LONDON BOROUGH OF SOUTHWARK v ROSEANN AYTON [2003] UKEAT 0515_03_1809

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2003] UKEAT 0515_03_1809Case No Appeal No.UKEAT/0515/03/(2)Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
LONDON BOROUGH OF SOUTHWARKAPPELLANTROSEANN AYTONRESPONDENT
Before
His Honour Judge J BurkeDate 18 September 2003
[1]APPEARANCES For the Appellants MR S FLETCHER (of Counsel) Instructed by: Southwark Legal (Contract) Services South House 30-32 Peckham Road London SE5 8PX For the Respondent MS C LEWIS (of Counsel) Instructed by: London Race Discrimination Unit c/o Unit 46 Eurolink Business Centre 493 Effra Road London SW2 1BZ HIS HONOUR JUDGE J BURKE QC In this appeal by the London Borough of Southwark ("Southwark") against the decision of the Employment Tribunal sitting at London Central and chaired by Mr B A Kelly QC that Southwark had been guilty of victimisation towards Ms Ayton and against the Tribunal's decisions as to remedies for that victimisation, Southwark have advanced five heads of appeal. We heard argument upon the first two heads on 18 September 2003; and on 3 October we handed down our judgment upon those two heads; on that day we then proceeded to hear the parties' arguments on the remaining three heads; this is our judgment on those three heads.[2]The facts, the Tribunal's decision and the five heads of appeal are set out in paragraphs 1 to 9 of our first judgment; we adopt those paragraphs into this judgment and, therefore, need not repeat what we there said - although we will have to go further into the facts later. Victimisation: less favourable treatment[3]We address first the third head of Southwark's appeal. In order to set the scene for the arguments ably put before us by Mr Fletcher on behalf of Southwark and by Ms Lewis on behalf of Ms Ayton as to the correctness in law of the Tribunal's conclusion that Southwark had victimised Ms Ayton, contrary to sections 2(1) and 4(1) of the Race Relations Act 1976 , by putting on hold and not proceeding with her application for a new post until the completion of the internal investigation into her race discrimination complaint against Ms Jansen; it is necessary to describe the history in a little more detail than we did in our first judgment. The Tribunal's very detailed findings of fact as to what happened after Ms Ayton made her complaint are set out at paragraphs 32 to 56 of their decision; for present purposes we can summarise the relevant findings more briefly.[4]Ms Ayton made her complaint to Mr Broxup, Southwark's Acting Director of Housing, on 11 June 2002. Within days thereafter she was asked to consider the new post and was told that Ms Pettifer, Southwark's Principal Project Officer, was aware of Ms Ayton's complaint but had said that Ms Ayton should not be deterred from applying for the post; she was interviewed for that post on 21 June; and three days later she was told that she had been successful and would be offered the post, subject to satisfactory references and medical clearance.[5]The task of pursuing the investigation of Ms Ayton's complaint appears to have been delegated to Mr Hancock, Head of Housing Community Services. By 24 June he had spoken to Ms Jansen and received a letter from her setting out her version of what had passed between her and Ms Ayton. On 26 June Mr Hancock told Ms Pettifer to put the new post on hold pending the outcome of the investigation into Ms Ayton's complaint. On 28 June satisfactory references were received from Ms Ayton's previous employer; and Ms Jansen produced a reference in which she was complimentary of many aspects of Ms Ayton's work but said that she could not complete her reference while the complaint was being investigated.[6]The Tribunal found that Mr Hancock trusted Ms Jansen, believed that Ms Ayton had acted unprofessionally and did not want her back; although she could have been appointed to the new job and Ms Pettifer was keen that she should be, Mr Hancock decided that she should not be so appointed because she had made a complaint which set out a different perspective (i.e a different account from that made to him by Ms Jansen). On 2 July he informed Ms Ayton that a Mr Osinowo had been appointed to carry out the investigation; she objected to Mr Osinowo; and on 30 July he was replaced by Ms Brown, Performance and Compliance Manager. At a complaint hearing on 27 August Ms Ayton asked Ms Brown why she had not been able to start in the new post; Ms Brown replied that the post could not be offered to her until after the complaint had been investigated because she would have to be in contact with Ms Jansen. In fact the new post did not involve contact with Ms Jansen.[7]In an e-mail to Southwark's Human Resources Manager on the same day, Ms Brown said that she did not understand why Ms Ayton had not been allowed to start in the new job. Ms Brown was soon afterwards taken ill; the investigation spluttered on; in mid-September a draft report was produced; the final version of Ms Brown's report was dated 11 October. She concluded that there was no conclusive evidence that Ms Jansen had used the words of which Ms Ayton complained. Knowing what the final report was going to say, Mr Hancock concluded that the offer of a new post should be withdrawn; but, eventually after various events which are not relevant, Ms Ayton started in the new post on 2 January 2003.[8]The Tribunal recorded, at paragraph 87 of their decision, that, by the end of the hearing, the victimisation claim was being put on the two bases described in paragraph 3 of our first judgment. They then, at paragraphs 90 and 91 correctly considered who was the comparator i.e. with what comparator or comparators was the treatment of Ms Ayton to be compared in order to determine whether she had been less favourably treated than such comparator or comparators. The Tribunal set out the second part of the headnote of the report in the Industrial Relations Law Reports of the then recent decision of the House of Lords in Chief Constable of West Yorkshire -v- Khan [2000] IRLR 830 which specifically addressed, among other issues, the way in which a Tribunal should, in a victimisation case, identify the appropriate comparator; and, having then referred to paragraphs 24 to 27 of the speech of Lord Nicholls of Birkenhead in that case, the Tribunal followed Lord Nicholls' preference for a simple comparison between the treatment afforded to the complainant who had done a protected act, namely making the complaint about Ms Jansen, and the treatment which was or would have been afforded to other employees who had not done a protected act. A simple comparison presented itself. Another employee, Ms Edwards, was offered a different vacant post, subject to references at about the same time as that at which Ms Ayton was offered her new post subject to references; Ms Edwards had not done any protected act; her references were obtained and she started in the vacant post on 5 August. The Tribunal determined that she was the correct comparator and rejected Southwark's argument that the correct comparator would have to be someone (presumably a hypothetical person - there was no suggestion of a real person who filled the bill) who had resigned, re-applied for work and obtained a negative reference but had not done the protected act.[9]Ms Fletcher submitted that the Tribunal had erred in making the comparison between Ms Ayton and Ms Edwards; that comparison involved, he contended, an over-simplification; if the simple comparison preferred by Lord Nicholls in Khan was to be made, the comparator would have to have been a job applicant who was not in a position to provide a satisfactory reference. The basis for that submission was that Ms Ayton and Ms Edwards were dissimilar applicants not because Ms Edwards had not done a protected act but because Ms Ayton could never have obtained the reference which she needed from Ms Jansen (although in truth she obtained the post eventually without it) and therefore could not have obtained the new post irrespective of the protected act whereas Ms Edwards had no difficulties with her references. To ignore that difference between the two applicants was, Mr Fletcher urged, to factor out the crucial difference which went to explain the differential treatment of one as against the other. Ms Jansen had made it clear that she was not going to provide a reference until the investigation was completed; and therefore Ms Ayton could not have been given the post, offered only subject to references, until that stage had been reached.[10]Ms Lewis submitted that the Tribunal were correct in applying the principles established in Khan to the facts of this case and were entitled, on their findings of fact, to conclude that Ms Edwards was the appropriate comparator; the real difference between the two applicants was Ms Ayton's protected act rather than her inability to obtain a reference from Ms Jansen.[11]In Khan , Lord Nicholls, with whose speech Lord Hoffmann and Lord Hutton agreed, went through the leading relevant authorities at paragraphs 19 to 22 and, having at paragraph 23 dealt with what were in that case the relevant circumstances - an issue to which no arguments were addressed before us, turned at paragraphs 24 to 28 to set out his views on the essential exercise of comparison required in these terms: "24.(2) less favourable treatment The second ingredient in the statutory definition calls for a comparison between the treatment afforded to the complainant in the relevant respect with the treatment he affords, or would afford, to other persons 'in those circumstances'. 25. As appears from my summary of the authorities, different views have emerged on the correct way to identify the 'others', or the comparators or control group, as they are usually known. One approach is that, to continue with my example, if an employee is dismissed the control group comprises the other employees. The complainant was less favourably treated because he was dismissed and they were not. There may be good reasons for this difference in treatment but, on this approach, that is a matter to be taken into account at the third stage when considering why the employer afforded the employee less favourable treatment. This was the approach adopted in Aziz v Trinity Street Taxis Ltd [1989] QB 463 . It was the approach adopted at all levels in the present case. Sergeant Khan was treated less favourably than other employees, because references are normally provided on request and Sergeant Khan was refused a reference. It was also the approach adopted in Brown v TNT Express Worldwide (UK) Ltd [2001] ICR 182.26. The other approach is that when considering whether a complainant was treated less favourably there should be factored into the comparison features which make the situation of the complainant and the control group fairly comparable. The control group should be limited to employees who have not done the protected act but whose circumstances, in the material respects, are fairly comparable. This approach was adopted by the Employment Appeal Tribunal in Kirby v Manpower Services Commission [1980] 1 WLR 725 and by the Court of Appeal in Nagarajan v London Regional Transport [1998] IRLR 73, 76, para 13 (this point was not the subject of the subsequent appeal to your Lordships' House [2001] 1 AC 501).27. There are arguments in favour of both approaches. On the whole I see no sufficient reason for departing from the former approach, adopted by Slade LJ in the Aziz case: [1989] QB 463 , p 483. The statute is to be regarded as calling for a simple comparison between the treatment afforded to the complainant who has done a protected act and the treatment which was or would be afforded to other employees who have not done the protected act. 28. Applying this approach, Sergeant Khan was treated less favourably than other employees. Ordinarily West Yorkshire provides references for members of the force who are seeking new employment".[12]Lord Mackay of Clashfern addressed the less favourable treatment issue at paragraphs 39 to 42 of his speech; at paragraphs 41 and 42 he said "41 On this basis, the other persons with whose treatment the treatment of Sergeant Khan must be compared are persons employed at the same establishment in Great Britain as Sergeant Khan, namely in the West Yorkshire police, and who have applied for a reference when seeking employment with another employer. 42 The refusal of a reference to Sergeant Khan when it is common ground that generally a reference would be given is in my view sufficient to demonstrate that in the circumstances relevant for the purposes of s.4 of the Act, Sergeant Khan has been treated less favourably than other persons." It does not appear that Lord Mackay was indicating an approach which differed from that preferred by Lord Nicholls.[13]Lord Scott of Foscote, at paragraph 73 set out a similar view, preferring, as did Lord Nicholls, the approach adopted by the Court of Appeal in Aziz v Trinity Street Taxis Ltd [1988] IRLR 204 .[14]In our judgment the Tribunal were at least entitled - indeed they may well have been bound by Khan to do so but we need not so decide - to apply a simple comparison between the treatment afforded to Ms Ayton who had applied for a new post and had done a protected act and the treatment afforded to an actual employee, Ms Edwards, who at the same time had applied for a vacant post and had not done a protected act. It was not necessary for the Tribunal to exclude such comparison because Ms Ayton could not have obtained a reference from Ms Jansen until the investigation was completed; it was not necessary to add or subtract features of the situation of Ms Ayton so as to produce an actual or hypothetical comparator whose circumstances were fairly comparable. That approach was rejected in Khan ; see in particular paragraph 26. The Tribunal, following the headnote in the report of Khan before them, which accurately represents the decision of their Lordships on this issue, made a comparison between the treatment afforded to Ms Ayton who had done a protected act and the treatment which was accorded to Ms Edwards who had not. We see no error of law on the part of the Tribunal in taking that course.[15]We should add the comment that what Mr Fletcher puts forward as the crucial distinction between Ms Ayton and Ms Edwards, namely the former's inability to obtain all the necessary references because Ms Jansen was not prepared to provide a reference in full, did not, in the event, prevent Ms Ayton from obtaining the post. Even when Ms Brown's investigation reached the conclusion that the complaint against Ms Jansen was not made out, Ms Jansen continued to seek to obstruct Ms Ayton's appointment, as can be seen from the Tribunal's findings at paragraph 52. Ms Pettifer confirmed the offer of a new post to Ms Ayton on 30 October as soon as she knew the outcome of the investigation; there is no suggestion that Ms Jansen had provided a full reference by that time or that she ever did so. The Tribunal did not explain their choice of comparator on this basis; but those were the facts which they found; and in our judgment they support the correctness of the Tribunal's decision to reject the comparison for which Mr Fletcher contended in favour of the comparison which we have identified above.[16]Mr Fletcher referred us to a number of passages in the subsequent decision of the House of Lords in Shamoon -v- Chief Constable of the Royal Ulster Constabulary [2003] IRLR 286 , which was not fully reported at the date of the hearings of Ms Ayton's claims and was not drawn to the Tribunal's attention as far as we are aware. The passages to which Mr Fletcher directed our attention were all in the speech of Lord Nicholls who, at paragraphs 5 and 6, said that a victimisation case called for a similar less favourable treatment comparison to that called for in a discrimination case, save only that the proscribed ground was different; and at paragraph 13 Lord Nicholls said that the observations of the House of Lords in Khan as to the comparison to be made had to read in the context of the particular circumstances then before the House of Lords. However, later in paragraph 13 Lord Nicholls said:
"The statute calls for a simple comparison between the treatment given to Mr Khan and the treatment which would have been given to a police officer who had not done a protected act. Protected act aside, the hypothetical comparator should be in the same position as Mr Khan, not in an admittedly different but allegedly comparable position."
[17]Mr Fletcher submitted that in Shamoon the House of Lords was indicating that the simple comparison adopted in Khan should not be applied in all cases and that, whatever comparison was applied, it could not be appropriate if the comparator was - or if a hypothetical comparator would have been - in a different position from that of the complainant. What was needed was a like-for-like test - see per Lord Hope of Craighead at paragraph 47 - which the Tribunal in Shamoon had failed to achieve because there were differences between the comparators and the complainant in that case which no reasonable person could treat as not being an essential part of the relevant circumstances.[18]Ms Lewis, not surprisingly, sought to turn to Ms Ayton's advantage the principles expressed in Shamoon , particularly by Lord Nicholls at paragraphs 8 to 11, that it is open to a Tribunal to decide whether there has been discrimination or victimisation by resolving the issue as to whether there has been less favourable treatment and "the reason why" issue, i.e. whether any less favourable treatment was on the relevant prescribed grounds, by resolving the "reasons why" issue before the less favourable treatment issue, especially when the identity of the comparator is in dispute, or by resolving the two questions together. This, she submitted, was just such a case in which the identity of the comparator was at issue and in which the ascertainment of the correct comparator was illuminated by the Tribunal's finding as to the "reasons why" issue.[19]In paragraph 94 the Tribunal expressly made the factual finding that Mr Hancock put Ms Ayton's application for the new post on hold "by reason that the Applicant had done a protected act". Mr Hancock's account that Ms Jansen's view of Ms Ayton's conduct prevented Ms Ayton from having the new job and that if Ms Ayton's complaint had been substantiated her route to the new post would have been cleared was rejected on the ground that even when Ms Brown's report was produced and was seen to be inconclusive, Mr Hancock still did not want Ms Ayton to get the new post. This, submitted Ms Lewis, removed from the contest as to the correct comparator a hypothetical comparator without the necessary references.[20]Had the Tribunal considered this case with the decision of the House of Lords in Shamoon in front of them, they might or might not have preferred to reverse the order in which they approached the "less favourable treatment" issue and "the reason why" issue, or to roll those two issues into one; but, in the absence of Shamoon , they followed what can fairly be described as the familiar course of resolving the "less favourable treatment" issue before the "reasons why" issue. Had we concluded that the Tribunal had erred in their approach to the less favourable treatment issue, it might have been necessary to consider whether, had they had Shamoon in front of them, they would have properly reached the same result by a different route; but in our judgment the Tribunal were entitled to reach the conclusion which they did on the less favourable treatment issue for the reasons we have set out; and nothing in Shamoon suggests, by way of contrast to Khan , that the Tribunal were wrong to do so. It is therefore not necessary to reflect further on Shamoon for present purposes, save to say that it is nowhere suggested in the speeches in Shamoon that the traditional approach adopted by Tribunals prior to Shamoon is or may be inappropriate. It is now open to a Tribunal to adopt the alternative approaches set out in Shamoon ; but it is not, in our judgment, erroneous in law for the Tribunal to ask themselves the "less favourable treatment" question and to answer that question before turning to the "reason why" question as long as they do not, in so doing, choose an actual or hypothetical comparator who is, using the simple comparison set out in Khan , in a different position from that of the complainant. In this case, applying the simple comparison approved in Khan and not discarded sixteen months later in Shamoon , the Tribunal reached a conclusion on the "less favourable treatment" issue which, in our judgment, they were entitled to reach. Victimisation: the "reasons why" issue[21]Mr Fletcher acknowledged that the Tribunal had concluded on the facts that Mr Hancock "put the job on hold by reason that the Applicant had done a protected act" and "Mr Hancock was aware of a protected act and that was an important cause of his putting the job on hold". He submitted, however, that the Tribunal had applied a "but for" test and had failed to distinguish between the bringing of the complaint and the effect of the existence of that complaint; Mr Hancock's account was that he could not let Ms Ayton take up the new post because, as a consequence of her complaint, the facts needed to be investigated so that, if the complaints succeeded, her route to the new post would be cleared; thus it was the situation brought about by the complaint and not the complaint itself which caused the putting on hold of the offer to Ms Ayton of the new post. The Tribunal, he submitted, had failed to appreciate that, as had the employer in Cornelius -v- Union College of Swansea [1987] IRLR 141 , (a decision in the Court of Appeal discussed in depth in Khan , particularly at paragraphs 30 and 31 in the speech of Lord Nicholls and at paragraphs 54 to 59 in the speech of Lord Hoffmann) Southwark were simply seeking appropriately to react to the situation brought about by the complaint.[22]Ms Lewis accepted that a "but for" approach would have been wrong in law; she was right so to accept, as is made clear, in our judgment, in the passages in Khan to which we have referred. Lord Nicholls, having explained that causation tests such as the "but for" test or the "operative cause" or "effective cause" tests were not apposite, said at paragraph 29:
" Contrary to views sometimes stated, the third ingredient ('by reason that') does not raise a question of causation as that expression is usually understood. Causation is a slippery word, but normally it is used to describe a legal exercise. From the many events leading up to the crucial happening, the court selects one or more of them which the law regards as causative of the happening. Sometimes the court may look for the 'operative' cause, or the 'effective' cause. Sometimes it may apply a 'but for' approach. For the reasons I sought to explain in Nagarajan v London Regional Transport [2001] 1 AC 502, 510-512, a causation exercise of this type is not required either by section 1(1)(a) or section 2. The phrases 'on racial grounds' and 'by reason that' denote a different exercise: why did the alleged discriminator act as he did? What, consciously or unconsciously, was his reason? Unlike causation, this is a subjective test. Causation is a legal conclusion. The reason why a person acted as he did is a question of fact."
Ms Lewis submitted that the Tribunal had approached the "reasons why" issue in this case consistently with the approach required by that passage and other passages in Khan .[23]The circumstances of this case were not the same as Khan or of Cornelius ; there was no litigation which, to use Lord Hoffmann's expression at paragraph 59 in Khan "created a new relationship between the parties" in which the employers had to be careful not to compromise their interests as a party to the litigation; and the Tribunal were fixed in the present case with a different task from that of the Tribunal in Khan or Cornelius in that, in those two cases, the Tribunal had to decide on undisputed facts how to categorise the reason for the employer's action - was it the protected act or the consequences of the protected act? In the present case within Southwark different people took a different view as to how Ms Ayton's application for the new post should be proceeded with; and it was far from clear that there was a need to put that application on hold; Mr Hancock's explanation for doing so was very much in dispute. His explanation was that he had done so because of the consequences of the protected act and, indeed, in effect so as to help Ms Ayton to attain the new post, if her complaint was substantiated, which otherwise, in the light of Ms Jansen's complaints about her, she would not have attained. Ms Brown, however (paragraph 43) and Ms Pettifer (paragraph 36) disagreed with Mr Hancock. Thus the Tribunal had to decide whether there was an innocent reason for Ms Ayton's application being put on hold, as Mr Hancock maintained, or whether the reason was the protected act, as was maintained by Ms Ayton.[24]The Tribunal had to and did resolve that issue on the evidence, it being an issue of fact. They resolved it, at paragraphs 93 and 94, by rejecting Mr Hancock's explanation; the first sentence of paragraph 94 is explained by paragraph 93. The Tribunal did not fail to distinguish between the bringing of the complaint and the effect of the existence of that complaint; those two paragraphs of the Tribunal's decision, read as a whole and read together with their earlier primary findings of fact, demonstrate, in our judgment, that the Tribunal rejected Mr Hancock's explanation and found that the reason or a principal reason for the putting of the job on hold - and therefore the reason for the different treatment between Ms Ayton and her comparator, Ms Edwards - was the protected act. We do not agree that the Tribunal applied a "but for" test; that test would have embraced both factual alternatives; they chose between those two alternatives; and in law they were entitled to make the choice which they did.[25]For these reasons Southwark's attack upon the finding of victimisation fails. Remedies[26]Mr Fletcher accepted that, in the absence of a finding of bad faith, he could not seek to sustain the fourth head of Southwark's appeal which attacks the Tribunal's finding as to compensation. He therefore focused his attention, so far as remedies are concerned, on the last of the five heads encompassed within the Notice of Appeal, namely the Tribunal's recommendation that, within three months, Southwark should arrange training in respect of racial awareness for Mr Hancock.[27]Section 56(1) of the Race Relations Act 1976 provides:- "Where an employment tribunal finds that a complaint presented to it under section 54 is well-founded, the tribunal shall make such of the following as it considers just and equitable -(a) [declaration](b) [compensation](c) a recommendation that the respondent take within a specified period action appearing to the tribunal to be practicable for the purpose of obviating or reducing the adverse effect on the complainant of any act of discrimination to which the complaint relates."[28]Mr Fletcher's criticisms of the Tribunal's decision as to recommendation was succinct; he submitted that, in paragraph 101 of their decision in which they deal with the recommendations sought by Ms Ayton, only one of which they made, the Tribunal did not express any finding that it was just and equitable to make that recommendation and gave no reasons for making it. We do not accept those criticisms. While the Tribunal did not expressly use the words "just and equitable", they explained in paragraph 101 why they did not consider it appropriate to make two of the three recommendations sought by Ms Ayton; the language used shows that the Tribunal considered what was appropriate; that is, in our judgment, sufficient to demonstrate that they were considering what recommendations it was just and equitable to make and what recommendations they considered it was not just and equitable to make. As to the absence of reasons, it is correct that there are no reasons in paragraph 101 of the Tribunal's decision, taken on its own; but the decision must be read as a whole. The Tribunal had expressly found that Mr Hancock was aware of Ms Ayton's complaint, that that complaint was an important cause of his putting her application for the job on hold and that his putting that application on hold deprived Ms Ayton of a job until, eventually, she got it and led to her being treated less favourably than her comparator; see paragraph 94. In our judgment, if paragraph 94 is read together with paragraph 101, the reasons for the recommendation, limited to Mr Hancock, are clear. Conclusions[29]For the reasons set out in our first judgment and in this judgment, we reject all of Southwark's grounds of appeal except the first; we therefore make the Order which we foreshadowed in paragraph 43 of our first judgment, namely that Ms Ayton's claim, insofar as it was based on the victimisation which the Tribunal found to have occurred, should be remitted to the same Tribunal to consider and decide, on the basis of the evidence which they had heard, whether the allegation made by Ms Ayton in her complaint against Ms Jansen was false and not made in good faith.