Appeal No. UKEAT/0450/06/RM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON, EC4Y 0DS

	At the Tribunal
On 1 November 2006
Judgment handed down on 9 January 2007

Before
THE HONOURABLE LADY SMITH
MR D G LEWIS
MR H SINGH

B	APPELLANT

A	RESPONDENT

Transcript of Proceedings

JUDGMENT

APPEARANCES

For the Appellant (Respondent)	Mr M Purchase
(of Counsel)
Instructed by:
Messrs CT Emezie Solicitors
The London BIC
Innova Science Park
Enfield
Middlesex
EN3 7XU	
For the Respondent (Claimant)	Mr P McLeish 
(of Counsel)
Instructed by:
Messrs Dowse & Co Solicitors
23-25 Dalston Lane
London
E8 3DF	

Summary
Sex discrimination - Direct
The Claimant was employed by the Respondent, who was a solicitor in a small practice.  A close and intimate relationship developed between them.  He dismissed the Claimant when he saw her with another man on account of jealousy and the discovery that she had another relationship.  The dismissal was unfair.  The Tribunal also found that the Respondent had discriminated against the Claimant on grounds of sex in dismissing her in respect that dismissal would not have occurred but for the fact that the Claimant was a woman.  The Respondent appealed against that finding and the EAT upheld the appeal since the Tribunal had plainly and wrongly applied a “but for” test to the question of whether or not discrimination on grounds of sex had occurred.  

THE HONOURABLE LADY SMITH

Preliminaries
1.	This case concerns sex discrimination.  An Employment Tribunal sitting at Stratford, Chairman Mr R D Miles, found, in a judgment registered on 5 June 2006, that the Claimant, who is the Respondent in this appeal, had been subjected to unlawful discrimination on grounds of sex by the Appellant, her employer, on 6 February 2005.  She was dismissed on that date and the discrimination was said to have been that that dismissal would not have occurred but for the fact that she was a woman.  We propose to refer to party A as the Claimant and to party B as the Respondent.  

Introduction
2.	The Tribunal also found that the Claimant was unfairly dismissed by the Respondent in respect that she was dismissed without notice and without any reason which could be recognised as potentially fair.  No statutory disciplinary procedures were followed.  The Tribunal found that the Claimant was entitled to compensation, to be determined at a separate hearing.  This appeal does not concern the finding of unfair dismissal or the finding of entitlement to compensation.  

Background Facts
3.	B is a solicitor in a small practice.  A was employed by him, initially as a secretary/ receptionist from 1 November 2002.  She was promoted to become his personal assistant, from December 2002.  By the latter part of 2003, they had commenced a consensual relationship which developed to the extent that they were regarded in their local community as man and wife.  The Respondent was considerably older than the Claimant.  He supported her financially and, in particular, paid for her to undertake college and university studies in addition to working in his office.  

4.	By December 2004, the Claimant had, unknown to the Respondent, formed what the Tribunal refer to as a “regular association” with a young man called Mustafa at the university she was attending.  She was, however, still working for the Respondent and continuing her relationship with him, although it was in decline.  On 4 February 2005, she visited his office and expressed her affection for him.  On 6 February, whilst B was in his office, he saw A out walking with Mustafa.  The Respondent reacted by dismissing the Claimant that day.  The Tribunal found as a fact that the reason for the dismissal was “driven by jealousy or the discovery of the Claimant’s relationship with Mustafa” (paragraph 30).  

The Tribunal’s Findings in Law 
5.	The Tribunal first considered whether earlier conduct on the part of the Respondent (in 2003) constituted sex discrimination in respect of which the Claimant could timeously advance a claim.  They found that any claim in respect of conduct in that period was time barred.  They then continued, at paragraph 36:-

“A’s dismissal stands alone as a new cause of action which the Tribunal finds an unlawful act of direct discrimination on grounds of sex entitling A to a declaration and to compensation which will be determined at a separate hearing.  Dismissal would not have occurred but for the fact that A was a woman and the Tribunal conclude that it is overtly an act of less favourable treatment amounting to a detriment and viewed as such not only by A but also would be so regarded by any reasonable person (R v Birmingham City Council, ex parte EOC 1989 IRLR 173(HL).”  

The Relevant Law
6.	In the employment context, Sections 1(2) and 5 of the Sex Discrimination Act 1975 (“SDA”) provide:-

“1(2) ………a person discriminates against a woman if – 
(a) on the ground of sex, he treats her less favourably than he treats or would treat a man …….

5(1) In this Act – 
(a) references to discrimination refer to any discrimination falling within Sections 1 to 4;  and 
(b) references to sex discrimination refer to any discrimination falling within [Section 1,2, or 3A], 
and related expressions shall be construed accordingly.
………………..

(3) Each of the following comparisons, that is – 
(a) a comparison of the cases of persons of different sex under Section 1(1) or (2) ……………..
must be such that the relevant circumstances in the one case are the same , or not materially different in the other.” 

7.	It is evident from the Nagarajan, Khan, Martin, Shamoon and Emokpae cases, all of which were referred to by the Respondent’s counsel, that the crucial and first question that requires to be asked in all cases such as the present one is:  Why it was that the Claimant received the less favourable treatment in question?  Was it on the grounds of sex or was it for some other reason?  As was discussed in Khan, the issue is not to be approached as a question of causation and certainly not as an issue of “but for” causation.  At paragraph 29, Lord Nicholls of Birkenhead said:-

“Contrary to views sometimes stated, the third ingredient (‘by reason that’) does not raise a question of causation as that expression is usually understood.  Causation is a slippery word, but normally it is used to describe a legal exercise.  From the many events leading up to the crucial happening, the court selects one or more of them which the law regards as causative of the happening.  Sometimes the court may look for the ‘operative’ or the ‘effective’ cause.  Sometimes it may apply a ‘but for’ approach.  For the reasons I sought to explain in Nagarajan ………, a causation exercise of this type is not required either by Section 1(1)(a) or Section 2.  The phrases ‘on racial grounds’ and ‘by reason that’ denote a different exercise:  why did the alleged discriminator act as he did?  What, consciously or unconsciously, was his reason?  Unlike causation, this is a subjective test.  Causation is a legal conclusion.  The reason why a person acted as he did is a question of fact.”  

8.	Although Khan concerned a claim under the Race Relations Act 1976, these comments can be applied mutatis mutandis, to cases brought under SDA.  

9.	Similarly, in Emokpae, where the Claimant sought to argue that her dismissal (which resulted from there being rumours in the workplace about her having a relationship with one of the principals in the office where she worked) was on grounds of her sex, the Court of Appeal said:

“It is not enough that there would have been no rumours but for Ms Emokpae being a woman.  The Employment Tribunal had to be able to infer that the reason in the mind of Mr Emezie was her sex, but the Tribunal’s acceptance of the rumours as the reason for dismissal shows that she was not dismissed on the ground of her sex.”  

10.	The approach of this Tribunal in the case of Martin is also instructive.  That case also concerned there having been an intimate relationship between a male and a female in the workplace, which broke down and resulted in dismissal of the female.  The following passage at paragraph 12 is in point:-  

“It seemed to us that the critical issue posed by Section 1(1)(a) was whether Mr Lovering dismissed Mrs Martin ‘on the ground of her sex’ an issue requiring a consideration of why he dismissed her.  As we have said, we interpret the Tribunal as having found that the dismissal was because of the breakdown of the relationship.  That, therefore, was the reason for her dismissal, not because she was a woman.  We accept that, but for her sex, there would have been no affair in the first place.  It could, however equally be said that there would have been no such affair ‘but for’ the facts (for example) that she was her parents’ daughter or that she had taken up employment with Lancehawk.  But it did not appear to us to follow that reasons such as those could fairly be regarded as providing the reason for her dismissal.”  

11.	As to the matter of the use of a comparator, we are mindful of the caveat sounded in Bahl at paragraph 128 to the effect that it is not an error of law to fail to construct a hypothetical comparator in a sex discrimination case provided all potentially non-discriminatory reasons which might sensibly account for the treatment have been properly been taken into consideration.  However, it seems to us that that is but another way of saying, as was commented in Shamoon, that it is vital that a proper comparison is made, given that the advancement of a non-discriminatory reason will almost inevitably involve the assertion that others without the characteristic in question, would have been treated the same way.  At paragraph 108, Lord Scott of Foscotte said:

“… the statutory definition of what constitutes discrimination involves a comparison …. between the treatment of the victim on the one hand and of a comparator on the other hand.  The comparator may be actual … or hypothetical …. but …. if there is any material difference of the comparator, the statutory definition is not being applied.”  

12.	Put more shortly, as in MacDonald v Advocate General for Scotland [2003] IRLR 512:
“ … there is no escape … from the need to resort to a comparison.” (per Lord Hope at paragraph 94).  

Thus, there may be no need for an actual or hypothetical comparator but there must, to accord with the statutory requirements be an appropriate comparison.  

Respondent’s Case on Appeal 
13.	In a clear and able submission, Mr Purchase sought to persuade us that the Tribunal had erred in law.  They had, he said, erroneously applied a “but for” test rather than asking whether the dismissal of the Claimant was “by reason of” her sex.  In support of his submission that they were in error in doing so, he referred to Nagarajan v London Regional Transport [1999] IRLR 572, Chief Constable of West Yorkshire Police v Khan [2001] IRLR 830 and Chamberlin & Anr v Emokpae [2005] ICR 931 and Martin v Lancehawk Ltd UKEAT/0525/03/ILB, 22 March 2004.  He also referred to the case of Shamoon v Chief Constable of the RUC [2003] IRLR 285.  Further, the Tribunal had not even attempted to construct an appropriate comparator as, in the circumstances, they should have done and they had given inadequate reasons for their decision.  
14.	It was plain, it was said, that the Tribunal required to focus on the question of what was the reason for the dismissal.  They had found the reason.  It was jealousy and the discovery of the Claimant’s relationship with Mustafa.  It was nothing to do with her gender.  That being so, it was not open to them to find that the dismissal was on account of the Claimant’s sex.  

15.	Mr Purchase submitted that that really was as far as he required to go.  However, lest it was felt necessary to do so, he also addressed the comparator question.  Whilst Tribunals may not be obliged be to create a hypothetical comparator (Law Society & Ors v Bahl [2003] IRLR 641), the Tribunal’s failure to do so in this case may have led them into the error that they made.  Had they constructed a comparator, they would have had to postulate a homosexual male employer and a homosexual male employee (Emokpae).  If that was done, it was not possible to find that the Claimant was treated less favourably than a man would have been in her position.  The SDA was not designed to protect employees from bad behaviour or spurned relationships.  It was to do with the protection of women from being treated less favourably because they are women and men being treated less favourably because they are men.  That was not what had happened in this case.  

16.	In anticipation of the argument against him, Mr Purchase submitted that the case presented on appeal was not a new point of law being raised on appeal.  It was integral because the Claimant’s claim was one for sex discrimination and thus whilst the points argued may not have been put before the Tribunal, it was not contrary to principle that they be considered at this stage.  

Submissions for the Claimant on Appeal 
17.	Firstly, Mr McLeish submitted that the Respondent was seeking, impermissibly, to present a new point of law; the submissions now presented were not argued before the Tribunal.  He referred to Jones v Governing Body of Burdett Coutts School [1998] IRLR 521, Glennie v Independent Magazines (UK) Ltd [1999] IRLR 719, Hendricks v Police Commissioner [2003] IRLR 96 and Kumchyk v Derby County Council [1978] ICR 1116.  In respect that the case for the Respondent on appeal was directed specifically at the applicable law in the context of it having been found that the act of dismissal was discriminatory, we asked Mr McLeish whether it had been argued for the Claimant before the Tribunal that her dismissal was a “stand alone” incident of sex discrimination.  He said it had not.  

18.	Secondly, he submitted that the Respondent had completely misconstrued the Tribunal’s decision.  It was not the case that the key issue was the parties’ relationship nor, he said, had the Tribunal made it clear that jealously was the cause of the dismissal.  

19.	In development of that submission, he drew attention to the fact that the Tribunal’s finding was not that the cause was jealousy but that it had been driven by jealousy.  He then submitted that it was implicitly clear from the whole of the Tribunal’s findings, including those regarding the earlier stages of the parties’ relationship, that the Claimant was dismissed on account of the Respondent having used threats to extort sex from her.  That submission was, however, ultimately withdrawn.  He then focussed on the Tribunal’s findings about the earlier difficulties in the parties’ relationship and submitted that it could have been that the Tribunal had them in mind when they were drawing conclusions as to whether the dismissal was discriminatory.  He did not explain, though, how, even if that was so, it would have amounted to a finding that the reason for the Claimant’s dismissal was her sex.  The submissions on this matter were not entirely clear but it seemed to be that Mr McLeish’s approach was to look at the difficulties that there were in the early part of the relationship, thereby brand the relationship as being one in which the Respondent was exploiting the Claimant throughout in a domineering fashion and to regard dismissal against that background as being discriminatory on grounds of sex on the basis that the sex discrimination legislation had as its purpose the protection of persons from being, as he put it “disproportionately subject to threats.”  

20.	Thirdly, he said that a Tribunal’s judgment can properly be brief and succinct, as this one was, but that that is only acceptable if they are addressing the right questions.  The use by the Tribunal of the “but for” formula was a necessary but not sufficient part of the correct test.  It showed that the Tribunal had taken account of there being a need for a comparator.  Whilst they had not described the characteristics of the comparator they had in mind, it was not necessary to have an elaborate discussion about the comparator.  If there was a “right” comparator to use, it would not be a homosexual man but a heterosexual man with whom the Respondent (as a woman) was having a relationship.  

Discussion and Conclusions
21.	We are readily satisfied that this appeal is well founded.  

22.	Firstly, we reject the argument that the Respondent now presents a new case and should not be allowed to do so.  It is not a new case.  The considerations to which Mr Purchase invited us to have regard arise from the nature of the Claimant’s claim, namely a claim that she was discriminated against on grounds of sex.  Whilst the application of the law to the particular factual matrix of the dismissal standing alone as a single act of discrimination may be new, the Claimant can hardly complain since, as Mr McLeish himself advised, that had not been her position before the Tribunal.  It is thus not at all surprising that the Respondent did not specifically address the matter.  Further, the Respondent could not have anticipated that the Tribunal would fall into the error which we are satisfied they did and it would be quite wrong to prevent the argument being advanced now on the basis that that error was not anticipated and guarded against at the earlier stage.  

23.	The Tribunal provide the answer to the necessary question:  “why was the Claimant dismissed?” in paragraph 30:-

“… the reason for the dismissal was driven by jealousy or the discovery of A’s relationship with Mustafa.  There was no business reason.”  

24.	Even less, does it seem, could it be said that the reason operating in the Respondent’s mind was that the Claimant was a woman.  The circumstances appear to be very like those in the case of Martin and we gratefully adopt the comments made there, to which we have already referred.  The dismissal occurred because of relationship breakdown, nothing more and nothing less than that.  That being so, it was simply not open to the Tribunal to find, as they later do, that the Claimant suffered discrimination on the grounds of sex.  They do so because the dismissal “would not have occurred but for the fact that A was a woman”.  But that will not do, for the reasons explained in the authorities to which we have already referred.  It is not a matter of applying simple “but for” causation, particularly not when the Tribunal had already made a specific finding as the reason why the Claimant was dismissed which was inconsistent with the reason being her sex.  

25.	It will be evident from the views that we have just expressed that we consider that there is no merit in Mr McLeish’s submission that the reason for the dismissal was as put forward by him.  There was no basis whatsoever in the Tribunal’s findings in fact for the approach that he urged us to adopt.  Further, insofar as his argument was driven by his view that the legislation has the wider purpose to which he referred, we do not agree with him that it does.  
26.	The Tribunal’s error may well have been compounded by the fact that they failed to carry out an exercise in comparison.  In the circumstances of this case we consider that it was incumbent on them to construct a hypothetical comparator and following Martin and Emokpae, we agree with Mr Purchase that the appropriate comparator would have been a homosexual male employer and a homosexual male employee.  On the Tribunal’s findings, such an employee would have received exactly the same treatment, namely, he would have suffered dismissal when his apparent infidelity was discovered driven by feelings of jealousy.  Further, we note the hypothetical comparator suggested on behalf of the Claimant but cannot see that reversal of the male/female roles as between the Respondent and the Claimant would have made any difference to the outcome.  It seems to us that dismissal for the same reason would still have resulted.  

Disposal
27.	We will, in all the circumstances, pronounce an order upholding the appeal and dismissing the Claimant’s claim that she was discriminated against on grounds of sex.