Appeal No. UKEAT/0315/07/MAA	 

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 20 November 2007

Before
THE HONOURABLE MR JUSTICE KEITH
MR D BLEIMAN
MR D CHADWICK

HATTEN WYATT SOLICITORS	APPELLANT

MR A MAMEDU	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR FRANK IRONS
(Consultant)
Peninsula Business Services Ltd
Litigation Department
Riverside
New Bailey Street
Manchester M3 5PB	
For the Respondent	MR AUGUSTINE MAMEDU
(The Respondent in Person)	

SUMMARY
Race Discrimination – Burden of proof
Contract of Employment – Implied term/variation/construction of term
The issue on the appeal was whether it had been open to the ET to conclude that a firm of solicitors had not discharged the burden of proof on it that the withdrawal of an offer of employment to a locum solicitor, who was a black Nigerian national, was unconnected with his colour or ethnic origin.  The EAT dismissed the appeal, concluding that the ET’s conclusion had been open to it.  The issue on the cross-appeal was whether the ET had erred in law in dismissing the Claimant’s claim that the withdrawal of the offer (which he had by then accepted) before the employment was due to begin amounted to a breach of contract, bearing in mind that the terms of the Claimant’s employment permitted the firm to terminate his employment at any time without notice or liability.  The EAT allowed the appeal, concluding that the provision for termination only applied after the employment had started and did not apply to the withdrawal of the offer before the employment had commenced, but commenting that the Claimant’s damages were likely to be nominal since his employment could have been terminated with immediate effect and without liability on the day when it was due to begin.

THE HONOURABLE MR JUSTICE KEITH

Introduction
1.	The Claimant, Augustine Mamedu, comes from Nigeria.  He is black.  He was offered temporary employment by the Respondent, Hatten Wyatt, a firm of solicitors.  He accepted that offer.  However, before his employment was due to begin, the offer was withdrawn.  In due course, he presented a claim of race discrimination under the Race Relations Act 1976, as well as a claim for breach of contract.  An Employment Tribunal at Ashford upheld his claim of race discrimination, and a hearing to determine what his remedy should be is due to take place tomorrow.  The Tribunal dismissed Mr Mamedu’s claim for breach of contract on the basis that his employment was a temporary one, terminable without notice at any time, including termination prior to its commencement.  The firm now appeals against the finding of race discrimination, and Mr Mamedu cross-appeals against the dismissal of his claim for breach of contract.

The facts
2.	The facts which the Tribunal found, so far as are relevant to the issues which arise on the appeal and cross-appeal, were as follows.  Mr Mamedu qualified as a barrister and solicitor in Nigeria.  For about three years before the events which gave rise to his claim, he had worked for a firm of solicitors in Ireland.  He had extensive experience in residential conveyancing.  He qualified as a solicitor in England and Wales, and was admitted to the roll of solicitors in July 2006.  He was anxious to obtain post-qualification experience in England and Wales, and contacted a number of employment agencies which specialised in the recruitment of legal personnel.  One of those agencies was Executive Network Legal Ltd (“ENL”).  Under the agreement between ENL and Mr Mamedu, Mr Mamedu appointed ENL to act on his behalf in arranging assignments for him with ENL’s clients.

3.	The firm of Hatten Wyatt is a firm of solicitors with about 20 fee earners.  Some 25% of its work is conveyancing, the vast majority of which is residential.  Its senior partner is Jasvinder Gill, who is British but of Asian origin.  The firm’s other employees, both fee earners and others, are of a wide variety of nationalities and ethnic origins.  The firm frequently uses locum solicitors on a temporary basis, particularly to cover holiday absences in the summer months.  The Tribunal found that the firm employed a number of locum solicitors in the months of July, August and September 2006, many of whom were of Nigerian nationality and black.  The firm used a number of agencies to obtain locums for it, one of which was ENL.

4.	Towards the end of July 2006, Mr Gill was very keen to find a locum for the conveyancing part of the firm’s practice.  On 28 July, ENL informed him of the availability of Mr Mamedu from 14 August.  Mr Gill was told that Mr Mamedu “had worked with a full residential property caseload to include sales and purchase and remortgage”.  The rate for Mr Mamedu’s services, which included ENL’s own fee, would be £36.66 per hour.  Mr Gill must have decided at that time to take Mr Mamedu on as a conveyancer from 14 August, and he must have informed ENL of that, since the Tribunal found that on 31 July Mr Mamedu was informed by ENL that he had been placed as a locum with the firm.  That information came to him by way of a document headed “Assignment Specification”, which recorded, among other things, that the assignment was to commence on 14 August.  In the box marked “End date: (if known)” was the word “Ongoing”, and in the box marked “Notice period: (if applicable)” were the letters “n/a”, meaning not applicable.  Mr Mamedu faxed his acceptance of this offer to ENL on the following day, i.e. 1 August.

5.	On 3 August, Mr Gill received an e-mail from another agency, which Hatten Wyatt had used to find locum solicitors.  The e-mail informed him of the availability, coincidentally also from 14 August, of Rupert Wakeman.  Mr Wakeman had qualified in New Zealand in 2002, and had had some experience in Australia.  The majority of his experience was in property, both residential and commercial.  Although he was described by the Tribunal as having had some exposure to UK law, he had only recently arrived in the UK where he had had four weeks experience, during which he had got a basic grounding in what the Tribunal described as “UK re-mortgage work and associated matters”.  The agency had previously quoted a rate of £32.00 an hour, and although Mr Wakeman should have been charged out at £33.75 an hour, the agency was prepared to stand by its quoted rate.  Mr Gill responded to that e-mail that evening by requesting that Mr Wakeman be engaged from 14 August.

6.	Mr Gill’s evidence in the Tribunal was that he had become aware of the availability of both Mr Mamedu and Mr Wakeman at more or less the same time, and he had decided “on or around” 1 August to recruit both of them.  In the event, the Tribunal found, as we have said, that he became aware of Mr Mamedu’s availability on 28 July, and Mr Wakeman’s only on 3 August, that he must have decided to recruit Mr Mamedu by 31 July, and that he decided to recruit Mr Wakeman on 3 August.  Be that as it may, by 3 August the firm had engaged two locums to carry out conveyancing work from 14 August.

7.	On 8 August, Mr Mamedu telephoned Hatten Wyatt and asked to speak to Mr Gill.  He was put through to Mr Gill’s voicemail, and he left a message to confirm that he would be starting on 14 August.  However, by 10 August, Mr Gill had decided to withdraw the offer which had been made to Mr Mamedu, since Mr Mamedu’s evidence, which the Tribunal accepted, was that it was on that day that ENL had telephoned him and informed him that the position he had accepted “had been given to another person”.  We shall return in due course to Mr Gill’s evidence about why he decided to withdraw the offer which had been made to Mr Mamedu, but an issue which the Tribunal had to resolve was when ENL had been informed by Mr Gill that he no longer wanted to take Mr Mamedu on.  Mr Gill’s evidence was that it was “on or around” 7 August that he informed ENL of that, but the Tribunal found it was not until after Mr Gill had heard the message which Mr Mamedu had left on his voicemail that Mr Gill decided to withdraw the offer which had been made to Mr Mamedu and notified ENL of that.  The Tribunal reasoned that if ENL had been informed of the withdrawal of the offer on or around 7 August, it would have informed Mr Mamedu of that before 10 August, and Mr Gill would have responded to the message left on his voicemail by getting in touch with Mr Mamedu to let him know that ENL had already been informed that the offer had been withdrawn.

8.	Two other matters should be mentioned.  First, the firm placed an advertisement in the issue of the Law Society’s Gazette of 7 September for a number of vacant positions.  Those vacant positions included “residential conveyancers with at least one year’s experience”.  The employee who was subsequently recruited as a conveyancer to start on 11 October as a result of that advertisement was a black Nigerian national.  Secondly, on 8 September, Mr Mamedu wrote to the firm complaining about his treatment.  He requested the name and contact details of the solicitor who had been offered his position, and he asked to be provided with copies of the firm’s files, which would explain why his position had been offered to someone else.  He asked to be paid what he would have earned between 14 August and 31 August when he obtained another locum assignment, together with an amount towards what he described as his “lost costs”, as well as the sum of £100,000.00 “as compensation for pain and hurt”.  He did not state the basis on which he was entitled to that compensation, and he made no allegation of race discrimination in that letter.  The firm did not reply to that letter, though the Tribunal did not say that it placed any weight on that fact.

The firm’s reasons for withdrawing the offer to Mr Mamedu
9.	Mr Gill’s evidence was that in July he was anticipating that the firm would require four locums by the end of August.  He already had two in place by the end of July, and he therefore still needed two more.  That was why offers were made to Mr Mamedu and Mr Wakeman at the beginning of August.  However, by 7 August it had become apparent to Mr Gill that the volume of work which was anticipated had “reduced more quickly than expected”.  As a result, he realised that he did not need both Mr Mamedu and Mr Wakeman, and the only reason he decided to withdraw the offer which had been made to Mr Mamedu rather than the one which had been made to Mr Wakeman was because Mr Wakeman’s hourly rate was less than that of Mr Mamedu.  Mr Gill said that the advertisement in the Law Society’s Gazette had been placed because by then he had come to the conclusion that the firm needed someone permanent to bear the brunt of the firm’s heavy workload which might arise when other members of staff were on holiday.  He acknowledged that by then the holiday season had ended, and that conveyancing transactions would normally be at a lower level than at other times of the year, but he thought that it would be cheaper in the long run to employ a conveyancer full-time than to engage agency personnel.  That was especially so because of the difficulty he anticipated in finding temporary conveyancers during the summer months, and because of the possibility that if there was not enough conveyancing work at other times of the year, the employee could do other work.

The Tribunal’s decision
10.	The hypothetical comparator which the Tribunal chose for Mr Mamedu was an identically qualified and experienced lawyer of European ethnic origin.  In deciding whether the firm had treated Mr Mamedu less favourably than it would have treated such a comparator because of Mr Mamedu’s colour and ethnic origin, the Tribunal had in mind, of course, section 54A of the Race Relations Act 1976.  It noted that the firm had conceded that the burden of proof had moved from Mr Mamedu to the firm, i.e. the firm had conceded that Mr Mamedu had proved facts from which the conclusion could, in the absence of an adequate explanation, be drawn that Mr Mamedu had been treated less favourably than his hypothetical comparator because of his colour and ethnic origin.  Accordingly, the Tribunal had to decide whether the firm had proved that Mr Mamedu’s colour and ethnic origin had played no part at all in Mr Gill’s decision to withdraw the offer from him rather than from Mr Wakeman.  None of that is disputed by Mr Frank Irons for the firm.  

11.	The Tribunal found that the firm had not discharged that burden.  It gave four reasons for that.  First, the Tribunal noted there had indeed been a downturn in the firm’s conveyancing work.  From 179 new instructions in June 2006, the number had gone down to 81 in July.  But the Tribunal found that Mr Gill had become aware of that on 1 August, i.e. by the time Mr Mamedu had been recruited and two days before Mr Wakeman was.

12.	Secondly, the downturn in the firm’s conveyancing work in July had not prevented the firm from placing an advertisement for experienced “conveyancers” (in the plural), an advertisement which would have had to have been placed at least one or two weeks in advance of the date of publication.  That made it clear, said the Tribunal, that the firm had an ongoing need for conveyancers with suitable experience from about the time when Mr Mamedu would, in the ordinary course of events, have commenced his employment, and made the retention of Mr Wakeman with comparatively little experience so surprising.  We note, in addition, that by 7 September Mr Gill would have known, on the findings made by the Tribunal, that there had been only 80 new instructions in August.  If that number of instructions had justified an advertisement for full-time “conveyancers” in September, it is at first blush a little difficult to see why 81 new instructions in July would have justified a reduction in the number of conveyancers, but why 80 new instructions in August would have warranted an increase.

13.	Thirdly, the Tribunal doubted whether the modest difference between Mr Mamedu’s hourly rate and Mr Wakeman’s hourly rate would have been the determining factor.  There was a significant difference between Mr Mamedu’s and Mr Wakeman’s qualifications and experience.  Mr Mamedu was an admitted solicitor with considerable experience of the conveyancing system as it operated in England and Wales, albeit gained in a practice in Ireland.  On the other hand, Mr Wakeman was not an admitted solicitor in England and Wales, and had only four weeks’ experience of the conveyancing system as it operated in England and Wales.

14.	Fourthly, having found that Mr Gill did not decide to withdraw the offer to Mr Mamedu until after he had heard the message left by Mr Mamedu on his voicemail, the Tribunal thought it more likely than not that Mr Gill had decided to withdraw the offer after he had heard Mr Mamedu’s African accent.  The Tribunal was unable to say whether the part which Mr Mamedu’s African accent had played in Mr Gill’s decision had been conscious or unconscious, but it found that it had played a part one way or another.

The challenge to the Tribunal’s decision
15.	In his skeleton argument, Mr Irons acknowledged that the Tribunal would normally expect cogent evidence to discharge the burden of proof, since the facts which constituted the explanation for the less favourable treatment would normally be in the exclusive possession of the employer: see para. 13 of the guidance given in the annex to the judgment of the Court of Appeal in Igen Ltd v Wong [2005] ICR 931.  However, Mr Irons’ skeleton argument took the point that in determining that the firm had failed to discharge the burden of proof on it, the Tribunal had fallen into error by comparing what the Tribunal would have expected a reasonable employer to do in the circumstances which confronted Mr Gill with what Mr Gill had actually done.  The Tribunal’s error, so it was said, was in thinking that since a reasonable employer might be expected to have acted differently, Mr Gill had been unable to satisfy the Tribunal that Mr Mamedu’s race had not played a part in the decision to withdraw the offer of employment from him.  When the grounds upon which that argument is based are analysed, however, they amount in reality to a contention that the reasons which the Tribunal gave for holding that the burden of proof had not been discharged were legally flawed because they were not reasons which the Tribunal could reasonably have adopted.  In order to evaluate that argument, it is necessary to look at the criticism which is made of each of those reasons in turn.

16.	First, Mr Irons argued that even if Mr Gill had been aware when Mr Wakeman was recruited of the decrease in the number of new instructions from June to July 2006, that did not necessarily mean that there would be an immediate need for less conveyancers.  He pointed out that it would take a few weeks for a decrease in the number of instructions to have any effect since a conveyancing transaction takes anything from 8-12 weeks to conclude.  Mr Gill had to make his own assessment about the number of staff needed to carry out the firm’s workload at any one time.  The Tribunal is said to have erred by failing to take that into account.  We do not agree.  The point which the Tribunal was making was that if Mr Gill had thought on 3 August that he needed two locum solicitors for the firm’s conveyancing work, it is unlikely that he would have changed his mind about the number of locums who were needed within only a few days of that, especially as he had known when he had decided to take on the second of the two locums that there had been a drop in the number of instructions over the previous month.  Granted that Mr Gill had to decide at any given time how many conveyancers the firm needed, the Tribunal was in effect saying that no reason had been advanced for why his assessment of what was needed had changed in that short space of time.  Accordingly, to have decided to withdraw Mr Mamedu’s offer, something else may have been in play.  The Tribunal in effect found the firm had not proved that it was not Mr Mamedu’s colour and ethnic origin which had been in play.
17.	Secondly, Mr Irons criticised the reliance which the Tribunal placed on the advertisement in the Law Society’s Gazette.  The need for locum conveyancers with little experience to carry out conveyancing work in the summer months while other members of staff were on holiday is very different from the need for permanent conveyancers with some experience who would make it unnecessary for locum conveyancers to be recruited for the summer months, and who could do other work when there was not enough conveyancing work for them – especially as it would take a good few weeks for them to be appointed given the notice they might have to give to their current employers, and therefore would not be recruited in time to cover for members of staff who were on holiday at that time of year.  We may have seen the force of that point if the Tribunal had been told that the advertisement had initially been placed in the Gazette at the end of June and the beginning of July, but that since the response had been poor, the Gazette had offered to place a further advertisement for free in September.  If the firm had wished to neutralise the effect of the points which Mr Mamedu was making about the advertisement, the firm should have led that evidence.  In the absence of that evidence – and indeed in the absence of any evidence of how long it would take for applicants who responded to the advertisement to be recruited – the Tribunal, in our view, cannot be criticised for treating the advertisement in September for permanent conveyancers as undermining the firm’s case that it had decided in early August, a few days after taking on a second conveyancer temporarily, that it did not need two temporary conveyancers after all, and chose to withdraw the offer which had been made to the more experienced conveyancer of the two.

18.	Thirdly, the Tribunal is criticised for concluding that Mr Gill would have regarded the difference in Mr Mamedu’s and Mr Wakeman’s hourly rate as insignificant.  The suggestion is that in order to reach that conclusion the Tribunal should have balanced the professional disadvantage of having a less experienced conveyancer who was not an admitted solicitor against the economic advantage of saving the equivalent of £175.00 a week (less VAT) – if the locums worked their contractual hours of 37½ hours a week, or even a little more if they worked longer hours.  For our part, we think that an exercise along those lines was what the Tribunal implicitly did when it expressed itself – in para. 27.6 of its reasons – as having difficulty accepting that cost was the driving factor in Mr Gill’s decision, and then proceeding to compare the respective qualifications and experience of Mr Mamedu and Mr Wakeman.  The Tribunal must therefore have implicitly rejected what Mr Irons told us was the evidence which he said Mr Gill gave about the difference in the qualifications and experience of Mr Mamedu and Mr Wakeman being irrelevant to him.

19.	Fourthly, the finding that Mr Gill had been influenced, perhaps unconsciously, by Mr Mamedu’s African accent is strongly criticised on the basis that that finding was inconsistent with the firm’s practice of engaging Nigerian locums and with the appointment of a black Nigerian to one of the posts advertised in the Gazette, and with the recruitment of Mr Mamedu in the first place, who Mr Gill would inevitably have known from his name and CV was Nigerian and almost certainly black.  In our judgment, this criticism misses the point.  The firm may have been perfectly happy to engage black Nigerians, whether as locums or permanent members of staff, but to the extent that Mr Gill decided that he needed to reduce the number of temporary conveyancers who were due to start on 14 August (and the firm had not established to the Tribunal’s satisfaction that that was the case), Mr Gill decided not to withdraw the offer from Mr Wakeman.  That did not mean he was not prepared to employ black Africans.  What it meant was that when it came to deciding whether to retain Mr Mamedu or Mr Wakeman, the Tribunal was not persuaded that Mr Gill chose to retain Mr Wakeman for reasons wholly unconnected with Mr Mamedu’s colour and ethnic origin.  The fact Mr Gill had wrongly claimed that ENL had been informed that the offer to Mr Mamedu had been withdrawn before he heard the message on his voicemail serves, in our judgment, to increase the Tribunal’s scepticism.
20.	For these reasons, we do not think that the reasons the Tribunal gave for concluding that the firm had failed to discharge the burden of proof on it were legally flawed, and it follows that the firm’s appeal against the finding of race discrimination must be dismissed.

Mr Mamedu’s cross-appeal
21.	In order to understand one issue which arises on the cross-appeal, it is necessary to consider a preliminary point which the Tribunal had to address.  Mr Mamedu’s claim for breach of contract was not brought against Hatten Wyatt only.  It was brought against ENL as well – no doubt in case it was held that ENL had been responsible for the offer of employment to Mr Mamedu and for its subsequent withdrawal.  However, at a previous hearing, the firm had accepted that ENL had acted as its agent in making the offer of employment and in subsequently withdrawing that offer.  In the light of that concession, Mr Mamedu withdrew his claim against ENL.

22.	At the substantive hearing, the point was taken by Mr Irons on behalf of the firm that Mr Mamedu’s contract had been with ENL all along.  Having been reminded of the concession made at the previous hearing, that objection was withdrawn, and it was agreed that the claim for breach of contract should proceed on the basis that the firm had been acting as principal, and that the terms of Mr Mamedu’s employment by the firm should be treated as those which governed his contract with ENL.

23.	The Tribunal thought that Mr Mamedu’s claim for breach of contract was based on the supposition that he had been entitled to notice of the termination of his employment, and that he had not been given any notice of it.  The Tribunal rejected that claim on the basis that he was not entitled to any notice of the termination of his employment because his employment was to be temporary, and his contract provided that his employment could be terminated at any time.  That applied to whether his employment was terminated before it had commenced or after.

24.	In fact, Mr Mamedu’s claim was not based on whether he was entitled to notice of the termination of his employment.  His claim was based on the fact that the firm had contractually agreed to employ him, but in breach of contract it had failed to do so.  It was a classic example of what the textbooks on the law of contract describe as an anticipatory breach of contract, in the sense that before the parties to the contract were required to perform their contractual obligations under it one of the parties (in this case the firm) gave unequivocal notice that it would not be performing its side of it.  That was precisely what happened in the old case of Hochster v De La Tour [1853] 2 E & B 678 and applied in the modern context to contracts of employment in Sarker v South Tees Acute Hospitals NHS Trust [1997] IRLR 328.

25.	The firm’s answer to that is that clause 8.1 of the agreement between Mr Mamedu and ENL, which was to be treated as having set out the terms of Mr Mamedu’s employment by the firm, provided as follows:

“The Employment Business [i.e. ENL] or the Client [i.e. the firm] may terminate the Temporary Worker’s [i.e. Mr Mamedu’s] Assignment at any time without prior notice or liability.”

Mr Irons argues the words “at any time” mean just what they say, i.e. at any time, whether before or after the employment was due to commence.  Accordingly, no liability attached to the firm as a result of it.  Alternatively, he argues that Mr Mamedu’s employment by the firm should be treated as having commenced on 1 August when Mr Mamedu faxed to ENL his acceptance of the offer of employment.

26.	We cannot go along with either argument.  Mr Mamedu’s employment would not have commenced until 14 August.  The fact that he and the firm agreed on 1 August that he would be employed by the firm did not mean that his employment had to be treated as having commenced on that date.  Moreover, clause 8.1 deals with the termination of the assignment, and the assignment was defined in clause 1.1 as “the period during which the Temporary Worker is supplied to render services to the Client.”  In our view, a contractual provision which allows the assignment to be brought to an end “without prior notice or liability” contemplates that the assignment had already commenced.  In short, we do not equate the termination of an assignment – which relates to a time after the assignment has started – with the withdrawal of an offer in connection with a future assignment.

Conclusion
27.	For these reasons, we allow Mr Mamedu’s cross-appeal, and for the dismissal of Mr Mamedu’s claim for breach of contract, we substitute a finding that the withdrawal of the offer of employment amounted to a breach of his contract of employment with the firm.  The damages to which Mr Mamedu is entitled will have to be decided by the Tribunal when it convenes to decide the appropriate remedy for the claim of race discrimination.  However, we doubt whether the damages could be anything other than nominal.  After all, Mr Mamedu’s employment could have been terminated lawfully without notice on 14 August.  As it was, Mr Mamedu had from 10 August (rather than from 14 August) to look for alternative work.  Mr Mamedu told us that his damages should reflect the fact that as a result of the offer he resigned from his post in Ireland and came to England, but he did that knowing – at any rate he is to be treated as knowing – that the offer he was accepting was an offer of employment which included a provision that his employment could be terminated without notice or liability as soon as it commenced.  These remarks should be drawn to the attention of the Tribunal when it comes to assess Mr Mamedu’s damages for breach of contract.