Khan & Anor v The Home Office

This is the judgment of the court.

Mrs Marti Khan and Mrs. Iris Odette King (the applicants) seek permission to appeal from a decision of the Employment Appeal Tribunal (the EAT) in a constitution chaired by His Honour Judge McMullen QC and dated 17 November 2006. The EAT had allowed in part the applicants’ appeal from a decision of the Employment Tribunal for London Central (the Tribunal) in which the applicants had been the claimants and their employer, the Home Office had been the respondent. The Tribunal’s reserved decision, which runs to some 139 paragraphs and followed a hearing lasting in all some 16 days, was signed by the Chairman on 15 November 2005 and sent to the parties on the following day. There had been an earlier hearing of the applicants’ claims in September 2004 before a different Tribunal. This had been aborted after 8 days, and was the subject of an order for costs against the Home Office, which the EAT overturned. The litigation itself had begun in December 2002.

As a consequence of the Tribunal’s decision sent to the parties on 16 November 2005 and the consequential appeal to the EAT there was a remedies hearing before the Tribunal between 16 and 23 February 2007, which resulted in a reserved decision sent to the parties on 9 March 2007. We understand that this decision is currently the subject of an appeal to the EAT by the respondent, which is due to be heard on 4 December 2007.

We mention these matters for two principal reasons. The first is to underline the length and complexity of the proceedings. The second is to urge the parties – even at this very late stage - to use their best endeavours to bring this lengthy and undignified litigation to either a negotiated or mediated conclusion. We do not know if the applicants have the resources to engage the Court of Appeal mediation scheme: we frankly doubt it. But, as the Tribunal pointed out, the respondent to this appeal has very substantial resources, and in our judgment these would be best applied in a genuine attempt to resolve this litigation by agreement.

That said, our task is, of course, to decide the issue before us. The applicants’ application for permission to appeal to this court came on for oral hearing on 24 October 2007 (not on notice to the respondent) pursuant to an order of Sir Henry Brooke dated 6 August 2007. Having considered the application on paper, Sir Henry adjourned it to be heard without notice in court in a two judge constitution. Sir Henry gave the following reasons for taking this course: -

Both before the Tribunal and in the EAT, the applicants were represented by Mr. Imtiaz Aziz, an employment consultant. We permitted him to advance the applicants’ case on 24 October. We are grateful to Mr. Aziz for the clarity and realism of his presentation.

In order to put our decision in context, it is necessary to attempt a summary of the proceedings, albeit that it will be in very broad terms, and that the question of the appellants’ re-instatement in the respondent’s employment (ordered at the remedies hearing on 23 February 2007) is currently the subject of an outstanding appeal by the respondent to the EAT. In essence, however, the position appears to be as follows.

The applicants are interpreters of Asian origin. Their position within the respondent’s organisation was highly unusual. They were two of only three specialist interpreters employed by the respondent under contracts of employment. The third has retired. The applicants began their employment in 1979 and 1985 respectively. For a number of years now, the need for interpreting services has been met by the respondent engaging freelance interpreters.

The applicants were dismissed by the respondent as redundant on 4 February 2005. The case can be seen, we think, in broad terms from the applicants’ perspective as their attempts to assert their rights and to be given work commensurate with their skills; and from the respondent’s perspective as the attempt over the years to resolve the applicants’ anomalous employment status.

The form which the litigation has taken has been a series of complaints by the applicants of sex and race discrimination (both of less favourable treatment and victimisation) not only in the manner in which their various grievances were handled by the respondent, but in the manner in which they were dismissed. Added to these allegations were claims for breach of contract, harassment and being subjected to a detriment for having made protected disclosures.

Before the Tribunal, the applicants achieved a measure of success. They succeeded in only one out of four complaints on their breach of contract claim. They were found to have been unfairly dismissed within section 98 of the Employment Rights Act 1996 (ERA 1996) (although not within the procedural fairness provisions of section 98A or the protected disclosure automatically unfair provisions of section 103A). They were also found not to have been subjected to a detriment within ERA 1996 section 47B. In relation to the grievances which they had raised against the respondent, they succeeded in establishing less favourable treatment on the grounds of both sex and race, but failed in their other claims of sex and race discrimination, victimisation, harassment and indirect discrimination. They were awarded the sum of £4,500 each by way of costs in relation to the abortive hearing to which we have referred.

In the EAT, the applicants improved their position to an extent, although the respondent’s appeal against the costs order was allowed, and the order for costs discharged. The applicants, as we understand it, do not seek permission to appeal against the EAT’s order in this regard. The EAT decided that the applicants’ dismissals were automatically unfair within ERA 1996, section 103A, and also concluded in relation to one of the applicants’ breach of contract claims (which they described as a “new point”) that the applicants were entitled to be paid a shift allowance.

At the remedies hearing held between 16 and 23 February 2007 (with the decision promulgated on 7 March 2007) the Tribunal made an award relating to the shift allowance; ordered, pursuant to ERA 1996 section 113, that the respondent re-engage the applicants on specified terms; and made various other financial awards consistent with the outcome before the Tribunal and the EAT, including the sum of £18, 750 for injury to feelings consequent upon their having been subjected to the acts of race and sex discrimination found by the Tribunal. That figure was made up as to £15,000 being the basic award, with a 25% uplift under section 31(3) of the Employment Act 2002. Their claims under other heads of compensation were refused, as were their applications for a preparation time order and a wasted costs order.

As filed, the appellants’ notice dated 7 December 2006 against the EAT decision runs to some 89 paragraphs, and was accompanied by a skeleton argument of some 30 pages and 132 paragraphs. It was against this background that Sir Henry Brooke’s order was made, and for the purposes of the hearing before us, Mr. Aziz produced a short and cogently argued skeleton, which he helpfully amplified in oral argument.

As we understand the matter, Mr. Aziz asserts that the Tribunal made errors of law in four material aspects of the claim, which the EAT has failed to rectify. They are in the following areas: (1) pay; (2) the applicants’ dismissals; (3) the placement of the applicants on special leave; and (4) the question of payments under the Civil Service Compensation Scheme (CSCS). Bound up with each heading is the manner in which both the Tribunal and the EAT dealt with allegations of race and sex discrimination. In relation to pay, and for the avoidance of doubt, Mr. Aziz accepts the EAT’s finding that it was a detriment not to make the shift allowance available to the applicants during their period of special leave – see paragraph 77 of the EAT decision.

Mr. Aziz’s overarching submission, as we understood it, related to the manner in which both the Tribunal and the EAT had applied the burden of proof provisions in section 54A of the Race Relations Act 1976 and section 63A of the Sex Discrimination Act 1975 and the two stages process as explained by this court in Igen Ltd v Wong [2005] ICR 931.

Mr Aziz’s submission was that the applicants had plainly succeeded in passing the first stage in relation to all of the four areas identified in paragraph 15, and that absent a non-discriminatory explanation for their actions by the respondent, the Tribunal and the EAT were bound to find the complaints well founded. However, Mr. Aziz submitted that to varying degrees; (1) the respondent had not offered an explanation, and should thus not have been taken as having done so; (2) the Tribunal had substituted its own explanation for that offered by the respondent; and/or (3) the Tribunal had neither identified the respondent’s explanation nor properly explained (in terms consistent with the test applied by this court in Meek v Birmingham City Council [1987] IRLR 250) why the explanation proffered by the respondent answered the allegation made by the applicants.

In relation to pay, Mr Aziz argued that the comparators were not the free-lance translators, but other employees of the respondent who were paid in line with market rates, and who received uplifts. The applicants, he argued, were the only specialist employees of the respondent who did not receive an uplift in their pay: they therefore received less than other white / male colleagues. This was sufficient to establish race and / or sex discrimination: the applicants had met the first stage burden of proof, and both the Tribunal and the EAT needed to look to the respondent for an explanation as to why the applicants were not paid in line with market rates like other white colleagues.

Mr Aziz’s submission was that the respondent had failed to provide such an explanation and criticised paragraph 108 of the Tribunal’s reasons which asserted that the applicants did not have a contractual or other right to be paid at any higher rate, and that the market rate enhancement depended upon the establishment of a proven “business need”. That, Mr. Aziz submitted was not the explanation proffered by the respondent but had been provided by the Tribunal which had, in effect, substituted its own view for that of the respondent. This, Mr. Aziz submitted, was an error of law. The Tribunal should have found that the applicants’ claim was well founded and that the respondent had failed to come up with an explanation. The Tribunal had thus been wrong in law to find that the applicants’ claim was not made out, and should have found discrimination established. The EAT had failed to correct the error.

In relation to dismissal, Mr. Aziz’s essential point was that if the procedure which was followed by the respondent was discriminatory, it was not open to the Tribunal to hold that the dismissals were free from discrimination. Mr. Aziz criticised paragraph 78 of the EAT decision which had asserted that if “being dismissed” included both the dismissal and the process of dismissal, and if the dismissal had been founded on a genuine redundancy, there could be no discrimination. Mr. Aziz did not dispute the fact that there had been “a redundancy situation”. He argued, however, that simply because a dismissal can be for a fair reason does not stop the dismissal from being unfair.

It followed, Mr. Aziz argued, that since the respondent had not given a non-discriminatory reason for its failure to follow its own redundancy procedures, the process had been discriminatory, and both the Tribunal and the EAT should have so found.

In relation to the applicants being placed on special leave the EAT had found that this constituted a detriment: - see paragraph 77 of the EAT decision. It followed that the applicants had established less favourable treatment. The respondent had no non-discriminatory explanation for the applicants being placed on special leave. There should, accordingly, have been a finding that the actions of the respondent in his regard were discriminatory.

As to CSCS, the same approach applied. The decision to deny any CSCS payment had to be seen in the context of the respondent’s behaviour leading to the applicants’ dismissals. It followed that the decision to deny CSCS was also infected by discrimination.

Mr Aziz satisfied us that all the considerations he identified arguably had financial implications, and that a prospective appeal was not academic from the applicants’ standpoint. He submitted that these were exemplary employees, who wanted to go on working for the respondent. The decisions of both the Tribunal and the EAT both contained errors of law and were not properly explained. An appeal, he argued, would stand a reasonable prospect of success.

It is not, of course, for us at this stage, to predict the outcome of any prospective appeal. We are, however, satisfied that the points raised by Mr. Aziz are properly arguable, and that the applicants should, as a consequence, be given permission to appeal. We therefore give such permission.

If the matter is not amicably resolved, and needs to be argued out in this court, we think it would be very helpful if Mr. Aziz were to prepare an amended appellants’ notice identifying the points he wishes to argue. If he wishes to amend or expand the skeleton argument dated 10 September 2007 for the purposes of the appeal, he should do so. Both documents should be prepared, however, in good time for any hearing.

We take the view that this case warrants the attention of a court comprising three Lords Justices, and should be given a time estimate of one and a half days. In our view certainly one, and preferably two of the members of the constitution should have EAT experience. If any further directions are required, they should be addressed to Wall LJ via the court office.