Mr M KhalidClaimantJAF Foods Company LtdRespondent
Before
Employment Judge LeithIn person for claimantMr Caesar (Solicitor) (participating with the permission (instructed by the Tribunal, no response having been accepted on behalf of the Respondent)) for respondentDate 31 January 2025
JUDGMENT
[1]The complaint of direct race discrimination succeeds. The Respondent must pay the Claimant the sum of £30,215.13 in respect of that complaint, calculated as follows:a. Injury to feelings - £6,000b. Interest on the award of injury to feelings - £616.44 (for the period from 20 October 2023 to 29 January 2025, being 467 days, at a daily rate of £1.32 [calculated at the rate of 8%])c. Loss of earnings - £22,452.33d. Interest on the award for loss of earnings - £1,146.36 (for the period from the mid-point between 20 October 2023 and 29 January 2025 to 29 January 2025, being 233 days, at a daily rate of £4.92 per day [calculated at the rate of 8%])[2]The Respondent made unauthorised deductions from the Claimant’s wages between March and October 2023. The Respondent must pay the Claimant the gross sum of £7,123.10, being the sum unlawfully deducted.[3]The complaint of unfair dismissal is struck out as the Claimant did not have the necessary qualifying service. Case No: 2303066/2024
REASONS
[1]In the interests of clarity and efficiency, these reasons cover both the reasons for the original judgment (written reasons having been requested by the Respondent), and the reasons for the reconsideration judgment set out above. Claims and issues[2]The claimant claims unfair dismissal, direct race discrimination, and unauthorised deduction from wages.[3]The claimant’s race is Pakistani. The complaint of direct race discrimination is based on two allegations: 3.1. On 20 October 2023, Dr Farzana telling the Claimant that she did not like or want to employ Pakistani people; and 3.2. The Claimant’s dismissal on 20 October 2023.[4]The complaint of unauthorised deduction from wages was based on the Claimant’s allegation that he was entitled to be paid at the rate of £3,000 per month, rather than the £2,000 per month the Respondent had paid him. Procedure, documents and evidence heard[5]The claim was presented on 26 March 2024. It was sent to the Respondent on 5 April 2024, meaning that the response needed to be received by 3 May 2024.[6]No response was presented in time. A response was presented on 7 May 2024, but it was not accompanied by an application to extend time. Respondent had failed to present a response in time. The Respondent did not apply for an extension of time or seek to present a further response, and the claim proceeded undefended. On 16 October 2024, the Tribunal listed the claim for hearing on 29 January 2025. The notice of hearing noted that the hearing was to decide what compensation or other remedy should be awarded, and that the Respondent would only be entitled to participate in the hearing to the extent permitted by the Employment Judge. No judgment on liability having been entered, I approached the hearing on the basis that I had to determine both liability and remedy.[7]I heard evidence from the Claimant, who gave his evidence by means of a pre-prepared witness statement. I allowed Mr Caesar to cross-examine him on both liability and remedy. I also had before me a schedule of loss, a set of documents prepared by the Claimant, a bundle of documents prepared by the Respondent, and a position statement on behalf of the Respondent. Case No: 2303066/2024[8]After hearing the Claimant’s evidence, I heard submissions from both Mr Caesar and the Claimant. Law Direct discrimination
Law
[9]The definition of direct discrimination is contained in section 13(1) of the Equality Act 2010: “(1) A person(a) (A) discriminates against another(b) (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others.”[10]The comparison may be to an actual or a hypothetical comparator. In either case, there must be no material difference between the circumstances relating to each case (s.23(1)). That is, the comparator must be in the same position in all material respects save only that he or she is not a member of the protected class (Shamoon v Chief Constable of the RUC [2003] ICR 337).[11]In considering whether a claimant was treated less favourably because of a protected characteristic, the tribunal generally have to look at the “mental processes” of the alleged discriminator (Nagarajan v London Regional Transport [1999] IRLR 572). The protected characteristic need not be the only reason for the less favourable treatment. However the decision in question must be significantly (that is, more than trivially) influence by the protected characteristic. Burden of proof[12]section 136 of the Equality Act deals with the burden of proof. The relevant parts provide as follows: “(2) If there are facts from which the [tribunal] could decide, in the absence of any other explanation, that a person (A) contravened the provision concerned, the [tribunal] must hold that the contravention occurred. (3) But subsection (2) does not apply if A shows that A did not contravene that provision”[13]The section therefore prescribes a two-stage process. At the first stage, there must be primary facts from which the tribunal could decide, in the absence of any other explanation, the discrimination took place. All that is required to shift the burden of proof is at primary facts from which “a reasonable tribunal could properly conclude” on balance of probabilities that there was discrimination. It must, however, be something more than merely a difference in protected characteristic and the difference in treatment (Madarassy v Nomura International PLC [2007] EWCA Civ 33. Case No: 2303066/2024[14]The burden of proof at that stage is on the claimant (Royal Mail Group v Efobi [2021] UKSC 22). The employer’s explanation is disregarded.[15]If the claimant satisfies that initial burden, the burden shifts to the respondent to prove on balance of probabilities that the treatment was not for the prescribed reason.
Remedy
[16]Section 124 of the Equality Act 2010 provides that where a claimant succeeds in a complaint of discrimination, the Tribunal may order a declaration, compensation, and a recommendation. Those are not mutually exclusive.[17]The Employment Protection (Recoupment of Benefits) Regulations 1996 do not apply to complaints of discrimination. The effect is that a successful claimant must give credit for any social security benefits received during the period for which they are being compensated.[18]Section 119(4) provides that an award of damages may include compensation for injured feelings, whether or not there is compensation on any other basis.[19]An injury to feelings award is not automatic (Ministry of Defence v Sullivan [1994] ICR 193). Some evidence is required, although not medical
evidence.
[20]The EAT in the case of Prison Service and ors v Johnson [1997] ICR 275 summarised the general principles regarding awards for injury to feelings as follows: awards for injury to feelings are designed to compensate the injured party fully but not to punish the guilty party an award should not be inflated by feelings of indignation at the guilty party’s conduct awards should not be so low as to diminish respect for the policy of the discrimination legislation. On the other hand, awards should not be so excessive that they might be regarded as untaxed riches awards should be broadly similar to the range of awards in personal injury cases tribunals should bear in mind the value in everyday life of the sum they are contemplating, and tribunals should bear in mind the need for public respect for the level of the awards made.[21]The Court of Appeal gave specific guidance in the case of Vento v Chief Constable of West Yorkshire Police [2003] ICR 318 that awards for injury feelings should fall into three broad bands: Case No: 2303066/2024 a top band of between £15,000-25,000: to be applied only in the most serious cases, such as where there has been a lengthy campaign of discriminatory harassment. Only in very exceptional cases should an award of compensation for injury to feelings exceed £25,000 a middle band of between £5,000-15,000: for serious cases that do not merit an award in the highest band, and a lower band of between £500-5,000: appropriate for less serious cases, such as where the act of discrimination is an isolated or oneoff occurrence. The Court said that, in general, awards of less than £500 should be avoided, as they risk being regarded as so low as not to be a proper recognition of injury to feelings.[22]Since 2017, Presidential Guidance has been issued by the Presidents of the ET in England and Wales and Scotland uprating the Vento bands. The Sixth Addendum, which was in force for claims issued after 6 April 2023, set out the relevant bands as follows: Lower band: £1,100 - £11,200 Middle band: £11,200 - £33,700 Upper band: £33,700 - £56,200[23]The Employment Tribunals (Interest on Awards in Discrimination Cases) Regulations 1996 give the Tribunal the power to award interest on awards made in discrimination cases. Regulation 2(1) provides that the Tribunal must consider whether to award interest even if the claimant does not specifically apply for it.[24]The rate of interest is set by reference to s.17 of the Judgments Act 1838 – currently that is eight percent.[25]Regulation 6(1)(a) provides that in respect of an injury to feelings, the period of the award of interest starts on the date of the act of discrimination complained of, and ends on the calculation day.[26]Regulation 6(1)(b) provides that for all other awards, interest is awarded for the period beginning on the mid-point date, which is the date half way between the date of the unlawful discrimination and the calculation date.[27]Regulation 6(3) provides that the Tribunal has discretion to calculate interest based on different periods where there would be “serious injustice” if different dates were not used. Unauthorised deduction from wages[28]Section 13(1) of the Employment Rights Act 1996 provides that an employer shall not make a deduction from wages of a worker employed by him unless the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker's contract or the worker has Case No: 2303066/2024 previously signified in writing his agreement or consent to the making of the deduction. An employee has a right to complain to an Employment Tribunal of an unlawful deduction from wages pursuant to Section 23 of the Employment Rights Act 1996.[29]In order to determine what wages are “properly payable”, the Tribunal may need to interpret the contract of employment (Agarwal v Cardiff University and anor [2019] ICR 433).[30]A claim about an unauthorised deduction from wages must be presented to an employment tribunal within 3 months beginning with the date of payment of the wages from which the deduction was made, or the last in a series of deductions (there is an extension in respect of early conciliation). Factual findings[31]I make the following findings on balance of probabilities.[32]The Respondent was setting up a café in New Cross Gate, to be called the “City Walk Café”. The Claimant was employed by the Respondent to manage the café.[33]On 7 February 2023, Mr Mehmood, the general manager of the Respondent, emailed the Claimant saying that he would be paid £2,000 per month until the commercial opening of the café, and £3,000 per month thereafter. The email set out various other terms. It concluded by asking the Claimant to convent his agreement to the terms so that an agreement could be prepared by the Respondent’s accountants.[34]The Claimant replied to that email on the same date. He explained in his email that his understanding was that he would receive £2,000 per month for the initial period of setting up the café, and once the project was completed his salary would be £3,000 per month to manage and run the business. He explained that he also wanted to be paid his travelling expenses. Mr Mehmood replied that travel from home to work would be at the Claimant’s own expense.[35]The Claimant’s contract of employment was in evidence before me. It was signed by both parties on 15 February 2023. It stated the Claimant’s salary would be £3,000 per month. It did not refer to a reduced rate of pay during the period before the café was open for business.[36]The Claimant’s evidence to the Tribunal was that he was told orally by Mr Mehmood that the building works would be completed within a month. His evidence was that he was told by Mr Mehmood that his salary would only be £2,000 per month for the first month of his employment, while building works were being undertaken, and that his salary would increase to £3,000 per month thereafter. That is consistent with what the Claimant wrote on his claim form. Case No: 2303066/2024[37]In the event, the Claimant was paid at the rate of £2,000 per month throughout his employment. The Claimant’s evidence, which I accept, was that he repeatedly requested that his pay be corrected.[38]It was common ground that the café did not enter commercial operation prior to the end of the Claimant’s employment on 20 October 2023.[39]The Claimant’s evidence was that on 20 October 2023 he was telephoned by Dr Farzana, the Director of the Respondent, and that during that telephone call Dr Farzana told him that she did not wish to employ individuals of Pakistani origin because they have a "different mentality". During the same call, Dr Farzana informed the Claimant that his employment was terminated.[40]It is common ground that Dr Farzana herself is Pakistani.[41]The Claimant emailed Mr Mahmood later that day regarding the conversation he had had with Dr Farzana. In that email he said that Dr Farzana had told him that she “doesn’t like and want to employ Pakistani people, as they have different mentality”.[42]The Claimant was dismissed with four weeks pay in lieu of notice – he was paid a net sum of £2,000.[43]The Claimant noted in his claim form that at an unspecified point during his employment, the Respondent sent another Pakistani national from Dubai to work alongside him, but that his attitude and behaviour were not acceptable and the Claimant felt very uncomfortable working alongside him. The Claimant accepted in cross-examination that that individual in question started working for the Respondent in April 2023, and that he was still employed there when the Claimant was dismissed.[44]The claimant notified ACAS under the early conciliation process of a potential claim on 17 January 2024 and the ACAS Early Conciliation Certificate was issued on 28 February 2024. The claim was presented on 26 March 2024.
Conclusions
[45]I deal first with the complaint of unauthorised deduction from wages.[46]I find that the Claimant was entitled to be paid at the rate of £2,000 for the first month of his employment, and £3,000 per month from the second month of his employment onwards. I reach that conclusion for the following reasons: 46.1. The email from Mr Mahmood referring to being paid at the reduced rate of pay until “commercial opening”, to which the Claimant appeared to agree in the email of 7 February 2023. 46.2. I accept the Claimant’s evidence that he had been told by Mr Mahmood that the works would be completed within a month of him Case No: 2303066/2024 starting work, and that that was why he agreed to the lower rate of pay temporarily, for the first month of employment. 46.3. In my judgment, the figure set out Mr Mahmood’s email was superseded by the Claimant’s contact of employment, signed by both parties on 15 February 2023, which referred to his salary being £3,000 per month. The Respondent had control of the drafting of the Claimant’s employment contract. Had their intention been that he would be paid at the rate of £2,000 for an extended period of time, I find that that is what the contract of employment would have said. 46.4. I conclude that although the contract of employment provided for a figure of £3,000 from the start of the contract, that in turn was modified by the Claimant’s oral agreement to receive the lower sum of £2,000 for the first month of his employment.[47]It follows then that I find that Respondent made unauthorised deductions from Claimant’s pay in each of the subsequent months of his employment.[48]The Claimant’s pay should have increased to £3,000 per month from 15 March 2023 until the termination of his employment on 20 October 2023 – a total of seven months and five days (thirty one weeks and two days).[49]The Claimant’s actual gross pay was £461.54 per week. His gross pay should have been £692.31 per week. That is a difference of £230.77 per week.[50]The figure in the Claimant’s Schedule of Loss was £8,123.10 gross, based on 35 week and two days employment at an underpayment of £230.77 per week. That was because the Claimant had calculated the loss of earnings as running from the start of his employment. on 15 February 2023. I have found that the Claimant was correctly paid for the first month of his employment. Therefore I subtract one month of the different between the two gross rates of pay - £1,000. That gives the correct gross figure of £7,123.10, and that is what I award in respect of the complaint of unauthorised deduction from wages. Direct Race Discrimination[51]I accept the Claimant’s evidence regarding what was said to him by Dr Farzana in the call on 20 October 2023. It was captured in the Claimant’s contemporaneous email to Mr Mehmood.[52]In my judgment, the comment speaks for itself. The fact that Dr Farzana is of the same race as the Claimant does not meant that it is impossible for her to have discriminated against him by reason of his race. It is entirely possible for an individual to hold negative views about people with whom they share one or more protected characteristics.[53]I find that Dr Farzani would not have made that comment to a person who was not Pakistani. In the context, there would be no reason for her to do so. Case No: 2303066/2024[54]In respect of the first allegation, I therefore have no difficulty in finding that Claimant has surmounted the initial burden upon him of showing facts from which, in the absence of a contrary explanation, a reasonable Tribunal could find that discrimination had occurred.[55]The claim was not defended, so the Respondent could not surmount the burden upon it at the second stage. It follows therefore that the first allegation succeeds.[56]In respect of the second allegation, I find that the Claimant was also dismissed during the same telephone call.[57]Dr Farzani said that she did not like or want to employ Pakistani people. She then dismissed the Claimant, who is Pakistani.[58]Mr Caesar submitted that it was inherent in the fact that another Pakistani employee was not dismissed when the Claimant was that the reason for the Claimant’s dismissal could not have been his race. I do not agree. It is a relevant factor. But I weigh against that the obvious inference inherent in Dr Farzani’s comment, which was that the Claimant’s race was the reason why the decision was taken to dismiss him.[59]There was some evidence before me that the Café never fully entered commercial operation. But in the absence of a defence and evidence from the Respondent, I do not draw any inference from that about an alternative reason for the Claimant’s dismissal. And that is, in any event, to some extent inconsistent with the other employee remaining employed.[60]I therefore conclude that the Claimant has surmounted the initial burden of showing facts from which, in the absence of a contrary explanation, a reasonable Tribunal could conclude that discrimination had occurred, in that the Respondent would not have dismissed a non-Pakistani employee at the time that the Claimant was dismissed.[61]The second allegation therefore succeeds.
Remedy
[62]In respect of injury to feelings, in my judgment the following factors are particularly relevant: 62.1. There were two substantiated allegations. One was Claimant’s dismissal, and the other was Dr Farzani’s comment. 62.2. They happened on the same day, and in the same telephone call; although self-evidently the dismissal had longer-term consequences. 62.3. There was limited evidence in the Claimant’s witness statement regarding the injury to his feelings. He did refer to finding Dr Farzani’s comments shocking and deeply upsetting. I accept that he would have found the comment both shocking and upsetting. I Case No: 2303066/2024 consider also that the knowledge or belief that he had been dismissed because of his race would have carried a considerable sting. There was, however, no real evidence in his statement regarding the length of time for which his feelings of shock and upset persisted, or of any effects it had on his life outside work.[63]In my judgment, the correct bracket for injury to feelings is the lower band, but in the upper half of that band. The sum I award is £6,000.[64]In terms of pecuniary loss, I find that the Claimant’s lost earnings were because of his dismissal, which I have found to be discriminatory. Mr Caesar suggested that the café never in fact opened for business. But there is no evidence before me from which I could safely conclude that the Claimant might have been dismissed in any event, whether because of issues with the café opening for business or otherwise.[65]The Claimant’s schedule of loss sought lost earnings up to 29 July 2024. His evidence, which I accept, is that he had no other earned income or benefits until 29 July 2024. His evidence was that he was in receipt of Job Seekers Allowance from 29 July 2024, and then started new work in August 2024.[66]I am satisfied that the Claimant took reasonable steps to mitigate his loss by searching for other work. His evidence, which I accept, was that he had applied for jobs daily and attended some interviews unsuccessfully. That was supported by numerous screenshots of emails applying for jobs in the same line of work. It took the Claimant nine months to mitigate his loss. Given his salary, and his management position, I do not consider that that is unreasonable. And of course, the burden of showing unreasonable failure to mitigate would rest on the Respondent. There was no suggestion from the Respondent that the Claimant had missed opportunities to mitigate his loss.[67]The period of lost earnings is 40.3 weeks, at the net rate of £557.13 per week (from the Schedule of Loss). That gives a total of £22,452.33.[68]As the Claimant did not seek lost earnings past 29 July 2024 in his Schedule of Loss, there is nothing to offset in terms of his income after that date. On his Schedule of Loss the Claimant gave credit for accrued but untaken holiday pay received on termination of employment, but that should not be offset.[69]That gives a total sum for lost earnings of £22,452.33. That was the sum which was announced orally to the parties, and which was set out in the Judgment dated 31 January 2025. Reconsideration[70]Upon preparing these written reasons following the Respondent’s request, it became apparent that I had not given credit for the notice pay received by Case No: 2303066/2024 the Claimant, in the sum of £2,000 (net). The period in respect of which he was give notice pay fell within the period in respect of which lost earnings were awarded, so credit ought to have been given.[71]On 27 February 2025, the Tribunal wrote to the parties to explain that I was of the view that the Judgment dated 31 January 2025 should be reconsidered on that basis. That correspondence asked the parties to write to the Tribunal within 7 days if they thought that the Judgment should not be reconsidered, and also to comment on whether the reconsideration could proceed without a hearing.[72]The Claimant wrote to the Tribunal to indicate that he considered that the reconsideration could proceed without a hearing. He did not comment on the substantive point. No response was received from the Respondent.[73]Accordingly, the parties having been given the opportunity to make representations, I conclude that the Judgment should be reconsidered. The sum for which Judgment was entered failed to take account of the Claimant’s notice pay. It is in the interests of justice that the Judgment be reconsidered to correct that obvious error. The new award for lost earnings is therefore £20,452.33.[74]It follows that the interest calculations must also be reconsidered, and I set out the corrected interest calculations below. Interest[75]The relevant period for the calculation of interest in the award of injury to feelings award is 467 days (20 October 2023 to 29 January 2025).[76]The daily rate of interest is £1.32 (based on interest at 8% on the sum of £6,000). That gives a total figure of £616.44.[77]On the pecuniary loss the period is 233 days (being the period from the midpoint day to 29 January 2025). The daily rate of interest is £4.48 per day (based on interest at 8% on the sum of £20,452.33). That gives a total figure of £1,044.47.[78]Adding up the figures for injury to feelings and pecuniary loss plus interest, taking account of the point on which I have reconsidered the original judgment, gives a revised total award for discrimination of £28,113.24. Unfair dismissal[79]The unfair dismissal claim is struck out, because the Claimant lacks the necessary qualifying service. Case No: 2303066/2024