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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> NTL Group Ltd v Difolco [2006] EWCA Civ 1508 (12 October 2006) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2006/1508.html Cite as: [2006] EWCA Civ 1508

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
(HIS HONOUR JUDGE J BURKE QC)

		Royal Courts of Justice Strand London, WC2
		12th October 2006

1. LORD JUSTICE LAWS: This is an appeal, with permission granted by Smith LJ and Cresswell J sitting in this court on 17 May 2006, against a decision of the Employment Appeal Tribunal ("the EAT") given on 27 January 2006. The EAT was dealing with an appeal by the appellant employer against findings by the Employment Tribunal ("the ET"), sitting at Teesside, made on 24 November 2004, to the effect that the respondent employee, the claimant before them, had been unfairly dismissed, discriminated against on grounds of disability and discriminated against on the grounds of her status as a part-time worker. The EAT found comprehensively in favour of the appellant on most points. This appeal concerns only one point in the case, upon which the appellant's appeal to the EAT was dismissed. The point is described by the EAT under the heading "the Teesside job" for reasons which will become apparent.
2. Given that the compass of the appeal in this court is much narrower than it was before the EAT, the material facts can be described quite shortly. The respondent was employed by the appellants as a Service Improvement Manager from 4 March 2002 in Hampshire. She was a graduate with 11 years experience of project management. After only ten days of employment she suffered an accident at work which caused substantial neurological injuries leading to partial paralysis. It was and is accepted that at all material times thereafter she was a disabled person within the meaning of the Disability Discrimination Act 1995 (the "DDA"). She went to her family home in the north-east and then returned to work part-time in October 2002, working three days per week, partly from home and partly from the appellant's Teesside office.
3. Before that, in July 2002, the appellant had appointed another Service Improvement Manager, Mr Lewis. He was ten years younger than the respondent and not a graduate. His was an internal appointment. In February 2003 the respondent was signed off sick for two months, but during that period she continued to work from her parents' home in the north and that state of affairs continued. On 6 October 2003 she was informed by Mr Melrose, the head of Internet Service Improvement and therefore the respondent's and Mr Lewis' line manager, that the number of Service Improvement Managers was to be reduced from two to one. Either she or Mr Lewis would be made redundant. Mr Melrose developed 13 selection criteria, scored the two candidates in the light of them and on 9 October 2003 informed the respondent that Mr Lewis had scored higher. She was at risk of redundancy and a consultation period would ensue. The respondent's appeal against her selection for redundancy was rejected on 11 February 2004. The events which followed engaged "the teesside job" issue. It is convenient to set out paragraph 10 of the EAT judgment:

"On 19 February 2004, Miss Difolco, Mr Melrose and another manager, Mr Langley, discussed alternative employment for her. She felt that the only suitable opportunities would be part-time roles in the North-East, because of her continuing health needs. She was informed that there was a full-time job in Teesside which matched some of her skills but that she would have to apply for it and go through a selection process and that, if successful, it might be possible for her to carry out the role on a part-time basis. Miss Difolco felt unable to apply for this role because it was not intended to be a part-time role and she did not wish to be pressurised into working full-time until she felt able to do so. There is no suggestion that any other alternative post was proposed; and her employment ended on 12 March 2004."

4. As I have said, the EAT allowed the appellant's appeal on most points other than the Teesside job. In order to understand how the arguments relating to the Teesside job arise, it is convenient at this stage to set out section 6 (1) of the DDA in the form it took relevant to these proceedings:

"Where-

a) any arrangement made by or on behalf of an employer, or

b) any physical feature of premises occupied by the employer,

place the disabled person concerned at a substantial disadvantage in comparison with persons who are not disabled, it is the duty of the employer to take such steps as it is reasonable, in all the circumstances of the case, for him to have to take in order to prevent the arrangements or feature having that effect."

5. The ET found that the respondent had been discriminated against on disability grounds in relation to the Teesside job. Their reasons are contained in a single paragraph of their decision, paragraph 16. This paragraph is at the centre of the issues before us. It reads as follows:

"It would also have been a reasonable adjustment to assess the suitability of the role in Teesside for the claimant without the need for a competitive selection procedure. In this regard the tribunal has taken into account the case of Archibald v Fife Council [2004] UK H 32 in which the House of Lords considered whether the duty to make reasonable adjustments included transferring a disabled person to fill an existing vacancy without the need further to undergo competitive interviews and their Lordships thought that it clearly involved more than allowing her to apply for the post and appointing her if successful. In this case the tribunal is satisfied that it would have been a reasonable adjustment for the respondent to ascertain whether the role in the North East could have been performed on a part-time basis and, if so, offer the post to the claimant without the need for a competitive selection procedure."

6. The expression "reasonable adjustments" must of course refer to the reasonable steps mentioned in section 6 (1) of the DDA. I can conveniently state the appellant's grounds of appeal before going to the EAT decision, given that the ultimate question in appeals of this kind to this court is whether there was a legal error affecting the ET's decision.
7. The grounds are: a) the ET misunderstood or failed adequately to apply the requirement of "substantial disadvantage", that being a precondition to the duty to make reasonable adjustments arising under the DDA; b) the ET failed to consider, misunderstood or misapplied the "arrangements" which were said to place the respondent at a substantial disadvantage; c) the EAT erred in setting aside a number of discrimination findings but allowing one to stand. In circumstances where it is plain that the ET have wholly misunderstood the statutory provisions applied to complex discrimination claims and have approached those claims in entirely the wrong way, it is inappropriate to allow any part of the judgment to stand.
8. I turn to ground one, substantial disadvantage. It is plain from the words of section 6 (1) that a finding of "substantial disadvantage" flowing from "any arrangement made by the employer" is a necessary precondition of the duty to take reasonable steps. The duty does not arise at all unless such a "substantial disadvantage" is established; but in this case, in paragraph 16 of the EAT decision, there is no finding of any substantial disadvantage, certainly no express finding. Indeed the expression is not even referred to. Had the ET laid the duty on the shoulders of the appellant without finding the only legal basis that might justify such a duty? Here is the EAT's answer, (paragraph 64):

"It is true that there is no finding of substantial disadvantage expressed in paragraph 16 of the Tribunal's judgment; but in this instance the Tribunal were considering not the highly contentious issue as to whether Miss Difolco's disabilities put her at a substantial disadvantage in relation to the redundancy selection exercise but whether her disabilities put her at a substantial disadvantage when, her job having gone, she was competing with others for alternative employment. Although we have been critical of the Tribunal for not setting out their reasons or their conclusions earlier in this judgment, it would, as we see it, be wholly excessive to have required the Tribunal to have set out in terms that Miss Difolco in the new situation was at a substantial disadvantage; and we cannot imagine that there was any issue as to whether she l I was at such a disadvantage. We are tempted to say that plainly she was at such a disadvantage; but it is not our task to put forward our own view of the facts; what we would say is that the Tribunal had shown throughout that they were conscious of the need to prove a substantial disadvantage before the duty to make adjustments was triggered and that their judgment on this topic must have implicitly involved the finding that Miss Difolco was at a substantial disadvantage in looking for alternative employment because of her disability which rendered her able to work only a 3-day week."

9. The want of any reasoning by the ET as to the existence of a "substantial disadvantage" might I suppose be supplied by a plain inference, if it were open to the EAT to make it, as to what the substantial disadvantage was and the basis for it in terms of arrangements made by the employer. That might be said to be the exercise on which the EAT was engaged in paragraph 64. Whether that was a viable exercise in the circumstances of this case requires, I think, consideration of ground two, relating to arrangements: ground two is at the heart of the appeal.
10. A claim under section 6 (1) of the DDA requires it to be shown that arrangements of the employer place the claimant under a substantial disadvantage. What, on the view of the ET or the EAT, were the arrangements in this case which had that effect? It cannot have been anything to do with the redundancy process itself. The EAT found against the ET's holding that the process was discriminatory, so it cannot have placed the respondent at a substantial disadvantage, taken on its own. Mr Hare for the respondent does not I think, accept this (see his supplementary skeleton argument paragraph 9), but the argument deployed is only to the effect that:

"there is no requirement that the substantial disadvantage suffered by the disabled person should be as a result of prior discrimination of the employer."

11. So far as it goes, that is a correct proposition. But if the only vice levelled at the redundancy process is that of discrimination, it is difficult to see how that process can as a matter of causation give rise to substantial disadvantage if no discrimination is established. As Mr Cohen for the appellant submits in his supplementary skeleton paragraph 8:

"If the ET were entitled to find (as they did) that the Claimant had been discriminated against under section 6(2) by the imposition of a competitive selection process for redeployment, it was only because and as a result of the Claimant being of a substantial disadvantage by virtue of having lost her substantive post. Hence, once the EAT removed that latter finding and remitted it for rehearing, the substantial disadvantage for the purposes of the redeployment claim fell away. With no substantial disadvantage, there necessarily was no duty to make any adjustments at all."

12. What other candidates are there for the relevant arrangements? One might be the employer's requirement of a competitive selection procedure for the Teesside job. In paragraph 10 of his supplemental submissions Mr Cohen suggests that was not, in truth, the basis for the ET's approach. On rereading paragraph 16 of the ET decision, I am bound to say that I think it unclear what was the approach of the ET in that crucial paragraph and to that I will return.
13. Moreover, as it seems to me, it is critical to have in mind the fact that the respondent chose in the event not to apply for the Teesside job. Mr Cohen submits (supplementary argument paragraph 13) that an employer is not obliged:

"… to make any adjustments to a role to remedy the substantial disadvantage of a disabled potential candidate before that candidate has applied for the job".

As a proposition this seems to me to have much force. If the mere fact of advertising for a full-time job can constitute an arrangement for the purposes of the DDA then on the face of it it would potentially discriminate against the whole innominate class of possible disabled applicants for the job. That, it may well be thought would be a reductio ad absurdum.

14. Are there any other candidates for arrangements? It was not I think actually suggested, and this is important, that the failure to offer part-time work in unequivocal terms constituted relevant arrangements in this case. Notwithstanding that, Mr Hare submits -- and it is at the centre of his submissions this morning -- that the combination of an imposition of a competition for the Teesside job, and its being offered on terms that it was full time, constituted the relevant arrangements. It seems to me that it is very difficult indeed to obtain that sense of arrangements from the words of paragraph 16. Paragraph 16 does not say that. For my part I do not believe that such an interpretation can be inferred.
15. In this context it is important to have in mind that we were shown the respondent's grounds of application to the ET and also a skeleton argument, or a written closing argument, that they had deployed. The case being made by the respondent related to the redundancy process. In the grounds the Teesside job is referred to in passing as a matter of narrative; there is no specific or particularised complaint relating to it. As I have said, we have also seen written submissions made to the ET; there was no express reference there to the Teesside job.
16. These matters are important background. Though I accept references to the Teesside job certainly appear in the respondent's cross-examination by Mr Cohen, to which our attention was also drawn, it is to my mind extremely difficult -- and I would venture to say impossible -- to be clear as to what the ET considered were the relevant arrangements.
17. Mr Hare submits that at least in a case like the present, it is not incumbent on the ET to identify what the arrangements are. I do not for my part think that that is a true reflection of the learning. There will be cases where it is obvious what the arrangements are; that is not so here. Mr Hare refers among other authority to Smith v Churchill Stair Lifts [2005] EWCA Civ 1220 [2006] IRLR 421 paragraph 34, but I think that Maurice Kay LJ's reasoning there is if anything against him. He said this:

"It is only when the relevant arrangements have been identified that one could proceed to consider whether those arrangements place the disabled person at a substantial disadvantage in comparison with persons who are not disabled."

18. I should refer at this point to the decision of their Lordships' House in Archibald v Fife Council, referred to by the ET in paragraph 16, as we have seen. That was a case in which, by reason of disability, the employee could no longer meet the requirements of the relevant job description. Neither the nature of the relevant arrangements, nor the substantial disadvantage flowing from them, was as I understand it in the least doubt there. That is a point of departure between this case and that. But Archibald is important for another reason: it is material to a submission which is at the heart of Mr Cohen's argument as he developed it this morning. The submission is this: if the respondent had been dismissed for a reason relating to her disability, then it is established, by Archibald that the employers would have a duty to redeploy her without competitive selection; but here as I have indicated the EAT have negated (subject to remission to the ET) any link between the dismissal and the disability, and so the Archibald duty simply did not arise.
19. One of the reasons why paragraph 16 is to my mind unsatisfactory is that given its reference to Archibald, it conflates two alternative possible cases. Mr Hare has confirmed this morning that these two alternatives indeed constitute the basis of his client's claim. First, there is the Archibald case. That can only prosper if in effect the respondent succeeds on the redundancy issue when the matter is remitted. Secondly, there is a freestanding case relating to the Teesside job, in which the relevant arrangements were, as Mr Hare submits, a combination of the absence of a part-time offer and the imposition of a competition. But, and I have made this clear paragraph 16 cannot be read as articulating either of these cases; it conflates the two. There is, of course, no requirement upon the ET to deliver "an elaborate, formulistic product of refined legal draughtsmanship", to use the words of Bingham LJ in Meek v City of Birmingham District Council [1987] IRLR 250 (paragraph 8) to which Mr Hare referred. But there is -- and this much is no more than elementary -- a requirement of clear reasoning. Here, it was absent.
20. In the result in my judgment the ET's decision at paragraph 16 was defective. They did not articulate the arrangements relative for the purposes of section 6.1; the gap cannot be supplied on appeal. There was in the ET's reasoning therefore no sound basis for finding substantial disadvantage, nor any duty on the appellant to take steps. The reasoning of the EAT does not refute that conclusion. The EAT decision gives rise to Mr Cohen's argument on Archibald, to which I have already referred. In consequence of the EAT's overall decision no Archibald case is presently available and no other case on arrangements is presently visible.
21. Smith LJ, granting permission to appeal, would not have given permission upon the third ground standing alone. Nor would I, and I say no more about it.
22. In the circumstances, for my part I would, for all the reasons I have given, allow the appeal.
23. Mr Cohen is content that the Teesside job issue, as it may be called, should be remitted to the ET for further determination, along with the other issues already so remitted by the EAT and that is the order I would make.
24. LORD JUSTICE LEVESON: For the reasons given by my Lord, Lord Justice Laws, I agree that this appeal should be allowed. I add only this. It is obviously inappropriate to approach the construction of the originating application to an employment tribunal in the same way as a High Court pleading, but the vital obligation upon applicants and their advisers is to identify the allegations that are made in such a way that the proposed respondent can understand the case which has to be answered. If, as sometimes occurs, the case develops prior to the hearing, that position should be clarified before the evidence starts. In this case, Mr Cohen complains that the case against the employers ultimately found by the Employment Appeal Tribunal was created by that judgment and cannot be spelt out of the decision of the Employment Tribunal or those parts of the evidence which Mr Hare, on behalf of the respondent, put before the court to seek to make good the factual basis or the decision of the Employment Appeal Tribunal. In my judgment, that complaint is made out.
25. LORD JUSTICE WALLER: I agree that the EAT's decision should be reversed and that this aspect should be sent back to an Employment Tribunal with the other points. As my Lord, Lord Justice Laws, has explained, in dealing with this point on its own, the EAT were really approving an alternative case as made by Miss Difolco. I should say that I found Mr Hare's argument, seeking to support that alternative case and seeking to suggest a way in which paragraph 16 could be construed as supporting that alternative case, a quite persuasive argument, and it may even be that Miss Difolco's case, as argued by Mr Hare, could turn out to be a good one, but I am quite clear that the case Mr Hare has argued was not one properly explored before the Employment Tribunal. Unsurprisingly, therefore, it is not a case which is properly reasoned in paragraph 16 of the Employment Tribunal's reasons. Such reasoning would need to identify, in my view, with some precision, the arrangements which put Miss Difolco at a disadvantage and I do not think that paragraph 16 does that.
26. Thus, it was not, in my view, open to the EAT to construe paragraph 16 as though it decided a point which was not properly adumbrated and, for those reasons, including those given by my Lords, Lord Justice Laws and Lord Justice Leveson, I would allow this appeal.

Order: Appeal allowed.