MR T LAMMY v HEP SECTIONS LTD [2003] UKEAT 784_02_2005

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2003] UKEAT 784_02_2005Case No Appeal No. EAT/784/02Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR T LAMMYAPPELLANTHEP SECTIONS LTDRESPONDENT
Before
MR COMMISSIONER HOWELL QCMR G LEWISMR D NORMANDate 20 May 2003
[1]APPEARANCES For the Appellant MS C RAYNER (of Counsel) Instructed by: Coventry Law Centre The Bridge Broadgate Coventry CV1 1NG For the Respondents MR D OUDKERK (of Counsel) Instructed by: EEF Broadway House Tothill Street London SW1H 9NQ MR COMMISSIONER HOWELL QC This is an appeal by Mr Trevor Lammy, a former production manager with the Respondents, HEP Sections Ltd, against the Decision of the Birmingham Employment Tribunal set out in Extended Reasons sent to the parties on 6 June 2002, that his dismissal from that employment on 31 January 2001 for redundancy, which the Tribunal held to be unfair, was not also an act of racial discrimination against him by the Respondents.[2]Mr Lammy had been an employee of the Respondents for many years, having joined them as a shop floor employee in 1978 when they were still a family firm. He had risen successfully to the position of works or production manager, responsible for the hands-on management of the shop floor employees. He had very good relationships with the managers in the works side of the business, in particular a Mr Rice and a Mr Jeavons, who had been the ones responsible for his promotion. By the time we are concerned with, the family firm had been taken over and had become a part of the Metsec group of companies, which has a total of some four hundred and fifty employees. The Respondents' workforce numbered about forty five, of whom, according to the Tribunal's findings, he was the only black employee, though there were also two employees of Asian ethnic origin. Mr Lammy, whose abilities in connection with the shop floor work the Tribunal expressly found to be of "a very high level", did not get on so well with paperwork and had less good relationships with other members of the management, in particular a Mr Allen, the financial controller, and a Ms Straw, the accounts manager.[3]In the late 1990s, the Respondents' profitability declined; and the Tribunal found that in the autumn of 2000 it became evident that they were likely to lose substantial amounts of turnover from two of their major customers, as a result of which Mr Tilsley, the managing director of Metsec, Mr Rice and Mr Jeavons decided it was necessary to effect reductions in their costs. On Wednesday 24 January 2001, Mr Rice made general announcements to the Respondents' employees that costs were under review and this could include possible redundancies of up to six employees. The Tribunal recorded that this number had not been carefully calculated and "to an extent, was a figure which Mr Rice plucked from thin air". At the end of January, following some discussions (but as the Tribunal found, without any proper collective or individual consultation on the question of redundancy or the system to be adopted) Mr Rice and Mr Jeavons decided to reduce the workforce by dismissing two other employees who only had very short service, and to delete altogether the production manager's role carried out by Mr Lammy. He was told verbally and by letter that the Respondents would no longer require a works manager and he was therefore redundant. That decision, and his dismissal on that ground on 31 January 2001, was later confirmed at an internal appeal. Subsequently, however, as the Tribunal found, a Mr Barlow had been taken on as an employee and by the time of the Tribunal hearing in March 2002 was doing much of the work previously undertaken by Mr Lammy, though some of it was being done by Mr Rice himself.[4]The Tribunal found that Mr Lammy had been genuinely dismissed for redundancy because at the time the Respondents anticipated losing important orders and had decided their requirements for an employee to carry out the particular work of production manager had ceased. They further recorded express findings that the decision to dismiss Mr Lammy had been taken by Mr Jeavons and Mr Rice; it had not been influenced by Mr Tilsley, and neither Mr Allen nor Ms Straw had played any part in the decision or influenced it. However the Tribunal found the decision to select and dismiss Mr Lammy was unreasonable and unfair because there was no proper consultation with him about it, nor did the Respondents look properly into any alternative possibilities before telling him he was to be dismissed. Those failures were not remedied by the appeal process, which was merely a review of the decision already taken. Those findings, and the decision that the dismissal was thus unreasonable and unfair, are not in any way challenged by the Respondents.[5]All that is in issue on this appeal brought by Mr Lammy is whether the Tribunal's rejection of his further claim that the dismissal amounted to an act of racial discrimination against him was based on adequate findings of fact and sufficiently reasoned conclusions. His original Notice of Appeal dated 17 July 2002 relied on variously specified grounds, criticising the way the Tribunal had reached its findings and applied the law to the facts and evidence in the case, but for the purposes of the appeal hearing, Ms Rayner, who appeared on his behalf but had not drafted the original grounds, helpfully refined these into one basic ground put in various different ways, relying in particular on the principles explained by the Court of Appeal in Anya -v- University of Oxford [2001] ICR 847 , that there had been a failure to make and record sufficient findings of fact or adequately reasoned conclusions on the relevant issues before rejecting the race discrimination claim. In particular, their findings on redundancy were inadequate for the purposes of deciding whether an inference of racial discrimination should be drawn in the decision to dismiss which they found to be unreasonable, and their explanation of reasons for not drawing that inference from the facts they did find was inadequate. She very properly made clear that there was no allegation of "perversity" in the conclusion itself, which it was accepted was one a Tribunal could properly have reached in this case, had it done so by a proper reasoning process.[6]It was accepted that the Tribunal had correctly directed themselves to the relevant law on racial discrimination as set out in the authorities to which they expressly referred in paragraph 66 of their Extended Reasons, and that there was no ground for criticising the summary in paragraph 76, where the Tribunal reminded themselves of the difficulties facing an employee in bringing such a claim, that the Respondents' motive and intention are not relevant to the issue being considered, of the importance of ascertaining whether it is appropriate to draw an inference or inferences of discrimination from the primary facts found, and the importance of taking into account background factors and all the circumstances concerning the Applicant's relationship with the Respondents. That summary was in our view rightly described by Mr Oudkerk, who appeared for the Respondents, as "faultless", and demonstrates that the Tribunal had well in mind the established principles and guidance relevant on such an issue, in particular the well known passage of the judgment of Neill LJ in King -v- Great Britain China Centre [1992] ICR 516 at 528 F - 529C .[7]It was accordingly on the succeeding paragraphs of the Tribunal's Extended Reasons in which they set out how they sought to apply those principles, that Ms Rayner's criticisms focused. In those paragraphs, the Tribunal first set out the background, noting in particular that the two individuals who took the decision to dismiss the Applicant were Mr Rice and Mr Jeavons, each of whom had taken important roles in his promotion and each of whom enjoyed good personal relationships with him, which the Tribunal were satisfied were genuine and honestly based. They noted that he was the only black employee of the Respondents, and that one apparently isolated past incident of racist graffiti in the works toilet had been speedily and firmly dealt with by Mr Rice who had convened a works meeting and made it clear to all the workforce that this was unacceptable and if it was repeated, the perpetrator would be instantly dismissed. There had been a genuine investigation at the appeal stage of Mr Lammy's earlier complaint that he was only picked for dismissal because of his skin colour, and a reasonable conclusion that he was not.[8]The Tribunal then proceeded to set out their conclusions from that background, and the primary facts they had already recorded. They said the racial discrimination claim was based on his dismissal, for which the Respondents' explanation was that he had been fairly dismissed by reason of redundancy. As the Tribunal had found the dismissal to be unfair, to that extent they were not satisfied with the employer's explanation as being an innocent and reasonable explanation for their conduct. The Applicant had been treated less favourably than those who were not dismissed, and that treatment could be consistent with unlawful racial discrimination based on his skin colour. They then said:
"89 The tribunal has gone on to consider whether it is appropriate to draw an inference, or inferences, that the applicant's treatment was unlawful discrimination. In carrying out this task, the tribunal has carefully looked at the facts found by it against the background of the applicant's relationship with the respondents and individual employees and office-holders of the respondents. It has taken into account the finding of the tribunal that the applicant's dismissal was unfair"
They then noted that a race relations questionnaire served after the start of the Tribunal proceedings had not been responded to within a reasonable period, and recorded that they found the late response unsatisfactory and the response to one question in particular "evasive". They said it was clear the Respondents did not accord proper importance to responding to the questionnaire and this finding was taken into account when deciding whether it was appropriate to draw an inference of unlawful conduct. In addition, they had taken into account the background of the Applicant's employment, the fact that only one other permanent employee was made redundant at the same time, the low representation of ethnic minorities in the workforce, along with other allegations made by the Applicant, and the fact that at any rate some of the work done by him was now being carried out by Mr Barlow. They reiterated their finding that Mr Tilsley and Mr Allen (whose attitude towards him the Applicant had criticised) were not parties to making the actual decision to dismiss him.[9]They then expressed their conclusion as follows:
"92 Having subjected the issue to the most anxious of scrutiny the tribunal concludes that it is not appropriate to draw the inference or inferences that the applicant's dismissal was an act of unlawful discrimination. It is clear that on occasion when unacceptable conduct of a racial nature had occurred with regard to graffiti in the toilets, Mr Rice dealt with it positively and effectively. The applicant was the only employee of the respondents with black skin colour, but his relationship with Mr Rice and Mr Jeavons was not tainted with unlawful racial discrimination. Mr Rice and Mr Jeavons were important decision makers in connection with the applicant's promotion and they also took the decision as to his dismissal. In these circumstances it is not appropriate to draw an inference, or inferences, of discrimination against the applicant by the respondents. 93 The tribunal has reminded itself that it has found that the applicant was unfairly dismissed. This clearly gives cause for concern and has raised serious questions in the minds of the members of the tribunal. Despite this, after scrutinising the situation most carefully, the tribunal is satisfied that there was no racial element in the dismissal"
And they went on to add:
"94 The tribunal has looked at the matter again and asked itself whether an individual in all circumstances similar to those of the applicant, with a similar experience and history with the respondents but not of black skin colour, would have been treated differently from the treatment of the applicant. The tribunal answers that question in the negative."
In the following four paragraphs they recorded that they had looked at the matter yet again in various different ways to see whether they should question any of their previous findings in the context of the race discrimination issues, or whether some inference of race discrimination should nevertheless be drawn; and were still satisfied that he had not been the subject of unlawful discrimination in respect of his dismissal.[10]Ms Rayner submitted that this consideration of the issues fell short of the standards laid down and explained by the Court of Appeal in Anya . In particular, the Tribunal had failed properly to address the question of whether the Applicant's job had really been redundant at all, given their own finding that another employee had later been taken on who was doing the Applicant's old work: they should have made clearer and more sustainable findings about the true reason for the dismissal, given their express rejection of the Respondents' explanation for it. That meant that there had been a failure by the Tribunal to make findings on a crucial issue of fact relevant to the question of whether an inference of racial discrimination should be drawn; and there had been a further breach of the principles laid down in Anya in what Ms Rayner said was an improper piece of supposition or speculation by the Tribunal in paragraph 94 set out above, in embarking on a hypothetical comparison, when as had been emphasised by the earlier authorities cited in Anya , in particular at page 854 C - E, inferences can only properly be drawn from a clear factual basis, and it is of the greatest importance that the primary facts are set out with clarity by the Tribunal in its fact-finding role, a mere intuitive hunch or speculation being insufficient.[11]In our judgment what was said in Anya (one of the authorities to which the Tribunal in this case expressly directed themselves in paragraph 66 of their Extended Reasons) helpfully clarifies and emphasises two already well established principles as distinct from creating any new ones; and we did not understand either Counsel before us to contend otherwise. The first principle, that if inferences of fact are to be drawn this must be from clearly identified findings of primary fact rather than mere hunch or speculation, is the point already referred to in Anya at page 854 C - E, derived from the judgment of Peter Gibson LJ in Chapman -v- Simon [1994] IRLR 124 , para 43. That was the point on which the actual decision in Anya depended, where there were allegations of previous hostility towards the applicant which he said demonstrated that the later rejection of which he was actually complaining had been because of racial bias, and it was held that the Tribunal had been wrong to dismiss the application without making any findings about whether the previous incidents relied on had actually occurred or not. The second and broader principle emphasised in Anya (e.g at paragraph 12, page 856 B - D) is the even more well established one that a Tribunal's reasons for its decision must be expressed in sufficient terms to enable the result to be understood, as held in Meek -v- City of Birmingham District Council [1987] IRLR 250 , in terms too well known to need repeating here; and that a want of such adequate reasons may itself be a free-standing ground of appeal.[12]In this case, the only question of primary fact on which Ms Rayner contended there had been a failure on the Tribunal's part to make adequate findings was in relation to redundancy. We were not persuaded by this argument. In our judgment, the Tribunal did make and record clear findings of primary fact, which are not open to question on this appeal, that because of the need to cut costs and reduce the workforce the Respondents decided they could do without a works manager. That was accepted by the Tribunal in paragraph 68 of their Extended Reasons as having been the genuine reason for the Applicant's dismissal, so that it amounted to dismissal by reason of redundancy. It is, in our judgment, made quite clear by that and the succeeding paragraphs where the Tribunal went on to consider the fairness of his dismissal on that ground, that they found there to have been a genuine redundancy situation, even though there was unfairness both in the substance and in the manner of his selection for dismissal on that ground since there was no proper selection procedure and the consultation was inadequate. Those findings, in our judgment, provided an entirely sufficient basis for the Tribunal to find as they did on the race discrimination aspect of the claim, that the unfair dismissal amounted to less favourable treatment of the Applicant for which the reason and explanation put forward by the Respondents was unsatisfactory, and thus to proceed immediately to consideration of whether an inference should be drawn against them that the true reason was, or was affected by, racial discrimination. The true parallel with what was said in Anya about the need for factual findings in this context is, we think, with the one and only previous incident identifiable in this case, as having racial overtones, namely what happened about the graffiti; and on that the Tribunal did make and record absolutely clear findings about the involvement and actions of Mr Rice and his firm and proper behaviour on that occasion, which demonstrate and support why it was not appropriate to infer against him that the Applicant's race had anything to do with the later dismissal which was the subject matter of the complaint. In that, the Tribunal appear to us to have been doing exactly what the judgments in Chapman -v- Simon and Anya required of them.[13]The broader point argued by Ms Rayner was that the Tribunal's analysis of the reasons for and against drawing such an inference against the Respondents amounted to a mere recital of points followed by a statement and reiteration of a conclusion, without any real explanation of why those in favour of an inference had not been preferred. On this, we again accept Mr Oudkerk's argument that the Tribunal's analysis and explanation of their reasons proceeds in an almost textbook manner in accordance with the guidance in King -v- Great Britain China Centre , and provides a full and sufficient explanation of why the inference of race discrimination in this particular dismissal was not drawn. Paragraphs 89-94 of the Tribunal's Reasons, to which we have already referred, clearly show the Tribunal giving a careful and balanced consideration to all the possible factors in the evidence that might have indicated that the Applicant's different racial origin played a part in selecting him for dismissal, or his post for elimination, in preference to those who were not dismissed. As Mr Oudkerk pointed out, this was a balanced consideration in the course of which they did express dissatisfaction with certain aspects of the way the Respondents behaved; but the result of that balanced consideration was the clear conclusion that they were not satisfied it was right to infer a racial element in the dismissal. The particular factors leading to this were identified at the end of paragraph 21 and in paragraph 22 of the Extended Reasons: most importantly, that the actual decision to dismiss had been taken by Mr Rice and Mr Jeavons, with whom Mr Lammy had a genuine good and friendly relationship untainted with discrimination: they had been the people actually responsible for his promotion, and Mr Rice had been the one who dealt firmly and positively with the racist graffiti episode. The other members of the management with whom Mr Lammy got on less well had not been parties to the decision at all. It was not suggested that that was in any way an impermissible conclusion for the Tribunal to reach: plainly the points just identified in paragraphs 91 and 92 justified it. Ms Rayner's criticism that in those paragraphs and the preceding ones the Tribunal failed to spell out their reasoning more specifically and left gaps for the reader to fill in by inference is not one with which we can agree. We find the findings and Reasons of the Tribunal set out clearly and analytically in the paragraphs to which we have referred; and the repeated emphasis on the decision having been made by Mr Rice and Mr Jeavons and the lack of any ground for inferring a racial element on their part in the decision to dismiss when all their previous actions and attitudes towards him had been found to be favourable, sufficient for any reasonable person to understand why the Tribunal found that no such inference should be drawn.[14]We similarly do not accept the subsidiary point argued by Ms Rayner that there was some element of improper speculation in what the Tribunal said in paragraphs 94 or later in their Extended Reasons about another hypothetical individual with a similar experience and history but of a different skin colour not being treated any differently. This in the context of the question of inference they were considering appears to us to be just another way of emphasising that they found no racial element in the dismissal. Her criticism that the Tribunal wrongly failed to direct their minds or refer to the possibility of unconscious, as distinct from deliberately motivated, discrimination is in our judgment unsustainable in view of the express reminder recorded in paragraph 76 that the Respondents' own motive and intention were not the question. The other grounds relied on in the original Notice of Appeal, for example that the Tribunal had failed to give adequate weight to certain aspects of the evidence, or to the alleged inadequacy in the Respondents' evidence in relation to redundancies and so forth, were in our judgment correctly characterised by Mr Oudkerk as doing no more than seeking to re-open and re-argue questions of fact on the evidence which had already been properly determined by the Tribunal, which is not of course permissible on an appeal confined to questions of law: as we have already recorded, Ms Rayner did not suggest that the conclusions themselves were perverse or unreasonable, and the only argument pursued was on the way they were expressed.[15]For those reasons, we unanimously dismiss this appeal.