Appeal No. UKEAT/0418/06/LA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 19 April 2007

Before
THE HONOURABLE MR JUSTICE UNDERHILL
MR D J JENKINS OBE
MR S YEBOAH

INTERCLEAN BUS SERVICES LTD	APPELLANT

MS R MUDANOWHO	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	Mr E Mallett
(of Counsel)
Instructed by:
Messrs Curwens Solicitors
Crossfield House 
GladbeckWay
Enfield
Middlesex
EN2 7HT	
For the Respondent	Ms S Bourke
(of Counsel)
Instructed by:
London Discrimination Unit
Unit 46 Eurolink Business Centre
49 Effra Road
London
SW2 1BZ	

SUMMARY
Race Discrimination – Inferring discrimination
Race discrimination – Reasons given by Tribunal for inferring discrimination at Igen stage 1 or rejecting the Respondent’s explanation at stage 2 held to be inadequate – Remitted to a different Tribunal.

THE HONOURABLE MR JUSTICE UNDERHILL

1.	The Appellants, to whom we will refer as “the employers”, provide bus cleaning services at a number of depots in London and the South East.  The Respondent, to whom we will refer as “the Claimant”, was employed as a supervisor at the New Cross bus depot from 25 April 2005 until her dismissal on 30 September 2005.  She is black and of African origin: rather oddly, her ET1 and witness statement say that she is Afro-Caribbean, but that was apparently a slip on the part of her advisers.  The Claimant brought proceedings in the Employment Tribunal complaining that her dismissal was on racial grounds.  In particular she asserted that the employers had a policy or practice of dismissing black employees in order to replace them with Portuguese employees.  That was explicitly stated in her ET1, although by another slip the favoured group of employees were described as being Spanish rather than Portuguese.  Perhaps slightly surprisingly, her case as refined in the hearing before the Tribunal appears to have been that the group against whom the policy in question operated were specifically “black African” rather than merely black.  It was the employers’ case that the Claimant was dismissed, essentially, for poor performance.  

2.	The case came before a Tribunal sitting at London (South) on 5 April 2006 and a reserved judgment was sent to the parties on 31 May 2006.  The Tribunal found the claim to be well founded.  Its judgment is short, running to some 3 ½ pages.  That by itself is not a criticism - on the contrary - but it is relevant to some of the points which we will have to consider.  

3.	The facts are set out at paragraphs 4-9 of the judgment.  At paragraph 10 there is a brief reference the decision in Igen Ltd v Wong [2005] ICR 931 but no other discussion of the law: again, we emphasise that that in itself is not a criticism.  The actual reasoning of the Tribunal on the issues which it had to decide is set out at paragraphs 11-14.  
4.	So far as the facts are concerned the only points which we need to record can be summarised as follows:-

1) There is a finding in paragraph 6 that Mr Whitehead, the Claimant’s line manager, was dissatisfied with the state of some of the buses for the cleaning of which the Claimant was responsible and that he spoke to her about this on 20 July and 11 August.  The incidents in question were recorded in contemporary notes which were before the Tribunal.  The Tribunal records that the Claimant sought to explain the defects of which he complained and that it was her perception that he was “picking on her”.  It also at this point records her perception that during her employment the Respondent had a policy of replacing black workers with Portuguese workers.  The Tribunal however makes no findings as to the validity, or indeed the genuineness, of Mr Whitehead’s complaints or, conversely, of the Claimant’s explanations or the correctness or otherwise of her perception that she was being picked on. 

2) Paragraph 7 records that the employers had an equal opportunities policy and had employed in-house equal opportunities training: it also records that they had an ethnically diverse workforce.  The Tribunal goes on to observe that the employers “had no policy prohibiting or warning of the possible discriminatory results in a mixed workforce of the practice of managers interviewing staff known to them for jobs with them or of staff putting forward people for positions”, and in that connection it records that a Portuguese worker called Jose had recommended Portuguese recruits to Mr Whitehead and that it was Jose who later took over the Claimant’s position.

3) It is necessary that we should read most of paragraph 8 of the judgment, which contains the Tribunal’s factual account of the circumstances of the Claimant’s dismissal.  It is in the following terms:

“The working relationship between the Claimant and Mr Whitehead did not improve.  By letter dated 22 September 2005, Mr Whitehead terminated her employment with one week’s notice, the last day of work being stated as 30 September 2005.  The Claimant was off sick at this time, and Mr Whitehead delivered the letter to her home.  No warning had been given to the Claimant and no procedure was followed.  The Claimant sought legal advice and her advisor, Mr R Leong (her representative at Tribunal), telephoned Mr Whitehead seeking a reason for the dismissal: Mr Whitehead said the reason was “operational” but in reply to Mr Leong’s letter of 28 September, Mr Whitehead wrote on 30 September that although the Respondent was not obliged to give reasons for the dismissal, they were as stated in the letter.  The reasons given related essentially to the Claimant’s performance and conduct in her work.  Mr Whitehead’s letter also mentioned the Claimant’s right of appeal.  By further letter dated 7 October, Mr Leong gave grounds of appeal, and the question of race was raised for the first time.”  

5.	The Tribunal’s expressed reasons for its finding of racial discrimination against the employers is set out in paragraphs 11-14 of the judgment, which it is necessary to set out in full:-
“11.	This was a case where the Tribunal felt that there was a paucity of evidence but, however, sufficient to allow the Tribunal to come to a proper decision. The Claimant’s comparator was hypothetical — anyone who was not a black African person. In a workforce of people of various races, nationalities and colours, that was likely to cause a claimant some difficulties, and the Tribunal scrutinised very carefully the statistics put forward by the Claimant. These proved not to be determinative, except that they showed a mixed workforce and a fairly high turnover of staff. From page 92 in bundle R1, as corrected by oral evidence, it appeared to the Tribunal that during a given period there were dismissed 13 black Africans and 11 people who were not black Africans. It also appeared that of those dismissed, 100% of the black Africans were dismissed and 66% of the other people were dismissed, the other 33% having resigned. The Tribunal considers that these figures may not be completely accurate, but are of use in that they show that the statistics put forward in this case are not determinative either way in respect of the matter of discrimination. The Tribunal found it more helpful to look at the circumstances of the Claimant’s dismissal and to examine whether or not her post was offered to Mr Mansaray, a black African, before it was filled by a Portuguese man.) The Tribunal noted that no formal process was undertaken by the Respondent in respect of the Claimant’s dismissal: there was no warning of her impending dismissal; at different times the Respondent gave different reasons for her dismissal (no reason was given at first; then, in response to her representative’s query, “operational reasons” were cited; then the Respondent referred to her performance and alleged misconduct). Further, the Claimant received no formal or proper response to her appeal. It was accepted that the Respondent did not dispute that dismissal can constitute a detriment and less favourable treatment.
12.	Mr Mansary, although still working for the Respondent, was not called to give evidence; neither did the Respondent call any evidence to support its assertion that it had a policy of following no formal or regular procedure before dismissing any employee with under one year’s service (these people being unable to bring “ordinary” claims for unfair dismissal under the Employment Rights Act 1996).
13.	From these facts, the Tribunal concluded that this was a case where the Claimant had proved facts from which the Tribunal could conclude in the absence of an adequate explanation that the Respondent had discriminated against the Claimant. Therefore the burden of proof shifted to the Respondent, as provided for in section 54A of the Race Relations Act 1976. The Tribunal therefore turned to the Respondent to give an adequate explanation, failing which the Tribunal would be obliged to uphold the complaint. The Tribunal finds that the Respondent failed to provide an adequate explanation that is, that the Respondent has failed to provide an adequate explanation. In particular, the Respondent failed to show that, although it has a written disciplinary procedure, it did or does not follow this (or any real procedure) in the case of other employees (whether or not black African employees); the Respondent contended that it does not adopt good practice in respect of dismissals for employees with under one year’s service, but put in no evidence about that. The Respondent did, however, show that it has a written disciplinary process (page 43 of bundle RI) and that there had been some training on equality matters. As to Mr Mansaray, Mr Whitehead and Ms Velvick said that the job had been offered to him; if it had, the Respondent would no doubt contend that that demonstrated that the Respondent tended not to discriminate against black African people. In view of the importance of whether or not the job was offered to Mr Mansaray, the Tribunal took particular note of the fact that, although he was still employed by the Respondent, the Respondent had chosen not to call him to give evidence. The Tribunal also noted the Respondent’s various and vaguely expressed reasons for dismissing the Claimant.
14.	Taking all these factors into account, in view of the provisions of section 54A of the Race Relations Act 1976 and of the Igen guidelines, and taking into account the Code of Practice for the Elimination of Racial Discrimination, the Tribunal considers that it must find on the balance of probabilities that the Respondent did discriminate against the Claimant on racial grounds in dismissing her.”

6.	We are sorry to say that we do not regard that reasoning as sufficient to discharge the Tribunal’s obligation to give a reasoned account of its decision.  We can summarise the most significant defects as follows.  

7.	First, it was, as the Tribunal appears to have recognised (see the references in both paragraphs 11 and 13), a central plank in the employers’ case that following the dismissal of the Claimant her job had first been offered to another black African, Mr Mansaray, although he had in the event turned it down.  If that were true, it is a fact which would be highly relevant to the question of whether the Claimant’s dismissal was on racial grounds, and more specifically whether it was in pursuance of a policy of dismissing black African employees in order to replace them with Portuguese employees.  We heard some argument about whether the question arose at what we might call “Igen stage 1” or at “Igen stage 2”.  In our view it properly belongs to stage 1; but, frankly, where precisely the point fits into the analysis is not of central importance.  The crucial point is that if it were indeed the case that the job was offered to Mr Mansaray it would be very damaging to the Claimant’s case that he was dismissed on racial grounds.  

8.	As acknowledged in paragraph 13 of the judgment, evidence of the offer of the Claimant’s job to Mr Mansaray was given by two witnesses called by the employers, Mr Whitehead and another manager called Ms Velvick.  Ms Velvick was not employed at the Claimant’s depot and her evidence may have been hearsay; but Mr Whitehead was of course the Claimant’s manager and it can safely be assumed that his evidence on the point was based on his own personal knowledge.  The Tribunal’s conclusion in paragraph 13 must mean that it rejected the evidence of Mr Whitehead and Ms Velvick, but it is noteworthy that it does not say so in terms nor does it give any reasons for doing so.  It is true that it is clear that the Tribunal attached importance to the fact that Mr Mansaray himself had not been called to give evidence of the offer of the job to him, and we certainly accept that the absence of a potential corroboratory witness was a factor which the Tribunal was entitled to take into account in deciding whether to accept the evidence of Mr Whitehead and Ms Velvick; but it cannot by itself be a reason for rejecting that evidence.  There is no recognition in the Tribunal’s reasons that it was in fact finding, albeit on the balance of probabilities, that the evidence of the two witnesses in question was untruthful.  That was a finding that it was entitled to make, but in our judgment fairness required that if so it be confronted head on and reasons for the finding be given.  

9.	In this connection we were referred to the decision of this Tribunal in Levy v Marrable & Co Ltd [1984] ICR 583, which was a case where the Industrial Tribunal had had to decide between the evidence of two witnesses giving conflicting evidence but it had been unclear what conclusion it had reached.  At page 587 Waite J said this:-
“What is our duty in those circumstances? We think the principle involved is the following: where there has been a conflict of evidence at the hearing before an industrial on a significant issue of fact, then the industrial tribunal’s finding (i.e. their acceptance or rejection of such evidence) must be made plain one way of the other.  Express words are not necessary.   That is clear from Union of Construction , Allied Trades and Technicians v Brain [1981] ICR 542, and in particular the judgment of Donaldson L.J. at p.551.  But the language must be sufficiently full and clear to make it possible for anyone to tell from a reading of the decision as a whole whether the members have believed the relevant witnesses or not.”

Both Counsel before us sought to derive some support from that passage.  Mr Mallett for the employers said that it demonstrated the importance of a Tribunal facing up to its duty to decide whether to accept or reject the evidence of witnesses where there was a conflict, and he pointed out that the present case was a fortiori because there was in fact no contrary evidence to set against that of Mr Whitehead and Ms Velvick.  Ms Bourke for the Claimant attached accordance to the statement of Waite J that “express words are not necessary”.  So far as that is concerned, the extent of the reasoning to be given in rejecting the evidence of a particular witness will depend on the circumstances of each case.  But in modern practice, and in the circumstances of the present case, we cannot regard it as acceptable for the evidence of Mr Whitehead and Ms Velvick to have been in practice rejected without any recognition by the Tribunal that it was doing so or any reasons being given.  It was in fact Mr Mallet’s recollection, he having appeared in the Tribunal, that neither Mr Whitehead nor Ms Velvick were even challenged on this part of their evidence.  If that is correct, the decision would be even more seriously defective; but it is fair to say that Ms Bourke’s instructions from Mr Leong, who did appear in the Tribunal, is that both witnesses were challenged on this point.  We do not therefore take this point into account in this part of our decision.  

10.	We in fact have the impression - it cannot be more - that the Tribunal regarded the reversal of the burden of proof under section 54A of the Race Relations Act 1976 as absolving it of the obligation to make an express finding on the question of the evidence of Mr Whitehead and Ms Velvick.  If that was its reasoning, it would have been obviously wrong if, as we think, the evidence in question belonged at stage 1 of the enquiry.  But even if it came in at stage 2 it does not seem to us that the reversal of the burden of proof absolves Tribunals from reaching conclusions on whether or not it accepts the evidence of witnesses whose evidence is relied on by either party for stage 2 issues.

11.	Secondly, the Tribunal was wrong to say, as it did at paragraph 12 of the judgment, that the employers did not call any evidence to support their assertion that they had a policy of following no formal or regular procedure before dismissing an employee of under one year’s service.  That issue was of course relevant because if the treatment of the Claimant to which the Tribunal attached importance in dismissing her without any procedures being gone through were unique to her that might arguably justify an inference that it was on racial grounds.  But evidence that the employers’ policy applied to all employees with less than one year’s service was given by Mr Whitehead, in terms and with some circumstantiality.  What we suspect that the Tribunal meant was that there was no independent or objective evidence demonstrating that policy over and above what Mr Whitehead told them.  That may be so, and it might have been a factor leading it to disbelieve Mr Whitehead’s evidence; but, if so, again it was its obligation to say that that was what it was doing and to give reasons.  

12.	Thirdly, the Tribunal failed to address at all the employer’s positive case that the Claimant was dismissed for performance reasons.  It included, as we have said, in its findings of fact findings that there had been problems between Mr Whitehead and the Claimant ostensibly on performance issues in the two months before her dismissal.  If it was going to find that those incidents were not based on genuine concerns about her performance it was obliged to say so.  

13.	Fourthly, there was no finding as to whether the discrimination found was conscious or unconscious.  We do not suggest that that is required as a matter of law; but it is, it seems to us, a matter of good practice, as this Tribunal held in Network Rail Infrastructure Ltd v Griffiths-Henry [2006] IRLR 865 Elias P at paragraph 31.  Where no such finding is made, it is suggestive that the Tribunal has not properly analysed whether the act complained of was indeed on racial grounds.  

14.	Fifthly, it is not in fact clear what are the particular facts referred to at the beginning of paragraph 13 of the judgment on which the Tribunal relied in concluding that the first Igen stage had been satisfied.  Plainly they included the procedural unfairness, or unreasonable conduct, identified in the second half of paragraph 11.  However Mr Mallett submitted with some force that if that were so it would be an inadequate basis for inferring discrimination, and he referred us to well-known authority suggesting that discrimination ought not to be inferred merely on the basis of unreasonable conduct - see in particular Bahl v The Law Society [2004] IRLR 799 and Madarassy v Nomura International Plc [2007] IRLR 246.  That objection would be answered if there were other evidence suggesting a pattern of disproportionate dismissal of black African employees.  The statistical evidence referred to by the Tribunal in the first half of paragraph 11 of the judgment might in principle, have been evidence of that kind.  The Tribunal describes that evidence, following its brief summary, as not being “determinative”.  Read as a whole and in particular in the light of the following sentence, it seems that the Tribunal was in fact meaning by that phrase to say that it was not intending to take the statistical evidence into account; but if it meant that, although not determinative, the statistical evidence nevertheless had some relevance the reasoning on the point is, we are bound to say, so opaque that we cannot understand it.  

15.	There is perhaps an overlap in those five points between some substantive criticisms of the Tribunal’s reasoning and our predominant conclusion, which is simply that the judgment is insufficiently reasoned for the parties to be given a clear understanding of the basis on which the Claimant’s claim succeeded.  In any event we are satisfied that this is a decision which cannot stand and the matter will have to be remitted for a fresh hearing.  We would not want it to be thought that we approved in any way of the way in which, according to the Tribunal’s findings, the employers handled the dismissal of the Claimant; but of course the question was not whether the dismissal in question was fair but whether it was on racial grounds.  We will hear any submissions on the question of whether, as we have indicated is our provisional view, the case should go back to a different Tribunal. 

[After submissions]
16.	Our original view has not changed.  It seems to us that the defects of the Tribunal’s reasoning were such that the parties could not have confidence in having the matter revisited by the same Tribunal.  We note that the case only took a day, and that indicates that the issues are limited.  Although we regret, as we always must in any case that is remitted, the additional cost for the parties, that has to be a secondary consideration.  We do not know whether second time around the case can again be heard within a day; but we cannot see any basis on which it would last more than a couple of days.  In those circumstances it seems to us that the balance is well in the favour of a fresh Tribunal and a fresh start.