The claimant worked in a financial services sector where bonuses were high in relation to his salary.  In early 2007 he was awarded a bonus of c$800k for 2006 but also asked to widen his pool of clients as the majority of his sales related to a single customer.  In March 2007 he was injured in a serious skiing accident which reduced his hours at work and mobility. In September that year a bonus of  $400k was proposed though at his end of year appraisal it was again noted that the majority of income was through the single client and he was graded as meeting expectations.  In February 2008 the claimant was placed at risk of redundancy and so he issued a grievance in relation to his bonus and selection for redundancy. The grievance was rejected after the claimant had been made redundant. The ET concluded that the claimant had not suffered disability related discrimination as any other person working the claimant's hours would have also been dismissed had they not widened their client base. However on essentially the same facts the tribunal also found that a claim for direct discrimination had arisen.

In this appeal, counsel for the respondent argued that  as the Employment Tribunal found there was no related discrimination because the "Malcolm" comparator would have been treated the same way there cannot, on the same facts, be direct discrimination either because a comparator would have been treated in the same way.  HHJ Serota reviews the statute and the relevant authorities, accounting for the recent Court of Appeal judgment in Stockton v Aylott which confirmed that the approach in Malcolm was not confined solely to housing legislation.  He accepts broadly the respondent's argument stating that the tribunal "appears to have confused the test of determining direct discrimination under section 3A(5) of the Disability Discrimination Act 1995 with the pre-Malcolm test of disability-related discrimination" and that it was unclear whether the ET had found there were other reasons for their finding of direct discrimination not related to the unfair dismissal and the bonus payment. The matter was therefore remitted for consideration of whether there were additional grounds for the finding of direct discrimination.

__________________

Appeal No. UKEAT/0286/09/JOJ

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 22 April 2010

Judgment handed down on 26 August 2010

Before

HIS HONOUR JUDGE SEROTA QC

MRS A GALLICO

DR K MOHANTY JP

JP MORGAN EUROPE LTD (APPELLANT)

MR R CHWEIDAN (RESPONDENT)

Transcript of Proceedings

JUDGMENT

For the Appellant
MS EMMA SMITH (of Counsel)

Instructed by:
Messrs Beachcrofts Solicitors
Portwall Place
Portwall Lane
Bristol
BS99 7UD

For the Respondent
MS ANNA BEALE (of Counsel)

Instructed by:
Messrs Leigh Day & Co Solicitors
Priory House
25 St John's Lane
London
EC1M 4LB

DISABILITY DISCRIMINATION

Disability related discrimination

Direct disability discrimination

The Employment Tribunal found that the Claimant, an Executive Director in Structured Credit and Sales, had not suffered disability related discrimination under s3A(1) of the 1995 Disability Discrimination Act, by reason of the fact that his disability limited his working hours and prevented him from widening his client base, when he was paid a lower bonus than appropriate and unfairly dismissed. The Employment Tribunal found that if a person in the employee's position had not been able to do the full hours and was limited to similar hours to the Claimant, that person would also have been dismissed where they had not sufficiently widened their client base. Nevertheless and despite that finding the Employment Tribunal appears to have found that those facts gave rise to a claim for direct discrimination under s3A(5) of the Act. The case was remitted to the Employment Tribunal to determine whether or not there were additional grounds for finding that the Claimant had suffered direct discrimination.

1. This is the full hearing of an appeal by the Respondent, as we shall call it, from part of the decision of an Employment Tribunal at London (Central) (Employment Judge Carstairs and lay members) after a fiveday hearing with two days spent in chambers. The judgment is dated 18 December 2008 and the reasons were sent to the parties on 23 April 2009. We stress that the delay in completing the reasons was caused by the unfortunate ill health of the Employment Judge who was taken ill after the conclusion of the hearing and having agreed the outcome of the application before being able to complete the reasons. We believe (and we accept that we may have been misinformed) that the lay members completed the judgment themselves in the absence of the Employment Judge.

1. The Employment Tribunal found (a) the Claimant had been unfairly dismissed; (b) the Claimant had suffered direct discrimination on the grounds of disability in relation to (I) his bonus for the year 2007 (II) his dismissal; (c) claims for disability-related discrimination in relation to his dismissal and bonus were dismissed; (d) claims for age discrimination, both direct and indirect, were also dismissed. There has been a subsequent remedies hearing. We are told that both parties have appealed the result but details are not known to us.

1. The appeal was referred to a full hearing by HHJ Reid QC on 24 September 2009.

1. For the sake of completeness we note that the Registrar allowed an extension of time for the Claimant to file an answer but refused the Claimant permission to cross appeal because he was out of time and the Claimant was ordered to pay the Respondent's costs of responding to the Respondent's application for an extension of time to lodge an answer and cross-appeal.

1. We take the factual background largely from the decision of the Employment Tribunal. The issue in this case is essentially a clear issue of law; does the finding of the Employment Tribunal, to which we shall come shortly, that there has been no disability related discrimination because a non-disabled comparator would have been treated in the same way as the Claimant require similar findings in relation to issues of direct discrimination? We shall set out the facts very shortly. Further reference can be made to the careful findings of the Employment Tribunal.

1. The Claimant had the misfortune to severely injure his back in a skiing accident on 25 March 2007. The Claimant was initially confined to bed but later had to use a back brace and crutches.

1. The Claimant had worked for the Respondent or for Robert Fleming, whose business had been taken over by the Respondent, from 4 November 1994. His employment was transferred to Chase Manhattan when it took over Robert Fleming in August 2000. Chase Manhattan merged with the Respondent in December 2000.

1. The Claimant was engaged in an industry with high bonuses (by reference to salary) and a somewhat ruthless approach to redundancies and dismissals generally. At the material time the Claimant was an Executive Director (the grade above Vice-President) in Structured Credit and Sales. We believe he was in the Hedge Funds team.

1. The Claimant's bonus was paid out of a pool and would depend on the profits of the relevant year which were then divided among those entitled to participate, based upon their performance. The Claimant had been successful although much of his work was from a particular client "P" and the Respondent wished him to increase the percentage of income derived from his other accounts. In early 2007 the Claimant was informed that his bonus for 2006 had been fixed at $798,483 amounting to some 4.8% of his sales credits; the corresponding figure for the year 2005 was $260,000 with which the Claimant was dissatisfied. The Claimant was dissatisfied because he considered that the bonus proposed understated his performance.

1. At the end of March 2007 the Claimant went skiing with a client and had the misfortune as we have said to suffer an injury to his thoracic spine. He spent two weeks in hospital and thereafter, although he worked as much as he could, initially from home, for obvious reasons his work hours were reduced as was his mobility and ability to travel. We assume that his ability to entertain clients in the evenings was significantly reduced and such entertainment is an important function of his work within credit sales. An Occupational Health assessment of August 2007 concluded that he was not disabled within the meaning of the Disability Discrimination Act.

1. The Respondent was pleased with the revenues generated by the Claimant but continued to have concerns that the client "P" still accounted for 60% of his revenue. On 27 September 2007, the Claimant's manager, Mr Hayward, proposed a bonus of $400,000 for 2007. He recommended that others in the Claimant's team received a greater sum.

1. It is helpful to quote paragraph 4:31 of the decision of the Employment Tribunal because it reflects the value of the work done by the Claimant:

"By the year end the Claimant had earned approximately £25m in sales credits. In addition, he had sold £150m in bridge loans in respect of Account S which reduced the Respondent's level of risk and prevented the Respondent from losing almost £50m. The Claimant believed that this would be reflected favourably in his bonus. The Claimant also became increasingly involved in and acted as point person on the desk for insurance linked securities. The Claimant also transacted a lot of highly profitable business with Account H which removed further risk from the Respondent's balance sheet. On the other hand, two of the Claimant's biggest accounts, Accounts AV and WC, closed."

1. In December 2007 the Claimant was at the end of his year's appraisal and had made a strong showing despite his injury. The Respondent was highly complimentary about his handling of client capital "P", but noted that it still was responsible for 65% of the Claimant's revenue. He was seen by the Flow Trading Department as a one-account salesperson; this needed to be changed. The Claimant was graded as "M" or "2"; that is to say that he met expectations.

1. On 22 January 2008 a report from Occupational Health accepted that the Claimant was now disabled within the meaning of the Disability Discrimination Act.

1. The Employment Tribunal found that at a meeting with Mr Hayward, the Respondent was told that his bonus reflected the Respondent's desire to "look after the junior guys" and the bonus was skewed towards them. The Claimant was told that the bonus pool was reduced and he would receive $450,000; understandably the Claimant was not at all pleased.

1. By the middle of February 2008 the Respondent was considering redundancy for the Claimant. He was informed that he was at risk at a meeting with Mr Hayward on 18 February 2008 and informed more formally at a further meeting on 19 February 2008. In the Respondent's language when someone was "at risk of redundancy" he had been selected for redundancy and would be made redundant unless he could find an alternative post in the company because "at risk" meant that redundancy was inevitable and the employee would be placed on garden leave.

1. On 14 March 2008 the Claimant issued a grievance in relation to his 2007 bonus and his selection for redundancy on the grounds that the Respondent's conduct amounted to age and disability discrimination. The issue of the grievance was followed by a grievance meeting. On 21 April 2008 the Claimant was given notice of dismissal and his employment terminated on 14 July 2008. We note that on 2 June 2008 his grievance was rejected, as was a subsequent appeal.

1. The Employment Tribunal set out the facts which we have briefly summarised. We do not need to refer to its directions as to the law in relation to age discrimination and unfair dismissal. The Employment Tribunal correctly directed itself as to section 3A of the 1995 Act and to section 17(1)(c). In relation to the question as to whether the nonpayment of the bonus amounted to direct disability discrimination, the Employment Tribunal considered that there was no issue that the Claimant had been treated less favourably having received a lesser bonus. The Employment Tribunal was asked to consider following the decision in Shamoon v Chief Constable of the Royal Ulster Constabulary [2003] IRLR 285 why the Claimant was treated as he was (the "reason why" issue).

1. The Employment Tribunal rejected various matters relied upon the Claimant as showing evidence of discrimination and also found various matters put forward by the Respondent to be correct. It was satisfied that the bonus would be lower if the pool was reduced even if a salesman improved his performance and that the diversity of the Claimant's revenue was still overreliant upon client "P", especially compared to the proportion of other salesmen's business from their largest clients.

1. The Employment Tribunal considered that the bonus seemed "remarkably unfair" because it was 44% less than in 2006. However, the Employment Tribunal did not know the relative size of the bonus pool and there was relatively little information as to appropriate comparators. The Employment Tribunal considered that a number of insensitive comments about which the Claimant complained amounted to no more than badinage between close colleagues and the Claimant did not take offence at the time. Although the $400,000 asked for the Claimant was low and employee D had a higher "ask" which was accepted, he had achieved a significant amount of new business. The Employment Tribunal rejected the submission that the reduction in the bonus was designed to encourage the Claimant to leave; the Respondent's reasoning that it would be difficult to find somewhere to move by reason of his back problem.

1. The Employment Tribunal was not able to derive anything of assistance from a spreadsheet showing the total bonuses. Paragraph 6:7 of the decision of the Employment Tribunal is close to the nub of the appeal:

"The Tribunal has on balance concluded that the dramatic decrease in the Claimant's bonus, particularly when compared with that of a person regarded by Mr Hayward as a comparator, albeit that the Tribunal does not know the circumstances of that person so that person is not a comparator for the purposes of the 1995 Act, suggest, in conjunction with the references to the Claimant's impairment from time to time, that the reason for the substantial decrease in the bonus was because he was disabled. Having regard to the explanation provided by the Respondent as to the basis on which it chose to award the bonus, the Tribunal has concluded that the Respondent has not proved that it did not treat the Claimant less favourably in any sense whatsoever on the ground of his disability. The Tribunal is of the view that the lack of a wider client base was a contributing factor to the decision but that equally the Claimant's disability also contributed to the decision for the reasons given above."

1. It is clear from the above paragraph that the Employment Tribunal found the Claimant had, under section 17(1)(c), established facts from which the Employment Tribunal could draw an inference of discrimination on the grounds of disability so as to reverse the burden of proof. It rejected the Respondent's case. We note in passing that it is accepted by the Claimant that paragraph 6:7 is unsatisfactory and it fails to explain why it considered that the discrimination was direct rather than disability related.

1. In relation to disability-related discrimination on the question of the bonus, at paragraph 6:8 the Employment Tribunal rejected the submission (in our opinion correctly) that the decision of the House of Lords in London Borough of Lewisham v Malcolm [2008] IRLR 700 was limited to housing legislation. We had understood that the application of Malcolm in the employment field was to be decided by the Court of Appeal in [Stockton on Tees Borough Council v Aylott]() and we did wait before concluding our judgment. The preparation of the judgment was also delayed by the indisposition of HH Judge Serota QC. However, the decision was handed down after we had drafted the judgment and confirmed that Malcolm did apply in the field of employment law; see [2010] EWCA Civ 910. We, therefore, consider that the Employment Tribunal was correct to follow Malcolm.

1. The Employment Tribunal went on to find that in relation to a bonus the Respondent would have treated a non-disabled person in similar circumstances in a similar manner:

"The Tribunal has concluded that if the circumstances of Mr Chweidan had been the same but his limited hours had not been for a reason related to a disability, the result would have been the same. The Tribunal is satisfied that the Respondent's concern was the lack of a broad client base which the Claimant was not able to improve because, for example, he was not available in the evenings to entertain potential new clients. Accordingly, the Tribunal has concluded in any event that the Claimant was not treated differently to a hypothetical comparator and therefore the Respondent was not guilty of disability related discrimination."

1. We now turn to the treatment by the Employment Tribunal of the question whether the Claimant's unfair dismissal could amount to direct disability discrimination. The Employment Tribunal was satisfied that the Claimant had suffered less favourable treatment because he had been dismissed while other persons who were not disabled had not been dismissed. The Employment Tribunal was satisfied on the facts that the Claimant had adduced evidence of action which the Tribunal could conclude that his dismissal was on the grounds of his disability. It continued:

"Accordingly, the burden of proof transfers to the Respondent to show that it did not treat the Claimant less favourably in any sense whatsoever on the ground of his disability. Although the Tribunal accepts that part of the reasoning for the Claimant's choice was that he did not have a sufficiently broad client base, being reliant so heavily on Client P, he was also to some extent prevented from broadening his client base because of his limitations regarding working in the evening when he would otherwise have been able to entertain possible new clients. As therefore his disability was a factor in the decision to dismiss the Claimant, the dismissal amounted to direct disability discrimination.""

1. In relation to whether the dismissal constituted disability-related discrimination the Employment Tribunal rejected this case; see paragraph 6:15:

"Dismissal Disability Related Discrimination

The Tribunal's conclusion is based on similar reasoning to that in respect of its decision regarding disability related discrimination in respect of the bonus. The Tribunal is satisfied that if a person in the employee's position had not been able to do the full hours and was limited to similar hours to the Claimant, that person would also have been dismissed where they had not sufficiently widened their client base. Accordingly, this complaint fails."

1. The Employment Tribunal was thus satisfied that the Respondent would have treated a non-disabled comparator in similar circumstances in the same way.

1. At this point in time it is important to note that the Employment Tribunal (a) has not constructed a comparator so far as direct discrimination is concerned; (b) the Employment Tribunal has not explained what the discrimination was. If the direct discrimination was simply that the Respondent believed that it was uneconomic to make reasonable adjustments, or that it was unable to make greater profits from clients because of the Claimant's disability, that discrimination would appear to be disability related rather than direct. Only if there was some prejudice against people in a back brace and using crutches might it be said to be direct discrimination and this would need to be explained.

1. The essence of the Respondent's point is that if a comparator would have been treated in the same way as the Claimant there cannot be direct discrimination. As the Employment Tribunal found there was no related discrimination because the "Malcolm" comparator would have been treated the same way there cannot, on the same facts, be direct discrimination either because a comparator would have been treated in the same way; accordingly, there would have been no less favourable treatment as he would have been treated in the same way as someone:

"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."

1. The Respondent accepted that discrimination need not be the sole ground of the treatment; see Lord Nicholls in Nagarjan v London Regional Transport [1999] IRLR 572 at paragraph 13.

1. Ms Smith accepted that it was permissible for the Employment Tribunal to follow Shamoon which permits an Employment Tribunal in discrimination cases to adopt a two-stage approach (a) firstly it will ask has the Claimant received less favourable treatment? (b) was the less favourable treatment on the proscribed ground? (the "reason why" issues). The less favourable treatment issue could not be decided without deciding the "reason why" at the same time. The answer to the "reason why" issue would provide the answer to the less favourable treatment issue; see Lord Nicholls at paragraph 11.

1. However, the issue of less favourable treatment is not omitted but it is postponed; see Lord Nicholls at paragraph 12, Lord Hope at paragraph 49 and Lord Scott at paragraph 108. Although it was recognised (see Lord Rodger at paragraph 125) that while dividing up the issues might be helpful in certain cases, there are others where the issues were so intertwined that attempting to deal with them separately might hinder rather than help a Tribunal to determine them.

1. Ms Smith submitted that the Employment Tribunal must, in performing the comparative exercise required for a finding of less favourable treatment, consider the treatment of the comparator, actual or hypothetical, whose circumstances must be the same or not materially different from those of the Claimant. Only when that is done can there be a judgment as to whether the treatment was less favourable; in this regard she relied upon the decision of HHJ McMullen QC in High Quality Lifestyles Ltd v Watts [2006] IRLR 850 at paragraphs 46 and 47 (approved by the Court of Appeal in Aylott). It was not sufficient for the Claimant to show treatment meted out to him on the grounds of his disability without there being less favourable treatment.

1. She then turned to the effect of Malcolm. Malcolm, she submitted, defined the comparator as a person in similar circumstances to the Claimant who either does not have his disability or is not disabled or where the circumstances of the comparator are unconnected with the Claimant's disability. She submitted that Malcolm had rendered the scope of section 3A(1)(a) of the Disability Discrimination Act 1995 for all practical purposes to be the same as for direct discrimination under section 3A(5). She drew attention to the speech of Lord Brown in Malcolm at paragraph 114 where he recognised that the approach adopted by the House of Lords in Malcolm to section 3A(1)(a) reduced its reach and confined it largely, if not entirely, to the proscription of direct discrimination only. She also drew attention to City of Edinburgh Council v Dickson UKEAT/0038/09 at paragraph 33 and the dictum of Underhill J that it was:

"Practically impossible for one (a claim for either direct or disability-related discrimination) to succeed where the other would not"

1. In relation to the question of the bonus and the finding that the Respondent had been guilty of direct discrimination in this regard, Ms Smith accepted that the Employment Tribunal was entitled to ask the reason why but it had failed to consider whether the Claimant was treated less favourably than comparators in relation to direct discrimination. However, when the Employment Tribunal compared the Claimant's treatment with comparators in relation to disability-related discrimination and when it had constructed an appropriate comparator, it found that he had not been less favourably treated.

1. Ms Smith went on to submit that the Employment Tribunal was satisfied (see paragraph 6:8) that the Respondent was concerned at the Claimant's limited client base. It, therefore, implicitly found that the fact he had received a lesser bonus was not on the ground of his disability. The fact that the disability may have contributed or was part of the circumstances did not necessarily mean it was the reason why; she relied upon the decision in Amnesty International v Ahmed UKEAT/0447/08 and City of Edinburgh Council v Dickson. If the reason for reduction in the bonus was his disability he would have had to have been treated differently to a comparator, but the Employment Tribunal found that he was not.

1. In relation to unfair dismissal paragraph 6:14 was unclear because what was described would be disability-related discrimination rather than direct discrimination. The Employment Tribunal appear to have confused the test of determining direct discrimination under section 3A(1) of the Act with the pre-Malcolm test of disability-related discrimination.

1. Ms Smith further submitted that the decision was not Meek compliant; the reasons were insufficient and unclear.

1. Ms Beale submitted that the judgment was Meek compliant. There was no need to construct a comparator if the Employment Tribunal was able to find "the reason why" for the discriminatory treatment. The assumption that the comparator for direct and disability-related discrimination would be the same was erroneous. There was no need for them to be the same although in most cases it would be. Ms Beale drew attention to the decision of HHJ McMullen QC in High Quality Lifestyles Ltd v Watts and to something that I had said in the case of Eagle Place Services v Rudd UKEAT/0497/08/DM. The Employment Tribunal made findings that were consistent with the Respondent having discriminated against the Claimant on the basis of a stereotyped view and the application of the law relating to disability discrimination.

1. As far as the bonus was concerned the Employment Tribunal was entitled to find that this payment of the bonus at such a low rate amounted on the evidence to direct discrimination, after applying the reverse burden of proof. The finding that there was no disability-related discrimination was not inconsistent because the related claim was referable only to working shorter hours by reason of his disability and the Employment Tribunal found that a comparator would have been treated the same way if unable to work full hours. By contrast direct discrimination is wider based and there is no reference in paragraphs 6:1 to 6:7 of the decision to this.

1. The Employment Tribunal rather concentrated on the client base which was only part of the reason for the decrease in the bonus. The Employment Tribunal was entitled to draw inferences which it did. It is clear from paragraph 6:8 that the inability to work long hours was subsumed in the concerns about the failure to achieve a wider client base; we do observe that if the Employment Tribunal were saying that a comparator who failed to widen his client base would not have been so treated why has the Employment Tribunal not said so in terms?

1. Ms Beale made a similar submission in relation to the grounds of appeal challenging the finding that the unfair dismissal constituted direct discrimination. She pointed out that the Employment Tribunal had found facts that raised the possibility of drawing an inference of discrimination; the Respondent's explanations were considered (see paragraph 6:13) and the Respondent's explanation was rejected.

1. Ms Beale conceded that paragraph 6:14 which dealt with the rejection of the Respondent's explanation was not felicitously worded but it clearly linked breadth of a client base to restricted hours (which were disability related) and that was only part of the reason for the selection for redundancy. Accordingly, it must follow that the Respondent's concerns that the Claimant was disabled within the meaning of the Disability Discrimination Act 1995 and that the Act applied to him also formed part of the reason for his selection.

1. In paragraph 6:14 only two reasons are given for rejecting the Respondent's explanation but there is no reference to the earlier findings in relation to disability-related discrimination. Accordingly, it was submitted that the correct course would be, if we were in favour of the Respondent's appeal, that we should remit the matter for further consideration on the question of direct discrimination only but not in relation to other matters.

1. Section 3A(1) *of the Disability Discrimination Act 1995* provides as follows in relation to what is referred to as "disabilityrelated discrimination":

"…3A[1] 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 that the treatment in question is justified."

1. Section 3A(5) defines direct discrimination:

"[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."

1. We are satisfied that notwithstanding that an Employment Tribunal may, before considering other ingredients of the statutory tort, ask itself "the reason why" for the alleged discriminatory treatment, a comparator is still required; in this regard we refer to what Lord Hope said at paragraph 49 of Shamoon in relation to article 8(2)(B) of the Sex Discrimination (Northern Ireland) Order 1976 which defined discrimination on the grounds of sex. Lord Hope said at paragraphs 48 and 49:

"48..... The comparison which is invited by the words "treats her less favourably" lies at the heart of the entire sub-paragraph.

49 It is, I think, open to question whether the issue of less favourable treatment should be examined separately from the third issue with which the tribunal dealt under article 3(1)(a), which was whether the treatment which the applicant received was "on the ground of her sex". The third issue is the primary question. It directs attention to the question why the claimant was treated as she was. It calls for an examination of all the facts. If the two issues are to be examined separately, it may be helpful for this question to be addressed first. But, whichever approach is adopted, one must not lose sight of the fact that article 3(1) must be read as a whole and that it must be read together with article 7. A comparison of the cases of persons of a different sex under article 3(1)(a) must therefore be such that all the circumstances which are relevant to the way they were treated in the one case are the same, or not materially different, in the other."

1. We also refer to the speech of Lord Scott at paragraphs 107 to 108, again stressing the need for there to be a statutory comparator, actual or hypothetical:

"107 There has been, in my opinion, some confusion about the part to be played by comparators in the reaching of a conclusion as to whether a case of article 3(1) discrimination-or for that matter a case of discrimination under section 1(1) of the Sex Discrimination Act 1975, or under section 1(1) of the Race Relations Act 1976, or under the comparable provision in any other anti-discrimination legislation-has been made out. Comparators come into play in two distinct and separate respects.

108 First, the statutory definition of what constitutes discrimination involves a comparison: "treats that other less favourably than he treats or would treat other persons". The comparison is between the treatment of the victim on the one hand and of a comparator on the other hand. The comparator may be actual ("treats") or may be hypothetical ("or would treat") but "must be such that the relevant circumstances in the one case are the same, or not materially different, in the other" (see article 7). If there is any material difference between the circumstances of the victim and the circumstances of the comparator, the statutory definition is not being applied. It is possible that, in a particular case, an actual comparator capable of constituting the statutory comparator can be found. But in most cases a suitable actual comparator will not be available and a hypothetical comparator will have to constitute the statutory comparator. In Khan's case [2001] ICR 1065 one of the questions was as to the circumstances that should be attributed to the statutory hypothetical comparator. It is important, in my opinion, to recognise that article 7 is describing the attributes that the article 3(1) comparator must possess."

1. The effect of Shamoon was well summarised by Elias J in Law Society v Bahl [2003] IRLR 250 at paragraphs 104 and 111:

"104 It is now clear following the decision of the House of Lords in the Shamoon case that whilst it is necessary that the tribunal should be satisfied both that there is less favourable treatment and that it is on discriminatory grounds, it is not obligatory for a tribunal to pose both these questions in sequential order. Nor is it necessary for it to construct an appropriate hypothetical comparator in order to test whether there is less favourable treatment. It will usually not be possible to distinguish the two issues in a cut and dried way. The reason is that if the relevant characteristics of the appropriate comparator are those which have actually influenced the mind of the alleged discriminator, they cannot be identified until the grounds for the decision have been determined. In a nutshell, it is not possible to state whether the chosen comparator would have been differently treated independently of knowing why the alleged victim was treated in the way in which he or she was. The reason why the two issues are so interrelated was described with conspicuous clarity by Lord Nicholls in the Shamoon case (paras 7-12):