Appeal No. UKEAT/0213/11/CEA

EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON, EC4Y 8JX

	At the Tribunal
	On 9 March 2012
	   Judgment handed down on 4 April 2012

Before
THE HONOURABLE MR JUSTICE SUPPERSTONE
MR A HARRIS
MR M WORTHINGTON

MR J W STEVENSON	APPELLANT

ATOS ORIGIN IT SERVICES UK LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR PHILIP JONES 
(of Counsel)
Instructed by:
Ashfords Solicitors
Ashford House
Grenadier Road
Exeter
EX1 3LH	
For the Respondent	MR NIGEL PORTER 
(of Counsel)
Instructed by:
Atos Origin IT Services Ltd
Legal Services
4 Triton Square
London
NW1 3HG	

SUMMARY
JURISDICTIONAL POINTS – Working outside the jurisdiction
RACE DISCRIMINATION – Inferring discrimination

A, who is British, was employed by R and in 2007 he was appointed as Chief Operating Officer for the UK.  From September 2008 he was assigned to manage a programme in support of ‘small countries’ in the Group, of which R is part, which is based in France, and he was appointed “CEO ad interim”.  On a group re-organisation in May 2009 A’s assignment was terminated and a German national was appointed to the permanent CEO position.  There was no redeployment available for A who was made redundant.  He complained of unfair dismissal and race discrimination.  The appeal is only concerned with a single complaint of race discrimination.  

Held, dismissing A’s appeal: 

(1) The Employment Tribunal had no jurisdiction to consider A’s complaint of race discrimination.  A’s original appointment to the CEO position was a temporary assignment.  As for the subsequent appointment to the permanent position of CEO of the German national, the position would require residence in a country outside Great Britain and further the business of the company concerned was not the business of R at an establishment in Great Britain; accordingly it could not be said that the issue of A’s non-appointment to this permanent role could be “in relation to employment by [R] at an establishment in Great Britain” (Race Relations Act 1976, s.4).  

(2) The ET had considered the merits of the claim, if they were wrong on jurisdiction.  The ET had correctly determined that the non-appointment of A to the permanent CEO position was not unlawful on grounds of nationality, and that there was, in any event, no basis on which R could be held liable for the non-appointment of A.

THE HONOURABLE MR JUSTICE SUPPERSTONE
Introduction 
1.	The central issue in this appeal is whether the Employment Tribunal had jurisdiction to determine the complaint made by Mr John Stevenson, the Appellant, that the actions of Atos Origin IT Services UK Limited, the Respondent, by removing him from the post of Chief Executive Officer (“CEO”) of EMA (European, Mediterranean and Africa section) whilst appointing a German national in his place constituted direct discrimination against him on the grounds of his nationality contrary to the Race Relations Act 1976 (“the Act”). 
2.	On 10 February 2011 an Employment Tribunal (“ET”), sitting at London Central, chaired by Employment Judge Goodman, found that the ET had no jurisdiction to hear this complaint; but in case it was wrong about the law as to jurisdiction, the ET went on to consider the substantive complaint and found that the Respondent did not discriminate against the Appellant on grounds of national origin.  
3.	This appeal is only concerned with this single complaint of race discrimination.  The ET found that the Respondent did not discriminate against the Appellant on grounds of race or national origin in respect of two other acts of alleged discrimination.  There is no appeal in relation to those matters; nor is there any appeal by the Respondent against the finding by the ET that the Appellant was unfairly dismissed.  
4.	Mr Philip Jones appears for the Appellant.  Mr Nigel Porter appears for the Respondent.  
The Statutory Framework 
5.	The relevant provisions in the Race Relations Act 1976 on territorial jurisdiction state: 
“4. Applicants and Employees
(1) It is unlawful for a person, in relation to employment by him at an establishment in Great Britain, to discriminate against another—
(c) by refusing or deliberately omitting to offer him that employment. 
(2) It is unlawful for a person, in the case of a person employed by him at an establishment in Great Britain to discriminate against that employee—
(c) by dismissing him, or subjecting him to any other detriment.”
6.	The meaning of employment at an establishment in Great Britain is defined in section 8: 
“(1) For the purposes of this Part… employment is to be regarded as being at an establishment in Great Britain if the employee—
(a) does his work wholly or partly in Great Britain or 
(b) does his work wholly outside Great Britain and sub-section 1(A) applies.”
7.	Sub-section 1(A) applies: 
“if in a case involving discrimination on grounds of race or ethnic or national origins or harassment 
(a) the employer has a place of business at an establishment in Great Britain; 
(b) the work is for the purposes of the business carried on at that establishment; and 
(c) the employee is ordinarily resident in Great Britain—
(i) at the time when he applies for or is offered the employment, or 
(ii) at any time during the course of the employment.”
Relevant findings of fact made by the ET 
8.	The Appellant, who is British, was employed by the Respondent since 1997.  In about February 2007 he was appointed as Chief Operating Officer (“COO”) for the UK reporting to Mr Keith Wilman, Chief Executive Officer of the Respondent.  
9.	In that position he was subject to reviews by Mr Wilman and Mr Wilkinson, the Respondent’s Head of Human Resources.  Later in 2007 he was graded “amber”, meaning in need of development.  By May 2008 (at the very latest) Mr Wilman had decided that the Appellant had to go as COO, “because the plan to get service lines to work more co-operatively was not working.  Mr Wilman thought that the Claimant’s personality was the obstruction” (Reasons, para 21).  Mr Wilman decided to re-organise the Respondent’s company structure (para 22).  
10.	In the meantime, within the Atos group which is based in France, concern had arisen that the smaller countries (meaning countries where Atos only had a small operation) were consistently losing money.  The then Chief Executive of the Atos group, Mr Guilhou, decided that they should be sold off.  He was looking for a project manager to take charge of this.  Mr Wilman recommended the Appellant for this role, as someone who had the ability to plan and take unpleasant decisions.  The Appellant welcomed the opportunity to undertake a European role, as part of his plan to achieve his longer-term goal to become a Chief Executive Officer.  He was interviewed and appointed (para 23).  
11.	The Appellant’s new role became public at the beginning of September 2008.  An announcement from the Respondent on 5 September 2008 said: 
“With immediate effect John Stevenson has been assigned to manage a programme in support of Atos Origins Global Business.  We are very pleased that a member of the UK executive has been selected for such a task… as it is our intention to move to a market-facing vertically managed structure for calendar 2009, we will not be replacing John in the Chief Operating Officer role.  I have asked Mark Bounds and Paul Bray to assume responsibility for two of our verticals each…”  (Para 30).  
12.	Also in September 2008 Mr Wilman carried out his annual performance review.  Mr Stevenson was identified as “manage out of position”, which means he was considered to be an individual not keeping up with the demands of his current position and it is likely he would be “moved into another position with a similar scope that is a better match for [his] skills and experience, demoted to another position of lesser scope, or managed out of the company” (Tab 16, page 157).  
13.	The Appellant continued to be paid on the UK payroll and under his UK contract of employment.  His pay was “recharged” to the Group Company, known as Corporate (para 35).  On 6 October Mr Wilman wrote to the Appellant: 
“I write to confirm with immediate effect from 1 September 2008 you have been appointed to a corporate assignment to manage a programme in support of Atos Origins Gobal Business.  As a consequence you will now report to Patrick Adiba for the duration of this assignment.”
14.	The letter noted the change in cost centre and said that all other terms and conditions of employment remain unchanged (para 37).  
15.	Reasons, paras 39-42: 
“Within the ‘rest of the world’ Group that the Claimant was reviewing there was a group of five countries: Italy, Greece, Turkey, South Africa and Switzerland.  On 29 September the Italian CEO, Luigi Giacalone, was in effect dismissed and the following day the Claimant was asked to take over.  It appears [that] Mr Guilhou and Mr Adiba wanted a stop-gap, and on 30 October an e-mail was sent out indicating that Luigi Giacalone was pursing other career opportunities and that John Stevenson had been appointed ‘CEO ad interim’.  The legal paperwork went ahead to get the Claimant appointed as CEO in the Italian company and in the other jurisdictions.  There is a dispute about the meaning of the term ‘ad interim’.  The Respondent says that it was obvious that it was ad interim as the Group as a whole was destined for sale or closure.  
40. The Respondent’s case is that if there was any sale, the Claimant would not be sold on with the Company.  The Claimant says that it was never stated that he was an interim Chief Executive Officer of any of these companies.  However, the announcement on 28 October referring to ‘ad interim’ was sent around internally, and there was a press release for 31 October which also refers to ‘ad interim’.  
41. The Claimant continued with his review and presented a three-year plan.  
42. In the meantime there was a change of leadership of the Group.  The new CEO was Thierry Breton.  He set about re-organising corporate governance and arranged for Gilles Grapinet to present strategy.  Thierry Breton presented a plan to make changes on 14 December 2008.  In January 2009 there was a strategy meeting in Istanbul and on 2 February, Winfried Holz who was CEO in Germany and Central Europe, offered the CEO post in EMA to Ulrich Engelhardt one of his executives.  An e-mail of 3 February shows that a meeting was to be set up for Mr Engelhardt to meet Patrick Adiba, Phillippe Marchand and Jean-Marie Simon on 9 or 11 February.  The e-mail says: ‘Gilles, FYI this is a job for Head of EMA to replace John Stevenson that is currently the Interim Manager for this area’.”
16.	Before the ET was a letter addressed to the Appellant dated 19 February 2009 (which seems to follow in standard form a letter of assignment and which the Appellant says he never received until disclosure of documents) which “confirms our mutual understanding of the terms and conditions applying to your current assignment which may involve significant overseas travel”.  It confirms the UK terms and conditions remain valid.  It says the home location is London, that the assignment started 1 September 2008 and was expected to continue until 30 June 2009, and it might subsequently be extended by mutual agreement.  If the Appellant wished to terminate the assignment early he had to give four weeks’ notice.  The letter concluded: 
“At the conclusion of this assignment, it is expected that you will resume duties within the Home company and as such, the Company will endeavour to find you a suitable position.”
17.	In March 2009 the Appellant had a meeting with Mr Adiba and Mr Simon at which he was told that the Group company wished to end his employment, as “from now on the EMA Region will be reporting directly to Germany and Central Europe”.  He was told there were no alternative roles available. (Para 50).  
18.	On 25 March 2009 a public announcement was made that with effect from 1 May, Mr Engelhardt would be Chief Executive Officer of the EMA Region, and that:
“the next assignment of John Stevenson, previously ad interim COO EMA and Head of Strategic Operational Reviews, will be announced separately.”
19.	On 7 May 2009 the Appellant lodged a grievance in the form of a letter from his solicitor in which he complained, inter alia, of the termination decision and that he was being replaced by a German national.  (Paras 54 and 55).  
20.	On 4 June 2009 the Appellant attended a redundancy meeting, led by Mr Wilman, when he was told that as there was no redeployment available he would be made redundant with effect from 13 July 2009.  On 13 July 2009 his employment was terminated.  
21.	Reasons, para 62: 
“As to reason, the Respondents say that when they dismissed the Claimant for ‘no cause’ they were interpreting French law, meaning that there was no misconduct, and that there had been a reorganisation.  In other words, they say ‘no cause’ did not mean ‘for no reason’, but not for misconduct.  They said it was in fact a true redundancy situation, in that the COO position in the Respondent company had been deleted, that the small companies project had concluded, and that it was never envisaged that the Claimant would be more than an interim CEO in the EMA, which had been merged into the German company structure.”
22.	Reasons, para 84: 
“It seems clear enough, on the facts, that the Claimant was not doing any work for or on behalf of Atos Origin IT Services UK Ltd (the Respondent) after September 2008.  In their words, he was ‘on assignment’.  The Claimant disputed this; it was not his assertion that he was in fact employed in Great Britain but by EMA, which had no connection with the Respondent, beyond being part of the same Group, based in France.”
23.	Reasons, para 86: 
“Between March and July 2009, the Respondents saw themselves as resuming responsibility for the Claimant, whose ‘assignment’ had come to an end.  Formally, at any rate, they were consulting about the redundancy, and looking for alternative employment for him.  Given the Respondent’s view that he was in effect a posted worker who had returned from his posting – but not been found other work – or someone who had been seconded or granted leave of absence – it seems to us that he was employed (after March 2009 at any rate) for the purpose of an establishment in Great Britain, even if they were not actually giving him any work to do.  The only coherent alternative is that his employment with the Respondent ended in September 2008, and he was then employed in Paris by EMA.  If so, clearly this ended in March 2009.  Such a construction is artificial, and does not match what happened: no-one suggested in September 2008 that there had been a termination.”
24.	Reasons, para 91: 
“… the Claimant was found a suitable alternative role, by being recommended for the project, EMA small countries clearly envisaged at the time by everyone, including the Claimant, to be temporary, to review small countries with a view to selling off the operation.  This subsequently turned into being Chief Executive of EMA.  When that in turn came to an end, with the decision not to sell off the small countries, but to re-organise them, and absorb most of that operation into the German company, the Claimant’s role was again redundant. … Given our finding that he remained an employee of the Respondent company, it then fell to them to find an alternative role for him… ”
The Parties’ Submissions 
25.	Mr Jones submits that the ET had jurisdiction to consider the complaint that the Appellant had been removed from the permanent post of CEO EMA and his replacement by Mr Engelhardt.  The Appellant was at the time of his removal and replacement employed by the Respondent and during his entire employment was working wholly or partly within Great Britain, thereby satisfying the test under ss.4 and 8(1) of the Act.  
26.	Mr Porter submits that the Appellant’s original appointment to the CEO EMA position was a temporary assignment.  As for the subsequent appointment to the permanent position of CEO EMA in 2010 of Mr Engelhardt, Mr Porter contends, that as the permanent EMA CEO position would require residence in one of the EMA countries and further that the business of EMA was not the business of the Respondent at an establishment in Great Britain, then it could not be said that the issue of the Appellant’s non-appointment to this permanent role could be “in relation to employment by [the Respondent] at an establishment in Great Britain” (s.4 of the Act).  
Discussion 
27.	The critical question to be determined on the issue of jurisdiction is whether when the Appellant originally took up the EMA role he did so on the basis of a temporary assignment or a permanent appointment.  The ET plainly had this in mind when it formulated the race claim issues at paragraph 7 of the Reasons: 
“7.1 If the Claimant was permanently appointed to the EMA role (as the Claimant says) does the Tribunal have territorial jurisdiction, that is was this work ‘for the purposes of a business carried on at the establishment in Great Britain’. 
7.2 If it was a temporary assignment, did those within Atos Group (who are not employees of the Respondent) act as agent for the Respondent, or did they aid an unlawful act.  
7.5 Whether there was less favourable treatment on ground of nationality.”
28.	At various points in the Reasons the ET set out the competing claims of the Appellant and the Respondent on permanent appointment and temporary assignment respectively (see, in particular, paragraphs 30, 34, 37, 39, 40, 49, 53, 54, 62, 84 and 86).  
29.	Mr Jones submits that the ET failed to make a finding as to whether the Appellant’s original appointment to EMA was by way of a temporary assignment or permanent appointment.  We reject this submission.  In our view the ET made a clear finding of fact that it was a temporary assignment.  At paragraph 91 of the Reasons the ET stated: 
“… the project, EMA small countries clearly envisaged at the time by everyone, including the Claimant, to be temporary, to review small countries with a view to selling off the operation.  This subsequently turned into being Chief Executive of EMA.  When that in turn came to an end, with the decision, not to sell off the small countries, but to reorganise them, and absorb most of that operation into the German company, the Claimant’s role was again redundant. …”
This was a finding that the ET was entitled to make on the evidence before it. 
30.	That being so it was for the ET to address the question as to whether the Appellant’s non-appointment to the permanent position of CEO EMA could be “in relation to employment by [the Respondent] at an establishment in Great Britain” (s.4 of the Act).  
31.	The ET found that the business of EMA was not in any way for the purposes of the Respondent’s business.  At paragraph 129 the ET stated: 
“In our view nothing the Claimant did between leaving London in September 2008 and the termination of his role in Europe on 11 March 2009 was for the purposes of an establishment in Great Britain.  The work was entirely for European Group companies and had nothing to do with the Respondent’s business.”
(See also paragraphs 82, 84, 125 and 126).  
32.	Moreover the permanent position of CEO EMA would require residence in one of the EMA countries (which excluded the UK) (see Reasons, para 135).  
33.	We accept Mr Porter’s submission that on such findings of fact, which in our view the ET was entitled to make, an appointment to the permanent CEO EMA position requiring residence in another EMA country and the undertaking of business which was in no way for the purposes of the Respondent’s business could not be a refusal or omission by the Respondent to offer him “employment at an establishment in Great Britain” (s.4(1)(c) of the Act).  
34.	We recognise that at paragraphs 123-129 where the ET address this issue the focus appears to be on the work that the Appellant did for EMA between leaving London in September 2008 and the termination of his role in Europe on 11 March 2009, rather than on the permanent CEO EMA position.  However the findings of fact made by the ET in this regard, to which we have referred, are equally applicable to the permanent appointment.  In our view there was no error of law made by the ET on the jurisdiction issue in relation to the non-appointment of the Appellant to the permanent position of CEO EMA.  However to the extent that the ET’s reasoning is in any way deficient on this point the conclusion it reached on the basis of the findings of fact it made is “plainly and unarguably right notwithstanding that misdirection” (Dobie v Burns International Security Services (UK) Ltd [1984] IRLR 329 at para 18).  
Other grounds of appeal 
35.	In our view the ET had no jurisdiction to hear the Appellant’s complaint in relation to his non-appointment to the permanent position of CEO EMA.  Accordingly it is not necessary for us to consider the remaining grounds of appeal.  However out of respect for the submissions carefully presented by counsel, for which we are grateful, we shall summarise our conclusions: 
(1) Burden of proof   
36.	There was no dispute between the parties on the applicable law on the burden of proof.  The ET received detailed submissions on the burden of proof under s.54A of the Act and also specifically on the guidance in Igen Ltd v Wong [2005] IRLR 258 (CA), Madarassay v Nomura International plc [2007] IRLR 206 and the approach in Laing v Manchester CC [2006] IRLR 748 which was approved in Madrassay (see Respondent’s skeleton argument at paras 72-84 and Respondent’s closing submissions at paras 137-149).  In these circumstances it was not necessary, in our view, for the ET to set out in its judgment s.54A or the agreed relevant authorities. 
37.	The ET had been specifically referred to Brown v London Borough of Croydon [2007] IRLR 259, in which the Court of Appeal confirmed that it is not compulsory to adopt the two-stage approach.  The ET applied the “reason why” test, as it was entitled to do, and concluded that the reason for the Appellant’s non-appointment was not on the grounds of nationality.  At paragraph 135 the ET said: 
“On the evidence, the real reason why the Claimant was not even considered [for permanent appointment as CEO EMA] seems to have been the ‘manage out’ entry on his performance assessment in September 2008 which was used globally in the Atos Group.  This was the evidence of Patrick Adiba (although as stated we have some doubts about the quality of his evidence) and of Jean-Marie Simon.  By contrast was that Ulrich Engelhardt had been put in the ‘recommend for promotion’ category.”
(See also paragraph 116 as to the evidence of Mr Simon and Paragraphs 98 and 100).  
38.	The ET did not find that nationality was or might have been a reason for the treatment of the Appellant.  At paragraph 136 the ET said that 
“…the Claimant and Ulrich Engelhardt appear to have been both appointable.  There must have been a strong pull for taking a German national, or at any rate a German speaker for the post, but none of this was considered because the Claimant was not even in the running because of the ‘manage out’ marking, and we think this was probably the reason why he was not even considered for the job.”
In our view, this was a finding that on the evidence the ET was plainly entitled to make.  We are satisfied that cogent reasons were given for not considering the Appellant for permanent appointment.    
(2) Agency and aiding and abetting 
39.	This ground only arises if the non-appointment of the Appellant to the CEO EMA position was unlawful on grounds of nationality.    
Agency 
40.	S.32(2) of the Act provides that: 
“Anything done by a person as agent for another person with the authority (whether express or implied, and whether precedent or subsequent) of that other person shall be treated for the purposes of this Act (except as regards offences thereunder) as done by that other person as well as by him.” 
In Yearwood v Commissioner of Police for the Metropolis [2004] ICR 1660 at paragraph 35 agency is defined as:
“the fiduciary relationship which exists between two persons, one of whom expressly or impliedly consents that the other should act on his behalf…”
41.	The relevant findings of fact made by the ET were at para 115: 
“We also had in mind that while the European jobs were not in the Respondent’s gift, clearly as a matter of practice, if Mr Wilman had put the Claimant forward for a corporate role, he would have been considered.”
At paragraph 141 the ET said: 
“We had no evidence that the Respondent knowingly participated in the appointments in … EMA.”
Those making the permanent appointment within the Atos Group were not employees of the Respondent.
42.	The Respondent had no power to make appointments to the CEO EMA position and had no involvement in the process.  That being so in our view the decision was not taken by such persons as agents of the Respondent.  
Aiding and abetting 
43.	In order to establish liability under s.33 of the Act the Appellant must establish first that “another person” had done an act made unlawful by the Act; second, that the Respondent aided that other person to do that act; and third, that the Respondent so aided that other person knowingly.  
44.	In our view the ET was entitled to find on the evidence that the Respondent was not involved in the appointment decision to the permanent CEO EMA post.  The appointment was decided upon by persons who were not employees of the Respondent who were outside Great Britain.  We reject Mr Jones’ submission that the decision was on grounds of nationality, but even if it was there is no claim against those decision makers under the Act.  Accordingly the Respondent could not be liable for aiding and abetting any such unlawful act.  
45.	The ET found that the Respondent’s only “involvement” in the process was in relation to the “manage out” rating that was fatal to the Appellant being considered for the permanent post.  (Reasons, para 141).  It is not suggested that that appraisal was made on any discriminatory basis.  That being so the ET was entitled in our view to find that the Respondent had not knowingly participated in a discriminatory appointment of Mr Engelhardt to the EMA position.  
(3) Relocation
46.	Mr Jones challenges the ET’s finding that it was unlikely that the Appellant would have agreed to relocate to Switzerland where the restructured EMA companies were registered.  This was not a reason for his non-appointment because “the Group appointers had not enquired whether he would relocate” (para 136).  However Mr Jones contends that the finding may be relevant on the issue of quantum, if liability is established.  Essentially this is a perversity challenge.  Mr Jones has satisfied us by reference to the agreed notes of evidence that the oral evidence of the Appellant and of Mr Wilman do not support the finding made by the ET at para 135 of the Reasons.  However there was evidence from Mr Adiba who said: 
“… It was my understanding from the Claimant that whilst he was happy travelling to different countries, he did not want to move from the UK.  As the CEO of EMA, one of the requirements of the job, from a management, efficiency and costs standpoint, was that the candidate relocate to one of the EMA countries.  Therefore he would have had to have resided in either Turkey, South Africa or Switzerland which the Claimant told me he would not have considered.”  (Mr Adiba’s witness statement, para 18).  
47.	Whatever criticisms may be made of Mr Adiba’s evidence, it cannot, we think, be said that there was no evidence to support the finding that the Appellant would have been unlikely to relocate to Switzerland or another EMA country.     
(4) Delay 
48.	The hearing before the ET was concluded on 7 July 2010.  The case was considered in chambers on 25 November 2010 and 20 January 2011.  The reserved Reasons are dated 7 February 2011.  Mr Jones accepts the delay does not in itself constitute an error of law (Bangs v Connex South Eastern Ltd [2005] ICR 763) but he submits that it justifies a more critical approach to the ET’s reasons than might normally be the case.  The fact that the ET has made a clear factual error by attributing to the Appellant evidence that he never gave (see para 46 above) reinforces the need for such an approach to the ET’s fact-finding.  Mr Porter notes that the ET records (at para 144) that its deliberations in fact commenced on 7 July 2010 at noon following closing submissions.  Accordingly, the contention that the fact-finding exercise was not started until five months after the hearing is incorrect.  The test for perversity remains that of Yeboah v Crofton [2002] IRLR 634 at para 92 and in our view none of the material findings of fact made by the Tribunal are even arguably perverse.  
Conclusion 
49.	For the reasons we have given this appeal fails.  In our judgment there is no jurisdiction for the ET to determine the Appellant’s complaint that he was discriminated against on grounds of national origin in relation to his non-appointment to the permanent post of CEO EMA.  If contrary to our view, the ET had jurisdiction, we reject the other grounds of appeal.