Aylott v Stockton-on-Tees Borough Council

The Court of Appeal considered whether the Employment Tribunal had correctly applied the Disability Discrimination Act 1995 (as amended) to the claimant's dismissal. The claimant had pleaded direct discrimination under s3A(5), disability-related discrimination under s3A(1) and breach of the duty to make reasonable adjustments under s4A, together with harassment under s3B (and an award for unfair dismissal under the Employment Rights Act).

The court held that the Employment Tribunal was entitled to find that the dismissal was direct discrimination because there was evidence from which it could infer that the Council made assumptions and reacted on stereotypical views of the claimant’s mental illness; those assumptions were operative in the detrimental treatment that led to dismissal. The court rejected the Employment Appeal Tribunal’s criticisms about the comparator selection, the burden of proof and the adequacy of reasons in respect of the direct discrimination finding.

The court also held that the approach in Novacold was overruled by the House of Lords in Malcolm and that Novacold no longer represents good law for disability-related discrimination (s3A(1)). The court accepted that the reasonable adjustments duty in s4A can be engaged in the context of dismissal in appropriate cases. The Court of Appeal allowed the claimant’s appeal on direct discrimination, dismissed the appeal on the disability-related point, and restored the Employment Tribunal’s award of compensation.

The claimant, Mr Russell Aylott, a disabled employee (bipolar affective disorder), brought claims against his employer, Stockton-On-Tees Borough Council, for direct discrimination (s3A(5) DDA 1995), discrimination for a reason related to disability (s3A(1)), failure to make reasonable adjustments (s4A), and harassment (s3B). The Employment Tribunal (after a 10-day hearing and findings of fact) found for the claimant on all discrimination claims and awarded compensation and unfair dismissal damages. On intermediate appeal the Employment Appeal Tribunal held that the Employment Tribunal had erred in law on most discrimination points and remitted the discrimination claims for rehearing, preserving the unfair dismissal award.

The Court of Appeal heard the claimant's appeal from the EAT decision. The central issues identified by the court included: (i) the correct selection and role of a hypothetical comparator in direct discrimination claims under s3A(5); (ii) the proper application of the burden of proof; (iii) whether the decision in Novacold remained good law after the House of Lords' decision in Malcolm (impacting s3A(1)); (iv) the scope of the duty to make reasonable adjustments under s4A and whether dismissal can be within that concept; and (v) causation for the award of compensation for an exacerbation of the claimant's condition.

The Court of Appeal analysed the Employment Tribunal’s factual findings and legal reasoning. On direct discrimination the court concluded that the Employment Tribunal had adequate evidence and reasoning to infer that stereotypical assumptions about the claimant’s mental illness influenced the Council’s treatment and dismissal of him; the chosen hypothetical comparator (someone with a similar sickness absence but not the disability) was a choice reasonably open to the tribunal and the burden of proof had not been misapplied. On disability-related discrimination under s3A(1) the court accepted the EAT’s and House of Lords’ analysis in Malcolm that effectively overruled Novacold; accordingly the Employment Tribunal’s reliance on Novacold was error for that head. The court noted that the Equality Act 2010 (s15) would, for future cases, reframe the law on discrimination arising from disability. On reasonable adjustments (s4A) the Court of Appeal accepted that the duty can, in principle, encompass dismissal as an aspect of an employer’s practice where appropriate and that the Employment Tribunal’s findings identified potential adjustments (for example, phased return and one-to-one support) that were relevant. On causation, the court found the Employment Tribunal was entitled to attribute 50% of the claimant’s exacerbation to employment factors and upheld the compensation awarded. The court allowed the appeal on direct discrimination, dismissed the claimant’s appeal on the disability-related point, set aside the EAT order and restored the original compensation award by the Employment Tribunal.

This was an appeal from the Employment Appeal Tribunal. The Court of Appeal allowed the claimant’s appeal in part: it upheld the Employment Tribunal’s finding of direct discrimination under s3A(5) because there was evidence from which the tribunal could infer that stereotypical assumptions about the claimant's mental illness influenced the treatment and dismissal; it held that Novacold had been overruled by the House of Lords in Malcolm so the Employment Tribunal erred in following Novacold on s3A(1) (disability-related discrimination); it accepted that s4A can encompass dismissal in appropriate circumstances and upheld the Employment Tribunal’s approach to reasonable adjustments and causation. The Court of Appeal restored the Employment Tribunal’s award and set aside the EAT order remitting the discrimination claims insofar as inconsistent with this judgment.

Employment Tribunal decision registered 26 June 2008 (claimant found in favour on discrimination and awarded compensation and unfair dismissal). Employment Appeal Tribunal allowed employer's challenge, describing the ET decision as flawed and remitted discrimination issues by judgments dated 28 November 2008 and 11 March 2009. Permission to appeal to the Court of Appeal was granted (Rimer LJ). This Court (Court of Appeal) handed down judgment [2010] EWCA Civ 910 allowing the claim in part and restoring the ET compensation award.