Appeal No. EAT/1263/98

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 28 November 2000

Before
HIS HONOUR JUDGE J ALTMAN
LORD  DAVIES OF COITY  CBE
MR J C SHRIGLEY

1)	MR K SHARMA 
2)	MR E EVANS	APPELLANT

LIVERPOOL CITY COUNCIL	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR C HAM
(Lay Representative)
Northern Complainant Aid Fund
Check Point
45 West Gate
Bradford BD1 2TH	
For the Respondent	MR T KENWARD
(Of Counsel)
Instructed by:
The Solicitor
Liverpool City Council
PO Box 88
Municipal Buildings
Dale Street
Liverpool L69 2XH	

JUDGE J ALTMAN

1	This is an appeal from the decision of the Employment Tribunal, then the Industrial Tribunal, sitting at Liverpool.  The decision was promulgated on 26 August 1998 following a hearing which covered 28 days.  The Tribunal dismissed the applications of both Appellants alleging racial discrimination.  These applications had raised a very large number of issues relating to the period of the Appellants’ employment with the Respondents.  There was another Applicant before the Tribunal, Mr Pollitt, but there is no appeal in respect of his case.  

2	In section A of their decision, the Tribunal dealt with the application of Mr Sharma.  In section 7 they set out their analysis of what they termed “the justiciable complaints”.  This included some 8 matters.  The one relating to this appeal is contained in paragraph 7.6 
“Was the delay in authorising additional counselling less favourable treatment because he is black?”
There was a similar complaint in relation to Mr Pollitt, whose case was analysed in section C of the decision.  Part 8.18 of that section, commencing on page 50 of the decision, dealt with the issue of counselling.  Mr Sharma requested counselling, and the request was granted in December 1996.  This amounted to the provision of an offer of counselling with a named individual to a cost of £200.  In April 1997 this counsellor requested funding from the Respondents to provide additional counselling for Mr Sharma.  The request was made to Ms Eley, the Head of Adult Services.  The request was granted eventually on 19 May 1997 and was communicated to the counsellor on 27 May 1997.  There was a similar delay, in fact, in relation to Mr Pollitt.  The Tribunal made their finding in relation to Mr Sharma in paragraphs 8.18.12 and 13:
“8.18.12  We do not believe that Ms Eley was convinced of the efficacy of counselling in itself.  We accept that she was under a lot of pressure……  She was being dilatory in respect of other matters…..However we have concluded that the delay in authorising Mr Pollitt’s counselling, and for Mr Sharma’s additional counselling, was deliberate.  Thus they were less favourably treated.

8.18.13   In relation to Mr Sharma it was not because he is black or of mixed parentage.  But it was “consciously motivated” by the fact that he had made complaints against Ms Carney, and Ms Akabuko under the HDB policy, and complained to the Tribunal.  However it is not justiciable since there is no complaint before us under Section 2 of the Act.”

3	It is contended by Mr Hay, on behalf of the Appellant Mr Sharma, that following the findings of fact there set out, the Employment Tribunal should, as a matter of law, have applied them to Section 1 of the Race Discrimination Act 1976 so as to conclude that the Appellant had established racial discrimination as set out in that section.  He further contends that the Chairman, by his directions at the interlocutory stages and during the main hearing, caused the then representative of Mr Sharma to withdraw any complaint under section 2 of the Race Relations Act 1976 as a result of which the Chairman wrongly precluded the Tribunal from considering that section in relation to this matter.  

4	A similar argument is advanced in relation to the appeal from the findings of the Tribunal so far as they concerned Mr Evans.  Since that hearing and most sadly Mr Evans has died.  We understand from Mr Hay that he has been instructed on behalf of the estate of Mr Evans to continue this appeal.  The necessary technicalities for changing the title to the proceedings have not, it appears, been perfected but we have heard the appeal nonetheless in the knowledge that that can readily be corrected.  We have therefore indicated that, strictly speaking, our findings in relation to Mr Evans must be regarded as conditional upon the filing of the appropriate written authority by Mr Hay.  

5	In section B, subsection 1, the Tribunal set out their analysis of the complaints made by Mr Evans including the following; 

“He has been victimised by the Respondent since lodging a complaint under the First Respondent’s HDBP policy in that a car mileage claim which he made in about November 1996 has not been paid; the fault lies he says with Ms Akabuko, and Ms Carney.”

The decision of the Employment Tribunal in relation to that complaint is set out in paragraphs 12 and 13 of section B as follows:
“12  During the course of our deliberations it became clear that on a proper construction of Mr Evans’ originating application he was claiming that most if not all of the less favourable treatment alleged, was because he had made a complaint in 1993 about the racist conduct of a colleague, and latterly because of his HDB complaint on 20 September 1996.  At the hearing we did not consider any of his complaints under Section 2 of the Race Relations Act.  The point was only briefly mentioned on the day of submissions, when the Chairman asked Ms O’Reilly” (the then representative of Mr Evans and Mr Sharma)  “if she pursued the point. She said that she did not.  It seems to us however that we should make this further observation.  Had we considered the matter it would have made no difference to our decision in all matters save for the Car Mileage claim, for which see paragraph 12 (sic) below.  The reason being that any complaint under Section 2 would be out of time, and therefore beyond our jurisdiction, see generally above.”  
13	Car Mileage allowance:  In November 1996, several months after he had left Drysdale Street, Mr Evans made a claim to Ms Carney for 108 miles for the month of July 1996 …..she was the proper authorising officer.  On 5 November 1996 she referred it to Ms Akabuko for her to sign, without any indication that she thought the claim was abnormally high, which it was ……Ms Akabuko did not sign it because it had not been her practice to sign such forms.  We accept Ms Carney’s evidence that she wished Ms Akabuko to verify the claim but she did not so inform Ms Akabuko.  She could have called Mr Evans in to check it herself.  The claim may yet be outstanding.  

13.1  Ms Carney was justified in referring the claim to Ms Akabuko, but she knew that her failure to ask Ms Akabuko to verify it should slow down the process of payment.  This was an act  of less favourable treatment which was consciously motivated by the fact that Mr Evans had made a complaint against her and Ms Akabuko, under the HDBP policy, on 20 September 1996.  It was not an act of less favourable treatment because he is black or of mixed parentage.  In these circumstances we find that his claim under Section 1 (1) (a) fails”

6	Mr Hay does not challenge the finding that there was no racial discrimination on the ground of Mr Evans’ colour as set out in the penultimate sentence of the paragraph we have just quoted.  But he does challenge the conclusion that this leads to the failure of the application under section 1.(1) (a).  Mr Hay contends that there was a finding by the Tribunal that the less favourable treatment was because Mr Evans had made a complaint of racial discrimination and that the less favourable treatment was carried out, therefore “on racial grounds” so as to bring this complaint within section 1.  He also complained that the Tribunal wrongly managed the proceedings so as to preclude themselves from considering this finding in the context of section 2 of the Act by dissuading Miss O’Reilly from pursuing it in that context.  

7	The arguments on the appeal in relation to the two Appellants appear to be essentially the same.  We have therefore considered them as they apply to the two sections of the Race Relations Act 1976.  We deal first with Section 1 which provides, so far as this appeal is concerned; 

“1	Racial Discrimination
(1)	A person discriminates against another in any circumstances relevant for the purposes of any provision of this Act if -
(a)   on racial grounds he treats that other less favourably than he treats or would treat other persons; or
(b)  he applies to that other a requirement or condition which he applies or would apply equally to persons not of the same racial group as that other
 but -
(i) which is such that the proportion of persons of the same racial group as that other who can comply with it is considerably smaller than the proportion of persons not of that racial group who can comply with it; 
and
(ii) which he cannot show to be justifiable irrespective of the colour, race, nationality or ethnic or national origins of the person to whom it is applied; and
(iii) which is to the detriment of that other because he cannot comply with it.”

8	Mr Hay submits that once the Tribunal had found that the Appellants were subjected to less favourable treatment because of the complaints made, it follows that this amounts to less favourable treatment on racial grounds.  He refers to the case of  Showboat Entertainments Ltd -v-Owens [1984] IRLR 7 and the statement in paragraph 6; 

“We therefore conclude that Section 1 (1) (a) covers all cases of discrimination on racial grounds whether the racial characteristics in question are those of the person treated less favourably or of some other person.  The only question in each case is whether the unfavourable treatment afforded to the claimant was caused by racial considerations.”

In particular Mr Hay points out that the Tribunal attributed “conscious motivation” to the Appellants in relation to the matters here concerned, the test at the time for victimisation.  As the original complaints by the Appellants had alleged racial discrimination, Mr Hay submits that the finding that they were treated less favourably because of making those complaints, amounts to a finding of less favourable treatment “on racial grounds”.  After all, says Mr Hay, the less favourable treatment was caused by “racial considerations” within the Showboat test.  

9	However we accept the submissions on behalf of the Respondents. First it appears that the Employment Tribunal made findings of fact that there had not been, in respect of any treatment which was less favourable, grounds to be explained as being “racial”.  As to Mr Sharma, whilst the Respondents’ policy refers to race discrimination, the factual matters of complaint raised by the First Appellant do not specifically amount to allegations of race discrimination.  They are rather a series of complaints of other matters.  Indeed in paragraph 8.2.9 of Section A the Employment Tribunal found:

“We have thus concluded that the April complaint was prepared as a pre-emptive attempt to thwart any disciplinary process against him.”

10	In the case of Mr Evans, in Section B, in paragraph 9.14 the Tribunal find and note that
no particulars are given in the complaint made of alleged race discrimination.  Accordingly it seems to us that whilst the Tribunal found that there was a conscious motivation they did not themselves relate that, as a matter of fact, to any racial consideration.  Furthermore it seems to us that the dicta in the Showboat case must be viewed in relation to the arguments of fact contained in that decision.  The passage quoted above, which begins with the word “therefore”, follows after an analysis of the arguments in that case.  The issue for the Court was whether unlawful racial discrimination for the purposes of the Act can relate to discrimination against a person other than the complainant:

“4. In essence, the question raised by this Appeal is whether, for the purposes of the 1976 Act, A can unlawfully discriminate against B on the ground of C’s race.”

Having analysed the arguments, Browne-Wilkinson J as he then was said at paragraph 15:

“We can therefore see nothing in the wording of the Act which makes it clear that the words ‘on racial grounds’ cover only the race of the complainant”

The same context appears from paragraph 16 which follows, where the learned judge 
says ‘we therefore conclude that s.1(1)(a) covers all cases of discrimination on racial grounds whether the racial characteristics in question are those of the person treated less favourably or of some other person.’(my italics).

We find that the broadening of the words, or the clarification of their meaning, by the use of the phrase “racial considerations” in paragraph 16 of that judgment was to emphasise that the Act itself was not directed solely to protect people who were discriminated against because of their race.  Nonetheless, in that case the act being examined is the act which immediately gave rise to the complaint.  In the case before us it is the delay.  It seems to us that Section 1 is still confined to a single stage process, in this context, and is not designed to cover an act of discrimination which is caused by the victims having previously sought to raise a matter to do with race discrimination, for that is covered by Section 2.

11	It seems to us that, under Section 1, the Employment Tribunal made findings of fact which they were entitled to make on the evidence that the original complaints were not of racial discrimination and that there was no racial discrimination under Section 1.  We dismiss the appeal under that head.  Having considered paragraph 4 and paragraph 16 of the Showboat case in full, it is clear that the judgment is not as wide as that contended for by Mr Hay.  

12	Section 2 of the Race Relations Act 1976 provides as follows:-

“2     Discrimination by way of victimisation
(1) A person (“the discriminator”) discriminates against another person (“the person victimised”) in any circumstances relevant for the purposes of any provision of this Act if he treats the person victimised less favourably than in those circumstances he treats or would treat other persons, and does so by reason that the person victimised has -
(a)    brought proceedings against the discriminator or any other person under this Act; 
or
(b)    given evidence or information in connection with proceedings brought by any person against the discriminator or any other person under this Act; or
(c)    otherwise done anything under or by reference to this Act in relation to the discriminator or any other person; or
(d)    alleged that the discriminator or any other person has committed an act which (whether or not the allegation so states) would amount to a contravention of this Act.
or by reason that the discriminator knows that the person victimised intends to do any of those things, or suspects that the person victimised has done, or intends to do, any of them.
(2) Subsection (1) does not apply to treatment of a person by reason of any allegation made by him if the allegation was false and not made in good faith.”

13	Mr Hay contends that whilst it is accepted that the Appellants did not make this Section 2 part of their case, he contends that they omitted to do so only because the Chairman intervened to advise Ms O’Neill not to do so and, he would say, effectively prevented the Appellants from raising this matter so as to make an error of law.  It is necessary to examine the way in which Section 2 was treated throughout these proceedings in the earlier applications. .  

14	Mr Kenward, on behalf of the Respondents, rightly in our judgment points out that even whilst the Employment Tribunal found conscious motivation the Appellants did not produce any comparator to show that such unfavourable treatment as they alleged was on racial grounds.  

15	Both Appellants in their Originating Applications describe the complaint as being 
“direct discrimination contrary to 1976 Race Relations Act Section 1(1)(a)
victimisation”

That on the face of it appears ambiguous.  It could be the general sort of victimisation which is a form of race discrimination contrary to Section 1, or perhaps it could be the statutory form of Section 2 victimisation, although it must be pointed out that the careful drafting of the complaint whilst referring to Section 1 did not specify Section 2.  It does seem that in the Further and Better Particulars, for instance that in relation to Mr Evans under Request 4 d the request was made as to why, “after submitting my complaint of discrimination she (Ms Carney) has insisted that Mary Akabuko signed my claim”  with the reply that the complaint of discrimination was not relevant to car mileage claims.  At that stage therefore there appears to have been the possibility of some Section 2 allegations.  Thereafter the matter was considered on a number of occasions.  At an interlocutory hearing in relation to Mr Sharma dated 23 May 1997 the issues were considered.  In paragraph 2 of the reasons the Chairman identified the issues and the complaints and in paragraph 2.6 said:

“The Chairman has assumed that all the applicant’s complaints are made under Section 1, not Section 2 of the Act.  If this assumption is wrong, the applicant must inform the Tribunal within 7 days, and specify which complaints it is alleged are brought under Section 2 of the Act.”

16	We understand that no correction of this assumption was ever made by the Appellants.  In her affidavit for this appeal, Ms O’Reilly says that the Chairman told her that the complaints under Section 2 added nothing to Mr Sharma’s case because they were covered within the direct discrimination claim.  She recalls him saying that there was no magic in the word victimisation, and she says that she understood the Chairman to mean that the victimisation claim was superfluous.  She said that as a result she accepted his guidance and did not insist that Mr Sharma’s complaints should be considered under Section 2 as well as Section 1.  In his letter of 26 January 1999 for this appeal the Chairman says that at that directions hearing it appeared that Mr Sharma’s case was “in a shambles” and he questioned the Appellant and Ms O’Reilly so he could form a clear view of the case.  He confirms that he got the clear impression that the word victimisation was being used in its widest sense as an ingredient of Section 1, and not its special meaning under Section 2.  He confirms that he therefore expressed the view that the victimisation claim seemed to add nothing to the Section 1 claim and that he probably said there was no magic in it.  He said that he did not leave the matter there.  Ms O’Reilly is not legally qualified and it was obvious to him that she did not have extensive experience.  He also noted that Mr Sharma himself was an intelligent and well qualified man and the direction was therefore given in the quoted.

17	There was then a further directions hearing on 23 June 1997.  This concerned the addition of further grounds to the Originating Application.  In the extended reasons the Chairman again referred to the complaint of discrimination and that Mr Sharma “has been victimised” and he describes it as follows:
“He alleges that Mrs Carney and Mrs Akabuko subjected him to persistent less favourable treatment, which he has described as victimisation (Section 1 not Section 2 Race Relations Act)…”

It appears that the Appellant was then complaining of being driven to apply for a transfer to another place of work and this is the allegation that was added. It seems to us that at this point in time, viewed objectively, that the following had occurred.  The Chairman had expressed a view, and even given advice, that it seemed to him that a Section 2 claim was surplusage.  It is also clear that he had given a direction, the only real inference from which could be that the Appellant and his advisers should take stock of that aspect of the matter.  However it also appears that by this time the Appellant and his representative had taken the Chairman’s view as being so authoritative that it was not appropriate to investigate it further.  

18	On the 9 July 1997 there was a further directions hearing at which the case of Mr Pollitt was consolidated as was that of Mr Evans with Mr Sharma’s.  In Mr Pollitt’s case the issue of a Section 2 claim was canvassed, leave to amend to add such a claim in his case was refused.  Counsel for the Respondents has suggested that this was another instance when the need to consider Section 2 was drawn to the attention of the Appellant and his representative, but on the other hand once they had formed their assessment of what the Chairman was saying to the effect that it did not add anything, it may be that the Order on those directions simply confirmed their already established understanding.  There was a further directions hearing on 8 September 1997 dealing particularly with the disclosure of documents which led to an application on behalf of the Appellant and the other Applicants for costs due to the default in relation to documents of the Respondent.  This application was granted.

19	It appears to us that the preparation for the main hearing was conducted by the Chairman with a thoroughness and care designed to seek to ensure that all possible matters were prepared in advance of the hearing.  

20	We turn now to the main hearing.  It is common ground that a Section 2 claim was talked about on a number of occasions.  In her affidavit Ms O’Reilly describes it in relation to a question from the Chairman as to Mr Evans’ victimisation claims, she recalls saying that if the position regarding his claim was the same as Mr Sharma’s, in term of it adding nothing to the Section 1 complaint, then there was no need to pursue the victimisation issue in Mr Evans’ case either.  She states, presumably critically, that the Chairman did not suggest that there was any difference in their cases.  The Chairman’s recollection is somewhat different.  He says that it was Mr Sharma’s victimisation claim that he raised with Ms O’Reilly because, as the evidence emerged, it seemed to him that there was a basis upon which such a claim could be argued.  A Chairman in this situation is in a difficult position.  Whilst he must guide and be able to advise a party who needs such advice, and whilst he will, in the case particularly of unrepresented parties, assist a party to present their case, he must hold the scales between the parties in fair balance.  And it is difficult for a Chairman to advise one party too affirmatively without being accused of entering the arena and damaging the case of the other party unfairly.  He was of the view that because the Section 2 claim had been abandoned it was not for the Tribunal to pursue it and indeed Counsel, Mr Kenward for the Respondents, pointed out that the matter was at that stage closed.  

21	The Chairman also points out another factor.  Mr Pollitt was represented by Mr Hay whom the Chairman described as a very experienced practitioner and, in that he presented the appeal before us, we had an opportunity of seeing that that was a true description.  There were a number of occasions when the two representatives had an opportunity by way of an adjournment to discuss matters that cropped up.  The Chairman understood that Ms O’Reilly was glad of this opportunity.  It may be that even if the Chairman was referring to Mr Sharma’s claim Ms O’Reilly had by then put it to one side and was not adverting to the fact that a Section 2 claim may still be a live issue in his case.  

22	At the end of the oral evidence there came submissions.  In her affidavit Ms O’Reilly says this:
“6.  At the conclusion of Mr Sharma’s case the Chairman asked me if I wanted the Tribunal to consider any complaints under Section 2.  He did not indicate that his earlier guidance may have been incorrect or misleading and I therefore assumed that his question was simply a legal formality.  Consequently, I said that I did not require the Tribunal to consider Mr Sharma’s complaints under Section 2.”

Two matters arise on the face of that observation.  In the first place it suggests some onus on the Chairman to indicate that he had been wrong or misleading and that without such indication it followed, with the word “therefore” that Ms O’Reilly would assume that his saying was what she described as “simply a legal formality”.  We find some difficulty in understanding that observation.  It appears that Ms O’Reilly thought that the Chairman’s raising the matter at the point he did was a formal process of identifying the issues rather than, as it now appears, the genuine attempt to identify, even at that stage, whether or not a real Section 2 claim was being mounted.  Furthermore the position as described by the Chairman in his letter is slightly different.  He recalls being concerned that Ms O’Reilly made specific reference to a Section 2 claim.  He says that he asked Ms O’Reilly to consider the position overnight so she could discuss it with Mr Hay and the next day she said she did not wish to pursue it.  This overnight pause is not inconsistent with the affidavit of Ms O’Reilly and we conclude that it did occur.  Accordingly we are driven to the conclusion that at this point in the hearing, whilst we fully accept that Ms O’Reilly was under the impression which she described, nonetheless the Chairman had done nothing to discourage her from taking her own informed position on the Section 2 claim.  The Chairman confirms that there were also discussions about Mr Evans’ claim.  

23	It is asserted in the Notice of Appeal, and reference is made to this by Ms O’Reilly in her affidavit, that in her written submissions at the end of the hearing appeared the following:

“The Originating Application, in addition, contains a complaint against victimisation.  The (Appellant) no longer pursues the claim of victimisation following a comment made by the Chairman during the proceedings namely: that a complaint under the hearing of victimisation added nothing to the (Appellant’s) case because the matters were covered within the direct discrimination claim.”

24	With hindsight it is possible to see that a misunderstanding arose in this case.  On the one hand the Chairman indicated that, as he saw the way in which the case was presented at the time, the Section 2 claim added nothing in substance to what was already being alleged under Section 1.  Ms O’Reilly says that she understood that that was in effect a direction that as a matter of law Section 2 added nothing to Section 1.  In those circumstances it is understandable that the Appellant should suggest that the Chairman was giving an erroneous direction in law.  

25	It appears that it was only when the Tribunal and Members were deliberating, as they did over a number of days, “that the position as set out in the decision became clear”.  

26	It seems to us that cases do change as they go along, and issues become clearer as the evidence emerges. It is important to see this case in the sequence in which the events occurred. At the outset the Chairman gave an indication of his view as he then understood the position to be, namely that the facts did not in this case give rise to an independent and different claim under Section 2.  As the evidence emerged and there were other references to Section 2 it is clear he invited the representatives of the Appellant specifically to reconsider the position and even at the end of the hearing invited the representatives, or at least Ms O’Reilly, to reconsider their stance.  In her written submissions Ms O’Reilly was saying that, in effect, they were standing by the indication given earlier by the Chairman.  But there was nothing in what was said there or elsewhere that would put a Chairman on notice that he was understood to have given a direction of law at an interlocutory hearing which was binding upon the Appellants and their representative and which could not be changed whatever occurred during the course of the hearing.  We have seen nothing in any of the material advanced by Ms O’Reilly, or in the affidavit she has made or in the letter from the Chairman which could give rise to any inference that any direction was being given by the Chairman to inhibit the way in which the parties presented their case.  

27	That the representatives of the Applicants before the Tribunal believed that such a direction had been given is most unfortunate.  There may have been a misunderstanding.  But there was no error of law on the part of the Chairman.  It would be a great shame if Chairmen were inhibited, in seeking to give assistance to parties and their representatives and to guide them in the presentation of their cases, by fear that such parties and representatives might think that they were being ‘straitjacketed’ by directions of law when no such thing was in fact occurring.  In this case it is clear that the Chairman went to considerable lengths both before and during the hearing to focus on relevant issues and to eliminate irrelevant issues.  Nonetheless it was an exceedingly long hearing.  At the end of that hearing the only inference is that the Chairman and Members gave a lot of care and thought to the evidence over a number of days.  The decision which followed deals with a vast body of evidence and made findings of fact applied those facts to the law in a meticulous careful and succinct way.  The Appellant complains that the Chairman erred in giving a direction as to the applicability of Section 2.  As he never gave such a direction the Appellant’s argument falls away and the appeal must be dismissed.