Vernon v Azure Support Services Ltd & Ors (Sex Discrimination)

A transferee may be liable under Transfer of Undertakings (Protection of Employment) Regulations 2006 for pre-transfer harassment for which the transferor was vicariously liable. A transfer does not itself interrupt a continuing course of discriminatory conduct for limitation purposes under section 123 of the Equality Act 2010. The relevant question is when the conduct extending over a period ended.

For direct sex discrimination, a hypothetical comparator need be sufficiently similar in the relevant circumstances; it need not be a minutely exact construct. The essential inquiry remains the ground or reason for the treatment, rather than a simple but for analysis. Where the Tribunal makes sustainable findings rejecting the employer's stated explanation, an appellate court will not infer that it used the wrong test merely because it did not formulate the question expressly.

The claimant worked for Port Vale (Valiant 2001) Football Club Ltd. Her employment transferred to Azure Support Services Ltd under TUPE on 4 July 2011. A club employee harassed her before and after the transfer. She was later dismissed by Azure after allegations that she had a prohibited personal relationship with a footballer.

The Employment Tribunal upheld her direct sex-discrimination dismissal claim. It found the pre-transfer harassment to be continuing conduct, but did not find that the transferor's vicarious liability for it had transferred to Azure. The claimant appealed that omission. Azure cross-appealed the finding that the dismissal was sex discrimination, challenging both the comparator and the Tribunal's approach to the reason for dismissal.

1. The claimant's appeal was allowed and Azure's appeal was dismissed. It was conceded that, subject to limitation, the transferor's vicarious liability for harassment committed before the TUPE transfer passed to Azure under regulation 4(2) of the Transfer of Undertakings (Protection of Employment) Regulations 2006, read with section 109(1) of the Equality Act 2010.

2. Sodexho v Gutridge, [2009] ICR 1486, did not govern the limitation issue. Its equal-pay limitation regime ran from the end of the relevant employment. Under section 123 of the 2010 Act, the question was whether the conduct complained of extended over a period. The unchallenged Tribunal finding that the harassment continued until 1 October 2011 meant that the claim presented on 29 December was in time, including the pre-transfer acts.

3. Alternatively, the Tribunal was entitled to extend time on a just and equitable basis. Although the claimant had not expressly advanced that basis at the hearing, the time issue had been pleaded, she was unrepresented, and the Tribunal could properly address it. Azure's representative had an opportunity to deal with it.

4. On the dismissal claim, section 23 did not require the Tribunal to construct the particular homosexual male comparator proposed by Azure. A male employee subject to the same rumours and giving the same explanations was sufficiently similar. Whether a comparator was sufficiently similar was a factual assessment for the Tribunal.

5. The Tribunal had not adopted an impermissible but for test. It rejected Azure's factual explanation based on trust and confidence, considered the absence of action against the footballer, and found that a comparable man would not have been dismissed. Those findings permitted the conclusion that sex was the reason for the dismissal. Azure's appeal therefore failed, and it was declared liable for the pre-transfer harassment.

• Employment Appeal Tribunal: The claimant's appeal was allowed and Azure's cross-appeal was dismissed.
• Employment Tribunal, Stoke-on-Trent: In a judgment sent to the parties on 22 January 2013, the Tribunal upheld the claimant's direct sex-discrimination dismissal claim and found pre-transfer harassment, but did not hold that the resulting vicarious liability transferred to Azure.