A1/2002/0957
Neutral Citation Number: [2002] EWCA Civ 964
IN THE SUPREME COURT OF JUDICATURE                                
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM AN EMPLOYMENT APPEAL TRIBUNAL

								Royal Courts of Justice
								Strand
								London WC2

								Thursday, 27th June 2002
B e f o r e:

LORD JUSTICE PETER GIBSON

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FELICIA PANAMA
Applicant

- v -

LONDON BOROUGH OF HACKNEY

Respondent
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(Computer Aided Transcript of the Palantype Notes of
Smith Bernal Reporting Limited, 190 Fleet Street,
London EC4A 2AG
Tel: 0171 421 4040
Official Shorthand Writers to the Court)
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The Applicant appeared in person.

The Respondent did not appear and was unrepresented.

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J U D G M E N T
Thursday, 27th June 2002
1.	LORD JUSTICE PETER GIBSON: Felicia Panama applies for permission to appeal from the order of the EAT on 12th March 2002. By that order the EAT dismissed appeals by her from two decisions of the Employment Tribunal sitting at Stratford. The EAT refused permission to appeal. 
2.	Miss Panama is a black woman. Her employment with the respondent, the London Borough of Hackney (“Hackney”), commenced in November 1991. She was promoted to the position of Re-housing Manager. She shared that job with Miss Carol Parker. In March 1998 she went on maternity leave to have her fifth child who was born on 13th May 1998. She gave notice to return to work in October 1998 but went on sick leave and thereafter elected to extend her maternity leave until 17th May 1999. She was then sick and only returned to work on 1st June 1999. Whilst she was absent on maternity leave, Hackney undertook a reorganisation. The post of Re-housing Manager went, as she was informed in July 1998. A new post of Voids and Re-housing Officer was created. She thought she should have that job, but it was four grades higher than the grade of Re-housing Manager and she was not successful in her application. She was invited to apply for the new post of Neighbourhood Allocator of the same grade as Re-housing Manager. The post was offered to her in November 1998 but she did not want it, even though it was what her trade union representative, Mr Page, suggested to Hackney was a suitable and appropriate job for her. 
3.	On 15th June 1999 Miss Panama's solicitors wrote to Hackney, alleging that she had been subjected to discriminatory treatment on grounds of her race and sex and contending that but for her pregnancy and absence on maternity leave, she would have been appointed as Voids and Re-housing Manager. On 30th June 1999 Hackney's solicitor replied, refuting the claims and asserting that the Neighbourhood Allocator post was a suitable alternative position for her. 
4.	On 1st July 1999 Miss Panama was suspended pending an investigation into her conduct in the following circumstances. Miss Panama, who has a law degree, entered into a training contract with solicitors Bhardwaj & Co, with Hackney's permission, subject to avoiding a conflict of interest with Hackney. Hackney received a letter dated 28th May 1998 from Bhardwaj & Co, who had been instructed by a Mrs Daramola, a tenant of Hackney. The letter bore the reference SS/FP/RA and revealed an understanding of Hackney's practice and procedures relating to housing matters. The letter sought to improve Mrs Daramola's re-housing categorisation with Hackney from grade C to grade A on the basis that Mrs Daramola's sons were severely brain‑damaged and that their condition had been exacerbated by inadequate housing provided by Hackney. The issues raised in that letter fell within the area of responsibility of Hackney's Re-housing Manager Miss Parker, in Miss Panama's absence. Miss Parker telephoned Bhardwaj & Co and was told that the person dealing with the matter, Felicia Panama, was working at home that day. Miss Parker informed Hackney's manager. The information was further corroborated by a telephone attendance note on 23rd June 1999 from a solicitor, Mr Gold, then working for Hackney, his recollection of what he was told being to the same effect as Miss Parker.
5.	Hackney decided on 27th August 1999 that Miss Panama was potentially guilty of misconduct, but not gross misconduct. It lifted the suspension, as she was notified by letter dated 15th September 1999. She was also then notified of the disciplinary hearing arranged for 30th September. She was warned that her rejection of the offer of the post of Neighbourhood Allocator put her employment at risk. She was given a further opportunity to accept the post and warned that if the offer was rejected or not accepted within seven days, she would be dismissed. 
6.	By 24th September 1999 Miss Panama had not accepted the post offered to her. That day Hackney wrote giving notice of immediate termination of Miss Panama's employment. She was told that she would receive seven weeks' pay in lieu of notice. On 5th October 1999 Miss Panama wrote a letter of protest, which Hackney treated as an attempt to appeal. It replied on 6th October that there was no appeal mechanism against redundancy. In the circumstances, the disciplinary hearing fixed for 30th September did not go ahead. 
7.	One other important event occurred. On 24th September Sylvia Caprice, the investigator looking into the letter from Bhardwaj & Co, in a report to Hackney, recorded what she was told at an interview with Mrs Daramola on 17th September 1999. Mrs Daramola is recorded as having said that it was on the advice of her solicitors, Bhardwaj & Co, that she changed the details of the health assessment form relating to her twin boys from common cold and breathing difficulties to severe brain damage, although the boys were not brain‑damaged. 
8.	By an originating application presented on 20th August 1999 and drafted by Miss Panama, she complained of sex and race discrimination, victimisation, unfair dismissal, breach of equal opportunities legislation and breach of maternity rights.
9.	Miss Panama presented a second originating application on 22nd December 1999. Again it appears to have been drafted by her. Her complaints overlap with those in her first application. She complained of race discrimination, unfair dismissal, personal injury, psychiatric injury, sex discrimination, unlawful deduction of wages and redundancy. 
10.	On 19th January 2000 the Employment Tribunal ruled that the two applications should be heard together. The hearing lasted five days. Both parties were represented by counsel, Miss Rayner appearing for Miss Panama and Mr Sutton for Hackney. By the decision sent to the parties on 2nd June 2000, the Employment Tribunal dismissed the complaints of direct discrimination and victimisation on the grounds of sex and race. 
11.	The Employment Tribunal found that when Miss Panama was not selected for interview for the job of Voids and Re-housing Officer the selection criteria were objectively applied without consideration of race, sex, or the fact that she had been on maternity leave. They also found that the letter of 15th June 1999 from her solicitors to Hackney was the doing of a protected act, but that the suspension of Miss Panama on 1st July 1999 was wholly unconnected to that letter and that in any event it did not represent less favourable treatment because Hackney's concerns were entirely legitimate and would have been raised with any employee, regardless of race, sex, or the doing of a protected act. 
12.	The Tribunal was not satisfied that the dismissal was by reason of redundancy, as claimed by Hackney, but found that it was for some other substantial reason of a kind sufficient to justify the dismissal of Miss Panama because her job had ceased to exist in the reorganisation that had taken place. The Tribunal found that the Neighbourhood Allocator post was a suitable post to have been offered to her, and that her refusal was unreasonable. But they also found in paragraph 38 of the Extended Reasons that the dismissal of Miss Panama was unfair because it had not been pointed out to her that the consequence of refusing the post would be that she would be deemed to have accepted redundancy, Hackney could not have concluded that she was volunteering for redundancy and her post was not redundant, a request made by her for an extension of time for consideration of the proposal was unreasonably refused and she was refused an opportunity to appeal. The Tribunal went on to consider what would have happened if the disciplinary process had continued to its conclusion. They referred to the discovery that the May 1998 letter from Bhardwaj & Co represented an attempt to defraud Hackney and to Mrs Daramola's acceptance that it was on the advice of her solicitor that the claim to Hackney was fabricated. The Tribunal also referred to Miss Panama's denial of any involvement in the sending of the letter to Hackney and said that it did not find her denials to be convincing. It concluded that the overwhelming probability was that Miss Panama would have been found guilty of gross misconduct and would have been summarily dismissed.
13.	At an adjourned hearing of 2nd November 2000 to consider remedies Miss Panama was not present or represented. The Tribunal, in the light of the finding as to the likely outcome if the disciplinary process had continued, awarded no compensation.
14.	Miss Panama appealed to the EAT by two Notices of Appeal. At the preliminary hearing, the EAT, Mr Recorder Underhill QC presiding, allowed the appeal to go to a full hearing but suggested that the grounds of appeal be redrafted. This was done by different counsel, Miss Belgrave, for Miss Panama. 
15.	In the first appeal, the grounds of appeal were set out under six headings:
(1)the Tribunal's failure to address her complaint that she was dealt with in a discriminatory fashion while on maternity leave;
(2)the Tribunal's failure to deal adequately with the complaint of discrimination on her return to work from maternity leave;
(3)the Tribunal erred in law in relation to a complaint of victimisation;
(4)the Tribunal erred in law in failing to consider whether the dismissal amounted to an act of discrimination;
(5)the Tribunal was perverse in finding that she would have been dismissed for gross-misconduct if the disciplinary process had proceeded;
(6)the Tribunal failed to give any reasons for their finding and Miss Panama was not discriminated against on the grounds of race or sex.
16.	In the second Notice of Appeal, drafted by solicitors for Miss Panama, she appealed against the award of no compensation at the remedies hearing on the ground that it was perverse for the Tribunal to conclude that Miss Panama's conduct was such as to have justified Hackney summarily terminating her employment. In particular complaint was made that no allegation of fraud was ever put to Miss Panama. 
17.	At the full appeal hearing, Miss Panama was represented by yet another counsel, Miss Monaghan, whilst Mr Sutton appeared again for Hackney. An application was made to admit fresh evidence from two solicitors, Mr Bhardwaj and Gita Vagjiani, a former trainee solicitor with Bhardwaj & Co. Their evidence was that Miss Panama did not return to Bhardwaj & Co after May 1997. The EAT applied the Ladd v Marshall principles in refusing to admit the new evidence on the basis that it could with reasonable diligence have been obtained for use at the Tribunal hearing and that it was not likely to have a significant influence on the outcome of the issues. 
18.	His Honour Judge Peter Clark giving the judgment of the EAT said under the heading “Live Grounds of Appeal” that the appeal had focused on four points. The first was that there was a deemed dismissal under section 96(1) of the Employment Rights Act 1996 through Miss Panama on her return to work after her child was born not being offered suitable employment. The EAT rejected this primarily on the ground that the Neighbourhood Allocator post was offered to her through her trade union representative in October or November 1998 before her return to work. The second was that the Tribunal failed to address her complaint that the treatment of Miss Panama in the manner of dismissal amounted to unlawful race or sex discrimination. Mr Sutton informed the EAT that it was not a live issue before the Tribunal. The EAT referred to this court's decision in Chapman v Simon [1994] IRLR 124 when saying that it was not for the Tribunal to consider and rule on acts not complained about in the originating application. The third was the award of no compensation. The EAT said that on the material before the Tribunal it was entitled to reach the conclusion which it did. The fourth was the alleged inadequacy of the Tribunal's reasons. The EAT held that the Tribunal's reasons as a whole did adequately tell the parties why they had won or lost.
19.	The grounds of appeal to this court are stated with largely unparticularised and uninformative brevity. Miss Panama accuses both the EAT and the Employment Tribunal of (1) a failure to give adequate reasons; (2) perversity; and (3) misdirection in law. The one specific ground is directed at what the EAT dealt with as the second point on which the appeal to the EAT was focused. She has provided me with a skeleton argument in which she has elaborated on her grounds in some more detail, and she has also added further arguments orally this morning, appearing as she does in person. She says that she appeals on merits and quantum. I am afraid that she cannot appeal to this court unless she persuades me that she has a real prospect of success on a point of law or that there is some other compelling reason why the appeal should be allowed to go ahead. 
20.	First, Miss Panama says that her complaint of sex and race discrimination was dismissed in a single line without reasons. But when a complaint of discrimination is made, a respondent and a tribunal can only deal with that complaint insofar as specific matters are complained about. Two such complaints are apparent from the Tribunal's decision. One was in relation to Miss Panama's non-selection for the post of Voids and Re-housing Officer. In paragraph 19 the Tribunal reject, for perfectly understandable reasons, why there was no sex or race discrimination in Hackney not selecting Miss Panama for a job four grades higher than her previous job. The other point was the decision to suspend Miss Panama on 1st July 1999 and to proceed with the investigation into the letter of May 1998 from Bhardwaj & Co. That was said to amount to victimisation. Again, that was rejected, and the reasons are given in paragraph 26 of the Extended Reasons: it was a decision unconnected with the letter from Miss Panama's solicitors or with race or sex, and Hackney's concerns were entirely legitimate. I do not agree that Miss Panama was not told why she lost on that point. 
21.	Miss Panama says that the Tribunal never dealt with a complaint that from the unfair manner of dismissal race and sex discrimination could be inferred. She says that contrary to what the EAT said, the issue was a live issue, and had been raised in her originating application and in written submissions. When I asked where the specific matters referred to in paragraph 38 of the Extended Reasons, and alleged to amount to unfair race and/or sex discrimination were to be found in either of the originating applications, Miss Panama was unable to point to anything. Accordingly, as the EAT rightly said, the decision in Chapman v Simon precludes the Tribunal from having to deal with the point. I would add that even if this was a point which had been taken in a submission to the Tribunal, it would not follow that it would have to be dealt with. In High Table Ltd v Horst [1997] IRLR 513 at 518, I said: 
“Whilst the Tribunal must consider all that is relevant, it need only deal with the points which were seen to be in controversy relating to those issues and then only with the principal important controversial points.” 
22.	In my judgment, particularly in the light of what Mr Sutton told the EAT was the position before the Employment Tribunal, there is no real prospect of success on this ground. 
23.	Miss Panama complains that the EAT's “findings” on the refusal to admit fresh evidence were inconsistent and amounted to Wednesbury unreasonableness. She has told me that that inconsistency was inconsistency with fairness. There is in my judgment no substance in this complaint. The EAT was bound to apply the Ladd v Marshall guidelines, and they were not satisfied, for the valid reasons which the EAT gave. In my judgment, therefore, there is no prospect of this court interfering with the EAT's exercise of discretion. 
24.	Then she complains that the Tribunal applied the wrong test in treating ordinary misconduct as gross misconduct. I am afraid she has failed to understand the thrust of the Tribunal's reasoning, even though to my mind what is said is entirely clear. Hackney's original view on 27th August 1999 was that Miss Panama might have been guilty of a conflict of interest and that that amounted to misconduct but not gross misconduct (see paragraphs 26 and 30 of the Extended Reasons). But when the investigator reported that the letter from Bhardwaj & Co of May 1998 represented an attempt to defraud Hackney, that conduct, if it was conduct by Miss Panama, plainly amounted to gross misconduct (paragraphs 40 and 41 of the Extended Reasons). 
25.	The one point on which I am troubled relates to what amounts to the finding of fraud against Miss Panama; that led to the Tribunal deciding not to award her any compensation. There was no direct evidence that Miss Panama wrote the letter dated 28th May 1998 from Bhardwaj & Co. The letter was written just two weeks after her baby was born, and that might suggest that it was highly unlikely that she wrote it. The EAT wrongly give the date of the letter as 28th March 1998. She was given no notice of the issue before it first arose. The investigator who interviewed Mrs Daramola does not appear to have named the solicitor in Bhardwaj & Co who had advised her to make a false claim. Miss Panama's manager, Mr Armand, gave evidence to the Tribunal that Miss Panama's conduct in writing the letter would have led to summary dismissal. But that evidence came as a surprise to Miss Panama, as it appears to have been unheralded before the hearing. It seems to me arguable that the Tribunal erred in law in relation to its finding that Miss Panama was guilty of gross misconduct. 
26.	I would therefore give permission to appeal on the ground that in finding that Miss Panama would have been dismissed summarily for gross misconduct if the disciplinary procedures had continued, and in awarding for that reason no compensation for unfair dismissal, the Tribunal erred in law, having regard to the lack of direct evidence before it that it was Miss Panama who had written the fraudulent letter and the lack of notice given to Miss Panama of the point being taken against her. I do not say that that ground of appeal will necessarily succeed, but it is in my judgment one which has a real prospect of success.
27.	However, on all the other grounds which Miss Panama has urged as grounds of appeal, I am not persuaded that she does have any real prospect of success. Nor does it seem to me that there is any other compelling reason why an appeal on those other grounds should be heard.
28.	Accordingly, I limit my grant of permission to appeal to that single ground.
Order: Application allowed in part. I estimate the appeal hearing at two hours.