MR MARSHALL MA v SHASONIC LTD [2001] UKEAT 368_99_1607

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2001] UKEAT 368_99_1607Case No Appeal No. EAT/368/99Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR MARSHALL MAAPPELLANTSHASONIC LTDRESPONDENT
Before
His Honour Judge Peter Clark Mr P A L ParkerDate 16 July 2001
[1]APPEARANCES For the Appellant MANJIT S GILL QC Instructed by: Commission for Racial Equality Elliott House 10-12 Allington Street London SW1E 5EH For the Respondent MICHAEL DUGGAN (Of Counsel) Instructed by: Messrs Shaidy Solicitors 102 Queensway LONDON W2 3RR JUDGE PETER CLARK This is an appeal by Mr Marshall Ma against so much of the decision of an Employment Tribunal sitting at London (North), now London (Central), chaired by Mr Giles Flint, promulgated with Extended Reasons on 15 January 1999, as dismissed his claim of unlawful racial discrimination brought against his former employer, the Respondent Shasonic Ltd. His further complaint of unfair dismissal was upheld. The question in the appeal is whether the Employment Tribunal provided adequate reasons for their conclusion that the complaint of racial discrimination failed for the purposes of rule 10(3) of the Employment Tribunal Rules of Procedure 1993 which provides:
"The Tribunal shall give reasons for its decision in a document signed by the Chairman."
Because the application included a complaint brought under the Race Relations Act 1976 the Employment Tribunal were required to give Extended Reasons for their decision.

(a) Background

[2]The Respondent company was, at the material time, run by 3 brothers Paresh Shah, Ramesh Shah and John Shah, each of whom were directors of the company. Its main trading activity was the retail sale of electrical goods such as TV, video and Hi Fi equipment.[3]The Appellant, who is of Chinese ethnic origin and a Muslim by religion, joined an associated company, Hi-Fi Care Ltd in 1994. In 1995 he transferred to the Respondent and worked from its premises at 42 Tottenham Court Road, London as a Mobile Sales Consultant.[4]His employment ended on 16 April 1998 and thereafter he presented his Originating Application to the Employment Tribunal complaining of unfair dismissal and racial discrimination. Attached to his application was a list of allegations of racially abusive treatment by, in particular, a work colleague Sunil Brahmbatt, culminating in his dismissal on 16 April 1998.[5]By their Notice of Appearance the Respondent denied racially discriminating against the Appellant and further denied that he had been dismissed. A further complaint of unpaid commission was also denied.[6]Prior to the Employment Tribunal hearing, held on 16 December 1998, the witnesses to be called at trial had prepared witness statements. Those statements formed the basis of their evidence in chief, together with supplemental questions, and the witnesses were cross-examined. The Appellant gave evidence on his own behalf and the Respondent called Paresh Shah, Sunil Brahmbatt, Selwyn Lloyd Buchanan, and Birju Patel. We have been provided with those witnesses' statements and the Chairman's Notes of the further oral evidence which each gave. The Tribunal Decision (1). Racial discrimination At paragraph 1 of their reasons the Employment Tribunal identify 3 separate incidents of racial discrimination particularised by the Appellant in 1996, early in 1997 and December 1997. Those alleged incidents are set out at paragraph 2 of the reasons as follows:(a) in 1996 Paresh Shah enquired of the Appellant whether he was a Muslim and then said insultingly that he did not know there were any Muslims in China.(b) in early 1997 Mr Bramhbhatt made insulting remarks about Chinese in relation to an article in the Times newspaper regarding the cruel treatment of bears by Chinese farmers.(c) Remarks were made about India replacing China as the largest nation in the world and insulting remarks made in October/November 1996 regarding the fact that the Appellant only ate lamb and chicken.[7]The Employment Tribunal added that the Appellant had, in his statement, detailed other insults and also claimed that on racial grounds commission payments had been withheld from him.[8]Having summarized the Appellant's evidence on racial discrimination in that way the Employment Tribunal expressed their conclusions, without reference to the applicable law, shortly at paragraph 4 in this way:
"We deal first with the allegation of racial discrimination as this is really separate from the questions surrounding the Applicant's dismissal. In respect of the claim of racial discrimination we found the Applicant's evidence to be vague and unconvincing. It is true that certain of the incidents were admitted by the Respondent's witnesses but our view was that the Applicant had placed a totally unjustified meaning on what had been said by the Respondents' employees at various times. Where the evidence conflicted we preferred the evidence of the witnesses called on behalf of the Respondents. We are not satisfied that the Applicant established to us that any remarks that might have been said bore a racial meaning. Consequently the Applicant's claim of racial discrimination is not made out and is dismissed." (2) Unfair dismissal The issue was whether or not the Appellant had been dismissed by the Respondent. It was the Appellant's case that on 16 April 1998 a dispute arose between him and Paresh Shah over vacuuming work. The Appellant complained that the Respondent did not have a fair system for that work, certain employees in the business section being exempted from performing that task. It culminated with Paresh Shah saying "
I don't care if it's fucking fair or not you just pick up your coat and leave the shop floor".[9]Paresh Shah's evidence was that during the exchange the Appellant accused him of being a racist. It ended with Mr Shah saying, "either do what I have asked you to do or leave the shop floor."[10]The Employment Tribunal resolved this conflict of evidence in favour of the Appellant's account. They found that Mr Shah did use words which indicated that he was dismissing the Appellant. Since no potentially fair reason for dismissal had been advanced on behalf of the Respondent they found that dismissal to be unfair, although they indicated that they were minded to make a finding of contribution to the dismissal on the part of the Appellant by his conduct. That matter was put over until a remedies hearing took place. The Appeal[11]The appeal came on for Preliminary Hearing before a division presided over by Judge Altman sitting on 18 June 1999. The case was permitted to proceed to this full hearing. In addition to a direction that the Chairman's notes of evidence be obtained, the parties, both of whom were represented by Counsel below, Mr Gill and Mr Duggan, were ordered to prepare a schedule of allegations of racially discriminatory incidents raised by the Appellant below but not referred to in the Emploment Tribunal's reasons.[12]Pursuant to that direction the Appellant lodged a schedule of 8 numbered incidents, dated 10 July 2000, not specifically referred to in the Employment Tribunal's reasons. They were: 1. The Appellant referred to almost daily abuse in his Originating Application and Witness Statement. 2. He referred to racist comments on the Chinese occupation of large parts of Indian territory in both the Originating Application and his Witness Statement. 3. He referred to racist remarks about his "small willy" in both the Originating Application and Witness Statement. 4. Similarly he referred to racist abuse by Mr Paresh Shah to the effect that if he had problems he should sort them out by himself and that he (Shah) was not his father. 5. He referred to his presence on the hoovering rota. 6. He referred to his dismissal as an act of racial discrimination in itself. 7. He referred to the racist comment that Muslims "breed like rats" in his Witness Statement. 8. He referred to his limited computer access in his Witness Statement.[13]In response, the Respondent accepted that those matters are not specifically referred to in the Employment Tribunal's reasons, but contended that they were fully explored in evidence and that the Employment Tribunal plainly had them in mind when reaching their decision.[14]Invited to comment on the above Schedules of incidents not adverted to in the reasons, a practice recently suggested by the Court of Appeal in the ordinary civil jurisdiction in Flannery v Halifax Estate Agencies Ltd [2000] 1AER 373, 379 g-h, per Henry LJ, the Chairman replied by letter dated 15 March 2001 in which he said only that all the Appellant's allegations were considered by the Employment Tribunal, but he saw no reason to say any more than was contained in their decision. He believed that the matter should be considered on the basis of the decision as promulgated. That we have done. The duty to give reasons 16. We have had the advantage of the guidance recently given by the Court of Appeal in Anya v University of Oxford [2001] IRLR 377 .[15]There, Sedley LJ, giving the judgment of the Court, reviewed the earlier cases on adequacy of reasons in the context of an unlawful racial discrimination case. From our reading of that case and others, with the assistance of Manjit Gill QC, we think that the following principles emerge.(1) The statutory questions posed in a complaint of unlawful direct racial discrimination are whether the complainant has been treated less favourably than another on racial grounds (the discrimination) and whether that discrimination is rendered unlawful, in the present case, by the Respondent dismissing the Appellant or subjecting him to any other detriment. RRA 1976; s1(1)(a) and 4(2)(c).(2) Where there is found to be a difference in treatment and a difference in race between complainant and comparator, the question as to whether that discrimination is on racial grounds is a difficult one, often depending upon what inference the Employment Tribunal feels it proper to draw, based on their findings of primary fact and the adequacy of the Respondent's explanation for the difference in treatment. Even if that explanation is found to be inadequate it does not follow that unlawful discrimination is made out. King v Great Britain China Centre [1992] ICR 516 , 528-9, per Neill LJ, approved by the House of Lords in Zafar v Glasgow City Council [1998] IRLR 36 .(3) Because the questions of law arising in discrimination cases are often "highly fact – sensitive", to borrow Lord Hope of Craighead's expression in Anyanwu v South Bank Students Union [2001] IRLR 305 , para 37 (HL), it is incumbent on the Employment Tribunal first to find the primary facts from which inferences may be drawn. Only in that way can the validity of the inference drawn by the Employment Tribunal, one way or the other, be judged on appeal. See Chapman v Simon [1994] IRLR 124 , para 43, per Peter Gibson LJ.(4) In stating their findings of fact, a bald statement that one side's evidence is preferred to the others is often unacceptable. It might appear as an attempt to try and prevent an appeal, which is on points of law only. The findings of fact should be set out in a sensible logical order, explaining why, where there is a conflict, one version is preferred to another. Tchoula v Netto (EAT 1378/96. 6 March 1998. Unreported); per Morison J cited without disapproval in Anya . To that we would add that such an exercise, apart from setting out the factual story logically and coherently and explaining the Employment Tribunal's findings of fact, represents a necessary discipline in the Employment Tribunal's reasoning process.(5) Simply to accept one witness'evidence, as was the case in Anya , is not the end of the matter. It was because the Employment Tribunal in that case, having embarked on the methodical approach to its primary fact-finding role which the Court regarded as essential (judgment paragraph 15), then abandoned the remainder of the enquiry, that the Court of Appeal reversed the Employment Appeal Tribunal decision dismissing the Applicant's appeal against the Employment Tribunal's decision that the complaint was not made out. (paragraph 19).(6) All that assumes that the relevant primary facts are in dispute. However, where admissions or concessions are made by the Respondent's witnesses those admitted facts must also, necessarily, be included in the Employment Tribunal's careful fact-finding.(7) Having found all the relevant primary facts it is then necessary for the Employment Tribunal to look at the factual picture as a whole in order to see whether any inference of unlawful discrimination ought properly to be drawn. Qureshi v Victoria University of Manchester (EAT 484/95. 21 June 1996. Unreported), per Mummery J.(8) We can see nothing inconsistent with the above approach and the earlier cases on adequacy of Employment Tribunal reasons considered in the judgment of Bingham LJ in Meek v City of Birmingham District Council [1987] IRLR 250 . That was a comparatively straightforward unfair dismissal case, as were the earlier Court of Appeal cases of Martin v Glynwed Distribution Ltd [1983] ICR 511 and Vandell v Keaney & Trecker Marwin Ltd [1983] ICR 683. It is unsurprising that in those cases the Court was anxious not to let it be thought that Employment Tribunal's reasons should be "an elaborate formalistic product of refined legal draftsmanship", as Bingham LJ put it in Meek , paragraph 8. However, the particular problems since identified in discrimination cases require, it appears from Sedley LJ judgment in Anya , a careful and patent articulation of the Employment Tribunal's fact-finding and reasoning in the promulgated reasons for decision. The parties submissions[16]Mr Gill submits that this Employment Tribunal's promulgated reasons for dismissing the racial discrimination complaint fail on all counts, applying the principles referred to above. In particular:(1) there is a complete failure to find the relevant primary facts. It is not enough to say that "where the evidence conflicted we preferred the evidence of the witnesses called on behalf of the Respondents" (reasons paragraph 4). See Tchoula .(2) there is no coherent account of the factual story. 8 incidents relied on by the Appellant are not mentioned in the reasons.(3) having found that they preferred the evidence of the Respondent's witnesses the Employment Tribunal then abandoned any further enquiry.(4) whilst acknowledging that "certain of the incidents were admitted by the Respondent's witnesses", the Employment Tribunal does not identify which incidents, apart from one mentioned in paragraph 3 of the reasons, were admitted and what such admissions amounted to in factual terms.(5) there is no attempt by the Employment Tribunal to explain what principles of law they have applied to the facts which, expressly or silently, they found.(6) most obviously, the Employment Tribunal expressly excluded from their consideration when dealing with the complaint of racial discrimination the question of the dismissal itself. That was an essential part of the timeous complaint of unlawful discrimination. Ironically, in the context of considering the unfair dismissal claim, the Employment Tribunal went on to find in the Appellant's favour, preferring his evidence to that of Paresh Shah, that he was in fact dismissed on 16 April 1998. Whether that dismissal was discrimatory as well as unfair is simply not addressed.[17]We have merely summarized the thrust of Mr Gill's submissions in this judgment for this reason. Faced with the force of the Appellant's case on appeal as to the adequacy of the Employment Tribunal's reasons, Mr Duggan found himself in the unenviable position of being unable to sustain those reasons. Having taken instructions, his clients with understandable reluctance but a high degree of realism, withdrew their resistence to the appeal, acknowledging that the case must be re heard by a fresh Employment Tribunal on the race complaint aspect only. Mr Gill, on behalf of the Appellant, agreed to that course.[18]Our Practice Direction requires, paragraph 13(4), that before allowing an appeal by consent we should ourselves be satisfied that there is good reason for making the order which both parties agree should be made. See J Sainsbury Plc v Moger [1994] ICR 800.[19]We indicated our approval to the course proposed and that we should provide full reasons for that approval. Hence this judgment, which has itself been seen and approved by my lay colleagues. Conclusion[20]The submissions made by Mr Gill on behalf of the Appellant in attacking the adequacy of the Employment Tribunal's reasons are overwhelming. For all those reasons the decision cannot stand so far as the race discrimination complaint is concerned. We shall not repeat them.[21]The outcome is wholly unsatisfactory to the parties. The Appellant has not received a properly reasoned decision, explaining why he lost on this part of his claim. The Respondent won, but must now go through the same exercise again. Both parties have been put to unnecessary expense, inconvenience and delay in having their case determined. It is now more than 3 years since dismissal; witnesses' memories will have faded; we are specifically told by Mr Duggan that Mr Brambhatt, a material witness, has now left the Respondent's employ and may be difficult to trace. However, the outcome of this appeal hearing, as both sides acknowledge, is in our view inevitable.[22]We should say something generally about Employment Tribunal decisions and reasons. Approximately 25,000 cases were determined at the Employment Tribunals in England and Wales last year. Of those, only 4 per cent were actively appealed. Only 1 in 4 appeals succeeded. That is 1 per cent of Employment Tribunal decisions.[23]In the vast majority of those successful appeals this Appeal Tribunal, looking at the Employment Tribunal's reasons, found them to be flawed in law. It is only in a handful of cases, of which this, unhappily, is a paradigm example, that the appeal is allowed not because we have detected an error of law in the reasoning, but because the reasons are so framed that we cannot tell whether the Employment Tribunal's reasoning is sustainable or not. However, on the very few occasions when this state of affairs arises, for the reasons which we have given, the parties are poorly served by the judicial system set up by Parliament to resolve individual employment disputes.[24]The appeal is allowed. The case is remitted to a fresh Employment Tribunal(a) to consider the racial discrimination complaint de novo and(b) to deal with the question of remedy, in that complaint if it succeeds (and we express no view on its merits) and for unfair dismissal in any event. For that purpose it will be necessary for the new tribunal to form a view on the evidence to be given at the re hearing as to the question of contributory conduct, if any, not determined by the first tribunal.[25]In view of the age of the case and its history we urge the Regional Chairman to arrange the new hearing as a priority.