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||Neutral Citation Number:  EWCA Civ 33
||Case No: A2/2005/0870
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
MR JUSTICE NELSON PRESIDING
||Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE MUMMERY
LORD JUSTICE LAWS
LORD JUSTICE MAURICE KAY
|| MS ANDREA MADARASSY
||- and -
||NOMURA INTERNATIONAL PLC
MR ROBIN ALLEN QC and MR JONATHAN COHEN(instructed by Messrs Palmer Wade) for the Appellant
MR PAUL GOULDING QC and MS CLAIRE WEIR (instructed by Messrs Osborne Clarke) for the Respondent
Hearing dates: 31st October and 1st & 2nd November 2006
HTML VERSION OF JUDGMENT
Crown Copyright ©
Lord Justice Mummery :
- This adjourned sex discrimination appeal was heard immediately before two race discrimination appeals, Brown v. Croydon London Borough Council (2006/0480-Brown) and Appiah & Anor v. Bishop Douglas Roman Catholic High School (2005/2495-Appiah). Brown, like Madarassy, is an employment case. Appiah is an appeal from the county court in a school exclusion case.
- Although we are handing down separate judgments on each appeal, they cross- refer to one another, as all of them cover a common question-the burden of proof in discrimination cases. The appeals were listed for hearing together because the grounds of appeal in each case included complaints that, at first instance, the burden of proof had been misunderstood or misapplied and that this error had resulted in the unjustified rejection of well-founded discrimination claims. In each appeal it was argued by the complainants that, as the decisions were flawed by error of law, the cases should be remitted for re-hearing, in the cases of Madarassy and Brown by a differently constituted employment tribunal, and in the case of Appiah by a different county court judge.
- In Madarassy, which has been informally treated as the lead case, the appeal on the burden of proof point turns on the construction and application of section 63A(2) of the Sex Discrimination Act 1975 (the 1975 Act). The 1975 Act was amended with effect from 12 October 2001 in order to implement the Burden of Proof Directive 97/80/EC and to provide that-
"63A. (2) Where, on the hearing of the complaint, the complainant proves facts from which the tribunal could, apart from this section, conclude in the absence of an adequate explanation that the respondent-
(a) has committed an act of discrimination against the complainant which is unlawful by virtue of Part 2, or
(b) is by virtue of section 41 or 42 to be treated as having committed such an act of discrimination against the complainant,
the tribunal shall uphold the complaint unless the respondent proves that he did not commit, or, as the case may be, is not to be treated as having committed, that act."
- The appeals on the burden of proof point in Brown and Appiah turn on sections 54A(2) and 57ZA(2) respectively of the Race Relations Act 1976 (the 1976 Act), which contain similar provisions for the hearing of race discrimination complaints.
- We were informed that, as evidenced by this clutch of appeals and by appeals pending in other cases, employment tribunals are experiencing difficulty with the burden of proof in sex and race discrimination cases. This is surprising, as the Court of Appeal analysed the law in depth and gave clear and sound detailed guidance in Igen v. Wong  EWCA 142;  ICR 931. At the end of the judgment of the court an Annex set out guidance in 13 short and logically arranged numbered paragraphs. The judicial guidelines were framed with expert assistance from the Commissions for Equal Opportunities, Racial Equality and Disability Rights, which, with the permission of the court, intervened in Igen v. Wong and made submissions through leading counsel (Mr Robin Allen QC). None of the parties in these appeals challenges the correctness of Igen v. Wong.
- Some of the difficulties with the new burden of proof are attributable to the process of adapting to change. It takes time for everyone to get used to a new law. Over the years tribunals were guided by Neill LJ's lucid explanation of the burden of proof in discrimination cases. For over a decade the passage in his judgment in King v. Great Britain-China Centre  ICR 516 at 528-529 became one of the most frequently cited in all discrimination law. It clarified and settled the law. It worked well in practice.
- Now tribunals and courts are faced with amended statutory provisions, which changed the law, but do not explain how it actually works. The difficulty is in knowing how much difference the amendments should make in practice. Although Igen v. Wong is authoritative on the construction of the statutory provisions and helpful in its guidance, it seems that tribunals are now faced, as was this court on these appeals, with contradictory arguments by the parties about the effect of Igen v. Wong. As Elias J observed in one of the more recent cases (Laing- see below) "There still seems to be much confusion created by the decision in Igen v. Wong." (paragraph 71).
- Some submissions in these appeals prompt me to alert practitioners to what Igen v. Wong did not decide.
- First, it did not decide that judicial guidance is a substitute for section 63A(2), (or section 57ZA(2)). On the contrary, the Court of Appeal went out of its way to say that its guidance was not a substitute for statute: see paragraph 16. Courts do not supplant statutes. Judicial guidance is only guidance.
- Secondly, Igen v. Wong did not decide that a tribunal commits an error of law by omitting to repeat the judicial guidance in its decision or by failing to work through the guidance paragraph by paragraph. The Court of Appeal expressly warned against this possible misuse of the guidance: see paragraph 16. Omitting to refer to guidance or to apply it may increase the risk of errors of law in a decision, but such an omission is not in itself an error of law on which to found a successful appeal.
- Having said what Igen v. Wong did not decide, I should add that there really is no need, at this level of decision, for another judgment giving general guidance. Repetition is superfluous, qualification is unnecessary and contradiction is confusing.
- I do not underestimate the significance of the burden of proof in discrimination cases. There is probably no other area of the civil law in which the burden of proof plays a larger part than in discrimination cases. Arguments on the burden of proof surface in almost every case. The factual content of the cases does not simply involve testing the credibility of witnesses on contested issues of fact. Most cases turn on the accumulation of multiple findings of primary fact, from which the court or tribunal is invited to draw an inference of a discriminatory explanation of those facts. It is vital that, as far as possible, the law on the burden of proof applied by the fact-finding body is clear and certain. The guidance in Igen v. Wong meets these criteria. It does not need to be amended to make it work better.
- The only possible value of this judgment and of the judgments in Brown and Appiah is in showing how the burden of proof should work. Problems arise when the parties are in dispute about the application of the relevant law to the facts of their particular case.
- Other decisions in the Court of Appeal and in the Employment Appeal Tribunal, both before and after Igen v. Wong, were cited. The discussions in them clarify law and practice and assist in their development. They iron out some of the misunderstandings evident from the legal submissions to the tribunal. They illustrate the implications of the amended legislation as it is worked through in practice, case by case: see Bahl v. The Law Society  IRLR 799 (Court of Appeal pre-section 63A(2) applying King v. Great Britain China Centre  ICR 516 at 528-529 and Glasgow City Council v. Zafar  ICR 120 at 125-126); Brown (EAT-Elias J- February 2006, one of the appeals heard along with this case); Network Rail Infrastructure Ltd v. Griffiths-Henry  IRLR 865 (EAT-Elias J-23 May 2006); NUT v. Watson (UK EAT/0204/06/DA-Elias J-13 June 2006); Li v. Atkins & Gregory Ltd (UK EAT/0157/06-Elias J-5 July 2006); Fox v. Rangecroft and Elmbridge BC ( EWCA Civ 1112 Court of Appeal-13 July 2006); Fernandez v. Office of the Parliamentary Commissioner ( UK EAT/0180/06/SM-Bean J-28 July 2006); Laing v. Manchester City Council  IRLR 748 (EAT-Elias J- 28 July 2006).
- On 14 December 2001 Ms Andrea Madarassy, the appellant, presented an originating application to the employment tribunal complaining of sex discrimination, victimisation and unfair dismissal. She subsequently served particulars specifying 33 separate allegations of sex discrimination spanning the whole of the period from 17 January 2000 to 22 November 2001 during which she was employed by the respondent, Nomura International PLC (Nomura), a multi-service financial institution transacting business on a global basis.
- At a hearing lasting 21 days in November and December 2002 the tribunal heard 38 witnesses. 32 of them attended for cross examination. Ms Madarassy gave evidence for 7 days. Mr Michael Boardman, who was her line manager at Nomura, was cross examined for 4 days. There were 21 lever arch files of documents. Litigation on this scale is now typical of the increasing numbers of sex and race discrimination claims by senior members of staff against financial institutions, professional firms and public authorities.
- In extended reasons (76 pages, 437 paragraphs) sent to the parties on 18 February 2003 the employment tribunal made findings on 33 allegations of sex discrimination. It found that only one allegation was well-founded (allegation-1.12-failure to carry out a health and safety risk assessment in connection with Ms Madarassy's pregnancy). It dismissed all the other claims, including a complaint of victimisation.
- As for the unfair dismissal claim, the tribunal found that the reason for her dismissal was redundancy following a diminution of her work and a fair selection procedure. The tribunal rejected the claim that she was dismissed for a reason connected with her pregnancy, with childbirth or with her taking maternity leave.
- Following a preliminary hearing her substantive appeal in the Employment Appeal Tribunal was confined to the sex discrimination claims. After a 4 day hearing in July 2004 the Employment Appeal Tribunal, for reasons given in the judgment (90 pages, 237 paragraphs) prepared by Nelson J and handed down on 16 December 2004, dismissed the appeal on all save two claims which had been dismissed by the employment tribunal (allegation 1.15-the failure to set objectives for her in the fiscal year 2001, whereas they were set for male colleagues; and allegation 1.18-the failure to supply information to her about the "broad redundancy exercise" carried out while she was on maternity leave). It remitted the two matters to the same tribunal for review in the light of its judgment. Nomura does not appeal against the order of the Employment Appeal Tribunal remitting these two allegations. Ms Madarassy objects to the form of the order in several respects.
- The Employment Appeal Tribunal allowed Nomura's cross-appeal against the decision of the employment tribunal against it on the complaint of discrimination in respect of the health and safety risk assessment (allegation 1.12).
- The Employment Appeal Tribunal order under appeal was entered on 8 April 2005 following further submissions.
- On 16 June 2005 the Employment Appeal Tribunal, after considering written submissions from the parties, made an order for costs against Ms Madarassy under Rule 34 (1) of the Employment Appeal Tribunal Rules. She was ordered to pay £2000 towards Nomura's costs on the ground of her unreasonable conduct on the appeal (while she was acting in person) in making allegations of bias, false evidence, misrepresentation and perversity, which she later withdrew. A warning as to the costs of the appeal had been given by the Employment Appeal Tribunal (HHJ Peter Clark) on 9 May 2003.
- Permission to appeal against the substantive judgment was granted by this court, subject to limitations, at an adjourned application on 31 August 2005. There is also before this court an application by Ms Madarassy for permission to appeal against the costs order. The application was adjourned to be heard by the full court at the same time as the substantive appeal.
- The hearing of this appeal began on 22 February 2006, but it had to be adjourned in the extraordinary circumstances described in the judgment handed down by the court on 4 April 2006. See  EWCA Civ 371 and  EWHC 748 (Bean J). It is unnecessary to say any more about this aspect of the appeal. Directions were given by this court for the future conduct of the appeal.
- As appears from the 45 paragraphs in Ms Madarassy's "Schedule of Inaccurate Assertions as to the Facts in the Respondent's Skeleton" factual disagreements between the parties abound. There are now disagreements about the proceedings themselves in addition to the disputed facts leading up to the proceedings. In an appellate judgment, which can only properly address points of law, I do not propose to examine the factual points in the Schedule in any detail.
- Ms Madarassy was born in 1964. She is a Hungarian born British citizen. She was employed by Nomura for less than two years until her employment was terminated on 22 November 2001. In January 2000 she had been appointed at a basic salary of £70,000 p.a. (plus a discretionary bonus) as a "Senior Banker" on the basis of a 6 month probationary period. She was assigned to "Equity Corporate Finance", joining Nomura's Equity Capital Markets (ECM) team. She specialised in originating and executing ECM transactions in emerging markets, particularly Hungary and Turkey. Mr Michael Boardman was a Senior Executive in ECM and her line manager. She had limited experience in these matters.
- In mid-June 2000 Ms Madarassy became pregnant. Nobody at Nomura was aware of this until early to mid-November 2000.
- After the probationary period her appointment was confirmed on 4 September 2000 by Mr Boardman, who supplied her with a list of objectives. Although he had concerns about her performance, he thought that the weaknesses could be overcome with hard work.
- On or around 7 November 2000 Ms Madarassy informed Mr Boardman that she was pregnant.
- On 14 February 2001 there was a First Performance Appraisal Meeting, followed by a Second Performance Appraisal Meeting on 26 February 2001. Mr Boardman assessed her performance as not being up to the Nomura standard.
- On 27 February 2001 Mr Sumino, the head of ECM, conducted a Performance Appraisal Meeting and Ms Madarassy signed the performance appraisal form.
- From 3 March 2001 to 8 July 2001 Ms Madarassy was away on pregnancy and maternity leave. Her daughter was born on 18 March 2001.
- After her return from maternity leave a meeting was held with Mr Boardman, Mr Sumino and Human Resources personnel on 16 August 2001 to consider potential redundancies in ECM. Nomura said that its revenues were down on the previous year and that the market was poor. There had been a significant number of redundancies in Nomura in June and July 2001 as a result of restructuring. This was consequent on deteriorating market conditions.
- On 7 September 2001 Ms Madarassy was informed that she was at risk of redundancy. Redundancy consultations took place. Her consultation period for redundancy was extended on 12 October and again on 16 October. It expired on 22 November 2001. In the redundancy selection process Ms Madarassy scored worst, as compared with a Mr Salim Salam and a Mr Adams. No suitable alternative employment could be found for her.
- She had indicated that she might wish to invoke the grievance procedure on 3 October 2001. She submitted a written grievance on 16 November. Nomura proceeded to terminate her employment on grounds of redundancy on 22 November 2001. She received pay in lieu of notice.
Grounds of Appeal
- Nine grounds of appeal were argued.
A. Burden of proof.
B. Tribunal's approach to evidence
C. Pregnancy and hypothetical male comparator
D. Time limits.
E. Health and safety risk assessment
F. Remission to same or different tribunal.
G. Review or re-hearing
H. Bonus issue
I. Costs order
A. Burden of proof
Self-direction on law
- This is the main ground of appeal. It is contended by Mr Robin Allen QC, who appeared on behalf of Ms Madarassy in this court (though not in the employment tribunal or in the Employment Appeal Tribunal), that the employment tribunal misdirected itself in law on the burden of proof. In particular, there was an erroneous self-direction of law in paragraph 175 of the decision. Mr Allen submitted that this error infected the conclusions of the tribunal on the numerous individual allegations of sex discrimination reached in other parts of the decision.
- An unfortunate feature of the case is that the employment tribunal did not have the benefit of the appellate rulings on the construction of the amended legislation. They came later: first, in the Employment Appeal Tribunal in Barton v. Investec Henderson Crothwaite Securities Ltd  ICR 1205 (Barton-3 April 2003) and then in the Court of Appeal in Igen v. Wong (18 February 2005). Without help from the judicial rulings and guidance the employment tribunal set out its own self-direction on the burden of proof in general terms-
"175. …. We have then considered whether Ms Madarassy was treated any less favourably than a hypothetical male comparator would have been treated in the same circumstances and, if so, whether it was on the grounds of her sex or pregnancy. If so, the Tribunal has to consider whether the Respondent has proved that it did not commit the act in question pursuant to Section 63A(2) of the Sex Discrimination Act 1975."
- Mr Allen contended that this was a complete misdirection in law and that the tribunal repeated the error in many paragraphs of its decision. The error was in failing to place on Nomura the burden of proving that it did not commit the alleged acts of unlawful discrimination against Ms Madarassy. On the contrary (and quite wrongly) the tribunal had placed the burden on Ms Madarassy of proving all the elements of her discrimination claims. The tribunal then dismissed her complaints because she had not proved that she was treated less favourably on the ground of her sex or pregnancy.
- Mr Allen argued that this direction on the burden of proof was completely inconsistent with the purpose of the Directive, which was intended to guarantee the effectiveness of the principle of equal treatment. It was also inconsistent with the proper construction of section 63A(2) and with the ruling and guidance in Igen v. Wong. The error deprived Ms Madarassy of the benefit of the statutory reversal of the burden of proof. The tribunal had scrutinised her case and rejected it. It should have scrutinised Nomura's case and rejected the adequacy of Nomura's explanation for its discriminatory treatment of her.
- This serious error of law was apparent, Mr Allen said, from many paragraphs of the tribunal's decision dealing with the individual allegations of sex and pregnancy discrimination. He criticised paragraphs 203, 204, 206, 209, 216, 218, 225, 228, 267, 282, 323, 350 and 365 of the decision on this ground. I shall return to these paragraphs later and I shall examine them in the light of Mr Allen's general criticism.
- The Employment Appeal Tribunal dismissed Ms Madarassy's appeal on this point. It failed, Mr Allen said, to recognise and correct the errors of law, which undermined all the conclusions of the employment tribunal. Nothing short of a complete re-hearing of the case by a different tribunal could correct the errors.
- Mr Allen had other more detailed points on the burden of proof. I shall deal with them later in this judgment. For the moment I shall concentrate on the general point on the erroneous displacement of the burden of proof.
Discussion and conclusion on burden of proof direction
- The relevant passages of the tribunal's decision, in particular paragraph 175, must be set in context. Earlier paragraphs of the decision set out the text of section 63A(2) (see paragraph 162), which had come into effect before the tribunal hearing in November and December 2001 (12 October 2001). The appellate rulings on the construction of section 63A(2) and the judicial guidance could not be cited by the tribunal in its decision, because they were given after this tribunal had heard the case and reached its decision. The unavailability of the rulings and guidance does not, of course, necessarily mean that the tribunal's self-direction was erroneous. The tribunal may have correctly anticipated the later appellate rulings.
- The tribunal had also quoted in its decision (paragraph 161) and referred to (paragraph 167) section 5(3) of the 1975 Act. This is an important provision which requires that a comparison of cases of persons of different sex must be such that the relevant circumstances in the one case are the same, or not materially different, in the other.
- The general point on the burden of proof and the detailed points which I shall deal with later must also be viewed from the larger perspective of the issue for the employment tribunal and the issue for this court.
- The issue for the employment tribunal was whether Nomura had committed acts of discrimination against Ms Madarassy which were unlawful by virtue of Part 2 of the 1975 Act. The issue for this court is whether a question of law arises from the decision of or the proceedings in the employment tribunal. These reminders are advisable in case immersion in the detail obscures the overall object of the exercise.
- The tribunal, in this section of its decision, had referred to authorities which were decided before section 63A(2) was enacted. In paragraph 175 of the decision the tribunal stated that it considered whether Ms Madarassy was treated any less favourably than a hypothetical male comparator would have been treated in the same circumstances and, if so, whether it was on the grounds of her sex or her pregnancy. If the tribunal considered that Ms Madarassy had been treated in that way (a second "if so"), it had to consider whether Nomura had proved that it did not commit the act of unlawful discrimination in question.
- As I read paragraph 175 the tribunal dealt with the burden of proof in two stages. It placed the burden of proof on Nomura at the second stage. It did not place the burden of proof on Nomura at the first stage. The Employment Appeal Tribunal took a similar view of paragraph 175: see paragraph 193 of its judgment. Mr Paul Goulding QC, who appeared for Nomura, submitted that there was no misdirection of law in paragraph 175. It correctly anticipated and accorded with the substance of the two stage analysis in Igen v. Wong on the construction of section 63A(2) and the annexed guidance.
- Mr Allen disagreed. He contended that the direction in paragraph 175 was legally flawed. It wrongly put all the burden on Ms Madarassy to prove sex and pregnancy discrimination before Nomura was required to prove anything.
- According to Mr Allen the correct approach was that, as Ms Madarassy had established two fundamental facts, namely a difference in status (e.g. sex) and a difference in treatment, section 63A(2) required the tribunal (as distinct from entitling it, as under the pre-amendment ruling by the Court of Appeal in King v. Great Britain China Centre, approved by the House of Lords in Zafar) to draw an inference of unlawful discrimination by Nomura. The burden shifted to Nomura to prove that it had not committed an act of discrimination which was unlawful. It could discharge this burden of proof by providing to the tribunal an adequate and acceptable non-discriminatory explanation of its treatment of Ms Madarassy. If Nomura's explanation did not survive the scrutiny of the tribunal at the second stage, the tribunal must ("shall") uphold Ms Madarassy's complaints of discrimination.
- Much of what Mr Allen said about the effect of reversing the burden of proof is correct. Mr Allen is obviously right in saying that the subsection does not require Ms Madarassy to prove a "conclusive case" of unlawful discrimination. She only has to prove facts from which the tribunal "could" conclude that there had been unlawful discrimination by Nomura, in other words she has to set up a "prima facie" case.
- I do not, however, read paragraph 175 (or any of the other paragraphs of the tribunal's decision) as requiring Ms Madarassy to prove a "conclusive case." If the tribunal were saying that she had to do that, the latter part of its direction in paragraph 175 following the second "if so" would have been superfluous.
- I am unable to agree with Mr Allen's contention that the burden of proof shifts to Nomura simply on Ms Madarassy establishing the facts of a difference in status and a difference in the treatment of her. This analysis is not supported by Igen v. Wong nor by any of the later cases in this court and in the Employment Appeal Tribunal. It was not accepted by the Employment Appeal Tribunal in the above mentioned cases of Network Rail Infrastructure ...paragraph 15) and Fernandez (paragraphs 23 and 24) and by the Court of Appeal in Fox (paragraphs 9-18 see above).
- In my judgment, the correct legal position is made plain in paragraphs 28 and 29 of the judgment in Igen v. Wong.
"28. …..The language of the statutory amendments [to section 63A(2)] seems to us plain. It is for the complainant to prove the facts from which, if the amendments had not been passed, the employment tribunal could conclude, in the absence of an adequate explanation, that the respondent committed an unlawful act of discrimination. It does not say that the facts to be proved are those from which the employment tribunal could conclude that the complainant "could have committed" such act.
29. The relevant act is, in a race discrimination case …., that (a) in circumstances relevant for the purposes of any provision of the 1976 Act (for example, in relation to employment in the circumstances specified in section 4 of the Act), (b) the alleged discriminator treats another person less favourably and (c) does so on racial grounds. All those facts are facts which the complainant, in our judgment, needs to prove on the balance of probabilities.[The court then proceeded to criticise the Employment Appeal Tribunal for not adopting this construction and in regarding "a possibility" of discrimination by the complainant as sufficient to shift the burden of proof to the respondent.]
- The court in Igen v. Wong expressly rejected the argument that it was sufficient for the complainant simply to prove facts from which the tribunal could conclude that the respondent "could have" committed an unlawful act of discrimination. The bare facts of a difference in status and a difference in treatment only indicate a possibility of discrimination. They are not, without more, sufficient material from which a tribunal "could conclude" that, on the balance of probabilities, the respondent had committed an unlawful act of discrimination.
- "Could conclude" in section 63A(2) must mean that "a reasonable tribunal could properly conclude" from all the evidence before it. This would include evidence adduced by the complainant in support of the allegations of sex discrimination, such as evidence of a difference in status, a difference in treatment and the reason for the differential treatment. It would also include evidence adduced by the respondent contesting the complaint. Subject only to the statutory "absence of an adequate explanation" at this stage (which I shall discuss later), the tribunal would need to consider all the evidence relevant to the discrimination complaint; for example, evidence as to whether the act complained of occurred at all; evidence as to the actual comparators relied on by the complainant to prove less favourable treatment; evidence as to whether the comparisons being made by the complainant were of like with like as required by section 5(3) of the 1975 Act; and available evidence of the reasons for the differential treatment.
- The absence of an adequate explanation for differential treatment of the complainant is not, however, relevant to whether there is a prima facie case of discrimination by the respondent. The absence of an adequate explanation only becomes relevant if a prima facie case is proved by the complainant. The consideration of the tribunal then moves to the second stage. The burden is on the respondent to prove that he has not committed an act of unlawful discrimination. He may prove this by an adequate non-discriminatory explanation of the treatment of the complainant. If he does not, the tribunal must uphold the discrimination claim.
- Mr Allen submitted that the tribunal had applied the wrong law. It had cited and applied the law as laid down in the Great Britain-China Centre case, instead of the amended law contained in section 63A(2) as construed in Igen v. Wong. He added that, if this court rejects his criticisms of paragraph 175, it will be holding that the burden of proof has not been reversed, that section 63A(2) does not give effect to the Directive and that no material change in the law has been made.
- I do not accept these submissions. The amendments changed the law. They did so by stating the circumstances in which the burden of proof moves from the complainant to the respondent. If and when this happens, the tribunal has to decide whether or not the respondent has proved that he has not committed an unlawful act of discrimination. If the tribunal accepts the respondent's evidence of a non-discriminatory reason for his treatment of the complainant as an adequate explanation, the respondent will have discharged the burden of proof. If the respondent does not discharge the burden of proof, the complainant "shall" succeed. This was not the law as laid down in Great Britain-China Centre and Zafar and applied by the tribunals before 12 October 2001, according to which the tribunals "may", not "must", infer unlawful discrimination from the absence of an adequate explanation for discriminatory treatment.
- I would reject Mr Allen's contention that the tribunal erred in law in paragraph 175.
- I shall now deal with two related points on the burden of proof, which are relevant to the decision of the tribunal on the individual allegations.
"In the absence of an adequate explanation"
- There was substantial argument (supplemented by written submissions after the hearing) on the construction of the expression "in the absence of an adequate explanation" in the opening part of section 63A(2) and its implications for the evidence which the tribunal could consider at the first stage.
- Igen v. Wong (paragraph 22) held that this expression indicates that, in considering what inferences or conclusions could be drawn from the primary facts (stage 1), the employment tribunal is required to make an assumption,
"22. …which may be contrary to reality, the plain purpose being to shift the burden of proof at the second stage, so that unless the respondent provides an adequate explanation, the complainant will succeed. It would be inconsistent with that assumption to take account of an adequate explanation by the respondent at the first stage."
- There has been a debate in the cases and on this appeal as to what evidence from the respondent is relevant at the first stage. It was observed in Igen v. Wong (paragraph 24) that the language of section 63A(2) points to the complainant having to prove facts, but there is no mention of evidence from the respondent. The Court added that it would be unreal if the employment tribunal could not take account of evidence from the respondent, if such evidence assisted the employment tribunal to conclude that, in the absence of an adequate explanation, unlawful discrimination by the respondent on a proscribed ground would have been established. The court referred to the examples given in Barton of unsatisfactory conduct of the respondent being relevant to the drawing of inferences at the first stage: for example, an unsatisfactory response to the statutory questionnaire or a breach of the code of practice by the respondent.
- We should take this opportunity to consider the relevance of the respondent's evidence at the first stage. This point has been contentious in the appeal and is of practical importance.
- As Elias J pointed out in Laing, the evidence from the respondent at the first stage goes wider than the particular examples given in Igen v.Wong (paragraph 24). It was argued in Laing (paragraph 56) that the only material that the tribunal can consider at the first stage is the evidence adduced by the complainant together with any evidence adduced by the respondent which assists the tribunal in reaching the conclusion that a prima facie case has been made out. It was argued that the tribunal must not consider, however, any other evidence, such as evidence from the respondent pointing the other way and tending to undermine the complainant's case.
- In Laing, for example, the key factor which caused the complainant to fail at the first stage was the respondent's evidence that the complainant was indiscriminately treated by the alleged discriminator in the same way as all subordinate employees. (This point was also made by Nomura in its evidence to the tribunal in response to many of Ms Madarassy's individual allegations of discrimination.) In Laing the complainant objected that this was part of the respondent's "explanation" which, in accordance with section 63A(2), had to be ignored at the first stage.
- The Employment Appeal Tribunal (Elias J presiding) in Laing rightly rejected the complainant's submission. It accepted the respondent's submission that, at the first stage, the tribunal should have regard to all the evidence, whether it was given on behalf of the complainant or on behalf of the respondent, in order to see what inferences "could" properly be drawn from the evidence. The treatment (or mistreatment) of others by the alleged discriminator was plainly a highly material fact. All the evidence has to be considered in deciding whether "a prima facie case exists sufficient to require an explanation." (paragraph 59). The only factor which section 63A(2) stipulates shall not form part of the material from which inferences may be drawn at the first stage is "the absence of an adequate explanation" from the respondent.
- Although no doubt logical, there is an air of unreality about all of this. From a practical point of view it should be noted that, although section 63A(2) involves a two stage analysis of the evidence, the tribunal does not in practice hear the evidence and the argument in two stages. The employment tribunal will have heard all the evidence in the case before it embarks on the two stage analysis in order to decide, first, whether the burden of proof has moved to the respondent and, if so, secondly, whether the respondent has discharged the burden of proof.
- Section 63A(2) does not expressly or impliedly prevent the tribunal at the first stage from hearing, accepting or drawing inferences from evidence adduced by the respondent disputing and rebutting the complainant's evidence of discrimination. The respondent may adduce evidence at the first stage to show that the acts which are alleged to be discriminatory never happened; or that, if they did, they were not less favourable treatment of the complainant; or that the comparators chosen by the complainant or the situations with which comparisons are made are not truly like the complainant or the situation of the complainant; or that, even if there has been less favourable treatment of the complainant, it was not on the ground of her sex or pregnancy.
- Such evidence from the respondent could, if accepted by the tribunal, be relevant as showing that, contrary to the complainant's allegations of discrimination, there is nothing in the evidence from which the tribunal could properly infer a prima facie case of discrimination on the proscribed ground. As Elias J observed in Laing (at paragraph 64), it would be absurd if the burden of proof moved to the respondent to provide an adequate explanation for treatment which, on the tribunal's assessment of the evidence, had not taken place at all.
- Mr Allen disputed the correctness of the judgment of the Employment Appeal Tribunal in Laing on this point. Mr Allen took up rather an extreme position on the construction of "in the absence of an adequate explanation."
- Mr Goulding's position was that the effect of the expression was that at the first stage the tribunal must disregard altogether (or "put on one side") any possible explanation by the respondent.
- Mr Allen's position, on the other hand, was that under section 63A(2) it must be presumed at the first stage that the respondent had no adequate explanation. This presumption then assisted the complainant in securing the reversal of the burden of proof. He relied on Igen v. Wong (paragraphs 21 and 22) to support this submission.
- In my view, Mr Allen's submission goes further than Igen v. Wong warrants. He argued for a presumed lack of an adequate explanation providing "a material premise" for the reversal of the burden of proof. The "absence of an adequate explanation" may, he said, be the only basis on which the tribunal could infer that a significant ground for the treatment of the complainant was a proscribed one.
- In my judgment, it is unhelpful to introduce words like "presume" into the first stage of establishing a prima facie case. Section 63A(2) makes no mention of any presumption. In the relevant passage in Igen v. Wong, which is probably more favourable to Mr Allen than to Mr Goulding, the court explained why the court does not, at the first stage, consider the absence of an adequate explanation. The tribunal is told by the section to assume the absence of an adequate explanation. The absence of an adequate explanation only becomes relevant to the burden of proof at the second stage when the respondent has to prove that he did not commit an unlawful act of discrimination. In Igen v. Wong the court did not go so far as to say that there was a "statutory presumption that there was no adequate explanation" for the respondent's treatment of the complainant and that there was therefore discrimination on a proscribed ground and that this presumption alone caused the burden of proof to move to the respondent.
- I would add that I do not think that there is much to be gained in this context by invoking or analysing possible distinctions between "explanations", "reasons" and "facts" that were debated in argument and have featured in some of the recent authorities.
- I do not accept Mr Allen's submission on the construction of the expression "in the absence of an adequate explanation" or his criticisms of Elias J in Laing. It seems to me that the approach of Elias J is sound in principle and workable in practice. This court should approve it. No alteration to the guidelines in Igen v Wong is necessary.
Hypothetical comparators and the two stages
- Mr Allen made an alternative submission that this case was distinguishable from Barton and Igen v. Wong as there is no actual comparator. If the comparator is hypothetical, he argued, it is unnecessary for the complainant to prove more than a difference in status and a difference in treatment in order to shift the burden of proof to the respondent. Those facts are sufficient to establish less favourable treatment for the purpose of stage 1, so that there is something to be explained by the respondent as to the reason for the treatment. The employment tribunal erred in law in not proceeding directly to the second stage and placing the burden of proof on Nomura to provide an explanation for its treatment of Ms Madarassy without requiring Ms Madarassy to prove less favourable treatment. He cited Lord Nicholls in Shamoon v. Chief Constable of the Royal Ulster Constabulary  ICR 337 at paragraphs 10-12 for the proposition that, in the case of less favourable treatment than a hypothetical comparator, tribunals could concentrate primarily on the reason why the complainant was treated as she was: was it on the proscribed ground which is the foundation of the application, or was it for some other reason?
- Elias J clarified this point in Laing in his valuable discussion (in paragraph 74) of cases in which "it might be sensible for a tribunal to go straight to the second stage." He gave as an example the case where the complainant is seeking to compare his treatment with that of a hypothetical comparator. He said that, as Lord Nicholls pointed out in Shamoon, the question whether there is a hypothetical comparator is often inextricably linked to the issue of the explanation for the treatment. He added that "it must surely not be inappropriate for a tribunal in such cases to go straight to the second stage." While it would often be desirable for a tribunal to go through the two stages suggested in Igen v. Wong, it would not necessarily be an error of law to fail to do so acting on the assumption that the burden may have shifted to the respondent and then considering the explanation put forward by the respondent.
- This particular aspect of the hypothetical comparator point arose in and is dealt with in our judgments on the Brown appeal. In such a case the complainant cannot usually complain of any error of law, as he would not be prejudiced by the tribunal's decision to move straight to the second stage and to the placing of the burden of proof on the respondent. The possible prejudice in passing over the first stage is to the respondent, if the burden of proof ought not to have moved to him in the first place.
- Mr Allen sought to develop this aspect of the case of the hypothetical comparator by constructing a different proposition, namely that there is an error of law in a tribunal in such a case, if it does not move straight to the second stage. Such a proposition cannot, in my view, be derived from section 63A(2) itself or from Shamoon or Igen v. Wong. In Shamoon (paragraph 12) Lord Nicholls made it clear that "the most convenient and appropriate way to tackle the issues arising on any discrimination application must always depend upon the nature of the issues and all the circumstances of the case."
- In my judgment, there was no error of law by the employment tribunal dealing with Ms Madarassy's allegations by following the conventional two stage approach of first requiring facts to be established from which the tribunal could infer sex discrimination before placing the burden on Nomura to provide an explanation for its treatment of Ms Madarassy. As we shall see, the tribunal in fact dealt, when appropriate, with the adequacy of the explanation provided by Nomura for its alleged less favourable treatment of Ms Madarassy.
Application of burden of proof to particular allegations of discrimination
- I will now consider Mr Allen's criticisms of the tribunal's treatment of the individual allegations of sex discrimination in particular paragraphs in the decision.
- Having set out in paragraph 175 its general direction on section 63A(2), the tribunal applied the burden of proof to the numerous individual allegations of sex discrimination. At the first stage the tribunal considered the evidence relevant to whether Ms Madarassy, as she claimed, had been treated less favourably on the grounds of her sex or pregnancy. It should be noted that no mention was made in paragraph 175 of Ms Madarassy having to prove that Nomura had committed an unlawful act of sex discrimination. All that this employment tribunal did at the first stage was to consider whether Ms Madarassy was treated any less favourably than a hypothetical male comparator in the same circumstances and whether it was on the grounds of her sex or pregnancy.
- Although the tribunal did not in every case spell out the process of making inferences, it was well aware of the familiar process of drawing appropriate inferences from primary facts: see paragraphs 163, 164, 167 and 169 (4) of its decision. The tribunal's approach was that, if it considered that there were no relevant facts from which inferences could be drawn supporting her allegations of sex discrimination, then it was entitled to dismiss her claim without shifting the burden of proof to Nomura and requiring it to provide a non-discriminatory explanation proving that it had not committed an unlawful act of discrimination.
- The majority of Ms Madarassy's allegations of sex and pregnancy discrimination failed at the first stage. It is clear, however, that in some instances the tribunal also considered the second stage at which it accepted as adequate Nomura's explanation for its treatment of Ms Madarassy. The reasons given for the rejection of the particularised individual allegations of discrimination show that the tribunal applied the correct construction of section 63A(2).
- For example, she alleged sex discrimination in the criticisms of work undertaken by her on behalf of Nomura on the Videoton deal in summer and autumn 2000. (Videoton is an electronics manufacturing company.) Although the tribunal ruled that the complaints were out of time and that it was not just and equitable to extend the time, it nevertheless considered the complaints and it rejected them in paragraphs 203, 204, 206 and 209 of the decision.
- The language differs slightly from paragraph to paragraph. The essence of each of them was that the sex discrimination complaint failed because Ms Madarassy "failed to show" (paragraphs 203 and 209), or "has not satisfied us" (paragraph 204), or "has not established" (paragraph 206) that a hypothetical male in the same situation would have been treated differently. The first stage of section 63A(2) was not passed by Ms Madarassy, as the tribunal could not conclude that she had suffered less favourable treatment on the ground of sex. There was nothing for Nomura to disprove by way of an adequate non-discriminatory explanation.
- Paragraphs 216 and 218 dealt with allegations of sex discrimination in connection with delays in the confirmation of her employment from July 2000 and in the provision of written objectives and of critical comments about her. The tribunal held that these complaints were in time. It then considered whether "a hypothetical male comparator in the same situation would have been treated differently."(para 215) The tribunal concluded that "there is no evidence that had she been a male she would have been treated any differently in relation to this" (paragraph 216) and that "she has failed to satisfy the Tribunal that she was less favourably treated than a hypothetical male employee in the same situation in respect of whom the Respondent had concerns over his communication skills, written work and other matters that were concerns in relation to Ms Madarassy" (paragraph 218). The complaints therefore failed at the first stage, because there was no evidence of less favourable treatment from which the tribunal could conclude that Nomura had committed an act of sex discrimination. There is no error of law in this approach.
- Paragraph 225 dealt with Ms Madarassy's absence from work on 6 September 2000 to attend a scan at her doctors. At this time Mr Boardman did not know that she was pregnant. Although the tribunal held that this was a complaint about an isolated act which was out of time, it considered the allegation of sex discrimination and held that it failed as there was no evidence to show that a hypothetical male comparator in the same situation as she had been-absent for several hours without explanation-it would have been treated any differently from Ms Madarassy. There is no error of law in rejecting a claim for sex discrimination if the complainant has no evidence of less favourable treatment than a comparator of a different sex.
- Paragraph 228 dealt with complaints that Mr Boardman conducted a discriminatory campaign against her from September 2000, regularly shouting at her, abusing, intimidating and threatening her. The tribunal held that it was satisfied on the evidence that Mr Boardman shouted at members of staff whether they were male or female. "There was equality of shouting regardless of gender or level within ECM." This was the culture of this workplace. It might be horrible, but it was not sexist. The complaint of discrimination failed at the first stage, as there was no comparative less favourable treatment of Ms Madarassy. Again there is no error of law. It is also clear that the tribunal referred to and accepted the evidence of Nomura on Mr Boardman's indiscriminate treatment of all employees under him by shouting at them.
- Paragraph 267 dealt with Ms Madarassy's complaint, which it held was out of time, that in December 2000 Mr Boardman refused to speak to her in private when he went outside to have a cigarette with Mr Salam. The tribunal said that there was evidence that Mr Boardman indicated to Ms Madarassy, who was a non-smoker, that she could accompany him, but she said she would await his return. It concluded that, even if this amounted to less favourable treatment, there was no evidence to suggest that a hypothetical male non-smoker would be treated any differently. The claim failed as Ms Madarassy was not treated less favourably on the ground of sex and section 63A(2) was not satisfied. The tribunal accepted the evidence of Mr Boardman on the facts of this incident.
- The complaint considered in paragraph 282 related to the performance review in February 2001, which the tribunal held was an isolated act, which was out of time and it was not just and equitable to extend time to found jurisdiction. The tribunal went on, however, to consider the allegation of sex discrimination based on the claim that the review was incorrect, incomplete and false, and rejected it on the ground that she was not treated unfairly and that a hypothetical male comparator in the same situation would not have been treated any differently.
- The complaint dealt with in paragraph 323 was that, after her return from maternity leave, she was not allowed to concentrate on the financial sector. Whilst her male colleagues were allowed to concentrate on their sectors of specialisation, she said that she was given impossible tasks. The tribunal accepted the evidence of Mr Boardman that he did involve her in financial institutions work and held that she "failed to show that she has sustained any less favourable treatment in relation to this allegation." In holding that her complaint failed the tribunal had concluded that there was in fact no unfavourable treatment which could found a claim for sex discrimination.
- The complaint dealt with in paragraph 350 was that Ms Madarassy was not properly considered for the risk management roles vacant within Nomura in October 2001. The tribunal rejected her claim because "she has not shown that she suffered less favourable treatment." The tribunal accepted Nomura's evidence that she had insufficient relevant experience to fulfil this role. There was no error of law in holding that in these circumstances the claim failed.
- The complaint dealt with in paragraph 365 was that her dismissal was discriminatory. This was rejected, as the tribunal found that, as explained in the part of the decision on unfair dismissal, she was redundant. It was also satisfied that "a hypothetical male employee in the same situation as Ms Madarassy would have suffered the same fate." She had scored lower than male colleagues in the redundancy matrix. The fact that she was dismissed, that she was a woman and suffered detriment, whereas male colleagues were not dismissed was insufficient to move the burden of proof to Nomura. It was necessary to consider the treatment of Ms Madarassy as compared with a male comparator in the same or not materially different circumstances. This approach does not involve any error of law.
- In my judgment, none of these paragraphs rejecting claims of sex discrimination involves any misunderstanding or misapplication of the burden of proof applying to sex discrimination claims.
B. Tribunal's approach to evidence
- According to this ground of appeal the employment tribunal erred in its approach to the evidence and its findings of fact by seeking corroboration of facts where none was required and by concluding that there was no evidence, when in fact there was evidence from Ms Madarassy. The tribunal therefore failed to direct itself properly in relation to what was evidence for the purposes of making findings of fact and the impact of section 63A(2).
- Mr Allen sought to make good this ground of appeal by referring to a number of paragraphs in the decision of the employment tribunal.
- Paragraph 182 dealt with alleged discrimination in relation to Ms Madarassy's title and its use on business cards. She was called "Associate Director". She said she should be called "Senior Banker", which was in fact printed on her business cards. She alleged that there was a conversation or discussion in which she was told by Mr Hoshino that she should be described as Associate Director on the business cards. The Tribunal said in paragraph 182 that there was "no corroborative evidence that this discussion took place and the Tribunal was unable to make any finding on it."
- This is one of the allegations (paragraph 1.1 of the particulars) which in granting permission to appeal this court ruled could not be pursued. Mr Allen nevertheless used it as an instance of the tribunal's wrong approach to the evidence in the case.
- Mr Goulding pointed out that the evidence on this point was unsatisfactory. The alleged discussion about business cards had not in fact been mentioned in the particulars. According to Ms Madarassy she was told that she should be described as Associate Director on her business cards. According to Mr Boardman she had business cards on which she was described as Senior Banker. In the closing written submissions on behalf of Ms Madarassy the significance of this evidence was not mentioned. The business cards were not put in evidence. In these circumstances it is not surprising that the tribunal said that it was unable to make any finding on the alleged discussion.
- Paragraph 236 dealt with allegations about Mr Boardman's behaviour (allegation 1.8 ). The tribunal stated that "There is no evidence before us from which we can find that Ms Madarassy's working conditions became unpleasant or the attitudes of her colleagues changed." Mr Allen criticised this paragraph, pointing out that there was evidence, as Ms Madarassy herself gave evidence on the issue.
- The tribunal had not overlooked the fact that she had given evidence on this point in support of her case. This is apparent from paragraphs 226 onwards, in which the tribunal summarised and considered her allegations about Mr Boardman's conduct. It is also apparent from the written submissions from each side on the evidence given by Ms Madarassy and by Mr Boardman. I am satisfied that, read in context, the meaning of paragraph 236 is that the evidence before the tribunal was insufficient to satisfy it of the facts alleged by Ms Madarassy.
- Paragraph 246 dealt with allegation 1.11 that in about December 2000 Mr Boardman began to interrupt and intentionally cut short her discussion with colleagues. The tribunal said that "Ms Madarassy has put forward no evidence in relation to this matter" and held that the complaint failed. Although Mr Allen criticised the tribunal, it appears that the tribunal was correct on this. No evidence was given by Ms Madarassy to support the allegation. No such evidence was mentioned in Ms Madarassy's closing submissions. The tribunal accepted Nomura's submission that the allegation was unsupported by the evidence.
- Paragraph 328 dealt with allegation 1.22 that in July 2001 Mr Boardman started giving Ms Madarassy secretarial/assistant tasks, such as addressing envelopes for him by hand, saying "women tend to have nicer handwriting." The tribunal said " ..there is no evidence before the Tribunal of Mr Boardman asking Ms Madarassy to address envelopes for him by hand, or saying that women tend to have nicer handwriting. The allegation is not proved."
- Although Mr Allen criticised the tribunal on this point, it appears that Ms Madarassy in fact gave no evidence in support of this allegation. There was no error by the tribunal in finding that the allegation was not proved.
- There is no substance in this ground of appeal. It is reasonably clear that the tribunal sometimes used the expression "no evidence" to cover both the situation where Ms Madarassy produced no evidence on the point either from herself or from any one else and the situation in which she gave evidence on the point, which the tribunal did not accept as establishing the allegation.
- It would have been better if the tribunal had not used the expression "no evidence" when they meant "no credible evidence" but the substance of their approach to the relevant evidence and their treatment of it is reasonably clear. It discloses some rather loose use of language, but that does not amount to an error of law in the decision of an employment tribunal if the factual conclusions and reasoning of the tribunal are sufficient to explain the decision reached on the point. These allegations failed for lack of evidence acceptable to the tribunal.
C. Pregnancy and male comparator
- The tribunal dismissed the allegation that Ms Madarassy's treatment was affected by her pregnancy and maternity. The ground of appeal is that, in relation to complaints of pregnancy and maternity related discrimination, there is no requirement for either a real or a hypothetical male comparator. The tribunal had not drawn the distinction between sex discrimination and pregnancy discrimination. In the latter case the sole question is whether she was treated less favourably.
- Mr Allen submitted that the tribunal erred in law in referring to a hypothetical male comparator. The following paragraphs were singled out for criticism by Mr Allen for wrongly including references to a hypothetical male comparator: 175, 215 and 218, 267, 282, 333, 346, 352, 354 and 365.
- Mr Allen cited Webb v. EMO Air Cargo (UK) Ltd (No 2)  ICR 1021 for the proposition that, in a pregnancy case, there is no need for a comparator for the purpose of establishing unlawful discrimination. The tribunal wrongly thought that such a comparator was necessary. It had failed properly to distinguish between sex discrimination and pregnancy discrimination.
- Mr Goulding submitted that this ground of appeal should be rejected for three reasons: first, the point was not taken before the Employment Appeal Tribunal and two of the paragraphs of the employment tribunal now criticised (paragraphs 215 and 218 relating to treatment in relation to her maternity leave) have in any case been remitted by the Appeal Tribunal to the employment tribunal: secondly, the point taken rests on a misconception of the law that a hypothetical male comparator is irrelevant to every allegation of pregnancy discrimination; and thirdly, on the facts the tribunal dismissed the allegation that her treatment was affected by her pregnancy.
- In my judgment, Nomura has a good answer to this ground of appeal quite apart from the dispute about whether this point had been taken before the Employment Appeal Tribunal. Mr Goulding submitted that the point was not taken, but Mr Allen points to paragraph 21(c) of the Grounds of Appeal at p330.
- No question of pregnancy discrimination could have arisen before November 2000, as her pregnancy was not known to Nomura before then. In respect of particular allegations of treatment thereafter, such as those considered in paragraphs 267, 282, 333, 346, 352, 354 and 365, the finding of the tribunal was that the treatment complained of was not affected or influenced by Ms Madarassy's pregnancy because a hypothetical male comparator would have been treated in the same way in the situation in question. They were findings of fact by the tribunal, not errors of law by it.
- The submission that a hypothetical male comparator is always irrelevant in cases of alleged pregnancy discrimination is incorrect. The mere fact that a tribunal compared Ms Madarassy's treatment with that of a hypothetical male comparator does not disclose an error of law in this case. It is necessary to take account of the factual nature of the particular allegation. As is clear, for example, from Webb v. EMO there is no place for a hypothetical male comparator in the case of dismissal of a female employee for becoming or being pregnant.
- It does not follow, however, that it is wrong for an employment tribunal to make a comparison with a hypothetical male comparator for the purpose of determining whether pregnancy or some other reason was the ground for the particular treatment of a pregnant female employee. As explained earlier, two routes are open to the tribunal and both of them are legitimate. The first route is to identify the attributes of a hypothetical comparator. The second is to go straight to the question why the complainant was treated as she was. There was no error of law on taking the first route of the hypothetical comparator.
D. Time limits
- A significant number of the 33 individual complaints were based on facts occurring outside the strict 3 month time limit set for complaints in section 76(1) of the 1975 Act.
- The tribunal found that certain acts were out of time, as they did not extend over a period within the meaning of section 76(6)(b) of the 1975 Act. It also refused to extend time on the just and equitable ground under section 76(5) of the 1975 Act. As the appeal is academic in all those instances where the appeal has failed on the burden of proof ground and where the allegations have been remitted for review by the employment tribunal (allegation 1.18), I shall only deal briefly with the submissions on the time limit ground.
- The employment tribunal's approach to limitation was criticised by Mr Allen (a) for determining issues on "continuing act" and "just and equitable" before reaching conclusions on the disputed facts and the complaints; and (b) for considering the issue of "continuing act" without considering the similarity of the acts complained of in similar allegations and having regard to the totality of the evidence as laid down by this court in Commissioner of Police of the Metropolis v. Hendricks  ICR 530.
- The following paragraphs in particular were criticised for dealing with the continuing act point in a compartmentalised fashion and for failing to consider the connection between the alleged acts in order to ascertain whether there was a discriminatory course of conduct by Nomura. The tribunal held in paragraphs 211 (the content of a conversation on 3 September 2000), 223 (an alleged shouting incident on 6 September 2000) and 326 (Mr Boardman's request to Ms Madarassy to address envelopes) that the acts in question were one-off acts which did not extend over a period or form part of a course of conduct or of a discriminatory state of affairs. They were therefore out of time.
- I am unable to find any error of law in the decision on the continuing act point. The rulings of the tribunal were made after the tribunal had heard all the evidence in the case. It is distinguishable from a case like Hendricks in which an attempt was made to have the continuing act point decided before hearing all the evidence relating to an alleged course of conduct extending over many years.
- In my judgment, there was no error of law in the decision of the tribunal on the refusal of the tribunal to exercise its discretion to extend time on the just and equitable ground. The grounds of appeal made no direct challenge to the substantive decision refusing to extend time and so no permission was granted to appeal on this ground. Although there are submissions on this point in the skeleton argument, they do not identify any error of principle or demonstrate that the refusal was plainly wrong.
- I would reject these grounds of appeal.
E. Health and safety risk assessment complaint
- This ground was raised by Nomura in its cross-appeal to the Employment Appeal Tribunal against the finding of the employment tribunal in favour of Ms Madarassy of unlawful discrimination by reason that a health and safety risk assessment was not undertaken in relation to Ms Madarassy's pregnancy (allegation 1.12).
- Nomura's cross-appeal was allowed, the order of the employment tribunal was set aside and the matter was remitted to the same tribunal. Nomura does not challenge the remission, the Employment Appeal Tribunal having accepted its contention that the employment tribunal erred in law in upholding Ms Madarassy's complaint that it was in breach of the relevant provisions of the health and safety regulations protecting new or expectant mothers and that this constituted sex discrimination. Ms Madarassy now seeks to have the decision of the employment tribunal restored.
- This point involves consideration of the Management of Health and Safety at Work Regulations 1999 (the 1999 Regulations). They were made under section 2(2) of the European Communities Act 1972 and implement EC Directive 98/391 (a directive to encourage improvements in the safety and health of workers at work) and 92/85 (the Pregnant Workers Directive), which make provision for the conducting of risk assessments in the case of pregnant women and women who have recently given birth or who are breastfeeding.
- Regulation 3(1) requires employers to make an assessment of the risks to the health and safety of employees to which they are exposed whilst they are at work.
- Regulation 16(1) concerns risk assessment in respect of new or expectant mothers. It provides that
(a) the persons working in an undertaking include women of childbearing age; and
(b) the work is of a kind which could involve risk, by reason of her condition, to the health and safety of a new or expectant mother, or to that of her baby, from any processes or working conditions, or physical, biological or chemical agents, including those specified in Annexes I and II of the Council Directive 92/85/EEC on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers who have recently given birth or are breastfeeding,
the assessment required by Regulation 3(1) shall also include an assessment of such risk.
(2) Where, in the case of an individual employee, the taking of any other action the employer is required to take under the relevant statutory provisions would not avoid the risk referred to in paragraph 1, the employer shall, if it is reasonable to do, and would avoid such risks, alter her working conditions or hours of work."
- Regulation 18 provides that Regulation 16(2) and (3) do not impose any obligation on an employer in relation to an employee until she has notified him in writing that she is pregnant, has given birth within the previous six months, or is breastfeeding. Ms Madarassy gave notification of her pregnancy in early November 2000. Nomura did not carry out any risk assessment pursuant to regulation 16(1), which does not depend on such notification.
- Ms Madarassy's case was that proof of some risk was not required before the 1999 Regulations imposed an obligation on Nomura to undertake a risk assessment. The purpose of the assessment was to determine whether such a risk exists in relation to the vulnerable category of workers. It was not for the pregnant worker to identify a risk. It was the function of the risk assessment to do that. Failure to carry out the protective step of an assessment required by Regulation 16 was sex or pregnancy discrimination and was a "detriment" within section 6(2)(b) of the 1975 Act. The decision of the Employment Appeal Tribunal in Hardman v. Mallon t/a Orchard Lodge Nursing Home  IRLR 516 at paragraphs 14-15 was cited on the disparate impact on pregnant workers of a failure to carry out a risk assessment under the 1999 Regulations and the automatic unlawful discrimination which occurs in such a case. In that case there was direct medical evidence that the employee's work, as a care assistant in a nursing home for the elderly, could involve heavy lifting, which posed a risk to her or her baby's health and safety.
- If, contrary to her submission that it was not necessary to identify a potential risk, it was necessary to do so, it was submitted that there was such evidence of risk in the form of Ms Madarassy's unchallenged evidence as to radiation exposure and the findings of the employment tribunal (paragraphs 260-261).
- Nomura contended that its obligation as employer did not arise unless 3 conditions are satisfied by the evidential material before the employment tribunal. The work must be of a kind (a) which could involve risk, (b) by reason of her condition, (c) to the health and safety of a new or expectant mother, or to that of her baby.
- As to the employment tribunal's conclusion (in paragraph 261) that Nomura's obligation arose in relation to the comfort of Ms Madarassy sitting before a computer and to radiation from a computer, Nomura submitted that there was no evidence, expert or otherwise apart from some general statements made by Ms Madarassy herself about pain and discomfort, as to her working conditions or as to discomfort and radiation in particular. The tribunal had reached a conclusion without evidence to support it. It had confused discomfort with risk to health and safety. In particular, it had not found that radiation from the computer could involve risk to health or safety nor was there any evidence of detriment to Ms Madarassy on which a complaint of discrimination could be founded.
- Mr Allen responded that it was sufficient to establish a possible risk and that Ms Madarassy suffered detriment in not getting the benefit of a risk assessment.
- On this point I agree with the Employment Appeal Tribunal (paragraphs 216-221) that the employment tribunal erred in law. It did not make an express finding of a risk to health and safety arising from exposure to radiation emitted from the computer; nor was there evidence before it on which it could make such a finding. A finding that the work involved potential risk to health and safety was necessary before there was an obligation on Nomura under Regulation 16 to carry out a risk assessment.
- I would therefore dismiss Ms Madarassy's appeal on this ground, leaving in place the order remitting the matter of the health and safety risk assessment to the same employment tribunal.
F.Remission to same or different tribunal
- This ground of appeal is that the Employment Appeal Tribunal erred in remitting the two allegations 1.15 and 1.18, on which it found that the employment tribunal had erred in law, to the same employment tribunal which would also review its decision on the alleged failure (1.12) of Nomura to carry out a health and safety risk assessment.
- Sinclair Roche & Temperley v. Heard  IRLR 763 at paragraph 46 was cited for the guidance given by the Employment Appeal Tribunal on this point. Factors relevant to whether the remission should be to the same tribunal or to a different tribunal include the length of time which has passed since the tribunal's decision; the risk of loss of recollection and the ability of the original tribunal to refresh the memories of the members from notes of evidence and submissions; the length and complexity of the case; the extent to which the decision under appeal was flawed or mishandled; the risk that the tribunal has already made up its mind to reach a certain result in the case and its ability to reconsider the matter fully and reach a different decision on the evidence and arguments; and the ability of the tribunal to exercise its usual professional approach and skills on the remission.
- Mr Allen contended that the allegations in question should have been remitted for re-hearing by a different tribunal. A considerable time had passed since the original hearing. The tribunal had produced a totally flawed decision, misdirecting itself on the fundamental point of the burden of proof and on its approach to the evidence in the case.
- Mr Allen also referred to Ms Madarassy's original grounds of appeal, which were later withdrawn (see the section below on the costs order), and to the tone of the members' comments when responding to her allegations against the tribunal ("insulting","preposterous"). From the standpoint of the objective observer this gave rise to a real possibility of a risk of bias on the part of the tribunal at a remitted hearing.
- Further, the numerous factual findings against Ms Madarassy in the original decision gave the impression that the tribunal had so committed itself to the decision in favour of Nomura that an objective re-think by it was impracticable.
- I am satisfied that the Employment Appeal Tribunal did not err in law in exercising its discretion to remit the three allegations to the same tribunal. It directed itself in accordance with the principles stated in the decision of the Employment Appeal Tribunal in the Sinclair Roche case. For the reasons given earlier the decision of the tribunal was not flawed by misdirection on the burden of proof or on its approach to the evidence. The decision to remit a small number of the numerous allegations to the same tribunal, which knows the detailed factual background to the case, having heard all the evidence in the course of a long hearing, is proportionate and appropriate in terms of cost, time and efficiency without any real possibility of a risk of apparent bias on the part of a fair minded and informed observer or other obstacle to the attainment of justice: see Amec Capital Projects Ltd v. Whitefriars City Estates Ltd  EWCA Civ 1418. Despite the passage of time the tribunal will be able to refresh its memory from the notes of evidence and the other papers and can be safely trusted to deal with the remitted matters in an impartial and professional manner.
- I would not interfere with the discretion of the Employment Appeal Tribunal on this point.
G. Review or re-hearing
- The ground of appeal is that the Employment Appeal Tribunal erred in remitting the three allegations on which it found errors of law by the employment tribunal for a review rather than for a re-hearing. Reference was made to the limited circumstances in which an employment tribunal has power to review its decisions on the application of a party or of its own motion: rule 13(1) Employment Tribunals (Constitution etc) Regulations 2001, Schedule 1. It was contended that the passage of time since the decision of the employment tribunal made it inappropriate to direct the tribunal to review its decision on the three allegations rather than re-hear the remitted matters from scratch.
- This point has no substance, amounting to little more than a verbal quibble. The Employment Appeal Tribunal had power to make this form of order in the exercise of its discretion to remit under section 35(1)(a) and (b) of the Employment Tribunals Act 1996. The Employment Appeal Tribunal made it clear that, in carrying out its review in accordance with the judgment of the Appeal Tribunal, the employment tribunal had power to hear further evidence on the application of the parties or of its own motion.
- I am unable to find any respect in which the Employment Appeal Tribunal erred in directing the review of the decisions on the particular allegations. It had power to make the order in its discretion. In exercising the discretion it neither erred in principle nor took a course that was plainly wrong.
H. Bonus claim
- There is an issue between the parties as to whether the issue about a bonus claim is before this court.
- Ms Madarassy made an allegation of sex discrimination in relation to the provision and amount of a bonus in April 2001(1.16). She alleged that she received a smaller bonus than her male colleagues. She later named seven male comparators, including Mr Boardman and Mr Salam. The chairman of the tribunal refused an application by her for disclosure of the bonuses of the individuals, holding that none of them appeared to be true comparators.
- At the substantive hearing the tribunal directed that the issue of disclosure on comparators be deferred to the end of the hearing when the parties could make submissions on it in the closing submissions. In the closing submissions Ms Madarassy's then counsel submitted that it was appropriate to disclose the figures and that the matter could be dealt with at any remedies hearing.
- The tribunal found that only Mr Salam was an appropriate comparator, that it did not have the evidence to enable it to resolve the allegation of less favourable treatment and that in any case it was a one-off issue which was out of time.
- It is said that the point was before the Employment Appeal Tribunal because every refusal of the employment tribunal to find for Ms Madarassy on a specified act of discrimination was raised on the appeal, unless it had been expressly excluded at the preliminary hearing. The point was, however, a complaint about the failure to make the order for disclosure about Mr Salam's April 2001 bonus.
- At a preliminary hearing on 3 February 2004 Burton J rejected the ground of appeal against the failure of the employment tribunal to order Nomura to disclose the remuneration levels of the named male comparators for the purposes of the bonus claim. The disclosure issue was excluded on the ground that it had no prospect of success. It did not proceed to a full hearing. The decision to exclude this ground was not appealed.
- Before this court Ms Madarassy appealed against every rejection of her sex discrimination claims, unless the court had excluded an allegation on the grant of permission to appeal. This issue was not expressly excluded.
- Mr Goulding does not accept that this issue is properly before the Court of Appeal. He said that Nomura had proceeded on the basis that the bonus issue did not feature in the appeal to this court. He pointed out that it was not before the Employment Appeal Tribunal at the full hearing. The skeleton argument for Ms Madarassy made no criticism of the tribunal's approach to the bonus claim allegation 1.16, not even in relation to the burden of proof ground as particularised by reference to particular paragraphs. The allegation was not referred to in the oral argument.
- The skeleton argument for Ms Madarassy in this court referred to many paragraphs of the tribunal on the burden of proof ground, but made no mention of the tribunal's approach to the bonus issue. It also referred to paragraphs on the issue of time limits, but not to the paragraph in which the bonus issue was held to be out of time. As the matter was not raised in the grounds of appeal or in the skeleton argument there was no call for it to be expressly excluded when permission to appeal was granted with limitations.
- I agree with Mr Goulding on this point. The issue is not before this court. It is unnecessary to deal with the bonus issue other than to say that it does not in any event appear to raise any point that is not covered by the rulings made above rejecting Ms Madarassy's grounds of appeal on the burden of proof and the time limits points.
- This point arises on an adjourned application for permission to appeal.
- Ms Madarassy was acting in person when she lodged her very long notice of appeal (108 paragraphs, 31 pages) with the Employment Appeal Tribunal on 31 March 2003. She made allegations of bias and improper conduct on the part of the employment tribunal.
- On 9 May 2003 HHJ Clark ordered her to lodge an affidavit giving details in support of her allegations of bias or improper conduct. HHJ Clark gave a costs warning to the effect that the unsuccessful pursuit of the allegations might give rise to an award of costs. The order also directed the notice of appeal to be served on Nomura, which was invited to lodge concise submissions in opposition for consideration at the preliminary hearing.
- On 23 May 2003 Nomura filed and served concise written submissions directed at persuading the Employment Appeal Tribunal not to allow the appeal to proceed beyond the preliminary hearing. Mr Goulding relied on the costs incurred in so doing to justify the award of costs later made in favour of Nomura by the Employment Appeal Tribunal.
- Mr Allen submitted that there was no sensible reason for Nomura responding to the allegations made by Ms Madarassy in her Notice of Appeal. The order made by HHJ Clark provided for Nomura to have an opportunity to respond to the affidavit following its receipt. There was nothing to respond to until the affidavit was submitted.
- In her affidavit lodged on 23 May 2003 in accordance with the direction Ms Madarassy expressly withdrew some of the allegations, but not all of them. A number of allegations of improper conduct remained in the Notice of Appeal. Some additional allegations were made by Ms Madarassy in the affidavit itself.
- A first draft amended Notice of Appeal was submitted on 23 September 2003. The allegations of bias and improper conduct were no longer pursued.
- Mr Allen contended that the Employment Appeal Tribunal erred in making an order against Ms Madarassy in respect of costs incurred after she had acted upon a costs warning given at the earliest possible stage by withdrawing parts of her appeal. The award of costs was, he contended, perverse in that no reasonable tribunal would have made an award of costs in the circumstances. Such orders would denude costs warnings of any effect. They would discourage parties from abandoning weak allegations at an early stage. The order should be set aside.
- While I agree with Mr Allen that it would be contrary to the purpose of a costs warning to make the party warned liable for costs incurred after the party had heeded the warning and ceased the conduct warned against, I have reached the conclusion that, on the facts of this case, the Employment Appeal Tribunal did not err in principle in the exercise of its discretion to order Ms Madarasssy to pay costs of £2,000 to Nomura. Although Mr Allen commented on the amount of the costs claimed by Nomura, there was no appeal against the quantum of the costs ordered against Ms Madarassy.
- Nomura had incurred legal costs in responding to the Notice of Appeal, which contained the allegations that led the Employment Appeal Tribunal to make the order directing affidavit evidence from Ms Madarassy and inviting Nomura to make concise submissions. Ms Madarassy's allegations of improper conduct were only completely dropped when the amended Notice of Appeal was served several months after the respondent had incurred the costs in respect of the concise submissions and only shortly before the preliminary hearing which was due to take place on 29 September 2003.
- In these circumstances the Employment Appeal Tribunal was entitled to come to the conclusion that Ms Madarassy had behaved improperly and unreasonably in making the allegations in the first place and that Nomura's costs in relation to the written submissions were incurred in consequence of the allegations.
- I would refuse the application for permission to appeal the costs order on the ground that there is no real prospect of persuading the Court of Appeal to interfere with the discretion of the Employment Appeal Tribunal.
- I would dismiss the appeal on the ground, first that there was no error of law in the decision of the employment tribunal on any of the many aspects of its decision which were appealed to this court, and, secondly, there was no error of law in the decision of the Employment Appeal Tribunal to remit three of the allegations for review by the same employment tribunal or to make the £2000 costs order against Ms Madarassy.
Lord Justice Laws:
- I agree.
Lord Justice Maurice Kay:
- I also agree.
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