Iwuchukwu v City Hospitals Sunderland NHS Foundation Trust

The Court of Appeal allowed the appellant's appeal and restored the Employment Tribunal's findings that the Trust's failure to investigate two grievances amounted to direct race discrimination and victimisation under the Equality Act 2010, and that the appellant's dismissal was unfair. The court held that the Employment Tribunal had correctly applied the reversal of the burden of proof under section 136 of the Equality Act 2010 to find less favourable treatment under section 13 and that the grievances were protected acts under section 27. The EAT had erred in interfering with those findings. On unfair dismissal the court concluded that McAdie was distinguishable and that the ET was entitled to find the employer had acted unreasonably in the conduct and length of the capability process, the failure to consider remediation adequately and the inadequate appeal arrangements under the MHPS framework.

The appellant was a consultant surgeon who, after a series of performance and conduct concerns culminating in a serious operating theatre incident in August 2013, was restricted to non-clinical duties for about 20 months and was dismissed following a capability panel in May 2015. He brought claims to the Employment Tribunal for direct race discrimination, victimisation, and unfair dismissal among others. The ET (EJ Buchanan and two lay members) upheld aspects of his claims: it found the Trust had failed to investigate two grievances raising race discrimination (treating this as less favourable treatment under section 13), treated those grievances as protected acts for the purposes of victimisation under section 27, and concluded the dismissal was unfair because the Trust acted as no reasonable employer would have done in the run up to the capability panel and had not followed the MHPS process adequately.

Procedural posture: the Trust appealed to the Employment Appeal Tribunal (HHJ Shanks) which allowed the Trust's appeal and dismissed the discrimination and victimisation findings and vacated the unfair dismissal finding (the unfair dismissal aspect was remitted). The appellant obtained permission to appeal to the Court of Appeal.

Issues before the Court of Appeal: (i) whether the EAT was right to overturn the ET's finding of direct race discrimination in relation to the failure to investigate grievances and whether the ET properly applied the reversal of the burden of proof; (ii) whether the ET was entitled to find victimisation in respect of the failure to investigate grievances; and (iii) whether the ET erred in finding the dismissal unfair, including the role of the MHPS framework and the relevance of McAdie v Royal Bank of Scotland.

The court's reasoning in brief: (i) the Court of Appeal concluded the ET had correctly applied section 136 and the surrounding authorities (including the need for an additional factor as explained in Madarassy) and that the ET's finding that the grievance initially raised in June 2014 was timely and that the Trust's explanation was unsustainable justified shifting the burden to the Trust. The EAT had failed to appreciate that reasoning and wrongly dismissed the ET's finding; (ii) on victimisation the Court held the ET was entitled to find the grievances were protected acts and that the failure to investigate was materially influenced by their content, so the EAT had no basis to overturn that conclusion; (iii) on unfair dismissal the Court distinguished McAdie because in that case the employer had followed a fair procedure and the employee was incapable of work at dismissal, whereas here the ET found unreasonable conduct by the Trust in imposing a blanket clinical restriction, failing proper review, failing adequately to explore remediation and allowing an unduly long MHPS process and deficient appeal arrangements; the EAT therefore erred to disturb the ET's conclusion and the ET's finding of unfair dismissal was restored.

Appeal allowed. The Court of Appeal restored the Employment Tribunal's findings that (a) the Trust's failure to investigate the appellant's grievances was direct race discrimination and (b) those failures amounted to victimisation, and that (c) the appellant's dismissal was unfair. The court held the EAT erred in law by failing to give proper effect to the ET's application of the Equality Act burden-shifting provisions and by misapplying McAdie in relation to unfair dismissal; the ET's factual findings and legal reasoning on these points were within its remit and the EAT should not have substituted its view.

Employment Tribunal (North Shields) judgment 2 November 2016 upheld aspects of claims for direct race discrimination, victimisation and unfair dismissal; appeal to Employment Appeal Tribunal allowed the respondent's appeal (EAT, HHJ Shanks) which dismissed those findings; permission to appeal to the Court of Appeal granted by Henderson LJ (order sealed 10 September 2018); Court of Appeal allowed the appellant's appeal ([2019] EWCA Civ 498).