Weathersfield Ltd v Sargent

An employee is treated on racial grounds where an employer requires the employee to implement a racially discriminatory policy against third parties. The racial characteristics need not be those of the employee. The appropriate comparator is an employee who would obey the unlawful instruction.

An employee may accept an employer’s repudiatory breach by leaving employment without immediately communicating the true reason. Communication is evidence of acceptance, not an inflexible legal requirement. The tribunal must determine from all the employee’s acts, conduct and surrounding circumstances whether the employee left because of the breach. Silence may make that finding harder, but does not preclude constructive dismissal.

The employer instructed a newly appointed receptionist to refuse vehicle rentals to black and Asian customers. She found the policy unacceptable, left after two working days and explained her reason by letter several days later.

The industrial tribunal found that the instruction caused her resignation, amounting in substance to constructive dismissal. It held that she had suffered unlawful direct discrimination under sections 1(1)(a) and 4(2)(c) of the Race Relations Act 1976, and awarded the agreed sum of £5,000. The Employment Appeal Tribunal dismissed the employer’s appeal.

The employer appealed on two questions: whether treatment arising from the race of third parties was treatment “on racial grounds”, and whether constructive dismissal required the employee to communicate her reason for leaving at the time of departure.

1. Appeal dismissed unanimously. Pill LJ delivered the leading judgment. Swinton Thomas LJ agreed with his reasoning and gave additional reasons; Beldam LJ agreed.

2. The words “on racial grounds” in section 1(1)(a) of the Race Relations Act 1976 are capable of covering treatment based on the race of either the person treated or another person. The different wording governing indirect discrimination in section 1(1)(b), and the reference to a complainant’s sex in section 1(1)(a) of the Sex Discrimination Act 1975, did not require a narrower construction. Pill LJ approved the reasoning in Showboat Entertainment Centre Ltd v Owens [1984] ICR 65. Requiring an employee to carry out a racially discriminatory trading policy was treatment on racial grounds.

3. The proper comparison was between the employee who refused to implement the unlawful policy and an actual or hypothetical employee who would obey it. The instruction and resulting loss of employment therefore constituted less favourable treatment and a detriment within section 4(2)(c).

4. An employee’s acceptance of a repudiatory breach need not, as a matter of law, include contemporaneous communication of the true reason for leaving. Acceptance will usually consist of leaving and explaining why, but the tribunal must determine from all the employee’s acts, conduct and surrounding circumstances whether the breach was the true cause of departure. A failure to give the reason may make proof more difficult, particularly where another plausible reason was given, but it does not bar a finding of constructive dismissal.

5. To the extent that Holland v Glendale Industries Ltd [1998] ICR 493 stated that constructive dismissal was impossible unless the employer was told or knew the true reason, it was erroneous. Norwest Holst Group Administration Ltd v Harrison [1985] ICR 668 concerned the absence of unconditional acceptance before the repudiation was withdrawn; it did not establish a general communication requirement.

6. The tribunal was entitled to find that the unlawful instruction caused the employee to leave. Her prompt departure, subsequent written explanation and the absence of any alternative reason supported acceptance of the repudiatory breach. The appeal was dismissed with costs, and leave to appeal to the House of Lords was refused.

• Court of Appeal: The employer’s appeal was dismissed unanimously, with costs. Leave to appeal to the House of Lords was refused.
• Employment Appeal Tribunal: On 6 June 1997 it dismissed the employer’s appeal from the industrial tribunal.
• Industrial tribunal: It found unlawful racial discrimination and that the unlawful instruction had caused the employee to resign. Compensation had been agreed at £5,000.