Appeal No. UKEAT/0316/08/DM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 3 October 2008

Before
HIS HONOUR JUDGE PETER CLARK

MRS M McARTHUR BA FCIPD

THE HONOURABLE LORD MORRIS OF HANDSWORTH OJ

MR M H SYED	APPELLANT

(1)  WIGHTLINK (GUERNSEY) LIMITED
(2)  WIGHTLINK LIMITED	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR E BROWN
(of Counsel)
(Appearing under the Employment Law Appeal Advice Scheme)	
For the Respondent	MR T FORER 
(of Counsel)
Instructed by:
Clarke Willmot
Burlington House
Botleigh Grange Business Park
Hedge End
Southampton  SO30 2DF	

SUMMARY
RACE DISCRIMINATION:  Direct / Burden of proof
PRACTICE AND PROCEDURE:  Appellate jurisdiction/reasons/Burns-Barke

Direct race discrimination. Consideration of case at stage 1 of Igen.  Reasons for upholding employer’s explanation at stage 2.

HIS HONOUR JUDGE PETER CLARK
1.	This is an appeal by Mr Syed, the Claimant before the Southampton Employment Tribunal, against a reserved judgment with reasons of a Tribunal chaired by Employment Judge Peters and dated 12 February 2008, dismissing his complaints of direct racial discrimination and victimisation brought against the Respondents (1) Wightlink (Guernsey) Limited and (2) Wightlink Limited.  We shall describe the parties as they appeared below.

Background

2.	The second Respondent operates car and passenger ferries between the Isle of Wight and the mainland.  The first Respondent provides sea-faring staff to the second Respondent.  The claimant, who is of Asian/Pakistani origin, is a well qualified marine engineer.  He worked for a number of shipping companies and commenced work on Wightlink Ferries in July 2004.  His services were then supplied on a series of temporary or seasonal contracts through a company called Guernsey Ship Management Limited.

3.	On 1 January 2006, he became directly employed by the first Respondent as an engineering officer.  Between October 2005 and August 2006, the Claimant applied for promotion on three occasions, responding to advertisements for (1) Chief Engineer Portsmouth, (2) Chief Engineer on the Lymington to Yarmouth route in July 2006 and (3) Ship Superintendent.  Following a hearing before Bean J under EAT Rule 3(10), we are principally concerned, in this appeal, with the second of these posts (the relevant post).

The relevant post

4.	The first Respondent’s policy, incorporated into the Claimant’s contract of employment from 1 January 2006, was to give priority to current employees with suitable skills and experience when considering job vacancies.

5.	The advertisement for the relevant post (there were two vacancies) appeared in July 2006.  The Claimant was one of five applicants, all of whom were interviewed.  The advertisement stated that the successful candidate would ideally possess a Maritime and Coastguard Agency Chief Engineer Certificate.  The Claimant had obtained his certificate as a Class One Chief Engineer in February 2006.  

6.	The Claimant was unsuccessful.  The two successful white candidates were Mr Herron and Mr Hopman.  Both had in excess of three years’ service with the first Respondent; the Claimant had seven months’ service.  Mr Herron did not possess a Chief Engineer Certificate as did the Claimant and Mr Hopman.

The Complaints
7.	Five claims were identified for determination at a case management discussion held on 13 April 2007; three of direct discrimination, two of victimisation.  The relevant claim, for our purposes, was formulated in this way,  Reasons paragraph 4.2:

“Whether the Claimant was the subject of direct discrimination by the First Respondent by being treated less favourably than the other applicants on racial grounds by being refused promotion to Chief Engineer on the Lymington to Yarmouth route in July 2006 contrary to Sections 1 and 4 of the Race Relations Act 1976.”

8.	The relevant comparators were Messrs Herron and Hopman.

The law

9.	This appeal focuses on the application of the reverse burden of proof, introduced by Section 54A RRA.  It is not in issue that the Tribunal correctly reminded themselves of that statutory provision and the guidance provided on its application by the Court of Appeal in Igen Limited v Wong [2005] IRLR 258 and Madarassy v Nomura International plc [2007] IRLR 246.  The Tribunal also took into account the judgment of Elias J in Laing v Manchester City Council [2006] IRLR 748, subsequently approved by the Court of Appeal in Madarassy.  The Tribunal further reminded themselves of the approach of the House of Lords in the pre-Section 54A case of Shamoon v Chief Constable of the Royal Ulster Constabulary [2003] IRLR 285;  what was the employer’s reason for the treatment complained of; the reason why question.

The appeal

10.	The questions for us in this appeal are, first, whether the Tribunal misapplied the Igen guidance at the first stage of their enquiry, whether the Claimant has raised a prima facie case of discrimination and, secondly, whether, having found that the Claimant failed to pass the stage one hurdle, the Tribunal gave adequate reasons for their alternative finding that even if stage one is surmounted nevertheless the first Respondent discharged the burden of proving that the reason for the Claimant’s non-selection for the relevant post was nothing to do with his race.  Whilst, of course, as Mr Forer correctly submits, we must view the Tribunal’s Reasons as a whole, the material findings, for the purpose of this appeal, are set out at paragraphs 38 and 39 of their Reasons.  We should set them out in full.

“38.	The second complaint was of direct race discrimination concerning the Chief Engineer position on the Yarmouth/Lymington route.  The Tribunal members had considerable difficulty in deciding on this complaint.  The Tribunal took into account all of the evidence and the facts found and the submissions made by the parties’ representatives.  The Tribunal noted that one of the successful candidates did not have the Chief Engineer certificate of competency, although in this competition, that was desirable rather than essential.  The Tribunal was very concerned about the poor documentation of the interview process.  The Tribunal read the notes and noted that the Claimant was described in the interview notes as “arrogant” and -1 for “teamwork”.  There was no hard evidence from which the Tribunal could establish a link between the Claimant’s race and his rejection for the post.  The Tribunal noted that the Claimant had only been employed by the first Respondent for a period of seven months, whereas the successful candidates had been employed for over three years.  Whilst the Tribunal found this decision the most difficult to make, the Tribunal members found most assistance from the case of Madarassy and concluded that the Claimant had only established sufficient facts to point to a difference of race and a difference of treatment and there was not sufficient other material from which the Tribunal could conclude that on the balance of probabilities the Respondent had unlawfully discriminated against the Claimant on the grounds of his race.
 39.	However, even if the Tribunal had found that the burden of proof shifted, the Tribunal accepts the evidence of Mr Hudlestone, which was that on this occasion the Claimant was not the best candidate.  Indeed, he came fifth out of the five candidates in order of ranking.”

Discussion

11.	In Madarassy the Court of Appeal saw no reason to vary the guidance provided at paragraph 76 of Igen, per Mummery LJ, paragraphs 10 to 11.  However, the Court rejected a submission made by Mr Robin Allen QC on behalf of the Claimant, paragraph 51, that it is enough to show a difference in treatment and a difference in sex or, in the present case, race to pass stage one of Igen, showing a prima facie case of unlawful discrimination.

12.	Those two factors are not sufficient material without more from which a Tribunal could conclude that on the balance of probabilities the Respondent had committed an unlawful act of discrimination.  Paragraph 56.

13.	In the present case the Tribunal, purporting to follow Madarassy, found at paragraph 38 of their Reasons that this Claimant had only established sufficient facts to point to a difference in treatment and of race.  There was not “more” from which the Tribunal could conclude that the Respondent had unlawfully discriminated against the Claimant on the grounds of his race.

14.	Mr Brown submits that there was, on the Tribunals findings of primary fact, more from which the Tribunal could conclude that unlawful discrimination had taken place.  He relies on three factors, identified by the Tribunal at paragraph 38.  First, the Chief Engineer Certificate possessed by the Claimant, but not by one of the successful candidates, an actual comparator, Mr Herron.  Secondly, the Respondent’s poor documentation, also referred to at paragraph 35 of the Reasons, and thirdly, the description of the Claimant as “arrogant” and scoring -1 for team work.

15.	Mr Forer has taken us along the evidential path relating to those three factors.  However, that raises the question of the Respondent’s explanation for the treatment complained of.  It is clear from the Igen guidance, paragraph 1, that at stage 1 it must be assumed that the Respondent is unable to provide an adequate explanation.  The Respondent’s explanation must be considered at stage 2, after the burden of proof has shifted.  That does not mean that, on factual issues, the Respondent’s evidence should be disregarded at stage 1.  If, having heard all the evidence, the Tribunal reject the Claimant’s necessary case on primary fact, then the claim fails at that point.  However, in the present case, it seems to us that Mr Forer’s submission trespasses on the necessary omission of the Respondent’s explanation at stage 1.

16.	There is a further difficulty with the Tribunal’s approach to stage 1, at paragraph 38 of their Reasons which, in our judgment, is fatal to the Tribunal’s conclusion.  It is the reference to there being no hard evidence from which the Tribunal could establish a link between the Claimant’s race and his rejection for the post.  Mr Forer submits that here the Tribunal was merely stating that there was no direct evidence of the link, before then going on to deal with the matter under the Igen guidance.  We cannot accept that submission.  

17.	It seems to us that the Tribunal have, here, overlooked the question as to whether, from the primary facts found, it was proper to draw inferences leading to a conclusion that unlawful discrimination could be found in the absence of any adequate explanation by the Respondent.  For these reasons we uphold the Appellant’s case in relation to paragraph 38 of the Reasons.

18.	Turning now to paragraph 39, we are persuaded by Mr Brown that the Tribunal has failed to give adequate reasons for its conclusion;  that the Respondent discharged the burden placed upon it (assuming that stage 1 was passed) of proving that the Claimant’s non-selection for the relevant post was in no sense whatsoever on the grounds of his race.

19.	We have been recently reminded by Rimer LJ, in Consistent Group Limited v Kalwak and Others [2008] IRLR 506 paragraph 52, of the importance of Tribunals explaining why they have reached their conclusion on a material issue in the case, following the explicit provisions of Rule 30(6), particularly (6)(e), introduced into the Employment Tribunal Rules of Procedure 2004.  It is not sufficient, in our judgment, for the Tribunal simply to state that they accept the evidence of Mr Hudlestone.  As Sedley LJ made clear in Anya v University of Oxford [2001] ICR 847 paragraph 28, most commonly racial discrimination is not overt. Discrimination may be subconscious.  Individuals will not wish to countenance even the possibility that they were motivated by considerations of race, however it is for the Employment Tribunal to exclude that possibility when accepting the Respondent’s case that the treatment complained of was in no sense whatsoever on grounds of race.  The Tribunal’s economical reasons, at paragraph 39, simply do not address the possibility of sub-conscious discrimination by the first Respondent.

Disposal
20.	It follows that this appeal is allowed.  The relevant claim only will be remitted to a fresh Employment Tribunal for re-hearing.