Appeal No.	 EAT/811/98

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 10 October 2000
Judgment delivered on 10 November 2000

Before
THE HONOURABLE MR JUSTICE CHARLES
MS B SWITZER
MR B M WARMAN

DSG RETAIL LTD	APPELLANT

MR S DIONE	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR ANDREW STAFFORD QC
Instructed By:
Messrs Doyle Clayton
Solicitors
69-70 Mark Lane
London
EC3R 7HS	
For the Respondent	MS KAREN STEYN
(of Counsel)
Instructed By:
Messrs Howes Percival
Solicitors
Oxford House
Cliftonville
Northamtpon NN1 5PN	

	MR JUSTICE CHARLES:	

1	We have before us an appeal and cross-appeal against decisions of an Employment Tribunal sitting at London (North) on 6 and 7 April 1998.  The Extended Reasons for the decisions made by the Employment Tribunal were sent to the parties on 6 May 1998.

2	The hearing of this appeal was adjourned because it was thought that the decision of the House of Lords in Nagarajan v London Regional Transport  [2000] 1 AC 501 might be relevant.  Although in that case the House of Lords allowed the appeal the decision and reasoning of the House of Lords has not been relied on by either of the parties.

3	The parties are DSG Retail Ltd (the Employer) who is the Appellant before us and was the Respondent before the Employment Tribunal and Mr Dione, the Applicant before the Employment Tribunal and the Respondent before us.  

4	The decisions of the Employment Tribunal that are the subject of the appeal and cross-appeal are:

(1)	the decision that Mr Dione was a victim of discrimination by way of victimisation under section 2 of the Race Relations Act 1976.  The Employer appeals against that decision,

(2)	the dismissal of Mr Dione’s claim for unfair dismissal.  Mr Dione cross-appeals against that, and

(3)	the decision to limit Mr Dione’s claim for damages for discrimination by way of victimisation to injury to feelings.  Mr Dione cross-appeals against that.

5	The issues before the Employment Tribunal are shown by paragraph 1 of the Extended Reasons which is in the following terms:

“1  The Applicant was employed by the Respondents as a salesman from 3 April 1989 until he was dismissed on grounds of misconduct on 13 June 1997.  The Applicant claims that he was victimised because of another Tribunal claim which he had brought against the Respondents for race discrimination in 1996, a claim which was compromised and withdrawn on 29 May 1997.  Mr Dione also claimed that he was unfairly dismissed.”

6	The findings of fact made by the Employment Tribunal are set out in paragraphs 3 to 13 of the Extended Reasons.  As much of the argument before us related to the reasoning of the Employment Tribunal having regard to those findings, we set those paragraphs out in full.  They are as follows:

“3  Mr Dione is a Senegalese national and is black African by ethnic group.  He is fluent in English, French, Wolof (his native language) and German, a facility which he found of great assistance working in the New Oxford Street branch with its multinational clientele.  Mr Dione was a very successful salesman and achieved top sales award certificates every year from 1992 to 1996.  This certificate is only awarded to staff who achieve more than £½ million sales in the year.
4  Although he was an excellent salesman, Mr Dione had a somewhat flamboyant style, given to speaking loudly and gesticulating to make his point.  That style could sometime spill over into unruly behaviour and from April 1996 he received a series of warnings as to that behaviour.  In his evidence Mr Dione dated the beginning of his problems with the arrival of Mr Bhogal as his manager, but in fact he had received a written warning on 26 April 1996, some two months before Mr Bhogal arrived.  A further incident occurred in July 1996 when Mr Bhogal reprimanded Mr Dione for unruly behaviour and insubordination but he took no action at that time.  On 27 September 1996 Mr Dione received a final written warning from Mr Demetriou Avraam the area manager.  This arose out of two incidents in September for which he eventually received a final written warning.  This was dated 27 September 1996 and in a letter to Mr Dione Mr Avraam stated as follows:
‘Should there be any further incidents relating to your conduct, in particular outbursts involving members of staff, customers, management and visitors to the company … this could result in further disciplinary action being taken against you which could lead to your dismissal.  This warning will remain on your file for 12 months and will be spent on 27 September 1997’.
5  Mr Dione objected to the disciplinary treatment which he received and appealed against it.  His appeal was refused on 29 October 1996.  He concluded that he was a victim of discrimination and the failure of the Respondents to investigate his complaints and he therefore made an application to the Industrial Tribunal on 22 November 1996.  In that application he claimed unlawful racial discrimination and equal pay.  That claim was listed for hearing on 30 May 1997 but just before it was due to be heard the claim was settled on the basis that Mr Dione would receive the sum of £1,690 representing arrears of pay which he was claiming as due to him.  That payment was expressed to be ‘in full and final settlement of all or any claims the Applicant has or may have arising from the claims made in these proceedings’.  Mr Dione was represented by solicitors in those proceedings and the letter of 29 May setting out the terms of settlement were in fact exchanged between the Respondents’ solicitors and the Applicant’s solicitors.
6  On 7 April 1996 another incident occurred at the 018 branch.  Mr Hedditch-Grey had recently joined the branch as a deputy manager.  Mr Dione was working at a computer in the store and Mr Grey asked him to attend to a customer who wanted to purchase a computer chess game.  Mr Dione indicated that he was busy dealing with the computer which had to be put into demonstration mode in order to prevent customers from interfering with the equipment.  Mr Grey insisted that Mr Dione should attend to the customer and assured him that another employee, Mr Rakesh Patel, who was also working on a computer in the next section, would keep an eye on Mr Dione’s computer.  Mr Dione was clearly unwilling to leave what he was doing and reluctantly went over to the customer with Mr Grey.  Mr Grey introduced the customer to Mr Dione and asked him to demonstrate the computer chess game.  Mr Dione asked his colleagues Mr McFarlane and Mr Brady who were attending to customers nearby, for the key to the cabinet in which the game was displayed.  They told him that no key was required.  Mr Dione seemed to be convinced that a key was required.  Mr Dione then attempted to open the cabinet and did so in such a manner that the display was knocked over and disturbed.  At some point in this process the customer walked out.  Mr Grey told Mr Dione to reassemble the display but by this time Mr Dione said that he had another customer to attend to.  There was another exchange of words between Mr Grey and Mr Dione and it appears that the second customer also lost patience and left the store.
7	Mr Grey reported these incidents to Mr Bhogal on the same day.  Mr Grey produced a statement of the incident at the request of Mr Bhogal and subsequently of Mr Avraam, the area manager.  Mr Bhogal interviewed other members of staff to obtain statements from them.  In his evidence Mr Bhogal could not recall whether he carried out these interviews himself or instructed his deputy manager to do so, or merely asking the staff to produce their own statements.  We were less than satisfied with Mr Bhogal’s evidence and we conclude that he may well have encouraged members of staff to produce statements which accorded with Mr Grey’s version of events.  Two members of staff, Mr McFarlane, of Afro-Caribbean origin, and Mr Patel, of Asian origin, subsequently sought to go back on their statements.  Mr McFarlane after discussing the matter with Mr Dione, wrote a further statement as follows:
‘Concerning statement of 14.4.97 written against Sady (the Applicant) was not correct.  I was forced by the general manager to write certain allegations which were not true.  To the recollection of my memory I did not witness the incident in full, of what occurred on the shop floor and I deeply regret getting involved, [in] being used in this vicious game.  I was very shocked when I learned about it.  After consulting my conscience I realised that it is a defamation of character.’
8  Having obtained statements from all witnesses to the incident Mr Bhogal then invited Mr Dione to give a written account of the event as he saw it, which he did by letter dated 15 April 1997.  Mr Dione described his conversation with Mr Grey in the following terms:
‘When I tried to explain to him diplomatically, he did not even try to listen.  With his preconceived mentality, he was only interested to jettison through his own selfish thought clouded with a colonial arrogance.’
9  Having accumulated all the written evidence Mr Bhogal concluded that the matter should go forward to a disciplinary hearing.  Mr Bhogal was well aware of the first Industrial Tribunal proceedings which Mr Dione had brought against the company, since he had prepared a statement which was going to be used as evidence in resisting the claim for equal pay.  Mr Bhogal was also probably aware of the date of the hearing as 30 May.  For reasons which were not explained to our satisfaction Mr Bhogal took no immediate action to initiate a disciplinary hearing but did so very shortly after he received a telephone call from Jonathan Flett, who was complaining about an incident which had occurred at his store in Marble Arch. That was on 28 April.
10  On that day Mr Dione had with the permission of his deputy manager gone to the 308 store in Marble Arch to collect some hi-fi equipment which he had sold to a customer.  Mr Dione was wearing his Dixons tie and although he may not have had a badge he was clearly identifiable as a Dixon’s employee.  As he was standing in the shop a customer walked up to him and asked for some information about computers.  Mr Dione gave the customer the information and subsequently passed him to Mr K. Patel, an employee at the 308 shop, who then went on to deal with the customer’s inquiry.  This was observed by Mr Flett who had recently been appointed as branch manager and did not know Mr Dione.  Mr Flett may or may not have been wearing an identifying badge to show that he was the manager but it seems clear that Mr Dione recognised him as such.  Mr Flett asked Mr Dione what he was doing talking to a customer in the shop.  This was certainly not against company policy but Mr Flett was concerned that Mr Dione might be seeking to attract customers away from Marble Arch to his own store.  Commission is a very important feature in the salaries of Dixons’ employees, staff and management alike and Mr Flett was concerned that Mr Dione should not be poaching potential custom.
11  After an initial friendly discussion the conversation became somewhat more tense and angry on both sides.  Mr Flett went to report the matter to his manager Mr Attwood who suggested that he should telephone to Mr Bhogal.  This he did and the contents of that conversation are crucial.  Mr Dione states that after he returned from speaking to Mr Bhogal, Mr Flett’s whole manner had changed and he made reference to the fact that Mr Dione had brought Tribunal proceedings against the company and their area manager and that he, Mr Flett was not afraid of Mr Dione.  The conversation became more heated and Mr Dione eventually left with the equipment which he had come for.  We find as a fact that during the course of the telephone conversation between Mr Bhogal and Mr Flett Mr Bhogal did inform Mr Flett not only that Mr Dione was difficult and that Richard Grey had a problem with him, but that Mr Dione had brought a race claim against Dixons and Mr Avraam.  That affected Mr Flett’s view of Mr Dione and whether or not with Mr Bhogal’s encouragement, Mr Flett made sure that the incident was reported and that it should form part of a disciplinary proceeding.  From Mr Bhogal’s point of view it was convenient to add this incident to that which took place on 7 April and both were dealt with together at the same disciplinary hearing.  Originally this was going to be chaired by Mr Avraam but in view of the pending proceedings in the Tribunal in which Mr Avraam was named as a Respondent, the divisional manager Mr Tweddell decided that it would be better in the circumstances to have a manager who was neutral to deal with the disciplinary hearing.  He appointed Mr Mark Egginton who was an area manager responsible for Dixons Stores in West London and part of the Home Counties.
12  Mr Egginton considered the documentary evidence of the two incidents which had been collated by Mr Bhogal and copies of statements were sent to Mr Dione in anticipation of the disciplinary hearing which was due to take place on 6 May.  That was postponed to 13 May and on that date Mr Egginton discovered that Mr Dione had not seen copies of all statements including that of Mr Flett.  Mr Egginton accordingly adjourned the disciplinary hearing again to enable Mr Dione to consider the further statements.  The hearing eventually took place on 20 May chaired by Mr Egginton and notes were taken by Lesley Wells, an area personnel manager.  Mr Dione was asked whether he wanted to have a witness with him.  He said that he did not.  He told the Tribunal that there was only one black worker who he would have called to assist but he did not wish to deprive that person of the opportunity to continue work and earn his commission and he did not trust anyone else.  The disciplinary hearing was undertaken by Mr Egginton very thoroughly and he went through each of the statements with Mr Dione in detail.  The meeting lasted for some 3½ hours, at the end of which Mr Egginton concluded that he needed to investigate the grey areas, wanted to speak to other persons who had not given statements and would reconvene the hearing.  Mr Egginton interviewed a number of witnesses, including Mr Grey and Mr Flett as well as some members of staff who had not previously given evidence.  He decided to discount the evidence of Mr McFarlane since it was contradictory.  As to the evidence of Rakesh Patel, he confronted him in the presence of Mr Grey who insisted that Mr Patel had been present and was looking after Mr Dione’s computer while the latter was called away to serve a customer at Mr Grey’s request.  Although Mr Patel maintains that he had not been present at the time, Mr Egginton concluded from Mr Patel’s manner that he was not being truthful and he decided to prefer the evidence of Mr Grey.
13  The reconvened disciplinary hearing took place on 13 June with the same persons present.  Mr Egginton reminded Mr Dione of his right to have a witness but again Mr Dione declined.  Mr Egginton engaged in further detailed consideration of the evidence and Mr Dione was given the opportunity to present his side of the story, which he did.  Eventually Mr Egginton stated that having taken all points into account he concluded ‘that there was sufficient evidence to say that it wasn’t acceptable conduct and whilst two incidents are not serious enough to be classed as gross misconduct they do warrant disciplinary action to be taken’.  He observed that as there was a final written warning still on record, Mr Egginton had no alternative but invoke stage 4 of the company’s disciplinary procedure – which is dismissal – for unprofessional conduct.  Mr Dione was given eight weeks’ pay in lieu of notice in respect of his eight years of service with the company.  Mr Dione lodged an appeal against dismissal.  The appeal was heard by Mr Tweddell on 25 July 1997 and the decision to dismiss was confirmed.”

The conclusions and reasoning of the Employment Tribunal are set out in paragraphs 24 to 29 of the Extended Reasons, under the main heading “Conclusions”.  These paragraphs are in the following terms:

“24  Victimisation	While we are satisfied that the two incidents which occurred on 7 April and 28 April did take place, they were in themselves of a very minor nature.  The first incident concerned Mr Grey and was no more than an exchange of words between him and Mr Dione.  It is true that Mr Dione did not refuse to serve a customer but by his conduct, directly or indirectly, the sale was lost.  It may be that another customer also walked out of the store at that time.  Mr Grey was within his rights in reporting the matter to Mr Bhogal.  We have found as a fact that Mr Bhogal obtained a statement from members of staff in a manner which encouraged them to support the allegations made by Mr Grey.  People were reluctant to give statements but were obliged to do so.  Although he was well aware of Mr Dione’s flamboyant style, Mr Bhogal does not appear to have taken this into account in taking a decision, which he did on or about 15 April, to pursue a disciplinary case against Mr Dione.
25  For reasons which are not clear to us there was a delay on Mr Bhogal’s part in pursuing the disciplinary hearing.  It may have been something to do with the divisional office and it is apparent that Mr Avraam, who was named as a Respondent in the then on going Industrial Tribunal proceedings, played some part.  There was even a suggestion that Mr Avraam should chair the disciplinary hearing.  Given his involvement in the first Tribunal, this would have been quite unacceptable.  Mr Tweddell recognised this and appointed Mr Egginton to chair the disciplinary hearing.
26  The second complaint which Mr Bhogal received, this time from Mr Flett, was immediately converted into an additional ground for complaint.  We have found as fact that Mr Bhogal did advise Mr Flett of Mr Dione’s pending Tribunal application and either that fact alone, or whatever else he may have said to Mr Flett in their brief conversation was enough to turn Mr Flett against Mr Dione and to change his whole attitude when he returned to speak to him after his telephone conversation.  Mr Flett was determined to lodge a complaint against Mr Dione and we find that his reason for this was the fact that Mr Dione was the author of a ‘protected act’ within section 2 of the Race Relations Act.  Similarly Mr Bhogal, who in spite of his evidence to this Tribunal, was very well aware and involved in the first Tribunal proceedings, seized on the opportunity to bring another complaint against Mr Dione.  We therefore find that the initiation of proceedings against Mr Dione constituted a detriment and less favourable treatment to him than would have been accorded to another employee who had not been involved in a protected act – in other words had a similar set of circumstances applied to another employee, disciplinary proceedings would not have been instituted.  This constitutes victimisation under section 2 of the Race Relations Act.
Unfair Dismissal
27  We find that the reason for dismissal (as opposed to the motive which created the initial disciplinary investigation) was misconduct.  Mr Egginton, who was regarded on both sides as an impartial and independent manager, carried out a reasonable investigation, he had reasonable grounds for concluding that Mr Dione was guilty of misconduct and he did believe on the balance of probabilities that Mr Dione was guilty.  His conduct of the disciplinary investigation was in our view exemplary and Mr Dione cannot complain about the manner in which the hearing was conducted.  He was given every opportunity to present his case and when he challenged the Respondents’ witnesses or referred to other witnesses whose statements had not been obtained, or had been obtained improperly, Mr Egginton took the time and trouble to investigate those matters during the period between first and second disciplinary hearings.  While Mr Egginton acknowledged that he was aware of the Industrial Tribunal proceedings, we do not take his knowledge of those facts as justifying an inference that he was thereby consciously motivated to treat Mr Dione less favourably – see Nagarajan.
28  As to the decision to dismiss, we were troubled by the fact that it was based upon a final written warning which was itself the subject of Industrial Proceedings.  Those proceedings were compromised but the final written warning remained on Mr Dione’s record.  This must have been a matter which was in the minds of Mr Dione and his advisers (who were a firm of solicitors) and while we have no knowledge of the negotiations which led up to the compromise, it is apparent that the final written warning was not to be expunged as part of it.  Because of that, that was little that Mr Egginton could do.  It is true that the fourth stage of disciplinary procedure did allow for an alternative penalty of demotion to be applied ‘under certain circumstances where it may be justified by mitigating circumstances (sic)’.  However as Mr Egginton pointed out, Mr Dione was at the lowest grade within the company, namely retail salesman, and there was no demotion available in his case.  The fact that the misconduct was of the same kind as previous incidents for which Mr Dione had been disciplined both formally and informally led us to the conclusion that the decision to dismiss was within the band of reasonable responses open to the Respondents.  The dismissal was therefore fair.
Remedies
29  As we have made a finding in favour of the Applicant on victimisation only, the only remedy available to him is that of compensation for injury to feelings.  …”

Our approach to the Extended Reasons

7	We adopt the approach taken by this Tribunal to the consideration of Extended Reasons in Lindsay v Alliance & Leicester EAT/1317/98 which we understand is to be reported.  A copy of this case was provided to the parties before the commencement of the hearing before us.  The approach we have adopted is in paragraphs 29 to 50 of the judgment in the Lindsay case.  Neither side argued that such approach was incorrect.

8	We add that in this case we recognise that the Employment Tribunal approached the issue of discrimination by way of victimisation on the basis of the decision of the Court of Appeal in the Nagarajan case.  They therefore considered conscious motivation.  Further, we recognise that in considering the issue of discrimination by way of victimisation, they did not have the benefit, for example, of (i) the discussion of the cases concerning the choice of comparator in TNT Express Worldwide (UK) Ltd v Brown (CA Unreported 4 April 2000) in which reference is made to another then unreported decision of the Court of Appeal in Chief Constable of West Yorkshire Police v Khan (24 February 2000), now reported at [2000] IRLR 324, or (ii) the points made in the decision of this Tribunal in the Lindsay case as to the statutory question posed by section 2 of the Race Relations Act 1976 and the manner in which they should be approached and answered.  

9	I pause to comment that the Lindsay case was heard before judgment in the Khan case was delivered by the Court of Appeal and the Khan case was not referred to in argument or in the judgment in the Lindsay case (albeit that the judgment in the Lindsay case was handed down after the judgment of the Court of Appeal in the Khan case).  On this appeal we were not referred to the judgment in the Khan case but, as pointed was out by Counsel for the Employer, having regard to the extracts from the Khan case referred to in the TNT case the conclusion reached in the Lindsay case concerning the “race connection” (see paragraph 55) appeared to be at odds with the decision of the Court of Appeal in the Khan case.  This conflict was not relied on in argument and we agree that it is not directly relevant to this appeal.  

10	The indirect relevance of such conflict to this appeal and the of the TNT case referred to above (with its reference to the Nagaragan case in the Court of Appeal) which relate to the identification of the correct comparator and the statutory question or test posed by section 2 Race Relations Act 1976 is that they demonstrate:

(a)	the need for, or the benefit of, an explanation of how the statutory question has been posed and addressed by an Employment Tribunal and why they have answered it in the way that they have, 

(b)	the questions that arise in a consideration of the statutory question or test set by section 2 in respect of a claim for discrimination by way of victimisation can give rise to fine and difficult questions and this was the case when the law, as decided by the Court of Appeal, was that conscious motivation was required, and

(c)	the Employment Tribunal did not have the advantage of authorities since 1998 in considering how they should explain their approach and decision.  

Standing back from the two appeals against the decisions as to liability

11	These appeals relate to the conclusions that:

(a)	Mr Dione was the victim of discrimination by way of victimisation, but nonetheless

(b)	Mr Dione’s dismissal was fair.

12	At the heart of the appeal against the decision that Mr Dione was a victim of discrimination by way of victimisation is an attack on the reasoning of the Employment Tribunal as expressed in the Extended Reasons.  In short, the attack was that the Employment Tribunal have failed adequately to explain how they reached that conclusion and the attack can be described as a “Meek attack” (see Meek v City of Birmingham District Council [1987] IRLR 250).

13	At the heart of the appeal against the conclusion that Mr Dione’s dismissal was fair was an argument that, having reached the finding they did as to causation in paragraph 26 of the Extended Reasons in respect of the claim for discrimination by way of victimisation, the Employment Tribunal should have held (i) that the operative cause of the dismissal was such discrimination, and therefore (ii) that the dismissal was unfair.  

14	As appears in particular from paragraphs 26 and 27 of the Extended Reasons the Employment Tribunal reached different conclusions on causation in respect of the two claims.

15	In our view this is a possible result in law and fact (see, for example, the argument in paragraph 40 of the TNT case which was not regarded by the Court of Appeal as an impermissible argument).  In our judgment the likelihood of this factual and legal possibility occurring is enhanced by the points that (i) for there to be victimisation by way of discrimination, it has to be shown that the protected act had a significant influence on the outcome which constitutes the less favourable treatment (see the speech of Lord Nicholls in the Nagarajan case at [2000] 1 AC 513 B) and therefore it does not have to be the sole cause, and (ii) section 98(1)(a) of the Employment Rights Act provides that in determining whether a dismissal is fair or unfair it is for the employer to show the reason (or if more than one the principal reason) for the dismissal.

16	Indeed in this context we note that it was not argued on behalf of Mr Dione that it is not possible for an Employment Tribunal to find that 

(a)	the reason or a significant reason for the institution of an internal disciplinary process was the existence of a protected act, and

(b)	the reason or primary reason for a dismissal at the end of that disciplinary process was the conduct of the employee that preceded its institution and was investigated during the process.

Rather the argument on behalf of Mr Dione was that, having regard to the finding reached by the Employment Tribunal as to causation in respect of the claim for discrimination by way of victimisation, it was then not open to them to find that the dismissal was fair.  

17	In this case because the conclusion of the Employment Tribunal as to the reason or primary reason for the less favourable treatment (i.e. the institution of the disciplinary process) is different to their finding as to the reason, or the principal reason, for the dismissal, in our view we should not adopt the approach taken by the Court of Appeal in paragraphs 41 and 43 of the judgment of Peter Gibson LJ in the TNT case. In our judgment in this case the point that against the same factual matrix, in respect of what was a continuing process, the Employment Tribunal have (i) found differing reasons, or primary reasons, for decisions made on behalf of the Employer and (ii) that the dismissal was fair, needs explanation.

18	When we first read the Extended Reasons we were all unclear as to what the explanation for the different findings as to causation and on the claims for discrimination by way of victimisation and unfair dismissal were.  As the arguments developed we became less clear because the analysis put forward by Counsel “reading between the lines” or by reference to the findings of fact made by the Employment Tribunal did not accord fully with our own preliminary views.

The appeal against the finding that Mr Dione was the victim of discrimination by way of victimisation

19	We deal with this first because it is dealt with first in the Extended Reasons and was argued first before us.  However, as we point out when dealing with Mr Dione’s appeal, it seems to us that as a matter of analysis the unfair dismissal claim could have been dealt with first.

20	In respect of both claims the factual matrix against which the conclusions and the reasoning of the Employment Tribunal fall to be considered include the following (the paragraph numbers are references to paragraphs in the Extended Reasons):

(a)	the fact that Mr Dione had received a warning (paragraph 4),

(b)	the protected act (paragraph 5),

(c)	the two incidents on 7 April and 28 April took place and there was sufficient evidence for Mr Egginton to conclude that Mr Dione’s conduct during those two incidents was not acceptable (paragraph 13),

(d)	the Employment Tribunal were less than satisfied with Mr Bhogal’s evidence and concluded that he may have encouraged members of staff to produce statements that accorded with Mr Grey’s version of events, but no finding as to why he may have done this was made (paragraph 7),

(e)	prior to 28 April Mr Bhogal had concluded that the incident on 7 April should go forward to a disciplinary hearing and at that time he was aware that Mr Dione had issued proceedings against the employer because he had prepared a statement to be issued in resisting the claim for equal pay (paragraph 9); albeit that this statement was not said to relate also to the claim for racial discrimination we read the Extended Reasons (in particular paragraph 9 and the fourth sentence of paragraph 12 relating to Mr Bhogal’s knowledge of the proceedings) as including a finding that Mr Bhogal was aware of the protected act,

(f)	for reasons that were not explained to the satisfaction of the Employment Tribunal Mr Bhogal did not initiate the disciplinary process in respect of the events on 7 April before 28 April but did so shortly thereafter (paragraph 9),

(g)	Mr Flett was affected by the facts that (i) Mr Dione had brought a race claim against the employer, and (ii) he was difficult (paragraph 11),

(h)	Mr Flett made sure that the later incident was reported and that it should form part of a disciplinary hearing (although it is not explained how Mr Flett was in a position to ensure that it formed part of such a hearing) (paragraph 11), and

(i)	from Mr Bhogal’s point of view it was convenient to add the incident of 28 April to that of 7 April (which, as we have pointed out, he had already, according to paragraph 9, concluded should go forward to a disciplinary hearing) (paragraph 11).

Those facts as found by the Employment Tribunal:
(a)	show that it was possible that the incidents were referred to the disciplinary proceedings because of the incidents themselves, because of the protected act or because of both, 
(b)	show that it was possible that the reason or primary reason for the dismissal was the events themselves and that (i) the point that Mr Dione had done a protected act and/or (ii) the point that the disciplinary process was, or may have been, initiated because (or partly because) he had done that act did not mean, or necessarily mean, that the dismissal was unfair,
(c)	contained (as we read paragraphs 11 and 26) an express finding that both the fact that Mr Dione was said to be a trouble maker and had made a claim under the Race Relations Act 1976 against the employer affected Mr Flett, and
(d)	do not contain express findings as to Mr Bhogal’s motivation by reference to the protected act..

22	Naturally the instigation of the disciplinary process or proceedings could not have been made without an allegation of misconduct.  It could have been found that those allegations were not made out.  This was not the case but we accept that this does not mean that the fact that Mr Dione had made a claim under the Race Relations Act did not have a significant influence upon Mr Flett and Mr Bhogal.  We accept that in paragraph 26 the Employment Tribunal find that it did have such a significant influence.  However, having regard to the agreed (or undisputed) factual matrix and the findings of fact made by the Employment Tribunal, we have concluded that the submission made on behalf of the Employer that the Employment Tribunal have failed properly to explain why they have reached that conclusion on causation is correct and therefore that the Employment Tribunal have erred in law.

23	As a free-standing sentence the penultimate sentence at paragraph 26 clearly founds the Employment Tribunal’s conclusion.  However, in our judgment the Employment Tribunal do not explain why that sentence follows from the points made earlier in paragraph 26 and their findings of fact.  In saying that, we repeat that we recognise that those conclusions could so follow but equally, it seems to us that they might well not.  It follows, in our judgment, that an explanation for the finding is required so as to enable the Employer to see why it lost.  In our judgment such an explanation is not given expressly and cannot properly be “read in” or inferred.

24	It seemed to us that a possible reading of the Extended Reasons was that it was Mr Flett’s subjective motivation that founded the conclusion on causation reached by the Employment Tribunal on the claim for discrimination by way of victimisation and it was thus Mr Flett’s subjective motivation which to borrow Lord Nicholl’s expression in the Nagarajan case had a significant influence on the institution of the disciplinary process.  However, and on further consideration, we accept that the argument advanced by Counsel for Mr Dione that paragraph 26 contained a finding that both Mr Flett and Mr Bhogal were consciously significantly influenced by the protective act probably (and certainly arguably) reflects the conclusion that the Employment Tribunal reached.  Counsel based this argument in connection with Mr Bhogal on the use by the Employment Tribunal of the word “seized”, their finding as to Mr Bhogal’s knowledge of the protected act and their criticism of the manner in which Mr Bhogal sought statements in respect of the incident on 7 April.  It was correctly accepted on behalf of Mr Dione that knowledge of a protected act does not necessarily carry with it the inference that it influenced the relevant decision-maker.  Indeed, it was pointed out that in respect of Mr Egginton the Employment Tribunal had taken this point on board and it was argued from that that they must also have taken the point on board in respect of Mr Bhogal.  However, in our judgment, having regard in particular to (a) the findings that Mr Bhogal had concluded prior to 28 April that the first incident should go forward to a disciplinary hearing and simply that it was convenient for Mr Bhogal to add the later incident, and (b) the lack of (i) any express finding as to Mr Bhogal’s conscious motivation by reference to the protected act, and (ii) the reasons for such a finding, the Employment Tribunal have failed to adequately explain their views and conclusions as to Mr Bhogal’s position and motivation in the Extended Reasons.

25	Additionally, in paragraph 26 of the Extended Reasons and elsewhere, there is no mention of an actual or hypothetical comparator that the Employment Tribunal considered in reaching their conclusion on the statutory question or test relating to discrimination by way of victimisation.  We accept that this might be adequately and properly explained by the approach taken by the Employment Tribunal based on the decision in the Nagarajan case in the Court of Appeal that conscious motivation was a necessary ingredient of the statutory test and a  conclusion founded on conscious motivation relating to the protected act.  However, this returns one to the difficulties as to the findings concerning Mr Bhogal’s conscious motivation.  

26	Further, in our judgment the inadequacy of the explanation on conscious motivation is compounded by the conclusion on causation reached in respect of the claim for unfair dismissal and the lack of any linkage between the two findings or any explanation as to how the potential for Mr Bhogal and Mr Flint having mixed motives was taken into account.

Mr Dione’s appeal against the dismissal of his claim for unfair dismissal

27	In the Notice of Appeal and Skeleton Argument put in on behalf of Mr Dione, his argument was based on a contention that the Employment Tribunal had found that it was only because Mr Dione was the author of the protected act that the disciplinary process in respect of two minor matters had been instituted.  We do not agree that this is the affect of the finding made by the Employment Tribunal and indeed, in argument before us different Counsel did not put the case this way.  She said that the finding was that “but for” the protected act and thus “but for” the existence of discrimination by way of victimisation there would have been no referral to the disciplinary process and thus no dismissal.  On that basis, she submitted that the operative cause of the dismissal was discrimination by way of victimisation and accordingly the dismissal was unfair.  

28	As appears from that description of it her argument was focused on the operative cause and thus the reason for dismissal and not on the issue whether the employer acted reasonably or unreasonably in treating the incidents (and thus the reason for the dismissal as found by the Employment Tribunal) as a sufficient reason for dismissing the employee having regard to the existence of the protected act and/or the possibility (or conclusion) that but for the protected act the disciplinary process and hearing would not have taken place.

29	Counsel for Mr Dione also submitted that Mr Egginton’s subsequent fair investigation and decision could not cure the dismissal of its unfairness and should not be looked at in isolation.  In support of this she referred to paragraph 43 of the judgment in the TNT case.  However, in that case what was under consideration was an unsuccessful internal appeal from a decision to dismiss found to have been an act of victimisation (see paragraphs 13 and 40 of the judgment).  In this case prior to the disciplinary process, hearing and decision made by Mr Egginton that is under consideration no decision to dismiss had been taken.  It follows that in our judgment different considerations apply.  Further, in our judgment, a finding that a referral to a disciplinary process is an act of discrimination by way of victimisation does not mean that it is an incurable substantive defect in respect of a decision to dismiss taken by a person who was not involved in the decision to refer the alleged misconduct to the disciplinary process.

30	On the face of it we accept that it can be said that there is logic in the “but for” approach argued by Counsel for Mr Dione however on analysis we consider that it places too much weight on one step in the chain of events and too little weight on the facts that Mr Dione had had a warning and that the events on 7 and 28 April took place.

31	Further, in our judgment the argument ignores or does not place sufficient weight on, the point that, as a matter of fact and law, it is possible to conclude (i) that the reason or a significant reason for the institution of the disciplinary process was the existence of the protected act, but (ii) that the reason or primary reason for the dismissal was the misconduct and the reason for the institution of the disciplinary process and the existence of the protected act do not render the dismissal unfair.  

32	In this context during argument we put the example of a whistle-blower who was motivated by racial discrimination whilst acting in the course of his employment in reporting a matter that might reasonably be regarded as of sufficient seriousness by the relevant decision-maker to warrant dismissal.  

33	In our judgment in such circumstances (and more generally) there can be a break in the chain of causation both as to (i) the decision to continue and therefore carry out the disciplinary process, and (ii) the decision to dismiss with the consequence that the dismissal can be based on the misconduct found to exist as a result of the disciplinary process and can be reasonable.

34	Accordingly in our judgment, as a matter of fact and law, it was possible for this Employment Tribunal to find that the institution of the disciplinary process or hearing was an act of discrimination by way of victimisation but that the reason or primary reason for the dismissal was misconduct and that the dismissal was reasonable.  

35	It follows that to succeed on his appeal against the decision of the Employment Tribunal that his dismissal was fair Mr Dione must persuade us to ignore the findings of the Employment Tribunal that the reason or primary reason for his dismissal was his misconduct or treat it as obviously inconsistent with the finding on causation in respect of the claim for discrimination by way of victimisation and give priority to that finding.

36	Given our conclusion on the appeal against the finding that Mr Dione was a victim of discrimination by way of victimisation, that course is not open to us.  

37	However, on the hypothesis that there had been no such appeal we are of the view that we would not have taken the course urged upon us by Mr Dione.

38	As to this, although we accept that the chronology of events can on the face of it be said to support the “but for” argument advanced on behalf of Mr Dione, in our judgment it should not be forgotten that the events which constituted misconduct took place before the institution of the disciplinary process and, as a matter of analysis, it seems to us that the consideration of the causes for the decisions to institute that process and a decision made as a result of that process, could have been conducted by the taking later decision first.

39	Also as appears above we do consider that the two decisions as to causation are obviously or necessarily inconsistent and we do not see why one of two such decisions in respect of a series or continuation of events should be given priority without explanation.

40	If that is right the argument advanced on behalf of Mr Dione, like that advanced on behalf of the Employer, becomes one that the Employment Tribunal have failed to adequately explain why they have reached the conclusion that they have, having regard to their differing findings on causation.

41	In our judgment, on the above hypothesis that the Employer had not appealed the finding of discrimination by way of victimisation this argument is correct.

42	As to this conclusion we repeat the point that there is no linkage in the Extended Reasons between the two findings.  Further the reasons given by the Employment Tribunal show that in reaching their conclusion as to the reason for the dismissal, the Employment Tribunal  focused on Mr Egginton’s investigation of the events and their conclusion that he was not motivated by his knowledge of the existence of the protected act.  However, in their reasoning they do not consider what effect, if any, the fact or possibility that the disciplinary process itself was instituted because of the existence of the protected act has on either the conclusion as to the reason for the dismissal or the conclusion on reasonableness.  We do not know if this was an issue raised before Mr Egginton.

The two appeals on liability

43	In our judgment for the reasons set out above, the Employment Tribunal erred in law in respect of both its decision on liability by not providing reasons which adequately explain to the parties why they won and lost.  

44	Additionally in our judgment:

(a)	having regard to our conclusion on the Employer’s appeal against the finding of discrimination by way of victimisation, Mr Dione’s appeal fails because the finding upon which he seeks to base his arguments is the subject of a successful appeal; and

(b)	although an equivalent “but for” argument does not exist (and was not advanced) in respect of the Employer’s appeal, we are of the view that because the dismissal took place after the institution of the disciplinary process and hearing, the connection between the institution of the disciplinary process and the decision to dismiss and the differing conclusions reached as to causation mean that one decision should not stand if the other falls.

Remission

45	As we understood them both sides invited us to allow their respective appeals on liability and then deal with the claims ourselves.

46	In our judgment we are not in a position to make, or read into the findings of the Employment Tribunal, the relevant findings of fact on causation to enable us to decide the claims ourselves.  It follows that in our judgment the correct course is for us to remit both appeals to a differently constituted Employment Tribunal (see Kapadia v London Borough of Lambeth [2000] IRLR 699).

The appeal as to quantum of damages for the claim of discrimination by way of victimisation

47	Having regard to our conclusion that the appeal on liability should be remitted to an Employment Tribunal in our judgment the question of damages should be reconsidered by that Tribunal if it finds in favour of Mr Dione on liability.  That Tribunal will necessarily have to consider the issue of damages in respect of the findings of fact that it makes.

48	Accordingly, and for the avoidance of doubt, we remit the issues of liability and quantum in respect of the claim for discrimination by way of victimisation to a differently constituted Employment Tribunal.

49	As to this appeal we add that:

(a)	in our judgment Counsel for Mr Dione correctly accepted that the “but for” argument she advanced applied without any real differences to this appeal and the appeal against the decision of the Employment Tribunal that Mr Dione’s dismissal was fair, 

(b)	our preliminary view is that if the new Employment Tribunal was to find like the old one that the principal reason for the termination of Mr Dione’s contract of employment was misconduct and he had not been unfairly dismissed that it would be odd if this did not fall to  be taken into account in the assessment of damages for discrimination by way of victimisation, and

(c)	we were referred to paragraph 60 of the judgment of this Tribunal in Ministry of Defence v Cannock [1994] IRLR 509, but our preliminary view is that this paragraph does not found (i) an argument that the difficult issues that can arise concerning causation in the assessment of damages for a statutory tort are excluded (see, for example, Harvey at paragraphs L 53404 and 53405 and McGregor on damages, 16th Edition, paragraphs 107, 118 and 139), or (ii) an argument that a conclusion that Mr Dione was fairly dismissed or would have been likely to have been dismissed in the near future is irrelevant (see by analogy Polkey v AE Dayton Services Ltd [1988] ICR 142). 

Overall conclusion and general comment

50	We allow the appeals against the decisions of the Employment Tribunal as to liability and quantum in respect of the claim for discrimination by way of victimisation and as to unfair dismissal and remit those claims both as to liability and quantum to a differently constituted Employment Tribunal.

51	Having reached that conclusion, we would like to express our sympathy to the Employment Tribunal because we recognise that particularly having regard to the conclusions they reached, this case gives rise to difficult issues of analysis and explanation.  

52	Further we have reached our decisions with reluctance because as we have explained they are based on our view that the Extended Reasons in this case do not sufficiently explain conclusions which in our view were open to the Employment Tribunal to reach as a matter of fact and law and as the approach taken by this Tribunal to the reading and interpretation of Extended Reasons demonstrates this is not a conclusion we should reach lightly or readily.