De Souza v Automobile Association

Racial abuse constitutes a detriment in employment only where the conduct places the employee at a disadvantage in the circumstances in which the employee must work. The assessment asks whether the employee and a reasonable worker in the same position would or might regard the working circumstances as disadvantageous. Distress caused by an isolated insult is insufficient by itself.

A discriminatory working environment may satisfy this standard even without dismissal, disciplinary action, transfer or constructive dismissal. An employer may be liable for conduct by any employee acting in the course of employment; the wrongdoer need not hold managerial status. An indirect insult amounts to less favourable treatment only where the speaker intended the employee to learn of it, or knew or ought reasonably to have anticipated that result.

The appellant, a black secretary-personal assistant employed by the Automobile Association, alleged racial discrimination concerning her working arrangements, remuneration and exclusion from a staff lunch. The Industrial Tribunal rejected those complaints. It nevertheless found that someone in her department had referred to her using a racial insult, although it could not determine who spoke the words or whether she overheard them.

The Employment Appeal Tribunal treated the insult as a complaint in its own right because the appellant had appeared before the Industrial Tribunal without representation. It dismissed her appeal on the ground that the remark, even if overheard, could not constitute an employment detriment.

The central issue before the Court of Appeal was whether an employee who learned that a racial insult had been used about her had suffered less favourable treatment and an “other detriment” under sections 1(1)(a) and 4(2)(c) of the Race Relations Act 1976.

1. Appeal dismissed unanimously. Lord Justice May delivered the judgment, with which Lord Justice Slade and Lord Justice Neill agreed. The findings of the Industrial Tribunal were insufficient to establish either less favourable treatment or an employment detriment. The incident could not be reopened and remitted for further evidence.

2. For section 4(2)(c) of the Race Relations Act 1976, “detriment” means a disadvantage in the employee’s working circumstances. The tribunal must consider whether the employee and a reasonable worker in the same position would or might regard the conduct as placing the employee at a disadvantage. Racially insulting an employee is therefore insufficient by itself, even where the insult causes distress.

3. A disadvantageous working environment can constitute a detriment without any dismissal, disciplinary sanction, enforced transfer or constructive dismissal. It is also immaterial that the employee remains at work and tolerates the harassment. To the extent that Porcelli v Strathclyde Regional Council [1985] I.C.R. 1977 confined detriment to contractual consequences of that kind, its approach was too narrow.

4. Under section 32(1), discriminatory conduct by any employee acting in the course of employment is treated as conduct by the employer. Liability is not confined to acts of managers or delegates exercising employment powers. Section 32(3) provides the employer with a defence where it proves that it took all reasonably practicable preventive steps.

5. An employee is not “treated” less favourably through an insult used in a conversation outside her presence unless the speaker intended her to overhear it, or knew or ought reasonably to have anticipated that it would be communicated to her or otherwise come to her attention. The Industrial Tribunal had made no sufficient finding to that effect.

6. The tribunal’s observation that the remark demonstrated racial prejudice did not establish that the appellant or a reasonable secretary in the same position had been disadvantaged in her working conditions. If intended as such a finding, it lacked evidential support. The complaint therefore necessarily failed. The appeal was dismissed with costs, and leave to appeal to the House of Lords was refused.

1. Court of Appeal: Dismissed the employee’s appeal with costs. It refused leave to appeal to the House of Lords.

2. Employment Appeal Tribunal: On 25 October 1984, dismissed the employee’s appeal. It held that the racial expression used about her, even if overheard, could not properly be described as a detriment.

3. Industrial Tribunal: On 12 January 1984, by an order registered on 18 January 1984, held that the complaint under section 4 of the Race Relations Act 1976 was not well-founded.