Base Childrenswear Ltd v Otshudi

Under section 136 of the Equality Act 2010, a claimant must establish facts from which a reasonable tribunal could conclude that discrimination occurred. Mere difference in status and treatment is insufficient. If that threshold is met, the respondent must show that the protected characteristic played no part in the treatment. The inference to be drawn is a question of fact, subject to limited appellate intervention. A false explanation, particularly one maintained after its original justification has disappeared, may support an inference of discrimination, although lies are not conclusive. A tribunal may find that a genuine suspicion was racially influenced by a predisposition to suspect misconduct, and need not identify the precise mechanism once the respondent fails to disprove racial influence.

The claimant, a black African employee, was summarily dismissed after her employer initially gave redundancy as the reason. The employer later advanced a suspected theft explanation. She pursued a claim of racial harassment concerning the dismissal under sections 26 and 40 of the Equality Act 2010. The Employment Tribunal extended time for that claim, found it proved and awarded compensation. The Employment Appeal Tribunal dismissed the employer’s appeal on 31 August 2018. The employer appealed to the Court of Appeal, challenging both the finding of a prima facie case under section 136 and the Tribunal’s treatment of the suspected theft explanation. The central issue was whether the Tribunal had made an error of law.

The appeal was dismissed. The Employment Tribunal’s decision was legally open to it and disclosed no material error of law.

1. Burden of proof. Section 136 of the Equality Act 2010 imposes a two-stage process. At the first stage, the claimant must establish facts from which a reasonable tribunal could properly conclude, on the evidence before it, that discrimination occurred. Difference in status and treatment alone establishes only a possibility. All potentially relevant evidence may be considered at that stage, except the absence of an adequate explanation. If the threshold is met, the burden shifts to the respondent to show that the protected characteristic played no part in the treatment. The Court applied the guidance in Madarassy v Nomura International plc [2007] EWCA Civ 33, which remained authoritative following Hewage v Grampian Health Board [2012] UKSC 37 and Ayodele v Citylink Ltd [2017] EWCA Civ 1913.
2. Appellate review. The inference to be drawn from primary facts is a question of fact, not law. The appellate court must not substitute its own view unless the conclusion was not reasonably open to the Tribunal.
3. Application. The employer’s strong reaction to the allegation of discrimination was equivocal. However, its false explanation for the dismissal and persistence in that explanation after the alleged reason for the initial lie had ceased could reasonably support a prima facie inference of racial discrimination. Lies may have other explanations, so the conclusion was fact-sensitive and near the borderline, but it was not impermissible.
4. Genuine suspicion and racial influence. The Tribunal had not found that the suspected theft account was fabricated. Its reasoning was more consistent with the employer genuinely suspecting theft, but reaching that conclusion precipitately and on flimsy evidence because of racial prejudice. Section 136 did not require the Tribunal to identify precisely how race influenced the decision once the employer failed to prove that race played no part.

1. Court of Appeal (Civil Division): The appeal from the Employment Appeal Tribunal was dismissed under [2019] EWCA Civ 1648.
2. Employment Appeal Tribunal: HH Judge Stacey dismissed the employer’s appeal on 31 August 2018.
3. Employment Tribunal: The Tribunal extended time for the harassment claim based on dismissal, found it proved, and awarded compensation. The other six harassment claims remained out of time.