Madarassy v Nomura International Plc

Under section 63A(2) of the Sex Discrimination Act 1975, the claimant must first prove facts from which a reasonable tribunal could conclude that unlawful discrimination occurred. A difference in protected status and treatment establishes only a possibility of discrimination and is insufficient without more.

At that first stage, the tribunal may consider all relevant evidence, including rebuttal evidence from the respondent. It must not treat the absence of an adequate explanation as material until the second stage. If the statutory threshold is met, the respondent must prove a non-discriminatory explanation.

A hypothetical male comparator may properly assist in identifying the reason for treatment of a pregnant employee, although it has no place in a dismissal based on pregnancy itself. A risk assessment under regulation 16 requires a potential risk to health or safety.

Ms Madarassy, a senior banker employed by Nomura International Plc, brought claims of sex discrimination, victimisation and unfair dismissal following her redundancy after pregnancy and maternity leave. The Employment Tribunal upheld only her complaint concerning a health and safety risk assessment.

On appeal, the Employment Appeal Tribunal dismissed her sex-discrimination appeal except for two allegations remitted for review, allowed Nomura’s cross-appeal on the risk-assessment complaint, and remitted that issue to the same tribunal. Its judgment was given under UKEAT/0326/03/ILB.

Before the Court of Appeal, the principal issue was the construction and application of section 63A(2) of the Sex Discrimination Act 1975, including whether the Tribunal had wrongly applied the burden of proof. Further issues concerned pregnancy discrimination, limitation, the risk assessment, remittal, review and costs.

1. Appeal dismissed. The Employment Tribunal did not misdirect itself on the burden of proof. Section 63A(2) of the Sex Discrimination Act 1975 requires a two-stage analysis. At the first stage, the claimant must prove facts from which a reasonable tribunal could conclude, on the balance of probabilities and absent an adequate explanation, that unlawful discrimination occurred. A mere difference in status and treatment establishes only a possibility of discrimination.

2. Applying Igen v. Wong [2005] EWCA 142, the court held that all relevant evidence may be considered at the first stage, including evidence from the respondent that the alleged act did not occur, that the comparison is not like with like, or that the treatment was not on a prohibited ground. The respondent’s adequate explanation is material only at the second stage. If the claimant establishes a prima facie case, the respondent must prove a sufficient non-discriminatory explanation.

3. The Tribunal had permissibly used a hypothetical male comparator in determining whether the claimant’s treatment was caused by pregnancy or by another reason. Webb v. EMO Air Cargo (UK) Ltd (No 2) [1995] ICR 1021 establishes that no comparator is needed where dismissal is for pregnancy itself. It does not prevent a comparator from being used for other alleged treatment of a pregnant employee.

4. The Court upheld the conclusion that the Tribunal had made no error on limitation, and that the Employment Appeal Tribunal had properly remitted the limited issues to the same Tribunal for review. The original Tribunal’s knowledge of the extensive evidence, together with the confined scope of the remission, made that course proportionate and did not create a real possibility of apparent bias.

5. On the health and safety issue, the Employment Tribunal had erred in finding a duty under regulation 16 of the Management of Health and Safety at Work Regulations 1999 without an evidential finding that the work could involve a risk to the health or safety of the expectant mother or her baby. Discomfort alone was insufficient. The remittal of that issue therefore stood.

6. The application for permission to appeal the £2,000 costs order was refused. Although a costs warning should not penalise a party for costs incurred after the warned conduct has ceased, the Employment Appeal Tribunal was entitled to find that Nomura had already incurred costs because of allegations improperly made and withdrawn only later.

• Court of Appeal (Civil Division): Dismissed Ms Madarassy’s appeal and refused permission to appeal the costs order: [2007] EWCA Civ 33 .
• Employment Appeal Tribunal: Dismissed the appeal except for two sex-discrimination allegations remitted for review; allowed Nomura’s cross-appeal on the health and safety risk-assessment complaint and remitted that issue to the same Tribunal: UKEAT/0326/03/ILB.
• Employment Tribunal: Upheld only the risk-assessment complaint and dismissed the remaining discrimination, victimisation and unfair-dismissal claims.