Moxam v Visible Changes Ltd & Anor UKEAT/0267/11/MAA
Appeal against decision that acts of discrimination and harassment had not been continuous and where a settlement had been reached following the ET judgment. Appeal allowed.
The claimant brought proceedings arising from the actions and language of some fellow employees which related to the claimant's race and colour. The ET decided in her favour concerning two out of four events presented as part of a continuing act but rejected the first two events as out of time. The parties came to terms after the judgment was announced though it was common ground that the agreement was not a compromise contract and so could restrict the claimant's rights under the RRA 1976. In this appeal, the claimant was seeking to appeal the decision to reject the first two events but the respondent submitted that she should be debarred because of the agreement.
In this judgment McMullen J considers the legal principles underlying the substantive appeal and the authorities indicating that the term "on racial grounds is wider than on the grounds of his race" . He concludes that the employment judge had erred in adopting the narrow on 'grounds of her race' approach as
"It does not matter what racial group the Claimant comes from, for she is entitled to be offended and to bring claims where she suffers as a result of any discriminatory language and conduct."
Having found for the claimant on the third and fourth events it was hard not to see why the earlier events were not part of the "regime" at the workplace. He then rejects the submission that the claimant should be barred from pursuing the appeal as
"It would be extraordinary that since the Claimant is not precluded from enforcing her rights in the Tribunal, she should be precluded from enforcing those rights by way of an appeal."
Appeal No. UKEAT/0267/11/MAA
EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON, EC4Y 8JX
At the Tribunal
On 24 November 2011
HIS HONOUR JUDGE McMULLEN QC, MR M CLANCY, MR T STANWORTH
MISS V MOXAM (APPELLANT)
(1) VISIBLE CHANGES LTD; (2) MR D WOOD (RESPONDENTS)
Transcript of Proceedings
For the Appellant
MR PETER WARD (of Counsel)
Dent Abrams Solicitors
7th Floor, 3 Shortlands
For the Respondents
MR KEVIN McNERNEY (of Counsel)
Messrs Browne Jacobson LLP Solicitors
44 Castle Gate
The Employment Tribunal correctly found the Respondent discriminated against and harassed the Claimant contrary to the Race Relations Act. It failed to deal with the Claimant's claims in respect of two earlier events which were "on grounds of race" rather than the narrow and incorrect view of the Employment Tribunal as to "on the grounds of her race". It erred in holding that, as the Claimant was not an immigrant, she was not protected when the Respondent referred to "fucking immigrants". It failed to consider the four index events as a continuing act. The only conclusion of the Employment Tribunal on a correct direction would be to find in her favour. The EAT set aside that part of the Judgment and substituted a finding in the Claimant's favour.**HIS HONOUR JUDGE McMULLEN QC**
- This case is about race discrimination in its direct sense, and in its sense relating to harassment. It also concerns the compromise of proceedings in an Employment Tribunal. It is the Judgment of the court to which all members, appointed by statute for their diverse specialist experience, have contributed. We will refer to the parties as the Claimant and the Respondents, except where more detailed reference is made.
- Visible Changes Limited is the corporate Respondent. It is now in liquidation. Mr David Wood, the Second Respondent, is the leading light. Ms Susan Ward is an employee but she was, by case management orders before this appeal, excused on the Claimant seeking no remedy against her.
- It is an appeal by the Claimant in those proceedings, against the Judgment of an Employment Tribunal chaired by Employment Judge Hobson, sitting at Watford over four days and sent to the parties on 21 January 2011. Mr Peter Ward and Mr Kevin McNerney, both of counsel, appeared respectively for the Claimant and the Respondents throughout. So far as is relevant to the appeal, the Claimant made claims of race discrimination arising out of four events and of sex discrimination out of one (the fourth of those). She succeeded in respect of claims under the third and fourth events, but failed on the first two.
- The Tribunal rejected a contention that the first, second, third and fourth events were all a continuing act of race discrimination and therefore were in time, for the Tribunal held that claims in respect of the first two events were out of time and discretion would not be exercised to enlarge time. The Claimant therefore substantially succeeded at the Tribunal although, it has to be said, her claims were wider than that.
- The issues before the Employment Tribunal were set out in a CMD conducted by Employment Judge Ryan as follow:
"4. Whether the respondent did some or all of the following:
(a) in April 2009 Dave Wood refer to a complainant as a 'fucking immigrant';
(b) in May 2009 heated conversations took place in the office in which employees referred to 'all fucking illegal immigrants' coming into the UK and claiming benefits for the families;
(d) in June 2009 Dave Wood asked why white girls like black men, and laughed;
(g) on 14 July 2009 Dave Wood truthfully claims to the claimant that 'we often joked about why black men big cocks'; and
5. Did some or all of the acts alleged comprise an event act extending over a period or, if not, whether it would be just and equitable for the tribunal to extend time to have jurisdiction to determine any such allegations as are out of time.
6. Did such acts as the tribunal may find occurred amounts to less favourable treatment of the claimant on the grounds of race and/or unwanted conduct amounting to harassment on grounds of race?
8. If proven, was the allegation at (g) unwanted conduct amounting to harassment on grounds of sex?"
- The Employment Tribunal decided in the Claimant's favour in respect of the third and fourth events. The parties came to terms after the Judgment was announced, which were not disclosed to the Employment Tribunal. They are embodied in a manuscript note, signed by both counsel. It is common ground that this is not a compromise contract, sufficient to restrict the Claimant's rights under the Race Relations Act, for it lacks certain statutory particulars. The gist of it was that the Claimant would be paid £10,000 and take the matter no further.
- The Claimant appeals against the unfavourable parts of the Judgment. There is no cross-appeal.
- There is, however, a Respondent's answer, contending that the agreement is sufficient to debar the Claimant from enforcing any rights in the EAT. Mr McNerney accepts that she is not precluded by this agreement from pursuing claims for remedy in the Employment Tribunal, notwithstanding the fact the Tribunal noted that there was a settlement. That is because of the failure to meet the technical specifications set out in s.72(1) and s.72(3) of the Race Relations Act 1976, and s.4A, relating to compromise contracts. His position is that while the Claimant does have access to the Employment Tribunal, effectively for a remedy, notwithstanding the terms of the settlement, she is debarred by ordinary contract terms, from pursuing an appeal in the EAT.
- On the substance, the Respondent contends that the Tribunal reached a conclusion which was open to it on continuing act, although Mr McNerney accepts that there are errors of law in three places in the Judgment to which we will turn.
- The relevant provisions of the legislation are not in dispute. The gist of them is set out by Judge Ryan in his order. The Employment Tribunal did not set out the relevant statutes but noted that it had been referred to the detailed submissions in writing by both experienced counsel.
- The legislation, as it was at the time, provides that it is unlawful to give less favourable treatment to a person on the grounds of race (see s.11A). Harassment is unwanted conduct on the grounds of race, which has the purpose or effect of violating her dignity of creating an intimidating, hostile, degrading, humiliating or offensive environment. It should be regarded as having that effect only if, having regard to all the circumstances, particularly including the Claimant's perception, it should be reasonably considered as having that effect (see s.3A). Identical provisions apply in respect of the Sex Discrimination Act 1975 but, as noted above, the claim for direct sex discrimination is not available in this case but only of harassment.
- Procedurally, the matters as to compromise of a race discrimination claim are set out in s.72 of the 1976 Act which says this:
"(1) A term of a contract is void where-
(b) it is included in furtherance of an act rendered unlawful by this Act; or
(3) A term in a contract which purports to exclude or limit any provision of this Act is unenforceable by any person in whose favour the term would operate apart from this subsection."
- Section 4A deals with compromise, and it is necessary to say no more about it, since it is common ground the agreement fails to meet the test. Thus, any terms within it would be void.
- As can be seen from Judge Ryan's clear directions, there are now on appeal four relevant issues, two of which are live as appeal grounds. She was born in the United Kingdom in 1968. Both her parents are from Jamaica. Her ancestry is mixed racially, and she regards herself as Afro-Caribbean. She was employed by this small business on 8 September 2008 as an office manager.
- The Respondent is a limited company where both the Second Respondent, Mr Wood, and his wife worked. Its main activity is building playgrounds for children. There are 20 to 25 employees. There was an employee handbook. Nobody knew anything about it. It was kept in people's drawers. Nobody received any awareness training or equal opportunity training.
- What we will call the four index events occurred in April, May, June and July 2009. The Tribunal described them as follows:
"2.13 In evidence, the Claimant alleges that in April 2009, when she was contacted on the telephone by a man who complained that employees of the First Respondent had shouted racial abuse at him, she informed the Second Respondent, Mr Wood, of this on his mobile, to which he said "I know, I have dealt with it. The man is a fucking immigrant". Mr Wood denies this but the Employment Tribunal accepts the Claimant's evidence that it did occur.
2.14 The Claimant then complains that in May 2009 colleagues in the office, including Tanya Wilson and the Third Respondent were saying things like "All fucking illegal immigrants come here to claim from the government and sponge from the system". When cross examined, Susan Ward, the Third Respondent, whilst denying that she had ever said "fucking illegal immigrants", confirmed that she could remember a conversation when Tanya Wilson had used strong language and that she and others had agreed with the proposition expressed about illegal immigrants.
2.16. The Employment Tribunal finds that in June 2009 the Second Respondent, Mr Wood, in the Claimant's presence at the office, made the remark "Why is it that white girls like black men?". He laughed. The Tribunal accepts that the Claimant found this extremely offensive and upsetting and that the remark was made by Mr Wood.
2.23 The Employment Tribunal find that paragraph 2 of page 62bd does reflect accurately what occurred and that at the meeting, the Second Respondent, Mr Wood, did make a comment to the claimant. "Yeah, I often joked about why do black men have big cocks". Susan Ward heard this remark and, as she agreed in answer to questions from the Tribunal, she accepted and agreed that Mr Wood had said things that were not relevant to the discussion about redundancy, but which were "a more personal discussion". Mrs Ward told the Tribunal that Mr Wood could have said that he had "brain farts" as is recorded in the note, but added that she would have recalled if Mr Wood had mentioned "big cocks"."
- The Tribunal came to conclusions in respect of those events, and we will reproduce them in full because they have been the subject of intense discussion before us.
"4(a) The statement by the Second Respondent, Mr Wood, about a complainant who was a target for racial abuse - "the man is a fucking immigrant" - the judgment of the Employment Tribunal is that the Claimant's claim of race discrimination fails. Mr Wood did not refer to the Claimant, albeit that he used insulting and inappropriate language about immigrants. The Employment Tribunal finds that the comment by Mr Wood shows a mindset of Mr Wood regarding immigrants as being inferior and not really worthy of respect and also an ability by Mr Wood to make very poor choice of words. However, he did not discriminate or harass the Claimant on the ground of her race. She is not an immigrant. The Claimant was undoubtedly offended by what was said. In any event the judgment of the Tribunal is that this claim is out of time and there are no grounds to extend time on the basis of it being just and equitable.
4(b) The discussion in the office which took place - Tanya Wilson and probably other staff including the Third Respondent, did express strong views about "fucking immigrants" but again this was not race discrimination or harassment of the Claimant. The claim fails and is dismissed. In any event the claim is out of time and again there are no grounds to extend time on the basis of it being just and equitable.
4(d) June 2009 concerning the remark by Mr Ward "Why is it that white girls like black men?" and laughed - it is the unanimous judgment of the Employment Tribunal that this was a highly offensive racist remark in the presence of the Claimant and amounts to harassment. The remark by the Second Respondent, Mr Wood, goes to the core of his attitude and his complete failure to observe any of his own procedures and equal opportunities policies. The Employment Tribunal has accepted the Claimant's evidence. The claims against the First and Second Respondents of race discrimination by harassment are upheld. Regarding the question of whether the claim is in time, evidence is that this incident occurred in June 2009. If the incident was after 6 June 2009 it is within the three month time limit. In any event, if the incident was prior to 6 June, the unanimous judgment of the Employment Tribunal is that it is just and equitable to extend the time limit to give the Tribunal jurisdiction. The incident was part of a sequence of events. The act is linked with and reflects a continuous state of affairs so far as the Second Respondent, Mr Wood, is concerned in relation to remarks that he made to and in the presence of the Claimant.
4(g) The Claimant's claims of discrimination and racial and sexual harassment against the First and Second Respondent are upheld. As in the case of the allegations under paragraph 4(d) above, the conduct of Mr Wood during the meeting on 14 July was, undoubtedly, unwanted by the Claimant. Mr Woods' conduct as complained of was on the grounds of the Claimant's race and ethnic origin and on the grounds of her sex. The denial by the Second Respondent is rejected. The conduct of the Second Respondent did have the purpose of violating the claimant's dignity or of creating an intimidating, hostile, degrading, humiliating or offensive environment for the Claimant. It is the unanimous judgment of the Employment Tribunal that the Claimant's claims of racial and sexual harassment against the First and Second Respondents are upheld."
- Indirectly relevant is a reference to a further claim which was dismissed, where the Tribunal says there was no discrimination against the Claimant on the ground of her race (see paragraph 4(e)).
- What the Claimant seeks in this case is to bolt on the two unsuccessful index events to the two successful ones, so that she may go back to the Employment Tribunal, the Tribunal knowing now, of course, that £10,000 has been paid, and seek an increase above that figure. That is the purpose of today's appeal.
- The Claimant contends that the Tribunal did not make findings on continuing act as prescribed by Judge Ryan's order, but only on what is just and equitable. For the purposes of the appeal, she does not contest the finding that it was not just and equitable to extend time in her favour. What she does contend is that events 1 to 4 are part of a continuing act.
- The time for bringing a claim under the statute is three months, unless an act continues over a period of time, in which case it is three months from the last relevant event, if there is a series of events or from the ending of the regime in question. In this case, the mindset of Mr Ward, and the failure of the corporate Respondent to carry out and implement its equal opportunities policy, was a continuing act at all times in place. Support is to be found in the Judgment in favour of the Claimant in respect of index event 3, the June event.
- Mr Ward contends that the Tribunal erred in failing to take the broad approach to claims under the Race Relations Act. It is often forgotten that this is broader than simply protecting a person on the grounds of her race. For the purposes of a claim, the actual race of any person is irrelevant if it is made in the broader sense. If the Claimant's case succeeds, Mr Ward contends that there is sufficient material here for the EAT to make a decision without it being necessary to send it back to the Employment Tribunal.
- On behalf of the Respondents, Mr McNerney contends that the Tribunal made the correct decision and that it did not overlook the findings as to continuing act. He contends that the first two index events are not race-specific, yet he concedes that being an immigrant is a racial group within the Act. He concedes that this was offensive abuse, but it is not by reference to the Act.
- He contends that if we are against him, the only place this can be determined is before the Employment Tribunal again. The Tribunal was referred in detail to the statutory provisions in the written submissions of both counsel and insofar as it may be said that the Tribunal did not cite the law, it did so by incorporating by reference the submissions of counsel.
- The legal principles to be applied in this case fall into two parts. As to the substantive law, it is plain that a series of Judgments of the Court of Appeal indicate that on racial grounds is wider than on the grounds of his race (see for example Redfearn v Serco Ltd  IRLR 623, Weathersfield Ltd v Sargeant  IRLR 94 and Thomas and Others v Robinson.
- The law on harassment, applying both to sex and race claims, is as we have summarised above, by reference to the statute. As to the procedural matters, s.72 deals with the compromise of claims to Tribunals. Appeals from an Employment Tribunal lie to the EAT under s.21(1) of the Employment Tribunals Act, which covers both decisions of, and any matters arising in, an Employment Tribunal.
- The Employment Tribunals Act 1996 also provides the procedural mechanism for the adjudication of rights arising under the Race Relations Act. The doorway is opened by the latter Act for a complaint to be made to an Employment Tribunal under the former, and the trial of the case is at the Employment Tribunal.
- We prefer the submissions of Mr Ward. We will start in reverse order, because this is uncontroversial. The July event is accepted to be both race discrimination and race and sex harassment. There is no challenge to the fact that the use of the words in front of the Claimant constitute all three of those statutory torts. The Tribunal uses, on three occasions in this Judgment, the phrase "on the grounds of the Claimant's race". In our judgement that is, first, to fail to carry out the task Judge Ryan set for it and, secondly, is wrong, because it is plain that the race of the Claimant was not the central element in this case but the comments of Mr Wood which are of a racist nature.
- It does not matter what racial group the Claimant comes from, for she is entitled to be offended and to bring claims where she suffers as a result of any discriminatory language and conduct. Given the Tribunal found unimpeachably in favour of the Claimant on those matters, which started with the language used by Mr Wood, why does that not apply further back? In the Judgment itself, it is plain that this is a reflection of Mr Wood's ongoing approach to race.
- The finding on event 3, the June event, is also a reflection on what is at the core of Mr Woods' attitude on any of these matters and, again, the Tribunal found in favour of the Claimant. This is a race discrimination claim, and a claim for harassment. Again, the racial group of the Claimant was irrelevant.
- As we will show, when we look at index event 1, the Tribunal was inconsistent. The words used by Mr Wood "why is it that white girls like black men?" in index event 3 and, in similar terms, in index event 4, were held to be race discrimination notwithstanding that the Claimant is not a white girl. That may be obvious, since the statute protects a person against discrimination on the grounds of race, and not on the grounds of her race. The Tribunal came to the conclusion that this was completion of the statutory torts of race discrimination and racial harassment, in respect of event 3.
- The Tribunal looked at whether it was in time. It decided that if this event 3 in June had occurred prior to 6 June it would, of itself, be out of time but it was just and equitable to extend time. No point is taken by the Respondents against that finding. What is important is that the Tribunal went on to say that the incident was part of a sequence of events, linked to a continuous state of affairs. These were remarks Mr Wood made to and in the presence of the Claimant. Here the Tribunal had no difficulty in applying the continuing act jurisdiction.
- Its presentation of the law in paragraph 4.1 refers to extension of time being just and equitable, and Mr McNerney contends that that shows the Tribunal being alert to the jurisdiction on continuing acts. If that is so, the Tribunal has made a finding on this and so, at the very least, there is a continuing act as between the June and July events.
- We turn then to the subject of the appeal which is the April event. Here, the Tribunal committed the same error. It uses the phrase "on the ground of her race". That is to misconstrue the tramlines of Judge Ryan and to make no finding on the wider ground of her claim. It may be for that reason that it makes the obvious solecism. It says "she is not an immigrant". She does not have to be an immigrant to complain of language used of a customer that he is a "fucking immigrant". The Tribunal failed to apply the correct statutory test.
- Given Mr McNerney's concession that being an immigrant is in a racial group, this is plainly language of a racial nature which is discriminatory as against immigrants. The Tribunal had no difficulty in fixing Mr Wood with the view that immigrants are inferior and unworthy of respect, and that comment upset the Claimant.
- This, therefore, is a straightforward claim under the Weathersfield v Sargeant jurisdiction, and the Tribunal was wrong not to apply the broader approach to racial grounds. The Tribunal ought then to have considered whether this was a continuing act to be bolted on, on this footing to the in-time continuing act spanning the June and July events. The Tribunal did not make a finding on that either. It simply said the claim was out of time.
- In our judgement, this was a simple answer for the Tribunal to give. Having decided that Mr Wood made those remarks to or in the presence of the Claimant, which were events of race discrimination and racial harassment in June and July, it is hard to see why it would not consider the April event to be part of that regime. We accept Mr Ward's point that, at least in respect of these three matters, they are all the same. They are all of language demonstrating the contempt Mr Wood had for people of different racial groups, said in the presence of the Claimant.
- They are also illustrations of the failure by the Respondent, and by Mr Wood, to pay any attention to the equal opportunities policy which it said it had. This is indeed, to use Mummery LJ's language in Hendricks v Commissioner of Police for the Metropolis  IRLR 96, a continuing state of affairs.
- Then we turn to the second index event, of May. Given that Mr McNerney does not challenge the view that immigrants are a racial group, the fact that they are now "fucking illegal immigrants" goes no way to take the sting out of the remark. The difficulty for Mr McNerney is that the findings which we have cited above at 4(b), are de jure and can only be understood by reading paragraph 4(a). Since we are against him on paragraph 4(a), and have found error in the Tribunal Judgment, it follows that we do the same in respect of 4(b).
- It is to be noted that the original formulation of index event 2 was as to a conversation about "fucking illegal immigrants who come here to claim from the government and sponge from the system" but what survives is the finding that staff, including the Third Respondent, expressed strong views about "fucking immigrants". That is precisely the same language as was found to have been uttered by Mr Wood and so, faithful to Mr McNerney's adoption of 4(a) in support of 4(b), it must sink with it. These, then, are errors. We hold that the Tribunal failed to carry out its duties and has made errors of law.
- We turn then to the adjectival criticism of this case. Has it been stopped in its tracks by the agreement reached? The simple proposition advanced by Mr Ward is that the term in the agreement, which precludes the Claimant pressing on with her race discrimination claim, is void. Mr McNerney accepts that it is, insofar as the Claimant may now still go to an Employment Tribunal. Why can she not come here on appeal?
- Mr Ward's point is that the appeal is brought under the Race Relations Act. A term in the agreement seeks to preclude the Claimant taking any further steps under the Race Relations Act which includes an appeal under s.21 of the Employment Tribunals Act. Mr McNerney, on the other hand, says that the Act is specific. The appeal to the EAT is under the ETA 1996 and not under the RRA 1976.
- Some assistance is drawn from the Judgment of the EAT in Courage Take Home Trade Ltd v Keys  IRLR 427, where the existence of a void agreement did not prevent an appeal being raised by the Claimant in that case. This has to be a term by term approach, since the whole agreement is not void. It is only a term which seeks to preclude the enforcement of rights under the Race Relations Act.
- The correct approach is to distinguish the substantive from the adjectival law. Claims are brought under the substantive law, in this case the Race Relations Act, and the Sex Discrimination Act. The mechanism for enforcing those rights is in the statutory Tribunals. These are set up by the Employment Tribunals Act. At the same time as there is provision for first instance, so there is for second instance, the ET and EAT both appearing there. In the ordinary sense, we are hearing today a case brought under the Race Relations Act. We are hearing an appeal from proceedings arising in an Employment Tribunal and a decision of an Employment Tribunal made under the Race Relations Act.
- It would be extraordinary that since the Claimant is not precluded from enforcing her rights in the Tribunal, she should be precluded from enforcing those rights by way of an appeal. This makes no sense at all. Parliament plainly intended the separation of the substantive from the procedural. This hearing is in every sense the hearing of proceedings under the Race Relations Act. If it is necessary to say something about the Sex Discrimination Act, then the same is true of that. And so, in our judgement, there is no bar to our hearing the case today.
- Having identified errors, we canvassed with the advocates what the outcome would be, and we accept Mr Ward's submission that this case can be decided by us. As to continuing act, we have no doubt as to what the Tribunal's approach would be, certainly as between index events 1, 3 and 4. There is no need for us to look in a crystal ball, for there it is in the book. The Tribunal bolted together the remarks of Mr Wood for the purposes of the June and July events. It is a continuing act.
- We can see no other solution than that the April event is part of that mindset. He did not change his mind between April and June. There is no utility in sending this matter back. The only result is clear. We have paid careful attention to the features in Sinclair Roche & Temperley v Heard  IRLR 763 and [Mindimaxnox]() UKEAT/0225/10. This is a very simple matter, and the same goes for 4(b). This is not actually Mr Wood's speech, but it is his language. We have no doubt that, in this close community, the language used by the group of people on that occasion is signally reinforcing Mr Wood's attitude in the April event.
- The Tribunal has got the law right in respect of its decision on the July event, that effectively the racial group of the Claimant is not relevant. The same must be read across to the April and May events. Just as the Claimant was not an immigrant nor was she a white girl and so, applying what we hold to be uncontroversially the correct approach as to the fourth event to the first and second event, the inevitable result of a remission of this case to the Employment Tribunal would be that there were acts of race discrimination and racial harassment in the April and May events.
- The appeal is allowed.
Published: 10/02/2012 15:02