Hayes v Charman Underwriting Agencies Ltd

In a sex-discrimination claim, an employment tribunal must apply the statutory questions under sections 1(1)(a) and 6(2)(a) of the Sex Discrimination Act 1975. It must assess all the surrounding circumstances relied on by the claimant, including circumstances capable of indicating subconscious discrimination. The credibility of the employer’s explanation is relevant, but it cannot be treated as the sole or determinative factor. A tribunal errs in law if it decides the case principally by accepting one witness’s honesty without properly considering the wider evidential context.

The claimant was employed by the defendant from 1986 until her resignation in July 1998. She alleged sex discrimination and constructive dismissal after male employees received shares under an earn-out scheme while she was absent on maternity leave.

The Employment Tribunal dismissed her claims on the basis that the chairman was an honest witness and had allocated shares according to merit and business considerations. The Employment Appeal Tribunal allowed her appeal, finding errors of law in the tribunal’s approach to the statutory test and the drawing of inferences from the surrounding circumstances. The defendant renewed its application for permission to appeal.

1. The renewed application for permission to appeal was refused. The Employment Appeal Tribunal had correctly identified errors of law and had properly remitted the complaints to a fresh Employment Tribunal.
2. Under sections 1(1)(a) and 6(2)(a) of the Sex Discrimination Act 1975, the tribunal had to address the statutory questions directly. It was required to consider the surrounding circumstances relied on by the claimant when deciding whether the difference in treatment was related to sex.
3. The approach described in King v Great Britain-China Centre [1991] IRLR 513 had been misapplied. The Employment Tribunal had paraphrased the guidance in a way that led it to focus on whether the chairman’s evidence was credible, rather than examining the evidential circumstances calling for an explanation.
4. The principles in Anya v University of Oxford [2001] IRLR 377 illustrated the correct approach. The fact that the chairman was regarded as an honest witness was important, but it was not the sole and determinative factor. The tribunal also had to consider the possibility of subconscious discrimination, for which direct evidence would ordinarily be unusual.
5. The case was therefore to be reheard by a fresh Employment Tribunal applying the correct approach.

1. Court of Appeal (Civil Division): renewed application for permission to appeal refused on 4 March 2002.
2. Employment Appeal Tribunal: appeal allowed on 19 December 2001; errors of law identified in the Employment Tribunal’s reasoning and the complaints remitted for a fresh hearing.
3. Employment Tribunal: claims for sex discrimination and constructive dismissal dismissed on 19 November 1999.