Xerox (UK) Ltd & Ors v Zeb

The Court of Appeal considered an appeal from the Employment Appeal Tribunal arising out of an Employment Tribunal preliminary hearing which had struck out a claimant's discrimination claims as having no reasonable prospect of success under the Employment Tribunal Rules (rule 37). The key statutory provisions considered were section 123 of the Equality Act 2010 (time limits and the rule on conduct extending over a period) and section 140B (one month extension to the primary limitation period for ACAS conciliation). The court applied strike-out principles (as articulated in Anyanwu and Ezsias) and considered the burden of proof in discrimination claims (Madarassy).

The court held that the Employment Tribunal had been wrong to treat the claimant's being placed at risk of redundancy as a separate, discrete act of discrimination (Act 3), and that that head of complaint should be struck out because it was not properly pleaded and lacked any reasonable prospect of success in the light of the facts (notably that the whole department was affected). The Court of Appeal remitted the remainder of the case to the Employment Tribunal for determination of the issues properly arising from the pleadings, including the question of whether Acts 1 and 2 amounted to conduct extending over a period for the purposes of section 123(3)(a).

Background and parties:

• The claimant, of Pakistani origin and a Muslim, was employed by Xerox (UK) Ltd in a finance team. After a reorganisation in September 2013 he was moved off a client contract, promised project work which did not materialise, and went off sick on 31 January 2014. In April/May 2014 Xerox announced a proposal to transfer work offshore and informed staff they were at risk of redundancy.
• The claimant issued Employment Tribunal proceedings on 23 May 2014 alleging direct discrimination on grounds of race, religion and sex. The defendants were Xerox and two individual managers.

Procedural posture:

• The Employment Tribunal held a preliminary hearing to consider (inter alia) a rule 37 strike-out application and whether the claims were in time under section 123 of the Equality Act 2010. The ET (Judge Forrest) struck out the claims as having no reasonable prospect of success. The claimant appealed to the Employment Appeal Tribunal and the EAT (Simler P) allowed the appeal. The defendants then appealed to the Court of Appeal.

Nature of the claim / relief sought: The claimant alleged unlawful direct discrimination on grounds of race, religion and sex. Specific remedies sought are not stated in the judgment.

Issues framed by the court:

• Whether the pleaded acts amounted to conduct extending over a period for the purposes of section 123(3)(a) so as to bring the claims within the primary time limit;
• whether the strike-out under rule 37 was appropriate because the claims had no reasonable prospect of success;
• whether the claimant had pleaded being placed at risk of redundancy as a separate act of discrimination and, if so, whether that head had any reasonable prospect of success.

Court's reasoning and outcome:

• The Employment Tribunal had characterised the claimant's case as comprising three acts (removal from post in September 2013; deprivation of promised alternative work; being put at risk of redundancy) and dismissed the claims on the ground that they had no reasonable prospect of success on the merits.
• The EAT reversed that conclusion and allowed the claim to proceed.
• The Court of Appeal held that the ET was wrong to uphold Act 3 (placement at risk of redundancy) as a separate head: it was not a proper feature of the pleaded case and, in any event, implausible as discriminatory given that the whole department was affected. The Court therefore allowed the appeal in part and struck out Act 3, but remitted the remaining issues — including the question of continuing conduct under section 123 — to the Employment Tribunal for determination with full evidence. The Court relied on strike-out principles and the usual approach to burden of proof in discrimination cases.

Wider context/implications: The judgment clarifies that appellate and lower tribunals should be careful to identify what is actually pleaded, should not treat consequences of earlier acts as separate heads of discrimination where that is not pleaded, and that questions of continuing conduct and causation may require full hearing and evidence rather than resolution on an interlocutory strike-out.

The Court of Appeal allowed the appeal in part: it allowed the appeal to the extent of striking out the claimant's putative complaint that being placed at risk of redundancy was a separate act of unlawful discrimination (Act 3). The rationale was that that head of claim was not properly pleaded and, on the facts found at the preliminary stage (everyone in the department being affected), had no reasonable prospect of success. The court remitted the remainder of the dispute (in particular the question whether the earlier acts constituted conduct extending over a period for the purposes of section 123 of the Equality Act 2010) to the Employment Tribunal for determination with full evidence.

Employment Tribunal (Judge Forrest) struck out the discrimination claims as having no reasonable prospect of success (preliminary hearing, October 2014; formal reasons November 2014). Employment Appeal Tribunal (Simler P) allowed the claimant's appeal (hearing 24 February 2016). Court of Appeal [2017] EWCA Civ 2137 allowed the defendants' appeal in part (14 December 2017) and remitted remaining issues to the Employment Tribunal.