Base Childrenswear v Otshudi

The Court of Appeal dismissed the employer's appeal against an Employment Tribunal finding that the claimant's summary dismissal constituted racial harassment under section 40 read with section 26 of the Equality Act 2010. The tribunal applied the statutory burden of proof in section 136 and concluded that the claimant had established a prima facie case: the employer persisted in a false account of the reason for dismissal, reacted in an intimidatory way to allegations of discrimination and failed properly to investigate. Once the burden shifted, the respondent's explanation (that the dismissal was prompted by a genuine belief she had been stealing) was rejected on the facts. The court held that the tribunal's inferences were open to it and that no error of law was shown, noting the relevant approach in Madarassy and the statutory two-stage burden of proof under section 136.

The claimant, a black African photographer employed by the appellant childrenswear business, was summarily dismissed on 19 May 2016. She brought claims to the Employment Tribunal alleging a number of incidents of racial harassment under section 40 read with section 26 of the Equality Act 2010; only the claim based on her dismissal proceeded, with the tribunal being invited to extend time under section 123(1)(b). The tribunal granted the extension in respect of the dismissal allegation and found the harassment proved, awarding compensation and interest and a preparation-time order. The employer appealed to the Employment Appeal Tribunal, which dismissed the appeal on 31 August 2018. The employer then appealed to the Court of Appeal with permission.

Nature of the claim and relief sought: the claimant sought a finding of racial harassment relating to her dismissal, extension of time under section 123(1)(b) to bring the claim, and compensation (the tribunal had awarded approximately 27,505.29 plus interest and a statutory uplift).

Issues framed by the court: (i) whether the tribunal lawfully applied the burden of proof under section 136 of the Equality Act 2010 to find a prima facie case of race-related harassment; (ii) whether, once the burden shifted, the respondent proved an adequate non-discriminatory explanation for the dismissal (the asserted belief that the claimant had been stealing); and (iii) whether the tribunal impermissibly drew inferences or otherwise made findings of fact that were not open to it.

Reasoning and disposition: the tribunal relied on the claimant's unchallenged primary facts, the employer's persistence in giving a false reason for dismissal, his intimidatory reaction to the discrimination allegation, refusal to engage with the grievance and late reliance on a suspected-theft explanation. Applying the two-stage approach required by section 136 (as explained in Madarassy and related authorities), it found a prima facie case and, after rejecting the respondent's theft explanation, found that race had been a factor. The Court of Appeal concluded that the tribunal's conclusion was within the range of permissible findings of fact, even if a close question, and that the tribunal had been entitled to treat the respondent's conduct as indicating a racially-influenced predisposition to suspect dishonesty rather than to accept that the theft explanation was an adequate non-discriminatory reason. The appeal was dismissed.

Appeal dismissed. The Court of Appeal held that the Employment Tribunal had applied the burden of proof provisions in section 136 of the Equality Act 2010 in an acceptable way, and that its inferences from the respondent's conduct (persistence in a false explanation, intimidatory reaction, refusal to address the grievance and failure to investigate) could reasonably support a finding that race contributed to the dismissal. No error of law was made out that justified overturning the ET's factual conclusions.

Employment Tribunal (East London Hearing Centre) liability decision sent 21 December 2017; Employment Appeal Tribunal appeal dismissed by HHJ Stacey on 31 August 2018; appeal to Court of Appeal (permission granted by Bean LJ) [2019] EWCA Civ 1648 — appeal dismissed on 9 October 2019.