Hillyard v Swale Housing Association [1995] UKEAT 32_94_1601

EAT
Hillyard v Swale Housing Association
[1995] UKEAT 32_94_1601 · 1995-01-16
MRS JUSTICE SMITH: This is an appeal by Mrs Hillyard from the decision of an Industrial Tribunal sitting at Ashford in July 1992 and February 1993. The Tribunal rejected Mrs Hillyard's complaints that her employer, the Swale Housing Association, who is the respondent to this appeal had discriminated against her on the ground of her sex and marital status and had dismissed her unfairly.At the conclusion of the hearing of this appeal, we announced our decision that the appeal would be allowed and that the case would be remitted for re-hearing by a differently constituted Tribunal. It is therefore inappropriate that we say any more about the facts of the case than is necessary for an understanding of our decision.In May 1990, the appellant began her employment as a Housing Welfare Officer with the respondent Housing Association. The respondent had recently taken over responsibility for the housing stock and Housing Department Staff of the Swale Borough Council, by whom the appellant had been employed since 1988.In March 1991, the Housing Corporation examined the respondent's affairs and required radical changes. A plan for reorganisation was drawn up and, after consultation with staff, put into effect. This involved the dissolution of the old staffing arrangements which had been inherited from the Local Authority. All employees had to apply for a position in the new structure. The appellant applied for a post as Housing Officer. On 30th September 1991 she was interviewed, found suitable and recommended for appointment.Prior to the reorganisation the respondent had staff at offices in three different towns, Sheerness, Sittingbourne and Faversham. The appellant had worked at Faversham for the Local Authority and at Sittingbourne for the respondent. The respondent intended to employ staff at the same three locations but it was not until 4th October 1991 that the respondent held a meeting to decide the locations at which individual employees were to be deployed. At that meeting, the respondent's management decided to deploy the appellant at Sheerness.Immediately after that meeting, the appellant was told of the decision. She immediately expressed reservations, on the ground that it would be difficult for her to make suitable arrangements for the care of her young son if she were required to work at Sheerness, which was considerably further from her home than either Sittingbourne or Faversham. The respondents had been aware of her domestic responsibilites and had allowed her some flexibility of starting time while at Sittingbourne in order that she could take her son to school or to the school bus before coming to work.On 8th October, the respondent's general manager formally offered the appellant the post of Housing Officer at the Sheerness Office. She made it known that she wished to work at Sittingbourne and on 22nd October, she and her Trade Union representative attended a meeting with management at which her child care difficulties were fully discussed. The respondent offered a compromise suggestion under which the appellant would move to Sheerness for three to four months on a temporary basis and the respondent would advertise for a Housing Manager for the Sheerness office with a view to giving consideration to permitting the appellant to return to work at Sittingbourne, where there was a vacancy. It is right to say that there was no firm commitment to return the appellant from Sheerness after that period, but the suggestion signified a willingness to be flexible on the part of the respondent. After some consideration, the appellant refused that compromise offer. There were some further discussions but these came to nought and the appellant was given a month's notice of termination of her employment.The Tribunal considered the appellant's domestic, child-minding and travel arrangements in some detail. They examined the effect which the proposed change of location would have. They made findings as to the extent to which the respondent was aware of her domestic position at the time they decided to deploy the appellant at Sheerness. They considered whether under the appellant's contract of employment as a housing welfare officer the respondent could require the appellant to work at any of the three locations. They considered too the effect of the reorganistion on the previous contract and the terms of the new contract which the respondent's had offered. Finally, they examined in some detail the reasons advanced by the respondent for the decision to require her to work at Sheerness.The Tribunal then turned to consider the relevant law. The appellant's allegation was that the respondent had discriminated against her indirectly on the ground of her sex and marital status contrary to Section 1(1)(b) of the Sex Discrimination Act 1975 . Section 1 provides:
"(1) A person discriminates against a woman in any circumstances relevant for the purposes of any provision of this Act if- (a) (is not relevant); (b) he applies to her a requirement or condition which he applies or would apply equally to a man but- (i) which is such that the proportion of women who can comply with it is considerably smaller than the proportion of men who can comply with it, and
(ii) which he cannot show to be justifiable irrespective of the sex of the person to whom it is applied, and

(iii) which is to her detriment because she cannot comply with it."

The Tribunal then formulated five issues which fell to be determined in their consideration of the case under section 1(1)(b). The first four dealt with the issues raised by paragraphs (i) and (iii). The Tribunal resolved each of them in the appellant's favour. It is neither necessary or appropriate that we should set out their findings of fact or their reasoning. Suffice it to say that no criticism was made at this appeal in respect of those findings or of the reasoning followed. In effect they held that the respondent's requirement of the appellant that she work at Sheerness was a requirement with which fewer women would be able to comply than men and that the appellant had suffered a detriment as the result of the requirement, because as a woman with responsibilites for her child, she could not comply with it. Thus, unless the respondent could show that the requirement was justifiable irrespective of the sex of the person to whom it was applied, under paragraph (ii), this would indeed be a case of indirect discrimination on the ground of sex.The Tribunal then turned to consider whether the respondent had shown that the requirement or condition was justifiable irrespective of the sex of the person to whom it was applied. They set out the principles of law which they considered ought to guide them in their determination of this issue. Then they examined the evidence and issues which they considered to be relevant and concluded that the respondent had indeed made out their defence.The first ground advanced on this appeal raised the question of whether the Tribunal had directed themselves correctly as to the law. After observing, correctly, that the burden of proof on this issue lay on the respondent, the Tribunal stated that guidance on the appropriate considerations to be taken into account were given by the Court of Appeal in Ojutiku v Manpower Services Commission [1982] I.C.R. 661 and [1982] IRLR 418 . They cited a passage from the judgment of Eveleigh LJ in which he considered the meaning of the word `justify' or `justifiable' as used in section 1(1)(b)(ii) of the Race Relations Act 1976 (which was similar to section 1(1)(b)(ii) of the Sex Discrimination Act 1975 ) and went on to propound the test to be applied in deciding whether someone has justified their actions. The passage cited began at page 668B:
"If I have to give some explanation of my understanding of that word, I would turn to a dictionary definition which says `to adduce adequate grounds for'; and it seems to me that if a person produces reasons for doing something, which would be acceptable to right-thinking people as sound and tolerable reasons for so doing, then he has justified his conduct'."
After this citation, the Tribunal continued:

"In Clymo's case. Wood J. gave further guidance as follows:......."

This is a reference to the decision of the Employment Appeal Tribunal in Clymo v. Wandsworth London Borough Council [1989] I.C.R. 250. The passages cited as giving `further guidance' are to be found first at page 267F:
"The tribunal should look to the requirement or condition and see what it is which the respondent seeks to achieve. That object must be more than a matter of convenience. It is the subject of managerial decision. It must have a proper purpose when viewed within the whole of the business or organisation for which the respondent is responsible and wherein he or it may have duties or obligations. `Good and adequate reasons' per Stephenson LJ at page 674 (of Ojutiko).
If the tribunal is satisfied up to this stage, then it must carry out a broad and objective balancing exercise taking into account all the circumstances of the case and giving due emphasis to the disadvantage caused by the condition or requirement against the achievement of the object sought. The tribunal must then decide whther the respondent has proved his defence. The well known phrase comes to mind that there is no need to use a sledgehammer to crack a nut.'The second passage cited from Clymo's case is at page 271H:
"In deciding this issue the question of fact for the tribunal was whether the respondent had proved that the decision was justifiable, objectively justified for economic, administrative or other reasons unrelated to discrimination on grounds of sex, and in reaching that decision it was for the tribunal to carry out the broad balancing exercise."
The criticism made by counsel for the appellant is that the Tribunal misdirected themselves in placing any reliance upon the judgment of Eveleigh L.J. in Ojutiku . The test propounded in the passage cited entailed only an examination of the reasons given by the respondent for acting as he did. If those reasons appeared acceptable as sound and tolerable to right-thinking people, the defence would be made out. That test was considered in the case of Hampson v. Department of Education and Science [1989] ICR 179 in which Balcombe L.J. formulated a different test to be applied by a Tribunal considering whether an employer had shown that the requirement he had imposed was justifiable irrespective of the sex of the applicant. At page 191F Balcombe L.J. said:
"In my judgment `justifiable' requires an objective balance between the discriminatory effect of the condition and the reasonable needs of the party who applies the condition. This construction is supported by the recent decision of the House of Lords in Rainey v. Greater Glasgow Health Board [1987] ICR 129 a case under the Equal Pay Act 1970......'
a provision with wording similar to that under consideration in Section 1(1)(b)(ii).In Webb v. Emo Air Cargo Ltd [1993] ICR 175 the House of Lords approved the test formulated by Balcombe L.J. in Hampson's case and said that it must now be regarded as having superseded that of Eveleigh L.J. in Ojutiku .Thus it appears to us that there is force in the appellant's submission that the Industrial Tribunal in this case misdirected themselves in saying that Eveleigh L.J.'s test provided any guidance. To be fair to them, it appears that the respondent's representative submitted that they should follow Ojutiku's case and the appellant's representative did not point out the error of this submission.The passage from the case of Clymo on which the Tribunal also placed reliance accurately reflected the test as propounded by Balcombe L.J. in Hampson's case. Counsel for the respondent submitted to us that as the Tribunal eventually cited the correct proposition of law and as they carried out the balancing exercise required by the Clymo case, their decision should be upheld. It is true that they claimed to have carried out a balancing exercise of what they regarded as the relevant factors in relation to the defence of justification. If it were clear that they had in fact applied the Clymo test, it would not matter in our view that they had wrongly included the Ojutiku test in their statement of the relevant law. But we are by no means satisfied that they did carry out the balancing exercise as required by Clymo or Hampson .It is now necessary to consider exactly what the Tribunal did, in purported compliance with the legal approach they had set out. In paragraph 42 they enumerated a number of factors which they regarded as relevant to their consideration under the general heading of the issue of justification. First, they noted that the reorganisation of the respondent's business had been the subject of consultation and had met with no opposition. They accepted that the respondent had reasonably decided that the reorganisation was necessary, as a proper management decision. Second, they accepted that a proper reason had been advanced by the respondent for placing the appellant at the Sheerness office. Third, they considered it was relevant that the respondent had offered a compromise suggestion and that, while it was acknowledged not to be a firm commitment, this showed that the respondent was willing to be flexible and show due consideration for the appellant's difficulties. They referred to the various meetings and discussions which had taken place after the appellant raised her objection to working at Sheerness. They said that they regarded these discussions as relevant as showing a "reasonable and consultative attitude on the part of the respondent in considering whether the respondent has produced reasons for their decision which strike us as sound and tolerable reasons to justify their conduct" . We note that reference to `sound and tolerable reasons' which are the words used by Eveleigh L.J. in Ojutiku . Fourth, they accepted as necessary to the business the requirement of punctual arrival at work, a requirement which had not been stressed during the appellant's employment at the Sittingbourne office. Finally they observed that all the factors to which they had alluded were factors which arose irrespective of the sex and married status of Mrs Hillyard. They said:
"That is certainly true of the fact that on any view of the contractual relationship, the respondent was entitled to require Mrs Hillyard to work at the Sheerness office.'
Pausing there, paragraph 42 could not be described as containing a balancing exercise. It is a recitation of the respondent's reasons for acting as they did and an evaluation of those reasons as being good or `sound and tolerable reasons', unaffected by the sex or marital status of the appellant.Then at paragraph 43 the Tribunal say this:
"Having carried out the exercise of considering and balancing the various factors set out above, in relation to the defence of justification, we find that the respondents have established that defence. The requirement to work at Sheerness was discriminatory but has been shown by the respondent to be justifiable."
Miss Morgan for the appellant submitted to us that although the Tribunal have said that they have carried out a balancing exercise, they do not appear to have done so. They refer to having balanced the factors `set out above' but it is not at all clear whether they are there referring to the factors set out immediately above in paragraph 42 or to the whole of their previous findings of fact. If the former, they have not carried out the balancing exercise required by Hampson's case and Clymo's case, which requires that they should balance the discriminatory effect on the appellant of the requirement that she should work at Sheerness as against the reasonable needs of the respondent. Paragraph 42 does evaluate the reasonable needs of the respondent but it says nothing of the discriminatory effect of the requirement on the appellant. It is true that the appellant's difficulties are fully described and accepted in earlier parts of the decision. It may be that by referring to the various factors `set out above', the Tribunal meant that they had taken into account the effect on the appellant of her inability to comply with the requirement that she work at Sheerness. But it is not at all clear that they have done so. It would obviously have been better if the Tribunal had drawn together the main factors which they regarded as relevant to the balancing exercise and had made the basis of their decision clear.Mr Stancombe for the respondent accepts that paragraph 43 is regrettably brief. He accepts that it would have been better if the Tribunal had set out the main factors which fell to be balanced. But he says that just because the detail is not set out we should not assume that the Tribunal have made an error of law. We accept that. He observes that the Tribunal assert that they have carried out the balancing exercise. They must, he submits, have balanced the proper factors, for what else could they have balanced other than the discriminatory effect on the appellant of the requirement and the reasonable needs of the respondent? That submission we cannot accept.In our view, the fact that the Tribunal had not set out the factors which they regarded as relevant to the balancing exercise, would not seriously undermine their decision, if it was clear that they had in mind the correct legal test. We are concerned that the Tribunal have cited two passages of what they describe as `guidance' which in fact contain different tests. Yet they do not seem to have realised that they have done so. They have not observed that one test has been superseded by the other. They have not perceived the difference between what was required by Eveleigh L.J. in Ojutiku and what is required by Wood J. in Clymo . We think that the Tribunal were confused as to the test they should apply and have tried to combine Eveleigh L.J.'s test with Wood J's test. In our view, paragraph 42 appears to be an attempt to apply the Ojutiku test. Paragraph 43 seems to be an attempt to follow the Clymo `guidance' and carry out a balancing exercise. We consider that as the result of that confusion the Tribunal found it difficult to describe the balancing exercise. That in our view is why paragraph 43 fails to give an adequate explanation of what is, after all, the crux of their decision.In the event, we are persuaded that this Tribunal fell into error at the final hurdle of what had been a complex and difficult case. They had evaluated the evidence in an exemplary fashion and, until this final stage, had directed themselves correctly in law. As we indicated earlier in this judgement, we have come to the conclusion, with regret, that this appeal must be allowed and the case must be remitted for re-hearing by a differently constituted Tribunal. There will be liberty to apply if any consequential orders are sought.