The issues before the ET concerned disciplinary action taken against the Claimant for matters characterised as acts of gross misconduct, ultimately leading to her dismissal. She had raised concerns about another colleague which were investigated - however, his behaviour was characterised as misconduct rather than gross misconduct, and the colleague was given a written warning. The ET considered the difference in treatment between the two cases to be inadequately explained and inferred that the Respondent's actions were because of race and thus upheld the complaint of direct race discrimination.  It also found the reason or principle reason for the Claimant's dismissal was her whistle blowing i.e. the raising of concerns about her colleague and thus unfair under section 103A ERA. However, the ET found the Respondent had made good its reason for her dismissal for the purposes of section 98(2) - conduct - and the dismissal was fair in all the circumstances. The Claimant appealed.

The EAT allowed the appeal. It was not possible for the reason or principle reason for the Claimant's dismissal to be both automatically unfair for section 103A purposes but still fair under section 98(2) of the ERA.

_____________

Appeal No. UKEAT/0322/15/LA

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8AE

At the Tribunal

On 7 March 2016

Before

HER HONOUR JUDGE EADY QC

(SITTING ALONE)

LONDON BOROUGH OF WANDSWORTH (APPELLANT)

CRW (RESPONDENT)

Transcript of Proceedings

JUDGMENT

**APPEARANCES**

For the Appellant
MR STEPHEN HEATH (of Counsel)
Instructed by:
Sharpe Pritchard Solicitors
Elizabeth House
4-7 Fulwood Place
London
WC1V 6HG

For the Respondent
The Respondent in Person

**SUMMARY**

RACE DISCRIMINATION - Direct

UNFAIR DISMISSAL - Automatically unfair reasons

UNFAIR DISMISSAL - Reason for dismissal including substantial other reason

Direct race discrimination - sections 13 and 136 Equality Act 2010; automatic unfair dismissal - section 103A Employment Rights Act 1996; unfair dismissal - section 98 Employment Rights Act 1996

The Claimant - a black woman employed by the Respondent at a residential unit for disabled, vulnerable young people - had brought complaints of direct race discrimination, automatic unfair dismissal (whistle blowing) and "ordinary" unfair dismissal. These concerned the disciplinary process pursued by the Respondent, resulting in the Claimant's dismissal for what was said to be gross misconduct arising from failures to safeguard vulnerable children in the Claimant's care. The Claimant's white comparator had also faced disciplinary charges relating to failings in respect of vulnerable children at the unit. In his case, the incidents were alleged to give rise to concerns as to inappropriate behaviour and/or risk of sexual abuse but there was a delay in investigating these matters and the concerns ultimately pursued to a disciplinary hearing were characterised by the Respondent as misconduct rather than gross misconduct and the disciplinary penalty limited to a written warning rather than dismissal.

The ET considered the difference in treatment between the two cases to be inadequately explained and inferred that the Respondent's actions were because of race and thus upheld the complaint of direct race discrimination, contrary to section 13 Equality Act. It also found the reason or principle reason for the Claimant's dismissal was her whistle blowing (she had raised concerns about the incidents involving her comparator) and thus unfair under section 103A Employment Rights Act. Considering the Claimant's section 98 unfair dismissal claim, however, the ET found the Respondent had made good its reason for her dismissal for the purposes of section 98(2) - conduct - and the dismissal was fair in all the circumstances.

On the Respondent's appeal.

Held: allowing the appeal

The inconsistencies in the ET's conclusions could not be reconciled and rendered the decision unsafe. It was not possible for the reason or principle reason for the Claimant's dismissal to be both automatically unfair for section 103A purposes but still fair under section 98(2) of the Employment Rights Act. Although it was possible that race might play a part in an employer's decision making, whilst not being the reason or principle reason for the dismissal, the ET's reasoning on the race discrimination case was not adequate to the task. In the circumstances the appeal would be allowed and the ET's decision set aside in its entirety. The matter would be remitted to be considered afresh by a differently constituted ET.

**HER HONOUR JUDGE EADY QC****Introduction**

1. I refer to the parties as the Claimant and Respondent, as below. This is the Respondent's appeal against a Reserved Judgment of the London (South) Employment Tribunal (Employment Judge Hyde, sitting with members over three days in December 2014 plus four days in chambers in January and February 2015; "the ET"), sent out on 2 July 2015, and comprising 378 paragraphs over 66 pages. The Respondent was and remains represented by Mr Heath of counsel. The Claimant below appeared by a lay representative; today in person.

1. By its Judgment the ET dismissed the Claimant's claim of unfair dismissal for the purposes of section 98 of the Employment Rights Act 1996 ("ERA") but allowed her complaint of public interest disclosure ("whistle blowing") dismissal and of direct race discrimination in relation to the investigatory and disciplinary processes and the imposition of the sanction of dismissal. The Respondent appeals under the following three heads: (1) the ET adjudicated on acts of discrimination that were not part of the Claimant's case; (2) it erred in applying the burden of proof or reached a perverse conclusion in rejecting the Respondent's explanation; and (3) the ET's rejection of the Claimant's case of having been unfairly dismissed for gross misconduct under section 98 ERA was inconsistent with its finding that the principal reason for the dismissal was whistle blowing, which was in itself inconsistent with the finding that the dismissal was because of the Claimant's race.

1. The appeal was permitted to proceed to a Full Hearing by HHJ Shanks. The Claimant resists the appeal, essentially relying on the reasoning of the ET.

**The Background Facts**

1. In summarising the facts found by the ET, I follow its course in anonymising most of the individuals to whom I refer: first, for consistency; second, because this case concerns a unit for vulnerable and disabled young persons and this protects their privacy.

1. The Respondent is a local authority. The Claimant was employed by it, from June 2006, as a worker at a residential unit for severely disabled young people, virtually all of whom are non-verbal. The Claimant is, relevantly, a black British woman of Caribbean descent.

1. The issues before the ET concerned disciplinary action taken against the Claimant for matters characterised as acts of gross misconduct, ultimately leading to her dismissal in October 2013. The allegations against the Claimant arose from reports made in May 2013 by a Senior Residential Worker at the unit, a white colleague of the Claimant, referred to as "SRW". Essentially, the matters in question - including a third matter volunteered by the Claimant herself - gave rise to concerns that she had acted outside of the Respondent's policies and care plans for some of the young people in her and the Respondent's care, such as to give rise to the risk of potential physical harm. The incidents included, on one occasion, leaving a young person in the bath unsupervised and without adequate safeguards, contrary to policy; separately, feeding a young person toast, contrary to the relevant care plan and giving rise to a potential risk of choking; and, thirdly, taking another young person out of the unit without another care worker present, again contrary to the relevant care plan.

1. SRW was the comparator relied on by the Claimant. She contrasted the Respondent's reaction to the complaints made against her with its response to the concerns she raised about SRW, initially in January 2013 but also, subsequently, after she had been suspended. As the ET found, the concerns relating to SRW also raised matters of potential risk to the young people at the unit, although in SRW's case the incidents alleged gave rise to questions of inappropriate behaviour and potential sexual abuse rather than, as in the Claimant's case, the risk of physical harm. The incidents ultimately found established against SRW involved an occasion when he had locked the door when attending to a young person inside a bathroom, contrary to the Respondent's policy, and an incident when he had lain on the bed next to another young person, apparently with the intention of assisting them to settle for the night. As the ET noted, it in fact appeared there was more than one occasion when SRW had locked the bathroom door when attending to clients; certainly, the evidence suggested that another care worker had also expressed concern about a separate occasion when this had occurred and SRW had himself spoken of a similar (but apparently separate) incident.

1. The Claimant had raised the locked bathroom door incident involving SRW with the Unit Manager ("UM"), in January 2013. Although this was discussed with SRW shortly afterwards, the ET found this was done with a light, informal touch. That contrasted with the Respondent's more formal approach to concerns raised by SRW about the Claimant in May 2013. The concerns raised with the Claimant were seen by the Respondent as failures to safeguard disabled children in her care and led to her suspension on 4 June 2013, to the subsequent disciplinary investigation and hearing against her, and ultimately to her dismissal. The ET found that the allegations involving SRW were serious; that was apparent from the way in which others described the incidents in question and from his own reaction to the matters raised. The ET further observed that SRW's responses were not always consistent but included his expression of a view that was not dissimilar to that expressed by the Claimant, that sometimes policies did not apply to the situation that had to be dealt with. Whilst, however, the Claimant had been suspended, SRW had initially faced no further action; UM had simply given general staff guidance on the issue of locking bathroom doors.

1. After the Claimant had formally put her concerns relating to SRW into writing, in July 2013, there was some attempt to look at matters further, but - as the ET found - no proper investigation at that stage. Dissatisfied with this, in September 2013, the Claimant reported matters to the police. That led to an investigation by the Respondent during which SRW was redeployed into a neighbouring unit. Subsequently, SRW was subjected to the disciplinary process, albeit that the charges against him were limited to those he admitted and were characterised as misconduct rather than - as was the case in respect of the Claimant - gross misconduct.

1. Both disciplinary hearings - that of the Claimant and that of SRW - took place before a Mr Benaim. At the conclusion of the Claimant's hearing in October 2013, Mr Benaim found the three charges proven and concluded she should be summarily dismissed. The Claimant appealed, but was unsuccessful. SRW's disciplinary hearing took place in December. Mr Benaim found two matters proven (as set out above), concluding that SRW had been guilty of misconduct that was serious and warranted a written warning.

**The ET's Conclusions and Reasoning**

1. The ET considered there was considerable discrepancy in tone, process and substance between the way the Claimant was treated as compared to SRW. It noted the Respondent's explanation for the difference in disciplinary sanction. It had contended that the Claimant's attitude to the disciplinary charges meant that it was appropriate to summarily dismiss her: she had at no point acknowledged fault, and this compared unfavourably with her comparator, SRW. The ET did not, however, accept Mr Benaim's characterisation of SRW's failings as "procedural breaches"; it concluded the same term could apply to the Claimant's defaults. The ET was, moreover, very concerned about the lack of seriousness attached to the incidents involving SRW, as to the way in which the charges against him had been limited to the two matters he had admitted and the unexplained failure to see the reputational risk as being as great in his case as that of the Claimant. In the circumstances, the ET:

"315. … considered that due to the very different treatment meted out to the Claimant and to SRW at all stages of the investigation and disciplinary procedure, given SRW's considerably more senior position and given the similar gravity of the allegations both faced, and the difference in race between the Claimant and SRW, there were prima facie grounds for concluding that there had been race discrimination. The burden of proof was reversed and it was therefore appropriate to look to the Respondent for a non racial explanation."

1. Considering first the earlier stages of the chronology, specifically the Claimant's initial report about SRW and UM's response, the ET accepted an explanation had been shown, other than the difference of race: UM was not as prepared to address issues of sexual abuse as she was risk of physical harm; that explained the absence of delay in proceeding with disciplinary action in the Claimant's case as compared to the initial inaction in SRW's case.

1. Thereafter, however, the ET found there were a number of unexplained differences in treatment; specifically:

"332. As the matter progressed following a second set of disclosures in July 2013, we did not consider that adequate explanations had been given for the considerable differences in treatment, such as the delays in initiating an investigation after the Claimant made the report against SRW in writing in July 2013; the perfunctory initial investigation into and disposal …; for SRW only being referred for discipline at the middle level; and for Mr Benaim's forgiving comments to him (eg there was no evidence of actual harm/these were mere procedural breaches) which could equally have been made in the Claimant's case but were not. There was also the supportive management action taken towards SRW, but not to the Claimant.

333. The Tribunal relied on its findings that similar statements about relying on his own judgment as opposed to following the care plan were made by SRW during the investigation and disciplinary processes after July 2013.

334. Also by the time the matters were being formally investigated, the Respondent was dealing with a much wider range of allegations, and a degree of relatively independent corroboration … Despite this, no consideration was given to suspending SRW at this stage pending the outcome of the investigation, despite the nature of the allegations being matters which on their face fell within the Respondent's category of major offences.

335. A further difference between the way in which the Respondent dealt with the Claimant's issues and those of SRW was that when they finally started to take formal action in relation to the SRW matters, he was redeployed into another role … However, it was not disputed as it emerged at the hearing that this work was in the same building as or adjacent to the Unit.

336. Further … SRW's seniority should have been an aggravating feature, both in terms of the initial breaches of procedure, having written some of the applicable care plans himself, and in terms of his ambivalence about the need to follow the care plan as set out in these Reasons also."

1. The ET considered that:

"337. … the allegations against SRW raised the same if not greater questions about his fitness to practice and reputational damage to the Council, given the nature of the allegations and SRW's seniority. …"

1. And it returned to Mr Benaim's explanation for the differences in treatment:

"343. … SRW reacted in a wholly different fashion to the allegations when compared to the Claimant. He stated that SRW was "very nervous and upset" at the hearing. He continued that SRW made an honest admission of what he had done and showed a good understanding of the errors of judgment he had made, errors which he appeared to regret sincerely. He stated that SRW appeared to appreciate that he had been unwise in breaching the procedure and placing himself at risk.

344. Mr Benaim appeared to undermine the significance of this point about appreciation of the risk posed, by his further evidence … that the other significant difference in the two cases was the nature of the allegations and the nature of the risks posed to the children concerned. He considered that the incidents involving the Claimant were more serious as they involved "the very real risk of harm to the children directly" whilst SRW's actions "represented breaches of procedure but in themselves did not present risk". The Tribunal did not agree with this distinction as set out in these Reasons."

1. The ET considered that:

"345. … the distinguishing features relied upon by the Respondent to explain the difference in treatment did not account for the far more favourable treatment of SRW from July 2013 onwards."

1. In the circumstances, the ET concluded (see paragraph 346) that it was appropriate to infer that one of the reasons for or an effective cause of the difference in treatment between the Claimant and SRW in the disciplinary proceedings - in terms of the process followed and the sanctions applied - was race.

1. The ET then went on to consider the whistle blowing complaint, noting that the real issue it had to determine was whether the reason or principal reason for the dismissal was the fact that the Claimant had made protected disclosures. It rejected Mr Benaim's assertion that he had not considered the Claimant was a whistleblower. It accepted that the facts of the allegations against the Claimant had warranted investigation and disciplinary action, but, set against the treatment by the Respondent of SRW, the ET considered:

"360. … he had been treated far more leniently and less formally by the Respondent from January 2013 onwards. …"

That led the ET to ask:

"360. … whether this employer had followed the more formal and more serious disciplinary route in respect of the Claimant, who previously had a clear disciplinary record, because she had made the whistle blowing disclosures." (Original emphasis)

1. The ET considered that:

"361. … the reason that SRW was treated as he was, was because he was accused of conduct which was extremely sensitive and which had considerable potential for adversely affecting the Respondent's reputation, and which the relevant management of the Respondent did not wish to draw attention to. The Respondent only launched a formal investigation into these matters when they had to, after the Claimant had made it clear that she would pursue matters further. …"

1. Allowing there might be a distinction between adopting a light touch towards SRW because of the nature of the allegations against him and being punitive or formal towards the Claimant because she had raised those allegations, the ET concluded the latter was the case:

"363. We considered that the Claimant was seen by the Respondent right from the start as someone who was raising uncomfortable issues in relation to SRW which the Respondent did not wish to address properly.

364. In the circumstances of this case, and having regard to the very different treatment of SRW, we considered that this was the principal reason why the Respondent subjected the Claimant to such a serious misconduct charge and suspended her, and then found that dismissal was the appropriate penalty.

365. In all the circumstances therefore we found that the automatically unfair dismissal complaint under section 103A of the 1996 Act (whistle blowing) was well founded."

1. The ET went on to consider ordinary unfair dismissal. It accepted that the referral of the Claimant to discipline was justified given the allegations in question: the Respondent had reasonable grounds for its belief and there had been adequate investigation. Considering the question of sanction, the ET revisited its earlier findings in respect of SRW, but:

"375. … did not consider that the disparity of treatment between these two cases took the sanction imposed on the Claimant outside the range of reasonable responses, given our findings above about the Claimant's defence which did not include an acknowledgment of her wrongdoing or reassurance to the Respondent that the conduct would not be repeated."

1. Concluding that the Claimant's dismissal was not, therefore, unfair, the ET continued:

"377. We were satisfied that this conclusion did not undermine or conflict with our conclusion in relation to the whistle blowing as we found in effect that, on the balance of probabilities, absent the background of the Claimant's whistle blowing disclosures, this employer would have treated the Claimant less harshly from May 2013 and would not have dismissed her for the agreed misconduct." (Original emphasis)

1. It ultimately concluded, however:

"378. … the ordinary unfair dismissal complaint under section 98(2) and (4) of the 1996 Act was not well founded and was dismissed."

**The Relevant Legislative Provisions**

1. The Claimant was pursuing a claim of automatic unfair dismissal under section 103A ERA, which provides:

"An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if the reason (or, if more than one, the principal reason) for the dismissal is that the employee made a protected disclosure.

1. That is to be contrasted with what might be described as a claim of normal, or ordinary, unfair dismissal under section 98 ERA, which, relevantly, provides:

"(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show -

(a) the reason (or, if more than one, the principal reason) for the dismissal, and

(b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.

(2) A reason falls within this subsection if it -

…

(b) relates to the conduct of the employee,

…

(4) Where the employer has fulfilled the requirements of subsection (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) -

(a) depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and

(b) shall be determined in accordance with equity and the substantial merits of the case."

1. The Claimant was also pursuing a complaint of direct race discrimination, comparing her case with that of SRW. By section 136(2) of the Equality Act 2010 ("EqA"), it is provided that, on such a case:

"(2) If there are facts from which the court could decide, in the absence of any other explanation, that a person (A) contravened the provision concerned, the court must hold that the contravention occurred."

**Submissions**

The Respondent's Case

1. The Respondent first objects the ET adjudicated on acts of discrimination that were not part of the Claimant's case before it. Referring to the pleaded case, the most that could be said was that the Claimant had put in issue the difference in sanction and the failure to pursue an investigation when she first raised concerns about SRW in January 2013. The parties had agreed the list of issues (recorded at paragraph 285 of the ET's Reasons), but that did not indicate agreement to an open-ended consideration of all matters relating to the disciplinary process, involving a number of stages and different decision takers. Having not understood the stages between January 2013 and the disciplinary decisions taken by Mr Benaim to be in issue, the Respondent had not called witnesses to address the interim stages but the ET had gone beyond the matters before it, in particular in making findings of less favourable treatment of the Claimant in comparison with SRW in respect of: (i) all stages of the disciplinary process, (ii) delays in initiating an investigation after July 2013, (iii) the perfunctory initial investigation and disposal, (iv) SRW being referred to disciplinary at the middle level, (v) Mr Benaim's forgiving comments, (vi) supportive management action towards SRW, (vii) not suspending SRW, and (viii) redeploying SRW. Inevitably the ET had been unable to scrutinise the thinking of the decision takers in these various respects.

1. Second, the Respondent contended the ET had erred in applying the burden of proof and/or had reached a perverse conclusion in rejecting the Respondent's explanation. In oral submissions Mr Heath fairly conceded this was really a perversity argument: the ET had failed to have regard to the entirety of Mr Benaim's explanation and had also apparently proceeded upon the basis of findings in respect of the Claimant's case that were inconsistent with its subsequent conclusions on unfair dismissal for section 98 ERA purposes.

1. This overlapped with the third area of challenge: the ET's rejection of the Claimant's case of having been unfairly dismissed for gross misconduct under section 98 ERA was inconsistent with its finding that the principal reason for the dismissal was whistle blowing, which was in itself inconsistent with the finding that the dismissal was because of the Claimant's race. The conclusions reached on automatic (section 103A) and on section 98 unfair dismissal were obviously inconsistent and could not stand. Although the race discrimination case gave rise to a different test, having found that the Respondent had a fair reason for the disciplining of the Claimant and for deciding she should be dismissed, the ET needed to explain what had been because of the Claimant's race. On its face, this seemed inconsistent and required an explanation, not discernible from the ET's reasoning.

The Claimant's Case

1. The Claimant urged the ET's decision should be upheld both on the claim of race discrimination and that of section 103A automatic unfair dismissal. On the first basis of challenge, she had ticked the box on the form ET1 making clear she was complaining of race discrimination. She had not understood she had then to set out all the points she was relying on but had set out her case in the Further Particulars and understood the issues were agreed.

1. As for the burden of proof (the second basis of challenge), there were many points in the evidence which demonstrated less favourable treatment of her as compared to SRW; the ET's decision was permissible given the evidence before it. The difference in treatment was such that the burden of proof plainly shifted. The ET properly looked to the Respondent for an explanation, but it failed to provide an adequate or justifiable explanation.

1. Third, on the inconsistency between the ET's findings on the three claims, the Claimant had herself initially found that difficult to understand, but ultimately concluded the ET was finding there was a proper basis for her disciplinary and proper grounds on which she could have been fairly dismissed - hence the finding on the section 98 unfair dismissal claim - but was concerned by the inconsistency in the approach between the Claimant and SRW both throughout the process and in terms of sanction and by the lack of adequate explanation. There were so many differences in treatment, and saying that the Respondent had taken into account that no children were harmed in SRW's case when that was also true in the Claimant's case meant the explanation given by the Respondent made no sense. That had led the ET to conclude that the burden of proof had shifted so as to give rise to its finding of race discrimination and that the principal reason for her dismissal had been her protected disclosures, and thus her complaint of automatic unfair dismissal was made out.

**Discussion and Conclusions**

1. The first issue raised by the appeal is whether the ET went beyond the pleaded case it had to determine, thereby denying the Respondent a fair hearing.

1. It is trite law that an ET cannot consider and rule upon a complaint that is not made before it (Chapman v Simon , and it can be unfair if issues are permitted to be based on shifting sands (see the comments of Langstaff J in Chandhok and Anor v Tirkey.

1. In this case, however, the Claimant had identified that she was making a complaint of race discrimination on her ET1 form. She had, further, provided Further Particulars that made plain she was comparing her case with that of SRW and she had put in issue not simply the difference in sanction in their respective cases but also the Respondent's failure to properly investigate the concerns raised about SRW at an earlier stage. Whilst the Respondent might initially have found it difficult to understand the race discrimination case, having received Further Particulars from the Claimant, it considered itself in a position to agree the issues that the ET needed to address, as recorded at paragraph 285 of the ET's Reasons, specifically:

"(a) Did the Respondent discriminate against the Claimant by treating her less favourably than they treated or would have treated SRW by:

(i) Investigating allegations against her more promptly than against him?

(ii) Dismissing her for misconduct but not him?"

1. In determining those questions, the ET:

"286. … also clarified with the parties during the hearing that the complaint about the race and whistle blowing dismissal entailed consideration of all the Respondent's actions in respect of the disciplinary process leading up to the dismissal."

1. Mr Heath complains that the Respondent had only understood the complaints relating to the delay in investigation to be up to the end of January 2013; more particularly, it had not understood the Claimant to be complaining of matters post-dating July 2013.

1. It seems to me that there are two difficulties with the Respondent's complaint in this respect. First, the issues it had agreed the ET needed to determine (arising from the Claimant's pleaded case) included the delay in investigating the allegations made against SRW. That issue was not limited in time but would also include the Respondent's failings in investigating matters after the Claimant had made further formal complaints in July 2013. That much was comprehended by the Claimant's Further Particulars, and was certainly not ruled out by the agreed list of issues. Second, in any event, the Claimant had identified an actual comparator and had put in issue the investigation and disciplinary sanction in his case. For the ET to determine whether there was a difference in treatment - and, if so, whether that was because of race and/or because the Claimant had blown the whistle - it would inevitably need to look at the process more broadly. As it had identified - without objection - that entailed consideration of the Respondent's actions more generally in respect of the disciplinary process leading up to the Claimant's dismissal and, by necessary implication, to SRW's warning. It was relevant that the disciplinary charges levelled against SRW were characterised as misconduct rather than gross misconduct as that set the tone for the disciplinary hearing and would guide the decision taker in terms of any sanction. Further, given that part of the Respondent's case, in terms of its decision in respect of the Claimant, related to reputational risk, it was also relevant to see that in context, in terms of the kind of risk that arose in terms of the allegations made against SRW and how the Respondent decided to protect its reputation (or not) in that case.

1. In the circumstances, I am unable to see how the Respondent could not have understood that the ET would need to consider the process more broadly than simply the initial decision making by UM in January 2013 and the final decision on sanction taken by Mr Benaim in the latter part of that year. If the Respondent chose not to call witnesses to deal with the evidential issues raised by the Claimant's case and by its own explanation for its actions, it cannot complain if the ET then made findings adverse to it on those matters. I am unable to see that the ET erred in determining the issues on the basis it had outlined to the parties, which was appropriate given the complaints it had to determine on the pleadings.

1. The second and third grounds of challenge raise overlapping issues.

1. When considering the complaints under the ERA 1996, the ET was concerned with the Respondent's reason or principal reason for deciding to dismiss the Claimant. That involved looking at the subjective reasons operating on the Respondent's mind at the time it determined to dismiss her. That was thus the exercise the ET had to undertake for the purpose of section 103A. Having done so, it apparently found that the Claimant's whistle blowing was the principal reason why the Respondent subjected her to such a serious misconduct charge and then found that dismissal was the appropriate penalty. Having reached that conclusion, the ET needed go no further: the dismissal was for a prohibited, automatically unfair reason. This ET did, however, go further. It went on to ask itself the same question for section 98 purposes and concluded the dismissal was fair. It did not do so simply on an alternative basis - looking at the question whether the process was fair for section 98(4) purposes - but expressly found that the dismissal had been fair under section 98(2): that is, for a reason or principal reason (here, conduct) that was capable of being fair.

1. There are thus two inconsistent conclusions as to what was the reason or principal reason for the Claimant's dismissal and I am unable to see any way of remedying that inconsistency. Given the findings of fact made, both findings would seem to be separately permissible. They are, however, incapable of standing together as findings as to the reason or principal reason for the dismissal, and I cannot uphold the ET's conclusions in that respect.

1. As for the claim of race discrimination, the ET was here applying a different test. It had first to ask whether the Claimant had established facts from which it could conclude that there had been direct race discrimination. It had certainly found a difference in protected characteristic between the Claimant and her comparator and a difference in treatment. It had also found that the Respondent had not adequately explained that difference; specifically, it rejected the matters relied on as justifying what it saw as the more favourable treatment of SRW. As well as seeking to explain its treatment of SRW, however, the Respondent had also given evidence as to why it had treated the Claimant as it had, something the ET had apparently accepted, at least in part, in agreeing that the Claimant had not acknowledged her wrongdoing and had not given the Respondent any reassurance that the conduct would not be repeated. Whilst allowing that meant that the comparison with SRW was not apt for the purposes of section 98 unfair dismissal, the ET did not allow that might explain the difference in treatment for section 136 EqA purposes. That gives rise to an inconsistency in the ET's findings. Whilst I accept that the ET was looking at this question under two different statutory regimes - and I do not say that the answers would necessarily be the same - where there is an apparent inconsistency in conclusions, as here, I do consider there has to be adequate reasoning so the parties can understand the ET's findings in each respect.

1. That brings me back to the finding on the Respondent's reason. Having found the reason or principal reason for the dismissal was the Claimant's misconduct, I do not say the ET was bound to rule that the Respondent's reasoning was in no respect because of the Claimant's race; when considering a race discrimination complaint the ET is applying a different test to that applicable to a claim of unfair dismissal. That said, what the ET needed to do was to explain which aspect of the reasoning was tainted by race; to scrutinise the mind of the respective decision takers and state which part of the process was rendered unlawfully discriminatory. That might, on the facts of this case, have been the way in which the allegations against the Claimant were characterised and pursued as gross misconduct (there might be reasonable grounds for a belief in gross misconduct but the reasoning leading an employer to that stage might be tainted by unlawful discrimination); it might have been in the decision on sanction (the decision could fall within the band of reasonable responses, but the Respondent might not have been able to show it was nothing whatsoever to do with race). Either way, the ET's reasoning needed to make clear what it had found and why. It does not. This was a case where neither party could properly understand the basis of the ET's reasoning on the three claims and, in the circumstances, the decision cannot stand.

**Disposal**

1. Having given Judgment in this matter, I permitted the parties to address me further on the question of disposal. Whilst not entirely straightforward, my conclusion is that this matter should go back to a differently constituted ET. In reaching that decision I have considered the factors laid down in Sinclair Roche & Temperley v Heard [2004] IRLR 763. The liability hearing was relatively short - three days - and it is now over a year ago since the ET last sat. The damages have since been assessed at a subsequent remedy hearing as something under £30,000, and so there is a limit to the amount at stake, although I do not underestimate the importance either of that sum or of the issues for all concerned. It seems to me that the factor that weighs most is that this is a case where the ET's reasoning was fundamentally flawed. Whilst I appreciate the Claimant's concern that there had been a full hearing before a three-member panel and full findings of fact made, I consider the appropriate course is for this matter to start afresh in respect of all three claims before a differently constituted ET.