Appeal No. UKEAT/0419/09/JOJ

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 5 February 2010

Before

THE HONOURABLE MRS JUSTICE SLADE

MR B R GIBBS

MR T MOTTURE

SECRETARY OF STATE FOR WORK & PENSIONS (JOBCENTRE PLUS) (APPELLANT)

MR B WHYMENT McCARTHY (RESPONDENT)

Transcript of Proceedings

JUDGMENT

For the Appellant
MR DIJAN BASU (of Counsel)

Instructed by:
Messrs Field Fisher Waterhouse LLP Solicitors
27th Floor City Tower
Manchester
M1 4BD

For Respondent
MISS KERRY SMITH (of Counsel)

Instructed by:
Messrs Thompsons Solicitors
23 Princess Street
Manchester
M2 4ER

SEXUAL ORIENTATION DISCRIMINATION/ TRANSEXUALISM

SEX DISCRIMINATION: Burden of proof

The Employment Tribunal did not err in law in considering that the burden of proof shifted to the Respondent to establish a non-discriminatory reason for the treatment complained of. It would be adopting too technical an approach to the question of whether the Respondent treated the Complainant in the manner complained of on grounds of his sexual orientation to hold that the Tribunal was in error in considering how a comparator would have been treated when it evaluated the Respondent's explanation rather than at the earlier stage of determining whether the burden of proof had shifted to the Respondent.

The Decision of the Tribunal that the Respondent had not established a non-discriminatory reason for the treatment was not perverse.

1. This is an appeal by the Secretary of State for Work & Pensions from the judgment of an Employment Tribunal sent to the parties on 13 July 2009, who, by a majority, held that claims of direct sexual orientation discrimination and harassment on such grounds were well-founded. We will refer to the parties by their titles before the Employment Tribunal. The Claimant alleged that he had been discriminated against on the grounds of his sexual orientation in six respects. The Employment Tribunal's finding adverse to the Respondent was based on part of one only of those allegations. That allegation, on which the adverse finding was made, was that the Respondent had discriminated against the Claimant in the course of investigating a concern about his conduct. The parties will be referred to by their description in the Employment Tribunal: Claimant and Respondent.

1. The facts briefly stated are these. The Claimant was and is employed by the Respondent. At the material time in February 2007 he was based at the Rusholme Jobcentre. As part of his duties he dealt with benefit applications for young people between 16 and 18 years of age. On 17 February 2007 the Claimant's line manager received a telephone call from a Pete Lovatt from Connexions, a partner organisation dealing with under-18s. Mr Lovatt raised concerns referred to him by one of his advisers about a possible relationship between an under 18 year old customer and the Claimant. Mr Lovatt sent an email following his telephone conversation to Lisa Pritchard, the Claimant's line manager, which read as follows:

"The member of staff [that is the member of staff in Connexions who drew a matter to Mr Lovatt's attention] got the feeling that the client felt that his benefit application would be helped by his relationship with B (the claimant). It was not clear how intimate and to what extent sexual relations were involved."

1. Ms Pritchard informed her line manager of the matter. She, in turn, referred it to Sally Hopkins in the Human Resources department. Sally Hopkins, in turn, referred the matter to May Millward in the Human Resources Investigation Service.

1. Much turned before the Employment Tribunal on an email of 14 February 2007 from Ms Hopkins to Ms Millward. That email was referred to by the Employment Tribunal in its judgment at paragraph 10:

"One of our managers has been contacted by Connexions stating that they are concerned about one of their clients who has reported to them that one of our under 18 officers has made sexual overtones to him. The client is a 17 year old male (our Under 18s officer is an openly gay male) and is considered to be particularly vulnerable. The allegation seems to be along the lines that our officer has stated that this young man's benefit application might be helped by his relationship with the officer."

1. The Employment Tribunal found at paragraph 11 of their judgment that the allegation contained within Ms Hopkins' email was not sustained by the information which had been provided by Mr Lovatt. Ms Hopkins' account characterised the Claimant as the proactive predatory party, making advances to SH and offering inducements, whereas the vague concern that had been raised by Mr Lovatt alluded to a consensual relationship between the two.

1. The Employment Tribunal accepted Ms Pritchard's and Ms Ryan's evidence that SH's age and the inherent vulnerability of under-18 benefit applicants were relevant features in their decision making and actions. At first Ms Hopkins advised Ms Ryan that she should invite witnesses and the "victim" to interview meetings and then hold an interview with the Claimant. The Claimant was suspended from his duties of advising under-18s. He was told that a complaint had been received from Connexions.

1. The next material step was that in an email on 2 March 2007 Ms Millward advised:

"care needs to be taken that the claimant does not feel that he is being discriminated against. The issue should be treated in the same way that management would treat a similar issue concerning male/female or female/female parties. If management feels that the issue needs to be investigated I think they would first of all need to get more information from the client himself and then re-assess."

1. On 5 March 2007 Ms Hopkins emailed Ms Ryan advising her to interview SH and stating she did not view the matter as lightly as Ms Millward. However, Ms Hopkins changed her approach and by 12 March 2007 she suggested:

"that we conduct an investigatory meeting with Barry (before interviewing SH) to get his version of events. This minimises the risk of SH forewarning Barry if they do actually have some kind of relationship and if we do then decide it is worth interviewing SH. I have a feeling that this is going to come down to a bit of a slap on the wrist for Barry and a reminder about standards of behaviour."

1. The Tribunal found that acting on this advice, contrary to that of Ms Millward that information should be sought from SH as a first step, Ms Pritchard then made arrangements to hold an investigatory interview with the Claimant. An investigatory interview meeting was scheduled for 13 April 2007. At that interview the Claimant denied that he had contact with SH outside work. On 17 April 2007 SH was interviewed. He denied ever having made allusions to a relationship with the Claimant and on 20 April 2007 the Claimant was informed that no further action would be taken. The Employment Tribunal expressed themselves satisfied, and the Respondent accepted, that there was no substance in the concerns raised by Mr Lovatt.

1. The Employment Tribunal found that Ms Pritchard acted on the advice of the HR adviser, Ms Hopkins, and the guidance of Ms Ryan in deciding to interview the Claimant first before SH was interviewed. The Employment Tribunal was satisfied that the reason for interviewing the Claimant before approaching SH was to avoid the Claimant being alerted by SH. This concern arose from a belief on the part of Ms Hopkins that the Claimant had been involved in contact with SH. Having considered the evidence produced before them at paragraph 32:

"The majority of the Tribunal did not accept that the decision was based on concerns for SH's vulnerable status. That explanation, proffered by Ms Pritchard and Ms Ryan, did not withstand scrutiny, it being more likely that concern for SH's vulnerable status would have led to swift action to obtain a clear account from the alleged victim as to what had actually occurred. …The more likely and the real reason, as the majority of the Tribunal found, was simply that those involved in the decision making process believed that the claimant had had a prior relationship, or at least, contact with SH at the Village and that they did not want the claimant alerted to their knowledge of his contact with SH in advance of the investigatory meeting."

1. At paragraph 33 the Tribunal record that,

"The minority of the Tribunal, whilst accepting that Ms Ryan and Ms Hopkins were acting on the assumption that the claimant had had some form of social contact or relationship with SH, found that concern about SH's vulnerability also played a part in the decision to interview the claimant first."

1. The Tribunal was unanimous in its conclusion that the material before it was sufficient to shift the burden of proof onto the Respondent to show the reason for the treatment, which in this case was interviewing the Claimant before interviewing SH, was not on grounds of the Claimant's sexual orientation. At paragraph 60 the Tribunal held,

"The Tribunal considered that the decision to conduct the investigatory process contrary to DWP established procedure, contrary to the advice of Ms Millward and, as found by the HRIS investigation, contrary to the rules of natural justice, together with Ms Hopkins misinterpretation of the initial concern, amounted to facts proved by the claimant from which the Tribunal could conclude, in the absence of an adequate explanation, that the manner in which the investigation was conducted amounted to less favourable treatment of the claimant on the grounds of his sexual orientation."

1. The reasons given by the minority member of the Tribunal for his dissent from the decision to uphold the claim made it clear that he joined the Employment Judge and the other member in concluding that the Claimant had proved facts from which, in the absence of an adequate explanation, the Tribunal could conclude that he had been subjected to less favourable treatment or harassment on the grounds of his sexual orientation. Where the minority parted with the majority was in accepting the reason advanced by the Respondent for the decision to interview the Claimant before interviewing SH. At paragraph 61 of its judgment the Tribunal decided:

"The burden of proof shifted to the respondent to provide an adequate explanation, untainted and unaffected by the respondent's knowledge of the claimant's sexual orientation and, for the reasons explained below, the majority of the Tribunal did not accept the reason advanced; that it involved a particularly vulnerable customer and, therefore, found that it had not proved an adequate explanation. The majority of the Tribunal found that the genuine reason arose from the respondent's knowledge of the claimant's sexual orientation and stereotypical assumptions based upon that knowledge as to the likely behaviour of the claimant, specifically, and gay men, generally."

1. At paragraph 64, the majority held that they were satisfied that:

"… based on their assumption about the claimant's conduct, Ms Hopkins and Ms Ryan decided not to alert the claimant, in advance, to what they believed was their discovery of his contact with SH, departing from established DWP procedure and the rules of natural justice, as found by the HRIS [that is Human Resources Investigation Service] investigation, and to interview the claimant without having taken any steps to ascertain from the alleged victim, SH, himself, what had taken place and the nature of any concern."

1. Mr Basu, counsel for the Respondent, criticises the majority for holding that:

" … on the balance of probabilities, that the respondent would not have made the same stereotypical assumption about a heterosexual man, about whom a concern had been expressed by a partner organisation that he had had social contact or a relationship with a female U18 client. It followed, therefore, that in the hypothetical situation identified, the respondent would not have had reason to depart from established DWP procedure and would have sought to interview the client to elicit the nature of any concern being raised, first"

1. The extensive grounds of appeal amount to a contention that the decision of the Employment Tribunal that the Respondent discriminated against the Claimant on the grounds of his sexual orientation was perverse. That perversity is constituted, it is alleged, first by erroneously shifting the burden of proof on to the Respondent to establish a non-discriminatory reason for interviewing the Claimant first before SH was interviewed. As part of that perversity attack the Tribunal's approach to identifying a hypothetical comparator is criticised. First it is said that the Tribunal appear to have considered the comparator issue at the wrong stage of their inquiry; that they should have considered it at the first stage of the two#stage process which they appear to have adopted in considering whether there was a sufficient case made out by the Claimant so as to shift the burden of proof on to the Respondent. Secondly, it is said that there was insufficient material before the Tribunal from which it could conclude that a hypothetical comparator, namely a heterosexual male having a relationship with an under-18 client, would have been treated differently. It is said that the majority was perverse in rejecting the Respondent's reason for interviewing the Claimant first before interviewing the comparator.

1. Mr Basu made it clear that the Respondent does not seek to challenge the finding that the Claimant suffered a disadvantage in the circumstances of this case by being interviewed first before SH was interviewed. Mr Basu contends that at the heart of the Tribunal's error was its finding in paragraph 12 of the decision that the misinterpretation and re-characterisation of Mr Lovatt's concern by Ms Hopkins required an explanation. Mr Basu contends that the Employment Tribunal erred in inferring that Ms Hopkins described matters, as she did in her early email, because of the sexual orientation of the Claimant. He submits that the view that the Tribunal took as to what it conceived to be a misinterpretation and re-characterisation of Mr Lovatt's concern and the reason for such misinterpretation and re-characterisation coloured the Tribunal's view of the evidence thereafter.

1. Also, as has been referred to, Mr Basu contends the Tribunal approached the issue of a hypothetical comparator at the wrong stage and with no factual basis upon which to conclude that such hypothetical comparator would have been treated differently from the way that the Claimant was treated. So far as reliance that the Tribunal placed on departing from Department of Work and Pensions disciplinary procedure is concerned, this was a unique situation. This was not a situation of dealing with a specific complaint and that the procedure itself shows that, for certain types of complaint, an investigation takes place before the equivalent of an interview with SH would have taken place.

1. Ms Kerry Smith, for the Claimant, contends that this appeal is a pure perversity challenge. There is a high hurdle to be met by an Appellant who seeks to overturn a Tribunal decision on grounds of perversity and this Tribunal did not err in law. There was material before it which supported its conclusion and the rejection by the majority of the Respondent's reasons for interviewing the Claimant before SH.

1. Ms Smith contends that there was evidence before the Tribunal to support its conclusion, constituted not just by Ms Hopkins' first email in which she made reference to an openly gay man but the actions and exchanges thereafter. These included the Respondent changing their procedure on the investigation that took place into the concern regarding the Claimant on the basis that SH may alert him to the fact that an investigation was to be made into a suspected relationship. Further, it is said that there was evidence to support the conclusion that the Respondent proceeded on the basis of an assumption that a relationship between the Claimant and SH existed and that the Respondent departed from procedure as found by the HRIS discussion.

1. An Appellant seeking to make a perversity challenge to a decision of an Employment Tribunal faces a very high hurdle. This is something well recognised by those who appear before this Employment Appeal Tribunal and beyond to other appellant courts. We think it is worth reminding ourselves of the passage in Crofton v Yeboah [2002] IRLR 634 at paragraph 12 in which Mummery LJ said:

"12. When the principal ground of appeal is, as here, perversity of the decision of the fact-finding tribunal, there is an increased risk that the appellate body's close examination of the evidence and of the findings of fact by the Employment Tribunal may lead it to substitute its own assessment of the evidence and to overturn findings of fact made by the Employment Tribunal. Only the Employment Tribunal hears all the evidence first hand. The evidence available to the Employment Appeal Tribunal and to the Court of Appeal on an appeal on a question of law is always seriously and incurably incomplete. Much as one, or sometimes both, of the parties would like it to be so, an appeal from an Employment Tribunal is not a re-trial of the case. The scope of the appeal is limited to consideration of questions of law, which it is claimed arise on the conduct of the proceedings and the decision of the Employment Tribunal. The legal points must, of course, be considered in the context of the entirety of the proceedings and the whole of the decision, but with an awareness of the limitations on the court's competence to question the evidential basis for findings of fact by the Employment Tribunal. It is a rare event for the appellate body to have all the documents put in evidence in the Employment Tribunal. No official transcript of the oral evidence exists. If an order is made for production of the chairman's notes, it is usually on a selective basis, related to the particular grounds of appeal, which should always be particularised on a perversity challenge. Most important of all, none of the witnesses give oral evidence on an appeal."

1. As for the reference made in the course of argument to the judgment of the Court of Appeal in Igen v Wong [2005] IRLR 258, we did not understand Mr Basu to be making a distinct submission on error of law by the Tribunal in regard to at what stage of its inquiry it considered the question of how a hypothetical comparator may have been treated. Employment Tribunals are not required to approach discrimination cases in two stages.

1. The essential question is whether the Respondent treated the Complaint in the way complained on prohibited grounds. We consider it would be adopting too technical approach to undermine a Tribunal's decision on the basis that it may have considered how a comparator would have been treated at the second explanation stage of the inquiry. This Tribunal plainly considered, unanimously, that there was sufficient evidence before them to cast the burden on to the Respondent to establish that the reason for the treatment was a non-discriminatory reason. This point was pursued by Mr Basu as part and parcel of his argument on perversity of the Tribunal's decision. Whilst we may not have come to the same decision as the majority of this Employment Tribunal, we are not satisfied that the decision of the Tribunal is perverse. Accordingly, this appeal is dismissed.