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 treatment and the inferences to be drawn from them form part of a critical core of disputed facts requiring evidence. This remains so where primary facts are largely undisputed. Unexplained unreasonable treatment, coupled with less favourable treatment and a protected characteristic, may permit an inference of discrimination.

Where a claim has little prospect of success but cannot properly be struck out, a deposit order may be appropriate. A new argument on appeal will ordinarily be refused unless exceptional circumstances justify its introduction, particularly where it requires uninvestigated factual issues.

The claimant brought discrimination claims concerning his removal from a role, the absence of suitable alternative work and his placement at risk of redundancy. Employment Judge Forrest struck out those claims as having no reasonable prospect of success, while making an alternative deposit order.

In separate proceedings, Employment Judge Rogerson dismissed victimisation complaints concerning five unsuccessful redeployment applications. Four were held out of time, and the claimant had not identified a factual basis linking most decision-makers to a protected act.

The claimant appealed both preliminary decisions. The central issues were whether the discrimination claims could properly be struck out before a full hearing and whether he could advance, for the first time on appeal, a continuing-act argument concerning the unsuccessful applications.

1. The first appeal was allowed. The Employment Judge had correctly directed himself that strike-out under Rule 37 is exceptional in discrimination cases. However, he erred by treating the absence of substantial dispute over primary facts as decisive. The respondents’ reasons for the claimant’s alleged poor and unreasonable treatment, and the inferences that could be drawn from those reasons, were central disputed issues requiring investigation at a full hearing.

2. The ET1 adequately advanced complaints of discrimination in respect of each of the three principal acts. It alleged more than a bare difference of treatment and protected characteristic. It also identified an unexplained poor relationship with the claimant’s manager, lack of frankness about the job change, alleged procedural irregularity, a role without substance, and treatment culminating in redundancy risk.

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 protected characteristic, a tribunal may be able to draw an inference of unlawful discrimination. The Employment Judge also erred by characterising the redundancy allegation as necessarily asserting that the whole redundancy exercise was a sham.

4. The claims nevertheless had little prospect of success. The appropriate course was therefore the alternative deposit order, which the EAT substituted for strike-out.

5. The second appeal was dismissed. The continuing-act argument had not been raised below. No exceptional circumstances justified permitting it on appeal, especially as it would require uninvestigated factual issues and was inconsistent with the claimant’s accepted position that five independent managers made the rejection decisions.

6. No costs order was made. Although continuing with the second appeal after 15 February had been unreasonable, the claimant’s limited means meant that a costs award was not in the interests of justice.

• Employment Appeal Tribunal: The appeal against Employment Judge Forrest’s decision of 24 November 2014 was allowed. Strike-out was replaced by a deposit order.
• Employment Appeal Tribunal: The appeal against Employment Judge Rogerson’s decision of 6 July 2015 was dismissed.