Munchkins Restaurant Ltd & Anor v. Karmazyn & Ors

An Employment Tribunal’s findings of persistent unwanted sexual harassment and constructive unfair dismissal will not be disturbed on perversity grounds where they are supported by credible evidence and explained by the Tribunal’s assessment of the witnesses and circumstances. Reasons need not recite every item of evidence, provided the parties can understand the findings and why the issues were decided. Jurisdictional time issues should ordinarily be determined when liability is decided, but an appeal will not succeed where later determination causes no injustice. Joint and several liability may be imposed where the respondents were jointly responsible for the wrong. Compensation for notice-period loss must follow common-law principles of loss and mitigation. An award of aggravated damages requires clear findings identifying conduct beyond a legitimate defence and the hurt caused by it.

Four waitresses employed at a London restaurant brought claims under the Sex Discrimination Act 1975, including sexual harassment, and one claimant brought a claim under the Employment Equality (Sexual Orientation) Regulations 2003. They also claimed constructive unfair dismissal. The Employment Tribunal upheld the claims against the company and its controlling director, finding persistent unwanted sexualised conduct and responsibility under section 42 of the 1975 Act.

Following a remedies hearing, the Tribunal made awards for injury to feelings, notice-period wages and aggravated damages. The respondents appealed against liability and remedy, alleging perversity, inadequate reasons, improper treatment of time-limit issues, excessive or undifferentiated compensation, and unlawful joint and several liability.

1. Liability appeal dismissed. The Employment Tribunal was entitled to accept the waitresses’ evidence that the sexualised conduct was unwanted. Their having remained in employment, or sometimes initiating sexual conversations, did not make the conduct welcome. The Tribunal gave a rational explanation based on the claimants’ circumstances, including financial and employment pressures, fear of losing work, and the protective role formerly played by an assistant manager.
2. The Tribunal’s findings were not perverse. The existence of discrepancies or evidence capable of supporting another conclusion did not make its conclusions wholly impermissible. The approach was consistent with Yeboah v Crofton [2002] EWCA Civ 794.
3. Reasons need not identify every witness or detail every item of evidence. They must make the material findings and the reasons for the decision sufficiently clear. Evidence which was merely corroborative did not require separate attribution where its substance had been addressed. The Tribunal satisfied that standard, applying Martins v Marks and Spencer [1998] IRLR 326.
4. Although jurisdictional time-limit issues should ordinarily be determined as part of liability, postponing them to the remedies hearing was not, in this case, an error requiring appellate intervention. The Tribunal ultimately found continuing conduct and no injustice resulted.
5. The Tribunal was entitled to make a joint and several award against the company and Mr Moss. The claimant was entitled to recover the full damages from either respondent, leaving any contribution issue to be resolved between the respondents. The Tribunal’s reasons sufficiently explained the joint responsibility. The EAT expressed very considerable doubts about the contrary reasoning in Way and Another v Crouch [2005] IRLR 603.
6. The appeal succeeded in relation to notice-period wages. Following Stuart Peters Ltd v Bell [2009] EWCA Civ 938, damages for breach of contract depended on common-law principles of loss and mitigation.
7. The aggravated-damages awards were remitted to the same Tribunal. It had not identified precisely what conduct by the respondents’ representative was high-handed, insulting, oppressive, inappropriate or excessive, nor sufficiently linked that conduct to the additional hurt or the sums awarded. The Tribunal was directed to consider whether the matter was properly one for costs and, if aggravated damages were justified, to assess only hurt caused by conduct exceeding legitimate and robust advocacy.

• Employment Tribunal, London (Central): Liability decision with written reasons delivered on 24 March 2009. The Tribunal upheld claims for sex discrimination, harassment, sexual-orientation discrimination and constructive unfair dismissal.
• Employment Tribunal, London (Central): Remedies decision with written reasons delivered on 19 May 2009. Awards included injury to feelings, notice-period wages and aggravated damages.
• Employment Appeal Tribunal: Liability appeals dismissed. Appeals concerning notice-period wages and aggravated damages allowed. The aggravated-damages issue was remitted to the same Tribunal.