Go Kidz Go Ltd v Bourdouane [1996] UKEAT 1110_95_0507

EAT
Go Kidz Go Ltd v Bourdouane
[1996] UKEAT 1110_95_0507 · 1996-07-05

JUDGE PETER CLARK :

This is an appeal by the employers, Go Kidz Go Ltd. against a decision of the Birmingham Industrial Tribunal sitting on 28th July 1995, upholding a complaint of unlawful sex discrimination brought by their former employee, Miss Bourdouane. Extended reasons for the decision are dated 30th August 1995.

The Primary Facts

These were largely undisputed and are set out in paragraph 4 of the tribunal's reasons. From October 1994 the appellant carried on the business of providing children's parties on a commercial basis. Parents brought their children to the appellant's premises which included a play area and restaurant facilities. There were also Birthday rooms, supervised by a hostess employed by the appellant. Thus parents could purchase a package to mark their child's birthday. The children invited to the birthday party could play for a time and then go to a Birthday Room where food was served and entertainment provided under the supervision of the allocated hostess.The respondent, a woman then aged 23 years, was recruited by the appellant as a group leader on 15th October 1994.On Sunday 22nd January 1995 she was in charge of operating birthday parties in one of the Birthday rooms. One particular party consisted of some 15 to 20 children, together with their parents. She began by describing the facilities available to those children and adults. As she did so one of the male parents present made a lewd remark containing a sexual innuendo aimed at the respondent. She was uncomfortable with that remark. That was followed by a series of sexual remarks directed by the same parent at the respondent. She became increasingly unhappy until she reached the point where she decided to try and obtain a substitute to continue the party.She left the party and approached Mr Morgan, a director of the appellant company involved in the day to day management of the business, who was on site. She told him that she was having "something of a nightmare party" and made it clear that she did not wish to continue with it. She referred to "perverted phrases" used by the offending parent.Mr Morgan's reaction, bearing in mind that all staff were fully occupied, was to encourage her to return to her party and complete it because there was not long to go. He hoped that the problem would resolve itself. He did not in terms direct her to return, but having raised the matter with him, she did so.Following her return, matters deteriorated. Not only did the same parent continue to make offensive remarks, but on occasions when she passed him he contrived to have physical contact with her by pressing against her. Finally, he smacked her hard on the bottom and then pinched her bottom. That was the final straw. She was deeply upset. She left the room and burst into tears.She discussed the incidents with another member of staff. That conversation was overheard by Mr Morgan. He learned that the respondent had been sexually assaulted and was extremely distressed. He told her to get changed and go home. Before leaving, she telephoned her parents. Her mother then telephoned Mr Morgan. It was arranged that a meeting should take place the following day.The next day Mr Morgan met the respondent and her mother. Initially the atmosphere was both positive and calm. Mr Morgan was very sympathetic towards the respondent. He asked what she wanted done. He did not himself volunteer to do anything and had not investigated the incident. The respondent and her mother made it clear that they wished to have the matter reported to the police. Mr Morgan was reluctant to do so. He thought that was an extreme reaction. The respondent and her mother pressed the point.Mr Morgan's attitude then changed dramatically. He announced that he had decided that her performance prior to the incident had been unsatisfactory; that she was obviously unhappy working in the business; the company was proposing to dismiss her in any event so she might as well have her notice and leave. The respondent's mother asked how he could justify his actions to which he replied that he could not fault the respondent's work but, as it was his company, he could do what he liked.The meeting ended on the basis that the respondent would work out a week's notice. It was also agreed that the matter would be reported to the police. Mr Morgan did contact the police. The police officer sent to investigate said that it was really a civil matter, rather than one for the police. A police report was prepared which amounted to little more than an account of what was said on the day.

The factual issue

The principal dispute as to fact was whether or not the appellant had intended to dismiss the respondent prior to the material incident. The tribunal found as a fact that the company had no such intention and that the reason for dismissing the respondent was that she raised the issue of the sexual assault and her persistence in pursuing it on a formal basis and involving the police.

The Sex Discrimination Act 1975 ["The 1975 Act"]

The following provisions are material:Section 1(1):
"(1) A person discriminates against a woman in any circumstances relevant for the purposes of any provision of this Act if- (a) on the ground of her sex he treats her less favourably than he treats or would treat a man, or (b) he applies to her a requirement or condition which he applied 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."

Section 6:

"Discrimination against applicants and employees

...(2) It is unlawful for a person, in the case of a woman employed by him at an establishment in Great Britain, to discriminate against her-...

(b) by dismissing her, or subjecting her to any other detriment."

Section 41:

"Liability of employers and principals

(1) Anything done by a person in the course of his employment shall be treated for the purposes of this Act as done by his employer as well as by him, whether or not it was done with the employer's knowledge or approval....(3) In proceedings brought under this Act against any person in respect of an act alleged to have been done by an employee of his it shall be a defence for that person to prove that he took such steps as were reasonably practicable to prevent the employee from doing that act, or from doing in the course of his employment acts of that description."Equivalent provisions are to be found in the Race Relations Act 1976 at, respectively, Sections 1(1), 4(2)(c) and 32(1) and (3).

The Complaint

The respondent had insufficient continuous service to qualify for unfair dismissal protection. Her claim was principally one of direct discrimination on grounds of her sex contrary to Sections 1(1)(a) and 6(2)(b) of the 1975 Act.

Sexual Harassment

The term `sexual harassment' may properly be applied to the treatment of the respondent by the male parent on the facts of this case. However, sexual harassment per se does not give rise to a complaint under the 1975 Act. Further, the parent was not an employee of the appellant for whose acts the appellant was vicariously liable, subject to the statutory defence, under Section 41 of the 1975 Act. How then does a complainant establish unlawful direct sex discrimination against her employer arising out of acts of sexual harassment directed at her in the course of her employment by a third party not a fellow employee?

Legal Principles

The starting point is the scheme of the 1975 Act. In order to establish unlawful direct discrimination the complainant must prove:(1) that her employer treated her less favourably than he treats or would treat a man and

(2) that such less favourable treatment was on the grounds of her sex, and

(3) that he had so discriminated against her by dismissing her or subjecting her to any other detriment.At the outset it is important to observe that the motive or intention of the employer is irrelevant. It is not necessary for the complainant to show that the employer intended to discriminate against her. See R v Birmingham City Council ex parte Equal Opportunities Commission [1989] IRLR 173 , applied James v Eastleigh Borough Council [1990] ICR 554 .Secondly, the defence of justification, available in a claim of indirect discrimination, is not open to the employer in a claim of direct discrimination.Next, the case of Porcelli v Strathclyde Regional Council . There the female employee complained of a campaign of sexual harassment by two male fellow employees designed to drive her away from their workplace. She applied for a transfer. She then complained of unlawful sex discrimination, contrary to Section 1(1)(a) and 4(2)(b) of the 1975 Act. The Industrial Tribunal accepted her account of sexual harassment, found that the employers were vicariously liable for the treatment meted out to her by the two male employees and found that she was subjected to a detriment. However, that tribunal dismissed her complaint on the grounds that the men would have treated a man they disliked as unfavourably as they treated the complainant. She had failed to establish that the less favourable treatment was on the grounds of her sex. On her appeal, the Scottish Employment Appeal Tribunal (Lord McDonald MC presiding) allowed her appeal. [1984] IRLR 467 . The Employment Appeal Tribunal held that the question that the Industrial Tribunal ought to have asked itself was; was there sexual harassment and if so was it to the detriment of the complainant? In answering that question, on the facts as found, there was little doubt that the conduct of the men amounted to sexual harassment and she had been subjected to a detriment, in that she had been forced to seek a transfer to a different workplace.The Council's appeal to the Inner House of the Court of Session was dismissed, but on grounds that differed from those of the Employment Appeal Tribunal. [1986] ICR 564 . The primary question under Section 1(1)(a) of the Act is not "was there sexual harassment?" but "was the applicant less favourably treated on the grounds of her sex than a man would have been treated?" In answering that question the Court of Session held that the campaign conducted by the two men included significant elements of a sexual character to which a man would not have been vulnerable. That was unfavourable treatment on the grounds of her sex. The detriment was admitted. Vicarious liability for the acts of their male employees was accepted by the Council. The complaint was made out.It follows, in our judgment, that Porcelli is authority for the proposition that where a complainant proves unfavourable treatment which consists of or includes behaviour which is sexually offensive to a woman that is sufficient to establish discrimination within the meaning of Section 1(1)(a) of the 1975 Act. However, what Porcelli does not decide is the question of an employer's liability where the sexual harasser is not an employee for whose acts the employer is vicariously responsible without more, but a third party. To what extent does the 1975 Act render an employer directly liable for the harassers acts against the female employee in the course of her employment?In our judgment the direct duty placed on the employer by the provisions of Section 1(1)(a) and 4(2)(b) of the 1975 Act is to take all reasonable steps to prevent such discrimination taking place where it is within his power to prevent it. That will necessarily involve a degree of knowledge or foresight as to the risk of discriminatory acts being directed at the employee in the course of her employment and the power to prevent them occurring or continuing.We can illustrate this principle in practice by taking the sequence of events in this case in three stages.Stage 1 : The initial verbal sexual harassment by the parent leading to the respondent's first complaint to Mr Morgan. Until that complaint, the appellant cannot be held to have treated the respondent less favourably on the grounds of her sex. It did not know and could not have foreseen that such treatment would be meted out to her. The employer would thus escape a finding of unlawful direct discrimination where the acts complained of were performed by a third party, whereas such conduct would be sufficient, subject to he statutory defence, to establish the complaint when performed by a fellow employee. See Bracebridge Engineering Limited v Darby [1990] IRLR 3 , provided that the offending employee could be said to be acting in the course of his employment. cf. Irving and Irving v The Post Office [1987] IRLR 289 .Stage 2 : Following the respondent's initial complaint Mr Morgan had actual knowledge of the sexual harassment complained of by the respondent. He then had the opportunity to excuse her from further attendance at the party, with the inherent risk that she would be subjected to further harassment, or to remove the harasser from the premises. He did neither. He allowed the respondent to return and thereby to be subjected to further harassment including a sexual assault. At this stage the appellant has discriminated against the respondent within the meaning of Section 1(1)(a) and further has subjected her to a detriment in the sense that he has permitted the sexual harassment to continue in circumstances where he can control whether it happens or not.Stage 3 : The dismissal. Having unlawfully discriminated against the respondent at Stage 2 the appellant, through Mr Morgan, compounded the matter by dismissing her because, as the Industrial Tribunal found, she insisted on pursuing her complaint of a sexual assault by the parent. That constitutes less favourable treatment on the grounds of her sex by dismissing her.

The Tribunal Decision

Having set out their findings of fact the Industrial Tribunal direct themselves as to the law in paragraph 6 of their reasons in this way:
"6 In arriving at its decision, the tribunal considered Porcelli -v- Strathclyde Regional Council 1984 IRLR 467 in particular they noted the following guidance provided by Lord McDonald:
If any material part of unfavourable treatment to which a woman is subjected includes a significant element of a sexual character to which a man would not be vulnerable, the treatment is on the grounds of the woman's sex within the meaning of Section 1(1)(a)."Pausing there, we have carefully read the judgment of Lord McDonald in that report and are unable to find the passage to which the Industrial Tribunal here refers. The closest to that passage which we can find is in the judgment of Lord Brand in the Court of Session appeal in Porcelli where he says at page 576F:
"... if a form of unfavourable treatment is meted out to a woman to which a man would not be vulnerable, she has been discriminated against within the meaning of s1(1)(a)."
It follows, in our judgment, that the Industrial Tribunal correctly directed itself as to the law, albeit not from the source to which it referred.In paragraph 7 of the reasons the tribunal find that the manner of the respondent's treatment arose directly from her complaint about being sexually assaulted and that the appellants decision to remain entirely passive when faced with a young and female employee, who was obviously extremely upset, was one which was directly related to her sex. They then apparently go on to consider whether the employer's inactivity could be justified and decided that it could not. Insofar as that enquiry was directed to any question of "justification" within the meaning of Section 1(1)(b)(ii) of the 1975 Act, it was irrelevant to the issue of direct discrimination. The question, as we have earlier indicated, is whether the employer, having been made aware of the employee's complaint, ought to have taken steps to prevent further harassment.Finally, in paragraph 10 of the reasons, the Industrial Tribunal find, first that there was an act of discrimination under Section 1(1)(a) and secondly that the appellant had unlawfully discriminated against her under Section 6(2)(b) by dismissing her.

The Appeal

The primary submission made by Mr Duffy on behalf of the appellants is that there was no evidence to support the conclusion that the respondent was treated less favourably on the grounds of her sex than a man would have been treated in similar circumstances. Quite simply, there was no evidence before the Industrial Tribunal and no finding by the tribunal as to how a man would have been treated in such circumstances.The finding that she suffered sexual harassment from a man who was not an employee for whose acts the appellant was vicariously liable, could not, without more, amount to discrimination under Section 1(1)(a). Further, the findings of fact that the appellant failed to properly investigate her complaint, and then dismissed her for pursuing that complaint are not sufficient to satisfy Section 1(1)(a).Accordingly, he submits, the Industrial Tribunal's conclusion was perverse, in the sense that there was no evidence to justify the conclusion which it reached. Watling v William Bird & Son [1976] 11 ITR 70 .For the respondent, Miss Dhillon submits that the appellant owed a duty to a young female member of staff who was subjected to sexual harassment; that such treatment was meted out to her because of her sex; a male employee would not have received such treatment; that instead of taking steps to prevent further harassment once he was made aware of the position the employer, through Mr Morgan, did nothing, and that when she pursued her complaint he dismissed her for doing so. The claim was made out.

Conclusion

We are satisfied that the Industrial Tribunal's conclusion is `plainly and unarguably right' on the facts as found (see Dobie v Burns [1984] ICR 812 ) although we cannot entirely accept their reasoning. In our judgment the correct approach is as follows;(1) The behaviour to which the respondent was subjected in the course of her employment by the male parent amounted to sexual harassment. That fact alone does not answer the question "has she been treated less favourable by her employer than he would treat a man on the grounds of her sex?"(2) The appellant is not vicariously liable for the acts of the male parent.(3) It is not necessary to enquire as to how the employer would have treated a male employee in circumstances where the form of treatment meted out to the respondent by the male parent is a form of treatment to which a man would not be vulnerable. See Porcelli per Lord Brand 576E-F.(4) The question is whether the appellant took all reasonable steps to prevent the sexual harassment taking place or continuing when it was within his power to prevent it. We return to our three stage approach to the facts in this case. At Stage 2 it was within the appellants power to prevent further acts of sexual harassment by the male parent by either excusing the respondent from further attendance at the party or by carrying out an investigation and removing the offending parent. Mr Morgan chose to do neither and in those circumstances he, and through him the appellant, was guilty of discrimination within the meaning of Section 1(1)(a) of the 1975 Act. Further he subjected her to a detriment by placing her at risk of further sexual harassment, which did in fact occur. His motives for so doing, or justification for his actions, are irrelevant.(5) Not only did he subject her to a detriment within the meaning of Section 4(2)(b), Mr Morgan also unlawfully discriminated against the respondent by dismissing her.(6) In these circumstances her complaint of unlawful direct sex discrimination is made out.Accordingly we shall dismiss this appeal.