ICE HOCKEY SUPER LEAGUE LIMITED v MR S HENRY [2001] UKEAT 1167_99_0203

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2001] UKEAT 1167_99_0203Case No Appeal No. EAT/1167/99Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
ICE HOCKEY SUPER LEAGUE LIMITEDAPPELLANTMR S HENRYRESPONDENT
Before
His Honour Judge Peter Clark Mrs T A Marsland Mrs J M MatthiasDate 2 March 2001
[1]APPEARANCES For the Appellant MR THOMAS KIBLING (of Counsel) Messrs Eversheds Solicitors Fitzalan House Fitzalan Road Cardiff CF24 0EE For the Respondent MR DANIEL OUDKERK (of Counsel) Messrs Russell Jones & Walkes Solicitors Swinton House 324 Gray's Inn Road London WC1X 8DH HIS HONOUR JUDGE PETER CLARK : This is an appeal by Ice Hockey Super League Limited, the second Respondent to proceedings brought by the Applicant, Mr Shane Henry, before the Sheffield Employment Tribunal, against that Tribunal's decision by a majority, the Chairman: Mr O T B David dissenting, upholding the Applicant's complaint of unlawful direct racial discrimination. A further complaint of indirect racial discrimination was dismissed. There is no cross-appeal against that finding. The Tribunal's reserved decision, following a two-day hearing and a further day in chambers, was promulgated with Extended Reasons on 28 July 1999.[2]The Facts The Appellant (The Super League) is an association of what was, at the relevant time, eight ice hockey clubs playing in England. Amongst those clubs were the Solihull Club and the Sheffield Steelers (The Steelers), first Respondent to the Applicant's claim. The Steelers went into liquidation in April 1999 and took no part in the Tribunal hearing. The Super League controlled the terms and conditions under which professional ice hockey players worked for the clubs. It provided a standard form of employment contract used by all clubs. The following terms are material: 1.4 Term of Employment The player is employed from the commencement of employment for a fixed period of 32 weeks expiring on 3 April 1999. Should the playing season extend beyond this date, then the contract shall be extended until the day following the last competitive match. 12.1 Provided that the player's employment has commenced with the employer on or prior to 1 November, the first 4 weeks of the players employment with the employer will be treated as a probationary period during which or at the end of which, the employment may be terminated by the employer by giving one week's notice in writing. Most professional ice hockey players come from countries where the sport is more popular than in the United Kingdom. In 1998, the Super League had 187 players registered to play in that season. 54 were from the European Union (EU), of whom 30 were registered as British, the remainder being from Austria, France, Finland, Germany, Ireland and Sweden. 85 of the total number of players were Commonwealth citizens with leave to work in the United Kingdom on the basis of their ancestry and all of those came from Canada. A balance of 48 players required work permits and originated from the USA, Canada and Lithuania. Accordingly, of the registered players, 74% (Group A) did not require work permits, the remaining 24% (Group B) did.[3]The Department for Education and Employment, through its Overseas Labour Service (OLS) control the employment of professional sportsmen who do not, by virtue of nationality or place of origin have the right to work in the United Kingdom. The OLS operated a system of granting work permits to overseas players not so entitled to work here, based on the principle that the person concerned was shown to be "internationally established at the highest level in their sport who can make a significant contribution to sport in this country". To that end the OLS apply certain criteria, including proof of level of skill and achievement. In assessing the level of skill the OLS will not accept an application where the player's contact refers to a "trial" or "probationary period". Such a term calls into question the player's ability. As a result, the Super League advised clubs that if they are contracting with players who require a work permit, they should delete Clause 12.1 from the standard form of contract.[4]The Applicant was born in Canada and is a Canadian citizen. He did not give oral evidence before the Tribunal, being based in the USA at the time of the hearing. However, the Tribunal took into account evidence given in the form of a written statement and documentary exhibits. His paternal grandfather was born in Northern Ireland and his mother in Finland. He claimed that he was of "EU National origin". It seems that, having played professional ice hockey abroad, he was first recruited by the Solihull Club to play in the English League in the 1996/1997 season. He did not deal with that period of his career in his statement, but the Tribunal inferred that on that occasion he was unable to provide proof of his ancestry and a work permit was deemed necessary.[5]In June 1998, he was offered a contract to play for the Steelers by their general manager, David Simms. At that stage, he had a UK ancestry stamp which allowed him to play professionally in England without a work permit. That contract contained Clause 12.1. The Applicant accepted the offer and signed the standard form contract. He was flown over from Canada to the UK, but following his arrival his physical fitness gave rise for concern. Before the expiry of the 4-week probationary period, he was given notice of termination. The Tribunal accepted that the reason for termination was a reason related to his fitness to play ice hockey.[6]The Complaint The Applicant commenced these proceedings by an originating application presented on 8 December 1998. The application was subsequently amended and then re-amended. The thrust of his case on direct racial discrimination was that he, as a person with national origins in the EU/EEA (European Economic Area) had been treated less favourably on racial grounds than persons whose national origins lay outside EU/EEA, by the inclusion of a probationary clause in his contract. In short, he compared himself as a member of Group A, with the treatment afforded to those in Group B.[7]The Tribunal Decision The Tribunal was divided. The majority lay members accepted the case advanced on behalf of the Applicant. They expressed their reasoning thus, at paragraph 18 of the Reasons. "The majority (the Chairman dissenting) accept Mr Oudkerk's argument that any decision based on the need for a work permit as distinct from the fact of a work permit having been issued must be based on a racial consideration. They conclude that by providing the Applicant with an unamended contract he was treated less favourably on racial grounds contrary to Section 1(1)(a) of the Race Relations Act 1976." The Chairman took a different view. He said at paragraph 19, "he thinks that the fact that in 1997 the Applicant was effectively in Group B whereas in 1998 he was in Group A, indicates that the decision could not have been on racial grounds. The Applicant's racial origins remain the same and the decision to place them in one group or the other depended on whether or not he had proof of those origins. Applying to the circumstances the test suggested by Lord Goff in James v Eastleigh Borough Council [1990] IRLR 288 and approved by the House of Lords (sic) in respect of race discrimination in Wakeham v Quicke [1999] IRLR 424 namely:
"Would the complaint have received the same treatment from the defendant but for his racial origins? The answer in the minorities view must be yes. It is common ground between Counsel that if the answer was yes then the complaint was made out."
We think that the Chairman may have encountered difficulties with the number of negatives involved in this branch of the law. The majority view prevailed and the complaint of direct discrimination was upheld.[8]The Law The scheme of the Race Relations Act 1976, for present purposes, may be approached in this way: 1) Has the Applicant shown: a) Less favourable treatment b) On racial grounds. Those two questions, raised by Section 1(1)(a), were identified by Lord Browne-Wilkinson in Zafar v Glasgow City Council [1998] IRLR 36 . 2) The question of less favourable treatment may require consideration of two further questions: a) What are the Applicant's national or racial origins? See Section 3(1) b) Who is the proper comparator? It must be an actual or hypothetical person of a different racial group and the comparison must be such that the relevant circumstances in one case are the same, or not materially different, in the other. Section 3(4). 3) Once less favourable treatment and a difference in race, when the proper comparison is made, has been established, it will be for the Respondent to give an explanation for the difference in treatment. If that explanation is regarded by the Tribunal as inadequate or unsatisfactory, the Tribunal may, but is not bound to, infer that the less favourable treatment is on racial grounds. Zafar . 4) Put simply, but for his race would the Applicant have been treated in the same way as his comparator? If yes, unlawful discrimination is made out. Motive is irrelevant. James v Eastleigh Borough Council [1990] ICR 554 .[9]The Appeal At a preliminary hearing in this case on 22 June 2000, three issues were identified for this full appeal hearing. They were: 1) To what racial group did the Respondent, Shane Henry belong? 2) Who is the proper comparator for the purposes of his complaint of unlawful race discrimination? 3) Has the Respondent established as a matter of law that he was less favourably treated than the appropriate comparator on grounds of his race? In advancing the appeal before us, Mr Kibling identified as his principal argument the second issue, that is the comparator point. With the consent of Counsel we took that as a discrete point and heard argument on it. He submits that on a fair reading of the Tribunal's reasons, they have failed to consider the issue, raised below, as to who was the proper comparator under Section 3(4), or if they did consider it they reached a perverse conclusion in accepting implicitly that there was no material difference between the circumstances of those in Group A and Group B. The material difference, he contends, is that those in Group A did not require a work permit, those in Group B did.[10]We have looked carefully at the structure of the Tribunal's reasons. It is clear to us that no express reasoning on the Section 3(4) comparison appears in the reasons, but that all 3 members of the Tribunal accepted the comparison advanced on behalf of the Applicant. In answer to the point made by Mr Oudkerk that the work permit factor was itself a racial consideration, as the majority of the Tribunal he submits, expressly found at paragraph 18 of the reasons, and therefore not a material difference for purposes of Section 3(4), Mr Kibling has referred us to the Court of Appeal's decision in Dhatt v MacDonalds Hamburgers Limited [1991] ICR 238, an authority not referred to the Tribunal below. That was a case concerned with the right to work in the United Kingdom. In dismissing the Applicant's appeal against a finding by the Industrial Tribunal that he, a person of Indian nationality entitled to live and work in the UK without the need for a work permit, could not compare himself with EEC nationals, who similarly had no restrictions.

Lord Justice Staughton put the matter in this way, at 252H-235A:

"Accordingly I hold that the need to have either a work permit or indefinite leave to enter is a relevant circumstance in this case. The proper comparison under Section 3(4) is between the Applicant and those who although not Indian citizens are also neither British nor EEC citizens. The relevant circumstances are then the same. All require either a work permit or indefinite leave to enter. All are treated alike in the employer's questionnaire. It is true that this approach treats nationality as a relevant circumstance and that nationality is itself discriminatory in racial terms but it is a discrimination which has been sanctioned if not actually enjoined on employers by statute. I do not believe that the principal which I have quoted from speech of Lord Bridge of Harwich was intended to extend to such a case. I would dismiss this appeal."
[11]Thus, just as there was found to be a material difference precluding a comparison between British and Japanese employees in Wakeham v Quicke Corporation [1999] IRLR 424 (Court of Appeal), namely that the Japanese employees had been seconded to work in the UK, explaining the difference in remuneration between the two groups, so the material difference between Group A and Group B players in this case was that the first did not require a work permit, the second did. It is not a proper like for like comparison for the purposes of Section 3(4). The result is, submits Mr Kibling, that the claim fails. There was no difference in treatment within Group A; the comparison within Group B is impermissible, accordingly there has been no less favourable treatment of this Applicant on racial grounds.[12]In supporting the Tribunal decision, Mr Oudkerk submits that the majority, at least, in paragraph 18, found as fact that the need for a work permit was a racial consideration and therefore did not fall to be regarded as a material difference under Section 3(4). The Tribunal, or at least the majority, accepted his submission below (reasons paragraph 17) that work permits are "intrinsically intertwined" with considerations of national origin. He reminds us that it is not for this Tribunal to interfere with findings of fact.[13]We accept the submission advanced by Mr Kibling. Whilst, as Lord Justice Staughton acknowledged in the passage cited above from Dhatt , treating the requirement for a work permit or not as a relevant circumstances for the purpose of Section 3(4) involves treating nationality as a relevant circumstances and that nationality is discriminatory in racial terms, that is a form of discrimination sanctioned by statute. On the authority of that case, we hold that the Tribunal erred in failing to recognise the work permit requirement distinction between Group A and Group B players was a material difference precluding the comparison which the Tribunal made in this case.[14]In these circumstances it must follows, in our judgment, that the Applicant was not treated less favourably on racial grounds. He was treated in the same way as all others, of whatever racial origins, in the true pool for comparison, the Group A players. We have heard submissions from Counsel as to the course we should take, having allowed this appeal. We think that the position is clear and we think this is a proper case in which to substitute a declaration that this complaint fails and is dismissed and we so order.