ZEB v Xerox (UK) Ltd & Anor

An Employment Tribunal should not strike out a discrimination claim under Rule 37 where the reasons for the alleged less favourable treatment form part of a critical core of disputed facts requiring investigation at a full hearing. Although a difference in treatment and protected characteristic alone will not ordinarily justify an inference of discrimination, unexplained unreasonable treatment or an unexplained poor relationship may do so when combined with those matters.

Where a claim is weak but not hopeless, a deposit order may be the proportionate alternative to strike-out. A new argument on appeal will be permitted only in exceptional circumstances, especially where it would require factual issues that were not investigated below.

The Claimant brought two appeals from preliminary decisions of the Employment Tribunal. In the first, Employment Judge Forrest struck out claims of direct race, sex, and religion or belief discrimination arising from restructuring, the absence of meaningful alternative work, and subsequent redundancy selection. The Judge made a deposit order in the alternative.

In the second, Employment Judge Rogerson dismissed as time-barred victimisation complaints concerning five unsuccessful redeployment applications. At the appeal stage, the Claimant sought to contend that the decisions formed an act extending over a period.

The central issues were whether the discrimination claims could properly be struck out under Rule 37, and whether the new continuing-act argument could be raised for the first time on appeal.

1. The first appeal was allowed. The Employment Judge erred in striking out the discrimination claims. The ET1 adequately alleged that the three acts of treatment were because of protected characteristics. It also identified matters beyond mere difference of treatment and protected characteristic, including an allegedly unexplained poor relationship with the manager, lack of candour about the job change, procedural unfairness, and an allegedly unsubstantial alternative role.

2. The primary events may largely have been undisputed, but the Respondents’ reasons for the treatment and the inferences to be drawn from them were not peripheral. They formed part of the critical core of disputed facts. An Employment Tribunal could not decide, without investigating those matters, that there was no reasonable prospect that protected characteristics were a more than trivial reason for the impugned acts.

3. Unreasonable treatment or a poor relationship alone does not establish discrimination. But where either is unexplained and is coupled with less favourable treatment and a difference in protected characteristic, it may support an inference of unlawful discrimination. The Judge also wrongly treated the redundancy complaint as necessarily alleging that the entire redundancy exercise was a sham; the pleaded case was more nuanced.

4. The claims nevertheless had little prospect of success. The appropriate order was therefore the alternative deposit order, substituted on the terms indicated by Employment Judge Forrest.

5. The second appeal was dismissed. The proposed continuing-act argument had not been advanced below. No exceptional circumstances justified its introduction on appeal, particularly as it would require uninvestigated factual issues. The available material also showed separate rejection decisions by independent managers. There was no order for costs.

• Employment Appeal Tribunal: First appeal allowed and the strike-out replaced with a deposit order; second appeal dismissed.
• Employment Tribunal: Employment Judge Forrest struck out the first discrimination claim, with an alternative deposit order. Employment Judge Rogerson dismissed the second victimisation claim as out of time.