APPEARANCES
| For the Appellant |
MR OLIVER SEGAL
(of Counsel)
Instructed by:
Howes Percival Solicitors
Oxford House
Cliftonville
Northampton
NN1 5PN |
| For the Respondent |
MR BRUCE CARR
(of Counsel)
Instructed by:
Rowley Ashworth Solicitors
No. 1 Snow Hill Plaza
St Chad's
Queensway
Birmingham B4 6JG
Wimbledon |
SUMMARY
Unfair Dismissal and Disability Discrimination
- Employee's claims of (1) disability discrimination, (2) failure to make adjustments, and (3) constructive dismissal succeeded.
- Employers' appeal against (1) and (3) dismissed; no misdirection; no perversity.
- As to (2) both parties believed that the employee had diabetes type 1 – in which case he would have been a disabled person to whom s.6(2) duty (old law) applied. However these were both mistaken; he had diabetes type 2 – in which case he was not disabled. This gave rise to a new point; should the issue he decided on the basis of the parties' joint belief or on the basis of the true facts? Held that s.1(2) of the Act defines a disabled person as a person "who has a disability" and not as one "who has or is believed to have a disability": therefore the s.6(2) duty did not arise; this aspect of the appeal succeeded.
HIS HONOUR JUDGE J BURKE QC
The History and Issues
- This is an appeal by the employers Copal Castings Limited, whom we shall call "Copal", against the decision of the Employment Tribunal sitting in Birmingham, chaired by Mr Swan and sent to the parties with Extended Reasons on 16 September 2004. By that decision the Tribunal found that the employee, Mr Donald Hinton, had been constructively and unfairly dismissed by the employers and that the employers had been guilty of discrimination under the Disability Discrimination Act 1995 in its pre-October 2004 form, both by way of less favourable treatment contrary to Section 5 (1) of that Act, as it then was, and also by way of failure to comply with the duty to make reasonable adjustments, which duty is imposed by s.5 (2) and s.6 of that Act. Copal appeals against all three of those conclusions of the Tribunal.
- Throughout this Judgment, and indeed throughout the argument, the Disability Discrimination Act has been looked at in its old form appropriately, because it is the old form which applied throughout the time material to this appeal and it is not suggested that any amendments recently introduced affect the position in any way.
- The relevant facts can for present purposes be set out with relative brevity. Mr Hinton was employed by Copal from 1983 to December 2002, latterly in the Stores. He was known to suffer from epilepsy. As a result it had been agreed that he would work only limited overtime and then only if he felt up to it. While he did not have any grand mal seizures for ten years prior to the facts which led to the end of his employment, he continued to suffer from time to time from minor seizures, which led to his being disorientated and sometimes to black-out for a brief period. When that happened, his brothers, one of whom also worked for Copal as we understand it, were permitted to attend his workplace to take him to hospital.
- In 2002 Copal was going through an economic downturn; redundancies were necessary; and there was increased pressure on the workforce. A new Operations Director, Mr Castle, came in; and Mr Hinton had a new line Manager, Miss Davey. At the end of May or the beginning of June, Miss Davey asked Mr Hinton to do some overtime. He said that he did not wish to do so. Miss Davey said his epilepsy should not be used as an excuse for his not wanting to do overtime. No formal or informal grievance was lodged by Mr Hinton at the time arising from this incident: it had not been complained of as a freestanding act of discrimination; and the Tribunal decided that that was not an act of discrimination; but plainly it was part of the background, indicative, perhaps, of the attitude of the new managers to Mr Hinton's special position in the company.
- There was another subsequent incident described by the Tribunal in paragraph 17 in its Decision; but the Tribunal's findings do not reveal anything which could be said to be critical of Copal in respect of that incident; and it has played no part either in the decision or in this appeal.
- Mr Hinton was not considered to be part of Copal's redundancy programme: he was not slated for redundancy; but in July 2002 his eyesight deteriorated; he went off work through ill- health on 10 July: and blood tests revealed that he was suffering from diabetes. At the time and until October 2002, both parties believed that this was type 1 diabetes, which would involve a regular injection of insulin and monitoring of blood and sugar levels. It later turned out, in October 2002, that it was in fact type 2 diabetes, which could be managed without injections and with a proper diet and appropriate rest.
- The Tribunal, at paragraph 20 of their Decision, said that, up to this point, there was no evidence to suggest that Mr Hinton had in any way received less favourable treatment from Copal. While Mr Hinton was off work, his brothers and Copal were in regular contact about his progress; and clearly Copal knew, as a result, about the diabetes. As a result of a suggestion made by Miss Johnston, the factory's Human Resources representative, a meeting was arranged between Mr Castle and Mr Chris Hinton, one of Mr Hinton's brothers, to discuss Mr Hinton's progress. There was a clash of evidence as to that meeting but the Tribunal expressly preferred the evidence of Mr Chris Hinton as to what occurred. The meeting took place on 8 August. The Tribunal found that Mr Chris Hinton suggested adjustments to his brother's workload so that he could work on a part-time basis and referred, in the light of his brother's condition, to the need for flexibility: clearly, he was indicating that Mr Hinton wanted to stay in his job. Mr Castle was found to have said that there were no part-time workers in the company and that such work was unacceptable but that Mr Hinton should consider and apply for voluntary redundancy.
- There has been much discussion in the course of the submissions before us on this Appeal as to whether, in what they said about voluntary redundancy, Copal were offering voluntary redundancy to Mr Hinton or were putting the matter in a less positive way. Mr Segal, on behalf of Copal, said that this was not an offer but a suggestion which Mr Hinton was being asked to consider. Mr Carr submitted, relying on what the Tribunal said in paragraph 27 of their Decision where they use the word 'offer', that this was an offer, albeit not one which was necessarily binding. What is clear to us is that the Tribunal was finding that a proposal was being put to Mr Hinton for him to consider; and he was entitled to believe that if he accepted it, the employers would either themselves accept or would at least seriously consider it. If in the course of this Judgment hereafter we use the word 'offer' it is to be construed in the light of what we have just said.
- It is accepted that Mr Hinton did apply in writing for voluntary redundancy, indeed by the very next day; and, on that day, a second meeting took place between Mr Castle and Mr Chris Hinton, at which Mr Castle told him that the position had changed in relation to redundancy and that the best offer that Copal could make was one of an ex gratia payment of £3,000, which was equivalent to a twelve week notice period without deduction of tax and national insurance, in other words, his notice money paid "up front". That would be paid at the end of the expiry of his period of contractual sick pay, of which six weeks remained. It is common ground that that ex gratia offer amounted to the offer of a financial package substantially less than that which would have resulted from a statutory redundancy payment plus twelve weeks' notice, Mr Hinton having been in employment for nineteen years. Whether there was a voluntary redundancy scheme offering enhanced redundancy pay over and above statutory redundancy pay does not appear from anything before us and is sheer speculation; and it does not matter because there is no doubt that there was a substantial difference between the original proposal of voluntary redundancy and the substituted offer or proposal of an ex gratia payment of £3,000.
- Mr Hinton decided that he did not want to take the ex gratia payment and leave; and at the family's request a further meeting took place on 12 August. Present for Copal were, as before, Mr Castle and Miss Johnston; another of the Hinton brothers, Mr Geoff Hinton, was present on behalf of the employee; and a trade union representative was also present. After a brief discussion, Mr Geoff Hinton said that the ex gratia offer was unacceptable and that future negotiations should go through his brother's trade union. Copal then withdrew the ex gratia offer.
- On 23 August, Copal again offered or put forward a revised proposal; in this case there is a specific finding that it was an offer to Mr Hinton of voluntary redundancy. Precisely how that was done does not appear; and it does not matter. Copal were informed that this offer should be canvassed at a formal meeting through the union, as indeed had been made clear on 12 August; but Copal never contacted the union. Although there was some contact between the family and the union, no further steps were taken by Copal or for that matter by the family.
- Mr Hinton remained off work until, in November 2002, he wrote a letter of resignation claiming that he had been very badly treated by Copal and that they had since his diagnosis as a diabetic effectively written him off. That resignation eventually took effect on 11 December 2002. His Originating Application to the Employment Tribunal complaining of constructive dismissal and disability discrimination was lodged on 4 February 2003.
- The Tribunal directed themselves as to the law of disability discrimination at paragraphs 3 to 10 of their decision, and as to the law of constructive dismissal at paragraphs 11 to 12. No criticism was made of their self-direction as to the law of discrimination. We will return later to what they said about constructive dismissal. They then set out their findings of fact, which we have set out in abbreviated form, summarised the submissions made by the parties and set out their conclusions in one long paragraph (paragraph 27). Those conclusions can be appropriately expressed in brief as follows: (i) Copal were aware by August 2002 that, in addition to his epilepsy, Mr Hinton suffered from diabetes, which all believed to be class 1 diabetes. He was a disabled person to whom Copal owed a duty under Section 6 (1) of the Act to make reasonable adjustments as appropriate. (ii), here we quote the precise words of paragraph 27:
"In so far as the redundancy suggestion and the ex-gratia offer were concerned, we conclude that on the evidence of Mr Chris Hinton the redundancy offer was first made and then withdrawn by Mr Castle. That in doing so (given the earlier comment made by Miss Davey about the applicant's epilepsy) in the absence of any satisfactory explanation from the respondent we infer and conclude from the facts, that this was for a direct reason relating to the applicant's disability, i.e. his epilepsy."
(iii) The failure of Copal to consider and undertake reasonable adjustments involving part-time working to allow a degree of flexibility to Mr Hinton to enable him to take his appropriate injections, have sufficient rest breaks and monitor his blood sugar levels, was a breach of Section 6 duty to make appropriate reasonable adjustments. (iv) As to constructive dismissal, the Tribunal said at the end of paragraph 27:
"In regard to the issue of constructive unfair dismissal there were ongoing negotiations and correspondence between the applicant and his family and the respondent following the meetings of 8 and 9 August. We do not consider that the applicant delayed in resigning his employment and cannot be criticised for this. We do conclude, however, that the actions of the respondent company which we found were first to offer him redundancy then withdraw it, and then to offer an ex-gratia payment and then ultimately to again offer redundancy meant that the applicant had every right to lose faith and confidence in his employer and the security of his future and was therefore so entitled to resign his position. We therefore find that the applicant was also constructively unfairly dismissed."
Disability Discrimination
- It appeared to us to be logical to hear the parties' submissions upon the issue of discrimination first; and Counsel have obligingly addressed us in that way. Mr Segal, on behalf of Copal, in his skeleton argument criticised the Tribunal's decision as to discrimination under Section 5 (1) of the Disability Discrimination Act 1995 in three respects.
- He set out, first, submissions that the Tribunal had failed to consider at all the issue of justification. It is, of course, a requirement of the finding of disability discrimination under Section 5(1) of the Acts that, in addition to discriminatory treatment under Section 5 (1) (a), the employer cannot show that the treatment in question was justified under Section 5 (1) (b). However, in the light, firstly, of the fact that the employer's version of events denied any facts such as that which the Tribunal found amounted to discrimination and, secondly, of the words in the passage which we have quoted from paragraph 27 of the Tribunal's decision "in the absence of any satisfactory explanation from the Respondent", Mr Segal withdrew this part of this appeal and we say no more about it.
- The second and third criticisms levelled by Mr Segal against this aspect of the Tribunal's decision can, it seems to us, be considered together. They are that the decision is perverse or contains no or no adequate reasons for the Tribunal's conclusions. It is perverse, he submitted, because no reasonable Tribunal could have decided that a changing approach to negotiations as to how to deal with the situation produced by Mr Hinton's condition, leading, as it seems both sides were prepared to discuss, in the absence of the possibility of part-time working to a consensual termination of his employment on an agreed basis, could be less favourable treatment for a reason relating to his disability. There were inadequate reasons, it was submitted, in that if the conclusion is not to be seen as perverse, the Tribunal must have had other reasons in mind which do not appear in the conclusions which they have expressed and in the reasons which appear, Mr Segal submits, not to give a great deal of support to the conclusion.. All that the employers did, he submits, is that they made a proposal which they were not bound to make, decided not to go through with that proposal, made a lesser offer which they were not required to make to an employee who was off-sick and might never have been able to return at all and then reinstated the original proposal. Mr Segal submits that it is, to use his words, "wholly indefensible to treat that as an act of discrimination". He draws attention to the fact that, in the submissions on behalf of Mr Hinton to the Tribunal, the finger was pointed, he says, more at the original offer than at its withdrawal.
- Mr Carr submits that the Tribunal were entitled to treat Copal's offer of voluntary redundancy or at least the proposal for voluntary redundancy and the withdrawal of that offer and its replacement with a less advantageous alternative as less favourable treatment, and then to infer that the treatment was related to Mr Hinton's disability. As to perversity, he submits that, even if, (which we should not, he says), the view taken by the Tribunal was not one with which we would have agreed, nevertheless, that would not make this decision perverse. He reminds us that, in the recent decision of the Court of Appeal in Yeboah v Crofton [2002] IRLR 634 (CA), Mummery LJ said this at paragraphs 92-93:-
"92. A ground of appeal based on perversity should always be fully particularised, so that the respondent can be fully prepared to meet it and in order to deter attempts to pursue hopeless and impermissible appeals on factual points…
93. Such an appeal ought only to succeed where an overwhelming case is made out that the Employment Tribunal reached a decision which no reasonable tribunal, on a proper appreciation of the evidence and the law, would have reached. Even in cases where the Appeal Tribunal has "grave doubts" about the decision of the Employment Tribunal, it must proceed with 'great care'…"
He went on to point out that there have been frequent attempts in the tribunal to present appeals on issues of fact rather than on questions of law and that that should be resisted.
- In our judgment the Tribunal was plainly, albeit perhaps elliptically, in the passage in paragraph 27 in which they set out their conclusion and their reasons for their conclusion as to discrimination by way of less favourable treatment, concluding that Mr Hinton had been treated less favourably than someone to whom the reason for so treating him did not apply, following the principle in Clark v Novacold [1999] IRLR 318 to which they had directed themselves earlier in their decision. There was no suggestion that any other employee who did not have a disability would have been treated as was Mr Hinton. Once that was established, then whether the treatment was for a reason related to Mr Hinton's disability or disabilities was, of course, a question of fact. The facts as found were that Mr Hinton, who was obviously in a position in which the security of his job was at risk, had, in that context, received a proposal of voluntary redundancy, which was then withdrawn and substituted by something substantially less valuable. In the absence of any satisfactory explanation, in our view, the Tribunal was entitled to conclude on the facts, as they did, that that conduct, which of course has to be viewed as a whole, subjected Mr Hinton to a detriment and that conduct was for a reason related to his disability. Whether we would have so found is another matter and does not arise. We are wholly satisfied that no overwhelming case of perversity has been made out. This is not a case, to use a different expression, as that in the well-known case of Neale v Hertfordshire and Worcestershire Council [1986] ICR 471, in which we think it right to say 'my goodness that must be wrong'. As to reasons, taking the decision as a whole, we are entirely satisfied that the reasons in the quoted passages of the decision satisfy the requirements of the decision in Meek v City of Birmingham District Council [1987] IRLR. when taken in the context of the findings of fact to which we have referred, which it was not necessary for the Tribunal to repeat in their decision paragraph. The Tribunal spelt out shortly and, in our judgment, sufficiently what their conclusion was and why they had so concluded so as to enable the parties to know sufficiently whether they had won or lost.
- We turn therefore to the second form of discrimination which the Tribunal found to have occurred, that is to say a breach of the duty to make reasonable adjustments. There is an important and novel aspect which arises on this part of the Appeal. As at August 2002, Mr Hinton and his family believed that he had type 1 diabetes, which is a serious condition: so did the employers. If he had had that condition, Mr Carr submitted, he would have fallen within the words of Section 6 (1) of the Disability Discrimination Act 1995, namely he would have been a person who fell within the words:
"6 Duty of employer to make adjustments
(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."
In other words, the duty to make adjustments would have arisen. But Mr Carr concedes that Mr Hinton did not in fact have that condition; he had type 2 diabetes only, although the parties did not know that was the case; and, with admirable frankness, Mr Carr accepts that if, as was the true case, Mr Hinton only had type 2 diabetes, then the Section 6 duties would not apply because he would not have been a disabled person who was "at a substantial disadvantage in comparison with persons who are not disabled."
- In these circumstances, a point arises as to whether, when both parties at the time when the impugned conduct takes place believe that there is a serious condition which gives rise to a Section 6 (2) duty but it turns out that there was no such condition giving rise to a Section 6(2) duty, the position must be judged on the true facts or on what the parties believed. It is perhaps somewhat surprising that, in nearly ten years since the passing of the Disability Discrimination Act in any form, this point has never arisen before.
- Mr Carr submits that we should adopt a purposive construction which would produce a result that the Disability Discrimination Act operates in the same way as the Race Relations Act and the Sex Discrimination Act. He puts before us the example of an employer who receives an application for a job from somebody who he believes to be a Moslem or, let us say, a Jew, and who says "I am not employing you, you are a Moslem" or "you are a Jew", when in fact it is the case the employee was not a Moslem or a Jew at all. The Race Relations Act, says Mr Carr, would extend to cover that kind of conduct irrespective of the true state of facts. That may well be right; but if the Race Relations Act does so extend, it is not because of any artificial construction which would have to be adopted of the Race Relations Act in order to achieve that result, but because of the words of Section 1 of the Race Relations Act themselves, namely:
"1 (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."
Those words focus on the grounds and the behaviour of the person who is alleged to be the discriminator and point in a different direction from that in which we have to look when considering Section 6 or Section 1 of the Disability Discrimination Act. Mr Carr accepts that if he is to persuade us on this part of his appeal, he must persuade us that Section 1 (2) of the 1995 Act, which says:
"1. Meaning of "disability" and disabled person"
(2) In this Act "disabled person" means a person who has a disability."
should be interpreted as meaning "In this Act 'disabled person' means a person who has a disability or is believed to have a disability". There is no authority for such an extension to the words of the statute; and we do not believe it to be right to read the words of the statute by adding important extra words which could have all sorts of consequences which the draughtsmen of the statute or, perhaps to be more correct, Parliament would not seem to have intended; and we decline the invitation so carefully dangled in front of us by Mr Carr.
- Mr Carr accepts that, if he fails on this construction point, he must fail on this part of the appeal. It is not therefore necessary for us to go any further into the argument presented by Mr Segal on this part of the Appeal because, for the reasons that we have set out, it must succeed and the finding that there was disability discrimination by failure to make reasonable adjustments must be set aside. As it happens, and as Mr Carr accepts, because Mr Hinton did not have the condition that he was believed to have and because what Mr Hinton did have did not require any reasonable adjustments to be made, it may be, although that is a matter with which we are not directly or even indirectly concerned, that there would have been little if any remedy for that particular act of discrimination in any event. It is also perhaps of some significance that this piece of discrimination is not relied upon by the Tribunal in reaching their decision as to constructive dismissal to which we now turn.
Constructive Dismissal
- Mr Segal's submissions on the constructive dismissal aspect of this case are threefold. Firstly, he submits that the Tribunal applied the wrong test in law when they came to make their decision of constructive dismissal, secondly that their decision was perverse and, thirdly that there are insufficient reasons. We will deal with those points in that order.
- As to the application of the wrong test, Mr Segal first of all takes us to paragraphs 11 and 12 of the Tribunal's Decision wherein they directed themselves as to the law of constructive unfair dismissal. In paragraph 11 the Tribunal referred to the principles derived from Western Excavating (ECC) Ltd v Sharp [1978] ICR 221, in terms which are unexceptional and as to which Mr Segal has no criticism. They then went on in paragraph 12 to say this:
" Further, we note that an employer may be held to be in repudiatory breach of contract not only if he breaks an express term but also if he infringes an implied term and therefore an employer will be held guilty of a breach which entitles an employee to resign and claim that he has been constructively dismissed, if the employer behaves in such a way which destroys the relationship of trust and confidence with his employee."
Mr Segal submits that there is an important difference between something which destroys the relationship of trust and confidence in an employee and an act which is an act of the employer such as is likely or calculated to achieve that effect. The implied term, well recognised of course in the case of Malik v BCCI [1997] IRLR 469 and earlier cases, is that the employer shall not act in a way calculated or likely seriously to damage the relationship of trust and confidence between employer and employee. That requires an objective assessment of the nature of what the employer has done and it is insufficient to establish constructive dismissal, that what the employer has done is seen by the employee to have had the effect of destroying the relationship of trust and confidence. Yet, says Mr Segal, the words of the Tribunal in paragraph 12 indicate that they were directing themselves to look only at the subjective attitude of the employee and not objectively at the nature of the conduct of the employer. That, says Mr Segal, is supported by and strengthened by what they say in their conclusions as to constructive dismissal at the very end of their decision, at paragraph 27, which we have already cited in full.
- We do not agree with these submissions. In our judgment, the Tribunal in paragraph 11, in setting out correctly the principles derived from Western Excavating v Sharp, directed themselves that what must be established is that the employer has committed a serious breach of his contract, thus implicitly directing themselves to look objectively. They then in paragraph 12 set out, correctly, that an employer may be held to be in repudiatory breach of contract not only if he breaks an express term of that contract but also if he infringes an implied term. They then went on to identify the nature of the implied term which was relevant to this particular case It is true that they do not use the words "calculated and likely" as set out in Malik; but the words "which destroys the relationship of trust and confidence" which they do use demonstrate to our satisfaction that the Tribunal had not departed from the objective standard as to which they had previously directed themselves and had not instead focussed on the employee's subjective reaction only. The Tribunal on a true reading of their words, in our judgment, were looking at the objective question, namely, had the conduct destroyed the relationship of trust and confidence?, and was it such conduct as had that effect? We take the view that, in paragraph 12, the Tribunal had not strayed from their correct self-direction. That that is so is made more clear by paragraph 27, in which the Tribunal said not only that the employee was entitled to resign from his position but that he had, as a result of the conduct, every right to lose faith and confidence in his employer. Those words we take to mean, because they clearly in our judgment do so mean, that the conduct was such as was likely to, and, indeed, had caused him to lose faith and confidence in his employer. They were looking at the position objectively and then expressing that, as a result of their objective assessment of the conduct, Mr Hinton was entitled to resign. Thus we reject that part of Mr Segal's argument.
- As to perversity, Mr Segal submits with echoes of the argument about perversity on the first part of this appeal, disability discrimination, that this was not conduct which could on any basis be regarded as sufficient to satisfy the tests to which we have referred. It may have been uncaring or lacking in sympathy. It may even have been unreasonable; but; as Mr Segal rightly says, conduct which only attracts that characterisation would not be sufficient for constructive dismissal; and the Tribunal must, in concluding that it did so amount, have come to a conclusion which was perverse, that is to say, a conclusion which no reasonable Tribunal could have reached.
- Mr Carr submitted that, in the context of Mr Hinton's concern as to the security of his job, it was open to the Tribunal to conclude that, when, rather than discussing how he could stay in his job, the employer offered redundancy, then withdrew that offer on the very next day after Mr Hinton had accepted it and then substituted it with a lesser offer, that was conduct which could be seen as sufficiently serious, viewed objectively, to amount to a repudiatory breach of the implied term to which we have referred.
- We repeat that perversity has to be established by producing in us the clear and firm reaction 'My goodness that must be wrong'. Perversity, if it is to succeed as argued, requires that we should be satisfied that an overwhelming case is made out that the Tribunal reached a decision that no reasonable tribunal on a proper appreciation of the evidence and the law would have reached; we are not so satisfied. In our view, for the reasons sets out by Mr Carr, the decision which the Tribunal reached on this issue was one which it was open to them to reach on the facts; and therefore it cannot be the subject of successful attack in this appeal tribunal with its limited jurisdiction. Finally, we take the view that the reasons which we have set out, taken in the context of the decision as a whole, the Tribunal's self-directions as to the law and their findings of fact, are sufficient to satisfy the requirements of Meek and to tell the parties not only who had lost and won but why they had lost and won. Thus, on this aspect of the appeal, the employers fail.
Conclusion
- Accordingly our conclusion is that this appeal is allowed in part; namely the part which we have identified, and is otherwise dismissed.
