Secretary of State for Work & Pensions (Jobcentre Plus) v McCarthy

In a discrimination appeal, an Employment Tribunal need not treat the hypothetical-comparator question as confined to the initial stage of the burden-of-proof inquiry. It is permissible to consider comparator evidence when assessing whether the employer has provided an adequate, non-discriminatory explanation.

An appellate tribunal must apply the high threshold for perversity and must not substitute its own assessment of the evidence. Where there is evidence from which discrimination could be inferred and the employer’s explanation is rejected on rational grounds, the finding will not be perverse merely because the appellate tribunal might have reached a different conclusion.

The Secretary of State appealed from a majority decision of the Employment Tribunal, which upheld claims of direct sexual-orientation discrimination and harassment. The adverse finding concerned the decision to interview the claimant, an openly gay male employee, before interviewing a vulnerable under-18 customer during an investigation into an alleged relationship.

The Employment Tribunal found that the claimant had established facts capable of supporting an inference of discrimination. The majority rejected the employer’s explanation that the interview sequence was justified by the customer’s vulnerability and found that stereotypical assumptions had influenced the decision. The appeal challenged the burden-of-proof approach, the treatment of the hypothetical comparator and the rejection of the employer’s explanation.

1. Appeal dismissed. The Employment Tribunal’s finding of direct sexual-orientation discrimination was not perverse.
2. An appeal based on perversity faces a very high hurdle. An Employment Appeal Tribunal must bear in mind that the Employment Tribunal heard the evidence first-hand and that an appeal on a question of law is not a retrial. The appellate tribunal must consider the legal issue in the context of the whole decision, while respecting the limits on its ability to reassess factual findings. The approach in Crofton v Yeboah [2002] IRLR 634 was applied.
3. The essential question was whether the claimant had been treated in the manner complained of on prohibited grounds. Employment Tribunals are not required to approach discrimination cases as a rigid two-stage process. It was therefore too technical to undermine the decision because the Tribunal considered how a hypothetical comparator would have been treated while evaluating the employer’s explanation rather than at the earlier stage of deciding whether the burden shifted.
4. The Tribunal had unanimously concluded that the evidence was sufficient to shift the burden to the employer to establish a non-discriminatory reason for interviewing the claimant first. The majority was entitled to reject the asserted concern for the customer’s vulnerability, having regard to the departure from established procedure, the advice received and the misinterpretation of the original concern.
5. Although the Employment Appeal Tribunal might not have reached the same factual conclusion, the majority’s conclusion was open to it on the evidence and was not irrational or perverse. The reference to Igen v Wong [2005] IRLR 258 did not establish a separate error of law.

• Employment Appeal Tribunal: dismissed the Secretary of State’s appeal from the majority decision of the Employment Tribunal.
• Employment Tribunal: upheld claims of direct sexual-orientation discrimination and harassment in relation to the order in which the claimant and the under-18 customer were interviewed.