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||Neutral Citation Number:  EWCA Civ 1421
||Case No: A2/2008/0600
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
HIS HONOUR JUDGE PETER CLARK
||Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE LAWS
LORD JUSTICE SEDLEY
LORD JUSTICE LAWRENCE COLLINS
|| Stephen English
||- and -
||Thomas Sanderson Ltd
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Frederic Reynold QC and Marcus Pilgerstorfer (instructed by Messrs Dean Wilson Laing) for the Appellant
Ms Shirley Bothroyd and Mr Robert Palmer (instructed by Messrs Bolitho Way) for the Respondent
Hearing dates : 31 October 2008
HTML VERSION OF JUDGMENT
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LORD JUSTICE LAWS :
- This is an appeal, with permission granted by the Employment Appeal Tribunal (the EAT), against the decision of the EAT dated 20 February 2008 by which they dismissed the appellant's appeal against the earlier determination of the Employment Tribunal (the ET) made on 12 February 2007. The ET had dismissed the appellant's claim of harassment brought pursuant to Regulation 5 of the Employment Equality (Sexual Orientation) Regulations 2003 (the Regulations).
- The issue in the appeal is whether someone who is ribbed or teased – or, it might be said, tormented – by "homophobic banter" (the phrase used in this case) is or may be thereby harassed within the meaning of Regulation 5 when (a) he is not gay, (b) he is not perceived or assumed to be gay by his fellow workers, and (c) he accepts that they do not believe him to be gay.
- The appellant was engaged by the respondents under a contract for personal services between 1996 and 26 August 2005. On about 23 November 2005 he issued a claim in the ET alleging harassment contrary to the Regulations, and another claim with which we are not concerned. The appellant's pleaded harassment case was as follows. He alleged that for a protracted period he had been subjected by four colleagues at work to sexual innuendo suggesting in obvious terms that he was homosexual. Someone had discovered that he had been to a boarding school and lived in Brighton, and these facts seem to have been the genesis of the suggestions. He had to endure names like "faggot", and on two occasions at least, lurid comments in the house magazine. His case was that this cruel and puerile conduct drove him to leave his job.
- The appellant is in fact a heterosexual happily married man with three teenage children. On his own case (as the ET was to record at paragraph 2.2 of their determination), the appellant fully accepted that his tormentors knew perfectly well that he was not gay. They knew he was happily married with children. Their homophobic banter (as it was described) was, as the EAT noted (paragraph 24), no more nor less than a vehicle for teasing him. One has the strong impression that the word "teasing" greatly understates the unpleasantness of what was being done.
- The appellant gave evidence before the ET to the effect that he was well aware that the perpetrators knew he was not gay and purposed only to "tease" him. On receiving that evidence the ET decided to proceed by determining a preliminary issue, formulated thus: did Regulation 5 of the Regulations cover the case of homophobic banter directed towards a man who (a) is not gay, (b) is not perceived or assumed to be gay by his fellow workers, and (c) accepts that they do not believe him to be gay. As will be obvious this formulation defines the issue in this appeal as I have set it out in paragraph 2.
THE REGULATIONS AND THE DIRECTIVE
- Regulation 5 provides:
"5 Harassment on grounds of sexual orientation
(1) For the purposes of these Regulations, a person ("A") subjects another person ("B") to harassment where, on grounds of sexual orientation, A engages in unwanted conduct which has the purpose or effect of -
(a) violating B's dignity; or
(b) creating an intimidating, hostile, degrading, humiliating or offensive environment for B.
(2) Conduct shall be regarded as having the effect specified in paragraph (1)(a) or (b) only if, having regard to all the circumstances, including in particular the perception of B, it should reasonably be considered as having that effect."
The subjection of an employee to such harassment is made unlawful by regulation 6(3).
- The Regulations were made in order to implement Directive 2000/78/EC "establishing a general framework for equal treatment in employment and occupation" (the Framework Directive). In light of part of the argument before us I should set out the 11th and part of the 12th recital, and certain of the executive provisions:
"(11) Discrimination based on religion or belief, disability, age or sexual orientation may undermine the achievement of the objectives of the EC Treaty, in particular the attainment of a high level of employment and social protection, raising the standard of living and the quality of life, economic and social cohesion and solidarity, and the free movement of persons.
(12) To this end, any direct or indirect discrimination based on religion or belief, disability, age or sexual orientation as regards the areas covered by this Directive should be prohibited throughout the Community…
The purpose of this Directive is to lay down a general framework for combating discrimination on the grounds of religion or belief, disability, age or sexual orientation as regards employment and occupation, with a view to putting into effect in the Member States the principle of equal treatment…
Concept of discrimination
1. For the purpose of this Directive, the 'principle of equal treatment' shall mean that there shall be no direct or indirect discrimination whatsoever on any of the grounds referred to in Article 1…
3. Harassment shall be deemed to be a form of discrimination within the meaning of paragraph 1, when unwanted conduct related to any of the grounds referred to in Article 1 takes place with the purpose or effect of violating the dignity of a person and of creating an intimidating, hostile, degrading, humiliating or offensive environment. In this context, the concept of harassment may be defined in accordance with the national laws and practice of the Member State."
THE DECISION OF THE EMPLOYMENT TRIBUNAL
- The ET accepted (paragraph 6.3) that discrimination may occur where the perpetrators of the conduct complained of believe that the victim is gay, even if he is not; and indeed this is common ground. They also accepted (paragraph 6.4) that there may be discrimination "where a victim is treated detrimentally because he has not followed an instruction to discriminate against somebody else. We know that that is the case from the cases of Showboat and Weathersfield…" These authorities are reported at  ICR 65 and  ICR 425 respectively. Showboat is the well known case in which the EAT, presided over by Browne-Wilkinson J as he then was, upheld a complaint of unlawful racial discrimination by a white man who was dismissed by his employers for refusing to obey an instruction to exclude all black customers from the entertainment centre where he worked. The ET cited among other passages this paragraph from the judgment:
"We therefore conclude that section 1(1)(a) covers all cases of discrimination on racial grounds whether the racial characteristics in question are those of the person treated less favourably or of some other person. The only question in each case is whether the unfavourable treatment afforded to the claimant was caused by racial considerations. "
- The ET also referred to the more recent decision of this court in Redfearn v Serco Ltd  IRLR 623, about which I will have more to say. They concluded "with some reluctance" (paragraph 6.13) that "to find in the claimant's favour would be to extend the ambit of the Regulations beyond extensions already made through cases such as Showboat".
THE DECISION OF THE EMPLOYMENT APPEAL TRIBUNAL
- And so the matter went to the EAT. Here the case took a different turn because the presiding judge, His Honour Judge Peter Clark, drew counsel's attention to the decision of Burton J in the Administrative Court in EOC v Secretary of State  ICR 1234. In that case the EOC contended amongst other things that s.4A(1)(a) of the Sex Discrimination Act 1975 did not fulfil its intended purpose, which was to transpose into English law provisions contained in the Equal Treatment Directive 2002/73/EC. The latter measure amended Council Directive 76/207/EEC. Article 2(2) of the 1976 Directive as so amended provided:
"For the purposes of this Directive, the following definitions shall apply… harassment: where unwanted conduct related to the sex of a person occurs with the purpose or effect of violating the dignity of a person, and of creating an intimidating, hostile, degrading, humiliating or offensive environment…"
S.4A(1)(a) of the 1975 Act provided:
"For the purposes of this Act, a person subjects a woman to harassment if (a) on the ground of her sex, he engages in unwanted conduct that has the purpose or effect…"
There are then set out consequences, including violation of the woman's dignity, which are taken from the Directive.
- Miss Rose QC for the EOC submitted, and Burton J accepted, that the use in s.4A(1)(a) of the expression "on ground of her sex" introduced a requirement of cause and effect between the woman's sex and the objectionable conduct: whereas no such element was present in the amended Directive's definition of harassment, which as we have seen uses the expression "unwanted conduct related to the sex of a person".
- Burton J considered a submission made by Mr Pannick for the Secretary of State that a purposive construction of the statute might be adopted which would allow the national measure to be brought into line with the European legislation. The judge concluded however, (paragraph 61) that such an exercise would involve altogether too substantial a rewriting of the statute.
- It is to be noted that s.4A(1)(a) has been amended to give effect to Burton J's judgment: see paragraph 3 of the Sex Discrimination Act 1975 (Amendment) Regulations 2008.
- The EAT in the present case (see for example paragraph 13) considered that there was a parallel between the relation between s.4A(1)(a) of the 1975 Act and Article 2(2) of the amended 1976 Directive, and that between paragraph 5 of the Regulations and Article 2(3) of the Framework Directive. They concluded (paragraph 21) that the Regulations did not properly implement the Framework Directive, just as s.4A(1)(a) did not properly implement Article 2(2) of the 1976 Directive. However the outcome of the appeal depended on the scope of Regulation 5, and in the absence of any recourse to a purposive construction of the Regulation so as to conform it with the Framework Directive (which the EAT implicitly rejected in line with Burton J's rejection of a like possibility in EOC), the appellant was not assisted by the failure of implementation.
- Accordingly, addressing Regulation 5, the EAT proceeded to consider the question posed by Lord Nicholls in Najarajan  ICR 877: why did the perpetrators of the conduct complained of behave as they did? They recorded the appellant's submission thus:
"22. … [T]hey did so because they perceived him as having stereotypical characteristics which they associated with a gay person; he went to boarding school and lived in Brighton. Insofar as that answer brings the claimant within the DTI explanatory note, paras, 24-25, he falls within the reach of Regulation 5."
But the EAT rejected this case. They said:
"23. We cannot accept that analysis. The difficulty facing the claimant on the facts adopted by the Employment Tribunal is that not only did the alleged harassers not perceive the claimant to be gay; he fully accepted that that was the position.
24. In these circumstances we have concluded that, on the facts, the unwanted conduct was not on grounds of sexual orientation. The homophobic banter (on the necessary assumption, contrary to the respondent's case) unacceptable as it was, was a vehicle for teasing the claimant, as Ms Bothroyd submits. It was not based on their perception nor even incorrect assumption that he was gay."
THE FIRST QUESTION
- In this court it is convenient to take the first question as being whether the assumed facts of the case can be said to fall within the scope of Regulation 5 applying the ordinary meaning of the language used. The critical words are "on grounds of sexual orientation".
- The appellant's submission, as formulated in his written argument (paragraph 14), is that if the banter is engaged in "because the target is perceived to have stereotypical characteristics associated with homosexuals", that is enough to show that the banter was "on grounds of sexual orientation". Mr Reynold QC for the appellant elaborated this argument before us. The "stereotypical characteristics" referred to were the facts that the appellant had been to a boarding school and lived in Brighton. This was obviously a fanciful basis on which to form any remotely objective opinion of a person's sexual orientation; and as I have indicated it is accepted on all hands that the perpetrators in this case did not actually believe the appellant was gay at all.
- It is a necessary premise of Mr Reynold's case that harassment "on grounds of sexual orientation" may occur even though no person's actual, perceived, or assumed sexual orientation has anything whatever to do with the case. That seems, to say the least, to be a counterintuitive and unpromising start. However it is clear (as I have indicated) that discrimination may occur where the perpetrators of the conduct complained of believe that the victim is gay, even if he is not; and also where a victim is treated detrimentally because he has disobeyed an instruction to discriminate against somebody else (the Showboat case). May this line of reasoning be extended so as to support Mr Reynold's case?
- In addressing that question I should give some account of the decision of this court in Redfearn, to which I have referred in passing. The claimant was a member of the British National Party. He was employed as a driver by a transport service most of whose passengers were of Asian origin as was a substantial minority of its workforce. The claimant was regarded as a satisfactory employee. He had been recommended for an award of first class employee status by his Asian supervisor. He was summarily dismissed for his politics. He could not bring proceedings for unfair dismissal, because he did not meet the statutory requirement relating to length of service. His claim was for race discrimination. He failed before the ET, but the EAT allowed his appeal. However the employers' appeal to this court was successful. I should cite these passages from the leading judgment delivered by Mummery LJ:
"42. Mr Bowers submitted that Serco's decision to dismiss Mr Redfearn was based on considerations relating to the race of third parties, their perceived hostility to his views and his perceived attitude to the race of third parties. That was direct discrimination 'on racial grounds'. The employment tribunal had misapplied the law. Race considerations had significantly influenced the decision to dismiss on 'health and safety grounds' which could not be relied on as a justification for direct race discrimination. Mr Bowers argued that any concern on the part of a tribunal or court about the consequences of appearing to permit racist conduct, as might occur in allowing a claim like the present case, could be dealt with at the stage of remedy.
45. Mr Bowers' proposition turns the ratio of Showboat and the policy of the race relations legislation upside down. It would mean that any less favourable treatment brought about because of concern about the racist views or conduct of a person in a multi-ethnic workplace would constitute race discrimination. The ratio of Showboat is that the racially discriminatory employer is liable 'on racial grounds' for the less favourable treatment of those who refuse to implement his policy or are affected by his policy. It does not apply so as to make the employer, who is not pursuing a policy of race discrimination or who is pursuing a policy of anti-race discrimination, liable for race discrimination.
46. In this case it is true that the circumstances in which the decision to dismiss Mr Redfearn was taken included racial considerations, namely the fact that Serco's customers were mainly Asian and that a significant percentage of the workforce was Asian. Racial considerations were relevant to Serco's decision to dismiss Mr Redfearn, but that does not mean that it is right to characterise Serco's dismissal of Mr Redfearn as being 'on racial grounds'. It is a non-sequitur to argue that he was dismissed 'on racial grounds' because the circumstances leading up to his dismissal included a relevant racial consideration, such as the race of fellow employees and customers and the policies of the BNP on racial matters. Mr Redfearn was no more dismissed 'on racial grounds' than an employee who is dismissed for racially abusing his employer, a fellow employee or a valued customer. Any other result would be incompatible with the purpose of the 1976 Act to promote equal treatment of persons irrespective of race by making it unlawful to discriminate against a person on the grounds of race."
- With great respect, I think that in some ways this is a difficult decision. Given that "the circumstances in which the decision to dismiss" the claimant included the race of most of Serco's customers and that of many of their employees, it is difficult to see that the answer to Lord Nicholls' question in Najarajan – why did the perpetrators of the conduct complained of behave as they did – consisted in anything other than those very facts. It is plain, however, that Mummery LJ's reasoning, leading to the conclusion that Mr Redfearn's case was not covered by the legislation, was strongly influenced by "the purpose of the 1976 Act [sc.] to promote equal treatment of persons irrespective of race by making it unlawful to discriminate against a person on the grounds of race".
- In this appeal, although the appellant's case on its particular facts is not at odds with that legislative policy, Mr Reynold is not I think assisted by Redfearn. If anything it assists the respondent. It shows the kind of difficulty that can arise if one seeks to extend the Showboat line of reasoning further than the statutory policy strictly requires. I do not think it should be extended so far as to carry the day for Mr Reynold's argument, which proceeds, as I have said, on the basis that harassment on grounds of sexual orientation may occur even though no person's actual, perceived, or assumed sexual orientation has anything whatever to do with the case. In my judgment harassment is perpetrated on grounds of sexual orientation only where some person or persons' actual, perceived, or assumed sexual orientation gives rise to it, that is, is a substantial cause of it. Mr Reynold's case confuses the reason for the conduct complained of with the nature of that conduct. On the facts the reason for the harassment was nothing to do with anyone's actual, perceived, or assumed sexual orientation. It happened to take the form of "homophobic banter" so called, which was thus the vehicle for teasing or tormenting the appellant. In those circumstances sexual orientation was not the grounds of the conduct complained of.
Moreover it seems to me that for the purposes of Mr Reynold's submission the appellant's supposed "stereotypical characteristics associated with homosexuals" are at best the fifth wheel of the coach. On the assumed facts it is nothing to the point what prompted the nature of the perpetrators' thoroughly nasty conduct. They did not actually think he was gay, and the appellant knew as much.
- I apprehend this conclusion does justice to the language of Regulation 5, and is consistent with Mummery LJ's observations on the statutory policy in Redfearn. Accordingly, if Regulation 5 stood alone I would dismiss the appeal.
THE SECOND QUESTION
- The second question in the case, as I see it, is whether the Framework Directive can make all the difference. As I have said, the EAT considered that there was a parallel between the relation between s.4A(1)(a) of the 1975 Act and Article 2(2) of the amended 1976 Directive (which was of course addressed in the EOC case) and that between paragraph 5 of the Regulations and Article 2(3) of the Framework Directive. It will be recalled that in EOC Burton J accepted that the use in s.4A(1)(a) of the expression "on ground of her sex" introduced a requirement of cause and effect between the woman's sex and the objectionable conduct, whereas no such element was present in the 1976 Directive's definition of harassment which uses the expression "unwanted conduct related to the sex of a person". Mr Reynold submitted that there is a like contrast in the present case, and that the Regulation can and should be read down so as to give effect to the broader scope which is thus inherent in the Framework Directive.
- I certainly accept that the phrase "on grounds of sexual orientation" in Regulation 5(1) imports a relation of cause and effect between a person's sexual orientation and the conduct complained of: that proposition is central to what I have said on Question (1). But I have difficulty with the proposition that the Framework Directive possesses the broader scope contended for by Mr Reynold. Articles 1 and 2(1) critically refer to "discrimination on the grounds of religion [etc]..." (my emphasis). Mr Reynold relies on Article 2(3) which I repeat for convenience:
"Harassment shall be deemed to be a form of discrimination within the meaning of paragraph 1, when unwanted conduct related to any of the grounds referred to in Article 1 takes place with the purpose or effect of violating the dignity of a person and of creating an intimidating, hostile, degrading, humiliating or offensive environment. In this context, the concept of harassment may be defined in accordance with the national laws and practice of the Member State."
- Mr Reynold would have us align the expression "unwanted conduct related to any of the grounds" with "unwanted conduct related to the sex of a person" in the definition of harassment appearing in Article 2(2) of the amended 1976 Directive, with which of course Burton J was concerned in EOC. In both cases, submits Mr Reynold, the phrase "related to" describes a connection or relationship which is not limited to cause and effect. And Article 2(1) of the 1976 Directive defines the principle of equal treatment as meaning "that there shall be no discrimination whatsoever on grounds of sex" – so that "on grounds of" plays its part in this Directive no less than in the Framework Directive; yet Burton J construed the 1976 Directive's prohibition as covering matters not limited to conduct caused by the victim's sex.
- I have two difficulties with Mr Reynold's submission. First, it is by no means clear that the phrase "unwanted conduct related to any of the grounds", retaining as it does the term "grounds", excludes the notion of cause and effect, even though on Burton J's reasoning in EOC the phrase "unwanted conduct related to the sex of a person" does so. We have been supplied with the French, German and Greek language versions of the Framework Directive, but I do not think they throw any further distinct light on the matter.
- Secondly however, and perhaps more substantially, it is important to see where Mr Reynold's invitation to apply Burton J's reasoning in EOC to the Framework Directive leads us. Here we should recall the premise of his argument to which I drew attention in addressing Question (1): that harassment on grounds of sexual orientation may occur even though no person's actual, perceived, or assumed sexual orientation has anything whatever to do with the case. In relation to the Framework Directive, his case must be that the same applies to each of the other forms of discrimination mentioned in Article 1: religion, belief, disability or age. Unwanted conduct relating to any of those matters may amount to harassment even if it does not touch or engage the possession of any of those characteristics by any person.
- This would amount not to a Pandora's box, but a Pandora's attic of unpredictable prohibitions. I do not believe that the European legislature intended such a state of affairs. And it is to be noted that no such consequence can be said to arise in the case of the amended 1976 Directive: there, the words in the definition of harassment are "unwanted conduct related to the sex of a person", which must refer only to the sex of a specific person, and manifestly cannot refer to anyone's religion, belief, disability or age. All of the unruly generalities implied by Mr Reynold's argument are excluded.
- Mr Reynold drew our attention to the decision of the European Court of Justice in Coleman v Attridge Law  IRLR 722. In that case the claimant, after accepting voluntary redundancy, brought proceedings against her former employers alleging disability discrimination and constructive dismissal. She claimed to have been subjected to unfair treatment because she had a disabled son, whose primary carer she was. She relied on the protection afforded by the Framework Directive against discrimination "on grounds of disability" as informing the construction of the material provisions contained in the Disability Discrimination Act 1995. Upholding this approach on a reference by the ET for a preliminary ruling, the Court of Justice stated:
"38. ... [I]t does not follow from those provisions of Directive 2000/78 that the principle of equal treatment which it is designed to safeguard is limited to people who themselves have a disability within the meaning of the Directive. On the contrary, the purpose of the Directive, as regards employment and occupation, is to combat all forms of discrimination on grounds of disability. The principle of equal treatment enshrined in the Directive in that area applies not to a particular category of person but by reference to the grounds mentioned in Article 1. That interpretation is supported by the wording of Article 13 EC, which constitutes the legal basis of Directive 2000/78, and which confers on the Community the competence to take appropriate action to combat discrimination based, inter alia, on disability.
50. Although, in a situation such as that in the present case, the person who is subject to direct discrimination on grounds of disability is not herself disabled, the fact remains that it is the disability which, according to Ms Coleman, is the ground for the less favourable treatment which she claims to have suffered. As is apparent from paragraph 38 of this judgment, Directive 2000/78, which seeks to combat all forms of discrimination on grounds of disability in the field of employment and occupation, applies not to a particular category of person but by reference to the grounds mentioned in Article 1."
- Clearly, then, domestic and European law alike vouchsafe that harassment or discrimination "on grounds of" sexual orientation or race or disability is not limited to situations where the victim is mistreated because of his or her own condition (whether sexual orientation, race, or disability): though no doubt that is the paradigm case. But the extended instances – Showboat here, Coleman in Luxembourg – are all connected with someone's actual, perceived or assumed condition. They are all examples of harassment or discrimination "on grounds of" (someone's) sexual orientation, race, or disability: that condition was, in each case, an operative cause of the mistreatment in question. To this extent I apprehend that Coleman tends to support the view I have put forward of the scope of the Framework Directive.
THE THIRD QUESTION
- The last question is whether, if I am wrong on Question (2) and the Framework Directive enacts a rule prohibiting unwanted conduct merely related to sexual orientation and not caused by it as a characteristic of a particular person or persons, Regulation 5(1) can be read down so as to produce that effect.
- In EOC Burton J considered there was too great a distance between the 1976 Directive's meaning and the terms of the relevant domestic legislation to allow for any proper "reading down" of the municipal statute. In my judgment a like conclusion applies to Regulation 5. HMRC v IDT Card Services Ireland Ltd  EWCA Civ 29 shows (paragraphs 81 – 82, 84 – 89) that the courts' duty to interpret domestic legislation so as to achieve the purpose of a European Directive which the legislation purports to implement is limited (just as is the interpretative duty owed by the courts under s.3 of the Human Rights Act 1998): it runs "so far as is possible"; any reading down must "go with the grain of the legislation" as drafted. That position is not, I think, displaced by any of the European cases to which Mr Reynold referred, such as Pfeiffer  IRLR 137 and Adeneler  IRLR 716, and which with respect I need not cite. They are essentially applications of the well known principle set out in Marleasing  ECR 1-4135, that the national court is bound to interpret implementing national law, "so far as possible", in order to achieve the result sought by the relevant Directive: the thrust of HMRC v IDT is just the same, and in truth all this learning points in the same direction.
- The gap between Regulation 5 on its ordinary construction and as Mr Reynold would have us read it down is surely no smaller than in the EOC case. There, Burton J said at paragraph 61:
"It is obviously not just open to a national court, but its obligation, to set out to construe statutes and regulations passed by the Member State so as to render them compliant with a relevant Directive. But, by reference to the aspects which have been in issue at this hearing (save for [sc. certain particular points]) both individually, and in any event collectively, I do not consider that to do so is appropriate – by virtue of the extent of reading down/transposition which would be required to be considered in order to render them compliant: or possible - because I am not persuaded that even such extreme application of the Marleasing principle would in any event be effective: or sensible – because of the need for clarity and certainty, and comprehensibility, by employees and employers alike."
Mr Reynold does not suggest that these conclusions were in any way incorrect in their context. Just like EOC, this present case involves the difference between X being caused by Y and X being related to Y. That is a difference of kind, not merely of degree. To read the first as meaning the second is not an act of interpretation, going "with the grain of the legislation". It is itself, in effect, an act of legislation, and therefore travels beyond what is permissible.
- Accordingly if I am wrong on Question (2) I would for these reasons answer Question (3) by holding that Regulation 5(1) cannot be read down as Mr Reynold suggests.
CONCLUSION AND POSTSCRIPT
- I would dismiss the appeal for all the reasons I have given. But I should record an unease I have felt about the case. The factual scenario on which the ET determined the preliminary issue formulated by them is, to say the least, surprising: as I have shown, the premise was that the appellant was not perceived or assumed to be gay by his tormentors who – as he was aware – did not themselves believe him to be gay. That was, I acknowledge, the appellant's own evidence and I do not of course suggest that his evidence was false. But I have wondered whether it tells the whole story. The application of a test of causation expressed by a phrase such as "on grounds of" is apt to be nuanced by the particular facts. I do not mean to imply that with further evidence this particular case might have turned out differently; and I certainly do not mean to qualify any of the legal conclusions I have reached. I add this postscript only to indicate that the ET should, with respect, approach the use of a preliminary issue procedure with circumspection in any case where the result may be influenced by the details of the facts as well as what may be called the main story.
LORD JUSTICE SEDLEY:
- As Lord Justice Laws points out in his postscript, the simplistic facts distilled by the employment tribunal and made the basis of their preliminary determination will have eliminated all the potentially important nuance and detail upon which a case such as this, properly heard out, ought ordinarily to turn.
- This said, however, the single critical assumed fact was that the appellant was repeatedly taunted as gay. In my judgment it did not matter whether he was gay or not. The calculated insult to his dignity, which depended not at all on his actual sexuality, and the consequently intolerable working environment were sufficient to bring his case both within Regulation 5 and within the 1976 Directive. The incessant mockery ("banter" trivialises it) created a degrading and hostile working environment, and it did so on grounds of sexual orientation. That is the way I would prefer to put it. Alternatively, however, it can be properly said that the fact that the appellant is not gay, and that his tormentors know it, has just as much to do with sexual orientation – his own, as it happens - as if he were gay.
- If, as is common ground, tormenting a man who is believed to be gay but is not amounts to unlawful harassment, the distance from there to tormenting a man who is being treated as if he were gay when he is not is barely perceptible. In both cases the man's sexual orientation, in both cases imaginary, is the basis – that is to say, the ground - of the harassment. There is no Pandora's box here: simply a consistent application of the principle that, while you cannot legislate against prejudice, you can set out in specified circumstances to stop people's lives being made a misery by it.
- There are also policy reasons why the distinction should be regarded as one without a difference. Sexual orientation is not an either-or affair. Some people are bisexual; some are asexual; some, including heterosexuals, have unusual interests or proclivities. All of these may desire to keep their orientation to themselves but still be vulnerable to harassment by people who know or sense what their orientation is. It cannot possibly have been the intention, when legislation was introduced to stop sexual harassment in the workplace, that such a claimant must declare his or her true sexual orientation in order to establish that the abuse was "on grounds of sexual orientation". What is required that the claimant's (or someone else's) sexual orientation, whether real or supposed, should have been the basis of harassment directed at him or her. That is what was going on here, even on the limited facts which were assumed to be the only relevant ones. The case would have been exactly the same if Mr English had elected, for whatever reason, to remain silent about his actual sexual orientation – for example because he took the principled position that it was nothing to the point. And the same would be the case if he were actually gay or bisexual but preferred not to disclose it.
- I particularly question the view that the word "grounds" imports more than is postulated by Lord Nicholls' question in Nagarajan: why did the other employees harass the claimant? It is not necessary to demand a logician's or a lawyer's answer by looking for motive or purpose or cause and effect. If the harassment has was based on his sexual orientation, whether real or imagined, the question "Why?" is answered. If one uses the "but for" test adopted by the House of Lords in James v Eastleigh Borough Council  2 AC 751, then but for the sexual orientation they chose to attribute to him the appellant's fellow employees would not have harassed him. Even if the entirety of the assumed facts is taken to be material and a cause-and-effect test is applied, the claimant was harassed because his fellow employees thought it was funny to taunt a man they knew to be heterosexual with being homosexual. Whichever approach is taken, the case in my judgment comes within the legislative intent, both domestically and under the Directive: the claimant was being harassed on grounds of sexual orientation.
- I share Lord Justice Laws' unease at the decision of this court in Redfearn. We are, of course, bound by it; but I do not think it either explicitly or implicitly sets any boundary or guideline material to the present case. Nor do I consider that Regulation 5 needs to be read down in order to conform to the Directive. What the employment tribunal took to have happened to Mr English in my judgment offended against both provisions. I would allow this appeal accordingly.
LORD JUSTICE LAWRENCE COLLINS:
- Laws LJ has set out the background, the legislation, and the relevant case-law with his usual lucidity, and I will therefore adopt much of what he has said in my reasons for having come to a different conclusion in this difficult and unusual case.
- The question is one of very considerable difficulty because of what seems to me to have been a very questionable decision to order a preliminary issue, which avoided what should have been a properly nuanced decision on the facts.
- In my judgment, however, even on the assumed facts, the proper construction of Regulation 5(1) leads to a conclusion that there was " harassment … on grounds of sexual orientation" because the conditions of Regulation 5(1) were satisfied, namely that (a) on grounds of sexual orientation (b) the tormentors engaged in unwanted conduct (c) which had the purpose or effect of violating the claimant's dignity or creating a degrading, humiliating or offensive environment for the claimant, and (d) which should reasonably be considered as having that effect.
- It seems to me that, without the benefit of accumulated case-law, that conclusion follows from an objective approach to the characterisation of the conduct. If one were to ask the question whether the repeated and offensive use of the word "faggot" in the circumstances of this case was conduct "on grounds of sexual orientation" the answer should be in the affirmative irrespective of the actual sexual orientation of the claimant or the perception of his sexual orientation by his tormentors.
- If the conduct is "on grounds of sexual orientation" it is plainly irrelevant whether the claimant is actually of a particular sexual orientation. In a case of this kind, even if the claimant is homosexual, it is obviously not for the claimant to show that he is homosexual, any more than a claimant in a racial discrimination case must prove that he is Asian or a Jew.
- It would follow from the decision of the EAT that if the claimant is actually homosexual, but those who victimise him do not in fact believe him to be so, then Regulation 5(1) would not be engaged. I do not consider that this could have been the intended result of the legislation, and I do not consider that it is its result.
- By virtue of section 3A(1) of the Race Relations Act 1976 there will be harassment where a person "on grounds of race or ethnic or national origins" engages in unwanted conduct which has essentially the same purpose or effect as in Regulation 5 of the Employment Equality (Sexual Orientation) Regulations 2003. In my judgment, where an employee is repeatedly and offensively called a Paki or a Jew-boy even when he is not of Asian or Jewish origin, and even when his tormentors do not believe that he is, that conduct can amount to harassment for the purposes of the Race Relations Act 1976.
- This is not the same as the example of an able-bodied but clumsy person being called "a spastic" which was mentioned in argument. The Disability Discrimination Act 1995, section 3B, provides that a disabled person is subject to harassment where the offensive conduct is engaged in "for a reason which relates to the disabled person's disability." See also sections 28SA, 31AC. Not only does that wording require an actual disability, but also, however unacceptable the word may have become, it does not normally denote actual disability when being used offensively.
- Does the case-law require the conclusion to which the EAT came? In my judgment it does not.
Showboat Entertainment Centre Ltd v Owens  ICR 65
- The EAT, presided over by Browne-Wilkinson J as he then was, upheld a complaint of unlawful racial discrimination by a white man who was dismissed by his employers for refusing to obey an instruction to exclude all black customers from the entertainment centre where he worked.
- Section 1(1)(a) of the Race Relations Act 1976 provides that a person discriminates against another if "on racial grounds he treats that other less favourably than he treats or would treat other persons". It was held that section 1(1)(a) covers all cases of discrimination on racial grounds whether the racial characteristics in question are those of the person treated less favourably or of some other person: "The only question in each case is whether the unfavourable treatment afforded to the claimant was caused by racial considerations" (at 71).
Redfearn v Serco Ltd  EWCA Civ 659,  ICR 1367.
- The claimant was a member of the British National Party. He was employed by a company which ran buses to transport adults and children with physical or mental disabilities in the Bradford area. The majority of the passengers were Asian in origin, as were a significant minority of its employees.
- He was summarily dismissed. The employment tribunal found that he had been dismissed following (among other matters) representations from the unions and the employer's employees expressing concerns about Mr Redfearn's membership of the BNP; considerable anxiety amongst Serco's passengers and those relatives/carers entrusting vulnerable passengers to Serco's care.
- It was the attempt to treat Browne-Wilkinson J's statement in Showboat Entertainment Centre Ltd v Owens as if it were a statute which led to the argument in Redfearn v Serco Ltd that the employer's decision to dismiss Mr Redfearn was based on considerations relating to the race of third parties, their perceived hostility to his views and his perceived attitude to the race of third parties, and consequently that the dismissal was direct discrimination "on racial grounds".
- I am satisfied that Mummery LJ was right to say (at ) that the argument turned the ratio of Showboat and the policy of the race relations legislation upside down. I agree with him that the ratio of Showboat was that the racially discriminatory employer was liable "on racial grounds" for the less favourable treatment of those who refused to implement his policy or are affected by his policy. As Mummery LJ said (at ), Mr Redfearn was no more dismissed "on racial grounds" than an employee who is dismissed for racially abusing his employer, a fellow employee or a valued customer.
Nagarajan v London Regional Transport  1 AC 501
- This decision was concerned with the construction of section 2(1) of the Race Relations Act 1976 which provides that there will be discrimination if the discriminator treats the person victimised "less favourably than in those circumstances he treats or would treat other persons, and does so by reason that the person victimised" has done certain things, including having brought proceedings against the discriminator or any other person under the Act.
- Mr Nagarajan had made a number of complaints to industrial tribunals alleging racial discrimination against a subsidiary of LRT. He applied for a position as a travel information assistant for the company, but after interview he was not appointed. He commenced proceedings in the industrial tribunal claiming victimisation under section 2(1) on the ground that the company had treated him less favourably than others "by reason that" he had previously brought proceedings against it under the Act.
- The company gave evidence that it had rejected his application solely on the basis of its assessment of him at a scored interview, where one of the interviewers had given him a score of one out of 10 for articulacy. It had also been noted that the applicant seemed to be "very anti-management." The tribunal, having found that the interviewer's assessment of the applicant's articulacy was unrealistically low and that the assessment of his attitude to management was derived solely from the knowledge of his previous complaints, made the inference that the interview panel had been "consciously or subconsciously" influenced by those previous complaints.
- The EAT and the Court of Appeal held that the tribunal was wrong. They applied a dictum in a previous case (Aziz v Trinity Street Taxis Ltd  QB 463, 485) that section 2(1) of the Race Relations Act 1976 "contemplates a motive which is consciously connected with the race relations legislation." Accordingly the employment tribunal erred in basing its decision on a finding that the interviewers were "consciously or subconsciously influenced" by the applicant's previous complaints.
- The essential question was whether there had been discrimination "by reason that" Mr Nagarajan had previously brought proceedings against the subsidiary. The argument for LRT, which was rejected by the House, accepted that the expression "on grounds of race" in section 1(1)(a) of the 1976 Act was sufficiently wide to allow a finding based on an inherently discriminatory rule, and in such a case motive was irrelevant; but that the words "by reason that" in section 2(1) connoted the motive for, or purpose of, the adoption or rejection of some course of action and thus implied a conscious or reasoned connection between the protected act and the less favourable treatment:  1 AC at 505. The argument for Mr Nagarajan was that both section 2(1) and section 1(1)(a) required the person victimised to do no more than establish that the cause or a principal cause of his treatment was related to his race:  1 AC at 503.
- The House of Lords (Lord Browne-Wilkinson dissenting) reversed the decision of the Court of Appeal. The leading speech was given by Lord Steyn, with whom Lords Nicholls, Hutton and Hobhouse agreed.
- The principal point addressed by Lord Steyn on this part of the appeal was whether there was any distinction between the expressions "on racial grounds" and "by reason that" for the purpose of determining whether conscious motivation was required. He accepted that "depending on the context the two expressions are capable of yielding different shades of meaning", but that they appeared in parallel provisions and were readily capable of parallel meanings: at 521. It was accepted that conscious motivation was not required in section 1(1)(a): R v Birmingham City Council, ex parte Equal Opportunities Commission  AC 1155; James v Eastleigh Borough Council  2 AC 751. There was no reason to adopt a different meaning in section 2(1).
- Lord Steyn said (at 521-522): "Quite sensibly in section 1(1)(a) cases the tribunal simply has to pose the question: Why did the defendant treat the employee less favourably? It does not have to consider whether a defendant was consciously motivated in his unequal treatment of an employee."
- Lord Nicholls of Birkenhead (with whom Lords Steyn, Hutton and Hobhouse agreed) said (at 510-512):
"Section 2 should be read in the context of section 1. Section 1(1)(a) is concerned with direct discrimination, to use the accepted terminology. To be within section 1(1)(a) the less favourable treatment must be on racial grounds. Thus, in every case it is necessary to inquire why the complainant received less favourable treatment. This is the crucial question. Was it on grounds of race? Or was it for some other reason, for instance, because the complainant was not so well qualified for the job? Save in obvious cases, answering the crucial question will call for some consideration of the mental processes of the alleged discriminator. Treatment, favourable or unfavourable, is a consequence which follows from a decision. Direct evidence of a decision to discriminate on racial grounds will seldom be forthcoming. Usually the grounds of the decision will have to be deduced, or inferred, from the surrounding circumstances.
… For the purposes of direct discrimination under section 1(1)(a), as distinct from indirect discrimination under section 1(1)(b), the reason why the alleged discriminator acted on racial grounds is irrelevant. …
I turn to the question of subconscious motivation. All human beings have preconceptions, beliefs, attitudes and prejudices on many subjects. It is part of our make-up. Moreover, we do not always recognise our own prejudices. Many people are unable, or unwilling, to admit even to themselves that actions of theirs may be racially motivated. An employer may genuinely believe that the reason why he rejected an applicant had nothing to do with the applicant's race. After careful and thorough investigation of a claim members of an employment tribunal may decide that the proper inference to be drawn from the evidence is that, whether the employer realised it at the time or not, race was the reason why he acted as he did. … Members of racial groups need protection from conduct driven by unrecognised prejudice as much as from conscious and deliberate discrimination. …
Thus far I have been considering the position under section 1(1)(a). I can see no reason to apply a different approach to section 2. 'On racial grounds' in section 1(1)(a) and 'by reason that' in section 2(1) are interchangeable expressions in this context. The key question under section 2 is the same as under section 1(1)(a): why did the complainant receive less favourable treatment? …"
- It would be a sterile exercise to consider whether some of the remarks in Nagarajan about the meaning of section 1(1)(a) were strictly obiter, since the considered views of Lord Nicholls and Lord Steyn are entitled to the greatest weight. But it does not follow that what was said in the context of the Race Relations Act 1976 will necessarily apply without reservation in all cases under parallel legislation such as Regulation 5. I accept that similar wording should if possible bear the same meaning. But although very similar wording is used in the legislation designed to combat discrimination based on race, disability and sexual orientation, the context may be subtly different.
- But for Mr English's concession it would have been open to a tribunal to find that, whatever the tormentors may have said about their motives, they were motivated by unconscious prejudices. But I do not consider that it follows from Nagarajan that in the present case Mr English's acceptance that the tormentors did not believe he was gay leads to the inevitable conclusion that in the context of Regulation 5 the offensive remarks were not made on grounds of sexual orientation.
- Showboat Entertainment Centre Ltd v Owens and Nagarajan v London Regional Transport adopted a purposive construction in order to achieve a result consistent with the objectives of the legislation. The effect of Showboat Entertainment Centre Ltd v Owens was to extend the application of section 1(1)(a). The use by Browne-Wilkinson J of the expression "caused by racial considerations" is not to be treated as a gloss on the statute. All he was doing was rationalising the extension of the section to cases where the race of a person other than the victim of the discrimination was in issue. I do not share the difficulties which Laws and Sedley LJJ seem to have with Redfearn v Serco Ltd. If one goes back to the statute and asks (without reference to the case-law) whether Mr Redfearn was dismissed on racial grounds the answer would be obviously in the negative.
- In my judgment there is nothing in those decisions to require the court in this type of case to enquire whether the maker of offensive homophobic statements actually thought that the victim was homosexual. The natural meaning of Regulation 5 in my judgment is sufficient to make such an enquiry irrelevant.
- I would therefore allow the appeal.
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