Appeal No. UKEAT/0044/08/BI

EMPLOYMENT APPEAL TRIBUNAL
52 MELVILLE STREET, EDINBURGH, EH3 7HF

	At the Tribunal
	On 6 March 2009 

Before
THE HONOURABLE LADY SMITH
MR P PAGLIARI 
MRS G SMITH

NETWORK RAIL INFRASTRUCTURES LTD	  APPELLANTS

MS PATRICIA GAMMIE	 RESPONDENT

Transcript of Proceedings

JUDGMENT

APPEARANCES

For the Appellant	MR J MACMILLAN
(Solicitor)
Instructed by:
Messrs MacRoberts Solicitors
152 Bath Street
Glasgow
G2 4TB
	
For the Respondent	MR A McPHERSON
(Solicitor)
Instructed by:
Messrs Drummond Miller Solicitors
32 Moray Place
Edinburgh
EH3 6BZ

SUMMARY
SEX DISCRIMINATION

The Tribunal found that the claimant had been constructively unfairly dismissed in circumstances where she was discriminated against on grounds of sex.  Appeal upheld and case remitted to a freshly constituted tribunal.  In concluding that there had been unlawful discrimination the tribunal had speculated as to the reasons why there appeared to be an imbalance in the workforce as between men and women.

THE HONOURABLE LADY SMITH

INTRODUCTION 
1.	This is an employers’ appeal from the judgment of an employment tribunal sitting at Edinburgh, (Employment Judge Mr K J McGowan) registered on 10 April 2008. The Tribunal found that the respondents had discriminated against the claimant under and in terms of sections 1(2)(b) and 6 of the Sex Discrimination Act 1975 and that, in doing so, they were in fundamental breach of contract which entitled the claimant to resign. She did so and her resignation amounted, accordingly, to unfair constructive dismissal. 

2.	We will continue to refer to the parties as claimant and respondents. 

3.	The claimant was represented by Mr A McPherson, solicitor and the respondents by Mr J Macmillan, solicitor, both before the Tribunal and before us. 

BACKGROUND 
4.	The issue that arose between the parties was an application by the claimant to reduce her weekly hours from 36 hours to 24 hours on her return from maternity leave.  She was employed by the respondents as a signaller. 

5.	The claimant began working for the respondents on 21 February 2006. She commenced “signalling school”, an eight week course, in Leeds on 6 March 2006.  It was planned that she would be assigned to the signal box at Plean, in Stirlingshire, once she had completed her training. Plean operated for 94 hours each week. The norm was that that was covered by three resident signallers, each working 36 hours average per week (with shifts being allocated on a 12 weeks cycle) and with one relief signaller being available as well. Relief signallers were shared with the Edinburgh and Glasgow areas.   When the claimant was recruited, Plean had only two resident signallers, Mr Boreland and Mr Porter, and the deployment of the claimant to Plean would have brought the number of resident signallers there up to the norm. 

6.	On 13 April 2006, the claimant told Mr Mina, the local operations manager for the Falkirk area, which included the Plean box, that she was pregnant.  A risk assessment was carried out and it was determined that it was not appropriate for her to carry out signal duties at Plean, which was a remote box that required manual working of levers, during her pregnancy. On 8 May, having completed her signalling training, she, accordingly, began alternative work at Rosebery House in Edinburgh. 

7.	In July 2006, Mr Porter left the respondents’ employment and was not replaced.  

8.	On 2 October 2006, the claimant went on maternity leave. On 14 February 2007, she submitted an application for what is referred to as “flexible working”. In her application she sought a reduction in her contracted hours from 36 hours to 24 hours per week. 

9.	By February 2007, Mr Mina was faced with what the Tribunal refer to at paragraph 61 as “something of a manpower crisis”.  Plean had only one resident signaller working there instead of the required three. Three signallers in the area were on long term sick leave, one of whom was a relief signaller, and another relief signaller was about to go off on sick leave.  He was having such difficulty in covering the requirements for manning the Plean box that managers were having to assist or other signallers were being asked to work overtime there on days when they would otherwise not have been working.  Sometimes the box had to be left unmanned, a situation which limits train movements and can cause delays. 

10.	The respondents had decided that the Plean box would close in December 2007.  In those circumstances, they also decided not to seek a new recruit to replace Mr Porter. Once training time had been allowed for, it was not an economic proposition. 

11.	The claimant discussed her “flexible working” request in March 2007.  Her application was rejected. She appealed. Job sharing was considered. It was considered that there would be a better chance of achieving a job share if there was an equal split in the hours i.e. 18 hours per job share partner. The claimant confirmed though that she was looking to reduce her hours to 24 and the job share was advertised on that basis. There were no applicants.  The claimant was invited to a meeting to discuss her appeal and it was refused on 11 June 2007. 

12.	At the relevant time, no signallers in Scotland were working on a part time basis.

13.	If a train is delayed such as by reason of a signal box being unmanned, the respondents have to pay penalties. In the case of Scotrail, they have to pay £8 per minute of delay.  In the case of National Express, they have to pay £180 per minute of delay. 

14.	The respondents’ Mr Blythe put forward four reasons for refusing the claimant’s appeal:   (1) additional costs (rest day cover and overtime working);  (2) detrimental effect on customer service – if the box was not covered for the full hours, this would lead to delays; (3) inability to reorganise on account of the unique elements of the work, and (4) failure in recruitment in respect of the job share attempt.  The manpower crisis was influential in his decision.  If the claimant had carried on in the respondents’ employment on the basis of her working 24 hours per week, that would have reduced the respondents’ costs at that point in time.  It is evident from the Tribunal’s findings that they accepted that if the claimant had continued on her contractual basis i.e. working 36 hours, then the cost savings would have been greater.  

15.	By that time, the claimant had begun looking at other options for employment as she was, as the Tribunal put it: “beginning to run into difficulties with childcare and working full time.”  She resigned on 19 June, giving four weeks notice.  

The Tribunal’s Judgment 
16.	The Tribunal referred to the relevant statutory provisions, observed that the respondents had applied a “provision, criterion or practice” to the claimant, namely that she was not allowed to work part time, that it was a practice that applied equally to men but put women such as the claimant at a disadvantage and noted the real issue in the case as being:
“whether that PCP was justified i.e. was it a proportionate means of achieving a legitimate aim?” 

17.	The Tribunal observed, at paragraph 60 that the respondents’ justification for the PCP was a combination of economic and operational factors. They state:
“In short, the Plean box normally had three resident signallers; as a result of (a) the termination of one resident signaller’s employment and (b) the claimant’s absence on maternity leave, shifts that would ordinarily be covered by resident signallers on a normal rota were being covered instead by the (i) remaining resident signaller working days when he would ordinarily be off (ii) other signallers doing overtime and (iii) utilising other staff such as managers and relief signallers.  (i) and (ii) had an economic impact since hours worked in that way are paid at an enhanced rate. (iii) had a knock on operational impact in terms of the respondent’s ability to cover absences for holidays and through sickness elsewhere among signallers. If cover could not be achieved, the box might close which in turn might lead to fines being imposed if trains were delayed.”

18.	The Tribunal’s initial reaction to that justification was that it appeared to be:
“… quite a compelling case for insisting that the claimant return full time.”  (paragraph 61)

19.	They then, however, go on and question whether it is so compelling. In so doing they take account of the fact that the box was due to close in December 2007, that the claimant was at least offering to work 24 hours per week, that there was no actual quantification as to the economic impact of accommodating the part time working request, that given the denial of the request was due to a manpower crisis and, as they surmised, the respondents therefore would have been prepared to consider the request at a later stage, they did not tell the claimant of that and that they were given no hard data on the risk to operations.  Having done so, they comment that the justification for the PCP “is not a particularly strong one” at which we would observe that the relevant justification does not require to be of high strength. It is sufficient if it is a proportionate means of achieving a legitimate aim.  

20.	The Tribunal then goes on to look at what it calls “the extent of the discriminatory impact”.  It notes the finding that there were no part time signallers in Scotland. Also, there were only part time signallers in the UK.  It notes that the respondents averred, in their ET3, that only 6 per cent of the signallers in Scotland are female.  They then continue:
“70. It was not suggested that any particular experience or qualifications were required for aspiring signallers. Although no doubt certain personal qualities are essential, given the important work which they carry out, it does not appear to us that the nature of the work alone would be such as to explain a very significant imbalance in the gender makeup of the workforce.
71. We consider that there is a real possibility that there is a link between the specific treatment which the claimant received and the more general picture which emerges as to the gender makeup and work patterns of the respondent’s workforce , in the sense that the treatment of the claimant may be an example of a reluctance on the part of the respondent to allow flexible working and require full time working , these being two sides of the same coin. In our view , the evidence as to the gender makeup and work patterns of the workforce give rise to an inference that women may be being discouraged from applying for work and/or pursuing careers as signallers.” 

21.	Further, at paragraph 73, the Tribunal state:
“…the discriminatory impact of the PCP on the claimant was significant. Shift working by itself makes it difficult to access child care such as nursery facilities. The imposition of a requirement to work 36 hours per week created significant practical problems for her in relation to child care. The claimant was reliant on friends and family and, as she put it, was beginning to run out of options. The discriminatory effect was that the claimant could no longer sustain her employment with the respondent and had no option but to resign. Thus the extent of the discriminatory impact could hardly have been more acute.” 

22.	In considering whether the respondents’ approach amounted to fundamental breach of contract justifying resignation, the Tribunal state:
“ 78. ….we gained the impression that the matter was dealt with in a relatively offhand way … we did not gain the impression there was any serious attempt to look at the situation from the claimant’s viewpoint.
…
82. We … are left with the nagging feeling that …the claimant had become regarded as a “problem” and that the respondent was content to allow that problem to be resolved by the claimant leaving its employment.” 

23.	However, it is clear that the Tribunal did not find that there was a case of unfair dismissal that stood alone separately from the finding of discrimination.  The finding of unfair dismissal depended on the finding of discrimination. Mr McPherson did not, at the appeal, suggest otherwise.

The Appeal 
24.	For the respondents. Mr Macmillan submitted that the Tribunal had fallen into error.  They had drifted into an analysis which involved comparing the 24 hours that the claimant wanted to work with zero hours whereas the starting point was her contracted hours of 36 hours. Those were the hours that required to be compared to the 24 she was offering. Further, they had an inadequate factual basis from which to reach their conclusions as to the impact of the PCP on the claimant. Then, most significantly, the Tribunal had, he said speculated as to the possibility of there being some sort of institutionalised discrimination taking place and that had affected their conclusions. 

25.	On their considerations of unfair dismissal, the Tribunal had also, he submitted, displayed an attitude of speculation and supposition where they referred to having an “impression” and to having a “nagging feeling” all without an evidential basis. 

26.	He referred, in the course of his submissions to Greater Glasgow Health Board v Carey [1987] IRLR 484, Hampson v Dept of Education and Science [1989] IRLR 69, Clymo v Wandsworth LBC [1989] IRLR 241, and Mitchell v David Evans Agricultural Ltd UKEAT/0083/06 for discussions of the statutory test.  He also referred to Scottish Shellfish Marketing Group Ltd v Connelly UKEAT/0082/05, Jabil Circuit v Fleming UKEATS/0069/06, Brown v London Borough of Croydon [2007] IRLR 259 for examples of appeals being upheld where tribunals had speculated and to Appiah v Governing Body of Bishop Douglas RC High School [2007] IRLR 264 in support of a submission regarding burden of proof.

27.	For the claimant, Mr McPherson submitted that the Tribunal had not erred. They had carried out the requisite balancing exercise.  Whilst the Tribunal had speculated at one point, it was for the purpose of making a recommendation.  The test for perversity was not met.  So far as the matter of comparison of hours was concerned, he submitted that the Tribunal took on board the respondents’ submission but it was relevant to take account of the fact that the claimant’s proposal of 24 hours was better than no hours at all.  If the respondents’ had acceded to her request, there would have been a saving of cost. The appeal should be refused.

Relevant Law 
28.	Section 1(2)(b)(ii) of the 1975 Act requires an employer to show that the provision, criterion or practice being applied is on account of a real need, is appropriate and is reasonably necessary (see Bilka–Kaufhaus GmbH v Weber Von Hartz [987]ICT 317, as discussed in the case of Mitchell v David Evans Agricultural). That means that the PCP in question requires to be justified objectively notwithstanding its discriminatory effect.  The Tribunal requires to take into account the reasonable needs of the business and to make a judgment on a fair and detailed analysis to the working practices and business considerations involved as to whether the proposal is reasonably necessary.   Regard may require to be had to administrative efficiency as well as economic matters (Rainey v GGHB [1987] IRLR, GGHB v Carey, Hampson v Dept of Education and Science). An employment tribunal requires, in these circumstances, to carry out a balancing exercise; there is an objective balance to be struck between the discriminatory effect of the requirement or condition and the reasonable needs of the employer who has applied it. 

Discussion and Decision 
29.	We consider firstly, the discriminatory effect of the PCP in this case. The Tribunal’s findings are, unfortunately, affected by speculation to a significant degree. They make no finding in fact about the obtaining of nursery places where the parent works shifts yet have included in their considerations of discriminatory effect that there was difficulty in that regard. They have made little by way of findings in fact as to exactly what was the problem for the claimant so far as combining child care and shift working was concerned, something which they required to do given that she was offering to work a significant number of hours, namely 24 hours on average each week. They needed to know how it was that 24 hours was feasible for her but 36 hours was not. The question was not addressed. We do not see that the general comments about reliance on friends and family meets the requirement here.  Thus the Tribunal’s findings on the discriminatory effect side of the balancing exercise they required to carry out are less than satisfactory.

30.	Turning then to the reasonable needs of the employer, we accept the submission that the judgment reads as though the Tribunal have, at times, drifted into comparing 24 hours with zero hours whereas the correct comparison was as between the contractual 36 hours and the 24 hours she wished to reduce to.  The issue flowed not from a situation where the respondents had no entitlement to any hours from the claimant - so any hours must have been better for them - but from a situation where their entitlement was to 36 hours work from the claimant and she was seeking to reduce their entitlement.   

31.	Further, the Tribunal found that the case of reasonable business need advanced by the respondents was, at first sight, compelling, an observation with which we agree. It is evident, however, that their departure from that preliminary conclusion has been influenced by their considerations set out at paragraphs 69, 71 and 71 to which we have referred above. These amount to nothing more than questioning and speculation as to whether there might be a situation of general institutionalised discrimination against women in the respondents’ employment of signallers. There was, however, no evidence before the Tribunal as to how or why other women may or may not have been deterred from applying for signalling jobs and it cannot be the case that the only inference that could be drawn in the circumstances is that they are deterred because of the PCP regarding part time working. It is not difficult to think of a host of other reasons not indicative of direct or indirect discrimination which could make the job seem less attractive to women.  Nor is it clear where the Tribunal felt that these considerations took them.  Whilst we can see that in a case where there is evidence pointing to institutional discrimination, a Tribunal may be sceptical about an employers’ explanation for the PCP and thus disbelieve it, in this case, the Tribunal accepted the evidence regarding the respondents’ reasons for applying it.  The Tribunal’s comments on these matters do, we agree, render the judgment perverse in the sense that they have taken into account wholly irrelevant material that was not founded in the evidence and was not based on any finding in fact. 

32.	Finally, we agree with Mr McMillan that when it comes to the unfair dismissal part of the judgment, the extent of the Tribunal’s references to its impressions and feelings does make it appear that they have, in considering whether or not the discrimination that they found occurred amounted to a relevant breach of contract on the part of the respondents, entered the realms of speculation and reached a judgment which was perverse.   

Disposal 
33.	In these circumstances, the judgment cannot stand.  We will pronounce an order upholding the appeal and remitting the case to a freshly constituted tribunal for a rehearing. It would not, given the extent of the Tribunal’s diversion in the claimant’s favour, be appropriate to remit it to the same Tribunal.