(1) LEEDS RHINOS RUGBY CLUB (2) MR D LANCE (3) MR D HOWES (4) MR G HETHERINGTON v MR P STERLING [2002] UKEAT 267_01_0909

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2002] UKEAT 267_01_0909Case No Appeal No. EAT/267/01Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
(1) LEEDS RHINOS RUGBY CLUB (2) MR D LANCE (3) MR D HOWES (4) MR G HETHERINGTONAPPELLANTSMR P STERLINGRESPONDENT
Before
His Honour Judge J R ReidDate 9 September 2002
[4]APPEARANCES For the Appellants MR S DEVONSHIRE (of Counsel) Instructed By: Cobbetts Trafalgar House 29 Park Place Leeds W. Yorkshire LS1 2SP For the Respondent MR A J HOWARD (of Counsel) Instructed By: Commission for Racial Equality Maybrook House 5th Floor 40 Blackfriars Street Manchester M3 2EG JUDGE J R REID QC: Preliminary1.1 Leeds Rhinos Rugby Club appeals against two aspects of a remedies decision made by an Employment Tribunal held at Leeds on 15 December 2001. The decision was promulgated on 8 January 2002. The decision followed a decision on liability promulgated on 30 October 2001 by which the Tribunal, whilst dismissing most of the complaints by Mr Sterling, held that the Club and Mr Lance had committed an act of discrimination against the applicant contrary to Part II of the Race Relations Act 1976 by excluding Mr Sterling from the Club's first team squad between 9 February and 2 March 2000 and that the Club, Mr Howes and Mr Hetherington victimised Mr Sterling by failing properly to investigate his complaint of racial discrimination. There is no appeal against that decision.1.2 The aspects of the remedies decision against which appeal is made are(1) the making of a recommendation that "on or before 22 December 2000 [the Club] should offer to [Mr Sterling] a contract on the same terms as that dated 17th November 1999" (the recommendation appeal) and(2) an award of £10,000 compensation for injury to his feelings (the feelings compensation appeal).1.3 The Employment Tribunal made a separate award for loss of potential earnings (£5250) against which there is no appeal and also made recommendations about public and personal apologies. There is no appeal against those recommendations. The facts2.1 Mr Sterling was continuously employed by the Club to play rugby league football from 11 November 1996 to 30 November 2000, under a series of three "Rugby League Player's Contracts". The last of those contracts was made on 17 November 1999 and was expressed to remain in force until 30 November 2000 (i.e. for the 2000 Season).2.2 On 5 May 2000 Mr. Sterling presented his originating application against the Appellants alleging race discrimination and victimisation.2.3 By the Liability Decision entered on the Register and sent to the parties on 30 October 2000 the ET upheld Mr. Sterling's complaints in the following respects: (a) Mr. Sterling had been the victim of direct race discrimination by the Club and by Mr. Lance in being excluded from the first team squad for a period of about three weeks; and (b) Mr. Sterling had been victimised by the Club and by Messrs Howes and Hetherington by reason of their failure properly to investigate his complaints of racial discrimination.2.4 The ET made the following material findings in reaching the liability decision: (1) Mr. Sterling was excluded from the first team squad by the coach, Mr. Lance, on or about 9 February 2000. (2) He was returned to the first team squad on or about 2 March 2000, but was not in fact selected to play for the first team until 26 May 2000.(3) His non-selection for the first team before 26 May 2000 was not the result of discrimination but of legitimate "sporting professional judgment"(4) Within ten days of making the discriminatory decision to exclude Mr. Sterling from the First Team Squad, Mr.Lance "did recognise. . . that the decision was wrong and set about putting it right".(5) All of the parties were "honourable men for whom the ... case [was] an unfortunate and unhappy experience" and the victimisation flowed from a failure to understand that "race discrimination could be unconscious and not necessarily ill-intentioned" and from "a form of intellectual paralysis" and an inability or unwillingness to come to terms with the nature of Mr. Sterling's allegations.2.5 In making the remedies decision the Employment Tribunal made the following findings: (1) Following the liability decision the Club did not apologise. The nearest they came to it was to issue a press release which said the Club was mindful that lessons must be learned and that they would be conducting a thorough review of their internal procedures. It added that Mr Lance had regretted the comments as soon as he had made them. (2) During the period between the publication of the liability decision and the remedies hearing the Club permitted a number of messages hostile to Mr Sterling to be posted on the Club website. (3) Had the Club investigated Mr Sterling's complaint properly and recognised that he had been less favourably treated on grounds of race, he would probably have been satisfied with an apology. (4) Mr Sterling suffered stress because he received no response to his written complaint of discrimination and shock at being told he would not be considered for selection irrespective of performance. He was left with a feeling of financial insecurity and was humiliated by Mr Lance announcing his decision to the whole squad. The Club's attitude obliged Mr Sterling to seek his remedy in the Employment Tribunal which put the matter in the public domain and led to press coverage which further upset him. The recommendations decision 3.1 The Tribunal dealt with its reasons for making the third of its recommendations in paragraphs 24 and 26 of its decision in these terms:
"24. In considering our third recommendation, we compared and contrasted section 116 of the Employment Rights Act 1996, which gives to employment tribunals in cases of unfair dismissal a discretion to make an order for reinstatement or re-engagement. In exercising that discretion, the employment tribunal is obliged to take into account among other things whether it is practicable for the employer to comply with an order for reinstatement. That condition is absent from section 56(1) (c) of the Race Relations Act 1976 which directs the question of practicability to the purpose of obviating or reducing the adverse effects on the complainant of any act of discrimination to which the complaint relates…. 26. As to the third recommendation, we have looked at the applicant's November 1999 contract which is copied in the original bundle. We accept the applicant's submission that, by bringing these proceedings, he is less likely to be offered contracts by other clubs, who would see him as a trouble—maker. Accordingly, it seems to us that our third recommendation is necessary for the purpose of obviating or reducing the adverse effect on the applicant of the act of discrimination and its consequences. Furthermore, although we have had no detailed evidence about the resources of the first respondent, we are told that they are substantial. It seems to us that the decision to reduce the squad from 28 to 23 is not one set in concrete so that taking on an extra player would not cause the first respondent any significant financial embarrassment. Thus, it seems practicable for us to make the third recommendation."
The Club's submissions on the recommendation appeal On the recommendation appeal the Club submitted as follows: 4.1. The Tribunal correctly identified that Section 56 of the Race Relations Act 1976 ("the 1976 Act") conferred upon it the power to make "a recommendation that the Respondent take within a specified period action appearing to [the Employment Tribunal] to be practicable for the purpose of obviating or reducing the adverse effect on the complainant of any act to which the complaint relates" (Section 56(1) (c)). 4.2 The decision in Fasuyi v Greenwich LBC (EAT/1078/99), unreported, indicates that a tribunal cannot make a recommendation within the sub-section, unless the recommendation obviates or reduces the adverse effect on the Claimant of the act to which the complaint relates, and not some other act or acts to which the complaint does not relate (such as, e.g., victimisation by a third party). 4.3. The power to make recommendations does not extend to the remuneration to be paid to an employee; monetary compensation is fully provided for under s.56(l) (b), and the language of s.56(1) (c) is inapt to cover recommendations as to the payment of remuneration: see Irvine v Prestcold Ltd [1981] IRLR 281 at 283 paras 13-15 (CA); 3. The section does not allow positive discrimination (eg recommending the promotion of an applicant unfairly treated on interview to the next suitable vacancy; British Gas Plc v Sharma [1991] ICR 19 at 41 A-B) and careful consideration needs to be given to whether an apparently obvious step would not itself be potentially discriminatory of others. 4.4. In making recommendations, practicality has to be considered from the perspective of both parties. The Tribunal could not, e.g., make a recommendation which "set at nought the statutory procedures set out for the benefit of [the employer] ... the public and others qualified for the vacant post"; Noone -v- North West Thames RHA [1988] IRLR 530 at 531 para.1l, and Sharma (supra) at 41 C to B. This will often require detailed information as to the circumstances of the workplace and the job and the practices in the workplace to be given to the tribunal before a recommendation can properly be made. 4.5 In making its third recommendation the Tribunal erred in law and/or misdirected itself in law in the following respects: 4.5.1 By failing to confine itself to making recommendations which obviated or reduced the adverse effect of Mr Sterling's exclusion from the First Team Squad between 9th February 2000 and 2nd March 2000 (ie the act of discrimination to which the complaint related); 4.5.2. By directing itself that it was appropriate to consider a recommendation which obviated or reduced the adverse effects not just of the act of discrimination to which the complaint related, but also "its consequences"; 4.5.3. By making a recommendation allegedly necessary to obviate or reduce the adverse effects of the publicity Mr Sterling's case had attracted and the likely reaction of other potential employers in the light of that publicity, rather than obviating or reducing the adverse effects of his exclusion from the First Team Squad. The Tribunal made its recommendation because of its view that other potential employers were likely to see Mr Sterling as a "trouble-maker". 4.5.4 By making a recommendation the effect of which was to require the Club to pay Mr Sterling remuneration for a further year when matters of financial remuneration were to be dealt with under s.56(1) (b) not s.56(1) (c); 4.5.5. By making a recommendation which obliged the Club to employ Mr Sterling even if there were other better qualified applicants for the contract he was to be given; 4.5.6. By directing itself that it was not obliged to consider the issue of "practicability" from the employer's (i.e. the Club's) perspective and/or failing to consider in any or any sufficient detail "the surrounding circumstances of the workplace and the job and the practices in the workplace", before making a recommendation under section 56(1) (c). In particular no weight was given to the decision to reduce the size of the squad from 28 to 23, or the need to promote younger players, or the fact that the club was well provided with other wingers, or that the recommendation required the Club to create a position for Mr Sterling where none existed; or that under the Rugby Football League Rules there was a limit to the amount of money the Club was entitled to spend on First Team Squad players (ie a salary cap). The player's submissions on the recommendation appeal 5. On behalf of Mr Sterling it was submitted: 5.1 The Tribunal properly directed itself in law as to the test to be applied. In coming to the conclusion that the recommendation should be made, it correctly contrasted section 56(1)(c) of the Race Relations Act 1976 with section 116 of the Employment Rights Act 1996. 5.2 The Tribunal accepted the Respondent's submission that as a result of the Club's discrimination and the resultant necessity of bringing proceedings Mr Sterling was less likely to obtain a further contract with another club. 5.3 The Tribunal concluded that it was "practicable" for them to make the said recommendation having heard the Club in respect of budgetary constraints and other players being considered for inclusion in the squad. In the absence of detailed evidence on the issues the Tribunal were entitled to reach the conclusion they did. 5.4 In making the said Recommendation the Tribunal were merely requiring the Club to increase their squad by one rather than positively discriminate in Mr Sterling's favour. The situation was therefore entirely different from that set out in Noone v North West Thames RHA (Supra) and British Gas plc -v Sharma (Supra). Conclusions on the recommendation appeal 6.1 The terms of paragraph 24 of the Extended Reasons suggest that the Tribunal did not regard the practicability of the recommendation from the Club's point of view as being relevant. As Lindsay J pointed out in paragraph 24 of his judgment in Fasuyi:
"…it is the practicability relating to the effect on the complainant that the Tribunal must focus on."
But this does not mean that the practicability of carrying out the recommendation from the point of view of the discriminator should be completely disregarded. It would not be proper for a Tribunal to make a recommendation the carrying out of which was from the point of view of the discriminator completely impracticable. In the present case, the latter parts of paragraph 26 of the extended reasons indicate that the Tribunal did consider practicability from the Club's point of view. Its decision cannot therefore be faulted on that ground. 6.2 The Tribunal accepted Mr Sterling's submission that he would face increased difficulties suffer in finding another club as a result of his having brought the discrimination proceedings because other clubs would see him as a trouble maker. This formed the basis of the recommendation for re-engagement. There is no suggestion that there was any evidence to support that proposition. It was merely a submission to the effect that a person who stood up for his rights and took action when he was subject to racial discrimination would be a less attractive employee for other clubs. The Tribunal in our judgment correctly did not suggest that the grant of a new contract to Mr Sterling would obviate or reduce the adverse effect on Mr Sterling of his being excluded from the first team training squad for some three weeks. 6.3 This leaves the question whether the hypothesized disadvantage could be said to be an adverse effect on the complainant of the act of discrimination to which his complaint related. In our judgment it could not. Even if (which we doubt) the Tribunal was entitled to accept the submission on Mr Sterling's behalf, unsupported by evidence, that other clubs would look askance at him because of his having taken successful proceedings, in our view this disadvantage cannot be said to be an adverse effect of the racially discriminatory decision to exclude him from training for a shortish period or of the failure to take his claim of discrimination seriously. As Lindsay J said Fasuyi v Greenwich LBC at para 25:
"Secondly, the adverse effect on the complainant the amelioration of which is to be the practicable purpose of the recommendation is not some nebulous or general adversity but it is the adverse effect on the complainant of the very act or acts of discrimination which shall have been complained of and which shall have been held by the tribunal to have been well-founded."
The asserted aversion of other rugby league clubs to contracting Mr Sterling because of his successful discrimination claim cannot, in our view, be said to be "an adverse effect … of the very act complained of." It was (if it existed) an adverse effect of the attitude of other clubs to players who stuck up for their rights. In our judgment it follows that the Tribunal should not have made the recommendation which it did which was intended to obviate or reduce the effect of that aversion rather than the effect of the exclusion from training or of the failure properly to investigate his assertion of discrimination. 6.4 Even if we had taken the view that such a recommendation (made for the purpose for which it was) was a proper one, we would have taken the view that it was a recommendation which should not have been made. 6.5 The recommendation would (if acted upon) have given Mr Sterling a further season's contract and the financial rewards flowing from it. There is, however, no evidence that the contract would have given him any prospect of a place in the Club's team. The evidence was that the Club was looking to promote its young players who had been extremely successful for it in the youth sides in the previous years. The Club was well provided with wingers without Mr Sterling. Mr Sterling was not offered a fresh contract by the Club and no suggestion was made that this was not a decision made on genuine grounds. He was surplus to the Club's requirements. Nor is there any evidence that the new contract would have enhanced the likelihood of another club making an offer for his services (which was the supposed adverse effect to be addressed) either during or after the expiry of the new contract. The effect of implementation would simply have been to give him some financial security, not to further the remainder of his rugby playing career. In those circumstances in our judgment the Tribunal erred in law on this ground also in making the recommendation of a new contract. 6.6 It was accepted by both parties that if we struck down the recommendation we should remit the case to the Employment Tribunal to reconsider the question of compensation, because it might well be that the Tribunal would have made a different award for loss of opportunity if it had not made a recommendation for re-engagement 6.7 Quite apart from the considerations which led us to strike down the recommendation, another matter which would have given us cause for concern if we had not decided that the recommendation should be struck down for the reasons given above is the passage of time since the original hearing. Mr Sterling was 36 years of age at the time of the original Tribunal hearing in September 2000. We would have been extremely concerned as to the practicality of awarding a further contract now to take effect from the summer of 2002 (ie for the 2002/3 season) for a player of Mr Sterling's age whose primary attribute when he was in his prime was said to be his pace. In the event we do not have to resolve how the passage of time might have affected the position if the recommendation had otherwise been appropriate. The injury to feelings decision[7]The Tribunal gave the following reasons for its award of £10,000 compensation for injury to Mr Sterling's feelings:
"28 In respect of the claim for injury to feeling, we were referred to McConnell v Police Authority for Northern Ireland [1997] IRLR 625, DHL International (UK) Ltd & Others -v- Gbaja-Biamila in a transcript of the judgment delivered on 1 March, Chief Constable of West Yorkshire Police & Others – v – Khan [2000] IRLR 324 and ICTS (UK) Ltd v Tchoula [2000] IRLR 643. Although the practice in England and Wales is sometimes to award a separate sum on account of aggravation, we find the approach of the Northern Ireland Court of Appeal more attractive. In McConnell , it held that an award of aggravated damages should not be an extra sum over and above the sum which the tribunal of facts considers appropriate compensation for the injury to the claimant's feelings. Any element of aggravation ought to be taken into account in reckoning the injury to feelings, for it is part of the cause of that injury. A tribunal should weigh the evidence and form a view as to the level of distress and humiliation caused by the act of discrimination, having regard to all the circumstances, including any features which may have had the effect of aggravating the sense of injury felt by the complainant. The final result of this assessment will be a single figure reflecting the total injury to feelings, which may in appropriate cases include an element of aggravation. 29. In Tchoula Judge Peter Clark described two broad categories of compensation for injury to feeling, higher and lower. Having regard to his judgment, we decided that the applicant's case fell within the upper end of the lower category. The elements which go to make up our award for injury to feelings are these: first, the shock of being told that irrespective of his performance he would not be selected for the first team in the 2000 season. Secondly, we have regard to the blow to the applicant's confidence. Thirdly, there is the frustration which he experienced thereafter in seeking a remedy from the first, third and fourth respondents. Then the discrimination affected his relationships with other players throughout the season. He was forced to take proceedings which created adverse publicity and he has had to cope with the failure of the respondents properly to acknowledge that he had been the victim of race discrimination and to apologise for it. Having regard to all these elements and the time period from 9 February to 15 December 2000, we think that £10,000 is an appropriate figure for injury to feeling. That includes an element of aggravation caused by the respondents' collective failure to learn anything from this case and to take any steps after 30 October to help the applicant."
Club's submissions on injury to feelings.[8]On the issue of the award of £10,000 compensation for injury to feelings the Club made the following submissions. 8.1 Awards for injury to feelings are compensatory, not punitive and feelings of indignation at the tortfeasor's conduct should not be allowed to inflate the award- Armitage & Ors -v- Johnson 119971 IRLR 162 at para.27. 8.2. Aggravated damages are available in discrimination cases. The touchstone to an award of aggravated damages is "high handed, malicious, insulting or oppressive behaviour directed towards the applicant" which increases his injury to feelings; it is not an extra award to reflect a degree of punishment of the respondent for his behaviour: Tchoula v ICTS (UK) Ltd [2000] IRLR 643 at 649. 8.3. An honest, if unfounded attempt by an employer to defend its actions should not generally be regarded as an aggravating element. Where a defence is honestly put forward and a claimant is treated with propriety in proceedings, the fact that his recollection is challenged does not, without more, aggravate the damages; McConnell v- Police Authority for Northern Ireland [1997] IRLR 624 especially at para.26. 8.4. In the present case the Tribunal was wrong in law in making its award of £10,000 because:(a) it overlooked the fact that the award should be compensatory and not punitive (and including an element in the award that reflected "the respondents' collective failure to learn anything from this case");(b) it failed to direct itself that the touch stone to an award of aggravated damages was "high-handed, oppressive, insulting or contumelious behaviour", and that such features were absent in the present case;(c) it increased the level of the award to reflect the Respondents' alleged "collective failure to ... take any steps after 30 October to help Mr Sterling"';(d) by not directing itself that if there was any culpable failure by the Respondents after that date, that failure would have to be made the subject of a fresh complaint;(e) by increasing the level of award to reflect (i) adverse press publicity the case had attracted, over which the Club had no control, and/or (ii) the fact that Mr Sterling had "been forced to commence proceedings", in circumstances where the defence had been advanced in good faith (as the ET had accepted in the Liability Decision);(f) by failing to pay any or any adequate regard to their own findings in the Liability Decision that any discrimination was subconscious;(g) by making an award which was manifestly excessive in all the circumstances. The Respondent's case on injury to feelings.[9]On Mr Sterling's behalf it was submitted that the Tribunal's finding of facts of the Decision should be considered in their totality in any analysis of the Decision. The approach adopted by the Tribunal in respect of damages for injury to feelings and aggravated damages was correct in law. The Tribunal was entitled to conclude that the injury to feelings award came within the upper bracket as set out in Tchoula (Supra) and to take account of factors that flowed from the acts of discrimination in determining the level of damages that should be awarded, including actions of the Club after the acts complained of which could have reduced the impact of the original discrimination, (eg by an unequivocal acceptance that its actions were wrong). The Tribunal was entitled to take into account the level and effect of press attention the Respondent attracted in having to bring an action against the Appellant in assessing the level of damages as this was an impact that flowed from the Appellant's wrongful actions. The level of damages that flow from a finding of racial discrimination are not dependant upon the type of discrimination, i.e. subconscious or otherwise. The factor that the Tribunal properly had regard to was the effect of the discrimination on the Respondent. The level of damages awarded was not manifestly excessive in all the circumstances and the compensation appeal should be dismissed. Conclusions on the feelings appeal10.1 The Tribunal correctly set out the law in their decision. It did not make any reference to aggravated damages including a punitive element. It correctly, in our view, said that a tribunal should weigh the evidence and form a view as to the level of distress and humiliation caused by the act of discrimination, having regard to all the circumstances, including any features which may have had the effect of aggravating the sense of injury felt by the complainants. The question for the Tribunal is whether there are features which have caused the sense of injury to be increased (rather than whether the conduct of the discriminator was intended to injure or increase the injury). Where the behaviour is malicious and the discrimination is conscious and deliberate, there is a greater likelihood that the injury to feelings will be aggravated, but it does not follow from the fact that discrimination was unconscious that there cannot have been conduct which has had the effect of aggravating the sense of injury felt by the victim. Conduct may be high-handed, oppressive, or insulting without any subjective intention that it should be so.10.2 There is nothing in the decision that could properly be taken to suggest that, despite the absence of references to a punitive element in the award, it had in fact included an element for penal purposes in the sum it arrived at, rather than compensating Mr Sterling for the injury to his feelings. In particular we do not see that the Tribunal allowed itself to be led into the error highlighted in Armstrong & Ors v Johnson [1997] IRLR 162 at para 27. There is nothing to suggest that the award was inflated by feelings of indignation at the Club's conduct rather than being fixed to compensate Mr Sterling for the injury he had suffered to his feelings.10.3 We do not accept the suggestion that the sentence "That includes an element of aggravation caused by the respondents' collective failure to learn anything from this case and to take any steps after 30 October to help the applicant" betrays an error of law and that any compensation capable of being awarded for this should be the subject of new proceedings. The Tribunal had found that if the Club had promptly recognized its error, Mr Sterling would probably have been content with an apology. Unhappily it did not and the Tribunal were perfectly entitled to find the injury to Mr Sterling's feelings was exacerbated by the intransigent attitude of the Club even in the period between the decision on the liability hearing and the remedy hearing. This was an element in the injury to his feelings which was properly dealt with by the award made at the remedies hearing.10.4 It is in our view impossible to say that the award of £10,000 for injury to feelings is manifestly excessive or that in arriving at that figure the Tribunal erred in law. This element of the appeal will therefore be dismissed. Direction[11]The result of our conclusions is that the case must be remitted to the Tribunal. If reasonably possible, the further hearing to re-consider the issue of compensation (other than for injury to feelings) should be before the same panel, but the ultimate decision on this point must rest with the Tribunal.