Appeal No. UKEAT/0014/06/DM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 28 June 2006

Before
THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)
MR J HOUGHAM CBE
MR D JENKINS OBE

CORUS HOTELS PLC	APPELLANT

MISS CAROL PATRICIA WILLIAMS	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR MICHAEL DUGGAN
(Of Counsel)
Instructed by:
Messrs Astons
Solicitors
The Stables
Manor Road
Staverton 
Nr DAVENTRY
Northants
NN11 6JD

For the Respondent	MR M REED
Legal Adviser
Free Representation Unit
6th Floor
289-293 High Holborn
LONDON
WC1V 7HZ	

SUMMARY

The employee, a black woman of West Indian origin, was found to have been unfairly dismissed and to have suffered race discrimination. The former finding rested on the fact that the employers had failed to act reasonably in assisting the employee to find alternative employment when she was made redundant and had not given priority in appointment to her as a redundant employee.  The latter was based on her rejection for two posts for which she was interviewed and for which she appeared well qualified.  The employers appealed both findings.  As to the unfair dismissal finding, it was said that the employers had acted reasonably.  As to the race discrimination finding, it was alleged that there were innocent non-discriminatory explanations for failing to appoint her which the tribunal should have accepted, or at least the tribunal should have said why they rejected them.   The EAT held that the tribunal was entitled to conclude that the employers had acted unreasonably; and that reading the decision  fairly it was plain that the tribunal had found the explanations unconvincing and unreliable such that the  tribunal was obliged to infer race discrimination.  Appeal dismissed.

THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

1.	The Appellant appeals from the Judgment of the Employment Tribunal, sitting at Stratford, in which it held that Claimant’s allegations of unfair dismissal and race discrimination were well-founded, and that the Claimant was entitled to compensation.

2.	The hearing took place over three days.
The Background

3.	Ms Williams is a black woman of Afro-Caribbean origin. She commenced employment with the Respondent in 2001. The Respondent is a hotel group operating hotels throughout the United Kingdom, although it has been gradually selling its properties and the number of hotels had reduced from 126 to 52 in the five years leading up to the tribunal hearing.
 
4.	Ms Williams was first employed as what is termed ‘Meetings and Events (M&E) Co-Ordinator’ at The Homestead Court Hotel in Welwyn Garden City.  The operation of that hotel was transferred to another Company and her employment transferred with it.

5.	On 10 June 2002 she recommenced service with the Respondent as M&E Manager at The Roebuck Hotel, Buckhurst Hill.  There her Line Manager was Mr Mustard.  He had worked with Ms Williams at Homestead Court and became the Manager of The Roebuck.  The two got on very well and had a good opinion of each other.  It was accepted that Ms Williams made a success of her job at both hotels. 

6.	However, The Roebuck Hotel was closed in 2004 because of a decision to sell the property for redevelopment.  The employees were all made redundant.  The question then arose as to whether alternative employment could be found for Ms Williams in the group.

7.	There is a large Human Resources Department with a Group HR Manager, reporting to a Director of Operations.  There were four Group Managers within HR, reporting to the Group HR Manager.  One of these was Mrs Dyeball.  In turn, four senior HR managers, what were termed ‘cluster’ Managers, reported to her.  One of these included a Mrs Joan Finch.  The word ‘cluster’ demonstrates merely that they are responsible for more than one hotel.  Mrs Finch was the Senior HR Manager charged with managing the redundancy process at the Roebuck.  The Respondent had a redundancy policy, which curiously was not generally made available to staff and not even to managers of the status of Mrs Finch.  However, it is accepted that the policy involved an obligation to explore suitable alternative employment within the Company.  The policy stated that individuals would be encouraged to apply for vacancies in the Group. 

8.	Two vacancies existed relevant to Ms Williams’ position but neither appeared on lists of vacancies supplied to her or were drawn to her attention.  Mrs Finch did not know of them, and in fact, only learned of one of them, at the Briggins House Hotel in Hertfordshire, from the Claimant herself.  Nor was there any consultation with her.

The first vacancy
9.	Ms Williams also became aware of a second vacancy at the Harpenden House Hotel.  That is one of 17 hotels recognised as having a particular potential for Conference bookings. These were known within the company as the Focus Group.  The General Manager there was a Miss Nicola Wilkins.  She had, in fact, at one stage before her appointment as General Manager, been the M&E Sales Manager at that hotel. 

10.	On the 3 February 2004 she interviewed Ms Williams for the job.  Ms Samuels was also present; she was the M& E site development manager, with particular concern for the Focus Group of hotels.  Ms Williams did not get the job.  Ms Wilkins interviewed both Ms Williams and the successful candidate, a Ms Cooper, who was a white employee.  Although Ms Samuels was present at Ms Williams’ interview, she was not present at Ms Cooper’s.  The witnesses both insisted that the rejection of Ms Williams was not because of her colour or race, but because she did not have the requisite skills and experience. 

11.	The Tribunal noted that the reasons given in the Respondent’s answer for not appointing Ms Williams was first, that the business at Harpenden House was significantly greater than The Roebuck, and it was thought that Ms Williams would not be able to cope with the volume; and second, that she had insufficient experience of the computer data base.  In fact, however, the tribunal found that neither witness gave any proper basis for believing the first reason. 

12.	As to the that reason, Ms Wilkins asserted to the Tribunal that the targets set for Harpenden House were much more significant than there had been at the Roebuck hotel. The Tribunal noted, however, that on a pro rata basis, the Roebuck under Ms Williams, which had generated M&E income of some £468,000.00, had out-performed the Harpenden, which, with over twice the resources, had generated in the same period around £686,000.00.

13.	Ms Wilkins sought to give evidence to explain the disparity, but the Tribunal found her explanation most unconvincing, particularly since she had made no enquiries about how Ms Williams had performed at The Roebuck. 

14.	Moreover, there was a significant conflict of evidence as to precisely what the job required.  Ms Samuels said that 90% of it would be office based, and relatively little would be spent with customers.  It was crucial that the successful candidate could operate the data base.  Much time would be spent interpreting the data.  Ms Wilkins, by contrast, described the role very differently as involving retaining contact with previous customers and generating new clients by promoting the hotel through websites, mail shots and so forth.

15.	Both had notes of the interview.  Ms Wilkins’ note described Ms Williams as being a very confident and strong character, but commented that she was unsure whether Carole Williams would “fit in to our Sales’ office”, and in her summary she noted that she thought Ms Williams was “too cocky for my liking” and that she didn’t have enough corporate sales’ experience.  She also noted that Ms Williams had argued with Ms Samuels; this was a comment made in connection with a question and answer given in interview, but Ms Wilkins accepted in cross examination that this was not an apt term to describe what had occurred.  The notes in relation to the successful candidate, a Ms Cooper, referred to her as a very likeable personality and said that she would fit in well with current Sales’ office personalities.  She had been doing a holding position at the same level at another hotel, where the relevant manager was on maternity leave.

16.	The Tribunal also considered Ms Samuel’s evidence of the interview and concluded that she had “been looking for failure rather than success” as they put it.  There had been no attempt to assess Ms Williams’ strengths and relevant experience.  No enquiry had been made about her previous relationships with staff when she had worked at other hotels; Ms  Samuels had simply made a subjective assessment, without the benefit of such information, that Ms Williams would not get on with other staff at the Harpenden.

17.	Nor did the Employers give any thought to the possibility of a trial period, during which the ability of the Claimant to do the job could be assessed.  When cross-examined about this, Ms Wilkins first replied that she would have offered that opportunity to Ms Williams if it had been available, but then quickly changed her answer to the negative.  The Tribunal treated this as a desire to give an answer consistent with the Employer’s case.  In our view this is significant and demonstrates that they did not find her evidence wholly reliable.  Ms Samuels claimed that it was not possible to offer a trial period because the post holder had to start immediately, but the tribunal found this inconsistent with the fact that the successful candidate was given a transitional period to ease her way into the job.

18.	The Harpenden House Hotel, according to Ms Wilkins, was in an affluent white area, whereas The Roebuck was at Luton, some seven miles away, and had a more significant proportion of black employees.

19.	The Tribunal found that neither Ms Wilkins nor Ms Samuels had given proper consideration to the fact that Ms Williams faced dismissal for redundancy.  They each appeared to see their task as merely appointing the best candidate, however marginal the difference was.

The second vacancy.
20.	Ms Williams then applied for the job at The Briggens House Hotel.  The manager was a Mr Install.  The hotel had apparently been in decline but still the M&E sales exceeded £1 million.  This was in fact the job vacated by Ms Cooper but again Ms Williams was rejected, this time by Mr Install.  The reason given was that the job was more ‘hands on’ than had been her job at the Roebuck, and required someone who could be pro-active in promoting its leisure activities.  As the tribunal noted, this was effectively the reverse of the explanation given for her failing to secure the post at the Harpenden when it was said that she had been more hands on at the Roebuck and the job required greater and different computer skills. 

21.	The respondent’s answer in fact gave three reasons why she was not appointed to this post.  First, she did not have experience of the particular area of development, namely outside activities.  Second, she did not have experience of operating the database (essentially the same reason that Ms Samuels rejected her at the Harpenden); and third, that she would not be able to cope with the volume of business.

22.	The statistics showed that no black employees were employed at Briggens House.

23.	In place of Ms Cooper, a white woman from New Zealand was appointed although she had very limited experience in the area, having done only limited catering work in New Zealand.  The tribunal commented that it was not satisfactorily explained why that experience was relevant to her new role whereas the apparently more, or at least equally, relevant experience of Ms Williams was not.  The tribunal also noted that the CV of the successful candidate did not inspire confidence as to her suitability; Mr Install said in evidence that it would have been put together by an agency and would only contain minimum information.  The tribunal did not find this explanation persuasive.  Nor was it suggested that the successful candidate had relevant experience with the data base.

24.	That successful candidate in fact remained for only a short period and then was replaced by another white woman, who in fact had worked at The Roebuck with Ms Williams as Rooms’ Manager.  It was not suggested that this involved any unlawful discrimination, but the tribunal noted that Mr Install was prepared on this occasion to appoint her notwithstanding her lack of experience in the field of outdoor activities, whereas the same alleged lack of experience had told against Ms Williams.  

25.	The Tribunal noted that there was no diversity awareness training provided by the Respondent at the time of Ms Williams’ dismissal, and nor was there any effective monitoring of equal opportunities.

The law. 
26.	The relevant law is not in dispute and we can take it quickly.  In determining whether there was direct discrimination on grounds of race the tribunal had to apply the guidelines established in the well-known case of Igen Ltd v Wong [2005] IRLR 258.  If there was a prima facie case of discrimination then the onus shifted to the employer to provide an explanation for the treatment which negated any race discrimination.

27.	As to unfair dismissal, it is accepted that in a redundancy context there is an obligation on the employer to consult with the employee about, amongst other matters, other possible jobs and to seek to find alternative employment in the hotel group; see the well known case of Willaims v Compair Maxam [1982] ICR 156 and in connection with alternative employment a case mentioned in the Tribunal Decision, Stacey v Babcock Power [1986] IRLR 3

28.	Mr Duggan, counsel for the Appellant, accepted that these requirements inevitably mean that there will be circumstances where an employer who is acting reasonably in an unfair dismissal context will have to give priority to potentially redundant employees and to appoint them to vacancies for which they are suited even although there may be better external candidates. Plainly, however, as he submits and we accept, this obligation does not extend to making an appointment to a post for which someone is not suitable.

The Tribunal’s conclusions.
29.	Against this background, the Tribunal had to consider whether there had been discrimination on grounds of race and whether there had been an unfair dismissal.  They set out in a section headed “Conclusions” their findings on these key matters.  However, it is a matter of criticism of this Tribunal that the Conclusions section is thin and very much of their analysis of the evidence is found in the body of the decision itself.  Their conclusions must be read in that context with the whole decision in mind.  

30.	As to the issue of unfair dismissal, the Tribunal accepted that the reason for dismissal was redundancy, but they considered that there had been a failure to discharge the obligation to act in a procedurally fair manner.  In particular, the list of vacancies was unreliable –indeed the two jobs for which Ms Williams was interviewed were not on the list; there was no consultation with the employee about other possible jobs, trying to match the skills with available vacancies; and no priority was given to Ms Williams as an internal candidates made redundant and seeking redeployment before filling vacancies with external candidates, or those not at risk of dismissal.  

31.	The Tribunal also concluded that there had been discrimination on grounds of race in rejecting her application for the vacancies both at Harpenden House and Briggens House. They found that there was a prima facie case which shifted the burden to the employer in the following terms: 

“We have little difficulty in concluding that we are satisfied, by the claimant, of facts from which we could conclude, in the absence of an explanation from the respondent, that she was a victim of racial discrimination.  Whilst some of the evidence was produced by the respondent, at the direction of the Tribunal, that evidence forms part of the material available to the Tribunal, from which an assessment can be made.  Miss Williams’s comparators are the two white women appointed to the posts at Harpenden House and Briggens House.  They were more favourably treated than the claimant was, in that they were appointed to the posts for which she had applied.  They were subjected to a less rigorous process in that negatives factors were ignored or treated as of little weight when, in the case of the claimant, they were seen as decisive: that notwithstanding her status as a re-deployee.”

32.	Accordingly the burden shifted to the employer to explain why Ms Williams was not appointed, and in the case of both appointments that explanation did not satisfy the tribunal that there had been an absence of race discrimination.  It is true to say that they do not state this in terms in the Conclusions section, but in our judgment it is a clear inference which must be drawn from their conclusion which they reached.

The Grounds of Appeal

33.	Mr Duggan, for the Appellant, submits that the Tribunal erred in both these findings.

34.	The principal ground in relation to both these matters is that it is said that the Employment Tribunal substituted its view for that of the Employer and more specifically it failed to give any cogent reasons why it rejected the explanation offered by the witnesses on behalf of the Appellant as to their reasons for rejecting Ms Williams for the two posts.  In particular, in relation to race discrimination, it is alleged the Tribunal erred when it said at paragraph 35 which we have set out that, in the absence of an explanation, it was entitled to find that there had been racial discrimination, and yet an explanation had been given by the witnesses but it was not properly analysed.  Even if the Tribunal did not find that explanation satisfactory, in the sense that they personally would have chosen Ms Williams, that did not establish discrimination.  Indeed, it would be a plain error of law for the tribunal to infer race discrimination solely from its own perception of the strengths of the candidates: see the observations of. Mummery LJ at paragraphs 50-52 in Martins v Marks and Spencers Limited [1998] IRLR 326.  The key question was why Ms Williams had been rejected for these jobs; if it was because the employers genuinely did not think she was capable of doing the jobs, then unless the tribunal was going to make a finding of unconscious discrimination (and it did not suggest that it was making such a finding) that would be enough to rebut the prima facie case of discrimination.

35.	The Tribunal, it is said, did not ask itself the essential question whether the Appellant did genuinely come to the view that the Claimant was not suited to either of these two vacancies. More specifically, the fact that the Claimant was a “re-deployee” was not relevant to the question of race discrimination, although it is accepted that it had potentially some bearing in the context of unfair dismissal.  The fact that the Tribunal itself would have weighed the evidence differently did not justify it concluding that there was any race discrimination.  If there is a genuine belief that the other candidates were stronger than Ms Williams, then that would have provided an obvious explanation, other than race, for their decision.

36.	More particularly, in relation to the appointment at Harpenden House, the Appellant submits that the decision was taken by Ms Samuels and not by Ms Wilkins, and it was her explanation in particular that should have been the focus of the Tribunal’s attention.  She took the view that Ms Williams needed the computer skills to work the particular data base, and that she did not have those skills.  Lack of capability was an obviously reasonable and non-discriminatory reason in the circumstances.

37.	Similarly, in relation to the appointment at Briggens House, the decision was taken by Mr Install, and yet there was no attempt to determine whether his reason for rejecting Ms Williams, and in particular his perception that she lacked the relevant experience both in outdoor activities and in the use of the data base, was a genuine one.

38.	As to unfair dismissal, the Tribunal could not properly conclude that it had been unreasonable not to offer alternative employment.  The Employers did not consider that Ms Williams was an appropriate person for the two vacancies on offer.  She had been considered for such posts as were available to her and been thought not capable of doing the job.  There was no legal obligation to place her in a job she could not properly do.  Nor in fact were there other jobs which were available to her, as a subsequent investigation for the purposes of the tribunal hearing had shown.

The respondent’s case.
39.	The Respondent to the Appeal contends that there was no error by the Tribunal and plenty of evidence to justify its conclusions.  As to the finding of racial discrimination, there was ample evidence to justify a finding that the first stage in Igen had been satisfied, thereby shifting the burden of proof to the employers.  The Tribunal set out their reasons for so finding in paragraph 35 and that is plainly a sustainable decision.  Once the burden had shifted, then the onus was on the Employers to be provide an adequate explanation and any sensible reading of the Tribunal decision shows that the tribunal has plainly taken the view that no satisfactory non-discriminatory explanation has been provided. 

30.	As to unfair dismissal, there were plainly failings to act as a reasonable employer would have acted; the requirements of consultation and a proper and reasonable approach to looking for alternative employment were not met.  That was a finding which the Tribunal was fully justified in reaching on the evidence and their decision could not conceivably be said to be perverse.
Conclusions

40.	We deal first with the discrimination case and then the unfair dismissal allegation.

Race discrimination.
41.	The proper approach to cases of this kind as laid down in Igen Limited v Wong [2005] IRLR 258 is for the onus to shift once a prima facie case is established. 

42.	We accept for the reasons essentially advanced by Ms Williams that the prima facie case had been established here.  That was not disputed by Mr Duggan.  He did make some objections to parts of paragraph 35 in which the Tribunal set out why it considered that there was a prima facie case, but he accepted that in any event there was sufficient evidence to shift the burden on the employer to explain why Ms Williams had not been appointed to the two potentially suitable jobs.  So the onus inevitably shifted to assessing the explanation of the employer

43.	We also accept that in the absence of a finding of unconscious discrimination (which was not what the tribunal found) the Employer does discharge the burden of proof by establishing that there is a genuine reason, untainted by considerations of race, which motivated the actions.  An employer does not act on racial grounds if he genuinely takes a decision on some other grounds, and the purpose of the legislation is not to attribute discriminatory motives if none exist.

44.	The fundamental question, in our view, is simply whether the tribunal’s decision does show that they were not satisfied with the explanation given by the employer.  We see some force in the submissions of Mr Duggan that the Tribunal nowhere explicitly states that it has rejected the employer’s explanation, and we also recognise, as we have said, that the section of the Tribunal’s decision headed “Conclusions” are somewhat sparse and do not satisfactorily summarise all the matters which have led it to its conclusions.  Having said that, however, we think that reading this Decision as a whole, the only fair reading is that Tribunal was clearly not satisfied from the evidence given by Management’s witnesses that the decisions taken not to appoint Ms Williams to either of these posts was for a non-discriminatory reason.  In short, although the Tribunal do not state in terms that they are left dissatisfied with the explanation given by the Employers, we think it is plain that that is what in fact they are implicitly saying. 

45.	Mr Duggan says that the evidence from Ms Samuels showed that the reason why Ms Williams was rejected from the Harpenden job was her lack of skills in using the particular data base, and similarly her failure to obtain the job at Briggens House was her lack of the relevant experience.  Had the tribunal accepted that then this would indeed have rebutted the claim of race discrimination.  But we are satisfied that they did not, and there is ample evidence, it seems to us, from which they could properly have been dissatisfied with these explanations in this case. 

46.	We simply refer to the following matters which strongly indicate their dissatisfaction with the explanations of the employers.  First, in relation to the Harpenden job was the fact that different accounts were given as to the requisite skills needed for the job; furthermore there was no clear and unambiguous statement even from Ms Samuels that the lack of skills meant that Ms Williams was simply incapable of doing the job.  Indeed, Ms Samuels took into account Ms Williams’ ability to fit in with other staff (without, as the Tribunal found, properly exploring how she had performed at the Roebuck), which is hardly compatible with lack of skills being the crucial or overriding factor.  Moreover, Ms Samuels did not say that a trial period would not be appropriate to her because she would never attain the skills but rather because the post needed to be filled immediately, an answer which the Tribunal did not think in fact was consistent with the way in which the post was filled.  Similarly the tribunal found that the somewhat different explanation given by Ms Wilkins was also unsatisfactory, and that little credit had been given for Ms Williams’ performance at the Roebuck.  The Tribunal was also critical of Ms Wilkins’ answer to the question about the possibility of Ms Williams being given a trial period; they felt that her suddenly changing her answer was not consistent with someone trying to give reliable evidence.  Mr Duggan says that in fact there was evidence that Ms Samuel made the final decision rather than Ms Wilkins, but he does not dispute that they must have discussed the case together and he accepts that if there was an input from Ms Wilkins which was racially tainted - or indeed even if the tribunal was left unsure whether it was or not - then that would render the decision unlawful even if Ms Samuels herself was not influenced by racial considerations. 

47.	As to the appointment to Briggen House, the tribunal again gave reasons why they felt that there was no satisfactory explanation as to why the experience of Ms Williams should have made her unsuited to the job when a similar lack of experience in the successful candidate did not, particularly since Ms Williams had been doing a similar kind of job at the Roebuck.  

48.	When one adds to these considerations the Tribunal’s observations about the racial mix at the different hotels, the lack of diversity training, and the failure by senior management properly to appreciate the implications of the Code of Practice on the Elimination of Racial Discrimination, we think the tribunal’s dissatisfaction with the explanations offered is clear.  Were we left in any real doubt then we would have referred the matter back for clear findings on the matter, but each of us has no doubt as to what the outcome of any remission would be.

Unfair dismissal.
49.	As to the unfair dismissal finding, there plainly were some failings in the way in which the question of alternative employment was handled.  There was no consultation; that might have led to a number of outcomes including the possibility of the employee being willing to take a job on a trial period to see if any necessary skills could be obtained.  The vacancies’ list was inadequate, as was admitted.  Indeed, it did not even identify the two jobs for which Ms Williams was interviewed.  There were potentially a number of jobs that might have been available, given the size of the group.   The Tribunal concluded that the Employers had thought that they should appoint the most desirable candidate and not give weight to the fact that Ms Williams was a ‘redeployee’.  All these were plainly factors the Tribunal was fully entitled to take into consideration when determining that overall the treatment of this Employee had not been reasonable.  Mr Duggan was constrained to admit that if the employer’s procedures were not reasonable then this would in principle render the decision unfair even if they did not in the event affect matters.

50.	He submits that even if Ms Williams had been shown a list with all vacancies it would in fact only have identified the two posts for which she was interviewed, and even had priority been given to her, she still would not have obtained these jobs because she was not considered to have the relevant capabilities.  However, in our view it is clear that those consequences, even if they are correct as a matter of fact, go to the question of remedies but do not touch the conclusion that this dismissal was unfair.  

51.	It follows but notwithstanding the careful submissions of Mr Dougan that we reject this appeal.