The Claimant's employment terminated after he agreed a settlement package with the Respondent. He subsequently brought claims of discrimination before and after the termination of his employment and claimed that the settlement agreement was void or voidable because he had signed it under duress. His claims were dismissed at an oral preliminary hearing and, relevant to this appeal, the EJ held that the post-termination claims should be struck out because they had no reasonable prospect of success. The Claimant appealed.

The EAT allowed the appeal. The Employment Judge had conducted a "mini trial" on core issues of fact and he should not have done so.

See also [Mechkarov v Citibank N.A]() UKEATPA/0678/15/DM

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Appeal No. UKEAT/0041/16/DM

EMPLOYMENT APPEAL TRIBUNAL

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

At the Tribunal

On 11 May 2016

Before

THE HONOURABLE MR JUSTICE MITTING

(SITTING ALONE)

MECHKAROV (APPELLANT)

**

**

CITIBANK N.A. (RESPONDENT)

Transcript of Proceedings

JUDGMENT

For the Appellant
MR MECHKAROV (The Appellant in Person)

For the Respondent
MR NICHOLAS GOODFELLOW (of Counsel)
Instructed by:
CMS Cameron McKenna LLP
Cannon Place
78 Cannon Street
London
EC4N 6AF

RACE DISCRIMINATION - Post employment

Whether permissible that part of a race discrimination claim should have been determined by hearing oral evidence on core issues of fact without a Full Hearing: on principle and on the facts, no.

1. The Claimant is a Bulgarian national. He was employed by the Respondents between 7 August 2006 and 30 September 2013 initially at the Sofia office and, after July 2010, at their London office in Canada Square, Canary Wharf. He was a Senior Assistant and Vice President. He worked in the bond issuers' section. His line managers were Mathieu Gelis and Catherine Pierre.

1. He claims that they subjected him to an excessive workload that led him to suffer a stress related illness that in turn caused him to be absent from work from 19 April 2013 until his employment ceased on 30 September 2013. On 26 September he signed a settlement agreement that brought his employment to an end by mutual consent on 30 September 2013 and compromised all claims arising out of or in relation to his employment and his termination other than discrimination claims. He later claimed that his signature to the agreement had been procured by duress. He also claimed that Ms Pierre had promised when his health had recovered to help him to find alternative work in the financial sector.

1. She agreed to meet him on 3 November 2014. According to the Claimant, she advised him to seek work in the Far East or in Central or Eastern Europe. In November 2014 he claimed to have made repeated attempts to speak again to her or to the Respondent's Human Resources Department, without success. On 26 November 2014 he sent a formal message to them copied to Senior Directors and called some former colleagues to seek their help. According to the Claimant, this prompted an angry response from Ms Pierre. They met again on 1 December 2014. She told him to stop talking to other people about his situation.

1. On the same day Amin Pannu, a Senior Investigator with the Respondent's security and investigative services section, was notified about and decided to investigate a number of complaints. Two were by the Claimant, concerning the circumstances of his departure from the Respondent's employment and Ms Pierre's attitude to him and, secondly, about the Respondent's practices in bond issuance. Ms Pierre also, it seems, made a complaint to Mr Pannu about the attitude of the Claimant towards her at the meeting of 1 December 2014.

1. On 4 December 2014 the Claimant emailed Mr Pannu, enclosing a two-page statement, which he had intended to send to former colleagues but had not in fact done so, outlining his complaints about his managers before he left the Respondent's employment. On 8 December 2014 he met Mr Pannu and provided further details of his complaint to him.

1. Meanwhile, the Claimant claims that the Respondent imposed a "firewall" between him and former colleagues preventing them from communicating with him via the Respondent's email system and further by an internal email discouraged them from contacting him by inviting them to notify the Human Resources section of any approach by him to them.

1. Mr Pannu conducted his investigation. In the course of it he interviewed at least Ms Pierre, although the Claimant claims that he interviewed others as well. He concluded that the Claimant's complaints were not made out and decided to take no further action.

1. On 29 January 2015 the Claimant commenced proceedings in the Employment Tribunal, making manifold claims including unfair dismissal and race discrimination both before and after termination of his employment. After a Preliminary Hearing on 27 April 2015 Employment Judge Warren ordered that three issues be determined at an open Preliminary Hearing to be held on 6 July 2015: (1) whether the claims of discrimination before termination of employment and unfair dismissal were out of time, (2) whether the settlement agreement was void or voidable for duress, and (3) whether the complaint of post-termination race discrimination should be struck out as having no reasonable prospect of success or alternatively whether a deposit order should be made because it had little prospect of success.

1. In a Reserved Judgment sent to the parties on 10 August 2015 Employment Judge Warren held: (1) that the settlement agreement was not void or voidable for duress and as a valid settlement agreement excluded claims for breach of contract, unlawful deduction of wages and unfair dismissal; (2) that claims of discrimination arising during and upon termination of the Claimant's employment were out of time and that it would not be just and equitable to extend time; (3) post-termination claims should be struck out because they had no reasonable prospect of success.

1. The Claimant appealed to the Employment Appeal Tribunal. At a Rule 3(10) Hearing on 9 February 2016 Simler P directed that no further action be taken on the first two grounds of appeal but referred the third to a Full Hearing. I have today conducted that Full Hearing, and the following are my reasons for allowing the appeal as I propose to do.

1. The approach to striking out applications in discrimination cases is not, with one reservation, controversial. The starting point is the observation of Lord Steyn in Anyanwu v South Bank Students' Union [2001] UKHL 14; [2001] IRLR 305 at paragraph 24:

"24. … For my part such vagaries in discrimination jurisprudence underline the importance of not striking out such claims as an abuse of the process except in the most obvious and plainest cases. Discrimination cases are generally fact-sensitive, and their proper determination is always vital in our pluralistic society. In this field perhaps more than any other the bias in favour of a claim being examined on the merits or demerits of its particular facts is a matter of high public interest. …"

1. Maurice Kay LJ emphasised the point in paragraph 29 of his Judgment in Ezsias v North Glamorgan NHS Trust [2007] ICR 1126:

"29. It seems to me that on any basis there is a crucial core of disputed facts in this case that is not susceptible to determination otherwise than by hearing and evaluating the evidence. It was an error of law for the employment tribunal to decide otherwise. In essence that is was Elias J held. I do not consider that he put an unwarranted gloss on the words "no reasonable prospect of success". It would only be in an exceptional case that an application to an employment tribunal will be struck out as having no reasonable prospect of success when the central facts are in dispute. An example might be where the facts sought to be established by the claimant were totally and inexplicably inconsistent with the undisputed contemporaneous documentation. The present case does not approach that level."

1. To these statements of principle must be added the observations of the Lord Justice Clerk in the Court of Session in Tayside Public Transport Company Ltd v Reilly [2012] CSIH 46 at paragraph 30.

"30. Counsel are agreed that the power conferred by Rule 18(7)(b) may be exercised only in rare circumstances. It has been described as draconian (Balls v Downham Market High School and College [2011] IRLR 217, at para 4 (EAT)). In almost every case the decision in an unfair dismissal claim is fact-sensitive. Therefore where the central facts are in dispute, a claim should be struck out only in the most exceptional circumstances. Where there is a serious dispute on the crucial facts, it is not for the Tribunal to conduct an impromptu trial of the facts (ED & F Mann Liquid Products Ltd v Patel [2003] CP Rep 51, Potter LJ at para 10). There may be cases where it is instantly demonstrable that the central facts in the claim are untrue; for example, where the alleged facts are conclusively disproved by the productions (ED & F Mann …; Ezsias …). But in the normal case where there is a "crucial core of disputed facts", it is an error of law for the Tribunal to pre-empt the determination of a full hearing by striking out (Ezsias …, Maurice Kay LJ, at para 29)."

1. On the basis of those authorities, the approach that should be taken in a strike out application in a discrimination case is as follows: (1) only in the clearest case should a discrimination claim be struck out; (2) where there are core issues of fact that turn to any extent on oral evidence, they should not be decided without hearing oral evidence; (3) the Claimant's case must ordinarily be taken at its highest; (4) if the Claimant's case is "conclusively disproved by" or is "totally and inexplicably inconsistent" with undisputed contemporaneous documents, it may be struck out; and (5) a Tribunal should not conduct an impromptu mini trial of oral evidence to resolve core disputed facts. I would treat the approval of the course taken by an Employment Judge in [Eastman v Tesco Stores Ltd ]()[2012] UKEAT/0143/12 by HHJ Peter Clark, sitting in this Tribunal, of hearing oral evidence on critical disputed questions of fact with reserve, because Tayside, which was decided before Eastman, was not cited to him or by him in his Judgment. In any event, it cannot determine the approach that the Employment Tribunal should take in a case such as this, in which an analysis of contemporaneous documents is required to permit a secure conclusion to be reached.

1. In his self directions of law the Employment Judge correctly in paragraph 35 of his Judgment cited the conclusions to be drawn from Anyanwu and Ezsias:

"35. … Guidance given there was that only in rare cases should a tribunal strike out a discrimination claim without hearing evidence, where the central facts are in dispute. If facts are not in dispute, one should take the Claimant's case at its highest and only then, if there are no prospects of success, should a claim be struck out."

1. After two further citations, at paragraph 37 he summarised the approach he would take:

"37. … The long and the short of it as I see it is that I should take the Claimant's case at its highest on undisputed facts and if on that basis, he has no prospects of success, I should strike it out. If there are disputed facts, unless they could be very shortly and simply dealt with within the PHR [pre-hearing review], the case should be allowed to proceed to a hearing. In this case I did her some evidence and have been able to make findings on some disputed facts."

1. He was not referred to and did not cite Tayside. The oral evidence that he heard was from the Claimant, Ms Pierre and Mr Pannu. He made the following findings of fact at paragraphs 43 and 47 of his Judgment:

"43. As to the investigation into [the Claimant's] complaint, the compelling evidence of Mr Pannu, which I accept, was that he had been instructed to investigate allegations which [the Claimant] had made, or rather concerns which he had raised and brought to their attention, about financial transaction processes that have nothing to do with this case whatsoever. He was also instructed to investigate and take appropriate action arising out of Ms Pierre's report that she had felt threatened by [the Claimant]. [The Claimant] complains that the Respondent did not report back to him on the outcome of their investigation. There was no obligation upon them to do so.

…

47. As to the victimisation claim, as I have mentioned above, we established during the hearing that the alleged protected act was that [the Claimant] told Mr Pannu that everything which had happened to him was because he was Bulgarian and therefore he had made a complaint of discrimination. That in any event would mean that nothing with regard to Ms Pierre could be said to be an act of victimisation and only anything which happened after the 8 December 2014 could have been. However, I heard evidence from Mr Pannu and [the Claimant] about this. I unhesitatingly accept the evidence of Mr Pannu, whose evidence was straightforward and consistent. I have already explained my criticisms of [the Claimant's] evidence. I find that [the Claimant] did not make an allegation of discrimination in the meeting with Mr Pannu on 8 December 2014. I am reminded that in cross-examination at its conclusion, [the Claimant] agreed that he had not mentioned discrimination until he issued these proceedings. I therefore find on that basis, the complaint of victimisation has no reasonable prospects of success and is also struck out."

1. In determining the application on the basis of the oral evidence to which I have referred, the Employment Judge did indeed conduct a "mini trial" on core issues of fact. He should not have done so, for two reasons:

(1) Tayside precludes that option.

(2) In any event, whether or not the Claimant's case was well founded on either issue, discrimination or victimisation, turned at least to a significant extent on contemporaneous documents that were not produced to the Employment Tribunal, including notes of any interaction between Mr Pannu and persons interviewed by him and his report and, if they exist, internal emails dealing with the acts of discrimination alleged by the Claimant, the imposition of a "firewall" between him and his ex-colleagues, the reason for the imposition of the "firewall" and, if it be the case, the discouragement of ex-colleagues from speaking to him. The documents actually provided to the Tribunal are anodyne and may be incomplete.

1. I found my reasons for allowing the appeal primarily upon those grounds, but there are four further aspects of the reasoning of the Employment Judge that are open to criticism, and while individually or even cumulatively they might not alone justify allowing the appeal, they add some force to the reasons already expressed for doing so:

(1) The complaints to Mr Pannu by the Claimant were not limited to "financial transactional processes" but included complaints about his treatment by his ex-managers, as the document attached to his email to Mr Pannu of 4 December 2014 and Mr Pannu's own witness statement demonstrate.

(2) He did not give any reason for his conclusion that there was no connection between the handling of the Claimant's complaint and his employment sufficient to bring into play section 108 of the Equality Act 2010 ("EqA"). Arguably at least, there was. He invited investigation into the manner with which he had been dealt before the termination of his employment and, perhaps correctly, contends that the Respondent may have a post-employment grievance procedure. At a minimum, they should have been invited to produce it.

(3) The Employment Judge's alternative conclusion expressed in paragraph 45 is open to criticism:

"45. Had I found otherwise, in any event [the Claimant] is unable to point to anything which suggests that post termination matters about which he complains have anything to do with his nationality as a Bulgarian. His argument is nothing more than, in effect, "this happened to me, I am Bulgarian therefore it must be because I am Bulgarian". Taking [the Claimant's] case at its highest, there would be no facts from which one could conclude that the matters which he complained about were because of his nationality."

That is not a sufficient reason for rejecting the claim, which ultimately will turn at least to a significant extent upon an analysis of the Respondent's actions, which, for reasons already explained, are likely to be the subject of indisputable contemporaneous documents.

(4) He did not address the issue at least impliedly raised by the Claimant's claim that the acts of victimisation alleged of imposing the "firewall" and discouraging his colleagues from communicating with him were done because following his meeting with Ms Pierre on 1 December 2014 the Respondent believed that he "may do a protected act". In such event an act of victimisation would be unlawful (see section 27(1)(b) EqA 2010).

1. I therefore conclude, for the reasons that I have given, that the Employment Judge should not have adopted the course that he did in determining whether or not to strike out this part of the Claimant's claim. I remit it to another Employment Judge to re-determine the application to strike out. For the avoidance of doubt, the Respondent may disclose and produce contemporaneous documents relating to the Claimant's complaints and to their investigation by Mr Pannu. If they conclusively disprove or are totally and inexplicably inconsistent with the Claimant's claim, the Employment Judge could properly strike it out. The Employment Judge will be entitled to take into account the undisturbed findings that the Claimant's claim of discrimination and threats by Ms Pierre have been rejected. They were findings that Employment Judge Warren was entitled to make on the preliminary issues that he determined. Further, the Employment Judge would be entitled in the alternative to striking out the claim to consider whether or not to order the Claimant to lodge a deposit if his claim is to proceed. I am not to be taken in the views that I have just expressed to indicate one way or another what the Employment Judge to whom this application will be remitted should decide. It will be a matter for him, having adopted the proper approach to the issue that I have indicated.

1. I order the Respondent to pay the Tribunal fees of £1,600 for the bringing and hearing of this appeal because the Respondent has lost on the principal point in issue. It is right that in the ordinary course the loser of an appeal to this Tribunal should pay the winner's costs. There is nothing about the facts of this case that would justify a departure from the usual rule.