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||BAILII case number:  UKEAT 0316_10_2102
||Appeal No. UKEAT/0316/10/JOJ UKEAT/0317/10
EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
||At the Tribunal
||On 21 February 2011
HIS HONOUR JUDGE RICHARDSON
MR D BLEIMAN
MR T MOTTURE
|THOMAS SANDERSON BLINDS LTD
|MR S ENGLISH
Transcript of Proceedings
© Copyright 2011
|For the Appellant
||MS SHIRLEY BOTHROYD
Bolitho Way Solicitors
13-18 Kings Terrace
|For the Respondent
||MR MARCUS PILGERSTORFER
Dean Wilson Laing LLP Solicitors
96 Church Street
SEXUAL ORIENTATION DISCRIMINATION/TRANSEXUALISM
PRACTICE AND PROCEDURE – Review
Harassment on grounds of sexual orientation. The Tribunal directed itself correctly in looking at the Claimant's own perceptions and feelings in order to decide whether the alleged unwanted conduct had the effect of violating his dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for him. Richmond Pharmacology v Dhaliwal  IRLR 336 applied. Claimant's appeal dismissed.
Review. The Tribunal reviewed its earlier judgment on the grounds that there was an issue, A2, which it had not considered. However it was clear from the procedural history that issue A2 was not argued by the Claimant at the September hearing, and in particular that the way in which the Tribunal interpreted issue A2 (as a racially discriminatory constructive dismissal) had been positively disavowed in 2007 and was never argued at the September hearing. In those circumstances there was no proper basis for the Tribunal to hold a review.
HIS HONOUR JUDGE RICHARDSON
- This case has already been to the Court of Appeal once on a preliminary issue: see English v Thomas Sanderson Blinds Limited  ICR 543. Mr Steven English ("the Claimant") alleged that when he was working for Thomas Sanderson Blinds Limited ("the Respondent") he was subjected for a protracted period to banter and innuendo of a homophobic nature. It was, however, common ground that he was not homosexual and that the colleagues who treated him in this way did not believe him to be homosexual. This, said the Court of Appeal, did not take him outside the protection of reg. 5(1) of the Employment Equality (Sexual Orientation) Regulations 2003 ("the SOR"), which prohibits harassment on grounds of sexual orientation.
- The case therefore returned to the Tribunal for a full hearing. The hearing took place on 15 – 16 September 2009 and resulted in a judgment dated 7 October 2009. In short, the Tribunal decided that for the most part the claim for harassment was not made out; it was made out in respect of a letter written in early August 2009; but the claim was brought out of time; and there was no basis for extending time. The Claimant appeals against this judgment. He submits that the Tribunal applied incorrect legal principles when it rejected, for the most part, his claim of harassment; and that the Tribunal ought to have found that the claim was brought in time.
- Then, however, matters took a further turn. The Claimant applied for a review, arguing principally that the Tribunal had failed to determine another complaint on which he relied – a complaint of direct discrimination on the grounds of sexual orientation. The Tribunal held a hearing on 22 March 2010. By a judgment dated 31 March 2010 it upheld the application, determining that the direct discrimination claim succeeded and had been brought in time. The Respondent appeals against this judgment. It submits that the Tribunal ought not to have held a review; if it did so, should have heard further evidence and cross examination; and made errors of law in determining the review.
- We will first set out the background facts, drawing on the Tribunal's original judgment and leaving until later the conclusions it reached on the review. We will then deal in turn with the issues raised by the original judgment and the review judgment.
The Background Facts
- The Tribunal accepted some but by no means all the evidence which the Claimant gave. They found that on occasions he was evasive, and that he was not at all convincing or forthright.
- The Respondent is a nationwide company manufacturing and selling blinds. It employs approximately 30 employees and has approximately 270 more engaged as agents.
- The Claimant began to work for the Respondent in October 1996. He became an area sales manager in January 2001, heading up a team in the south. He lived (and lives) in the Brighton area. He is married with three children. His sexual orientation is heterosexual.
- A fellow manager, Mr Cannell, began to direct remarks of a homophobic nature towards the Claimant. Apparently he had discovered that the Claimant had been educated at a boarding school and lived in Brighton. This, as Laws LJ said (paragraph 17) would be a fanciful basis on which to form any remotely objective opinion of a person's sexual orientation, and Mr Cannell did not in fact believe that the Claimant was homosexual. But the remarks were regularly made at meetings. The Claimant was described as a faggot. He was asked whether he had been marching up and down at what was described as a "notorious pick up point" in Brighton. Articles were written in the Respondent's internal magazines portraying him as a gay man. As the Tribunal found Mr Cannell and another colleague, Mr Lee, used "distasteful, demeaning and degrading expressions" to the Claimant.
- The Claimant, however, himself engaged in similar conduct. He wrote a number of articles which the Tribunal described as "riddled with sexist and ageist innuendo". The Tribunal recorded an occasion when he had been obliged to apologise to a woman for an offensive remark about her breasts. It described the Claimant's own behaviour as "extremely offensive".
- The Tribunal said (referring to the Respondent's business) that in its view "this must have been a truly horrid place to work".
- Until August 2005 the Claimant did not make any complaint about the conduct which we have described. Indeed the Tribunal found that he was good friends with both Mr Cannell and Mr Lee. He had been on holiday with Mr Cannell. He invited Mr Cannell and his partner to a meal in August, describing them as "two favourite people". He had visited Mr Lee in hospital.
- In early August 2005 a further article was written for one of the Respondent's internal magazines. The writer, Mr Stevenson, was an old friend of the Claimant. The article read:
"On a lighter note on Saturday I went to Steve's house to pick up some paperwork. He said he had to hurry as he was on his way to the Brighton Gay Pride Procession. Guess what? He was wearing a Royal Jacquard shirt and skin tight lycra cycling shorts. Enough said. I hurriedly left".
- The Claimant took the writer to task over the article. The writer apologised and gave evidence to the Tribunal that he had been sucked into the "maelstrom of unchecked banter" that had developed in the workplace unwittingly.
- On 18 August 2005 the Claimant attended a meeting with Mr Saunders about his workplace performance. At the start of the meeting Mr Saunders asked for his resignation from the position of sales manager by reason of poor performance. The Claimant persuaded Mr Saunders that he would improve. Mr Saunders gave him a formal performance warning and put a 3 month probationary period in place. He wrote a letter to him dated 18 August, confirming this.
- On 19 August 2005, the following day, the Claimant made a written complaint by email to Mr Saunders concerning the homophobic conduct. He said that he had meant to discuss it the day before, but had not had time to do so. After describing the conduct he continued:
"This constant innuendo must stop. I would like assurances when I attend national sales meetings there will be no further mention of this in any shape or form. Also there will be no further mention of this in the newsletters published by the company. In the nine years that I have been with the company there has been much banter of which I have also taken part. For my part on one or two occasions when I have overstepped the mark have made profuse apologies usually accompanied with a gift. I expect no less courtesy to be extended to me.
Although to my knowledge there is no gay element in the sales force imagine how a person might feel on hearing these remarks directed at a totally heterosexual happily married man. he or she would live in constant fear.
Whilst my wife and children do not attend the sales meeting for nine years they have been avid readers of the newsletter and this is now causing them extreme embarrassment and distress."
- The Respondent, by a manager called Mr Urpens immediately replied in a way which the Claimant accepted to be entirely reasonable and appropriate. He said he intended to take action and asked for more information. However, on 22 August the Claimant emailed in reply, saying he was "disappointed that you chose to immediately put this on such a formal footing and straightaway involve others …." Mr Urpens replied to say that because the complaint was in writing he had to respond in writing and take appropriate action after fully investigating the accusations. He invited the Claimant to a meeting and suggested the following Tuesday, 26 August.
- The Tribunal found that the Respondent was right to deal with his complaint in the way they had up to that date. Indeed the Tribunal records that the Claimant, when cross-examined, effectively accepted this.
- On Tuesday 26 August, however, the Claimant did not attend the meeting. He terminated his agency agreement. He said:
"I have held a team meeting at my house this morning and informed them of the situation with regards to my complaint and Steve Saunders letter to myself. I feel I am now in an untenable position so with immediate effect I offer my resignation as area sales manager/designer. I have handed the team over to Bill Stephenson who I am sure is more than able to look after things until a new manager is installed."
- The Tribunal's findings of fact end by recording, without making any finding, the following evidence on the part of the Claimant:
"4.18 In evidence, the Claimant gave his reasons for resignation to be the fact that he felt that he would be regarded as the school sneak and that his position was therefore untenable although, as we have said, he accepted that the Respondent was right to have dealt with it in the way that they had, at least until that date."
- Reg. 5 of the SOR defined harassment on the grounds of sexual orientation. It provided:
"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."
- We note in passing that these provisions have been repealed and replaced by section 26(1) and (4) of the Equality Act 2010, which provides a definition of harassment operating across the whole range of characteristics protected by that Act. The provisions of the 2010 Act are not entirely the same as those in the SOR. It is, however, the SOR which we must apply in this case.
- The Tribunal referred to this provision and to the decision of the Appeal Tribunal in Richmond Pharmacology v Dhaliwal  IRLR 336. The Tribunal then continued as follows.
"5.12 The key question, then, here is whether Mr English also found the comments or articles harassing within the meaning of regulation 5. He says that he did and there are two pieces of objective evidence which support his view. First, his complaint to Bill Stevenson about the August 2005 article and, secondly, his email of 19 August to Mr Saunders on page 66 of the C1 and the other documents leading to his resignation on 26 August."
- The Tribunal then referred to the Respondent's case on this issue. The Respondent's case was that the Claimant himself engaged in banter and wrote articles comparatively far worse than those of others; he did not complain until August 2005; he was very friendly with the alleged tormentors; and therefore the conduct towards him did not amount to harassment. The Tribunal continued:
"5.15 In our view, all that the Respondent says is right, but up to a point. The point was the August 2005 article written by Mr Stevenson. That appears to have been read by his family, as is evident from the document at page 66. That appears to have provoked the email to Mr Saunders and that in our view, did really upset him. He felt that the article, to use his own expression, 'had overstepped the mark'.
5.16 Our conclusions are therefore that the articles and banter and name calling did not, up until August 2005 in the Claimant's eyes, have the prohibited effect of either violating his dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment. We simply cannot accept that the Claimant would not have complained and would have been so friendly with his tormenters if that had been the case. We have considered whether the old adage 'keep your friends close but your enemies closer' may have applied to their relationship, but we do not accept that the Claimant's friendships, particularly with Mr Cannell, was an example of that adage applying here. He said himself that it was a genuine friendship.
5.17 We have also considered the ACAS leaflet on harassment and whether the Claimant's actions in engaging in the banter himself might have been retaliation for harassment that he was suffering, but we also reject Mr Wilson's submissions to that effect.
5.18 And so, for the reasons we have explained, the article in August 2005 did have a degrading effect in the Claimant's eyes and would objectively be seen as such. Insofar as that was concerned, we do not accept Miss Bothroyd's submissions that the email written at page 66 did not contain the Claimant's genuine feelings. The article appears to have been a tipping point and something that exceeded what the Claimant considered to have been the acceptable level of personal attack and insult. The Claimant's claim therefore succeeds, but only in relation to the August 2005 article.
5.19 We should point out the Claimant has done himself no favours, both in relation to the evidence that he gave to us on the last occasion, but also in respect of his own extremely offensive behaviour whilst at work. It has been that behavior that has, at least in part, led us to the view that the conduct that he experienced did not cause him the prohibited consequences within the meaning of regulation 5."
- On this part of the case Mr Pilgerstorfer submits that the Tribunal erred in law by applying a purely subjective test. He submits that the test laid down by the SOR is predominantly objective: see Dhaliwal at paragraph 15. He submits that if the Tribunal had applied that test then, given its findings, it was bound to conclude that the conduct amounted to harassment. It was wrong to hold that the Claimant's perception provided what was in effect a free-standing defence.
- Ms Bothroyd in response submits that the Tribunal reached the correct conclusion for the correct reasons. She submits that where a claimant alleges harassment on the basis of unwanted conduct which has the effect of creating the prescribed consequences, the Tribunal must first determine whether the alleged conduct actually had that effect. This what the Tribunal first did. If the conduct did not have that effect, then harassment will not be made out. If the conduct did have that effect, then it will be necessary for the Tribunal to consider whether it should reasonably be considered as having that effect. It is at this point that the test is predominantly objective.
- Our conclusions are as follows.
- We start with Dhaliwal. This case gave valuable guidance on several aspects of the harassment provisions contained in the various statutes and regulations which preceded the Equality Act 2010. In common with the Appeal Tribunal in Dhaliwal (see paragraph 11) we think it is a helpful discipline for a Tribunal, particularly in a case which is not straightforward, to address in its reasons each of the elements of the definition of harassment. In this case the questions which the Tribunal had to consider were the following.
- The first question for the Tribunal to consider was if a person (A) had engaged in "unwanted conduct". This was a question of fact for the Tribunal to resolve. The words mean, we think conduct which is unwanted by person B. It was not in dispute in this case that the Respondent would be vicariously liable for the persons alleged by the Claimant to have engaged in unwanted conduct.
- The next question for the Tribunal to consider was whether A's unwanted conduct was "on grounds of sexual orientation". On this question the Tribunal had the judgment of the Court of Appeal, to which we have already referred. In other cases the guidance in Dhaliwal at paragraph 16 will be valuable.
- In most cases the Tribunal would then have to consider separately two different types of harassment. The first would be related to purpose. In this case, however, it was not argued that the purpose of the conduct of Mr Cannell, Mr Lee and Mr Stevenson was to violate the Claimant's dignity or create an adverse environment for him.
- The second type of harassment was related to effect.
- Here the question for the Tribunal was whether A engaged in unwanted conduct which had the effect of violating B's dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for B.
- In answering this question, the Tribunal had to take into account a specific statutory direction in reg. 5(2). It was only to regard conduct as having that effect if, having regard to all the circumstances, including the perception of B, it should reasonably be regarded as having that effect. In relation to this statutory direction Underhill P said in Dhaliwal:
"15. Thirdly, although the proviso in sub-section (2) is rather clumsily expressed, its broad thrust seems to us to be clear. A respondent should not be held liable merely because his conduct has had the effect of producing a proscribed consequence: it should be reasonable that that consequence has occurred. That, as Mr Majumdar rightly submitted to us, creates an objective standard. However, he suggested that, that being so, the phrase 'having regard to ... the perception of that other person' was liable to cause confusion and to lead tribunals to apply a 'subjective' test by the back door. We do not believe that there is a real difficulty here. The proscribed consequences are, of their nature, concerned with the feelings of the putative victim: that is, the victim must have felt, or perceived, her dignity to have been violated or an adverse environment to have been created. That can, if you like, be described as introducing a 'subjective' element; but overall the criterion is objective because what the tribunal is required to consider is whether, if the claimant has experienced those feelings or perceptions, it was reasonable for her to do so. Thus if, for example, the tribunal believes that the claimant was unreasonably prone to take offence, then, even if she did genuinely feel her dignity to have been violated, there will have been no harassment within the meaning of the section. Whether it was reasonable for a claimant to have felt her dignity to have been violated is quintessentially a matter for the factual assessment of the tribunal. It will be important for it to have regard to all the relevant circumstances, including the context of the conduct in question. One question that may be material is whether it should reasonably have been apparent whether the conduct was, or was not, intended to cause offence (or, more precisely, to produce the proscribed consequences): the same remark may have a very different weight if it was evidently innocently intended than if it was evidently intended to hurt. See also our observations at paragraph 22 below."
- Later Underhill P said:
"22. We accept that not every racially slanted adverse comment or conduct may constitute the violation of a person's dignity. Dignity is not necessarily violated by things said or done which are trivial or transitory, particularly if it should have been clear that any offence was unintended. While it is very important that employers, and tribunals, are sensitive to the hurt that can be caused by racially offensive comments or conduct (or indeed comments or conduct on other grounds covered by the cognate legislation to which we have referred), it is also important not to encourage a culture of hypersensitivity or the imposition of legal liability in respect of every unfortunate phrase."
- Against that background, we turn to the Tribunal's reasons.
- There is no express finding as to which, if any, of the conduct of Mr Cannell and Mr Lee was unwanted. This is, to say the least, a curious omission by a Tribunal which has read and directed itself in accordance with Dhaliwal. It may be, as Mr Pilgerstorfer suggests, that there was not much issue before the Tribunal as to whether the conduct was unwanted: certainly he is right to say that the Respondent's response did not make much of the point. Nevertheless the Tribunal would have been wise to address the question and make findings. However, this would not in itself vitiate the Tribunal's judgment if it was entitled to reach the conclusion that the conduct did not have the effect prohibited by reg. 5.
- The Tribunal said that the key question was "whether [the Claimant] also found the comments or articles of harassing within the meaning of regulation 5". It would, we think, have been much better if the Tribunal had followed the wording of the regulation. In practical terms, however, it seems to us that the Tribunal asked the critical question.
- In Dhaliwal the Appeal Tribunal held that the proscribed consequences within reg. 5 are of their nature concerned with the feelings of the putative victim; that is, the victim must have felt or perceived his or her dignity to have been violated or an adverse environment to have been created. Reg 5(2) then acts as a control: it is only if it was reasonable for the victim to hold this feeling or perception that the conduct will amount to harassment; but when the Tribunal reaches that judgment the very fact that the victim genuinely held that feeling or perception is to be kept firmly in mind. We agree with, and will follow, the approach of the Appeal Tribunal set out in Dhaliwal.
- The Tribunal was therefore right to ask about the Claimant's own perceptions and feelings in order to determine whether the effect of the unwanted conduct was to violate his dignity or create an adverse environment. This is what the Tribunal did. We do not accept the submission of Mr Pilgerstorfer that the Tribunal erred in law.
- There is, in our judgment, no general rule applicable to answer the question whether, when fellow workers use homophobic or sexist language to each other (or language relating to any other protected characteristic), both commit unlawful harassment; one commits unlawful harassment; or neither does. The answer lies in an application of the statutory test now contained in section 26 of the Equality Act 2010. We think in many cases both employees will have committed unlawful harassment; each will commit conduct having the effect of violating the dignity, or creating an adverse environment, for the other. Also in many cases the conduct will have had this purpose, and the other form of harassment ("purpose harassment") will be in play.
- In this case, where the fellow workers engaged in similar conduct toward each other while remaining genuinely good friends, the Tribunal was entitled to reach the conclusion it did, so long as it applied the correct statutory test. We think that in substance it did.
Harassment and Time
- The claim to the Employment Tribunal was presented on 23 November 2005 – within 3 months of the letter of resignation, but more than 3 months after Mr Stevenson's article.
- The Tribunal found that the harassment claim was out of time. It was argued that the claim was in time because the Claimant's letter crystallised the claim on 26 August. The Tribunal rejected this argument, holding that "a harassment claim is founded on the conduct itself, not when a claimant chooses to act on that conduct".
- Mr Pilgerstorfer's argument on appeal is that the Tribunal ought to have found that there was a continuing course of conduct which amounted to harassment and that this conduct continued until the termination of his engagement by resignation. This being so, he argues that the claim was in time – it was an act extending over a period until his dismissal – see reg. 34(4)(a) of SOR.
- We have upheld the Employment Tribunal's finding that the only act of unlawful harassment was the publication of the newsletter article in early August. The other acts of unlawful harassment relied on were rejected. There was no act extending over a period, and no finding of any act or deliberate omission after the publication of the newsletter. This ground of appeal must therefore fail.
Failure to consider a Direct Discrimination Claim
- The Claimant's final ground of appeal concerning the original judgment was that the Tribunal failed to consider a complaint of direct discrimination. As we have seen, the Tribunal heard an application for a review, upheld this argument, and made a finding of direct discrimination. The Respondent appeals against the review judgment. It is logical now to turn to that appeal.
- It is essential background to the procedural problems which we must now describe to appreciate three features which the SOR had in common with other forms of discrimination legislation.
- Firstly, a direct discrimination claim might be made on the ground that an employer discriminated against an employee "by dismissing him, or subjecting him to any other detriment": reg 6(2)(d).
- Secondly, "dismissal" was defined to include reference to the termination by an employee of that person's employment in circumstances such that he was entitled to terminate it without notice by reason of the conduct of the employer: see reg. 6(5)(d). The effect of this is to import what is known in other areas of employment law as the doctrine of "constructive dismissal", whereby an employee who resigns in response to a fundamental breach of contract by his employer is treated as dismissed.
- Thirdly, there was specific provision limiting the extent to which a claim of direct discrimination and a claim of harassment will overlap. It was specifically provided by reg.2(3) of the SOR that "detriment" does not include harassment within the meaning of reg.5.
- The Claimant's claim form ticked the box which was appropriate if a claim for sexual orientation discrimination was being claimed. The form itself did not contain any separate tick-box to distinguish between direct discrimination, indirect discrimination and harassment.
- The particulars set out the Claimant's case about homophobic remarks and sexual innuendo. It continued at paragraph (f):
"In my view this behaviour constitutes harassment contrary to Regulation 5 of the Employment Equality (Sexual Orientation) Regulations 2003. In short this conduct has violated my dignity. I feel that I have been discriminated against contrary to Regulation 8 of the 2003 Regulations in that I have been subjected to a detriment that has led me to resign and lose well remunerated employment."
- At this point we must digress for a moment. The reference to reg. 8 was inapposite. Reg. 8 of SOR is concerned with "contract workers" as defined by reg. 8(5). The Claimant was not an employee of the Respondent in the narrow sense of the word; his contract was not a contract of employment. He worked under a sales agency agreement. There is, however, an extended definition of "employment" for the purposes of the SOR and other discrimination legislation: see reg 2(3) of SOR. The extended definition includes a person who works under a contract "personally to do any work". The Tribunal had already found that this applied to the Claimant. So he was an employee for the purposes of SOR. But he was not a "contract worker" as defined in reg. 8. If the Claimant wished to bring a claim of direct discrimination, the reference should have been to reg. 6, which is the equivalent provision where an employee alleges direct discrimination. We think, however, that the reference to reg. 8 was a mistake and that it was corrected. We shall explain in a moment why we take this view.
- A pre-hearing review took place on 13 April 2006 (at all events the Order is headed "Pre-Hearing Review" although the hearing seems to have taken the form of a case management discussion). The Schedule of Issues drawn up at this hearing contained the following issue A2:
"For the purposes of the claim under the Employment Equality (Sexual Orientation) Regulations the Claimant argues that the termination of the contractual arrangement between the Claimant and the Respondent having taken place on 26 August 2005, that termination which was brought about by the resignation of Mr English, is the final act of detriment and that the claim was therefore lodged within three months of such final act. The Respondent disputes this in that it contends that the resignation was not the final act of detriment but rather that the alleged final act was the publication of an in-house magazine in early July 2005 and that, therefore, the claim is out of time."
- This Schedule therefore contains a reference to detriment; but it does not in terms expressly raise a claim of dismissal.
- A further pre-hearing review took place on 14 June 2007. It is relevant to note three paragraphs of the skeleton argument put forward by the Claimant's counsel for use at that hearing:
"(d) This case is pleaded on two bases namely harassment contrary to regulation 5 and detriment in the form of any other detriment contrary to regulation 6.
(e) The word "dismissing" clearly envisages a traditional employment situation and could either be actual or constructive dismissal. It is accepted that neither concept applies in the case of the Claimant who was not a conventional employee but nevertheless is protected by virtue of these Regulations.
(f) His claim is therefore that he was both harassed within the meaning of the Regulations prior to the termination of his contract with the Respondent and was subjected to a detriment namely suffering an unpleasant working environment and being forced to resign his position as a result of this behaviour."
- Two points emerge from these paragraphs. Firstly, it was plain that the case for the Claimant was put under reg. 6 of the SOR. Hence any mistake in the claim form was corrected. Secondly, however, the case was not put as a case of actual or constructive dismissal.
- A fresh and more detailed list of issues was drawn up. Section A of that list mainly dealt with the SOR claim (there was also a public interest disclosure claim with which we are not concerned). This section recorded that it had been determined in favour of the Claimant that he was an employee for the purposes of the SOR. It set out the requirements of a harassment claim in paragraphs A3-A6. It said nothing about paragraph A2 of the earlier list of issues.
- Two years later at the hearing in September 2009 the Claimant was represented by the same solicitor. At the start of the hearing the Tribunal canvassed the issues with the representatives. Neither representative suggested that direct discrimination was an issue. During oral closing submissions neither counsel made submissions of any kind referring to issue A2 or about direct discrimination as opposed to harassment. The Claimant's case was put on harassment.
- This was the case which the Tribunal dealt with in its judgment and reasons. The Tribunal did not consider that there was any alternative case on direct discrimination. At the commencement of its reasons for the judgment dated 7 October 2009, the Tribunal considered the list of issues drawn up at the pre-hearing review which took place on 14 June 2007. It did not notice that there was an issue A2 from the earlier pre-hearing review. That is hardly surprising: issue A2 had not figured in the argument before it at all.
- Once the judgment was received, and it was appreciated that the case had been lost because there was only a single finding of harassment more than 3 months prior to the presentation of the claim, the Claimant's legal advisers applied for a review. The application specifically referred to issue A2 and submitted that it ought to be determined. The application also submitted that direct discrimination had been pleaded, the reference to reg. 8 being a typographical error for reg. 6. It was submitted that the claim was still outstanding and had been "lost in the process".
- The Employment Judge, on receiving the application, wrote a letter dated 21 October 2009 in which he discussed briefly the grounds of the application and said that he was "prepared to order a review in this case (Rule 35)". He said the review hearing under rule 36 would "proceed to determine any further substantive issues should it succeed". In this letter the Employment Judge expressly stated that the reg 6(2)(d) complaint was not raised as an issue either at the start, when issues were canvassed with the representatives or at the end, during oral closing submissions.
- The review hearing took place on 22 March 2010. The Respondent put in written submissions but (to the surprise of the Tribunal, which we share) did not appear at the review hearing. The Respondent's written submissions had, however, put in issue whether there were grounds for a review. At one point the submissions recorded that the Claimant was formulating an entirely new claim and having a "second bite at the cherry".
- The Tribunal concluded, concerning the issue at A2:
"The simple fact of the matter is, however, that this was a claim raised in the ET1 Claim Form and it has never been withdrawn or dismissed nor has it been adjudicated upon. It falls to us to do so now on the basis of the facts that we found at the previous hearing, as Mr Wilson [solicitor for the Claimant] agrees."
Direct Discrimination – the Tribunal's Reasons
- We can summarise quite briefly the Tribunal's much longer reasons for holding that there was a constructive dismissal. It held that the writing of the article in August 2005 was a fundamental breach of contract, being in breach of the implied term of trust and confidence; that the Claimant had resigned at least in part in response to that fundamental breach of contract; that this was a dismissal; and that the Claimant was entitled to succeed in a claim for direct discrimination based on constructive dismissal; and that this claim was in time, the resignation being less than 3 months prior to the presentation of the claim.
The Granting of a Review
- On behalf of the Respondent Ms Bothroyd attacks the decision of the Tribunal to review the earlier judgment in two ways.
- Firstly, and most fundamentally, she argues that there were no grounds for ordering a review. The only conceivable ground for doing so was the "just and equitable" ground. But it was not "just and equitable" to allow the Claimant to open up a ground which had not been pursued in any shape or form at the hearing.
- In support of this she points out that if paragraph (f) of the claim form or issue A2 is treated as raising a claim of constructive dismissal (which was the way in which the Tribunal treated it) then it would follow that there was a range of issues which were never argued before the Tribunal. The first is the question whether there was a breach of contract. The Claimant was not an employee: it did not follow that the implied term of trust and confidence could automatically be applied to him. Then the question would arise whether the writing of the newsletter in August was so serious as to give rise to a fundamental breach of contract, given the Claimant's own behaviour. Then there was an issue as to whether the Claimant resigned in response to the breach.
- Miss Bothroyd submits also that the Tribunal in the reasons it gave for the review at no point addressed the question whether there were good grounds for holding a review. It should have done so; it was an error of law that it failed to do so, and a further error of law that it failed to give reasons for reviewing the judgment.
- In response to these submissions Mr Pilgerstorfer submits that it was just and equitable to hold a review; this had been the ground upon which the application for a review had been made; it was implicit in the Employment Tribunal's reasons that the review had been granted on this basis. He further submits that, the Employment Judge having ordered a review on 21 October 2009, it was not necessary for the Tribunal itself to consider whether it was just and equitable to review the original judgment. He submits that the omission to consider an issue, such as issue A2, could be a ground for review: he referred to and relied on a leading case on this question - Lindsay v Ironsides Ray & Vials  ICR 384 at 393.
- Our conclusions are as follows.
- In our judgment it is plain that at the hearing in September 2009 the Claimant did not advance a case based on issue A2. We reach this conclusion for two reasons.
- Firstly, as regards constructive dismissal, the Claimant's solicitor had expressly stated that no such case was being put forward in his skeleton argument for the second pre-hearing review.
- Secondly, the Claimant's solicitor at no stage during the hearing put forward any argument based on issue A2. This is to our mind plain from the letter of the Employment Judge dated 31 October 2009 which is supported by the submissions of Ms Bothroyd (who was present at the hearing in September 2009). Mr Pilgerstorfer has no instructions to the contrary. We do not find it surprising that the Claimant's solicitor did not argue the point; it would have tended to dilute his case on harassment, for (as we have said) if an action amounted to harassment it would not be a detriment.
- In our judgment the Tribunal erred in law by granting a review. It failed to consider whether it was just and equitable to review its judgment, bearing in mind that no argument had been advanced on issue A2 during the substantive hearing. It allowed the Claimant to put forward a case which had not been put forward at the substantive hearing and which, as regards constructive dismissal, the Claimant's solicitor had specifically stated he was not putting forward. Issue A2 was not, and was not intended to be, an issue of constructive dismissal.
- Helpful guidance on the use of the power of review is to be found in Trimble v Supertravel Limited  ICR 440 at 442 (applied more recently in Lindsay v Ironsides Ray & Vials  ICR 384 at 393):
"If … due to an oversight or to some procedural occurrence one or other party can with substance say that he has not had a fair opportunity to present his argument on a point of substance, then that is a procedural shortcoming in the proceedings before the tribunal which, in our view, can be correctly dealt with by a review under rule 10 of Schedule 1 to the Industrial Tribunals (Rules of Procedure) Regulations 1980, however important the point of law or fact may be In essence, the review procedure enables errors occurring in the course of the proceedings to be corrected but would not be normally be appropriate when the proceedings had given both parties a fair opportunity to present their case and the decision had been reached in the light of all relevant argument."
- Applying those principles here, we have no doubt that the Claimant had a fair opportunity to raise his case on all points of substance at the September hearing; the Tribunal dealt with the case which was raised; and there were no good reasons for reviewing the judgment. The Tribunal ought to have directed its mind to the question whether it was just and equitable to grant a review; if it had done so it would have been bound to reach this conclusion.
- Finally, we note that in the Claimant's appeal it is also argued that the Employment Tribunal ought to have dealt with issue A2. But on well settled principles it is not permissible (save in special circumstances) to raise as a ground of appeal an issue which was not argued below. No such circumstances exist here.
- It follows that the Respondent's appeal must be allowed and the judgment dated 12 March 2010 set aside.
- For the sake of completeness, we should mention the following alternative submissions of Ms Bothroyd.
- Firstly, she submitted that in any event the Tribunal ought to have adjourned the review so that the Claimant could be cross examined. If this point had stood alone it would have been unsuccessful: the Employment Judge made it clear in his letter dated 31 October that the Tribunal would have proceeded to determine any further substantive issue should the application for review succeed. The Respondent should have attended the hearing and been ready to apply for an opportunity to cross examine.
- Secondly, she submitted that the reasoning of the Employment Tribunal for finding that there was a constructive dismissal was wrong in law on various grounds. She submitted, in particular, that the Employment Tribunal erred in law in holding that the term of trust and confidence implied into a contract of employment should also be implied into the particular agency agreement which formed the basis of the contract between the Claimant and the Respondent. We heard excellent submissions from Mr Pilgerstorfer on this issue; but in the light of our earlier conclusions it does not arise for decision. We will express no opinion on the submissions made by counsel on the question whether the Tribunal was correct in law to find that there was a constructive dismissal.
- We also raised in the course of argument the question whether the reasoning of the Court of Appeal in this case on discrimination by harassment applied in the same way to direct discrimination, where less favourable treatment and a statutory comparator were required. Again it is not necessary to express any opinion on that question.
- The Claimant's appeal will be dismissed. The Respondent's appeal will be allowed and the judgment dated 12 March 2010 will be set aside.
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