Verifone (UK) Ltd v K Zena

For claims under section 136 of the Equality Act 2010, unreasonable treatment and a difference in protected characteristic do not alone require an inference of discrimination. The tribunal must ask whether a hypothetical comparator would have been treated differently, having regard to all relevant facts and without taking the employer’s explanation into account at the first stage.

An inadequate investigation of a discrimination complaint may amount to victimisation, but the complaint’s context is not causation. The tribunal must determine why the investigation was inadequate. Where it has found that the appeal outcome and deficient investigation were pre-determined for a reason independent of the protected act, it cannot uphold victimisation without accounting for that finding.

The claimant, a black woman employed as EMEA financial controller, was dismissed following a purported redundancy process. The Employment Tribunal held unanimously that the redundancy process was a sham, the dismissal was unfair, and the appeal outcome was pre-determined. It nevertheless dismissed direct race discrimination claims, holding that the claimant had not established facts from which it could infer that a hypothetical comparator of another race would have been treated differently.

By a lay-member majority, the tribunal upheld two victimisation complaints. It found that the respondent’s investigation of allegations of discrimination was inadequate and its findings superficial. The Employment Judge dissented, considering that the inadequacies resulted from the pre-determined dismissal appeal rather than the protected act.

The respondent appealed the victimisation finding. The claimant cross-appealed the dismissal of direct race discrimination.

1. Appeal allowed; cross-appeal dismissed. The EAT set aside the majority finding of victimisation and substituted dismissal of that claim.

2. The tribunal had correctly used the two-stage approach under section 136(2) of the Equality Act 2010 when deciding direct discrimination. It considered all the facts and permissibly concluded that an Uxbridge-based EMEA financial controller of a different race would have been treated in the same way.

3. The proposed comparison with Mr Makowski was inapt. He was a more junior employee in Warsaw who had resigned. The decision to try to retain him was made before, and separately from, the plan to transfer the claimant’s duties and dismiss her. There was no binary choice between him and the claimant. The respondent’s unreasonable and deceptive conduct was explained by its prior, non-discriminatory objective of retaining him; bad treatment alone does not establish discrimination.

4. An employer’s deficient handling of a complaint of discrimination can constitute victimisation. The essential question remains why the inadequate, superficial or delayed investigation occurred. The fact that the protected act supplied the context for the investigation does not itself prove causation.

5. The majority were entitled to treat the respondent’s failure to meet its own investigation standards, and the change in its communication after the appeal, as relevant evidence. However, they failed to take account of the tribunal’s unanimous finding that Ms Wiersma’s rejection of the dismissal appeal, and her inadequate investigation, were pre-determined before the protected act. The discrimination allegations formed part of that appeal and raised no separate issue. That finding made the majority’s contrary causation conclusion unsafe.

6. Applying [2014] ICR 920, remittal was unnecessary. On the tribunal’s unanimous findings, the only lawful outcome was dismissal of the victimisation claim.

• Employment Appeal Tribunal: Allowed the employer’s appeal, set aside the tribunal majority’s victimisation finding, and substituted dismissal. Dismissed the claimant’s cross-appeal on direct race discrimination: [2024] EAT 54.
• Employment Tribunal, Watford: Judgment sent on 9 March 2023. It unanimously upheld unfair dismissal and dismissed direct race discrimination; by a lay-member majority it upheld two victimisation complaints.