MR R W LISK-CAREW v (1) BIRMINGHAM CITY COUNCIL (2) DR S SHARP [2003] UKEAT 0779_02_2110

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2003] UKEAT 0779_02_2110Case No Appeal No. EAT/0779/02Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR R W LISK-CAREWAPPELLANT(1) BIRMINGHAM CITY COUNCIL (2) DR S SHARPRESPONDENT
Before
His Honour Judge Richardson Mr I Ezekiel Mr R LyonsDate 21 October 2003
[1]APPEARANCES For the Appellant MR R W LISK-CAREW (the Appellant in Person) For the Respondent MR EDWARD PEPPERALL (of Counsel) Instructed by: Birmingham City Council Legal Services Ingleby House 11-14 Cannon Street Birmingham B2 5EN HIS HONOUR JUDGE RICHARDSON Note for judge at end of hearing: at one stage wrong year given for the dismissal – it was in 2001. This is an appeal against a decision of the Employment Tribunal sitting in Birmingham, promulgated on 13 May 2002 awarding the sum of £5,000 together with interest for victimisation in contravention of section 2 of the Race Relations Act 1976 . The appeal is brought on the ground that the award of compensation is inadequate.[2]The Appellant is Mr Lisk-Carew. He was employed by the first Respondent, Birmingham City Council ("the Council"). On 9 February 2001 he was dismissed. The other remaining Respondent, Dr Sharp, was the officer of the Council who took the decision to dismiss. The Procedural History[3]There have been four decisions of Employment Tribunals in litigation between Mr Lisk-Carew, the Council and various of its officers. The first was chaired by Mr D S Crump ("the Crump Tribunal"). After a hearing lasting about 19 days, spread during the years 1998 and 1999, that Tribunal gave its decision on 11 November 1999. Next was a Tribunal chaired by Mr S Ahmed ("the Ahmed Tribunal"). That Tribunal held hearings during 2000 and gave its decision on 7 December 2000. Those Tribunals concerned allegations by Mr Lisk-Carew of race discrimination and victimisation. All the complaints dealt with by the Crump Tribunal and the Ahmed Tribunal were dismissed.[4]Then Mr Lisk-Carew brought proceedings for unfair dismissal, race discrimination and victimisation. The Employment Tribunal determined those by a decision promulgated on 31 January 2002 ("the Merits Decision"). By that decision the Employment Tribunal dismissed the claims for unfair dismissal and race discrimination, but upheld the claim for victimisation. There is no appeal against that decision. Mr Lisk-Carew served a Notice of Appeal that it was out of time and an extension of time was refused. Neither the Council nor Dr Sharp appealed. As Counsel, Mr Pepperall, for the Council and Dr Sharp said, it is the tension between the different findings in that merits decision which underlies the appeal today. Nevertheless, the appeal today is not against that decision.[5]The fourth decision, dated 13 May 2002, was the Employment Tribunal's decision on remedies ("the Remedies Decision"). This is the decision under appeal. The Appellant contends that compensation should have been awarded for loss flowing from his dismissal. At a preliminary hearing on 11 December 2002 this was identified as the central ground of his appeal and by virtue of the Order made on that day it is the sole remaining question in his appeal. The loss for which he seeks to claim is financial loss.[6]However, the Council and Dr Sharp applied out of time to amend their Answer by adding a cross-appeal. This application was granted by Order of the Registrar dated 5 August 2003. By that cross-appeal they contend that it was not just and equitable to award compensation at all. They seek to set aside the award of £5,000 which they have already paid to Mr Lisk-Carew.[7]Mr Lisk-Carew has asked us today, out of time, to consider an appeal against the Registrar's decision dated 5 August 2003. The Facts[8]Mr Lisk-Carew was employed by the Council as a Senior Educational Social Worker from July 1991 until his dismissal on 9 February 2001. During 1998 and 1999 he was off work for lengthy periods for stress and stress-related headaches. On 5 October 1998 he returned to work. The Council wished to operate return to work procedures. It is the Council's case that he failed to co-operate and comply with reasonable management instructions. On 14 October 1998 he was told to go home on full pay and not to report for work until the conclusion of the Crump Tribunal. In effect, he was suspended on full pay, although the Council did not then use the term 'suspension' and did not invoke any disciplinary procedure against him. He remained in effect suspended as the Crump Tribunal completed its work and the Ahmed Tribunal did its work.[9]The Ahmed Tribunal had to consider the events which took place in October 1998. It criticised Mr Lisk-Carew's conduct. He failed to keep the Council informed. He failed on several occasions to follow simple instructions on the return to work arrangements. He had made it impossible to have a structured return to work meeting. The Ahmed Tribunal found that he had "behaved in a manner which clearly demonstrated that he was not willing to follow simple and straightforward instructions on his return to work in line with Council procedures". It found that a Council employee was justified in finding his behaviour offensive and unco-operative. Far from finding that there was discrimination against him, the Ahmed Tribunal concluded that he was treated more favourably than might otherwise have been the case because he had brought other tribunal proceedings.[10]On 2 June 1999 Mr Lisk-Carew was formally suspended. The reasons for suspension – in essence the charges against him – were fourfold. Firstly, it was said he was unwilling to implement City Council policies. Secondly, it was said he repeatedly failed to comply with reasonable management instructions. These charges related to his failure to comply with the return to work policy in 1998. Thirdly, it was said that he made repeated unsubstantiated allegations against management and other colleagues. Finally, it was said that he had an offensive and unco-operative attitude to management.[11]Of the four charges, the first two and the fourth related to what happened in October 1998. So the preponderance of the charges related to October 1998. The third charge, however, related to allegations of discrimination made by Mr Lisk-Carew for the first time in the course of Tribunal proceedings without, it was said, prior notice or complaint.[12]Those two decisions to suspend were the subject of complaints dealt with by the Ahmed Tribunal. The complaints were not upheld. The Ahmed Tribunal concluded that the initial suspension in 1998 was not discriminatory (see paragraph 57 of its Decision) and that there was no victimisation or discrimination in the formal suspension on 2 June 1999 (see paragraphs 64 and 65 of the same Decision). In essence it found that the suspension on 2 June 1999 formalised the earlier suspension, which had been imposed for good reason.[13]On 9 February 2000 Dr Sharp on behalf of the Council chaired the disciplinary hearing which led to Mr Lisk-Carew's dismissal. Much of the evidence before her related to October 1998. But among the evidence which Dr Sharp received there was certainly evidence relating to the third of the charges – allegations made against Council employees. It came from Mr Smail and Miss Raybould. Its nature is summarised at paragraphs 22-25 of the Merits Decision. It included allegations of race discrimination made at the Tribunal and elsewhere. It included an allegation that in a letter dated 12 October 1998 he accused Mr Smail of "continued and blatant direct racial discrimination".[14]Following the hearing Dr Sharp concluded that Mr Lisk-Carew should be summarily dismissed for gross misconduct. The letter of dismissal described the gross misconduct in terms which follow closely the wording of the four charges which we have set out above. An internal appeal was heard and dismissed. The Merits Decision Unfair Dismissal and Race Discrimination[15]In its Merits Decision the ET first dealt with the complaint of unfair dismissal. It held that the Council had satisfied it that the principal reason for dismissal was the misconduct of Mr Lisk-Carew in failing to comply with reasonable instructions given to him.[16]At paragraph 32 of the Merits Decision the ET said: 32 "The dismissing officer was Dr Sonia Sharp. She gave honest and open evidence to the tribunal. She responded courteously to detailed cross-examination. In her evidence she insisted that the main factor for the dismissal was the repeated refusal of the applicant to comply with reasonable instructions, to comply with a return to work and to accept work. In cross-examination she confirmed that she based her decision on the allegations contained in pages 108 to 112 of John Smail's statement to the disciplinary hearing. That section of the statement dealt with the issues of the return to work in October 1998. In answer to the tribunal she confirmed that her main decision was based on the failure of the applicant to comply with reasonable instructions which led her to conclude that the relationship of trust and confidence had broken down."[17]It is plain that the ET accepted the evidence of Dr Sharp. It described her as giving "honest and open evidence". The ET, having held that the principal reason was Mr Lisk-Carew's misconduct in failing to comply with reasonable instructions given to him, went on to find that the Council had undertaken a full investigation and afforded Mr Lisk-Carew a fair hearing. It held that dismissal was within the range of penalties which a reasonable employer, behaving reasonably, could adopt. It therefore dismissed the complaint of unfair dismissal.[18]The ET then dealt with Mr Lisk-Carew's complaint that the Council and Dr Sharp had been guilty of direct discrimination on racial grounds by dismissing him. He complained that a white employee would not have been dismissed as he was. The ET gave itself a careful direction in accordance with Glasgow City Council v Zafar [1998] ICR 120 and Anya v University of Oxford [2001] ICR 847 . It pointed out that Mr Lisk-Carew's criticisms of the return to work policy and his suspension had been rejected by the Ahmed Tribunal. It concluded that Mr Lisk-Carew had not made out his claim of race discrimination. It said he had failed to establish any difference in treatment. Victimisation[19]Having then found that his dismissal was neither unfair nor unlawful discrimination, the ET went on to uphold Mr Lisk-Carew's complaint of victimisation. Victimisation is shorthand for what is provided by Section 2 of the Race Relations Act 1976 . This provides:
"Discrimination by way of victimisation 2 (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; or (b) given evidence or information in connection with proceedings brought by any person against the discriminator or any other person under this Act; or (c) otherwise done anything under or by reference to this Act in relation to the discriminator or any other person; or (d) alleged that the discriminator or any other person has committed an act which (whether the allegation so states) would amount to a contravention of this Act. or by reason that the discriminator knows that the person victimised intends to do any of those things, or suspects that the person victimised has done, or intends to do, any of them. (2) Subsection (1) does not apply to treatment of a person by reason of any allegation made by him if the allegation was false and not made in good faith."
[20]It is important to set out in some detail how the Employment Tribunal approached this part of the case and what findings it made.[21]The Employment Tribunal referred to the decision of the House of Lords in Chief Constable of West Yorkshire Police v Khan [2001] ICR 1065 . It concluded in paragraph 46 of its Decision that it was bound to hold that Mr Lisk-Carew had suffered "less favourable treatment". Indeed written submissions on behalf of the Council and others who were then respondents had conceded the point.[22]The Employment Tribunal then considered the law concerning the question whether an individual has been less favourably "by reason that an individual has done a protected act". It referred to the speech of Lord Nicholls in Nagarajan v London Regional Transport [1999] ICR 877 . It referred to Khan (above) as authority for the proposition that a "but for" test would impose too low a threshold.[23]After recording the submissions of the parties, the Employment Tribunal set out its conclusions.[24]Mr Lisk-Carew had instituted several sets of proceedings before the Employment Tribunal which, it found, were potentially protected acts under section 2 of the 1976 Act.[25]Moreover, it will be recalled that one of the four grounds of suspension and dismissal concerned allegations Mr Lisk-Carew had made against council employees. At the disciplinary hearing Veronica Raybould and John Smail had given instances of these allegations. The allegations Mr Lisk-Carew had made were also potentially protected acts under section 2. Dr Sharp had expressly stated in her letter of dismissal that she found them to be substantiated.[26]The key conclusions of the Employment Tribunal are set out in paragraphs 57 and 58 of its Decision: 57 "In her evidence to the tribunal Dr Sharp maintained that those factors (namely the allegations of race discrimination and the allegations made in the context of tribunal proceedings) had played only a small part in her decision to dismiss. This tribunal accepts that consciously that may be so. However, that must be contrasted with the weight attached by the respondents to the allegations both in reaching the decision to suspend on 2 June 1999 and in preparing the statement of case against the respondent. It is the tribunal's view that those allegations must have had a significant influence on the decision to dismiss even if that influence was subconscious rather than conscious. 58 It follows that the applicant will have established discrimination by way of victimisation unless the tribunal are satisfied that the allegations were false and made in bad faith."[27]The Employment Tribunal then considered its findings in respect of section 2 (2) of the 1976 Act. It held (by a majority) that an allegation made by Mr Lisk-Carew against Mr Smail, was both false and made in bad faith. It was, it should be noted, an allegation intimately connected with the return to work episode in October 1998. The majority found that it was falsely made in order to prevent the return to work process being completed. The other complaints by Mr Lisk-Carew to Employment Tribunals and the other allegations taken into account by Dr Sharp were found to be genuine but misguided.[28]On the basis of this approach the Employment Tribunal found victimisation to be proved. It adjourned the question of remedy to a further date. The Remedies Decision[29]On its adjourned hearing the Employment Tribunal was concerned to apply section 56 of the Race Relations Act 1976. This provides:
"Remedies on complaint under s. 54. 56 (1) 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) an order declaring the rights of the complainant and the respondent in relation to the act to which the complaint relates; (b) an order requiring the respondent to pay to the complainant compensation of an amount corresponding to any damages he could have been ordered by a county court or by a sheriff court to pay to the complainant if the complaint had fallen to be dealt with under section 57."
[30]The ET heard evidence from Mr Lisk-Carew. He gave evidence as to his applications for work in the social work field, his retraining to work with computers, and the health problems which meant he was no more than intermittently fit for work. It is clear that he was seeking compensation for the financial consequences of dismissal. On behalf of the Council and Dr Sharp it was submitted that the loss of employment resulted from a fair dismissal rather than the act of victimisation identified. It was submitted that the finding of victimisation was a sufficient remedy in itself but alternatively that the award should be at the lowest end of the scale.[31]The Employment Tribunal noted that the substance of its decision on the issue of victimisation was to be found in paragraph 57 of the Merits Decision (which we have quoted above). After referring to the law and to reported cases, the ET concluded, so far as material to this appeal: 9 "The applicant is entitled to be compensated for the damages which flow from the acts of victimisation identified by this tribunal in the earlier decision. The applicant has lost his employment and has yet to secure alternative employment. However the loss of employment was caused by a fair dismissal and the failure to secure fresh employment flows from that fair dismissal. His ill health does not result from the act of victimisation nor has that ill health been exacerbated by the act of victimisation. 10 Accordingly the act of victimisation has not caused any special damage (in the sense of loss of earnings) to be sustained by the applicant. The act of victimisation has not caused any injury to health."[32]The ET went on to award the sum of £5,000 for injured feelings. It held that it was not "appropriate" to make a separate award against Dr Sharp, who was acting in the course of her employment. Submissions[33]Mr Lisk-Carew, in written submissions, which he has developed economically and succinctly before us, submitted that it was inexplicable, given its finding that his dismissal was by reason of victimisation, that the Employment Tribunal had not awarded him compensation for the financial consequences of the dismissal. He had lost his livelihood. It was just and equitable to award him compensation: the Employment Tribunal must found this, because it awarded him £5,000 for loss of feelings. He was entitled to compensation to be put in the position he would be in if no victimisation had been out by the Council. Since the Employment Tribunal's finding is that he was dismissed by reason of victimisation, his losses include loss of earnings, past and future, loss of employment protection, loss of pension rights, and other consequential financial losses. Elias J, at the preliminary hearing, giving a succinct judgment said "There is arguably some contradiction between the finding of fair dismissal and the finding of victimisation. We are satisfied that on this point, but only this point, there is a matter fit to go to the full hearing."[34]On behalf of the Council and Dr Sharp Mr Pepperall submitted that the decision of the Employment Tribunal contained no error of law. The burden was upon Mr Lisk-Carew to establish that he had suffered loss of earnings by reason of victimisation – viz, that but for the victimisation he would not have suffered the loss of earnings. He said that there was a fundamental causation point. Mr Lisk-Carew had to prove what loss flowed. Given that there was a fair dismissal he was unable to say that the victimisation was a cause of financial loss to him.[35]There was an alternative submission on this point from Mr Pepperall, that in any event the Employment Tribunal found him to be suffering from ill health. That is true, but on our reading of the Employment Tribunal's Decision that was not the reason for finding that he was not entitled to financial loss. The reason for finding that he was not entitled to financial loss was because the loss of employment was caused by the fair dismissal and the failure to secure fresh employment flowed from that dismissal.[36]By way of alternative submission, it is contended by Mr Pepperall that it was not just and equitable to award compensation in this case. He had amended the Answer to include a cross appeal because there is clear law, which he does not challenge, that once an ET has determined that it is just and equitable to award compensation the tribunal does not then have a jurisdiction to reduce the amount of such compensation – see Hurley v Mustoe (No 2) [1983] ICR 422 at 425G-426A and Chan v Hackney London Borough Council [1997] ICR 1014 at 1021E-G.[37]Mr Lisk-Carew, in response to this submission, contends that it is unjust that such a cross appeal should be allowed so long after the event. He contrasts allowing the cross-appeal with the refusal of an extension of time to him to pursue the Merits Decision. He says that it was well within the discretion of the Employment Tribunal to determine that it was just and equitable to award him compensation. He has, as we have said, sought to appeal the Registrar's decision to allow the cross-appeal. Our Conclusions[38]We emphasise that we are not called on to determine an appeal against the Merits Decision. This appeal is concerned whether there is an error of law in the Remedies Decision. There will only be an error of law in the Remedies Decision if the Employment Tribunal misdirected itself in law, or misapplied the law, or reached a finding or conclusion for which there was no evidence, or reached a decision which no reasonable Tribunal properly directing itself on the law, could reach. The Merits Decision is relevant as setting out the essential background to the Remedies Decision. It is therefore important to examine it. But the Merits Decision is not itself the subject of this appeal.[39]There were three elements to the reason for dismissal.[40]First, the conduct of Mr Lisk-Carew in connection with his return to work in October 1998. This conduct was not a protected act.[41]Second, there was the conduct of Mr Lisk-Carew in making allegations of discrimination in previous employment proceedings and elsewhere against the Council and other members of staff which, even though false, were made in good faith. All but one of the allegations were found to have been made in good faith, even though false (see paragraph 60 of the Merits Decision).[42]Third there was the conduct of Mr Lisk-Carew in making an allegation of discrimination against Mr Smail in his letter dated 12 October 1998. The majority found this was made in bad faith, being false and motivated by a desire to prevent the return to work process being completed (paragraph 59).[43]In its decision on the unfair dismissal application the Employment Tribunal found that the first of these was the principal reason for dismissal. It found that the dismissal for this reason was fair, being reached after reasonable investigation and being within the range of responses open to a reasonable employer. Nor was the decision to dismiss racial discrimination, as the Employment Tribunal made clear.[44]Given these two decisions, it is necessary to look closely to see what the victimisation decision entailed and what it may not have entailed.[45]The starting point of the decision concerning the victimisation claim is the finding, not opposed, that the Council had treated Mr Lisk-Carew less favourably. The treatment which the Employment Tribunal identified was the dismissal (paragraph 46). This reasoning is in accordance with the decision of the House of Lords in Khan v Chief Constable of West Yorkshire [2001] 4 All ER 834 . But because the comparison is with an employee who has not been dismissed, this is not the central question in a victimisation case.[46]The central question is whether the dismissal is by reason of' protected acts and if so to what extent and in what respect. This the Employment Tribunal dealt with in paragraphs 59-60 of its Decision (which we have quoted). We have the following observations on this part of the Decision.[47]First, the Employment Tribunal did not find that the dismissal was by reason of the conduct of Mr Lisk-Carew in making an allegation of discrimination against Mr Smail in his letter dated 12 October. If the Employment Tribunal had made such a finding, then since that conduct was an allegation made falsely and in bad faith, section 2 (1) would not have applied to the dismissal. This supports and is consistent with the finding of the Employment Tribunal that misconduct in failing to comply with reasonable instructions was the principal reason for dismissal.[48]Second, the ET concentrated on a particular phrase in the speech of Lord Nicholls in Nagarajan – the phrase "significant influence". We quote the full passage [1999] ICR at 886:
"Decisions on racial grounds are frequently reached for more than one reason. Discrimination may be on racial grounds even though it is not the sole ground for the decision. A variety of phrases, with different shades of meaning, have been used to explain how the legislation applies in such cases: discrimination requires that racial grounds were a cause, the activating cause, a substantial and effective cause, a substantial reason, an important factor. No one phrase is obviously preferable to all others, although in the application of this legislation legalistic phrases, as well as subtle distinctions, are better avoided so far as possible. If racial grounds or protected acts had a significant influence on the outcome, discrimination is made out."
[49]In a recent case, Bahl v The Law Society [2003] IRLR 640 at para. 83, Elias J giving the judgment of the EAT said "...the discriminatory reason for the conduct need not be the sole or even the principal reason for the discrimination; it is enough that it is a contributing cause in the sense of a "significant influence"." It was this phrase, "significant influence", that the Employment Tribunal adopted in paragraph 57 of its decision.[50]It follows in our judgment that the Employment Tribunal cannot necessarily be taken as finding that the decision to dismiss would have been different, absent the protected acts. Indeed, if the Employment Tribunal had meant in the Merits Decision to say that the decision to dismiss would not have been made but for the protected acts, it cannot in our judgment be reconciled with the cumulative effect of the findings it had made: that the principal reason for the dismissal was Mr Lisk-Carew's conduct in connection with the return to work, that there was a fair dismissal, that Dr Sharp was honest, that any influence was subconscious and that Mr Lisk-Carew had made a false allegation of racial discrimination in bad faith.[51]We do not consider that the Employment Tribunal can be taken as finding that the decision to dismiss would have been different, absent the protected acts.[52]It follows, in our view, that the Employment Tribunal was not bound in law to find, in the Remedies Decision, that there should be compensation for the financial consequences of the dismissal. Given the findings which it had made in respect of Mr Lisk-Carew's case in the Merits Decision, which we have summarised just before, we see no error of law in the Employment Tribunal's Remedies Decision. The Cross-Appeal[53]We turn to the cross appeal. Was there an error of law in the Employment Tribunal's finding that it was just and equitable to award compensation? In our judgment, no error of law is demonstrated. It is important here to bear in mind, as the Employment Tribunal said in paragraph 56 of its Decision, that protected acts were relied on as part, albeit only part, of the disciplinary process. One of those protected acts was false and made in bad faith, but others were false and made in good faith. The rationale of section 2 of the 1996 Act is to protect an employee who makes honest allegations of race discrimination. He should not have had to face charges which arose out of allegations and complaints which he made honestly even if they were false. Given the Employment Tribunal's finding in paragraph 57 of its Decision it is impossible to say that it erred in law in finding that it was just and equitable to compensate him in the way that it did.[54]We therefore have no hesitation in dismissing the cross-appeal.[55]We refuse Mr Lisk-Carew's application to appeal out of time against the Registrar's Decision. Any such appeal should have been made a long time ago. But, in the light of our Decision, that is academic.[56]It follows that the appeal and the cross-appeal will both be dismissed. [Upon an application on permission to appeal]:[57]We do not think that this is a case where we should give permission to appeal. We do not consider that any general point arises and we do not think an appeal is arguable. But, you have the right to go to the Court of Appeal and apply to them for permission.