Canadian Imperial Bank of Commerce v Beck

In the light of the matters cited above, it is the claimant’s belief that he may have been the subject of race discrimination in contravention of section 1 of the Race Relations Act 1976.

In particular, it is clear to the claimant that when looking at the people who have had their employment terminated and those who have been allowed to remain in employment during this and previous waves of redundancy, there is a sharp distinction between how those people of Canadian nationality and/or national origin and/or who were hired in Canada have been treated by the Respondent compared to those who were not Canadian and/or were not hired in Canada. (The claimant is German and was hired in London). Had the claimant been of Canadian nationality and/or national origin and/or hired in Canada, he believes he would not have been dismissed.

To the extent that the claimant has been treated less favourably on the grounds of his non-Canadian nationality and/or national origin, such action is contrary to section 1(b) and/or 1A of the Race Relations Act 1976.

To the extent that the place where an employee is hired was treated as a provision criterion or practice affecting treatment of employees, such provision criterion or practice put the claimant and other employees of non-Canadian nationality and/or national origins at a disadvantage and could not be justified contrary to section 1(b) and/or 1A of the Race Relations Act 1976.

there would likely to be significant reduction in the marketing and structuring roles required and potentially a shift in the skills and experience required of any future roles. Management’s assessment was that only a reduced staffing would be required pending finalisation of the revised strategy for FIC and that the remainder of the roles were therefore at risk of redundancy.

Altogether I had 5 flow traders, 4-5 sales people, 3 lawyers and Darcy Hall’s Correlation team of 3 people to consider. Two of these individuals were Canadian (Darcy Hall and Milton Bonellos). One, Alex Tchernitser, was Russian but had been hired in Canada and had relocated to London. For all intents and purposes, Alex was treated as a Canadian employee.

There were several conversations with Sharon Marshall (who was Head of HR for London), Peter Letley (Head of Europe); Wayne Halenda (who was my counterpart based in Toronto) and Ron Lalonde (Vice-President Technology and Operations as well as Head of Run-Off activities). Throughout these conversations I was left with the clear impression that the Bank regarded it to be more important to look after the Canadian employees.

I remember, in particular, having a conversation with Ron Lalonde in late March when I was in Toronto talking about this subject. Ron was very senior in the Bank: he reported directly to the Chairman. I said to Ron that I sensed there was more of a moral obligation to look after Canadians based in the UK (i.e. Darcy and Milton) than the others. I cannot remember the exact words he used in response but I recall that he indicated that he agreed.

This indeed was reflected in the destiny of those that were retained by the Bank compared with those that were made redundant. Both Darcy and Milton were kept on. Further, Alex would have been offered a job in Canada had he wanted one.

all documents relating to Mr. Nsouli’s grievance and appeal. Including all handwritten interview notes and electronic correspondence between Steve Gardner and any person interviewed as part of Mr. Gardner’s investigation (including Ian Howard); and

all correspondence (either handwritten notes or email correspondence) between senior management (including Ron Lalonde) regarding the decision to offer guarantees and/or redeployment opportunities to employees of the Bank since January 2007.

we would point out that Mr. Beck’s claim relates to an allegation of direct and/or indirect discrimination in relation to the proposal to make him redundant in April 2008. The redundancy proposal which affected Mr. Beck was made by Franck Risler and Jim Meloche and the relevant correspondence has already been included within (the Bank’s) disclosure documents. Ron Lalonde was not in any way involved in this redundancy proposal and is not responsible for the conduct of the Fixed Income and Currencies Division of which Mr. Beck formed a part. We therefore do not accept that our client has any obligation to carry out a search for and/or provide any correspondence which may exist in respect of the second request.

It is the (Bank’s) position that again these documents are irrelevant to the proceedings. (Mr Beck’s) claim relates to an allegation of direct and/or indirect discrimination in relation to the proposal to make him redundant in April 2008. The redundancy proposal which affected (Mr. Beck) was made by Franck Risler and Jim Meloche and the relevant correspondence has already been included within the documents disclosed by (the Bank) in accordance with the Tribunal’s order. Ron Lalonde played no part whatsoever in the redundancy proposal affecting (Mr. Beck) and Mr. Lalonde is not responsible for the conduct of the (FIC) Division of which (Mr. Beck) formed a part. We therefore respectfully submit that (Mr. Beck’s) application should be refused.

I accept the argument of (Mr. Beck) preferring it to that of (the Bank) on both of the subject matters of the application. I do hold that the Employment Judge made an error in his approach to these documents. Careful attention should be given to them. The first relates not simply to what Mr Nsouli said in his grievance or what his grievance was about. In order to show that there is a culture of discrimination, in statutory terms that there is a provision criterion or practice, it is relevant to look at what leading lights within (the Bank) say and do. In this case, to use Mr Oudkerk's graphic imagery, (Mr Beck) appears to have found a "smoking gun" for he has found a statement by a former employee, who had occupied the senior position of Managing Director of an organ of the Bank, which supports his case as set out in the letter from (Mr Beck)'s solicitors on 27 November 2008. It was plainly enough to cause the (Bank) some anxiety for an investigation was called for and a reference has been made to the approach of Mr Steve Gardner.

It cites from a document which I am told is the Bank's response of 24 September 2008 to the allegation based upon Mr Nsouli's case that there was unfair treatment of non Canada connected people. This document has not been disclosed. An edited extract from it has been quoted. It seems to me, therefore, that that document was bound to be disclosed since it does include at least in part an admission by (the Bank) of a differential treatment of Canadians. (The Bank) is of course most anxious, as it was to Mr Nsouli, to demonstrate that there was a reason for that different treatment. In part it relates, it appears from the document, to Canada connected employees' different status under Canadian law. But doing the best I can at this stage, this at least has the makings of a prima facie case which calls for an answer from (the Bank) and in order to do that I consider that these documents are relevant. It is no answer to say that following this paper trail Mr Howard has now been summoned to appear at the Employment Tribunal and his witness statement is before me which was not before the Judge. Mr Howard may well want to look at documents. There may be other documents relating to interviews which he has had. The result of an investigation carried out by a senior officer of a bank into an allegation of unfavourable treatment of an employee who is different by race from others is one that is disclosable. If individual names are resisted on the grounds of confidentiality a redaction process can be put in place. This document relates to the allegation of differential treatment. It contains a statement by senior officers of (the Bank) and there is at least more to this than this simple extract sent by the solicitors and thus it is wrong in law not to include disclosure of all that material.

I turn then to the second request. As (the Bank's) solicitors themselves acknowledge, there is a connection between the two requests. That should say it all. Mr Ron Lalonde, the "Ron" referred to in the original email correspondence, is a senior manager and since it is acknowledged that there is a connection between the two that at least ought to be grounds for eliciting the same answer. If there has been correspondence indicating that in certain circumstances, where, for example, there is to be a shrinkage of staff, there will be a different approach taken to those Canada connected from those not, those documents should be disclosed. Lest it be said that now in the open floodwaters of employment practice a fishing expedition has now been let loose, it is simple to respond that in this case most unusually there is evidence by senior officers of (the Bank) of the differential approach to employees who are Canada connected from those who are not. It is relevant to the claim (Mr Beck) makes as is clear from the depiction of the issue by the Employment Judge.

Thus for those reasons the Judge did err when he did not make the connection which this document plainly points to and so I will allow the appeal. It is now for me to exercise my discretion. I have not been addressed in detail about it but I have been minded to order it in terms of the narrowed approach now commending itself to (Mr Beck) but I will hear further argument about that.

No difficulty having been presented in respect of an Order in the terms of bullet point one on page 102 of the bundle nor as to completion of this exercise by Wednesday 4 March at 4 pm. I will make an Order in those terms which Counsel will kindly draw up for me.

As to the second bullet point I will make the Order as sought - Friday 4 pm. Liberty is given to the parties to apply to the Employment Tribunal if difficulties emerge in relation to Mr Risler and Mr Phillips for I acknowledge that there are different circumstances attending upon them from those of the other employees or former employees who are giving evidence. It may well be that the material is easily exigible but I will give an allowance to the parties to make an application to the Employment Tribunal and to explain such difficulties as there are and I see no reason why that cannot be done by the beginning of the hearing on Tuesday. I am probably looking at the Respondent here so if you substantially complied and the other side are still not happy then you can apply for relief from sanctions and for a change in my Order I will leave that entirely to the Tribunal.

The (Bank) shall provide disclosure to (Mr. Beck) of all documents relating to Mr Aboud Nsouli’s grievance and appeal which record any comments and/or opinions and/or decisions (of individuals other than Mr. Nsouli) on the issue of race discrimination, specifically including the investigations which were carried out into Mr. Ian Howard’s comments as referred to in (the Bank’s) letter to (Mr Beck) of 4 December 2008 and the original records of Mr Ian Howard’s comments which were made during his conversation with Mr. Steven Gardner of 7 August 2008.

The (Bank) shall provide disclosure to (Mr. Beck) by list and with simultaneous provision of copies of all correspondence between Franck Risler, Richard Phillips, Ron Lalonde, Ian Howard, Peter Letley, Jim Meloche and Sharon Marshall regarding decisions to offer guarantee and/or redeployment opportunities to employees of the (Bank’s) London office (including any employees assigned to the (Bank’s) London Office) since January 2007.

The law has always recognised that it is of the greatest importance from the point of view of public policy that proceedings in the courts or before tribunals shall be fairly disposed of. This, no doubt, is why the law has never accorded privilege against discovery and inspection to confidential documents which are necessary for fairly disposing of the proceedings. What does "necessary" in this context mean? It, of course, includes the case where the party applying for an order for discovery and inspection of certain documents could not possibly succeed in the proceedings unless he obtained the order; but it is not confined to such cases. Suppose, for example, a man had a slim chance of success without inspection of documents but a very strong chance of success with inspection, surely the proceedings could not be regarded as being fairly disposed of, were he to be denied inspection.

It is clear to me that in indicating that they were not minded to issue witness summonses going to the collateral and subsidiary issue of whether other employers had been racially discriminated against, the ET were properly exercising their discretion, taking into account whether the likelihood that those subsidiary issues would affect the outcome. If the allegations as to his conduct were true, genuine and not trumped up, race was extremely unlikely to have played any part. If it was a conspiracy, as Mr Noorani says, matters might be different, but whether it was could be judged by the evidence that was called. If it were necessary to widen the ambit having heard that evidence, that was possible.

Such proactive judicial case management in the law courts becomes more and more important now that it is generally recognised that, unless the judge takes on such a role, proceedings become overlong and over costly, and efforts must be made to prevent trials being disproportionate to the issue at stake, and thus doing justice neither to the parties, to the case at point or to other litigants.

The EAT erred in law in interfering with the classic exercise of discretion by the Employment Judge in a decision which had been entrusted to the discretion of that Judge at first instance. The EAT did not identify any adequate grounds for interfering with the ET Order.

The EAT erred in law in overturning the decision of the Employment Tribunal in respect of the second request for all disclosure of “all correspondence between senior management (including Ron Lalonde) regarding the decision to offer guarantees and/or redeployment opportunities to employees of the Bank since January 2007” (i) is not relevant to the Claimant’s claim; (ii) the Claimant’s claim relates to a separate allegation of direct and/or indirect discrimination in relation to a proposal to make the Claimant redundant in April 2008; and (iii) Ron Lalonde was not involved in the Claimant’s redundancy proposal and is not responsible for the conduct of the Fixed Income and Currencies Division in which the Claimant was employed.

Judge McMullen QC erred in law when, in effect, he directed himself that (i) the change in the burden of proof since Noorani; and (ii) the difficulty in proving allegations of discrimination, were matters that the EAT was entitled to have regard to in interfering with the Employment Tribunal’s discretion. There was no basis for concluding that the Employment Tribunal had failed to take such matters into account or that those factors in any way detracted from the binding guidance on the approach to appeals against the discretionary orders of an Employment Judge set out in Noorani.

The EAT erred in law when, in effect, it directed itself that where an employee alleges a culture of discrimination (i) the employee is entitled to seek disclosure of the documents in any other grievance where an employee of the company has made an allegation of race discrimination; (ii) the employee is entitled to disclosure of any documents which he asserts may show a culture of discrimination in other parts of the business; and (iii) a tribunal which refuses disclosure will make an error of law. Those propositions are misconceived and would make disclosure in the tribunal system unworkable.

The documents which fall to be disclosed under the EAT Order are confidential. The EAT erred in law in failing to give any or any proper weight to the principle that where the documents which form the subject matter of the application are confidential the House of Lords has held that disclosure should not be ordered unless it is necessary for disposing fairly of the proceedings that the confidence be overridden, see Science Research Council v Nassé [1979] ICR 921 , at p.938B-C.

Five of the seven individuals named in the Order are no longer employed by the Bank (namely Franck Risler, Richard Phillips, Ian Howard, Peter Letley and Jim Meloche);

Four of the seven individuals are and/or were at the material time based in Canada;

In order to conduct electronic searches it will first be necessary to restore the entire mailboxes of the five individuals who are no longer employed by the Bank (Stage 1). Following the EAT Order approximately eight individuals in the Bank’s IT departments were tasked with working on the restoration of mailboxes. To date approximately 170 man hours have been spent. The work of restoring the mailboxes – as a precursor to any search – is still not complete;

Once the mailboxes have been restored it is likely that in excess of 500,000 emails will be recovered and material will need to be subjected to electronic searches (Stage 2). Given the volume of material this is likely to have to be outsourced to a third party;

A manual review of identified emails will then need to be carried out for relevance, commercial sensitivity and, if necessary, redaction of any irrelevant parts (Stage 3). Given the nature of the search and the broad category of documents covered by the EAT Order this is likely to involve the manual review of a very large number of emails and will be time-consuming and expensive;

It is highly likely that many of the emails will contain confidential and commercially sensitive information as set out in the Particulars. The emails will also contain the personal data of a large number of employees who have no involvement in the claim brought by Mr Beck.

Even if a Claimant can put forward “some credible grounds” of discrimination it did not follow that an Employment Tribunal must order disclosure of all correspondence between senior managers or that, as the EAT Judge in effect held, a Tribunal which does not order disclosure of such correspondence will thereby make an error of law;

Whether or not there are “credible grounds” is not the touchstone for disclosure. The touchstone remained necessity.

If the EAT judgment were correct in any race discrimination case involving, say, the Metropolitan Police, a Claimant would be able to insist upon disclosure of unrelated correspondence between senior officers, in unrelated cases, on the grounds that there was a credible case of institutional racism which the Claimant wished to prove;

The “credible grounds” relied upon by the EAT Judge consisted principally of an email dated 7 August 2008 (from an ex-employee of the Bank) and an unsigned witness statement from the same ex-employee who, according to the unsigned statement, makes a complaint about the circumstances of his own redundancy from the Respondent. There is no principle that where a Claimant puts forward an unsigned witness statement from an ex-employee of the Respondent the Claimant is entitled to wide-ranging disclosure in relation to matters which are not directly relevant to the Claimant’s claim.

In any event, notwithstanding the EAT’s direction to itself that “it is relevant to look at what leading lights with the Bank say” (Judgment at paragraph 18 referring to Mr Howard):