Indigo Design Build & Management Ltd & Anor v Martinez

For direct discrimination under Equality Act 2010 section 18, the tribunal must determine the reason why the woman received unfavourable treatment. A failure to comply with a pregnancy-related statutory obligation is not automatically treatment because of pregnancy or maternity leave. Where the treatment does not implement an inherently discriminatory criterion, the tribunal must consider whether pregnancy or maternity materially influenced the alleged discriminator’s mental processes.

The ordinary burden-of-proof analysis remains applicable. A finding of direct sex discrimination may stand where the tribunal properly identifies the hypothetical comparator, draws permissible inferences, and rejects an explanation as lacking cogency and credibility.

The Employment Tribunal upheld Mrs Martinez’s claims of pregnancy, maternity and sex discrimination, unfair dismissal and unpaid wages. It later awarded compensation of £53,338.45. Indigo Design Build and Management Ltd and Mr Tank appealed the discrimination findings and aspects of remedy; they did not challenge the findings of unfair dismissal or unpaid wages.

The appeal concerned whether the tribunal had applied the correct causation test to alleged pregnancy and maternity discrimination under Equality Act 2010 section 18, whether those claims were in time, whether the sex-discrimination finding was legally sound, and whether particular compensation awards disclosed an error of law.

1. Appeal allowed in part. The findings of pregnancy and maternity discrimination under Equality Act 2010 section 18, and the associated determination that those claims were in time, were set aside and remitted to the same Employment Tribunal. The remaining appeal, including the finding of sex discrimination and the principal remedy challenges, was dismissed.

2. Section 18 requires the tribunal to ask why the claimant received unfavourable treatment. The change from the earlier statutory expression “on the grounds of” does not alter that approach. In a case involving an inherently discriminatory rule or criterion, the rule or its application may itself supply the grounds for treatment. Otherwise, the tribunal must examine whether the protected characteristic significantly influenced the alleged discriminator’s conscious or unconscious mental processes.

3. The tribunal had instead treated failures to provide pregnancy-related notification or a risk assessment, and treatment which would not have occurred had the claimant been at work, as necessarily being because of pregnancy or maternity. That was an impermissible “but for” approach. Administrative error could explain such failures without establishing the requisite discriminatory ground. The error affected all the section 18 findings, so the EAT could not preserve them.

4. The time issue had to be reconsidered because a continuing course of discriminatory conduct depended upon findings made under the correct legal test. Fuller reasoning would be required.

5. The sex-discrimination finding concerning the unresolved grievance was upheld. The tribunal had identified a suitable hypothetical male comparator and was entitled to shift the burden of proof under section 136. It could reject the employers’ explanation as insufficiently cogent or credible.

6. The awards for psychiatric injury, injury to feelings and the ACAS uplift disclosed no present error of law. The psychiatric-injury award reasonably reflected the contribution of unlawful discrimination. The tribunal had also made the necessary counterfactual assessment when awarding discrimination losses. Those awards may require reconsideration if the remitted discrimination findings change.

7. Remittal was necessary because the correct conclusion was not inevitable on the existing findings. Applying the relevant remittal guidance, the matter was remitted to the same tribunal to reconsider all section 18 issues afresh, beginning with unfavourable treatment and then the reason why it occurred.

• Employment Appeal Tribunal: Allowed the employers’ appeal only as to pregnancy and maternity discrimination and the related time ruling, and remitted those issues to the same tribunal.
• Employment Tribunal, Colchester: By a liability judgment dated 2 May 2013, upheld claims of pregnancy, maternity and sex discrimination, unfair dismissal and unpaid wages.
• Employment Tribunal, Colchester: By a remedy judgment dated 12 August 2013, awarded £53,338.45, principally as compensation for unlawful discrimination.