MR J FERNANDEZ v THE OFFICE OF THE PARLIAMENTARY COMMISSIONER FOR ADMINISTRATION AND THE HEALTH SERVICE COMMISSIONER [2006] UKEAT 0180_06_2807

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2006] UKEAT 0180_06_2807Case No Appeal No. UKEAT/0180/06Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR J FERNANDEZAPPELLANTTHE OFFICE OF THE PARLIAMENTARY COMMISSIONER FOR ADMINISTRATION AND THE HEALTH SERVICE COMMISSIONERRESPONDENTS
Before
Mr Justice Bean Mr Terry Haywood Ms Gloria MillsDate 28 July 2006
[1]APPEARANCES For the Appellant MR RAJEEV THACKER (Of Counsel) Instructed by: Messrs Russell Jones & Walker Swinton House 324 Gray's Inn Road London WC1X 8DH For the Respondent MR ADAM TOLLEY (Of Counsel) Instructed by: The Treasury Solicitor (Employment Law Team) 1 Kemble Street London WC2B 4TS SUMMARY Discrimination – burden of proof – whether Bahl v Law S ociety still good law – significance of first tribunal's findings on unfair dismissal claim when second tribunal conducted discrimination hearing following remission by EAT. THE HONOURABLE MR JUSTICE BEAN The Appellant John Fernandez is a barrister. On 4 th January 1999 he began employment with the Respondent, the Office of the Parliamentary Commissioner for Administration and the Health Service Commissioners (OPCA). In February 2001 a fellow employee, Mrs Thomas, complained to OPCA management that Mr Fernandez had been harassing her; she complained of a further act of alleged harassment a few days later. On 6 th March 2001 Mr Fernandez was sent home so that the complaint could be investigated. On 18 th July 2001 he presented an equal pay claim, followed on 30th August by an allegation of racial discrimination, to an employment tribunal. The equal pay claim was to become a reported case in the EAT: see [2004] ICR 123 .[2]On 3 rd August 2001 a disciplinary panel of OPCA decided that the Appellant should be summarily dismissed on the grounds of gross misconduct, namely the harassment of Ms Thomas. An internal appeal against that decision was rejected on 8 th October 2001. On 1 st November 2001 Mr Fernandez presented the tribunal claim which is the subject of the present appeal, claiming that his dismissal constituted direct racial discrimination, direct sex discrimination, victimisation under both the Race Relations Act 1976 and the Sex Discrimination Act 1975, and unfair dismissal. An employment tribunal sitting at London South heard the case from 9 th to 17 th October 2003 (six working days) and reserved judgment. While that judgment was pending the equal pay litigation, which by then had become the subject of applications and cross applications to the Court of Appeal, was settled.[3]The reserved decision of this tribunal (which we shall call "the first tribunal") was not promulgated until 13 th May 2004. The tribunal were divided on the issue of the unfair dismissal claim. It was upheld by a majority, the Chairman (Mr Snelson) and Mr Shukla; Mrs Siggs dissenting. The majority were extremely critical of the employer's decision to dismiss. They stated in paragraph 19 of the decision that the "draconian penalty of dismissal … fell well outside the range of reasonable options open to the Respondents in the circumstances". They considered dismissal to have been a "quite unreasonable sanction". The reasoning which cost the Appellant his job was in their view "not founded on reality or common sense". In one respect, namely the disciplinary panel's view that the Appellant's lack of insight into his wrongdoing indicated a risk of re-offending, the evidence of the relevant witnesses was described as "nothing less than absurd". The penalty, in the view of the majority, was "utterly disproportionate and plainly unfair". Mrs Siggs, by contrast, attached importance to the Appellant's failure to recognise that he had done wrong and considered that the Respondents were entitled to regard this as a pointer to his likely conduct in the future. She considered that the sanction of dismissal fell within the range of reasonable responses open to the respondents.[4]On the claims of direct discrimination and victimisation the first tribunal were unanimous. They considered the case law on the burden of proof as it then stood and expressed the view that Barton v Investec Henderson Crosthwaite Securities Ltd [2003] ICR 1205 was inconsistent with Nelson v Carillion Services Ltd [2003] ICR 1256 . They concluded on the facts that the applicant had not come close to demonstrating facts from which (in the absence of an explanation from the respondents) an inference of unlawful discrimination could be drawn, and said that they were "satisfied to a very high standard that the applicant's race has nothing to do with the case". They were equally satisfied that a comparable allegation of harassment of a man by a woman would have been treated in the same way. As to the victimisation claim, they were satisfied to a very high standard that the equal pay complaint had nothing whatever to do with the dismissal. This last finding was not the subject of an appeal.[5]It is worth recording that the first tribunal were vehemently critical not only of the employers' decision to dismiss but also of the conduct of the litigation on both sides: - "Out of this simple set of facts, the parties have conjured a very substantial piece of litigation. The Tribunal file is about a foot thick. On the Applicant's side, the case has been bedevilled for the greater part of its history (prior to Mr Thacker and his instructing solicitors being retained) by pedantry and legalism of a high order. For their part the Respondents have joined in the fray on every point of complaint (however fatuous), generating astonishing volumes of paper in the process. We have been surprised and alarmed by their liberality in expending public resources on the case, and have regretted the cost which must inevitably have resulted not only in the public's purse but also to those who rely on their services. We detected among the decision makers who had been (or should have been) in control of this litigation no such regret. The bundle of documents runs to over 1,500 pages. We heard evidence from a total of 12 witnesses, 10 on the Respondents' side. They saw fit to adduce live evidence from both members of the disciplinary panel and both members of the appeal panel. Two investigators were also called. At more than one point during the hearing it was suggested by the tribunal that the parties might not have approached this matter with an appropriate sense of proportion. For the most part, these suggestions were met with polite puzzlement. We wondered what those responsible for creating the employment tribunals would have thought if they had been told that, 30 years on, their system, designed to achieve swift, economical, practical, accessible justice in workplace disputes, would be put to this kind of use."[6]OPCA appealed against the finding of unfair dismissal; Mr Fernandez appealed one day later against the rejection of the direct discrimination claims. The hearing occupied two days. By its reserved judgment handed down on 15 th February 2005 the EAT, HHJ McMullen QC presiding, dismissed the employers' appeal against the finding of unfair dismissal but upheld Mr Fernandez' appeal and remitted the direct discrimination claim for re-hearing by a freshly constituted tribunal. They held (anticipating the decision of the Court of Appeal in Igen v Wong [2005] ICR 931 given three days later) that the first tribunal's approach to the burden of proof was wrong; that Barton and the decisions which followed it should have been treated as binding on the tribunal; and that in the light of that error they could not say that the judgment on the merits would have been the same. Under the heading of "Perversity" they added the following paragraph: - "26. The whole point about the shift in the burden of proof is to call for explanations from the Respondent which are to be evaluated critically in the knowledge that the Respondent must prove them. Correct application of Barton ought to have yielded that the Claimant had put forward a prima facie case. Given the majority's findings relating to unfair dismissal, especially its findings that the evidence lacked reality and was absurd, and that the sanction of dismissal was outside the band of reasonable responses, those findings were bound to have a very important effect upon the evaluative treatment by the Tribunal of OPCA's explanations. Poor treatment of an employee for the purposes of unfair dismissal does not necessarily have a bearing on the question of whether he or she was less favourably treated on a proscribed ground, for an employer is entitled to raise what Burton P memorably described as the "duff employer syndrome" in University of Huddersfield . In our judgment, however, these extraordinarily firm findings about the evidence and explanations of OPCA, irrespective of the correctness of the Tribunal's approach to the burden of proof, could not logically co-exist with a finding upholding OPCA's explanations. We uphold the ground of appeal that this judgment, even if correct on the burden of proof, was perverse."[7]Despite these observations the EAT did not substitute a finding of racial discrimination and/or sex discrimination but, as we have said, remitted the claims to the employment tribunal: and, moreover, directed that it should be freshly constituted. The EAT also resolved two subsidiary issues in favour of OPCA: one of these was that the Tribunal was entitled to have regard to the Appellant's lack of insight into his wrongdoing. They concluded by saying that "this case cries out for a conciliated or negotiated settlement". But it was not to be.[8]The remitted discrimination claims came before a tribunal chaired by Mr Hall- Smith on 30 th November 2005. It is greatly to the credit of the tribunal and of counsel, Mr Rajeev Thacker for the Claimant and Mr Adam Tolley for the Respondents, that the hearing was completed in two days. The Tribunal, by a unanimous judgment promulgated on 19 th January 2006, dismissed the complaints[9]The first difficulty facing the second tribunal was to determine the scope of the remitted hearing. They cited paragraph 26 of the EAT's judgment and went on: - "5. In the light of the observations of Judge McMullen QC about the extraordinarily firm findings about the evidence and explanations of OPCA which could not logically co-exist with a finding upholding OPCA's explanations, this Tribunal at the outset of this hearing initially considered that it had been placed in a quandary. What concerned this Tribunal was whether, in the light of the firm findings of the previous Tribunal, which the EAT determined could not logically co-exist with a finding upholding the Respondent's explanations for its treatment of the Claimant, this Tribunal had any scope for reaching any conclusion of the Claimant's complaints of discrimination other than a finding that the Respondent had not discharged the burden of proof and that accordingly, having regard to the requirements of the burden of proof provisions in both the 1975 and 1976 Acts, reaching a conclusion that the Claimant's complaints of discrimination had been well founded. 6. The Tribunal, at the outset of the hearing, invited Counsel who had been involved with the case throughout its long history to address us on our concerns about the extent of the Tribunal's ability to reconsider to re-determine the issue which had been remitted by the Employment Appeal Tribunal. Both Counsel agreed that the role of this Tribunal was to critically evaluate the explanations, if any, provided by the Respondent for its treatment of the Claimant by dismissing him. The Claimant's dismissal was the alleged act of discrimination relied upon by the Claimant as founding his complaints of both sex and racial discrimination, for the purposes of this Tribunal hearing. 7. We accepted the agreed approach of both Counsel and considered that the EAT must have allowed the Tribunal some room for manoeuvre, because otherwise the matter would not have been remitted. Accordingly, we heard evidence from the two witnesses called by the Respondent, who provided oral evidence relating to the Respondent's explanation."[10]This agreed approach was clearly correct. The matter had been remitted to a fresh tribunal. The parties at the tribunal were bound by the majority finding of unfair dismissal reached by the first tribunal (and upheld on appeal) and the reasoning necessary to that conclusion: but that was all. In particular, it was clearly open to the second tribunal to hear the employers' decision-makers and evaluate their explanations; though they could be, and were, cross-examined on any perceived discrepancies between their evidence at the first hearing and at the second. Influenced, perhaps, by the forceful observations of the first tribunal about the resources devoted to the litigation, OPCA confined themselves to calling one member of the disciplinary panel, Mr Monk, and one member of the appeal panel, Ms Charlton. No other witnesses were called.[11]It was common ground that by virtue of the findings of the first tribunal on the unfair dismissal claim, Mr Fernandez had proved "facts from which conclusions could be drawn that the Respondent has treated the Claimant less favourably" on the ground of race or sex. Paragraphs (10) to (13) of the revised Barton guidelines set out in the Annex to Igen therefore applied:- "10 It is then for the respondent to prove that he did not commit, or as the case may be, is not to be treated as having committed, that act. 11 To discharge that burden it is necessary for the respondent to prove, on the balance of probabilities, that the treatment was in no sense whatsoever on the grounds of sex, since "no discrimination whatsoever" is compatible with the Burden of Proof Directive. 12 That requires an ET to assess not merely whether the respondent has proved an explanation for the facts from which such inferences can be drawn, but further that it is adequate to discharge the burden of proof on the balance of probabilities that sex was not a ground for the treatment in question. 13 Since the facts necessary to prove an explanation would normally be in the possession of the respondent, an ET would normally expect cogent evidence to discharge that burden of proof. In particular, the ET will need to examine carefully explanations for failure to deal with the questionnaire procedure and/or code of practice."[12]Since Mr Thacker's central submission of this appeal is that the second tribunal did not adequately scrutinise the employers' explanation, it is necessary to set out their findings in full:- " 21 The Tribunal heard from two witnesses, namely Mr Geoffrey Monk who chaired the disciplinary hearing which had dismissed the Claimant, and Ms Charlton who was a member of the appeal panel which heard the Claimant's appeal against his dismissal. Mr Monk had attended a one day training course provided by the Civil Service College which included coverage of concepts and principles of equality of opportunity and managing diversity. The Claimant's disciplinary hearing was the first such hearing with which he had been involved during his career. At the time of the previous hearing, Mr Monk had retired. In his evidence before this Tribunal Mr Monk stated the reason for falling into "error" in relation to the Claimant's dismissal was that the Respondent's disciplinary procedure provided that gross misconduct would involve summary dismissal. In cross examination Mr Monk said that he utterly accepted the decision of the previous employment tribunal which had found that the Claimant had been unfairly dismissed and said "I got it wrong". Mr Monk further said in evidence during cross examination "we should have reflected more what should have been done in terms short of dismissal. We were over-influenced by the terms of the disciplinary policy. We thought too much in terms of sanction." Mr Monk in relation to the policy said that the wording of the policy stated that the sanction "normally would be dismissal" and that they were trying to follow the terms of the policy.22. There were two charges before the disciplinary hearing, relating to the Claimant's conduct towards Mrs Thomas. The disciplinary panel took into account a number of factors which are reflected in the reasons of the previous Tribunal and which were accepted by the EAT. Such factors involved the Claimant's demeanour at the hearing and to his lack of insight into the effect of his conduct. This Tribunal was concerned about the involvement of "demeanour" in the disciplinary panel's determinations, particularly in a case of alleged racial discrimination, because of the subjectivity which could be involved in arriving at a decision to dismiss partly on account of the demeanour of the individual concerned. Counsel and the Tribunal probed Mr Monk on what he meant was the Claimant's lack of insight at the disciplinary hearing of the effects of his conduct upon the Complainant, Mrs Thomas, and Mr Monk added that he meant that by "demeanour" the full extent of the Claimant's conduct before the disciplinary hearing and he referred to the way in which the Claimant had attacked inconsistencies in Mrs Thomas' evidence which appeared trivial. Mr Monk stated that had the Claimant expressed words to the effect of "gosh I now realise I was out of order", such a recognition would have weighed very heavily on the panel. The Tribunal found Mr Monk to be an impressive witness and accepted his account of his approach and we found he was utterly genuine in the reasons which he gave for his decision that the appropriate sanction for the Claimant was dismissal.23. Ms Charlton stated that she thought the decision to dismiss the Claimant had been appropriate within the disciplinary framework. She stated that she would have treated all employees, white and black, equally and she thought that her reasons for dismissing the Claimant's appeal were well-founded and well-judged. Mr Monk in his evidence made the same comments. Ms Charlton stated that harassment was one of the descriptions for gross misconduct and although they did consider moving the Claimant to another office or warning him, for the reasons stated they decided to dismiss him by applying the Respondent's procedure which provided that dismissal was the normal sanction in such cases. Ms Charlton added that the appeal panel was not persuaded that the Claimant's conduct would change.24. Ms Charlton had sat on disciplinary panels in a period of employment before she joined the Respondent. She had sat on about three panels but none of them had been involved with allegations of sexual harassment.25. The Tribunal had regard to the Respondent's disciplinary policy. The Respondent's disciplinary policy is at pages 512-517 of the bundle. Annex 1 of the policy lists examples of gross misconduct and provides "where allegations of gross misconduct are found to be substantiated on completion of disciplinary investigation hearing, the result would normally be summary dismissal without notice and without payment in lieu of notice. The policy then bulleted examples of conduct which amounted to gross misconduct and which included "discrimination or harassment of any kind i.e. on the grounds of race, sex or sexuality; bullying, victimisation.26. Paragraph 3.5.1 of the policy sets out possible outcomes of the disciplinary hearing and under the hearing Dismissal stated the following:
"Dismissal will only be considered for a first offence where there are allegations of gross misconduct. However, dismissal may also result from repeating misconduct where previous warnings are still current and conduct is not improved. In these circumstances notice of the dismissal and pay in lieu of notice will normally be given. Where a panel is satisfied, with regard to mitigation, that gross misconduct has occurred, the result will be summary dismissal without notice or pay in lieu of notice. A decision to dismiss can only be taken by a member of the senior Civil Service. 27. The Tribunal noted that under paragraph 3.5.1 of the policy, the policy provided that where gross misconduct has occurred; the result would be summary dismissal, whereas the reference to dismissal under examples of gross misconduct stated that the result would normally be summary dismissal. The Tribunal did not consider that there was any significant inconsistency between the two provisions. We understood the policy to provide that summary dismissal would normally be the sanction where there had been a finding of gross misconduct by a disciplinary panel against the employee concerned. 28 We also had regard to the Respondent's replies to the questionnaires and to the answer relied upon by the Claimant at page 82 of the bundle, in which Mrs Thomas stated that she wished to make a formal complaint. The previous Tribunal found as a fact at paragraph 13 of its Reasons that although Mrs Thomas had stated that she wanted something done, she did not wish to make a full complaint about the Claimant, although she did say that she wanted her concerns to be investigated and dealt with. We do not consider that, in the light of what Mrs Thomas said, there was any evasiveness or equivocation on the part of the Respondent, from which we could draw any adverse inferences. 29. This Tribunal was also aware the Respondent, as part of a negotiated settlement to an equal pay complaint brought by the Claimant before an employment tribunal, had conceded liability in respect of the Claimant's equal pay complaint. However, that was a complaint about pay, and the individuals involved in the dismissal, the alleged discriminatory conduct before this Tribunal, had not been involved with the matters giving rise to the Claimant's equal pay claim, which was not really related to it. We did not consider that the fact that the Respondent organisation had conceded liability in respect of the equal pay complaint either assisted us or could inform us in any respect, in relation to the Respondent's explanation, which we were critically evaluating, for his dismissal. Conclusions 30. The Tribunal reached its conclusions having regard to the totality of the evidence, to the relevant law and to the submissions of both Counsel. 31. The Tribunal bore in mind that the Employment Appeal Tribunal had resolved two factual issues in favour of the Respondent, namely the Appeal Tribunal rejected the Claimant's contentions that the appeal did not concern allegations of sexual harassment, and it also rejected the Claimant's contention that the previous Tribunal was not entitled to have regard to the Claimant's lack of insight into his wrongdoing, characterised by his highly qualified approach to any apology to his victim. Accordingly, we had regard to the fact that the decision to dismiss the Claimant had been taken against the disciplinary hearing panel's findings of gross misconduct against the Claimant in respect of two allegations of sexual harassment. We also bore in mind the fact that although the Appeal Panel upheld the decision to dismiss the Claimant, it did reduce the second complaint against the Claimant to an allegation of serious misconduct as defined by the policy, rather than gross misconduct. Thus, we did not consider that this was a case where the Appeal Panel had simply rubber-stamped the decision of the disciplinary hearing panel. 32. The Claimant's lack of insight had been a factor in the decision to dismiss the Claimant, because the view of both Panels namely that the Claimant was a risk to other members of staff, albeit unreasonable in the terms expressed by the previous tribunal, had not been taken in isolation from such. Nevertheless, the Claimant's conduct did fall within the scope of the examples of gross misconduct set out in the Respondent's disciplinary policy, and which provided that summary dismissal would be the result, or would normally be the result. We found as a fact that the provisions of the disciplinary policy were the most significant factor in the decision makers' decision to dismiss the Claimant. 33. Apart from the decision to dismiss the Claimant, there was no other evidence before the Tribunal which we considered supported a contention that the decision to dismiss the Claimant had been tainted by discrimination on grounds of sex and/or on grounds of race. The Tribunal did not consider the particular reply to the questionnaire relied upon by the Claimant supported a contention of discriminatory tendencies and, again, the Tribunal did not consider the Respondent's concession of liability in the compromise agreement relating to the Claimant's equal pay claim to have any relevance. 34. As this was a claim of discrimination which relied upon hypothetical comparators, the Tribunal was not in a position to evaluate the Respondent's treatment of identified comparators in similar circumstances. The Claimant's case was founded upon his contention that the Respondent would not have treated a White non-Indian employee and a female in the same way as it had treated him. Equally, the Respondent was unable to point to any treatment of individuals in similar circumstances to that of the Claimant, which might have assisted the Tribunal in its evaluation of the Respondent's explanation for its treatment of individuals in similar circumstances to that of the Claimant, which might have assisted the Tribunal in its evaluation of the Respondent's explanation for its treatment of the Claimant. All the Respondent was able to say in relation to the issue of comparators was that it would have treated a White, non-Indian and a female in similar circumstances the same way as it treated the Claimant. The Tribunal also bore in mind the difficulties confronting Claimants in discrimination cases in circumstances where employers invariably deny that the treatment complained of had been tainted by discrimination, and in many cases believe that such is the case. We reminded ourselves of the observations of Cox J in Dresdner at paragraph 76 of the reported judgment of the EAT, namely 'it is equally correct that discriminatory assumptions will frequently underpin the stated reason, even where the reason is given in good faith and genuinely believed, and the discriminator is unaware that such assumptions are operating. These difficulties in exposing discriminatory treatment are well known, have been the subject of comment in a number of authorities and are no doubt responsible, at least in part, for the legislative changes affecting the burden of proof. Employment tribunals cannot look inside the mind of an alleged discriminator and expose stereotypical assumptions about, for example, the attitudes, values or behaviour of black African people. The discriminator may himself be unaware that such assumptions have led him genuinely to believe that the black complainant is guilty of misconduct and that he is, thereby, discriminating against him.' 35. In our evaluation of the Respondent's explanation for its treatment of the Claimant, we concluded that the decision makers had genuinely reached their conclusion that dismissal was the appropriate sanction in the light of its findings about the Claimant's conduct and his lack of insight into his conduct. In addition, we concluded that the Respondent's disciplinary policy was overwhelmingly in the forefront of the decision makers' minds when the decision to dismiss was taken and that under such policy where the Claimant had been found guilty of gross misconduct, the sanction provided for such conduct was normally summary dismissal. In such circumstances, the Tribunal concluded that neither the fact of the Claimant's race or gender played any part in the decision to dismiss the Claimant. We concluded that the Respondent's evidence, which was wholly focused on the decision to dismiss the Claimant, and on no other allegation of discriminatory conduct on grounds of sex or of race, did amount to cogent evidence discharging the burden of proof. 36. It is the unanimous judgment of the Tribunal that the Claimant's complaints of unlawful sex discrimination and unlawful racial discrimination are not well-founded and are accordingly dismissed."
Inconsistency between the two tribunals[13]Mr Thacker submits that the findings of the second tribunal as set out above are inconsistent with the findings of the first tribunal on the unfair dismissal claim. This might have led to an interesting argument about whether the vehement expressions of opinion by the first tribunal could be re-opened – in particular the majority's characterisation of the evidence about the perceived risk of re-offending as "nothing less than absurd" and "not founded on reality or common sense" despite their colleague taking a diametrically opposite view. Mr Tolley, however, was content to take these criticisms of his clients on the chin and to argue that there is, in fact, no inconsistency between the two tribunals.[14]Mr Thacker argued that an explanation which has been found to be "absurd" cannot later be found to be "cogent". But that depends on the nature of the absurdity. It is important to note that the first tribunal did not find that the evidence of OPCA's decision-makers was in any respect untrue .[15]As we see it, the reasoning of the disciplinary panel may be summarised as follows:
"(a) On a number of occasions between 5 th September 2000 and 16 th February 2001 Mr Fernandez had behaved inappropriately towards Mrs Thomas to the extent that this constituted harassment ("
Allegation 1": the detailed findings of fact on this subject and the next one were set out in a three page document accompanying the dismissal letter); (b) Despite being notified by his line manager on 16 th February 2001 that this behaviour towards Ms Thomas was inappropriate Mr Fernandez committed a further act of harassment on 22 nd February 2001 ("Allegation 2") (c) These facts constituted gross misconduct (d) A substantial factor in the panel's decision on the appropriate penalty was Mr Fernandez' "demeanour" throughout the disciplinary hearing. (e) OPCA's disciplinary policy specifies that "where a panel is satisfied, with regard to mitigation, that gross misconduct has occurred, the result will be summary dismissal without notice or pay in lieu of notice. (f) The disciplinary and appeal panels took the view that the appellant was incapable of change; that his lack of insight meant that there was a risk of re-offending; and thus that to retain him in employment would involve a risk to other employees."[16]The first three sub paragraphs are no longer contentious. Mr Thacker realistically accepts that the findings of fact were open to the panels and that they were entitled to treat those facts as amounting to gross misconduct.[17]As to (d), Mr Monk's use of the word "demeanour" naturally called for careful scrutiny. But both in his witness statements and in oral evidence to the second tribunal (see paragraph 22 of their Decision) Mr Monk explained this as a reference to Mr Fernandez' perceived lack of insight. In his witness statement of 1st October 2003 submitted to the first tribunal Mr Monk explained this as follows:- "Mr Ogilvie produced typed notes of the hearing. However, I do not consider that the notes can provide a full indication of the Applicant's demeanour at the hearing, which I felt was very important and would like to expand upon. During the hearing, I was disappointed to note that there was scant evidence from the Applicant of any self-reflection or the ability to place himself in Mrs Thomas' position and understand her perspective. The Applicant seemed rather to attack Mrs Thomas and pursue detailed and legalistic points. He seemed angry and resentful at the hearing, rather than trying to sort out a misunderstanding or explain his actions (which one might have thought that he would try to do if he had an understanding of how Mrs Thomas felt)….The Applicant alleges that no reasonable panel would have reached the decision to summarily dismiss him. As I stated above, a large factor when we were deciding the appropriate penalty was the Applicant's demeanour throughout the hearing. Had this been different, for example, had the Applicant shown a genuine acknowledgement that his behaviour may have been viewed as inappropriate, or, had he done something to show that he recognised Mrs Thomas' views, we may not necessarily have imposed summary dismissal." The second tribunal were entitled to accept this evidence; and the first EAT expressly ruled that the panels were entitled to regard Mr Fernandez' lack of insight as significant. Again, Mr Thacker did not suggest otherwise.[18]As to e), the second tribunal found (at paragraph 32 of the decision) that the provisions of the disciplinary policy were the most significant factor in the decision to dismiss. It was open to them so to find. Mr Monk, at least, had mentioned the disciplinary policy and its significance from the very beginning. Ms Charlton, the appeal panel member who gave oral evidence to the second tribunal, said that on the appeal she and her colleague applied the disciplinary procedure. She was challenged about this in cross-examination, but the second tribunal accepted that the policy had been "in the forefront of her mind".[19]As to f), the first tribunal had found that this was part of the reasoning process of the panels who took and confirmed on appeal the decision to dismiss, and the tribunal majority castigated it in forthright terms. At the second tribunal the two witnesses who testified accepted that, if they were now asked to adjudicate on a similar case, they would bear in mind the guidance of the first tribunal in assessing whether the wrongdoer's lack of insight meant that he constituted a risk to other employees. But that concession has nothing to do with what the panel's reasons were at the time they took their decisions. Indeed, the first tribunal expressly (though with flawed legal reasoning) accepted that the decision had nothing to do with race or sex. There is in our view no inconsistency between the findings of the first tribunal and those of the second. The Burden of Proof[20]It was common ground that the leading case on this subject was Igen v Wong [2005] ICR 931 ; and also common ground that the findings of the first tribunal were sufficient for the Claimant to satisfy the requirements of the first stage. The arguments before us therefore focussed on whether the second tribunal were entitled to find that the employers had discharged the burden placed on them at the second stage.[21]Mr Thacker submitted that the second tribunal, like the first, had fallen into the trap of assessing the decision-makers to be honest witnesses and then accepting their assertions without cogent objective evidence to support them. He submitted that the second tribunal "may have been misled" by the observations of the Court of Appeal in Bahl v Law Society [2004] IRLR 799 . Mr Thacker did not shrink from submitting that Bahl may no longer be good law where the facts under consideration post-date the implementation in domestic law of the Burden of Proof Directive. He had made the same submission to the second tribunal, who said that they approached Bahl "with some degree of caution".[22]We set out the relevant passages from paragraphs 97 to 101 of the judgment of the court in Bahl :-"97. It is well understood that discrimination is not necessarily conscious on the part of the discriminator. Courts and Tribunals have long been sensitive to the fact that this may result in difficulties for a person who seeks to prove discrimination. This was the context in which Neill LJ formulated a number of principals and guidance in King v Great Britain China Centre [1992] ICR 516 . [The Court then set out principles (3) to (5) in King ] That approach, which applies equally to sex discrimination and racial discrimination, was expressly approved by the House of Lords in Zafar [1998] ICR 120 (per Lord Browne-Wilkinson, with whom all their other Lordships agreed). Although it has stood the test of time, a number of interstitial problems have arisen and have been resolved.98. The first concerned the situation in which the alleged discriminator gave an explanation in terms of his own unreasonable conduct whilst denying discrimination on the proscribed grounds: at its simplest, "I may have treated my employee unreasonably, but I treat all my employees like that, white or black, male or female". A misreading of King might have produced an analysis that such an unreasonable explanation in itself justified an inference of discrimination. However, such an erroneous approach was identified and terminated by Zafar . Lord Browne-Wilkinson said:- "The conduct of a hypothetical reasonable employer is irrelevant. The alleged discriminator may or may not be a reasonable employer. If he is not a reasonable employer he might well have treated another employee in just the same unsatisfactory way as he treated the complainant in which case he would not have treated the complainant "less favourably" for the purposes of the Act of 1976. The fact that, for the purposes of the law of unfair dismissal, an employer has acted unreasonably casts no light whatsoever on the question whether he has treated the employee "less favourably" for the purposes of the Act of 1976." His Lordship then commended the words of Lord Morison in the Court of Session, [1997] IRLR 229, 231:- " It cannot be inferred, let alone presumed, only from the fact that an employer has acted unreasonably towards one employee that he would have acted reasonably if he had been dealing with another in the same circumstances.99. The next issue to be clarified by the House of Lords was as to the position where discrimination is one of several reasons for the less favourable treatment. In Nagarajan v London Regional Transport [2000] 1 AC 501 ; [1999] IRLR 572 it was held that the applicant only has to prove that the proscribed ground had a 'significant influence on the outcome' (per Lord Nicholls of Birkenhead, at p.576).100. At this point, it is appropriate to refer to Anya , a decision of this Court. Its ratio takes matters no further than King and Zafar , both of which are cited in the judgment of the Court given by Sedley LJ. However, the judgment contains an obiter passage which has attracted debate in a number of cases including the present appeal. It reads ([2001] IRLR at p.381):
"As Neill LJ pointed out in King , such hostility [i.e. unreasonableness] may justify an inference of racial bias if there is nothing else to explain it: whether there is such an explanation as the Industrial Tribunal posit here will depend not on a theoretical possibility that the employer behaves equally badly to employees of all races but on evidence that he does."
It has been suggested, not least by Mr de Mello in the present case, that Sedley LJ was there placing an important gloss on Zafar to the effect that it is open to a tribunal to infer discrimination from unreasonable treatment, at least if the alleged discriminator does not show by evidence that equally unreasonable treatment would have been applied to a white person or a man. 101. In our judgment, the answer to this submission is that contained in the judgment of Elias J in the present case. It is correct, as Sedley LJ said, that racial or sex discrimination may be inferred if there is no explanation for unreasonable treatment. This is not an inference from unreasonable treatment itself but from the absence of any explanation for it. However, the final words in the passage which we have quoted from Anya are not to be construed in the manner that Mr de Mello submits. That would be inconsistent with Zafar . It is not the case that an alleged discriminator can only avoid an adverse inference by proving that he behaves equally unreasonably to everybody. As Elias J observed (paragraph 97):
"Were it so, the employer could never do so where the situation he was dealing with was a novel one, as in this case. Accordingly, proof of equally unreasonable treatment of all is merely one way of avoiding an inference of unlawful discrimination. It is not the only way. He added (ibid): 'The inference may also be rebutted – and indeed this will, we suspect, be far more common – by the employer leading evidence of a genuine reason which is not discriminatory and which was the ground of his conduct. Employers will often have unjustified albeit genuine reasons for acting as they have. If these are accepted and show no discrimination, there is generally no basis for the inference of unlawful discrimination to be made. Even if they are not accepted, the tribunal's own findings of fact may identify an obvious reason for the treatment in issue, other than a discriminatory reason."
We entirely agree with that impressive analysis. As we shall see, it resonates in this appeal." Part of this passage was cited in passing, but without disapproval, in the Court of Appeal in Igen v Wong at paragraph 48. Mr Thacker nevertheless submits that it may not have survived the statutory amendments concerning the burden of proof.[23]In Network Rail Infrastructure Ltd v Griffiths-Henry 23 rd May 2006 UKEAT/0642/05, the President, Elias J, giving the judgment of the EAT, said:-"19. We accept Ms Cunningham's submission [on behalf of the Appellant employers] that nothing in the new statutory burden of proof alters the evidence needed to establish a prima facie case as that concept was used in the well known authority of King v Great Britain-China Centre [1992] ICR 516 . Nor does it affect, in our view, the analysis of how evidence is to be assessed when determining at the second stage whether the employers have provided an adequate (in the sense of non-discriminatory) explanation as laid down by the Court of Appeal in Bahl v The Law Society [2004] EWCA Civ 1070 ; [2004] IRLR 799 . The significant legal change is that whereas formerly under the analysis in King the Tribunal could but was not obliged to draw an inference of discrimination if there was a prima facie case and no adequate or satisfactory answer, now the Tribunal must draw such an inference in those circumstances. Whether in practice Tribunals did frequently take advantage of their discretion not to find discrimination where the conditions referred to in King were established, is a moot point.20. Accordingly, in our judgment the Tribunal was fully entitled to find that the employee had established a prima facie case so that it fell to the employer to explain why it was that five white men have been selected and she was not. The employer knows why the selection was made and can give evidence about that. That evidence should identify why he did what he did and if that has nothing to do with race or sex, then that is the end of the matter. Also, it seems to us that the burden imposed on the employer will depend on the strength of the prima facie case. … 22 … it is crucial that the Tribunal at the second stage is simply concerned with the reason why the employer acted as he did. If there is a genuine non-discriminatory reason, at least in the absence of clear factors justifying a finding of unconscious discrimination, that is the end of the matter. It would obviously be unjust and inappropriate to find discrimination simply because an explanation given by the employer for the difference in treatment is not one which the Tribunal considers objectively to be justified or reasonable. If that were so, an employer who selected by adopting unacceptable criteria or applied them inconsistently could, for that reason alone, then potentially be liable for a whole range of discrimination claims in addition to the unfair dismissal claim. That would plainly be absurd. Unfairness is not itself sufficient to establish discrimination on grounds of race or sex, as the courts have recently had cause to observe on many occasions: see Bahl and the House of Lords decision in Glasgow City Council v Zafar [1998] ICR 120 . … 29. Plainly there cannot be a finding of sex or race discrimination every time an employer carries out a selection process unfairly to the detriment of someone who is black or female. Indeed, taken to its logical conclusion it would mean that there would be discrimination if one black woman were kept on and seven white males were dismissed provided the selection criteria were not fairly applied."[24]We agree with this analysis. Zafar is still good law; so is Bahl , in particular paragraph 101 of the judgment of the Court of Appeal.[25]Mr Thacker was on less contentious ground in citing the well known observations of Anya v Oxford University [2001] ICR 847 that an honest witness may nevertheless be discriminating subconsciously. The second tribunal bore this principle clearly in mind. It cited and followed a passage from paragraph 47 of the judgment of the EAT, Cox J presiding, in Dresdner Kleinwort Wasserstein Ltd v Adebayo [2005] IRLR 514 (EAT):- "We agree that a number of principles set out in [ Bahl ] will still be very relevant including, for example, the following: the fact that discrimination need not be conscious and that people may discriminate on grounds of sex or race because of in-built and unrecognised prejudices; the fact that the discriminatory reason for the conduct may not be the sole, or even the principal reason for the discrimination and it is enough that it is a contributing cause in the sense of a significant influence; or the fact that, in deciding whether discrimination has occurred, the Tribunal must consider the totality of the evidence. We also recognise the continuing validity of those paragraphs in the judgment, echoed in many other cases, emphasising the need for tribunals not only to find the primary facts and to set out their conclusion upon them, but also to provide sufficiently clear reasons to explain how they moved from the former and arrived at the latter."[26]Our attention was also drawn to paragraph 53 of the judgment in Dresdner :- "… The shifting of the burden to employers means that tribunals are entitled to expect employers to call evidence which is sufficient to discharge the burden of proving that the explanation advanced was non-discriminatory and that it was the real reason for what occurred. That the EAT [in Barton ] recognised that the standard of proof required to discharge this burden is the balance of probabilities is clear from the words used in guidelines (10) and (11). No greater burden on an employer is being suggested; and whether it is found to be discharged in any case will be for the tribunal to determine on the particular facts of the case. …"[27]Mr Thacker submitted that the second tribunal's examination of the employers' decision-makers' explanations was insufficiently critical and that it was perverse to regard those explanations as "cogent". But the second tribunal's treatment of the evidence of Mr Monk and Ms Charlton was in our view a far cry from the uncritical acceptance of the honesty of the decision-makers by the employment tribunal in Anya . Those explanations were as summarised above. The Tribunal, having set out their reasoning in paragraphs 21 to 34 of their decision, concluded at paragraph 35 that neither the fact of the Claimant's race nor his gender paid any part in the decision to dismiss: the same conclusion, incidentally, to which the first tribunal had come. They were entitled to do so and there is no error of law in their decision.[28]Mr Tolley very properly reminded us of the decision of the Court of Appeal in Yeboah v Crofton [ 2002] IRLR 634 . This lays down that when the principal ground of appeal is perversity of the decision of the fact-finding tribunal, then there is an increased risk that the Appellate Court's close examination of the evidence and of the findings of fact by the tribunal may lead it to substitute its own assessment of the evidence and to overturn findings of fact made by the tribunal. A ground of appeal based on perversity ought only to succeed where an overwhelming case is made out that the employment tribunal reached a decision which no reasonable tribunal, on a proper appreciation of the evidence and the law, would have reached. We do not consider that Mr Thacker has come anywhere near establishing the allegation of perversity to that high standard, either in respect of the second tribunal's finding that the disciplinary policy was "overwhelmingly in the forefront" of the decision-makers' minds or otherwise.[29]The final ground of appeal was expressed as follows:- "In essence if an employer wishes to discharge the burden of proof by relying upon the 'duff employer' defence, it must clearly proceed on this basis and adduce evidence to this effect. Further, in the present case, the Respondent expressly disavowed any reliance on such a defence. Indeed it is always asserted that the reasonable employer has acted fairly throughout. However, the employment tribunal's finding is to the effect that the Respondent treats all employees equally badly."[30]The phase "the duff employer syndrome" was used by the EAT in University of Huddersfield v Wolff [2004] ICR 828 . We would not wish to discourage the use among employment lawyers of memorable shorthand phrases, but as a description of OPCA's stance in this case, it is something of a caricature. The evidence of Mr Monk and Ms Charlton was to the effect that they would have treated anyone in Mr Fernandez' position equally severely whether male or female and whatever his or her ethnic origin. That was their evidence before both employment tribunals and both tribunals accepted it. They were entitled to do so.[31]In the result this appeal must be dismissed.