MR P B BAYNTON v SAURUS GENERAL ENGINEERS LTD [1999] UKEAT 1002_98_1407

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [1999] UKEAT 1002_98_1407Case No Appeal No. EAT/1002/98Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR P B BAYNTONAPPELLANTSAURUS GENERAL ENGINEERS LTDRESPONDENT
Before
His Honour Judge Peter Clark Ms B Switzer Mrs R A VickersDate 14 July 1999
[1]APPEARANCES For the Appellant MR NICHOLAS RANDALL (of Counsel) Messrs Hopkin & Sons Solicitors Eden Court Crow Hill Drive Mansfield Nottinghamshire NG19 7AE For the Respondents MR TIM KERR (of Counsel) Instructed by: Ms L Atherton Legal Adviser Engineering Employers Federation Broadway House Tothill Street London SW1H 9NQ JUDGE PETER CLARK : This is an appeal by Mr Baynton, the applicant before the Nottingham Employment Tribunal sitting on 18th May 1998, against that tribunal's decision dismissing his complaint of unlawful disability discrimination brought against his former employer, Saurus General Engineers Ltd, the respondent. That decision, with extended reasons, was promulgated on 12th June 1998. The Facts Both parties to the appeal have referred us to certain matters of evidence, not recorded within the tribunal's reasons, without objection. We shall interpose those evidential matters in the story given by the tribunal.[2]The appellant commenced employment with the respondent in August 1996. His job involved driving a forklift truck and pressing pipe connections. There was an unresolved conflict of fact as to the proportion of his time spent on driving duties; the appellant said 80%, Mr Fenlon, the Production Director called to give evidence by the respondent, said 50%. The tribunal found that either way the non-driving part of the job was substantial.[3]On 12th February 1997 the appellant suffered a crush injury to his left thumb at work. An operation was performed on the thumb the following day. The tribunal had before them one medical report only which was dated 28th August 1997. That report referred to a loss of dexterity; fiddly tasks were difficult as was lifting, particularly his children. He could use a knife and fork and drive a car but not a motorcycle. He was assessed as suffering a 15% disability in the (non-dominant) left hand. He wore a splint on the thumb to ease the pain when required.[4]The specialist's opinion and prognosis was expressed in this way:
"It is now only six months since Mr Baynton's injury and it is possible that his thumb sensation will recover somewhat during the next year. However, on the balance of probability, I think it unlikely that he will regain useful thumb sensation in the important area, that is beyond the border of the thumb tip, which is presently numb. This numbness in itself will cause considerable permanent disability, 15% hand disability, and make it difficult for Mr Baynton to perform fiddly tasks with his left hand."
[5]On 12th September 1997 statutory sick pay for the appellant ceased. Thereafter telephone contact was maintained between the appellant and Mr Fenlon. Towards the end of 1997 there was a discussion between them during which the appellant told Mr Fenlon that he would require further operations on his thumb.[6]We are told by the respondent that it was in evidence that the appellant told Mr Fenlon that he would not be returning to work in the near future; that his absence from work was causing disruption in that one of his colleagues had been required to cover for him and a temporary employee had been recruited to cover for that colleague.[7]The tribunal found that there was a discussion between Mr Fenlon and Mr Pearce, the Group Accountant, about the appellant's situation in late 1997. That coincided with a need for redundancies to be declared in a related firm, Pressure Engineering.[8]The tribunal found that it was the necessity for those redundancies which precipitated the appellant's dismissal on 30th January 1998, thus protecting at least one of the employees in the sister company. The reason for dismissal, held the tribunal, was the appellant's inability to do his job and the fact that he had been long term sick for almost 12 months. The tribunal added that it was abundantly clear that his disability was going to last a lot longer.[9]It was the appellant's evidence, not referred to in the reasons, that the letter of dismissal came as a complete shock and surprise to him. He had received no warning of impending dismissal. At that time he was due to attend an appointment with the surgeon in charge of his case fixed for 4th February 1998 at which he intended to discuss with him the question of whether he was sufficiently fit to resume his old duties. The complaint[10]The appellant commenced these proceedings by an Originating Application, settled by his solicitor, presented on 10th February 1998. In addition to the complaint of disability discrimination he raised complaints of unfair dismissal and breach of contract with which we are not concerned in this appeal.[11]In Box 12 of the Form IT1 he set out his complaint of disability discrimination, having referred to the accident on 12th February 1997, in this way:
"… I went to see Tom Fenlon in about June 1997 and told him then that if he could give me work forklift driving and with other light manual duties I could resume work "tomorrow"
. He told me that if I could not come to work and do the whole of my old job then I should wait and come back when I was "fit and ready". In August 1997 I was advised that I should be left with a permanent disability in the ulnar border of the thumb tip which was and has remained numb. This has left me incapable of performing precise tasks with my left hand but the strength of the hand has slowly improved. At the end of January 1998 I was waiting for an appointment with the surgeon in charge of my case, Mr Chamberlain, which was due to take place on 4th February 1998 and at which I had intended to discuss with him whether I was now sufficiently fit to resume my old work. However, on 30th January 1998 I received a letter from the Respondents (dated the previous day) by which they terminated my employment on the grounds of "your long term sickness". This letter came as a complete surprise and shock to me. The Respondents had made no attempt to discuss the matter with me beforehand. …"[12]The claim was resisted. In answer to the claim of disability discrimination the respondent contend in its Notice of Appearance first that the appellant was not disabled or if he was they denied that he had been less favourably treated, for a reason which related to his disability, than they would have treated a person who did not have the disability in question. In the further alternative they relied on the defence of justification on the grounds that the respondent needed an employee who was both capable of doing the job for which the appellant was employed and who did not take off significant periods of time for sickness. The tribunal's reasoning[13]Self-direction in law The tribunal set out the provisions of ss. 5(1)(a) and (b) and 5(3) of the Disability Discrimination Act 1995 ["the 1995 Act"]. They referred to the duty imposed on an employer to make adjustments under s. 6. They dealt with the definition of disability under s. 1 and Schedule 1. They referred to the Code of Practice and guidance to be taken into account in determining questions relating to the definition of "disability", without referring to specific provisions in the Code and then gave this self-direction at paragraph 3(viii) of their reasons:
"We remind ourselves that the onus of proof is on the Applicant to show that he is disabled within the meaning of the Act and that he was discriminated against by reasons of that disability. Discrimination arises if the Applicant is treated less favourably than others to whom that reason does not or would not apply. The question arises as to who is the appropriate comparator. We were referred to the case of Clark v Novacold the decision of an Industrial Tribunal (1801661/97). Whilst acknowledging that such a decision is not of binding authority on this Tribunal in the instant case, the decision that the appropriate comparator is not someone capable of working normally but someone who is off long term sick but not disabled within the meaning of the Act is in our view the correct approach. That is the basis upon which we approach this case. If the Applicant satisfies us on the matter set out in S.5(1)(a) it is for the Respondent to satisfy us that the treatment was justified under S5(1)(b) and/or that S.6 adjustments cannot be made."
[14]Material conclusions The basis of the tribunal's decision appears to be as follows:(1) The appellant was disabled within the meaning of the Act. That finding is not challenged by the respondent.(2) There was a causal connection between the disability and the dismissal.(3) The appellant failed to show less favourable treatment under s. 5(1)(a) when compared with the long-term absentee who was not disabled within the meaning of the Act. On that ground the disability claim failed.(4) Alternatively, if they were wrong in finding that the appellant had failed to establish discrimination under s. 5(1)(a) they found that the treatment was justified. The appellant's dismissal came about because he could not do his job. They reminded themselves of the duty under s. 6 to make adjustments by, for example, allocating duties to others, for example, transferring the appellant to fill an existing vacancy. On that aspect the respondent's unchallenged evidence was that that was simply not possible. There was no suitable alternative work. Mr Fenlon would have given the appellant a trial if he had asked for it but the appellant did not do so. Mr Fenlon was confident the appellant could not drive the forklift truck, particularly if he was wearing a splint. Applying s. 5(3), the tribunal was satisfied that the reason for the less favourable treatment under s. 5(1)(a), if it were made out, was material to the circumstances of the case and substantial. There were no adjustments which could be made. On this alternative ground the claim also failed. The 1995 Act[15]For present purposes the scheme of the Act works this way:(1) It is for the applicant to show that he has a disability with the meaning of s. 1. The appellant has passed that hurdle. We need not say any more about it.(2) Can the applicant show that he has received less favourable treatment under s. 5(1)(a)? (S. 5(1) discrimination).(3) If so, can the employer show that the treatment in question is justified? For this purpose the treatment is justified if but only if the reason for it is both material to the circumstances of the particular case and substantial (s. 5(3)), subject to the provisions of s. 5(5), to which we shall return. (S. 5(1) justification).(4) Further or alternatively s. 5(2) creates a separate cause of action to that under s. 5(1). An employer discriminates against a disabled person if he fails to comply with the s. 6 duty imposed on him in relation to that person. S. 6 imposes a duty on the employer to make reasonable adjustments to prevent disadvantage to that person in the circumstances there set out. The duty is again subject to the defence of justification. (S. 5(2)(a) and (4)).(5) S. 5(5) provides: "If, in a case falling within subsection (1), the employer is under a section 6 duty in relation to the disabled person but fails without justification to comply with that duty, his treatment of that person cannot be justified under subsection (3) unless it would have been justified even if he had complied with the section 6 duty."(6) Finally, discrimination against a disabled employee under s 5(1) or 5(2) which cannot be justified is rendered unlawful by s. 4(2). In particular, in dismissing the employee (s. 4(2)(d)). The Code[16]S. 53 of the Act provides for the Secretary of State to issue codes of practice containing practical guidance with a view to eliminating discrimination against disabled employees. Employment Tribunals are required to take into account any provision of a code which appears to be relevant to any question requiring determination in any proceedings under the 1995 Act.[17]The relevant Code of Practice was issued on 2nd December 1996 ["the Code"].[18]We have been referred to the following provisions of the Code: Paragraph3.1 observes that many way of avoiding discrimination will cost little or nothing. Paragraph3.2 advises employers that it will probably be helpful to talk to the disabled person about what the real effects of the disability might be or what might help. Paragraph 4.6 gives guidance on what will and what will not be justified treatment. It refers to the need for the reason for less favourable treatment under s. 5(1)(a) to be both material to the circumstances of the case and substantial (s. 5(3)). That means that the reason has to relate to the individual circumstances in question and not just be trivial or minor. Illustrations of fact-situations which will and will not be justified are there set out . Paragraph 6.21 provides:
"Dismissal – including compulsory early retirement – of a disabled person for a reason relating to the disability would need to be justified and the reason for it would have to be one which could not be removed by any reasonable adjustment."
Then the following, among others, illustration is given:
"It would be justifiable to terminate the employment of an employee whose disability makes it impossible for him any longer to perform the main functions of his job, if an adjustment such a move to a vacant post elsewhere in the business is not practicable or otherwise not reasonable for the employer to have to make."
Interpretation of the Act[19]S. 5(1) discrimination Less favourable treatment This tribunal directed itself in accordance with the approach of the Hull Employment Tribunal in Clark v Novacold as to the question of less favourable treatment, namely by comparing the treatment of A (dismissal) with an employee who is not disabled but is off work long term sick. It took the view that such a comparator would also be dismissed. There was no less favourable treatment of the appellant. The Employment Tribunal's approach to less favourable treatment in Novacold was upheld by the EAT [1998] IRLR 420 . However, in the Court of Appeal [1999] IRLR 318 that approach was disapproved, the Court holding that it was not correct, under the 1995 Act, to make a comparison with a person off work for the same length of time but not suffering from a disability. That comparison, appropriate by analogy under the sex and race discrimination legislation, did not arise under the different wording of the 1995 Act. It is enough to identify others to whom the treatment (dismissal) was not applied. On the facts of that case Mr Clark was less favourably treated under s. 5(1)(a) Justification The Employment Tribunal in Novacold made an alternative finding that had the employee been subjected to less favourable treatment by the employer it could not be justified under s. 5(3) on the grounds that they could have continued his employment and not paid him sick pay. It would have been of no economic loss to them to continue the employment under those circumstances. The Court of Appeal allowed Novacold's cross-appeal against the Employment Tribunal's finding on justification. Mummery LJ, giving the leading judgment of the Court, observed that the Employment Tribunal appeared to have overlooked paragraph 6.21 of the Code and concentrated on the illustrations in paragraph 4.6 so as to exclude other findings which they made and instead to focus on their finding that in continuing Mr Clark's employment there would have been no organisational or economic consequences at all in terms of wages or other matters. That constituted an error of law leading to the Court remitting the question of justification to the same Employment Tribunal for rehearing.[20]S. 5(2) discrimination For reasons which will appear later in this judgment it is unnecessary for present purposes to dwell on the alternative cause of action under s. 5(2), that is the employer's failure to make reasonable adjustments without justification. We make only one observation. The suggestion contained in the EAT decision in Morse v Wiltshire County Council [1998] IRLR 352 that the requirements to make adjustments under s. 6(2) and (3) apply to a "dismissal situation" is erroneous. The duties under s. 6 apply only to failures pre-dismissal. Novacold paragraph 77. The Appeal[21]In this appeal Mr Randall on behalf of the appellant challenges the findings of the Employment Tribunal under two heads. First, the finding that the appellant was not less favourably treated under s. 5(1)(a). Secondly, as to the finding that any less favourable treatment under s. 5(1)(a) was justified by the respondent.[22]Less favourable treatment Mr Kerr, on behalf of the respondent, accepts that in the light of the Court of Appeal decision in Novacold this Employment Tribunal fell into error in comparing the appellant with a long term sick employee who was not disabled. He concedes, we think correctly, that here the appellant was less favourably treated than others to whom the reason, disability, did not apply. Further, he accepts that the less favourable treatment consisted of the appellant's dismissal on 30th January 1998. Accordingly the focus of the appeal has rested on the tribunal's alternative finding that the respondent succeeded in showing that such treatment was justified.[23]Justification Mr Randall attacks the tribunal's findings on justification on two separate grounds, which we shall call the misdirection ground and the perversity ground. The misdirection ground He first submits that the tribunal misdirected themselves in dealing with justification, by confusing the question of justification in a s. 5(1) claim and the duty to make reasonable adjustments under s. 6 relevant to a s. 5(2) claim. He refers particularly to the following findings by the tribunal; first, that where less favourable treatment is made out under s. 5(1)(a) it is for the respondent to show that the treatment was justified under s. 5(1)(b) and/or that s. 6 adjustments cannot be made; secondly, having found, in paragraph 6 of their reasons, that on the facts the treatment was justified, the appellant's dismissal came about because he could not do the job, the tribunal then went on to find that on the respondent's unchallenged evidence there was no failure to make adjustments under s. 6. Thirdly, in paragraph 7 of the reasons, having found that the respondent passed the s. 5(3) test, the tribunal add:
"There were no adjustments which could be made."
He submits that this was a s. 5(1) claim only; not a claim under s. 5(2). In these circumstances there was no need for the tribunal to consider the question of reasonable adjustments under s. 6, relevant to a s. 5(2) claim only. That the tribunal did so indicates that they fell into the error of considering that an employer is able to justify less favourable treatment under s. 5(1)(a) simply by showing that there was no failure under s. 6. That cannot be correct, particularly where the s. 5(1)(a) treatment in this case, dismissal, has no relevance to the s. 6 duties ( per Novacold paragraph 77).[24]We do not accept that submission. First, because it seems to us that the particulars of complaint contained in Box 12 of the Form IT1 foreshadow a potential claim under s. 5(2) as well as under s. 5(1). The appellant there pleads that in June 1997 he told Mr Fenlon that if he could be given work forklift driving with other light manual duties he could resume work "tomorrow". That, it seems to us, raises a s. 5(2) pre-dismissal claim. To what extent, if at all, that claim was pursued before the Employment Tribunal is unclear. However, what is clear is that the respondent led evidence to negate a s. 5(2) claim based on the proposition that the respondent ought to have provided alternative suitable work for the appellant. In these circumstances the tribunal was entitled to make a finding that the respondent was not in breach of any s. 6 duty.[25]Secondly, we are not satisfied that the construction of the tribunal's reasons contended for by Mr Randall is correct. We accept Mr Kerr's construction, namely that the tribunal found that the respondent had justified the less favourable treatment under s. 5(1)(b), as defined by s. 5(3), which is in turn subject to s. 5(5).[26]Thirdly, we think that Mr Randall's first submission overlooks s. 5(5) of the Act, as explained in paragraph 6.21 of the Code. The statutory sequence for establishing justification in a s. 5(1)(a) claim is as follows:(1) The disabled appellant shows less favourable treatment, dismissal, under ss. 1(1)(a) and 4(2)(d).(2) The respondent shows that that treatment, the dismissal, is justified if: (i) the reason for the dismissal is both material to the circumstances of the particular case and substantial (s. 5(3)), unless (ii) the employer is under a s. 6 duty in relation to the appellant but fails without justification to comply with that duty, subject to the treatment being justified even if he had complied with the s. 6 duty. Thus, far from the question of a s. 6 duty being irrelevant to justification under s. 5(1)(b), it will be necessary for the respondent to show, for the purpose of establishing the requirements of s. 5(3), that the reason for dismissal was material to the circumstances of the case and substantial and that he has not, without justification failed to comply with any duty under s. 6. For these reasons we reject the first misdirection argument put forward by Mr Randall.[27]Next, Mr Randall submits that in considering the question of justification the Employment Tribunal failed to consider the appellant's central argument, namely that he was dismissed without prior warning in circumstances where he was to see his surgeon on 4th February 1998 at which meeting he intended to discuss the question whether he was sufficiently fit to resume his old job with the respondent. A failure to consider whether the respondent was justified in dismissing in these circumstances was a clear error of law. He relied on the obiter finding of the EAT in Kenny v Hampshire Constabulary [1999] IRLR 76 , paragraph 47.[28]Mr Kerr submits that this tribunal did not fall into the error found by the Court of Appeal in relation to the justification finding in Novacold . Here, although not specifically mentioned, it is clear that the tribunal had in mind the guidance contained in paragraph 6.21 of the Code; the tribunal found that the respondent had justified the dismissal of an employee whose disability made it impossible for him to perform the main functions of his job. In the tribunal's words:
"The Applicant's dismissal came about because he could not do the job."
That was a permissible finding. Further, we accept Mr Kerr's observation that the finding by the EAT in Kenny at paragraph 47 of the President's judgment in that case was not necessary to the result, and was one with which the President reluctantly concurred with his lay colleagues.[29]It is this point which concerns us in this case. We sought assistance from counsel as to the proper approach to be taken to the question of justification under the 1995 Act.[30]Just as the Employment Tribunal and EAT in Novacold fell into error in adopting the comparator approach to the question of less favourable treatment in s. 5(1)(a) of the Act, by importing a concept from the differently worded provisions of the sex and race discrimination legislation, so we must be careful to observe the difference in wording between the concept of justification under the 1995 Act and the race and sex discrimination Acts.[31]Under the 1995 Act the defence of justification is available to a claim of direct disability discrimination under s. 5(1)(a). It is not available as a defence to claims of direct sex and race discrimination.[32]The defence is available to claims of indirect sex and race discrimination. The provisions are effectively the same in both Acts.[33]Thus, s. 1(1)(b)(ii) of the Sex Discrimination Act 1975 provides that where an applicant shows that a requirement or condition applied to her by the employer has a disproportionate impact on women; that she cannot comply with it and that it is to her detriment, it is for the employer to show that it is justifiable irrespective of the applicant's sex. There is no further statutory definition of justification (cf. S. 5(3) of the 1995 Act).[34]It is now accepted that the word "justifiable" in s. 1 of the sex and race discrimination Acts requires an objective balance between the discriminatory effect of the condition and the reasonable needs of the party who applies the condition. Per Balcombe LJ Hampson v Department of Education and Science [1989] ICR 179 .[35]S. 5(3) of the 1995 Act provides:
"Subject to subsection (5), for the purposes of subsection (1) treatment is justified if, but only if, the reason for it is both material to the circumstances of the particular case and substantial."
[36]Mr Randall submits that in applying the test of justification under s. 5(3) the Employment Tribunal must carry out a balancing exercise between the interests of the disabled employee and the interests of the employer. It is material to consider the applicant's circumstances as well as those of the employer. Mr Kerr does not accept that approach. He submits that the focus is on the adequacy of the reason for the discriminatory treatment, here dismissal, put forward by the employer.[37]In preferring the approach espoused by Mr Randall we have taken into account, not as an analogy, but by way of comparison, the approach taken to the question of dismissal for some other substantial reason in the law of unfair dismissal. There, although it is for the employer to demonstrate a sound good business reason for dismissal, the interests of the employee cannot be ignored.[38]We accept that the statutory test laid down in s. 5(3) of the 1995 Act is unique. The reason for the discriminatory treatment must be material to the circumstances of the case and substantial. "Material to the circumstances of the case" must, in our judgment, include the circumstances of both the employer and employee.[39]In Novacold the Employment Tribunal fell into error, so the Court of Appeal held, in focusing, too narrowly, on their finding that the employer could continue the applicant's employment without economic consequences. They did not take into account all the relevant circumstances.[40]In the present case we have concluded that the Employment Tribunal's approach precisely mirrored the Employment Tribunal's error in Novacold . Whereas in that case the tribunal concentrated only on one aspect of the facts which favoured the employee, here, the tribunal has focussed only on those facts which favour the employer.[41]In reaching a conclusion on the issue of justification this tribunal was bound to consider, before finding that the appellant was dismissed because he could not do his job, whether the respondent had, at the date of dismissal (the date of the discriminatory act for the purposes of s. 5(1)(a)) found out from the appellant what the real effects of the disability might be. Code, paragraph 3.2 . There was no apparent consideration by the tribunal of the effect of the failure by the respondent to warn the appellant that he was at risk of dismissal, or to find out the up-to-date medical position before dismissing him. Had those steps been taken the respondent would have discovered that the appellant was due to see his consultant on 4th February 1998. Bearing in mind that the appellant was not then in receipt of sick pay, how does the tribunal balance the desirability of awaiting the outcome of that consultation with the present need to save an employee from redundancy in the sister company? There is no indication in the tribunal's reasons that they have carried out this consideration of all the circumstances of the case in judging whether the respondent has justified the discriminatory treatment, that is, the dismissal.[42]In these circumstances, like the Court of Appeal in Novacold , we find that this Employment Tribunal has fallen into error.[43]The Perversity ground We can take this ground of appeal quite shortly. We do not accept Mr Randall's submission that the tribunal's finding of justification under s. 5(1)(b) was perverse on the facts simply because the respondent did not wait for the consultation held on 4th February 1998. Communication is a two-way street. Whilst it appears that the respondent made no attempt to find out the up-to-date medical position immediately before dismissing the appellant without warning, the appellant did not advise his employer of the forthcoming appointment. Further, the findings as to the need for redundancies in the sister company, and the effect that had on the position of the appellant were relevant factors in the equation. So too was the understanding Mr Fenlon had as to the prospects of a return to work by the appellant as a result of their telephone conversation in late 1997.[44]In these circumstances it is quite impossible for us to say that no reasonable tribunal properly directing itself could come to the conclusion that the respondent had made out the justification defence on the fact of this case.[45]However, that is only one part of the perversity test. We remind ourselves of the restatement of the Wednesbury test by Arnold J in Bastick v James Lane [1979] ICR 778 , 782, approved by the Court of Appeal (per Stephenson LJ) in Carter v Credit Change Ltd [1979] ICR 908 , 918, which we paraphrase in this way; has the tribunal taken into account an irrelevant factor or failed to take into account a relevant factor or otherwise gone beyond what any reasonable tribunal would have decided so that the decision may be rejected as perverse?[46]On our findings on the misdirection ground of appeal we are satisfied that this tribunal failed to take into account relevant factors, namely the absence of consultation or warning prior to dismissal and the medical consultation arranged for 4th February 1998. On this limited basis we shall allow the appeal. Conclusion[47]We shall remit the case to the same Employment Tribunal with a direction that there was less favourable treatment of the appellant under s. 5(1)(a) on the grounds of his disability, that treatment being his dismissal. The Employment Tribunal is required to reconsider the question of justification under s. 5(1)(b) in accordance with the terms of this judgment. That is the sole question on remission. It will be for the Employment Tribunal to give a direction as to whether that question is to be decided on the basis of submissions by the parties only, or whether further evidence is required.[48]Finally, there will be an order for Legal Aid taxation of the appellant's costs in the appeal.