Neutral Citation Number: [2014] EWCA Civ 716
Case No: A2/2013/0730
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM EMPLOYMENT APPEAL TRIBUNAL
THE HON MR JUSTICE MITTING, MR JENKINS, MR LEWIS
UK EAT 0368 & 0427/DM
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 23/05/2014
Before :

LORD JUSTICE MAURICE KAY
Vice President of the Court of Appeal, Civil Division.

LADY JUSTICE BLACK
and
LORD JUSTICE TREACY
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Between:

	Gary Burrell	Appellant	
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	Micheldever Tyre Services ltd	Respondent	

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Marcus Pilgerstorfer (instructed by leonard & Co) for the Appellant
Alice Mayhew (instructed by Thomas Eggar Llp) for the Respondent

Hearing date: 11 March 2014
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Judgment
Lord Justice Maurice Kay:  
1.	The point of law raised on this appeal is a narrow one. The Employment Appeal Tribunal (EAT) identified an error of law in the judgment of the Employment Tribunal (ET) in relation to Mr Burrell’s victimisation claim. However, rather than remit the case to the ET for further consideration on the basis of a corrected understanding of the law, the EAT made its own decision on victimisation and took away from Mr Burrell the success which he had obtained in the legally flawed decision of the ET. His complaint on this appeal is that it was an error of law on the part of the EAT to dispose of the case in this way without remittal. If (but only if) he is right about that, Mr Burrell further complains that the EAT ought also to have remitted his unfair dismissal case to the ET. Appeals to this court about the failure of the EAT to remit following the identification of an error of law on the part of the ET are not uncommon. I shall refer to the jurisprudence later. 
2.	First it is necessary to summarise the factual background and the procedural history.
The facts 
3.	Mr Burrell was employed as a tyre fitter by Micheldever Tyre Services Ltd (the Company) from 11 November 2008 until he was dismissed on 28 July 2010. He is black. The company has branches in various parts of the country. Two are at Micheldever and Fareham. Mr Burrell worked at the Fareham branch where he was the only black employee.
4.	In the early months of his employment, Mr Burrell was the subject of racial banter. The ET found that Mr Burrell tolerated this and reciprocated at least until September 2009. Up until then the exchanges had been seen as good natured. From September 2009 Mr Burrell’s attitude changed and he made a complaint to his line manager, Mr Wright. On 11 September, Mr Wright called a meeting and made it clear to all employees that the banter should stop. In October 2009, Mr Burrell told Miss Shore, the human resources manager, that he did not find the racial banter amusing. He was then off sick for a time with a viral illness. When he returned on 3 November, he had an interview with Mr Wright which ended in an argument leading to Mr Burrell being sent home. He returned to work on 5 November and stated that he was unhappy about the racial abuse. He was told that he should raise a grievance if he so wished. He did so on 11 November. On 16 December he wrote to Miss Shore complaining of bullying, harassment and discrimination. No steps were taken to investigate his grievance until the end of January 2010. Miss Shore finally wrote to Mr Burrell on 18 February 2010 by which time he had again gone off sick, this time due to stress. 
5.	Miss Shore’s conclusion was that Mr Wright’s instruction that the banter and abuse should cease had been ineffective. She considered that Mr Burrell and his colleagues had all engaged in unacceptable behaviour. Having spoken to the Area Manager, she asked him to hold a meeting at Fareham to which all the staff would be invited and at which the Area Manager would tell them that such conduct must cease. However, the meeting never took place. Mr Burrell appealed against Miss Shore’s decision. A grievance appeal meeting took place on 15 April 2010, conducted by Mr Harley. He dismissed the grievance appeal for reasons set out in a letter dated 24 May 2010. At that stage the grievance procedure came to an end. Even before then, on 6 April 2010, Mr Burrell had submitted the first of his two applications to the ET.
6.	On 8 June 2010 Mr Burrell unexpectedly returned to work. The following day he was given two weeks paid leave and he agreed that ACAS should be involved in trying to mediate and resolve the differences which had arisen. However, Mr Burrell later withdrew his agreement to ACAS’s involvement. The second grievance process appears to have been initiated but it is not clear what became of it.
7.	On 25 June 2010, the Company wrote to Mr Burrell suggesting that he return to work not at Fareham but at the Micheldever branch. This proposal was discussed with him on 29 June. On 2 July the proposal was repeated in writing and it was stated that Mr Burrell could choose to work as either a tyre fitter or a mechanic at Micheldever. The Company considered that the travel time and costs in relation to Micheldever were the same as for Fareham but offered to subsidise any additional costs incurred by Mr Burrell. All this was discussed with Mr Burrell on 13 July but he refused to go to Micheldever. His contract of employment provided for a power to relocate him to an alternative place of work. On 15 July, he was again told of the Company’s wish to relocate him and that, if he continued to refuse the location, consideration would be given to terminating his employment. The Company maintained that a return to Fareham was not realistic given the past history. On 20 July, the Company reiterated its position but Mr Burrell continued to insist that he return to Fareham. On 21 July, the Company wrote to Mr Burrell stating that his place of work was being changed to Micheldever and instructing him to attend there on 23 July. He was told that failure to do so would be treated as a disciplinary matter likely to lead to his dismissal. He did not attend on 23 July. There was another meeting on 28 July when he was dismissed by Mr Harley. An internal appeal against that decision was later rejected.
The decision of the ET 
8.	Following a hearing which lasted several days, the ET decided that Mr Burrell’s complaints of direct race discrimination and victimisation should succeed but his claim of unfair dismissal failed. The case was adjourned for a remedies hearing. The ET dealt with victimisation at paragraph 41 of its judgment. The material parts read as follows:
“It is accepted by the Respondents that the Claimant’s grievance amounts to a protected act within section 2(1) Race Relations Act 1976. In order to determine whether there has been less favourable treatment, the statute calls for a simple comparison between the treatment afforded to the complainant who has undertaken the protected act, and the treatment which was or would be afforded to other employees who have not done the protected act. The reason or motive for that treatment is immaterial, at least as far as the issue of liability is concerned. Applying that test, it is plain that at least part of the reason for the Complainant’s proposed relocation from Fareham to Micheldever was because of his having raised a grievance (the protected act in question) which involved allegations against his Fareham colleagues. As a result, it was proposed to move the Claimant from his existing place of work, whereas his colleagues who had not raised any such grievance were to remain where they were. That must, it seems to us, amount to less favourable treatment. Accordingly the victimisation claim must succeed. We should say at this point for the avoidance of doubt that we do not find the Respondents’ actions in proposing to relocate the Claimant to amount to what is popularly misunderstood as being victimisation, in the sense that the Respondents were only proposing the move in a cynical attempt to try to get rid of the Claimant. We do not accept that. We do accept that the Respondents were (to a considerable extent of their own making) in a very difficult position in the early summer of 2010 in seeking to ensure the Claimant’s return to work at Fareham, and that what they proposed was, we accept a reasonable, and arguably the best, solution that they could come up with. That too may be reflected in the compensatory award, but it does not impact on the issue of liability. Additionally, we do not accept the suggestion that the Claimant was dismissed as a direct result of victimisation. In the circumstances of this case, that seems too remote a consequence, and the dismissal resulted from the Claimant’s refusal to countenance any alternative but to return to the Fareham depot. As we make plain hereafter, we find the suggested relocation was neither unfair nor unreasonable. ”
	   In the following paragraph the ET referred to:
“The great difficulty involved in integrating him back to work at Fareham and the risks involved in so doing for both the Claimant and his colleagues.”
It repeated that it considered it reasonable for the Company to seek to relocate     Mr Burrell in accordance with its contractual right to do so. It concluded that the reason for his dismissal was “his unreasonable refusal to move” which was “some other substantial reason” within the meaning of section 98 (1) (b) of the Employment Rights Act 1996. It was satisfied that the Company had adopted a fair procedure and that, overall, the Company had acted reasonably in treating Mr Burrell’s refusal to relocate as a sufficient reason for his dismissal.
The judgment of the EAT
9.	The legal error identified by the EAT was that the ET had misdirected itself as to the law in paragraph 41 of its judgment because it was not sufficient simply to compare what has happened to someone who has undertaken a protected act with what has not happened to someone who has not. As the EAT stated (at paragraph 25) the  ET went on to compound the error by its observation:
“The reason or motive for that treatment is immaterial at least as far as the issue of liability is concerned.”
Section 2 of the Race Relations Act 1976 is concerned with whether less favourable treatment was perpetrated “by reason that the person victimised has…done anything under or by reference to this Act in relation to the discriminator or any other person”. It is common ground that the EAT’s legal analysis was correct. 
10.	The dispute now is about the following passages in the judgment of the EAT:
“33. It seems to us that on the clear findings of the Tribunal made in relation to the history as to how matters had got to where they ended up and as to the lack of any realistic alternative to relocating the Claimant from Fareham to Micheldever, that far from the raising of the grievance having been in the minds of anyone responsible for the decision to require him to relocate, it played no part in it.
34. The history which we have recited demonstrates that matters came to a head a fortnight after the grievance had finally been resolved by Mr Harley on 8 June 2010 when the Claimant unexpectedly and without prior warning returned to work at Fareham. That gave rise to the sensible decision by the Respondent to require him to take two weeks fully paid absence and to involve ACAS in an attempt to resolve the differences which had arisen. It is only after the Claimant had withdrawn his consent to that initiative that the Respondents first made the proposal that he should relocate to Micheldever which they did by letter of 25 June. That proposal was, as the Tribunal found, a reasonable one and, indeed, arguably the best solution to the problem which had arisen. We are, therefore, driven to the conclusion that there was no foundation in the evidence for the Tribunal’s conclusion that it was the raising of the grievance which formed at least part of the reason for the proposed relocation. If there was no evidence upon which such conclusion can be based and if it flies, as it does, in the face of the other findings of fact made by the Tribunal then the Tribunal made an error of law in reaching the conclusion. We therefore, allow the Respondent’s appeal against the second of its findings.”
In other words, having identified the legal error, the EAT concluded that, on the evidence, there had been no victimisation. By implication, it saw no need to remit the case to the ET for it to reconsider victimisation, absent the original error of law. 
The law as to remittal
11.	Section 35 of the Employment Tribunals Act 1996 provides:
“(1) For the purpose of disposing of an appeal, the Appeal Tribunal may – (a) exercise any of the powers of the body or officer from whom the appeal was brought, or (b) remit the case to that body or officer.”
The approach to the exercise of that discretion was considered in well known authorities decided almost 30 years ago. 
12.	In Dobie v Burns International Security Services (UK) Ltd [1985] 1 WLR 43, 49, Sir John Donaldson MR said:
“Once you detect that there has been a misdirection, and particularly that there has been an express misdirection of law, the next question to be asked is not whether the conclusion of the tribunal is plainly wrong, but whether it is plainly and unarguably right notwithstanding that misdirection. It is only if it is plainly and unarguably right notwithstanding the misdirection that the decision can stand. If the conclusion was wrong or might have been wrong, then it is for appellate tribunal to remit the case to the only tribunal which is charged with making findings of fact.”
In Hellyer Brothers Ltd v McLoud [1987] 1 WLR 728, referring to that passage, Slade LJ said (at page 747):
“This statement, however, must, in our judgment, be read subject to an implicit qualification correctly stated by Waite J in the present case [1986] ICR 122, 130:
“	if we are satisfied that a conclusion reached as a result of a misdirection is plainly and unarguably wrong upon the facts found by the Industrial Tribunal and those facts do not require further amplification or reinvestigation, then we are entitled and bound to substitute our own conclusion as to what those findings require in law.”
Sir John Donaldson MR returned to the subject in McLaren v National Coal Board [1988] ICR 370, 378:
“There is also a category of cases where it is quite clear that (a) there has been a misdirection, and (b), if the Tribunal had directed itself correctly, it must have reached the opposite conclusion. In those circumstances it is obviously absurd to send it back to the Industrial Tribunal, telling them what the proper direction is and if by any chance they do not arrive at the inevitable answer on the basis of that direction, to hear another appeal and set that aside and send it back again. In those circumstances, of course, it is for the Appeal Tribunal to substitute what must inevitably be the answer by the Industrial Tribunal rather than to remit it.”
I should refer to two further statements of this conventional view. In Wilson v Post Office [2000] IRLR 834 (at paragraph 36) Buxton LJ said:
“The Tribunal is not merely a fact finding body, it is an industrial jury. That is not merely a phrase, but a concept that has to be taken seriously. It is only going to be in an extreme case, one that is very clear, that it is going to be possible for an appellate body properly to say that a jury would have inevitably reached the conclusion that the EAT reached, when in the original case, albeit proceeding upon an incorrect basis, the Tribunal had come to a contrary conclusion.”
In Tilson v Alstom Transport [2010] EWCA Civ 1308 (at paragraph 27) Elias LJ added:
“As this judgment of Buxton LJ makes clear, it is only where the Employment Tribunal, properly directing itself in law, could reach only one legitimate decision that the EAT can substitute that decision for the one improperly reached by the Employment Tribunal. This is a well established principle…”
However, Elias LJ went on to say (at paragraph 29):
“I would observe in passing that I think there is much to be said for a relaxation of the established principles…, particularly where, as in this case, the proceedings have continued for a long time…. The overriding objective set out in the EAT rules seeks to save costs, amongst other matters, and it is not necessarily in the parties’ interests to disable the appellate court from reaching a decision on the same evidence as would be available to the judge. However we were not addressed on any of this jurisprudence and this is not an appropriate case to formulate a modification of the traditional rule.”
13.	Although Tilson was decided on 19 November 2010, the Court does not seem to have been made aware of Bournemouth University Higher Education Corporation v Buckland [2011] QB 323 which had been decided on 24 February 2010. There, Jacob LJ said (at paragraphs 57 to 58):
“Finally a word about the Appeal Tribunal’s “academic” decision that if it upheld the finding of constructive dismissal it would have remitted the question of fairness to the Employment Tribunal. With respect I cannot see why. Even though the Employment Tribunal had not made a finding about this, no more evidence was required. So the Appeal Tribunal could have decided the point itself.
Quite generally, sending a case back to a tribunal or court below should be used only as a last resort. “Ping Pong”, as some call it, generally serves litigants badly – prolonging things and increasing costs.”
Carnwath LJ expressed agreement with these paragraphs referring to “the desirability of avoiding unnecessary remittal to the Tribunal when the Employment Appeal Tribunal is in as good a position to decide the matter itself” (paragraph 50). Sedley LJ did not express a further comment but referred to “the inexorable outcome in this [case]” (paragraph 48). The Bournemouth case is relied upon by the Company in the present case. 
14.	In Tilson, when Elias LJ referred to the overriding objective set out in the EAT Rules, he had in mind Rule 2A of the Employment Appeal Tribunal Rules 1993 (as amended). The amendment dates from 2004. It replicates the approach of the Civil Procedure Rules. It provides that the overriding objective is to enable the EAT “to deal with cases justly”. Rule 2A (2) then provides:
“Dealing with a case justly includes, so far as practicable –
(a) ensuring that the parties are on an equal footing;
(b) dealing with the case in ways which are proportionate to the importance and complexity of the issues;
(c) ensuring that it is dealt with expeditiously and fairly;
(d) saving expense. ”
Before I consider these authorities further, it is appropriate to summarise the submissions of the parties.
15.	At the hearing of this appeal on 11 March 2014, the authorities cited to us were mainly those to which I have referred. However, shortly after I had completed a first draft of this judgment it was drawn to my attention that another constitution of this Court had heard an appeal which raised the same issue on 13 February and was about to hand down judgment (which had already been sent to counsel in draft). That case was Jafri v Lincoln College [2014] EWCA Civ 449. It contains a careful judgment of Laws LJ with which Underhill LJ and Sir Timothy Lloyd agreed, although Underhill LJ expressed “regret” as to the current law (at paragraph 46). We drew the attention of Mr Pilgerstorfer and Ms Mayhew to Jafri and invited their written submissions which we have now digested.
16.	In Jafri, the Court reaffirmed the conventional approach. Laws LJ said (at paragraph 21):
“it is not the task of the EAT to decide what result is “right” on the merits. The EAT’s function is (and is only) to see that the ET’s decisions are lawfully made. If therefore the EAT detects a legal error by the ET, it must send the case back unless (a) it concludes that the error cannot have affected the result, for in that case the error will have been immaterial and the result as lawful as if it had not been made; or (b) without the error the result would have been different, but the EAT is able to conclude what it must have been. In neither case is the EAT to make any factual assessment for itself, nor make any judgment of its own as to the merits of the case; the result must flow from findings made by the ET, supplemented (if at all) only by undisputed or indisputable facts. Otherwise there must be remittal.”
            Although the Court in Jafri was directed to most of the earlier authorities, it was not referred to the obiter comments of Elias LJ in Tilson.
17.	I confess that, but for the intervention of Jafri, I  would have been disposed to pick up the baton offered by Elias LJ in Tilson and would have suggested a softening of the conventional approach. It seems to me that there have been two significant developments since the conventional approach took root. The first is that a significant part of its rationale – deference to the “industrial jury” – is no longer a constant feature. An ET now commonly comprises an Employment Judge sitting alone: Employment Tribunals (Constitution and Rules Procedure) Regulations 2013, regulation 9. In such cases, there is no question of the EAT (itself an expert tribunal) depriving a successful applicant of a right to trial by industrial jury. It is true that in many cases, not least discrimination cases, an ET continues to be constituted with lay members. However, it would not be right for the approach to remittal to vary, depending on whether the original ET comprised an Employment Judge alone or in a tribunal of three. Nor would it be sensible for there to be a different rule in discrimination cases.
18.	The second development is the introduction of the overriding objective into this jurisdiction. It seems to me that the EAT ought to have it in mind when deciding whether remittal is appropriate. In the present case, the hearing in the ET lasted several days. That does not mean that a remittal hearing would be of the same duration, but the questions of proportionality and saving expense which are written into the overriding objective could have a part to play on the issue of whether or not to remit.
19.	With a free hand, I would have been minded to modify the conventional approach on the basis that much of the earlier jurisprudence is obiter and circumstances have now changed in the light of the procedural developments to which I have referred. However, now that this Court, differently constituted, has so clearly reaffirmed the conventional approach – and it clearly had in mind the metamorphosis of the industrial jury  (see Underhill LJ at paragraph 46), if not the overriding objective – I have come to the conclusion that it would be inappropriate for us to come to a different conclusion, even if it could be said that there is an obiter element in the relevant part of Jafri. As Cairns LJ said in Harnett v Harnett [1974] 1 764, 767 (a matrimonial finance case):
“If there is anything which is likely to cause difficulty for the profession and for the public, it is that two different decisions of the Court of Appeal should say different things in relation to a matter of this kind.”
I therefore accept the characteristically clear exposition of Laws LJ to be correct.
20.	However, even within the confines of the conventional approach, the EAT can contain its application in a number of ways. First, provided that it is intellectually honest, it can be robust rather than timorous in applying what I shall now call the Jafri approach. There is reason to believe that it is robust. From statistics shown to us by Mr Pilgerstorfer, it seems that the EAT remits in only about half of successful appeals. Secondly, as Underhill LJ said in Jafri, parties to appeals to the EAT can be encouraged to consent to the EAT disposing of the case pursuant to its powers under section 35 (1) (A) of the  Employment Tribunals Act 1996, even where the EAT does not consider  that the appeal before it is an “only one outcome” case. Thirdly, even where remittal is necessary, the EAT, mindful of the overriding objective, may limit the scope of the remittal, for example by identifying issues or limiting or forbidding further evidence. It may also save further expense by remittal to the same rather than a fresh tribunal, subject to the constraints which govern that choice: see Sinclair Roche & Temperley v Heard [2004] 1RLR 763, at paragraph 46, per Mr Justice Burton P. With all this in mind, I now return to the present case.

The submissions
21.	On behalf of Mr Burrell, Mr Pilgerstorfer seeks to identify this as a typical case in which, having identified the error of law, the EAT should have remitted. He refers to the following sentence in paragraph 41 of the judgment of the ET:
“..it is plain that at least part of the reasons for the Claimant’s proposed relocation from Fareham to Micheldever was because of his having raised a grievance…”
He submits that on the basis of this and other findings, this cannot be identified as a case in which, the legal error having been corrected, the ET could reach only one legitimate decision. In addition, he stresses the legal context. The fact sensitive nature of discrimination cases is well known: see, for example, Anyanwu v South Bank Student Union [2001] 1 WLR 638, per Lord Steyn, at paragraph 24. The outcome “will therefore usually depend on what inferences it is proper to draw from the primary facts found by the Tribunal”: King v Great Britain-China Centre 1992 ICR 516, 528, per Neill LJ.  Moreover, the fact that an employer acted reasonably does not necessarily mean that his act was untainted: Zafar v Gloucester City Council [1998] IRLR 36. All this points to a need for a proper evaluation of the subtleties by the tribunal entrusted by statute to make the necessary findings of fact. Paragraph 41 of the decision of the ET is not a model of clarity. There is ambivalence within it. It should be for the ET to resolve the factual issue, undistracted by its previous misunderstanding of the law. The ET alone should be entrusted with the task of deciding whether the less favourable treatment was “by reason of” the protected act in the light of all the evidence. 
22.	Ms Mayhew submits that, properly construed, the findings in paragraph 41 of the judgment of the ET can lead to only one legitimate answer. She refers to a concession made by counsel then appearing for Mr Burrell in the EAT that there was nothing in the other findings made by the ET to support the conclusion that “at least part of the reason for the …proposed relocation from Fareham to Micheldever was because of [Mr Burrell] having raised a grievance which involved allegations against his Fareham colleagues”. Her submission is that, on the Jafri approach, this is an “inexorable”, “only one outcome” case. 
Discussion
23.	It is not surprising that the judgment of the EAT contains no consideration of the authorities on remittal. It seems that no submissions were made on the issue. Nevertheless, it is plain that the EAT considered this to be an “only one outcome” case. This is apparent from the final two sentences in paragraph 34 of the judgment. The question is whether that conclusion was legally permissible applying in the Jafri approach.
24.	It must be accepted that, in accordance with Zafar, the fact that the ET concluded that the Company had adopted “a reasonable, and arguably the best solution” does not necessarily exclude an inference of victimisation. It is, however, an indicator in that direction. The real problem lies in the ET’s earlier statement that the “at least part of the reason for the Claimant’s proposed relocation from Fareham to Micheldever was because of his having raised a grievance…” There is no doubt that the raising of the grievance had been part of the chain of events which culminated in the relocation decision. However, the question is whether that decision was taken “by reason that” the Claimant had done a protected act. The EAT felt able to conclude that there was “no foundation in the evidence” for the proposition that it was the raising of the grievance which formed part of the reason for the late relocation decision. That conclusion seems to have been derived from an inference that the relocation decision was made not because of the raising of a grievance which had, by then, been properly processed but that it arose as a result of Mr Burrell’s sudden and unexpected return to work on 8 June. That is certainly one permissible interpretation of the evidence as I understand it. However, the question is whether it is the only permissible interpretation. Put another way, and using the language of Laws LJ in Jafri, has the EAT fallen into the legal error of making a factual assessment for itself rather than one which necessarily flows from the findings made by the EAT, supplemented by undisputed or indisputable facts? With some hesitation, and not without regret, I have come to the conclusion that the EAT did fall into that legal error. Notwithstanding the chronology and the finding of “a reasonable, and arguably the best, solution”, I do not feel able to say that it would not have been open to the ET, properly directing itself as to the law, to conclude that the relocation decision was, at least to some extent, “by reason that” Mr Burrell had raised his grievance. 
Conclusion
25.	It follows from what I have said, that I would allow this appeal and direct that the case be remitted to the ET. Although time has passed, I consider that the remitted hearing should be before the ET as originally constituted, if that remains possible. On that basis, I do not think that it will be necessary for the ET to receive further evidence. It will simply need to revisit paragraph 41 of its original judgment without the distraction of the legal error  identified by the EAT so as to re-determine the issue of victimisation. If, but only if, it determines that issue in favour of Mr Burrell, it will also have to revisit the question of unfair dismissal.

Lady Justice Black:
26.	I agree.
Lord Justice Treacy:
27.	I also agree.