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England and Wales Court of Appeal (Civil Division) Decisions


You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Clark v TDG Ltd (t/a Novacold) [1999] EWCA Civ 1091 (25 March 1999)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/1999/1091.html
Cite as: [1999] IRLR 318, [1999] Disc LR 240, [1999] 2 All ER 977, [1999] ICR 951, (1999) 48 BMLR 1, [1999] EWCA Civ 1091

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IN THE SUPREME COURT OF JUDICATURE EATRF 98/0796/3
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL

Royal Courts of Justice
The Strand
London WC2

Thursday 25th March, 1999

B e f o r e:

LORD JUSTICE BELDAM
LORD JUSTICE ROCH
LORD JUSTICE MUMMERY

- - - - - -

DARREN KEITH CLARK
Appellant

- v -

TDG LIMITED
(Trading as NOVACOLD)
Respondent
- - - - - -
(Handed down Transcript of Smith Bernal Reporting Ltd
180 Fleet Street, London EC4A 2HG
Tel: 0171 421 4040
Official Shorthand Writers to the Court)

- - - - - -

MR ROBIN ALLEN QC and MR NEIL CAMERON (Instructed by Messrs Stamp Jackson & Procter, Hull HU1 2AZ) appeared on behalf of the Appellant

MR PETER OLDHAM (Instructed by Messrs Clarks, Berkshire RE1 1SX) appeared on behalf of the Respondent
- - - - - -
J U D G M E N T
(As approved by the Court )
- - - - - -
©Crown Copyright

LORD JUSTICE MUMMERY:

Introduction


This is the first appeal to this court under the Disability Discrimination Act 1995 (the 1995 Act), which was brought into force in relation to employment on 2 December 1996. Since then well over 3,000 applications have been presented to the Employment Tribunals (formerly called Industrial Tribunals). The appeal raises fundamental questions on the interpretation and application of the definition of "discrimination" in section 5(1) and (2) of the 1995 Act.
Leading Counsel for the appellant described it as a "revolutionary Act" aimed at the integration of disabled people into society and, in particular, into the country's workforce. It is certainly more ambitious in its aim and scope than the system of registered disabled persons and quotas in the Disabled Persons (Employment) Act 1944, now repealed. And it is without doubt an unusually complex piece of legislation which poses novel questions of interpretation. It is not surprising that different conclusions have been reached at different levels of decision.
This state of affairs should not to be taken as a criticism of the Act or of its drafting or of the judicial disagreements about its interpretation. The whole subject presents unique challenges to legislators and to tribunals and courts, as well as to those responsible for the day to day operation of the Act in the workplace. Anyone who thinks that there is an easy way of achieving a sensible, workable and fair balance between the different interests of disabled persons, of employers and of able bodied workers, in harmony with the wider public interests in an economically efficient workforce, in access to employment, in equal treatment of workers and in standards of fairness at work, has probably not given much serious thought to the problem.
These proceedings were started in the Industrial Tribunal on 1 April 1997. The employee's complaint of discrimination was dismissed on 21 August 1997. On the employee's appeal on 22 May 1998 the Employment Appeal Tribunal directed that the case be remitted for re-hearing to the Industrial Tribunal. Both sides object to that order and appeal to this court.
The facts of the case are simple. The law is novel. The arguments are complicated. The court is indebted to both counsel for being excellent and intrepid guides in new territory.
An attempt to simplify the legal reasoning and to clarify the outcome is made in the summary at the end of this judgment.

The Facts

On 31 July 1995 Mr Darren Clark started employment at a plant in Hull as a Process Operator with TDG Ltd, which trades as Novacold (Novacold) and carries on the business of processing and storing frozen food. That job involved a considerable element of manual work and was physically demanding.
From the end of May 1996 Mr Clark performed the function of Assistant Supervisor for a probationary period. That job was also physically demanding. Before the probationary period had finished he allegedly suffered an injury at work on 21 August 1996. From early September 1996 he was away from work. Novacold paid him full sick pay for a period of 16 weeks. He never returned to work before his dismissal on 24 January 1997.
Novacold had obtained a report dated 6 December 1996 from Mr Clark's GP, who expressed the opinion that it was extremely difficult to anticipate his return to work in the near future. He was unable to walk properly, let alone lift heavy loads. Novacold also received from an orthopaedic consultant, Mr Bryant, a report dated 27 December 1996. Mr Bryant stated that he was unable

"to give an exact time when it should be possible for Mr Clark to return to work".

Novacold interpreted Mr Bryant's report as meaning that Mr Clark was likely to be off for up to 12 months. Novacold decided to terminate Mr Clark's employment. They wrote to him to that effect on 14 January 1997 stating that, in view of his medical condition, they had come to the conclusion that he would be unable to resume work in his former capacity within a reasonable time scale. They confirmed that alternative work was not available. He was given the period of notice to which he was contractually entitled. His employment terminated on 24 January 1997.

The Proceedings

On 1 April 1997 Mr Clark presented an application to the Industrial Tribunal complaining of

"Unfair Dismissal under the Disability Discrimination Act 1995".

He was not entitled to complain of unfair dismissal under the Employment Rights Act 1996, as he had not been in the employment of Novacold for the requisite period of two years. He gave his dates of employment, which were not disputed by Novacold, as running from 31 July 1995 until 24 January 1997.
In the details of his complaint he stated

"I see no reason why my job could not have been held open pending recovery from my injuries. In addition I do not consider that my employers gave reasonable consideration to alternative jobs within the company that I could do even with my injury".

In their Notice of Appearance Novacold stated that the reason for Mr Clark's dismissal was

"No longer capable of performing the main functions of his job".

Novacold contended that full consideration had been given to alternative employment, but no suitable vacancies were identified to suit Mr Clark's experience, qualifications or capabilities. Novacold went on to state

"This company considers that it waited a reasonable length of time for Mr Clark's condition to improve but even in the circumstances the action taken was reasonable.
Mr Clark is not considered to qualify under the Disability Discrimination Act given that his injury prognosis was recovery in under 12 months."

Decision of the Industrial Tribunal

The Industrial Tribunal sitting at Hull heard Mr Clark's application on 11 and 23 July 1997. In Extended Reasons sent to the parties on 21 August 1997 the tribunal explained its unanimous decision that Mr Clark's claim for discrimination under the 1995 Act failed.
The main conclusions of the tribunal may be summarised as follows:-

(1) Mr Clark was suffering from a disability and was a disabled person within Section 1 of the 1995 Act (para 11). He fell within the definition of disability as he suffered from "a physical...impairment which has a substantial and long term adverse effect on [his] ability to carry out normal day-to-day activities". This is not an issue on the appeal.
(2) Mr Clark was dismissed for a reason relating to his disability within the meaning of Section 5(1) (para 13). The reason for his dismissal was found to be that (para 7(q))-

"....he was no longer capable of performing the main functions of his job and that his absence was continuing and that [Novacold] needed somebody to perform the role that he was performing."

The Tribunal rejected Novacold's contention that the reason did not relate to Mr Clark's disability, stating (para 13)

"On either basis of the reason for dismissal it must be related to the disabled person's disability, whether he be absent or whether he be incapable of performing his main functions in employment. It must certainly, in the tribunal's view, relate to his disability, ie the continuing symptoms arising from the injury which he has suffered."

(3) Mr Clark was not treated less favourably than Novacold would treat others absent from work for reasons other than disablement. The tribunal stated (para 18) that the relevant comparator would be somebody

"who could have been off work for the same length of time as the applicant, but for a non-disablement reason, and the treatment that is to be examined is what would be the treatment (be it actual or hypothetical, and in this case was hypothetical) that could have been given to such a person who was not a disabled person."

There was no liability under Section 5(1) of the Act (para 18) because the tribunal accepted that

"...it was likely that a person who had been off work for a similar length of time, and where there was no foreseeability of a return to work and therefore a continued long term absence, would have been treated no differently than the applicant albeit that the reason for the termination of the applicant's employment related to his disability. Therefore the tribunal is satisfied that the applicant was not discriminated against as he was not treated less favourably than a person in a similar set of circumstances. The tribunal in making that comparison believes that there has to be consideration of similar circumstances in taking the hypothetical comparison. It is not open to the tribunal to take a comparison of somebody who, hypothetically or otherwise, does not have similar circumstances other than disability. So it would not therefore, for example (an extreme example) be open to the tribunal to make the comparison with somebody who was not off work and who was performing their normal functions and who was not disabled."

(4) The tribunal explained (in para 19) that, if it had decided in favour of Mr Clark on the less favourable treatment point, it would then have had to consider whether there was discrimination against him under section 5(2) by way of Novacold failing to comply with a duty to make adjustments under Section 6(2) of the 1995 Act. It went on to hold that the provisions of section 6 did not apply for two reasons: first, because there was no question of any arrangement being called into question which could be said to substantially disadvantage Mr Clark compared with any other person working for Novacold; and, secondly, the provisions of section 6 (1)(a) do not, by virtue of the provisions of section 6(2), apply to decisions to dismiss.
(5) If, contrary to the view of the tribunal, there had been less favourable treatment, it would not have been justified within the meaning of Section 5(1)(b) and Section 5(3) of the Act. The tribunal said

" ....it is clearly the position that there could have been no prejudice to [Novacold] in continuing the applicant's employment if his employment had not been terminated. It would have had no organisational nor economic consequences at all in terms of wages or other matters.... If there had been a finding of less favourable treatment and therefore discrimination, the tribunal cannot find that the respondents in this case would have been able to substantiate the justification defence as they would not have had a material and substantial reason for the termination of the employment." (para 20).

Novacold had confirmed to the tribunal that

"...if they had continued the applicant's employment and not continued to pay him sick pay, it would have been of no economic loss to them for them to continue that employment under those circumstances." (para 7(p))

Appeal to the Employment Appeal Tribunal

Mr Clark appealed to the Employment Appeal Tribunal and contended that there were errors of law in the decision of the Industrial Tribunal. Judgment on the appeal was given by the President on behalf of the tribunal on 22 May 1998. It is reported at [1999] IRLR 420. The Appeal Tribunal ordered the matter to be remitted, but allowed the parties 14 days in which to make further submissions.
The main conclusions of the Employment Appeal Tribunal can be summarised as follows:-

(1) On the construction of section 5(1) the tribunal had correctly approached the identity of the comparator as a person who is unable to fulfil all the requirements of his job, but whose inability is not related to disability as defined by the 1995 Act. The Appeal Tribunal, like the Industrial Tribunal, rejected the contention that the comparator is a person who is able to fulfil all the requirements of his job. However, it was not apparent from the decision what characteristics the Industrial Tribunal assumed the hypothetical comparator to have. It should be asked to deal expressly with that point and the case was remitted for that purpose.
(2) The Industrial Tribunal had erred in law in holding that the duty of adjustment in Section 6 had no application to a case where an employee was complaining of dismissal. The Tribunal was not given the assistance it needed on this point. Mr Clark's case should have been based on a breach by Novacold of their duty to make adjustments to accommodate him within their employment eg by altering his hours of work, allocating some of his duties to others or providing supervision before dismissing him. Those are matters which form part of the arrangements on which Novacold afforded employment to him. The Industrial Tribunal had erred in law in not treating these as additional rights under section 5(2) and section 6, which were not contingent on Mr Clark succeeding in his discrimination claim under section 5(1). The matter should be remitted to the Industrial Tribunal to consider whether there was discrimination under Section 5(2), in particular having regard to the relevant provisions of the Code of Practice.
(3) Although the issue of justification did not arise for decision on the appeal, there did not appear to be any ground on which the tribunal's factual decision on that point could be faulted.

The Appeal

Following that order Counsel for both parties made further submissions to the President of the Appeal Tribunal. In the light of those submissions he made an order dated 17 July 1998 that remission to the Industrial tribunal should be stayed pending the determination of the Court of Appeal, as both parties wished to appeal. There are in fact two Notices of Appeal. The first is dated 15 June 1998 and is by Mr Clark, challenging the Appeal Tribunal's interpretation on the comparator point. The second is dated 18 June 1998 and is by Novacold, contending that the Employment Appeal Tribunal should not have overturned the decision of the Industrial tribunal and seeking an order that Mr Clark's application under the 1995 Act be dismissed.
It has been agreed that on this appeal Mr Clark will be treated as the Appellant and Novacold as the Respondent and that Novacold's Notice of Appeal will be treated as a Notice of Cross Appeal.
It is common ground that the issue on this appeal is whether there was an error of law in the decision of the Industrial Tribunal on the interpretation and application of the relevant provisions of the 1995 Act to the facts of Mr Clark's case. That error might take the form of a misinterpretation of the relevant provisions of the 1995 Act or of a misapplication of the provisions to the facts or of a conclusion which no reasonable tribunal, properly directing itself, could have reached.

The 1995 Act-General
The provisions of the 1995 Act relating to employment are contained in Part II. Although their general aims are clear and commendable, the language in which the detailed implementation of them is expressed is not easy to interpret or to apply to particular cases.
Contrary to what might be reasonably assumed, the exercise of interpretation is not facilitated by familiarity with the pre-existing legislation prohibiting discrimination in the field of employment (and elsewhere) on the grounds of sex (Sex Discrimination Act 1975) and race (Race Discrimination Act 1976). Indeed, it may be positively misleading to approach the 1995 Act with assumptions and concepts familiar from experience of the workings of the 1975 Act and the 1976 Act.
Unlike the earlier discrimination Acts the 1995 Act does not draw the crucial distinction between direct and indirect discrimination on specified grounds; it provides a defence of justification to less favourable treatment which would constitute direct discrimination and be without such a defence under the earlier Acts; and it does not replicate the express requirement of the 1975 Act (section 5(3)) and the 1976 Act (section 3(4)) that, when a comparison of the cases of persons of different sex or persons of different racial groups falls to be made, the comparison must be such that the relevant circumstances in the one case are the same, or not materially different, in the other.
One consequence of these differences is that the terms "discriminate" and "discrimination" are not used in Part II of the 1995 Act in the same sense as in the earlier Acts. Failure to discern and observe this difference in meaning in decision making (and in commentaries on both the 1995 Act and on decisions under it) can lead to serious conceptual confusion.
In Part II of the 1995 Act "discrimination" is defined as less favourable treatment which is not shown to be justified; if the less favourable treatment of a disabled person is shown to be justified it is not "discrimination" within the meaning of the Act. This is to be contrasted with the 1975 Act and the 1976 Act under which a person directly "discriminates" against another if, on the specified ground of sex or race, he treats that other less favourably than he treats or would treat other persons. Justification does not enter into it. Such treatment can never be shown to be justified.
It may be helpful to bear these general observations in mind when interpreting the detailed provisions of the 1995 Act.

Detailed Provisions

Section 4(2) makes it unlawful for an employer to discriminate against a disabled person in specified ways, including

"(d) ...dismissing him....."

Section 5 defines discrimination as follows:-

"(1) For the purposes of this Part, an employer discriminates against a disabled person if -
(a) for a reason which relates to the disabled person's disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply; and
(b) he cannot show that the treatment in question is justified.

(2) For the purposes of this Part, an employer also discriminates against a disabled person if -
(a) he fails to comply with a Section 6 duty imposed on him in relation to the disabled person; and
(b) he cannot show that his failure to comply with that duty is justified."

Justification is dealt with in subsections (3), (4) and (5) as follows
"(3) Subject to subsection (5), for the purposes of subsection (1) treatment is justified if, but only if, the reason for the failure is both material to the circumstances of the particular case and substantial.

(4) For the purposes of subsection (2), failure to comply with a section 6 duty is justified if, but only if, the reason for the failure is both material to the circumstances of the particular case and substantial.

(5) If, in a case falling within subsection (1), the employer is under a section 6 duty in relation to the disabled person but fails without justification to comply with that duty, his treatment of that person cannot be justified under subsection (3) unless it would have been justified even if he had complied with the section 6 duty."

Section 6 concerns the duty of an employer to take reasonable steps to make adjustments in relation to arrangements and physical features of premises to prevent the disabled person from suffering disadvantage:-

"(1) Where-
(a) any arrangements made by or on behalf of an employer, or
(b) any physical feature of premises occupied by the employer,
place the disabled person concerned at a substantial disadvantage in comparison with persons who are not disabled, it is the duty of the employer to take such steps as it is reasonable, in all the circumstances of the case, for him to have to take in order to prevent the arrangements or feature having that effect.
(2) Subsection (1)(a) applies only in relation to -
(a) arrangements for determining to whom employment should be offered; and
(b) any term, condition or arrangements on which employment, promotion, a transfer, training or any other benefit is offered or afforded."

Subsection (3) sets out detailed examples of steps which an employer may have to take in relation to a disabled person in order to comply with subsection (1). They include not only adjustments to premises but also allocating some of the disabled person's duties to another person, transferring him to fill an existing vacancy, altering his working hours or assigning him to a different place of work.
Subsection (4) refers to those matters to which regard shall be had in determining

"whether it is reasonable for an employer to have to take a particular step in order to comply with subsection (1)."

Subsection (5) defines what is meant by "the disabled person concerned". That includes not only an applicant for the employment concerned but also an employee of the employer concerned: subsection (5)(b)(ii).
Section 6(7) provides-

"Subject to the provisions of this section, nothing in this Part is to be taken to require an employer to treat a disabled person more favourably than he treats or would treat others."

Section 6 (11) provides-

"This section does not apply in relation to any benefit under an occupational pension scheme or any other benefit payable in money or money's worth under a scheme or arrangement for the benefit of employees in respect of-
(a) termination of service;
............"

Section 6 (12) states-

"This section imposes duties only for the purpose of determining whether an employer has discriminated against a disabled person; and accordingly a breach of any such duty is not actionable as such."

Section 55 in Part VII (SUPPLEMENTAL) of the 1995 Act contains provisions relating to victimisation of persons, whether disabled or not, who are discriminated against for bringing proceedings under the Act or giving evidence in connection with such proceedings. See subsection (2). Section 55(1) states that-

"For the purposes of Part II or Part III, a person ("A") discriminates against another person ("B") if-
(a) he treats B less favourably than he treats or would treat other persons whose circumstances are the same as B's; and
(b) he does so for a reason mentioned in subsection (2)."

This provision in Part VII of the 1995 Act as to what constitutes discrimination by way of victimisation is an instructive example of the use of the term "discriminate" in the same sense as direct discrimination in the earlier Acts. It is different from the sense in which it is used in Part II of the 1995 Act.

Issues on the Appeal and the Cross Appeal

(1) Did the Industrial Tribunal err in law in holding that Mr Clark was not subject to discrimination within the meaning of section 5(1) ?
Novacold contend that the Industrial Tribunal reached the right decision. Mr Clark contends that the Industrial Tribunal erred in its construction of section 5(1).
(2) Did the Industrial Tribunal err in law in holding that there was no failure of duty on the part of Novacold to make adjustments to Mr Clark pursuant to section 5(2) and 6(1) ?
Novacold contend that there was no error of law, that the Industrial Tribunal's decision is correct and that the Appeal Tribunal should not have interfered with it by remitting the question to the Industrial Tribunal.
(3) Did the Industrial Tribunal err in law in holding that, had there been discrimination, it was not justified within the meaning of section 5(1)(b) and section 5(2)(b) and (3). Novacold contend that, if it becomes necessary to determine this issue, the decision of the Industrial Tribunal that discrimination was not justified should be overturned and a finding that it was justified substituted. Alternatively, the matter of justification should be remitted to the tribunal for rehearing.

The Section 5(1) Point

The two questions posed by the statutory provisions are:-

(1) Was Mr Clark dismissed for a reason which relates to his disability?
(2) If so, did Novacold treat him less favourably than they would treat others to whom that reason would not apply?
Question (1) is one of fact. It is common ground that "dismissal" is caught by section 5(1). See section 4(2)(c). The finding of the Industrial Tribunal on the reason for dismissal is stated above. It is clear that that was a reason which related to his disability.
In order to answer Question (2) it is necessary to compare Novacold's treatment of Mr Clark with the treatment of others to whom "that reason" would not apply.

What is meant by " that reason"?

On the one hand, it is argued on behalf of Novacold that it refers to the whole of the first clause of the paragraph. That imports two requirements: first, the existence of "a reason" for the treatment (in this case, the dismissal); secondly, the causal link between the reason and the disabled person's disability. It must be a reason "which relates to the disabled person's disability." Thus " that reason" embraces the significant causal link to the disability. On this approach the person to whom " that reason" would not apply would be one who, like the disabled person, is incapable of performing the main functions of his job, but for a reason which does not relate to disability. This is the interpretation favoured both by the Industrial Tribunal and the Appeal Tribunal. On the factual findings of the tribunal this interpretation leads to the conclusion that Mr Clark was not treated less favourably than others incapable of performing the main functions of their job for a non-disability reason.
A contrary interpretation is submitted on behalf of Mr Clark. His argument is that " that reason" refers only to the first three words of the paragraph - "for a reason". The causal link between the reason for the treatment and the disability is not the reason for the treatment. It is not included in the reason for the treatment. The expression "which relates to the disability" are words added not to identify or amplify the reason, but to specify a link between the reason for the treatment and his disability which enables the disabled person (as opposed to an able-bodied person) to complain of his treatment. That link is irrelevant to the question whether the the treatment of the disabled person is for a reason which does not or would not apply to others. On this interpretation the others to whom " that reason" would not apply are persons who would be capable of carrying out the main functions of their job. Those are the "others" proposed as the proper comparators. This comparison leads to the conclusion that Mr Clark has been treated less favourably: he was dismissed for the reason that he could not perform the main functions of his job, whereas a person capable of performing the main functions of his job would not be dismissed.
Linguistically section 5(1)(a) is ambiguous. The expression "that reason" is, as a matter of ordinary language, capable of bearing either of the suggested meanings. The ambiguity must be resolved by recourse to the context of the ambiguous language and to the aim of the legislation. The correct approach is that stated by Waite LJ in Jones v Tower Boot Co Ltd [1997] ICR 254 at 261H-262A-

"...a statute is to be construed according to its legislative purpose, with due regard to the result which it is the stated or presumed intention of Parliament to achieve and the means provided for achieving it ("the purposive construction") and the second is that words in a statute are to be given their normal meaning according to general use in the English language unless the context indicates that such words have to be given a special or technical meaning as a term of art ("the linguistic construction")

In the historical context of discrimination legislation it is natural to do what the Industrial Tribunal and the Appeal Tribunal (though "without great confidence") did, namely to interpret the expression "that reason" so as to achieve a situation in which a comparison is made of the case of the disabled person with that of an able-bodied person and the comparison is such that the relevant circumstances in the one case are the same, or not materially different, in the other case. This might be reasonably considered to be the obvious way of determining whether a disabled person has been treated less favourably than a person who is not disabled.
But, as already indicated, the 1995 Act adopts a significantly different approach to the protection of disabled persons against less favourable treatment in employment. The definition of discrimination in the 1995 Act does not contain an express provision requiring a comparison of the cases of different persons in the same, or not materially different, circumstances. The statutory focus is narrower: it is on the "reason" for the treatment of the disabled employee and the comparison to be made is with the treatment of "others to whom that reason does not or would not apply." The "others" with whom comparison is to be made are not specifically required to be in the same, or not materially different, circumstances: they only have to be persons "to whom that reason does not or would not apply".
This is to be contrasted not only with the different approach in the 1975 and the 1976 Acts, but also with the express requirement of comparison of with the treatment of other persons "whose circumstances are the same" stipulated in victimisation cases by section 55(1) (a) of the 1995 Act.
The result of this approach is that the reason would not apply to others even if their circumstances are different from those of the disabled person. The persons who are performing the main functions of their jobs are "others" to whom the reason for dismissal of the disabled person (i.e. inability to perform those functions) would not apply.
In the context of the special sense in which "discrimination "is defined in section 5 of the 1995 Act it is more probable that Parliament meant "that reason" to refer only to the facts constituting the reason for the treatment, and not to include within that reason the added requirement of a causal link with disability: that is more properly regarded as the cause of the reason for the treatment than as in itself a reason for the treatment. This interpretation avoids the difficulties which would be encountered in many cases in seeking to identify what the Appeal Tribunal referred to as "the characteristics of the hypothetical comparator". It would avoid the kind of problems which the English (and Scottish) courts and the tribunals encountered in their futile attempts to find and identify the characteristics of a hypothetical non-pregnant male comparator for a pregnant woman in sex discrimination cases before the decision of the European Court of Justice in Webb v Emo Air Cargo (UK) Ltd : see Webb (No 2) [1995] 1 WLR 1454.
This interpretation is also consistent with the emphasis on whether the less favourable treatment of the disabled person is shown to be justified. That defence is not available in cases of direct discrimination under the other discrimination Acts.
It is also more consistent with the scheme of the 1995 Act as a whole. As Roch LJ pointed out in the course of argument, the language of section 5(1) is replicated in other Parts of the Act relating to the definition of discrimination in other areas: goods, facilities and services in section 20(1); and premises in section 24 (1). Although neither side sought to place before the court any Pepper v Hart material on section 5, such material appears to be available on the provisions relating to access to services. The interpretation of the provisions in section 20(1) is relevant to the interpretation of section 5, as they are in the same terms.
On the second reading of the Bill for this Act the Minister for Social Security and Disabled People stated-

"The Bill is drafted in such a way that indirect as well as direct discrimination can be dealt with...A situation where dogs are not admitted to a cafe, with the effect that blind people would be unable to enter it, would be a prima facie case of indirect discrimination against blind people and would be unlawful." (253 HC Official Report (6th series) col 150, 24 January 1995)

Section 20(1) provides that

"For the purposes of section 19,a provider of services discriminates against a disabled person if-
(a) for a reason which relates to the disabled person's disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply; and
(b) he cannot show that the treatment in question justified."

Section 19 covers,among many other things, access to facilities for refreshment: (3)(f).
The important point to note is that, if Novacold are correct in their interpretation of section 5(1), it would follow that section 20(1), which is in the same terms, would have to bear a meaning inconsistent with the specific statement of the Minister on the intended effect of those provisions.
Consider his example. If no dogs are admitted to a cafe, the reason for denying access to refreshment in it by a blind person with his guide dog would be the fact that no dogs are admitted. That reason "relates to" his disability. His guide dog is with him because of his disability.
On the Novacold interpretation of the comparison to be made, the blind person with his guide dog would not be treated less favourably than the relevant comparator i.e." others", to whom that reason would not apply, would be sighted persons who had their dogs with them. There could not therefore be any, let alone prima facie, discrimination.
But the Minister specifically stated that this would be a prima facie case of disability discrimination i.e. less favourable treatment, unless justified. It could only be a case of less favourable treatment and therefore a prima facie case of discrimination, if the comparators are "others" without dogs : "that reason" for refusing access to refreshment in the cafe would not apply to "others" without dogs.
The same point can be made on the example given in the Code of Practice on Rights of Access issued by the Secretary of State at para. 2.12-

"A waiter asks a disabled customer to leave the restaurant because she has difficulty eating as a result of her disability. He serves other customers who have no difficulty eating. The waiter has therefore treated her less favourably than other customers. The treatment was for a reason related to her disability-her difficulty when eating. And the reason for her less favourable treatment did not apply to other customers.
If the waiter could not justify the less favourable treatment, he would have discriminated unlawfully."

It is clear from this example that the comparison to be made is with other diners who have no difficulty in eating and are served by the waiter, and not with other diners who may be asked to leave because they also have difficulty eating, but for a non-disability reason e.g because the food served up by the waiter is disgusting. This interpretation of section 20(1) provides support for Mr Clark's interpretation of section 5(1). The reason for his dismissal would not apply to others who are able to perform the main functions of their jobs; he has been treated less favourably than those others. He was dismissed for not being able to perform the main functions of his job. The "others" would not be dismissed for that reason.
However, that does not necessarily mean that Mr Clark has been discriminated against. It is open to Novacold to show that the dismissal is justified, just as it would be open to the cafe proprietor to justify the exclusion of dogs, including guide dogs with their blind owners.

The Section 5(2) Discrimination Point and the Duty to make adjustments
The question is: did Novacold treat Mr Clark less favourably under section 5(2) by failing to comply with their duty under section 6 to take reasonable steps to prevent arrangements, on which employment by them is afforded, having the effect of placing Mr Clark at a substantial disadvantage in comparison with persons who are not disabled?
One difficulty with this point is that, as explained by the Appeal Tribunal on ordering that the matter be remitted to the Industrial Tribunal, the point was never apparently fully addressed by it in those terms.
The opening words of paragraph 19 of the Extended Reasons indicate that the tribunal wrongly thought that, as the discrimination claim under section 5(1) failed, it was not possible to make a discrimination claim under section 5(2). That is legally erroneous. The language of section 5(2) makes it clear that failure to make adjustments under section 6(2) may "also" constitute an act of discrimination against a disabled person and liability for that discrimination is not contingent on a finding of less favourable treatment under section 5(1).
It does not follow from this error of interpretation of section 5(2) that the decision of the tribunal on this point should be reversed. The tribunal went on to hold that section 6(2) did not apply where the disabled person had, as here, been dismissed and there was no arrangement made by Novacold that could be said to substantially disadvantage Mr Clark compared with any other person working for Novacold.
It is contended that this is an erroneous interpretation of section 6(2). The wide language of section 6(2) and 6(3) is capable of applying to a "dismissal situation" as was held by the Appeal Tribunal in Morse v Wiltshire CC [1998] ICR 1023. It was pointed out by Bell J at 1033 B-C that, although section 6 makes no express mention of dismissal, termination of service or redundancy, the Code of Practice assumes that section applies to a dismissal in the circumstances of the applicant in that case. "Arrangements on which employment....is offered or afforded" include alternatives to dismissal, such as are mentioned in section 6(3)-allocation of the disabled person's duties to another person, assigning him to a different place of work or transferring him to fill an existing vacancy. It is important to note, however, that the complaint in that case under section 5(2) and section 6 was about arrangements of the employer relating to the criteria for selection for redundancy and the pre-dismissal failure of the employer to make reasonable adjustments to them under section 6
The position in this case is that the only act complained of by Mr Clark in his IT 1 (and this was confirmed by his Leading Counsel at the hearing of this appeal) was dismissal. His complaint was that the dismissal was discriminatory, because it was less favourable treatment within section 5(1)(a) and it was not justified under section 5(1)(b) because reasonable consideration had not been given to alternative jobs within the company which he could do even with his injury.
It was only open to him to argue that the act of dismissal was itself a breach of the duty to make adjustments under section 6. An industrial tribunal only has jurisdiction to adjudicate on the acts of which complaint is made to it and not on some other act of which the applicant could have made complaint but did not: see Chapman v Simon [1994] IRLR 124 at 128 and 129; Nagarajan v London Regional Transport [1998] IRLR 73 at 76. I agree with the Industrial Tribunal to the extent that it held that the act of dismissing Mr Clark was not in itself a breach of the section 6 duties. I should add, however, that there is a possible source of confusion in the reference in paragraph 19 of the Extended Reasons and the arguments arising from the reference to "dismissal situations" not being included in section 6(2). There may well be cases (but this is not one of them) where a person who has been dismissed complains of both section 5(1) discrimination by unjustified dismissal and also of section 5(2) discrimination by pre-dismissal breaches of section 6 duties while he was still in employment. There is no reason why an employee should not be able to pursue both claims: they are separate acts of discrimination and the fact that the employee has been dismissed does not deprive him of the right to complain of a wrong committed against him while he was still employed in the employer failing to comply with the duty to make reasonable adjustments to arrangements and to premises. I would add that, in an appropriate case, there is no reason why the compensation recoverable for a section 5(2) case should not include compensation for the loss of a job which flows from the failure to make the reasonable adjustments, though I would normally expect such compensation to be awarded on a successful claim for section 5(1) discrimination rather than under section 5(2).
The Justification Point
The question is: is the less favourable treatment of Mr Clark by Novacold shown to be justified under section 5(1)(b)? The Tribunal held that it was not. The Appeal Tribunal saw nothing wrong with that conclusion. This court has had the benefit of fuller argument on this point, as on the other points.
There is an error of law in the reasoning of the tribunal which makes it necessary to remit the question of justification for rehearing.
Under section 53(6) of the 1995 Act the duty of the tribunal is as follows-

"If any provision of a code appears to a tribunal or court to be relevant to any question arising in any proceedings under this Act, it shall be taken into account in determining that question."

It is true that the tribunal expressly stated that it had "considered the provisions of the Code of Practice and in particular paragraphs 4.6,4.7 and 4.8 of the Code" and it concluded that "None of the examples set out in the Code are of particular assistance in this case."
The tribunal appears to have overlooked a relevant provision in the Code. Paragraph 6.21 of the Code is headed "Termination of Employment." It provides-

"Dismissal-including compulsory early retirement-of a disabled person for a reason relating to the disability would need to be justified and the reason for it would have to be one which could not be removed by any reasonable adjustment.
It would be justifiable to terminate the employment of an employee whose disability makes it impossible for him any longer to perform the main functions of his job, if an adjustment such as a move to a vacant post elsewhere in the business is not practicable or otherwise not reasonable for the employer to make."

This provision in the Code is of particular assistance in this case because the tribunal found as a fact that the reason for Mr Clark's dismissal was that "he was no longer capable of performing the main functions of his job" (paras 7q and 13); that his absence was continuing; that they needed somebody to perform the role that he was performing; and that there was "not available any existing vacancy that would have provided suitable alternative employment" for him.
The Tribunal also found that "it was likely that a person who had been off work for a similar length of time and where there had been no foreseeability of a return to work and therefore a continued long term absence, would have been treated no differently than the applicant" (para 18).
Instead of addressing these points the tribunal concentrated on the examples in the provisions of the Code quoted by it (in particular, para 4.6) as illustrations of the requirement in section 5(3) of the 1995 Act that the reason for less favourable treatment must be both material to the circumstances of the case and substantial. This approach led the tribunal to focus, to the exclusion of other material facts found by them, on the finding that there could have been no prejudice to Novacold "in continuing the applicant's employment if his employment had not been terminated. It would have had no organisational nor economic consequences at all in terms of wages or other matters. "(para 20).
On a rehearing the tribunal should reconsider that point in the light of all the other relevant findings of fact already noted and of paragraph 6.21 of the Code.
Summary

In brief the legal position is that

(1) Less favourable treatment of a disabled person is only discriminatory under section 5(1) if it is unjustified.
(2) Treatment is less favourable if the reason for it does not or would not apply to others.
(3) In deciding whether that reason does not or would not apply to others, it is not appropriate to make a comparison of the cases in the same way as in the 1975 and the 1976 Acts. It is simply a case of identifying others to whom the reason for the treatment does not or would not apply. The test of less favourable treatment is based on the reason for the treatment of the disabled person and not on the fact of his disability. It does not turn on a like-for-like comparison of the treatment of the disabled person and of others in similar circumstances.
(4) The act of dismissal from employment falls within section 5(1), but not within section 5(2) and section 6; but an employee who has been dismissed may bring a case under section 5 (2) for pre-dismissal discrimination involving a breach of a section 6 duty.
(5) A section 5(2) claim for a breach of a section 6 duty is not dependant on successfully establishing a claim under section 5(1). They are different causes of action, even though, as recognised by section 5(3), they may overlap.
(6) The question whether treatment has been shown to be justified is a question of fact to be determined on a proper self direction on the relevant law. Such a self direction includes taking into account those parts of the Code of Practice which a reasonable tribunal would regard as relevant to the determination of that question.

Conclusion

I would allow the appeal to the limited extent of holding that there was less favourable treatment of Mr Clark within section 5(1)(a) and that there is no need to remit that question for further consideration by the tribunal; but I would order that the question of justification of the dismissal of Mr Clark should be remitted to the same tribunal for rehearing in accordance with the terms of this judgment. If necessary I would grant Novacold leave to amend their cross appeal to seek such an order. As things have turned out the critical question in this case is that of justification of the treatment. This will also probably be the case with many other complaints under the 1995 Act.

LORD JUSTICE ROCH: I agree.

LORD JUSTICE BELDAM: I also agree.

ORDER: Appeal allowed in part; case remitted to the Tribunal for the question to be decided on the issue of justification. No order for costs. Legal aid taxation of the Appellant's costs.
(Order not part of approved judgment)
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