Lindsay v London School of Economics & Political Science  EWCA Civ 1650
Appeal seeking to uphold claims for racial harassment, direct discrimination and victimisation where the EAT had dismissed the harassment and discrimination claims and remitted the victimisation claim to the same Tribunal. Appeal dismissed.
The claimant made complaints of victimisation, harassment and/or direct discrimination on the grounds of race. The Employment Tribunal dismissed her 4 claims of direct discrimination and the EAT dismissed appeals against two of those, the other two not being appealed. The Tribunal upheld the claim of harassment but held it was not just and equitable to extend time to allow that claim to be made. Both the claimant and respondent appealed. The EAT dismissed the claimant's appeal. They found that the ET had considered relevant factors under Keeble and set aside the Tribunal's finding in favour of the claimant on victimisation for it had failed to make clear findings on who made the relevant decision, whether a hypothetical comparator should be constructed and whether there was a connection between the decision and the protected act, given that the claimant had been suspended for a breach of internal rules.
In this judgment Floyd LJ conducts an extensive review of the facts, the underlying statutes and authorities, the conclusions of the lower courts and the parties' submissions. He concludes that
* the ET was entitled to exercise their discretion not to extend time for the racial harassment claim partly because the act had been an isolated one and, although unnecessary given that conclusion, he found that the remark in question was made on grounds of race * the Respondent's decision to suspend investigations into others' behaviour while the claimant's grievance was considered "was a practical decision which had obvious advantages" and had not been racial grounds * the Court was not in a position to make conclusive findings on the victimisation point, though the Tribunal's reasoning was inadequate, so he upheld to decision to remit the matter so it could determine some key facts surrounding the decision to suspend the claimant.
Case No: A2 2012 3124
Neutral Citation Number:  EWCA Civ 1650
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
(HHJ McMullen QC, Mr P Gammon MBE, Dr K Mohanty JP)
Royal Courts of Justice
Strand, London, WC2A 2LL
LORD JUSTICE MOORE-BICK, LORD JUSTICE FLOYD and LORD JUSTICE CHRISTOPHER CLARKE
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DENISE LINDSAY (Appellant)
- and -
LONDON SCHOOL OF ECONOMICS AND POLITICAL SCIENCE (Respondent)
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Daniel Matovu (instructed by Whitecross solicitors) for the Appellant
Shaen Catherwood (instructed by Pinsent Masons LLP) for the Respondent
Hearing date: 28 November 2013
- - - - - - - - - - - - - - - - - - - - -
Lord Justice Floyd:
- The appellant and claimant, Denise Lindsay, who is black and of Afro Caribbean ethnic origin, was employed as Assistant Chef Manager by the respondent, the London School of Economics and Political Science, at their hall of residence, Passfield Hall. On 4 January 2010, she made a number of claims in the Employment Tribunal of racial discrimination and victimisation under the Race Relations Act 1976 ("the Act"). She succeeded before the Employment Tribunal (Employment Judge Woffenden, Mrs D. May and Mr D.L. Eggmore) in relation to one claim of victimisation contrary to section 2(1) of the Act, but failed in relation to two other claims (one of racial harassment contrary to section 3A of the Act and one of direct discrimination contrary to section 1(1)(a) of the Act). The Employment Tribunal also dismissed other claims by the appellant which are not relevant to this appeal.
- The Employment Appeal Tribunal (HHJ McMullen QC, Mr P. Gammon MBE and Dr K. Mohanty JP) ("the EAT") dismissed the appellant's appeal in relation to the harassment and direct discrimination claims, but allowed the respondent's appeal against the finding of victimisation, remitting it to the Employment Tribunal with an invitation for it to make further findings of fact.
- The appellant now appeals to this court, with the permission of Rimer LJ granted at an oral hearing, asking us to uphold all three claims. I will refer to the three claims with which we are now concerned as "the racial harassment claim", "the direct discrimination claim" and "the victimisation claim".
The racial harassment claim
- The appellant worked as Assistant Manager in the kitchen at Passfield Hall from 2006 until 2012. In July 2008 Mr Mark McAleese was appointed Chef Manager, a position which the appellant had also applied for. Mr McAleese and the appellant worked together in the kitchen, on up to three days a week.
- On 26 January 2009 the appellant and Mr McAleese were working together in the kitchen. They had their backs to one another. In the course of conversation between them Mr McAleese used the word "gollywog". The appellant's complaint, which she made to her employers in writing on 3 February 2009, alleged that the word "gollywog" was directed at her, in other words that Mr McAleese had called her a gollywog to get her attention. Mr McAleese, on the other hand, did not accept that he had used the word at all. His case was that he and the appellant were having a conversation about food and packaging. Mr McAleese had initially brought up Walker's crisps. They went on to discuss the names of foodstuffs which had changed, and Mr McAleese mentioned Robertson's jam which had been changed because of the well known doll (historically known as a "gollywog") on the front of it.
- It was however common ground that the appellant had become upset as a result of what had been said and that Mr McAleese had apologised to her. Mr Barrett (the respondent's Residences Catering Manager) held meetings with both the appellant and Mr McAleese on 9 February 2009. Mr McAleese provided a statement at the meeting in which he said that he had referred to the doll on Robertson's jam, and at that point the appellant had called him a racist and a bigot. He had apologised, but this was "just to calm her down". Mr Barrett decided that an appropriate way of dealing with the matter was to send Mr McAleese and all other catering hall managers on an equality and diversity course. The appellant agreed at that stage with this course of action. Mr Barrett had a meeting with the appellant on 13 May 2009 and wrote to her the next day recording that he was pleased that things had now settled down and that there had been no more repercussions of the previous incident with Mr McAleese. He invited her to contact him if she experienced any other difficulties. The appellant had put the matter behind her and got on with her job.
- The incident of 26 January 2009 did, however, later form one aspect of a formal grievance filed by the appellant on 23 June 2009. Ms Beazley, the Deputy Head of Catering, held investigatory meetings in relation to the grievance on 22 July 2009 with Mr McAleese and Mr Barrett. Mr McAleese denied using the word "gollywog" or "doll" and maintained that he did not think he had done anything wrong.
- Mr Barrett attended a second investigatory meeting with Ms Beazley on 22 October 2009. He said that when he had spoken to Mr McAleese in February about the gollywog incident Mr McAleese had accepted that he had used the word "gollywog" but that it had "not been in context". Mr McAleese had, according to Mr Barrett, accepted that what he had said was wrong and he would not do it again. It was in these circumstances that Mr McAleese had agreed to attend the equality and diversity course.
- As a result of what Mr Barrett said at the meeting on 22 October, a further meeting was held between Ms Beazley and Mr McAleese on 26 October. Mr McAleese again denied using the word "gollywog" and said that he would not use it as it "would be damn right offensive". He maintained his denial in his witness statement in the Employment Tribunal.
- The Employment Tribunal was thus faced with a head-on conflict of evidence. The appellant's case throughout was that Mr McAleese had directed the gollywog remark at her - he had called her by that name. Mr McAleese was saying that he had not used the word at all. He had been engaged in a conversation which had turned to the subject of Robertson's jam, but in which he had not used the word complained of. The Tribunal, however, found as a fact that Mr McAleese had used the word "gollywog" and "gollywog jam" during the discussion with the appellant in the kitchen in the context of discussing the change to Robertson's jam. Because they had their backs to each other and because Mr McAleese was softly spoken, the appellant either did not hear properly or had not understood the context and formed the view that the words were directed at her. In consequence, although not intended by Mr McAleese, his words had had the effect of violating her dignity or creating an intimidating, hostile or degrading environment for her.
The direct discrimination claim
- On Sunday 15 June 2009 the appellant called Mr McAleese to report that she had been sworn at by a member of staff, a Mr Diaz, over the weekend. Mr McAleese was not at work that day and asked the appellant to put the complaint in writing. On Monday 16 June, on returning to work, Mr McAleese spoke to the appellant who reiterated her complaint about swearing. She had not at that stage put anything in writing. Later in the day, Mr McAleese was informed that a written complaint had been received from Mr Diaz alleging that he had been sworn at by the appellant, and asking that an investigation be commenced. There was also a witness statement from another member of staff, called Alex.
- On 17 June 2009 Mr McAleese handed the appellant a letter asking her to attend a meeting on 26 June to investigate the complaint against her. He told the appellant that both complaints would be investigated separately.
- On 23 June the appellant gave Mr McAleese two statements made by her about the behaviour of Mr Diaz and Alex on 13 and 14 June. This was her written complaint. Mr McAleese was not at work on 24 or 25 June, and made arrangements to meet with Ms Hunt of the respondent's HR team on 26 June to get advice about how to deal with the appellant's complaints. He did not meet with Ms Hunt until June 29, by which time the appellant had sent Ms Hunt her grievance of 23 June 2009. This grievance included, amongst other things, the fact that she had not been appointed Chef Manager in 2008, the kitchen "gollywog" incident of January 2009 and the fact that, although she had reported the swearing incidents of 13 and 14 June, she now had to attend an investigatory meeting in connection with an allegation against her.
- On 2 July 2009 Ms Hunt wrote to the appellant to tell her that the grievance would be investigated and that, since she had made allegations of racism against Mr McAleese, the disciplinary investigation which had been commenced by him into the swearing incident would be suspended. A grievance meeting was ultimately held on 19 October at which the allegations made by the appellant were inquired into. Part of the delay in holding the meeting was due to the appellant's absence from work, and a period of annual leave.
- The appellant's claim under this head, in essence, is that by deciding to investigate the complaint against her and failing to investigate her complaint against the other employees, Mr McAleese gave her less favourable treatment.
The victimisation claim
- On 21 October 2009 the appellant placed an order for two organic carrot cakes for delivery on 22 October. Mr McAleese was not at work on either day. The LSE Catering Staff Information Handbook provides that members of staff may buy goods in exceptional circumstances provided certain rules are strictly adhered to. These include obtaining the manager's consent, purchasing the goods through a cashier's till at the time of purchase during the normal operating hours of the unit concerned and obtaining and keeping a dated and itemised receipt for the items in question. They include a statement that if the rules cannot be complied with the employee should not take anything, as it may be considered theft, and that theft of any kind or wilful appropriation of school property will result in dismissal.
- The cakes were duly delivered on 22 October and on 23 October the appellant left work with the cakes. It was common ground before the Employment Tribunal that the appellant left money for the cakes in the office, but she did not comply with the requirements of the rules about receipts and payment through the till.
- On 24 October Mr McAleese sent an email to Mr Barrett with the subject line "stealing". He said that he had seen a carrot cake box on top of one of the appellant's bags. It had been confirmed to him by another member of staff that the appellant had left with the cakes, claiming that she was entitled to do so. Mr McAleese confirmed that the appellant had told him that there was money on the desk, but that the appellant had not said what it was for, and that he had seen money on his desk which he had moved out of the way because he wanted to access his computer. He concluded that he knew stealing was a very serious offence and that he wanted some advice as to how to proceed as he guessed that with the allegation (of racism) against him he could not start an investigation himself.
- In Mr Barrett's absence Mr McAleese spoke to Ms Thomas, Head of Catering. She did not see Mr Barrett's email. Ms Thomas decided that Mr McAleese could not be involved as investigator. She decided instead to appoint a Mr Hawkins, a Unit Catering Manager, to conduct an investigation. Mr Hawkins had never undertaken an investigation for the respondent before.
- On 28 October Mr Hawkins and Ms Thomas went to Passfield Hall together. On the way she explained the situation as Mr McAleese had explained it to her. The appellant was on duty at the counter. Ms Thomas (who had brought a substitute chef with her to take over from the appellant on the counter) asked to speak to the appellant concerning an allegation. They went into the nearby office and Ms Thomas introduced Mr Hawkins. She then left. Mr Hawkins suspended the appellant for taking cakes without permission. The appellant was very upset. Mr Hawkins wrote to the appellant on 29 October to confirm that she had been suspended on full pay and to ask her to attend an investigatory meeting with him on 3 November. He told her that the allegation was that she had taken two cakes from work without the prior permission of her line manager and in doing so had not followed the correct procedure for personal purchases as outlined in the LSE Catering Staff Information Handbook. He also recorded that she said to him that she had asked Mr McAleese for permission to order them, he had given her permission, they had been ordered and she had left the money on the counter for him to collect when he returned to work because he was not in on the day she took them. Mr Hawkins said that the purpose of the suspension was to enable a full investigation to take place and to allow the investigation to be carried out as smoothly as possible and to minimise the stress she might feel while the investigation was taking place.
- In evidence Ms Thomas said that that an employee would not be suspended unless the matter was very serious. On the other hand she said that a breach of the rules in the Handbook would ordinarily lead to suspension pending an investigation. She referred to the cases of two other employees. The first was an employee whom she had suspended for theft when food items from the cafeteria were found in the employee's bag. The letter to the employee stated that she was dissatisfied with the explanation the employee had given. The second was suspended for having been seen taking a packet of crisps and placing it under his jacket. The letter to him indicated that he had first admitted the allegation but then denied it.
- The suspension of the appellant in relation to her conduct in taking the cakes is the subject of the victimisation claim. The bringing of her grievance was the protected act on which she relied.
- Section 1 of the Act deals with direct discrimination by less favourable treatment, and provides as follows:
"1 Racial discrimination
(1) A person discriminates against another in any circumstances relevant for the purposes of any provision of this Act if –
(a) on racial grounds he treats that other less favourably than he treats or would treat other persons;"
- Section 2 deals with victimisation and provides:
"2 Discrimination by way of victimisation
2(1) A person ("the discriminator") discriminates against another person ("the person victimised") in any circumstances relevant for the purposes of any provision of this Act if he treats the person victimised less favourably than in those circumstances he treats or would treat other persons, and does so by reason that the person victimised has –
(a) brought proceedings against the discriminator or any other person under this Act; or
(b) given evidence or information in connection with proceedings brought by any person against the discriminator or any other person under this Act; or
(c) otherwise done anything under or by reference to this Act in relation to the discriminator or any other person; or
(d) alleged that the discriminator or any other person has committed an act which (whether or not the allegation so states) would amount to a contravention of this Act;
or by reason that the discriminator knows that the person victimised intends to do any of those things, or suspects that the person victimised has done, or intends to do, any of them."
- The various types of act listed in section 2(1)(a) to (d) are known colloquially in the cases as "protected acts". The less favourable treatment must be "by reason that the person victimised has" done a protected act. In Chief Constable of West Yorkshire Police v Khan  1 WLR 1947 at , Lord Nicholls (with whom Lord Hoffmann and Lord Hutton agreed) explained that this was not a conventional exercise in causation as causation is usually understood. The phrase "by reason that" requires the court to ask a different question, namely:
"Why did the alleged discriminator act as he did? What, consciously or unconsciously, was his reason? Unlike causation, this is a subjective test. Causation is a legal conclusion. The reason why a person acted as he did is a question of fact."
- Section 3A of the Act relates to harassment and provides:
(1) A person subjects another to harassment in any circumstances relevant for the purposes of any provision referred to in section 1(1B) where, on grounds of race or ethnic or national origins, he engages in unwanted conduct which has the purpose or effect of -""
(a) violating that other person's dignity, or
(b) creating an intimidating, hostile, degrading, humiliating or offensive environment for him.
(2) Conduct shall be regarded as having the effect specified in paragraph (a) or (b) of subsection (1) only if, having regard to all the circumstances, including in particular the perception of that other person, it should reasonably be considered as having that effect."
- As the Employment Appeal Tribunal said in Richmond Pharmacology v Dhaliwal  ICR 724 at , the necessary elements of liability are:
(1) The unwanted conduct. Did the respondent engage in unwanted conduct?
(2) The purpose or effect of that conduct. Did the conduct in question either:
(a) have the purpose or
(b) have the effect of either (i) violating the claimant's dignity or (ii) creating an adverse environment for her? …
(3) The grounds for the conduct. Was that conduct on the grounds of the claimant's race (or ethnic or national origins)?
- It is the third element which is relevant for the purposes of this appeal. The phrase "on the grounds of" imports the same legal concept as the equivalent phrase in the victimisation provision: see, again, the EAT in Dhaliwal at . Moreover, as the EAT there pointed out in relation to the third element:
"… the inquiry into the perpetrator's grounds for acting as he did - or, to use Lord Nicholls' phrase, "the reason why" he acted - is logically distinct from any issue which may arise for the purpose of "element (2)" about whether he intended to produce the proscribed consequences: a perpetrator may intend to violate a claimant's dignity for reasons other than her race (or indeed any of the other reasons proscribed by the discrimination legislation)."
- Mr Matovu, who presented the case on this appeal for the appellant, also relied on a further passage from the judgment of the EAT in Dhaliwal in which it indicated that there may be circumstances where it is not necessary to inquire into the respondent's motives when deciding whether the conduct was on the ground of race:
"In some cases, the "ground" of the action complained of is inherently racial. The best-known example in the case-law, though in fact relating to sex discrimination, is the decision of the House of Lords in James v Eastleigh Borough Council  2 AC 751 ( ICR 554). In that case the criterion applied by the Council inherently discriminated between men and women, and no consideration of the thought processes of the decision-makers was necessary: the application of the inherently discriminatory criterion could without more be identified as "the reason why" the plaintiff had suffered the detriment of which she complained. It is only because in most cases the detriment complained of does not consist in the application of an overtly discriminatory criterion of that sort that the "reason" (or "grounds") for the act has to be sought by considering the respondent's motivation (not motive). It seems to us particularly important to bear that point in mind in harassment cases. Where the nature of the conduct complained of consists, for example, of overtly racial abuse the respondent can be found to be acting on racial grounds without troubling to consider his mental processes."
- The first example in the passage cited (an inherently discriminatory criterion) needs no further explanation. The example in the final sentence is also self-evidently correct if applied to a statement which fits the description "overtly racial abuse". It is difficult to imagine how overtly racial abuse could be uttered except on the grounds of race. Mr Matovu sought to develop this proposition far beyond that point, however. He submitted, at least initially, that there are some words which were inherently racial in nature so that, whatever the context in which they are used, they must be taken as having been uttered on the grounds of race. I do not accept that submission. Context remains relevant. When the court pressed Mr Matovu with examples, he accepted that, if the context made it absolutely clear that the words were not being used on racial grounds, then the third element would not be established.
- In Law Society & others v Bahl  IRLR 640, Elias J (as he then was) sitting in the EAT considered in some depth the manner in which courts and tribunals may draw conclusions as to discriminatory conduct. Thus at  in his judgment he explained, in the context of direct discrimination:
"Where there is a finding of less favourable treatment, a tribunal may infer that discrimination was on the proscribed grounds if there is no explanation for the treatment or if the explanation proffered is rejected: see the comments of Neill LJ in King v Great Britain-China Centre  ICR 516, approved by the House of Lords in Glasgow City Council v Zafar  ICR 12."
- He also explained that unreasonable treatment is not itself a reason for drawing an inference of discrimination. At , in a passage relied on by the respondent in this appeal, and with which I agree, he said:
"It is however a wholly unacceptable leap to conclude that whenever the victim of such conduct is black or a woman then it is legitimate to infer that our unreasonable treatment was because the person was black or a woman. All unlawful discriminatory treatment is unreasonable, but not all unreasonable treatment is discriminatory, and it is not shown to be so merely because the victim is either a woman or of a minority race or colour. In order to establish unlawful discrimination, it is necessary to show that the particular employer's reason for acting was one of the proscribed grounds. Simply to say that the conduct was unreasonable tells us nothing about the grounds for acting in that way. The fact that the victim is black or a woman does no more than raise the possibility that the employer could have been influenced by unlawful discriminatory considerations. Absent some independent evidence supporting the conclusion that this was indeed the reason, no finding of discrimination can possibly be made."
- However, unreasonable conduct is not irrelevant. At  Elias J explained that unreasonable conduct may form a basis for rejecting an explanation proffered by the alleged discriminator. He added a cautionary note, however:
"But it will depend upon why it has rejected the reason that he has given, and whether the primary facts it finds provide another and cogent explanation for the conduct. Persons who have not in fact discriminated on the proscribed grounds may nonetheless sometimes give a false reason for the behaviour. They may rightly consider, for example, that the true reason casts them in a less favourable light, perhaps because it discloses incompetence or insensitivity. If the findings of the tribunal suggest that there is such an explanation, then the fact that the alleged discriminator has been less than frank in the witness box when giving evidence will provide little, if any, evidence to support a finding of unlawful discrimination itself."
- A tribunal has an obligation to give a clear reasoned decision. The basic principle is that set out by Bingham LJ in Meek v City of Birmingham District Council  IRLR 250 at 251:
"It has on a number of occasions been made plain that the decision of an Industrial Tribunal is not required to be an elaborate formalistic product of a refined legal draftsmanship but it must contain an outline of the story which has given rise to the complaint and a summary of the tribunals basic factual conclusions and a statement of the reasons which led them to reach the conclusion which they do so on those basic facts. The parties are entitled to be told why they have won or lost. There should be a sufficient account of the facts and the reasoning to enable the EAT or, on further appeal, this court to see whether the question of law arises……"
- Section 54A(2) provides in some circumstances for a reversal of the burden of proof in discrimination or harassment (but not victimisation) claims:
"(2) Where, on the hearing of the complaint, the complainant proves facts from which the tribunal could, apart from this section, conclude in the absence of an adequate explanation that the respondent—
(a) has committed such an act of discrimination or harassment against the complainant, …
the tribunal shall uphold the complaint unless the respondent proves that he did not commit or, as the case may be, is not to be treated as having committed, that act."
- Section 68, relating to timing of claims, provides:
"(1) An employment tribunal shall not consider a complaint under section 54 unless it is presented to the tribunal before the end of –
(a) the period of three months beginning when the act complained of was done;
(6) A court or tribunal may nevertheless consider any such complaint or claim which is out of time if, in all the circumstances of the case, it considers that it is just and equitable to do so.
(7) For the purposes of this section –
(a) when the inclusion of any term in a contract renders the making of the contract an unlawful act, that act shall be treated as extending throughout the duration of the contract; and
(b) any act extending over a period shall be treated as done at the end of that period."
- Guidance which neither side challenged on the exercise of this discretion is to be found in British Coal v Keeble  IRLR 336, where, at  to  the EAT approved an approach which applied by analogy the checklist of factors in section 33 of the Limitation Act 1980:
"That section provides a broad discretion for the Court to extend the limitation period of three years in cases of personal injury and death. It requires the court to consider the prejudice which each party would suffer as a result of the decision to be made and also to have regard to all the circumstances of the case and in particular, inter alia, to -
(a) the length of and reasons for the delay;
(b) the extent to which the cogency of the evidence is likely to be affected by the delay;
(c) the extent to which the respondent has cooperated with any requests for information
(d) the promptness with which the appellant acted once he or she knew of the facts giving rise to the cause of action;
(e) the steps taken by the appellant to obtain appropriate professional advice once he or she knew of the possibility of taking action."
- With that short introduction to the legal framework, I turn to the decisions of the two courts below.
The decision of the Employment Tribunal
The racial harassment claim
- The Employment Tribunal expressed its conclusion on the facts of the harassment claim in this way:
"We have concluded that for a white manager to use the word 'gollywog' and 'gollywog jam' in the course of a conversation with a black Afro Caribbean colleague is unwanted conduct. Although Mr McAleese did not do so with the purpose of violating the appellant's dignity or creating an intimidating hostile degrading or offensive environment for her, it had that effect having regard to all the circumstances, including in particular the perception of the appellant. The immediate effect on her was evidently short-lived since she found no reason not to ask Mr McAleese, the perpetrator, if her daughter could work with him that same weekend and told Mr Barrett she was alright. Having then decided to make a complaint, she did not choose to pursue a formal route despite the advice of Ms Thomas and by 18 February 2009 had agreed with the course of action proposed by Mr Barrett and was happy not to take matters further. Thereafter she was able to continue working with Mr McAleese and did not raise the matter again until faced with a disciplinary investigation into her conduct by Mr McAleese."
- The Tribunal does not in this passage, or indeed in any other, expressly consider whether the unwanted conduct was engaged in on the grounds of race. It seems from paragraph 20, which I quote below, that it considered that liability for harassment had been established, because they described the incident as "an isolated act of harassment". They went on, however, to dismiss the harassment claim by declining to extend the time pursuant to section 68. The Employment Tribunal directed itself on section 68 following the guidance in British Coal v Keeble  IRLR 336. At  they said:
"20. We have concluded that the Gollywog comments constituted an isolated act of harassment by Mr McAleese in January 2009. There is no link between it and the act of victimisation when the appellant was suspended on 28 October 2009. There was therefore no continuing act for the purposes of section 68(7)(b) of the RRA. We do not consider it just and equitable to extend time to consider that complaint. The grievances she raised referred in terms to racism and we heard no evidence that her lengthy absences from work prevented her from presenting her claim in time. The delay is a lengthy one for which she has given no adequate explanation and she has failed to act promptly."
The direct discrimination claim
- The Employment Tribunal dealt with the complaint of less favourable treatment in relation to the two cross-complaints as follows:
"18. The appellant compares herself with the two employees whose complaints against her were immediately investigated while hers was not. Mr McAleese had asked her to put her complaint in writing and she had not done so. In contrast without complaining orally first the other employees did put their complaint in writing which prompted the initiation of an investigation under the instructions of the respondent's HR team. If Mr McAleese can be criticised it is for not being proactive in securing a written complaint from the appellant who was obviously sufficiently upset by the events of the week end to contact him at home but we do not conclude that he took the decision to investigate the complaints of the other employees was less favourable treatment of the appellant on racial grounds ... . It was a result of timing of receipt of a written complaint and before he had the chance to seek HR support about what to do about her complaint (a matter of a few days after he had commenced the Investigation) the investigation was stopped."
The victimisation claim
- The Employment Tribunal concluded, as is clearly the case, that the appellant's grievance was a protected act within section 2(1)(d) of the Act. The Tribunal noted that:
i) Ms Thomas did not take any advice from HR;
ii) Ms Thomas was aware that the appellant had lodged a grievance and that her deputy was questioning Mr McAleese;
iii) It had not heard evidence from Mr Hawkins about the reasons for the suspension of the appellant;
iv) Mr McAleese had told Ms Thomas about the money on the desk;
v) Ms Thomas had already put in place arrangements needed to enable the appellant's duties to be assumed immediately by another chef;
vi) There was no need for the investigation to commence immediately before service;
vii) The appellant gave Mr Hawkins a version of events which was entirely consistent with that given by Mr McAleese and "therefore passed (or ought to have been passed)" by Ms Thomas to Mr Hawkins;
viii) Ms Thomas agreed that suspension depended on the circumstances of the case and an employee would not be suspended unless the matter was very serious;
ix) An employee who was known to have taken cakes home and said that money had been left for them and whose manager had confirmed that money had indeed been found would not have been suspended as the first step in an investigation;
x) The suspension of the two other employees relied on by Ms Thomas was in relation to allegations of theft not of the rules set out at 5.25 and followed the rejection of their initial explanation;
xi) There was no evidence before them as to why Mr Hawkins chose to reject the explanation which was immediately given to him by the appellant.
- The Tribunal therefore concluded that the suspension of the appellant was less favourable treatment. They concluded on the balance of probabilities that the decision to suspend the claimant had been taken by Ms Thomas before and irrespective of any explanation from the claimant and that she took that decision by reason of the protected act.
The decision of the Employment Appeal Tribunal
- The appellant appealed to the EAT against the adverse findings on the harassment and direct discrimination claims.
- On the harassment claim, the appellant contended that the Employment Tribunal had failed to have regard to the relative prejudice to the parties in exercising its discretion to refuse to extend time. The EAT considered that there was no flaw in the exercise of the Employment Tribunal's discretion to refuse to extend time. Given its self direction by reference to Keeble, it could not be said that the Tribunal did not consider the prejudice to the appellant.
- The EAT also rejected the respondent's cross appeal that harassment was not made out on the facts. It said:
"In our judgment, all of the elements were met in this case. The use of the term itself, by a white manager to a black female junior, and the upset it caused her all establish the correctness of the Tribunal's finding of direct harassment on the ground of race. If it had been necessary for our decision, we would have dismissed this ground of appeal by the Respondent."
- On the less favourable treatment complaint the appellant contended that the Employment Tribunal had failed to deal with the central point in the case, which was that the decision by Mr McAleese to be pro-active about investigating the complainant led to an investigation against her, yet when she complained about them, they were not invited to a disciplinary investigation. The EAT's answer was as follows:
"In our judgment the Tribunal has made adequate findings as to the reason for the apparently disparate treatment. The circumstances were not truly the same: the Claimant had not put her complaint in writing until after the two employees did so. But she had made a grievance and on 29 June 2009 the investigation into the complaints against her was stopped because of the grievance she had lodged. The decision of the Respondent to focus upon the grievance of the Claimant as a matter of priority was one which apparently appealed to the Tribunal as being sensible. The decision of Mr McAleese was said by the Claimant to be an act of direct discrimination on the grounds of her [race], the other two employees not being black. We see no error in the Tribunal's dismissal of this contention. It directed itself correctly on the law and made findings which explain the apparently separate treatment of the two employees and of the Claimant. The Tribunal was alert to the burden of proof. It plainly accepted the Respondent's explanation."
- The victimisation complaint was the subject of the respondent's appeal. The respondent argued that the Employment Tribunal had made an unacceptable leap in concluding that the suspension was by reason of the protected act, that is to say the bringing of the grievance by the appellant. It argued further that the Tribunal's findings as to who made the decision to suspend were inconsistent.
- The conclusions of the EAT appear to have been:
i) If Mr Hawkins made the decision, no link with the grievance was established as he had nothing to do with it;
ii) On the other hand if his association with Ms Thomas is invoked, the grievance was four months before the decision to suspend, the grievance was not against Ms Thomas and she did not investigate it, and the highest it could be put was that she was aware of it.
- The EAT did not however itself reverse the Employment Tribunal's finding of victimisation. The EAT concluded, shortly, that the conclusion of the Employment Tribunal contained "errors in analysis and application". It decided to remit the matter to the Employment Tribunal for it to make further findings. It directed the Employment Tribunal in particular to make a clear finding as to who made the decision to dismiss.
The appeal to the Court of Appeal
- On this appeal the appellant repeats in substance the arguments made to the EAT on the harassment and direct discrimination claims. She argues further that the EAT had no basis for interfering with the Employment Tribunal's conclusions in relation to the victimisation claim, which should have been left in place.
- The respondent supports the Employment Tribunal and the EAT on the harassment and direct discrimination claims. In addition it argues, by way of its respondent's notice, that the Employment Tribunal should have found against the appellant on the facts of the harassment claim. The respondent also cross-appeals the decision and order of the EAT to remit the victimisation claim, maintaining that it ought to have decided the victimisation claim on the basis that no reasonable tribunal properly directing itself in law could have properly upheld it.
The racial harassment claim
- The first question which arises under this head concerns the refusal of the Employment Tribunal to uphold the complaint because it was out of time. I approach this question, firstly, by bearing in mind that the Employment Tribunal was exercising a discretion. This court will not interfere with the exercise of a discretion by a lower court unless that court has gone wrong in principle, or has either taken into account irrelevant matters, or left out of account relevant matters, or is plainly wrong. Secondly, an extension will not automatically be granted simply because it results in no prejudice to a respondent in terms of a fair trial. If a claim is brought out of time it is for the claimant to show that it is just and equitable for the extension to be granted. This is a multi-factorial assessment, where no single factor is determinative.
- Mr Matovu submits that it is not clear from the Employment Tribunal's decision that it had taken account of all the relevant matters. He submits, in my judgment quite rightly, that the impact of any delay in bringing a claim may be lessened by the fact that the respondent is not prejudiced by the delay. Yet, he submits, the EAT has not in terms referred to the absence of prejudice to the respondent if an extension of time were to be granted. He also relies on the fact that the Employment Tribunal made no express reference to the fact that the effect of refusing an extension of time would be to deny the appellant the remedies which she was seeking. Mr Matovu also makes a further, but quite separate point based on the fact that the racial harassment claim was linked to the direct discrimination claim. That, he says, undermines the Employment Tribunal's conclusion that the racial harassment was an isolated incident. For present purposes I put Mr Matovu's second point to one side, as it depends upon this court taking a different view from both Tribunals below as to the direct discrimination claim.
- For the respondent, Mr Catherwood submits that the Employment Tribunal cannot have failed to have been aware of the two matters relied on by Mr Matovu. As to the absence of prejudice to the respondent, it had been able to come to a clear conclusion in relation to the facts of the racial harassment incident. As to the second, the Employment Tribunal must obviously have been aware that the consequence of refusing the extension of time would be to prevent the appellant from obtaining the relief she was seeking. He submits that, although the Tribunal did not mention these matters expressly in the paragraph of the decision dealing with the extension of time, it cannot have failed to take them into account. That is particularly so given the Tribunal's accurate self-direction by reference to Keeble that it must balance the prejudice to both sides.
- On this issue I prefer Mr Catherwood's submissions. The Employment Tribunal turned to the exercise of its discretion at the end of its judgment and at a point where it had already found the facts in relation to the racial harassment proved. The fact that it had been possible to hold a fair trial of that issue, without significant prejudice to either side caused by the lateness of the claim, must have been at the forefront of its mind. Similarly the Tribunal cannot realistically be thought to have been unaware of the fact that, by refusing the extension of time, it would be depriving the appellant of the remedy to which she would otherwise have been entitled. It was from that starting point that the Employment Tribunal went on to consider what other factors there were which were relevant. These included the fact that the claim was very late and that the incident was an isolated one. The appellant had been content to put the matter behind her. The effect on her was short lived. There was also no adequate explanation for the delay: the appellant was relying on her own account of events, not on some material which had come to light later of which she had been unaware. There was no basis for supposing that her absences from work were the cause of the delay. Thus she had felt able to raise the matter in the internal grievance procedure in June. These matters provided ample basis for the Employment Tribunal to conclude, as in my judgment it must have done, that an extension should be refused because it was not just and equitable, despite the prejudice it would cause to the appellant by denying her a remedy. In arriving at its conclusion the Employment Tribunal did not fail to take account of any relevant matter. This court would not be justified in interfering with its exercise of discretion.
- The conclusion which I have just reached makes it strictly unnecessary to consider the respondent's alternative ground for upholding the Employment Tribunal's decision to dismiss the racial harassment claim. Nevertheless, as the matter was fully argued, I will go on to consider that issue.
- The issue for the Employment Tribunal was whether the unwanted conduct, the use of the term "gollywog", was engaged in by Mr McAleese "on grounds of race". If the Tribunal had accepted the appellant's case that Mr McAleese used the expression by directing it at her in the manner she had described, the task for the Tribunal would not have been a difficult one. The reason why the term was used would, more or less self-evidently, have been that of the appellant's race. The Employment Tribunal did not accept that version of the facts, however. It accepted Mr McAleese's evidence as to the context in which the term had been used, namely the change to the label of Robertson's jam. The Tribunal also expressly accepted that the remarks had not been made with the intention of violating the appellant's dignity or creating an intimidating, hostile, degrading or offensive environment for her (although they had had that effect). All that meant that it could not easily be inferred that the remarks were made on the ground of race and made it critically important for the Employment Tribunal to determine the reason why Mr McAleese used the words.
- Mr Matovu submitted that the Employment Tribunal must be taken to have concluded that the words were uttered by reason of the appellant's race. He relied on a variety of matters: his submission that the term "gollywog" was inherently racist whatever the context; the offence caused to the appellant; the fact that the Tribunal had rejected Mr McAleese's denial of his use of the term; and the fact that Mr McAleese had accepted that the term was "damn right offensive".
- I cannot accept the first two of those submissions. As to the first, I have already accepted that the term "gollywog" if used directly towards the appellant would be obviously racist and offensive. In the context accepted by the Tribunal, however, its use may or may not have been on the grounds of race. Secondly, Mr Matovu's reliance on the offence caused to the appellant is also misplaced. It conflates the various elements of the claim in the impermissible way identified in Dhaliwal (cited above). The question for the Tribunal is "why did Mr McAleese say what he did?" not "why did Mr McAleese produce the effect on the appellant which he did?" The Tribunal provided the answer to the latter question when it explained that the two participants had their backs to each other, Mr McAleese spoke quietly, and the appellant did not hear or understand the context in which the words were being used.
- There is more force in the second two submissions. On the Tribunal's findings, Mr McAleese had not been truthful about whether he had used the word at all. Moreover it was a word which he recognised could cause serious offence, at least if used insensitively. For the Tribunal, that would have begged the question as to why Mr McAleese had not been truthful. Was it because he knew he had used the word on the grounds of her race, but dressed up as innocent chat? Or was it for some other reason?
- Mr Catherwood submitted that there was no evidence or finding that Mr McAleese (whether consciously or unconsciously) made the comment because of the appellant's race or that he would not have made a similar comment to a white employee, for instance. To the contrary the Employment Tribunal's findings demonstrate that the words arose in the context of "an apparently innocent discussion about food packaging which would have been apt to arise whatever the race of the colleague."
- Whilst the Tribunal could have done far more to spell out its reasoning on this aspect of the matter, I am not in the end persuaded that we should interfere with its conclusion, so as to support its order on this alternative ground. The Tribunal was entitled to infer from the findings of fact which it did make that the most likely explanation was that Mr McAleese had used the word because of the appellant's race. His failure to be truthful about the fact that he had used the terms at all, coupled with his own subjective view that any use of the term in the presence of a black person would be offensive formed an adequate evidential basis for the Tribunal's finding that the words had been used by him on the grounds of race.
The direct discrimination claim
- The appellant's ground of appeal in respect of this claim is that the Employment Tribunal failed to deal with the central point of her complaint. This was that there was less favourable treatment of her complaint against her fellow employees Mr Diaz and Alex than there was of those employees' complaints against her. No investigation had been launched into her complaint, whilst an investigation had been launched into the complaint against her. At the very least, Mr Diaz and Alex should have been notified of the fact that an investigation would take place, even if it was to be suspended whilst the appellant's grievance was investigated.
- Mr McAleese's account was that, once he received the written complaint from the appellant, he sought the advice of the HR department. By the time he had the opportunity to speak to the HR department, Ms Hunt had received the appellant's grievance. The Employment Tribunal was plainly entitled to conclude, as I understand it to have done in paragraph 18 of its decision, that the delay in investigation of the complaint was due to Mr McAleese's decision to take advice from HR, and not on the grounds of race. Thereafter, the respondent took the view that it would not be right for Mr McAleese to continue with the investigation into the complaint against the appellant or commence investigation of the appellant's complaint against Mr Diaz and Alex. That, as it seems to me, dealt with the substance of the appellant's complaint under this head. There was no error of law by the Employment Tribunal in reaching that conclusion.
- It is true that it is possible to suggest that neither Mr McAleese nor Ms Hunt wrote to the employees implicated in the appellant's complaint and told them that an investigation would be launched into them once the appellant's grievance had been concluded. That, however, would be a different way of putting the claim. I am not persuaded that this was the way in which this complaint was put before the Employment Tribunal. Even if it had been, it would be necessary for the appellant to prove that this decision was taken "on racial grounds". The Employment Tribunal obviously accepted the respondent's explanation that the decision to suspend one complaint and not start the other was so as to allow the grievance to take priority. This was a practical decision which had obvious advantages. It was not a decision taken on racial grounds.
The victimisation claim
- It will be recalled that the appellant succeeded on this claim before the Employment Tribunal, but the EAT remitted the matter to the Employment Tribunal holding that its reasoning contained "errors of analysis and application". On this appeal Mr Matovu submits that the EAT should not have interfered with the finding of the Employment Tribunal that victimisation had occurred.
- The reasoning of the EAT had the two limbs I have set out in  above. The EAT made its order, it would appear, in part on the ground that there was doubt as to what the Employment Tribunal had decided on the issue of who it was who took the decision to suspend the appellant. The case presented by the appellant in its opening skeleton argument to the Employment Tribunal was that the suspension was carried out by Ms Thomas and Mr Hawkins under the direction of Ms Thomas. The Employment Tribunal concluded that Ms Thomas took the decision, although it made no clear finding that Mr Hawkins was not acting independently. For the purposes of considering this aspect of the appeal, I will assume in Mr Matovu's favour that the Employment Tribunal was entitled to find that the decision was taken by Ms Thomas. The focus of Mr Matovu's appeal was his challenge to the EAT's conclusion that there was an unacceptable leap in the reasoning of the Employment Tribunal that the suspension was by reason of the protected act.
- I have set out the conclusions of the Employment Tribunal in  to  above. In essence it was that an employee who had purchased items and left money for those items would not normally be suspended. Suspension required the matter to be very serious. As Ms Thomas knew that money had been left, the appellant had been treated less favourably than others in a comparable position. Her explanation that the appellant had been treated in the same way as those comparators which she had identified was rejected by the Tribunal. The comparators were examples of cases where the initial explanation of the employee had been rejected by the respondent. Here there was no evidence that the appellant's initial explanation for taking the cakes had been rejected. Indeed the appellant's explanation that she had left the money was known to be true.
- Mr Matovu submitted that, in the light of that evidence and those conclusions it was open to the Employment Tribunal to conclude that the explanation for the unfavourable treatment was not that which Ms Thomas gave. Given that the grievance was relatively recent, that Ms Thomas was aware of it and it was still under active investigation, there was no error of law in the Tribunal's conclusion that the decision to suspend was taken by reason of the protected act. It was an inference that the Tribunal was perfectly entitled to draw.
- Mr Catherwood submitted, firstly, that there was no adequate explanation as to how the Employment Tribunal reached its conclusion that the ground of suspension was the protected act. This was a reasons-based challenge to the Employment Tribunal's decision. He submitted, secondly, that, whatever the reason for the suspension the ET had in mind, the conclusion that it was because of the protected act was an unsupported and unacceptable leap.
- Mr Catherwood developed these submissions in the following way. Ms Thomas' knowledge of the grievance was not enough, as it merely raised the possibility, not the fact, of victimisation. He pointed out that there were undoubted breaches of the rules, which provided an alternative reason for suspension. The grievance was four months before the suspension occurred, not against Ms Thomas and not being investigated by her. The Tribunal had in other respects found Ms Thomas to be a credible witness. He submits that the Tribunal's reasoning does not permit the respondent to understand why it lost on this central issue.
- In my judgment, the reasoning of the Employment Tribunal was indeed inadequate. Ms Thomas' knowledge of the protected act was an inadequate basis for the inference that she took the decision to suspend the appellant because of it. Ms Thomas' knowledge is wholly neutral. As to the drawing of inferences, the Tribunal did not expressly reason that, because Ms Thomas had proffered an explanation which they had rejected, they should infer that Ms Thomas took the decision to suspend the appellant because she had lodged a grievance. There were a number of aspects of her explanation which needed to be tackled. The Tribunal did indeed find that the other employees had had their explanations for taking goods rejected, but that is not a wholesale rejection of Ms Thomas' evidence. She had also said that a breach of the rules could justify a suspension. The short point is that, if that was their line of reasoning it needed to be spelled out with clarity. The Employment Tribunal's decision was liable to be set aside on this ground.
- By his respondent's notice Mr Catherwood supports the decision of the EAT on the additional ground that the Employment Tribunal based its decision on a finding that Ms Thomas knew that the appellant had left the money for the cakes, when that allegation had not been advanced by the appellant and not properly put to Ms Thomas. He points out that the appellant's skeleton argument before the Employment Tribunal alleged that Ms Thomas triggered the suspension without finding out first the circumstances in which it was alleged that a suspected theft had taken place. Ms Thomas was asked a question in cross examination which appeared expressly to accept that she did not know about the money paid. It was certainly not put squarely to her that she knew the money had been left. (Although there was some debate at the hearing of this appeal as to whether the Employment Tribunal was entitled to find that it was Ms Thomas who made the decision to suspend, this was not a matter relied on in the respondent's notice, and I do not consider it further here.)
- In my judgment Mr Catherwood is clearly right on the point raised in his respondent's notice. It was not open to the Employment Tribunal to hold that Ms Thomas knew about the money when this was not the appellant's case and it was not put to her in cross examination.
- Mr Matovu submitted that this did not matter. Either Ms Thomas knew about the money, or she had taken the decision without bothering to find out. In both cases the decision to suspend would not have been justified. This is what the Tribunal had meant when it said that Ms Thomas took the decision "irrespective of any explanation". I am unable to accept that submission. The Tribunal did not decide the case on the alternative basis suggested by Mr Matovu. It held that Ms Thomas knew about the money. It is not open to this court to speculate about what their conclusion would have been if she had not known. The point raised by the respondent's notice provides a further ground for upholding the EAT's order.
- Mr Catherwood also advanced a cross appeal. He invited this court to set aside the EAT's order remitting the matter to the Employment Tribunal, and decide the suspension was not on the ground of the protected act. He submitted that the obvious reason for the appellant's suspension was breach of the rules. He drew our attention to the observations of Jacob and Carnwath LJJ in [Bournemouth University Higher Education Corpn. v Buckland]()  EWCA Civ 121;  QB 323 that sending a case back to the Tribunal should be a last resort.
- In my judgment, and despite those observations, it would be wrong for this court to attempt to reach a conclusion as to the grounds for the suspension. It is true that the burden of proof was on the appellant to prove her case of victimisation, but her lack of success before the EAT cannot be put down to a failure by her to adduce sufficient evidence. Whilst I have concluded that the Employment Tribunal's reasoning is inadequate, and that it is based in part on a conclusion about Ms Thomas' knowledge which was not properly advanced or put, this court is not in a position to make conclusive findings. The better course is to endorse the EAT's decision to remit the matter to the Employment Tribunal.
- When the victimisation claim comes before the Employment Tribunal again it will be necessary for it to focus more clearly on and make clear findings about three matters:
i) whether it was indeed Ms Thomas who took the decision with Mr Hawkins having no independent role;
ii) whether Ms Thomas knew that the appellant had left money for the cakes;
iii) whether the decision maker took the decision by reason of the protected act, and if so, the reasons for arriving at that conclusion.
- I would, however, dismiss the appeal on each of the three claims.
Lord Justice Christopher Clarke
- I agree.
Lord Justice Moore-Bick
- I also agree.
Published: 21/12/2013 13:31