MR T ORR v MILTON KEYNES COUNCIL [2009] UKEAT 0506_08_0511

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2009] UKEAT 0506_08_0511Case No Appeal No. UKEAT/0506/08Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR T ORRAPPELLANTMILTON KEYNES COUNCILRESPONDENT
Before
His Honour Judge HandDate 5 November 2009
[1]APPEARANCES For the Appellant MR S HARDING (of Counsel) Instructed by: Messrs Fisher Meredith Solicitors Blue Sky House 405 Kennington Road LONDON SE11 4PT For the Respondent MR S CHEETHAM (of Counsel) Instructed by: Milton Keynes Council PO Box 111 Civic Offices 1 Saxon Gate East Central Milton Keynes MK9 3HG SUMMARY UNFAIR DISMISSAL: Reasonableness of dismissal RACE DISCRIMINATION: Direct Where discrimination and unfair dismissal allegations overlap and the Employment Tribunal hears and disbelieves evidence about a discriminatory remark from a manager, which the employer heard and believed during the investigation, the Employment Tribunal was correct to conclude that such evidence did not make the employer's dismissal of the Appellant unfair: Small v London Ambulance Service applied. Nor did the fact that discrimination had been proved in relation to the remark make it inevitable that direct discrimination had been proved in relation to the dismissal. The Employment Tribunal had correctly asked itself what was the reason why the Appellant had been dismissed and a "but for" test of causation is not the correct approach; Shamoon v Chief Constable of the Royal Ulster Constabulary , Martin v Lancehawk Ltd (t/a European Telecom Solutions) , AvB , Olasehinde v Panther Securities PLC and Amnesty International v Ahmed considered and applied. HIS HONOUR JUDGE HAND QC Introduction This is an appeal from the judgment of an employment tribunal, comprising an Employment Judge and two lay members, sitting at Bedford over a period of seven days in March and April 2008. This was the second hearing of the case, the matter having been remitted after a previous appeal to this tribunal, and we shall refer to this as "the second employment tribunal".[2]The first determination in relation to Mr Orr's claims had been by made by another employment tribunal, comprising a Chairman and two lay members, and also sitting at Bedford. We shall refer to this as "the first employment tribunal". On 31 May 2007 the first employment tribunal had sent out a reserved judgment finding that the Appellant had not been unfairly dismissed but had been discriminated against on the grounds of race. An appeal against that decision was heard by a division of the Employment Appeal Tribunal on 27 September 2007; the appeal was allowed and the case remitted for a rehearing.[3]The judgment of the second employment tribunal was sent to the parties on 10 June 2008 and a reasoned written judgment was entered in the register and sent to the parties on 29 August 2008. By it, the second employment tribunal found that there had been a discrimination on the grounds of race against Mr Trevor Orr, a man of black Jamaican origin, ("the Appellant") by a fellow employee, for which the employer, Milton Keynes Council ("the Respondent"), was vicariously liable, but that his dismissal by the Respondent was fair and not an act of race discrimination. The judgment also made an order about holiday pay by consent but we are not concerned with that. The Factual Background[4]This synopsis of the facts is taken from the judgment of the second employment tribunal at paragraphs 2 to 8 (pages 2 to 5 of the bundle). The Appellant worked as a part-time youth worker for the Respondent from 2002. The events leading to dismissal occurred in October 2005 but there had been several incidents before then.[5]One occurred in January 2004, when a trainer was alleged by the Appellant to have made racist remarks about him. The matter was investigated and the trainer involved apologised and the matter was not taken further. In 2005 a safety warden called Maxine Russell, who was of a white ethnic background, had a violent argument with her manager during the course of a meeting; mitigating circumstances seem to have been accepted by the Respondent and no disciplinary action was taken against her.[6]Two incidents occurred in October 2005. Firstly, on 17 October 2005 it was alleged that the Appellant discussed allegations of an indecent assault or a rape with some youths attending a community centre, although previously he had been instructed not to do so by Mr Peter Madden, who was his manager. Secondly, on 20 October 2005 there was a meeting between the Appellant and Mr Madden about the Appellant's working hours. A letter dated 7 October, purporting to respond to the Appellant's request for shorter hours, had been received by him. He had made no such request and, as the second tribunal found, the letter, although signed by another employee, originated from Mr Madden, who was seeking to manipulate the timetable for his own purposes. Although the Appellant suspected that Mr Madden was responsible, he did not know this. Nevertheless, in the course of the meeting the Appellant became angry and he began to speak a Jamaican patois. At this point the second employment tribunal found that Mr Madden said:
"… you lot are always mumbling on and I cannot understand a word you lot are saying …"
[7]Mr Madden alleged that during the course of the meeting the Appellant had been rude and abusive to him. In November 2005 the Appellant was suspended on full pay and an investigation was started to look into "unprofessional conduct and breach of confidential procedures with some young people" and "gross insubordination and unprofessional conduct towards your manager". During the investigation statements were taken from the Appellant, from Ms Louise Labell and from Mr Peter Madden. It is not clear whether the second employment tribunal had those statements; they are not part of our bundle. As a result of the investigation the Appellant was summoned to a disciplinary hearing on 19 May 2006. He indicated that he would attend, providing that certain material was disclosed to him and that he could be accompanied by a Mr Charles Buckman. These conditions were not met and the hearing proceeded in the absence of the Appellant. He was dismissed summarily after a study of the written material and, what the second employment tribunal found to be, "careful consideration". Both sets of allegations were found proved and both characterised as gross misconduct.[8]There was an appeal hearing on 5 September 2006, which was attended by the Appellant and by Mr Buckman, who was by this time an employee of the Respondent and, thus, acceptable as a representative. The hearing could not be completed within a day and there was some difficulty about reconvening. In the event, the hearing resumed on 9 October 2005. The second employment tribunal found that the Appellant had not taken full advantage of the appeal process both by declining to answer questions himself and by declining to put questions to witnesses. His dismissal was confirmed on both grounds. The history of this case[9]The issues in this case were distilled by the first employment tribunal to the following:a. Did a fellow employee, Mr Peter Madden, make a racially discriminatory comment to the Appellant on 20 October 2005?b. Was the reason for the Appellant's dismissal with effect from 26 May 2006 because of his conduct on 17 October 2005 and 20 October 2005?c. If so, was the dismissal fair?d. Was any part of the reason for that dismissal less favourable treatment of the Appellant on the grounds of his race?e. If so did the dismissal constitute discrimination on the grounds of race?[10]The first employment tribunal, in a short and not entirely pellucid judgment (the actual reasoning comprises less than two pages), answered those questions as follows:a. No; on a balance of probabilities the remark alleged by Mr Orr had not been made (see paragraph 21.3 - 21.5 of the judgment at page 83 of the bundle).b. Yes; he was dismissed because of his conduct on 17 and 20 October (see paragraph22.1 of the judgment at page 83 of the bundle).c. Yes; the dismissal was fair (see paragraph22.2 – 22.6 of the judgment at page 83 of the bundle).d. Yes; there was race discrimination because there was less favourable treatment of the Appellant than of a white comparator; Maxine Russell, a woman of white ethnic background, had behaved in a similar way to the Appellant and had not been dismissed (see paragraphs 9 and 11 of the judgment at pages 77 to 78 of the bundle and see paragraphs 23.2 – 23.4 at page 84 of the bundle).e. Yes; the dismissal was on the grounds of race because it follows from the findings at d. above (see paragraph 23.5 at page 84 of the bundle).[11]That judgment was appealed. Before the appeal could be heard, the first employment tribunal had held a hearing on quantum. Its judgment on that part of the case featured in the subsequent appeal but we do not have the decision itself, only a quotation from it.[12]A division of the Employment Appeal Tribunal (His Honour Judge Pugsley, Mr D G Smith and Mr D Welch) heard an appeal from the judgment of the first employment tribunal on 27 September 2007 (the written judgment (see pages 85 to 92) is stamped as sealed on 11 February 2008). The appeal was allowed because the Employment Appeal Tribunal regarded the conclusions at paragraphs 22.5 and 23.5 of the judgment of the first employment tribunal as inconsistent. This was particularly so when considered against the light of the judgment of the first employment tribunal on the quantum hearing (see paragraphs 5, 6 and 8 of the judgment of the Employment Appeal Tribunal at pages 90 and 91 of the bundle). Thus the appeal was allowed and the case remitted to a differently constituted tribunal for a complete rehearing.[13]The circumstances of the second hearing are summarised at paragraph 1 above. The second employment tribunal's answers to the questions posed at paragraph 8 above were as follows:a. Yes; Mr Madden had made the remark and by doing so committed an act of direct race discrimination for which the Respondent was vicariously liable (see paragraphs 1, 4 and 8 of the judgment at pages 3, 4 and 7 of the bundle)b. Yes; the dismissal was by reason of conduct; the facts of the 17 October incident are set out at paragraph 3 of the judgment (see page 4 of the bundle) and the facts of the 20 October incident are set out at paragraph 4 (also page 4 of the bundle); the conclusions as to those incidents as reasons for dismissal are at paragraph 9 (see pages 8 and 9 of the bundle).c. Yes; the dismissal was fair, also dealt with at paragraph 9 (see page 9 of the bundle).d. No; there was no less favourable treatment of the Appellant on the grounds of race; the facts relating to this are at paragraph 7 (see page 6 of the bundle) and the reasoning is set out at paragraph 10 at page 8 of the bundle).e. No; that follows from d. above but is also the subject of what might be regarded as separate and additional reasoning at paragraph 10. This appeal[14]The Notice of Appeal addresses the issues under three headings; firstly, the incident of 17 October 2005; secondly, the incident of 20 October 2005; thirdly, race discrimination and equal treatment. On 11 November 2008, His Honour Judge Peter Clark, having considered the Notice of Appeal, ordered the matter to proceed to a preliminary hearing. He noted that:
"The appeal contains a strong factual element. However, there was a finding that Madden made a racial remark during one of 2 incidents leading to dismissal and the ETs concluding paragraph (10) is indigestible."
[15]The preliminary hearing took place on 14 January 2009 before His Honour Judge McMullen QC, Lord Morris and Mr J R Rivers; the transcript of the judgment is at pages 58 to 62 of the bundle. The "substance of the appeal" was ordered to proceed to a full hearing (see paragraph 1 at page 60 of the bundle). In terms of the Order, that decision was given effect by paragraphs 18 to 29 and 40 to 49 of the Notice of Appeal being "dismissed or not pursued to full hearing". It is necessary to examine this with care in order to understand the scope of the appeal and what is open to argument.[16]So far as the incident of 17 October was concerned, there is no difficulty. The Order made by Judge McMullen's division of this tribunal precluded the Appellant from challenging, as perverse, the finding of fact that an instruction had been given to him not to discuss the alleged indecent assault. That is all dealt with by paragraph 6 of the judgment (see page 61 of the bundle).[17]The exclusion of paragraphs 40 to 49 of the Notice of Appeal, which were headed "Race Discrimination and Equal Treatment", presents more difficulty because paragraphs 40 to 49 seem quite extensive in scope and, at first sight, it is not so easy to reconcile their exclusion with the statement that the "substance of the appeal" would proceed to a full hearing. Because there has been some doubt as to what might be open on this appeal, it is necessary to examine these paragraphs in some detail.[18]Paragraph 40 refers to the alleged more favourable treatment of a woman, with a different racial origin, who had appeared to have lost her self-control during a meeting and, thus, might be thought to be in a similar position to that of the Appellant on 20 October. It should, perhaps, be linked to paragraph 48, which asserts that, given the fact a racist remark had been made, a comparator was not necessary in any event.[19]Excision of the argument raised by paragraph 40 eliminates the contention that the dismissal was by reason of grounds of race due to less favourable treatment of the Appellant when compared to the treatment of others. Nor can the Appellant rely on the notion that less favourable treatment by the employer is to be presumed as axiomatically arising from a remark, found to amount to racial discrimination, made by a fellow employee; that follows from the exclusion of paragraph 48. The removal of these paragraphs from consideration would still leave open the extent to which the Respondent had failed to investigate and take account of the apparent attitude of Mr Madden towards the Appellant but that appears to be what paragraphs 41 to 47 are aimed at.[20]Paragraph 41 quotes part of paragraph 10 of the judgment (i.e. the paragraph referred to by Judge Clark as "indigestible"). Paragraph 42 asserts the conclusion quoted there, namely that the dismissal was not an act of discrimination, to be "startling" given that the employment tribunal had found Mr Madden to have made a racist remark. Paragraphs 43 and 44 develop this by submitting that the employment tribunal ought to have considered the role played by Mr Madden during the investigation of the Appellant's alleged misconduct and, having done so, could not have concluded that the Appellant's racial origin was not material to the employer's decision.[21]The alleged relevance of Mr Madden's role is developed further at paragraph 45; he had "engineered the cut in working hours", he had made a racist remark; he had participated in the investigatory and disciplinary process. These facts should have been enough to engage "the reverse burden of proof". Moreover, the employment tribunal had failed to consider that the Appellant had complained about Mr Madden making a racist remark and had failed to ask itself whether the disciplinary process had been motivated by the fact that he had made such a complaint (paragraph 46).[22]On one view the excision of these paragraphs would eliminate most, if not all, of the arguments relating to discrimination. In order to fit the Order into a context, we need to look at the actual judgment of Judge McMullen's division on the preliminary hearing.[23]At paragraphs 7 and 8 (see pages 61 and 62 of the bundle) the following appears:
"7. A similar (if we may say, sensible) approach was taken to the issue of comparators. In the grounds of appeal only one was advanced, Maxine Russell, and after debate between ourselves and Mr Harding it is not to be pursued any further, since it is recognised that there is a finding of fact about the circumstances of Ms Russell's case and whether the Tribunal is right or wrong it is for the Tribunal to make those decisions. So, with Mr Harding's help, we are able to focus on the grounds of appeal which will go forward. The Notice of Appeal, which will be extant before a full hearing, does not include paragraphs 18 - 29 or paragraphs 40 - 49, except by way of background only. 8. We have attempted to separate the unfair dismissal aspect from the dismissal on the grounds of race discrimination aspects of this case, but that is too difficult a task at this stage and it will be a matter for the full hearing. We draw attention to the judgment which we gave in London Ambulance Service NHS Trust v Small (judgment pending in CA) for the purpose of examining material (which was or ought to have been available to an employer in the light of allegations of misconduct), and note this case is one which includes contentions relating to procedure and the Tribunal's criticism of Mr Orr for not participating fully in the procedure will be borne in mind by the EAT which has the full case. "
[24]We think two things emerge from the above. Firstly, although the Appellant was to be prevented from arguing further about Maxine Russell, it was not the intention to exclude all further discussion as to race discrimination. We think this follows from the first sentence of paragraph 8 above. When the Order is looked at in the context of the judgment what we think has been excluded from argument by the excision of paragraphs 41 to 47 is the argument that there is anything axiomatic about discrimination. It is therefore not open to us to consider the judgment of the second employment tribunal from the point of view of reverse burdens or inevitable conclusions. In particular, and this is the second matter that emerges form the judgment of Judge McMullen's division of this tribunal, it was envisaged that the focus of the appeal might be on the procedural aspects of the investigative and disciplinary process; hence the reference to London Ambulance Service NHS Trust v Small , a copy of which was ordered to be part of the bundle of authorities for the full hearing. In the event, the decision referred to had been reversed by the Court of Appeal by the time we heard this appeal. It is necessary, however, to consider that case both in this tribunal and in the Court of Appeal in order to understand its relevance to this appeal. London Ambulance Service NHS Trust v Small [2009] EWCA Civ 220 ; [2009] IRLR 563[25]Mr Small was a paramedic, who was one of an ambulance crew of two, responding to an emergency call in July 2005. He was experienced, well qualified and had an unblemished record. The patient was a 78 year old woman complaining of abdominal pain and Mr Small decided she should be taken to hospital. She was walked downstairs and then put in a carry chair. Whilst she was being carried from the house to the ambulance she had what the employment tribunal subsequently described as "an accident"; we would understand that to be an episode of incontinence. Mr Small made a comment about it. On the way to hospital oxygen was administered but not at the level prescribed by the relevant manual. Other aspects of her treatment relating to examination, assessment, pain relief and record keeping were controversial. When in hospital (and no longer in the care of Mr Small) the patient had a series of heart attacks and later died. Her death was not connected with the way she had been dealt with by Mr Small. But complaint was made about her treatment at the hands of Mr Small. There was an investigation and a disciplinary hearing. Gross misconduct was found proved against Mr Small and he was summarily dismissed. He complained of unfair dismissal and the employment tribunal upheld his claim but found him to have caused or contributed to his dismissal and reduced the award by 10 per cent.[26]The Trust appealed to this tribunal and a division presided over by Judge McMullen upheld the decision at first instance, notwithstanding its acceptance that one of the employment tribunal's factual findings was unsound. However the Employment Appeal Tribunal did find an error of law in the approach to contributory fault and remitted that question to the employment tribunal. The Trust appealed to the Court of Appeal. The Court of Appeal allowed the Trust's appeal and remitted the case back to the employment tribunal for a complete rehearing.[27]The case of Small is factually dense and the instant appeal will not profit from a close examination of the detail of its factual controversies. Suffice it to say that the employment tribunal investigated evidentially some of the factual findings of the disciplinary panel, which were disputed by Mr Small and concluded that the decisions made about them by the disciplinary panel could not establish a genuine belief on reasonable grounds in the employee's culpability. Having regard to what had been proved against, or admitted by, Mr Small that could not amount to gross misconduct; accordingly, the dismissal was unfair. Part of that analysis had referred to the procedure adopted by the employer but also, and as a discrete point, the employment tribunal found that a fair procedure had not been followed, thus rendering the dismissal unfair on that additional ground.[28]The appeal to this tribunal was founded on two main points. Firstly, and despite self directions to the contrary, the employment tribunal had substituted its own decision for that of the employer. Secondly, the employment tribunal had made a number of erroneous factual findings.[29]Neither of those points was accepted by the Employment Appeal Tribunal, save in respect of one factual matter, which the Employment Appeal Tribunal did accept was erroneous but which it judged made no difference to the balance of the outcome. So far as factual findings were concerned, the Employment Appeal Tribunal said this in the course of paragraph 28 of the judgment:
"It must be recalled also that the Employment Tribunal is now specifically required by the Employment Tribunal Rules, rule 30 (6), to set out the findings of fact which it makes relevant to the issues which it has to decide. In this case, the Tribunal had set out that there were agreed facts and there were disputed facts. It follows if there are disputed facts, as identified by the Tribunal following submissions of Counsel, it is under an obligation to determine them if they are relevant to the decision, as they were. In this case, there were issues as to the grounds upon which the Respondent formed its belief, whether that belief was genuine, whether there was a reasonable investigation informing that belief, and whether on this material it was reasonable to dismiss. In addition, were allegations conduct and contribution (sic)."
[30]At paragraph 29 the Employment Appeal Tribunal reinforced the above by citation from authority relevant to contributory fault cases and to gross misconduct/breach of contract cases; in each situation, the Employment Appeal Tribunal suggested findings of fact have to be made. Similarly, where an investigation was impugned, the employment tribunal has to investigate the factual matrix in order to be able to understand what might have emerged had a proper investigation been carried out. In the instant case, there were three disputed areas of fact, which the Employment Tribunal had been obliged to examine.[31]Moreover, the Employment Appeal Tribunal supported the Employment Tribunal's approach to procedure. It thought the Employment Tribunal had been justly and correctly critical of the procedure.[32]The Court of Appeal reversed that judgment and that of the Employment Tribunal. The judgment of the Court of Appeal was given by Mummery LJ. In the introductory part of the judgment, at paragraph 3, he stated the basic principle relevant to cases like that of Mr Small to be as follows:
"The parties agree that the legal principles on conduct dismissals are those set out by the EAT 30 years ago in its judgment in British Home Stores Ltd v. Burchall [1978] IRLR 379 and affirmed by this court in Post Office v. Foley 2000 ICR 1283 . The essential terms of enquiry for the ET were whether, in all the circumstances, the Trust carried out a reasonable investigation and, at the time of dismissal, genuinely believed on reasonable grounds that Mr Small was guilty of misconduct. If satisfied of the Trust's fair conduct of the dismissal in those respects, the ET then had to decide whether the dismissal of Mr Small was a reasonable response to the misconduct."
[33]He immediately went on in paragraph 4 to draw a distinction, which is of significance in terms of this case; this reads:
"The questions of law on this appeal relate to the ET's application of the legal principles when, as is often the case, there are related issues, in this case contributory fault and breach of contract. In quite a few cases the related issues will include constructive dismissal and, increasingly, discrimination in, or associated with, the dismissal. The additional issues require findings of fact. The additional facts are not the same facts as relate to the issue of the fairness of the dismissal."
[34]The Trust took three points; firstly, that the Employment Tribunal's criticism of the procedure was flawed; secondly, that factual errors made by the Employment Tribunal rendered the finding of substantive unfairness perverse; thirdly, that the Employment Tribunal had misapplied settled principle and substituted its own view for that of the employer. The thrust of this third point was identified at paragraphs 30 and 31 as follows:
" ... that the ET made findings of fact about conduct issues that were in dispute in the disciplinary proceedings. It then wrongly used its factual findings, which were based on the evidence that it had heard, in order to substitute its own decision on Mr Small's conduct dismissal for that of the Trust. Mr Reynold cited the decision of this court in Morgan v. Electrolux Ltd [1991] ICR 369 for the proposition that it was an error of law for the employment tribunal to substitute its own evaluation of the witness or of the evidence for that of the employer. The ET must consider the reasonableness of the employer's conduct. In judging that the ET was not to substitute its view as to what was the right course to adopt for that of the employer. 31. On the issue of liability, as distinct from the issues of contributory fault, the ET was not, as the EAT thought, bound to make the findings of fact that it used in deciding whether the dismissal was fair."
[35]The second point, referred to at paragraph 34 above, was not accepted by the Court of Appeal. But the first and third points were. As to the first, the judgment proceeds, by reference to very specific factual details of the evidence, to accept the argument put forward on behalf of the Trust that the reasons advanced by the Employment Tribunal for finding the procedure to be flawed cannot, on analysis, support that conclusion. That specific analysis is not of assistance in the instant case and for that reason there is no need to examine it further.[36]It is the third point that is most pertinent for present purposes. In order to understand it fully and avoid the dangers of misrepresentation that can arise from synopsis, it is necessary to quote extensively from the latter part of the judgment:
"B. Substitution and misapplication … 41. On the liability issue the ET ought to have confined its consideration to facts relating to the Trust's handling of Mr Small's dismissal: the genuineness of the Trust's belief and the reasonableness of the grounds of its belief about the conduct of Mr Small at the time of the dismissal. Instead, the ET introduced its own findings of fact about the conduct of Mr Small, including aspects of it that had been disputed at the disciplinary hearing. For example, the ET found that the daughter, who did not give evidence to the ET, had not told Mr Small that her mother was hypertensive and diabetic. Further, on the point whether Mr Small had done a risk assessment before asking the patient to walk, the ET held that there was no evidence that he had failed to carry out a risk assessment, but Mr Suter gave evidence to the ET that the critical issue before the disciplinary panel was that Mr Small had not carried out a proper patient assessment, before the decision was made. 42. The ET used its findings of fact to support its conclusion that, at the time dismissal, the Trust had no reasonable grounds to its belief about Mr Small's conduct and therefore no genuine belief about it. By this process of reasoning the ET found that the dismissal was unfair. In my judgment, this amounted to the ET substituting itself and its findings for the Trust's decision maker in relation to Mr Small's dismissal. 43. It is all too easy, even for an experienced ET, to slip into the substitution mindset. In conduct cases the claimant often comes to the ET with more evidence and with an understandable determination to clear his name and to prove to the ET that he is innocent of the charges made against him by his employer. He has lost his job in circumstances that may make it difficult for him to get another job. He may well gain the sympathy of the ET so that it is carried along the acquittal route and away from the real question - whether the employer acted fairly and reasonably in all the circumstances at the time of the dismissal. C. Separate and gradual fact-finding 44. I agree with the EA T that the ET was bound to make findings of fact about Mr Small's conduct for the purpose of deciding the extent to which Mr Small's conduct contributed to his dismissal. That was a different issues from whether the Trust unfairly dismissed Mr Small for misconduct. Contributory fault only arose for decision, if it was established that the dismissal was unfair. The contributory fault decision was one of the ET to make on the evidence that it had heard. It was never a decision for the Trust to make. That makes it different from the decision to dismiss, which was for the Trust to make. It was not the role of the ET to conduct a re-hearing of the facts which formed the basis of the Trust's decision to dismiss. The ET's proper role was objectively to review the fairness of Mr Small's decision by the Trust. 45. I am unable to agree with the EAT that the ET kept the issues and the relevant facts separate or that it avoided the error of substituting its own judgment about dismissal. Although the ET rightly warned itself against substitution and thought that it was not falling into that error, my reading of the reasons is that its findings of fact about Mr Small's conduct seeped into its reasoning about the unfairness of the dismissal. 46. Mr Marsh [counsel for the Respondent, Mr Small] spoke of his experience that ETs often structure their reasons by setting out all findings of fact in one place and then drawing on the findings at the later stages of applying the law to the relevant facts. It is not the function of appeal courts to tell trial tribunals and courts how to write their judgments. As a general rule, however, it might be better practice in an unfair dismissal case for the ET to keep its findings on that particular issue separate from its findings on disputed facts that are relevant to other issues, such as contributory fault, constructive dismissal and, increasingly, discrimination and victimisation claims. Of course, some facts will be relevant to more than one issue, but the legal elements of the different issues, the role of the ET and the relevant facts are not necessarily all the same. Separate and sequential findings of fact on discrete issues may help to avoid errors of law, such as substitution, even if it may lead to some duplication."
[37]The distinction drawn between the nature of the evidential inquiry to be made by an employment tribunal considering the fairness of a conduct dismissal and that to be undertaken in discrimination proceedings is obviously pertinent to the present case. The distinction is foreshadowed at paragraph 4 of the judgment (see above at paragraph 33 of this judgment) and is reiterated at paragraph 46 (see immediately above). Mummery LJ plainly recognised that allegations of unfair dismissal and discrimination arising from the same dismissal are a regular feature of litigation in the employment tribunal but regrettably (although understandably because, factually and in terms of the claims made, the case of Small has nothing to do with discrimination) the relationship between a conduct dismissal and a cognate discrimination claim is not explored beyond the suggestion about separate fact finding at paragraph 46, which is clearly no more than a suggestion and cannot be regarded as part of the ratio decidendi.[38]Two things are, however, clear. Firstly, in discrimination cases, which are cognate with unfair dismissal proceedings relating to alleged misconduct, "additional facts" will have to be found. This is because, whilst the unfair dismissal is concerned with the inquiry identified in paragraph 3 of Mummery LJ's judgment (i.e. " whether, in all the circumstances, the … [employer] … carried out a reasonable investigation and, at the time of dismissal, genuinely believed on reasonable grounds that … [the employee] … was guilty of misconduct "), a discrimination claim is concerned with whether the dismissal has been by reason of discrimination. The former requires the employment tribunal to scrutinise the reasonableness of the decision taken by the employer on the evidence available to it. The latter requires the tribunal to decide whether the dismissal has been on the ground of discrimination. Secondly, in terms of analysis, the employment tribunal will need to keep clear the distinction between facts needed to answer questions as to the fairness of dismissal and those required for decision making as to discrimination. Failure to keep the issues separate will lead, at best, to confusion, and, at worst, to error.[39]Adopting the words of Mummery LJ, the main theme of the judgment might be described as avoiding the "substitution mindset". It is clear that the Court of Appeal rejected the Employment Appeal Tribunal's reasoning that where facts are disputed the employment tribunal must resolve them by admitting and evaluating evidence about them. Although there is no express reference to it, the Court of Appeal must be taken to have also rejected the reasoning of the Employment Appeal Tribunal that it is necessary to establish some factual matters in order to judge whether " whether, in all the circumstances, the … [employer] … carried out a reasonable investigation and, at the time of dismissal, genuinely believed on reasonable grounds that … [the employee] … was guilty of misconduct ".[40]In particular, the Employment Appeal Tribunal had suggested it might be necessary to understand what might have emerged had a proper investigation been carried out and that might involve fact finding on evidence not called before the disciplinary panel. Because the rejection of that by the Court of Appeal does not appear expressly on the face of the judgment, it is difficult to know whether that was rejected as a matter of principle of general application or on the specific facts of Small . We think it would be problematic if it were the former. To take a simple example, it would mean that the refusal of the employer to allow an exculpatory witness to be called could not be scrutinised by the employment tribunal; it should not hear from that witness and should not decide as to the reasonableness of the employer's decision by reference to its findings as to that witness's evidence. No doubt this is a matter that may need to be debated in other cases but, for reasons, which will emerge in the rest of this judgment, we do not think it necessary to consider it further in this case. We turn now to the submissions of the parties. Submissions[41]On behalf of the Appellant, Mr Harding of counsel submitted that the Employment Tribunal had failed to consider the extent to which the dismissal might be "tainted" by the race discrimination, which the Employment Tribunal had found proved against Mr Madden. This, together with the other finding made against Mr Madden, namely his manipulation of the correspondence to create the impression that the Appellant had asked for a reduction in hours, should have led the Employment Tribunal to the conclusion, in the context of the unfair dismissal claim, that the investigation and/or the disciplinary process was flawed because it had failed to identify these shortcomings in the case being put forward against the Appellant. The Employment Tribunal had uncovered them and so too should the employer during a reasonably conducted investigation. Accordingly, the dismissal was unfair and that was so irrespective of the findings in relation to the 17 October incident because, even if the Employment Tribunal had approached them as separate and freestanding incidents, if one fell away because the finding was impermissible on the evidence, then the other would still need to be reconsidered.[42]Also, relying on the judgment of Mummery LJ in Small , the Employment Tribunal had correctly found "additional facts" in relation to discrimination but had failed to make a separate decision as to discrimination based on those facts. An employee, Mr Madden, had been shown to have made discriminatory remarks and to have indulged in devious and doubtful manoeuvring. He must then be taken to have lied to his employers in the course of the investigation and disciplinary process. This had led directly to the dismissal and the second employment tribunal should have recognised that the dismissal occurred because the Appellant had been provoked both by devious conduct on the part of his manager (albeit he did not realise the full extent of the duplicity at the time) and the racist remark. There was thus a chain of causation, which the second employment tribunal should have recognised and which it signally failed to do in paragraph 10 of the judgment. Had it done so, it must have found that the dismissal was by reason of race discrimination. Moreover, had the Respondent recognised discrimination, as it should have done, then it might well not have dismissed in respect of the first incident.[43]Mr Cheetham of counsel, who appeared for the Respondent, emphasised the unfortunate history of this case. There have been two decisions of employment tribunals on the merits. This is the second appeal, in a case, the facts of which date from late 2005. Key witnesses have now left the Respondent's employment. Thus, any further remission would place the Respondent in "an impossible position".[44]In any event, so far as unfair dismissal is concerned, the Employment Tribunal had made a perfectly conventional and understandable decision. True it is that some of the language and grammar is infelicitous but the main thrust of the decision is perfectly clear. The Employment Tribunal may have had reservations about Mr Madden and found that, his protests to the contrary notwithstanding, he had made a racist remark and that he did have a somewhat devious approach to the question of the reduction of hours but the Appellant had not participated in the disciplinary hearing and the employers were not acting unreasonably in accepting Mr Madden's version of events and, thus, reasonable in concluding that there was gross misconduct, in respect of which summary dismissal was a reasonable reaction.[45]Moreover, the findings as to the events of 17 October were not open to challenge on this appeal as a result of the Order made on the preliminary hearing. Consequently the finding as to gross misconduct on 17 October must stand and the Employment Tribunal had made it clear that it was a reasonable response to dismiss in respect of either incident. So whatever criticism might be sustained as to the findings relative to the events of 20 October could make no difference to the outcome.[46]Finally, Mr Cheetham took a simple position in relation to discrimination. It was not arguable in the light of the Order made by Judge McMullen's division of this tribunal on the preliminary hearing and this tribunal could not entertain any submissions relating to it. Conclusions[47]As might be anticipated from paragraphs 17 to 24 above, we reject Mr Cheetham's submission that all considerations of race discrimination have been excluded from the scope of this appeal as a result of the Order made on the preliminary hearing. As explained in those paragraphs, we do not regard the terms of the Order as intended to or as having the effect of stifling all debate as to race discrimination. In our judgment that was not the intention of Judge McMullen's division of this tribunal. What was to be excluded was any argument as to the comparator Maxine Russell, as to the axiomatic nature of discrimination and as to the engagement of the reverse burden of proof.[48]Nor can this case be decided simply on the basis of its unfortunate history. We are extremely sympathetic to the proposition that the case has gone on for a long time and all Mr Cheetham's submissions in this context are full of good sense but the case must be disposed of according to its merits and if there has been a further error of law then it will have to continue either by a reference back to the same tribunal or to a differently constituted tribunal, it not being a case where we could reach any conclusion ourselves.[49]One obvious deficit of the judgment of the second employment tribunal (and it was unhappily also a deficit of the decision of the first employment tribunal) is that the findings are not clearly expressed. As Judge Clark observed, paragraph 10 is "indigestible"; as Judge McMullen observed, the judgment does not bear the hall mark of careful proof reading. Mr Harding did not submit that the decision failed to explain the reasoning process to the extent required by the well known case of Meek but its reasoning is greatly compressed and we confess to having had some difficulty in penetrating it. Ultimately, however, it is clear to us why the Appellant did not succeed in terms of unfair dismissal or of dismissal by reason of race discrimination.[50]So far as unfair dismissal is concerned, it seems to us that the second employment tribunal decided that the conclusions it reached as to the motives and veracity of Mr Madden did not vitiate the Respondent's decision. Contrary to the proposition in the Grounds of Appeal and to Mr Harding's submissions, we find nothing "astonishing" about the conclusion that the dismissal was not unfair even though the employment tribunal found that Mr Madden had made a discriminatory remark.[51]When the second employment tribunal said at paragraph 9 of its judgment: "We do not of course substitute our own view for that of the employer, it is our task to measure their (sic) conduct against the standard of a reasonable employer and the range of responses available to him. It is important to note that that the employer's duty is to investigate and that the formal hearings form part of that investigation. They are an important part since they give the employee an opportunity not only to advance his own version of events but to (sic) also to challenge the version advanced by other witnesses. In this case the Claimant did not avail himself fully of that important opportunity either at the time of the initial disciplinary hearing or subsequently on appeal. The evidence available to Mr Cove on the initial disciplinary hearing is contained and preserved in the bundle before us of (sic) particular note is Mr Madden's evidence which paints perhaps a rather different picture of the events then (sic) has (sic) emerged to us post Mr Leader's cross examination of him. However it is the evidence that was before the employer that is crucial and whilst we recognise that care should be taken in a disciplinary hearing where an employee fails or does not attend the reasonability (sic) of an employers belief rests firmly on the evidence that he has and not on the evidence he might have had if the employee had chosen to take an (sic) more active role in the process." it was expressing a completely orthodox approach to the issue of a dismissal based on misconduct and an approach entirely consistent with established authority, including the very recent authority of Small .[52]In our judgment, the later passage in paragraph 9, upon which great emphasis was laid by Mr Harding, namely: "The level of investigation and the conduct of the hearings was both fair and reasonable in the circumstances. Based upon the evidence before them and in particular Mr Maddens account the Claimant had launched a (sic) unprovoked and unwarranted tirade against Mr Madden and on his account Mr Madden confessed to being no more then (sic) being the voice of quiet reason." must be read in the overall context of the rest of paragraph 9. In that context it is, by no means, an "astonishing" statement. It means no more than that the employer had conducted a reasonable investigation and a reasonable disciplinary process, notwithstanding the failure to uncover the fact that Mr Madden was being less than frank during the investigation and disciplinary process about his role and about some of the events.[53]Accordingly, we reject Mr Harding's submissions that there was an error by the second employment tribunal in failing to recognise that the decision to dismiss was unsound because the main protagonist was shown at the Employment Tribunal not to be credible. The second employment tribunal recognised it but decided that the employer's investigation and disciplinary process could not be impugned. In doing so, whilst we understand how unpalatable it must be to the Appellant, we think they committed no error of law.[54]Even if we are wrong as to that, we do not accept Mr Harding's submission that the second employment tribunal should have looked again at the 17 October incident. In our view Mr Cheetham is quite right to say that the employer regarded both incidents as gross misconduct and that each would be sufficient to justify dismissal. Nor do we accept Mr Harding's argument that if dismissal by reason of race discrimination can be sustained that provides a basis for unpicking the second employment tribunal's decision that there were two incidents of gross misconduct, both of which justified summary dismissal as a reasonable sanction. In our view it is a non sequitur to say that if events of 20 October can be regarded as "tainted" by race discrimination so that any dismissal based on them must also constitute race discrimination, that would mean that gross misconduct on 17 October, which had no component of race discrimination, could no longer be regarded as a reasonable basis for summary dismissal. The appeal cannot succeed in relation to unfair dismissal and must be dismissed.[55]Turning then to the question of whether the second employment tribunal were wrong in concluding that the dismissal was not by reason of race discrimination, the issue here seems to us to be whether the second employment tribunal should have recognised a "chain of causation". This takes us into the territory of the "indigestible" paragraph 10 of the judgment of the second employment tribunal. The first seventeen lines of that paragraph set out, albeit in an unpunctuated, ungrammatical and somewhat breathless fashion, the relevant statutory considerations. The tribunal then say this:
"We are not satisfied that the Claimant has proved facts from which we could conclude that the Respondents had committed an act of discrimination. We have before us a body of evidence which has supported our finding that the Respondents acted reasonable (sic) in treating the Claimants conduct as a reason for dismissal (sic) there is nothing within that evidence from which could be drawn and influence that (sic) his race or ethnic origin were in any way material to do (sic) that decision. … [we omit a sentence relating to comparators, who, for the reasons set out above, are not relevant to this appeal] … Accordingly we do not find the Claimants dismissal to have been an act of discrimination."
It is in this part of paragraph 10 that Mr Harding contends the error arises.[56]As Mummery LJ made clear in his judgment in Small , different considerations apply to discrimination than apply to unfair dismissal. In discrimination the tribunal is concerned with whether the dismissal was by reason of discrimination not whether the employer acted reasonably in terms of investigation and disciplinary process and reached a determination as to facts and sanction that was reasonably open to it on the material that the processes of investigation and disciplinary hearing had produced. So it is not what the employer reasonably believed to be the position that matters but what was, in fact, the true position. In so far as that part of paragraph 10 of the judgment of the second employment tribunal quoted at paragraph 55 above seems to confine itself to the evidence, which the Respondent had at the time of dismissal, we accept Mr Harding's submission that the second employment tribunal was not asking itself the right question. The tribunal should have been concerned with the evidence that it had heard not with the state of the evidence known to the Respondent at the time of dismissal or at the time of the appeal.[57]It seems to us, however, that had the tribunal asked itself the correct question the outcome would have been the same. No doubt it should have asked – on the evidence known to the tribunal was the dismissal on the grounds of race discrimination? Given that the Respondent was unaware of any race discrimination, on one level, the answer to that question must be in the negative. It may be that is what the passage from paragraph 10 of the judgment of the second employment tribunal, as quoted at paragraph 55 above, is getting at.[58]Even so, it is argued that does not go far enough when it is found, as a result of the evidence at the tribunal hearing, that race discrimination has been a component of the factual matrix. What must then be considered is whether the employer, who is unaware of this at the time of the dismissal, can be liable for that discrimination in terms of the dismissal. One obvious route to such responsibility would be by way of vicarious liability. But, as the facts of the instant case illustrate, that would only be effective where the dismissal had been effected by an employee, who had been dismissed by reason of race discrimination. Then the employer would be vicariously liable for the actions of that employee. Here there was race discrimination in terms of the remark made by Mr Madden and the Respondent is, of course, vicariously liable for that. Mr Madden, did not, however, dismiss and the extent of the vicarious liability must be as to the remark not as to the dismissal.[59]In his submissions Mr Harding recognised this limitation and proposed another route, namely that of the dismissal being tainted by Mr Madden's race discrimination. It was in this context that he proposed his "chain of causation". If Mr Madden had not made the remark, the Appellant would not have reacted, the argument would not have escalated, there would have been no abusive remarks, there would have been no disciplinary procedure and if there had been no disciplinary procedure there would have been no dismissal. In other words what is being put forward is a "but for" test of causation. As a chain of causation argument, we think that there are a number of very weak links here and the argument might not be tenable, even on its own terms. But it seems to us that there is an objection in principle, which we should address and in order to do so, we will assume that the "chain of causation" is made out.[60]Causation is, no doubt, a useful analytical tool. It has enabled courts to eliminate motive from the analysis of whether actions were on the grounds of or by reason of race (or any other form of discrimination) or not (see James v Eastleigh Borough Council [1990] ICR 554). But applied as Mr Harding suggests in the context of the instant case, it would make an employer liable for dismissal by reason of discrimination (of any character) when that employer was completely unaware of such discrimination. In our judgment the application of such a concept to the present case should be rejected.[61]It is not enough to show that "but for the discriminatory remarks made by Mr Madden the Appellant would not have been dismissed". The Appellant cannot succeed simply by the "but for" argument. He must show why the employer acted as he did and that "reason why" must disclose that the dismissal was on the grounds of his race. In our judgment this is the effect of the decisions of the House of Lords in the trilogy of cases Nagarajan v London Regional Transport [1999] ICR 877 , Chief Constable of West Yorkshire Police v Khan [2001] ICR 1065 and Shamoon v Chief Constable of the Royal Ulster Constabulary [2003] ICR 337 . In Martin v Lancehawk Ltd (t/a European Telecom Solutions) UKEAT/0525/03 a division of the Employment Appeal Tribunal presided over by Rimer J took that view (see paragraphs 22 to 29, which contain a thorough analysis of James and the "trilogy") and that was also the approach of this tribunal in AvB [2007] IRLR 576 (see paragraph 24 on page 579 of the judgment of the tribunal given by Lady Smith).[62]The remarks of the President, Underhill J, in the case of Olasehinde v Panther Securities PLC UKEAT/0554/07 at paragraph 27 on pages 13 and 14, albeit obiter dictum, encapsulate the correct approach:
"The metaphor of a "taint" of discrimination is attractive and sometimes useful, but it may be ambiguous and what is meant by it needs to be clearly understood. A decision can be said to be tainted by discrimination if the decision-taker is motivated, even sub-consciously, to a significant extent by the complainant's race (or sex, or whatever it may be). But … [counsel for the Appellant] … seemed to use the terms "tainted" or "infected" also to refer to the fact that the whole incident of 23 March, and thus the dismissal of 24 March, would not have occurred but for the earlier incident on 6 March, which the Tribunal found to involve discrimination on the Respondents' part, and that one was an important cause of the other. This approach, however, seems to us to fall foul of Lord Nicholl's well-known observations in Chief Constable of West Yorkshire Police v Khan [2001] ICR 1065 (picking up his earlier speech in Nagarajan v London Regional Transport [ 1999] ICR 877 ) to the effect that tribunal's should eschew the language of "causation", which he described as "slippery", and should instead ask what was the reason why the decision-taker acted as he did."
We also draw attention to paragraphs 31 to 37 (pages 892 – 893) of the judgment of this Tribunal in the case of Amnesty International v Ahmed [2009] IRLR 884 , where the President sets out the above analysis in greater detail.[63]As we pointed out at paragraph 57 above, it is by no means clear that the second employment tribunal did fall into the error of confining itself to what the employer reasonably knew at the time of the dismissal, as opposed to considering all the evidence it had heard, but, given the history of this case and the lack of clarity in the judgment, we have been prepared to assume that to be so. Equally, although far from convinced that a "but for" argument can be made out here, for the same reasons, we have been prepared to accept that it can. Nevertheless, when we come to ask ourselves what was the reason why the Appellant was dismissed, the answer is clear. He was dismissed because of his conduct on 17 October and 20 October and no part of the Respondent's reasoning related to his race. That the events of 20 October were "tainted" by the conduct of Mr Madden or that it might be said that "but for" the conduct of Mr Madden, the Appellant would not have been dismissed is not to be equated with, nor does it lead to, the conclusion that he was dismissed on the grounds of his race. None of the evidence that the second employment tribunal had heard, nor any of the findings that it had made, could lead to such a conclusion and there was no material error on the part of the tribunal in rejecting the argument that Appellant had been dismissed on the grounds of his race. Accordingly the appeal in relation to race discrimination must also be dismissed.