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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Citibank NA & Ors v Kirk (Age Discrimination, Unfair Dismissal, Remedies) [2022] EAT 103 (12 July 2022) URL: https://www.bailii.org/uk/cases/UKEAT/2022/103.html Cite as: [2022] IRLR 925, [2022] EAT 103 |
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EA-2021-000258-BA EA-2019-000861-BA |
Fetter Lane, London, EC4A 1NL |
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B e f o r e :
MS G MILLS CBE
MRS G P TODD
____________________
(1) CITIBANK N.A. (2) TOM ISAAC (3) MANOLO FALCO (4) ASHU KHULLAR (5) JAMES BARDRICK |
Appellants |
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- and - |
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NIELS KIRK |
Respondent |
____________________
Schona Jolly QC (instructed by Leigh Day Solicitors) for the Respondent
FULL HEARING
Hearing dates: Tuesday 10 May, Wednesday 11 May and Thursday 12 May 2022
____________________
Crown Copyright ©
SUMMARY
AGE DISCRIMINATION, UNFAIR DISMISSAL, REMEDIES
The Claimant succeeded before the Tribunal in his claims of unfair dismissal and age discrimination (in part) following his dismissal from the Respondent at the age of 55. The comparator in respect of the dismissal was Ms Olive, aged 51. The principal challenge to the Liability Judgment is that the Tribunal erred in not properly considering the Respondents' explanation for the treatment of the Claimant in light of the marginal age difference between the Claimant and Ms Olive, and the unchallenged evidence that all of the individual Respondents regarded the Claimant and Ms Olive as being in the same age bracket. This aspect of the appeal is upheld as the Tribunal appears not to have given due consideration to the Respondents' evidence in this regard, and their explanation that age could not be reason for the alleged discriminatory treatment.
The Respondent also appealed against two Remedy Judgments. The appeal against the First Remedy Judgment was primarily a perversity challenge based on the Tribunal's approach to the selection pool that would have been adopted had the Respondents followed a fair and non-discriminatory process. Whilst the inclusion of a subordinate in the selection pool for a position superior to that held by the Claimant and Ms Olive is surprising, it is not such as to establish an overwhelming case that the Tribunal had adopted a course that no reasonable tribunal on these facts would have adopted. Accordingly, the high threshold for a perversity challenge was not crossed.
The appeal against the Second Remedy Judgment challenged the Tribunal's failure to take account of the value of the Claimant's shareholding in a company established by way of mitigating his loss. In principle, such value could be taken into account. However, the burden is on the Respondent to establish the value of the shareholding and the extent to which that should be offset against loss. In the particular circumstances of the present case, including the unsatisfactory evidence adduced by the Respondents on this issue, the Tribunal was entitled to conclude that that burden had not been discharged. Accordingly, there was no error of law in not ascribing a value to that shareholding for the purposes of assessing loss.
MR JUSTICE CHOUDHURY:
Introduction
Background
Proposed restructure in 2016
Restructuring opportunity in 2017
Meeting on 25 September 2017
Consultation, Dismissal and Appeal
The Tribunal's conclusions.
Liability Judgment ("LJ")
"132.1 The evidence of Mr Isaac and Mr Falco in particular appeared unconvincing and at times evasive when questioned on this topic. The Tribunal had the impression that we were not being given the full story as to whether their consultation with the Claimant was genuine.
132.2 No paper trail, such as the structure chart produced in 2016 (to which we referred further above in our findings of fact), or written explanation for the restructure was provided by any witness of the Respondent.
132.3 Written records of any meetings or discussions conducted between July and September 2017 are scant, to the point of being almost non-existent, as to discussions about the proposed restructure. It is less surprising that there are no such records of discussions between Messrs Khullar, Isaac and Falco, as they had adjacent offices. It is more surprising that no such records were kept of discussions with human resources as the Tribunal was informed that frequent discussions and meetings were taking place during this time between Mr Isaac, Mr Khullar and human resources. As, the Tribunal was informed, human resources would usually keep records of such meetings or discussions; it is surprising that none had been produced (even allowing for the possibility that parts of such meetings might have been excluded on the basis of legal advice privilege).
132.4 Mr Isaac and Mr Khullar had decided that Ms Olive was more suitable for the post before they asked Ms Senecaut to draw up a job description for the post and before the so-called "stress testing" of their decision.
132.5 Before Mr Isaac and Mr Falco met with the Claimant on 25 September 2017 to notify him of the proposed restructure, they had already met Ms Olive to inform her that she was their preferred candidate for the position and check that she wanted the role.
132.6 There was a lack of effort on the Respondent's part to seek to find alternative employment for the Claimant, to which we refer further below. This suggests that, once the Claimant had been selected for redundancy, the Claimant's managers were not interested in retaining him within the organisation by engaging with him as to the possibility of finding him suitable alternative employment.
132.7 The Claimant's franchise, energy, was the largest revenue generator of the franchises being consolidated. As referred to above, the Tribunal had some scepticism about the explanations given for the restructure and their responses when cross-examined on the issue.
132.8 Mr Falco was asked in cross-examination whether he had a perception that Mr Kirk could not change and replied: "I tried my best he had a lot of opportunities to change".
132.9 Mr Falco's initial response to questions as to whether there was any point in the stress testing being carried out appeared to the Tribunal to be evasive. The Tribunal formed the impression from his evidence, and that of other witnesses for the Respondent that the stress testing was undertaken to seek to give credence to a decision that had already been made, rather than being an open minded inquiry as to which of the two individuals was better suited to the role.
132.10 In an interview conducted by Mr Bardrick for the Claimant's appeal against dismissal, Mr Falco stated, in response to being asked about the Claimant's opinion that the decision was a fait accompli, Mr Falco replied that he personally would have preferred a more direct conversation but HR did not allow it.
132.11 When cross-examined about this interview and the meeting on 25 September, Mr Falco's reply included that they had really thought about their decision and once they were in the room (i.e. on 25 September, a meeting to which we will refer shortly) "we were very certain that's what we were going to do". This suggests that by 25 September the decision to make the Claimant redundant was, as the Claimant believed, a fait accompli.
132.12 The Tribunal agrees with the Claimant's case that once meetings were conducted with the Claimant from late September until November, the Claimant's responses to the consultation were not addressed in an open-minded way.
132.13 The manner in which the Claimant's complaints of age discrimination
were dealt with by the Respondent were surprising for an organisation
professing to take equal opportunities seriously."
"138 On the balance of probabilities, the Tribunal finds that Mr Falco did say: "you're old and set in your ways" at the meeting on 25 September. We so find from our consideration of the written and oral evidence of the three witnesses concerned and consideration of all the evidence provided to the Tribunal in the case. Our reasons for so finding include:-
138.1 The Claimant, on the whole, was (as referred to above) the most convincing of the three witnesses. His evidence was succinct, straightforward, calm, appeared plausible and not to be evasive. As referred to above, the evidence of Mr Isaac and Mr Falco appeared to the Tribunal to be less convincing.
138.2 That the Claimant was set in his ways appeared to be what Mr Falco thought about the Claimant. We refer for example to his comment (referred to above) "I tried my best he had a lot of opportunities to change".
138.3 The Claimant did make a written record of the meeting at the time it was being held. Mr Isaac accepted, when cross-examined on the point, that the Claimant was taking notes of the meeting. It was not put in cross examination of the Claimant that the notes the Claimant produced, that he said he had written during the meeting on 25 September, were not the notes he had written during the meeting, or were false.
138.4 Mr Isaac's evidence was that he threw his contemporaneous note of the meeting into the confidential waste bin. This was surprising to the Tribunal for someone being extensively advised by human resources. Mr Isaac's evidence also changed as to how many days after the meeting he took his recollection of what was said at the meeting.
138.5 The Tribunal has some concern about the length of time the Claimant took to make the allegation as to these remarks. Initially, he made only generalised references to assuming that age discrimination was a factor in the decision, rather than referring to the specific remarks. His explanation for not making the specific allegation sooner was reasonably plausible, i.e. that he was fighting to keep his job, rather than jeopardise it. In the Tribunal's experience sometimes such an explanation (the delay in making the allegation) is genuinely through giving priority to try to save their job, sometimes it is, as suggested by Mr Arnaldi when he was cross-examined, a tactical decision to make such an allegation to bolster their case.
138.6 Mr Isaac's explanation for not challenging the Claimant's allegation when he first heard the Claimant make it in a telephone conference call was slightly less convincing. We accept that he was in his hotel room which was not the best of circumstances for responding to such an allegation. It is nevertheless surprising that, if he was indignant about the allegation as he said he was during his evidence, that he did not challenge the Claimant about his allegation when he first heard it. Another possibility is that he did not challenge the remark when it was first brought to his attention because he knew that Mr Falco had said it.
138.7 The Tribunal also has some concern about the authenticity of the remark because of Mr Falco's evidence, for whom English is not his first language, that: "set in your ways" is not an expression he would * use. Had we felt more confident in Mr Falco's evidence as a whole, we would have given more weight to this evidence of Mr Falco, although we have borne this part of his evidence in mind when weighing up all the evidence with which we were provided on this dispute of fact.
138.8 We also have some concern about a point referred to in cross-examination of the Claimant as to the Claimant may be adding the comment in a subsequent written note he made of the meeting, in that remark appears to have been inserted between two lines.
138.9 We accept that, as asserted in closing submissions and in Mr Arnaldi's evidence, that it would have been a stupid remark for Mr Falco to have made, particularly as a Mr Graham had previously made similar allegations against Mr Falco as those of the Claimant. Nonetheless, in the Tribunal's experience, individuals do from time to time say foolish things; and this was a meeting where no-one from human resources was present.
138.10 The remark appeared to the Tribunal to be the kind of throwaway remark Mr Falco could make.
138.11 The Tribunal does not give great weight to the fact that Mr Graham brought an age discrimination against the Respondent and attributed the age discrimination as being by Mr Falco. The case was settled so no findings of fact were made one way or another at a Tribunal hearing for his case. Nonetheless Mr Graham was another individual who considered that Mr Falco had discriminated against him because of his age, including as to his dismissal; and he felt strongly enough to bring Employment Tribunal proceedings against the Respondent."
"220 The Tribunal has concluded that the Claimant has proved such facts, at least for the allegations concerning the Claimant's performance reviews and his dismissal, including because:
220.1 Mr Falco's remark "you're old and set in your ways," was an act of age discrimination in itself.
220.2 As recorded in the Tribunal's findings of fact the remark by Mr Falco represented his view of the Claimant, for example, by his response in cross-examination "I tried my best he had a lot of opportunities to change".
220.3 The Claimant received a rating of 2 every year from 2006 to 2013, then a rating on 1 in 2014. His drop by two grades calls for an explanation. Additionally, the differences in the feedback received for the Claimant as an important part of the explanation for dropping two grades from 2014 to 2015 and 2016 appeared relatively similar during the three years in question (although as highlighted in the findings of fact there were some differences).
220.4 Taking together, some of the statements made by Mr Turek, Mr Falco, Mr Isaac and Mr Bardrick could show, possibly unconsciously, the presence of age discrimination. We refer to our findings of fact earlier above, such as Mr Turek's comments in the Claimant's performance review document, to Mr Falco's comments quoted in the Financial Times concerning the recruitment of Mr Davison, to Mr Bardrick's comments published in the Evening Standard and to Mr Isaac's frequent references to the word "agile" as part of his explanation for selecting the Claimant for redundancy.
220.5 The statistical information provided to the Tribunal shows that during 2015, out of 48 managing directors, only one was 57 or more; and out of 51 managing directors in 2016 only two were 57 or over.
220.6 The Claimant's complaints of age discrimination were treated less seriously than a complaint of sex or race discrimination would have been treated, as described in our findings of fact above. The explanation given for not investigating the Claimant's allegations of age discrimination independently of the consultation process leading to his dismissal did not stand up. According to the Respondent's case, the consultation process with the Claimant did not start until the meeting on 17 October, by which time the Claimant had already complained of age discrimination. It was dismissed out of hand, at least until the Claimant's appeal against dismissal. The Respondent's witnesses responses as to why they did not consider it relevant that Mr Graham had made complaints against Mr Falco or age discrimination were evasive.
220.7 More generally the Respondents' witnesses treated with some incredulity that there could be the existence of any age discrimination within the Respondent. Although a large organisation, they do not monitor age to investigate the possibility of age discrimination.
220.8 Although Mr Bardrick expressed surprise during the Claimant's appeal hearing as to the Claimant's allegations of age discrimination, he appeared to have agreed that Mr Falco made statements about the Claimant being old and set in his ways; and the words "set in your ways" that were in his draft appeal outcome letter were removed from the letter that was sent to the Claimant.
220.9 As set out below the Claimant was unfairly dismissed. Unfair or unreasonable treatment is not necessarily discriminatory treatment. Neither, however, would we assume that the Respondent habitually dismisses its employees unfairly regardless of their ages. Dismissing an employee unfairly calls for an explanation as to the employer's motives for doing so."
"228 The Tribunal considers and finds that the information leading to, the skillset document, decision to dismiss the Claimant and the Claimant's dismissal were, at least to the extent of having an important effect on the outcome, on the prohibited ground of the Claimant's age including because:
228.1 Mr Falco's perception of the Claimant was that he was old and set in his ways and that Ms Olive was not.
228.2 Mr Isaac shared Mr Falco's perception of the Claimant, although probably not to such a conscious extent. He supported Mr Falco's denial of the remark and did not challenge him. He perceived the Claimant as being less "agile" than Ms Olive and thus less suited for the position in question.
228.3 The Claimant's age was not, however, the only factor in the decision to dismiss him. The Tribunal accepts that Mr Isaac and Mr Khullar did want to reorganise the department as, in the Tribunal's experience, many incoming managers do. The opportunity for a reorganisation was presented by Mr Hanen leaving his position and moving to another part of the Respondent's organisation.
228.4 The Tribunal considers and finds, therefore, that the decision to make the Claimant redundant, and the process undertaken to seek to give credence to the decision was an opportunistic response to the circumstances presented in 2016; rather than a long standing desire and plan to prepare the ground work in earlier years, through the performance reviews in 2015 and 2016, in order to dismiss him in 2017.
228.5 There are compelling reasons, set out above, for why the burden of proof shifted to the Respondent to disprove age discrimination in respect of the processes leading to the Claimant's dismissal and the dismissal itself. The Respondent has fallen a long way short of satisfying the Tribunal, on the balance of probabilities, that the treatment was in no sense whatsoever on the prohibited ground.
228.6 The Tribunal also concludes that Mr Bardrick's upholding of the decision to dismiss the Claimant was tainted with age discrimination, although possibly unconscious. Whether consciously or unconsciously, he agreed with, or at least wished to support, Mr Falco and Mr Isaacs views of the Claimant and to close his mind as to the Claimant's ground of appeal that he was being dismissed because of his age. As set out in the Tribunal's findings of fact above there is a strong possibility that Mr Bardrick did believe that Mr Falco had made the remark in question although, if that was his opinion, there is a contradiction between how he questioned the Claimant and what he truly believed had happened. His questioning of the Claimant at the appeal meeting suggested incredulity at the possibility of age discrimination on the Respondent's part, rather than an open mind. When conducting further investigation of the Claimant's allegations he accepted Mr Falco and Mr Isaac's denials without any great scrutiny and chose to support Mr Falco with whom he had had a close working relationship for the years when they had a joint managerial responsibility. It suggested a possible desire on his part to support Mr Falco's version of events, despite believing that Mr Falco had telling the Claimant that he was old and set in his ways as part of his explanation for preferring Ms Olive for the role in question.
229 These complaints of the Claimant, therefore, succeed against the First Respondent, Mr Isaac, Mr Falco and Mr Khullar."
"267 In the circumstances of the case (including the size and administrative resources of the Respondent) did the Respondent act reasonably or unreasonably in treating the re-organisation concerned as a sufficient reason for dismissing the Claimant, in accordance with equity and the substantial merits of the case? The Tribunal has concluded that neither the procedures adopted by the Respondent nor the substantive decision to dismiss the Claimant fell within the band of reasonable responses a reasonable employer might have adopted, including for reasons set out in our findings of fact and for each of the following reasons:-
267.1 The dismissal of the Claimant was an act of unlawful age
discrimination.
267.2 The Claimant was not given any warning as to the proposed re-organisation until after the decision to re-organise had been made and,
as set out in the Tribunal's findings of fact, the decision to select the
Claimant for dismissal on the (stated) grounds of redundancy had been
made. The so called consultation with the Claimant was not genuine
consultation, for the reasons set out in the findings of fact above.
267.3 If any efforts to seek alternative employment were made for the
Claimant which, as set out in our findings of fact, we doubt, they were
inadequate. The Claimant was an employee for over twenty six years.
He was trying to keep his job, or be placed in the position for which Ms
Olive was to be appointed. No effort was made by the Respondent to
have a meeting to discuss with him what might be possible areas of
interest for him to work in and for which he might be suited.
267.4 The Claimant's complaints of age discrimination were, in effect, ignored until the Claimant's appeal although, in view of the Respondent's policy they should have been considered as they were made before the
Respondent's so called consultation had started.
267.5 The conducting of the Claimant's appeal by Mr Bardrick was also an act of age discrimination, as described above.
267.6 After meeting the Claimant to discuss his grounds of appeal, Mr
Bardrick carried out further investigations. He did not reconvene the
meeting or give the Claimant any opportunity to comment on the
outcome of his further investigations before reaching his decision on
the outcome, to dismiss the Claimant.
268 The Claimant's dismissal was, therefore, unfair."
The First Remedy Judgment ("RJ1")
"39 In accordance with the guidance given in the Chagger judgment (above) it is necessary for the Tribunal to ask what would have occurred had there been no unlawful discrimination. Was there a chance that dismissal would have occurred in any event, even if there had been no discrimination, bearing in mind that the gravity of the alleged discrimination is irrelevant to the question of what would have happened had there been no discrimination?
40 As regards the Claimant's unfair dismissal, from all the evidence, would or might the Claimant's employment have ceased in any event had fair procedures been followed? Is this a circumstance where the nature of the evidence which the employer wishes to adduce, or on which he seeks to rely, is so unreliable that the Tribunal may take the view that the whole exercise of seeking to reconstruct what might have been so riddled with uncertainty that no sensible prediction based on the evidence can properly be made (as was one of the submissions made on behalf of the Claimant)?
41 The Tribunal bears in mind the guidance given in Hill v Governing Body of Great Tey Primary School (above) that the assessment of chances that the employer would have fairly dismissed the Claimant are predictive. We bear in mind, as was stated in the Polkey case that there is no need for an all or nothing decision.
42 In this case, making predictions of what would have occurred is a difficult exercise. It requires the Tribunal to consider what would have occurred instead of many discriminatory and/or unfair actions that did occur, and actions that should have occurred that did not. It requires, in a sense, the people involved to be different people to the people they were.
43 We do not accept, however, as was one of the submissions on the Claimant's behalf, that the nature of the evidence upon which the Respondent seek to rely is so inherently unreliable that no sensible prediction based on that evidence can properly be made in the Respondent's favour. Although we did have a number of criticisms of the evidence of the Respondents' witnesses we find that the evidence is not so inherently unreliable that no sensible prediction can be made. We do our best to undertake the exercise required by the guidance given in the relevant caselaw as best we can."
"55 it is hard to see how Mr Isaac and Mr Falco (and Mr Khullar, if this had happened before he moved post) would not at least have placed him into a pool for selection, if they were acting fairly and without age discriminatory perceptions of the Claimant."
"59 First, the Tribunal finds the issues of the discriminatory dismissal and the unfair dismissal to be intertwined. Dismissal is a process that starts with the first steps taken in the stages of dismissal and ends with the outcome of the employee's appeal. At all stages of this process the Respondent's actions were influenced by age discrimination, such as the perception that the Claimant was old and set in his ways and that he was not agile enough, in comparison to how Ms Olive was perceived.
60 Second, the steps outlined in the Williams v Compair Maxam case giving guidance as to the actions a reasonable employer, acting within the band of reasonable responses, would have adopted influence causation. If, for example, the outcome of consultation had been either for the restructure not to have taken place, or to have taken place in a very different way so as not to have put the Claimant's position at risk, the discriminatory element of the Claimant's dismissal would not have occurred at all because the Claimant would not have been dismissed."
"63 that some criteria would have been given that would have met the guidance given in the Williams v Compair Maxam case, to which we referred in The Liability Judgment and that they would have been made fairly and without discrimination. We have in mind the guidance that the employer will seek to establish criteria for selection which so far as possible do not depend solely upon the opinion of the person making the selection but can be objectively checked against such things as attendance record, efficiency at the job, experience or length of service. The employer will then seek to ensure that the selection is made fairly in accordance with those criteria."
"79 We find that what is most likely to have taken place is that either the position held by Mr Husband would have been deleted as well as those of the Claimant and Ms Olive, and that his position would have been made redundant (if it was not filled after his promotion); or that he would have been placed in a pool of three for two positions. We find that it is likely that the Claimant would have obtained either the role that was offered and accepted by Ms Olive; or the role that was offered and accepted by Mr Husband.
80 If the Claimant had been successful in obtaining the role offered to Ms Olive, he would undoubtedly have accepted it, as it was the position he fought for, having been told that he was unsuccessful. If he had not been successful and offered instead the role to which Mr Husband was promoted, he would have been highly likely to have accepted it, for the reasons set out earlier above.
81 Having all these considerations in mind, the Tribunal finds that, absent the unfairness and discrimination as found by the Tribunal and set out in The Liability Judgment, it is unlikely although possible that he would have been dismissed. We reduce the Claimant's compensation by fifteen per cent, to reflect the "Polkey" and "Chagger" issues namely, as described in submissions on behalf of the Respondents, whether the Claimant would have been dismissed absent the unfairness or discrimination as found by the Tribunal and set out in its decision on liability."
The Second Remedy Judgment ("RJ2")
"155.9 Doing the best we can, with the provisos we have set out above, we find that the gap between what the Claimant will receive with KLC and his other appointments with Subsea 7 and Advanced Power, and what we have found that he would have received whilst working for the first Respondent will diminish by approximately 20% for 2021; 40% for 2022, 60% for 2023 (by which time the Claimant will no longer hold positions with Subsea 7 and Advanced Power); and 80% for 2024. In other words, the Claimant's overall remuneration with KLC for 2021, whether by way of salary, repayment of previous salary sacrifice, dividends or bonus, rather than being £250,000, as stated by the Claimant, as against £765,000, that the Tribunal finds that he would earn in total with KLC the sum of £353,000 in 2021; in 2022 the sum of £456,000; in 2024 the sum of £559,000; and 2025 the sum of £662,000."
"Whether to include a valuation of the shares held by the Claimant in KLC as part of the Claimant's mitigation of loss
177 A difficult, and so far as we were made aware, untested, question is whether the Tribunal should include the value of the Claimant's shares in KLC at whatever point is taken for such a calculation.
178 The issue is an interesting one, although unnecessary for the Tribunal to resolve in view of our findings about the evidence produced on behalf of the Respondents to substantiate their case on this point. We offer the following observations.
179 The Tribunal can appreciate an argument that the Claimant's mitigation for remuneration from KLC included the dividends it was estimated he would receive. Dividends are something the Claimant received from being a shareholder and would not have been payable had he been purely an employee of the company. We can recognise, therefore, an argument that, likewise, the value of the shares he has in forming a company that forms part of his mitigation of loss should also be taken into account.
180 The Tribunal would have concluded, however, that the Claimant's shareholding in KLC is conceptually different from the remuneration he earned whilst working there, other than the following qualification we make.
181 If the Claimant was deliberately depressing his earnings in the company in order to inflate the compensation he would receive, we would accept that this would be a failure of mitigation on his part. In this case, however, although we have found the Claimant's figures on future earnings to be over cautious, we have not found that he was deliberately seeking to depreciate the amount of the dividends or value of the company to increase his loss of earnings award. Additionally, in our findings of fact above as to what the Claimant's future remuneration with KLC will be, the Tribunal has sought to strike an appropriate balance between the need to invest in KLC, to ensure that it pays its employees sufficiently well to attract and retain employees that will enable KLC to obtain high quality work and to have some resilience against future downturns in business, with keeping to the stated objectives when the company was formed of paying dividends to its shareholders.
182 Firstly, an employee who has savings may choose to invest their money in a multitude of different ways. He/she might, for example, invest in the stock market, or purchases of property. The Claimant chose to invest in a company for which he was to be the chief executive. If he had wished and succeeded to do so, or lacked ready funds to invest himself, he could have become chief executive for the company with no or minimal personal investment in the company.
183 Secondly, and perhaps more importantly, decisions on when an individual may wish to retire from paid work and when they may wish to cash in and spend their investments are different. Although it is possible that the Claimant might wish to sell KLC,
or at least his shareholding in it at the date of his retirement from working with the company, or at an earlier date, the two will not necessarily be aligned. If the company would be unlikely to be sold for at least 8 10 years from its inception, and the hope was that its value would increase over the years, as stated by Mr Lovegrove when the company was being set up, it is unlikely that the Claimant would seek to sell his shareholding before that date. Similarly, if an individual were to invest in property, and have no reason to make an immediate sale, it would be unlikely that he/she would do so in the middle of a property slump. The Claimant remuneration for working for KLC; and the value of his shareholding in the company are conceptually different."
Liability Appeal
Grounds of Appeal
a. Ground 1 Failure to make proper findings of fact on points central to the issues in the case. This ground of appeal is based, essentially, on the contention that the Tribunal ought to have reached an express finding on whether the Claimant had subsequently inserted the words "old and set in your ways" into his second manuscript note of the September meeting, and that its failure to do so amounted to an error of law.
b. Ground 2 Failure properly to apply the burden of proof provisions and to consider the Respondents' non-discriminatory explanation for the Claimant's dismissal. Although, this is numbered Ground 2, it was the primary ground of appeal in respect of the Liability Judgment. It is based on the inherent implausibility of there being age discrimination in circumstances where the difference in age between the Claimant and his comparator is a mere four years.
c. Ground 3 Failure to consider, properly or at all, the comparator for the purposes of the complaint of age discrimination against Mr Bardrick.
LJ - Ground 1- Submissions.
LJ - Ground 1 - Discussion
51. Of course, it would be surprising if an important detail had been omitted altogether from the subsequent write-up. That was not the case either: the words attributed to Mr Falco were in the later note. The only issue arises from the possibility, raised by the disputed words appearing between paragraphs, that they were subsequently inserted. The Tribunal did not "duck" this issue, as Mr Carr submits. It clearly had the point well in mind as it expressly identified it as a "concern". It can reasonably be inferred from a fair reading of the judgment, and bearing in mind the Tribunal's ultimate conclusion that Mr Falco did make the remark, that the Tribunal concluded that the possibility of insertion did not affect or undermine its conclusion that the remark was made. That may be because the Tribunal accepted the Claimant's evidence on this issue, or because, even if there was some doubt about that evidence, it did not change the Tribunal's overall view that the Claimant was "on the whole the most convincing of the three witnesses". The use of the phrase, "on the whole" is telling: the Tribunal was not suggesting that the Claimant was convincing in every single aspect of the evidence he gave, and in fact there may have been aspects which appeared less convincing, of which his denial that the words were inserted after the first draft, might have been one. These are quintessentially matters for the assessment and judgment of the Tribunal, and the fact that it did not expressly set out each and every such instance where the Claimant was believed and those where there was some doubt, does not begin to undermine the Tribunal's conclusions or give rise to any error of law.
"With respect to Mr. Digby's argument, we have found it very difficult to find in the language of the decision any clear indication of the view taken by this industrial tribunal about the conflicting evidence led on each side in regard to the alleged previous episodes of welding in the store.
What is our duty in those circumstances? We think the principle involved is the following: where there has been a conflict of evidence at the hearing before an industrial tribunal on a significant issue of fact, then the industrial tribunal's finding (i.e. their acceptance or rejection of such evidence) must be made plain one way or the other. Express words are not necessary. That is clear from Union of Construction, Allied Trades and Technicians v. Brain [1981] I.C.R. 542, and in particular the judgment of Donaldson L.J. at p. 551. But the language must be sufficiently full and clear to make it possible for anyone to tell from a reading of the decision as a whole whether the members have believed the relevant witnesses or not. Failure by the industrial tribunal to provide that indication, expressly or by reasonably clear implication from the overall language of their decision, amounts to an error of law: see Alexander Machinery (Dudley) Ltd. v. Crabtree [1974] I.C.R. 120,122. This principle has not, we think, been affected byindeed it derives implicit support fromthe recent decision of the Court of Appeal in Varndell v. Kearney & Trecker Marwin Ltd. [1983] I.C.R. 683. Application of that principle to the circumstances of the present case has driven us to the conclusion, on the grounds already indicated, that the industrial tribunal failed to make it sufficiently clear, on a plain reading of their decision as a whole, whether they accepted (and if so to what extent) or whether they rejected the evidence on the one side or the other. Thereby they fell into an error of law which it is our duty to redress."
LJ - Ground 2 - Submissions
LJ - Ground 2 Discussion.
"5 Age
(1) In relation to the protected characteristic of age
(a) a reference to a person who has a particular protected characteristic is a reference to a person of a particular age group;
(b) a reference to persons who share a protected characteristic is a reference to persons of the same age group.
(2) A reference to an age group is a reference to a group of persons defined by reference to age, whether by reference to a particular age or to a range of ages."
"13 Direct discrimination
(1) A person (A) discriminates against another (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others.
(2) If the protected characteristic is age, A does not discriminate against B if A can show A's treatment of B to be a proportionate means of achieving a legitimate aim "
"136 Burden of proof
(1) This section applies to any proceedings relating to a contravention of this Act.
(2) If there are facts from which the court could decide, in the absence of any other explanation, that a person (A) contravened the provision concerned, the court must hold that the contravention occurred.
(3) But subsection (2) does not apply if A shows that A did not contravene the provision "
"17 The first stage requires the complainant to prove facts from which the tribunal could, apart from the section, conclude in the absence of an adequate explanation that the Respondent has committed, or is to be treated as having committed, the unlawful act of discrimination against the complainant. The second stage, which only comes into effect if the complainant has proved those facts, requires the Respondent to prove that he did not commit or is not to be treated as having committed the unlawful act, if the complaint is not to be upheld."
"
(9) Where the Claimant has proved facts from which conclusions could be drawn that the employer has treated the Claimant less favourably on the ground of sex, then the burden of proof moves to the employer.
(10) It is then for the employer to prove that he did not commit, or as the case may be, is not to be treated as having committed, that act.
(11) To discharge that burden it is necessary for the employer to prove, on the balance of probabilities, that the treatment was in no sense whatsoever on the grounds of sex, since "no discrimination whatsoever" is compatible with the Burden of Proof Directive.
(12) That requires a tribunal to assess not merely whether the employer has proved an explanation for the facts from which such inferences can be drawn, but further that it is adequate to discharge the burden of proof on the balance of probabilities that sex was not a ground for the treatment in question.
(13) Since the facts necessary to prove an explanation would normally be in the possession of the Respondent, a tribunal would normally expect cogent evidence to discharge that burden of proof. In particular, the tribunal will need to examine carefully explanations for failure to deal with the questionnaire procedure and/or code of practice."
"111. We would make three observations about [Shamoon]. First, by requiring all the relevant circumstances to be taken into consideration when defining the hypothetical comparator in the context of answering the "less favourable treatment" issue, and not merely when asking the "reason why" issue, a tribunal which finds that the prohibited grounds have played no part in the decision will also thereby necessarily be concluding that there is no less favourable treatment. This is not, however, of any practical importance since the determination of the "reason why" issue against the applicant is itself enough to defeat the claim. Conversely, if the tribunal find that the reason was a prohibited reason then there will usually be no difficulty in inferring less favourable treatment, as Lord Nicholls indicated. Once it is shown that a discriminatory reason has had a causative effect upon the decision, it will almost inevitably be an adverse one resulting in the victim receiving less favourable treatment than that which would have been meted out to the hypothetical comparator. In other words, the finding that the treatment was on the grounds of race or sex will almost always involve a finding of less favourable treatment".
"15. In my judgment the prospect that the Claimant could prove a prima facie case of age discrimination in relation to his non-appointment to either role is indeed fanciful, for the reasons advanced by Mr Linden which I have already set out and which indeed the Judge largely accepted. So far as the UK job is concerned, where the age difference was only nine months, nothing more need be said. But even as regards the global job there would in my judgment have to be some very particular reason to believe that Mr Pettit was liable to be influenced by the age difference [of seven years] in question. The passage from the note of the investigation meeting relied on by Mr Reade does not in my view afford any such reason. It shows simply that Mr Pettit thought, from his appearance, that the Claimant was somewhere in between 38 and 48. Even if Mr Reade were able to get Mr Pettit to admit that he thought the Claimant was near the bottom of that range, i.e. a year or two younger than he in fact was, that does not make his case more plausible to any appreciable extent. I can see nothing else to indicate even a possibility of age discrimination. "
"156 The transcript produced to the Tribunal of the meeting on 26 October shows. Mr lsaac as following Ms Senecaut's script for the meeting. Of note during the meeting (and referred to in Ms Jolly's closing submissions) were at least four occasions when Mr Isaac referred to the need for a more "agile' approach and for greater 'agility'- the point being asserted that agility is a characteristic [of] or associated with youth."
"228.3- The Claimant's age was not, however, the only factor in the decision to dismiss him. The Tribunal accepts that Mr lsaac and Mr Khullar did want to reorganise the department as, in the Tribunal's experience, many incoming managers do. The opportunity for a reorganisation was presented by Mr Hanen leaving his position and moving to another part of the Respondent s organisation.
228.4 The Tribunal considers and finds, therefore, that the decision to make the Claimant redundant, and the process undertaken to seek to give credence to the decision was an opportunistic response to the circumstances presented in 2016, rather than a long standing desire and plan to prepare the ground work in earlier years, through the performance reviews in 2015 and 2016, in order to dismiss him in 2017."
"228.5 There are Compelling reasons, set out above, for why the burden of proof shifted to the Respondent to disprove age discrimination in respect of the processes leading to the Claimant's dismissal and the dismissal itself. The Respondent has fallen a long way short of satisfying the Tribunal, on the balance of probabilities, that the treatment was in no sense whatsoever on the prohibited ground."
LJ - Ground 3 - Submissions
LJ - Ground 3 Discussion.
"237 In respect of Mr Bardrick's questioning, did he treat the Claimant less favourably than he would have treated a younger employee making a complaint of direct age discrimination".
First Remedy Appeal
a. Ground 1 Failure to address the Respondents' case on certain key aspects;
b. Ground 2 Perversity in proceeding on the basis that Mr Husband, who was subordinate to Ms Olive, would have been included in the selection pool with Ms Olive and the Claimant, for a role that was senior even to them;
c. Ground 3 Failure to distinguish between the Polkey and Chagger exercises;
d. Ground 4 The Tribunal's speculation as to what would have occurred went too far.
RJ 1 - Grounds 1 and 2 Submissions.
RJ 1 - Grounds 1 and 2 Discussion
a. Disloyal to findings We did not discern any such disloyalty to the conclusions in the LJ. Mr Carr submitted that the Tribunal's finding in RJ1 at [59] that, "At all stages of this process the Respondent's actions were influenced by age discrimination ", was necessarily inconsistent with the finding in the LJ at [228.3], where the Tribunal held that "The Claimant's age was not, however, the only factor in the decision to dismiss him", as the latter means that the processes prior to the decision to appoint Ms Olive were not considered discriminatory. However, the passage from RJ1 [59] quoted above needs to be read with the preceding sentence, which provides:
"Dismissal is a process that starts with the first steps taken in the stages of dismissal and ends with the outcome of the employees appeal".
In stating that "At all stages of this process the Respondent's actions were influenced by age discrimination " the Tribunal was referring back to the process of dismissal. The Tribunal was not thereby suggesting that the decision to reorganise was itself an act of discrimination. Even if we are wrong about that, the Tribunal's various conclusions as to what would have happened had there been a fair and non-discriminatory process, appear to be focused on the outcome of a proper consultation exercise having been undertaken. Such consultation would have taken place when the restructuring proposals were "at a formative stage" (RJ1 at [45]) and certainly prior to any decision being made as to which of Ms Olive or the Claimant to retain. The Tribunal was entitled to conclude that a fair and non-discriminatory procedure would have involved the Respondent undertaking consultation at that stage. In doing so, it was not being disloyal to its findings in the LJ or substituting its view as to what should have occurred, but reaching a reasonable conclusion based on the evidence available as to what the Respondent was likely to have done. Given that the Respondent accepts that there was consultation after the Claimant had been given a "heads up" that Ms Olive was the one to lead the division, it is hardly a leap to conclude that, acting fairly and without discrimination, this employer would have commenced the consultation at an earlier stage.
b. Reliance upon Williams v Compair Maxam At RJ1 [63], the Tribunal said as follows:
"63 The Tribunal does not know, therefore, exactly what criteria would have been used absent unfairness and age discrimination in the process. We find, however, that some criteria would have been given that would have met the guidance given in the Williams v Compair Maxam case, to which we referred in The Liability Judgment and that they would have been made fairly and without discrimination. We have in mind the guidance that the employer will seek to establish criteria for selection which so far as possible do not depend solely upon the opinion of the person making the selection but can be objectively checked against such things as attendance record, efficiency at the job, experience or length of service. The employer will then seek to ensure that the selection is made fairly in accordance with those criteria."
Mr Carr submits that it is an egregious error to suppose that a financial institution in selecting for termination between two highly paid individuals would do so by reference to such matters as attendance records. However, on a proper reading of the passage it is clear that the Tribunal is merely indicating that a fair employer would conduct its selection by reference to objective criteria which would include "such things as attendance records, efficiency at the job, experience or length of service." (Emphasis added). In other words, these criteria were only identified as examples and were not cited as ones that this employer would have to apply in order for the dismissal to be fair. This reading is supported by the fact that nowhere in RJ1 does the Tribunal suggest that the Respondent ought to have considered attendance records or would have done so. In fact, the Tribunal's assessment of what would have occurred is by reference primarily to past performance assessments: RJ1 [65].
c. "Influence causation" At RJ1 [60], the Tribunal said as follows:
"60 Second, the steps outlined in the Williams v Compair Maxam case giving guidance as to the actions a reasonable employer, acting within the band of reasonable responses, would have adopted[,] influence causation. If, for example, the outcome of consultation had been either for the restructure not to have taken place, or to have taken place in a very different way so as not to have put the Claimant's position at risk, the discriminatory element of the Claimant's dismissal would not have occurred at all because the Claimant would not have been dismissed."
Mr Carr criticises this passage as containing a clear misdirection of law in that the Tribunal was saying that if the Claimant had not been unfairly dismissed, he might not have been subjected to discrimination. However, it does not appear to us that the Tribunal was giving itself a direction of law to that effect; rather, it was merely indicating that if there had been fair consultation then one possible outcome would have been that the Claimant would not have been dismissed, whether discriminatorily or otherwise. This was stated in support of the Tribunal's view that the dismissal and discrimination issues were intertwined.
d. Mr Husband Mr Carr also criticised the Tribunal's approach to the evidence and the Claimant's late inclusion of Mr Husband as a comparator. Mr Carr contends that Mr Husband had not been identified as a comparator and if he had been the position would have been properly addressed in disclosure and statements. Whilst the Tribunal will be astute not to permit late amendments without careful scrutiny, we note in this case that the significance of Mr Husband's position only emerged during the cross-examination of Mr Isaac when he posited that the restructuring was "4 MDs going to 2 MDs not 3 going to 1", the fourth MD in that scenario being Mr Husband. In circumstances such as this, where significant evidence emerges at a late stage, the Tribunal was entitled to consider submissions on it. The fact that, in the circumstances of this particular case, the Tribunal decided to take that evidence into account cannot be said to amount to an error of law.
"Such an appeal ought only to succeed where an overwhelming case is made out that the employment tribunal reached a decision which no reasonable tribunal, on a proper appreciation of the evidence and the law, would have reached." (per Mummery LJ in Yeboah v Crofton [2002] IRLR 634).
104. The Tribunal considered that if there had been a consultation exercise, and the employees had been told that Mr Husband's role was earmarked for deletion, then Mr Husband would have argued for inclusion in the pool or that "Ms Olive and probably the Claimant would have argued at least that he should have been placed in the pool for selection for redundancy" (RJ1 [55]). Whilst it is right to say that it is unlikely that any employee would argue for inclusion in a selection pool from which he had poor prospects of emerging successfully, it is not perverse for the Tribunal to conclude that he might.
RJ1 - Ground 3 Failure to distinguish between Polkey and Chagger exercises.
RJ1 - Ground 4 Speculation taken too far
Conclusion on First Remedy Appeal
Second Remedy Appeal
RJ2 - Submissions
RJ2 - Discussion
"But a serious question arises as to the plaintiff's investments in Martindale and Ventilation. Ought he to give credit for his profits from them?
(I) Martindale: This company has done well under the plaintiff's management. In the first 17 months from August, 1964, to December, 1965, it made £4,000, largely by reason of one special contract. In the following two years to December, 1966, and December, 1967, it is expected to make £2,500 a year. Thus the £9,000 loss will be made good and it will start to make profits in 1968.
(ii) Ventilation: This company was under the management of M. Devaud. It made losses in its first and second years, 1965 and 1966, but it is expected to break even in the year 1967, and then to make profits in 1968.
The master held that the plaintiff ought to give credit for his investments in both these companies. He estimated the present value of the future profits at £1,500 in the case of Martindale and £7,500 in the case of Ventilation, and deducted those sums.
In my opinion the master was wrong in requiring the plaintiff to give credit for his investment in Ventilation. He might have invested his money in any other company and made similar profits. It is sheer speculation whether he would do better in Ventilation than in others. I realise that the plaintiff was only at liberty to invest in Ventilation because his employment was terminated. But nevertheless the benefit from that investment was not a direct result of his dismissal. It was an entirely collateral benefit, for which he need not account to his employers.
Martindale stands on a little different footing. His salary of £1,500 was very low for a man of his ability: and it looks as if he was getting, in addition, a concealed remuneration by a profit on his shares in the company. In the course of the argument Russell L.J. worked out the estimated improvement in his equity over the period from August, 1964, to March, 1967, in so far as it was due to his work. It comes to £2,066. I think that the plaintiff should give credit for that figure in addition to the actual earnings of £3,717 9d. 2d."
On the same issue, Russell LJ held as follows:
"Finally, there is the question whether any and what deduction should be made from the damage suffered on account not only of his salary earned and expected in the period from Martindale, but also on account of the undoubted fact that the expenditure of the time released to him by the wrongful dismissal has enabled him by his work and management during that time to enhance the value *301 of the half interest in Martindale that he bought for £1,500 shortly after his dismissal. I agree that account should be taken of this, though of necessity a fairly high degree of estimation is involved. The master held that in all the circumstances it was reasonable that the plaintiff should go into Martindale on the terms on which he did, rather than hawk his services around. One of the reasons for saying that it was reasonable is that avowedly the plaintiff was hoping to gain in part by improving by his own efforts the value of his holding as well as, in other part, by a relatively low salary. To the extent that this hope has been fulfilled in the relevant 2 2/3 years, it seems right to set it against his loss of salary from the defendants. "
a. The equity value in a shareholding acquired after termination may be taken into account as an aspect of mitigation;
b. However, it is only where the benefit from the investment is the direct result of the dismissal that it may be taken into account;
c. An increase in value of a shareholding where such increase had nothing to do with dismissal or which can be said to be a collateral benefit will not be taken into account;
d. The exercise of assessing the amount to take into account will involve "a high degree of estimation".
"16.
(1) The burden of proof is on the wrongdoer; a Claimant does not have to prove that he has mitigated loss.
(2) It is not some broad assessment on which the burden of proof is neutral. If evidence as to mitigation is not put before the Employment Tribunal by the wrongdoer, it has no obligation to find it. That is the way in which the burden of proof generally works: providing the information is the task of the employer.
(3) What has to be proved is that the Claimant acted unreasonably; he does not have to show that what he did was reasonable (see Waterlow , Wilding and Mutton ).
(4) There is a difference between acting reasonably and not acting unreasonably (see Wilding ).
(5) What is reasonable or unreasonable is a matter of fact.
(6) It is to be determined, taking into account the views and wishes of the Claimant as one of the circumstances, though it is the Tribunal's assessment of reasonableness and not the Claimant's that counts.
(7) The Tribunal is not to apply too demanding a standard to the victim; after all, he is the victim of a wrong. He is not to be put on trial as if the losses were his fault when the central cause is the act of the wrongdoer (see Waterlow , Fyfe and Potter LJ's observations in Wilding ).
(8) The test may be summarised by saying that it is for the wrongdoer to show that the Claimant acted unreasonably in failing to mitigate.
(9) In a case in which it may be perfectly reasonable for a Claimant to have taken on a better paid job that fact does not necessarily satisfy the test. It will be important evidence that may assist the Tribunal to conclude that the employee has acted unreasonably, but it is not in itself sufficient."
"179 The Tribunal can appreciate an argument that the Claimant's mitigation for remuneration from KLC included the dividends it was estimated he would receive. Dividends are something the Claimant received from being a shareholder and would not have been payable had he been purely an employee of the company. We can recognise, therefore, an argument that, likewise, the value of the shares he has in forming a company that forms part of his mitigation of loss should also be taken into account."
"158 The Tribunal finds that we are unable to make any sensible valuation of the Claimant's shareholding at the cut-off point we have selected for his loss of earnings (or if we were to have been taking the position as being on the Claimant's 65th birthday) including because:
158.1 Mr Wallace is not an expert witness. Although he is a qualified accountant, he has never conducted such a valuation in the period of over 20 years that he has been working for the first Respondent.
158.2 Mr Wallace's current role requires no expertise in energy and his only experience in energy was during 2002 2006. His role with the Respondent includes balancing risk and returns for work in the pipeline and interpreting financial statements for strategy purposes, but he does not have a client facing role.
158.3 Mr Wallace has no experience of running or starting up a new business.
158.4 The comparators on which Mr Wallace based his valuation of the Claimant shareholding as being 10 times its profit ratio did not appear to be comparable to KLC. As was pointed out by the Claimant in his second witness statement, Evercore is a global advisory firm founded in 1995, with 1,900 employees and a market capitalisation of $3billion; Lazard is a global advisory firm/investment bank and founded in 1848, with some 800 employees in asset management and perhaps a similar number in financial advisory globally, with a market capitalisation of $3.7million and Greenhill a company listed in 2004 with 400 employees worldwide and the market capitalisation of $240million.
158.5 Any estimate of the Claimant shareholder value by the Tribunal, whether 2 times, 10 times, 23 times or some other figure would be wild guesswork rather than being based on reliable evidence.
158.6 If there were to be a shareholder dispute at KLC and an application for sale and valuation made to the High Court, it is hard to conceive that the High Court would be satisfied with the level of evidence provided at this hearing for the size of the valuation proposed by the Respondent. In the cases provided by Ms Jolly, there was a variety of evidence provided by individuals with specialist expertise in the fields in question and expert evidence in the form of forensic accountancy evidence. None of this was provided.
158.7 We accept Ms Jolly's submission that the valuation of the Claimant's shareholding is an offset of mitigation, with the burden of proof on the Respondent to satisfy the Tribunal as to its valuation. It has not done this.
158.8 If the Tribunal were to make a wild guess as to the value of the Claimant's shareholding at the appropriate time, it would be a judicial decision with potential consequences should a future valuation of the company be required."
"34 Having regard to those authorities, I am unable to accept Mr Blake's first three submissions. The employment tribunal's task, when deciding what compensation is just and equitable for future loss of earnings will almost inevitably involve a consideration of uncertainties. There may be cases in which evidence to the contrary is so sparse that a tribunal should approach the question on the basis that loss of earnings in the employment would have continued indefinitely but, where there is evidence that it may not have been so, that evidence must be taken into account.
36 The EAT appear to regard the presence of a need to speculate as disqualifying an employment tribunal from carrying out its statutory duty to assess what is just and equitable by way of compensatory award. Any assessment of a future loss, including one that the employment will continue indefinitely, is by way of prediction and inevitably involves a speculative element. Judges and tribunals are very familiar with making predictions based on the evidence they have heard. The tribunal's statutory duty may involve making such predictions and tribunals cannot be expected, or even allowed, to opt out of that duty because their task is a difficult one and may involve speculation. Giving judgment in the leading case on loss of earning capacity, Moeliker v A Reyrolle & Co Ltd [1976] IRLR 120, an important head of damage in personal injury cases, Stephenson LJ when seeking words to define the correct approach to be followed stated, at p.144:
'I avoid "speculation" because this head of damage can really be nothing else.'
"50 I agree with Mr Jeans that it will be a rare case where it is appropriate for a court to assess compensation over a career lifetime, but that is not because the exercise is in principle too speculative. If an employee suffers career
loss, it is incumbent on the tribunal to do its best to calculate the loss, albeit that there is a considerable degree of speculation. It cannot lie in the mouth of the employer to contend that because the exercise is speculative, the
employee should be left with smaller compensation than the loss he actually suffers. Furthermore, the courts have to carry out similar exercises every day of the week when looking at the consequences of career shattering personal
injuries. Nor do I accept a floodgates argument. The job of the courts is to compensate for loss actually suffered; if in fact the court were to conclude that this required an approach which departed from that hitherto adopted, then we would have to be willing to take that step.
53 Exceptionally, a tribunal will be entitled to take the view on the evidence before it that there is no real prospect of the employee ever obtaining an equivalent job. In such a case, the tribunal necessarily has to assess the loss on the basis that it will continue for the course of the claimant's working life. Chagger is an example of such a case. By the time the tribunal came to assess compensation in his case he had already been out of a job for some years. The evidence was that he had made every effort to obtain employment in his chosen field, having made countless applications for new employment. There was a suggestion that he had been stigmatised in the eyes of other employers as a result of the manner of his dismissal. He had taken reasonable steps to mitigate his loss by going into teaching. In these circumstances the tribunal was entitled to conclude that he had suffered, permanent career damage and should be compensated accordingly. Where such a loss is established, a tribunal has to undertake that task, however difficult and speculative it may be." (Emphasis added)
a. The evidence of the Claimant himself, which the Tribunal considered to be "measured, thoughtful, concise and plausible": RJ2 [153];
b. The track record of KLC to the date of the hearing, including evidence as to salaries paid, salary sacrifices, emergency funding, retainers and success fees;
c. The strategy documents produced by KLC;
d. The Claimant's forecasts and estimates of future performance and the increased confidence in KLC by the time of the Second Remedy Hearing: RJ2 [135] and [150];
e. Mr Lovegrove's "scenarios" document and potential outcomes: RJ2 [142] to [143]; and
f. The management report produced in September 2020: RJ2 [145].
Conclusion and Disposal
a. The Liability Appeal is allowed in respect of Grounds 2 and 3 only;
b. The First Remedy Appeal is dismissed; and
c. The Second Remedy Appeal is dismissed.
"46
46.1 Proportionality must always be a relevant consideration. Here the award was for £900,000, and although we are conscious that ordering a fresh hearing in front of a different Tribunal would add considerably to the cost to parties on both sides who have already invested in solicitors and Counsel, both at the Tribunal and on appeal (in the case of the Applicants, two Counsel for the appeal), sufficient money is at stake that the question of costs would from the one point of view not offend on the grounds of proportionality and from the other not be a decisive, or even an important, factor. Similarly the distress and inconvenience of the parties in reliving a hearing must be weighed up, but (a) are rendered necessary in any event by the decision to set aside the original decision and (b) will not be greatly less by virtue of the extra time taken by a fully, rather than partially remitted, hearing, the main distress and inconvenience being caused by the matter being reopened at all.
46.2 Passage of Time. The appellate tribunal must be careful not to send a matter back to the same tribunal if there is a real risk that it will have forgotten about the case. Of course, tribunals deal with so many different cases per month that it is impossible for them to carry the facts in their minds, nor would they be expected to do so. But they can normally refresh those minds from the notes of evidence and submissions if the case occurred relatively recently. This case was a relatively long one, and will not on that basis alone have completely evanesced from the minds of the tribunal. It was only just over a year ago. That in itself is quite a long time, though the lengthy reserved decision sent to the parties on 30 July 2003 would have kept the case in the minds of the Tribunal at least until then: but in addition they have held a remedies hearing which began in October 2003, the hearing lasting until 18 December, and then required consideration in chambers' meetings in January and March, and did not result in a promulgated decision until as recently as 19 March 2004. We are satisfied therefore that the question of delay and loss of recollection is not a material factor in this case one way or the other.
46.3 Bias or Partiality. It would not be appropriate to send the matter back to the same Tribunal where there was a question of bias or the risk of pre-judgment or partiality. This would obviously be so where the basis of the appeal had depended upon bias or misconduct, but is not limited to such a case.
46.4 Totally flawed Decision. It would not ordinarily be appropriate to send the matter back to a tribunal where, in the conclusion of the appellate tribunal, the first hearing was wholly flawed or there has been a complete mishandling of it. This of course may come about without any personal blame on the part of the tribunal. There could be complexities which had not been appreciated, authorities which had been overlooked or the adoption erroneously of an incorrect approach. The appellate tribunal must have confidence that, with guidance, the tribunal can get it right second time.
46.5 Second Bite. There must be a very careful consideration of what Lord Phillips in English (at paragraph 24) called "A second bite at the cherry". If the tribunal has already made up its mind, on the face of it, in relation to all the matters before it, it may well be a difficult if not impossible task to change it: and in any event there must be the very real risk of an appearance of pre-judgment or bias if that is what a tribunal is asked to do. There must be a very real and very human desire to attempt to reach the same result, if only on the basis of the natural wish to say "I told you so". Once again the appellate tribunal would only send the matter back if it had confidence that, with guidance, the tribunal, because there were matters which it had not, or had not yet, considered at the time it apparently reached a conclusion, would be prepared to look fully at such further matters, and thus be willing or enabled to come to a different conclusion, if so advised.
46.6 Tribunal Professionalism. In the balance with all the above factors, the appellate tribunal will, in our view, ordinarily consider that, in the absence of clear indications to the contrary, it should be assumed that the tribunal below is capable of a professional approach to dealing with the matter on remission. By professionalism, we mean not only the general competence and integrity of the members as they go about their business, but also their experience and ability in doing that business in accordance with the statutory framework and the guidance of the higher courts. Employment law changes; indeed it has been a rapidly developing area of the law. Employment tribunals are therefore all too familiar with the need to apply a different legal approach to a case today from that which they applied last year, or even last week, where the law has changed, although the cases may be on all fours as regards their facts. Some areas of employment law have not been easy, and the approach to be adopted in considering whether there has been race or sex discrimination in a case such as this is just such a matter which has understandably caused problems for tribunals. It follows that where a tribunal is corrected on an honest misunderstanding or misapplication of the legally required approach (not amounting to a "totally flawed" decision described at 46.4), then, unless it appears that the tribunal has so thoroughly committed itself that a rethink appears impracticable, there can be the presumption that it will go about the tasks set them on remission in a professional way, paying careful attention to the guidance given to it by the appellate tribunal."
a. Proportionality The size of the claim and the award in this case means that it would not necessarily be disproportionate to remit to a freshly constituted tribunal, if it were otherwise appropriate to do so.
b. Passage of Time We do not accept Mr Carr's submission that the passage of time since the LJ renders it unrealistic for the Tribunal to be able to assess the necessary issues on remittal. Whilst it will be nearly 4 years since the original Liability Hearing, the Tribunal made extensive and detailed findings of fact which it can use to refresh its memory. Moreover, the Tribunal has already had to refresh its memory on two separate occasions since the LJ: first when considering RJ1; and second, in November 2020, when considering RJ2. Thus, this is not a case where the Tribunal has not turned its mind to the matter for years. Even though the RJs raised distinct issues, we note that in both judgments, the Tribunal did, as one would expect, refer back to aspects of its findings in the LJ and based its judgments on remedy on those findings. We note that the Judge did state, in July 2021, that his recollections were "a great deal less fresh than they would have been nearer the time" and that he could not remember a particular item of evidence about which he was asked. However, those difficulties, which are to be expected, are not such as to render the task of reconsidering the narrow issues on remittal unreasonably challenging for this experienced Tribunal.
c. Bias or Partiality We agree with Ms Jolly that there is no real risk of bias or partiality here. The Claimant did not succeed on all of his claims, and it is evident that the Tribunal approached its task in a fair and balanced way. Mr Carr relies on the apparent decision by one of the Lay Members to recuse themselves from another subsequent case involving the First Respondent because of a "conflict of interest" arising out of their involvement in another Citi case. The Respondents "understand" that other case to be this one. However, there is no firm indication of that, and there appears to be a degree of speculation as to the precise basis on which the Lay Member decided upon recusal. Even if it is the involvement in this matter that caused the Lay Member concern, it would not follow that the fair minded independent observer would consider that there was any real risk of bias in the Lay Member revisiting a case in which they had already been involved. In any case, if there is an issue in this regard, the Lay Member would have the opportunity to raise it if they so wish; that would be preferable to the EAT seeking, on the basis of incomplete information, to pre-empt what course the Lay Member might wish to take;
d. Totally Flawed Decision The LJ was not, on any view, "totally flawed". Whilst we have found that the Tribunal did not properly address the second stage of the Igen v Wong test, perhaps because of an over-reliance on the finding as to Mr Falco's remark, we remain confident that the Tribunal would be able to complete that aspect of the analysis with the guidance of this judgment.
e. Second Bite We do not consider that the Tribunal is irrevocably wedded to its conclusions such that it would not be willing or able, having properly considered those matters omitted from its analysis on the first occasion, to come to a different conclusion, if so advised.
f. Professionalism There is no doubt about the Tribunal's professionalism. The only point raised by Mr Carr in this regard is as to the Lay Member's position. However, for reasons already discussed under (c) above, we do not regard that as a difficulty in this case.