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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Brennan v American Express Services Europe Ltd [2003] UKEAT 0623_02_1507 (15 July 2003) URL: http://www.bailii.org/uk/cases/UKEAT/2003/0623_02_1507.html Cite as: [2003] UKEAT 0623_02_1507, [2003] UKEAT 623_2_1507

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APPEARANCES

 

For the Appellant	MS K GALLAFENT (of Counsel) Instructed by: Messrs Mishcon de Reya Solicitors 21 Southampton Row London WC1B 5HS
For the Respondent	MR D SCOREY (of Counsel) Instructed by: Messrs Glovers Solicitors 115 Park Street London W1Y 4DY


 


THE HONOURABLE MR JUSTICE WALL

Introduction

1. This is Mrs Vanessa Brennan's appeal against the Decision of the Employment Tribunal held at London South on a total of fifteen days between 19 March and 15 October 2001, with a further three days (16 October, 1 and 2 November 2001) in Chambers. The unanimous Decision of the Tribunal was that Mrs Brennan's former employer, American Express Services Europe Ltd (abbreviated for convenience and for the purposes of this judgment to AMEX) had neither unlawfully discriminated against nor victimised Mrs Brennan on the ground of her sex. Furthermore, it had not unfairly dismissed her.
2. Mrs Brennan had been employed by AMEX as Strategic Product Manager, Corporate Purchasing Card, in the Marketing Department of AMEX's Corporate Services. She had instituted proceedings not only against AMEX, but also against her line manager Mr Michael Rutter, AMEX's Head of Marketing Corporate Services Europe. During the first nine days of the hearing (between 19 and 30 March) Mr Rutter, who resisted Mrs Brennan's claims of sexual discrimination and victimisation against him, took a full part in the proceedings and was represented by counsel. When the hearing adjourned on 30 March 2001, Mrs Brennan had given evidence and had called six witnesses, all of whom had been cross-examined. AMEX had also called four of the ten witnesses it eventually called. However, Mr Rutter had not given evidence nor had any of the witnesses who had made statements on his behalf been called.
3. Following the adjournment on 30 March 2001, there were negotiations between those advising Mrs Brennan and Mr Rutter's advisers which resulted in terms of settlement being agreed between them. The consequence was that when the hearing resumed on 1 October 2001, Mrs Brennan's application against Mr Rutter was dismissed on withdrawal. Mrs Brennan then went on against AMEX alone. However, neither side sought to call Mr Rutter, and he did not give evidence; nor were any of his witnesses called to give evidence.
4. These procedural aspects of the case are of importance, as an analysis of the pleadings and the manner in which the Tribunal went about its decision will both demonstrate. Unusually, this is a case in which the pleading are of particular importance, and we need to set out parts of them in detail.

The pleadings: Mrs. Brennan's claim

5. Mrs Brennan's original form IT1, initially dated 5 May 2000, was amended on 26 September 2000 following AMEX taking action against Mr Rutter. We propose, accordingly, to set out how the case presented itself to the Tribunal by reference to Mrs Brennan's amended form IT1, and both AMEX and Mr Rutter's amended responses.
6. In her amended grounds, Mrs Brennan said that she had been employed by AMEX from 1 April 1997 until 12 July 2000, when she claimed she had been constructively dismissed. At the time of her constructive dismissal, she had been on maternity leave since 20 September 1999.
7. From 21 September 1998, Mr Rutter had been Mrs Brennan's line manager. Her case was that since that date he had subjected her to a course of discriminatory conduct on account of her sex. She asserted that this became increasingly severe after she had notified him of her pregnancy and impending maternity leave on 29 March 1999.
8. Mrs Brennan asserted that AMEX was aware of Mr Rutter's discriminatory attitude and conduct and did not make any (or any sufficient) efforts to protect her. In addition, she alleged that AMEX and in particular its Corporate Card Europe operation was an institution:

"at which sexism permeates the upper echelons of management, where discriminators are immune from appropriate action if they are seen to be valuable to it, and women receive less favourable treatment than men."

9. She alleged that both AMEX and Mr. Rutter engaged in a continuing course of conduct, or practices of discrimination against her, on the grounds of her sex and her pregnancy, treating her less favourably than they would have treated a man. She also alleged that AMEX treated her less favourably than it would have treated other persons by reason of the fact that she had brought proceedings against it under the Sex Discrimination Act 1975. Mrs Brennan then proceeded to set out what are described as Particulars of Discrimination against Mr Rutter. These occupy some six pages, and we summarise them in the following way:-

(1) that in September 1998, Mr Rutter told her she was a young attractive female, which meant that she had limited credibility. She was told that the senior management team was very chauvinist, with all the senior management positions being held by men, and that she was going to have to work much harder than her male colleagues to prove herself.

(2) On 12 November 1998 she was due to make a presentation to the senior management team. On 11 November 1998, Mr Rutter came to her desk and said:

"are you ready for tomorrow? This is your one and only chance to prove yourself and get some credibility as a woman with the senior management team ……. as you know, there are not many women they rate"

(3) On 13 November 1998 she was lunching with Mr Rutter and other colleagues. The discussion touched on the Swiss attitude to women in the workforce, namely that women make up a very low percentage of the workforce. Mr Rutter was alleged to have commented:

"Sounds like a great place to me …. as far as I am concerned AMEX should move its headquarters to Switzerland as there are far too many women working for this organisation, especially in senior positions, .. is too hard to get things done."

(4) On 24 November 1998 during a conference meeting, Mr Rutter was alleged to have become enraged with an external consultant and shouted at both her and Mrs Brennan:

"let me tell you both now, no stupid little girl is going to tell me how to run this conference."

(5) On 2 March 1999, Mrs Brennan was promoted (largely, it appears, at Mr Rutter's instigation). Shortly afterwards, she was informed that the Vice President Head of Corporate Purchasing Card UK, Mr David Knowles, had said, on learning of the her promotion that she:

"looks good and is very friendly, but I don't think she has the intellect to handle this role."

(6) On 29 April 1999 Mrs Brennan informed Mr Rutter that she was pregnant. He advised her to keep the pregnancy a secret, as the senior management was very chauvinist. He said to her:

"I thought you were a career woman, I was obviously wrong."

(7) Mrs Brennan alleged that after informing Mr Rutter of her pregnancy, her attitude towards her changed markedly. He was constantly rude and aggressive, and ceased giving her the support she required in her new role. Whereas previously he had promised that he would arrange meetings with Laurent Gampel, the Head of Corporate Purchasing Card Europe, and that this was a key to success in her new role, he frequently cancelled meetings arranged with Mr Gampel, with the consequence that Mrs Brennan never met him.

(8) At a meeting on 6 April 1999, Mrs Brennan alleged that Mr Rutter had criticised her work and undermined her in front of an external consultant. Later, the consultant told her that she did not understand Mr Rutter's attitude to her work and stated that she believed Mr Rutter had a personality issue with Mrs Brennan.

(9) On another occasion in April 1999, Mrs Brennan alleged that Mr Rutter had said to her:

"Oh and by the way, one day soon you need to tell me how you played me so well into giving you the Corporate Purchasing Card job when you knew you were pregnant. I'm very impressed with how you manipulated the situation.".

She alleged that he made similar comments to the same effect on two other occasions. She also alleged that he told her at a meeting on 6 April that by telling senior management about her pregnancy she was making the biggest mistake of her career.

(10) Mrs Brennan alleged that throughout her pregnancy Mr Rutter continued to make her work extremely long hours, up to eighty hours a week. He ignored her protests, despite her telling him that the stress she was putting her under had almost led to the loss of her unborn child. She alleged that he actually increased her workload thereafter, and maintained his aggressive attitude.

(11) On or about 5 May 1999 Mr Rutter received what is known as an "AMEX Climate Survey" result (an appraisal of senior management) which reflected very unfavourably on him. He called her into his office and told her, she said, that she (amongst others) was to blame for the result as she was moody and difficult to work with. He also blamed the Communications Team on the basis that this was made up predominately of women.

(12) Mrs Brennan alleged that on 11 May 1999 she nearly collapsed at her desk with stomach pain and exhaustion. She told Mr Rutter that she had worked long hours the previous day and felt ill and was going home to rest. Mr Rutter responded that he did not care where she worked but that the work must be done.

(13) Sometime in June 1999 when Mrs Brennan was working late with another pregnant employee, Mr Rutter boasted to the Vice President of the Strategic Resource Management Corporate Services Europe, Mr James Crotty, that out of his staff of approximately twenty, the only employees working late were those who were pregnant.

(14) Towards the end of her pregnancy Mr Rutter, Mrs Brennan asserted, undermined her position within AMEX by informing her colleagues that she would not be returning to work after maternity leave.

(15) When, on 3 January 2000, Mrs Brennan told Mr Rutter that she intended to take her full maternity leave entitlement and would not be returning early, that this was inconvenient as she was expected back at work the following week.

(16) On 7 February 2000, Mrs Brennan says that Mr Rutter reduced her appraisal rating which had previously been agreed with her in July 1999 to:

"reflect the fact that you have been on maternity leave".

This was a lower grade than she had ever received in the course of her employment with AMEX.

(17) On 7 February 2000, Mr Rutter also said to Mrs Brennan:

"I have aged about 60 years since you went on maternity leave …… you have placed an awful lot of pressure on me and the rest of the team while you have been on maternity leave ….. never again."

(18) Mrs Brennan also alleges that both Mr Rutter and AMEX made efforts to fill her position while she was on maternity leave and notwithstanding the fact that she was due to return in May 2000.

(19) On 25 February 2000 Mrs Brennan was told that Mr Rutter had informed an outside supplier that the only way to keep his staff was to sterilise them.

10. Mrs Brennan also made a number of allegations of discrimination against AMEX. She said, firstly, that a number of AMEX's employees who reported to Mr Rutter or worked with him, had complained about his antisocial and sexually discriminatory behaviour, but that AMEX had failed to take appropriate action. This failure, she alleged, allowed Mr Rutter the opportunity to discriminate and continue discriminating against Mrs Brennan on account of her sex. Mr Rutter boasted that whatever he did, senior management would support him because he was "producing the numbers". She alleged that Mr Crotty had told another employee, Monique Herne, when discussing Mr Rutter's treatment of employees, that he, Mr Crotty, had to balance

"good v bad, good for the company versus bad for the employees"

11. Mrs Brennan also alleged that despite the fact that AMEX had been aware of Mr Rutter's antisocial and discriminatory behaviour and had sent him to see a company of business psychologists, AMEX firstly had not disciplined Mr Rutter; secondly, it did not (or did not properly) put in place adequate protection for Mr Rutter's female team members; thirdly it did not, or did not properly supervise Mr Rutter; fourthly, it awarded Mr Rutter high appraisal ratings and, fifthly, awarded him undeserved bonuses and stock options.
12. Mrs Brennan also argued that the 1998 and 1999 Employee Surveys at AMEX indicated that female employees were significantly less satisfied than male employees. She submitted that this situation was not properly addressed by AMEX, and that when the Head of Corporate Services Europe was told about the 1998 Employee Survey, he said:

"so all I need to do is fire all the women and we will get good survey results".

13. Mrs Brennan also alleged that not only did Mr Rutter get good appraisal ratings, despite the complaints made about him by female members, but that as a general rule, men unjustifiably received better appraisal ratings than women. She alleged that there were a disproportionately small number of job-share or part-time working arrangements at management level in the Corporate Services Europe Division of AMEX. She further alleged that when she initially complained about Mr Rutter to Mr Crotty, the latter suggested that she should change roles rather than Mr Rutter. She alleged that both in AMEX generally and in Corporate Services Europe, men were comparatively better remunerated by way of bonuses and stock options than women, and that men ascended the corporate ladder quicker than women. She then made the following allegation:

"The allegations made by Mrs Brennan against AMEX were confirmed by an independent report commissioned by AMEX which also made a finding which alluded to a culture of sex discrimination within AMEX. However, instead of admitting knowledge of, or concern about the problem, acknowledging some culpability and attempting to deal with the issue as a reasonable employer would have done, AMEX victimised Mrs Brennan. It ignored and denied any culpability on its part and attempted to focus all blame on Mr Rutter and in doing so chose to deny events that took place in an attempt to protect its legal position. This, in addition to AMEX's failure to agree to an unconditional mediation in an attempt to resolve the matter, and the failure to pay Mrs Brennan a Return to Work Bonus of approximately £900, constituted victimisation of Mrs Brennan and fundamentally breached the duty of trust and confidence owed to her as an employee which she accepted by letter from her solicitors dated 12 July 2000."

14. Accordingly, Mrs Brennan claimed that both Respondents discriminated against her, contrary to sections 6(2)(a) and (b) of the Sex Discrimination Act 1975 by virtue of Mr Rutter's actions, for which AMEX was vicariously liable. She also alleged that AMEX was liable in its own right for failing to prevent the discrimination occurring and operating in such a manner that women were treated less favourably than men. She further alleged victimisation against AMEX, by virtue of its treatment of her after she had brought proceedings against AMEX, and that it had constructively dismissed her.

The pleadings: AMEX's grounds of resistance

15. In its amended grounds of resistance, AMEX admitted that it had employed Mrs Brennan from 1 April 1997 until 12 July 2000. It specifically denied that it had constructively dismissed her, asserting that Mrs Brennan resigned from her position voluntarily, with effect from 12 July 2000.
16. AMEX denied that Mrs Brennan had been subjected to a course of discriminatory conduct by Mr Rutter and denied that it was aware of acts committed by Mr Rutter at the time they were committed. Furthermore, it pleaded in some detail to Mrs Brennan's allegation that it had not made, or any sufficient, efforts to protect her from Mr Rutter's conduct, and that it was an institution in which sexism permeated the upper echelons of management or where discriminators were immune from appropriate action. It denied that it was an institution in which women received less favourable treatment than men on the grounds of sex, and specifically denied the allegation that it had treated Mrs Brennan less favourably on the ground that she had brought proceedings against it under the 1975 Act.
17. AMEX then set out in its pleading the detailed steps and measures it had taken to ensure that all its employees were aware of its equal opportunities policies, and the way in which those policies were enforced. These included a code of conduct which was distributed to all employees; a handbook, an office of 'ombudsperson' who was available to receive all complaints and comments, independent and distinct from AMEX's Human Resources Department, 'Blue Box' values containing positive statements with regard to equality within the working environment, a leadership feedback process and an annual employees' survey. There were also self-assessments.
18. AMEX asserted that no other complaints of sexual discrimination had been brought against Mr Rutter, with the result that despite the above checks and balances being in place, AMEX was not alerted to any possible and/or potential discriminatory conduct by Mr Rutter.
19. AMEX asserted that it was only by a letter dated 28 April 2000 sent to Mr Petruccelli, AMEX's President of the Travel Services Group based in France, that Mrs Brennan formally raised, for the first time, allegations of sexual discrimination to which she alleged she had been subjected by Mr Rutter. It asserted that Mr Petruccelli responded immediately on 3 May 2000, and gave Mrs Brennan four assurances, namely;

(1) that her allegations were being treated very seriously;

(2) that he would activate a full and thorough internal investigation of the situation to understand all aspects and to determine the appropriate next steps;

(3) given the seriousness of the allegations, the internal investigation would be conducted by an independent third party consultancy, thereby ensuring objectivity;

(4) that Mrs Brennan would not suffer any detriment as a result of raising the allegations.

20. AMEX asserted that on 2 May 2000, it had appointed one Catherine Parsons, of The Employment Law Advantage (independent consultants) to investigate Mrs Brennan's allegations of discriminatory conduct by Mr Rutter. Ms Parsons completed her internal investigation by 12 June 2000, when her report was passed to AMEX. In her report, Ms Parsons identified forty four complaints made by Mrs Brennan in her letter of 28 April 2000, of which, Ms Parsons found eight established. There are variations in the dates of the incidents, but the findings of Ms Parsons upon which Mrs. Brennan relied (she did not rely on all of them) are recorded in paragraph 9 of this judgment and are those which we have summarised in sub-paragraphs (1), (2), (5),(6),(9) and (16).
21. In its pleading, AMEX admitted that Mr Rutter had spoken the words set out in the eight allegations. However, it denied that Mr Rutter's views about AMEX's senior management, and in particular, its alleged chauvinism, were correct, and asserted that in giving his views, Mr Rutter was acting without any factual basis and/or without any authority or permission from AMEX. Secondly, in so acting, Mr Rutter was acting in breach of his contract of employment and contrary to AMEX's equal opportunities policy, as well as the measures and guidelines which it had put in place to ensure compliance with that policy.
22. AMEX asserted that following receipt of Ms Parsons' report, Mr Petruccelli wrote to Mr Rutter on 14 June 2000, informing him that it was AMEX's intention to dismiss him without notice on grounds of gross misconduct, subject to meeting with him to hear any representations that he may wish to make as regards Ms Parsons' findings. Mr Rutter had a right of appeal against this decision, but in the event he resigned his employment with AMEX on 20 July 2000 with immediate effect.
23. It is, we think, important to note that AMEX, in its amended Form IT3, specifically admitted and asserted, as found by Ms Parsons, that Mr Rutter had been guilty of eight distinct incidents of sexual discrimination against Mrs Brennan, although it denied that those events amounted to a course of conduct and/or practice on his part. AMEX plainly took the view that Mr. Rutter's conduct warranted summary dismissal. It is also important to note AMEX's denial that it was responsible for those incidents which, it asserted, were carried out by Mr Rutter despite the extensive measure taken by AMEX to ensure that discriminatory conduct was neither undertaken nor suffered.
24. For the purposes of this judgment, it is not necessary for us to set out the detail of AMEX's pleading in relation to each and every allegation made. The structure of its case was, however, perfectly clear. AMEX had commissioned the Parsons report. It accepted the findings of that report. It was, accordingly, constrained to admit that acts of sexual discrimination had been committed by Mr Rutter. It, however, was not responsible for Mr Rutter's acts because it had put in place stringent and careful procedures designed to prevent acts of sex discrimination, and was, accordingly, entitled to the defence available under section 41(3) of the 1975 Act namely:

"In proceedings brought under this Act against any person in respect of an act alleged to have been done by an employee of his it shall be a defence for that person to prove that he took such steps as were reasonably practicable to prevent the employee from doing that act, or from doing in the course of his employment acts of that description."

The pleadings: Mr. Rutter's case

25. On the basis of the Amended Forms IT1 and IT3, therefore, there was no issue as between Mrs Brennan and AMEX on those elements of Mr Rutter's behaviour which related to a number of specific findings made against him by Ms Parsons, which AMEX admitted. However, in his pleadings, Mr Rutter specifically denied that he had spoken any of the discriminatory words alleged. He denied that his behaviour had been anti-social or discriminatory towards Mrs Brennan or to other female colleagues. He said he had not been previously subject to a complaint of sexual discrimination. His case was that he had been used as a scapegoat by AMEX: hence his resignation.

Events after the settlement of Mrs. Brennan's claim against Mr. Rutter

26. The settlement of Mrs Brennan's claims against Mr Rutter, and his withdrawal from the proceedings, undoubtedly shifted the focus of the Tribunal's enquiry. Unfortunately, however, it does not seem to us that the evidential status of the admissions made by AMEX about Mr Rutter's conduct was fully or properly addressed. No doubt, in what can legitimately in this case be described as the heat of battle, the matter was either overlooked or, at best, mentioned only in passing.
27. If Mrs Brennan had not settled against Mr Rutter, and if the case had gone its full length, the Tribunal would undoubtedly have had to have made findings of fact and credibility in relation to the allegations made by the claimant against Mr Rutter after hearing evidence from Mr. Rutter and his witnesses. In that event, it was accepted at the Bar in argument before us, that AMEX could then properly have taken the stance that whilst, as a matter of honour, it had regarded itself as bound by the findings of Ms Parsons' report, and had dismissed Mr Rutter on the strength of them, those findings were not, as a matter of law, binding on the Tribunal. Accordingly if, as a result of the forensic process, the Tribunal were to find, having heard all the witnesses, that Mrs Brennan's allegations lacked credibility, and that the remarks found by Ms Parsons to have been made by Mr Rutter were not said, it would have been open to AMEX to invite the Tribunal to release it from the admissions it had made in the pleadings. It further seems to us, that, in this hypothetical situation, that application would have stood a reasonable prospect of success At the very lowest, however, the status of Ms Parsons' report, the impact of any contrary findings by the Tribunal, the status of AMEX's admissions and AMEX's capacity to resile from them would have formed the subject of submissions to, and an adjudication by the Tribunal.
28. Admissions made in pleadings (in this case the amended form IT3 filed by AMEX) are important. They are designed to inform the Tribunal that certain facts are not in dispute between the parties and that, accordingly, judicial findings about them are unnecessary. Accordingly, if a party wishes to advance a case at a hearing which is contrary to admissions which it has made, it either requires the permission of the Tribunal to do so, or, at the very least, needs to make it crystal clear that the admissions are being withdrawn and that the opposite party and the Court may no longer rely upon them.
29. What happened in the instant case - and forms the principal basis of Mrs Brennan's appeal - is that the Tribunal proceeded to examine each and every allegation made by Mrs Brennan and, in each and every case, went on to find that it was not made out. At no point does it make a specific finding as to Mrs. Brennan's credibility: Mrs. Brennan's evidence, it appears, failed to satisfy the Tribunal on the balance of probabilities that any of the relevant incidents occurred. At no point, however, does the Tribunal address the fact that within the Parsons report there were allegations which were not only accepted as proved on the balance of probabilities by Ms Parsons, but admitted by AMEX, not only to have happened, but to constitute acts of sexual discrimination. The Tribunal referred to the Parsons report once only and in the following terms:

"[AMEX] had accepted and adopted the conclusions of an independent investigation it had commissioned into [Mrs Brennan's] complaints. The Tribunal has made its own findings of primary facts and has not relied on the report"

30. For Mrs Brennan, Ms Kate Gallafent complained that by dealing with the matter in this way, the Tribunal failed to distinguish between the status of the Parsons report before the Tribunal and the status of the formal admissions made by AMEX, which reflected the findings of the report. As to the former, it was not in dispute between the parties that the Parsons report was not, of itself, binding upon the Tribunal so as to preclude the Tribunal reaching a different view as to the primary facts. In respect of the latter, however, absent some form of "release" of AMEX by the Tribunal from those admissions, AMEX's formal admissions were binding on the parties and on the Tribunal.
31. Ms Gallafent submitted that in order for AMEX to be able to resile from formal admissions (or for it to be "released" from those admissions) it would be necessary for there to have been:-

(1) an application to the Tribunal by the AMEX for permission to resile/be released;

(2) the opportunity afforded to both parties to make submissions on that application;

(3) a reasoned determination of the basis upon which the Tribunal allowed or refused the application, the Tribunal having directed itself to the relevant authorities as to when a party should be allowed to resile or be released from an admission.

32. In relation to the status of admissions and a party's capacity to resile from them, Ms Gallafent relied on the decision of the Court of Appeal in Gale -v Superdrug Stores PLC [1996] 1 WLR 1089 (Gale). This was a case in which insurers admitted liability in correspondence for personal injuries suffered by the plaintiff. When the matter did not settle, the plaintiff instituted proceedings to prevent the claim becoming statute-barred. The defendant thereupon lodged a defence denying all liability and pleading contributory negligence. A district judge granted the plaintiff's application for the defence to be struck out, and the judge dismissed the defendant's appeal, holding that the defendant's withdrawal of their admission of liability had caused the plaintiff prejudice by reason of delay and disappointment. The Court of Appeal (by a majority) allowed the defendant's appeal.
33. It was common ground between the parties in Gale that the discretion conferred by what was then Order 27 Rule 3 was wide enough to allow the Court to entertain an application by the Defendant to resile from the admissions made. The test adopted was that enunciated by Ralph Gibson LJ in the unreported case of Bird -v- Bird's Eye Walls Ltd (The Times 24 July 1987), which was in these terms:

"When a defendant has made an admission the Court should relieve him of it and permit him to withdraw it or amend it if, in all the circumstances, it is just to do so, having regard to the interests of both sides and the extent to which either side may be injured by the change in front"

34. Giving the first judgment in Gale, Waite LJ stated that the discretion to permit withdrawal of an admission was a general one in which all the circumstances had to be taken into account, and a balance struck between the prejudice suffered by each side if the admission was allowed to be withdrawn (or made to stand as the case may be). Late retraction of admissions was not something the Courts should encourage. But where it was sought to withdraw an admission, what the party resisting the retraction of the admission had to show was clear and cogent evidence of prejudice, before the Court could be persuaded to restrain the privilege which every litigant enjoyed - a freedom to change his mind.
35. What happened here, Ms Gallafent argued, was that the Tribunal did not invite argument on the point, and nowhere in its Decision did it indicate that it had considered and determined the issue of whether or not it was appropriate to release AMEX from its admissions. This, she submits, was an error of law. Furthermore, she submits that it was of substantial prejudice to Mrs Brennan, who was entitled to rely on the admissions made by AMEX, and that at the very lowest was relieved of their benefit without the opportunity of addressing the Tribunal on the point.
36. The matter is not helped in the instant case by the fact that submissions were dealt with by both counsel, with commendable industry, producing very substantial closing submissions in writing for the Tribunal, to which they then spoke only briefly. From the limited extracts which we have been shown, it is apparent that Mr Scorey's submissions on behalf of AMEX ran to more than one hundred pages, and that those of Ms Gallafent were likewise lengthy. Ms Gallafent pointed out that in a footnote to paragraph 36 of her submissions, she submitted this:

"Whilst it is of course correct that this Tribunal is not bound by the findings in the Catherine Parsons report, it is not the findings of discrimination in that report which bind the Tribunal, rather, it is the express formal admission by AMEX that those 9 incidents amounted to sex discrimination. At all times it would have been open to AMEX to not admit or deny these incidents, thereby leaving them as live issues before this Tribunal. However, having chosen to admit that these acts occurred and were discriminatory in order to resile from this submission they would require the permission of the Tribunal to amend their Amended Grounds of Resistance"

37. In answer to this ground of appeal, Mr Scorey submitted that when the hearing resumed on 1 October 2001, the matter was raised with the Tribunal. A note by those instructing him reads as follows:

" "[The Tribunal] must make findings of fact and whether it believes [Mrs Brennan]."

"Parsons report is irrelevant as [the Tribunal] has to make up its own mind"

"[Ms Gallafent] made great weight that AMEX admitted it was bounded [sic] as findings of Parsons report

T not bound by Parsons report

T may decide alleged downgrading not discrimination. Parsons wrong to find it discrimination". "

38. Ms Gallafent, however, pointed out that even in his final submissions, AMEX was not seeking to resile from its admission of the findings made in the Parsons report. She pointed out that several times in the extract from the submissions which has been shown to us. Mr. Scorey says in terms that AMEX accepted the particular findings of the Parsons report and "has never sought to resile" from that position. It is, however, equally fair to say that in paragraph 19 and 20 of those submissions, Mr Scorey said:

"19 Mrs Parsons was not legally qualified. She did not view the totality of the evidence presented to the Tribunal, nor did she have the benefit of seeing that evidence tested under cross-examination. It may be that certain "findings" of discrimination do not withstand legal scrutiny and do not and/or could not amount to discrimination. Whether that is the case or not is a matter for the Tribunal whose investigation and findings are neither prescribed nor limited by the Parsons' Report. It creates no issue estoppel between the parties.

20 As a consequence, whilst AMEX was obliged to accept the findings of the Parsons' Report, the Tribunal may and is entitled to come to a different conclusion. If that is the case, then AMEX must necessarily be released from any admissions it may have made in reliance upon that Report."

39. In answer to this aspect of the appeal, Mr Scorey submits that not only was the Tribunal invited to do what it did, there was no prejudice to Mrs Brennan. In any event, he submits, no contention of prejudice can be advanced without disclosing the benefit obtained from the settlement which Mrs Brennan made with Mr Rutter. If there was prejudice, he submits that it was in fact suffered by AMEX.

Discussion

40. Whatever actually happened at the hearing, it is plain to us that the Tribunal's Reasons do not address the question of AMEX's admissions or their status in the proceedings. The Tribunal deals with the Parsons report in what is almost an aside (see the extract set out in paragraph 29 of this judgment). In these circumstances, we think there is considerable force in Miss Gallafent's argument as we have summarised it, and that the Tribunal's failure to address the question of Amex's release from its admissions was a substantial procedural irregularity, and an error of law. Whether it is sufficient to vitiate the Decision of the Tribunal must, we think, be addressed by looking at the remainder of the Tribunal's reasons.

The Tribunal's approach to the evidence of Mrs. Brennan

41. Ms Gallafent submitted that the Tribunal's approach to Mrs Brennan's evidence was flawed. She argued that the Tribunal rejected Mrs. Brennan's evidence as to every one of the incidents, but gave no adequate reasons for doing so. It made no finding as to her credibility which, she submitted, it should have done given that her sworn evidence as to Mr Rutter's conduct towards her was the primary evidence before the Tribunal in respect of Mr Rutter's conduct towards her. Indeed, the majority of the incidents she alleged occurred when only she and Mr Rutter were present. Furthermore, of course, AMEX had admitted a number of the incidents alleged.
42. Mr Rutter was not called to give evidence. It would, of course, have been open to AMEX to call him - indeed AMEX obtained permission to issue a witness summons against him. In the event, however, AMEX decided not to call him. It is not difficult to see why. Mr Rutter's pleaded case was that he was a scapegoat for AMEX's deficiencies. That, of course, was flatly inconsistent with AMEX's case under section 41(3) of the 1975 Act, and that part of his evidence would, no doubt, have been ripe material for Ms Gallafent in cross-examination. Equally, one can understand why Mrs Brennan did not wish to call him by way of witness summons, since she would have been unable to cross-examine him and his witness statement contradicted the major part of her case.
43. Mr Scorey courageously submitted that the Tribunal did not have to explain why it rejected Mrs Brennan's evidence: it was sufficient that it did not satisfy the Tribunal on the balance of probabilities. If she asked "why did I lose?" the answer from the Tribunal would have been "we were not satisfied that the incidents you alleged took place". That, Mr Scorey, submitted, was good enough. The Tribunal did not need to make express findings of credibility, and their absence was readily explained by an inference that the Tribunal wished to let Mrs. Brennan down lightly, and did not want to say in terms that it had not believed a word of what she is saying.
44. It is a striking feature of this case that the Tribunal rejected Mrs. Brennan's evidence on each and every one of the incidents alleged, and in these circumstances we agree with Ms Gallafent that the Tribunal needed to explain why it had done so. In the absence of a specific finding on credibility (which itself, we think, would have to be explained) we have to look for other reasons; and whilst we recognise that the absence of Mr Rutter placed the Tribunal in a difficulty, we have come to the clear view that the Tribunal does not, in Meek -v- Birmingham City Council [1987] IRLR 250 terms give sufficient reasons for explaining why it rejected the entirety of Mrs Brennan's evidence.
45. As Ms Gallafent pointed out, a number of witnesses gave evidence of Mr Rutter's behaviour and demeanour, albeit not of direct sexual discrimination against Mrs Brennan. The remark made to Mr. Crotty about telephone sex gives a flavour, although the Tribunal records it without comment. In addition, on advice, Mrs Brennan had made notes of the remarks which Mr Rutter, she alleged, had made about her and against her. She had also made records of conversations with other senior members of AMEX staff. Those staff members substantially agreed with her notes of their respective meetings.
46. The Tribunal rejected the probative value of Mrs Brennan's notes, not on the basis that they were not contemporaneously made, but that they were not contemporaneously used. At paragraph 159 of the Reasons, it says:

The Tribunal was not assisted by the Applicant's notes because they were not used contemporaneously to assist her in making a complaint. That being so, the Tribunal was unable to ascertain with any certainty when and in what circumstances they had been prepared or with what motivation

47. In our judgment it is a non-sequitur to find that notes were not made contemporaneously because they were not used when made. Ms Gallafent points out that this finding is inconsistent with an earlier finding in paragraph 74 that Mrs. Brennan was advised to make notes of any comments made by Mr. Rutter: -

The Applicant told Ms Belkonen (former Vice-President of International Research at AMEX) that Mr. Rutter had said she would have to work harder than her male colleagues to prove herself because the senior management team was chauvinist. Ms Balkonen believed the allegations had substance and told the Applicant that such comments were totally inappropriate. Ms Belkonen did not advise the Applicant to report Mr. Rutter to the human resources department but advised the Applicant to keep notes of 'non-Blue Box behaviour'. From that time the Applicant made notes of incidents which she considered should be recorded during her employment with the Respondent

48. We find the Tribunal's reasoning on this important point wholly unsatisfactory, the more so because, on several occasions, the Tribunal pointed out that the absence of corroboration of what Mrs Brennan said (even though much of it was said when only she and Mr Rutter were present) meant that the evidence was insufficient to conclude that the words alleged had been spoken. This was, of course, the only sworn evidence which the Tribunal had. If it was to reject it, it needed to explain why it was doing so.
49. In her submissions, Ms Gallafent supports her argument on this point by reference to a number of incidents where there was support for Mrs. Brennan's case. She also produced a spreadsheet identifying the challenges (or the lack of them) by AMEX to Mrs. Brennan's evidence. She also submitted that in making a finding adverse to Mrs. Brennan in relation to the incident described at paragraph 9(4) of this judgment, the Tribunal impermissibly relied upon the witness statement of one of Mr. Rutter's witnesses, Alwena Hall, AMEX's Operating Director of Marketing Perspectives, who was not called by AMEX to give evidence. This, she submitted, was flatly contrary to the guidance given by the EAT in London Borough of Barking and Dagenham v. Oguoko [2000] IRLR 179, that such a witness statement should only be admitted either by consent or by express order of the Tribunal after argument, neither of which took place in the instant case. Ms Gallafent acknowledged frankly that if this latter point had stood alone, it would have been insufficient to overturn the Tribunal's findings. In conjunction with all the other factors upon which she relied, however, it was, she submitted, a telling indication of the Tribunal's fallacious approach to the evidence.
50. At the end of the day, we are persuaded by Ms Gallafent that both the rejection of the entirety of Mrs. Brennan's evidence of sex discrimination and the manner in which the Tribunal dealt with that rejection are unsatisfactory. If it did not believe her, it should have said so in terms and explained why. Its rejection of her evidence by reference to its uncorroborated nature is unsatisfactory. There plainly was corroborative material produced by Mrs. Brennan, and the Tribunal's failure to address it is particularly striking.
51. In these circumstances, we are of the view that Ms Gallafent's argument on procedural irregularity is buttressed by the inadequacy of the Tribunal's reasons and that she is entitled to succeed on both grounds of her substantive appeal.

The Section 41(3) defence

52. However, Mr Scorey, by way of cross-notice, seeks to argue that AMEX was entitled to succeed in its section 41(3) defence, and that, even if we were minded to allow the appeal on the grounds argued by Ms Gallafent, AMEX should have the benefit of that defence, thereby removing any need to remit the case back to the Employment Tribunal.
53. There is undoubtedly a basis for this argument. The Tribunal spent a substantial part of its Reasons setting out the procedures AMEX had in place to prevent sexual discrimination and other unacceptable workplace practices. AMEX's reaction when it learnt of Mrs Brennan's allegations was swift and strong. It instructed Ms Parsons; it accepted her conclusions; it moved summarily to dismiss Mr Rutter for gross misconduct. In the Tribunal's findings there is little to support the proposition that AMEX was riddled with institutional sexism, or that the culture within the organisation was discriminatory against women. Had the Tribunal properly addressed its mind to the issue, therefore, it may well be that it would have allowed AMEX to succeed on the statutory defence.
54. However, in our view, an additional mischief arising from the way in which the Tribunal went about its task is demonstrated by the fact that because it dealt exclusively with the factual allegations made by Mrs Brennan, and dismissed them wholesale, it did not address its mind to section 41(3). Since we have found that its approach to the evidence, and the basis upon which it made its findings of fact, were both flawed, it seems to us impossible for this Tribunal to substitute a finding in relation to section 41(3) when we ourselves have not heard the evidence.
55. In these circumstances, we have reached the conclusion, with regret, that there is no alternative but for this appeal to be allowed, the Tribunal's Decision to be set aside (save insofar as it relates to Mr Rutter's withdrawal from the case) and for the case to be re-heard. Our regret is based not only the matter of delay, but on the fact that this case took some fifteen working days to hear before the Tribunal. We can only express the hope that if a re-hearing proves necessary the parties can agree to define and limit the issues, no doubt on this occasion with a much heavier emphasis on section 41(3).
56. It also follows from the manner in which the Tribunal went about its task that it did not address the issue of unfair dismissal. Its rejection of Mrs Brennan's evidence must mean that it took the view she was not unfairly dismissed. However, similar consideration must, we think, apply to this point as apply to the section 41(3) defence. It must follow (in the light of our criticisms of the Tribunal's approach to the evidence) that the finding Mrs. Brennan was not unfairly dismissed cannot stand, and has to be re-heard with the allegations of unlawful discrimination and victimisation.
57. In these circumstances, the appeal will be allowed: paragraphs (ii) to (iv) of the Tribunal's decision will be set aside and the matter will be remitted to a different Tribunal for re-hearing.