Appeal No. UKEAT/0653/03/SM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 4 March 2004

Before
HIS HONOUR JUDGE J MCMULLEN QC
MR M CLANCY
MR J R RIVERS CBE

MR S DONALDSON	APPELLANT

MISWA CHEMICALS LTD & OTHERS	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR C HUTCHINSON
(Of Counsel)
Instructed by:
Messrs Howells
33 Love Street
Sheffield
S3 8NW	
For the Respondent	MR ALAN BISHOP
(Of Counsel)
Instructed by:
Messrs Turner Coulston
Solicitors
29 Billing Road
Northampton
NN1 5DQ	

SUMMARY

Employment Tribunal failed to give reasons for not drawing an reference following adverse findings on questionnaire, (Deman v AUT) yet ET unarguably right to dismiss Applicant’s case of race discrimination when he was dismissed after assaulting a fellow-worker.

One aspect remitted – the allegation of racist language.

HIS HONOUR JUDGE J McMULLEN QC

1.	This case is about race discrimination founded upon an allegation of disparate treatment for gross misconduct.  The judgment represents the views of all three members.  We will refer to the parties as Applicant and Respondents.

Introduction 
2.	It is an appeal by the Applicant in those proceedings against a decision of an Employment Tribunal sitting over five days and one in Chambers at Bedford, Chairman Mr V J Adamson. registered with Extended Reasons on 12 June 2003.  The Applicant was represented there by Mr McFadden, a representative of the Northern Complainant Aid Fund and here by Mr Colin Hutchinson of Counsel.  The Respondent was represented there by a Solicitor who today instructs Mr Alan Bishop of Counsel.

3.	The Applicant claimed, so far as is relevant to the appeal (other claims and other Respondents not now being relevant) that the Respondent was guilty of direct race discrimination.  The Respondent denied the claim.

The Issue
4.	The essential issue as defined by the Employment Tribunal was (to adopt the Respondent’s summary):

“2.	
i.	… more favourable treatment of Klaus Piertzak than the Applicant;
ii	that the Applicant had suffered some form of discrimination and that Klaus Piertzak had sneered or ignored him;
iii.	that the words used by Klaus Piertzak were directly discriminatory.

In supplementary written submissions the Applicant’s representative referred to these submissions and stated that the second type was not a complaint, but Background evidence, no reference was made to the first or third type of complaint.”

5.	The Tribunal decided that the Respondent had not discriminated against the Applicant and dismissed the claim.  The appeal against that decision is made on five grounds which are that the Employment Tribunal:

“3.	

(1)	erred in law in failing to find that the First Respondent was vicariously liable for Mr Piertzak’s conduct on 27 May, and in construing the Originating Application as excluding such a complaint
(2)	erred in law or failed to give sufficient reasons for finding Sidhu v Aerospace Composite Technology to be of relevance
(3)	erred in law or failed to give sufficient reasons for failing to draw adverse inferences in respect of the reply to the Race Relations Act questionnaire
(4)	erred in law or was perverse in finding that there was material difference between the Appellant and Mr Piertzak, who were both guilty of gross misconduct
(5)	erred in law or were perverse in treating the warning given to Mr Piertzak as a final written warning.”

Those grounds are as defined by directions given by His Honour Judge Richardson and members at a Preliminary Hearing sending this case to a full hearing.  

The Legislation
6.	The relevant provisions of the legislation are the Race Relations Act 1996 Section 1(1)(a) which defines discrimination known as direct discrimination as follows:

“1(1)A person discriminates against another person in any circumstances relevant for the purposes of any provision of this Act if –
(a)	on racial grounds he treats that other less favourably than  he treats or would treat other persons;”

7.	Comparisons are to be made like with like.  This is provided by section 3(4):
“3(4) A comparison of the case of a person of a particular racial ground with that of a person not of that group under section 1(1) must be such that the relevant circumstances in the only case are the same, or not materially different, in the other.”

8.	Section 4(1)(c) deals with discrimination by way of dismissal:

“4(1) It is unlawful for a person, in relation to employment by him at an establishment in Great Britain, to discriminate against another –

(c)	by refusing or deliberately omitting to offer him that employment”

9.	Inference may be drawn against a person who has answered to a statutory questionnaire.  See section 65(2)(b):

“65(2) Where the person aggrieved questions the respondent (whether in accordance with an order under subsection (1) or not) -

(b)	if it appears to the court or tribunal that the respondent deliberately, and without reasonable excuse, omitted to reply within a reasonable period or that his reply is evasive or equivocal, the court or tribunal may draw any inference from that fact that it considers it just and equitable to draw, including an inference that he committed an unlawful act.”

10.	The Employment Tribunal did not direct itself expressly by reference to any of those provisions.  It did however refer to what we hold to be the leading authorities which are Anya v University of Oxford [2001] IRLR 380.and to Sidhu v British Aerospace Composite Technology Ltd [2000] IRLR 602.

The Facts
11.	The Applicant is African Caribbean of Jamaican origin.  He compares his treatment with that of Klaus Piertzak who is white and of German nationality also with a hypothetical white male.

12.	On 27 September 2002 Mr Piertzak made a statement to the Applicant, the precise words of which have been recounted in various forms.  We are satisfied that the words used by Mr Piertzak were as he himself described, namely: “you are a black bastard”.  It was not disputed by either party that the Applicant had been dismissed by the Respondent on 28 May 2002.

13.	The First Respondent is a manufacturing company producing a variety of liquid and paste products involving chemicals.  The chemicals are inflammable and safety is of particular importance.  It has a multi racial workforce of about forty people.  It does not have a written or any formal equal opportunities policy.

14.	The Applicant’s employment with the Respondent as a production operator began in October 2001 and continued until he was summarily dismissed on 28 May 2002. Klaus Piertzak was employed as an engineer since 1997.

15.	The events with which this case was concerned took place almost entirely on 27 May 2002.  Mr Piertzak who was by his own description abrupt, direct and found to be irascible, was working in the factory.  The Applicant was working on the production line.  The Applicant contended he was told off for swearing. There was an appreciable amount of swearing by workers on the factory floor and the Applicant swore out loud.  The Applicant acted in an aggressive form towards two female workers swearing at them shouting and keeping the cardboard boxes they were putting together.  He put in fear one of the women who was in due course instructed to leave the factory.  The supervisor Mr Brown who gave this instruction told the Applicant there should be no further incidents. In the meantime the other female worker had contacted the manager who instructed that disciplinary proceedings should begin against the Applicant.  

16.	At about 1 pm an altercation took place in a different form.  The Applicant was again working at his workplace.  Mr Piertzak, who has a voice impediment which is the equivalent of a stammer (but the Tribunal was not called upon to make a finding as to whether this constitutes disability under the Disability Discrimination Act) came along and the following took place:

“The Applicant was working on the production line.  A taping machine had broken down.  The Applicant was arguing with Ms Leith.  Mr Piertzak arrived and said to the Applicant “you my friend have got a attitude problem”.  Mr Piertzak continuing to speak but with difficulty.  Ms Leith decided that the Applicant’s behaviour was aggressive and left the immediate area to contact the First Respondent’s management.  Mr Piertzak said “you are a black bastard” to the Applicant, the Applicant took hold of Mr Piertzak’s clothing, hit him and let him go.  Mr Piertzak composed himself and left the area.”
 
17.	As a result of this incident Mr Piertzak was given what the Tribunal found to be a final written warning and, following a proper procedure, the Applicant was dismissed.  The Respondent has works rules which provide that acts of gross misconduct might include race discrimination or unacceptable conduct at work and which also provide that on a finding of gross misconduct an employee is liable to be summarily dismissed.  There is no definition of gross misconduct.  

18.	The Tribunal found that the language used by Mr Piertzak was a racially derogatory insult specific to the Applicant as a black person.  It also found that that statement was potentially a fundamental breach of contract as was the Applicant’s striking of Mr Piertzak.  The Tribunal considered the allegation that there was disparity of treatment.  The Applicant alleged there had been a number of examples by of abusive language.  

19.	Following his dismissal the Applicant caused a questionnaire to be served on the Respondent in accordance with the Act, as to which the Tribunal said as follows:

“41.   … In replies to that questionnaire the Respondent answered that it had an equal opportunities policy.  We were not prepared with any, and do not find that the Respondent had any such formal policy.  In respect of the questionnaire, we consider that the first Respondent's answers are defensive, in part (as far as the equal opportunities policy was concerned), inaccurate and outside the spirit of the legislation.  We do not however consider that we should draw any adverse inferences on that basis.
…
45.    We consider that the Respondent’s actions in producing witness statements which had not been located until part way during the course of the hearing; producing a video tape on the morning of the resumed hearing date which had only recently been disaggregated from the remainder of the tape; in producing evidence relating to the Applicants alleged sexual misconduct; and in giving answers to the questionnaire Race Relations Act other than in that from these actions we should infer that the Respondent treated the Applicant unlawfully on the grounds of his race.”
20.	The Applicant then launched Tribunal proceedings alleging that he had been discriminated both at work and in his dismissal in a number of specific respects.

The Applicant’s case on appeal
21.	The Applicant submitted that the Employment Tribunal had erred in law in four respects set out by Judge Richardson (above). The fifth was not pursued with any vigour and we did not invite Mr Bishop to respond to it.  It is contended that the Applicant had made a case that Mr Piertzak’s conduct in his racial abuse was part of the Applicant’s claim and the Tribunal had failed to hold that the Originating Application included such a claim.  Reliance was placed on the summary which we have given above on how the Respondent saw the Applicant’s case. which was that a claim was made against Mr Piertzak for which the Respondent would be liable if liability were established against Mr Piertzak.  The Tribunal failed to deal with that matter for it is said there was no complaint in the Originating Application.  That would have been direct discrimination for the Tribunal’s findings were plainly in the Applicant’s favour subject to his proving detriment.  

22.	Secondly, it was contended that the Tribunal failed to pay sufficient attention to the complaint that the Sidhu case was relevant.  This case it is contended is all about vicarious liability.  

23.	Thirdly it was contended that the Tribunal failed to give any explanation as to why it failed to draw adverse inferences.  Fourthly, at the heart of the case, the Tribunal failed to disclose why differential treatment as between the Applicant and Mr Piertzak was not counted as race discrimination. Both the Applicant and Mr Piertzak committed these breaches of contract at the same time arising out at the same incident and they should have been treated together.  The decision was perverse. The Tribunal is under a duty to give reasons for not drawing an inference.

The Respondent’s case
24.	On behalf of the Respondent it is contended that Sidhu is relevant to the issue.  Detriment must be proved by the Applicant in relation to the allegation against Mr Piertzak: Thomas v Robinson [2003] IRLR 7.  As to the dismissal, no less favourable treatment took place for there was a policy within the Respondent of dismissal on account of an act of violence, which is different from racial abuse.  It was conceded that the Respondent would be liable for acts of Mr Piertzak and it was not contended that the language of Mr Piertzak was other than racially discrimatory.  Using language to which we are more accustomed in unfair dismissal cases, it was contended that it was within the reasonable ambit of an employer to distinguish violence to and mocking of a person with a voice impediment, from racial abuse.

The legal principles 
25.	The legal principles to be applied in this case appear to us to emerge in the following authorities:

(1)	A Tribunal is required to give reasons for its decision so that parties can see why they win and lose - Meek v City of Birmingham District Council [1987] IRLR 250 CA.

(2)	A Tribunal is required to give reasons when it decides that it will not draw an adverse inference see Deman v The Association of University Teachers [2003] EWCA Civ 329.

(3)	Less favourable treatment is defined by the speech of Lord Nicholls in Shamoon v The Chief Constable of the Royal Ulster Constabulary [2003] ICR 337 HL at paragraph 9.

(4)	Detriment is defined in the same case by Lord Nicholls and also by Lord Scott of Foscote.

(5)	Generally speaking, a single act of verbal abuse will not constitute discrimination - see Thomas v Robinson above.

(6)	The rules relate for vicarious liability and the application of a policy which is non specific to race are set out in Sidhu (above).

(7)	Whether a point is made in an Originating Application or not is usually a matter of construction of the Originating Application - see Housing Corporation v Bryant [1999] ICR 123.

Conclusions
26.	We will deal in turn with the four live issues on appeal.  We accept the Applicant’s case that the Tribunal has failed to deal with the complaint made in his Originating Application.  As a matter of construction, the Originating Application provides for a complaint against Mr Piertzak - see for example paragraph 21:

“21  .As a consequence of the foregoing, I believe my employer discriminated against me on racial grounds, by failing to investigate my complaints of abuse and harassment by Klaus Piertzak, by suspending me and not him and by further dismissing me and not him, because of the manner in which I reacted to him racially abusing me.”

27.	This is an allegation which includes the events on 27 May 2002 in our judgment.  Thus the Tribunal was wrong to hold that no complaint was made against Mr Piertzak in respect of his remarks.  That was a simple error of construction.  Further, the Tribunal failed to recognise that such a point was live during the case even though that it had used the Respondent’s submission in order to set out its own depiction of the issues.  The Respondent was plainly aware that the Applicant was alleging that Mr Piertzak’s words were directly discriminatory.  Thanks to the helpful concession by Mr Bishop correctly made on behalf of his client, such abuse would be the subject of vicarious or constructive liability of his client if made out.

28.	Given the findings which we have recorded above relating to that abuse it is plain that the Tribunal has found that there was the first stage of a finding of race discrimination.  We accept the proposition advanced by Mr Bishop that there must be detriment basing ourselves upon Thomas v Robinson.  It is contended that the Applicant plainly suffered detriment because he described himself as being very angry as a result of the abuse he suffered.  Whether that constitutes a detriment in the context of this case and against the background of Thomas v Robinson is a matter which we are unable to decide ourselves.  The Tribunal was pointing in that direction but since it regarded itself as disqualified for making a judgment on this complaint it must now do so and we will remit this matter for it to make findings on that complaint.  As we see it, it is not necessary for there to be a further hearing since it will have had all the material but that is a matter for the Employment Tribunal.

29.	Turning to the failure to give sufficient reasons for finding Sidhu to be of relevance, we reject that complaint.  It is a judgment of the Court of Appeal based on the concept of vicarious liability and the application by an employer of a policy relating to misconduct at or around the workplace.  No error of law arises in our judgment in the Tribunal’s approach to Sidhu.

30.	We uphold the complaint by the Applicant that the Tribunal failed to give any or any sufficient reasons for not drawing an inference of race discrimination.  The passages we have cited from paragraphs 41 and 45 are very strong.  The narrative in each of these paragraphs does not lead to its obvious conclusion.  On the contrary, one is surprised to read the last sentence rejecting the contention that an inference be drawn.  It will be borne in mind that the Tribunal, if asked, is bound to consider whether to draw an inference from the conduct of a Respondent in its approach to the statutory questionnaire.  The Tribunal, having set out reasons which point, it seems to us, directly towards the drawing of an inference does the opposite.  It is entitled to do so but it should give reasons to the parties because they, like us, are left wondering how from that initial premise the Tribunal reached its final conclusion.

31.	Thus, on this matter, subject to what we say in a moment, we consider the Applicant is right.  

32.	As for dismissal, as we said, the heart of this case was whether or not there was a material difference between the Applicant and Mr Piertzak in their treatment.  This relates to Section 3(4) of the Race Relations Act.  The Tribunal has in our judgment demonstrated why it came to a different decision:

“iv.	By dismissing the Applicant and not Mr Piertzak
The Applicant was dismissed, Mr Piertzak was given a final written warning.  Both employees had committed disciplinary offences which could be regarded as gross misconduct.  The offences were not however the same nor was the situation.  The Third Respondent had a personal policy of dismissing anybody involved in physical violence and the Fourth Respondent at that time was unaware that this was not expressly stated in the First Respondent’s disciplinary procedures.  We are satisfied that the First Respondent had a policy of dismissing any employees guilty of physical violence to a colleague.  We are further satisfied that the First, Second and Third Respondent applied the policy, which policy was not race specific.  We find that the Respondents would have dismissed Mr Piertzak if he had hit or attempted or hit the Applicant.  We do not consider the treatment of the Applicant by the Respondent was on the ground of his race, nor that he was less favourably treated than a hypothetical white male or other worker.”

33.	The lay members of this Appeal Tribunal have been particularly concerned to match their industrial experience with the findings of this industrial jury.  The logic deployed by the Employment Tribunal in this passage corresponds precisely with normal industrial experience.  The Respondent had a clear policy of dismissal for violence.  The circumstances leading to racial abuse would require to be the subject of careful investigation and mitigation.  There is qualitatively a difference between racial abuse uttered once and a criminal assault.  The difference here is demonstrated by the existence of a policy of dismissal for the latter but not for the former.

34.	We can fully see that there was a distinction to be made between the Applicant and Mr Piertzak which is not based upon race.  It is based upon both common sense and the application of the Respondent’s policy which fits industrial reality.  Mr Piertzak was the object first of mocking on account of his speech impediment and secondly of a physical assault.  His response between those two events was to use racist language.  Any approach to the comparison required by Section 3(4) must take account of the mitigating circumstances which obviously applied to Mr Piertzak but which did not apply to the Applicant.

35.	Thus the Tribunal has demonstrated for those two clear reasons why it came to the conclusion that the Applicant was not discriminated against unlawfully in his dismissal.  

36.	We now return to the inference point.  Can it be said that notwithstanding the failure to give reasons for not drawing an inference the decision is unarguably right?  In our view it is.  The two grounds upon which the Tribunal based its decision that there was no less favourable treatment are clear and cogent.  It does not seem to us to matter that the Tribunal has failed to carry out its duty to give to explain why it did not draw an inference.  Inference, after all, assists in a borderline case in helping to come to a conclusion one way or the other; but in our judgment the failure to give reasons for not drawing an inference in this case does not destroy the essentially sound foundation of the decision.  So, for those reasons we will not allow the appeal in relation to the dismissal claim.

37.	Following our judgment and discussion about future disposition of this case Mr Bishop has taken instructions from his client and, as he foreshadowed in his opening, indicated that no point will be taken against the Applicant’s case that the Respondent is liable for what is conceded to be discrimination by Mr Piertzak in that racially derogatory comment.  We regard that as an extremely helpful approach to resolve this matter.  We will therefore direct that this be returned to the Employment Tribunal for a hearing on the remedy for that aspect of race discrimination alone and the Applicant will prepare any evidence relating to that single issue if so advised within 14 days and the Respondent may reply within 28 days. The Applicant will apply for a hearing, 2 hours at the most at the Employment Appeal Tribunal on the question of remedy on that point.

38.	We would like to thank Counsel very much for their assistance today in completing the case well before the time allotted.  

39.	The appeal is allowed in part relating to racial abuse, for which the Respondent is conceded to be liable and the case remitted for remedy.