Appeal No.	EAT/1087/00

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 20 September 2001
Judgment delivered on 5 October 2001

Before
HIS HONOUR JUDGE PETER CLARK
MS S R CORBY
MR R N STRAKER

JOHNSON & JOHNSON MEDICAL LTD	APPELLANT

MISS K FILMER	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MS TESS GILL
(of Counsel)
Instructed By:
Messrs Eversheds 
Solicitors
Fitzalan House
Fitzalan Road
Cardiff CF24 OEE	
For the Respondent	MR DECLAN O’DEMPSEY
(of Counsel)
Instructed By:
Messrs Russell Jones & Walker
Solicitors
Swinton House
324 Gray’s Inn Road
London WC1X 8DH	

JUDGE PETER CLARK:

1	This is an appeal by the respondent employer before the Brighton Employment Tribunal chaired by Mr I.A. Edwards against that tribunal’s reserved decision, promulgated on 1 August 2000, upholding the applicant, Ms Filmer’s complaint of unlawful disability discrimination.

The Facts

2	The applicant commenced her employment with the respondent as a sales person on 9 November 1992.  She was highly successful.

3	In early 1997 a Mr Hardwick took over as her manager.  Their relationship was not a happy one.  The applicant complained that Mr Hardwick was subjecting her to unnecessary criticism.  In November 1997 he issued her with a verbal warning concerning her attendance record, failure to provide a doctor’s certificate when ill and failure to comply with reporting systems.  She successfully appealed against that warning to the Regional Director, then Mr van der Westhuyzen.  

4	On two occasions in late 1997 the applicant asked for a copy of the respondent’s rules relating to discipline, grievances and harassment.  They were provided to her by Mrs Matthews, the Human Resources Manager.  

5	Of relevance to the present case were these features:

(1)	complaints of harassment by employees were to be dealt with under a separate procedure, not the respondent’s grievance procedure

(2)	once the disciplinary procedure has been initiated an employee cannot initiate the grievance procedure, but all aspects of the matter must be raised and handled under the disciplinary procedure

(3)	the harassment policy made clear that a complaint of harassment would be dealt with promptly and with due care and attention.

6	Due to a genuine misunderstanding between Mr Hardwick and Mr van der Westhuyzen the former told the applicant that she was to be interviewed by the latter for a new post in the company on 3 March 1998.  When the applicant saw Mr van der Westhuyzen on 3 March he told her that she was not to be interviewed for the job.

7	In a distressed state the applicant decided to telephone Mr Hardwick at his home that evening.  During the course of that telephone call, according to Mr Hardwick, the applicant threatened him by saying:

“I hope you get a good night’s sleep tonight, because it will be the last one that you have.  I don’t think I have anything more to say.”

She then hung up.

8	Mr Hardwick promptly wrote a letter of complaint about that remark to Mr van der Westhuyzen and, as a result, the Regional Director suspended the applicant on full pay by a letter dated 4 March in which he formulated a disciplinary charge against her of gross insubordination and/or a threat of harassment and/or threat of violence against her line manager on 3 March 1998.

9	A disciplinary hearing commenced on 10 March.  Meanwhile, the applicant lodged a harassment complaint against Mr Hardwick on 9 March.

10	The disciplinary hearing commenced on 10 March before Mr van der Westhuyzen.  It lasted for two and a half hours.  Mr Hardwick gave his evidence and was cross-questioned by the applicant.  The hearing was then adjourned to allow the applicant to prepare her case. 

11	In the event that disciplinary hearing was never resumed before the termination of the applicant’s employment by the respondent on grounds of her ill-health effective on 7 May 1999.

12	The reason for that state of affairs, described by the tribunal (reasons, paragraph 70) as the nub of these whole proceedings, was that the applicant raised a procedural problem.

13	During the disciplinary hearing held on 10 March 1998 Mr van der Westhuyzen informed the applicant that, disciplinary action having been initiated, she could not enter a grievance.  Her response was that she was not raising a grievance but an allegation of harassment which, under the grievance procedure was a separate matter;  the disciplinary procedure did not preclude her from raising a complaint of harassment and that, under the harassment policy, such a complaint was to be dealt with promptly.

14	The position was further complicated by the applicant’s deteriorating health.  Subsequent hearings fixed for the disciplinary proceedings were adjourned due to the applicant’s certificated illness, first described as psychological trauma and later nervous debility.

15	Solicitors became involved on both sides and in correspondence the applicant’s solicitors maintained that the harassment complaint against Mr Hardwick was inextricably linked with the disciplinary proceedings and that the applicant was being prevented from raising matters in the disciplinary proceedings in which she might be summarily dismissed for gross misconduct.

16	On 2 June 1998 the applicant presented a complaint of sex discrimination to the Employment Tribunal.  Her sick pay was reduced to half pay and on 20 October 1998 a second set of tribunal proceedings were commenced alleging victimisation under the Sex Discrimination Act (SDA) and unlawful deductions from wages.  On 11 May 1999 she withdrew both those claims.

17	On 5 November 1998 the applicant wrote to Mrs Matthews asking that a reasonable adjustment should be made so that the matter could be concluded, pointing out that her doctor had advised her against attending any disciplinary hearing in its existing format.

18	Having failed to elicit from the applicant what adjustments she wanted, Mrs Matthews wrote to her on 1 December 1998 stating that the only changes which the company could envisage in the disciplinary process were

(a)	to allow the applicant to make written representations and to carry out the disciplinary procedure as a paper exercise and

(b)	to go ahead in her absence.

19	Mrs Matthews concluded her letter by pointing out that the company was under considerable pressure to make a decision as to the future of the applicant’s sales territory, which inevitably meant that “your continued employment with [the respondent] is at risk”.

20	On 12 January 1999 Linda Barry, a Human Resources Manager, visited the applicant at home.  On that occasion the applicant handed over a copy of a medical report prepared by Dr Berelowitz, Consultant Psychiatrist dated 11 November 1998.  That was the only medical report obtained by the respondent prior to the applicant’s dismissal.  The tribunal found that from mid-January 1999 the respondent knew that the applicant was disabled within the meaning of section 1 of the Disability Discrimination Act 1995, (DDA), the relevant mental impairment consisting of reactive depression of a psychotic nature which had a substantial effect on her day to day activities.  Before the tribunal the respondent admitted that the applicant was suffering from that disability.

21	Impasse having been reached over the procedural questions bedevilling the disciplinary/harassment process Mr Gallagher, the new Regional Director, wrote to the applicant a letter dated 12 March 1999 in which he dismissed her on the ground of her continuing ill-health, that dismissal to take effect on 7 May 1999.

22	Following her dismissal the applicant presented the current Originating Application to the Employment Tribunal on 2 August 1999, complaining of unlawful disability discrimination and breach of contract.  The latter claim stands adjourned.  Further an application to amend to add a complaint of unfair dismissal was refused by the tribunal.  Accordingly we are concerned in this appeal only with the tribunal’s findings on the disability discrimination complaint.

The Relevant DDA Provisions

23	The scheme of the DDA 1995 echoes the earlier SDA and Race Relations Act (RRA) in providing that it is unlawful for an employer to discriminate against a disabled person by, among other things, dismissing him or subjecting him to any other detriment (section 4(2)(d)).

24	Where it differs materially is in the definition of discrimination in section 5.  There are, as this tribunal observed (reasons paragraph 134) two alternative definitions, both of which arose in this case.

Section 5(2) discrimination

An employer discriminates against a disabled person if – 

(a)	he fails to comply with a section 6 duty imposed on him in relation to the disabled person; and

(b)	he cannot show that his failure to comply with that duty is justified.

Section 6 duty

(1)	Where –

(a)	any arrangements made by or on behalf of an employer, or
(b)	any physical feature of premises occupied by the employer,

place the disabled person concerned at a substantial disadvantage in comparison with persons who are not disabled, it is the duty of the employer to take such steps as it is reasonable, in all the circumstances of the case, for him to have to take in order to prevent the arrangements or feature having that effect.

Section 6(3) provides examples of steps which the employer may have to take in order to comply with his section 6(1) duty and section 6(4) sets out specific factors relevant to determining whether it is reasonable for an employer to have to take a particular step in order to comply with his section 6(1) duty;  in particular, the extent to which taking the step would prevent the effect in question (section 6(4)(a)).

By section 6(6), no section 6(1) duty arises unless and until the employer knows or could reasonably be expected to know that the employee has a disability.  In this case the relevant date, so the tribunal found, was January 1999.

Section 6(7) expressly provides that an employer is not required to treat a disabled person more favourably than he would treat others.  It is not a positive discrimination statute.

Justification

Where a breach of a section 6 duty is made out it is then for the employer to show that his failure to comply with that duty is justified.

By section 5(4), failure to comply with a section 6 duty is justified if, but only if, the reason for the failure is both material to the particular circumstances of the case and substantial.

Section 5(1) discrimination

This form of “direct” discrimination by an employer is made out if, 

(a)	for a reason which relates to the disabled person’s disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply; and

(b)	he cannot show that the treatment in question is justified.

The Comparison

25	The comparative approach appropriate in SDA and RRA direct discrimination cases does not apply to disability discrimination under section 5(1).  The question is rather, but for his disability, would the employee have been dismissed (on the facts of this case)? Clark v Novacold Ltd [1998] IRLR 420 (CA).

Justification

26	The test for justification under section 5(1)(b) differs from that under section 5(2)(b).

27	Section 5(3) is in identical terms to section 5(4), but is expressly subject to section 5(5), which provides:

“If, in a case falling within subsection (1), the employer is under a section 6 duty in relation to the disabled person but fails without justification to comply with that duty, his treatment of that person cannot be justified under subsection (3) unless it would have been justified even if he had complied with the section 6 duty.”

Code of Practice

28	Section 53(6) provides that any relevant provision of a Code of Practice issued by the Secretary of State shall be taken into account by the Employment Tribunal in determining any question arising in proceedings under the Act.

29	We shall hereafter refer to the 1996 Code of Practice:  Disability Discrimination, as “the Code”.  

The Employment Tribunal’s findings

30	The tribunal made the following material findings, by agreement between the parties or by decision:

(1)	the applicant was a disabled person within the meaning of section 1 DDA and the respondent’s knowledge, actual or imputed of her disability, for the purposes of section 6(6), arose in January 1999.

(2)	Under section 5(2)

(i)	The applicant was placed at a substantial disadvantage in the early part of 1999 when the respondent imposed deadlines to resume the disciplinary hearing without dealing with the applicant’s harassment complaint (reasons, paragraph 144).

(ii)	The respondent could have modified its instructions (section 6(3)(i)) if necessary, whereby the harassment complaint could be heard alongside the disciplinary proceedings (reasons, paragraph 148)), assuming, which the tribunal did not accept, that the respondent’s procedures rendered such a course inappropriate.

(iii)	As to section 6(4)(a);  the extent to which the taking of such a step would have prevented the effect in question on the applicant, the tribunal said this at paragraph 163(a) reasons:

“We are satisfied that if the Respondent had made it clear that because of her illness and because of the circumstances of the remark she made to her manager on the telephone, it would be unlikely that she would be dismissed and that, at the same time, it would consider the whole of the Applicant’s harassment complaint, this would have prevented the effect on the Applicant of her condition worsening.”

(iv)	in these circumstances the respondent was in breach of a section 6 duty.

(v)	Neither Mrs Matthews nor Mr Gallagher had heard of the Code.  Mrs Matthews had consulted lawyers for advice on disability discrimination.  At paragraph 169 the tribunal held:

“In our view the reason for the Respondent’s failure to comply with a Section 6 duty was its complete ignorance of its obligations and such a failure cannot be objectively justified, particularly for such a large company with the resources which it has at its disposal.”

(vi)	accordingly, the respondent had discriminated against the applicant contrary to section 5(2) (reasons, paragraph 170).

       (3)  Under Section 5(1)

(i)	the respondent accepted that by dismissing the applicant they had prima facie discriminated against her under section 5(1)(a) and

(ii)	“for the same reasons we have outlined above that treatment could not be justified” (reasons, paragraph 172).

The Appeal

31	    It is convenient to consider the grounds of appeal under the following heads.

(1)	 Breach of a section 6 duty for the purposes of section 5(2)(a)

(a)	We accept Ms Gill’s submission that the adjustment found by the tribunal to be reasonable, namely having the harassment and disciplinary proceedings heard together, required the tribunal, before arriving at that conclusion, to have regard to “the extent to which taking the step would prevent the effect in question” section 6(4)(a).

The relevant “effect” for the purposes of section 6(4)(a) is that of placing the applicant at a substantial disadvantage compared with an employee who was not disabled, in dealing with disciplinary proceedings which might lead to her dismissal.  The disadvantage suffered by the applicant was that by reason of her disability she was not fit to attend that hearing due to her mental condition.  The question for the tribunal was to what extent would that disadvantage be removed if, on their analysis, the harassment and disciplinary proceedings were combined.  Would the applicant then feel fit enough to attend?  Instead, the tribunal considered it sufficient that combined proceedings “would have prevented the effect on the applicant of her condition worsening”.

It follows, in our judgment, that the tribunal fell into error in failing to have regard to the mandatory question posed by section 6(4)(a).  It remains to be answered.  

(b)	We further accept Ms Gill’s submission that the tribunal’s reference, at paragraphs 152 and 163(a) of their reasons to the respondent notifying the applicant in advance of the resumed disciplinary hearing that it would not, or was unlikely to result in her dismissal, would not be a permissible finding of a reasonable adjustment for the respondent to make since, first, there is no warrant for such an adjustment in either the Statute or the Code (particularly paragraph 8.3);  secondly, it would have amounted to positive discrimination when compared with an employee who was not disabled contrary to section 6(7) and thirdly, it is not for the tribunal to substitute its view of the appropriate penalty for that of the employer, which had yet to hear and determine the disciplinary charge.

It follows that, in answering the question which we have posed under (a) above, any question of giving that indication to the applicant is an irrelevant factor which ought not to be taken into account.  

(2)	Section 5(4) Justification

Having found a prima facie breach of section 5(2)(a) the tribunal appears to have rejected, under section 5(2)(b), the defence of justification as defined in section 5(4) solely on the ground that the relevant managers, Mrs Matthews and Mr Gallagher, were completely ignorant of the respondent’s obligations under section 6.

Since the tribunal’s decision in this case there have been four relevant EAT decisions, namely British Gas Services Ltd v McCaull [2001] IRLR 60;  Quinn v Schwarzkopf Ltd [2001] IRLR 67;  Greater Manchester FCDA v Bradley (27 April 2001.  Unreported) and Glasgow City Council v Callaghan (2001 Unreported) and a decision of the Court of Appeal in Jones v Post Office [2001] IRLR 384.

The EAT decisions deal with the question as to whether ignorance of the section 6 duty necessarily precludes a defence of justification being raised. McCaull and Quinn were decided, respectively by divisions presided over by Keene J, as he then was, and Lord Johnston, so closely together in time that neither was aware of the other.  In short, Keene J answered that question in the negative and Lord Johnston, it appeared, in the affirmative.  In Bradley I preferred the approach in McCaull, but in the later case of Callaghan Lord Johnstone revisited Quinn and said this, at paragraph 11:

“Insofar as this Tribunal may have suggested in Quinn v Schwarzkopf that justification can never occur if the employer is ignorant of the fact of disability at the relevant time, that goes too far … .  Obviously the fact the employer did not know that disability exists might affect the justification issue but does not preclude it."

Those remarks were made in connection with the defence of justification under section 5(3) to a claim of section 5(1) discrimination, where knowledge of the disability is not necessary (compare section 6(6)), unless a section 5(5) consideration is triggered.  Nevertheless, I adhere to the views which I expressed in Bradley, namely, that the approach of Keene J in McCaull, summarised at paragraph 29 of Bradley, is to be followed.

It follows, in our judgment, that this tribunal fell into error in dismissing the defence of justification under section 5(4) simply on the ground that the respondent’s managers were ignorant of the Code, particularly where, on these facts, the applicant had raised the question of reasonable adjustments and, in response, Mrs Matthews had suggested, by way of adjustments to the disciplinary procedure, those steps set out in her letter to the applicant dated 9 February 1999 (reasons, paragraph 105).

Instead, the tribunal ought to have considered the question of justification in terms of the guidance subsequently given by the Court of Appeal in Jones.  

(3)	  Section 5(1) discrimination

It being accepted by the respondent that in dismissing the applicant on grounds of ill-health it had discriminated against her under section 5(1)(a), subject to the defence of justification under section 5(1)(b), as defined in section 5(3), subject to section 5(5), the tribunal then dealt with that defence simply by reference to its finding under section 5(4).

For the reasons given above, in relation to section 5(2)(b) and (4) justification that approach is flawed in law and cannot stand.  What is required is an enquiry into whether the matters relied on by the respondent to justify the discriminatory dismissal are both material and substantial, in the sense explained by Lady Justice Arden in Jones, paragraphs 38-39.

Conclusions

32	It follows that this tribunal’s decision is flawed in three respects:

(1)	The relevant question under section 6(4)(a) has not been answered.

(2)	The defence of justification under section 5(4) to the claim brought under section 5(2) has not been properly considered.

(3)	Similarly, the defence of justification to the section 5(1) claim, involving as it does the additional question raised by section 5(5) to which section 5(3) is subject, has not been properly considered.

33	In these circumstances we shall allow the appeal and formally set aside the decision of the Employment Tribunal.

34	That raises the question, what should now happen to this case?  Plainly it would not be appropriate for this Appeal Tribunal to attempt to answer the questions posed above.  Those answers will require further fact-finding.  The case must therefore be remitted to an Employment Tribunal.

35	The question which then arises is whether it should be remitted to the same or a different tribunal.

36	Ms Gill invites us to take the latter course.  She submits that the tribunal which heard this case has plainly reached so firm a view as to the outcome that the respondent is entitled to take the view that the same tribunal will be cloaked with the appearance of bias against their interests at a resumed hearing.  She asks that the whole case be reheard by a different tribunal.  In support of that submission she relies upon certain observations by Henry LJ in Flannery v Halifax Estate Agencies Ltd [2001] 1 WLR 377, 383 C-F.  In that case the court declined to remit the case to the trial judge in circumstances where it was found that he had failed to give adequate reasons for his decision at first instance.

37	We have carefully considered that submission, acknowledging that in the ordinary case that is the course which we would normally adopt.  However, we reject it for these reasons:

(1)	whereas in Flannery, the trial judge would have been asked, on remission, to reconstitute his reasons for decision, not articulated in his judgment, one year later, in the present case this tribunal has made virtually all the necessary findings of fact.  The purpose of remission here is to invite the tribunal to now answer the outstanding statutory questions identified in this judgment.

(2)	the judicial interpretation of statutory employment law moves rapidly, particularly in this comparatively new area of disability discrimination.  The tribunal cannot be criticised for failing to predict the subsequent debate at EAT level over the effect of an employer’s ignorance of its obligations under the Act, as the tribunal here found, on the defence of justification.  To have dealt with justification under both section 5(1)(b) and section 5(2)(b) as it did does not, in our view, demonstrate any appearance of bias in the event that the case is remitted for reconsideration.  Similarly, the narrow point on the proper application of section 6(4)(a) to the proposed adjustment, that is combining the internal disciplinary and harassment proceedings, does not appear to us to give rise to a danger of bias on the part of the tribunal.

(3)	This was a four-day hearing.  There will be a considerable saving in expense and delay if the case is remitted to the same tribunal, particularly in circumstances where that same panel is to reconvene for a remedies hearing on 1-2 November 2001, at which the remitted questions may be dealt with.

(4)	Finally, we have taken into account the medical report on the applicant prepared by Dr Denise Bound, MRC Psych and dated 23 May 2001.  It is quite clear that it is in the applicant’s best medical interests that this case is concluded as soon as possible.

38	For all these reasons we accept Mr O’Dempsey’s submission that this case should be remitted to Mr Ian Edwards’ tribunal for determination of the three questions on liability which we have earlier identified.