A Ltd v Z

Mental-health related absences do not automatically fix an employer with knowledge of a disability. Instead the section 15(2) inquiry asks not only whether further enquiries were reasonable, but whether those enquiries would have led the employer to know of a disability. If reasonable enquiries would still have left the employer unaware, the employer cannot be treated as having constructive knowledge.

The proportionality limb of section 15(1)(b) requires the tribunal to weigh discriminatory effects against the employer's business needs. Procedural haste may bear on proportionality but the tribunal must show it has balanced those needs in its reasoning.

This is an appeal from an Employment Tribunal finding of disability discrimination under section 15 of the Equality Act 2010. The employee suffered long‑standing psychiatric disorders but had not disclosed them and repeatedly attributed absences to physical causes. The ET held that the employer had constructive knowledge and that dismissal was not a proportionate means of achieving a legitimate aim. The employer appealed on constructive knowledge, justification and the assessment of loss under the [2009] ICR 624 (Chagger) principle. The Employment Appeal Tribunal heard argument and substituted dismissal of the complaint.

(1) Overall disposition: The appeal is allowed and the ET's judgment in favour of the claimant is set aside. The claim of disability discrimination under Equality Act 2010 s.15 is dismissed (see final paragraph: Disposal).

1. Constructive knowledge (s.15(2)). The correct two-stage approach asks first whether, on the facts known to the employer, it was reasonable to take further steps. The second, distinct question is whether those further steps would have resulted in the employer reasonably knowing of the disability. A tribunal must answer both stages (see paras [48]; [53]).
2. Application to the facts. Although the ET identified reasonable further enquiries, it did not then ask whether those enquiries would have produced knowledge. The ET itself found that, had enquiries been made, the employee would have continued to conceal her psychiatric history. That finding meant the employer could not reasonably have been expected to know of the disability. The ET therefore erred and the employer avoids liability under s.15(2) (see Discussion and paras [48]; [53]).
3. Justification (s.15(1)(b)). The proportionality assessment requires a tribunal to balance the discriminatory effect against the employer's legitimate business needs and resources. Procedural defects (for example summary dismissal) may be relevant to proportionality. However, the ET's reasoning did not demonstrate the necessary evaluative balance with regard to the employer's business needs. Had it been necessary, the employer's appeal on justification would also have succeeded (see paras [49]; Hensman applied).
4. Loss and Chagger analysis. The ET permissibly applied the Chagger approach to assess the chance that the claimant would have lost employment lawfully. The ET's factual conclusions about likely future absences and about the claimant's conduct supported its assessment of a 50% chance of lawful termination and a 20% reduction for contributory fault. Those findings were not shown to be perverse on the high threshold required (see paras [50]–[55]).
5. Practical outcome and order. The ET's liability finding is set aside and replaced with dismissal of the s.15 claim. No remittal was required because the appellate court could decide the section 15(2) issue on the ET's own findings.

• Employment Appeal Tribunal: Appeal allowed; ET judgment set aside and claim dismissed ([2019] UKEAT 0273_18_2803).
• Employment Tribunal (London Central): Claimant successful for disability discrimination under Equality Act 2010 s.15 (Employment Judge Snelson; lay members Ballard and Tyler) (judgment dated 30 January to 2 February 2018 as recorded in the ET findings referenced at paras [30]–[55]).