Appeal No. UKEAT/0420/04/ILB

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 4 November 2004

Before
THE HONOURABLE MR JUSTICE BEAN
MR A HARRIS
MR S YEBOAH

BANNER BUSINESS SUPPLIES LTD	APPELLANT

MRS K GREAVES	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MATTHEW SHERIDAN
(Of Counsel)
Instructed by:
Messrs Mills & Reeve
Solicitors
1 St James Court
Whitefriars
Norwich  NR3 1RU	
For the Respondent	PAUL JOHNSON
Solicitor
Oldham Law Centre
First Floor
Archway House
Bridge Street
Oldham
OL1 1ED	

SUMMARY

Dismissal of female employee for failure to attend annual stocktake at a weekend found by tribunal to be unfair and discriminatory - no issue of law in finding of unfair dismissal, but on sex discrimination issue tribunal failed to carry out Bilka analysis of employer’s defence of justification - appeal allowed in part and case remitted to the tribunal.

THE HONOURABLE MR JUSTICE BEAN

1.	This is an appeal by Banner Business Supplies Ltd, the employers, who were Respondents to Originating Applications in the Employment Tribunal at Manchester brought by two former employees Mr Fox and Mrs Greaves.  The claims were heard together by a Tribunal under the chairmanship of Mr D N Jones.  The Tribunal found that both Applicants had been unfairly dismissed and that the employers had unlawfully indirectly discriminated on the grounds of sex against Mrs Greaves.  There is no appeal before us in the case of Mr Fox.

2.	Mrs Greaves was awarded compensation for unfair dismissal in the sum of £2,781.82 and compensation for sex discrimination in the sum of £1,500.00 for injury to feelings together with interest of £112.00.  No issue arises before us as to quantum.  The employers, however, challenge both findings of liability in Mrs Greaves’ case.  The relevant findings of fact are set out in paragraph 5 of the reserved decision with exemplary clarity.  We shall cite only some of them:
“(i)  The Respondent is a business which supplies and distributes paper and other equipment.
(ii)	The second Applicant was employed as a part-time warehousing operative at its Manchester premises.
(iii)	The second Applicant was obliged under her contract to “assist with occasional stock takes which will involve working either additional hours in the evenings and/or weekend shifts as part of your normal week”.
(iv)	On 8 October 2002 the Respondent placed a notice in its warehouse notifying all employees of the date of the annual stock take, in two month’s time and stating, “Unless a period of absence is authorised by [the DC manager, M Williams] in advance, all Banner employees shall be expected to attend without fail”.  It pointed out this was essential to confirm an accurate stock take figure.  Full time employees were expected to undertake 20 hours overtime work and part time employees were expected to do 10 hours.
(v)	In order to comply with the Respondent’s audit requirements, the stock take could only be undertaken over one weekend of the year and not during the working week.  Furthermore other warehouses of the Respondent around the country were undertaking similar stock takes that weekend as a further audit requirement.  It was therefore not practicable or possible for the Respondent to arrange for other staff from other areas to attend at the Manchester warehouse to assist, as had occurred in the previous year.
(vi)   The stock take was a major undertaking.  The warehouse was 150,000 square feet in size and contained over 14,000 stock locations.  It extended to checking items as small as pens and writing pads.  It was a heavily labour intensive exercise and the Respondent required the vast majority of its staff to complete the job within the weekend.  The Respondent therefore considered that it had to make this stock take obligatory for all 106 of its warehouse staff.  The work was to commence in shifts commencing at 10 pm on Friday 6 December 2002 and concluding at 6 pm on Sunday 8 December 2002.
(vii)   Shortly after the notice was published the second applicant told her manager, Mr Currie, that she would be unavailable to work on the stock take because she could not arrange child-care over that particular weekend for her daughter.  Mr Currie’s initial response was to say that she should arrange for others to care for her daughter.  The applicant replied that this was not possible and she could not attend.  Mr Currie did not respond.  He did not report the difficulty to Mr Williams.  He made no attempt to address the matter further.  The second applicant (that is Mrs Greaves) assumed he had accepted her situation such that she need not attend.  There was a dispute as to this conversation, because Mr Currie denied it ever took place.  The Tribunal prefer the evidence of the Applicant.  At the disciplinary hearing to which we shall come later it was recorded that she had informed Mr Currie that two months previously she could not attend.  In that hearing Mr Currie did not dispute this assertion, but, the implication of his response was that he accepted it.  He said two months was long enough to make other arrangements.  The Tribunal then referred to the evidence of another employee, Mrs Leigh who raised childcare problems with Mr Currie at about the same time and received the response that she should go away and find someone else to look after her children and that if he made an exception for her, everyone would expect the same and he was not prepared to do this.  She however, unlike Mrs Greaves, spoke to Mr Williams.”
The Tribunal went on in sub paragraph (vii) to find that it was clear from these discussions that Mr Currie was well aware of the consequence the provision would have upon those with childcare responsibilities.  They also found that Mr Williams and Mr Currie knew the provision would be more difficult for women to comply with for that reason, but they nevertheless intended to impose the provision regardless of its consequences:
“(viii)   On Thursday 5 December 2002 a meeting was held with the workforce.  The second Applicant however was on leave.  Mr Williams informed the staff at that meeting that there would be severe repercussions if anyone failed to attend.
(x)    Mrs Grieves did not attend work on the Friday, 6 December because she had a car accident and notified the Respondent accordingly.
(xi)    Neither Applicant attended the stock take over the weekend.  Neither had made arrangements for child-care to be able to attend their allocated shifts.
(xii)   The second Applicant was looking after her daughter for much of the weekend and working in her father’s public house on a Sunday after.  She thought she had permission not to attend.  If she had known she was to lose her job she could and would have made arrangements for child care such that she would have worked for more than five hours for the Respondent that weekend. She would not have been able to work the required ten hours.  The Tribunal found that in those circumstances she would still plainly have been disciplined as her fellow employee Mrs Leigh was.
(xiii)     Mr Williams instructed Mr Currie to suspend those employees who had not attended any allocated hours who would stock take weekend to investigate and to consider implementing disciplinary proceedings.  Both Applicants were suspended and did attend disciplinary hearings conducted by Mr Currie.
(xiv)   Of the 106 employees who were required to work the stock take 102 attended.  4 employees did not attempt at all, 3 of whom were men.  7 employees had approached Mr Williams well in advance of the weekend to inform him of difficulties they did had with child care, 5 of whom were women and 2 of whom were men.  These numbers are far more illustrative of the issue of disproportionate detrimental effect than the simple number of those who attended the stock take, relied upon by Mr Harrington.  The position adopted by the Respondent was that there would be flexibility in respect of when each employee undertook his or her shifts, but childcare would not be accepted as a sufficient excuse not to undertake the full 20 hours for full timers, and 10 hours for part timers.  The Respondent took the view that it was necessary to impose such strict requirements simply to ensure that the stock take was completed.  There were very few exemptions granted.  One employee worked only on the Saturday due to a domestic issue and another worked only one day because of a pre-booked commitment..”

The Tribunal does not in the sub paragraph specify the number of men and number of women who made up the 106 employees; for the sake of completeness we add that we were told without objection from either side that the work force comprised 82 men and 24 women:
“(xv)    In point of fact the work was completed earlier than might have been the case on the Sunday.  Most of those who were due to finish at 4 pm were released at 2 pm and similarly those who were to finish at 6 pm left at 4 pm.
(xviii)     The Respondent had a written disciplinary policy and procedure.  The Tribunal found that it was not incorporated as a contractual term but it was, they said, nevertheless the procedure the employers ought to have applied.
Under Section 5.5 it is stated:
“No individual may be dismissed, transferred or be demoted without first consulting the Human Resources Director”.
(xix)    The disciplinary hearing in respect of Mrs Greaves was heard on 11 December 2002 by Mr Currie.  She attended with her union representative.  She made reference to the fact that she had informed Mr Currie two months previously that she could not attend the stock take.  After referring to a dispute as to the notes of that meeting the Tribunal said that they accepted the evidence of Mrs Greaves as to what took place at the meeting.  They were satisfied that during the hearing she set out the reasons she could not attend namely because she was looking after her daughter and working in her father’s pub on the Sunday afternoon.  However, they said, significantly she stated that she might have been able to work on a Friday evening if she had known the importance of failing to attend.  What is not in dispute is that Mr Currie found Mrs Greaves to have been of deliberate and planned behaviour in failing to attend the stock take.  He considered this to be gross misconduct and summarily dismissed her.”

3.	The Tribunal then set out all the statutory provisions relevant to the case both unfair dismissal and sex discrimination.  They concluded that both dismissals were unreasonable and unfair.  So far as Mrs Greaves’ dismissal was concerned they said this:
“24.   We find that the dismissal of the second applicant was unfair.  It was the respondent which failed to address the child-care difficulties the second applicant raised two months before the stock take.  Mr Currie wholly failed in his managerial responsibilities to accommodate the issues raised by the second applicant or to attempt to negotiate the satisfactory arrangement with her.  It was no answer for Mr Harrington to say that the second applicant should have raised the matter with Mr Williams because his name was referred to on the notice of 8 October 2002.  Any employee in the second applicant’s circumstances would assume her line manager, Mr Currie, would take the matter up in the appropriate quarters or refer her on to Mr Williams.  Mr Currie did neither.  Accordingly any disciplinary sanction in such circumstances was wholly inappropriate and outside any reasonable band of responses.  There were additionally procedural irregularities in that Mr Currie had failed to take advice from the Human Resources Director  before imposing a sanction of dismissal.”

4.	Mr Matthew Sheridan who has argued the appeal most attractively on behalf of the employers, complains that in the paragraph we have just set out the Tribunal failed to address themselves to the critical question required by the well-known decision of British Home Stores Ltd v Burchell, namely whether, in the light of the facts as the employer’s decision maker reasonably believes them to be following a reasonable investigation, was dismissal within the band of reasonable responses?

5.	We consider that paragraph 24 cannot be viewed in isolation.  The conclusion to which the Tribunal come in the sentence beginning “Accordingly” is plainly taken in the light of the findings of fact in paragraph 5 as well as the criticisms which the Tribunal make of Mr Currie in paragraph 24.  Taking the two together we can summarise the critical sequence of events as follows:

(1)	In early October a conversation took place between Mrs Greaves and Mr Currie.  Mrs Greaves said she would be unavailable to work on the stock take weekend because of childcare difficulties.  Mr Currie’s “initial response” as the Tribunal put it was to say that she should arrange for others to care for her daughter.  She replied this was not possible and she could not attend.  Mr Currie for his part said nothing and left it at that.

(2)	As found in paragraph 24 Mr Currie should either have referred Mrs Greaves on to Mr Williams, taken up the issue with Mr Williams himself or attempted to negotiate a mutually satisfactory arrangement with Mrs Greaves or (possibly) made it absolutely clear to her that neither he nor Mr Williams would entertain any further argument and that if she persisted her job would be on the line.

(3)	Paragraph 5(xix) - at the disciplinary hearing the Applicant reminded Mr Currie of the conversation two months earlier but nevertheless he decided that she had behaved effectively in deliberate defiance of management’s requirements and accordingly dismissed her.

(4)	Paragraph 24 - in those circumstances dismissal (indeed in the Tribunal’s view any disciplinary sanction, but what matters is dismissal) was wholly inappropriate and outside the band of reasonable responses.  

6.	The Respondents at the Tribunal hearing were in the obvious difficulty that Mr Currie denied that the October conversation ever took place.  The Tribunal’s finding of fact, however, is that it did and they accepted the Applicant’s evidence as to the contents of the conversation.  Mr Sheridan very sensibly does not attempt to impugn those findings of fact and plainly we cannot interfere with them.  In the light of those findings of fact it was plain to the Tribunal and it is plain to us that at the conclusion of that conversation the ball was in Mr Currie’s court.  With that in mind it is clear that the Employment Tribunal took the view that Mr Currie on 11 or 12 December could not reasonably form the view that the Applicant had committed gross misconduct.  Putting it another way, any reasonable decision maker in Mr Currie’s position (and one bears in mind that he was the person who had been party to the October conversation) would have realised that the initiative after the October conversation made with him not with her and acted accordingly, by not treating Mrs Greaves’ behaviour over the stock take weekend as gross misconduct.

7.	There was ample material in our view on which to find that his decision to dismiss was outside the band of reasonable responses.  Whether we would have formed the same view had we been the Tribunal of fact is entirely beside the point.  The Employment Tribunal were in our judgment entitled to come to the conclusion they did and the appeal against the finding of unfair dismissal is accordingly dismissed.

8.	Turning to sex discrimination, the Tribunal’s decision was by a majority.  We set out two paragraphs from the Reserved Decision:
“27   The Tribunal unanimously find that the respondent applied a provision to work a particular weekend which had a disproportionately detrimental effect upon considerably more women than men, because of their greater involvement in looking after children.  We unanimously find that the applicant was subjected to the detriment as a consequence of this condition because she was subject to the detriment of dismissal for failing to undertake the full complement of 10 hours work allocated to her over that weekend.  The second applicant had child-care responsibilities which meant she would not have been able to comply with the full requirement without significant inconvenience and difficulty.
28   The majority of the Tribunal find that the respondent has failed to justify the imposition of this provision.  The majority find that the respondent did not analyse the scope for which there was capacity to allow women with significant child-care difficulties to be excused from the stock take, or at the very least, to undertake fewer hours than those demanded.  The stock take concluded two hours early on the Sunday and most staff were allowed to go home before the conclusion of their shift.  A small number of individuals did not undertake the full complement of hours, such as Mrs Leigh, one man who worked only on the Saturday due to a domestic issue and another who had a pre-booked arrangement.  There was thus scope for the stock take to be completed by less than the entire workforce, albeit such scope was relatively limited.  It is for the respondent to satisfy the Tribunal that the discriminatory provision was justifiable.  In the view of the majority insufficient evidence has been placed before the Tribunal by the respondent to satisfy it that the stock take could not be completed without imposition of the discriminatory provision.”

9.	The issues raised under Paragraph 27 about disproportionate adverse impact are quite complex and Mr Sheridan very sensibly suggested that we might wish to hear argument first on justification.  Since his clients are not seeking to persuade us to substitute a view of our own for the finding of sex discrimination, but simply to remit the case to the Tribunal, it is sufficient for his purposes if the majority decision on justification is unsustainable.  He argues that it is because the Tribunal, in reaching the conclusion that the employer has failed to justify the imposition of the provision, have not undertaken the analysis which case law both European and domestic requires.

10.	 The authoritative statement of what the Equal Treatment Directive requires is to be found in the Luxembourg Court’s decision in the case of Bilka-Kaufhaus GmbH v Weber von Hartz [1986] IRLR 317 at paragraph 36:
“If the national court finds that that the measures chosen by [the employer] correspond to a real need on the part of the undertaking, are appropriate with a view to achieving the objectives pursued and are necessary to that end, the fact that the measures affect a far greater number of women than men is not sufficient to show that they constitute an infringement of [what was then] Article 119.”

Mr Sheridan reminds us rightly that in subsequent domestic case law such as Barry v Midland Bank [1998] IRLR 138 CA in the Court of Appeal and Health and Safety Executive v Cadman [2004] IRLR 29 in this Tribunal the tripartite test set out in the citation in Bilka case was adopted with the gloss that the word “necessary” is to be taken to mean reasonably necessary.

11.	We consider that the majority of the judgment at paragraph 28 simply treats justifiability as an industrial jury question without undertaking the analysis which Bilka requires.  The learned Chairman in his dissenting opinion on this point at paragraph 29 of the judgment, points out certain difficulties in the conclusion that the Respondents had failed to justify the imposition of the provisions.  He points out the fact that the stock take finished early was fortuitous, that any glitch or mistake could have resulted in the failure to finish the work in the allotted time, with major ramifications, that had child-care been a permissible exemption a significant number of staff would have been able to avoid working the stock take and he concluded that it was proportionate to impose the provision notwithstanding its discriminatory effect given the imperative of complying with the requirement of the audit and that it affected only one weekend of the year.

12.	If the Employment Tribunal were to find at the previous hearing, or before the Employment Tribunal could find at the remitted hearing, that the employers had failed to justify the imposition of the provision we would expect to see the Bilka analysis carried out.  It simply was not carried out in the decision under appeal.  The finding of sex discrimination must therefore be set aside and the case remitted to the Tribunal.  We have not as yet heard argument from either side about whether the remission should be to the same or a different Tribunal, nor on what terms.  Our provisional view is that there is no reason why the original Tribunal should not hear the case but we will hear both parties on this point.

13.	Finally, we would add that it would be a pity if this issue, involving as it does an award of £1,500, was not susceptible of discussion and compromise, with or without the good officers of ACAS.  But we say no more than that.  In the absence of agreement there will have to be a remitted hearing.