Ladiende v Royal Mail Group Ltd

Under section 136 of the Equality Act 2010, a tribunal may proceed directly to the respondent’s explanation, rather than follow a rigid two-stage sequence. If it does so, it must assess that explanation on the basis that the burden may have shifted.

A tribunal may not fill an evidential gap by speculating about a non-discriminatory or non-retaliatory reason which the respondent has not established. Where it finds serious inadequacies in grievance handling, it must take those findings into account when deciding discrimination and victimisation. In a victimisation claim, the adequacy of an investigation and any resulting detriment must be assessed from the claimant’s perspective.

Four long-serving black employees complained that Royal Mail had not treated or paid them properly as temporarily promoted managers, had not considered them for higher-grade roles, and had mishandled their grievance. They relied on the treatment of a named comparator, Ms King, and on a hypothetical comparator. Their grievance was also the protected act relied upon for victimisation.

The Employment Tribunal at London (Central), by a judgment sent on 18 March 2015, dismissed the direct race discrimination and victimisation claims. The claimants appealed. The central issues were whether the Tribunal had lawfully addressed the burden of proof and the reasons for the challenged treatment, particularly in relation to the grievance investigation.

1. Appeal allowed in part. The appeal against the dismissal of the complaints concerning higher-grade vacancies and the failure to pay the claimants at the temporary-promotion rate was dismissed. The appeal succeeded in respect of direct race discrimination in the handling of the grievance and the separate victimisation claim.

2. Section 136 of the Equality Act 2010 remains the governing test. A tribunal need not use a formal two-stage method and may go directly to the reason for the treatment. But it may do so only on the assumption that the burden may have passed to the respondent. The respondent’s explanation must then be assessed on that basis: Igen Ltd v Wong [2005] ICR 931; Hewage v Grampian Health Board [2012] ICR 1054 SC; Madarassy v Nomura International plc [2007] ICR 867 CA.

3. The Tribunal’s findings showed that Ms King had been placed in an ML4 post because Royal Mail genuinely, though mistakenly, believed her to be a substantive manager. The claimants’ own temporary-promotion status had also been misunderstood. Those findings provided a non-racial explanation for the vacancy complaints. The later failure to correct Ms King’s position was not an issue in the claims before that Tribunal.

4. The Tribunal permissibly found that the failure to pay the claimants correctly arose because their 2004 temporary promotions were not communicated to payroll, together with the absence of a subsequent review amid organisational change. Its reasoning, although imperfectly expressed, did not show that it had invented the respondent’s explanation.

5. In contrast, the Tribunal identified serious concerns about the grievance handling, including the investigator’s erroneous approach to race, but did not properly use them in deciding discrimination. It confused the explanation with the question of less favourable treatment and treated the possibility that a white comparator may have received the same treatment as sufficient.

6. Having found no explanation from the respondent, the Tribunal wrongly supplied possible explanations of its own, such as forgetfulness or incompetence. It was required to determine whether the proved inadequacies shifted the burden and, if so, whether Royal Mail had shown a reason unconnected with race or the protected act. For victimisation, it also asked the wrong question by treating the existence of an investigation as decisive instead of considering whether its inadequacies were detriments to the claimants.

7. No substituted decision was possible because more than one outcome remained open. The successful complaints were remitted to a differently constituted Employment Tribunal, applying Sinclair Roche & Temperley v Heard [2004] IRLR 763.

• Employment Appeal Tribunal: allowed the appeal in part and remitted the successful grievance-related complaints to a differently constituted Employment Tribunal: [2016] UKEAT 0197_15_2705.
• Employment Tribunal, London (Central): judgment sent on 18 March 2015 dismissing the relevant direct race discrimination and victimisation claims.