Appeal No. EAT/0026/02/MAA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 24 January 2003

Before
THE HONOURABLE MR JUSTICE RIMER
MR M CLANCY
MRS A GALLICO

UNDERWOOD & CROXSON	APPELLANT

MRS C J JOHNSTON	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR PHILIP J UNDERWOOD
(Representative on behalf of the Appellants)

For the Respondent	MS BETSAN CRIDDLE
(Representative on Behalf of the Respondent)
Free Representation Unit
4th Floor,  Peer House
8-14 Verulam Street
London  WC1X 8LZ

MR JUSTICE RIMER

1.	This is an appeal by a firm of veterinary surgeons called Underwood & Croxson (which we will call ‘Underwoods’) against the decision of the employment tribunal (Chairman, Ms J Wade), sitting at London South on 24 October 200, the tribunal’s extended reasons being promulgated on 30 November 2001.

2.	The applicant before the tribunal was Mrs Caroline Johnston.  The tribunal’s decision was that Underwoods had unlawfully discriminated against her by reason of her sex, had unfairly dismissed her and that she had suffered a detriment under regulation 19 of the Maternity and Parental Leave etc Regulations 1999 because she was on maternity leave.

3.	Underwoods, which has been represented on this appeal by Mr Phillip Underwood, the firm’s senior partner, appeals against the decisions that Underwoods had unlawfully discriminated against Mrs Johnston by reason of her sex and had unfairly dismissed her.  He asserts that those decisions are ones to which, having regard to the employment tribunal’s primary findings of fact, the tribunal were not entitled to come.  Mrs Johnston, who appears by Ms Criddle, resists the appeal.  There is no free-standing appeal against the tribunal’s findings of the suffering of detriment by Mrs Johnston under regulation 19, but the tribunal awarded no separate remedy under that head of their decision.  The facts as found by the tribunal, together with certain further ones which we understand from Counsels’ skeleton argument to have been undisputed, are as follows.  We should add that Mr Underwood advanced his argument to us by reference to a skeleton argument which had been prepared for Underwoods by Counsel who had appeared for it at a preliminary hearing of this appeal.

4.	In 1997, Underwoods had a number of surgeries in Godalming/Farnham area.  It took Mrs Johnston on as an employee on 1 June 1997.  There were three partners and five full-time employees.  Mrs Johnston was originally a full-time employee and was the sole vet at the surgery in Tongham, Surrey.  In July 1999, Mrs Johnston negotiated with Mr Underwood that she would reduce her hours and become part-time.  She also ceased to be on the out of hours rota: vets have a statutory duty to provide a twenty-four hour emergency service for treatment for animals.  Following this change in her working pattern, Mrs Johnston worked for only two and a half days a week at Tongham, with another vet becoming full-time there.  She was allergic to guinea pigs but was able to control the allergy.  Following that change in Mrs Johnston’s working hours, Underwoods employed another vet to cover her previous duties, including night and weekend work.

5.	Mrs Johnston became pregnant in November 1999.  That limited the scope of work she could do so as to exclude certain activities which were potentially injurious to her.  There was a discussion about the hours she might work, which was resolved in early 2000 when it was agreed that she would work the same number of hours but on different days.  From January 2000 onwards she worked from 8.30 am until 7 pm on Monday and Thursday and from 2 pm to 7 pm on Wednesday.  She worked mainly at Tongham but would go to other surgeries to help out when needed.  She still did not do the out of hours rota.

6.	Mrs Johnston’s maternity leave commenced on 1 August 2000.  Before she went on leave she spoke to Mr Underwood who assured her that her job was safe and she made it clear that she would return after the end of her leave and after also taking some accrued holiday.  At that point Underwoods employed four vets, including Mrs Johnston.  Mrs Johnston told Mr Underwood that she had already booked nursery care for her baby on her present days of work.  Her baby was born on 17 August 2000 and Mrs Johnston was due to return to work on 9 April 2001.

7.	Mrs Johnston’s ordinary maternity leave ended on 4 December 2000, when her additional maternity leave commenced.  On 3 January 2001, Mr Underwood went to see her at her home.  The Tribunal made no findings as to what happened at that meeting although it appears there was a discussion about options for her to return to work and the hours she would work.  The need to discuss this was because there had in the meantime been a material downsizing in, and change in the nature of, the practice of Underwoods, including the sale in December 2000 of two of its surgeries, with then current negotiations for the sale also of the Tongham surgery.  The Tribunal found that a new rota for the practice had been established under which there was no longer any need for Mrs Johnston to work her original days.  

8.	On 4 January, Mr Underwood wrote to Mrs Johnston asking for confirmation of her intention to return to work, and on 8 January she replied, confirming that intention but not confirming the intended date.  It appears that that letter was not in fact received by Underwoods until 21 February 2001.  On 24 January, Mr Underwood wrote again to Mrs Johnston asking for the date of her intended return to work.  On 29 January, he wrote to her again.  That letter explained that two factors had affected the practice during her absence from work: first, a downturn in the profitability of the small animal practice, largely due to local competition;  secondly, the sale by Underwoods of two of its surgeries, and Mr Underwood explained in the letter that they were also in the process of selling the Tongham surgery.  He explained that in these circumstances Underwoods could not offer exactly the same job as she had had before but he said they could offer her three options.  The first was all day Tuesday at Farnham, all day Friday at Farnham, Tongham or Farncombe, Thursday morning at Farnham and one Saturday morning in five.  The second was as a locum to all the practices, filling in as required for holidays, with plenty of warning.  The third was all day Friday at Tongham, with two and a half sessions there, but most Saturday mornings.  The third was said to be capable of being subject to further discussion.  Mr Underwood concluded the letter by saying:

“We hope you can see your way to agreeing to one of these alternatives and perhaps you could let me know promptly, as I am now doing the rota for the year ahead.”

9.	Mr Underwood urged upon us during his submissions that that last sentence showed that the daytime rota, which directly affected Mrs Johnston, had not yet been determined and that although the night and out of hours rota had been agreed with the other employees of the practice, this was not one which affected Mrs Johnston as she did not do out of hours work and had never participated in the determination of that rota.

10.	On 8 February, Mrs Johnston replied to that letter, rejecting two of the three options and saying that, as regards the third, she would not work after 5 pm on Fridays.  On 19 February, Mr Underwood wrote to her again explaining that Underwoods needed her to work the Friday afternoon and evening surgeries at Tongham.  He said in his letter that if she could not work the required hours, he would have no alternative but to make her redundant.  There was a further telephone conversation which did not result in agreement over hours and so Mr Underwood then wrote to Ms Johnston confirming her redundancy.

11.	Mrs Johnston responded on 6 March querying the three weeks’ notice of her redundancy and indicating that she was now willing to work on Friday evenings.  Her additional maternity leave ended on 5 March, when she commenced taking her accrued holiday.  On 8 March, having received Mrs Johnston’s letter of 6 March, Mr Underwood wrote to her withdrawing the redundancy notice.  She replied on 13 March rejecting his offer.  The tribunal found that Mrs Johnson chose not to take that offer up because she felt that her relationship with Underwoods had been undermined and she felt she was likely to be made redundant later.  She had by then also accepted another job.

12.	Mr Underwood wrote to her again on 19 March expressing his regret at her rejection of the withdrawal of the redundancy.  On 7 April, she returned to work at Underwoods and worked out her notice.  She left Underwoods on 30 April, issued her claim to the employment tribunal on 2 May and commenced work with a new employer on 14 May.

13.	The tribunal did not detail this course of events in its findings, but it made an important finding in relation to the events of early 2001 in paragraphs 4(i)-(k) of its extended reasons where it said this:

“(i)	Mr Underwood and his partners were under financial pressure in early 2001.  The business was not going well and this had been the case for some months.  Mr Underwood and Mr Croxson were approaching retirement and were looking for ways to either bring in new partners who could presumably purchase their equity in the practice or sell surgeries to other business.  Client numbers were perceived to be dropping and the junior partner, Ms Watson, was firmly of the opinion that the practice was overstaffed.  Mr Underwood therefore approached his meeting with Ms Johnston on 3 January hoping and expecting that she would tell him that she did not plan to return to work.  This would enable the practice to downsize without Mr Underwood having to make a staff member redundancy which, because he felt loyal and responsible for his staff, he was unwilling to do.  This was despite the fact that Ms Johnston had told him clearly that she was returning to work.

(j)	Expecting that Ms Johnston would not be returning to work, Mr Underwood had prepared a new rota for the practice which took into account that two of the surgeries had been sold off to another practice.  He had negotiated the rota with the other vets and was left with no need for a vet to work the hours that Ms Johnston had worked before her maternity leave.  On the other hand, he needed a vet to work on a Friday, which was the shift that was unpopular with the other vets, particularly if they were due to work at weekends, the trade-off being that they could take it in turns to have Friday off and a long weekend at another time.  Ms Johnston explained to Mr Underwood that although she would be happy to try to accommodate the practice, it was difficult for her to work until 7 pm, the full working day, on a Friday.  This was because her husband worked late on that day and because his dental practice was closed over the weekend it was important for him to be available for clients until late on the Friday evening.  He was prepared to adjust his working hours on other working days to collect their child from the childminder whilst his wife worked until 7 pm.  In arriving at proposals for her new working hours, Mr Underwood had not consulted Ms Johnston because she was on maternity leave.  Had Ms Johnston not been involved in maternity leave, she would have been involved in negotiations over the new rota and would have been able to explain at an early stage that it was very difficult for her to work on a Friday.

(k)	Mr Underwood was not prepared to take account of the difficulty the Applicant faced in complying with his offers of work as an alternative to the work she was doing before she went on maternity leave.  Mr Underwood was correct in his assessment that there was no longer enough work at the Tongham Surgery to sustain Ms Johnston there on her original days and hours but an impasse was arrived at because Mr Underwood was requiring Ms Johnston to work hours which she could not do.  This meant that Mr Underwood wrote to Ms Johnston on 19 February saying: “I can see no other way apart from making you redundant.””

14.	The Tribunal related that, at what it called the ninth hour, Mrs Johnston then offered to rearrange her childcare arrangements so that she could work until 7 pm on Fridays, but by then Mr Underwood had already written his letter of 19 February to which we have referred, and we have also referred to the further events leading to the termination of Mrs Johnston’s employment.

15.	Underwoods’ case before the Tribunal was, as one might infer from the facts we have outlined, that it dismissed Ms Johnston on the grounds of redundancy.  There had by early 2001 been a significant downturn in its business, which had been caused by a countrywide decline in business for vets, increasing local competition and the disposal of two of Underwoods’ surgeries leaving less work for its other vets.  Mrs Johnston had indicated on inflexibility in the way in which she was willing to work, and could not work with guinea pigs, and so she was selected for redundancy.  The tribunal recorded that Mrs Johnston’s case was that, had she been prepared to work the hours required by Mr Underwood, there would have been a job for her; and of course when she indicated that she was willing to fit in with the required hours, the job was available to her.  Her case was that she had been dismissed because she had taken maternity leave.

16.	The tribunal upheld Mrs Johnston’s complaint and found that she was dismissed because she took maternity leave.  They recognised that Mr Underwood tried to do his best as an employer but found that Underwoods had unlawfully discriminated against her, unfairly dismissed her and caused her a detriment under regulation 19 of the 1999 Regulations.  The tribunal’s reasons for this conclusion are contained in paragraph 14 of their extended reasons.  They read as follows:

“(a)	Before Ms Johnston went on maternity leave she worked part-time, she did not work “on call” rotas and she worked with guinea pigs.  On the eve of her maternity leave she was assured by Mr Underwood that her job with the practice was safe.  Five months later and with no change on her part in the hours that she was expecting to work and arrangements having already been made for her return, she was told that her job no longer existed.  Having looked at the plethora of reasons that Mr Underwood has given for this decision, we are inexorably led back to the fact that the only significant thing that changed in the practice over those months was the fact that the Applicant went on maternity leave.  We accept that there was a downturn in business but the practice had been facing this over a protracted period of time and Mr Underwood, by his own admission, had found it difficult to respond to this by making staff redundant.  Had the Applicant not been on maternity leave she would not have been made redundant.  We know that Ms Johnston was not prepared to work on the out of hours rota but Mr Underwood had accepted this before she even became pregnant and had not refused to allow her to work for him unless she worked on the out of hours rota.  We know that Ms Johnston had an allergy to guinea pigs, but she continued to work with guinea pigs and control her allergy.  Had Ms Johnston not been on maternity leave Mr Underwood would not in all probability have required her to change her hours.  Even if he had required her to change her hours, he would have negotiated with her at the same time as he negotiated with the other vets and come up with a rota which she could comply with.  He had always done this in the past.  However, because she was on maternity leave he consulted the other vets about the rota and then presented Ms Johnston with a requirement to work the hours that none of the other vets wished to do.  She had reasons why she did not wish to work those hours either.  We therefore find that the Respondent directly discriminated against the Applicant by reason of her sex and unfairly dismissed her because she took maternity leave, contrary to section 99 of the Employment Rights Act 1999.  As the Employment Appeal Tribunal said in the case of O’Neill v Governors of St Thomas More RCVA Upper School [1996] IRLR 233, the fact that she took maternity leave “precipitated and permeated the decision to dismiss her.” 

(b)	As we have concluded above, the reason that the Applicant was dismissed was because she took maternity leave.  Whilst we accept that there was a downturn in business, which may well have amounted to her redundancy situation, the dismissal could not have amounted to a fair dismissal by reason of redundancy because the criterion used to select the Applicant was, at bottom, the fact that she took maternity leave.  Much was said of her inflexibility but as long ago as 1999 the Respondent chose to vary her contract to allow her to work fixed hours and not work on the “on call” rota.  The inflexibility only appears to have become a problem once the Applicant was on maternity leave and then planning to return afterwards with the additional constraints on her time that childcare responsibilities brought.  Since we have found that the dismissal was unfair under section 99, it is not necessary for us to go on to look at whether the manner of the dismissal was fair or not under section 98(4).”

17.	Underwoods challenge the soundness of the conclusions arrived at on the basis that they are unsupported, or insufficiently supported, by evidence.  First, the tribunal record their finding that the only significant thing to have changed in the practice in the five months since Mrs Johnston commenced her maternity leave was the fact that she had taken that leave.  If that were correct, it would be an important finding.  However, it is a finding which it is difficult to reconcile with the findings made by the tribunal in paragraph 4, in which the tribunal refer to the increasing financial difficulties which Underwoods were facing by early 2001.  Ms Watson of Underwoods had said that the practice was by then overstaffed, and the sale of the two surgeries, amounting to a third of the practice, had been effected in December 2000.  The tribunal’s own findings were that there had then been other significant events affecting the practice during the five months from August 2000, being events which were entirely consistent with the emergence of a redundancy situation, as indeed the tribunal acknowledged in paragraph 14(b) of its reasons.  The sales reduced the number of Underwoods’ employees.  The tribunal’s finding, or conclusion, that there had been no significant change in the affairs of Underwoods during the period Mrs Johnston had been on maternity leave is, on the face of it, wholly at odds with the tribunal’s primary findings of fact and is simply wrong.  Underwoods urge that it was an important conclusion because it appears to have been a central finding made by the tribunal and, on the face of it, if it were correct it might indeed provide cogent support for the inference which the tribunal in fact made, namely that Mrs Johnston was dismissed because she had taken maternity leave.  

18.	Secondly, the tribunal found in paragraph 14 that, had Mrs Johnston not been on maternity leave, Mr Underwood would not in all probability have required her to change her hours.  The difficulty we have about that finding is that it appears to be one which was essentially based on speculation, being speculation which does not appear to be derived from any findings of fact which might said to justify it.  Bearing in mind the fundamental changes which were affecting Underwoods by the end of 2000, we regard it as far from obvious that there was any justification for the drawing of this particular inference.
 
19.	Thirdly, the tribunal found that, even if Mr Underwood had required Mrs Johnston to change her hours, he would have negotiated with her at the same time he negotiated with the other vets to come up with a rota she could comply with.  Again, this is essentially a matter of inference which, perhaps inevitably, is not founded on any primary finding of fact.  As we have already indicated, Mr Underwood urged that no rota had yet been prepared affecting Mrs Johnston, and he of course relied on the last sentence of the letter of 29 January 2001.

20.	In addition, and consistently with Underwoods’ case that Mrs Johnston was dismissed for redundancy, her own case before the tribunal was that, had she been prepared to work the hours required by Mr Underwood, there would have been a job for her.  Quite what point she was making there is not entirely clear to us.  But Underwoods agree with her and assert that there would indeed have been a job for her.  The soundness of that assertion is supported by the fact that, when she did agree to work the hours that Underwoods wanted of her, they offered to withdraw the redundancy notice.  It appears to us that the inference from this is that Underwoods were at all time ready and willing to retain her in their employment provided she could work the hours they needed of her, and this points away from the conclusion that they dismissed her because she had taken maternity leave.

21.	Underwoods also question the soundness of the tribunal’s conclusion in paragraph 14(a) that the request to Mrs Johnston in January 2001 to work particular hours, being hours for which she had reasons not to want to work, amounted to direct discrimination against her on the grounds of her sex, being discrimination against her as a parent with childcare responsibilities.  That was a questionable conclusion because, in paragraph 2(a) of the reasons, the tribunal had identified Mrs Johnston’s case with regard to the requirement for her to work hours which she said was incompatible with her childcare arrangements as amounting to indirect sex discrimination.  Further, in paragraph 5 of the reasons, the tribunal had, Underwoods submit, correctly analysed this part of Mrs Johnston’s complaint as being an allegation of indirect discrimination.  The tribunal there said:

“5 … The [Sex Discrimination] Act, as recently amended, also says that if an employer requires an employee to work hours which she is unable to work and she suffers a detriment as a result, then this can amount to indirect sex discrimination if the number of women who can comply with the requirement is smaller than the number of men and if the employer cannot justify the requirement.”

22.	Underwoods submit, and we agree, that if any case of indirect discrimination was to be held by the tribunal to have been made out then in the light of section 1(1)(b) of the 1975 Act, the tribunal had to consider, but failed to do so, whether (1) Underwoods applied to Mrs Johnston a requirement or condition which was to her detriment because she could not comply with it, (2) whether the requirement or condition was such that the proportion of women who could comply with it was considerably smaller than the proportion of men who comply with it, and (3) whether the requirement or condition was justified irrespective of the sex of the person to whom it was applied.  But the tribunal did not consider any of these matters.  If we have correctly understood what they were saying in paragraph 14 in their decision, they simply arrived at the incorrect conclusion that the requirement to work particular hours was an instance of direct discrimination.  Underwoods submit further that, if the tribunal had embarked on the necessary enquiry, they ought to have concluded that the evidence showed that Mrs Johnston was able to work the required hours so that she was not subjected to a requirement or condition with which she could not comply, and that there was anyway no evidence providing an answer to the second point we have identified above.

23.	Ms Criddle, on behalf of Mrs Johnston conceded, rightly in our view, that the tribunal’s finding in paragraph 14(a) of their reasons that the only significant thing that had happened during the five months leading to the end of December 2000 was that Mrs Johnston had taken maternity leave was a surprising one, and she did not seek to defend it as a freestanding conclusion justified by the evidence.  She instead urged that it should be taken in context and it is of course the case that paragraph 14 of the tribunal’s reasons shows that they took into account the downturn in Underwoods’ business and acknowledged that a redundancy situation could thereby have been created.

24.	Nevertheless that central finding appears to have been a crucial one, because it is the only finding that we can identify which, if well founded, might be said to justify the inference that Mrs Johnston was dismissed because she had taken maternity leave.  Mrs Johnston’s argument was that the tribunal were anyway entitled to draw the inference, because Underwoods did not explain adequately why they dismissed her as opposed to anyone else.  It is said that significance of Mrs Johnston being on maternity leave is that it is she who was considered first for dismissal in the event of the downturn in the business.  Mr Underwood, however, points out that if anyone else was to be made redundant it would have to be one of the full-time employees who did emergency out of hours work, something which Mrs Johnston had long refused to do.  This appears to us to suggest that the facts are by no means so clear that the tribunal could safely draw the inference that the reason for Mrs Johnston’s dismissal was one referable to the fact that she had taken maternity leave.

25.	In our view there is a serious question as to whether the undisputed course of events in early 2001 and the tribunal’s primary findings of fact justify the conclusion that Mrs Johnston was selected for redundancy because of the taking by her, of her absence on, maternity leave.  The evidence discloses what the tribunal themselves acknowledged was a redundancy situation and the facts found appear to us to lead to the inference that Mrs Johnston’s dismissal was in no manner influenced by the fact for her maternity leave, but rather because she was unwilling to work the hours required of her.  We are not satisfied that there was any evidence before the tribunal which justified them in drawing the different inference they did as to why Mrs Johnston was dismissed.  This seems to us to be underlined by Underwoods’ willingness to withdraw its redundancy notice once Mrs Johnston had indicated that she was prepared to work the required hours.  Ms Criddle constructed an argument based on the contentions that, even though Mrs Johnston was not directly affected by the out of hours rota, the change to it which was admittedly effected without reference to her must inevitably have had an impact on the daytime rota by which she was and would be concerned.  She relied on the fact that Mrs Johnston was not consulted over the changes to the out of hours rota.  We can see that it may perhaps be arguable that the failure to consult her in respect of that was less favourable treatment on the grounds of sex, although it is not clear to us that the tribunal’s rather short reasons show that they made any finding to this effect.  But we are anyway left in serious doubt as to whether the matter of the rotas, or any lack of consultation about them, about which the tribunal’s findings are less than comprehensive, provided any support for an inference that Mrs Johnston was dismissed because she took maternity leave.  It does not appear to us that there is any necessary causal connection between the two.

26.	We have come to the conclusion that the tribunal’s conclusion that Mrs Johnston was dismissed because she was on, or had taken, maternity leave is one which is an unsafe one having regard to the tribunal’s primary findings of fact and to what appears to have been the undisputed course of events leading to the termination of Mrs Johnston’s contract.  We are not satisfied that there was any evidence justifying such a conclusion.  If there was, the tribunal did not sufficiently identify it in their extended reasons.  We are also satisfied that any separate finding of discrimination against Mrs Johnston on the basis of her status as a parent with childcare responsibilities was not justified by the tribunal’s findings of fact.  We will allow the appeal and set aside the tribunal’s order.  Both parties accept that, were we to allow the appeal, as we do, the matter will have to be remitted to a different employment tribunal for a rehearing and we so order.