Donovan v New Islington & Hackney Housing Association [1997] UKEAT 1269_95_1003

EAT
Donovan v New Islington & Hackney Housing Association
[1997] UKEAT 1269_95_1003 · 1997-03-10

JUDGE PETER CLARK :

The respondent is a Housing Association with charitable status, providing accommodation for 7,500 tenants. Its management structure consisted of an executive team reporting to Management Committee, made up of volunteers. At all material times the Chief Executive was Mr Mervyn Jones.The applicant commenced employment with the respondent on 4th September 1989. On 1st April 1992 she was promoted to the post of Property Services Director and thereupon joined the management team responsible for the day to day running of the respondent. Her employment terminated on 23rd September 1993.Following termination she presented an Originating Application to an Industrial Tribunal on 2nd December 1993. She made three separate complaints; first, that she had been unfairly, constructively dismissed; second, that she had been unlawfully discriminated against on the grounds of her sex; and thirdly, she complained of unlawful racial discrimination.The matter was listed before the Stratford Industrial Tribunal for five days commencing on 18th September 1995. The case was heard by a full Industrial Tribunal chaired by Mr Jeremy McMullen QC. At the end of the applicant's evidence Counsel for the respondent, Mr Clarke, submitted that there was no case to answer in relation to each of the three complaints, and that the discrimination complaints were out of time. The limitation plea was upheld by the tribunal, which then went on to consider the unfair dismissal complaint. Ultimately all three complaints were dismissed. Extended reasons for the tribunal's decision are dated 18th October 1995. This appeal is limited to the tribunal's decision to dismiss the complaint of sex discrimination.

The facts

The applicant raised a number of complaints about her treatment by the respondent during her employment. We summarise those complaints by way of background.

The John Drummond affair

In mid-1992 a Mr John Drummond was appointed a manager in the applicant's department. He was then a member of Hackney Council. The applicant was concerned as to his right to remain an employee whilst holding Council office. She recommended to Mr Jones that Mr Drummond's appointment be not confirmed at the end of the his probationary period. The tribunal found that Mr Jones criticised the applicant's management style over this issue. However, they concluded that the affair came to an end in mid-September 1992.

Restructuring

In March 1993 the personnel manager, Ms Salli Whittaker was asked by Mr Jones to come up with some options, dealing in particular with the reporting lines to the Chief Executive. Hitherto all members of the management team, including the applicant, had reported directly to him.In summary the recommendation was that two members of the management team, the applicant and Stuart Phelps (a white male), would henceforth report to the Deputy Chief Executive, David Cant; other reporting lines would remain the same. The applicant feared that this alteration would result in a loss of status. On 26th April 1993 she drafted a memorandum to Mr Jones which spoke of her demotion and stated that she would have no option but to seek amicable termination of her contract of employment on terms.On 4th May 1993 a management team meeting took place. Mr Jones and the applicant disagreed over the proposed reorganisation, and during that debate Mr Jones referred to the need for corporate responsibility and drew an analogy between the applicant's response to the reorganisation and Mr Michael Heseltine storming out of a Cabinet meeting over the Westland affair.The restructuring proposal went ahead and from 1st June 1993 the applicant reported to Mr Cant.Meanwhile she raised a formal grievance on 16th May 1993 relating to(1) the John Drummond affair and(2) the Westland comment made by Mr Jones. Neither in that grievance, nor at any later date, so the tribunal found, did the applicant again raise any complaint about the change in reporting lines.

Grievance

The applicant's grievance raised on 16th May was heard on 29th July 1993 with Ms Whittaker acting as facilitator. The applicant complained that the relationship had broken down following the Drummond affair, and arising from that came the restructuring. She again indicated a desire to leave on agreed terms.On 2nd August 1993, following a memorandum to her from Mr Jones dated 30th July 1993, the applicant wrote to him setting out her concerns and stating:
"Of the then Management Team members I was the only woman to have reporting lines changed from the Chief Executive to the Deputy Chief Executive and as such I believe that I have been treated less favourably than other male members of the senior management team."
That was the first occasion on which she had raised the issue of sex discrimination.On 6th September 1993 a second tier grievance was conducted by two senior members of the management committee, Pat Brown and Peter Dixon. The tribunal found that the sole issue at that meeting was whether the parties could come to agreed terms for her departure. That came down to money.Matters were not resolved on that day and on 7th September the applicant tendered her resignation which was accepted by the respondent to take effect on 23rd September 1993. The tribunal ultimately found that the applicant's resignation was not prompted by any repudiatory breach on the part of the respondent. She was not constructively dismissed.

The tribunal decision

In submitting that there was no case for the respondent to answer, the tribunal record Mr Clarke as making two points in paragraph 38 of their reasons:
"I) That there was no evidence of their being relevant acts such as to constitute discrimination under either statute; and

ii) That such acts as there were were outside the limitation period."

Having reminded themselves of the three month primary limitation period under the Sex Discrimination Act ["SDA"] and the provision for continuing acts of discrimination, the tribunal express their conclusions and reasoning at paragraph 40-42 in this way:
"40 We hold that there is no evidence of any discrimination on the grounds of gender or race during the period when the claim ought to have been presented in this case. It is common ground that the application must stem from events occurring on or after 3 September 1993. Dr Skyte, who has represented the Applicant member of MSF, pointed to only two matters within this relevant period, viz the failure to provide a reference and the "dismissal" itself. As to a reference, we reject this as being a matter in which the Respondent behaved in a discriminatory way, there being no evidence that Ms Whitaker, who was the person principally involved in this, discriminated against the Applicant on the grounds of her race or sex. As to the "dismissal" itself, this can only be a reference to what occurred on 6 September 1993. The Applicant's chronology indicates the causative impact of the failure to agree terms upon her resignation. It is accepted by the Applicant that there was no discriminatory act by the relevant committee members, individually or corporately, who had control of the grievance meeting on 6 September 1993. That being so, there is no relevant act upon which a claim may be brought within Section 78(1)."
Paragraph 41 deals with continuing acts and that is not now material to this appeal.
"42 As a matter of observation, having heard all the evidence of the Applicant in relation to her claims of sex and race discrimination, there are certain illogicalities, including, for example, the fact that in the restructuring she was treated in precisely the same way as a male who is white, ie Stuart Phelps. There are therefore, as we see it, seismic faults in her case but, formally, we have not dealt with those since we accepted the submission made by Mr Clarke that there was no case for the Respondent to answer and we dismiss claims under both discrimination statutes."

The Appeal

Ms Davies takes broadly two points, which we shall consider in turn.

Claim in time

She does not contend for a continuing act or acts of sex discrimination which extended into the primary limitation period. See Sougrin v Haringey Health Authority [1992] ICR 650 . cf. Owusu v London Fire and Civil Defence Authority [1995] IRLR 574 . Instead she relies solely upon the grievance hearing held on 6th September 1993 as bringing the claim within the three month limitation period under s.76(1) of the SDA.The way she puts the point is this. At the outset of 6th September meeting the applicant's union representative, Dr Skyte raised the question of sex discrimination.In his opening statement he said this:
"As a result Ms Donovan was the only woman whose reporting line had changed which had reduced her responsibilities. Her memo of 26/4/93 confirmed her position then and still stands."
That observation refers back to the applicant's complaint of sex discrimination in her memorandum to Mr Jones dated 2nd August 1993 to which we have earlier referred.The point was then picked up by Mr Jones at the grievance hearing. He wanted the issue of potential sexual discrimination raised as he felt that the comment in the applicant's letter of 2nd August 1993 need to be explored. He denied that he had been motivated in his actions by sexism. There was then some discussion of that aspect, at the end of which Dr Skyte reiterated that, according to the management notes of the hearing, the applicant was not saying that the Chief Executive had directly discriminated against her. It was the applicant's case that the word used was 'intentionally' rather than 'directly'.When the panel came to announce their decision they made no reference to any complaint of sex discrimination.Ms Davies relies upon the Employment Appeal Tribunal decision in Adekeye v The Post Office (No.1) [1993] ICR 464 for the proposition that failure to deal with an allegation of sex discrimination at a grievance hearing is itself an act of discrimination which in this case brings the complaint within time.We think that there are three answers to that point.First, Adekeye was concerned with an internal appeal. The proposition of law emerging from that case is summarised by May J at page 470C, where he said:
"... If a dismissed black employee complains that he or she did not succeed upon an internal appeal in circumstances where a white comparator would have succeeded such that there is an allegation of unlawful discrimination on racial grounds in the result of the appeal, we consider that that is an "act complained of" within the terms of section 68(1) of the Act of 1976. That in substance is the employee's case on this appeal."
Assuming that the principle applies equally to a grievance hearing, it must be the applicant's case that the result of the grievance hearing was such that the applicant was treated differently on the grounds of her sex. That was not her complaint.Secondly, the tribunal found as a fact in paragraph 40 of their reasons that the applicant expressly disavowed any discrimination by the panel members who sat on 6th September 1993. We are unable to interfere with that finding, based as it was on her own evidence, and indeed it accords with the issue which Dr Skyte identified at the grievance hearing when he said this:
"This was an unusual position for him to be arguing in favour of a union member terminating employment. However it was the applicant's contention that ultimately her responsibilities had been downgraded and the only resolution was an agreed termination."
Thirdly, the point taken by Ms Davies today was not advanced by Dr Skyte on behalf of the applicant before the Industrial Tribunal. It cannot now be properly raised for the first time on appeal. See Kumchyk v Derby City Council [1978] ICR 1116 .For these reasons we reject Ms Davies' first submission.

Extension of time

S.76(5) of the SDA provides:
"A ... tribunal may nevertheless consider any ... complaint, ... which is out of time if, in all the circumstances of the case, it considers that it is just and equitable to do so."
No mention is made in the tribunal's written reasons of an application for an extension of time under s.76(5).At a preliminary hearing held before the Employment Appeal Tribunal, Mummery J presiding, on 26th April 1996, the tribunal directed that an affidavit be provided by Dr Skyte within four weeks setting out his recollections of what happened at the Industrial Tribunal on the application for an extension of time for bringing the discrimination cases and the circumstances in which the submission was made that there was no case to answer.Pursuant to that direction, Dr Skyte swore an affirmation on 22nd May 1996 which is before us. In paragraph 9 of the affirmation he puts the matter in this way:
"9. It was then that he [ the Chairman ] invited me to consider whether I should make an application on behalf of the Applicant for an extension of time on the basis that it had not been reasonably practicable for the Applicant to submit her application in time and that it would be just and equitable to grant such an extension. It was then, on behalf of the Applicant, that I made my submission that it would be just and equitable to allow an extension, on the basis that the issue of jurisdiction of the tribunal had not been previously raised by the Respondents at any time until the hearing of the case. In fact there is no reference to this second submission or the ruling made by the tribunal in the written decision of the tribunal but I recollect that Mr McMullen responded to my submission by stating that the Applicant had made an oblique reference to discrimination in her complaint under the internal grievance procedure (and presumably could thus have made her application at an earlier date) and he further stated that her evidence on the complaint of race discrimination was "confusing". There was an adjournment while the tribunal considered these submissions and, when we returned, Mr McMullen stated that complaints of discrimination both in respect of sex and race would be dismissed on the grounds that the claims were out of time and the tribunal had no jurisdiction and the application for an extension of time was refused."
In response to that affirmation the Chairman wrote to the Registrar on 13th July 1996 a letter in which he said this:
"As I understand the criticism raised by the Applicant, the Industrial Tribunal gave no reason for rejecting an application (which I invited Dr Skyte to make) for the exercise of discretion to allow the claims to be heard. I was pellucidly clear that the invitation was based on s 76(5) of the Sex Discrimination Act 1975 (actually recite s 76(1) and (4)) and the same test for race discrimination. This is the just and equitable formula and not the reasonably practicable formula for unfair dismissal. Yet my notes record a submission based on the latter formula.
The submission then, and now in the Affirmation, is that the issue of limitation and jurisdiction had not been made until the Respondent's submission at half-time and should be dismissed. Although the Applicant invited us to exercise discretion on that limited ground only, we did consider all the circumstances. Having heard all of the Applicant's case and reviewed all the relevant documents, we were satisfied that it was not just or equitable to allow her discrimination claims to be pursued, and to require the Respondent to defend them. The merits of her case could not improve once the Respondent called evidence."Two questions arise for consideration:(1) are the tribunal's written reasons defective in failing to mention the application for an extension of time, and if so, what course should now be taken?(2) if adequate reasons for refusing an extension of time have been revealed, was that refusal perverse?

Defective reasons

It is quite clear that the tribunal's refusal to extend time, and give reasons for that refusal, ought to have appeared in the written reasons. Industrial Tribunal Rules of Procedure 1993, Rule 10(3).In Guest v Alpine Soft Drinks Ltd [1982] ICR 110 an Industrial Tribunal decision which failed to provide reasons for refusing a complainant compensation for injury to feelings on a successful complaint of sex discrimination was held to be a nullity, and the matter was remitted to a fresh Industrial Tribunal for consideration of the question as to whether compensation for injury to feelings ought to be awarded.However, in this case, as a result of Mummery J's direction at the preliminary hearing, we now have before us the affirmation of Dr Skyte and the Chairman's subsequent comments.It seems to us that we are today in the position reached by the Employment Appeal Tribunal in Yusuf v Aberplace Ltd [1984] ICR 850 , where an Industrial Tribunal failed to make any finding on a material issue, namely, whether the applicants had been dismissed by reason of redundancy. The Employment Appeal Tribunal remitted the case to an Industrial Tribunal requiring them to amplify their reasons in relation to the redundancy issue.The tribunal did so, but queried whether it was functus officio . In delivering the judgment of this tribunal, Nolan J said this at 853D-854D:
"The members of the industrial tribunal accordingly reconvened to consider and comply with the order of the appeal tribunal. They clearly felt, however, that the order should not have been made. At paragraph 3 of the note which they produced on 3 January 1984 they said:
"3. We are not aware that this procedure, namely requiring us to amplify our findings and our reasons upon the question of redundancy, has ever been used before. We regard ourselves as functus officio and we have noted the decision of the Court of Appeal in Union of Construction, Allied Trades and Technicians v. Brain [1981] I.C.R. 542, 551 and Varndell v. Kearney & Trecker Marwin Ltd. [1983] I.C.R. 683."
These remarks call for comment, coming as they do from a very experienced chairman of an industrial tribunal and his colleagues, and raising matters of some general importance. Without in any way wishing to chide them for raising the subject or expressing their views upon it, we must make it plain that, in our judgment, each of the three points which they made is erroneous. In the first place, the procedure of calling upon an industrial tribunal to amplify findings and reasons which are incomplete or obscure is not often used because it is not often required, but there is ample precedent for its use in decisions both of the appal tribunal and of the National Industrial Relations Court: [various cases are cited]. Secondly, by virtue of paragraph 9(2) of Schedule 1 to the Industrial Tribunals (Rules of Procedure) Regulations 1980, the industrial tribunal must give the reasons for their decision. As had been made clear by the Court of Appeal in Union of Construction, Allied Trades and Technicians v. Brain [1981] I.C.R. 542, the purpose of giving reasons is "to tell the parties in broad terms why they lose, or as the case may be, win." Unless and until the reasons are given with sufficient clarity to fulfil that purpose, there can be no question of the industrial tribunal being functus officio. Finally, the suggestion that the position may have altered since the decisions of the Court of Appeal in Union of Construction, Allied Trades and Technicians v. Brain and Varndell v. Kearney & Trecker Marwin Ltd. [1983] I.C.R. 683, can hardly be reconciled with the judgment of Eveleigh L.J. in the latter case. Eveleigh L.J., at p.685, refers to the fact that the appeal tribunal had remitted the case to another industrial tribunal because the chairman of the original industrial tribunal was no longer sitting and continues:
"It was therefore not possible to take the obvious course of remitting the case to that tribunal to make the findings of fact which, in the judgment of the appeal tribunal, should have been made in the first instance.""
In our judgment it is procedurally permissible for the Employment Appeal Tribunal to require an Industrial Tribunal to amplify its reasons. This is what the Chairman did as a result of the earlier direction.The question then arises whether the reasons given are adequate to tell the parties why they have one or lost on this issue of an extension of time. See Meek v City of Birmingham District Council [1987] IRLR 250 .In our judgment, the Chairman's letter, read with the written reasons, passes the Meek test. First it is clear that the application was dealt with on the just and equitable ground under s.76(5) of the SDA, and not the more limited test of reasonable practicability appropriate to unfair dismissal claims. Secondly, this case was unusual in that the tribunal heard the whole of the applicant's case on sex discrimination before ruling on the limitation issue. It concluded, in paragraph 42 of the reasons, that the claim was bound to fail on its merits. That is why, in all the circumstances, the applicant's application for an extension of time failed.

Perversity

It is well-established that appeals against the exercise of Industrial Tribunals discretion to extend time on the just and equitable grounds in s.76(5) of the SDA and the equivalent provision s.68(6) of the Race Relations Act 1976 is very wide. See Hutchison v Westward TV Ltd [1977] ICR 279 ; Hawkins v Ball & Barclays Bank [1996] IRLR 258 .On the particular facts of this case it was open to the tribunal to conclude, following a submission of no case to answer at the end of the applicant's evidence, that the claim of sex discrimination was doomed to failure on its merits, and in those circumstances to conclude that it would not be just and equitable to extend time. Such a finding cannot be characterised as perverse.For these reasons, this appeal must be dismissed.