THE LONDON BOROUGH OF HOUNSLOW v MISS PADMA BHATT [2001] UKEAT 337_99_1306

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2001] UKEAT 337_99_1306Case No Appeal No. EAT/337/99Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
THE LONDON BOROUGH OF HOUNSLOWAPPELLANTMISS PADMA BHATTRESPONDENT
Before
MISS RECORDER ELIZABETH SLADE QCMS N AMINMISS A MACKIE OBEDate 13 June 2001
[1]APPEARANCES For the Appellant MS LAUSRA COX QC And MS LOUISE BROOKS (of Counsel) Instructed By: Borough Solicitors Office London Borough of Hounslow Civic Centre Lampton Road Hounslow Middx TW3 4DN For the Respondent MR MOHINDERPAL SETHI (of Counsel) Instructed By: Blaser Mills Winter Taylors PO Box No.172 High Wycombe Bucks HP11 1PB MISS RECORDER ELIZABETH SLADE QC : This is an appeal by the London Borough of Hounslow ('the Appellant') against the Decision of an Employment Tribunal that the Appellant had victimised Miss Bhatt contrary to sections 2(1) and 4(2)(c) of the Race Relations Act 1976 ('the RRA') by dismissing her. The Tribunal also held that the Appellant had unfairly dismissed Miss Bhatt within the meaning of section 95(1)(a) and 98 of the Employment Rights Act 1996 ('the ERA'). The Employment Tribunal had before it two Originating Applications from Miss Bhatt. In the first, dated 8th August 1996, ('the first Originating Application') Miss Bhatt alleged race discrimination by the Appellant, naming Barnet Racial Equality Council as her representative. In the second, presented on 28th November 1998, ('the second Originating Application'). Miss Bhatt claimed unfair dismissal, race discrimination and victimisation under the RRA. The Employment Tribunal dismissed the complaints of race discrimination in both Originating Applications and upheld the complaints of victimisation and unfair dismissal in the second Originating Application. The Issues[2]The issues which arise on this appeal are:(1) whether the Employment Tribunal erred in law in failing to compare for the purposes of RRA section 2 the treatment of Miss Bhatt with the treatment of an actual or hypothetical comparator who had or could have requested redundancy dismissal on early retirement terms and/or who had undergone disciplinary proceedings;(2) whether the conclusion of the Employment Tribunal that dismissal was an act of victimisation was perverse and was reached without proper or any consideration of causation;(3) whether the finding of unfair dismissal was perverse. The factual background[3]The Employment Tribunal made the following material findings of fact. Miss Bhatt, who is of Indian racial origin, was employed from 1st September 1989 to 31st August 1997 in the Appellant's Mother Tongue Teaching Team as a teacher/instructor of Community languages (Gujerati) (Primary Schools). Following concerns about Miss Bhatt expressed by the head teachers of the schools in which she worked and a meeting with her on 10th July 1995, an action plan for her was drawn up. Concerns about Miss Bhatt remained, and on 29th April 1996 she was invited to attend a disciplinary hearing which took place on 7th May 1996. Mr Jenkins, an NUT representative, attended with Miss Bhatt. He had appeared for Miss Bhatt at previous meetings. The disciplinary hearing was adjourned. Miss Bhatt went on sick leave and the proposed reconvened disciplinary hearing did not take place in June. On 24th July, the last day of term, she returned to work and was asked to see the Occupational Health Physician as early as possible in September. Miss Bhatt, who had approached the Commission for Racial Equality on 29th May 1996, presented her first Originating Application on 8th August 1996, naming Barnet Racial Equality Council as her representative. In that application she alleged race discrimination by the Appellant. On 19th September the Appellant's Occupational Health Physician declared Miss Bhatt fit for work. However, the head teachers of two schools who were offered Miss Bhatt's assistance declined the offer. In a letter dated 29th October 1996, Miss Bhatt was informed that the reconvened disciplinary hearing would take place on 12th November 1996. On 4th November, 1996 Mr Jenkins wrote to Miss Bhatt in the following terms:
"Dear Padma Meeting called by Hounslow LEA for 12 November 1996 I write to confirm those aspects of our telephone conversation yesterday evening which relate to this basis on which I, on behalf of the NUT, will be representing you at the above meeting. You will recall I pointed out that it is entirely your decision whom you choose to represent you at the hearing, within the context of the Borough's disciplinary procedure. However, if you chose NUT representation the person accompanying you would be constrained from offering a defence to the substance of the allegations made against you in the Authority's letter of 20 May 1996 and could only offer you advice and support on matters of procedure. You confirmed that you still wanted me to represent you on this basis. The reason for the above, as I explained, is that the Union could not put itself in the position whereby anything we said in your defence might interfere or be inconsistent with the quite separate Industrial Tribunal application, alleging Race Discrimination, which has been lodged against the Authority on your behalf by the Barnet Race Equality Council. You will accept that this IT application has never had anything to do with the Union and it would therefore be wholly improper, not to say unfair, for it to become embroiled in legal proceedings to which it had never been party. I trust that this is entirely clear to you and I look forward to representing you in the manner described in this letter. Yours sincerely, STEVE JENKINS Secretary Hounslow Teachers' Association (NUT)"
[4]The minutes of the disciplinary meeting on 12th November 1996 record that Mr Jenkins stated that he was "… accompanying Miss Bhatt only to advise on procedural matters, and not to represent her or put her case forward. This was in light of the fact that she was taking a case against the LEA to the Industrial Tribunal, not in conjunction with the Union, and they did not wish to become involved with the substance of the complaint." The Employment Tribunal commented at paragraph 38 of its Decision:
"At no stage was the Applicant asked by Mrs Riddell or Ms Carter whether, in the light of Mr Jenkins' opening statement, she was content to go ahead or whether she wanted a different representative in which case the matter of an adjournment would have to be considered."
Mrs Riddell was Head of Education Personnel and Ms Carter was Head of the Language Service. The outcome of the disciplinary meeting was that Miss Bhatt was given a first written warning to remain on file for two years. She was also set targets to be met during the period 15th November to 14th January 1997.[5]On 10th January 1997 the head teacher of the school to which Miss Bhatt had been allocated wrote asking that she be replaced. On 14th January 1997 the review meeting took place. Mr Jenkins attended and made it clear that he was present on the same basis as on 12th November 1996. The Tribunal commented at paragraph 42 of its Decision:
"Again, neither Mrs Riddell nor Ms Carter asked the Applicant if she was happy with Mr Jenkins' statement and whether she would have preferred someone else to represent her."
The review panel considered the difficulties in finding placements in schools for Miss Bhatt and were aware that the schools to which she had been assigned did not wish to continue with her placements. The Tribunal continued as follows:
"… Mr Jenkins, without prior consultation with the Applicant, requested the Respondent to produce figures for the Applicant showing her pension entitlement should she be made redundant or choose to take early retirement. Mr Jenkins said in evidence before this Tribunal that he had raised the matter because, to be honest, he could see the writing on the wall, and that it was his considered view that the Applicant would lose her job, one way or the other, and he considered that that being the likeliest eventuality, it would be far more beneficial for her to leave by mutual consent than risk proceedings via the disciplinary process which would, in his view, result in her inevitable dismissal with no financial payment being made to her and with an unfavourable reference. He also asked for figures relating to the Applicant's entitlement to redundancy."
[6]On 20th January 1997 Mrs Riddell wrote to Miss Bhatt informing her of a further review meeting and set out, amongst other matters, the details of enhanced redundancy terms requested by Mr Jenkins. She added that:
"… the authority could not enter into any negotiation while you are pursuing an application to an Industrial Tribunal."
She recommended that Miss Bhatt take legal advice. In response to a letter from Miss Bhatt, Mrs Riddell wrote on 25th February 1997 that she was acting upon legal guidance in indicating that the authority could not enter into negotiations for early retirement whilst the Tribunal application was still in progress. On 17th March Miss Bhatt served the Race Relations Questionnaire on the Appellant.[7]A further review meeting took place on 15th April 1997. Mr Jenkins was present to advise but not to represent Miss Bhatt. The Tribunal commented in paragraph 50 of its Decision:
"Again, neither Mrs Riddell nor Ms Carter asked the Applicant as to whether she was happy to proceed on the basis of Mr Jenkins' statement."
Ms Carter informed the meeting that none of the ten schools which had been approached with a view to placing Miss Bhatt with them wanted her. She said that Miss Bhatt had had only 1.5 days school placement since the previous September, with the remaining 3.5 days at the Centre, and from the following September there would be no placements at all. It was pointed out that with impending change to the superannuation scheme, the redundancy/pension package would become less attractive in financial terms if Miss Bhatt's employment was not to be terminated on or by 31st August 1997.[8]Mrs Riddell set out the redundancy/pension package in her letter to Miss Bhatt of 17th April 1997. On 13th May 1997 Miss Bhatt wrote accepting the redundancy terms. Miss Bhatt was given notice terminating her employment on 31st August 1997 on the enhanced redundancy terms. Victimisation[9]The statutory provisions Section 2 of the RRA provides:
"(1) A person ('the discriminator') discriminates against another person ('the person victimised') in any circumstances relevant for the purposes of any provision of this Act if he treats the person victimised less favourably than in those circumstances he treats or would treat other persons, and does so by reason that the person victimised has- (a) brought proceedings against the discriminator or any other person under this Act; …"
Section 4(2) provides:
"It is unlawful for a person, in the case of a person employed by him at an establishment in Great Britain, to discriminate against that employee- … (c) by dismissing him or subjecting him to any other detriment."
[10]The approach of the Employment Tribunal In paragraph 60(2) of the Decision, the Tribunal directed itself that the relevant principles governing the approach to complaints of victimisation are contained in Aziz v Trinity Street Taxis Ltd [1988] ICR 534 . It analysed these as:
"(a) The treatment meted out by the alleged discriminator (i.e. the victimiser) to the complainant (i.e. the person victimised) has to be compared with the treatment which he has meted out or would mete out to persons who have not done the relevant protected act."
Although in paragraph 60(2)(b) of the Decision the Tribunal made reference to the statutory requirement that the comparison be made with someone "in those circumstances", the Tribunal made no finding as to what those circumstances were in this case. In paragraph 60(2)(c) the Tribunal stated that section 2(1) of the RRA contemplates a motive which is consciously connected with the Race Relations legislation. After the Decision of the Tribunal the House of Lords in Nagarajan v London Regional Transport [1999] ICR 877 overruled Aziz on this point. Both parties are in agreement that since Nagarajan the correct test is one of causation. Lord Nicholls in Nagarajan observed at page 886A:
"The key question under section 2 is the same as under section 1(1)(a): why did the complainant receive less favourable treatment?" and Lord Steyn held that tribunals should ask the question: "… Did the defendant treat the employee less favourably because of his knowledge of a protected act?"
[11]In concluding that the Appellant had victimised Miss Bhatt contrary to RRA section 2 the Tribunal found that by 12th November 1996 the Appellant's managers including Mrs Riddell had become adversely influenced against Miss Bhatt by allegations in the first Originating Application and that their subsequent actions were consciously motivated by the fact that the Applicant had committed a "protected act". The "subsequent actions" relied upon by the Tribunal were that Mrs Riddell did not satisfy herself that Miss Bhatt was happy to proceed with the hearings on 12th November 1996, 14th January and 15th April 1997 on the basis that Mr Jenkins was not there to represent her but to advise her on procedures. The Tribunal also relied upon the statement in the letter from Mrs Riddell on 20th January 1997 that, on legal advice, she was not prepared to explore the option of premature retirement with Miss Bhatt whilst the race discrimination claim was outstanding. The Tribunal concluded that the Appellant was faced with pursuing the time-consuming and protracted capability procedures or termination or 'voluntary redundancy'. The Tribunal found that the Appellant did not examine too closely the reasons advanced by the schools for rejecting Miss Bhatt and that "Redundancy was used as a pretext to get rid of [Miss Bhatt]". Relying on all these reasons the Tribunal held at paragraph 60(7):
"… that in dismissing the Applicant by reason of 'redundancy', the Respondent was consciously motivated and influenced by the protected act – the presentation of the Applicant's first IT1 – and but for that fact the Respondent would have continued down the 'capability' route which on the evidence before the Tribunal would not necessarily or automatically have resulted on her dismissal. It is the Tribunal's unanimous decision that the Respondent did victimise the Applicant contrary to sections 2(1) and 4(2)(c) of the 1976 Act. The Respondent would not have proceeded down that route and dismissed any employee who had not done a 'protected act'. The Applicant was treated less favourably because she had done a 'protected act' than employees who had not done any 'protected act'."
[12]For the purposes of RRA section 2, the Tribunal proceeded on the basis that the protected act was the presentation of the first Originating Application alleging race discrimination and the treatment was the dismissal of Miss Bhatt. The comparison made by the Tribunal was with employees of the Appellant who had "not done a 'protected act'". In concluding that the Appellant had victimised Miss Bhatt contrary to RRA section 2, the Tribunal applied the test of causation as well as that of motive.[13]The submissions Mrs Cox QC submits on behalf of the Appellant that the Tribunal failed to apply the statutory test to the facts by failing to consider whether Miss Bhatt had been treated less favourably than any comparator, actual or hypothetical, who had or could have requested a redundancy dismissal on early retirement terms and/or who had undergone disciplinary hearings. In support of that proposition she relies upon Chief Constable of West Yorkshire Police v Khan [2000] ICR 1169 at page 1177E-F and Brown v TNT Express Ltd [2001] ICR 182 at page 194A-E. Further Miss Cox attacks the conclusion of the Tribunal that the Appellant had victimised Miss Bhatt by dismissing her as perverse since the dismissal and the terms on which the contract of employment terminated were at the specific request of and negotiated by Miss Bhatt. Further, it is contended on behalf of the Appellant, that the Tribunal erred in law or acted perversely in regarding as a significant element in the victimisation allegation the absence of any enquiry from the Appellant of Miss Bhatt as to whether she was satisfied with Mr Jenkins representing her on the limited basis he had outlined and whether she would like someone else to represent her. It is contended on behalf of the Appellant that the findings of fact made by the Tribunal cannot support the conclusion the Appellant had victimised Miss Bhatt when the dismissal and the terms on which the contract of employment was terminated were at the specific request of and negotiated by Miss Bhatt.[14]Mr Sethi on behalf of Miss Bhatt contends that the Tribunal decided that the comparators for the purposes of RRA section 2 were other persons employed by the Appellant who had not done a protected act. He points out, correctly, that there is no "like for like" comparison to be made under section 2 such as is required by section 3(4) in claims of race discrimination under section 1(1). He places particular reliance on Aziz v Trinity Street Taxis Ltd [1988] ICR 534 at page 545F-G in which Slade LJ accepted the proposition that the treatment complained of is not a circumstance to be taken into account in making the comparison. In any event he contends that even if the comparison had been that contended for by the Appellant, the outcome would have been the same. As for causation, Mr Sethi contends that there is nothing perverse about the Tribunal's finding of fact on this issue. Further, he submits that the Tribunal was entitled to take the view that it did of the absence of an enquiry of Miss Bhatt as to whether she was content with her representation. Mr Sethi asserts that the Appellant cannot successfully pursue an appeal on the ground of perversity without obtaining the Chairman's notes of evidence.[15]The comparator Section 3(4) of the RRA which requires a like for like comparison to be made applies to direct discrimination under section 1(1). It does not apply to a complaint of victimisation under section 2. Section 2 requires a comparison of the treatment of the person victimised "in any circumstances relevant for the purposes of any provision" of the RRA with the actual or hypothetical treatment of other persons in those circumstances. Section 2 requires the circumstances to be taken into account. In Aziz at page 545B Slade LJ observed:
"The key to the correct relevant comparison, in our judgment, lies in correctly identifying the relevant 'circumstances' for the purpose of section 2(1) …"
In a passage at page 545F-G upon which considerable emphasis is placed by Mr Sethi on behalf of Miss Bhatt, Slade LJ observed that the circumstances do not include the treatment of which complaint is made. Nor do the relevant circumstances include the fact that the complainant has done a protected act (see Aziz at page 546B). Mr Sethi submits, correctly, that these passages in Aziz are unaffected by the judgment of the House of Lords in Nagarajan . In Khan and Brown the Court of Appeal considered the identification of the correct comparator in cases in which a request had been made which was refused. In both cases the Court of Appeal proceeded on the basis that the nature of the request, in Khan for a reference, in Brown for time off, was to be taken into account in identifying actual or hypothetical comparators ( Khan at page 1177F, Brown at page 194B). Whilst principally concerned with issues other than those under consideration in this appeal, these cases illustrate the application of the statutory requirement in RRA section 2 to take into account circumstances relevant to the treatment when selecting appropriate comparators.[16]In comparing the treatment of Miss Bhatt with other employees who had not done a protected act, the Employment Tribunal erred in law in failing to take into account the circumstances of the treatment as is required by RRA section 2. Mr Sethi submits that if the Tribunal had made the comparison contended for by the Appellant the outcome would have been unaffected. We disagree. In our judgment the relevant circumstances to be taken into account in making a comparison in Mrs Bhatt's case are those relied upon by Mrs Cox Q.C. The findings of fact made by the Tribunal do not support a conclusion that Mrs Bhatt was treated less favourably than an employee who had not made a complaint of race discrimination and who had been offered and accepted redundancy dismissal on early retirement terms in the circumstances which applied to her.[17]Causation Since the Appellant's case on causation is based on the proposition that no Employment Tribunal could have reached the conclusion that the dismissal of Mrs Bhatt was victimisation within the meaning of RRA section 2 was perverse on the facts found by it, no notes of evidence are required. The Tribunal held that but for the presentation of the first Originating Application, the Appellant would have continued down the capability route. On the findings of fact made by the Employment Tribunal, it was the enquiry made by the NUT representative, Mr Jenkins, on 14th January 1997 about pension entitlement in the event of redundancy and early retirement rather than the presentation of the first Originating Application in August 1996, which led to an estimate of benefits on early retirement for redundancy being given to Miss Bhatt which she accepted and which resulted in her dismissal on 31st August 1997.[18]The findings of fact made by the Tribunal do not support a conclusion that the presentation of the first Originating Application substantially influenced or even influenced the dismissal of Miss Bhatt by notice given some nine months later. As for the facts relied on by the Tribunal to support such a conclusion, we find that it was perverse for the Tribunal to hold that Mrs Riddell should have satisfied herself that Miss Bhatt was happy to proceed with the disciplinary hearing on 12th November 1996 with Mr Jenkins present to assist Miss Bhatt on procedural issues only but not to represent her on the substantive allegations. The Tribunal regarded this as "the significant element in relation to the victimisation allegation." (Decision paragraph 60(4). The Tribunal had noted the evidence that Mr Jenkins had made his position quite clear at the beginning of the meeting on 12th November 1996 and subsequent meetings. The Tribunal had before it the letter from Mr Jenkins to Miss Bhatt of 4th November 1996 in which she is recorded as wanting Mr Jenkins to continue to represent her on the basis explained by him. There was no evidence before the Tribunal that Miss Bhatt indicated to the Appellant that she wanted other representation. As evidence of a motive to victimise the Tribunal also relied upon the statement in the letter from Mrs Riddell dated 20th January 1997 that she was not prepared to explore the option of premature retirement while Miss Bhatt had an outstanding tribunal claim as evidencing a motive to victimise. The logic of such reliance is difficult to follow. The dismissal in this case was constituted by the departure of Miss Bhatt on premature retirement terms. The Tribunal criticise Mrs Riddell for not being prepared to discuss terms leading to what they held was an act of victimisation. In our judgment, neither the observation in the letter of 20th January 1997 nor the "short-circuiting" of the capability procedures by Miss Bhatt's premature early retirement are capable of supporting a finding that her dismissal on premature early retirement terms was an act of victimisation substantially influenced or even influenced the presentation of the first Originating Application.[19]If on this appeal the Appellant had merely succeeded in establishing that the Employment Tribunal had misdirected itself in its decision on the correct comparator for the purposes of RRA section 2 we would have remitted the case to an Employment Tribunal. The Tribunal drew the comparison required by section 2 on an impermissibly wide basis. Charles J observed in Lindsay v Alliance & Leicester plc [2000] ICR 1234 at paragraph 65:
"The closer the circumstances of the comparison (with the exception of the existence of the protected act, as defined) the more likely it is that a consideration of whether there has been less favourable treatment will answer the whole statutory question. In contrast the greater the difference in those circumstances the more likely it is that to answer the whole statutory question causation will have to be considered separately."
In this case, the Tribunal made the comparison in the widest possible terms with employees who had not carried out a protected act. In so doing the Tribunal placed greater emphasis on the question of causation than otherwise would have been the case. The key question in a complaint under section 2 is why did the complainant receive the treatment of which complaint is made. We have found the decision of the Tribunal on causation, that Miss Bhatt "was treated less favourably because she had done a 'protected act'", to be perverse. Accordingly the appeal against the finding of victimisation under section 2 and 4(2) of the RRA is allowed and a dismissal of the complaint of victimisation is substituted. Unfair dismissal[20]The statutory provision The Employment Rights Act 1996 ('ERA') section 98(1) provides:
"In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show- (a) the reason (or, if more than one, the principal reason) for the dismissal, and (b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held."
Redundancy is included in section 98(2)(c).[21]The approach of the Employment Tribunal In paragraph 61(1) of the Decision the Tribunal held:
"(1) There was no real redundancy situation within the meaning of section 139 of the 1996 Act. The Respondent has not shown that the need to teach Gujerati in the schools maintained by it had ceased or diminished or was expected to cease or diminish. It was not the need to teach Gujerati that had diminished; it was the reluctance, for whatever reason, on the part of the schools, which had such a need, to have the Applicant placed in their schools that was the determining factor."
The Tribunal was by no means convinced that dismissal would have been the inevitable outcome of a capability disciplinary procedure. It held that the Appellant had failed to establish that redundancy or some other substantial reason was the reason for dismissal. Accordingly the dismissal was held to be unfair.[22]The submissions The Appellant contends that the finding of unfair dismissal was perverse since the dismissal was at the specific request of Miss Bhatt or her Union representative. On behalf of Miss Bhatt it is contended that the Tribunal was entitled to hold that the Appellant had failed to establish the reason for dismissal.[23]The reason for dismissal There was plainly material upon which the Tribunal could conclude that the reason for dismissal was not redundancy for the reasons set out in paragraph 61(1) of the Decision. As for the allegation that it was perverse to make a finding of unfair dismissal when the dismissal was at the specific request of Miss Bhatt or her Union representative, this was not the "other substantial reason" advanced in the Appellant's Notice of Appearance to the Employment Tribunal. The reason advanced in paragraph 12 of the Grounds of Resistance as an alternative to redundancy was some other substantial reason, namely:
"the refusal of primary schools within the area to accept her as a mother tongue instructor and consequent lack of suitable work for her to do."
If the ground of perversity advanced on appeal is intended to go to the question of whether there was "some other substantial reason for the dismissal" the Tribunal cannot be criticised for not making a finding on a basis which was different from the reason for dismissal advanced in the Grounds of Resistance before it. If the perversity ground now being raised is intended to go to the question of fairness under ERA section 98(4), the Appellant fell at the first hurdle in failing to establish a reason for dismissal within ERA section 98(2) and the Tribunal rightly did not consider section 98(4). Accordingly the appeal against the finding of unfair dismissal fails and is dismissed.