[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Marriott Motor Group & Ors v Cottington [2009] UKEAT 0319_08_1404 (14 April 2009) URL: http://www.bailii.org/uk/cases/UKEAT/2009/0319_08_1404.html Cite as: [2009] UKEAT 0319_08_1404, [2009] UKEAT 319_8_1404

[New search] [Printable RTF version] [Help]

APPEARANCES

 

For the Appellants	MR H KNILL (Solicitor) MILS Solicitors 27b The Mansions 252 Old Brompton Road London SW5 9HW
For the Respondent	MR P STRELITZ (of Counsel) Instructed by: Messrs Kester Cunningham John Solicitors Chequers House 77-81 Newmarket Road Cambridge CB5 8EU


 


SUMMARY

SEX DISCRIMINATION: Justification / Burden of proof

Employment Tribunal found direct sex discrimination and that the employer was unable to justify it. The EAT held reasoning of Tribunal inadequate and failed to properly apply the burden of proof. The Employment Tribunal also made an order for costs when there was no basis to do so. Appeal allowed and case remitted to a fresh Tribunal. Costs order vacated.


 


HIS HONOUR JUDGE BIRTLES

1. This is a judgment in an appeal between (1) Marriott Motor Group and (2) Mr Barry Haigh (Appellants) and Miss Liza Cottington (Respondent).

Introduction

2. These are two appeals from two separate judgments of the same Employment Tribunal sitting at Bury St Edmunds. The first judgment (the liability judgment) was sent to the parties on 27 September 2007. The second judgment (a review judgment) was sent to the parties on 25 April 2008.
3. The liability judgment found that the Appellants had discriminated against the Respondent by reason of her sex and awarded her compensation, together with interest and costs. The review judgment followed a hearing on the issue of costs only, and the review was refused. The Tribunal confirmed its original order for costs.
4. Mr Knill (Solicitor) appeared before us for the Appellants, and Mr Strelitz (of Counsel) appeared for the Respondent. We are very grateful to both of them for their written and oral submissions.

The material facts

5. The Employment Tribunal set out the material facts as found by it at paragraphs 1-27 of its judgment. We will refer in more detail to particular parts of that fact finding later in this judgment. Suffice it to say that the Respondent had, over a number of years, gained experience in the accounting procedures and financial services departments of various motorcar sales franchises and was recruited to work for the Appellants at its St Edmunds Audi franchise. The offer of employment is contained in a letter dated 4 August 2006 (EAT bundle, page 98). There was a formal contract of employment signed on 26 August 2006 (EAT bundle, pages 2-15). Paragraph 32 of that contract of employment refers to a company handbook which "contains additional terms and conditions of your employment" (EAT bundle, page 111). The company handbook is at EAT bundle pages 178-211. The section which relates to assessment of capability is at EAT bundle pages 183-186. It commences with a statement:

"This procedure does not form part of your contract of employment."

6. In September 2006 the Second Respondent, Mr Barry Haigh, was appointed Sales Manager. The Respondent's job title was ALD Business Manager and she reported to the Sales Manager. Her office was accessible to the sales area and there were a team of salespeople who reported to their own manager, but not to the Respondent. She was on a level with them and had no one reporting to her. Her function was to receive and process enquiries generated by the sales force and in selling to customers purchasing new motorcars extra finance and insurance products offered by Audi.
7. The Respondent's case was that Mr Haigh adopted a domineering stance in relation to her. On 29 November 2006 there was a meeting attended by the Respondent, a representative of Audi Finance, and Mr Steve Nicol, who was head of business at the Appellants' Bury St Edmunds' premises. There were references made to the fact the level of business in the Finance area with which she was concerned was low. Mr Haigh continued to express doubts to Mr Nicol about the Respondent's performance.
8. On 23 January 2007 there was a meeting between the Respondent, Mr Nicol, and Mr Haigh. This was after the Respondent had returned from a four week holiday commencing on 23 December 2006. The meeting was adjourned until the following day.
9. On 24 January 2007 there was a discussion about the income generated by the Respondent. The Tribunal found that the meeting of 24 January was not convened as a disciplinary meeting, nor was it convened within the capability provisions of the contract of employment. The two managers criticised the Claimant's management of her administrative responsibilities and she was advised that she had to distance herself from the sales team or, as expressed in the note of the meeting, to "control" the sales team. The notes indicate that:

"The Claimant agreed with the criticism and said that she had found it difficult to control the sales team, but agreed she would try to do so. One of the problems highlighted at the meeting was the fact that members of staff sometimes ate their lunch and sandwiches in the Claimant's office and she was asked to stop this happening. The sales force itself was also spoken to in firm terms about their performance and the instruction about where not to eat sandwiches was repeated to them."

10. The Respondent worked the next two days until the weekend and then returned to work on Monday 29 January, when she was ill with migraine on 30 and 31 January. She went to work on one of these days and her case was that Mr Haigh was extremely angry with her and bullied her. The Tribunal accepted the Respondent's evidence about the bullying by Mr Haigh.
11. There were then two more working days of that week and the Respondent came back to work on Monday, 5 February. On that day Mr Haigh put in writing a complaint about her. Mr Haigh criticised the Respondent because she had failed to distance herself from the sales office and had demonstrated no improvement in performance, "in fact, the opposite has occurred". Mr Haigh complained that people in the sales team were eating sandwiches in her office and this had happened on two occasions. She had failed to demonstrate a positive attitude to her work, and reference was made to the case of Mr Sillett. That involved an alleged failure to prepare the proper paperwork for the purchase by Mr Sillett of a new car (Tribunal judgment, paragraphs 13-15). This happened while the Respondent was on holiday.
12. The Tribunal found as a fact that Mr Nicol decided to dismiss the Respondent on the receipt of Mr Haigh's memorandum on 7 February. On the same day the Respondent spoke with a Mr Norris, who had worked with her in previous employments, and who confirmed to the Tribunal that he had never had any problem with the Respondent's performance.
13. On 8 February the Respondent was called to Mr Nicol's office for "another little chat". She had asked whether or not she could bring someone with her and was told not to do so. At the meeting she was dismissed. The letter of dismissal is dated 9 February (EAT bundle 120). It says this:

"Dear Liza,

Following our meeting on 8/02/2007 where your employment was terminated I am writing to confirm the reasons for our decision.

You attended a meeting on 24/01/2007 where we discussed the following areas of concern regarding your performance.

1/ Poor level of Finance Income.

2/ Administration of Finance Payouts and Vehicle Debtors.

3/ Management and control of the sales team.

Following that meeting your performance and conduct remained unsatisfactory and it was therefore decided to terminate your employment with immediate effect."

The letter was signed was by Mr Nicol.

14. As the Tribunal found at paragraph 25 of its judgment, Mr Nicol took the view that as the Respondent had not been employed for 12 months it was not necessary for him to invoke the contractual capability provisions. As we already pointed out, the capability provisions of the employment handbook are not contractual. Mr Nicol said to the Tribunal that he had bypassed the capability procedures in this case and, indeed, in other cases.

The Employment Tribunal reasons

15. The Employment Tribunal found that the Respondent had been discriminated against on the grounds of sex for the reasons contained in paragraphs 28-33 of its judgment. The Employment Tribunal said this:

"28. Against that background of fact, the Tribunal must ask whether the Claimant has shown circumstances from which an inference of sex discrimination can be drawn. If we find that such an inference can be drawn, then the burden of proof shifts to the Respondent to show that any detriments suffered by the Claimant were not for a reason relating to sex.

29. We find that we can draw an inference that the Claimant was discriminated against and treated less favourably than her male colleagues, in several ways. Of course, she was not singled out 'as a woman' to be dismissed. However, we feel that the bullying exercised by the Second Respondent, which we believe took place not only on 30 or 31 January 2007 but also on the other occasions referred to by the Claimant when she was subsequently seen to be in tears, was bullying by a man of a woman because she was a woman. There is no evidence that Mr Haigh behaved in that way towards other employees. It is only a small matter but very significant that whereas the Claimant was criticised, and indeed it formed part of her dismissal, for not applying the sandwich rule, the one of the two salesmen who did know of the sandwich rule and who was found by Mr Haigh to be breaking it, was not disciplined. The Claimant was disciplined and indeed it was the substantial reason for her dismissal in regard to the 'Sillett' case, whereas the man who altered the papers and failed to draw that alteration to the Claimant's attention or take the steps that good business practice would have required to draw to the attention of a person returning from holiday an important change in the terms of a contract which had occurred whilst that person was on holiday, was not disciplined.

30. The material relating to the Claimant's performance was a best hazy. There were generalised allegations of failure to manage paperwork properly and specific allegations of failing to achieve targets, but it seems to have been totally overlooked that, as we have quoted from the Claimant's evidence which we believe, that Mr Haigh told her that the December targets had been wrongly written, primarily for the reason we have already referred to, the emission point, in December 2006.

31. All these things happened to the Claimant as a woman and we find that we are able to draw an inference from them that they say were because she was a woman and that she was discriminated against.

32. The Respondents must now severally discharge their burden of proof. We find that they have failed to do so. The direct discrimination by Mr Haigh, the bullying, as well as his participation in the dismissal process, which was process was manifestly unfair, can easily sit with the claim that it was by reason of the Claimant's sex that these things were done. Indeed, it was he who failed to discipline the sandwich-eating salesman or the person who had altered the contract in the 'Sillett' case. So far as Mr Nicol is concerned, the same criticism can be made of him, but additionally the Tribunal were unimpressed by his statement that he believed that employees with less than 12 months' service need not be put through the capability/performance procedure, nor need any formal procedure be adopted in regard to them. The Respondent needs to be reminded that apart form the rights recently promulgated applicable to employees after 6 months, there are a raft of other rights the breach of which can lead to potential claims from the day one-from whistle blowing to the range of discrimination jurisdictions. But that apart, and apart from the contractual rights granted in the contract of employment, good business practice and common courtesy in dealing with human beings demands that something more should be done before dismissing somebody that that they should be summoned to a meeting 'for a little chat' resulting in dismissal. It may be that Mr Nicol did not consciously discriminate against the Claimant by reason of her sex. However, his cavalier approach to the application of good employment practice, as embodied in the employment legislation, never mind completely bypassing and ignoring the capability provisions of the contract of employment, lead us to the conclusion that he may well have exercised subconscious discrimination in relation to the Claimant and wanted to be rid of her because she was a woman, though he did not express it openly in those terms.

33. For these reasons, we find that the Claimant was discriminated against. The substantial detriments she suffered was the matters that we have referred to but in particular dismissal."

The Notice of Appeal

16. The Notice of Appeal on the liability decision is at EAT bundle, pages 14-27.

Ground 1: Burden of proof

17. Mr Knill submits that the Tribunal failed to properly apply the burden of proof requirements under Section 63A of the Sex Discrimination Act 1975. Mr Knill begins by referring us to Madarassy v Nomura International Limited [2007] ICR 867, which approved the judgment of Elias P in Laing v Manchester City Council [2006] ICR 748.
18. The main point of the decision of the Court of Appeal in Madarassy was that on a complaint under the Sex Discrimination Act 1975 the complainant had to prove, pursuant to Section 63A(2), facts on which an Employment Tribunal "could" properly conclude that the Respondent had committed an unlawful act of discrimination; that the section did not prevent the Tribunal at that stage from hearing, accepting or drawing inferences from evidence adduced by the Respondent disputing and rebutting the complaint; that that once a prima facie case was established, the burden of proof moved to the Respondent to prove that it had not committed any act of unlawful discrimination, but it did not shift simply on the complainant establishing the facts of a difference in status and a difference in treatment; that it was only once the burden had shifted that the absence of an adequate explanation for the differential treatment became relevant; and that the Employment Tribunal had not erred in that case in following the two-stage approach, considering at the first stage whether the Claimant was treated less favourably than either theoretical male comparator in the same circumstances and whether it was on the grounds of her sex or pregnancy, and whether the burden shifted, dealing at the second stage with the adequacy of the explanation provided by the employer for its alleged less favourable treatment of the Claimant.
19. Applying these authorities to the facts of this case, Mr Knill submits that the Employment Tribunal erred in law in that it did not properly analyse whether a prima facie case of less favourable treatment on the grounds of sex had been established. It had decided to adopt the two stage test (see paragraphs 31-32 of the judgment) and then misapplied it. The detail of Mr Knill's submissions are set out in the Notice of Appeal (EAT bundle, pages 17-22) and are supplemented by his skeleton argument and oral submissions.
20. Mr Strelitz opposes this ground of appeal on the basis that it amounts to criticisms of the facts found by the Tribunal and does not raise a point of law.
21. In paragraphs 29-30 of its judgment (which we have set out above) the Employment Tribunal identified four matters from which they can draw an inference that the Respondent was discriminated against and treated less favourably than her male colleagues. We take each in turn:

(a) The bullying by Mr Haigh, which the Tribunal believed took place on 30 or 31 January 2007, but also on other occasions, "was bullying by a man of a woman because she was a woman. There is no evidence that Mr Haigh behaved in that way towards other employees." The only evidence which the Employment Tribunal relied on in support of this conclusion was paragraph 17 of the Respondent's witness statement (judgment, paragraph 11). That says this:

"17. Mr Haigh, who was my Line Manager, pursued a campaign of harassment against me. I believe he did this with the intention of making me give up my employment. Examples include on or around 30th/31st January 2007, I was off sick with a migraine, although I came in to complete some outstanding paperwork. He shut the office door behind me and started to shout at me. He believed that I had been complaining about my Company Demonstrator to my colleagues. He continued to shout to get his point across even when I told him I found it upsetting. His behaviour was always like this when there were no witnesses present, although others have witnessed me in tears afterwards."

In paragraph 31 the Tribunal say:

"All these things happened to the Claimant as a woman and we find that we are able to draw an inference from them that they were because she was a woman and that she was discriminated against."

This is tautologous when seen against the background of (a) of poor performance by the Respondent; and (b) a poor personal relationship between Mr Haigh and herself. There is simply an assertion by the Tribunal but no reasoning.

(b) The sandwich rule. The Tribunal in paragraph 29 go on to say this:

"It is only a small matter but very significant that whereas the Claimant was criticised, and indeed it formed part of her dismissal, for not applying the sandwich rule, the one of the two salesmen who did know of the sandwich rule and was found by Mr Haigh to be breaking it, was not disciplined."

Mr Haigh and the Claimant shared an office. Mr Haigh did not want sales staff for whom he was responsible eating their sandwiches in his office. He made this clear. A comparator would have been a man doing the Respondent's job. There is no evidence that such a person would not have been treated in the same way as the Respondent. Again, there is no reasoning by the Tribunal as to a hypothetical comparator, i.e. a person doing the Respondent's job who would not have been treated in the same way as the Respondent.

(c) The third ground given by the Tribunal is the Sillett case. Before turning to the Tribunal's reasoning it is important to set out the facts of the Sillett case as found by them. It appears at paragraphs 14-16 of the Tribunal judgment and it says this:

"14. However, the case of 'Sillett' must be considered. Mr Sillett had apparently agreed to purchase an Audi motorcar some time before the Claimant went on holiday. At that stage, there was to be a trade-in of his current vehicle and the balance was to be paid we know not how. The Claimant completed all the paperwork on the basis of the transaction proceedings on that basis.

15. Whilst the Claimant was on holiday, Mr Sillett changed his mind about he trade-in, he sold his car privately or for whatever reason decided not to trade it in, and when he came to collect his vehicle he did so without the proper paperwork having been completed. During the Claimant's absence on holiday, a Mr McLean was responsible for her desk and when the Claimant returned from holiday Mr Sillett's car was delivered, she not knowing the change of circumstances.

16. It is Mr Nicol's evidence that, upon receipt of this memorandum on Wednesday 7 February, he decided to dismiss the Claimant. He was particularly annoyed about the 'Sillett' case because, since this car had left the depot's premises without the appropriate paperwork having been created, the Respondent was liable for £30,000 until the paperwork had been corrected and Audi Finance were able to process the transaction."

The Tribunal say this at paragraph 29:

"The Claimant was disciplined and indeed it was the substantial reason for her dismissal in regard to the 'Sillett' case, whereas the man who altered the papers and failed to draw that alteration to the Claimant's attention or to take the steps that good business practice would have required to draw to the attention of a person returning from holiday an important change in the terms of a contract which had occurred whilst that person was on holiday, was not disciplined."

It might be the case that the man who altered the papers, a Mr McLean, was a proper comparator, but there is insufficient fact finding by the Employment Tribunal in paragraphs 14-16 to enable the Respondent to know why Mr McLean was the appropriate comparator. Detail of what Mr McLean did do, or should have done, is unclear. A more appropriator comparator would have been a man occupying the Respondent's position who went away for a four week holiday and where Mr McLean acted in the same way. If such a comparator would have been disciplined because of the Sillett affair then no inference of discrimination can be made.

(d) The Tribunal found that the material relating to the Respondent's performance was at best hazy. This is despite the fact of the Tribunal's findings that:

(1) The Respondent herself admitted that part of the problem was her relationship with the sales team (judgment, paragraph 4);

(2) Mr Haigh's continuing concerns about the Respondent's performance (judgment, paragraph 6);

(3) The actual figures showing that the income per unit sold by the Respondent was down on that generated by her predecessor (judgment, paragraph 8);

(4) The assessment of the income generated by the Respondent did not depend on the numbers sold, but on the additional insurance contract and units sold, i.e. in this way the Respondent was not dependent on the sales force (judgment, paragraph 9).

It is difficult to see how this evidence can be called "at best hazy". Neither has the Tribunal made any attempt to identify whether the Respondent would have taken the same view of the performance of a male comparator in the Respondent's position.

22. These are the four matters taken into account by the Tribunal in carrying out its evaluation of the evidence under the first stage of the test under Section 63A of the Sex Discrimination Act 1975. We particularly note that at paragraph 23 of its judgment the Tribunal noted that the Respondent complained that she was referred to as "the finance bird". She was called such by Mr Nicol. However, that fact is not relied on by the Employment Tribunal in deciding that the burden of proof shifted to the Appellant to provide an explanation.
23. In our judgment, the Employment Tribunal failed to explain its reasoning as to why it drew the inferences that it did from the four points mentioned above. That is an error of law.

Ground 2: The why question?

24. This is really dealt with in paragraphs 25 and 32 of the judgment. The Tribunal found that the Appellants had failed to discharge the burden of proof which had shifted to them. The reasons given by the Tribunal are devoid of reasoning and simply amount to assertions.
25. Turning first to Mr Haigh, the Tribunal simply assert that his bullying of the Respondent amounts to sex discrimination and as Mr Haigh failed to discipline the sandwich-eating salesmen or Mr McLean in the Sillett case it also amounts to sex discrimination. No attempt is made to analyse the evidence of Mr Haigh on any of these three points or as to whether any explanation he gave justified any action he took. There is no attempt in the case of Mr Nicol to do other than say, "The same criticisms can be made of him".
26. Mr Nicol's uncontested evidence that he did not put any employee of under 12 months service through the capability/performance procedures points in the opposite direction, i.e. there was no discrimination on the grounds of sex in the way he treated the Respondent in this case.
27. The Tribunal appear to have overlooked the fact that the capability/performance procedures were not contractual, but given they were applied by Mr Nicol in a non-sex discriminatory way we cannot see the relevance of the second part of the Tribunal's reasoning in paragraph 32 of its judgment.
28. Finally, we note that the fourth ground relied on by the Tribunal in drawing an inference of sex discrimination, i.e. the Respondent's performance, is not dealt with at all in paragraphs 32 or 33 of its judgment. Again, the reasoning is inadequate.

Ground 3: The correct comparator

29. For the reasons already given, we agree with Mr Knill's submissions that in respect of both the First and Second Respondents the Employment Tribunal failed to identify the correct hypothetical comparator in each of the four instances it gave for finding that it could draw an adverse inference of sex discrimination which shifted the burden of proof to the Appellants. The Tribunal is not obliged to construct a comparator, but when it does so it must construct the correct comparator.

Ground 4: Unreasonableness

30. Mr Knill's submission here is that the Tribunal wrongly took into account its view that the Appellants treated the Respondent unreasonably as leading to an inference of sex discrimination: (Bahl v The Law Society & others [2004] IRLR 800. In that case the Court of Appeal stated that where there is unreasonable treatment of a complainant alleging discrimination by an employer and there is nothing else to explain that treatment then that cannot in itself lead to an inference of discrimination, even in the absence of evidence from that employer that equally unreasonable treatment would have been meted out to the comparator.
31. Mr Knill refers to the Tribunal's judgment at paragraphs 3-5, 7, 11, 12 and 14 as examples of unreasonable treatment where the Tribunal has failed to construct a hypothetical comparator and failed to ask itself whether such a hypothetical comparator would or would not have been treated in the same way.
32. The same is true of the Tribunal's finding in respect of Mr Nicol's bypassing the Appellant's employment handbook in respect of the application of the capability procedures (judgment, paragraphs 25 and 32). Indeed, there is no finding of fact at all by the Employment Tribunal as to whether or not the Appellants in the shape of Mr Haigh and/or Mr Nicol did not genuinely believe that the Respondent was incapable at her job (see Network Rail Infrastructure Limited v Griffiths-Henry [2006] at paragraph 22 per Elias J).

Ground 5: Reasons

33. This ground is based upon the judgment of the Court of Appeal in Bahl, supra, at paragraph 101. In that passage Mummery LJ specifically endorsed the observations of Elias J in the EAT. In that case, Mummery LJ said this:

"It is not the case that an alleged discriminator can only avoid an adverse inference by proving that he behaves equally unreasonably to everybody. As Elias J observed (paragraph 97):

'Were it so, [common] the employer could never do so where the situation he was dealing with was a novel one, as in this case.'

Accordingly, proof of equally unreasonable treatment of all is merely one way of avoiding an inference of unlawful discrimination. It is not the only way. He added:

'The inference may also be rebutted - and indeed this will, we suspect, be far more common - by the employer leading evidence of a genuine reason which is not discriminatory and which was the ground of his conduct. Employers will often have unjustified albeit genuine reasons for acting as they have. If these are accepted and show no discrimination, there is generally no basis for the inference of unlawful discrimination to be made. Even if they were not accepted, the tribunal's own findings of fact may identify an obvious reason for the treatment in issue, other than a discriminatory reason.' "

34. As Mr Knill points out, in this case there is no evidence in the Tribunal's judgment that Mr Haigh bullied the Respondent because she was a woman and there is no evidence that he subjected other employees to that kind of behaviour, i.e. men or women (judgment, paragraph 29). What the Tribunal should have done was to have assessed Mr Haigh's behaviour against the background of his obvious dissatisfaction with the Respondent's poor performance and the fact that despite his instruction she continued to allow sales staff to eat sandwiches in the office she shared with Mr Haigh. Adequate investigation of those issues and proper reasoning might well have led the Tribunal in this case to the opposite conclusion to which it did. It seems to have closed its mind to that possibility.

Conclusion on liability

35. For these reasons, we allow the appeal against the liability decision.
36. We have carefully considered the question of disposal. We are mindful of the case law. However, the judgment is so flawed in this case and the Tribunal's views so clear that we think it right that this case should be remitted for a rehearing to a fresh Employment Tribunal.

Appeal on costs

37. At the end of its judgment dated 27 September 2007 the Tribunal ordered that the Appellants pay the costs thrown away by the adjournment on 16 July 2007 in accordance with the oral judgment delivered on that day. The costs were agreed between counsel as £1,498.89. No copy of any such oral judgment delivered on 16 July 2007 is in the papers before us.
38. The background is that the case was originally listed for hearing on 16 July 2007 and did not take place on that day because one of the Appellants' witnesses, a Mr Christopher Norris, did not attend on that day. The First Appellant had put in a witness statement signed by him and was willing to proceed in his absence. The Respondent wished to call Mr Norris on the basis that he could give evidence about the Respondent's performance in other similar businesses where they had both worked. The Tribunal acceded to the Respondent's application and adjourned the hearing, and eventually made an order for the First Appellant to pay the Respondent's costs thrown away by the adjournment.
39. The account of that hearing is set out in the judgment of the Employment Tribunal on the review hearing on 20 March 2008. The judgment of that review hearing is dated 25 April 2008 (EAT bundle, pages 31-36). It is important to note that the order for costs was made on 16 July 2007. It was not made at the end of the adjourned liability hearing on 25 July 2007 or by the Tribunal in its reserved decision dated 27 September 2007.
40. It is convenient to turn to the review judgment at this stage. The Respondent appeared in person and the Appellant made written representations (EAT bundle, pages 85-90).

The Employment Tribunal judgment on review

41. At paragraphs 1-12 the Tribunal set out the history of the hearing on 16 July 2007. They say this:

"5. The case was listed for hearing before this Tribunal for 16 July 2007 and on that occasion the Claimant was represented by Mr Stelitz of counsel and the Respondent by Mr M Grant of counsel. Mr Strelitz was accompanied by a trainee solicitor.

6. At the hearing, it was indicated to the Tribunal that Mr Norris was not being called as a witness. It was confirmed that witness statements, including a statement from Mr Norris, had been exchanged in accordance with the order, and as we have described, and the Claimant's side told the Tribunal that the Claimant had been assured that all the witnesses, including Mr Norris, would be present. In fact, a Mr Grout, whose statement had also been exchanged, was also not present. The Claimant's position was that Mr Norris had been her line manger at other companies and had, as she understood, recommended her as an employee. Her knowledge of him went back to December 2005 and in particular she wished him to give evidence supporting her good performance. The Respondent's position being that she was dismissed for a reason relating to her capability and not her sex.

7. The Respondent's position was that, whilst Mr Grout could be called to give evidence since he was at the premises in Bury St Edmunds, Mr Norris was then in another division or part of the Respondent's group and was in fact in Yorkshire. It is not in the Chairman's note but it is in the note of one of the Members that he was attending at a VW event. The VW franchise is one of the businesses owned and managed by the Respondent and it was impossible for him to be present at the hearing.

8. The Tribunal adjourned to consider the matter and, upon resuming, granted an adjournment so that Mr Norris could be present. At first an order was made was that costs would be reserved. There was a further adjournment and, upon resuming, the case was adjourned to 25 July, which was a date convenient to everybody and to the Tribunal, and the Tribunal itself issued a witness order, calling Mr Norris as a witness. The Tribunal further indicated that at the re-hearing the Tribunal would have read the documents in the case and expected the case to be completed within a day. It was not in the recollection of any of the Tribunal Members at the review hearing that there was a request for a two-day listing. The Claimant proceeded to ask for costs once again and, after argument, the previous order that costs were reserved was amended and the order was made the costs thrown away on 16 July would be met by the Respondent."

42. The material part of the Tribunal's judgment in relation to the appeal on costs is contained in paragraphs 13-17 of the review judgment. The Tribunal say this:

"13. The application to review is limited to the costs order and is set out in five numbered paragraphs and then a summary of grounds for review. The Tribunal propose to deal with these matters in some detail.

14. Looking at paragraph 2, paragraph 1 being a general introduction, the Tribunal are satisfied that on the facts before it, then and on 25 July 2007, Mr Norris's evidence was very important. The Claimant had a burden of proof to discharge to establish facts from which an inference of discrimination could be drawn, and her case was that Mr Norris had no problem with her capability and had in fact recommended her as an employee. She had also made complaint of the recent bullying by Mr Haigh at the meeting as described in Mr Norris's proof of evidence. Looked at on 16 July, the Tribunal had a situation where witness statements had been exchanged in accordance with an order of the Tribunal and took the view that the party receiving the other side's statements was entitled to assume that that person would be called to give evidence unless they were notified to the contrary. No such notification was given to the Claimant's side and the excuse put forward by the Respondent's counsel was that the solicitor having management of the case was away on holiday at the relevant time. That, in the view of the Tribunal, was not a matter which deserved much weight deserved to be given. The disadvantage to the Claimant in not having available for cross-examination a witness whom she regarded, and on the facts at the time the Tribunal regarded, as important to her case. Since Mr Norris would speak as to her capability, and since the Respondent's case was that she was dismissed for want of capability, it was plainly relevant in discharging the burden of proof upon the Claimant to call Mr Norris. Furthermore, at the hearing it was said Mr Norris was at a business event, a Volkswagen presentation, in Yorkshire.

15. When Mr Norris eventually gave evidence, it was brought to the Tribunal's attention, and this is a note not made by the Claimant but by one of the Members but the circumstances are plainly recalled by all the Tribunal, that Mr Norris had not been in Yorkshire at a Volkswagen event but in Windsor. Again, though no note was made of the fact, it is believed he was said to be in Windsor playing golf. Mr Norris also told the Tribunal that he had never been asked to attend the first hearing.

16. Looking at paragraph 3 of the application for review, the Tribunal took the view that costs had become an issue. The Tribunal took the view that costs had become an issue. The Tribunal had regard to regulation 40 of the Rules of Procedure and in particular paragraph 1 and paragraph 3. it was plain to the Tribunal that the adjournment was necessary because, even if the case had proceeded on 16 July 2007, since we were told Mr Norris could not be available that day, there still would have had to have been a second day's hearing. His evidence was plainly relevant and on 16 July 2007 the adjournment, in the view of the Tribunal, was entirely the fault of the Respondent for the reasons we have already given in this judgment.

17. The situation became more serious in two respects. First of all, there is a suggestion in the grounds for the application for review that the Respondent sought a two-day hearing as being necessary in order to dispose of the case. It is suggested that this submission was correct because in fact two days were needed. The Tribunal have no recollection of an application being made on 16 July for the case to be listed for two days. It was in fact disposed of in one day, being saved from a third day only because the Tribunal had by the second hearing read the statements and relevant documents. A reserved judgment in a case of this sort was inevitable and that is what happened, the case being reconsidered by the Tribunal itself in chambers on 13 August 2007. However, as a second reason for making the costs order, or at least not on 25 July reviewing the order made on 16 July, is the fact that by the end of the hearing on 25 July the Tribunal had evidence that Mr Norris had not [been] in Yorkshire at a business event and therefore unavailable but was in Windsor at a social event and, far more seriously, was not merely not available but had never been asked to attend. In this regard, the Tribunal take the view that they were seriously misled and frankly, had an order not been made on 16 July, the Tribunal would have found it necessary to raise the issue of an order for costs at the close of the hearing on 25 July.

21(b). Far from there being ignorance of a fundamental principle in regard to witnesses, for the reasons we have given the Claimant was entitled to expect Mr Norris to be present unless she was notified to the contrary. Had she been notified to the contrary, she could have requested a witness order. In fact, Mr Norris was never asked to attend that brings the matter fair and square within the provisions of paragraph 40(4) of the Rules of Procedure where the Tribunal take the view the party had not complied with the order since the witness, whose statement had been exchanged, was not called."

It is, of course, to be noted that at the review hearing on 20 March 2008 the Employment Tribunal was in possession of information which it did not know anything about when it made its order for costs on 16 July 2007. What is under challenge in the appeal on costs is the order for costs made on 16 July 2007 and not on any later date. There is a separate appeal on the review decision to which we will come later in this judgment.

Law on costs

43. Rule 40 of Schedule 1 of the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2004 states this:

"40. When a costs or expenses order may be made-

(1) A Tribunal Chairman may make a costs order when on the application of a party it has postponed the day or time fixed for or adjourned a Hearing or pre-Hearing review. The costs order may be against or, as the case may require, in favour of that party as respects any costs incurred or any allowances paid as a result of the postponement or adjournment.

(2) A Tribunal Chairman shall consider making a costs order against a paying party where, in the opinion of the Tribunal or Chairman (as the case may be), any of the circumstances in paragraph (3) apply. Having so considered, the Tribunal or Chairman may make a costs order against the paying party if it or he considers it appropriate to do so.

(3) The circumstances referred to in paragraph (2) are where the paying party has in bringing the proceedings, or he or his representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by the paying party has been misconceived.

(4) A Tribunal or Chairman may make a costs order against a party who has not complied with an order or practice direction."

44. We pause here to note that although we do not have a copy of any order or reasons made on 16 July 2007, it is clear that the reason for the order being made on that day was that the hearing had to be adjourned because of the absence of Mr Norris, who the Respondent wished to question, albeit that the First Appellant was content to proceed in his absence and by relying on his witness statement. Furthermore, it is clear that what led the Tribunal to make the order for costs on 16 July 2007 was: (paragraph 4 of the review judgment)

"Looked at on 16 July, the Tribunal had a situation where witness statements had been exchanged in accordance with an order of the Tribunal and took the view that the party receiving the other side's statements was entitled to assume that that person would be called to give evidence unless they were notified to the contrary. No such notification was given to the Claimant's side and the excuse put forward by the Respondent's counsel was that the solicitor having management of the case was away on holiday at the relevant time."

45. At the review judgment, paragraph 21(b) (as set out above), the Tribunal took the view that the Appellant had not complied with the order in respect of witnesses "since the witness, whose statement had been exchanged, was not called". The order in relation to witnesses is at EAT bundle, pages 94C-94E. The relevant passage is as follows:

"4. WITNESS STATEMENTS:

Two weeks before the hearing of the parties shall exchange written witness statements (including one from a party who intends to give evidence). The witness statements should set out all of the evidence of the relevant facts which that witness intends to put before the Tribunal. If it is intended to refer to any document, the witness statement should refer to page/s in the agreed bundle. A failure to comply with this order may result in a witness not being permitted to give evidence because it has not been disclosed in a witness statement; or in an adjournment of the hearing and an appropriate order for costs caused by such adjournment. Each party shall bring 4 copies of any such witness statement to the hearing. The Claimant's statement should contain evidence relevant to the schedule of loss."

46. What is clear from the passage cited and, indeed, the order as a whole is that there is clearly a requirement to serve a witness statement in respect of any party who intends to give evidence, but the order is not limited to the exchange of witness statements of those who intend to give evidence. Second, it is equally clear that there is no obligation upon a party to call every witness for whom it serves a witness statement. Third, there is nothing in the order which compels any party to call each witness for whom it has served a witness statement. With those observations in mind, we turn to the Notice of Appeal.

Notice of Appeal

Ground 1

47. The Employment Tribunal has disregarded the overriding objective under Regulation 3 of the 2004 Rules in that the Tribunal have ignored the merits of the claim and the relevance of the witnesses.
48. We do not see how the Tribunal could decide whether the absence of Mr Norris on 16 July 2007 inextricably led to an order on that day (our emphasis) for the Appellant to pay the costs of the adjournment. That could only be decided properly once Mr Norris' evidence had been heard and taken into account. That was done after the adjourned hearing on 25 July 2007 when the Tribunal considered its judgment at the discussion meeting on 13 August 2007.
49. This point is underpinned by the fact that in its judgment dated 27 September 2007 Mr Norris' evidence is referred to at paragraph 17 of the judgment, which is part of the fact finding exercise. His evidence is not referred to in the Employment Tribunal's conclusions.

Ground 2

50. This ground of appeal is that the Tribunal have ignored the fundamental principle that there is no property in a witness and that both sides are therefore responsible for what evidence they would call in support of their case.
51. We have already indicated that there is no judgment in respect of the order or reasons for the order of 16 July 2007. The best we have is in the review decision judgment, which is dated 25 April 2008. We have set out what seemed to us to be the relevant passages in paragraphs 14 and 21(b) of that judgment. Those passages record that the only reason the Employment Tribunal had in its mind on 16 July 2007 for making an immediate award of costs was that "the party receiving the other side's statements was entitled to assume that that person would be called to give evidence unless they were notified to the contrary" (paragraph 14).
52. In the absence of such notification the Tribunal clearly felt entitled to make an immediate award of costs.
53. In our judgment, this view constitutes an error of law. There is no property in a witness and there cannot be any general rule of law or procedure which requires a party to inform the other party of which witnesses it intends to call from amongst those it has served or exchanged witness statements for.
54. While it may be a matter of professional courtesy and it is, of course, a practice to be encouraged, it is not a binding rule of law and contrary to the Tribunal's belief, the order made by the Tribunal on 10 May 2007 (EAT bundle, pages 94C-94E, which we have set out above) does not constitute an order by the Tribunal that each witness whose witness statement is served is to be called. Neither can it be inferred from the language of the order.
55. While as a matter of professional courtesy the Appellant's solicitor should have notified the Respondent's solicitor which witnesses the Appellant intended to call, likewise there was an obligation on the Respondent's solicitor to make sure that any witness his client wished to have called, i.e. Mr Norris was going to attend. That could have been done by a simple telephone call or email. On being informed that Mr Norris was not going to be called then a witness order could have been applied for in advance of the hearing on 16 July 2007.
56. With respect to the Tribunal the subsequent matters relating to the particular reason why Mr Norris was unavailable on 16 July 2007 or, indeed, whether he had been warned to attend at all are irrelevant. They cannot provide ex-post facto rationalisation for the decision made on 16 July 2007 because they were matters not then known to the Tribunal.

Ground 3

57. The third ground of appeal is perversity and/or bias. The test for perversity is well known (Yeboah v Crofton [2002] IRLR 634 at paragraphs 92-95 per Mummery LJ). We do not think the decision of the Tribunal was either perverse or biased. However, for the reasons we have already given under grounds 1 and 2, there was an error of law and the decision on costs will have to be set aside. Before deciding the question of disposal of the appeal on costs we turn to the appeal against the review.

The appeal against the review judgment

58. The review judgment appears at EAT bundle, pages 31-36. We have already set out the relevant parts of it. The Notice of Appeal is at EAT bundle, pages 37-41. In our judgment, it is not necessary to consider this appeal separately because we have allowed the appeal against the costs order as it is contained in the original Notice of Appeal. The review judgment cannot therefore stand.

Disposal

59. We have carefully considered the reasoning given by the Employment Tribunal in its review decision which, as we have indicated, provides the basis for its decision to award costs against the Appellant for causing the adjournment of 16 July 2007. That decision on costs was made on 16 July 2007. The later events do not assist us.
60. In our judgment, it was an error of law for the Employment Tribunal to award costs on 16 July 2007 and we can see no basis on which such a decision can be sustained on the material before us. In those circumstances, there is no purpose in remitting the issue of costs to the Employment Tribunal and we therefore propose to substitute our decision for that of the Employment Tribunal.
61. The order we make is that there be no order for costs in respect of the adjournment of 16 July 2007.

General conclusion

62. The order of the Employment Appeal Tribunal will therefore be as follows:

(1) The appeal against the judgment and reasons sent to the parties on 27 September 2007 is allowed and the case be remitted to a hearing on the merits before a fresh Employment Tribunal.

(2) The appeal against the order for costs dated 16 July 2007 is set aside and the EAT substitutes an order that there be no order for costs for the adjournment of 16 July 2007.

(3) The appeal against the review judgment and reasons sent to the parties on 25 April 2008 is allowed and that judgment is set aside. No further action is needed as the matter will be resolved by the fresh hearing on the merits.

63. We are very conscious that this appeal has been through a number of hearings and has a long history. We very much hope that the parties will be able to resolve this issue between themselves without recourse to a further Employment Tribunal hearing.