Wangtian Xie v E'Quipe Japan Ltd

Under Rule 37 of the Employment Tribunal Rules 2013, strike-out for having no reasonable prospect of success remains a high threshold in discrimination claims. A tribunal should generally resolve a core dispute of fact, particularly as to the decision-maker’s reasons or mental processes, after hearing evidence. When considering strike-out, it should assume that the claimant can prove the primary facts relied on, but need not assume that the ultimate inference of discrimination will be drawn.

Where assumed facts could support an inference of discrimination or a shift in the burden of proof, it will ordinarily be wrong to strike out the claim. A tribunal also errs if it assesses a complaint on a material mischaracterisation of the alleged treatment.

The claimant, a Chinese Beauty Consultant engaged on a zero-hours contract at the respondent’s Harrods counter, brought direct race discrimination complaints against the respondent’s trainer and Area Manager. The Employment Tribunal struck out the claims at a preliminary hearing, holding that they had no reasonable prospect of success.

The claimant relied on alleged facts said to support an inference of an anti-Chinese culture, including the differing treatment of customer complaints and of a Japanese colleague. She also alleged that she was blamed for taking a tea break. On appeal, the central issues were whether the Tribunal had properly taken her case at its highest and whether it had correctly formulated the tea-break complaint.

1. Appeal allowed. The strike-out order was set aside and the claim remitted to the Employment Tribunal.

2. Taking a case at its highest requires an assumption that the claimant can establish the relevant primary facts. It does not require an assumption that the claimant will establish the ultimate reason for the treatment, discrimination, or an inferred anti-Chinese culture. The Employment Judge was therefore not obliged to assume those conclusions.

3. Nevertheless, the Tribunal erred in striking out the direct race discrimination claims. The alleged differential attention to complaints by Arabic and Chinese customers, and the asserted lack of action against a Japanese colleague following a complaint by a Chinese customer, could be relevant to an inference of discrimination and to a shift in the burden of proof. The central issue—why the claimant was treated as she was—was a core disputed fact concerning the alleged decision-maker’s reasoning. It required evaluation at a full hearing.

4. The limited possibility of striking out a discrimination claim despite factual disputes must not displace the general rule that such claims should ordinarily be determined on the evidence. The Rule 37 hurdle is high.

5. The amendment ground failed. Although the alleged anti-Chinese culture had not been pleaded, the Tribunal had considered the asserted facts rather than rejecting them for want of pleading.

6. The Tribunal also materially mischaracterised the tea-break complaint. The complaint was that the claimant was blamed for taking a tea break, not that she had been prevented from taking one. That ground succeeded.

The respondent was invited to reflect before making any renewed strike-out or deposit-order application. Any such application should be determined by a different Employment Judge.

• Employment Appeal Tribunal: allowed the claimant’s appeal, set aside the strike-out order, and remitted the claim.
• Employment Tribunal: following a preliminary hearing on 14 July 2023, struck out the direct race discrimination complaints; judgment was sent to the parties on 14 August 2023.