Appeal No.   EAT/0437/02/MAA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 14 March 2003

Before
HIS HONOUR JUDGE J MCMULLEN QC
MR P GAMMON MBE BA
MR D A C LAMBERT

COMPANY X	APPELLANT

(1) MRS A (2) MR B	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	Mr M Sethi
(of Counsel)
The Pemberton Partnership Limited
226 Lichfield Road
Shire Oak
Walsall
W Midlands
WS9 9TD	
For the Respondents	Mr D Craig
(of Counsel)
Messrs Scannell Dimdor Solicitors
35-37 King Street
Stanford-le-Hope
Essex
SS17 0HJ	

HIS HONOUR JUDGE J MCMULLEN QC

1	Restrictions were placed on the names of the parties and those remain in place until further Order.  This case is about Employment Tribunal procedure in the handling of material adduced during the course of a sex discrimination case.  From the first part of this judgment, dealing with the adjectival law, it may appear that the points raised are pedantic and overly concerned with written and formal presentation of a claim before an Employment Tribunal.  There is, however, a real point of law about fairness in this part, which, if it succeeded, would be fatal to the Applicant’s case at the Employment Tribunal.  We will continue to refer to the parties as the Applicant, the Respondent (Company X) and Mr B.  

2	It is an appeal by the First Respondent in those proceedings against a decision of an Employment Tribunal sitting at Stratford East over three days, promulgated with Extended Reasons on 14 February 2002, Chairman, Ms I Manley.  The Applicant represented herself; the Respondents were represented by Mrs Pemberton, a solicitor.  The Applicant claimed wrongful dismissal and sex discrimination in the form of sexual harassment.  The Respondent contended that the Applicant was dismissed and that neither the Respondent nor Mr B discriminated against her.  

The Legislation
3	Section 4 of the Sex Discrimination Act provides as follows: 

“(1)	A person (“the discriminator”) discriminates against another person, (“the person victimised”) in any circumstances relevant for the purposes of any provision of this Act if he treats the person victimised less favourably than in those circumstances he treats or would treat other persons, and does so by reason that ….
(c)	otherwise done anything under or by reference to this Act …. or
(d)	alleged that the discriminator or any other person has committed an act which (whether or not the allegation so states) would amount to a contravention of this Act …
Or by reason that the discriminator knows the person victimised intends to do any of those things, …
(2)	Subsection (1) does not apply to treatment of a person by reason of any allegation made by him if the allegation was false and not made in good faith.”

Article 6(1) of the European Convention on Human Rights forming Schedule 1 to the Human Rights Act 1998 guarantees to everyone engaged in civil proceedings a right to a fair hearing.  

The Issues
4	The essential issues as defined by the Employment Tribunal were direct sex discrimination and victimisation, although that taxonomy is disputed and we will return to this issue.

The Tribunal Decision
5	The Employment Tribunal found that Mr B did not sexually harass the Applicant and dismissed claims under Section 1 (direct discrimination) against both Respondents.  The Applicant did not appeal the adverse finding.  It upheld the claim against the Respondent Company X, of victimisation.  It awarded the Applicant a total sum of £2,636, compensation.  The Tribunal refused an application for costs made on behalf of Mr B.

The Grounds of Appeal
6	The Respondent appeals against the finding against it on the following grounds, set out in a Notice of Appeal and a Skeleton Argument and oral submissions made today on its behalf by Mr Mohinderpal Sethi of Counsel.  Essentially they are:

(a)	The Respondent did not have a fair hearing.
(b)	The Employment Tribunal incorrectly applied the test of victimisation.
(c)	It gave inadequate reasons for its decision.
(d)	It denied the Respondent the opportunity to make submissions in relation to authorities, thus denying it natural justice.

EAT Directions
7	Directions were given in this appeal by Judge Serota QC and members at a Preliminary Hearing on 3 September 2002.  All four points noted above were permitted to go forward to a Full Hearing.  

The Parties
8	The Applicant worked for about six months for the Respondent from April 2000 until she was dismissed by letter of 11 October 2000.  Her dismissal came after she had made an allegation that her manager Mr B had sexually harassed her.  The Tribunal found that the Applicant’s claim was in essence two-fold: sexual harassment, and therefore sex discrimination at the hands of Mr B, for whom the Respondent was liable, and that she had been victimised by the Respondent when she raised the complaint about Mr B and was subsequently dismissed.  The Tribunal set itself the task of determining the facts as to whether or not the alleged harassment took place.  If it did, it would constitute direct discrimination; and it had to decide whether a protected act had occurred and whether the Applicant had suffered less favourable treatment within the meaning of Section 6(2)(b) of the Sex Discrimination Act, that is, dismissal.  

The complaint about the Employment Tribunal proceedings
9	It is important to note the procedural steps taken in this case since the first ground of appeal alleges an unfair procedure.  Unusually in this case, the Chairman has documented the state of play at the time of adjournment.  The case was due to open for three days on 5 December 2001.  For fully understandable extrinsic reasons, the case did not start until 6 December.  The Chairman said this:

“On that day, the issues, as stated above, were clarified and the case commenced.”

The issues to which she was referring are set out in a letter dated 21 December 2001 where, under the heading of ‘Background’ the Chairman records what was agreed and directed.  She wrote this:

“The Applicant claims sex discrimination arsing out of incidents at work which, if proved, amount to sexual harassment and are therefore unlawful under Section 1 of the Sex Discrimination Act 1975.  She claims that she was subjected to sexual harassment by her manager, the first-named Respondent and, having complained about this treatment to the Second Respondents, was subsequently dismissed.  This second point the Applicant claims would amount to victimisation under section 4 of the Sex Discrimination Act 1975.”

The Chairman recorded that there was insufficient time to conclude the matters by the close of business on 7 December.  That was caused by difficulties in Mrs Pemberton, the Respondent’s representative, in arriving on time.  The matter was adjourned to agreed dates of 30 and 31 January 2002.  Directions were also given in the letter to which we have referred.

10	Unusually therefore, midway through the proceedings, we have a record made available to the Parties of what the Tribunal’s view of the issues were.  The Tribunal obviously took steps with an unrepresented litigant who was found to be in difficulty presenting her evidence of sexual harassment, to clarify the issues.  No dispute was registered about that letter, since there was no reply from any of the Parties.  The proceedings went on in January 2002, and were concluded with the decisions being made and announced orally by the Chairman and subsequently promulgated.  

11	The complaint by the Respondent is that the issue of victimisation was not properly before the Employment Tribunal and that the Tribunal acted irregularly in making a finding adverse to the Respondent on a claim which had not been put forward.  These matters were set out fully in an affidavit of Mrs Pemberton which was made available to the Chairman upon which she commented.  Mrs Pemberton said, in relation to this matter:

“On the 6th December, 2001, the first day of the merits hearing, the Chairman raised for the first time the issue of victimisation on the part of the Appellant.  I remonstrated with the Chairman that no allegations of victimisation had ever been made …  The Chairman instructed me that “the Tribunal has a wide discretion in such matters” and then addressed the first Respondent on the point.  The first Respondent replied that she had believed that she had been victimised “because the complaint should have been investigated by a woman”.”

Mrs Pemberton considered the letter written by the Chairman and said this:

“I make no dispute with the Chairman that at some time after the [Applicant] made an allegation against [Mr B], the [Applicant] had been dismissed.  This is a matter of fact.  However, it was not agreed at any stage during the merits hearing that the [Applicant] had been dismissed because she had made a complaint.”

She went on to make her complaint which relates to the fourth ground of appeal, the lack of natural justice, where she says, at paragraph 27:

“The [Applicant] was asked by the Tribunal to address them on the alleged sexual harassment by [Mr B] and then asked to address them specifically on the point of victimisation.  Again the only submission made by the [Applicant] was that she believed her complaint should have been investigated by a woman.  I did ask the Tribunal whether I could address them on the investigation of the complaint and was permitted to do so.”

12	In response to that affidavit, produced following the hearing before Judge Serota, the Chairman has commented, at paragraph 5 in a letter dated 20 December 2002:

“Contained within the Originating Application were words which suggested to the Tribunal that the Applicant might well be making a claim of victimisation as well as direct sex discrimination.  It was clear to the Tribunal that Mrs A had completed her own Application.  Firstly she sets out the details of her sexual harassment claim and towards the end of her handwritten attachment she says this:
	“Then I received a letter saying my employment was terminated with immediate effect.  I went to the Citizens Advice.  They advised me to take this further to Tribunal.  Since then I have had another letter asking why I resigned (enclose copy).  I did not, I was sacked.  As you can imagine this has had an effect on me.  I don’t trust men anymore and has made my [me] physically ill.  Can’t see why I am being sacked.  I didn’t do anything wrong.””

The Chairman recorded that the Applicant had given her evidence by way of a written statement.  During the course of the proceedings, on the first day, she attempted to clarify matters about a particular witness and the discrimination claim.  The Chairman then said this:

“At this point I asked specifically about Section 4 of the Sex Discrimination Act and victimisation and my handwritten note indicates that Mrs A agreed that her complaint was also connected to the way in which Company X dealt with her harassment claim.  My handwritten note says quite clearly “R [Respondents] accepts also Section 4 claim victimisation dismissed cos made complaint”.  The cross examination of Mrs A then continued for the rest of day.”

At the end of all of the evidence, at 11.00am on the third day of the hearing, Mrs Pemberton and the Applicant made submissions.  The Chairman’s note of the company’s submissions suggests that they related mostly to the argument that the Applicant should not be believed and that her conduct was abusive and that the only alternative was to terminate her employment.  The Applicant made very brief submissions that she had gone to the police and that she was concerned about the way in which she had been treated.  A request was made for a review based upon the complaint currently made by the Respondent that the victimisation issue was not in play.  Although we have not seen the decision, we take it that that was refused by the Chairman as having no reasonable prospect of success.  

13	On this material Mr Sethi submits that no claim was made in the Originating Application to the Employment Tribunal.  Mr Craig drew our attention to the Notice of Appearance of the Respondent at the Employment Tribunal where it is contended that the Applicant herself committed acts which constituted both sexual and racial harassment towards Mr B.  There then follows this:

“… and accordingly, the Applicant’s employment was terminated on one weeks notice.”

That is repeated in the following phrase:

“… evidence in support of the Applicant’s sexual and racial harassment toward the first Respondent was accepted and [Mr B] was accepted and accordingly the Applicant’s employment with the first Respondent [the company] was terminated.”

14	The task which we have to undertake is to decide whether the Employment Tribunal was right in deciding the material in the Originating Application did disclose victimisation.  In our judgment it plainly did.  The Originating Application makes clear the sequence of events which begins with the allegation of sexual harassment and is followed by three consequences:
1	Having reported the matter to a manager, she was sent home while the matter would be investigated.
2	A hearing three days later was set up during the course of which the Applicant was made to look like a liar.
3	Thereafter the Applicant received a letter terminating her employment upon which she then took advice.  She raised the question in her Originating Application that she could not see why she was being sacked.

15	In our judgment, as a construction of this letter, the facts which she sets out establish a claim that by reason of her complaint, which is accepted to be a protected act within Section 4, certain steps were taken including her dismissal, for why else, she asks, was she to be dismissed.  On its face, this Originating Application makes good a claim of victimisation. 

16	If this were a matter of construction, we need take the matter no further, but it will also be recalled that the Chairman in her letter had recorded that the Tribunal was engaged upon clarifying what matters had been agreed and directed.  The record of the Chairman is conclusive in the light of the dispute by Mrs Pemberton about what was said – see Dexine Rubber Co Ltd v Alker [1977] ICR 434 EAT at 556 per Cumming-Bruce J, and Aberdeen Steak Houses Group plc v Ibrahim [1988] ICR 550 EAT at 556 per Wood J (P).  By reference to the Chairman’s appreciation of what was happening it appears to us that that decision is unimpeachable.  

17	In The Housing Corporation v Bryant [1999] ICR 123 CA, it was held that to amount to a claim of victimisation there had to be a causative link between the making of the allegation of sex discrimination and the dismissal.  Taken as a question of construction and therefore of law, the absence of any such causative link in the Originating Application was fatal to the issue of whether the Originating Application made a claim in respect of victimisation.  As Buxton LJ said, at page 130, he had been driven to express his judgment in such technical and artificial terms because the matter was characterised as one of construction, on the other hand, the approach was one of reality in which the court was assessing, in that case the Chairman’s approach to the assessment of the reality of the claim.  The Chairman in that case had held that in reality the claim did not include a claim of victimisation.  The facts in that case, which we need not dwell upon, are of significance in the distinction we draw from the facts in our own case.  The time period over which the issues arose in the Housing Corporation case was something over one year, whereas in our case it is three days, or perhaps two weeks to take the matter through to dismissal.

18	In our judgment, approached as a matter of reality, the Chairman’s decision about what was included within the case of the Applicant is not perverse and is fully argued and cogent.  It will be recalled that no objection was taken to her depiction of a claim under Section 4 when communicated to the Respondent a month or so before the resumption of the adjourned hearing.  Thus, we reject the submission that a claim of victimisation was not made.  We turn then to the substantive issues.

Misdirection
19	First, it is contended that the Tribunal failed to apply the law correctly to the facts it found.  The structure of the Tribunal’s decision, following that brief introduction and issues which we have set out above, was to find the facts.  The Tribunal set out its findings on all of the allegations on sexual harassment the Applicant made.  It made decisions adverse to the Applicant on each.  Since the matter is not pursued by the Applicant, it is not necessary for us to take the factual issues further.  

20	What is important, however, is to recognise what happened after the Applicant had raised her complaint with her relevant manager.  The Applicant’s husband appeared at the workplace on the day that the Applicant had been sent home.  He came and made abusive and seriously racially insulting remarks to Mr B, who is black.  The Applicant was not with her husband.  Management was called; the husband was persuaded to leave.  Mr B was justifiably upset by the incident.  There then followed, three days later, a hearing at which the Applicant’s husband also attended.  He left the hearing part way through because he became angry.  At the end of the hearing matters were adjourned.  Shortly thereafter it was decided that a letter should be written to the Applicant.  She did not respond.  Then, on 11 October, Mrs Cowley, a relevant decision maker in this case, wrote to the Applicant reporting the finding of the hearing and the investigation, that no evidence of harassment had been found.  She went on:

“In view of your husband’s actions and the abuse Mr B has suffered I do not feel that it would be appropriate for you to return to work in the store.
Therefore your employment will terminate with immediate effect.”

That then ended the relationship.  

21	The joint decision to dismiss had been made by Mrs Cowley and by Mr Lucas.  The Tribunal said this:

“The reason was that he had found no evidence to support her claim and it was very difficult under those circumstances for her to continue in employment with Mr B.  Ms Cowley’s evidence was that the decision to dismiss was based on the fact that it was impossible to continue to employ the Applicant because of the events that had taken place and the way her husband had acted towards Mr B.  Ms Cowley said that it would have been impossible to reconcile the two parties working together again and there had been no consideration of moving the Applicant or Mr B to working in any other store.”

Upon those findings, the Tribunal reached conclusions, having addressed the law, to which we will come in a moment.  It dismissed the claims of direct discrimination but said that the Applicant had proved victimisation.  It is common ground that the complaint to the relevant manager was a protected act.  The Tribunal said this:

“Following on from that she suffered less favourable treatment in that she was dismissed.  The Tribunal do not accept that someone who had not made a complaint would have been dismissed in these circumstances.  The other part of the test which the Applicant has to meet is whether that dismissal was by reason of her complaint.  The Tribunal believes that it was.  Both Respondents’ witnesses who accepted they were responsible for the dismissal referred to the complaint.  Both referred to the difficulties of the Applicant working with the First Respondent again, a matter which is clearly tied to the facts that she had made a complaint.  The only reason which might be said to be separate is the reference to the Applicant’s husband’s behaviour.  However, that is also so closely connected to the Applicant’s complaint.  The Tribunal believe there is a strong causal connection between the Applicant committing a protected act and her dismissal.  For these reasons, the Tribunal believe that the Applicant’s claim for victimisation is well founded and succeeds as against the Second Respondents.”

22	The Tribunal directed itself in accordance with Section 4 (above), to the definition contained in Strathclyde Regional Council v Porcelli [1986] IRLR 134, and to the principles which should be applied in a sexual harassment case.  The issues in a claim of harassment which the Tribunal had to decide were set out, as was victimisation.  The Tribunal determined that the law in respect of victimisation is now clear, having referred to Nagarajan v London Regional Transport [1999] IRLR 572, HL and Chief Constable of West Yorkshire Police v Khan [2001] IRLR 833 HL.  It said this:

“Here the burden rests upon the Applicant to prove that she has performed one or more of the protected acts … and that she has received less favourable [treatment] than a person (real or hypothetical) who had not performed the acts.  This is the first stage and requires the appropriate findings of fact and conclusions.  Thereafter we move to the second stage in determining were [whether] there was any less favourable treatment, insofar as it has been proved was “by reason that” the employee had committed the protected act.  We asked ourselves the following questions:-
	a)	did the Applicant do a protected act?
	b)	was she thereafter subjected to less favourable treatment (the dismissal)?
c)	was that less favourable treatment by reason of her having committed the protected act and was the allegation not made in bad faith?”

23	The assault upon the Tribunal’s findings made by Mr Sethi focused upon the correctness of those directions and the questions the Tribunal asked itself.  He referred us to the speeches of Lords Nicholls, Mackay and Scott.  We have also been taken by Mr Craig to Lord Hoffman’s speech.  Essentially the majority of the speeches concur with the analysis given by Lord Nicholls requiring the stages to be adopted, set out in paragraph 23-29 of the report.  A feature of Lord Nicholls’ judgment is his adoption of the approach taken in by Slade LJ in Aziz v Trinity Street Taxis Ltd [1988] IRLR 204 - which is that the statute is to be regarded as calling for a simple comparison between the treatment afforded to the complainant who had done a protected act and the treatment which was or would be afforded to other employees who had not done a protected act.  In so approving the approach in Aziz, Lord Nicholls and those Law Lords who agreed with him eschewed the factoring into the comparison of other features.  In other words, to add other layers to the simple comparison enunciated by Lord Nicholls was incorrect.  Thus, the only issues to consider are the circumstances pursuant to Section 4 and to ask the simple factual question: what was the reason why a victimiser acted as he or it did, which is a question of fact.

24	Lord Nicholls also gave the principal speech in Shamoon v Chief Constable of the Royal Ulster Constabulary (Northern Ireland) [2003] UKHL 11 [2003] ICR 337, and included remarks which are apt for both direct discrimination and victimisation – see paragraph 7 of his speech.  Again, His Lordship stressed that matters should be decided relatively simply.  He said, in relation to the two issues which are intertwined in asking a single question, the ‘reason why’ issue and the ‘less favourable treatment’ issue, that the question is to be put in these terms:

“… the less favourable treatment issue is incapable of being decided without deciding the reason why issue.  And the decision on the reason why issue will often provide the answer to the less favourable treatment issue.”

25	We do not read Shamoon as departing from the judgment in Khan and nor do we detect in the speeches in Khan what Mr Sethi urges to be a contradiction.  True it is they offer slightly different approaches but not a contradiction: they were after all unanimous.  If one looks at the different approaches of Lord Hoffman and Lord Mackay, they do still come to the conclusion that the issue to be asked in the question of a hypothetical comparison, in respect of victimisation at least, was the comparison with persons who did not commit the protected act.  Provided the circumstances are the same the comparison can properly be made.  This is essentially an issue of fact for the Tribunal to determine as to the composition of the control group or pool.

26	In our judgment the Tribunal made a firm finding of fact which answers simply and positively the composite question: why did the company treat the Applicant as it did?  It found that this was because she had presented her complaint about sexual harassment.  That is a conclusion which was open to it upon the findings which it had made, which we find cogent and rational.  Thus, we dismiss the second ground of the appeal.

Inadequate reasons
27	We turn to the second ground, which is the complaint of inadequacy of reasons.  As is now common in appeals before us, Meek v City of Birmingham District Council [1987] IRLR 250 and Anya v The University of Oxford [2001] IRLR 377 CA, were prayed in aid.  Of course the Tribunal must give reasons and it must give adequate reasons so that the Parties and the Employment Appeal Tribunal can know why they won or lost.  It is worth noting that in English Emery Rheinbold v Strict Ltd [2002] 1 Weekly Law Reports 2409 CA, the Master of the Rolls giving the judgment of the court indicated that for the purposes of both the Strasbourg jurisprudence and the domestic proceedings, reasons should be given for matters which are vital, critical, essential – see for example paragraphs 18-20.  He also described as a cottage industry the endeavour Mr Sethi is here engaged in, the inadequacy of reasons industry.

28	In our view the disposition of the essential matters within the Tribunal’s reasons is entirely clear.  The architecture of the decision draws properly an introduction, a description of the issues and of the evidence, the findings of fact, the application of the relevant law, and conclusions which follow naturally and, as we have said, cogently, from what went before.  We thus reject the contention that this Tribunal has neglected its duty to set out its reasons adequately for its conclusion.

Natural justice
29	Thirdly, Mr Sethi’s complaint under this ground of appeal is that the Tribunal directed itself to those three authorities cited in its reasons – Strathclyde, Nagarajan and Khan.  To do so, he contends, is a breach of natural justice, for the Tribunal should not rely upon an authority without giving the opportunity to the parties to comment upon it – see Albion Hotel (Freshwater) Ltd v Maia E Silva and another [2002] IRLR 200.  This ground we consider to be misconceived.  There was no unfairness caused to the Respondent in the Tribunal setting out the law and the leading authorities in the House of Lords and the Court of Appeal.  Indeed, it would be open to criticisms if it had not.  

30	On our findings, Mrs Pemberton, the solicitor representing the Respondent, was fully alerted to the fact that the Tribunal was proceeding to hear a victimisation claim.  She, if anyone, should have put the law before the Tribunal.  Apparently, she did not.  The Applicant was unrepresented.  The Tribunal therefore discharged its duty to set out the law upon which it based its decision.  It has to be said, notwithstanding Mr Sethi’s arguments about the apparent contradiction, as he put it, in the House of Lords, that these authorities do set out the law clearly and uncontrovertibly.  This was not a case where the Tribunal relied upon an authority against a party which had not had an opportunity to make submissions in order to support its case.  On the contrary, the Tribunal was applying the clear law.  We see no fault in its approach and that ground is dismissed.

Reporting and Costs
31	We see no reason to lift the Restricted Reporting Order.  Parties can apply to the Registrar in due course if they seek to lift it.  In the Tribunal, there is a public interest in making those anonymous, and although Mr B has been exonerated in the Employment Tribunal proceedings there is no need for his name or the Applicant’s name to be linked, subject to any further order.  We will award costs because we consider the conduct of the Respondent to have been unreasonable.  We have no doubt that the Appeal Tribunal presided over by Judge Serota QC would have been significantly influenced by seeing the letter from the Chairman.  It was entirely the fault of Mrs Pemberton for not instructing Mr Sethi to put that before it at the preliminary hearing.  Had he seen it, either before the Preliminary Hearing or before the grounds of appeal were amended, we have no doubt he would have put this matter before the Appeal Tribunal.  We consider it was unreasonable of the Respondent, through its solicitor, not to put that matter forward.  If it had, we consider that Judge Serota’s Tribunal would have dismissed that ground.  Thus, we hold unreasonable conduct to have occurred and we will award, as sought, 25% of the costs of the Applicant on a detailed assessment.  We will give a certificate for Public Funding of the Applicant’s costs. The appeal is dismissed with costs.