1) POTHECARY WITHAM WELD 2) MR P J M HAWTHORNE v 1) MISS S A BULLIMORE 2) SEBASTIANS SOLICITORS [2010] UKEAT 0158_09_2903

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2010] UKEAT 0158_09_2903Case No Appeal No. UKEAT/0158/09Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
1) POTHECARY WITHAM WELD 2) MR P J M HAWTHORNEAPPELLANTS1) MISS S A BULLIMORE 2) SEBASTIANS SOLICITORSRESPONDENTS
Before
Mr Justice UnderhillDate 29 March 2010
[1]APPEARANCES For the Appellants MR. OLIVER HYAMS (of Counsel) Instructed by: Pothecary Witham Weld 70 St George's Square London SW1V 3RD For the First Respondent MISS S A BULLIMORE (The First Respondent in Person) For the Second Respondent No appearance or representation by or on behalf of the Second Respondent The Intervenor MS KARON MONAGHAN (One of Her Majesty's Counsel) The Equality and Human Rights Commission Arndale House The Arndale Centre Manchester M4 3AQ SUMMARY VICTIMISATION DISCRIMINATION SEX DISCRIMINATION – Burden of Proof Ex-employee given unfavourable reference – Claim that terms of reference were partly on account of her having previously brought sex discrimination proceedings against employers – Claim decided by the Tribunal on basis of the "reverse burden of proof" provisions of s. 63A of Sex Discrimination Act 1975 – Employer contends, relying on Oyarce v Cheshire County Council [2008] ICR 1179 :(1) that s. 63A does not apply to claims of victimisation; and(2) that in any event the statutory instrument by which it was inserted was ultra vires because the Burden of Proof Directive did not oblige the UK to apply the reverse burden of proof provisions to victimisation claims and that accordingly the powers conferred by s. 2 of the European Communities Act 1972 were not available Employer also contends (a) that Tribunal in any event failed properly to apply the decision of the House of Lords in Derbyshire v St. Helens Metropolitan Borough Council [2001] ICR 841; and (b) that the Tribunal was obliged to make an express finding whether the reason advanced by the employer for the way he had drafted the reference was genuine and had not done so. Held: (1) The ratio of Oyarce is peculiar to the Race Relations Act 1976 and does not extend to claims under other discrimination statutes. (2) S. 63A of the 1975 Act is not ultra vires - Oakley Inc v. Animal Ltd [2006] Ch 337 applied.(3) While the Tribunal had referred unnecessarily to the decisions in Derbyshire and Chief Constable of West Yorkshire v Khan [2001] ICR 1065 , which are concerned specifically with the case of acts done by an employer to protect his position as a litigant, rather than focusing on the general principles deriving from Nagarajan v London Regional Transport [1999] ICR 877 , it had nevertheless asked and answered the right questions.(4) In a case decided on the basis of s. 63A it was enough for the Tribunal to find (with such reasons as were appropriate) that the employer had not proved that he was not significantly influenced by the bringing of the previous proceedings. THE HONOURABLE MR JUSTICE UNDERHILL (PRESIDENT) INTRODUCTION This is an appeal against the decision of an Employment Tribunal sitting at London Central, chaired by Employment Judge Potter, upholding the Claimant's claim that she was victimised by the Appellants contrary to the Sex Discrimination Act 1975 . The claims were heard over four days in December 2008 and the Judgment was sent to the parties on 6 January 2009, followed by written Reasons on 13 February. Other claims by the Claimant against the Appellants and another party were dismissed.[2]It is not necessary for the purpose of this appeal that we set out the facts in any great detail. They can be sufficiently summarised as follows:(1) The Claimant is a solicitor. From 1999 to 2004 she was employed, latterly as a salaried partner, at a firm called Witham Weld in Pimlico. She worked in the dispute resolution department, which was managed by the Second Appellant, Peter Hawthorne.(2) Various problems arose in the latter stages of the Claimant's employment, including a personality clash with the practice manager and an issue about whether, and if so when, she would be admitted to equity partnership. In early 2004 she resigned; and in May she brought proceedings in the Employment Tribunal alleging unfair (constructive) dismissal and sex discrimination.(3) Later in 2004 the Claimant obtained employment with a firm called Carter Bells. In that connection she required a reference from Witham Weld, and Mr. Hawthorne gave one in bland terms.(4) It is necessary, because it is referred to in a passage from the Tribunal's Reasons to which we will have to refer, to mention a bizarre incident which occurred in November 2004. A car driven by the Claimant's father crashed into Mr. Hawthorne's car, which was parked outside his house, and ended up in his garden, causing considerable damage. The Claimant has always maintained that this was a pure coincidence.(5) The claim against Witham Weld was settled in February 2005, using the COT 3 procedure, after the case had gone part-heard in January. One of the terms of the settlement was that Witham Weld would provide a reference to any future prospective employer of the Claimant "consistent with those already provided".(6) The Claimant was made redundant by Carter Bells in early 2008. She applied for an advertised job with a firm called Sebastians. In March 2008 she was made an offer of employment with them subject to satisfactory references. Among the referees whom she gave was Mr. Hawthorne, who was now a partner in the merged firm of Pothecary Witham Weld ("PWW"), the First Appellant.(7) Mr. Hawthorne gave a reference to Sebastians in April 2008 which was on any view less favourable than the reference which he had given to Carter Bells. In particular: (a) it referred to her poor relationship with the partners and the practice director; (b) in answer to a question about how the employment had ended it referred not simply to the fact that she had resigned but (gratuitously) to the fact that she had brought employment tribunal proceedings; (c) in answer to a question about her strengths and weaknesses it said "she could on occasion be inflexible as to her opinions".(8) The terms of that reference caused some concern at Sebastians, and on 25 April Mr. Sebastian spoke to Mr. Hawthorne on the telephone. Following that conversation, Sebastians asked their recruitment agency to confirm the job offer to the Claimant, but only on the basis that she undergo a probationary period. Precisely what passed between the Claimant and the agency is unclear, but the Claimant took the view that an attempt was being made unjustifiably to alter the terms of the original offer, and the upshot was that the offer did not proceed.(9) The Claimant wrote to Mr. Hawthorne to protest about what he had done. Rather surprisingly, given that her employment had ended some four years previously, Mr. Hawthorne offered the Claimant a meeting with him, purportedly pursuant to the statutory grievance procedures: he said that he thought that such a meeting was necessary because he could not understand the nature of her complaint. The meeting took place on 15 May 2008. The Tribunal described it, with evidently some understatement, as "difficult". It became extremely heated and the Tribunal found that both the Claimant and Mr. Hawthorne behaved "inappropriately".[3]On 20 May 2008 the Claimant commenced proceedings against PWW, Mr. Hawthorne and Sebastians. As regards PWW and Mr. Hawthorne, the acts complained of consisted of the terms of the reference, together with what Mr. Hawthorne was said to have told Mr. Sebastian over the telephone; and Mr. Hawthorne's conduct in the meeting of 15 May. These acts were said to constitute both sex discrimination within the meaning of s. 1 of the 1975 Act and victimisation within the meaning of s. 4 and to be contrary to s. 20A (3). As regards Sebastians, the withdrawal of the offer of a job was said to constitute victimisation; and the Claimant also complained of it as a breach of contract.[4]The case was, as we have said, heard by the Tribunal in December 2008. The Claimant appeared in person. PWW and Mr. Hawthorne were represented by Mr Oliver Hyams of counsel. Sebastians were also represented by counsel. The Claimant's claims of victimisation were upheld against all three Respondents, but her remaining claims were dismissed. It is necessary to mention at this stage that in reaching its conclusion on the victimisation claim the Tribunal applied the so-called "reverse burden of proof" provisions of s. 63A of the 1975 Act, which was inserted into the legislation by the Sex Discrimination (Indirect Discrimination and Burden of Proof) Regulations 2001 (SI 2001/2660).[5]PWW and Mr. Hawthorne appealed to this Tribunal. There was no appeal by Sebastians, and we were told that they have in fact reached a settlement with the Claimant. They were, as a matter of form, named as Respondents to the appeal, but they have taken no part in it. On the sift the appeal was allowed to proceed only on certain limited points, contained at paras. 6.4 and 6.8-12 of the Notice of Appeal. The appeal came before a Tribunal chaired by HHJ Ansell on 11 August 2009. The Appellants were again represented by Mr. Hyams of counsel and the Claimant again appeared in person. The Tribunal took the view that Mr. Hyams' skeleton argument introduced a point not raised in the Notice of Appeal, namely that s. 63A of the 1975 Act is of no effect because the 2001 Regulations were ultra vires – "the vires point". The Claimant had had no opportunity to consider that point, and there were also concerns whether in any event the case could be dealt with in a day. Accordingly the appeal was adjourned.[6]The Tribunal at the August hearing also took the view that the Equality and Human Rights Commission should be notified of the s. 63A point and invited to apply to intervene. The Commission accepted that invitation and in fact sought permission to make submissions not only on the s. 63A point but on a further point concerning the effect of the decisions of the House of Lords in the Khan and Derbyshire cases which we discuss below.[7]The adjourned hearing came before us on 19 and 20 November 2009. As regards the parties, the representation was the same. We gave permission to the Commission to intervene. It was represented by Ms. Karon Monaghan QC, whose submissions we found very helpful.[8]For completeness we should record that at a subsequent remedy hearing the Claimant was awarded the sum of £7,500 for injury to feelings. She has appealed against that award, but the appeal is stayed pending the outcome of the appeal on liability. THE LAW THE STATUTORY PROVISIONS[9]S. 4 of the 1975 Act is headed "discrimination by way of victimisation" and provides, so far as relevant, as follows:
"(1) A person ("the discriminator") discriminates against another person ("the person victimised") in any circumstances relevant for the purposes of any provision of this Act if he treats the person victimised less favourably than in those circumstances he treats or would treat other persons, and does so by reason that the person victimised has – (a) brought proceedings against the discriminator or any other person under this Act or the Equal Pay Act 1970 … (b) – (d) … or by reason that the discriminator knows the person victimised intends to do any of those things, or suspects the person victimised has done, or intends to do, any of them. (2) – (3) … ."
Acts of the kind specified at s-s. (1) (a)-(d) are conventionally referred to as "protected acts".[10]It is clear from the title to s. 4 that victimisation is treated by the draftsman as a sub-species of discrimination; but the point is in any event explicitly covered by s. 5 (1) (a), which provides that "in this Act ... references to discrimination refer to any discrimination falling within sections 1 to 4".[11]S. 20A, which comes under Part 2 of the Act, provides, so far as relevant, as follows: "(1) This section applies where—(a) there has been a relevant relationship between a woman and another person ("the relevant person"), and(b) the relationship has come to an end (whether before or after the commencement of this section). (2) In this section, a "relevant relationship" is a relationship during the course of which an act of discrimination by one party to the relationship against the other party to it is unlawful under any preceding provision of this Part. (3) It is unlawful for the relevant person to discriminate against the woman by subjecting her to a detriment where the discrimination arises out of and is closely connected to the relevant relationship." (S. 20A was introduced in order to cover the case of discrimination against ex-employees; but no point arises on that peculiarity; and s-s. (3), in particular in its reference to "detriment", employs the same terminology as the more familiar s.

(b) )

[12]S. 63 (1) (a) provides that a complaint about an act of discrimination which is unlawful by virtue of Part 2 may be brought in the employment tribunal. S. 63A provides (so far as material) as follows:
"(1) This section applies to any complaint presented under section 63 to an employment tribunal. (2) Where, on the hearing of the complaint, the complainant proves facts from which the tribunal could, apart from this section, conclude in the absence of an adequate explanation that the respondent – (a) has committed an act of discrimination … against a complainant which is unlawful by virtue of Part 2 …, or (b) ... ."
We should note that s. 63A and the cognate provisions of the other anti-discrimination legislation have been the subject of a great deal of recent case-law, most notably the decisions of the Court of Appeal in Igen Ltd v. Wong [2005] ICR 931 and Madarassy v. Nomura International PLC [2007] ICR 867 ; but it is not necessary for the purpose of the issues in this appeal to consider those decisions. THE CASE-LAW ON VICTIMISATION[13]It is necessary to an understanding of the Tribunal's decision in this case to set out in some detail the effect of the three decisions of the House of Lords in which the effect of s. 4 of the 1975 Act, or the cognate provisions of s. 2 of the Race Relations Act 1976 , have been considered.[14]Nagarajan . In Nagarajan v. London Regional Transport [1999] ICR 877 the appellant had made a number of complaints of racial discrimination against the respondent (or an associated entity) and had brought proceedings against it in the industrial tribunal. He subsequently applied for a promotion and was rejected, ostensibly on grounds which related to his qualifications to do the job. The tribunal, however, held that the responsible panel had been consciously or subconsciously influenced by his previous complaints and that the decision not to promote him therefore constituted victimisation within the meaning of s. 2. This Tribunal overturned the decision of the industrial tribunal on the basis that the phrase "by reason that" connoted conscious motivation. The Court of Appeal upheld that decision. The House of Lords by a majority restored the decision of the industrial tribunal. The leading speeches were those of Lord Nicholls and Lord Steyn. Both held that the phrase "by reason that" required the same approach as the terminology of "grounds" used in the definition of direct discrimination in s. 1 of the 1976 Act (and of course in the other anti-discrimination legislation) - see per Lord Nicholls at p. 886 A-B and Lord Steyn at p. 895 B-F – and Lord Nicholls' speech in particular is regarded as the locus classicus on the nature of the exercise required in cases both of "ordinary" discrimination and of discrimination by way of victimisation. (In the recent JFS case [2010] IRLR 136 a majority in the Supreme Court clearly adopted Lord Nicholls' approach, although with some further amplification and some, though inconsistent, departure from his terminology.) It is necessary to make a distinction between cases where an explicitly discriminatory criterion is applied and cases – like Nagarajan itself and the present case – where the employer's ostensible reason for the act complained of is innocent: in the latter kind of case it is necessary for the Tribunal to consider the employer's "mental processes" (see per Lord Nicholls at p. 884F), conscious or unconscious; and if on such consideration it appears that the protected act had "a significant influence on the outcome" victimisation is established (see at p. 886F).[15]Khan . In Chief Constable of West Yorkshire v. Khan [2001] ICR 1065 the applicant was a sergeant in the West Yorkshire Police. He presented a complaint in the industrial tribunal alleging racial discrimination in connection with the failure of two applications for promotion to the post of inspector. While that claim was pending he applied for a post as an inspector in the Norfolk police. The Norfolk police asked for, in effect, a reference. The Chief Constable, on legal advice, declined to provide one for fear of prejudicing his own case before the tribunal. The applicant amended his claim to complain of that refusal as an act of victimisation. The amended claim was upheld in the industrial tribunal and appeals to this Tribunal and the Court of Appeal were dismissed. The House of Lords allowed the applicant's appeal. Its ratio most clearly appears from the speech of Lord Nicholls. He held that the Chief Constable's refusal of a reference could not properly be described as having been "by reason that" the applicant had brought his discrimination claim. He said this, at paras. 29–31 (pp. 1072-3):
"29. Contrary to views sometimes stated, the third ingredient ("by reason that") does not raise a question of causation as that expression is usually understood. Causation is a slippery word, but normally it is used to describe a legal exercise. From the many events leading up to the crucial happening, the court selects one or more of them which the law regards as causative of the happening. Sometimes the court may look for the "operative" cause, or the "effective" cause. Sometimes it may apply a "but for" approach. For the reasons I sought to explain in Nagarajan v London Regional Transport [1999] ICR 877 , 884-885, a causation exercise of this type is not required either by section 1(1)(a) or section 2. The phrases "on racial grounds" and "by reason that" denote a different exercise: why did the alleged discriminator act as he did? What, consciously or unconsciously, was his reason? Unlike causation, this is a subjective test. Causation is a legal conclusion. The reason why a person acted as he did is a question of fact. 30. A situation, closely comparable to that in the present case, arose in Cornelius v University College of Swansea [1987] IRLR 141. This was a decision of the Court of Appeal, comprising Sir John Donaldson MR, and Fox and Bingham LJJ. Like the present case, Cornelius concerned steps taken by employers to preserve their position pending the outcome of proceedings. A college declined to act on an employee's transfer request or to operate their grievance procedure while proceedings under the 1975 Act, brought by the employee against the college, were still awaiting determination. Giving the only reasoned judgment, Bingham LJ said, at pp 145-146, para 33: "
There is no reason whatever to suppose that the decisions of the registrar and his senior assistant on the applicant's requests for a transfer and a hearing under the grievance procedure were influenced in any way by the facts that the appellant had brought proceedings or that those proceedings were under the Act. The existence of proceedings plainly did influence their decisions. No doubt, like most experienced administrators, they recognised the risk of acting in a way which might embarrass the handling or be inconsistent with the outcome of current proceedings. They accordingly wished to defer action until the proceedings were over. But that had … nothing whatever to do with the appellant's conduct in bringing proceedings under the Act. There is no reason to think that their decision would have been different whoever had brought the proceedings or whatever their nature, if the subject matter was allied. If the appellant was victimised, it is not shown to have been because of her reliance on the Act." Two strands are discernible in this passage. One strand is that the reason why the officers of the college did not act on the complainant's two requests was the existence of the pending proceedings, as distinct from the complainant's conduct in bringing the proceedings. They wished to defer action until the proceedings were over. The second strand is that the college decisions had nothing to do with the complainant's conduct in bringing proceedings against the college under the 1975 Act . The decisions would have been the same, whatever the nature of the proceedings, if the subject matter had been allied to the content of the employee's requests. 31. Mr Hand submitted that Cornelius v University College of Swansea [1987] IRLR 141 was wrongly decided. I do not agree. Employers, acting honestly and reasonably, ought to be able to take steps to preserve their position in pending discrimination proceedings without laying themselves open to a charge of victimisation. This accords with the spirit and purpose of the Act. Moreover, the statute accommodates this approach without any straining of language. An employer who conducts himself in this way is not doing so because of the fact that the complainant has brought discrimination proceedings. He is doing so because, currently and temporarily, he needs to take steps to preserve his position in the outstanding proceedings. Protected act (a) ("by reason that the person victimised has—(a) brought proceedings against the discriminator … under this Act") cannot have been intended to prejudice an employer's proper conduct of his defence, so long as he acts honestly and reasonably. Acting within this limit, he cannot be regarded as discriminating by way of victimisation against the employee who brought the proceedings." Lord Hoffmann and Lord Scott likewise relied on the decision in Cornelius – see paras. 54–60 (pp. 1078-9) and 77–81 (pp. 1083-4). Lord Hoffmann emphasised that the fact that the act complained of would not have occurred but for the bringing of the proceedings did not mean that the bringing of those proceedings was a "reason" why it occurred, in the sense required by s. 2: see in particular paras. 56-57, at p. 1078. He made the same distinction as Lord Nicholls between, on the one hand, an employer being influenced by the fact that proceedings had been brought and, on the other, the nature of those proceedings, characterising the former as being by reason of the relationship of the parties as adversaries in litigation rather than their relationship as employer and employee: see para. 59 (p. 1079).[16]Derbyshire . The facts of Derbyshire v. St. Helens Metropolitan Borough Council [2001] ICR 841 can conveniently be taken from the head note in the Industrial Cases Reports:
"The applicants were amongst some 510 female catering staff employed by the respondent council in its school meals service who brought equal pay claims against the council. The majority of the claims were compromised, but the applicants did not accept the settlement and pursued their claims. Two months prior to the hearing of the claims the council wrote letters to all the catering staff, including the applicants, pointing out that a successful claim was likely to lead to the cost of school meals rising to such an extent that the council would have to consider ceasing to provide them except to those entitled to receive them by law, with a consequent reduction in the school meals service for which only a very small proportion of the existing workforce would be required. It wrote letters to the same effect to the individual applicants. The applicants complained to the employment tribunal of victimisation, contrary to section 4(1)(a) of the Sex Discrimination Act 1975, alleging that the letters had caused them anxiety and distress and had amounted to an attempt to induce them to abandon their claims. The employment tribunal upheld their complaints. An appeal by the council was dismissed by the Employment Appeal Tribunal, but the Court of Appeal by a majority allowed its further appeal."
The House of Lords allowed the appeal. Its reasoning can be summarised as follows: (1) The employment tribunal had held (at para. 4 (d) of its decision) that the effect of the letters went beyond merely an encouragement to settle and was, particularly in its reference to the potential impact of the continuation of the litigation on the applicants' colleagues, intimidatory; and that it accordingly constituted a detriment. It went on to hold (at para. 4 (e)) that that detriment was suffered "by reason that" the applicants were continuing to pursue the equal pay proceedings: it referred expressly to the distinctions required by the reasoning in Khan , but it held that the Council's conduct went beyond that of a litigant merely seeking to protect its position as such. (2) This Tribunal upheld that decision. The Court of Appeal, however, by a majority allowed the Council's appeal. The majority, Jonathan Parker and Lloyd LJJ, held that the effect of Khan was that the decisive question was simply whether the Council's letter represented "an honest and reasonable attempt by the council to compromise the proceedings". (3) Lord Neuberger delivered the leading speech in the House of Lords: each of the other members of the House explicitly agreed with him, although all save Lord Carswell delivered supplementary speeches of their own. Lord Neuberger starts his analysis by considering the effect of Khan . At para. 63 he sets out the speech of Lord Nicholls as representing the majority ratio ; and at para. 64 he points out that that had been interpreted by the parties and by the majority in the Court of Appeal "… as meaning that there is, as it were, an "honest and reasonable" exception or defence open to a respondent to a claim brought under the victimisation provisions." He continues:
"65. My Lords, it is with some diffidence that I suggest that, while the conclusion as expressed in para 31 in Khan is correct, both its juridical analysis, founded as it no doubt was, on the arguments addressed to the House, and its subsequent interpretation, are not entirely satisfactory. There are two reasons for my concern, apart from the fact that, as pointed out by Lloyd LJ in the Court of Appeal [2006] ICR 90 , para 66, the "point which has been called the 'honest and reasonable employer' defence is not found in the legislation itself"
. First, the reasoning in Khan seems to me to place a somewhat uncomfortable and unclear meaning on the words "by reason that". 66. Secondly, under the victimisation provisions, it is primarily from the perspective of the alleged victim that one determines the question whether or not any "detriment" (in this case, in section 6(2)(b) of the 1975 Act) has been suffered. However, the reasoning in Khan suggests that the question whether a particular act can be said to amount to victimisation must be judged from the point of view of the alleged discriminator. Of course, the words "by reason that" require one to consider why the employer has taken the particular act (in this case the sending of the two letters) and to that extent one must assess the alleged act of victimisation from the employer's point of view. However, in considering whether the act has caused detriment, one must view the issue from the point of view of the alleged victim. 67. In that connection, Brightman LJ said in Ministry of Defence v Jeremiah [1980] ICR 13, 31a that "a detriment exists if a reasonable worker would or might take the view that the [treatment] was in all the circumstances to his detriment". That observation was cited with apparent approval by Lord Hoffmann in Khan [2001] ICR 1065 , para 53. More recently it has been cited with approved in your Lordships' House in Shamoon v Chief Constable of the Royal Ulster Constabulary [2003] ICR 337 . At para 35, my noble and learned friend, Lord Hope of Craighead, after referring to the observation and describing the test as being one of "materiality", also said that an "unjustified sense of grievance cannot amount to 'detriment' ". In the same case, at para 105, Lord Scott of Foscote, after quoting Brightman LJ's observation, added:
"If the victim's opinion that the treatment was to his or her detriment is a reasonable one to hold, that ought, in my opinion, to suffice". 68. In my judgment, a more satisfactory conclusion, which in practice would almost always involve identical considerations, and produce a result identical, to that in Khan , involves focusing on the word "detriment" rather than on the words "by reason that"
. If, in the course of equal pay proceedings, the employer's solicitor were to write to the employee's solicitor setting out, in appropriately measured and accurate terms, the financial or employment consequences of the claim succeeding, or the risks to the employee if the claim fails, or terms of settlement which are unattractive to the employee, I do not see how any distress thereby induced in the employee could be said to constitute "detriment" for the purposes of sections 4 and 6 of the 1975 Act, as it would not satisfy the test as formulated by Brightman LJ in Jeremiah , as considered and approved in your Lordships' House. An alleged victim cannot establish "detriment" merely by showing that she had suffered mental distress: before she could succeed, it would have to be objectively reasonable in all the circumstances. The bringing of an equal pay claim, however strong the claim may be, carries with it, like any other litigation, inevitable distress and worry. Distress and worry which may be induced by the employer's honest and reasonable conduct in the course of his defence, or in the conduct of any settlement negotiations, cannot (save, possibly, in the most unusual circumstances) constitute "detriment" for the purposes of sections 4 and 6 of the 1975 Act. 69. As already mentioned, it seems to me that in practice the "honest and reasonable" test suggested by Lord Nicholls in para 31 of Khan would, at least in any case I can conceive of, be very likely to yield precisely the same result as the approach, having had the benefit of argument in support from Mr Hendy and Ms Gill focusing on the word "detriment" in the present appeal, I would prefer. It is hard to imagine circumstances where an "honest and reasonable" action by an employer, in the context or conduct of an employee's equal pay claim, could lead to "detriment", as that term has been considered and explained in the cases to which I have referred, on the part of the employee. In this case, at any rate, I am content to proceed on the basis that the council would succeed in defeating the claims if it could establish that, in sending the two letters, it had acted as an honest and reasonable employer in the circumstances. 70. It is right to mention that the decision of the European Court of Justice in Coote v Granada Hospitality Ltd (Case C-185/97) [1999] ICR 100 was not cited in Khan [2001] ICR 1065 . If it had been, it might well have caused the House to reconsider the precise juridical basis for its conclusion, but not the conclusion itself. In particular, it seems to me significant that the European Court focused, in para 27, on the purpose of the relevant Directive (76/207) as being to require victimisation legislation not to be limited merely to dismissal. This was on the basis that that was "not the only measure which may effectively deter a worker from making use of the right to judicial protection". In other words, the European Court focused on the effect of the relevant act on the alleged victim, rather than the purpose of the alleged discriminator when carrying out the act. One finds similar emphasis in para 24 of the judgment." (4) It will be observed that the first of Lord Neuberger's reasons for disapproving the reasoning in Khan is expressed in a single sentence at the end of para. 65, namely that it places "a somewhat uncomfortable and unclear meaning on the words 'by reason that'". However, the point which he is making is clear. On an untutored approach, it would seem clear that the letters were sent "by reason that" the applicants were doing a protected act, namely pursuing their equal pay claim. As Lady Hale puts it at para. 41 of her speech (pp. 855-6):
"If one asks the simple question – "why did these employers send the letters?" – there can only be one answer: because these women were pursuing their claims for equal pay even though the others had settled."
Likewise, at para. 9 of his speech (p.846 B-C), Lord Bingham says:
"The letters were sent because the applicants had persisted in their claims and the council wished to put pressure on them to settle."
That straightforward answer can only be avoided by the kind of highly sophisticated analysis of the "reason" for the act complained of adopted by Lord Nicholls and Lord Hoffmann, and it is that over-sophistication which Lord Neuberger deprecates. (5) It is unnecessary for us to seek to summarise in full the reasoning of Lord Bingham and Lord Hope or of Lady Hale. But it is worth noting that although both Lord Hope and Lady Hale make it clear that Khan should not be read as providing for an "honest and reasonable" defence – see per Lord Hope at para. 24 (p. 850 G-H) and Lady Hale at para. 36 (p. 854 D-E) – they also recognise that the question of the reasonableness of the employer's conduct, properly understood, remains of central importance. Although the focus is to be on the issue of detriment, and thus on the employee's reaction to the conduct complained of, both Lord Hope and Lady Hale acknowledge that employees cannot reasonably regard as "detrimental" ordinary steps taken by an employer in defence of his position; and that by that route the question of reasonableness remains relevant – as Lord Hope expressly acknowledges at the end of para. 36.[17]Chaudhary . We should mention for completeness the decision of the Court of Appeal in British Medical Association v Chaudhary [2007] IRLR 800 . The decision in Derbyshire only became available after the conclusion of argument in that case, and there is no full analysis. But the Court regarded it as "reaffirm[ing] the essential statement of law that a person does not discriminate if he takes the impugned decision in order to protect himself in litigation" (para. 177, at p. 818).[18]Overview. We have felt it necessary to set out the reasoning in Khan and Derbyshire in some detail because the Tribunal in this case clearly regarded those decisions as affording the principal source of guidance on the issues which it had to resolve. But we are bound to say that we regard them as something of a red herring. As Ms. Monaghan persuasively submitted, it is crucial to appreciate that both are cases of a very particular type, namely cases where the employer has taken action in order to protect his position in current litigation; and that the particular problems discussed in them are peculiar to that type of situation. We accept Ms Monaghan's submission that in most cases the familiar approach of(a) deciding whether the Claimant has suffered "less favourable treatment" (which in practice answers also whether he or she has suffered a detriment) and(b) asking whether the protected act was, or was part of, the reason why he suffered that detriment, following the guidance in Nagarajan , will suffice; and the complexities addressed in Khan and Derbyshire simply do not arise. The present case is not of the Khan/Derbyshire type. There was no litigation between the Claimant and the Appellants at the time that Mr. Hawthorne gave the reference complained of or conducted the grievance meeting. (For the avoidance of doubt, however, we should make clear that we are not to be taken as saying that the often-quoted observations in para. 29 of Lord Nicholls' speech in Khan are no longer relevant on the general question of the correct approach to the "reason why" question.)[19]In these circumstances we need not attempt any elaborate analysis of how the law stands post- Derbyshire in the kinds of case with which it is concerned. Since, however, we heard some useful submissions on the question it may be helpful in other cases if we briefly summarise the position as we understand it, while repeating that in most cases this analysis is unnecessary:(1) It remains necessary formally to ask all three questions which arise from the statutory wording – namely (a) whether the claimant has suffered "less favourable treatment"; (b) whether, if so, that is "by reason that" he or she did the protected act; and (c) whether he or she has suffered a detriment (although, as noted above, questions (a) and (c) substantially overlap). That follows inevitably from the statutory language but it is in any event made clear by Lady Hale: see para. 36 of her speech in Derbyshire (p. 854 D-F).(2) In the case of an act done by an employer to protect himself in litigation involving a discrimination claim, the act should be treated straightforwardly as done by reason of the protected act, i.e. the bringing/continuance of the claim; and the subtle distinctions advanced in Khan as to the different capacities of employer and party to litigation should be eschewed.(3) In considering whether the act complained of constituted a detriment the starting-point is how it would have been perceived by a reasonable litigant; but such a litigant could not properly regard as a detriment conduct by the employer which constituted no more than reasonable conduct in defence of his position in the litigation.(4) There is no "honest and reasonable" defence as such; but the exercise required under (3) will in all or most cases lead to the same result as if there were. THE TRIBUNAL'S REASONS ON THE VICTIMISATION ISSUE[20]After setting out various introductory matters at paras. 1-7, the Tribunal makes its findings of fact at paras. 9-53 of the Reasons. We have summarised those findings adequately for present purposes at para. 2 above. We should, however, because it is relied on by the Appellants, set out the terms of para. 30, in which the Tribunal discusses the terms of the reference given to Sebastians. This reads as follows:
"The Tribunal's perspective was that the Second Respondent could not refer to Employment Tribunal proceedings following resignation without the intention of putting the prospective employer on enquiry in relation to such proceedings. Indeed, the Second Respondent seemed to indicate in his evidence that that was his intention. Furthermore, the reference to being on occasion inflexible as to her opinions was also likely to alert a prospective employer to a concern. His suggestion in cross examination that the reference to inflexibility was a subtle clever way of introducing a strength was not for the Tribunal convincing."
At paras. 54-66 the Tribunal summarises the applicable law. As regards the victimisation issue, the authorities referred to are those which we have set out above. At paras. 67-75 it gives a short summary of the parties' submissions.[21]The Tribunal's conclusions on the victimisation issue are at paras. 76–84 of the Reasons. They can be summarised as follows:(1) At para. 76 the Tribunal refers to issues which had been raised as to (a) whether PWW could have any liability given that the Claimant had only ever been employed by the pre-merger firm of Witham Weld, and (b) whether PWW were liable for the actions of Mr. Hawthorne. It records that with the agreement of the parties it did not propose to address those issues pending determination of the substantive issues. Those questions were accordingly not before us.(2) At paras. 77-78 it records that the Appellants had initially contended that, as a matter of construction, s. 63A has no application to cases of victimisation, relying on the decision of the Court of Appeal in Oyarce v. Cheshire County Council [2008] ICR 1179 in relation to the cognate provisions of s. 54A of the Race Relations Act 1976 ; but it says that Mr. Hyams had on reconsideration accepted that Oyarce depended on the particular wording of s. 54A and that the reasoning could not be transposed to s. 63A (as to this, see paras. 33-35 below). On that basis, it would be applying s. 63A, in accordance with the guidance given in Igen and Madarassy .(3) The core of the Tribunal's reasoning in relation to the terms of Mr. Hawthorne's reference appears at paras. 79-84, which read as follows:
"80. The Tribunal took into account the following circumstances. The Second Respondent, in his conduct towards the Claimant in the giving of a reference and in the grievance meeting, plus in his evidence to the Tribunal, showed a patent hostility towards the Claimant. Some of that anger clearly arose from extrinsic matters such as the Claimant's father's damage to the Second Respondent's property. However, there was a thread apparent of annoyance in relation to the Claimant's attitude to the practice manager, the Second Respondent's handling of her grievance in that regard and the consequent row about withdrawal of equity leading to the proceedings claiming both constructive dismissal and sex discrimination. 81. It was factually difficult to disentangle the aspects of the Claimant's conduct that had led to the Second Respondent's hostility. It was however apparent that, in contrast to the Khan case, here animosity increased after the ending of proceedings. The reference given after the ending of proceedings was more negative than that given just after the initiation of proceedings. There was a pattern of discomfort and awkwardness concerning the telephone conversations between the Second Respondent and Mr. Sebastian. Conversely, it was not possible to say factually and therefore legally, by reference to the shifting burden that the animosity had nothing whatsoever to do with the sex discrimination proceedings she had brought. The Tribunal recognised the attraction to the First and Second Respondents of seeking to extend Oyarce to avoid the shifting burden of proof on the tangled facts of the case and thus to avoid the "in no sense whatsoever" test. 82. Khan asks about the real reason for the treatment. The Derbyshire case emphasises an "honest and reasonable" test. Derbyshire brings out that the employer's conduct is to be looked at however from the stand point of an employee's interest, not that of the employer. The Tribunal's finding by reference to the facts is that the Second Respondent does not satisfy that honest and reasonable test in relation to the reference he gave to the Third Respondent. The attention that the reference draws to proceedings is so stark; the reference to inflexibility is so harshly selected. Furthermore, the Tribunal do draw a strengthening inference from such matters as the Second Respondent failing to take into account the express provisions of the COT3 in relation to the terms of a subsequent reference: particularly surprising conduct on the part of a senior employment solicitor. 83. By reference to the Khan approach to victimisation and references, the Tribunal's perspective was, applying a shifting burden, that the Claimant had made out a prima-facie case that she had been less favourably treated in the terms of the reference provided for her than an employee who had not done the protected act of instituting sex discrimination proceedings. With the burden shifted, by reference to the findings of fact, the First and Second Respondent could not show that the less favourable treatment had nothing whatsoever to do with the previous proceedings. 84. Taking account of the criticisms in Derbyshire of the Khan "by reason" approach the Tribunal also tested their conclusion focusing on the "detriment" rather than on "by reason that"
. The Tribunal did conclude that a reference in the terms of that provided by the Second Respondent would not have been sent by an honest and reasonable employer. In the circumstances in which that reference was sent, so long after the event, a standard administrative-type short form reference for example would have been adequate. The features of the reference, as drafted by the Second Respondent, did constitute a detriment to the Claimant, her offer of employment was modified to her disadvantage without explanation and withdrawn. Further, a reasonable worker would take the view that he had been disadvantaged in the pursuit of his job application by the terms of the reference." (We note in passing that there is clearly a slip in para. 82. Derbyshire does not "emphasise an 'honest and reasonable' test" – on the contrary. But we are sure that the slip is in the Tribunal's expression rather than its substantive understanding of the position.) (4) At para. 85 the Tribunal considers the claim that the conduct of the grievance meeting on 15 May 2008 constituted victimisation. It is not, however, clear what the Tribunal intended to decide. Specifically, it is unclear whether the observation that "detriment was not so clearly made out in relation to the meeting" is intended as a rejection of the claim in this regard. As to this, see para. 24 below.[22]The reasoning at paras. 79–84 of the Reasons is vulnerable to the criticism that it is unnecessarily expressed in terms of the analysis in Khan and Derbyshire rather than straightforwardly by reference to Nagarajan : see para. 18 above. Nevertheless, it is in our view entirely clear that the Tribunal found that there was a prima facie case (in the sense defined in Madarassy ) of victimisation by reference to the terms of the statute as explained in Nagarajan . Specifically, it found:(a) that the giving of the reference in the terms employed constituted a detriment within the meaning of s. 20A (2) (see para. 84);(b) that there was reason to suppose that Mr. Hawthorne was significantly influenced in the drafting of the reference by the fact that the Claimant had brought tribunal proceedings against Witham Weld, and thus also that the Claimant had in this respect been less favourably treated than she would have been if she had not done the protected act – that seems to us to be the effect of para. 82 and the first half of para. 83. In the final sentence of para. 83 the Tribunal held that the Appellants had been unable to discharge the burden thereby established. (The same point is made in the penultimate sentence of para. 81.) THE GROUNDS OF APPEAL[23]The grounds of appeal which were allowed to proceed on the sift read as follows:
"6.4 Despite what the Tribunal said in the first two sentences of paragraph 30 of the Reasons, nowhere did the Tribunal decide specifically what was the Second Respondent's intention in referring, in the character reference which is one of the subjects of these proceedings ("the Character Reference"), to the fact that the Claimant had made a claim to an employment tribunal in 2004. Alternatively, nowhere did the Tribunal state whether or not it accepted as a true the evidence of the Second Respondent as to the reason why he made such a reference in the Character Reference. . .. 6.8 In paragraphs 82 and 84 of the Reasons, the ET misapplied section 4 of the SDA Act 1975. 6.9 In paragraphs 84 of the Reasons, the ET misapplied the "detriment" test in Derbyshire v St Helens Metropolitan Borough Council [2007] ICR 841 . 6.10 The ET wrongly applied to the circumstances before it (1) the tests stated by the House of Lords in Derbyshire v St Helens Metropolitan Borough Council and in Chief Constable of West Yorkshire v Khan [2001] ICR 1065 and (2) at the same time section 63A of the SDA 1975. 6.11 The application of section 63A if the SDA 1975 to the claim of victimisation was in any event wrong. 6.12 There was a failure by the ET in paragraph 85 of the Reasons to make two necessary findings of fact and (whether in paragraph 85 of the Reasons or otherwise) to make a specific finding as to whether or not the fact and manner of the conduct of the grievance meeting of 15 May 2008 by the Second Respondent constituted victimisation of the Claimant."
[24]Mr. Hyams in the course of his oral submissions said that it was ground 4 which was "central" and that grounds 8-10 were "subsidiary": they were not however abandoned and we should accordingly deal with them, though we can do so briefly. Ground 11 is of a different character and remains live. As to ground 12, Mr. Hyams was content not to pursue it on the basis that the uncertainty about whether the Tribunal meant to find that the conduct of the grievance meeting constituted victimisation only mattered if that conduct was taken into account in assessing remedy, and that the Tribunal had not in fact done so in its remedy decision. It could still in theory be material if the Claimant in her remedy appeal (see para. 8 above) sought to rely on the conduct of the grievance meeting; but she confirmed to us that she did not. In those circumstances ground 12 does not arise.[25]In addition to those pleaded grounds there is the vires point which prompted the adjournment referred to above and the intervention of the Commission. GROUND 4[26]As we have indicated above, the Tribunal found that the evidence established a prima facie case that the terms of the reference – including the mention of the earlier employment tribunal proceedings – were significantly influenced by the fact that the Claimant had brought the previous claim. Mr. Hyams did not challenge that finding, and he expressly acknowledged in his oral submissions that he was not contending that it was perverse. Accordingly, he accepted that (subject to his other arguments about the applicability of s. 63A) the burden of proof shifted. His point, however, is that Mr. Hawthorne had put forward an innocent (i.e. non-victimisatory) explanation of why he mentioned the earlier proceedings – namely that he felt that merely to refer to the Claimant as having resigned would obscure the fact that she claimed to have done so in response to repudiatory breaches by Witham Weld; and that it was therefore necessary for the Tribunal, in deciding whether that explanation discharged the burden of proof, to make an express finding as to whether it accepted that explanation.[27]We do not accept that it was incumbent on the Tribunal to make a firm finding as to whether Mr. Hawthorne's explanation for his mention of the earlier proceedings was correct. In a case where a claimant has raised a prima facie case for the purpose of s. 63A it must in principle be enough to say (with, of course, such reasons as may be appropriate) "we were not persuaded that his explanation was right", rather than "we reject his explanation": that is what the burden of proof is about. In cases like the present where any discriminatory motivation may well be subconscious – something notoriously difficult to prove or disprove - a tribunal may reasonably prefer to go no further than saying that the burden of proof has not been discharged. It is indeed mainly because of the difficulties of such cases that s. 63A and its cognate provisions sometimes have a useful function - though wherever possible it is preferable for a tribunal to make positive findings one way or the other. That is, we think, the approach which the Tribunal took here, reminding itself that what Mr. Hawthorne had to show was not merely that the protected act was not his main or conscious reason but that it had not influenced him in any significant way, consciously or unconsciously. (The Tribunal in fact refers – at para. 81 – to what it calls "the 'in no sense whatsoever' test". This picks up the language in which the "principle of equal treatment" is formulated in art. 2.1 of the Burden of Proof Directive, which we set out at para. 38 below, and elsewhere; but the approach is substantively the same as that in Nagarajan : see Igen at para. 37 (p. 945H).)[28]We would if necessary go further. In our view if paras. 80-83 are read as a whole we believe that it is sufficiently apparent that the Tribunal intended to find as a fact that Mr. Hawthorne was influenced in the terms of the reference, consciously or unconsciously, by the fact that the Claimant had brought discrimination proceedings against Witham Weld. The finding may be made ostensibly for the purpose of deciding whether " Igen stage 1" was satisfied, but it is nevertheless a factual finding.[29]We accordingly reject ground 4. THE "SUBSIDIARY" GROUNDS 8-10[30]Ground 8. As developed in Mr. Hyams' skeleton argument, the point here is that the Tribunal "mixed up" the "honest and reasonable employer test" derived from Khan and the "detriment test" derived from Derbyshire . We have already made clear that we think it was unnecessary for the Tribunal to enter into the complexities of Khan and Derbyshire and that its conclusion can be sufficiently justified on the basis of the approach in Nagarajan . But we would add that the Tribunal clearly appreciated that there were two tests, and we can see nothing wrong – if it was to go down this route at all – in its applying both in order to check whether they produced the same result, as Lord Neuberger in Derbyshire said they should.[31]Ground 9. Whatever the precise language used by the Tribunal, it was plainly a detriment for the Claimant to be given a reference which potentially – and, as it turned out, actually – damaged her chances of getting the job with Sebastians.[32]Ground 10. Mr. Hyams' argument here was that neither the Khan nor the Derbyshire approach is compatible with the application of s. 63A. We do not understand this. We can see no such incompatibility. GROUND 11[33]This ground depends on the decision of the Court of Appeal in Oyarce , in which it was held that the "reverse burden of proof" provisions contained in s. 54A of the Race Relations Act 1976 had no application to a claim of victimisation under that Act. The question is whether the Court's reasoning applies equally to s. 63A of the 1975 Act. We should start with the terms of s. 54A of the 1976 Act. S-s. (2) provides for the burden of proof in terms equivalent to those of s. 63A (2): see para. 12 above. However, the drafting of s-s. (1), which defines the scope of the application of s-s. (2), is different. It reads:
"This section applies where a complaint is presented under section 54 and a complaint is that the respondent – (a) has committed an act of discrimination, on grounds of race or ethnic or national origins [our emphasis], which is unlawful by virtue of any provision referred to in section 1 (1B) (a) (e) or (f) … or (b) … ."
Plainly, on a natural construction of those words s-s. (2) would have no application to a case of victimisation, since such an act is not done "on grounds of race or ethnic or national origins". It was contended in Oyarce that an expansive construction of s. 54A (1) was required because the section had been inserted in order to comply with the requirements of an EC Directive, 2000/43/EC ("the Race Directive"). The Court of Appeal however concluded that the Race Directive on its true construction did not require the application of the reverse burden of proof in claims of victimisation: specifically, both the article which provided for the reverse burden of proof and the article proscribing victimisation – arts. 8 and 9 – were to be regarded as provisions ancillary to the primary proscription of breaches of the principle of equal treatment and had no operation on one another (see paras. 11-17 of the judgment of Buxton LJ, at pp. 1184-6).[34]As we have already recorded, the Tribunal understood that the Appellants had withdrawn their submission that the decision in Oyarce applied covered the present claim: see para. 21 (2) above. Mr. Hyams in his skeleton argument on this appeal contended that that was a misunderstanding: the submission based on Oyarce had not been withdrawn and was correct.[35]We need not try to resolve who misunderstood whom, because in our view the submission based on Oyarce was in any event ill-founded. The essential point is that, as we have shown, the language of s. 63A of the 1975 Act is different from that of s. 54A of the 1976 Act. The Court of Appeal's reasoning in Oyarce is based squarely on the words in s. 54A (2) which we italicised above. There are no equivalent words in s. 63A (2). On the contrary, as a matter of ordinary statutory construction, it is entirely clear that s. 63A applies to claims of victimisation because they are claims of discrimination as defined in s. 5: see para. 10 above. THE VIRES POINT[36]The vires point can be summarised as follows:(1) The statutory instrument by which s. 63A was inserted into the 1975 Act was purportedly made under the powers granted to the Secretary of State by s. 2(2) (a) of the European Communities Act 1972 . S. 2 (1) and the material parts of s-s. (2) provide as follows: "(1) All such rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Treaties, and all such remedies and procedures from time to time provided for by or under the Treaties, as in accordance with the Treaties are without further enactment to be given legal effect or used in the United Kingdom shall be recognised and available in law, and be enforced, allowed and followed accordingly; and the expression "enforceable Community right" and similar expressions shall be read as referring to one to which this subsection applies. (2) Subject to Schedule 2 to this Act, at any time after its passing Her Majesty may by Order in Council, and any designated Minister or department may by order, rules, regulations or scheme, make provision— (a) for the purpose of implementing any Community obligation of the United Kingdom, or enabling any such obligation to be implemented, or of enabling any rights enjoyed or to be enjoyed by the United Kingdom under or by virtue of the Treaties to be exercised; or (b) for the purpose of dealing with matters arising out of or related to any such obligation or rights or the coming into force, or the operation from time to time, of subsection (1) above; … ." (2) The Community "obligation" which the Regulations were designed to implement was that imposed by Council Directive 97/80/EC, generally referred to as "the Burden of Proof Directive".(3) The Burden of Proof Directive on its true construction does not apply to discrimination by way of victimisation.(4) Ergo s. 2 (2) gave no power to introduce regulations amending the 1975 Act so as to apply the burden of proof provisions to claims of victimisation.[37]In our view it is clear, and we think that Mr. Hyams ultimately accepted, that, wide as the language of ground 11 may be, in context it was not designed, and would not have been understood, to raise the vires point. Accordingly, the Appellants need permission to amend the Notice of Appeal to raise that point. The Claimant opposed the grant of permission. If the vires point had been taken before the Tribunal, permission might have been granted quite readily; but, as Mr. Hyams acknowledged, it was not. There is of course a stream of authorities in this Tribunal, starting with Kumchyk v Derby City Council [1978] ICR 1116 , which establish that permission to raise a new point on appeal will very rarely be given. There is, however, no absolute rule, and permission may be given in exceptional circumstances: see Glennie v Independent Magazines (UK) Ltd [1999] IRLR 719 . Particularly in view of the involvement of the Commission, we decided that we should hear argument on the vires point without prejudice to the question whether permission to amend should be given. Similarly we propose, exceptionally, to express our views on the merits of the point before reaching a conclusion on whether permission should be given.[38]The starting-point must be the terms of the Burden of Proof Directive. These are, so far as material, as follows:
" Article 2 Definitions 1. For the purposes of this Directive, the principle of equal treatment shall mean that there shall be no discrimination whatsoever based on sex, either directly or indirectly. 2. For purposes of the principle of equal treatment referred to in paragraph 1, indirect discrimination shall exist where an apparently neutral provision, criterion or practice disadvantages a substantially higher proportion of the members of one sex unless that provision, criterion or practice is appropriate and necessary and can be justified by objective factors unrelated to sex. Article 3 Scope 1. This Directive shall apply to: (a) the situations covered by Article 119 of the Treaty and by Directives 75/117/EEC, 76/207/EEC and, insofar as discrimination based on sex is concerned, 92/85/EEC and 96/34/EC; (b) any civil or administrative procedure concerning the public or private sector which provides for means of redress under national law pursuant to the measures referred to in (a) with the exception of out-of-court procedures of a voluntary nature or provided for in national law. 2. This Directive shall not apply to criminal procedures, unless otherwise provided by the Member States. Article 4 Burden of proof 1. Member States shall take such measures as are necessary, in accordance with their national judicial systems, to ensure that, when persons who consider themselves wronged because the principle of equal treatment has not been applied to them establish, before a court or other competent authority, facts from which it may be presumed that there has been direct or indirect discrimination, it shall be for the respondent to prove that there has been no breach of the principle of equal treatment. 2. This Directive shall not prevent Member States from introducing rules of evidence which are more favourable to plaintiffs. 3. Member States need not apply paragraph 1 to proceedings in which it is for the court or competent body to investigate the facts of the case. Article 5 … Article 6 Non-regression Implementation of this Directive shall under no circumstances be sufficient grounds for a reduction in the general level of protection of workers in the areas to which it applies, without prejudice to the Member States' right to respond to changes in the situation by introducing laws, regulations and administrative provisions which differ from those in force on the notification of this Directive, provided that the minimum requirements of this Directive are complied with. … ."
The effect of these provisions is that art. 4, which is the operative provision, applies to claims invoking "the principle of equal treatment", as defined in art. 2, in the situations specified in art. 3. Those claims include those falling within the scope of Directive 76/207/EEC: that directive – the so-called "Equal Treatment Directive", which proscribes sex discrimination in employment in all fields except that of pay – reads, so far as material, as follows:
" Article 1 1. The purpose of this Directive is to put into effect in the Member States the principle of equal treatment for men and women as regards access to employment, including promotion, and to vocational training and as regards working conditions and, on the conditions referred to in paragraph 2, social security. This principle is hereinafter referred to as "the principle of equal treatment". 2. … . Article 2 1. For the purposes of the following provisions, the principle of equal treatment shall mean that there shall be no discrimination whatsoever on grounds of sex either directly or indirectly by reference in particular to marital or family status. 2-4. … … Article 6 Member States shall introduce into their national legal systems such measures as are necessary to enable all persons who consider themselves wronged by failure to apply to them the principle of equal treatment within the meaning of Articles 3, 4 and 5 to pursue their claims by judicial process after possible recourse to other competent authorities. Article 7 Member States shall take the necessary measures to protect employees against dismissal by the employer as a reaction to a complaint within the undertaking or to any legal proceedings aimed at enforcing compliance with the principle of equal treatment." (Arts. 3-5, referred to in art. 6, are the provisions requiring application of the principle of equal treatment in regard to the various aspects of the employment relationship there specified. It is unnecessary to set out their terms here.) Both the Burden of Proof and Equal Treatment Directive have, with effect from 15 August 2009, been superseded by the "
Recast Directive" referred to below, but nothing turns on that for present purposes.[39]Ms. Monaghan's primary submission was that step (3) in the Appellants' argument as summarised at para. 36 above was simply wrong, and that the Burden of Proof Directive did indeed impose a direct obligation on the United Kingdom to apply the provisions of art. 4 to cases of victimisation. She accepted that there is no reference to victimisation in either the Burden of Proof Directive or the Equal Treatment Directive (save for art. 7 of the latter – which, however, is irrelevant for present purposes since it refers only to dismissal); but she relied on the decision of the European Court of Justice in Coote v. Granada Hospitality Ltd [1999] ICR 100 . In that case the employer was alleged to have refused to give a reference to an ex-employee because she had previously brought a claim of sex discrimination against it. The Court held that art. 6 imposed an obligation on member states to proscribe such treatment. At para. 24 of the judgment (p. 113 A-B) it said:
"The principle of effective judicial control laid down in article 6 of the Directive would be deprived of an essential part of its effectiveness if the protection which it provides did not cover measures which, as in the main proceedings in this case, an employer might take as a reaction to legal proceedings brought by an employee with the aim of enforcing compliance with the principle of equal treatment. Fear of such measures, where no legal remedy is available against them, might deter workers who considered themselves the victims of discrimination from pursuing their claims by judicial process, and would consequently be liable seriously to jeopardise implementation of the aim pursued by the Directive."
And at para. 28 (p. 113G) it said:
"In those circumstances, the answer to the questions put by the national court must be that article 6 of the Directive requires member states to introduce into their national legal systems such measures as are necessary to ensure judicial protection for workers whose employer, after the employment relationship has ended, refuses to provide references as a reaction to legal proceedings brought to enforce compliance with the principle of equal treatment within the meaning of the Directive."
Ms. Monaghan submitted that the effect of that reasoning was that the principle of equal treatment referred to in art. 2 of the Burden of Proof Directive extended also to the right not to be victimised.[40]We found that argument attractive but we do not believe that it is correct. The Court in Coote does not say in terms that the right not to be victimised forms part of the principle of equal treatment. Rather, the reliance on art. 6 suggests that it is an ancillary right which is accorded in order to render the principle of equal treatment properly enforceable. That might seem a fine distinction, but it was at the centre of the reasoning of the Court of Appeal in Oyarce . The Court in that case considered not only the Race Directive but other directives, promulgated following the decision in Coote , which – unlike the Equal Treatment Directive – contained an express proscription of victimisation. The directives in question are 2000/73/EC, which made various amendments to the Equal Treatment Directive, including the replacement of art. 7 with a more general definition of victimisation; 2000/78/EC, the so-called "Framework Directive", which extended the proscription of discrimination in the employment field to a number of further grounds; and 2006/54/EC, the so-called "Recast Directive", which consolidated the various earlier directives covering discrimination on the grounds of sex. These directives all follow essentially the same pattern. The proscription of victimisation does not occur among the provisions providing for the primary rights but as part of the provisions governing remedies and enforcement; and the same applies to the articles providing for the reverse burden of proof. It was on this basis that, as indicated at para. 32 above, it was held in Oyarce that the Race Directive did not on its true construction require the reverse burden of proof provisions to apply to claims of victimisation. The same reasoning would appear to apply to the other directives referred to. Although that reasoning has, strictly, no direct application to the directives with which we are here concerned, i.e. the Burden of Proof and Equal Treatment Directives, which are of earlier date and drafted in a different way, it would be surprising and unsatisfactory if the underlying analysis were different; and it is right to proceed on the basis that the Community legislators in enacting those directives intended to apply and make explicit, rather than to extend, the reasoning of the Court in Coote (as to this, see para. 16 of the judgment of Buxton LJ in Oyarce at p. 1185H). On the assumption, therefore, which we are bound to make, that Oyarce correctly states the effect of these later directives, we think that we should treat its reasoning as authoritative also on the question of the effect of the Burden of Proof Directive.[41]We turn therefore to Ms.Monaghan's alternative submission, which was that even if the Burden of Proof Directive did not oblige the UK to provide for a reverse burden of proof in cases of victimisation, so as to bring the case within the terms of s. 2 (2)(a) of the 1972 Act, the Secretary of State was nevertheless empowered so to provide by s. 2 (2)(b) because such a provision would "arise out of", or be "related to", the obligations imposed by the Directive. She relied on the analysis of s. 2 (2) (b) in the decision of the Court of Appeal in Oakley Inc v. Animal Ltd [2006] Ch 337 . That case was concerned with regulations which implemented a directive on the legal protection of registered designs. The directive provided an option permitting member states to provide for the continuing recognition of designs registered under previous legislation. The implementing regulations took advantage of that permission. A claim was brought for infringement of designs so registered. The defendant argued that since the provision in question was optional the UK had been under no relevant "obligation" and the power under s. 2 (2) was accordingly not available. The Court of Appeal dismissed that argument, holding that the case fell within s. 2 (2) (a). However, it also considered whether, if that were wrong, it would in any event fall within s-s. (2) (b). Waller LJ considered such earlier authorities as there were, including a dictum of Otton LJ in R v. Secretary of State for Trade and Industry ex p. UNISON [1996] ICR 1003 to the effect that the phrase "related to" should be given "its natural, everyday meaning" and dicta by Lord Johnston in Addison v. Denholm Ship Management (UK) Ltd [1997] ICR 770 and Perth and Kinross Council v. Donaldson [2004] ICR 667 advocating a restrictive approach. At para. 39 (p. 352 C-F) Waller LJ said this:
"Lord Johnston's opinion as to the ambit of the section is not in my view right. Furthermore I can see nothing in the wording of the section which would support the view that in some way a policy decision or a significant policy decision is automatically excluded from the ambit of section 2(2)(b). At the same time I do not for my part equate the words "related to" or "arising from" in this subsection with "not distinct, or separate, or divorced from" (the language used by Otton LJ). I would endorse his words that they should be given their natural meaning but as we know context means everything. That context is the bringing into force under section 2 of the laws, which under the Treaties the United Kingdom has agreed to make part of its laws. The whole section is clearly primarily concerned with that obligation and the primary objective of any secondary legislation under section 2(2) must be to do just that. Section 2(2)(b), and the words "arising out of" and "related to" take their context from that being the primary purpose of section 2. It seems to me that section 2(2)(b) from its position in section 2, from the fact that it adds something to both subsections (1) and (2), and from its very wording is a subsection to enable further measures to be taken which naturally arise from or closely relate to the primary purpose being achieved. I accept that I will be accused of adding the words "naturally" and "closely", but I believe that describes the context which provides the meaning of the words."
May LJ expressed a similar view at para. 47 (p. 353G), saying that s. 2 (2) (b) covered the case of provisions "which [have] the effect of tidying things up or [make] closely related original choices which the Directive does not necessarily require". Jacob LJ expressed the view at para. 80 (p. 360A) that s. 2 (2) (b) does "indeed [add] more", observing that "how much more must depend on the particular circumstances of the case – the statutory language is the guide". Ms. Monaghan submitted that the choice of the Secretary of State to extend the effect of the burden of proof provisions not only to "ordinary" discrimination but to discrimination by way of victimisation was an example of just such a legislative choice, closely related to the purpose and effect of the mandatory provisions of the Directive.[42]We accept Ms. Monaghan's submission. Although, ex hypothesi , the UK was not required to apply the burden of proof provisions to claims of victimisation, art. 4.2 of the Burden of Proof Directive expressly preserves the right of member states to introduce "rules of evidence which are more favourable to plaintiffs", and the application of the burden of proof provisions to victimisation claims is simply a (small) further step on the same path as is trod by its primary provisions. Given the decision in the pre-existing UK discrimination statutes (i.e.the 1975 and 1976 Acts, together with the Disability Discrimination Act 1995 ) to categorise victimisation as a sub-species of discrimination, it obviously makes both for consistency of approach and for convenience in drafting to apply the burden of proof provisions to claims of victimisation as well as to "ordinary" discrimination. The course taken seems to us indeed a good example of a "closely related" choice of the kind which the Court of Appeal in Oakley held to be permissible under s. 2 (2) (b).[43]This conclusion involves no departure from the reasoning of the Court of Appeal in Oyarce . Although as part of its approach to the construction of s. 54A the Court was required to reach a view on whether the Race Directive obliged the UK to apply the reverse burden of proof to claims of victimisation, the actual decision turned on the wording of s. 54A itself. The Court expressed no view on whether, if s. 54A had clearly purported to extend to claims of victimisation, it would have been ultra vires. Indeed Longmore LJ, albeit obiter and somewhat tentatively, expressed the view that it would not: see para. 59 (p. 1197H).[44]For those reasons we believe the vires point to be bad on the merits, and we will refuse permission to the Appellants to amend to raise it on that basis. We need not, therefore, consider whether, if it had been good, there were exceptional circumstances justifying it being raised as a new point. CONCLUSION[45]The appeal is accordingly dismissed. We regret that pressure of work has led to such a delay in this judgment being promulgated.