Appeal No. UKEAT/0369/10/ZT

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 8 April 2011

Before
HIS HONOUR JUDGE McMULLEN QC
BARONESS DRAKE OF SHENE
MISS S M WILSON CBE

CROMWELL GARAGE LTD	APPELLANT

MRS H L DORAN	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR HENRY KNILL
(Solicitor)
MILS Solicitors t/a Motor Industry Legal Services
27b The Mansions
252 Old Brompton Road
London
SW5 9HW
	
For the Respondent	MS AMANDA HART
(of Counsel)
Instructed by:
Messrs Leigh Day & Co Solicitors
Priory House
25 St John’s Lane
London
EC1M 4LB	

SUMMARY

SEX DISCRIMINATION
Pregnancy and discrimination
Injury to feelings
MATERNITY RIGHTS AND PARENTAL LEAVE – Sex discrimination

The ET was entitled to find that the burden of proof passed to the Respondent to explain his treatment when he made gender-related comments about the Claimant’s pregnancy, and subjected her to discipline on her return to work.  It correctly rejected the explanations.  It did not err in placing injury to feelings in the middle of the middle Vento Da’bell band.

HIS HONOUR JUDGE McMULLEN QC
Introduction
1.	This case is about unfair dismissal and sex discrimination in the context of rights in respect of pregnancy and maternity leave.  This is the Judgment of the court, to which all members appointed by statute for their diverse specialist experience have contributed.  We make this point for two reasons.  First, throughout his address to us, Mr Knill, solicitor for the Respondent, the employer in this case, referred to the reasons of the Judge, meaning the reasons of the three-person Employment Tribunal.  Despite many reminders to him, he continued to isolate the Judge from the tripartite decision-making of the Employment Tribunal, and that is generally unpromising when making submissions to our own Tribunal which is a majority specialist lay Tribunal.

2.	Secondly, Mr Knill made two assertions without evidence, but by an invocation of what we should generally understand to be the position in employment generally, and in society.  The first is that, generally speaking, it is sometimes the case that women who are on maternity leave do not return to work, and secondly, that it is widely acknowledged that the problems facing small employers are increased when employees go on and come back from maternity leave.

3.	We say at once, in respect of the first assertion, that is not the impression currently we have by looking at the profile of women at work.  Of course a woman on maternity leave makes her decision about whether to go back and circumstances change, but it is the impression of the lay members here, including a legislator, that more and more women in the relevant age group are employed, and that would indicate that they are taking advantage of their right and come back after maternity leave has expired.

4.	As to the second assertion, we do accept that small employers face greater challenges in coping with the absence of, let us say, a key worker.  We fully understand Mr Knill making the point, as he is a solicitor, providing specialist services to members of the motor trade, many of whom run small garages.  So we do accept his assertion that it is frequently put forward that there are challenges for smaller employees in meeting their obligations under the statute.  However, the obligations under the law apply to the big and the small employer, and in the context it should be noted that this is a relatively small employer of 13 people, losing, for the period of maternity leave, as it would put it, its key worker.

The appeal
5.	It is an appeal by the Respondent in those proceedings, against a reserved Judgment of an Employment Tribunal, chaired by Employment Judge Dean, sitting over three days at Birmingham, and registered with reasons on 13 April 2010.  The Claimant was represented by Working Families and the Respondent by its leading light, Mr Lynch, the Managing Director of the Respondent company.

6.	Today, Mr Knill appears for Mr Lynch, and Ms Amanda Hart, of counsel, appears for the Claimant.  The Claimant claimed unfair dismissal and direct sex discrimination arising out of the treatment she received following her maternity leave.  The Respondent contended that there was no discrimination, and the reasons for the actions which Mr Lynch took were in no way whatsoever affected by the Claimant’s pregnancy and subsequent maternity leave.

The issues
7.	The issues were defined by the Employment Tribunal in paragraphs 2 and 3 of its Judgment.  The Tribunal began by considering whether there would be findings on ordinary unfair dismissal under section 98(4) of the Employment Rights Act, and pregnancy-related dismissal under section 99, which is automatically unfair.  It further considered whether there was discrimination directly in relation to pregnancy and maternity, contrary to section 3A(1)(b)of the Sex Discrimination Act 1975.

8.	In the course of its definition of the issue, the Tribunal said the Claimant has to prove that she has been dismissed for a reason that was automatically unfair.  With respect, that places too high a burden on the Claimant, as Miss Hart accepts.  It is not a ground of appeal for of course the Claimant, as will be clear, had no difficulty in meeting that test, but it seems to us, following Kuzel v Roche Products Ltd [2008] IRLR 530 that what a Claimant has to do in a case where she is asserting a competing reason, here pregnancy or maternity-related, is to produce some evidence, but the burden is still on the employer to show what the reason for dismissal was.  Nevertheless, despite that misdirection, nothing turns up on it.  

9.	The Tribunal decided in favour of the Claimant on, effectively both limbs, which is a finding under section 99 and a finding under section 3A of the 1975 Act.  It awarded the Claimant the sum of £24,723.36.  The Respondent appeals.  Directions sending only one part of this appeal to a full hearing were given at a preliminary hearing, presided over by Judge Hand QC.  

The legislation
10.	The relevant provisions of the legislation are as follow: 

“3A Discrimination on the ground of pregnancy or maternity leave
(1)	In any circumstances relevant for the purposes of a provision to which this subsection applies, a person discriminates against a woman if -
(a) at a time in a protected period, and on the ground of the woman’s pregnancy, the person treats her less favourably…; or
(b) on the ground that the woman is exercising or seeking to exercise, or has exercised or sought to exercise, a statutory right to maternity leave, the person treats her less favourably…”

11.	For the purposes of unfair dismissal, section 99 of the Employment Rights Act provides as follows:

“99(1) An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if _
(a) the reason or principal reason for the dismissal is of a prescribed kind 
[…]
(3) A reason or set of circumstances prescribed under this section must relate to -
(a) pregnancy, childbirth or maternity,
(b) … maternity leave.”

12.	It will be noted that ordinary unfair dismissal provided by section 98 is, by section 98(6), subject to section 99.  In other words, ordinary unfair dismissal considerations - fairness, justification and so on - do not arise where there has been a finding of automatic unfair dismissal for family reasons under section 99.

13.	The Tribunal directed itself by reference to authorities relevant to ordinary unfair dismissal British Home Stores Ltd v Burchell [1978] IRLR 379 EAT, for example, but since the finding was under section 99, and sex discrimination, that does not matter.

The facts
14.	The Respondent is a small garage with a shop.  The Claimant was at the time 28, having three children aged 13, 7 years and 17 months.  The Claimant enjoyed a good relationship with the Respondent.  She was employed as a Forecourt Manager, having been promoted from her original employment in August 2003, and she covered the shop from 09.00 to 15.15 every day, and occasionally filled in for other employees when they were out.

15.	The Claimant told Mr Lynch in March 2008 that she was pregnant.  As a result of that, Mr Lynch made a number of comments at various stages.  As soon as he was told of the Claimant’s pregnancy, he regarded that as “dropping him in it”, and he made comments about the inability of a woman to run a family and a job. These indicated the frustration of Mr Lynch that the Claimant was going to be away on maternity leave and he was not happy about it. While the Claimant was still employed, and prior to the maternity leave, it came to Mr Lynch’s notice that one of her co-workers, a good friend of hers, was associated with drug dealing. Mr Lynch contended that the Claimant knew about that and yet did nothing.  There was a risk, he thought, of the association with illegal activity at the premises.  

16.	However, neither in November 2008, when this arose, nor at any stage up until April 2009 was the matter ventilated.  The Claimant was projecting to come back to work on 5 May 2009.  To that end, three meetings were conducted between Mr Lynch and herself, during which Mr Lynch sought to persuade her that, in the light of what had occurred at the business, one employee leaving and another person taking over various parts of the job, the Claimant’s hours should be changed from 13.00 to 18.00, because that would suit the business.

17.	During the course of these discussions, Mr Lynch’s impatience, or perhaps lack of understanding, became clear in a number of comments he made.  At the same time as Mr Lynch wrote to the Claimant about the arrangements for her coming back to work on 5 May, he also uttered a letter indicating the first step of a disciplinary procedure, to do with the perception by Mr Lynch that the Claimant had not disclosed that she knew about this colleague’s husband’s drug dealing.  She refuted those matters on her first day at work.  The Claimant was dismissed, and her appeal, also before Mr Lynch, was dismissed.  

18.	The Tribunal approached the decision-making first on the basis of Igen v Wong [2005] IRLR 258 CA, which deals with the burden of proof, and came to the firm conclusion that the burden of proof shifted to Mr Lynch in the light of the comments which he had made, and the chronology, that is the timing of the return to work and the introduction of stale disciplinary proceedings.

19.	Mr Lynch failed to discharge it. The Tribunal found that the reason Mr Lynch sought to change the terms and conditions was not, as he put it, the change in the circumstances of the business, but was on the grounds of her maternity.  But for the Claimant’s maternity leave, Mr Lynch would not have sought to vary her terms and conditions and would have found alternative means.  

20.	Secondly, the introduction of the disciplinary matter was not to do with the original concern of Mr Lynch, but was again to do with her maternity.  His two explanations were found to be not persuasive, and incredible, and so the Claimant’s claim was made out.

21.	The Tribunal went to remedy.  There is no issue as to the financial losses of some £12,000, but in respect of injury to feelings the Tribunal awarded £12,000.  The Claimant had suffered depression, as noted by her General Practitioner, for which counselling was prescribed.  The Tribunal noted the difficulty which this dismissal had caused to the relationship with her youngest child, the baby for whom the maternity leave was taken.  

22.	The Tribunal made findings about the damage to that relationship, and to the loss of esteem of the Claimant who had, through adversity been able to work herself up to the position of manager at the forecourt shop, and so awarded £12,000, which is in the middle of the band prescribed now by Da’bell v National Society for Prevention of Cruelty to Children [2009] UKEAT/0227/09.

The Respondent’s case
23.	The Respondent contends that the Tribunal failed to pay sufficient attention to the problems of a small business.  We have already acknowledged there is some force in the perception that Mr Knill advances.  He contends however the burden of proof should not have shifted to the Respondent, and that it had an adequate explanation.  The problem facing this employer was impossible.  His client had been subjected to a “witch’s ducking stool”.  Although he acknowledges that it is vitally important to protect women, a miscarriage of justice has occurred here. In the skeleton argument, criticisms are made of the way in which the Tribunal approached the burden of proof, but essentially the argument is one of perversity.  The Tribunal reached the wrong conclusion on the basis of the facts.

24.	Secondly, the decision of the Tribunal was irrational, and the Tribunal should have paid more attention to the matters which possessed Mr Lynch concerning the drug dealing husband of the other employee.

25.	Mr Knill contends, thirdly, that the Tribunal was wrong to find that the dismissal was automatically unfair, because the reason for dismissal was not connected with the maternity.  

26.	Fourthly, the remedy of £12,000 was manifestly excessive because there was no proper medical evidence.  It is accepted that the Claimant became depressed, but this is insufficient.  Mr Knill acknowledges that the correct award would have been £7,000 not £12,000.

The Claimant’s case
27.	The Claimant contends, in an elegant skeleton argument, analytically responding to the points, that the Tribunal made no error in the burden of proof; there was ample material upon which the Tribunal could find that the Claimant has put forward evidence which could show discrimination and that the burden passed to Mr Lynch.  Thereafter, the Tribunal was entitled to draw the inference and to reject the explanations he gave.

28.	Miss Hart draws our attention to Fuller v The London Borough of Brent [2011] EWCA Civ 267, in which Mummery LJ enjoins the EAT against taking a fussy or pernickety approach to the reasons of the Tribunal, which must be read in the round.  She contends there is no error in the burden of proof.

29.	As to the perversity arguments, she relies on the high threshold for successful appeals on the grounds of perversity (see Yeboah v Crofton [2002] IRLR 634).  In respect of the quantum, she contends there is no requirement for the purposes of an award for injury to feelings to produce medical evidence, that, of course, being appropriate if there is actual illness.  The Claimant was entitled to give evidence about how she feels.  

The legal principles
30.	The legal principles to be applied in this case are not in dispute.  The burden of proof, passes from the Claimant to the Respondent once she has shown matters which could prove sex discrimination or maternity discrimination: Igen v Wong.  The standard for a perversity appeal is very high: Yeboah v Crofton.  Decisions on quantum will rarely be attacked if the right band is found: Da’bell v NSPCC adapting  Vento [2003] ICR318 CA

Discussion and conclusions
31.	We prefer the arguments of Miss Hart and have decided to dismiss the appeal.

The burden of proof
32.	In our judgment, there was ample material of great cogency from which the Tribunal could conclude that discrimination had been proved by the Claimant.  The language used by Mr Lynch in six separate comments recorded by the Tribunal is plainly sufficient for the Claimant to have shown relevant facts.  

33.	Independently of those comments is the juxtaposition of the disciplinary matters.  This is simply a matter of chronology.  There was no reason for the matter being raised than the imminent return of the Claimant, and on the day she was to resume her work, the disciplinary matter was thrust upon her. The Claimant has shown evidence which could lead to discrimination.

34.	The Tribunal then rejected the explanations.  It is not for the EAT to second guess the Tribunal.  It heard Mr Lynch and found him incredible.  His explanations were not persuasive, and so, not only did the Claimant provide sufficient material, which went beyond simple facts, as is required in Madarassy v Nomura International plc [2007] EWCA Civ 33, it showed a gender explicit issue (see the comment about working mothers), which the Respondent was not able to explain.  In our judgment, this was a matter within the fact-finding and inference-drawing duties of the Employment Tribunal, and we see no basis upon which we could intervene.  

Perversity
35.	The same is true about the allegations of perversity.  Given that the evidence here was so plain to the Tribunal, it cannot be said that no Employment Tribunal would have found as this Tribunal did.  The interrelationship between the discipline and the return to work is powerful.  The Tribunal had to make decisions about causation, and it had material before it upon which it could decide that the treatment of the Claimant by her dismissal was connected with and for the reason of her pregnancy and maternity.

Remedy
36.	We then turn to the remedy.  As we said in Da’bell such decisions are for the Employment Tribunal:

“46. We indicated at the outset that appeals on the basis of inadequate or excessive compensation were more likely to succeed if the wrong band were chosen.  Mr Duggan conceded the claim was worth £6,000 to £8,000.  That is within the middle band.  In our judgment disputes about the placement within a band of an award are likely to be about fact and impression.  They are more likely to raise questions of law if they are about placement in the wrong band or at the extremes.  The difference here is between the mid point and the lower end.  Between the two poles are five steps.  The Respondent concedes the first (£8,000) and the Employment Tribunal chose the third (£12,000).
47. The Employment Tribunal listened to the Claimant tell her story and say what effect the failures of the employer had had upon her; that is a unique advantage not bestowed upon us.  We will not interfere with such findings unless they are manifestly wrong, which in this case they are not.  With out thanks to both Counsel for their written and oral submission, the appeal and the cross-appeal are dismissed we noted at the outset that the Respondent has paid in full the award of the Tribunal which of course will remain as it falls.”

37.	The difficulty with the Respondent’s contention is that there was indeed medical evidence.  To say that it was not proper medical evidence is not a legal argument.  We accept the submission that medical evidence to indicate injury to feelings is not a requirement, but here there was evidence, and it did indicate distress. On top of that, the Claimant told her own story about the relationship with her youngest child, following her dismissal.  These were pieces of powerful evidence for a Tribunal to consider and we see no difficulty in the Tribunal awarding injury to feelings on that evidence.  

38.	What was the proper band?  As Mr Knill concedes, it was the middle band of Vento Da’bell, and he puts it at £7,000; £12,000 was ordered.  

39.	It would be tinkering if we were to change that and, as we indicated in Da’bell, allocation of the wrong band may be more susceptible to an appeal as an error of law, but within the same band it would be difficult to find that it was manifestly excessive.  This was a figure for the discretion of the Tribunal to decide what was just inequitable, having heard the Claimant, and in our judgment it made no error.

40.	The appeal is dismissed.