Mr N Pasha v Elaine Investment Management Ltd and Elaine Zhang: 2208469/2016
EMPLOYMENT TRIBUNALS
Case No 2208469/2016
Between
Mr N PashaClaimantElaine Investment Management Ltd (1) Elaine Zhang (2)Respondent
Before
Employment Judge Ms H Clark
Members
Ms K DentMs E ChampionMr Davey - Counsel for claimantMs Chute - Counsel for respondentDate 30 June 2017
JUDGMENT
The unanimous Judgment of the Tribunal is that(1) The First Respondent directly discriminated against the Claimant because of his race by dismissing him.(2) The Second Respondent harassed the Claimant because of his race. :
REASONS
[1]The issues for determination by the Tribunal were identified at a closed preliminary hearing on 31st March 2017 as follows:1.1 Was the Claimant treated less favourably in being dismissed because of his race.1.2 Did the Second Respondent engage in unwanted conduct which had the purpose or effect of violating the Claimant’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for him related to his race. Ms Chute confirmed to the Tribunal that the Respondents do not pursue any contention that the alleged acts of harassment were out of time.[2]There were three main disputed allegations:2.1 In the first few days of the Claimant’s employment that the CEO of the First Respondent, Ms Zhang, said they could work together as “Indian, Chinese and Pakistanis people – we are all a bit crooked.”2.2 On 7th September 2017 in the course of the last telephone conversation between the Claimant and Ms Zhang, the latter said: “You Pakistanis are completely useless. You are wasting my money and wasting my time”.2.3 It is the Claimant’s case that his dismissal was tainted by that characterisation, whereas the Respondents maintain he was dismissed in accordance with the terms of his contract for poor performance.[3]For the purposes of this hearing, the Tribunal heard oral evidence from the Claimant and the Second Respondent, who was assisted by an Interpreter provided by the Tribunal using the Mandarin language. There was a joint bundle of documents, to which documents were added on the second day of the hearing by agreement between the parties, relating to the date on which the Claimant was provided with a draft contract of employment and Employee Handbook and a number of emails sent by and to the Claimant in the course of his employment. The Tribunal is grateful for the oral submissions of both representatives.
The Law
[4]Section of 13 the Equality Act 2010 provides that a person discriminates against another if: “because of a protected characteristic, A treats B less favourably than A treats or would treat others”. In common with other discrimination strands, unlawful direct race discrimination relies on a comparison being made between a Claimant’s treatment with that of another who does not share his race. Race can include colour and ethnic or national origins.[5]It is not always helpful to start with an inquiry as to whether the Claimant was treated less favourably than a comparator, but to focus on the reason why the Claimant was treated as he was. The use of a comparator can be a helpful way to cross check the reason for the treatment.[6]In recognition of the difficulties in proving unlawful discrimination cases, particular provisions are made in section 136 of the 2010 Act. The Tribunal notes the guidance concerning the operation of the burden of proof from cases such as Igen v Wong [2005] IRLR 258 and Madarassy v Nomura [2007] EWCA Civ 33 to the effect that it is unusual to find direct evidence of discrimination, which can depend on what inferences it is proper to draw from primary facts found by the Tribunal. Where the Claimant has proved facts from which conclusions could be drawn that an employer has treated the Claimant less favourably because of race, then the burden of proof moves to the employer. It is then for the employer to prove that he did not commit that act. In order to do so it is necessary for the employer to prove on the balance of probabilities that the treatment was not because of race. It requires a Tribunal to assess not merely whether the employer has proved an explanation for the facts from which such inferences can be drawn, but further that it is adequate to discharge the burden of proof on the balance of probabilities that race was not a reason for the treatment in question.[7]Simply acting unfairly or unreasonably is not sufficient to raise an inference of discrimination. Although, where an alleged discriminator has acted unreasonably or unfairly the Tribunal will want to know why he or she has acted in that way. Even if a cogent explanation is given, the Tribunal must be astute to the possibility that the alleged discriminator has been subconsciously influenced by unlawful discrimination.[8]Unlawful discrimination may not be the only or even the main cause of the Claimant’s less favourable treatment. Whilst there needs to be a causative link to the less favourable treatment, it does not need to be the only or even the main reason for it (see the Equality and Human Rights Commission Employment Code paragraph 3.11).[9]Unlawful harassment occurs under section 26 of the Equality Act 2010 where an employer engages in “unwanted conduct which had the purpose or effect of violating a Claimant’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for him” and that conduct is related to a relevant protected characteristic. An isolated act of harassment is capable of satisfying this definition.
Findings of Fact
[10]The First Respondent is a Company involved in property management and development. It is controlled by the Second Respondent, Ms Zhang, who set it up in 2009 when she came to the UK from China. She is its Director and CEO. Since its inception, staff have been recruited from around the world, which has made for a racially and religiously diverse work force. The Employee Handbook included both equal opportunity and diversity and bullying and harassment policies.[11]The Claimant was living in Dubai prior to his employment with the First Respondent, but wanted to return to the UK to be near two of his daughters, who live here. He needed to secure employment before making the move. The Claimant is a Chartered Accountant with an impressive CV and over 30 years’ experience working in banking finance and real estate management, including over 15 years for Citibank and as a Group Chief Financial Officer for companies involved in real estate development in Dubai. He is a British Citizen of Pakistani national origin.[12]The preliminary stages of the recruitment exercise were conducted by Recruitment Consultants, Aston Tate, and the Claimant appears to have been one of three short-listed candidates. The Second Respondent says that the other two candidates were white British. The Claimant travelled to the UK from Dubai for three interviews – the first with an HR Intern of the Respondent, then the CFO and finally, a 90-minute interview with the Second Respondent, Ms Zhang, who is the CEO and main shareholder of the First Respondent.[13]The Claimant’s interview with Ms Zhang was conducted at the Arts Club in Mayfair on the 9th June 2016. English is not Ms Zhang’s first language and, although she conducted the Claimant’s interview in English and could converse with her English-speaking staff, she also relied to some extent on her Assistant to translate for her.[14]Neither the Claimant’s interviews nor his induction day took place in the office at 2 Windmill Street, London at which he was to work, but in the basement of the building. The Claimant was both surprised by the fact that the office was quite small and that there appeared to be fewer staff than he was expecting. At the time he was engaged there were a total of 6 members of staff but he had gained the impression there were around 20. An email he received from an HR Intern of the First Respondent referred to the Company’s “projects and planning applications” whereas there was really on one potential application and one project which needed real input.[15]Although it was hoped by Ms Zhang that the Claimant would be able to take over the role of CEO in due course, he was offered the role of Managing Director within a couple of hours of his interview with Ms Zhang. He was sent a written offer of employment, which included a draft contract of employment and the Employee Handbook on the 13th June 2016. He was offered and accepted a salary of £125,000 plus the potential to earn a profit-related bonus. Whilst the Claimant was looking to receive a higher salary and did not like the discretionary nature of the bonus, he said that Ms Zhang had confirmed verbally that he would get a 10% bonus at the end of the year plus any value he created in the business. The Claimant considered that it was standard in the business world that what was written in the contract did not necessarily match what was agreed verbally and so expected to receive a 10% bonus on top of his salary. However, he accepted the role on the 20th June 2016 on the basis of the written documentation, which made it clear (at section 11) that the bonus was discretionary and not payable after termination of employment. The Claimant started work on the 15th August 2016.[16]The Respondents owned and managed residential property at 54 Portland Street, the Company’s office premises at 2 Windmill Street (which had tenants on two of the upper floors) and a hotel property at Lancaster Gate. In May 2016, there was also another property in Charlotte Street which was sold. No maintenance was required for the Portland Street premises, so the primary property which needed input was the hotel premises at Lancaster Gate. Ms Zhang was hoping to obtain permission for a change of use from a hotel to residential and the plan was then to sell the building. There was one tenant in the property, an artist, who had a gallery there. Ms Zhang was advised that he should be given notice to quit to enhance the prospects of obtaining the change of use permission the Respondents sought. Some maintenance was required on that property, but until the planning issues were resolved, there was no need to undertake any redecoration of the premises.[17]The Claimant’s employment was subject to a probationary period of 6 months and it was an express term of his contract that his employment could be terminated with immediate effect within the first month of employment with written notice (paragraph 14). Ms Zhang claimed in evidence that she made sure the Claimant was aware of this at their interview on the 9th of June. She originally suggested that the Claimant had been sent the contractual documentation prior to his interview with her and that she had, therefore, just reminded him of the no notice provision. However, on further questioning, she said she was unsure as to when the contractual documentation had been sent to the Claimant. Checks were made overnight and it was conceded that the Claimant was not sent the contract prior to interview.[18]The Tribunal considers it highly unlikely that Ms Zhang would have expressly drawn the Claimant’s attention to the lack of security in his role at his interview (and, by definition before he had been offered it). The Claimant denies that there was any such discussion. Emphasising the precarious nature of the employment being offered, particularly to someone who was relocating to the UK for the role, would have rung alarm bells in any experienced employee’s mind and the Tribunal does not accept Ms Zhang’s evidence in this regard.[19]Although Ms Zhang corrected her initial evidence to the effect that she had specifically drawn the Claimant’s attention to this provision in the contract at interview, this was done after it was pointed out to her how unusual it would be to send a detailed contract prior to an interview. This was one of a number of occasions that Ms Zhang’s evidence lacked credibility.[20]Ms Zhang travels a lot, so of the three weeks during which the Claimant was employed by the First Respondent, she was only in the office for 7 or 8 days. When she was travelling, she expected to be kept informed by the Claimant as to what he was doing. It is common ground that they had at least daily contact. However, there is a dispute as to the timing and frequency of that contact.[21]On one of the first days of the Claimant’s employment, he was very shocked by an exchange with Ms Zhang. The latter commented to him that Pakistanis, Indians and Chinese were able to work together because they were all “crooked”. The Claimant prides himself on his integrity, which is essential for an Accountant and took exception to it. The Respondents denied that any such remark was made and it was put to the Claimant in cross-examination that this conversation did not take place.[22]In oral evidence, Ms Zhang accepted that she had made a comment to the Claimant about “Indians, Pakistanis and the Chinese” sharing a common characteristic, which she described as “flexibility”. This was in distinction to, for instance, the British, who she described as “direct.” She said that her English was not sophisticated enough to understand a word such as “crooked”. This alternative form of words was not put to the Claimant in cross-examination (and was not asserted in the pleadings or Ms Zhang’s witness statement). In explaining what she meant by “flexible” Ms Zhang gave the example of a museum shutting at 3pm, but that in India, Pakistan or China, staff would keep it open beyond 3pm on the payment of a “tip”.[23]The Claimant corrected Ms Zhang’s characterisation of Pakistanis and explained he was a man of integrity. He did not make any formal complaint about it, as he was wanted the role to work. It was not his style to make a complaint, although he accepts that there was a grievance policy and procedure, which was outlined in the Employee Handbook and referred to in his contract. He told the Tribunal that there was a lot riding on this job and he wanted to make a success of it. Although he was taken aback by Ms Zhang’s remark, he thought he would try to make the best of it.[24]It is clear from the Employee Handbook that Ms Zhang likes to keep very firm control of her staff – there were a number of examples in the Handbook as to how employees should behave and what permissions they need from her, including a requirement that they converse in English unless she gave permission otherwise. Employees were required to call Ms Zhang “CEO” or “Boss”. The Claimant’s contract of employment contained provisions permitting percentage salary reductions to be made on days where the Claimant was late, left early or took more than his 1 hour lunch break.[25]The Claimant’s working hours were between 9am and 6pm. Ms Zhang says she required the Claimant to clock in with her at 9am and also contact her at 6pm at the end of the day. She complains that he failed to do so. The Claimant denies that he was required to do this and the Tribunal accepts his evidence. In the Tribunal’s experience, it is unusual to expect such a senior and highly paid employee to clock in and out every day.[26]Although Ms Zhang makes various complaints about the Claimant’s work (that he was too slow, his typing was not up to speed and he did not have the experience of refurbishing hotels that he claimed on his CV), with one exception, none of these complaints were documented or evidenced in any way apart from through Ms Zhang’s oral or written evidence.[27]The exception relates a handwritten note prepared for Ms Zhang by the Claimant giving the former details of a flight which was booked in her name to and from Lisbon. The note was brief as it only contained the booking reference, and flight times and dates, but Ms Zhang could not understand why the Claimant had not simply forwarded her these details either as a screenshot or a photograph. As far as Ms Zhang was concerned, this demonstrated that the Claimant was a slow, inefficient worker. She also suggested that his typing speed was slower than he had claimed. Whilst the Claimant accepts that he is a two-finger typist, he can do so quickly and, in any event, he was not engaged primarily as a typist.[28]Ms Zhang explained that she would send the Claimant a number of voice messages in day, but the Claimant would be slow to respond to them so she would have to chase him up. Although there is no written record of Ms Zhang alerting the Claimant to his poor performance or reminding him of tasks he had forgotten, Ms Zhang said that some of these were in voice messages. These messages were not produced to the Tribunal.[29]It was common ground that there were at least daily email, voice mail and message exchanges between the Claimant and Ms Zhang, although no such evidence was included in the agreed bundle of documents. On the second day of the hearing, a number of emails were produced by the Respondents on the basis that they constituted the sum total of all the email correspondence generated by the Claimant during his three weeks of employment. Ms Zhang had been unable to discuss the case overnight with her staff as she was in the middle of her evidence, so her Assistant apparently printed off all the Claimant’s emails. Ms Zhang explained that the Respondents have external IT support providers who could retrieve any information from the Company’s computers, although there was no indication that these external providers had produced the Claimant’s emails overnight.[30]Whilst Ms Zhang asserted in her evidence that all the Claimant’s emails had been produced, the Claimant denied that he had only sent 13 emails and received 21 emails in a three-week period and that he had copied Ms Zhang into a number of emails which had not been produced. Ms Zhang told the Tribunal she did not read her emails and where she needed to, her Assistant would translate them for her. As Ms Zhang was not involved in the process of obtaining the emails, the Tribunal is unable to rely on her evidence to the effect that her Assistant printed out all the emails sent and received from the Claimant’s email account at the First Respondent. In any event, there appeared to be some surprising omissions in the emails provided.[31]In the course of the Claimant’s role, he had to communicate with tenants in the Respondents’ properties, architects and builders. For instance, it was agreed that the Claimant had to negotiate with the artist who worked in the Lancaster Gate property to ensure he moved out, also with English Heritage and a Company in Birmingham from which the Claimant ordered a letter box on Ms Zhang’s instructinons. None of these communications were included in the emails produced by the Respondents on the second day of the hearing. Whilst some of the Claimant’s communications would have been over the telephone, the lack of any emails passing between the Claimant and a number of key personnel it is accepted he was dealing with regularly is odd. So much so that the Tribunal accepts without hesitation the Claimant’s evidence the Respondents’ printout of his emails is incomplete.[32]In addition to e-mail contact, the Claimant explained that Ms Zhang would call the office between 5 and 10 times a day and he would explain to her what he was doing. He said that he quickly assessed that Ms Zhang needed to be kept informed and so he would copy her into any emails concerning significant things he was doing.[33]On 7th September 2016 at around 5pm the Claimant had a telephone conversation with Ms Zhang during which they discussed her request of him to source a particular letter box for the hotel property in Lancaster Gate. Although the letterbox had been ordered, it had not arrived, to Ms Zhang’s frustration. They also discussed the eviction of the artist tenant in that building. The Claimant sensed Ms Zhang’s frustration over the telephone, which culminated in her saying that “you Pakistanis are completely useless. You are wasting my money and wasting my time.” She then asked for the phone to be passed to the Office Manager, John White, who she instructed to dismiss the Claimant. Apart from denying the offending phrase, Ms Zhang accepts the Claimant’s chronological account of their telephone call at around 17.00 and his dismissal by letter at 17.30.[34]Ms Zhang explained that she simply asked Mr White to dismiss the Claimant by letter, but when questioned as to how Mr White would have known to put the reason for dismissal in the letter, she stated that Mr White rang her back to ask for this information. She was in China at the time and responded to him in another telephone call.[35]Half an hour later, the Claimant was handed a letter of immediate dismissal signed by Mr White suggesting that the Claimant was being dismissed “by reason of poor performance.” The letter indicated that the Claimant would be paid one week’s pay in lieu of notice in accordance with an unidentified clause of his contract. The Claimant was advised of his right to appeal his dismissal, which he initially exercised.[36]It is clear from the correspondence following his dismissal that the Claimant was very exercised by the fact that the Respondents withdrew their offer to pay him one week’s pay in lieu of notice, which had been included in his dismissal letter in error. The Claimant did not have the right to such a payment under his contract, but considered he was entitled to it as it appeared in the notice of dismissal.[37]The Claimant did not make any complaint concerning his two allegations of racial harassment during the currency of his employment or in the correspondence which followed it. A contemporaneous complaint of discrimination can lend credibility to such a claim and the lack of one can indicate the opposite. The Tribunal accepts the Claimant’s explanation for failing to complain about Ms Zhang’s initial remark about Pakistanis being “crooked.” It was very early days of a job which he wanted to succeed, so his pragmatic response to the remark was entirely understandable. His failure to complain about Ms Zhang’s final remarks to him or raise them at all in correspondence after his employment ceased is not quite as easy to understand. The Claimant explained that he did not want to start detailing an account of what took place in his employment to someone he had never met. He was also clearly focused at that point on the withdrawal of the offer of notice pay. He described himself as a positive and practical person who preferred to move on and get on with his life.[38]Although the Claimant took the opportunity to appeal, when he was offered a date for the appeal and it was explained to him that a newly recruited member of staff, Mr Hussain, would hear the appeal, the Claimant decided not to go through with it. He said that this was because he wanted to meet with Ms Zhang and air his grievances and ask why he was terminated. He felt it was pointless to have a conversation with a lawyer who had not been in the Company at the same time of the Claimant.[39]Whilst proceeding with the appeal might not have reversed Ms Zhang’s decision, in the Tribunal’s view, the Respondents should not be criticised for providing the opportunity to appeal to an independent person. It is more usual that an employer is criticised for the opposite, namely where the person who made the substantive decision to dismiss also hears the appeal.[40]The Tribunal found the Claimant to be a straightforward and reliable witness, whereas there were a number of doubts about the evidence of Ms Zhang. For example, her evidence that she specifically discussed the Company’s ability to dismiss the Claimant without notice in the first month of his employment at his interview was not credible. Her initial suggestion that a contract and Employee Handbook had been provided to the Claimant before his interview was implausible and turned out to be mistaken. She also suggested that the Claimant was unemployed at the time he secured the job with the First Respondent, even though the documentation clearly confirmed that the Claimant had to give 1 month’s notice in his existing role in Dubai (whereas the other two short-listed candidates were immediately available). Ms Zhang suggested that the Claimant had a strong Pakistani accent and had told her in interview that he was from Pakistan. The Tribunal was unable to discern that the Claimant had any marked accent and accepts his evidence that his heritage was not discussed at interview. Giving evidence via an interpreter can be more challenging than giving evidence in a first language, but even allowing for this, the Tribunal found Ms Zhang to be an evasive witness.[41]The Tribunal does not understand why Ms Zhang’s acceptance that she made some sort of comment about “Indian, Pakistanis and Chinese” people sharing a common characteristic was neither in the Response Form or her witness statement and it was not put to the Claimant in cross-examination. This gave the impression that it was something that only occurred to Ms Zhang in the course of giving her evidence.[42]In deciding whether Ms Zhang did link the Claimant’s national origins with his being allegedly “completely useless” in the course of her final conversation with him on the telephone, the Tribunal takes account of the fact that, on her own evidence, Ms Zhang had expressed a generalised conclusion about people from India, China and Pakistan in mid August. Whilst she may not have regarded her statement as derogatory, it betrays a way of thinking which ascribes characteristics to people in accordance with racial stereotypes rather than based on their individual merits. If this is taken together with the generally unsatisfactory nature of her evidence and the fact that the Tribunal found the Claimant to be a compelling witness, the Tribunal is satisfied that Ms Zhang did say to the Claimant, “you Pakistanis, you are completely useless and you are wasting my money and wasting my time” immediately prior to giving John White the instruction to dismiss him.
Conclusions
[43]Having accepted that Ms Zhang made the two comments about “Pakistanis” which were clearly directed at the Claimant’s heritage, the Tribunal turns to the legal effect of those comments.[44]Even on the Ms Zhang’s own evidence, she was engaging in racial stereotyping in her conversation with the Claimant in the early days of his employment. Whilst Ms Zhang associated herself with the stereotype she ascribed to the Claimant as “Pakistani” in the comments she partially admits, that does not mean it was not harassing in nature. Whilst the Tribunal accepts that this comment did not have the “purpose” of violating the Claimant’s dignity or creating a degrading or offensive environment for him, it certainly had that effect. He reasonably perceived it to be an attack on his integrity. Whilst the Claimant did not complain about it at the time, for reasons which are understandable given he wanted his new role to be a success, it was clearly an unwanted characterisation and he found it insulting. Linking an attack on integrity to the Claimant’s national origins is most clearly an act of racial harassment. The offending remark was made in the course of Ms Zhang’s role as CEO. The Tribunal is, therefore, satisfied that the Second Respondent harassed the Claimant related to his race. The Claimant did not make a separate claim against the First Respondent in relation to racial harassment, although it appears from the evidence that the Company would also have been vicariously liable for Ms Zhang’s behaviour.[45]Although potentially out of time as an isolated act, this comment was followed by another, similarly derogatory remark by Ms Zhang about “Pakistanis” on 7th September 2016, which the Tribunal is satisfied formed part of a continuing course of conduct on the part of the First Respondent’s CEO towards the Claimant.[46]Turning to the second comment, which was the last thing Ms Zhang said to the Claimant before his dismissal, “You Pakistanis are completely useless. You are wasting my money and wasting my time”: immediately after this statement, Ms Zhang asked for the telephone to be passed to John White, who was instructed to terminate the Claimant’s employment with immediate effect. It is unusual in the Tribunal’s experience to have a statement drawing such a clear link between an employee’s race and their capabilities. It is difficult to see how this characterisation did not infect Ms Zhang’s decision to dismiss the Claimant. It was also another act of racial harassment for the reasons set out in paragraph 44 above.[47]Whilst the Tribunal does not doubt that Ms Zhang took issue with aspects of the Claimant’s work and was frustrated that things were not progressing as fast as she wanted (whether in relation to the letterbox, the planning issues, eviction of the artist or the Claimant’s use of a pen rather than a camera to transcribe flight details), it is impossible to compartmentalise how far her dissatisfaction was purely with his work and how far her view was infected by her stereotyping of the Claimant in accordance with her perception of his race and that “Pakistanis are completely useless”.[48]Without doubt, a statement immediately proceeding a dismissal which links a person’s race with the reason for their dismissal is sufficient to discharge the evidential burden that the First Respondent’s decision to dismiss was, in part, because of the Claimant’s national origins. It is then necessary to consider whether the First Respondent has discharged the burden of proving that the Claimant’s Pakistani heritage played no part in his dismissal.[49]Given the complete lack of any documentary or other external evidence of the Claimant’s alleged failings, the lack of any specific detail as to areas in which he fell short and the generally unsatisfactory nature of Ms Zhang’s evidence, the Tribunal cannot be satisfied that race played no part in Ms Zhang’s decision. The reasons given for the Claimant’s dismissal by Ms Zhang included his typing speed, which she could not quantify and seems an extraordinary reason to dismiss a Managing Director earning £125,000 per annum, even one without a personal assistant. The Respondents also cited a perceived lack of experience in hotel decoration. Given that Ms Zhang accepted that the Lancaster Gate property had not reached the stage of needing decoration, it is unclear to the Tribunal how Ms Zhang assessed that the Claimant did not have the experience he claimed to have had on his CV (which she claimed to have limited ability to read). The Claimant’s experience included the development of the Dubai Intercontinental Hotel and the Respondents did not specifically challenge this claim.[50]The Tribunal accepts that Ms Zhang was frustrated that the Claimant handwrote her flight details for her, rather than forwarding a screen shot of those details. Although a relatively trivial issue, it illustrated a difference in approach between Ms Zhang and the Claimant. The Tribunal does not accept that the Claimant was required to report in to Ms Zhang at 9am in the morning and 6pm in the evening when she was not in the office.[51]Ms Zhang suggested to the Tribunal that she knew that the Claimant was of Pakistani heritage at interview, the implication being that she had positively appointed someone of Pakistani heritage, therefore, that could not have influenced her decision to dismiss him. Quite apart from the fact that the Tribunal does not accept that the Claimant’s heritage was discussed at the interview, it is perfectly possible to hire an employee in full knowledge of their race, but still treat them less favourably because of it.[52]Ms Zhang expressly linked the Claimant’s perceived negative abilities at work to his national origins, which are an immutable characteristic. Such a mindset limits an employee’s ability to change in circumstances where “all Pakistanis are completely useless.” If the Claimant’s perceived poor performance was ascribed to his race by Ms Zhang, as it was, it would follow that he would be unlikely to improve given the chance, because his competence was linked to something which would not change with time, training or experience. That is why it is impossible to separate Ms Zhang’s racially offensive remark from her decision to dismiss the Claimant. The Tribunal does not suggest that Ms Zhang set out to dismiss the Claimant simply because he was of Pakistani national origin, but that her decision to dismiss him was influenced by racial stereotyping. The Tribunal does not consider that Ms Zhang would have stereotyped British or Chinese employees in a similarly negative way. Ms Zhang did not regard her comment about Pakistani and Chinese people being “crooked” as necessarily a negative thing.[53]Whilst the Tribunal accepts that there were a number of considerations operating on Ms Zhang’s mind when she dismissed the Claimant, including the fact that dismissing him within a month of his start date would avoid the 25% fee otherwise payable to the Recruitment Consultants, her stated reason for dismissal was inextricably linked to his race, which constitutes less favourable treatment because of his race for the purposes of section 13 of the Equality Act 2010.[54]The Claimant was in a vulnerable position contractually as he had relocated from Dubai to a role from which he could be dismissed without notice in the first month or on one week’s notice in the first 6 months. Had it not been tainted by discrimination, the First Respondent could have terminated the Claimant’s employment on the flimsiest of grounds without financial penalty. To allow the decision to be infected by negative stereotyping converted a lawful dismissal to an unlawful one.
Conclusions
The Issues
[1]The Claimant is entitled to an injury to feelings award of £2,000 as against the Second Respondent.[2]The Claimant is entitled to an injury to feelings award of £8,400 as against the First Respondent.[3]The Claimant is entitled to £53,151,48 in compensation for loss of earnings.[4]The Claimant is entitled to the following sums by way of interest:4.1 On the injury to feelings award as against the First Respondent of £672.4.2 On the injury to feelings award as against the Second Respondent of £1604.3 On the Claimant’s financial losses as against the First Respondent of £2,742.70.[5]All the above awards, including those for injury to feelings, should be grossed up by a percentage of 40% in so far as they exceed £30,000 to reflect their anticipated taxation in the Claimant’s hands.[6]An award of aggravated damages is not appropriate and the Tribunal declines to uplift the Claimant’s award pursuant to section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992.[7]There is no order as to costs. Employment Judge Clark Date: 27 September 2017[1]The issues for determination by the Tribunal were as to remedy arising out of its finding that the First Respondent directly discriminated against the Claimant because of his race in dismissing him and that the Second Respondent racially harassed him. The parties reached a degree of agreement as to the loss of earnings and interest figures and the First Respondent accepted that the Claimant had taken adequate steps to mitigate his losses. There remained five issues for determination by the Tribunal as follows:1.1 As to the correct level of injury to feelings for racial harassment as against the Second Respondent.1.2 As to the correct level of injury to feelings for the act of dismissal against the First Respondent.1.3 As to the effects of taxation on the injury to feelings award and appropriate percentage to be applied.1.4 As to whether an award of aggravated damages should be made.1.5 As to whether an adjustment should be made to the award pursuant to section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).[2]In its judgment dated 30th June 2017, the Tribunal found three allegations to be proven:2.1 In the first few days of the Claimant’s employment that the CEO of the Second Respondent, Ms Zhang, said they could work together as “Indian, Chinese and Pakistanis people – we are all a bit crooked.”2.2 On 7th September 2017 in the course of the last telephone conversation between the Claimant and Ms Zhang, the latter said: “You Pakistanis are completely useless. You are wasting my money and wasting my time”.2.3 The Claimant’s dismissal on 7th September 2017 was an act of race discrimination.[3]For the purposes of this hearing, the Tribunal heard evidence from the Claimant and considered the contents of a bundle of documents related to remedy. The Tribunal was provided with an updated schedule of loss from the Claimant and a counter-schedule from the Respondents. The Tribunal is grateful for the oral submissions of both representatives.
The Law
[4]The Tribunal’s power to award a remedy to the Claimant is set out in section 124(2) of the Equality Act 2010, which provides: “The tribunal may— (a)make a declaration as to the rights of the complainant and the respondent in relation to the matters to which the proceedings relate; (b)order the respondent to pay compensation to the complainant; (c)make an appropriate recommendation.”[5]Section 124(6) of the 2010 Act sets out that, “The amount of compensation which may be awarded under subsection (2)(b) corresponds to the amount which could be awarded by the county court or the sheriff under section 119”. That is to say that compensation will be awarded under tortious principles, namely to put the Claimant in the position he would have been in but for the Respondents’ unlawful conduct.[6]The Tribunal has the power to award damages for injury to feelings under section 119(4) of the 2010 Act; “An award of damages may include compensation for injured feelings (whether or not it includes compensation on any other basis)”. Guidance was given to Tribunals as to how to approach such awards in Vento v Chief Constable of West Yorkshire Police No 2 [2003] ICR 318 as up-dated by Da’ Bell v National Society for Prevention of Cruelty to Children [2010] IRLR 19: the lower band being £600 - £6,000, the middle band £6,000 - £18,000 and the top band £18,000 to £30,000. All awards are subject to a 10% increase pursuant to Simmonds v Castle [2012] EWCA 1039 (De Souza v Vinci Construction (UK) Ltd [2017] EWCA 879). The Vento band figures have recently been increased by Presidential Guidance, to a lower band of £800 to £8,400; a middle band of £8,400 to £25,200; and an upper band of £25,200 to £42,000, with the most exceptional cases capable of exceeding £42,000. The Presidential Guidance figures relate to claims filed after 11th September 2017 and a formula is offered for cases which pre-date this.[7]The lower Vento band is appropriate for less serious cases, such as where the act of discrimination is an isolated or one-off occurrence. The middle band is for serious cases that do not merit awards in the highest band and the most serious in the top band where there has been a lengthy campaign of discriminatory harassment. The Tribunal should bear in mind the level of awards made in personal injury claims, pursuant to the Judicial College Guidelines. The guidelines for minor psychiatric damage (in the 14th Edition) provide a range of £1,350 to £5,130 and for moderate psychiatric damage of £5,130 to £16,720.[8]Aggravated damages can be awarded as an aspect of an injury to feelings award where a Respondent’s conduct has aggravating features which have caused additional distress to a Claimant. Guidance as to the circumstances in which aggravated should be awarded was given by the Court of Appeal in Alexander v Home Office [1988] IRC 685, namely, where an employer has behaved in a “high-handed, malicious, insulting or oppressive manner in committing the act of discrimination.” In Commissioner of the Metropolis v Shaw EAT 0125/11 the (then) President of the EAT, Mr Justice Underhill clarified that there are three types of case in which an award of aggravated damages would be appropriate: firstly, where the manner in which an act of discrimination occurred was particularly oppressive or upsetting, secondly, where there was a clear discriminatory motive (rather than inadvertent or ignorant discrimination) and, finally, where an employer’s conduct after the act of discrimination adds to the offence, for instance, where an employer does not take a complaint of discrimination seriously or conducts any subsequent Tribunal proceedings in a dismissive or offensive manner. Aggravated damages are not punitive in nature, but are designed to compensate a Claimant for any additional distress caused by behaviour of the Respondent which adds to the hurt of the core act of discrimination.[9]The Claimant seeks an uplift to his compensation pursuant to section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992, which provides as follows: (2) If, in the case of proceedings to which this section applies, it appears to the employment tribunal that— (a)the claim to which the proceedings relate concerns a matter to which a relevant Code of Practice applies, (b)the employer has failed to comply with that Code in relation to that matter, and (c)that failure was unreasonable, the employment tribunal may, if it considers it just and equitable in all the circumstances to do so, increase any award it makes to the employee by no more than 25%. (3) If, in the case of proceedings to which this section applies, it appears to the employment tribunal that— (a)the claim to which the proceedings relate concerns a matter to which a relevant Code of Practice applies, (b)the employee has failed to comply with that Code in relation to that matter, and (c)that failure was unreasonable, the employment tribunal may, if it considers it just and equitable in all the circumstances to do so, reduce any award it makes to the employee by no more than 25%. The exercise of discretion is subject to the Tribunal’s having regard to the overall size of the award (Abbey National Plc v Chagger [2010] ICR 1290).[10]The Tribunal has the power to award interest on compensation pursuant to the Employment Tribunals (Interest on Awards in Discrimination Cases) Regulations 1996 SI. For injury to feelings, the relevant date starts on the date of the act discrimination and ends on the calculation date, for loss of income, it is from the mid-point date ending on the day of calculation. The interest rate is 8%. The parties in this case have agreed that an award of interest is appropriate and as to the method of calculation. Relevant Facts[11]These findings should be read in conjunction with those made in the Tribunal’s judgment and reasons dated 30th June 2017. The Claimant was born on 11th April 1955 and is, therefore, now aged 62. He was entitled to a salary of £125,000 with the First Respondent plus the potential to earn a profit-related bonus. However, the Claimant accepted the role on the 20th June 2016 on the basis of the written documentation, which made it clear (at section 11) that the bonus was discretionary and not payable after termination of employment. The Claimant started work on the 15th August 2016 and he was summarily dismissed on 7th September 2016.[12]The Claimant’s employment was subject to a probationary period of 6 months and it was an express term of his contract that his employment could be terminated with immediate effect within the first month of employment with written notice (paragraph 14). Although he was promised one week’s pay in lieu of notice, this did not materialise.[13]The First Respondent had a written disciplinary policy and procedure, which was incorporated into the Claimant’s contract (and was provided to him prior to the commencement of his employment). Paragraph 8.1(2) of that policy provided, “If your commencement date was on or after 6th April 2012, the Company reserves the right to discipline or dismiss you without following the Disciplinary Procedure if you have less than 24 months’ continuous service.”[14]In his written witness statement, the Claimant described feeling shocked and embarrassed about his dismissal and that it took him a number of months to recover his self-esteem and dignity. The Claimant told the Tribunal at the full merits hearing that he had worried about telling his family that he had lost his job following their relocation from Dubai. The Tribunal accepts the Claimant’s evidence in this regard.[15]It is clear from the contents of the bundle of document and the Claimant’s own description of the number of applications he made, that he has taken reasonable steps to mitigate his losses. His efforts bore fruit in that he started a new job as a Chief Financial Officer on 2nd May 2017, initially at a lower salary than his employment with the First Respondent for a 3-month probationary period. From the start of August 2017, however, the Claimant’s salary rose to £130,000 per annum, which provides an agreed cut- off date for his loss of earnings. Conclusions Injury to Feelings for Harassment
Conclusions
[16]An injury to feelings award is made as against the Second Respondent in relation to the two incidents of racial harassment, firstly, at the start of the Claimant’s employment. The Claimant told the Tribunal during the liability hearing that he had never suffered discrimination of this sort before (in his relatively long working life) and was upset at this characterisation. He regarded it as an attack on his professional integrity, however, took a pragmatic view and did not complain at the time. In his parting exchange with the Second Respondent immediately before his dismissal, the latter characterised the Claimant as “completely useless”. The Tribunal accepts the Claimant’s evidence in his witness statement to the effect that he had felt hurt and belittled by these comments, albeit it was the loss of his job which caused him the most distress. The Second Respondent has suggested a sum of £1,000 for these two incidents of harassment. That is close to a nominal sum and, in the Tribunal’s view, trivialises what were racially very offensive comments. The Claimant’s most recent schedule of loss suggests he should be awarded £3,000. Having regard to the award of injury to feelings made in relation to the Claimant’s dismissal and recognising that there were two separate incidents of harassment, the Tribunal consider that £2,000 is the appropriate sum, representing £1,000 for each incident. Injury to Feelings for Dismissal[17]The Tribunal agrees with the Respondents, that the Claimant’s dismissal and his reaction to it fell somewhere on the cusp of the lower and middle Vento bands. The Tribunal was struck by the fact that the Claimant felt embarrassed to tell his family about his dismissal. He has had a long and apparently distinguished employment record, so to lose his job in circumstances which were tainted by race discrimination was humiliating for him. The Tribunal accepts that this affected his self-esteem and dignity but also takes into account that there is no medical evidence to suggest consequences which sufficiently affected the Claimant’s health to require medical attention. In the context of personal injury awards for minor psychological damage being up to £5,130, it would be wrong, in the Tribunal’s judgment, for the Claimant to be awarded more than twice that amount (£12,000), as the Claimant contents.[18]Contrary to Mr Davey’s submissions, the Tribunal does not regard the Claimant’s seniority as an aggravating factor, although the fact that the perpetrator of the discrimination was the CEO, the most powerful person in the Respondent Company does exacerbate the injury. However, the Claimant was in a precarious position contractually, he was in his probationary period and could have been dismissed at no or very short notice, so this was certainly not a case where there was a loss of congenial employment. The Claimant had not had the time to form bonds with his colleagues, and as was observed in submissions, there were aspects of the contractual terms and the way the Respondents operated, which fell very short of congenial. Although the Claimant had relocated with his family from Dubai for this role, he had wanted to move back to the UK prior to accepting the job, so the fact of his relocation does justify an increase in his injury to feelings award.[19]The Claimant’s dismissal was by far the most significant incident of discrimination and was closely linked to the second incident of harassment, such that it was more in the nature of a single act of discrimination than a sustained campaign. The Claimant’s original claim for injury to feelings was £6,000, including at the full merits hearing in June 2017, by which time the Claimant had obtained alternative employment and apparently largely recovered from the effects of his dismissal. Whilst the Claimant is entitled to amend his claim for injury to feelings, there is no obvious reason why his estimate of his claim has more than doubled in recent months.[20]The new Presidential Guidance dated 5th September 2017 suggests that £8,400 is the appropriate figure for top of the lower band/bottom of the middle Vento band. The Presidential Guidance relates to claims presented after 11th September 2017, which puts the Claimant’s award of injury to feelings for his dismissal in 2016 into the bottom of the middle Vento band. This properly reflects the effect on his mood and self-esteem of losing his job relatively late in his career, in circumstances where he was understandably worried about obtaining alternative employment in his 60’s. Taxation[21]The parties are agreed that the Claimant’s loss of earnings should be grossed up to reflect the fact that any compensation awarded in excess of £30,000 will be taxable in his hands. An issue emerged at the hearing as to the appropriate percentage for the grossing up exercise. Although the Claimant originally invited the Tribunal to gross up at 20%, the Respondent very fairly pointed out that his annual earnings from his new employment will place the Claimant’s earnings in the relevant tax year in the higher tax bracket, to the extent that a small proportion of his earnings and compensation will fall into the 50% band. On reflection, Mr Davey, submitted that the figures should be uplifted by 47%, to reflect the fact that had the Claimant been paid his salary in the tax year it was due, he would have obtained a tax benefit from the fact that he was working out of the country and not subject to UK tax on his income for the first few months of the tax year April 2016/2017 when he was employed by the First Respondent. There was no evidence before the Tribunal concerning the Claimant’s tax affairs for the relevant year, however.[22]Deciding on the appropriate percentage is something of an artificial exercise, because who is to say whether the sum awarded by the Tribunal lies in the first £45,000 Claimant’s income (which would then be liable to taxation at 20%) or whether it falls in the tranche of his income which would be taxed at 40 or 50%. The Respondent has ignored the 20% bracket in its suggested calculations. The Claimant now invites the Tribunal to gross up at 47%, even though, on any view, his compensation will not all be taxed at that level. Doing the best we can, we consider that 40% is a pragmatic and fair figure, as 47% would provide the Claimant with a windfall.[23]There are conflicting authorities as to whether an injury to feelings award is subject to taxation. The Tribunal was referred to a passage in Harvey on Industrial Relations and Employment Law on the tax treatment of injury to feelings awards, which set out the two EAT judgments which held that such awards are not taxable and, therefore, should not be grossed up (Orthet Ltd v Vince-Cain [2005] ICR 374 and Wilton v Timothy James Consulting Ltd [2015] IRLR 369 EAT). However, there is a subsequent decision of the Upper Tribunal, (Moorthy v Commrs for HMRC [2016] IRLR 258), which held that Orthet and Timothy James were both wrongly decided and that there is no tax-free element in part of a termination settlement which relates to injury to feelings. Harvey continues: “The case law thus leaves parties and practitioners in a rather difficult position. If employment tribunals consider themselves bound by the EAT judgements (particularly that in Timothy James, which had regard to all the relevant authorities on the point), ET awards for injury to feelings will be made absent any grossing for tax. On the other hand, the view of the tax chamber of the first-tier Tribunal in Moorthy was that it was “not bound by a judgement of the EAT which purports to decide the scope of a taxing statute” and the Upper Tribunal has made clear that it considers that the EAT has simply got this point wrong. If that approach is followed by HMRC and upheld in future tax cases, Claimants will clearly lose out. This is a point that plainly needs to be resolved (and it is noted that the government is presently consulting on draft legislation will do so, making clear that payments to injury to feelings are subject to tax). In the meantime, the safer course would seem to be to assume that any sum of injury to feelings arising from the termination of employment will be taxed and should, therefore, be grossed up. Alternatively, parties might wish to consider adopting the course followed by the employer in Timothy James, which was to indemnify the Claimant against any subsequent tax liability imposed by HMRC inconsistently with the EAT’s judgement.”[24]The Respondents were not willing to offer any indemnity to the Claimant in this case, so the Tribunal was required to decide the point. The Tribunal is clearly not bound to follow the advice of the learned Editor of Harvey, but the Tribunal considers it to be correct. HMRC is bound by the decision of the Upper Tribunal in Moorthy to the effect that injury to feelings awards are taxable, at least in so far as they are part of compensation for loss of office. Following basic tortious principles the Claimant is entitled to such compensation as will put him in the position he would have been had the wrong not been committed. The Tribunal considers it highly likely that any award it makes for injury to feelings will be taxable in the Claimant’s hands, not only because HMRC is bound by the decision of the Upper Tribunal, but also because it appears that the government is likely to clarify that the sum is taxable in any event. Since the tax will not be due for another 18 months or so, either way it seems that the Claimant is likely to have to pay tax on his injury to feelings award. The EAT decision to the contrary predates the Upper Tribunal’s decision in Moorthy. For these reasons, the Tribunal does not regard itself bound by the decision of Mr Justice Singh in Timothy John. The Claimant’s injury to feelings award should, therefore, be grossed up by 40%.[25]The parties are agreed that interest is payable on the awards of compensation and that, therefore, the First Respondent’s total liability to the Claimant, including interest and grossing up is £88,276.67. Aggravated Damages[26]The Claimant has been compensated in the injury to feelings award for any hurt caused by his harassment and dismissal. The Tribunal accepts (and accepted in its liability judgement) that the First Respondent had genuine concerns about the Claimant’s performance (albeit some of them were trivial to say the least). Aggravated damages are not designed to punish a Respondent to compensate for offence over and above that which is recognised by an injury to feelings award. This was not a case where there was a clear discriminatory or spiteful motive. The Second Respondent appeared genuinely puzzled at the suggestion that she or the First Respondent might have discriminated against the Claimant given the diverse nature of the workforce and the fact that the Claimant had been employed in the full knowledge of his (assumed) ethnicity/national origins. The Second Respondent clearly had a very unsophisticated understanding of diversity issues, but the Tribunal accepts she did not set out to deliberately discriminate against the Claimant. Whilst that is no defence to a discrimination claim, it is relevant to an assessment of aggravated damages.[27]Mr Davey’s alternative submission that the Respondent’s failure to offer an indemnity in relation to any taxation which might fall due to the Claimant on his injury to feelings award does not come close to conduct which might justify an award of aggravated damages. The Respondents like the Claimant are entitled to a decision on a particular legal issue from the Tribunal, with the opportunity to appeal and clarify anything which is unclear or erroneous. Section 207A Uplift[28]The ACAS Code of Conduct on Grievance and Disciplinary Procedures applied to the Claimant’s dismissal and there was a breach of those procedures by the First Respondent, most notably the failure to hold a formal meeting with the Claimant prior to his dismissal and to put any allegations of poor performance to him. The requirements of section 207A(2)(a) and (b) are, therefore, met. Although the First Respondent dismissed the Claimant with minimal process, we accept Mr Epstein’s submission, that in circumstances where a right to a disciplinary procedure (akin to that in the ACAS Code) is expressly excluded in an employee’s contract and the Claimant agreed to that exclusion, it was a not unreasonable for the First Respondent to dismiss with minimal process for the purposes of section 207A(2)(c). Having a contractual disciplinary procedure does not disapply the provisions of the ACAS Code. However, the Claimant was still in the first month of his employment and in his probationary period with a small employer. Whilst it is recognised that there is generally inequality of bargaining power between employee and employer in relation to the negotiation of terms and conditions, this Claimant was an experienced and senior employee, such that he can be expected to have read and understood the terms of his employment and challenged any with which he did not agree. In circumstances where the Claimant was at least offered an appeal chaired by someone who was not involved in the decision to dismiss, and where the Claimant’s contract could be terminated lawfully with minimal notice and without cause (subject to the provisions of the Equality Act 2010), the Tribunal considers it was not unreasonable of the First Respondent to terminate the Claimant’s employment without full compliance with the relevant ACAS Code.[29]Even if the Tribunal is wrong in that conclusion, as was made clear in the liability judgment, the Claimant did have the opportunity to appeal against his dismissal to Mr Hussain, but he did not see this through. The Claimant has reiterated in his witness statement that he believes an appeal would have proved fruitless and, in any event, he wanted to move on from the matter. In effect, he had lost confidence in the Respondents’ ability to deal fairly with him. However, as he did not see through his appeal, it is unclear to what extent this view was justified, particularly in circumstances where the opportunity to appeal was provided. By the same token, the Respondents had lost confidence in the Claimant’s ability to do the job which was required of him and the Claimant was denied the opportunity to defend himself against the Second Respondent’s concerns. The Claimant did not raise a grievance following his dismissal concerning his allegation of race discrimination. Whilst the Tribunal perfectly well understands why the Claimant would not have raised a grievance concerning the Second Respondent’s racial harassment in the first week of his employment, the only aspect of his dismissal which he challenged related to his notice pay. He raised no grievance relating to race discrimination and as he did not pursue his appeal, there was no opportunity for the Respondents to consider the Claimant’s allegations of race discrimination. In circumstances where neither party has fully complied with the provisions of the same ACAS Code and where the Claimant has been awarded loss of earnings for the full period from his dismissal to the time where he is now earning in excess of his income with the Respondent, the Tribunal considers it is just and equitable to make no uplift award against the First Respondent. Costs[30]By a written application apparently sent to the Tribunal prior to the hearing (but which has not made its way to the file), the Claimant invited the Tribunal to make a costs order against the Respondents either because the defence of his claim had no reasonable prospects of success or by reason of their unreasonable conduct of the proceedings. The Respondents had prior notice of the application. The Claimant’s schedule of costs amounted to £13,220 inclusive of VAT. The Respondents (sensibly) do not challenge the reasonableness of the amount claimed, which covers both preparation and representation at two hearings. The parties were agreed that any request for recoupment of the Claimant’s Tribunal fees should be made against the Government rather than the Respondents.[31]The Issues for decision by the Tribunal in relation to costs, were as follows:31.1 Whether the Respondents acted unreasonably in the conduct of the proceedings or whether their defence of the proceedings had no reasonable prospects of success.31.2 In light of the above, whether the Tribunal should exercise its discretion and make a costs order, and, if so, in what amount.[32]The relevant costs provisions are contained in rules 74 to 84 of the Employment Tribunal (Constitution etc.) Regulations 2013. Rule 76(1) sets out the circumstances in which a costs or expenses order may be made, namely, “a party (or that party’s representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably, in either the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted; Or (b) any claim or response had no reasonable prospect of success.” Rule 78 deals with the amount of a costs or expenses order, which can either be restricted to £20,000, agreed between the parties or be assessed by the County Court. Rule 84 provides: “The Tribunal may have regard to the paying party’s ability to pay” when deciding whether to make a costs or order and, if so, in what amount. Costs orders are the exception rather the rule in the Employment Tribunal and the purpose of an award of costs is to compensate not punish (Lodwick v Southward LBC [2004] IRLR 554).[33]Mr Davey submitted that the Tribunal’s liability findings make it clear that the Second Respondent lied in the course of her evidence. Given the Second Respondent was the moving mind of the First Respondent, she must have been aware that the Claimant’s claim was bound to succeed, as what she said to the Claimant immediately before she dismissed him was within her knowledge. In circumstances where the Second Respondent knew she had called the Claimant “crooked” and that the Claimant, as a “Pakistani” had been “wasting her time” and was “completely useless,” she would have realised that the Respondents’ defence of the Claimants’ claims had no reasonable prospects of success. Mr Epstein disputed Mr Davey’s characterisation of the Tribunal’s findings. The Tribunal made no finding that the Second Respondent had lied in her evidence and accepted that the Second Respondent had genuine concerns about the Claimant’s performance. As such, there was clearly an issue between the parties which could have been decided either way.
Conclusion
[34]Whilst the Tribunal preferred the evidence of the Claimant in relation to the contents of the final telephone conversation between him and the Second Respondent, in particular the latter’s reference to “you Pakistanis”, it does not follow that the Tribunal was satisfied that the Second Respondent deliberately lied about that conversation. It was clear from the latter’s evidence concerning her characterisation of Pakistani and Chinese people as being “crooked”, that the Second Respondent, was prone to racial stereotyping, including of herself. The first time that the Claimant alleged he had suffered race discrimination or harassment was in the course of these proceedings – some months after the Second Respondent’s offending remarks. It is conceivable, therefore, that the Second Respondent would have forgotten a comment which she would have regarded as wholly insignificant (albeit wrongly so).[35]There is more force in Mr Davey’s submissions in relation to the Second Respondent’s comments about Pakistanis being “crooked”, given that the latter admitted for the first time in oral evidence that she had made a comment along those lines (albeit she put a positive spin on what she had said, claiming she had used the word “flexible”). The fact that the Second Respondent might have wrongly concluded that using as a racial stereotype was acceptable was irrelevant to her prospects of successfully defending a claim. However, this comment was a relatively small element in the Claimant’s overall case, which primarily related to the reasons for his dismissal. The First Respondent had an arguable defence to this claim, either on the basis that the second racially offensive remark was not made or that it did not infect the Claimant’s dismissal, given the Second Respondent had genuine concerns about the Claimant’s performance, was entitled to dismiss the Claimant without cause and was seeking to avoid paying an Agency fee for the Claimant’s services.[36]Complaint is also made about the dilatory manner in which the Respondents approach the preparation of the case, including exchange of witness statements; the fact that they applied for an adjournment on the day prior to the hearing because their Solicitors ceased to act; the fact that they have not engaged in settlement discussions with the Claimant, even after the liability decision and due to their failure to offer an indemnity to the Claimant in relation to any potential tax liability on his compensation for injury to feelings.[37]The Claimant has provided a short bundle of correspondence between the parties concerning the preparation of the trial bundle and exchange of witness statements, from which it can be seen that the Claimant offered the Respondent appropriate advice about how the bundle should be arranged. There followed some slightly testy exchanges between representatives about the relevance of certain documents in the bundle, but a bundle was prepared and put before the Tribunal. Exchange of witness statements was slightly delayed, but not such as would amount to unreasonable conduct of the proceedings. In the Tribunal’s view, the closest the Respondents conduct got to unreasonable conduct was the failure to include an admission in the Second Respondent’s witness statement that she had said something along the lines of “Pakistanis are like Chinese people – a little bit flexible”. Given the additional challenges of taking evidence through a translator, however, the Tribunal is not satisfied that this poor preparation was such as to amount to unreasonable conduct of the proceedings.[38]Whilst a very late application was made by the Respondents to postpone the full merits hearing, it was not granted. Ms Chute, who represented the Claimant at the full merits hearing on a direct access basis, explained that she had only been briefed the day before the hearing, which was consistent with the Respondents’ assertion that their Solicitor had ceased to act immediately prior to the hearing. The Tribunal accepts that the application for a postponement was made for genuine reasons, albeit those reasons were insufficient to justify a postponement in all the circumstances.[39]A refusal to engage with settlement negotiations can be frustrating, however, parties to litigation are generally entitled to have their legal rights and responsibilities determined in a public forum. Had the Claimant made a written, “without prejudice save as to costs” offer to the Respondents at a level lower than he achieved following the hearing, the Tribunal might well have awarded him costs in these circumstances. However, no written offers of settlement were made by the Claimant to the Respondents and there is nothing in the correspondence provided to the Tribunal which suggests that the Respondents were obstructing the proper preparation of the case. For all these reasons, the Tribunal does not consider that the threshold for making a costs order against the Respondents has been reached. The Tribunal, therefore, refuses the Claimant’s application for costs.