Appeal No.	 EAT/290/00

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 4 July 2000

Before
MR COMMISSIONER HOWELL QC
MR P DAWSON OBE
MR J HOUGHAM CBE

INSOLVENCY SERVICE	APPELLANT

MR ASTON LOUIS JOHNSON 	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellant	MR A UNDERWOOD
(of Counsel)
Instructed by:
Treasury Solicitor
Queen Anne Chambers
28 Broadway
London SW1H 9JS	

MR COMMISSIONER HOWELL QC:

1.	In this appeal which is before us today for a preliminary hearing the Appellant is described as the ‘Insolvency Service’ but is in fact the Department of Trade and Industry.  They seek to have set aside as erroneous in law, two decisions of the Employment Tribunal after sittings at London South in 1999 and early 2000, recorded in statements of extended reasons issued to the parties on 11 January 2000 and 10 February 2000 before us in the appeal bundle at pages 7-15 and 16-18 respectively.

2.	The proceedings before the Tribunal had been brought by an originating application by Mr Aston Louis Johnson who was at all material times an Assistant Official Receiver with the Insolvency Service.  His originating application dated 5 October 1998 had been brought after he had been dissatisfied with the results of his annual staff appraisal report for the twelve months ended 31 March 1998; the relevant events and the carrying out of the review itself took place in May and June of that year.  His complaint, as expressed, was that he had suffered racial discrimination in the way in which his dissatisfaction at that report had been dealt with in the department’s internal Appeal and Review procedures.

3.	Mr Johnson brought the originating application himself, unrepresented, as he had been in the departments Internal Appeal Procedures which had preceded the making of the application to the Tribunal.  The nature of his complaints had been initially specified as dissatisfaction with his ‘box markings’ – under the system used in the Civil Service for assessment and the award of grades for an employee’s performance within his existing employment.  In the later stages of the Tribunal application process, there were more specific complaints made about the way in which the question of whether he was suitable for promotion, so as advance to other higher employment had been dealt with. The assessment of that issue, which is also carried out in the course of the same staff appraisal process, had also been the subject of consideration at a later stage of the appeal process conducted by the employer. 

4.	As recorded by the Tribunal, because of the date the complaint to them was lodged the only relevant issue for the Tribunal was the way in which Mr Johnson’s complaints about his assessment had been dealt with at and around 17 September 1998. That was the date when an appeal decision had been made by a Mr Cramp, who had conducted his appeal against the initial staff appraisal made in respect of him.  As the Tribunal also recorded, that appeal conducted by Mr Cramp and concluded on 17 September 1998 had itself been the subject of further internal appeal processes within the Department, I think right up to the level of the permanent Secretary himself. For present purposes, it is enough to note as regards the period after 17 September that further appeal procedures were conducted on behalf of the Department by a Mr Hart and a Mr Thorn from 5 October 1998 onwards, and these were concluded (as the Tribunal found satisfactorily), by 5 January 1999 when a letter was written by Mr Hart to a Mr Sanderson, who was the Appellant’s Line Manager.  

5.	By that stage, the box markings in the original staff appraisal report had been improved in favour of the Appellant from a ‘Box 3H’ to a ‘Box 2’, improving his overall assessment from ‘fully satisfactory for his grade’ to ‘significantly above the requirements for his grade’.  In addition to this improved award, an explanation had been furnished to him by Mr Hart to explain why he was not considered immediately suitable for promotion to all the management grades that were under potential consideration.

6.	 As Mr Underwood, who appeared for the Insolvency Service before us today and also before the Tribunal at the first hearing, explained to us, he on their behalf had made it quite clear in submissions to the Tribunal that the only issue that the Tribunal were concerned with was whether the appeal process concluded on 17 September 1998 was or was not satisfactory, as far the Appellant was concerned.  There was no proper ground of complaint, so far as the originating application was concerned, in anything that happened subsequently, or for that matter before that; though the later events of Mr Hart and Mr Thorn’s investigations were dealt with at any rate to some extent, in the evidence that was put before the Tribunal by both sides.  

7.	The conclusions of the Tribunal on whether there had been improper discrimination against the Applicant in the way that the standard appraisal report and appeal proceedings had been conducted, were that there was no discrimination against the Appellant (who is a Black African Caribbean) in the actual substance of the appeal findings of 17 September 1998. That is not under a separate appeal to us by Mr Johnson.  What is under appeal to this Tribunal by the Department is the Employment Tribunal’s finding that as Mr Johnson’s employer, the Insolvency Service did discriminate against the Appellant in one respect only, that as the Tribunal put it: 
“The Respondent discriminated against the Applicant by treating him less favourably than a white colleague Mr Wickens on racial grounds.  The Respondent did not, at the time it dealt with the Applicant’s appeal on 17 September 1998 against his performance and promotion markings specify in the same detail as it did for Mr Wickens the matters which the Applicant needed to address to become fitted for promotion.”
That is the decision of the Tribunal recorded on page 7 of the appeal bundle to which they add firmly:
“The Respondent did not otherwise discriminate against the Applicant.” 

8.	On behalf of the Appellants, Mr Underwood has criticised the Tribunal’s finding of discrimination as being unsustainable having regard to the evidence before the Tribunal itself, and as having been based on a misdirection by the Tribunal in the way in which they approached the evidence, in particular the evidence of what had or had not been properly within the scope of the appeal process in September 1998 and the evidence of what had taken place after that date.  

9.	He said in particular that the Tribunal’s conclusion that there had been a difference in treatment between the way the Applicant’s appeal and Mr Wickens’ dissatisfaction about his own earlier staff appraisal report had been handled was wrong. They had wrongly, as the decision showed, taken into account material as to what had happened after the appeal decision in dispute on 17 September 1998, and in particular had apparently misdirected themselves as to what the proper scope of that appeal had been, since the evidence before the Tribunal had, in Mr Underwood’s submission, shown that the appeal being considered on 17 September 1998 had been in respect of the ‘box markings’ of the Applicant’s current performance in his staff appraisal report only, and had had nothing to do with the question of his promotability. That in Mr Underwood’s submission had raised entirely separate issues which had been to the forefront in the treatment of Mr Wickens, but had not been a matter that fell for consideration in a comparable way at all in the case of the Applicant.  

10.	Secondly, he submitted that the Tribunal’s decision showed that they had given an inadequate explanation for the differences in treatment which they found to have existed, between Mr Wickens’ case and that of the Applicant.  The particular paragraph of the Tribunal’s decision in their extended reasons of 11 January 2000 which Mr Underwood sought to attack was paragraph 4.3, which contained their findings as to the difference in treatment, and their conclusions as to the inferences to be drawn from the evidence before them as to whether this had or had not been on racial grounds.  In the Tribunal’s words: 
4.3 “The difference in the Respondent’s response to Mr Wicken’s concern about his SAR promotability rating in 1995 and its response to the Applicant’s similar concern expressed in his 1998 SAR and his appeal – as it was addressed in the rejection of his appeal on 17 September 1998.
From our finding of facts we could find no direct evidence of racial discrimination.  We therefore considered what inferences it would be proper for us to draw for the primary facts.
The difference in the Respondent’s response to Mr Wicken’s in 1995 and to the Applicant in 1998 was quite remarkable.  Mr Wickens’ concern was met in a matter of days by a detailed explanation of his shortcomings and action to address them.  By contrast the Applicant’s concerns raised in May 1998 were not met with a similar detailed explanation until January 1999 and then only after a lengthy appeal process, continuous correspondence from the Applicant and Mr Hart’s letter of 5 January 1999 to Mr Sanderson.  In short Mr Wicken’s concern was met with an immediate response while the Applicant’s concerns were not with similar seriousness for some six months and only after the expenditure of considerable effort by the Applicant.  In particular they were not dealt with at the time of his appeal on 17 September 1998.
The Applicant had 20 years service with the Respondent and similar service in post as Mr Wickens.  The Tribunal finds that the Applicant’s concern that he should be given a full explanation of the shortcomings he needed to address to be fitted for promotion was neither frivolous nor premature.  
The Respondent’s explanation for the difference in treatment was that in 1995 Mr Wickens reported directly to Mr Sanderson whereas in 1998 the Applicant reported to Mr Chapman who in turn reported to Mr Sanderson.  We find this explanation entirely incredible.  Mr Chapman and Mr Sanderson are both experienced and capable managers in the same suite of offices as the Applicant.  The Tribunal concludes that the Respondent’s explanation could account for no more delay than a week or so.  
In view of the very implausibility of the Respondent’s explanation, the complete absence of any explanation and the fact that Mr Sanderson did not address the Applicant’s concerns until requested to do so by the Respondent’s Human Resources department (in the shape of Mr Hart the Respondent’s Equal Opportunities Officer) we have unanimously drawn the inference that the only reason for the difference between the treatment of Mr Wickens and the Applicant was the Applicant’s race.”-

11.	On that basis they concluded in the following paragraph:
4.4 “It is the unanimous decision of the Tribunal that the Respondent discriminated against the Applicant by not, at the time of dealing with his appeal on 17 September 1998, specifying in the same detail as it did for Mr Wickens the matters which the Applicant needed to address to become fitted for promotion.”
The Tribunals’ factual findings about the case of Mr Wickens that they held comparable are recorded in paragraph 3.12 of the stated reasons as follows:
3.12 “On Friday 5 May 1995 Mr Wickens received what he regarded as a disappointing SAR assessment from Mr Sanderson.  He expressed in similar terms to those which the Applicant used in his 1998 SAR, his concerns at his Box marking and assessment for promotability (although he did not make a formal appeal). 
Mr Sanderson replied on the following Tuesday 9 May 1995 – (in similar detail to that he used in his letter of 11 January 1999 to the Applicant) and in more detail on Thursday 11 May 1995.  Action was taken consequent to these exchanges the following week.”

12.	The major ground on which Mr Underwood sought to persuade us that there was an arguable ground for attacking the Tribunal’s apparent factual conclusion that the two cases were comparable, and that there had been a difference in treatment between that of Mr Wickens and the Applicant, was that in the Applicant’s original expressions of dissatisfaction about his SAR and his subsequent appeal, the complaints put at the forefront of his expressions of dissatisfaction had been the Box markings in his performance assessment in his existing role, and not the assessment of his suitability for promotion to higher or different grade employment.
In particular, Mr Underwood sought to attack the Tribunal’s apparent finding that the Applicant had indeed raised both issues in his own comments, when signing off the staff appraisal report on 5 June 1998 according to the usual procedure, when as they recorded it in paragraph 3.5 of their statement of reasons: 
3.5 “On 5 June 1998 the Applicant “signed off” his SAR – objecting to it on the grounds that while he had exceeded his targets (a fact which was not disputed) another AOR (Mr Wickens) who worked in another division at Croydon which had failed to achieve any of its targets had received a Box 2 overall rating.  The Applicant added that he considered that he had been treated less favourably in this regard and as regards promotion because he was of ethnic minority origin.”

13.	If the Tribunal were satisfied on proper evidence that the issue of the Applicant’s suitability for promotion had been raised by him at that stage, in addition to the issue of whether his Box ratings were fair, so as to be within the proper scope of the department’s internal reconsideration review and appeal processes from then on, it appears to us that it cannot be said that the Tribunal fell into error in regarding the case of Mr Wickens, (where it is common ground that the issue of promotability was raised by him and dealt with satisfactorily by the department within a matter of days) as a proper basis of comparison, so as to found the conclusion that there had been a difference in treatment between the two. 

14.	Everything therefore it appeared to us depended on whether the Tribunal’s apparent statement of fact in the second sentence of paragraph 3.5 represented a fair assessment of the evidence before them, or whether as Mr Underwood submitted it was not really based on any evidence before the Tribunal at all, and had therefore resulted in a complete misdirection by the Tribunal of themselves as to the basis of comparison they should have been considering.  

15.	Mr Underwood conceded that the issue of promotability had indeed been raised in specific terms at the later stages of the appeal process, at any rate from 5 October 1998 onwards, as specifically held and recorded by the Tribunal in paragraph 3.9 of the stated reasons. But he contended that it had not for practical purposes become a live issue in the internal reconsideration and appeal processes at all before that date, and certainly had not been a live issue requiring consideration on 17 September 1998 when the appeal decision which was the basis of the Tribunal’s finding had been reached.  

16.	In support of his submission, he put before us the staff appraisal report document itself which had been in front of the Tribunal; and said that the recollection both of the solicitors and departmental officials instructing him and indeed, his own recollection, having appeared at the hearing himself, was that there had not been separate evidence put before the Tribunal to show that there had been a specific complaint about the promotability assessment in issue, before it was raised specifically in the further appeal process on 5 October.  Accordingly, Mr Underwood submitted that that had been too late for the promotability issue to be used by the Tribunal as a proper basis of comparison with the case of Mr Wickens, where it had obviously been dealt with, with more alacrity.  

17.	We have looked at the standard appraisal report form itself, which was in evidence before the Tribunal and was at pages 170-179 inclusive of the Tribunal bundle.  It is true that the Applicant’s comments in the box for ‘job holders comments” included on the form and signed by him on 5 June 1998, dealt mainly with his dissatisfaction at having received a box (3H) grading and not a box (2), by comparison with Mr Wickens who had received a box (2). However it does also contain a reference to the Applicant’s prospects of promotion and the way that these had been assessed in the form itself, in the following terms:
“I have accepted that although I have been an AOR (C) Senior Examiner for almost 12 years, I will never get promotion to AOR (B) because I know that my character/personality does not fit into the ideal requirements of what the senior managers of the service deem appropriate.  That is why I worked extremely hard to achieve a Box (2) marking, so at least I can get increased performance related pay.  Please do not think that I am using the race discrimination card as sour grapes but what other explanation can there be for the unfavourable treatment handed down to me.  I deal fairly when reporting on my staff so I expect the same.  Terry, I would appreciate your written feedback on the matters I have raised.  Due to pressures of work, I have only had about 60 minutes to write my comments, so I apologise for any errors made.”  
18.	With an unrepresented employee, and given the circumstances in which the staff appraisal report comment boxes are filled in, we are not satisfied having looked at the terms of the Applicant’s own comments on that form, that it is right to make such a clear dichotomy as Mr Underwood has urged on us between the issues of the performance assessment in the boxes and the assessment of the jobholder’s suitability for promotion to higher grades.  

19.	These issues are all dealt with in (separate but consecutive) sections of the same form; section 3 being an assessment of performance and section 4 being promotion assessment, before the space given for the jobholder’s comments and the interviewer’s “action record”, about the further steps to be taken to deal with any scope for improvement disclosed by the previous sections shown on the form. We have also noted in the bundle, the further document described as the: “Personal achievement plan.” which in accordance with the department’s normal processes, follows the making of the staff appraisal report and (in the nature of a “plan”) is not concerned with past performance alone.   

20.	Accordingly, we have concluded that the Tribunal were entitled to find as they did in the second sentence in paragraph 3.5 that what the Applicant was dissatisfied about, and suspected might have something to do with his ethnic minority origin, extended both to the assessment of his existing performance rating and his existing job, and also his suitability for promotion; and further that the concern he recorded in the comments on the form of 5 June 1998 that he considered himself to have been treated less favourably extended to both of these matters, and not only the box rating.  It is in our judgment not right to construe comments made by employees on these forms in the same way as formal appeal documents such as those subsequently lodged to the Tribunal, where of course the grounds of complaint may be gone into and spelt out in a good deal more specific terms.  

21.	Further, it appears to us reasonable that an internal appeal process, or an investigation into allegations of dissatisfaction expressed in less formal ways after a staff appraisal report assessment, should be regarded by an employer as properly including the issue of promotability as well as that of the Box markings after a staff appraisal procedure of this nature. We consider it reasonable for the Tribunal so to have regarded the scope of the appeal procedure embarked on by the employer in this case after June 1998 and culminating in the decision of Mr Cramp on 17 September 1998. That appears to us to be a justifiable view by the Tribunal, whether or not the two issues were initially raised by the individual, unrepresented as he was, in quite such specific terms as he later did in the course of the formal legal proceedings before the Tribunal itself.  

22.	Therefore, we have concluded that the Tribunal were entitled to reach the conclusion they did that the treatment of Mr Wickens’ expressions of dissatisfaction about his own staff appraisal report in 1995, even though not themselves leading to a formal appeal process within the department, was a fair basis of comparison; and consequently, that the employer’s failure to address all the potential issues arising from the staff appraisal report adequately, (that is including promotability as well as the Box markings) in the course of the appeal procedure on 17 September 1998 was capable of amounting to less favourable treatment, as on the facts the Tribunal having heard the evidence, held that it had done in this particular case.  

23.	We do not for our part find any difficulty in understanding the Tribunal’s explanation of the reasons why, on that basis, they concluded that there had been a difference in treatment between Mr Wickens’ case which was dealt with expeditiously, and Mr Johnson’s case, which on their findings was not dealt with expeditiously: in the sense that all potential issues were not dealt with satisfactorily in the appeal procedure culminating on 17 September 1998, but only subsequently.   
24.	The Tribunal found in paragraph 4.3 of the decision, to which we have already referred, that the explanations given by the employer for this difference in treatment were unsatisfactory.  That was a finding of fact on the evidence before them and (while it is not for us to say whether we would ourselves have drawn the same inferences on the evidence had that factual issue been before us) we have concluded that the Tribunal’s conclusions on the evidence as recorded by them, having regard to the lack of any satisfactory explanation for the apparent difference in treatment, were within what a reasonable Tribunal on the evidence as recorded by them could have found.  

25.	It must therefore follow that we have not been satisfied that there is an arguable ground to warrant sending this case forward for a full hearing before the Employment Appeal Tribunal on the main issue of discrimination, as determined by the Tribunal in its decision recorded in the reasons of 11 January 2000. We therefore dismiss the appeal in respect of that decision.  

26.	When it comes to the second decision, recorded in the reasons of 10 February 2000 which was the decision making an award of compensation for the one item of discrimination which had been found to have occurred, we take a different view.  As expressed, the decision was to award compensation for: 
“Injury to the Applicant’s feelings of £5,000 plus £2,500 aggravated damages making a total of £7,500.”  	
We have been satisfied by Mr Underwood’s submission, that there are arguable grounds here to warrant us directing that on this the matter should forward to a full hearing before the Employment Appeal Tribunal, to consider whether the Tribunal’s fairly shortly stated reasons under the heading: 4.3 “Injury to Feelings, Aggravated and Exemplary Damages”  at pages 17-18 of the appeal bundle  demonstrate that they must either have misdirected themselves in the approach to the assessment and award of damages for injury and aggravated damages, or alternatively whether the amount of the award in this case could not have been reasonably justified on the evidence actually before the Tribunal.  

27.	On that ground alone therefore, we will direct that this case should go forward to a full hearing, so that Mr Underwood on behalf of the Insolvency Service can argue for the setting aside of the Tribunal’s assessment or award of the damages that they held the Applicant to be entitled to.  We will give him leave to amend his Notice of Appeal, since the grounds in the existing paragraph 6.3 on page 6 of our appeal bundle are fairly shortly stated. We consider it would be advantageous, both for the parties and also for the Employment Appeal Tribunal itself, to have the benefit of an amplified statement of the grounds on which it is sought to set aside that award of damages, by raising as separate issues:
1)	The question of a potential misdirection by the Tribunal in its basic approach, 
2)	The question of whether the reasons they gave for arriving at the figures they did were adequately expressed or not; and
3)	Thirdly, the question (shortly described as “perversity” in the existing form) of whether the figures arrived at were sustainable, having regard to the evidence before the Tribunal itself.  

28.	We therefore give leave for the Notice of Appeal to be amended in that way and on that issue alone, we direct that the case should go forward to a full hearing before the Employment Appeal Tribunal.