MS H PETERS v SAT KATAR CO LTD (IN LIQUIDATION) [2004] UKEAT 0019_04_2408

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2004] UKEAT 0019_04_2408Case No Appeal No. UKEAT/0019/04Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MS H PETERSAPPELLANTSAT KATAR CO LTD (IN LIQUIDATION)RESPONDENT
Before
His Honour Judge McMullenDate 24 August 2004
[1]APPEARANCES For the Appellant MISS E MELVILLE (of Counsel) Instructed by: Messrs Fisher Meredith Solicitors 2 Binfield Road Stockwell London SW4 For the Respondent NO APPEARANCE OR REPRESENTATION BY OR ON BEHALF OF THE RESPONDENT SUMMARY Practice and Procedure – Review – ET applying the test in Wileman v Milinec wrongly made findings of actual credibility rather than apparent credibility. HIS HONOUR JUDGE McMULLEN QC This case is about Employment Tribunal procedure in handling an application for a review of a decision it had made in 2001. The judgment represents the views of all three members, who pre-read the relevant papers. We will refer to the parties as Applicant and Respondent. Introduction[2]It is an appeal by the Applicant in those proceedings against a Decision of an Employment Tribunal sitting at London South, Chairman Mr M Houghton, registered with Extended Reasons on 1 March 2002. The Applicant was represented there by a law student, and the Respondent by Counsel. That was the Review Decision which had been made on 8 February 2002, following an application made on the Applicant's behalf after a Reserved Decision from the same Tribunal, registered with Extended Reasons on 25 July 2001, following a hearing over three days. The Applicant there had the advantage to be represented by a solicitor, and the Respondent by different Counsel. The Decision of the Tribunal was that the Applicant was not unfairly dismissed nor had she suffered unlawful sex discrimination.[3]The Tribunal refused to review the first Decision. The Applicant appealed, her Notice of Appeal was presented late; it was rejected by the Registrar and by His Honour Judge Peter Clark, on appeal from the Registrar to him. On 20 June 2003 the Court of Appeal reversed Judge Clark's judgment and extended time for the Applicant's . The appeal therefore came before Rimer J the sift, who ordered that the case be sent to a preliminary hearing. At a preliminary hearing His Honour Judge Prophet and members decided that the appeal should be considered at a full hearing i.e. today.[4]Between the date of Judge Clark's hearing (26 September 2002) and the hearing in the Court of Appeal, the Respondent went into voluntary creditors liquidation on 31 October 2002, and thus there is no representation or submission on behalf of the Respondent. Consideration in different jurisdictions within our field might have been given to inviting the Secretary of State for Trade & Industry to be represented, since she would ultimately pick up certain awards made against an insolvent employer. But the insolvency provisions of the Employment Rights Act do not apply to awards of sex discrimination, thus the Applicant is today represented by Miss Elizabeth Melville of Counsel, and we have no material in opposition.[5]The central issue before the Employment Tribunal was whether to review its Decision on grounds of new evidence in the form of an affidavit from Ms Shantell Gordon, sworn on 5 February 2002. The Tribunal declined to exercise its power of review. The Applicant appeals against that Decision. The Legislation[6]The relevant provisions are contained in the Employment Tribunal Constitution and Rules of Procedure Regulations 2001, where rule 13(1) provides as follows:
"13(1) Subject to the provisions to this rule, a tribunal shall have power, on the application of a party or of its own motion, to review any decision on the grounds that - ….

(e) in the interests of justice require a review"

The facts[7]The facts are not relevant to the issue on appeal, but briefly the Applicant, following three months' employment by the Respondent, was dismissed in circumstances where she contended the dismissal was based upon her pregnancy and thus was unlawful sex discrimination.[8]The way in which the review arose was because Ms Gordon was prepared to give evidence on affidavit relating to her own circumstances, which paralleled, it is said, those of the Applicant. She said this:
"6. At the end of May 2000, I discovered that I was pregnant. First I approached Paul my Manager, who asked me to contact Nick Chadha. I told Nick Chadha that I was pregnant and that I could definitely work up to December because the baby was due in February. 7. I told him many times that after my baby was born, I would definitely come back to work. I needed the job and would have gone back there. Nick Chadha told me that he never gives maternity pay and that I would not get it and then sacked me. He did not give me anything in writing. I did not resign. 8. Just before Christmas I sent into Sage Croydon to buy something. I met Paul Chouda and Shami Chadha. They took me into the back stock room where they told me to write and sign a letter that I left the company myself. 9. They pressurised me and forced me to do this in front of them. I felt intimidated and afraid. So without thinking, I did so. Paul Choudha kept saying that I had to do this favour for them and also wanted me to date the letter as being May 2000."
[9]The Tribunal considered the power to review a decision. It decided it would be guided by Wileman -v- Minilec Engineering Ltd [1988] IRLR 144 , where Popplewell J, President, said at paragraph 14 as follows:
"So far as the industrial tribunal's Rules of Procedure Regulations are concerned, we would read into them, not only that the new evidence must be relevant, but that it will probably have an important influence on the result of the case. The reason for that is that simply because it is relevant, unless it is also likely to affect the decision a great deal of time will be taken up by sending cases back to the Industrial Tribunal for no purpose"
Furthermore, the case is also authority for the proposition that the new evidence must be apparently credible. The Tribunal then came to the following conclusions. "10 The Tribunal has unanimously concluded that Miss Gordon's evidence would not probably have an important influence on the result of this case. We say that for the following reasons. First, we do not think that the Respondent's alleged behaviour towards Miss Gordon, even if true, is of sufficiently important relevance to the question of the Respondent's treatment of the Applicant. Second, the Tribunal considers it highly unlikely that Miss Gordon would, as she has demonstrated today, at any stage give oral evidence of the matters set out in the Affidavit before us. Further, the Applicant, who has been legally advised throughout, has at no stage made an application for a witness order in respect of Miss Gordon. Third, the Tribunal considers that there are serious questions as to the credibility of the proposed new evidence. In the Tribunal's unanimous judgment, that evidence does not appear to be credible. The evidence set out in the Affidavit made by Miss Gordon is lacking in particularity and details such as dates, including the date of birth of her baby. In paragraph 10, Miss Gordon states that she has written a false document, namely a confirmation to the Respondent that she resigned. There was no suggestion that Miss Gordon made any complaint or brought any proceedings against the Respondent arising from the allegations she makes. Miss Gordon alleges that she was dismissed by the Respondent on the grounds of pregnancy. The Applicant told us that when Miss Gordon informed the Applicant of this, in late July 2001, she was angry and upset. It is, despite that, Miss Gordon's evidence that on the occasion she had been pressurised into writing a false resignation letter she had gone back to the Respondent's shop in order to buy something. The Tribunal considers this raised a further question as to the credibility of Miss Gordon's evidence. 11 It is established that it is not sufficient for the Applicant to show that the fresh evidence relied upon is merely relevant. In the Tribunal's unanimous judgment, the fresh evidence on which this application for a review is made would not have an important influence on the result of this case and is not apparently credible. The Tribunal is of the unanimous view that the interests of justice do not require a review. For these reasons the Applicant's application for a review is refused." The Applicant's case[10]On behalf of the Applicant it is contended that the Tribunal did not apply the test in Wileman -v- Minilec correctly, for it was concerned with the actual credibility of Ms Gordon, rather than her apparent credibility. It also incorrectly judged the importance of the evidence which she was giving to the issue before it. An application was also made to us for new grounds of appeal to be argued, based upon the failure of the Tribunal correctly to address the burden of proof under section 63A of the Sex Discrimination Act 1975, which came into effect on 12 October 2001; or, in any event, the correct approach under the relevant authorities prior to the burden of proof changing. Reliance was placed upon the statement of the law in Barton -v- Investec Henderson Crosthwaite Securities Ltd [2003] IRLR 332 .[11]A further application was made to adduce fresh evidence on appeal, in the form of an affidavit from Geoff Martin, sworn on 26 May 2004. It was contended that this evidence should be put before the Appeal Tribunal, pursuant to the Order given by His Honour

Judge Prophet, which is in the following form:

"If any application to adduce fresh evidence is to be made by any party then any such application must be lodged with the Employment Appeal Tribunal and served on the other party within 14 days of the seal date of this Order, and must address the following points, namely that: (i) the evidence could not have been obtained with reasonable diligence for use at the Employment Tribunal. (ii) It is relevant and would probably have had an important influence on the result of the case. (iii) It is apparently credible."
The evidence of Mr Martin previously employed as the store manager for Sage Clothing Ltd Bromley is, so far as is relevant, as follows:
"5 During my employment with Sage Clothing, it became apparent to me that it was no secret within the company that Mr Chadha had terminated Hazel's employment purely because she was pregnant. This was evidence from a conversation that I overheard between Mr Chadha and the area manager. It was sometime in August 2002 when they were visiting the store that hey both were in conversation on the shop floor. They spoke of the "court case with Hazel"
. I also recall Mr Chadha saying that he was going to have to liquidate Sat Katar to protect Sage. He said that using Sat Katar in court was a good move on his part. 6. In May 2002, Mr Chadha had a specific conversation with me regarding the employment of women. He advised me not to take on any women who were pregnant or likely to become pregnant. He mentioned how Hazel had taken him to court when he had "got rid of her". Mr Chadha recollected a time some years ago when he had to pay maternity pay to an employee but swore after that experience that he would not allow a woman to work the term of her pregnancy, instead he would dismiss - it would be easier. It was clear to me that Mr Chadha did not like pregnant women in his shops, nor did he like paying maternity pay and moreover he would not allow any women to work the term of her pregnancy. 7. I was also aware through other members of staff that Hazel is not the only pregnant woman to suffer at the hands of Mr Chadha." It is submitted from his evidence that he also had been contacted at a late stage in these proceedings, and that his evidence met the tests set out by Judge Prophet from the application of the principles in Ladd -v- Marshall [1954] 1 WLR 1489 , The legal principles[12]The power of a Tribunal to review its own decision is regulated by, in this case, two principles which are that new evidence has become available or the interests of justice require it. The case is based upon those two principles. A Tribunal is required to apply, at first instance, the approach in Wileman -v- Minilec . A Tribunal, on hearing a Sex Discrimination Act case after 12 October 2001, is required to apply the new burden of proof. Prior to that, a Tribunal was required to take the approach summarised in Barton above, by His Honour Judge Ansell, in the following passage:
"17 The Courts have always acknowledged that it was rare for an applicant complaining of discrimination to have evidence of overtly discriminatory words or actions, therefore the affirmative evidence of discrimination will normally consist of inferences to be drawn from the primary facts. Having established those inferences, a concept of a shifting burden began to be developed whereby the employer was then called upon to give an explanation so as to negative those inferences. In Khanna -v-Ministry of Defence [1981] ICR 653 the Employment Appeal Tribunal (Mr Justice Browne-Wilkinson presiding) dealt with these evidential problems in the following way at 658F: "
In the future, we think industrial tribunals may find it easier to forget about the rather nebulous concept of 'the shift in the evidential burden' ….. In this case, the Industrial Tribunal would, we suspect, have found the case rather more straightforward if, looking at all the evidence as a whole, they had simply decided whether the complaint had been established. No useful purpose is served by stopping to reach a conclusion on half the evidence. The right course in this case was for the Industrial Tribunal to take into account the fact that direct evidence of discrimination was seldom going to be available and that, accordingly, in these cases the affirmative evidence of discrimination would normally consist of inferences to be drawn from the primary facts. If the primary facts indicate that there has been discrimination of some kind, the employer is called upon to give an explanation and, failing clear and specific explanation being given by the employer to satisfaction of the Industrial Tribunal, an inference of unlawful discrimination from the primary facts will mean the complaint succeeds…….". 18 Later, in the same year in Chattopadhyay -v- Headmaster of Holloway School [1982] ICR 132 Mr

Justice Browne-Wilkinson repeated the concept that he had outlined in Khanna at 137B:

"It is for this reason the law has been established that if an applicant shows that he has been treated less favourably than others in circumstances which are consistent with that treatment being based on racial grounds, the industrial tribunal should draw an inference that such treatment was on racial grounds, unless the respondent could satisfy the industrial tribunal that there is an innocent explanation……."
In two subsequent cases in the Court of Appeal May L J expressed a degree of dissatisfaction with the passages in Khanna see Morris -v London Iron and Steel Company Ltd [1987] ICR 855 and North West Thames Regional Health Authority -v- Noone [1988] ICR 813. Eventually clarification was sought and obtained from the Court of Appeal in the case of King -v- GB China Centre [1992] ICR 516 and the frequently quoted passage of Neill LJ at 518:
"From these several authorities it is possible, I think, to extract the following principles and guidance. (1) It is for the applicant who complains of racial discrimination to make out his or her case. Thus if the applicant does not prove the case on the balance of probabilities he or she will fail. (2) It is important to bear in mind that it is unusual to find direct evidence or racial discrimination. Few employers will be prepared to admit such discrimination even to themselves. In some cases the discrimination will not be ill-intentioned but merely based on the assumption that "he or she would not have fitted in". (3) The outcome of the case will therefore usually depend on what inferences it is proper to draw from the primary facts found by the tribunal. These inferences can include, in appropriate cases, any inferences that it is just and equitable to draw in accordance with section 65(2)(b) of the Act of 1976 from an evasive or equivocal reply to a questionnaire. (4) Though there will be some cases where, for example, the non-selection of the applicant for a post or for promotion is clearly not on racial grounds a finding of discrimination and a finding of a difference in race will often point to the possibility of racial discrimination. In such circumstances the tribunal will look to the employer for an explanation. If no explanation is then put forward or if the tribunal considers the explanation to be inadequate or unsatisfactory it will be legitimate for the tribunal to infer that the discrimination was on racial grounds. This is not a matter of law but, as May LJ put it in North West Thames Regional Health Authority -v- Noone [1988] ICR 813, 822, "almost common sense". (5) It is unnecessary and unhelpful to introduce the concept of a shifting evidential burden of proof. At the conclusion of all the evidence the tribunal should make findings as to the primary facts and draw such inferences as they consider proper from those facts. They should then reach a conclusion on the balance of probabilities, bearing in mind both the difficulties which face a person who complains of unlawful discrimination and the fact that it is for the complainant to prove his or her case."
This passage was approved by the House of Lords in Glasgow City Council -v- Zafar [1988] ICR 120. 19 The importance of the Tribunal's fact-finding role in these cases was emphasised in Anya -v- University of Oxford & Another [2001] ICR where Sedley L J at page 855F referred to the "ubiquitous need to make the findings of primary fact without which it is impossible to consider the drawing of relevant inferences."[13]In applications for the adduction of fresh evidence before the Employment Appeal Tribunal the principles in Ladd -v- Marshall apply. In applications to raise fresh points of law the Practice Direction para 8 requires this matter to be ventilated in advance, and a long line of authorities, stretching from Kumchyk -v- Derby City Council [1978] ICR 1116 EAT to Jones -v- The Governing Body of Burdett Coutts School [1998] IRLR 521 , indicates that new points will only allowed to be adduced in exceptional circumstances. Our conclusions[14]In our judgment, the Employment Tribunal imposed too high a standard in the application of the test in Wileman -v- Minilec . Its line-by-line analysis of the evidence of Ms Gordon goes beyond an assessment of whether it is apparently credible for the purpose of allowing a review, and involves a conclusion as to its actual credibility. That is not the correct test. First, this evidence was produced on affidavit, and indicated material relevant both to the substance of the Applicant's claim and to the reason why Ms Gordon had not herself raised matters earlier. She tells the story of her own case and explains why she did not bring this matter up earlier. Given that it is on affidavit, it must at first sight be credible. It is not the job of the Employment Tribunal at that stage to decide matters on the basis of its impression of how that witness may give her evidence at a full hearing. The Tribunal made a firm finding against Ms Gordon that she had written a false document, and paid no attention to the fact that Ms Gordon was indicating that she had been pressurised into making that false document. The Tribunal therefore considered that there were serious questions as to her credibility. In our judgment, it erred in taking the matter as far as that.[15]Secondly, it erred in failing to address correctly the third limb in Wileman , which is that it would probably have had an important influence on the case. Obviously, the Tribunal is not deciding finally on this matter, but, given the close parallel circumstances of Ms Gordon and the Applicant, the Tribunal erred in its firm conclusion that her evidence would probably not have had an important influence on the result of the case.[16]Thus, for those two reasons, the Decision of the Tribunal to refuse a review cannot stand. We will order that a review take place, which is the full reach of the Order sought by the Applicant today. The material which will go before the Employment Tribunal will be the evidence of Ms Gordon and the form in which that is to be delivered is a matter for the Applicant. Plainly if Ms Gordon is produced, her evidence will be more impressive than if it is on paper.[17]We then turn to the submission relating to the burden of proof. We refuse the application made by Miss Melville to introduce this matter. The Applicant was found by the Tribunal to have been legally advised throughout her proceedings. The burden of proof was not mentioned at the review hearing. The Tribunal cannot be criticised for making an error when it considered whether to review its decision, when the matter was not put before it as an issue which it should adjudicate upon. The question is whether or not we should have allowed this matter to be argued. It is not, in our view, an exceptional case, falling within that long line of authorities, above.[18]The issue of the burden of proof as a factor in deciding whether or not to allow a review simply was not raised before it. It is not so easy for us to say this is simply a question of law, but even if it were, there are strong policy reasons for refusing new points to be taken, especially when, as here, there is no opposition to it. Not only was there no treatment of the matter by the Employment Tribunal but there is no treatment of it by the Respondent before us. We do not regard this as an exceptional circumstance and will not allow that to be taken as an additional point. It is, of course, unimportant since we have already allowed the appeal.[19]We then turn to the application to admit fresh evidence before us. We have decided that this application is validly made, meeting as it does the test in Judge Prophet's Order. The evidence of Mr Martin formed part of our considerations in discussing the merits of the appeal. We have decided to allow this material to be adduced, for it too falls in line with the evidence given by the Applicant, the evidence which we have now said should be produced in respect of Ms Gordon, and it appears to us to be apparently credible, and could not have been adduced before the review hearing. When this case goes back to the Employment Tribunal, Mr Martin's evidence too will be before it; we make the same comment as we do in respect of Ms Gordon, that if he is produced in person, his evidence will be the more impressive. The way forward[20]As we indicated, this case has had a complex procedural history. The Applicant was dismissed more than four years ago. In giving the judgment of the Court of Appeal, Peter Gibson LJ said this in Peters -v- Sat Katar Co Ltd [2003] ICR 1574, 1581 paragraph 20:
"I will not end this judgment without adding two further observations. One is that the applicant, however upset by the original decision of the tribunal, should consider with her legal advisers whether there is any point in continuing with her proceedings. She has a long and difficult road on which to travel is she is ever to obtain a decision which vindicates her complaints, and it would appear that even there is real doubt as to whether she will recover a penny by way of compensation. But I accept that that is a matter for her."
[21]We were assured by Ms Melville this morning that that His Lordship's views had been fully considered by the Applicant and her legal advisers. It is of course with some dismay that we remit this case for a review hearing, which will probably mean that by four and a half or five years later, the Applicant is able to have a decision on her case, since it is not disputed that Peter Gibson LJ's prediction may be right and that there is no money to be had. All that is at stake is a declaration in the Applicant's favour.[22]We, of course, are not hearing this case on review, but we have all three considered whether there is a more simple solution to this case. While deferring, or course, to the Employment Tribunal's fact finding function, we observe that since the Respondent is in liquidation, there is going to be no opposition to the evidence which is to be led from Ms Gordon and from Mr Martin.[23]Of course, since this case will be tried under the new regime, the burden of proof will now be upon the Applicant to prove a prima facie case and then will be transferred to the Respondent. If we were judging this case upon this evidence it seems likely that the Applicant would indeed show a prima facie case. causing the transfer of the burden to the Respondent.[24]Since the Respondent will not be there it is unlikely that the Tribunal will be satisfied that it has discharged the burden, and it is likely that she will win her case with a declaration that she was unlawfully discriminated on the grounds of her being pregnant. The Tribunal will then move to consider remedies. We have not seen the Schedule of Loss from the Applicant, but as Peter Gibson LJ observed, there appears to be no chance of her even getting a penny.[25]With those observations, which in no way bind the Employment Tribunal, we hope to have offered some comfort to Ms Peters, so that she may discuss what we have said, earnestly, with her advisers, together with the clear advice given by Peter Gibson LJ, when she considers whether this matter should indeed go back to the Employment Tribunal.[26]We would very much like to thank Miss Melville for her clear and crisp submissions this morning, inheriting as she did a Skeleton Argument at the last moment from other Counsel. The appeal is allowed and remitted to the Tribunal for it to conduct a Review.