The claimant was, and still is, the headteacher of a primary school. Following concerns relating to her leadership and low standards, the Local Authority asked the governors of the school to suspend her, which they did after a period of resistance. The claimant brought claims of race discrimination against 3 respondents: the Local Authority, the Governors and Serco. Her claims against the Governors and Serco were later compromised and she was reinstated; however, her claims against the Local Authority remained. The main thrust of this case concerns the correct respondent for the purposes of the claimant’s claims. Her contractual employer and paymaster was the Local Authority but the majority of employment powers are exercised by the Governors, who, for the purposes of Tribunal proceedings are treated as the employer, although under Regulation 6(3) of the Modification Order, any award is treated as if made by the Local Authority. The Tribunal ruled that some of the allegations fell within the Modification Order and thus were struck out, the claimant’s claim not being against the Governors, and other allegations fell outside the Order and so the correct respondent would be the Local Authority.

HHJ Ansell at the EAT disagreed with the Tribunal which distinguished between the different claims, saying that:

‘they are all steps on the way to achieving the possible removal or disciplining of the Appellant and, therefore, fell within the Governors’ employment powers.’

He therefore struck out the remaining claims against the respondent Local Authority, and upheld the ruling that other claims could not proceed, saying this about the employment powers of the Governors:

‘It seems to me that included within those powers are all the acts and statements which could form the background leading up to the possible exercise of disciplinary powers.  The effect of the legislation is clearly that, for the majority of complaints by teachers relating to breaches of employment or discrimination legislation, the correct Respondent will be the Governors, even though contractual employment remains with the local authority’

Finally, the EAT upheld another Tribunal decision, striking out a claim brought under the Race Relations Act 1976 s33, which sought to show that the Local Authority had both knowingly aided the Governors to do some act (the suspending of the claimant) and that this act was unlawful. Because the claimant had already compromised her claim with the Governors, the EAT said that it would be an abuse of process to allow an aiding claim to proceed, requiring as part of that claim a finding against the Governors who were no longer a party to the proceedings.

______________________

Appeal No. UKEAT/0210/10/ZT

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 6 July 2010

Judgment handed down on 22 July 2010

Before

HIS HONOUR JUDGE ANSELL (SITTING ALONE)

MS R BUTT (APPELLANT)

BRADFORD METROPOLITAN DISTRICT COUNCIL (RESPONDENT)

Transcript of Proceedings

JUDGMENT

For the Appellant
MR AYOADE ELESINNLA (of Counsel)

Instructed by:
Messrs Stanton-Dunne & Co Solicitors
The Generals
Main Road
Boreham
Chelmsford

For the Respondent
MR DAVID N JONES (of Counsel)

Instructed by:
City of Bradford Metropolitan Council
Legal Services
City Hall
Bradford
BD1 1HY

PRACTICE AND PROCEDURE – Parties

School governors' liability for employment powers can include acts or statements by the local authority who are the contractual employers.

1. This has been the hearing of an appeal and cross-appeal from a decision of Employment Judge Grazin, sitting in Leeds on 11 February 2010, who in a decision sent to the parties on 1 March 2010 struck out some of the discrimination allegations made against the Respondent local authority who were the First Respondents in the original proceedings on the grounds that they should be made only against the deemed employer, the former Second Respondents, namely the Governors of Feversham Primary School, pursuant to the provisions of the Education (Modification of Enactments Relating to Employment) (England) Order 2003 ("the Modification Order").

1. The cross-appeal related to those allegations which were not struck out. The appeal also related to the striking out of a claim against the Respondents under section 33 of the Race Relations Act 1976 (RRA), alleging aiding acts made unlawful by the RRA. The striking out was on the grounds that the claim had no reasonable prospect of success and/or it was no longer possible to have a fair hearing of these proceedings. Leave was given for this appeal by HHJ Peter Clark by order dated 20 April 2010.

1. The Appellant was, and indeed still is, employed as a head teacher at Feversham Primary School in Bradford. That employment commenced in September 2004 and she remains in employment following reinstatement earlier this year after suspension. The school is a community school with a delegated budget. Although the Respondent is the nominal contractual employer, the Governors exercise employment powers by virtue of the Education Act 2002. The Governors were the original Second Respondents to the Tribunal proceedings, however, the Appellant compromised her claims against them at a judicial mediation on 10 September 2009. In the course of the hearing before Employment Judge Grazin on 11 February 2010 the proceedings against the Third Respondent, Serco Limited t/a Education Bradford, were also compromised. No admissions as to liability regarding discrimination were made within the settlement with the Governors, although it is contended by Mr Elesinnla on behalf of the Appellant that some admissions have been made within the grievance procedure.

1. Following the Appellant's appointment there had been increasing concerns regarding her leadership of the school, particular concerns related to staff morale and falling standards. The unions became involved and indeed informed the Appellant that fellow staff had no confidence in her and at one stage there was a vote of no confidence. These concerns were also reported to the Respondent being the relevant local authority.

1. The Respondent wrote to the governing body on 28 June 2007. The letter was said to be in accordance with its statutory duty pursuant to Regulation 5 of the School Staffing Regulations 2003, as it had serious concerns concerning the Appellant's performance. Decisions about the proper action upon this letter, including the decision to suspend and investigate the Appellant, were decisions taken by the governing body. Initially they rejected the idea of suspension, although in December 2007 she was suspended following further allegations and an investigator was appointed. The original investigator resigned; the Appellant contends that this was under pressure from the Respondents.

1. The proceedings began in December 2008 against the three Respondents, local authority, the Governors and Serco. The allegation against the Respondents that affect this decision were contained in paragraphs 53 to 64 of the claim:

"53. On 19 December 2008, the Claimant lodged her ET1 complaint. In summary paras 54-65 highlight the following issues:

54. The instruction and/or encouragement by the First and Third Respondents to members of the Claimant's staff to complain about her directly to them with a view to removing her from the position of Head Teacher.

55. The deliberate failure by the First and Third Respondents to disclose the existence of these complaints from March 2007 until around July 2007. Even then no specific details were provided until March 2008- one year after they had been submitted.

56. The Claimant believes that the First and Third Respondents acted and encouraged the Claimant's subordinates to complain in writing about her directly to them with the sole intention of gathering sufficient material to dismiss her. This was highly irregular and unprecedented. The normal way for legitimate complaints to be dealt with was through using the Second Respondent's grievance procedure. It was also highly irregular to hoard such complaints and not bring their existence to the attention of the Claimant and the Second Respondent.

57. The letter issued on 28 June 2007 by the First and Third Respondent contained allegations that were completely baseless. This method was designed to put the maximum pressure on the Second Respondent to suspend the Claimant with a view to dismiss her.

58. The First and Third Respondent blocked the Claimant's pay awards which was the result of a successful performance review by the Second Respondent. This action was completely unreasonable and unjustified.

59. The Second Respondent suspended the Claimant as a result of threats made by the First and Third Respondent. The First and Third Respondent threatened repeatedly to remove the Second Respondent if it did not comply with their request to suspend the Claimant. The Second Respondent resisted ratification of this suspension on the grounds that there had been agreement to draw a line under the allegations and in view of their previous meeting of the 18th July where they had decided that suspension was not warranted. They also had not seen the letters of complaint. The Claimant was suspended immediately after her successful performance review during which she was awarded a 2-point pay rise by the Second Respondent for very good performance.

60. The First, Second and Third Respondents had planned an immediate public announcement to the staff of the school that the Claimant had been suspended. After her objection, they assured the Claimant and her union representative that this suspension would remain confidential and would announce that she was on leave but the damage had been done. Furthermore, John Hesketh had instructed the clerk to invite staff governors against statutory regulations to the ratification of the suspension.

61. The contents of the confidential report dated 28 June 2008 were leaked to the press by the First or the Second and/or the Third Respondent.

62. The interference by the First and Third Respondent caused the resignation of the original investigator into the matters that led to the Claimant's suspension because the investigator was not prepared to follow the First and Third Respondents' instructions.

63. The way and manner Ms Caroline McNamee conducted the investigation into the allegations against the Claimant. Ms McNamee conducted the investigations in a rude, overbearing and condescending manner. She failed to disclose to the Claimant the complaints that led to her suspension and reached conclusions which no reasonable investigator could have reached on the basis of the evidence that she had available to her.

64. The First Respondent's investigation into alleged financial irregularities - there was reasonable basis for investigation to have been commenced. The investigation is still ongoing which is unprecedented. The First Respondent has admitted such an investigation as highly unusual. The Claimant has not been informed of any particularity, the defalcations she allegedly was responsible for. Su Halliday was one of the complainants and she took over the Claimant's office almost immediately despite having her own office. The Claimant was concerned that her own supporting evidence may have been tampered with and items removed by either Su Halliday or Ms Salani, both of whom had complained about her. The length of the investigation is totally unreasonable."

1. As I have indicated above, in due course the claims against the Governors and Serco were compromised and the Appellant has returned to work. In the hearing before me I was also informed that the Governors had been replaced. This appeal relates to how far the claims against the Respondents alleging discrimination, particularly race discrimination, should continue.

1. The Modification Order provides as follows:

"Interpretation

Regulation 2(2) - In this Order references to employment powers are references to the powers of appointment, suspension, conduct and discipline, capability and dismissal of staff conferred by the 2003 Regulations.

Regulation 3(1) - In their application to a governing body having a right to a delegated budget, the enactments set out in the Schedule have effect as if -

(a) any reference to an employer (however expressed) included a reference to the governing body acting in the exercise of its employment powers and as if that governing body had at all material times been such an employer;

(b) in relation to the exercise of the governing body's employment powers, employment by the authority at a school were employment by the governing body of the school;

(c) references to employees were references to employees at the school in question;

(d) references to dismissal by an employer included references to dismissal by the authority following notification of a determination by a governing body under regulation 18(1) of the 2003 Regulations […]**

Regulation 6(1) Without prejudice to articles 3 and 4, and notwithstanding any provision in the Employment Tribunal Act 1996 and any regulations made under section 1(1) of that Act, this article applies in respect of any application to an employment tribunal, and any proceedings pursuant to such an application, in relation to which by virtue of article 3 or 4 a governing body is to be treated as if it were an employer (however expressed).

(2) The application must be made, and the proceedings must be carried on, against the governing body.

(3) Notwithstanding paragraph (2), any decision, declaration, order, recommendation or award made in the course of such proceedings except in so far as it requires reinstatement or reengagement has effect as if made against the authority.

(4) Where any application is made against a governing body under paragraph (2) -

(a) the governing body must notify the authority within 14 days of receiving notification; and

(b) the authority, on written application to the employment tribunal, is entitled to be made an additional party to the proceedings and to take part in the proceedings accordingly."

1. The School Staffing (England) Regulations 2003 provides as follows:

"Performance of the head teacher

5. Where the authority has any serious concerns about the performance of the head teacher of a school -

(a) it must make a written report of its concerns to the chair of the governing body of the school, at the same time sending a copy to the head teacher; and

(b) the chair of the governing body must notify the authority in writing of the action he proposes to take in the light of the report.

6. - (1) The governing body must establish procedures -

(a) for the regulation of the conduct and discipline of staff at the school; and

(b) by which staff may seek redress for any grievance relating to their work at the school.

(2) Where the implementation of any determination made by the governing body in operation of the procedures requires any action which -

(a) is not within the functions exercisable by the governing body by or under the 2002 Act, but

(b) is within the power of the authority,

the authority must take that action at the request of the governing body.

7. The governing body must establish procedures for dealing with lack of capability on the part of staff at the school."

1. The Education Act 2002 provides as follows:

"35 Staffing of community, voluntary controlled, community special and maintained nursery schools

(1) This section applies to -

(a) community schools,

(b) voluntary controlled schools,

(c) community special schools, and

(d) maintained nursery schools.

(2) Any teacher or other member of staff who is appointed to work under a contract of employment at a school to which this section applies is to be employed by the local education authority.

(3) The teaching staff of any school to which this section applies shall include -

(a) a person appointed as head teacher, or

(b) a person appointed to carry out the functions of the head teacher of the school -

(i) pending the appointment of a head teacher, or

(ii) in the absence of the head teacher.

(4) Regulations may make further provision with respect to the staffing of schools to which this section applies.

(5) Regulations under subsection (4) may, in particular -

(a) make provision with respect to the appointment, discipline, suspension and dismissal of teachers and other staff,

(b) make provision with respect to the appointment of teachers and other staff to work at a school otherwise than under a contract of employment.

(c) make provision with respect to staff employed, or engaged otherwise than under a contract of employment, wholly or partly for the purposes of -

(i) the provision of facilities and services under section 27, or

(ii) any other activities which are not school activities but are carried on on the school premises under the management or control of the governing body, and

(d) confer functions on local education authorities, governing bodies and head teachers."

1. The relationship thus created by the statutes and regulations is one of a duality of employer. The contractual employer and paymaster is the local authority, but the majority of employment powers are exercised by the governors who, for the purpose of Tribunal proceedings, are treated as the employer, although under Regulation 6(3) of the Modification Order any award is treated as if made by the local authority.

1. In his judgment, Employment Judge Grazin also referred to two Court of Appeal authorities on the topic, namely Green v The Governing Body of Victoria Road Primary School and Kent County Council [2004] ICR 684 and Murphy v Slough Borough Council [2005] ICR 721. Both cases were concerned with predecessor but similar legislation to this case. In Green the Court of Appeal determined that the phrase "employment powers in the Modification Order" included not only the express power of dismissal under the relevant statute but was wide enough to include claims for constructive unfair dismissal. May LJ, in the course of his judgment, described the employment powers as "a legislative signpost, not a definition".

1. In Murphy the Court of Appeal determined that the power to grant a teacher leave whether paid or unpaid, again, fell within their employment powers, even if the reasons for not granting paid leave would be the refusal of the local authority to provide additional funding. In his judgment Keene LJ spoke of the "need for a broad purposive approach to the construction of the relevant legislative provisions".

1. In his decision, Employment Judge Grazin went through the allegations set out above to determine whether or not in his view they fell within the Governors' employment powers, in which case, as against the remaining Respondent, the local authority, they would be struck out. At the hearing before Employment Judge Grazin, Mr Dugdale who then appeared on behalf of the Appellant conceded that paragraphs 60, 63 and 65 had no relevance as against the Respondents. Equally, on behalf of the Respondent Mr Sadiq, who then appeared for them, conceded that paragraph 61 did not fall within the Modification Order. Before me Mr Jones, who represented the Respondents, indicated that he would not have made such a concession but felt himself bound by it.

1. As regards the remaining allegations, Employment Judge Grazin determined that the allegations in paragraphs 57, 59, 62 and 64 fell within the Modification Order and, therefore, could not proceed against the Respondents, and that decision is the subject of the appeal. He further held that paragraphs 54, 55, 56 and 58 could proceed as being outside the Order and the cross-appeal lies against that decision.

1. In seeking to advance the appeal and resist the cross-appeal, Mr Elesinnla, on behalf of the Appellant, argued that in considering whether the acts and/or statements complained of were within the Governors' employment powers, the question must be posed as to whether those acts or statements were part of the exercise of the employment powers by the Governors. He referred me in particular to articles 3(1)(a) and (b) of the Modification Order, which speaks of the "exercise of … employment powers". He submitted that most of the acts complained of in paragraphs 54 to 65 of the allegations were committed by either the First and/or Third Respondents, not by the Governors, who, in relation to the original request for suspension, refused that request. He, therefore, argued that those acts or statements could not be construed as the exercise by the Governors of their employment powers. Therefore, the Governors should not be held responsible for those acts of persons over whom they had no control, even if ultimately it may have lead to employment powers, particularly suspension, being exercised.

1. Mr Elesinnla then took me to the judgment of Keene LJ in the Murphy case where paragraphs 19 to 21 the position was set out as follows:

"19. It is these provisions of the 1999 Order which are at the heart of this case. The Employment Tribunal seems to have regarded them as making the governing body the employer in all cases brought by a teacher under the 1995 Act. Some passages in the EAT's decision appear to proceed on the same basis, though elsewhere in that decision the EAT makes it clear that it is dealing specifically with the claim brought by this applicant. Mr White, on behalf of the applicant, submitted that the 1999 Order does not mean that only the governing body can be made the Respondent to a claim under the 1995 Act brought by a teacher at a school with a delegated budget. He drew attention to the wording of Article 3(1)(a), by which a reference to an employer "included a reference to the governing body." (emphasis added)

20. That in itself does not substitute the governing body for the LEA, but merely adds the governing body as an employer. Those words, said Mr White, are not words of exclusion so as to exclude the LEA from the category of employer. He also emphasised that some employment powers remain with the LEA (as indeed I have set out earlier in this judgment) and that, when it comes to an alleged breach of the employer's duty under section 6 of the 1995 Act, some of the steps which are reasonably required to prevent the disabled person being placed at a substantial disadvantage may be ones which only the LEA has the power to take. In this respect the applicant relied on some of those steps listed as examples in section 6(3). Making adjustments to premises may, in some instances, require capital expenditure the expending of which lies outside the power of the governing body. Transferring a disabled teacher to fill a vacancy at another school is again a matter for the LEA, not for the governing body of the school at which the teacher is currently employed. Such instances, it is submitted, demonstrate that an "all or nothing" approach to claims by a teacher under the 1995 Act is wrong.

21. I agree, and Mr Oldham for the Respondents did not seek to argue otherwise. In my judgment, the key to this issue is to be found in the words in article 3(1)(b) "in the exercise of the governing body's employment powers." Similar wording appears in Article 3(1)(a). It is clear that the liability of the governing body as an employer when a claim is brought by a teacher under the 1995 Act exists, and only exists, when the claim relates to the exercise by such a body of the employment powers vested in it. That makes practical sense. If complaint is being made about the exercise of an employment power retained by the LEA, the originating application lodged with the Employment Tribunal should cite the LEA as the Respondent. But where the power being exercised is one vested in the governing body, that body is the proper Respondent."

1. Mr Elesinnla laid particular emphasis on the passage in paragraph 21 where Keene LJ speaks of the liability of the Governors "where the claim relates to the exercise by such a body of the employment powers vested in it." Mr Elesinnla also relied on the passage relating to reasonable adjustments, pointing out that if reasonable adjustments fell within the local authority's power, e.g. adjustments to premises if expenditure was required, then liability under disability discrimination could attach to them.

1. In response Mr Jones invited me to consider paragraph 29 in Keene LJ's judgment as follows:

"Looking at the matter more widely, one needs to bear in mind that the governing body of a school with a delegated budget is patently given the power by Schedule 16 to appoint, suspend and dismiss a teacher, and that the LEA has no power to prevent the suspension or dismissal of a teacher from employment at the school in question. In those circumstances it would be an absurdity if the governing body were not to be held to have the power to grant leave to a teacher at its school, whether on compassionate grounds or for any other proper purpose, and to decide whether or not such leave should be paid or unpaid. Its financial powers granted by section 50(3) of the 1998 Act confirm that: see paragraph 10 of this judgment. I am satisfied therefore that, for all these reasons, the governing body of such a school has that power and only the governing body of such a school has that power."

1. Together with paragraph 45 in the judgment of Pill LJ where he sets out the position thus:

"The Employment Tribunal put it too broadly when holding (paragraph 9) that for "all matters" arising under the Disability Discrimination Act 1995 ("the 1995 Act") the Governing Body is the employer but the power to grant leave and decide whether it should be paid or unpaid is that, and only that, of the Governing Body. Nor can the LEA be made a party by the indirect route of identifying, as the reason for the Governing Body's decision that the leave should be unpaid, the refusal of the LEA to provide additional funding for paid leave. An employer's decisions affecting an employee will often be taken for reasons arising from the conduct of other parties. That normally does not give rise to a claim by the employee against these parties."

1. Mr Jones argued that all steps relating to the exercise of the employment powers, even if those steps related to conduct on behalf of the local authority, all fell within the Modification Order provisions. For example, he argued in relation to allegation 57, the letter of complaint, though emanating from the First Respondent, was clearly aimed towards a suspension, would, therefore, fall within the Modification Order. The effect of the acts of the local authority being effectively treated as committed by a servant or agent of the Governors. For example in paragraph 59, the threats to remove the Governors if they did not comply with the request to suspend, again, were closely bound up with the powers of suspension and/or conduct. He posed the rhetorical question that if these acts did not fall within the Governors' employment powers, what employment powers on behalf of the local authority is it suggested governed these acts or statements?

1. Mr Jones argued that the scheme of the legislation meant that the normal liability for employment discrimination falling upon the contractual employer was replaced for most circumstances by the Governors' statutory liability who, thereby, took on responsibility not only for the acts of their own employees but employees of the local authority; provided that those acts or statements on behalf of the local authority fall within the general factual matrix leading up to the exercise of the Governors' employment powers.

1. I agree with that analysis and reject the general notion that simply because the acts or statements complained of were committed by the local authority as opposed to the Governors, they do not potentially fall within the scope of the exercise of the Governors' employment powers as defined in the Modification Order. It does not matter who committed the acts but whether they can be factually connected to employment powers.

1. As to paragraph 57, Employment Judge Grazin held that the allegation that the First Respondent issued a letter containing baseless allegations, designed to put maximum pressure on the Governors to suspend the Appellant clearly raised issues of conduct and fell within the provisions of the Modification Order. Before me, Mr Jones contended that it was equally open to Employment Judge Grazin to determine that the letter was written under the local authority's specific statutory power and did not fall within the employment powers of either Governors or the local authority, but rather under a statutory duty falling on the Respondents in its capacity as a local authority charged with the provision of schooling.

1. The local authority's duties under the School Staffing Regulations apply both to the staff at community schools where the local authority is the contractual employer, as well as voluntary schools where the Governors are the employer. He argued that any complaint about a misuse of that power would be under section 18(1) of the Race Relations Act 1976:

"18 Other discrimination [etc] by local education authorities

(1) It is unlawful for a local education authority, in carrying out such of its functions under [the Education Acts] as do not fall under section 17, to do any act which constitutes racial discrimination [or harassment].

(2) It is unlawful for an education authority, in carrying out such of its functions under the Education (Scotland) [Act 1980] as do not fall under section 17, to do any act which constitutes racial discrimination [or harassment]."

The remedy for such a breach would involve the commencement of proceedings in the appropriate County Court.

1. In addition to his general argument that acts and statements allegedly committed by the local authority could not fall within the exercise of the Governors' powers. Mr Elesinnla argued as regards paragraph 57 that the Employment Judge's reasons were not Meek compliant in that they failed to explain how the letter amounted to an issue of conduct. I cannot agree. The reasons given by the Employment Judge when read together with the local authority's letter of 28 June, together with the parties' representations before the Tribunal make the position very clear. Although the reasons refer to conduct as the relevant employment power, it seems to me that equally suspension was also engaged.

1. Consideration of paragraph 57 leads to consideration of paragraphs 54, 55 and 56; the subject of the cross-appeal. Mr Jones argued that there is no logical distinction between these three paragraphs and 57. He argued that if 57 fell within the Modification powers so should the preceding three paragraphs. He argued that the three paragraphs contained allegations which were clearly steps on the way to the possible disciplining and/or suspension of the Appellant and also clearly involved her conduct, and that, therefore, Employment Judge Grazin created an unnecessary and illogical distinction between those paragraphs and paragraph 57. Again he asked rhetorically if those three paragraphs did not fall within the Modification Order, what employment powers on the part of the Respondents were being engaged. He argued that the Judge took far too narrow an approach to those three paragraphs, rather than taking the wider or purposive approach suggested in both Green and Murphy.

1. Mr Elesinnla repeats his general submissions that the Governors should not be held responsible for the independent acts of the local authority and submitted that the Judge had clearly carried out a very careful analysis of whether the allegations in those three paragraphs fell within the Modification Order. That careful analysis was clearly required from the guidance given in the Murphy decision and that accordingly the EAT should be loathed to interfere with the Judge's decision.

1. I cannot agree. I can see no logical distinction between dividing up those three paragraphs from paragraph 57. I repeat that they are all steps on the way to achieving the possible removal or disciplining of the Appellant and, therefore, fell within the Governors' employment powers. It seems to me that included within those powers are all the acts and statements which could form the background leading up to the possible exercise of disciplinary powers. The effect of the legislation is clearly that, for the majority of complaints by teachers relating to breaches of employment or discrimination legislation, the correct Respondent will be the Governors, even though contractual employment remains with the local authority.

1. I, therefore, agree with Employment Judge Grazin's analysis with regard to paragraph 57, although equally the decision could have been made under the School Staffing Regulations 2003, in which case the claim would have to be brought in the County Court. I depart from Employment Judge Grazin's analysis in respect of paragraphs 54, 55 and 56, for the reasons set out in paragraph 29 above and, to that extent, the cross appeal shall be allowed and those paragraphs should be struck out.

1. This allegation falls within the cross-appeal. The allegation concerns the blocking of a pay award by the Respondents of which Employment Judge Grazin determined would lie outside the Modification Order. On behalf of the Respondents, Mr Jones reminded me of the facts in Murphy where the Court of Appeal determined that the issue of paid leave fell within the Modification Order and also referred me to current statutory instruments relating to teachers' pay (which were not placed before the Employment Judge). In particular, the School Teachers Pay and Conditions Document 2007 which she submitted makes clear that the fixing of pay and increases fell within the Governors' powers, although overall scales and bands were set nationally. Further, he submitted that the blocking of the award must have related to concerns about the Appellant's conduct or capability.

1. Employment Judge Grazin's view was that however broadly the Modification Order was to be considered, it could not "in his judgment properly cover a refusal to implement a pay award". I am not persuaded that that view was incorrect. Further, I note that the Modification Order in its Schedule does not apply to those sections of the Employment Rights Act 1996 which deal with unauthorised deduction of wages.

1. This paragraph relates to the allegation that threats were made by the local authority and Serco to remove the Governors if they did not comply with the request to suspend the Appellant, although, as I have indicated above, for some months this was resisted by the Governors. The Employment Judge ruled that this allegation clearly fell within the scope of the Modification Order and struck it out.

1. In his submissions Mr Elessinla argued that firstly this matter had been allowed to proceed at a previous PHR. He also argued that there was no reasonable authority to support the proposition that the Respondents could not discriminate against the Appellant by either complaining about her to the Governors or threatening the Governors to cause her a detriment on discriminatory grounds provided that she was aware of what local authority were doing.

1. The Judge struck out the claim firstly on the basis that there was no allegation of less favourable treatment towards the Appellant, rather that it was improper treatment of the Governors and, in any event, the Respondents' actions fell within the Governors' employment powers. It seems to me that there could be discrimination of the Appellant if any attempt was made to try and force the Governors to suspend her; that that attempt was made for discriminatory reasons. In any event, since the allegation directly relates to a suspension of the Appellant I cannot fault Employment Judge Grazin's view that it is not actionable against the Respondents.

1. Finally I can deal briefly with paragraphs 62 and 64. In paragraph 62 the allegation was that the Respondents caused the resignation of the original investigator into the matters that lead to the Appellant's suspension, and in paragraph 64 the allegations that the Respondents commenced an investigation into alleged financial irregularities, failed to provide particulars of the alleged misconduct and failed to proceed fairly in respect of that investigation.

1. Again I do not intend to repeat the overall submissions that Mr Elesinnla made and my reasons for rejecting them. Employment Judge Grazin's particular decision on these two paragraphs was that a suspension and/or conduct was engaged and, therefore, fell within the Order.

1. I turn to the other limb of the appeal in relation to the striking out of the claim under section 33. The relevant statutory provisions are contained in sections 30, 31 and 33 of the Act:

"30 Instructions to [commit unlawful acts]

[(1)] It is unlawful for a person –

(a) who has authority over another person; or

(b) in accordance with whose wishes that other person is accustomed to act,

to instruct him to do any act which is unlawful by virtue of Part II or III, [section 76ZA or, where it renders an act unlawful on grounds of race or ethnic or national origins, section 76,] or procure or attempt to procure the doing by him of any such act.

[(2) Proceedings in respect of a contravention of subsection (1) may be brought only -

(a) by the Commission, and

(b) in accordance with section 25 of the Equality Act 2006.]"

31 Pressure to [commit unlawful acts]

(1) It is unlawful to induce, or attempt to induce, a person to do any act which contravenes Part II or III [section 76ZA or, where it renders an act unlawful on grounds of race or ethnic or national origins, section 76].

(2) An attempted inducement is not prevented from falling within subsection (1) because it is not made directly to the person in question, if it is made in such a way that he is likely to hear of it.

[(3) Proceedings in respect of a contravention of subsection (1) may be brought only –

(a) by the Commission, and

(b) in accordance with section 25 of the Equality Act 2006.]

33

Aiding unlawful acts

(1) A person who knowingly aids another person to do an act made unlawful by this Act shall be treated for the purposes of this Act as himself doing an unlawful act of the like description.

(2) For the purposes of subsection (1) an employee or agent for whose act the employer or principal is liable under section 32 (or would be so liable but for section 32(3)) shall be deemed to aid the doing of the act by the employer or principal.

(3) A person does not under this section knowingly aid another to do an unlawful act if –

(a) he acts in reliance on a statement made to him by that other person that, by reason of any provision of this Act, the act which he aids would not be unlawful; and

(b) it is reasonable for him to rely on the statement.

(4) A person who knowingly or recklessly makes a statement such as is mentioned in subsection (3)(a) which in a material respect is false or misleading commits an offence, and shall be liable on summary conviction to a fine not exceeding [level 5 on the standard scale]."

1. In the course of the hearing before Employment Judge Grazin he raised the issue of whether the complaint against the local authority, if the Governors were to be held primary responsible under the Modification Order, should more properly have been brought under section 30 or section 31 which alleges either instructions to or pressure to commit unlawful acts under the RRA. However, it was pointed out to the Employment Judge that both sections required proceedings to be brought by the Equality and Human Rights Commission.

1. The Judge then went on to consider the effect of section 33. He determined, and it has not been challenged before me, that if the Appellant were to succeed under this section, she would be required to prove not only that the Respondents knowingly aided the Governors to do some act but that that act was unlawful. In other words the Tribunal had to make findings as to both knowingly aiding on the part of the local authority and an unlawful act of the primary discriminator, the Governors, on the other.

1. The great difficulty in the case was that the Appellant had decided to settle with the Governors on the basis that no admissions were made, yet to proceed under section 33 the Appellant would be required to prove the self-same allegations against the primary discriminator, which she had decided not to pursue against the Governors, without the Governors being a party to the proceedings and with no certainty as to who, if at all, from the Governors would be giving evidence.

1. The Employment Judge dealt with his conclusions in paragraphs 31 and 32 of his decision as follows:

"31. In practical terms, it is highly that the Second Respondent will take any further part in these proceedings. It has no present wish to do so and no motive to do so. In order for the Claimant to succeed in her claim under section 33, she must, as I analyse the position, prove that the Second Respondent committed a series of unlawful acts. The question then arises whether it is contrary to public policy to allow the Claimant to make such an allegation, in circumstances where she has settled her claim and, more importantly, where the Governing Body is unlikely to wish to attend to defend any such claim. The consequence of allowing the Claimant to proceed in the manner advanced by Mr Dugdale is that the Tribunal would have to make a public finding of unlawful discrimination, on one or more grounds, against the Governors, so as to enable the Claimant to succeed against the First Respondent.

32. Mr Dugdale argued that this was not a matter of public policy, but a mere evidential problem caused by the absence of the Second Respondent on any hearing. In one sense, of course, the absence of the Second Respondent to deny any unlawful act assists the Claimant. Having said that, it seems to me that the Claimant cannot be allowed to proceed on this ground. Whether or not the Claimant or those advising her within the Judicial Mediation appreciated the point that now arises is not material. What is material, in my view, is that, when the Claimant settled her claims against the Second Respondent within that mediation process (and subsequently via an ACAS COT3 Agreement) she impliedly, if not expressly, accepted that she could not proceed against the Second Respondent in any manner. Proceeding against the First Respondent, by the front door, brings in the Second Respondent by the back door. That would be contrary to public policy, because it would negate the effect of a settlement of those claims which, as a matter of long-established public policy, is in the interests of good justice. No party in the position of the Second Respondent would ever settle a claim of this sort if a Claimant was nonetheless entitled to maintain the same allegations against another party as part of the claim against that other party."

1. If the matter were to proceed, the result could be that the Tribunal would be asked to make findings against a primary discriminator, the Governors, in their absence, the Governors believing that the case had been concluded against them as a result of the concluded settlement. How could the Tribunal possibly make findings against the Governors as primary discriminators if they were not party to proceedings and had settled the claim? Mr Jones posed an additional problem in terms of compensation as to how it would be calculated. The Appellant had been reinstated, although it was not clear how much, if anything, she had received by way of compensation.

1. Further, it had been raised in argument before Employment Judge Grazin, although not dealt with in his conclusions, that this case should more properly have fallen within section 30 or section 31, instructions or pressure, rather than aiding. In Hallam v Cheltenham Borough Council and Ors [2001] UKHL 15 the House of Lords considered the effect of section 33. In that case police officers had given information to the local authority relating to the background of persons who are proposing to hire some rooms from the council. In light of the information the council provisionally decided to cancel the booking, although on reflection decided to impose new conditions which had already been mentioned to the hirer. The hirer rejected the conditions and alleged that the council had repudiated the contract and sued for breach of the hiring contract for damages, for racial discrimination and also a claim against the three police officers for knowingly aiding the council to discriminate against them.

1. The House of Lords left open the question of whether a party can be liable under section 33 where they give information to another and on which that other relies in doing an unlawful discriminatory act. Lord Millett, however, in his speech said this:

"The man who helps another to make up his mind does not thereby and without more help the other to do that which he decides to do. He may advise, encourage, incite or induce him to do the act; but he does not aid him to do it. As I said in Anyanwu v South Bank Student Union, aiding requires a much closer involvement in the actual act of the principal than do either encouraging or inducing on the one hand or causing or procuring on the other."

1. For the purposes of this appeal it is not necessary for me to decide that issue. Were it the only issue on this part of the appeal I would have to send it back to the Employment Judge for further reasons.

1. There may be situations, e.g. where the principal discriminator as employer no longer existed or had gone in to liquidation, where it would be proper to allow a claim against the secondary discriminator to proceed. For the reasons which Employment Judge Grazin has so clearly set out, it seems to me that it would be a complete abuse of process to allow an aiding claim to proceed in this case, requiring as part of that claim a finding against a primary discriminator who is no longer a party to proceedings as a result of the Claimant being willing to settle the case against that primary party without any admission of liability; a true case of a Claimant wishing to have the best of both worlds. The absence of the Governors as parties together with the probable absence of their witnesses, yet with the risk of a finding against them, creates, to my mind, an overwhelming unfairness and for those reasons I would not interfere with Employment Judge Grazin's decision.