ICAP Management Services Ltd v Schmidt (Practice and Procedure)

When considering whether a discrimination arising from disability claim has little reasonable prospect of success, a tribunal must address the employer’s justification case under section 15(1)(b) of the Equality Act 2010. It must assess the full alleged conduct, including repeated dishonesty, and whether dismissal was proportionate to the legitimate aim of maintaining trust and confidence.

A reasonable-adjustments amendment must identify a realistic provision, criterion or practice. A proposed PCP which recasts alleged dishonesty as mere lack of transparency is unsustainable. A tribunal may also refuse a late direct-discrimination amendment after a balanced assessment of hardship, delay, additional evidence and the claimant’s ability to pursue existing claims.

The claimant, a senior HR employee, was summarily dismissed after obtaining leave by falsely saying that her son required hospital treatment and then maintaining that account to colleagues while undergoing IVF treatment abroad. She brought claims for discrimination arising from disability, failure to make reasonable adjustments and wrongful dismissal.

An Employment Judge refused the employer’s strike-out and deposit-order applications, allowed an amendment to the reasonable-adjustments claim, and refused proposed direct disability-discrimination and pregnancy-discrimination claims. The employer appealed. The claimant cross-appealed the refusal of permission to add direct disability discrimination.

The central issues were whether the interim decisions sufficiently addressed the repeated dishonesty and justification for dismissal, whether the proposed PCP was viable, and whether the amendment discretion had been lawfully exercised.

1. Appeal allowed in part; cross-appeal dismissed. The Employment Judge erred in refusing to make deposit orders on the claims for discrimination arising from disability and wrongful dismissal. The appeal was also allowed against permission to amend the reasonable-adjustments claim.

2. There was no error in the Employment Judge’s assessment of the claimant’s case that depression may have contributed, with other factors, to her inability to think clearly and disclose the true reason for her absence. Nor was there error in treating the psychiatric evidence as capable of supporting that case at a full hearing.

3. However, the Judge’s reasoning did not materially address the repeated and embellished lies told during the week of absence. Under section 15(1)(b) of the Equality Act 2010, it was necessary to assess whether dismissal was a proportionate means of achieving the legitimate aim of maintaining an HR department whose members could be trusted. On the agreed facts, the employer had a very strong justification case. Although a full hearing was needed to assess the effect of depression, the discrimination claim had little reasonable prospect of success.

4. The same omission affected wrongful dismissal. Depression and its effect on conduct could not simply be excluded when assessing repudiatory breach. Nevertheless, the repeated dishonesty meant that the wrongful-dismissal claim also had little reasonable prospect of success.

5. The proposed reasonable-adjustments amendment failed because its PCP—that the employer ordinarily characterised a lack of transparency about absence as dishonesty—did not reflect the case. The employer had treated the conduct as dishonesty, not merely non-disclosure. The amendment advanced an unrealistic case distinct from the section 15 claim and should have been refused.

6. The refusal of the direct-disability-discrimination amendment disclosed no error of law. Applying the Selkent principles, the Employment Judge was entitled to weigh the late new cause of action, additional inquiries and witnesses, comparator evidence, and the claimant’s ability to continue her existing claims. Deposits of £500 were ordered for each of the two remaining matters.

• Employment Appeal Tribunal: Appeal allowed in part and cross-appeal dismissed. The Tribunal substituted deposit orders and refused the reasonable-adjustments amendment.
• Employment Tribunal, London (Central): By judgment dated 28 August 2013, Employment Judge Grewal refused strike-out and deposit orders, allowed a reasonable-adjustments amendment, and refused proposed direct disability-discrimination and pregnancy-discrimination claims.