Appeal No. EAT/1076/01 SM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 19 November 2002

Before
HIS HONOUR JUDGE PETER CLARK
MS S R CORBY
MISS S M WILSON

MRS J E DERBYSHIRE & OTHERS	APPELLANT

ST HELENS METROPOLITAN BOROUGH COUNCIL	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR DAMIEN BROWN
(of Counsel)
Instructed by:
Messrs Thompsons Solicitors
Martins Building
Water Street
Liverpool L2 3SX	
For the Respondent	MR SIMON GORTON
(of Counsel)
Instructed by:
St Helens Borough Council
Town Hall
Corporation Street
St Helens
Merseyside WA12 8LY	

HIS HONOUR JUDGE PETER CLARK

1	This is an appeal by Mrs Derbyshire and 36 others against the majority Decision of the Employment Tribunal sitting at Liverpool under the chairmanship of Mr D Reed, dismissing their complaints of unlawful discrimination by way of victimisation, contrary to the Sex Discrimination Act 1975 (SDA), brought against their employer, the Respondent, St Helens Metropolitan Borough Council.  That reserved decision was promulgated with Extended Reasons on 30 July 2001.

Background

2	In 1998 510 catering staff employed by the Respondent presented equal pay claims to the Employment Tribunal against the Respondent (the Equal Pay complaints).  Amongst those Applicants were these Appellants.

2	The majority of those claims, 470 in all, were compromised without determination by the Employment Tribunal, by payment of a lump sum by the Respondent to the majority.

3	Some 40 of the original Applicants continued their claims, including these Appellants.

4	On 19 January 2001 the Respondents’ Acting Director of Environment Protection, Paul Sanderson, wrote two letters to staff.  The first letter was addressed individually to each of the remaining 40 Applicants who had not agreed to compromise their claims; the second, longer letter, was addressed to “All Catering Employees”.

5	In the first letter Mr Sanderson urged each remaining Applicant to consider the original settlement offer, which remained open.  In his second letter, a copy of which was sent to these Appellants, he stated that the impact of the claims continuing to the Tribunal and being successful would result in costs which could not be borne by the Council or service users.  He indicated that the costs implications to the Council of a successful outcome for the Applicants before the Employment Tribunal would be such that the Catering Service would have to be drastically reduced to cover only children entitled by law to a free school meals service, requiring only a small proportion of the existing work force.

6	Following receipt of these letters the Appellants commenced victimisation proceedings by Originating Applications presented on 1 February 2001 (the Victimisation Complaints).  At that time the outstanding Equal Pay complaints were listed for hearing on 19-20 March 2001.  They were heard and the Appellants were successful.

7	The Victimisation Complaints were resisted.  The matter came before Mr Reed’s Employment Tribunal on 24 March 2001, leading to the majority decision now under appeal.

Victimisation – The Law

8	It is, we think, highly significant that the Employment Tribunal heard and determined these complaints at a time when the most recent statement of the law on victimisation by the Court of Appeal was to be found in Chief Constable of West Yorkshire Police v Khan [2000] IRLR 324.  Judgment was delivered in that case on 24 February 2000.  The leading judgment, with which Hale LJ and Lord Mustill agreed, was delivered by Lord Woolf MR.  On 24-25 February 2000 a different division of the Court of Appeal, Peter Gibson LJ, Mantell LJ and Sumner J heard an appeal in Brown v TNT Express Worldwide (UK) Ltd.  In giving the leading judgment in that case on 4 April 2000, with which Mantell LJ and Sumner J agreed, Peter Gibson LJ elected to follow the Court of Appeal’s very recent approach in Khan.

9	In their Reasons (paragraph 13) the Employment Tribunal refer to the case of Khan, the majority purporting to distinguish that case on its facts.  It must follow, as a matter of chronology, that although the case reference is not given for Khan the Employment Tribunal must have been referring to the Court of Appeal decision, which in any event upheld our approach at the Employment Appeal Tribunal in that case.

10	Khan later went to the House of Lords.  Speeches were delivered on 11 October 2000: see [2001] IRLR 830.  The employer’s appeal was allowed and the decision of the Employment Tribunal, upheld by the Employment Appeal Tribunal and the Court of Appeal, was set aside.  Sergeant Khan had not suffered victimisation within the meaning of the Race Relations Act 1976.  It is clear that no material distinction exists between victimisation under that Act and the SDA with which we are concerned in the present case.

11	In considering this appeal we must approach the relevant statutory provisions in accordance with the guidance given by the House of Lords in Khan and not that of the Court of Appeal in that case.

12	SDA provides, so far as is material:

4	Discrimination by way of victimisation
(1)	A person (“the discriminator”) discriminates against another person (“the person victimised”) in any circumstances relevant for the purposes of any provision of this Act if he treats the person victimised less favourably than in those circumstances he treats or would treat other persons, and does so by reason that the person victimised has –  
(a)	brought proceedings against the discriminator…under…the Equal Pay Act 1970;
(c)	otherwise done anything under or by reference to this Act or the Equal Pay Act 1970…in relation to the discriminator or any other person.
5	Interpretation
(1)	In this Act – 
(a)	references to discrimination refer to any discrimination falling within sections 1 to 4; and
(b)	references to sex discrimination refer to any discrimination falling within section 1 or 2.
6	Discrimination against applicants and employees
(2)	It is unlawful for a person, in the case of a woman employed by him at an establishment in Great Britain, to discriminate against her – 
	(b)	by…subjecting her to any other detriment.”

13	In approaching the question of statutory victimisation in Khan the House of Lords identified three ingredients:

(1)	“Circumstances relevant for purposes of any provision of this Act” (section 4(1)) is a reference to circumstances in respect of which discrimination, (here victimisation (section 5(1) (a)) is unlawful (here, ‘the Detriment Question’).

(2)	Less favourable treatment, requiring a comparison between the treatment afforded to the complainant and that afforded to the appropriate actual or hypothetical comparator (‘the Comparator Question’).

(3)	“By reason that”; was the Respondent’s treatment of the Applicant complained of by reason that the Applicant had brought proceedings under the Equal Pay Act (‘the Causation Question’)?

14	In explaining how those questions should be approached on the facts of that case, the House of Lords held in Khan:

(1)	The Detriment Question

On the facts, DS Khan was refused a reference when other employees would normally receive one; he had suffered a detriment.  The test formulated by Brightman LJ in Ministry of Defence v Jeremiah [1979] IRLR 436, 440, that

“a detriment exists if a reasonable worker would or might take the view that the [treatment] was in all the circumstances to his detriment”

was expressly approved by Lord Hoffman (paragraph 53).

(2)	The Comparator Question

The issue, in Khan, was whether the appropriate comparator, being a person who has not done the ‘protected act’ (i.e. bringing proceedings under the relevant legislation), was an employee who had brought other employment-related proceedings, but not discrimination proceedings, against the employer (‘the Employer’s Submission’) or an employee who had not brought discrimination proceedings (‘the Employee’s Submission’).  Their Lordships preferred the latter approach, upholding that of the Court of Appeal below.

(3)	The Causation Question

Sergeant Khan had established the first two ingredients of the statutory tort of victimisation.  What of the third and final ingredient?  Was the less favourable treatment amounting to a detriment, by reason that he had done a protected act, namely bringing discrimination proceedings?

Here the House of Lords parted company with the Court of Appeal.  A simple ‘but for’ test, sufficient for the purposes of establishing direct race and sex discrimination (see James v Eastleigh Borough Council [1990] IRLR 288; Nagarajan v London Regional Transport [1999] IRLR 572) does not provide the answer to the third question posed by the victimisation provision.  A different causal question is here raised.  To used the Latin tags, the bringing of proceedings may be the causa sine qua non; however the question is whether the protected act is the causa causans, the motive or real reason for the treatment (per Lord Scott, paragraph 77).

15	In Khan Counsel for the Applicant submitted that the Court of Appeal approach contained in the judgment of Bingham LJ in Cornelius v University College of Swansea [1987] IRLR 141, was incorrect.  That submission was rejected (see Lord Nicholls, paragraph 31; Lord Mackay, paragraph 46; Lord Scott, paragraph 59; Lord Hoffmann, paragraph 78).  Their Lordships in Khan drew a clear distinction between the bringing of proceedings and the existence of proceedings in train.

16	It was on this third question that Detective Sergeant Khan’s complaint failed.  The less favourable treatment complained of was not meted out to him because he had brought the proceedings; the existence of the proceedings influenced the Chief Constable’s decision not to give a reference.  The ‘causation’ ingredient was not made out.  It was on this point that the House of Lords differed from the Court of Appeal.

The Employment Tribunal Decision

17	The parties came prepared, following an earlier directions hearing to lead oral evidence but the Tribunal deemed that unnecessary.  Instead they proceeded to decide the case solely on the basis of Mr Sanderson’s two letters of 19 January 2001.  They were divided in the result.  The Employment Tribunal’s reasoning may fairly be described as economical.  There is a reference to section 4 SDA and the case of Khan, as we have earlier observed, then decided at Court of Appeal level only.

18	Dealing first with the reasoning of the majority, they found that the Appellants had done a protected act; they had brought proceedings under the Equal Pay Act.  No reference is made to a comparator.  They found (Reasons, paragraph 11):

“There could be no doubt that the purpose of the letters was to persuade (or pressure) the Applicants into compromising their claims on the terms already offered to them.”

19	It is not altogether easy to discern to what statutory issues the Tribunal considered those findings went.  We infer that the majority concluded (a) that the content and purpose of the letters, by pressing the Applicants, amounted to a detriment and (b) that treatment was by reason that the Applicants had done a protected act.  However, that is no more than supposition.  The Tribunal’s findings and reasoning on these two matters is not set out.
20	However they went on to find that that did not amount to less favourable treatment, purportedly distinguishing Khan on its facts and later invoking policy grounds and even justification for the Respondent’s actions.

21	The minority member, not identified, took a simple and straightforward approach.  The letters were written with a view to persuading the Applicants to compromise their claims, against the threat that if they did not there would be dire consequences for the catering service as a whole.  They were subjected to less favourable treatment.  The appropriate comparator was one who had not commenced proceedings at all; such a person would not have received such a letter.  The sole reason for the treatment was the fact that proceedings had been commenced by them.  The tests under section 4 SDA were satisfied.  The claim was made out.

The Appeal

22	In advancing this appeal Mr Brown submits that six errors of law are made out in the Tribunal’s majority decision.  Mr Gorton adds two further points which, in our judgment, go to undermine the integrity of this Tribunal’s decision.  We uphold all 8 submissions.  They are as follows:

(1)	The majority did not identify a comparator.

(2)	The majority considered the motives of the Respondent, referring to a lack of “malevolent intent”.  We accept that motive for the treatment complained of is not a material consideration for the Tribunal (see Nagarajan).

(3)	It followed, in Mr Brown’s submission, that having failed to identify a comparator no proper comparison was made for the purpose of the less favourable treatment question.

(4)	The Respondent was permitted to rely upon the argument that what was contained in the letters was a statement of fact.  That, we think, fails to address the question as to whether or not it amounted to less favourable treatment and a detriment to the Appellants.

(5)	The majority refer to policy grounds in support of their finding that there was no victimisation.  It seems to us that the question is one of statutory construction, not general policy.

(6)	The Tribunal ought to have permitted oral evidence to be called.  As indicated at the earlier directions hearing, both parties came prepared to call evidence but it appears were not permitted to do so by the Chairman.

(7)	The majority failed to identify the detriment suffered by the Appellants.

(8)	The Tribunal as a whole, based on the Court of Appeal decision in Khan, failed to address the causation question in accordance with the law as it has since been revealed by the House of Lords in Khan.

23	For these reasons it is common ground between Counsel and we agree that this decision cannot stand and must be set aside.  The appeal is allowed and the matter will be remitted to a fresh Employment Tribunal for re-hearing.  At that re-hearing evidence will be called.

24	The questions for the Tribunal on the next occasion, it seems to us, are these:

(1)	The treatment complained of is the sending of the two letters of 19 January 2001.  In sending those letters was the Respondent treating the Appellants less favourably than a person who had not brought and continued equal pay proceedings.  Did they suffer a detriment not suffered by their comparator?

(2)	If so, was that less favourable treatment by reason that the Appellants had brought and continued equal pay claims?  It is not enough that the existence of such proceedings influenced the Respondent’s decision to send those letters.  It must be shown that the reason for that decision was that the Appellants had brought and continued the proceedings.  Conscious motive or intention to treat the Appellants less favourably is not a material consideration.