EAT Unfair Dismissal: Constructive Dismissal – RACE DISCRIMINATION – Direct
UNLAWFUL DEDUCTION FROM WAGES
Constructive dismissal – section 95(1)(c) Employment Rights Act 1996 – whether breach of the implied term – Malik and Anor v BCCI SA  ICR 606 HL
Race discrimination – sections 13(1), 23 and 136(2) Equality Act 2010 – direct discrimination – less favourable treatment – burden of proof
Paternity pay – section 171ZC Social Security Contributions and Benefits Act 1992 – Statutory Paternity Pay and Statutory Adoption Pay (General) Regulations 2002
The Claimant (an Indian national) had sought a lateral transfer as a Manager from one of the Respondent’s stores to a new store it was due to open in Romford. There had, however, been four other applicants for the Romford position, including three external candidates, and the Respondent had applied a selection process, albeit (as the ET allowed) one that had been created for promotions rather than transfers. The Claimant performed badly and was unsuccessful. One of the external candidates, a British national, achieved the highest score and was offered the position. Shortly after this, the Claimant’s Assistant, who was also a British national, was offered a Relief Manager position at another store, without being subject to the same kind of assessment process used for the Claimant. The Claimant submitted a grievance about these matters, but this was rejected, and the Claimant resigned from his employment and brought ET proceedings, complaining that the rejection of his grievance had amounted to a fundamental breach of his contract, specifically it had destroyed the relationship of trust and confidence, thus entitling him to resign and claim constructive dismissal. He also relied on these matters as acts of race discrimination because of his Indian nationality. The Claimant further complained of an unauthorised deduction of wages in the failure to pay him paternity pay for the leave taken after the birth of his son.
The ET rejected the claims. Although agreeing that the process used by the Respondent should not have applied to lateral transfers, the Respondent had reasonable and proper cause for its conduct given that it had to apply some kind of selection process and had thus been entitled to refuse the Claimant’s grievance. Further rejecting certain allegations made by the Claimant, the ET did not consider the burden had shifted for the purpose of the complaint of race discrimination; the Claimant’s comparators were in different circumstances, and a difference in protected characteristic was insufficient to shift the burden. In any event, even if the burden had shifted, the ET accepted the Respondent’s non-discriminatory explanation for why it had treated the Claimant as it had; specifically, it had permissibly applied the selection process when having to choose the best of the five candidates for the new Manager position. As for paternity pay, the Claimant had failed to provide the requisite notification in writing at the relevant time and had, in any event, brought his claim out of time.
On the Claimant’s appeal
Held: dismissing the appeal
The ET had accepted the Claimant’s argument that the assessment used for the Romford Store Manager selection exercise had been created for promotions and not lateral transfers and it was further prepared to accept that his trust and confidence in his employer may have been destroyed by the decision not to offer him this position (and whilst his actual complaint before the ET relied on the rejection of his grievance, this was really a reiteration of the earlier decision not to offer him the Romford post). The question for the ET was – applying Malik unvarnished, as the Claimant submitted – whether the Respondent had conducted itself in the way that it had without reasonable and proper cause (Malik and Anor v BCCI SA  ICR 606 HL). This was not – as the Claimant contended – the wrongful importation of the range of reasonable responses test; the ET was properly applying Malik, recognising that an employee’s loss of trust and confidence in their employer was not the only question: the ET also had to be satisfied this had happened as a result of conduct on the part of the employer that was without reasonable and proper cause, a question to be answered objectively, not by applying a range of reasonable responses test. The ET had not lost sight of this and had reached a permissible conclusion on the basis of its findings of fact.
Similarly, in respect of the race discrimination claim, the ET had been entitled to find the burden of proof had not shifted, not least as it rejected allegations made by the Claimant that might otherwise have corroborated his case and had found the circumstances of his comparators were materially different to his. In any event, the ET considered the Respondent’s explanation – on the basis that the burden had shifted – and found the conduct complained of was for reasons (see above) other than the protected characteristic (the Claimant’s nationality).
As for the paternity pay claim, this appeal was doomed to fail as the ET had found the claim had been brought out of time and no appeal against that finding had been permitted to proceed. In any event, the appeal focused on the wrong Regulations (those concerned with the entitlement to leave, not pay); the ET had been entitled to find the Claimant had failed to comply with the written notification requirements laid down by the paternity Pay Regulations.
Eady QC HHJ
 UKEAT 0272 – 16 – 0303
England and Wales
Updated: 24 March 2022; Ref: scu.582064