Appeal No. EAT/36/96

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 4 November 1996

Before
THE HONOURABLE MRS JUSTICE SMITH
MR R SANDERSON OBE
MRS R A VICKERS

MR A J SHEHAN	APPELLANT

BERNHARDT UPHOLSTERY LTD	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MS K MONAGHAN
(of Counsel)
Mr J Phipps
Barton Neighbourhood Centre
Underhill Circus
Headington
Oxford
OX3 9LS	
For the Respondents	NO APPEARANCE BY OR ON
BEHALF OF THE RESPONDENTS	

	MRS JUSTICE SMITH:	This is an appeal from the decision of an Industrial Tribunal sitting at Reading on 7 November 1995.  The Tribunal rejected the Appellant’s complaint of racial discrimination.  

	The Respondents are not present at today’s hearing of the appeal.  The Respondent Company is in liquidation.  The appeal proceeds because the Appellants have reason to believe, upon enquiry, that the liquidation may not have been bona fide and they are hopeful that, if this appeal is successful, there may remain some prospect of recovering compensation notwithstanding the liquidation.

	The case presented by the Appellant to the Tribunal was that, during the course of his brief employment with the Respondents, between April and June 1995, he had been the victim of a number of racist remarks allegedly made by Mrs Maria Perry, his supervisor.  He also alleged that, when he had complained of these racist remarks to Mr Atack, the Managing Director, Mr Atack had taken no action with regard to his complaints and had subsequently victimised him and dismissed him.  By their Notice of Appearance the Respondents denied any discrimination.

	The Respondents were a comparatively new organisation employing only about six employees including two Directors.  The Appellant is an Arab, an Iraqi national, but has lived in the United Kingdom for the last 16 years.  He was the only employee of the Respondents who came from an ethnic minority.  His job at the outset was either that of cutter or trainee cutter.  The Respondents were furniture manufacturers and it was part of their activity to cover armchairs and sofas with upholstery fabric.  However, it was common ground that the Appellant never carried out any duties as a cutter.  He worked mainly on the preparation of furniture frames, at least for the first six weeks.  During that time he was supervised by a Mr Hickman and there were no complaints either as to the quality of his work, the amount of work that he did, or his attitude.  After about six weeks the Respondents ran out of furnishing fabric and all employees were put on to other work involving mainly the painting and cleaning of the premises.  At about this time the Appellant was transferred to the supervision of Mrs Perry.  What happened after the Appellant was transferred to the supervision of Mrs Perry was highly contentious.

	The Industrial Tribunal set out the opposing versions of the alleged abuse.  They record the Appellant’s complaint that Mrs Perry made racially abusive remarks about him and about black and Asian people generally.  This, as the Tribunal record, she adamantly denied.  The Appellant alleged that some of the racially abusive remarks had been made in the presence of Mr Atack.  That, he denied.  The Appellant alleged that he had complained to Mr Atack about Mrs Perry’s remarks, but that he, Mr Atack, had taken her side.  Mr Atack told the Tribunal that the Appellant had made no complaint that he was the subject of racial abuse.  He claimed that a problem had arisen because Mrs Perry had been dissatisfied both with his work and his attitude.  He agreed however, that he had told the Appellant in general terms that he must work according to the instructions of Mrs Perry and he agreed that he had told the Appellant that he had given Mrs Perry full backing for her actions, so far as the Company’s quality control policy was concerned.  He confirmed that he had told the Appellant that he felt that his problem was in having to take orders from a woman in view of the Appellant’s culture.

	The Tribunal also recorded a specific complaint.  The Appellant said that, when he was about to book his holidays with the intention of visiting his family in Iraq, Mr Atack had said that, with a bit of luck, he would stay there permanently.  Mr Atack denied saying that.

	Then the Tribunal set out the opposing contentions in relation to the events which led to the Appellant’s dismissal.  This was also highly controversial.  The Appellant had told the Tribunal that he was sacked following an argument with Mr Atack.  He said that Mrs Perry had criticised his work and he went to complain to Mr Atack.  An argument had developed during which Mr Atack had said that he had been warned that he would have to work with Mrs Perry, and that he would now have to get another job.  He claimed that Mr Atack had said that, he would never employ another Arab again and that “I am not taking any more of your shit, I’m going to give you a week’s notice”.  Mr Atack’s version of events was quite different.  He said he was due to go on holiday the following day.  He spoke to all the staff, including the Appellant, to explain to them what was required during his absence.  When he spoke to the Appellant, the Appellant had become extremely annoyed and an argument had developed.  He agreed that he might well have said words to the effect that he had enough of this and he agreed that he dismissed the Appellant, but he rejected the suggestion that he had done so because the Appellant had previously made complaints about racist remarks.  

	Having set out the opposing factual contentions, the Tribunal then turned to consider the law.  They reminded themselves of the case of King v Great Britain China Centre [1991] IRLR at page 513.  At paragraph 9, they said:

“Neill LJ reminded Tribunals that it was for the applicant to prove his case, that is to say he must prove the primary facts on which he relies.  In this case the allegations made by the applicant were completely denied by the respondents and we had to consider, first of all, whether or not we were satisfied that the applicant had proved, on the balance of probabilities, that the allegations he made were true.  We reminded ourselves that we had to consider each allegation separately and to consider whether they had been proved individually and not merely whether they had been proved ‘en bloc’.  In approaching this exercise, we had regard to the appearance of the parties and the witnesses as they were at the witness table when giving their evidence.  The applicant gave his evidence with a great deal of passion and firmness.  Equally the respondents’ witnesses, particularly Mr Atack and Mrs Perry were very firm in what they said.”

	They then continued at paragraph 10:

“10  After much lengthy discussion, the Tribunal unanimously came to the conclusion that we could not be sure what had happened on any of the occasions that the applicant had mentioned to us.  It would have required a substantial feat of imagination on the part of the applicant to have invented such allegations of the nature that he had put forward, but, equally, it would have required a similar feat on the part of respondents to invent the allegation about the joke allegedly told by the applicant.  We concluded that we were not satisfied on each or any of the occasions as to exactly what had transpired and therefore concluded that the applicant had not established the primary facts on which he relied, either the facts of the alleged racist remarks, or the facts of his alleged complaint of them to Mr Atack.  We were not satisfied that Mr Atack had made the remark that he hoped that the applicant remained in Iraq.
11  We further considered whether we might draw the inference of discrimination from the fact that, as the only employee of ethnic minority origin, the applicant was dismissed.  We had regard to the, once again, contradictory versions of what happened on the occasion when the applicant was dismissed.  It is clear that the applicant and Mr Atack had a violent disagreement, but we are not certain precisely what caused this.  On balance, we do not think that the mere fact that the applicant was dismissed is sufficient to support the inference of racial discrimination in this case.”

	Thus, they dismissed the application.

	Miss Monaghan, who has appeared before this Appeal Tribunal on behalf of the Appellant, has advanced several grounds of appeal.  First, she submitted that the Industrial Tribunal have failed to make the findings of fact essential to their determination of the issues.  Their approach, she submitted, was wrong.  They have set themselves too high a standard of proof.  Had they applied the correct standard of proof, of which they had reminded themselves when referring to the case of King, they would have been able to reach conclusions of fact.

	We note that in paragraph 10 the Tribunal used the expression “that they could not be sure what had happened” and they also say that “we were not satisfied on each or any of the occasions as to what had transpired”.  We note also that in paragraph 11 that they say they are “not certain precisely what caused” the violent disagreement between the Appellant and Mr Atack.

	We accept Ms Monaghan’s submission that the Tribunal have applied too high a standard of proof in seeking to make their findings of fact.  Having failed to make findings of fact, they have relied, or sought to rely on the burden of proof which, as they had correctly identified, lay upon the Appellant.  Of course, the burden lay upon the Appellant only to satisfy them on the balance of probabilities.  

	This was not a case, as for example occurred in Morris v London Iron And Steel Co Ltd [1987] ICR 855, in which the Tribunal, having correctly directed itself as to the standard of proof, found themselves unable to reach a conclusion on the balance of probabilities because the evidence was so finely balanced.  The Court of Appeal said that in such an exceptional circumstance, the Tribunal may resort to a decision based upon the burden of proof.  However, in this case the Tribunal has not applied the correct standard of proof and therefore could not properly resort to the burden of proof as a basis for their decision.  The duty of a Tribunal to make findings of fact is spelled out in the Morris case at page 864 B - G.  This failure of the Industrial Tribunal to make findings of fact is sufficient in itself to undermine the whole of their decision.  Their failure affects their conclusions both in respect of the alleged racial abuse and also in respect of the dismissal.

	Ms Monaghan is also critical of the Tribunal’s approach to the case as set out in paragraph 11 of their reasons.  This relates to the issue of whether the Appellant was dismissed on racial grounds.  At paragraph 11 the Tribunal have considered whether they should draw the inference of racial discrimination from the undisputed facts that the Appellant was dismissed and was the only ethnic minority employee.  They declined to draw the inference of racial discrimination although, as Ms Monaghan submits, it was open to them to do so.  Ms Monaghan submits that they failed to ask themselves what explanation the Respondent had offered for this difference of treatment.  They should have asked themselves that question before refusing to draw the necessary inference.  She submits that they failed to make any finding of fact as to the reason for the dismissal, or as to the circumstances in which the Appellant came to be dismissed.  So, she submits, although the Tribunal have referred themselves to the case of King they have not applied its guidance.  

	Here again, we accept Ms Monaghan’s submissions.  In considering whether to draw an inference the Industrial Tribunal should have considered the explanation for the dismissal advanced by the employer.  They have failed to do so in that they have failed to make any findings of fact on that subject.  In any event, it is not satisfactory, in our view, for a Tribunal to consider whether or not to draw an inference against a background of so many unresolved conflicts of primary fact.  

	Third, Ms Monaghan submits that the Tribunal’s refusal to draw the inference of racial discrimination was perverse.  She relies first on the established difference of treatment between the Appellant and other employees who were white and who were not dismissed.  She relies second, on the admitted evidence that Mr Atack had made a remark which was at least potentially racist.  He had admitted that he had told the Appellant that his problem was not being able to take orders from a woman in view of his culture.  Ms Monaghan submits that any reasonable Tribunal would have drawn the inference of racial discrimination from such evidence.  We agree that it was certainly open to the Tribunal to draw that inference and had they drawn it there could have been no complaint.  However, in view of the many unresolved factors remaining in this case we do not think it would right to say that a Tribunal were perverse not to draw the inference of racial discrimination. 

	Finally, Ms Monaghan complains that the Industrial Tribunal failed to give adequate reasons for rejecting the Appellant’s specific complaint that Mr Atack had made a racist remark when he had said that the Appellant could not take orders from women.  The Appellant had alleged, in the particulars attached to his Originating Application, that that remark had been made and that it was racist.  Mr Atack had admitted making the remark or something very like it.  The Tribunal has made no finding as to whether the remark was, or was not, racist.  We agree with Ms Monaghan’s submission that the Tribunal has failed to deal with this issue as it should have done.  It is however, a small point in the context of the case as a whole.

	Regrettably this decision cannot stand and must be set aside.  There should be a re-hearing before a differently constituted Tribunal.  No doubt before the case is listed for hearing the Appellant and his advisors will consider carefully whether there is any prospect of enforcing a judgment against the Respondent in the event of success.