Aylott v Stockton-on-Tees Borough Council  EWCA Civ 910
Appeal against the judgment of the EAT overturning an Employment Tribunal’s finding of direct discrimination. Appeal allowed on the direct discrimination point but dismissed on the disability-related discrimination claim. Order for compensation restored.
The claimant suffered from bipolar affective disorder and was a disabled person within the meaning of s1 of the Disability Discrimination Act 1995. Following incidents of alleged harassment and bullying the claimant went on paid leave of absence. The complaints were investigated and rejected. A medical report on the claimant expressed concern over his ability to continue in employment unless he was given a different job in a different section, which he was. He returned to work under a different line manager, but there was a total change in the working relationship, leading the claimant to go off sick with stress-induced chest pain. On his return to work, a meeting took place at which there was shouting and raving by the claimant and he was sent home. Disciplinary action was started in respect of this behaviour. The claimant then went off sick again, and several months later he was dismissed on grounds of capability. The decision was taken at a meeting to which the claimant was invited but could not attend due to being in hospital at the time. The claimant pleaded dismissal as an act of discrimination and the ET found for him, saying that:
'the respondent's treatment of the claimant changed from February 2006, and the dismissal, and the events leading up to it were discrimination on the grounds of the claimant's disability. They were also disability related. There was a failure to make reasonable adjustments.'
The EAT said that the ET had erred in law in almost every aspect of discrimination and that the ET's decision was 'wholly flawed': the discrimination claims were remitted to the ET. This appeal is against that decision.
The claimant at the Court of Appeal advanced three closely connected grounds of appeal against the EAT's decision: 1) the ET used the wrong hypothetical comparator; 2) the ET misapplied the burden of proof; and 3) there was a lack of adequate reasons in the ET judgment for the finding of direct discrimination. On the direct discrimination issue, the Court of Appeal did not agree with the EAT on the comparator point – the hypothetical comparator as a person who did not have the claimant's particular disability, but had a similar sickness record, was a comparator choice reasonably open to the ET. They also said that the ET had made detailed findings of fact about the respondent's treatment of the claimant in relation to the dismissal, the events leading up to it and the reasons for it, thus dismissing claims that the ET had misapplied the burden of proof. The ET's reasons were also deemed to have been sufficient to support their finding of direct disability discrimination. On the issue of disability-related discrimination, the CoA agreed with the EAT that the ET had erred in law by using a comparator as laid down in the case of Clark v Novacold  ICR 951, the interpretation of which had, unknown to the ET, been criticised the day before their decision.
Neutral Citation Number:  EWCA Civ 910
Case No: A2/2009/0720
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
MRS JUSTICE SLADE
Royal Courts of Justice
Strand, London, WC2A 2LL
LORD JUSTICE MUMMERY
**LORD JUSTICE THOMAS
LORD JUSTICE TOULSON
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MR RUSSELL AYLOTT (Appellant)
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STOCKTON-ON-TEES BOROUGH COUNCIL (Respondent)
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MR ROBIN ALLEN QC and MS CATHERINE CASSERLEY (instructed by Equality and Human Rights Commission) for the Appellant
MR DAVID READE QC and MR HARI MENON (instructed by **Legal Services Stockton-on-Tees BC) for the Respondent
Hearing dates : 20 & 21 April 2010
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Lord Justice Mummery :
- This appeal is about how the Disability Discrimination Act 1995, as amended (the 1995 Act), should be interpreted in law and applied in practice. The course of the proceedings demonstrates that problems persist, even after 15 years' experience of the legislation. The problems are not solved by attempting to work from other discrimination legislation and the authorities on how that should be construed. Many of the problems are different in practice. Important features of the 1995 Act have no equivalent in sex discrimination and race discrimination law.
- The Employment Tribunal (ET) spent 10 days listening to evidence from 20 witnesses and to legal argument on discrimination claims made by Mr Russell Aylott (the claimant) against his former employer, Stockton-on-Tees Borough Council (the Council). The claims were for direct discrimination contrary to s3A(5) of the 1995 Act, for discrimination for a reason related to a disability contrary to s3A(1), and for discrimination by failing in its duty to make reasonable adjustments contrary to s4A. There was also a claim for harassment contrary to s5.
- The only aspect of the Council's actions relevant to this appeal is whether Mr Aylott's dismissal was discriminatory. The issue in this court is whether the ET correctly interpreted the 1995 Act and properly applied the provisions governing the three forms of discrimination to the circumstances of his dismissal that took effect from 8 November 2006.
- It is common ground that, in respect to the complaint presented by him to the ET on 6 February 2006, the claimant has at all material times been "a disabled person" within the meaning of s1 of the 1995 Act. He suffers from bipolar affective disorder, a condition that dates back to 1973.
- In their judgment registered on 26 June 2008 the ET found in the claimant's favour on all the discrimination claims and awarded him £30,686.54. They also awarded him £1,670 for unfair dismissal. On the Council's appeal to the EAT the claimant suffered a serious reversal of fortune. The EAT said that the ET erred in law in almost all every aspect of discrimination challenged by the Council and that the ET's decision was "wholly flawed."
- In a judgment handed down on 11 March 2009 the EAT remitted the discrimination claims to the ET, but did not disturb the judgment on unfair dismissal. As explained in a further judgment dated 28 November 2008 the EAT directed that, although the remitted hearing should be before a differently constituted Tribunal, they would not have to re-hear all the evidence. They would proceed on the findings of fact made by the original Tribunal, if and in so far as they are not inconsistent with the judgment of the EAT. They could hear additional evidence as required for the purpose of determining the issues remitted to them, including jurisdictional issues relating to the claimant's complaints; whether the claims were properly pleaded; whether a proper grievance had been presented in accordance with s32 of the Employment Act 2002 in relation to each allegation that was pursued as a complaint under s17 of the 1995 Act; whether each such complaint had been presented within the 3 months time limit; and, if not, whether time should be extended.
- Rimer LJ granted permission to appeal. This court has no lay members, unlike the ET and the EAT where they are indispensable for the actual experience of industrial relations and of day-to-day life in the workplace that they bring to bear on the decisions. Nor is this a specialist court. These features are brought sharply into focus when the court is faced with the contradictory decisions of two tribunals both expert in the law and experienced in the practice of resolving discrimination disputes at work.
- There is also before the court an application by the Council for permission to cross appeal against the decision of the EAT upholding the ET's award for automatic and ordinary unfair dismissal. Rimer LJ adjourned that application to the hearing of the appeal. At a late stage of the hearing the Council decided not to pursue its application.
- The claimant is supported by the Equality and Human Rights Commission (the Commission), which would like the court to clarify aspects of disability discrimination law that impact on other cases. In particular, in the part of their judgment dealing with disability related discrimination under s3A(1), the ET applied the construction of the 1995 Act laid down by this court in an employment discrimination case, Clark v. Novacold  ICR 951 (Novacold). That case concerned what was then s5 of the 1995 Act, but became s3A(1) as a result of amendments in 2003. The day before the ET judgment was sent to the parties the House of Lords handed down opinions in a disability discrimination case in a premises management setting, Lewisham Borough Council v. Malcolm  1 AC 1399 (Malcolm). *The issues in the EAT and in this court included whether Novacold was still good law on the interpretation of the employment discrimination provisions of the 1995 Act: was it overruled, in whole or in part, by Malcolm? Is Malcolm distinguishable from Novacold and from this case? Was Malcolm* wrongly decided? (This is obviously not the right court for that question) Those are just some of the questions put to the court by Mr Robin Allen QC, who appears on the instructions of the Commission putting the case for the claimant. The range of the questions explains the Commission's commitment to this appeal.
- As will appear later, the significance of the Novacold/Malcolm questions is fading fast. Under new legislation they will soon cease to matter altogether for future cases. The Equality Act 2010 received Royal Assent on 8 April 2010 and will be brought into force later this year. The effect of s15 of the 2010 Act relating to "discrimination arising from disability" is that the law on disability- related discrimination, as laid down by the majority in Malcolm, **will not be relevant to that kind of discrimination in employment.
- There are, however, other controversial legal points of continuing relevance. They relate to the scope of s3A(5) and the selection of a hypothetical comparator by the ET; the treatment of the burden of proof in the direct discrimination claim; the scope of s4A and the identification of the reasonable adjustments that the employer is under a duty to make; and a question of causation relating to the exacerbation of the claimant's psychiatric symptoms in connection with the assessment of compensation for discrimination. **
- Mr Robin Allen QC accepts that, in order to retain the benefit of Mr Aylott's compensation award, success on only one of the 3 forms of alleged disability discrimination in his dismissal is sufficient. In general, the courts do less damage to this area of the law by rationing themselves to a case at a time rather than by attempting to lay down the law in advance of cases in which a legal ruling on a doubtful point is unavoidable. This judgment is confined to points which have been fully argued and on which rulings are both reasonably necessary and can be made with a reasonable degree of confidence.
- The claimant's employment with the Council began in a non-managerial role on 3 June 2003. On 4 May 2004 he was appointed Business Support Manager. Problems in the workplace began to emerge. On 2 January 2005 the claimant submitted to the Head of Technical Services a list of 17 complaints or grievances arising from difficulties with colleagues in the Business Support Team (alleged assault, harassment, bullying and failure to have regard to his state of health). Until then the managers dealing with the claimant were unaware of his disability. He went on paid leave of absence. In February 2005 he made a request for reasonable adjustments to his working practice to help him continue working effectively. On medical advice from Dr Slade an investigation of the complaints was not pursued.
- His complaints against colleagues were investigated under the Dignity at Work Procedure while he was on paid leave of absence. He returned to work on 31 May 2005. At a meeting on 3 June he stated that he stood by the specific allegations against named individuals. The allegations were investigated and in due course rejected in the Dignity at Work Report dated 13 October 2005. That Report contained a recommendation that-
"Mr Aylott does not return to employment until such time as his bipolar condition is demonstrably stabilised over a period of time. If this can be achieved, opportunities for Mr Aylott to undertake a post which plays to his knowledge and expertise should be sought within the Council. Ideally this should be one without line management responsibility for staff and should not be in the section where he was previously employed and the difficulties arose. If such a post cannot be identified or Mr Aylott's bipolar condition cannot be sufficiently stabilised, both the Council and Mr Aylott will need to consider whether his employment can realistically continue."
- When the report was sent to him on 28 November 2005 the claimant lodged an appeal against it. A risk assessment was prepared and sent to him on 20 December. He attended a meeting on 22 December. It was agreed that he would return to work on 9 January 2006 in a different team headed by Sue Daniels, with whom he would have weekly one-to-one meetings; that he would have no line responsibility for staff; and that some adjustments would be made to provide him with support. He returned to work and for a time all went well, as appeared from notes of review meetings on 13 and 20 January 2006. He was then off work for some days with chest problems.
- On 8 February 2006 he returned to work. He was seconded to the team of Sue Daniels, Head of Performance and Business Services. His Line Manager was Paul Diggins. The ET found that, following the claimant's return to work, there was a "total change" in the working relationships. Strict deadlines were set, there was reference to delay in meeting them, and his performance was closely monitored. On 22 February he went off sick with stress-induced chest pain.
- When he returned to work on 13 April 2006 a meeting took place at which there was some shouting and ranting by the claimant. He was sent home. Sue Daniels sent an email to Lynn Donald, the Human Resources Manager, about a get-together "to discuss how we manage Russell [the claimant] out of work." Sue Daniels gave evidence to the Tribunal that she was concerned about the claimant and the staff who had witnessed his behaviour. She said it was clear that he was not well enough to return to work. She felt that his behaviour towards staff was unprofessional, intimidating and wholly inappropriate. It was a disciplinary matter needing investigation. 13 April 2006 was the last day the claimant was at work. He was admitted to hospital the following day. The Council was unaware of that when, on 18 April, it suspended him on full pay pending a disciplinary investigation into his conduct at the meeting on 13 April. When it became aware of his admission to hospital the Council withdrew the suspension and the investigation.
- A medical report by Dr Slade on 7 July 2006 stated that the claimant was unfit to return to work on account of his mental condition. Lynn Donald had written to Dr Slade describing the claimant's conduct as intimidating and scary and saying that the claimant appeared to be erratic, unpredictable and over exuberant, making him uncomfortable to work with.
- The claimant's period of sick pay was due to expire on 15 September 2006. That fact was stated in a brief note of a review meeting dated 21 August 2006 followed by the words "Dismiss on grounds of sickness, disorder and findings of previous investigation." The claimant was in hospital on 1 September 2006 when a meeting, which he was invited to attend to discuss the situation in relation to his sickness and the inability to stabilise his bipolar disorder, went ahead in his absence. As stated in a letter dated 6 September he was dismissed on 2 months notice with effect from 8 November. Dismissal was stated to be "on grounds of capability (health)."
- On 26 September the claimant appealed against the dismissal decision. The appeal was outstanding at the date when the claimant presented his claim to the ET and it has never been formally resolved.
- In total the claimant had 147 working days off sick from 18 April to 8 November 2006. He had 115 days paid leave of absence during the Dignity at Work investigation in 2005. The Council and the claimant found themselves in a difficult situation for much of 2005 and 2006. The main issue for the ET was whether, in its dismissal of the claimant, the Council acted unlawfully against him by one or more of the forms of discrimination of which he complained. That could have happened without there being any motive or intent on the part of Council or its personnel to act in a discriminatory way.
- It is not for this court to re-decide the facts or to re-write the legislation. The issue here is whether a question of law arises from the decision of the ET that the dismissal was discriminatory contrary to the 1995 Act. On the intermediate appeal the EAT thought that there were errors of law in the ET judgment on all aspects of the discrimination claims. I will turn first to the ET judgment.
- In their summing up of the position on the disability discrimination claims the ET said-
" 25. … the Tribunal finds that the respondent's treatment of the claimant changed from February 2006, and the dismissal, and the events leading up to it were discrimination on the grounds of the claimant's disability. They were also disability related. There was a failure to make reasonable adjustments."
- Most of the findings of fact are relevant to each head of discrimination. I will deal with each head separately, avoiding repetition as far as possible. I need first to put the claims in their legislative context.
- Section 3A of the 1995 Act was the result of amendments made by regulations to the original Act in 2003 in order to comply with Council Directive 2000/78/EC. It introduced direct disability discrimination framed along the same lines as direct discrimination in the legislation relating to sex and race discrimination in the following terms-
"(5) A person directly discriminates against a disabled person if, on the ground of the disabled person's disability, he treats the disabled person less favourably than he treats or would treat a person not having that particular disability whose relevant circumstances, including his abilities, are the same as, or not materially different from, those of the disabled person."
- It is unlawful for an employer to discriminate against a disabled person whom he employs by dismissing him, or subjecting him to any other detriment: s4(2) (d).
- The ET correctly treated the complaints about matters occurring on the claimant's return to work in 2006 as evidence supporting their findings on the grounds of his dismissal. The claimant pleaded dismissal as an act of discrimination and that complaint was presented to the ET within the applicable time limits.
- Disability discrimination takes different forms. In the case of direct discrimination on a prohibited ground the aim is to secure equal treatment protection for the individual person concerned on the basis that like cases should be treated alike. The essential inquiry is into why the disabled claimant was treated less favourably than a person not having that particular disability.
- In the case of indirect discrimination the aim is to secure equal treatment results for members of a group to which that individual belongs. The essential inquiry is into whether the members of that group, who appear not to have been discriminated against on the ground of disability, have not in fact had equal treatment protection on the basis of the prohibited ground as a result of the disproportionate adverse impact of a neutrally worded provision, criterion or practice.
- Direct discrimination was not expressly included in the 1995 Act. It was introduced by amendment in 2003. Indirect discrimination of the kind legislated against in the sex and race discrimination legislation was neither specifically included in the 1995 Act nor in the later amendments, though provided for in the directive Article 2(2)(b). The probabilities are that the framers of the 1995 Act considered that protection by other forms of discrimination-disability related discrimination and the duty to make reasonable adjustments-would be sufficient to protect disabled people.
- The defence of justification is unavailable in the case of direct discrimination. That defence is available, however, in the case of indirect discrimination and in the case of two further forms of discrimination in the 1995 Act that did not appear in the earlier discrimination legislation relating to sex and race: I refer to disability-related discrimination and discrimination by failing to make reasonable adjustments. They will be discussed in more detail in due course.
- The ET held that the conclusions of the Dignity at Work report did not amount to direct discrimination, but they said that the use of the conclusions in it in respect of the dismissal and the events leading up to dismissal did amount to direct discrimination. In relation to the Council's treatment of the claimant after his return from sickness to work in 2006 the ET dealt first with the shifting of the burden of proof and the selection of the hypothetical comparator saying-
"18. The Tribunal is satisfied that the claimant has established facts from which a Tribunal could conclude, in the absence of an adequate explanation, amounted to direct discrimination on the grounds of the claimant's disability. The appropriate comparator is someone who had been off for a similar number of days but did not have the claimant's disability. The Tribunal is satisfied that the claimant has shown that the respondent's treatment of him upon his return from sickness, by imposing deadlines and referring to his performance, and strict monitoring followed by the response to his return to work in April 2006 and his dismissal were sufficient to shift the burden of proof. A comparator who had a similar sickness record in respect of, for example, a complicated broken bone or other surgical problem, would not have been subjected to the same treatment.
The sudden change of tone in the meeting with Sue Daniels and Paul Diggins as shown in the notes of 10 and 17 February 2006, and the claimant's evidence that they were giving him conflicting advice and subjecting him to deadlines and stress represented direct discrimination on the grounds of the claimant's disability. It is clear that a decision had been made to deal with the claimant. Undue pressure was exerted on the claimant when the respondent was aware of his disability and the facts that he had been off sick as a result of stress which exacerbated his condition.
- With regard to the claimant's return to work on 13 April 2006, the claimant's representative referred to this as a hysterical reaction to the claimant's return to work and the tribunal has some sympathy with this view. There was clearly some panic on the part of the respondent. The Tribunal infers from the treatment and the surrounding events that this was as a result of stereotypical views of mental illness which Dr Vincenti referred to as 'a blight on those suffering from mental illness.' Paul Diggins ignored Sue Daniels' instructions to have a welfare/return to work meeting with the claimant and send him home. Instead he gave the Claimant tasks and deadlines which provoked the heated meeting. The subsequent decision to carry out a disciplinary investigation and to suspend the Claimant was extremely harsh when an informal approach would have been appropriate. Once again, the Tribunal finds that this was direct discrimination based on the stereotypical view of mental illness."
- The ET added that that treatment was also for a reason related to his disability and that a person who had not had the claimant's sickness record would not have been treated in that way. A reasonable adjustment would have been to take into account his mental illness by having one-to-one meetings with Sue Daniels rather than what turned into confrontational meetings with both Sue Daniels and Paul Diggins. The Tribunal found that, on those aspects of the case, there was no justification for the measures taken against the claimant. They found finally that the treatment of the claimant during that time was harassment within s3B of the 1995 Act. I will return later to those other forms of discrimination. For the present I will concentrate on direct discrimination in the light of the facts found by the Tribunal.
A. Direct discrimination
ET findings and decision
- The ET examined in detail the treatment of the claimant on his return to work in April 2006 and the circumstances of his eventual dismissal. The ET found that there was some panic on the part of the Council with regard to the claimant's return to work on 13 April 2006; they inferred from the treatment and the surrounding events that this was "as a result of stereotypical views of mental illness"; instead of having a return to work meeting and sending the claimant home, Mr Diggins gave the claimant tasks and deadlines that provoked the heated meeting; the subsequent decision to carry out a disciplinary investigation and to suspend him was "extremely harsh" when an informal approach would have been more appropriate; and that was direct discrimination based on the stereotypical view of mental illness, which was further exhibited by a letter from Lynn Donald to Dr Slade referring to the claimant' behaviour as "intimidating and scary" when that did not reflect the statements of the employees in question. The ET referred to the e-mail sent by Sue Daniels on 13 April that she wanted to discuss "how we can manage the claimant out of work," as meaning how to engineer the ending of his employment rather than how to manage him when he was out of work, as contended for by Sue Daniels in her evidence to the ET.
- The ET found that it was likely that the Council and its managers had decided that they could no longer put up with the claimant. That was demonstrated by the events leading up to his dismissal. A decision had been made to dismiss him before the meeting of 1 September from which he was absent, because he was ill in hospital. Part of the reason for that decision, the ET held, was that the Council was afraid that the claimant would attempt to return to work at the expiry of his sick pay entitlement. Although the dismissal was on the basis of the claimant's health, the most recent medical evidence that the Council had was from two months earlier which referred to a phased return in the "not too distant future." The Council had no up-to-date information with regard to the stabilisation of the claimant's bi-polar disorder.
- The ET re-iterated that the dismissal was on the grounds of the claimant's disability. There was a fear of his return based on a "stereotypical view of mental illness." But his behaviour had never been threatening and there was medical evidence that he could continue to work in a low key and non-stressful role rather than in a managerial position.
Grounds of appeal
- The claimant advances three closely connected grounds of appeal against the EAT's decision that the ET erred in law on the direct discrimination point: that the ET used the wrong hypothetical comparator; that the ET misapplied the burden of proof; and there was a lack of adequate reasons in the ET judgment for the finding of direct discrimination. I will discuss each in turn.
- The purpose of the comparison exercise conducted by the ET was to determine whether there was less favourable detrimental treatment of the claimant on the prohibited ground of disability. Less favourable treatment of a disabled claimant than the treatment that would be afforded to a person not having that particular disability, whose relevant circumstances are the same or not materially different, is mentioned in s3A(5). It is relevant to determining whether or not the treatment was on the ground of disability.
- The ET selected a hypothetical comparator. As the identity of the comparator for direct discrimination must focus upon a person who does not have the particular disability, that disability must, as directed in s3A(5), be omitted from the circumstances of the comparator. In other respects the circumstances of the claimant and of the comparator must be the same "or not materially different." The claimant's abilities, as directed in s3A(5), must be attributed to the comparator. Although the comparator is not required to be a clone of the claimant, failure by the ET to attribute other relevant circumstances to the comparator may be an error of law on the part of the Tribunal: see, for example, the judgment (HHJ McMullen QC) in High Quality Lifestyles Ltd v. Watts  IRLR 850. However, as explained below, there is no obligation on the ET to construct a hypothetical comparator in every case and failure to do so does not necessarily lead to an error of law in the ET's findings.
- In this case the ET selected as the hypothetical comparator a person who was off work for a similar number of days, but did not have the bi-polar disorder affective disorder suffered by the claimant. The EAT did not think that that detail went far enough. It is correctly explained in the EAT's judgment that, in deciding upon the characteristics of a hypothetical comparator, it is necessary to determine the reason why the complainant received the treatment of which complaint is made. The relevant circumstances and attributes of an appropriate comparator should reflect the circumstances and attributes relevant to the reason for the action or decision of which complaint is made. The EAT concluded that, in the selection of the comparator, the ET erred in law, first, by not including other circumstances of the claimant that should have been included, and, secondly, in relation to the dismissal, by failing to use a comparator at all, and instead simply saying that the Council had a "stereotypical view of mental illness."
- The EAT held that the comparator should have all the attributes or features which materially affected the employer's decision to do the act said to be discriminatory. It was not enough to select someone with a similar sickness record returning to work. That was only one relevant circumstance. Other relevant circumstances would be the fact that the comparator had recently been moved to a different post and the fact that the comparator's past conduct and performance had caused concern. It followed that, according to the EAT, the ET had erred in just selecting someone returning to work after a complicated broken bone or other surgical problem.
- The EAT said that it was not apparent that the claimant had received less favourable treatment than the hypothetical comparator. This was a normal case in which the ET should first consider whether the claimant received less favourable treatment than the appropriate comparator and then go to consider whether the less favourable treatment was on the relevant proscribed ground. The EAT also said that the difference in treatment from that which would be given to a comparator has to be established before the significance of stereotypical views may be taken into account in determining the grounds for that difference in treatment: see paragraphs 82 and 83.
- At this point I turn to a pellucid passage in the opinion of Lord Nicholls in the case of Shamoon v. Chief Constable of the RUC  ICR 337 (which was cited by the EAT) at paragraphs 7-12 for the proposition that the two stage analysis which has been followed by the ET in direct discrimination cases can cause unnecessary difficulty and confusion in practice. As Lord Nicholls explained in that passage, the question of less favourable treatment than an appropriate comparator and the question whether that treatment was on the relevant prohibited ground may be so intertwined that one cannot be resolved without at the same time deciding the other. There is essentially a single question: did the claimant, on the proscribed ground, receive less favourable treatment than others? Once it is found that the reason for the treatment was a proscribed one, there should be no difficulty in deciding whether the treatment on that ground was less favourable than the treatment that was or would have been afforded to others. If the evidence establishes that the reason for the treatment is the claimant's disability, then it will usually follow that the hypothetical comparator would not have been treated in the same way and there will be discrimination.
- Applying that approach to this case I think that the decision whether the claimant was treated less favourably than a hypothetical employee of the Council is intertwined with identifying the ground on which the claimant was dismissed. If it was on the ground of disability, then it is likely that he was treated less favourably than the hypothetical comparator not having the particular disability would have been treated in the same relevant circumstances. The finding of the reason for his dismissal supplies the answer to the question whether he received less favourable treatment: the real question is not so much about the hypothetical comparator, as whether the ET's finding on the ground of dismissal was supported by evidence.
- The ET found that the claimant's mental disability was the ground of his dismissal. The reasons for that finding included the stereotypical view taken of mental illness taken by the Council in its reactions to the claimant's disability: the ET referred to panic, to descriptions of intimidating and scary behaviour, to fear of his return to work and to the wish to manage him out of work. I will address that particular point below. Subject to that, I am of the view that in this case the issue of less favourable treatment of the claimant, as compared with the treatment of the hypothetical comparator, adds little to the process of determining the direct discrimination issue. I am not saying that a hypothetical comparator can be dispensed with altogether in a case such as this: it is part of the process of identifying the ground of the treatment and it is good practice to cross check by constructing a hypothetical comparator. But there are dangers in attaching too much importance to the construct and to less favourable treatment as a separate issue, if the Tribunal is satisfied by all the evidence that the treatment (in this case the dismissal) was on a prohibited ground.
- With great respect, I have difficulty in agreeing with the EAT that there was an error of law in the ET's decision that this was a case of direct discrimination. The hypothetical comparator as a person who did not have the claimant's particular disability, but had a similar sickness absence record, was a comparator choice reasonably open to the ET. The ET is criticised by the EAT and by Mr Reade QC, appearing for the Council, for not adding in the further circumstances of a move to a different post and past behaviour and performance causing concern. Mr Reade QC contends (and the EAT agreed with him) that the ET erred in law on the direct discrimination point for two reasons: the selection of the comparator was wrong and the reliance of the ET on the "stereotypical view of mental illness" was too vague to support the conclusion of discrimination in the dismissal. In my judgment, the criticisms are not well founded in law. They fail to take proper account of the findings of fact that the ET were justified in making on the evidence before them.
- First, some of the claimant's particular behavioural and performance difficulties and his move to another post stemmed from his particular disability. The ET are not, and cannot be, criticised for leaving the claimant's particular disability out of the circumstances of the hypothetical comparator. S3A(5) stipulates that the comparator does not have the disability. In my judgment, there was no error in the ET also leaving out of those circumstances particular results caused by the claimant's disability: the move to another post and the behavioural and performance difficulties resulting from the particular disability would not be relevant circumstances of a hypothetical comparator who did not have that particular disability.
- Secondly, I am unable to accept that, in the circumstances of this case, the ET's reference to the Council's "stereotypical view of mental illness" was too vague to support the finding of direct discrimination. Direct discrimination can occur, for example, when assumptions are made that a claimant, as an individual, has characteristics associated with a group to which the claimant belongs, irrespective of whether the claimant or most members of the group have those characteristics: see R(European Roma Rights) v. Prague Immigration Officer  2 AC 1.
- I would accept that an ET can err in law if they conclude that liability for direct discrimination has been established simply by relying on an unproven assertion of stereotyping persons with that particular disability. Direct discrimination claims must be decided in accordance with the evidence, not by making use, without requiring evidence, of a verbal formula such as "institutional discrimination" or "stereotyping" on the basis of assumed characteristics. There must be evidence from which the ET could properly infer that wrong assumptions were being made about that person's characteristics and that those assumptions were operative in the detrimental treatment, such as a decision to dismiss.
- In this case there was evidence from which the ET could, and did, make detailed findings of primary fact about the Council's reactions to the claimant's mental disability and could properly make inferences from those facts to support the conclusion that the Council dismissed him on the ground of his mental disability. The Council's decision to dismiss the claimant was based in part at least on assumptions that it made about his particular mental illness rather than on the basis of up-to- date medical evidence about the effect of his illness on his ability to continue in the employment of the Council.
Burden of proof
- The EAT accepted the Council's submission that the ET erred in law in holding that the burden of proof had shifted to the Council on the basis that had been disapproved by the ruling of this court in Madarassy v. Noruma International  IRLR 246 at paragraph 56. That ruling was to the effect that the bare facts of a difference in status and a difference in treatment only indicate a possibility of discrimination and they are not, without more, sufficient material from which a tribunal could conclude that the respondent had committed an unlawful act of discrimination. On this appeal Mr Reade QC repeats the contention that the ET misapplied the burden of proof by equating detrimental treatment and status as a disabled person as sufficient to shift the burden to the Council.
- In my judgment, this criticism of the ET by the Council and by the EAT falls with the failed attack on the ET's selection of the hypothetical comparator. The ET did not make the error of simply looking at the fact of mental disability and the fact of dismissal in order to shift the burden of proof to the Council. As explained earlier by reference to their judgment, the ET made detailed findings of fact about the Council's treatment of the claimant in relation to the circumstances of the dismissal, to the events leading up to it and to the reasons for it. In my judgment, those findings were more than sufficient to take the case out of that kind of case in which there is only the fact of disability and the fact of dismissal, which could not alone properly support an inference of discrimination.
Inadequate reasons **
- This criticism of the ET judgment is also connected with the Council's and the EAT's criticisms of the ET on the comparator issue and their reliance on a "stereotypical view of mental illness" treating it as synonymous with causing detrimental treatment and not explaining what it meant in context.
- In my judgment, these "reasons" criticisms of the ET judgment do not take sufficient account of their detailed findings about the events leading to the claimant's dismissal, the Council's treatment of him and their reasons for doing so. The ET's reasons are sufficient to support the finding of direct discrimination once it is appreciated that the choice of the hypothetical comparator and the application of the burden of proof was not erroneous.
- There was no error of law in the ET judgment that the dismissal of the claimant was a case of direct disability discrimination. I would allow the claimant's appeal on that issue.
- In those circumstances it would be possible to dispose of the appeal without a decision on the other discrimination grounds on which the EAT allowed the Council's appeal and remitted the case to the ET. There are, however, some aspects of the decisions of the tribunal on which it is desirable and possible to reach some clear conclusions with the benefit of the full arguments received by the court from both sides.
B. Disability-related discrimination:s3A(1): Malcolm: s24(1)(a).
- By s3A(1) it is provided that
"For the purposes of this Part, a person discriminates against a disabled person if-
(a) for a reason which relates to the disabled person's disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply; and
(b) he cannot show that the treatment in question is justified."
- In their self-direction based on the legislation, as interpreted in Novacold, the ET stated-
"11. …The comparator is therefore different to that applied to direct discrimination, it is a person to whom the disability related reason does not or would not apply.
- The comparator may be non-disabled or disabled but the key point is that the disability related reason for the less favourable treatment must not apply to them."
- The ET chose as comparator a person who did not have the effects of bi-polar affective disorder and found disability related discrimination in relation to the claimant's dismissal. The ET said-
"22. The dismissal was also disability related. The Tribunal has considered the question of a comparator. There is no actual comparator but the hypothetical comparator would be somebody who did not have the effects of bipolar affective disorder and the Tribunal finds that such a comparator would not have been dismissed by the respondent."
- The EAT held that the ET erred in law in applying the interpretation of disability-related discrimination and in using the comparator as laid down in Novacold. Unknown to the ET the House of Lords had criticised that interpretation in opinions in Malcolm published the day before their decision. Although Malcolm was a case on discrimination in the management of premises governed by s24 of the 1995 Act, the provisions governing disability-related discrimination were in very similar wording as those governing discrimination in employment. After carefully analysing the opinions in Malcolm the EAT concluded that Novacold was overruled by the House of Lords and that it was not possible to distinguish Novacold or this case from Malcolm. **
- Mr Allen QC was not deterred from submitting that the legal materials and arguments put before the House of Lords in Malcolm were incomplete (for example, they did not include the consultation paper, or the White Paper Cm 2729, or the Parliamentary debates on the Bill); that its ratio on the interpretation of s24 was wrong; that it was in any event distinguishable from this case and should not be applied in the context of employment in relation to s3A as now re-enacted; and that the correct interpretation *to apply to this case was that laid down in Novacold* so that there was no error of law in the ET judgment on this point.
- I will deal first with the status of Novacold following Malcolm. On this point Mr Allen had to contend with some later cases, which I will refer to now as they limit the scope for extended argument. In R(N) V. London Borough of Barking & Dagenham Independent Appeal Panel  EWCA Civ 108 at paragraph 44, a case on the education discrimination provisions in s28B in Part IV of the 1995 Act, this court held that Malcolm applied and that the House of Lords had overruled Novacold. The proper comparator was someone who had behaved in the same way as the person concerned, but did not suffer from that person's disability, rather than someone who had not acted in the way that caused the employer to treat the employee as it did. Otherwise the comparative test would not be a test at all: the claimant would be logically bound to be able to satisfy the requirement that his treatment was less favourable to others to whom the reason did not apply whenever the reason for a person's treatment related to his disability.
- Carter v. London Underground Ltd & Anor UKEAT/0292/08/ZT (8May 2009- Underhill P presiding) was a case in which the ET applied Novacold and found an element of unjustified disability related discrimination in the treatment of an employee suffering from a depressive illness. The employer contended that the ET's finding was wrong in law on the basis of the Malcolm point. On the appeal it was common ground that, if the ET should have applied the comparison adopted in Malcolm, *the employee would be unable to establish disability discrimination since it was clear that in relevant respects the employer treated the employee in the same way that it would have treated anyone in the same circumstances who was not suffering from a disability. It was necessary to decide whether Malcolm over-ruled Novacold.*
- The EAT judgment sets out a valuable detailed analysis of the opinions in Malcolm and the later authorities (including the judgment of the EAT in this case) and concludes in paragraph 42 that Malcolm had overruled Novacold and *was binding as to the correct approach to disability related discrimination in the employment field. I am satisfied that that analysis is correct. I cannot improve upon it. Although the members of the Appellate Committee in the majority expressed themselves differently, it is clear that the only dissenting member (Lady Hale) thought that the Novacold* interpretation was correct. It is also clear that she regarded the provisions in s24 and the equivalent provision on disability related discrimination in employment as having the same effect on this point.
- Mr Allen QC submits that one ground for distinguishing Malcolm is that the provisions in the 1995 Act construed in Novacold were later amended with effect from 1 October 2004 to implement the Equal Treatment Directive 2000/78/EC and thus must now be construed to be consistent with the directive. S5 of the original 1995 Act became s3A of the 1995 Act as amended. 3A(5) introduced the concept of direct discrimination in order to implement the directive, but, as was pointed out in Carter (paragraph 34) there is no material difference in substance between the old s5 and the new s3A. I do not think that this provides a ground for distinguishing Malcolm.
- The result is that the ET erred in law on the disability related claim by following Novacold which, unknown to them, was wrong and has been overruled.
- It was, however, recognised that the construction of the 1995 Act by the majority in Malcolm weakened the statutory protection that the 1995 Act was intended by its framers to provide. The case made it more difficult to establish a case of disability related less favourable treatment and the situation has been redressed by legislation.
- Following the decision in Malcolm the Government produced a consultation paper on disability discrimination, noting that Malcolm weakened protection for disabled people and that the disability-related discrimination provisions were intended to cover a situation where there was both direct and indirect discrimination and that Malcolm shifted protection under the 1995 Act "away from the Government's policy intention", disturbed the balance between the rights of disabled people and made it "more difficult for a disabled person to establish a case of disability-related less favourable treatment."
- For the future the Equality Act 2010 has resurrected Novacold and nullified Malcolm by providing in s15 (Discrimination arising from disability) that
"(1) A person (A) discriminates against a disabled person (B) if-
(a) A treats B unfavourably because of something arising in consequence of B's disability; and
(b) A cannot show that the treatment is a proportionate means of achieving a legitimate aim. "
- This is a point on which this court should make a decision in order to remove any lingering uncertainty about the status of Novacold. In my judgment, it is deceased as a case. It did not survive the opinions of the majority in Malcolm, which, in this court, cannot be said to have been wrongly decided. The Directive relied on by Mr Allen does not provide a reason for departing from that conclusion. The amendments made to implement the Directive were made before the decision in Malcolm and all parties were contending for the same meaning to be applied to disability-related discrimination in the similarly worded sections relating to employment and to housing.
- Three points arising from the Novacold/Malcolm interlude may be worth noting, if only because they may help to make disability discrimination law easier to understand and operate in practice. They may even have the beneficial effect of reducing unnecessary complexity, so that it does not take 10 hearing days for the parties to cover the areas of evidence and the parts of the law that really matter.
- First, the significance of s4A in disability discrimination cases. Mr Robin Allen QC explained that, after Malcolm and the difficulties in the way of success for a claim for disability related discrimination, claimants and their expert advisers shifted their target to the failure of duty to make reasonable adjustments. Perhaps that is what they ought to have been doing all along, as that is the concept central to the scheme of the 1995 Act. As Lady Hale said in Archibald v. Fife Council  ICR 954 at paragraph 57 the 1995 Act entails a measure of "positive discrimination", in the sense that employers are required to make such adjustments as are reasonable in all the circumstances to help disabled people, which they are not required to make for others. In some cases no-one, including the claimant, is helped by a presentation to the ET of every possible permutation of the various forms of discrimination. The next two points flow from this potentially beneficial change of perspective.
- The second point is that it is not sensible, or even legally correct, simply to carry across from the longer established fields of discrimination law (race and gender) their principles and precedents. The disability-related form of disability discrimination and the duty to make reasonable adjustments do not even appear in the earlier discrimination law, which, if used in deciding disability discrimination claims, may prove to be an obstacle to a proper understanding of the new law. As Lady Hale explained in Archibald at paragraph 47, the sex discrimination legislation and the race discrimination legislation are different from disability discrimination. The earlier legislation is based on the irrelevance of the identified differences between human beings, who are accordingly entitled to receive equal treatment and to protection from less favourable treatment on the proscribed ground of sex or race.
- The 1995 Act recognises a wide range of disabilities. It therefore provides that relevant differences between a disabled person and a person who is not disabled entitle the disabled person, in the prescribed circumstances, to receive different treatment in order to achieve overall equality, so far as reasonably practicable.
- The third point is the role of the justification defence in disability discrimination cases. It is not a defence to direct discrimination on the grounds of disability, nor, since the 2003 Amendment Regulations, to failure to comply with the duty to make reasonable adjustments, but it is a defence to disability-related discrimination, and to the more traditional form of indirect discrimination derived from the Equal Treatment Directive. Employers' concerns about the impact of the 1995 Act on them and their workforce can be seen in a better perspective if it is understood that justification is available as a defence to some forms of disability discrimination. The claimant does not win, if the employer can justify his actions.
- In conclusion I agree with the EAT that the ET erred in law in following Novacold and therefore chose the wrong comparator when they should have used the same comparator as for direct discrimination as laid down in Malcolm, *which the EAT rightly held overruled Novacold.*
C. Failure to make reasonable adjustments:s3A(2) and s4A and dismissal
- By s3A it is provided that
"(2) For the purposes of this Part, a person also discriminates against a disabled person, if he fails to comply with his duty to make reasonable adjustments imposed on him in relation to the disabled person."
- This form of discrimination proceeds on the basis that different cases will be treated differently. A requirement is imposed to make reasonable adjustments for the person disadvantaged by a particular disability rather than that the disabled person be treated in the same way as a person not having that disability. In a case of disability-related discrimination the failure to comply with the duty to make reasonable adjustments cannot be justified under s3A(3) unless it would have been justified even if he had complied with that duty: s(1)(6) .
- Section 4A provided that-
(a) a provision, criterion or practice applied by or on behalf of an employer, or
(b) any physical feature of premises occupied by the employer ,
places the disabled person concerned at a substantial disadvantage in comparison with persons who are not disabled , it is the duty of the employer to take such steps as it is reasonable , in all the circumstances of the case, for him to have to take in order to prevent the provision, criterion or practice, or feature, having that effect.
(2) In subsection (1), "the disabled person concerned" means –
(a) in the case of a provision, criterion or practice for determining to whom employment should be offered, any disabled person who is, or has notified the employer that he may be, an applicant for that employment;
(b) in any other case, a disabled person who is –
(i) an applicant for the employment concerned, or
(ii) an employee of the employer concerned.
(3) Nothing in this section imposes any duty on an employer in relation to a disabled person if the employer does not know, and could not reasonably be expected to know-
(a) in the case of an applicant or potential applicant, that the disabled person concerned is, or may be, an applicant for the employment; or
(b) in any case, that that person has a disability and is likely to be affected in the way mentioned in subsection (1)."
- Section 18D provided that "provision, criterion or practice includes any 'arrangements."
- The ET found failure to make reasonable adjustments saying
"23. With regard to failure to make reasonable adjustments, the respondent's confrontational pressure, deadlines and the insistence on formal investigation of incidents that could have been dealt with on an informal basis. Also the dismissal and assumptions made with regard to the claimant's condition without the benefit of medical advice represented provisions criteria or practice that placed the claimant at a substantial disadvantage in comparison with non-disabled persons. Both Dr Vincenti and Dr Reilly indicated that a strategy for phased return to work as part of a process of rehabilitation would have been appropriate, and Dr Vincenti felt that, given the severity, depth and persistence of his mental illness, the claimant would probably have required several months of a phased return to work with the whole process carefully monitored throughout by both the management and Occupational Health in co-operation with mental health services. Even so he felt the process could have well proved unsuccessful. Dr Reilly's evidence was that he felt it might have been successful and there were further adjustments that could have been made. Dr Vincenti referred to the importance of early recognition of work stress and the need for urgent steps to address this properly, particularly settling disputes. Any sort of heated exchange of words needed to be avoided."
- The EAT held that it was not clearly stated what reasonable adjustments the ET considered should have been made regarding assumptions about the claimant's condition without taking medical advice, for example about the possibility of a phased return to work, which did not arise if he was not fit to return to work. Mr Reade QC supports the EAT's view that the ET's findings were not adequately reasoned and also contends that the consequence of the ET's finding that the claimant was unfit to return to work after April 2006 meant that the postulated adjustment of a phased return to work could not apply at the point of dismissal and could have no practical effect.
- The EAT held that dismissal of the claimant, rather than retaining him was not a breach of the duty to make reasonable adjustments and that the Council was not applying a provision, criterion or practice within the meaning of s4A. Mr Reade QC points out the only claim for failure to make a reasonable adjustment was the dismissal and that dismissal itself, though a potential consequence of failing to make a reasonable adjustment, was not itself a "provision, criterion or practice." The position had not been changed by Article 3 of the directive.
- It is true that in Novacold it was **held that dismissal was not a breach of the duty to make adjustments. There were limits on that duty in s6(2)(b) by reference to any term, condition or arrangements on which employment is offered or afforded. However, that has been altered by the amendments to the 1995 Act in implementation of the directive in s4A. Mr Allen submits that the courts must construe s4A to comply with the directive, which applies to dismissals: Article 3(1)(c). It must be read so as to permit the duty to make reasonable adjustments to apply to dismissals, just as s3A(1) and (5) do. He submits that dismissal itself is the application of a practice.
- As at present advised, I would accept that submission and, if it were necessary to do so (which it is not), I would have allowed the appeal on this point.
Unfair dismissal: ERA s98 and s98A
- As mentioned above, the adjourned application for permission to cross appeal against the finding of unfair dismissal was withdrawn during the hearing. I would therefore dismiss the application.
Causation and compensation for discrimination
- In respect of the claim for compensation for disability discrimination the parties agreed the sum of £5,000 in respect of a 2 year exacerbation of the claimant's condition. The experts agreed that the cause of this exacerbation was multi-factorial involving "the removal of his lithium treatment, his work situation and anxiety over his physical health." It proved difficult to distinguish the effects of the discrimination from the anxiety over the claimant's physical health as they were inextricably linked. The experts eventually agreed that 50% of the worsening was attributable to the lithium withdrawal and 50% in relation to the claimant's employment problems. The ET held that 50% of the claimant's condition was attributable to health problems.
- Mr Menon, who made submissions on behalf of the Council on this point, submits that the EAT erred in failing to resolve this point on the Council's appeal from the ET, which had reached a perverse decision, as there was no proper basis in the evidence, including the evidence of the experts, to justify holding the Council liable for an exacerbation in the claimant's psychiatric condition.
- Mr Menon accepts that the proposed appeal, for which permission is required, could only succeed, if the ET's decision on this point was perverse and therefore wrong in law. That is also accepted to be a high hurdle to surmount on an appeal.
- Mr Menon submits that the findings were misleading and perverse. In particular, the ET judgment did not make any attribution of the exacerbation to any specific acts or omissions alleged to be breaches of the 1995 Act or to any findings of fact capable of supporting such attribution. It was insufficient to refer in a vague and unspecific way to "employment problems " and "personal difficulties" as constituting a causative link between a breach of the 1995 Act and the exacerbation of the claimant's condition in a claim for personal injury
- In my judgment, there was evidence before the ET on which they could conclude that there had been an exacerbation of the claimant's condition and to justify taking a broad brush approach in attributing 50% of that to the Council's treatment of him.
- I would not grant permission to the Council to cross appeal against the award of compensation for disability discrimination. **
- I would dismiss the claimant's appeal on the disability-related discrimination point, but I would allow the claimant's appeal on the direct discrimination claim. It follows that I would set aside the order of the EAT and restore the order for compensation made by the ET and dismiss the Council's application for permission to cross appeal on its withdrawal. In my judgment, the ET properly addressed the direct discrimination issue, correctly directed themselves on the law relating to it and properly applied the law to the facts found by them with sufficient explanation for their conclusions.
Lord Justice Thomas:
- I agree.
Lord Justice Toulson:
- I also agree.
Published: 02/08/2010 11:38