treated less favourably because of her race. It was expressly denied that the reference was discriminatory in nature or that Mr Jarman was motivated or acted in any particular way so as to treat Miss Stenning less favourably by reason of her race. 
5.	The complaint was heard by the Employment Tribunal on 20th July 1999. All parties were represented by counsel. The Tribunal was split on the result. The majority decision was that Miss Stenning's application failed and was dismissed. However, there was a dissenting member who did not share that view. 
6.	Miss Stenning appealed to the Employment Appeal Tribunal. The matter went to a full hearing after a preliminary hearing on 31st January 2000. At the full hearing (at which Bell J presided) it was unanimously decided to allow the appeal on the ground that there was an error of law in the decision of the Employment Tribunal. The order made by the Appeal Tribunal was that the matter should be remitted for rehearing before another Tribunal, differently constituted, with such guidance as appears in the Appeal Tribunal's judgment. 
7.	An application by Mr Jarman and by the London Borough of Hackney for permission to appeal to this court was refused. 
8.	Mr Jarman made an application to this court for permission to appeal on grounds indicated in the draft notice of appeal and more fully explained by Mr Bryant's skeleton submissions. The application was first considered on paper by Hale LJ. On 8th February 2001 she refused permission to appeal, giving these reasons: 
“It is difficult to discern from the ET's reasoning that they gave serious consideration to whether the treatment of Mrs Jordan, Mr Mahoney and Mr Gorst was such that an inference of less favourable treatment of the applicant could be drawn. The ET appears to have relied upon the passage quoted from Zafar v Glasgow City Council [1998] IRLR 36 without also applying the guidance given in King v The Great Britain China Centre [1991] IRLR 513.” 
9.	Following the paper refusal, Mr Jarman renewed his application for permission at the oral hearing today. 
10.	I have to decide whether this proposed appeal has a real prospect of success. If there was no error of law in the decision of the Employment Tribunal, then this appeal would have no real prospect of success and I should refuse permission. It is necessary therefore to look at the way in which the extended reasons given by the Employment Tribunal majority for dismissing the claim were expressed in the reserved decision promulgated on 22nd September 1999. 
11.	The Tribunal set out the background to the case, referring to procedural issues, the relevant authorities and statutory provisions. They stated in paragraph 9 that the position was reached in 1998 when some changes were made in the department which Mr Jarman was struggling to run. Those decisions included a decision that a Mr Gorst, who was white, should have his contract extended indefinitely. That was decided under cover of a letter sent on behalf of Mr Jarman on 20th January 1998. Mr Gorst was in charge of the computer systems in the department. 
12.	Reference is then made to Mr Mahoney, who is also white. He was in charge of the building, knew about the office structure and was responsible for security, among other things. By a memo of 12th February 1998 Mr Jarman arranged for him to be assimilated into a new job. 
13.	Paragraph 10 of the extended reasons starts in this way: 
“No such indulgence was shown to the Applicant. As 19 February approached she could see her employment coming to an end.” 
14.	The paragraph goes on to refer to a meeting which took place between Miss Stenning and Mr Jarman on 19th February. It was common ground that there was a discussion about her future and that Mr Jarman advised her to seek employment elsewhere on the basis that she had been at Hackney for too long and that, in any event, the Education Department in Hackney was in such a parlous state that no one should rely upon it for their future career progression. It was common ground that Mr Jarman offered to provide her with a reference. 
15.	The Tribunal then considered the later events and set out in paragraph 17 in full the reference which led to her not being given the position for which she had applied with Birmingham City Council. 
16.	The Tribunal summarised the legal approach between paragraphs 19 and 23 and stated their conclusions in paragraph 24 onwards. In paragraph 24 they referred to the actual comparator chosen by Miss Stenning. She was a white employee, Mrs Jordan. The Tribunal found ‑ and the Appeal Tribunal agreed ‑ that Mrs Jordan was not an actual comparator who met the criteria within section 3(4) of the Race Relations Act 1976. 
17.	So the Tribunal proceeded to consider whether this Stenning had established her case of less favourable treatment on the ground of race by reference to a notional comparator. That is the correct way in which to proceed. What the Tribunal said in paragraph 25 was this: 
“We are in no doubt that she has been treated unfairly. The reference given by Mr Jarman is, in our view, wholly misleading and irresponsibly delivered and was designed to ensure that she was unsuccessful in her application. We accept that when an adverse reference is to be given in these circumstances, fairness would demand that at least the referee should qualify the reference to show that it is based on very limited knowledge of the Applicant particularly when on his own admission, Mr Jarman had not even read her file before preparing the reference. On analysis it was clear that she comfortably met the required person specification and although obviously there were limitations upon the breadth of her experience, those were much overstated. It was wholly unreasonable to allow the Applicant to go to that interview knowing that such a damning reference had been given without at least telling her or seeking her comments upon the proposed reference and to give, as an excuse, that he was too busy is frankly wholly unpalatable bearing in mind, for example, the lengths that he went to to protect the position of Mr Mahoney. That behaviour is then compounded by him trying to ensure that the offending reference would not pass into her possession and lying to her about his intentions to give her a copy of it.” 
18.	Having said that, the Tribunal correctly reminded themselves of what Lord Browne‑Wilkinson had said in Zafar, that unfair treatment is not necessarily the same as less favourable treatment for the purposes of the 1976 Act. 
19.	Paragraph 27 is, in my view, the crucial part of the reasons of the Employment Tribunal which are vulnerable to criticism. The Tribunal said: 
“What other evidence then is there? It may be argued that the differential treatment of Mr Gorst and Mr Mahoney, both white, is an indicator of a racist approach. It may also be said that the wholly different phraseology used in the other references referred to create the same impression, ...” 
20.	I pause there to mention that that is a reference to paragraph 24, which mentions references produced on discovery for both white and black employees of the authority. The Tribunal continued: 
“... but then having rejected Mrs Jordan as a direct comparator, we must note that some very glowing references have been given for black candidates. Perhaps the strongly thread of evidence lies in the argument that the reference to the Applicant's experience in equal opportunities demonstrates a mind set that equates that experience with a person that comes from an ethnic minority and therefore indicates a racist approach. It might. Equally however, it could be simply explained by the Applicant's previous personnel experience that would have involved her closely with equal opportunity issues. 
28. We may have suspicions that Mr Jarman was racially motivated, we may find that there are straws in the wind that would fuel their suspicions, but that is not enough. We have to be satisfied that it is more probable than not, that that was the case. The majority cannot so find.” 
21.	The dissenting member did not share that view and the concluding sentence in the following paragraph (paragraph 29) expresses the view of the dissenting member that the differing treatment afforded to the applicant, as opposed to the treatment given to Mr Gorst and Mr Mahoney previously referred to, was support for his view that there had been racial discrimination. 
22.	The Employment Appeal Tribunal found that there was an error of law in the decision of the Employment Tribunal. The principal part of their decision on this point is to be found in paragraphs 21 to 25. They were particularly critical of the way in which the Tribunal had dealt with the material circumstances relating to Mr Mahoney and Mr Gorst, though they also included a reference in that context to Mr Jarman's treatment of Mrs Jordan. The Tribunal stated in paragraph 23: 
“... there was real material in Mr Jarman's treatment of Mrs Jordan, Mr Mahoney and Mr Gorst, and the lack of `indulgence' in respect of the appellant, indeed her positively unfavourable treatment, for the inference that she was less favourably treated than her notional comparator would have been. Paragraphs 25, 27 and 28 of its reasons show that the tribunal was troubled about Mr Jarman's treatment of the appellant and saw the possibility of racial discrimination. In those circumstances, in our view, the appellant is entitled to complain that the tribunal did not go on as it should have done to evaluate the respondent's explanation and decide what inference, if any, to draw if it judged his explanation to be inadequate or unsatisfactory.” 
23.	The Tribunal said in paragraph 24 that they regarded that view, which had been submitted by counsel on behalf of Miss Stenning, to be a valid and important criticism. They referred also to the criticism that had been made of Mr Jarman in paragraph 25 of the extended reasons. 
24.	The Appeal Tribunal continued:
“Furthermore, it seems to us that paragraphs 22 and 23 of the decision indicate that the tribunal thought that once a direct comparator was eliminated, consideration of whether the first respondent's explanation as to why he composed the reference in the way that he did was acceptable and, if not, consideration of what inference should be drawn from that conclusion, fell away as relevant considerations. The tribunal seems to us to have gone straight to the question of whether there was direct evidence of unlawful discrimination, referring to, but giving insufficient weight to the spirit of the second principle in King as approved in Zafar.” 
25.	In his submissions Mr Bryant sought to defend the extended reasons of the Employment Tribunal in the paragraphs quoted. He submitted that the Tribunal had dealt with the notional comparator in a correct legal manner. He reserved his criticisms for the Appeal Tribunal, saying that they had adopted an overanalytical approach. He reminded me of the well‑known decision in Meek v City of Birmingham District Council [1987] IRLR 250 as to what can reasonably be expected of the detail and composition of extended reasons given by an Employment Tribunal. 
26.	He sought to explain why the reasons given in paragraph 27 of the extended reasons were not justifiably subject to the criticisms made of them by the Appeal Tribunal. 
27.	Mr Bryant in an excellent skeleton argument contended that permission to appeal should be granted because there was no error in the decision of the Employment Tribunal. He put forward two grounds of appeal. The first was that the Appeal Tribunal was wrong in its criticisms of the way in which the Tribunal approached the issue of the notional comparator. He said the Tribunal had considered all the evidence that could assist them in answering the question whether Miss Stenning had been treated less favourably than she would have been if she had been a white person. Reference had been made to the treatment of Mr Gorst and Mr Mahoney. Detailed reference had also been given to the treatment of Mrs Jordan. He therefore submitted that it was clear that the Employment Tribunal did consider properly whether Miss Stenning was treated less favourably than a notional comparator would have been, and, in so doing, took into account all the evidence relevant to that question; that evidence included the treatment of other white and black employees who had been given references, and, in particular, the treatment of Mr Gorst, Mr Mahoney and Mrs Jordan. The fact that there had only been a short reference to Mr Gorst and Mr Mahoney (paragraph 25) and no mention of Mrs Jordan by name did not mean that there was an error of law on the part of the Tribunal. 
28.	The second ground on which he advanced his argument related to the three stage inquiry. He said that what had happened in this case was that Miss Stenning had failed at the first stage, at which it was necessary for her to establish that she had been treated less favourably than she would have been had she been white. As she had failed at that stage, the less favourable treatment stage, the Appeal Tribunal was wrong in thinking that the Employment Tribunal was required to go on to consider the second and third stage, namely whether the employer had provided an adequate explanation for less favourable treatment and whether, if there was not an adequate explanation, whether they should infer that that less favourable treatment was on racial grounds. 
29.	I have carefully considered those points. But I conclude (as did the Appeal Tribunal and Hale LJ) that the reasons given by the Employment Tribunal are vulnerable to serious criticism as indicating an error of law in the approach to the question of the notional comparator. I agree with the criticisms which have been made by the Appeal Tribunal of the Employment Tribunal's extended reasons, in particular in relation to paragraphs 25 and 27 of the decision. It seems to me that, in the notional comparator exercise, the Employment Tribunal should have considered, in a way that they do not appear to have done, what the reasons were for the treatment received by Mr Gorst and Mr Mahoney, but was not received by Miss Stenning. I regard this as a particularly important failing, having regard to the trenchant criticisms made by the Tribunal of the way in which Mr Jarman had conducted the whole matter of the reference, as set out at paragraph 25. 
30.	Of course, unfair treatment, or bad treatment, is not necessarily the same as discriminatory treatment. But when there are other employees, such as Mr Gorst and Mr Mahoney, who were white and did not receive that bad treatment, it is highly relevant to enquire why they received the treatment that they did. 
31.	In those circumstances, I do not think that this appeal has a real prospect of success. There was an error of law in the Employment Tribunal's extended reasons. Though it may be unfortunate for all concerned to have to face it, the order made by the Employment Appeal Tribunal was correct. This matter has to be remitted to the Employment Tribunal, differently constituted, for the purpose of rehearing this complaint. 
ORDER: Application for permission to appeal refused.
(Order does not form part of approved judgment)