Woods v Pasab Limited [2012] EWCA Civ 1578

Appeal by claimant against reversal of ET decision that she had been dismissed for making an implied complaint of discrimination but where the respondent instead believed the claimant herself had made a racist remark. Appeal dismissed.

The claimant, a Muslim, worked for the respondent pharmacy, whose pharmacist and managing director were Sikhs. The pharmacist alleged that the claimant had made a comment that the company were effectively 'a little Sikh club that only looked after Sikhs'. The claimant denied making the comment, but was dismissed after a disciplinary hearing, ostensibly on the grounds of poor timekeeping and failure to follow the company's absence reporting procedure. The ET found in the claimant's favour as, broadly, the comment implied that the claimant was alleging that people who were not Sikhs were treated less favourably which was an allegation of direct discrimination under the RRA 1976 and the respondent at least suspected that the claimant had alleged less favourable treatment. That decision was overturned in the EAT who found that the ET had erred by inferring that there had been a complaint of religious discrimination and then imputing that inference to the respondent. If the comment was viewed, not as a protected act but an offensive racist comment by the respondent, then the reason for dismissal was not that the claimant had done a protected act but some other feature genuinely separable from the implicit complaint of discrimination.

In this judgment Hallett LJ reviews the facts and the reasoning of both the ET and the EAT.  She rejects the claimant's submission that, in the absence of an express finding that the claimant had been dismissed for making a racist remark the EAT was bound to conclude that the reason why she was dismissed was for a protected act (ie the implied complaint of discrimination), as the continuing theme of the ET's judgment was that the respondent believed the remark was racist and she would have dismissed the claimant for that alone. She therefore finds that the EAT's analysis was correct: it had not substituted its own findings of fact but instead had "disagreed on the logical consequences that flowed from them."
Case No: A2/2012/0427

Neutral Citation Number: [2012] EWCA Civ 1578




Royal Courts of Justice

Strand, London, WC2A 2LL

Date: Wednesday 24th October 2012







WOODS (Appellant)

- and -


(DAR Transcript of WordWave International Limited
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Mr Thomas Rochford (instructed by The PDA Union) appeared on behalf of the Appellant.

Mr Edward Legard (instructed by *Natwest Mentor Services) appeared on behalf of the Respondents*.


Lady Justice Hallett:

  1. This is an appeal by Ms Woods, the claimant, against a decision of the Employment Appeal Tribunal (the "EAT") of 2 February 2012. They overturned a judgment in her favour given by the Employment Tribunal (the "Tribunal"). The Tribunal had found that the appellant's complaint of victimisation under Regulation 4(1)(d) of the Employment Equality (Religion and Belief) Regulations, ("the Regulations") was well founded. At the same time it dismissed her complaints of direct discrimination and harassment. The appellant seeks an order reinstating the Tribunal's decision and the remedy award. In the alternative, she seeks an order that the issue as to "the reason why" she was dismissed be remitted to the Tribunal.
  1. The facts can be relatively shortly stated. The appellant, who describes herself as "white Irish" and is a practising Muslim, was recruited by a Mr Palmar, the Jhoots pharmacy manager, to work as a trainee pharmacist at the first respondent's pharmacy in Birmingham. The workforce at the pharmacy is multi-faith and multi-racial. Within a couple of months of the appellant's starting in August 2009 problems arose.
  1. The appellant was dissatisfied with her training and her deployment to a branch which she considered too restricted in its operation. She felt she had too little allotted time to study and she was uncomfortable about the fact that Mr Palmar and the trainee dispenser, a Mr Singh, were talking Punjabi, with which she was unfamiliar. They also spoke about religion. Unbeknown to the respondents, she complained to her professional body, the Royal Society, about this on 9 November 2010. For his part, Mr Palmar was concerned about her timekeeping and her attitude.
  1. On 10 November 2009 the respondent's sickness absence policy was altered. The Tribunal found that, contrary to her evidence, the appellant had been shown this new policy and signed it. On 30 November 2009 there was a further conversation between the appellant and the Royal Society during which the appellant complained of her treatment by Mr Palmar. She alleged she was being pressured to work during a Muslim religious festival. This complaint may have been premature, because, in the result, she did not have to do so.
  1. The appellant declined an offer from the Royal Society to intervene on her behalf. The same day Mr Palmar expressed concerns regarding poor timekeeping by the staff to the second respondent, Mrs Sandip Jhooty, who is responsible for human resources. Mrs Jhooty told Mr Palmar to ensure strict compliance with contractual working hours by both the appellant and Mr Singh and to warn them of possible disciplinary action should there be no improvement.
  1. On 7 December 2009 Mr Palmar met with both the appellant and Mr Singh and told them to comply with their working hours or face the prospect of disciplinary action. There was a discussion about arrangements for the appellant to pray at work. Mrs Jhooty insisted that the appellant reduce her lunch break by 30 minutes to allow for the prayer breaks. The appellant regarded this as unfair because her prayers did not take as much as 30 minutes during the working day. The meeting became heated, especially on the appellant's part. The Tribunal found as a fact that during that meeting the appellant described Mr Palmar and the company as "twofaced"; that the company was "a crap company and a crap pharmacy" and that Mr Palmar and the respondents were effectively "a little Sikh club that only look after Sikhs". Mr Palmar considered the last remark to be racist and was very upset by it. The Tribunal concluded, however, that the remarks were simply borne out of the appellant's frustration and related to the fact that she had been asked to restrict her lunch break. They declared that, although the appellant denied using the words, she had used them because she felt she was being treated less favourably on religious grounds.
  1. The appellant has not appealed the finding that she made the remark about "a little Sikh club". Mr Palmar relayed what had happened to Mrs Jhooty. She was shocked and, as the Tribunal found, "incensed". She rang the appellant and informed her that she was suspended. The appellant rang the Royal Society again on 8 December complaining of a number of matters.
  1. On 8 December Mrs Jhooty wrote to the appellant saying the reasons for her suspension were "racist and abusive" comments. She was required to attend a meeting with Mrs Jhooty the following day, the 9 December 2009. At that meeting the appellant denied making the "little Sikh club" comment. She raised a number of concerns, including the use of the Punjabi language in her presence. She claimed that Mr Palmar had made inappropriate comments in her presence about religion and politics. Mrs Jhooty repeated that the appellant should shorten her lunch break because of the amount of time she required for prayer.
  1. Later the claimant was to write to Mrs Jhooty describing her understanding of the meeting on 9 December 2009. She understood that the meeting was to address:

"whether or not I made a comment describing Jhoots as a 'little Sikh club who only look after their own people'. You made it clear to me that this was a racist comment and the allegation being made was that I was a racist."

  1. Mrs Jhooty investigated in her capacity as head of human resources,(albeit the Tribunal were not very impressed by her skills in that area). Mr Palmar denied that he had said or done anything inappropriate in the presence of the appellant and he appears to have been supported to a degree by Mr Singh. Mrs Jhooty preferred the account of Mr Palmar to that of the appellant. She remained unaware of what the appellant had told the Royal Society.
  1. The equivalent of a disciplinary meeting took place on 14 December 2009. The appellant was dismissed at the end of that meeting, ostensibly for poor timekeeping and failure to follow procedures. In her letter of the same date Mrs Jhooty did not give a specific reason for the dismissal. Where relevant she said this:

"I am writing to advise you that your employment with the Company was terminated on 14th December 2009.

You were spoken to on 9th December 2009 regarding:

• Your poor timekeeping record

• Your failure to follow the absence reporting procedure."

  1. In the next two paragraphs she referred to those specific complaints. In the final paragraph she said this:

"During that meeting it is alleged you made a racist comment describing Jhoots as 'a little Sikh Club who only look after their own people'. I met with you to investigate the allegation (you denied making the comments) and you made a number of counter allegations regarding your treatment, none of which you had raised prior to the investigation meeting about your timekeeping and attendance. I have conducted a thorough investigation into each of your allegations and conclude there is no evidence of any religious or racist discrimination against you. Indeed, the evidence clearly demonstrates that the Company and your manager have fully supported your right to pray at work."

  1. The appellant began proceedings in the Employment Tribunal claiming direct discrimination and victimisation. Initially, she made a number of allegations against several employees of Jhoots, but many were abandoned, leaving just Mrs Jhooty and the company, Jhoots Pharmacy, as defendants. Initially she did not allege victimisation on the basis of "the little Sikh club" remark because she denied making it. On the morning of the hearing, however, counsel for the appellant, Mr Rochford, developed what the EAT described as an ingenious argument, namely that if, which was denied, she made the remark, the remark constituted a complaint of discrimination and a "Protected Act" within the meaning of regulation 4 of the Regulations.
  1. Ultimately this complaint became the only basis of the Tribunal's decision in the appellant's favour. I turn to that decision. The relevant findings of fact for our purposes appear during the course of the Tribunal's narrative in paragraphs 38 to 40 and then again at 62. In paragraph 38 the Tribunal acknowledged what they described as Mrs Jhooty's "frank admission" that her decision to dismiss was:

"…influenced by the fact that she believed the claimant had made a racist comment regarding Jhoots being 'a little Sikh club' and she told us that she would have dismissed the claimant for that alone."

  1. In paragraph 39 they continued:

"She also told us that in the absence of the comment regarding the 'Sikh club', she would also have disciplined and dismissed the claimant for poor timekeeping and failure to follow the absence reporting procedure. We reject that evidence."

  1. The Tribunal then go on to explain why they rejected that evidence. It is absolutely clear from the terms in which they do so that they rejected Mrs Jhooty's account that she would also have disciplined and dismissed the complainant for poor timekeeping and failure to follow procedure.
  1. In paragraph 40 importantly the Tribunal found as follows:

"We find that Mrs Jhooty was so incensed by the claimant's reported comment about Jhoots being a 'little Sikh club' that, having heard it and having decided immediately that the claimant had said this, she then shut her mind to all other issues raised by the claimant and determined that the claimant should leave the respondent's employment."

  1. In other words, the Tribunal found Mrs Jhooty dismissed the appellant because she believed the appellant had made a racist remark. Mr Rochford valiantly tried to persuade us the Tribunal did not explicitly make such a finding but to my mind there can be no doubt.
  1. Later in the judgment the Tribunal analysed the "little Sikh club" comment in a little more detail and they decided that implicit within it was an allegation by the appellant that the respondents had treated non Sikhs less favourably than Sikhs. They said this at paragraph 60:

"We therefore consider that [the claimant] has established that Mrs Jhooty at least suspected that the claimant had alleged that Jhoots, the 1st respondent, treated her, as a non-Sikh, less favourably than it treated Sikhs. Indeed, Mrs Jhooty believed that the claimant had made this comment. We find that Mrs Jhooty did treat the claimant less favourably than she would treat others who had not made such a remark."

  1. In the concluding remarks of that paragraph they find:

"Although the claimant's dismissal was said to be due to bad timekeeping and failure to follow the absence recording procedure, we find that no disciplinary action would have been taken at that point in the absence of the claimant making the 'little Sikh club' comment. It was therefore the reason for the disciplinary proceedings and dismissal which followed."

  1. At paragraph 62 the Tribunal found:

"We accept, therefore, that the claimant has established that she made (or was suspected to have made) a complaint of direct religious discrimination under regulation 3 of the 2003 regulations in relation to the 'little Sikh club' comment, and that she was treated less favourably by both the respondents by being disciplined and dismissed by reason of making that comment. The claimant has established facts from which we could conclude that the respondents have victimised her under regulation 4 of the 2003 regulations. The respondents have not proved that they did not. We do not consider that Mrs Jhooty believed that the complaining about her treatment on the grounds of her race rather than her religion by making the comment in question, given the context in which it was made (as Mrs Jhooty was aware from the email of 8 December from Mr parmar, it was made just after the discussion about the restriction of the claimant's lunch break to account for prayer time) but if we are wrong about that, and Mrs Jhooty believed the claimant was complaining about less favourable treatment on grounds of her race, Mrs Jhooty's actions would still amount to victimisation under Section 2(1) of the 1976 Act."

  1. At a later remedy hearing the appellant was awarded £34,748.21, the irony being, as far as the respondents are concerned, that the appellant has been awarded nearly £35,000 on the basis of a remark that she denies ever making and on the basis that she alleged discrimination of a kind that has been found not to exist. There was an additional award of two weeks' pay for failing to permit the appellant to be accompanied to the dismissal hearing and there is no appeal from that part of the award.
  1. The respondents advanced a number of grounds of appeal before the EAT, but the only ground upon which they adjudicated was "the reason why". His Honour Judge Peter Clark, giving the judgment, analysed succinctly, but accurately the basis of the decision below:

i) the appellant was dismissed because Mrs Jhooty was incensed by the "little Sikh club comment";

ii) implicit in the remark was an allegation of unfavourable treatment amounting to direct discrimination;

iii) Mrs Jhooty at least suspected that the appellant had alleged that the first respondent treated her less favourably than Sikhs;

iv) the "little Sikh club" remark was not a generalisation about all Sikhs but referred to her own experience and was not a racist remark;

v) the "little Sikh club" comment was neither false nor made in bad faith;

vi) the appellant had established she was dismissed because she made, or was suspected to have made, a complaint of direct religious discrimination.

  1. At paragraph 19 the EAT found as follows:

"Where we accept, on Mr Legard's submissions, that the Tribunal went wrong in law was to overlook that finding [the finding that the appellant had been dismissed in relation to the racist comment]. Whilst the reason why a person acted as she did is a question of fact, it is not open to a Tribunal to accept the subjective reason put forward by the alleged discriminator as a matter of fact and then to impute some different reason to her based on the Tribunal's objective assessment of a remark and its meaning."

  1. The EAT reasoned that, on the Tribunal's own findings, the appellant was not dismissed because she was claiming to be the victim of discrimination. The regulations did not, therefore, apply. They derived considerable support for their approach from the decision of the House of Lords in The Chief Constable of West Yorkshire Police v Khan [2001] UKHL 48 in which the effect of similar regulations was considered..
  1. The most significant regulation for our purposes is regulation 4. It reads:

"4.—(1) For the purposes of these Regulations, a person ("A") discriminates against another person ("B") if he treats B less favourably than he treats or would treat other persons in the same circumstances, and does so by reason that B has—

(a) brought proceedings against A or any other person under or by virtue of these Regulations;

(b) given evidence or information in connection with proceedings brought by any person against A or any other person under or by virtue of these Regulations;

(c) otherwise done anything under or by reference to these Regulations in relation to A or any other person; or

(d) alleged that A or any other person has committed an act which (whether or not the allegation so states) would amount to a contravention of these Regulations,

or by reason that A knows that B intends to do any of those things, or suspects that B has done or intends to do any of them."

  1. In Khan the House of Lords considered a similar provision in the Race Relations Act of 1976. Mr Khan had sued his Chief Constable for refusing to supply him with a reference. Had it not been for pending race discrimination claims brought by Mr Khan against the Chief Constable, the Chief Constable would have provided the reference. Mr Khan was therefore "treated less favourably in relevant circumstances". However, the reason the Chief Constable declined to provide a reference was not that Mr Khan had brought the proceedings but because the proceedings were still live and the Chief Constable might be prejudiced by the content of any reference he supplied.
  1. Lord Nicholls of Birkenhead observed at paragraph 29:

"Contrary to views sometimes stated, the third ingredient ('by reason that') does not raise a question of causation as that expression is usually understood. Causation is a slippery word, but normally it is used to describe a legal exercise. From the many events leading up to the crucial happening, the court selects one or more of them which the law regards as causative of the happening. Sometimes the court may look for the 'operative' cause, or the 'effective' cause. Sometimes it may apply a 'but for' approach. For the reasons I sought to explain in Nagarajan v London Regional Transport [2001] 1 AC 502, 510-512, a causation exercise of this type is not required either by section 1(1)(a) or section 2. The phrases 'on racial grounds' and 'by reason that' denote a different exercise: why did the alleged discriminator act as he did? What, consciously or unconsciously, was his reason? Unlike causation, this is a subjective test. Causation is a legal conclusion. The reason why a person acted as he did is a question of fact."

  1. At paragraph 77 Lord Scott observed under the heading "The Causation Point":

"Was the reference withheld "by reason that" Sergeant Khan had brought the race discrimination proceedings? In a strict causative sense it was. If the proceedings had not been brought, the reference would have been given. The proceedings were causa sine qua non. The language used in Section 2(i) is not the language of strict causation; the words "by reason" suggest to my mind that is the real reason, the core reason, the causa causans, the motive for the treatment complained of that must be identified."

  1. Mr Rochford advised caution in the use of the word "motive" in the final sentence of that passage given the scope for unconscious as well as conscious discrimination. That brings me to Mr Rochford's grounds of appeal. There are several, but many could be combined. His grounds 1 to 3 focus on the reasons given by the Employment Appeal Tribunal for rejecting the possibility that a "protected act" had wholly or substantially played a part in the appellant's dismissal.
  1. He contends that the Tribunal must have found as a fact that Mrs Jhooty believed, or at least suspected, that the appellant had alleged that the first respondents had treated her, a non-Sikh, less favourably than it had treated Sikhs and that is the reason why she dismissed her. Mr Rochford conceded there is no explicit finding to that effect but argued it is implicit in the passages to which I have already referred. He also asked us to note that the Tribunal found as a fact that implicit within the "little Sikh club comment" was an allegation by the appellant that people who were not Sikhs were treated less favourably than those who were.
  1. Mr Rochford maintained that in the absence of an express finding that Mrs Jhooty dismissed the appellant because she thought the appellant had made a racist remark, the EAT was bound to conclude the reason why the appellant was dismissed was a complaint by her of discrimination, a protected act. The EAT was not entitled to reject the Tribunal's analysis of how Mrs Jhooty regarded the comment and substitute its own findings. The Employment Tribunal is the fact-finding body, not the Employment Appeal Tribunal.
  1. The difficulty I have with that argument is that when one reads the judgment of the Tribunal as a whole, as Mr Rochford invited us to do, the continuing theme throughout is that Mrs Jhooty believed the appellant's remark was racist. This is what so upset Mr Palmar and it is what made Mrs Jhooty so angry. She was incensed by the suggestion. The contemporaneous documentation (including the appellant's own letter) supports this interpretation. All agreed: the appellant had been accused of making a racist remark.
  1. The Employment Tribunal accepted Mrs Jhooty's frank admission that she would have dismissed on the basis of the "racist" remark alone. This coupled with their rejection of her evidence that poor conduct played a part in the dismissal leaves no room for doubt, in my view, that they have in effect found that Mrs Jhooty dismissed the appellant by reason of the racist remark. Thereafter,

"shut her mind to all other issues raised by the claimant and determined that the claimant should leave the respondent's employment."

  1. Given those findings, I fail to see how it can be said that the reason why the appellant was dismissed was because she was claiming the Respondents were themselves racist or discriminatory. It was the other way round. The appellant was dismissed because it was thought she was a racist. A "Protected Act" played no part, certainly no substantial part in the dismissal.
  1. Had the Tribunal found as a fact that the reason why Mrs Jhooty had dismissed the appellant was because she herself had been accused of being racist one might have expected to see an analysis of Mrs Jhooty's thought process both conscious and unconscious. One would have expected to find in the judgment a clear rejection of her evidence that she thought it was the appellant who had behaved in a racist fashion by making a racist remark. One would have expected an analysis of the extent to which a complaint of discrimination played in the dismissal. There is none.
  1. Therefore, to my mind, the Employment Appeal Tribunal was correct in its analysis. It did not substitute its own findings of fact. On the contrary, it accepted and adopted them. It disagreed on the logical consequences that flowed from them. The Tribunal's reasoning was flawed. I am satisfied therefore there was an error of law on the part of the Employment Tribunal which stood to be corrected.
  1. As far as grounds 5 and 6 are concerned, Mr Rochford submitted that if Mrs Jhooty failed to recognise the comment for what the Tribunal found it to be, namely a protected act, the appellant was still entitled to succeed because the employer's thought process does not need to be conscious. A number of decisions of appellate courts support the contention that any Tribunal assessing the reasons why an employee has been dismissed must be bound to consider the possibility not only of conscious discrimination but also unconscious discrimination. The true reason why someone has been dismissed may not always be obvious. Some kind of analysis may well be required.
  1. However, I am satisfied that in the light of my approach to his grounds 1- 3, this complaint must also fail. The Tribunal's findings clearly exclude the possibility both of conscious and unconscious reliance upon the protected act as a reason for the dismissal.
  1. As to ground 7, this would only arise if Mr Rochford succeeds in persuading the court that the analysis of the Employment Appeal Tribunal is wrong. It relates to the question of the shifting of the burden of proof. He has not succeeded in persuading me the EAT was wrong and I do not need to consider further.
  1. Finally, Mr Rochford argued that if we were to find that Mrs Jhooty's "thought process" is the issue and the Tribunal failed to make a finding as to this, the appropriate disposal of the appeal is to remit the issue to the Tribunal for determination. He repeated that the EAT is not a fact-finding Tribunal and is not entitled to substitute its findings as to how Mrs Jhooty viewed or did not view the "little Sikh club" remark. He referred us to the decision in Dobie v Burns International Security Services (UK) Ltd [1984] IRLR 329.
  1. In many circumstances it may be appropriate to remit a fact-finding exercise to the appropriate fact-finding Tribunal. However, as I have already indicated there are no more facts to be found. There is no need to remit. The whole of the Tribunal's judgment is premised on the basis that Mrs Jhooty dismissed the claimant because she thought the appellant had made a racist remark. She did not dismiss the appellant consciously or unconsciously because of a protected act.
  1. The errors in the Employment Tribunal's reasoning, as it seems to me, were threefold: 1) it failed to comply with the Khan principles 2) it attributed to Mrs Jhooty its own understanding of the disputed comment; and 3) it made an unwarranted leap from that understanding to a finding of victimisation. The appellant was dismissed because she made the remark, and in a strict causative sense the appellant was dismissed because she made a remark which the Tribunal considered objectively to be a complaint of discrimination. However, that was not in reality the reason why Mrs Jhooty acted as she did.
  1. For those reasons, I prefer the analysis and approach of the Employment Appeal Tribunal. It was sound in law and logic and relied on the facts as found by the Employment Tribunal itself. The Employment Tribunal's reasoning was flawed. I would dismiss the appeal and in those circumstances I do not need to deal with the respondent's notice.

Lord Justice Etherton:

  1. I agree

Dame Janet Smith:

  1. I also agree.

Order: Appeal dismissed

Published: 10/01/2013 16:43

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