Appeal No. UKEAT/0461/07/LA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 22 February 2008

Before
THE HONOURABLE MR JUSTICE BEATSON
MR M CLANCY
MR D CHADWICK

MR J KOTECHA	APPELLANT

1)  INSURETY PLC T/A CAPITAL HEALTH CARE	RESPONDENTS
2)  MR D ABINGDON
3)  MR C BELL
4)  MR P SMITH
5)  MR D RILEY

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MS A MIZZI
(Solicitor)
Messrs Lewis Silkin LLP Solicitors
(Employment Dept)
5 Chancery Lane
Cliffords Inn
London EC4A 1BL	
For the Respondents	MR K J O’DONOVAN
(of Counsel)
Instructed by:
Insurety Plc
15 Apex Court
Almondsbury
Bristol
BS32 4JJ	

SUMMARY

Race Discrimination:  Burden of proof

Tribunal erred in applying principles in Igen.

THE HONOURABLE MR JUSTICE BEATSON

1.	This is an appeal by Mr Kotecha against a judgment of the Employment Tribunal sitting in Birmingham dated 2 November 2005.  

2.	As His Honour Judge Richardson observed at the preliminary hearing the passage and disposal of this appeal has taken much longer than most appeals to this Tribunal.  The reason in part is because Mr Kotecha’s original Notice of Appeal contained no arguable grounds and was subsequently amended in the light of legal advice he received, and in part because of a Burns-Barke remission to the Tribunal.

3.	At the hearing before Judge Richardson and two members on 29 October 2007 Mr Kotecha was given permission for the case to proceed to a full hearing on amended grounds 2, 3 and 5 of his appeal.  These are that the Tribunal misdirected itself in law on the burden of proof;  that the Tribunal misdirected itself in law in its approach to its finding that Mr Abingdon had said “Here are the representatives of the Indian sub-continent”;  and that the Tribunal erred in law in its approach to the issue of costs.  

4.	The background facts are conveniently set out in the judgment at the preliminary hearing.  Mr Kotecha was engaged by Insurety Plc with effect from November 1998.  He was a self-employed sales consultant with managerial responsibilities.  In February 1999 he was promoted to the post of Regional Manager and subsequently to the post of Divisional Manager.  Things apparently started to go wrong in January 2000.  At a managers’ meeting prior to a sales conference there was a discussion of a written change in policy.  Mr Kotecha was critical of the new policy and was not prepared to sign up for it.  One of the incidents of which he complained happened at the sales conference the following day.  In February 2000 he reverted to being a Regional Manager, which was a demotion.  In April 2000 he presented his first claim alleging race discrimination.  He was absent from work through sickness in May 2000.  He declined an invitation by Insurety’s management to discuss his first claim, and on 14 August 2000 his employment was terminated altogether because of an alleged sexual assault by him on a fellow employee who had previously left the firm.  

5.	The Tribunal hearing took place on 18 – 24 May 2000, 26 October – 1 November 2004, 13 and 14 June 2005 and then in Chambers on 13 September 2005, and, as we have stated, the judgment was given on 12 October 2005 and was sent to the parties on 2 November 2005. 

6.	Mr Kotecha appeared on his own behalf.  The Tribunal stated in paragraph 2 that he presented as an articulate and competent man experienced in Tribunal practice.  He suffers from controlled alcoholism.  The Tribunal state that he confirmed at the outset of the hearing that he was physically and mentally fit to represent himself.  

7.	One of the reasons the hearing was so long after the events complained of and Mr Kotecha’s dismissal, was that there had originally been an appeal to this Tribunal on the question of whether he was entitled to take advantage of the race discrimination legislation.

8.	The Tribunal in its decision did not accept Mr Kotecha as a credible witness.  Although on some matters they ultimately found the facts as he asserted them, on many matters set out in the decision between paragraphs 3 and 16 they rejected his evidence.  They found that he had discussed evidence with the witnesses on his behalf and had prepared their witness statements going well beyond what is normal in such cases.  The Tribunal found that Mr Kotecha was not open, frank and honest with it and that his version of events was unsatisfactory on many accounts, as set out in their reasons.  
9.	The allegations of less favourable treatment on which Ms Mizzi, on behalf of Mr Kotecha, in focussed and concise submissions, primarily relied related to the fact that a colleague, Mr Riley, had been allowed hotel expenses, entertaining expenses and the use of a mobile telephone where the Claimant was not (paragraph 19.1);  the fact that the Claimant was the only manager not asked to speak at a sales conference on 22 January 2000 (paragraph 19.6) and the fact that he was not given a black badge denoting senior management at the conference (paragraph 19.8).  Ms Mizzi also relied on statements made at the conference, which formed the first of the grounds of appeal at this hearing.  In particular, the fact that Mr Kotecha’s employer and the owner of the firm, Mr Abingdon when inviting the three sales persons of Indian origin to the podium at the conference stated “Here are the representatives of the Indian sub-continent”.

10.	The Tribunal considered these and other allegations and stated in paragraph 18:
“In considering the allegations both in totality and specifically, we have applied the guidance set out in Igen Ltd –v- Wong [2005] IRLR 258 together with the provisions of the Race Relations Act 1976 as amended.  This sets out a two stage approach.  The first stage is for the claimant to show a probability (not a possibility) that the respondent has committed the unlawful act complained of.  This is considered without taking into account anything said by the respondent.  If he does that it is for the respondent to prove on the balance of probabilities that the treatment was not significantly influenced by grounds of race.”

11.	Ms Mizzi submitted that the Tribunal in this passage misdirected itself on the burden of proof.  It had relied heavily on the Appellant to prove facts, should have used the reverse burden of proof, and its formulation of the effect of s54A of the Race Relations Act as to the burden of proof was, in the light of Igen v Wong, wrong.  The burden under s54A is to:
“prove facts from which the Tribunal could, apart from this section, conclude in the absence of an adequate explanation that the respondent−
(a)	has committed such an act of discrimination”

12.	Ms Mizzi submitted that the correct approach is to make findings of fact on all relevant issues and then to see what inferences could be drawn from them, assuming there is an inadequate explanation from the Respondent.  She submitted that the Tribunal instead required the Appellant to satisfy it on the balance of probabilities that there was discrimination for each compartmentalised allegation.  Only then did it look at the Respondent’s explanation.  This was an error of law infecting all the findings:  see Anya v Oxford University [2001] IRLR 377 and Qureshi v Victoria University of Manchester (EAT 21.6.96) unreported but substantially extracted in Anya’s case.

13.	She also submitted that the Tribunal erred in law as to the Respondent’s burden at Stage 2.  In the light of Igen this was not to prove that the treatment was “not significantly influenced by race” but to prove on the balance of probabilities that the treatment was “in no sense whatsoever on grounds of race” with sufficiently cogent explanations and evidence to discharge that burden.

14.	On behalf of the Respondent Mr O’Donovan was unable to defend the Tribunal’s approach on burden of proof.  He invited us to consider whether in this case, in an idiosyncratic manner despite these errors, examining the findings may in respect of the matters that we have set out, the Tribunal nevertheless applied themselves to the task correctly.  

15.	We indicated during the course of hearing that he faced an uphill task.  When he had concluded his submissions on the remainder of the points we retired briefly and, while not shutting out any further submissions by him, indicated that we were unable to see a way of not remitting this case.  Mr O’Donovan accepted that it was open to him to make more submissions but he did not do so.  We consider that this was, in the light of his concessions, an inevitable conclusion.

16.	On these points, effectively what Ms Mizzi submitted was that, in relation to the managers speaking at the sales conference, the Tribunal found that the facts sufficed to cross the Stage 1 hurdle of the Igen case but that the Respondent satisfied it at Stage 2.  Effectively, although the way she formulated her submissions was slightly different, this was the same in relation to the conclusion about expenses and the black badge.  

17.	We consider that the formulation of the test in paragraph 18 was so flawed that it is not possible to conclude that the Tribunal did not apply that flawed test when dealing with the individual points which it carefully went through.  This may be the problem of a Tribunal attempting to synthesize a complicated test and to express it in lay language.  However, the difference between “not significantly influenced by” and “in no sense whatsoever on grounds of” is not a technical distinction but a substantial one.  That suffices in our judgment to require this matter to go back to the Tribunal.  

18.	It is therefore not necessary for us to consider ground 3 that the Tribunal misdirected itself in law in its approach to the finding that Mr Abingdon had said “Here are the representatives of the Indian sub-continent”.  We do, however, observe that, although Ms Mizzi involved Shamoon v Chief Constable of the RUC [2003] IRLR 285 and Thomas v Robinson [2003] IRLR 7 in submitting that what is relevant is the objective effect of the treatment and not the subjective effect on an individual, there remains a need for an individual to suffer detriment.  Had the case turned on this matter we would have found that Mr O’Donovan’s submission that, in view of the Tribunal’s finding that the Claimant was not distressed in the way that he claimed (one of the adverse findings against him), he had not established the necessary detriment.  However, as we have stated, it is not necessary for us to decide this point.

19.	Ground 5 of the appeal was that the Tribunal erred in relation to costs.  After we had come to the provisional conclusion that the matter should be remitted, we considered that the position of a costs order made on the ground of vexation, where the judgment was set aside because of an error of law, was one on which we should invite the parties to make further submissions.  Accordingly, and after discussion with Ms Mizzi and Mr  O’Donovan, we reserve our judgment on the costs issue pending receipt of submissions by them.  We will discuss between ourselves those submissions and a judgment will be handed down in this Tribunal as soon as possible, but that seemed to us not to be a reason for not giving judgment on the main issues and thus disposing of this matter.

20.	We are grateful to Ms Mizzi and Mr O’Donovan for their help.