Appeal No. UKEAT/0466/06/CEA
UKEAT/0627/06/CEA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 15 May 2007
                                                          Judgment handed down on 20 August 2007

Before
THE HONOURABLE MR JUSTICE UNDERHILL
MR I EZEKIEL
MR B R GIBBS

VISION INFORMATION SERVICES (UK) LTD	APPELLANT

MR L C COUTINHO	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR N GRUNDY
(of Counsel)
Instructed by:
Messrs. Aaron & Partners Solicitors
5-7 Grosvenor Court 
Forgate Street
Chester
CH1 1HG	
For the Respondent	MR L COUTINHO
(The Appellant in Person)	

SUMMARY

Transfer of Undertakings – Dismissal – Economic technical or organizational reason
Practice and Procedure – Postponement
Race Discrimination – Comparison – Injury to Feelings

Claims for unfair dismissal and race discrimination by executive dismissed four months before transfer of undertaking - Tribunal held dismissal to be in anticipation of transfer and not for an ETO reason, and thus held transferee liable both for automatic unfair dismissal and for transferor's pre-transfer discrimination - Preliminary issue on appeal as to whether transferor had locus to appeal, notwithstanding that transferee was the person found liable: held that it had, since if the appeal on the TUPE issues succeeded liability would revert to the transferor - Substantive issues on (a) whether Tribunal right to refuse an adjournment when employer's principal witness taken ill and (b) on details of Tribunal's reasoning on TUPE and discrimination issues - Appeal dismissed - Employee's appeal on quantum (inc. refusal of claim for aggravated damages) also dismissed

THE HONOURABLE MR JUSTICE UNDERHILL
1.	The Claimant, the respondent to this appeal, is an IT specialist.  He describes himself as British Asian.  In January 1997 he commenced employment with the appellant company, Vision Information Services (UK) Ltd (“Vision”), which is a subsidiary of a U.S. company providing stock management software to major entertainment corporations which sell products in the U.K. market.  From about 2002 the business began to do badly.  In November 2002 negotiations began to sell it to a subsidiary of the Rank Corporation called Deluxe Media Services Ltd (“Deluxe”).  The negotiations proceeded patchily and appeared to have fallen through altogether in May 2003; but they resumed in late 2003.  On 22 March 2004 the Claimant was dismissed, ostensibly for redundancy, with effect from 31 March.  Vision’s business was sold to Deluxe some four months later, on 31 July 2004.

2.	On 28 June 2004 the Claimant brought proceedings in the Employment Tribunal against Vision claiming:

(a)	that he had been unfairly dismissed and 

(b) 	that Vision had discriminated against him on racial grounds, both by reference to a long sequence of problems which he claims to have suffered during his employment and by his eventual dismissal.

(In fact the claim was originally brought not against Vision itself but against its U.S. parent; but that error was soon rectified.)  

3.	In May 2005 the Claimant raised a claim that there had been a relevant transfer of Vision’s undertaking to Deluxe within the meaning of reg 3 of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (“TUPE”), and that his dismissal had been for a reason related to that transfer, with the result that all Vision’s liabilities arising out of the employment relationship transferred to Deluxe by virtue of reg 5 of TUPE (as applied in the decision of the House of Lords in Litster v. Forth Dry Dock & Engineering Co Ltd [1990] 1 AC 546).  Deluxe resisted being joined but by order of the Tribunal dated 28 November 2005 it was joined as Second Respondent.  

4.	The claim came before a Tribunal sitting at Watford on 25/26 April and 2 May 2006.  In a reserved judgment sent to the parties on 26 June 2006 (“the liability judgment”) the Tribunal found that there had indeed been a “TUPE transfer” to Deluxe and that the Claimant’s dismissal had been for a reason related to that transfer.  It held that the dismissal was not for an “economic, technical or organisational [“ETO”] reason” within the meaning of reg 8 (2) of TUPE and that accordingly the dismissal was automatically unfair within the meaning of reg 8 (1).  It also found for the Claimant as regards some, but not most, of his claims of racial discrimination.  

5.	On the basis adumbrated above, liability in relation to both the unfair dismissal and the discrimination claim passed to Deluxe.  For reasons which will appear, it is necessary that we set out the precise form which the liability judgment took.  It was expressed as follows:

	“1.	The Claimant’s claim for unfair dismissal is upheld.

	2.	The Claimant’s claim of race discrimination is upheld.

3.	It is determined that there was a relevant transfer from [Vision] to [Deluxe] within the meaning of regulation 3 of the Transfer of Undertakings (Protection of Employment) Regulations 1981 and that the transfer was the principal reason for the Claimant’s dismissal.”

6.	There was a remedies hearing on 18/19 July 2006.  By a reserved judgment sent to the parties on 5 October 2006 (“the remedies judgment”) the Tribunal made the following order

“1.	The Claimant is awarded compensation for unfair dismissal in the total sum of £57,025, which is payable to the Claimant by [Deluxe].

2.	It is declared that [Vision] discriminated against the Claimant on the grounds of race.

3.	Compensation for race discrimination is awarded to the Claimant in the sum of £12,500, together with interest in the sum of £2,781.25, which is payable by [Deluxe].”

It is unnecessary to set out the Tribunal’s detailed reasoning which led to those figures, but we should note that the award of compensation for racial discrimination contained no element for aggravated damages.  It will be seen that the pecuniary remedies were, correctly, awarded only against Deluxe; but that the declaration named Vision as the discriminator. 

7.	At both hearings the Claimant, who is evidently both intelligent and articulate, represented himself.  At the liability hearing Vision was represented by Mr Pasha of Aaron and Partners LLP and Deluxe by its Human Resources manager, Mr Wright.  At the remedies hearing Mr Pasha appeared for both Vision and Deluxe.  (On the face of it, their interests might not appear identical; but we were told that, as is common, there were indemnity arrangements in place between the two companies.)  

8.	Vision, but not Deluxe, appealed against the liability judgment.  After some vicissitudes the matter was allowed to proceed to a full hearing on the basis of an amended notice of appeal.  The Claimant appealed against the remedies judgment on the basis that the level of the award for racial discrimination was too low and that the Tribunal had been wrong to refuse to award aggravated damages.  Both appeals have now come before us.  The Claimant again appeared in person.  Mr Nigel Grundy of counsel appeared for Vision on the liability appeal and for both Vision and Deluxe on the Claimant’s appeal against the remedies judgment.

THE LIABILITY APPEAL

THE FACTS

9.	For the purpose of the issues on the appeal, it is unnecessary that we set out the facts in much detail.  They can be summarised as follows:

(1)	Dramatis personae.  Ultimate control of the business was vested in Ms. Correia, the owner and founder of the U.S. company.  When the Claimant was first appointed there were only two employees in the U.K. – himself and a Mr. Armer, the Director of International Operations, to whom he initially reported.  In 1998 a Ms. Hoddell was recruited and in early 1999 a Mr. Meyer.  From that point both the Claimant and Ms. Hoddell (whose title was Operations Manager) reported to Mr. Meyer.  In May 1999 Mr. Armer was dismissed for redundancy.  From October 2001 a Mr. Motzny, from the U.S. parent, became more involved in the management of the business.  By the time of the Claimant’s dismissal the workforce in the U.K. had grown to about fifteen: about twice that number were employed in the U.S.  A Ms. Fish and a Mr. Rowlandson were working under the Claimant at the date of his dismissal.

(2)	The Claimant’s performance.  The Claimant was clearly a very successful employee and following Mr. Armer’s dismissal became its most highly-paid employee.  (We are not clear whether that includes Mr. Meyer.  Since the Claimant reported to him, it might have been expected that he would be paid more, but the Reasons are not clear on this.)

(3)	The Claimant’s concerns.  Notwithstanding his success, it is clear that the Claimant had for some time felt under-appreciated and did not feel that he got sufficient support from Mr. Meyer and the managers in the U.S.  He had various complaints, including in particular about the performance of Ms. Hoddell, with whom his relationship was difficult: he believed that these were not properly dealt with.  At one stage, in late 2001, he resigned; but following a conference call with Ms. Correia, Mr. Meyer and other senior managers from the U.S. he was persuaded to stay.  However, matters did not improve and he continued to feel that he was not taken seriously, particularly by Mr. Meyer.  It was Mr. Meyer’s handling of these matters which gave rise to the claims of discrimination: we deal with the details below, but the essence of the case was that it was (at least partly) because he was an Asian that Mr. Meyer did not take his concerns seriously.  

(4)	Sale to Deluxe.  As mentioned above, there were negotiations between Vision and Deluxe between November 2002 and May 2003.  Another purchaser expressed interest in October 2003, but this came to nothing.  Talks with Deluxe resumed in December 2003.

(5)	The dismissal.  The Claimant was aware from discussions with Mr. Meyer in late 2003 and early 2004 that if a sale of the business could not be achieved there were likely to be redundancies.  But there was no suggestion at that stage that his own job was at risk.  On 19 March 2004 Mr. Meyer asked the Claimant to attend a meeting at the Landmark Hotel on 22 March: he told him that the negotiations with Deluxe had fallen through and that they needed to discuss the situation.  At the meeting on 22 March he told the Claimant he was being dismissed for redundancy.  The Tribunal held that that was not the true reason.  It found that the reason for the dismissal was that the business was unsaleable because of the costs associated with employing the Claimant and that the sale to Deluxe had not fallen through but had simply been “put into parking” until he had been dismissed.

THE EVIDENCE

10.	The only witnesses from whom the Tribunal heard oral evidence were the Claimant himself and Mr. Wright.  Vision had served a witness statement (apparently drafted in March 2005) from Mr. Meyer, but he was not able to attend the hearing because of ill-health:  Vision had applied for an adjournment on that ground but it had been refused (as to this, see paras. 17-25 below).  Statements were not served – either originally or when it became clear that Mr. Meyer was ill – from any other witness on behalf of who had first-hand knowledge of any of the issues: although Mr. Meyer was clearly the person on behalf of Vision who had been most closely involved in dealing with the Claimant, there were other witnesses – most obviously, Ms. Correia, Mr. Motzny and Ms. Hoddell – who had relevant knowledge.  Mr. Wright, who was of course an employee of Deluxe and not Vision, had no first-hand knowledge of any of the matters.

11.	The Tribunal was apparently presented with a substantial bundle of contemporary documents, but it noted that Vision had neither produced nor disclosed any documents relating to the transfer to Deluxe or to the reasons for the Claimant’s dismissal.  It observed at para. 9 of the Reasons that:

“There was a dearth of evidence in relation to these matters, which were in the exclusive knowledge and control of the First and, to some extent, the Second Respondents.”

12.	The Claimant submitted to us that the “dearth” of evidence to which the Tribunal referred was not the result of neglect or a failure to appreciate the nature of his case based on TUPE.  As he demonstrated by reference to the submissions which he had lodged in connection with the (contested) application for the joinder of Deluxe, the nature of his case was entirely clear, albeit that he had not been required formally to plead it.  He submitted that it was in fact evident from Mr. Pasha’s submissions and conduct at the hearing that both Vision and Deluxe had taken a deliberate tactical decision to adduce no evidence, and produce no documents, relating to the transfer and instead to rely on a (misconceived) submission that the Claimant had failed properly to plead any case based on TUPE.  There is nothing in the Reasons explicitly supporting what the Claimant told us; but it is plausible and at least consistent with the Tribunal’s observations.  Mr. Grundy did not seek to rebut it.

PRELIMINARY: VISION’S LOCUS TO APPEAL

13.	The Claimant raised a preliminary point about this appeal with which we must deal before deciding whether to address the substantive grounds of appeal.  He submitted that Vision’s appeal was “academic” because no finding of legal liability had been made against it.  Although the acts complained of, both as regards the unfair dismissal claim and the race discrimination claim, were acts committed by it, the legal liability in relation to those acts had passed to Deluxe via TUPE.  Only Deluxe, therefore, had locus to appeal, and it had not done so.  

14.	This raises a technical point of some nicety.  Reg. 5 (2) of TUPE provides that:
“… [O]n the completion of a relevant transfer —
(a)     	all the transferor's rights, powers, duties and liabilities under or in connection with any such contract shall be transferred by virtue of this regulation to the transferee; and
(b)    	 any act or omission before the transfer is completed, of or in relation to the transferor in respect of that contract or a person assigned to that organised grouping of resources or employees, shall be deemed to have been an act or omission of or in relation to the transferee.”

It is of course on that basis that the two elements of the remedies judgment which require the payment of compensation – orders 1. and 3. as set out at para. 6 above – are explicitly directed at Deluxe: although the acts complained of were in fact done by Vision, they are deemed by sub-para. (b) to be acts of Deluxe, so that it necessarily follows that any legal liability for those acts falls on Deluxe.   (Possibly the same result is achieved by sub-para. (a) as well, depending on whether Vision’s contingent liability for unfair dismissal and for disability discrimination, which is not yet crystallised in a Tribunal award, counts as a “liability”.)  It is true that orders 1. and 2. in the liability judgment and order 2. in the remedies judgment are of a different character, inasmuch as they are simply declarations about the lawfulness of acts done by Vision; but we cannot see that this makes any difference.  If the acts in question are deemed by reg. 5 (2) (b) to be Deluxe’s acts, it is on the face of it unclear why Vision should have an interest (in the formal sense) in the issue of their lawfulness.  However, that is not the whole story.  Reg. 5 (2) (b) only has the effect in question on the basis (via the Litster reasoning) that the dismissal was indeed for a transfer-related reason and therefore unfair.  That is of course the very finding which Vision disputes; and it would be extraordinary if the decision were, so to speak, self-insulated from challenge.  In our view Vision must have locus to pursue the liability appeal because if the appeal were successful the acts in question would be its acts.

15.	As a fallback, Mr. Grundy – who fortunately had immediate access to instructions from Deluxe, since they were his clients on the remedies appeal – made clear that if we were persuaded by the Claimant’s objection on this point he would apply for Deluxe to be substituted as the appellant on the liability appeal.  We deferred a final decision on the point but allowed him to argue the substantive case without prejudice to whether he was entitled to do so or, if so, on behalf of which of his clients.  In view of our conclusion above, that application is unnecessary.  But we should make it clear that if it had been necessary we would have granted it.   It would of course have been being made long after the time within which Deluxe could have mounted a free-standing appeal.  But if the Claimant’s locus point had been good, then in our judgment it would have been in the interests of justice that substitution be permitted.  The objection to Vision’s locus is of the most technical character, and any failure to join Deluxe from the start would have been venial and would have caused no substantial prejudice to the Claimant.

THE GROUNDS OF APPEAL

16.	We turn to the substantive grounds of appeal.  These were under three heads, which we take in turn.

(a)	The Tribunal’s Refusal to Grant an Adjournment

17.	The claim was originally presented on 28 June 2004.  For various reasons, into which it is unnecessary for us to go, there were considerable interlocutory delays.  It was not until January 2006 that the date for the substantive hearing (25 April 2006) was fixed.  On 1 February Vision sought to have that date adjourned; but the Tribunal refused the application.   On 7 April Aaron & Partners applied again for an adjournment, this time on the basis that Mr. Meyer was too ill to attend.  They enclosed a medical certificate, which stated as follows:
“I have been seeing Mr. Meyer recently with what seems to be left ventricular failure.  I have referred him today to a consultant cardiologist for a further opinion.
At the present time he becomes breathless on minimal exertion and is not fit to attend a court hearing in Watford.  At the present time I cannot accurately estimate a timescale for his recovery but hope that with treatment starting today and an urgent cardiology opinion he might be fit enough to attend in perhaps May or June.”

On 24 April (i.e. on the eve of the hearing) that request was refused by letter from the Tribunal.  It was renewed at the start of the hearing.  

18.	The Tribunal refused the application.  It gave its reasons as part of its eventual Judgment.  After setting out the parties’ submissions it said this:
“19.	The tribunal took into account … that Mr. Meyer was the only witness whom the First Respondent intended to call and accepted that there was a possibility of prejudice to the First Respondent if the case were permitted to proceed in his absence.  Mr. Meyer was the only individual against whom the allegations of race discrimination were made and was the person who carried out the Claimant’s dismissal on behalf of the First Respondent.  The tribunal accepted that Mr. Meyer genuinely had a heart condition which prevented him from attending the tribunal.
20.	On the other hand, the Claimant had been dismissed more than two years ago.  He had attended the tribunal, well-prepared and ready to present his case.  Delay in determining discrimination cases is particularly undesirable and the delays in determining this case had already been considerable.  No up-to-date medical information in relation to Mr. Meyer’s health was available to the tribunal and no explanation was given as to why the “urgent” appointment with the cardiologist had not yet been made.  The First Respondent had provided the witness statements, other than from Mr. Meyer, notwithstanding that a number of individuals had been involved in the relevant events, including the major shareholder at the relevant time, Ms. Irene Correia.  No explanation was given as to why no other witness evidence had been obtained, either when it first became clear that Mr. Meyer might be too unwell to attend the Hearing or after the tribunal first refused the application for adjournment or at all.  It was frankly accepted by Mr. Pasha that any adjournment would have to be for an indefinite period and that there was a strong possibility that Mr. Meyer would never be fit to attend.
21.	The tribunal read Mr. Meyer’s witness statement before determining the application.  The witness statement was full and detailed.  The case was well-documented and, whilst there were some significant disputes of fact, the facts were mainly uncontentious.  The allegations of race discrimination rested entirely on inference.  Where facts were disputed, the Claimant could be cross-examined by the First Respondent’s legal representative.
22.	The tribunal took into account the importance of ensuring that there should be a fair trial pursuant to Article 6 of the European Convention on Human Rights and took into account the two cases relied on by the First Respondent [these were Teinaz (below) and Andreou v Lord Chancellor’s Department [2002] IRLR 728].  It considered whether Mr. Meyer’s presence was necessary in order for there to be a fair trial.  A fair trial does not necessarily require that a witness should give evidence orally.  Further, a right to a fair trial under Article 6 requires that disputes should be determined without undue delay.  If the present case were postponed, the postponement would be indefinite.  The previous history of applications for adjournment, the paucity of the medical evidence and the seriousness of Mr. Meyer’s condition all indicated that there was only a modest possibility, no higher than 50%, that Mr. Meyer would ever attend the tribunal to give evidence.  The tribunal concluded that there could be a fair trial in the absence of Mr. Meyer and that, in balancing fairness to both the Claimant and the Respondent, the application to postpone should be refused.”  

The Tribunal made it clear that, since Mr. Meyer’s statement had been prepared in response to a statement from the Claimant, it would not admit evidence in chief from the Claimant over and above what appeared in his statement.

19.	Mr. Grundy submitted that the Tribunal erred in law in refusing the application.  He referred to the decision of the Court of Appeal in Teinaz v. London Borough of Wandsworth [2002] ICR 1471, and to the observation by Peter Gibson LJ, at para. 21 (p. 1479) that:
“A litigant whose presence is needed for the fair trial of a case, but who is unable to be present through no fault of his own, will usually have to be granted an adjournment, however inconvenient it may be to the tribunal or court and to the other parties. That litigant's right to a fair trial under article 6 of the European Convention on Human Rights demands nothing less. But the tribunal or court is entitled to be satisfied that the inability of the litigant to be present is genuine, and the onus is on the applicant for an adjournment to prove the need for such an adjournment.”

He submitted that the Tribunal failed to follow “the general principle in Teinaz”.  He also identified a number of alleged failures in the Tribunal’s reasoning.

20.	We accept of course the general proposition stated by Peter Gibson LJ in Teinaz.  The present case does not in fact fall precisely within its terms, since Mr. Meyer was a witness rather than a party.  But we accept that the Respondent was a company and Mr. Meyer the principal management witness, and no doubt what Peter Gibson LJ says is broadly applicable to the case where such a witness is unavoidably absent.  But it is not formulated as an absolute rule.  Although there is indeed a strong presumption in favour of adjournment in the circumstances stated, the tribunal will still in each case have to decide what course it is right to take in the interests of justice to all parties; and it was thus not only legitimate but necessary for the Tribunal to take into account all factors capable of bearing on the fairness of the legal process as a whole, as it did in the paragraphs which we have set out.  

21.	We turn to consider Vision’s challenge to the way in which the Tribunal weighed the factors.  Mr. Grundy summarised the points made in the Grounds of Appeal under, essentially, three heads.

22.	First, he submitted that the Tribunal underestimated the extent to which Mr. Meyer’s oral evidence was essential.  Although his witness statement was no doubt “full and detailed” as far as it went, it did not address the issue of whether the dismissal was transfer-related because it had been prepared at a date when no TUPE issues had been raised.  Even as regards the issues which it covered, the evidence would inevitably have less weight if the Tribunal were unable to hear Mr. Meyer giving live evidence on those issues in cross-examination.  We understand these points, as did the Tribunal (see para. 19 of the Reasons); but they seem to us, as to the Tribunal, far from overwhelming.  As regards the areas not covered by Mr. Meyer’s statement, if he had evidence to give on the TUPE issues it is not clear why a further witness statement was not served once it became clear that those issues would arise: indeed, the Tribunal might reasonably have been reluctant to allow him to give oral evidence in chief on matters not covered by his statement.  The issues in question went to the reason for the dismissal, as to which the burden had been on Vision from the start.  Nor, as the Tribunal pointed out, was Mr. Meyer the only possible source of evidence on these issues.  As regards the value of oral evidence, the Tribunal would of course have been aware that, for reasons which were not his fault, it had been unable to hear Mr. Meyer’s evidence tested and would bear that in mind.

23.	Secondly, the previous delay in the proceedings had not been Vision’s fault.  This may well be correct, but the Tribunal did not suggest otherwise.  It merely noted that the delay had occurred and that further delay was undesirable.

24.	Thirdly, Mr. Grundy said that it was wrong for the Tribunal to proceed on the basis that Mr. Pasha had “frankly accepted … that any adjournment would have to be for an indefinite period”: he said that that misrepresented what Mr. Pasha had said.  But precisely what Mr. Pasha said is not the point.  It was clear from the medical evidence that there could be no certainty about whether and if so when Mr. Meyer would ever be well enough to give evidence.

25.	The truth is that the Tribunal’s refusal of Vision’s application for an adjournment was a case management decision, involving the need to weigh a number of competing factors, of a kind with which this Tribunal will very rarely interfere.  We can see no error of law in the decision to which the Tribunal came.  We would add, though this is not central to our decision, that the Tribunal plainly, and with justification, felt that Vision had not done as much as could reasonably be expected to support its application – either by providing up-to-date medical information or by demonstrating what attempts had been made to fill the gaps left by Mr. Meyer’s absence by approaching other witnesses. 

(b)	The Challenge to the Unfair Dismissal Decision

26.	The Tribunal’s decision that the Claimant’s dismissal was unfair was based squarely on the provisions of reg. 8 of TUPE.  This provides, so far as relevant, as follows:

(1)   Where either before or after a relevant transfer, any employee of the transferor or transferee is dismissed, that employee shall be treated for the purposes of [Part X of the Employment Rights Act 1996] ,,, as unfairly dismissed if the transfer or a reason connected with it is the reason or principal reason for his dismissal.
(2)   Where an economic, technical or organisational reason entailing changes in the workforce of either the transferor or the transferee before or after a relevant transfer is the reason or principal reason for dismissing an employee –
(a)   paragraph (1) above shall not apply to his dismissal; but
(b)   … .

The Tribunal’s finding necessarily had two parts – first, that the dismissal was for a transfer-related reason, and secondly that that reason did not amount to an ETO reason. 

27.	The detailed reasoning underlying the first of those findings appears principally at paras. 82-85 of the Reasons, which read as follows:

“82.  Whilst negotiations were ongoing with the Second Respondent, the financial position of the First Respondent remained strained.  Mr. Meyer, in consultation with US management, decided that one way of reducing costs would be to terminate in-house development and control of IT systems in the UK and to transfer that function to the US company.  The Claimant’s position would then become redundant and the substantial cost of his salary would be saved.  Mr. Meyer also decided that his own salary could be cut by 66% and that two Accounts Management Staff, Keely Fish and Peter Rowlandson, could be made redundant.
83.  Mr. Meyer in his witness statement mentioned the negotiations with the Second Respondent between about September 2002 and about April 2003 but failed to mention that negotiations with the Second Respondent resumed in about December 2003.  Nor did he mention that he told the Claimant on 19th March 2004 that the takeover by the Second Respondent had fallen through.  The Claimant’s evidence in relation to these matters was unchallenged.  Mr. Meyer’s omission to mention these matters tainted the credibility of his evidence.  When taken together with the dearth of evidence in relation to the negotiations between the First and Second Respondents, the tribunal considered it reasonable to infer that it was likely that the takeover had not fallen through in March 2004 but, as the Claimant said in his evidence, had merely been “put into parking” until after the Claimant had been dismissed.
84.  As the Second Respondent was still considering a takeover in March 2004, the tribunal inferred that it must have had knowledge of the First Respondent’s proposals for costs savings and, on the balance of probabilities, Mr. Meyer’s proposals for costs reductions were part and parcel of the negotiations between the First Respondent and the Second Respondent.  Mr. Meyer’s proposals would, no doubt, lead to a balancing of the books for the First Respondent which would, no doubt, be attractive to the Second Respondent in the context of the takeover.
85.  The tribunal concluded, on the balance of probabilities, that the Claimant’s dismissal was transfer-related and that the transfer was the principal reason for the Claimant’s dismissal. The only evidence adduced by the First and Second Respondents specifically to refute the Claimant’s assertion that his dismissal was transfer-related was the evidence of Mr Wright, who reported that Mr Benchabo [his predecessor as HR manager] had told him that the dismissal was not linked to the transfer.  Although the evidence as to the negotiations between the First and Second Respondents was available only to the Respondents and not to the Claimant, the Respondents elected to call no first-hand evidence or to disclose any documents relevant to the negotiations.  The tribunal did not consider Mr Meyer’s evidence as to the reasons for the Claimant’s dismissal to be reliable in the absence of supporting documentation and in the light of his failure to mention the ongoing discussions with the Second Respondent in his witness statement. The fact that the sale did go ahead four months after the Claimant’s dismissal with the party (the Second Respondent) which had been negotiating with the First Respondent immediately before the dismissal; and that the First Respondent used the Second Respondent’s alleged withdrawal from the negotiations as a pretext for the Claimant’s dismissal both supported the Claimant’s assertion that his dismissal was transfer-related.  Neither Respondent adduces evidence that the Second Respondent had withdrawn from the negotiations on 19th March 2004 and the tribunal concluded, on the balance of probabilities, that the Second Respondent was still in negotiation with the First Respondent at that time.”

This reasoning is picked up in the “Conclusions” section of the Reasons at para. 109, as follows:
The tribunal concluded that the Claimant’s dismissal was connected with the transfer.  Following the Claimant’s dismissal, the transfer did proceed.  The Claimant was the most highly paid employee of the First Respondent and his dismissal assisted the First Respondent to “balance its books” so as to make the purchase more attractive to the Second Respondent.  The fact that the Claimant was invited to the meeting at the Landmark Hotel on the same day that he was told that the takeover by the Second Respondent was not proceeding was more than coincidental.  The tribunal inferred from these facts and from the failure by the First and Second Respondents to call any first-hand evidence in relation to the negotiations between the First and Second Respondents and the transfer that the reason for the Claimant’s dismissal was to effect the sale to the Second Respondent.”

28.	Vision contended that that reasoning was not open to the Tribunal.  Mr. Grundy made two points.

29.	First, he submitted that the Tribunal was wrong to place any weight on the fact that Mr. Meyer had failed in his statement to mention the sale negotiations involving Deluxe.  He said that those negotiations were not material to the matters which were in issue at the date that the statement was drafted, and accordingly no inference could be drawn from the failure to mention them.  This was Ground 5A (c) of the Amended Notice of Appeal.  But it is important to appreciate that the Tribunal’s point was not simply that Mr. Meyer had failed to mention the negotiations with Deluxe: it was that he had mentioned the first phase of the negotiations but had omitted to mention their resumption.  It seems to us that that omission was sufficiently noticeable to constitute an element in the Tribunal’s conclusion.  It was not of course the sole, or even the main, basis for that conclusion.  The Tribunal also took into account the inferences to be drawn from the sequence of events and the commercial realities of the situation; and it understandably attached considerable weight to Vision’s failure, even once it became entirely clear that TUPE issues were in play, to produce any documentary or other evidence about the history of the transfer.  

30.	Secondly, Mr. Grundy submitted that the Tribunal was wrong to take into account the Claimant’s “evidence” that the transfer to Deluxe had merely been “parked” until he had been dismissed.  This is Ground 5A (a)/(b) of the Amended Notice of Appeal.  But although the Tribunal did indeed quote an assertion to that effect from the Claimant, it was well aware that the Claimant himself had, and claimed to have, no knowledge of what had occurred, as to which the burden of proof was on Vision.  His assertion was quoted merely as a pithy summary of what the Tribunal was being asked – and was in the event prepared – to infer.  The basis of the inference was the matters summarised in paras. 85 and 109.

31.	In our view, therefore, the challenges made by Mr. Grundy fail.  The Tribunal was entitled to infer, on the grounds which it stated, that the decision to dismiss the Claimant was transfer-related.

32.	We turn to the second element in the Tribunal’s decision, namely that the transfer-related reason which it found did not amount to an “economic technical or organisational” reason within the meaning of reg. 8 (2) of TUPE.  As to that, Mr. Meyer had given express and fairly circumstantial evidence in para. 47 of his witness statement that he decided, in the first half of March 2004, “to terminate in-house development and control of IT systems in the UK”, which meant that “as the Claimant was responsible for the development of IT systems in the UK his position therefore became redundant”.  The Tribunal accepted that evidence: see para. 82 of the Reasons (see above).  

33.	The reason why the Tribunal did not accept that as an ETO reason appears at paras. 110-113 of the Reasons, where it said this:
“110.  The tribunal next considered whether the reason or principal reason for the dismissal was the transfer or an ETO, bearing in mind that the burden of proving the reason for the dismissal rests on the employer.

111.  The First Respondent was in financial difficulties and was therefore actively negotiating with the Second Respondent for a takeover of the First Respondent’s business as at March 2004.  The First Respondent could not have survived without the takeover by the Second Respondent and it was not being reorganised in order that it could continue as a going concern. There was no redundancy procedure put in place by the First Respondent; no selection criteria were identified; and no consultation took place.  All of these factors would normally have been present in circumstances where a dismissal was attributable to a genuine ETO involving redundancy.

112.  Further, in circumstances where the reason or the principal reason for dismissal was an ETO involving redundancy, even in a relatively small company such as the First Respondent, there would have been some documentation supporting the existence of an ETO.

113.  The tribunal was not satisfied, in the circumstances, that the reason or principal reason for the dismissal was an ETO.”

As we understand it, the Tribunal there had in mind the line of cases beginning with Wheeler v Patel [1987] ICR 631, which establish that a dismissal carried out as part of a reorganisation designed to make an undertaking more saleable does not fall within the terms of reg. 8 (2).  That is the point of the finding that the business “was not being reorganised in order that it could continue as a going concern [sc. in the hands of Vision]”.  Mr. Grundy did not seek to  develop any line of argument based on those authorities or any limitation to their effect.

34.	The Amended Notice of Appeal makes essentially two points about that reasoning.

35.	First, it is contended that the Tribunal’s finding contradicts the evidence in Mr. Meyer’s witness statement, which the Claimant was in no position to challenge, and the finding in para. 82 of the Reasons which was based on it:  see Ground 5B (a) and (c).  But that misses the point.  If Mr. Meyer’s redundancy proposal was simply part of the exercise of preparing the company for sale there is no inconsistency in the Tribunal accepting that evidence.

36.	Secondly, it is contended that the reasoning in those paragraphs contained some elements which appear more relevant to the question whether the dismissal was fair than to the question whether it was for an ETO reason, such as the references to absence of consultation or proper procedures:  Ground 5B (b).  But the final sentence of para. 111 makes it clear that the Tribunal has its eye on the right ball:  the factors in question are mentioned as indications that the reorganisation was not genuinely directed to the continuation of the business.

37.	We accordingly believe that the Tribunal was entitled to find that the reason for the Claimant’s dismissal was not an ETO reason.  It follows that Vision’s challenge to the finding of unfair dismissal fails.  (We should add for completeness that the Claimant sought, following the conclusion of the hearing, to make further submissions in writing on this aspect.  We have not found it necessary to take those submissions into account in reaching our conclusion.)

(c)	The Challenge to the Findings of Racial Discrimination

38.	The Claimant’s complaints of racial discrimination were set out in 24 sub-paragraphs under para. 3 of the grounds pleaded under para. 11 of his Originating Application.  As noted above, the Tribunal dismissed most of the complaints.  Those which it found proved it dealt with in four groups, as follows:
(1)	In para. 3.1 the Claimant had complained that:
“Management undermined my position with clients, operations & IT staff by telling the Client to liaise with the Operations Manager (OM) with regard to IT matters.”

At para. 124 it identified that the gist of the complaint was that Ms. Hoddell, who was white, was treated more favourably by Mr. Meyer than he was.  At paras. 124-126 the Tribunal accepted that that was indeed the case.  Although no details are given, it plainly had in mind its detailed findings in the “Findings of Fact” section of the Reasons.  We need not set these out, but we note in particular that at paras. 55-56 the Tribunal made findings about a specific episode, involving Fox, in which the Claimant was excluded, in favour of Ms. Hoddell, from matters which properly fell within his sphere.  At para. 127 it held that the facts so found satisfied “Igen stage (1)”, i.e. that the Claimant had established facts from which, in the absence of an adequate explanation, it could infer unlawful discrimination.  It then identified the explanation advanced by Vision for any difference in treatment between the Claimant and Ms. Hoddell, namely their different functions, but it held that this was “insufficient to explain the full nature and extent of the Claimant’s exclusion from involvement and discussion on IT matters”.

(2)	Sub-paras. 3.2, 3.3, 3.8, 3.10 and the final sentence of 3.13 were regarded by the Tribunal as constituting 

“all part of a pattern which includes failing to inform the Claimant of matters which he should have been informed of as head of the IT department, failing to require Ms Hoddell to keep him informed on IT matters and failing to take any action in relation to complaints and concerns raised by the Claimant, including complaints in relation to the running of the operations team.  In relation to all of these matters also, the Claimant was not treated as one of the two most senior managers within the First Respondent company.  His serious concerns were given no attention.”

At para. 128 of the Reasons the Tribunal found that those complaints were proved: again, no details are given.  It found that Ms Hoddell would not have been treated the same way; that the difference of treatment was capable of justifying an inference of discrimination; that it was unexplained; and that accordingly it was right to infer discrimination.

(3)	Sub-paras. 3.16, 3.17, 3.19 and 3.20 were described in para. 129 of the Reasons as 

“all concern[ing] a lack of recognition and a failure to treat [the Claimant] in the manner in which a senior manager could expect to be treated”.  

The complaint at para. 3.16 was that:
“When [in 1999] office moved to Hanover Square, OM [i.e. Operations Manager & Asst. were allowed to choose prime seating arrangements, while I was forced to sit in a corner with the computer equipment.  This was despite my arranging the office move, seniority & length of service with the company.”

At para. 130 the Tribunal said:
“At the time of the office move to Hanover Square, Ms Hoddell was allowed to choose prime seating arrangements.  The Claimant was not.  These facts, coupled with a difference in race, are facts from which an inference of unlawful discrimination could be drawn.  The tribunal has rejected the Respondent’s explanation for this difference in treatment and the complaint is upheld.”

The remaining complaints in this group are addressed in para. 131, where the Tribunal says:
“The allegations at 3.17 and 3.20 both involve issues of lack of recognition of the Claimant’s very considerable skills and ability, as evidenced by his level of pay, his seniority and the considerable efforts which the First Respondent made to retain him after he threatened to resign in October/November 2001.  When that lack of recognition is considered against the background of the more favourable manner in which Ms Hoddell was treated the difference in race between Ms Hoddell and the Claimant and the lack of non-white employees at senior level in the First Respondent company and its US parent, the tribunal is satisfied that the Claimant has established facts from which the tribunal could conclude that there was an act of discrimination.  The First Respondent has provided no adequate explanation as to why the Claimant was treated in this way and his claim therefore succeeds.”

(4)	The Claimant complained that his dismissal had been handled in a brusque and insensitive manner and that this too was on account of his race.  He referred to the much more considerate manner in which the dismissal of Mr. Armer had been handled.  As to that, the Tribunal held as follows:

“132.	…  Mr. Armer was not in a precisely comparable position to the Claimant, in that at the time of his dismissal he was Director of International Operations. However, like the Claimant, he was the most senior employee in the company (a position which the Claimant shared with Ms Hoddell).  He was a closer comparator than Ms Keely Fish and Mr Peter Rowlandson, who were both junior employees.  It was reasonable to infer from the manner in which Mr Armer was treated that a hypothetical white comparator, at the same senior level of management as the Claimant, would have been treated in a manner similar to Mr Armer.

133. 	The hypothetical white comparator, like Mr Armer, would have been given warning of redundancy, an opportunity to tell his staff of his redundancy and permitted a dignified exit from his place of work.  The Claimant, in contrast, was given no warning, no opportunity to speak to his team of staff and was treated in a manner which was more appropriate to an employee being dismissed for gross misconduct and was thoroughly humiliated.

134. 	In relation to his dismissal, the Claimant has proven facts from which the tribunal could conclude that there was unlawful discrimination in relation to the manner of his dismissal.  The First Respondent has provided no adequate explanation of dismissing the Claimant in a manner which was less favourable that the dismissal of Mr Armer.  The financial pressures on the First Respondent do not provide an adequate explanation for the manner of dismissal and this aspect of the complaint of race discrimination in relation to dismissal is upheld.”

39.	Vision’s Amended Grounds of Appeal make six points, but Mr. Grundy abandoned one.  We will consider the remaining grounds in turn.

40.	Ground 6.  Vision’s submission here was that the Tribunal was wrong to approach the individual complaints of discrimination by

“(i) 	considering the alleged acts (if proven) in separate groups or individual groups rather than individually or as a whole 

(ii)	seeking to identify and finding a “pattern” of less favourable treatment by artificially dividing up the acts of discrimination relied upon at paragraphs 124, 128 and 129 of the Decision.”

We are unable to see anything wrong in the Tribunal’s approach.  It is not uncommon for a tribunal, particularly in a discrimination case, to be faced with a large number of somewhat miscellaneous individual allegations, and it is not necessarily “artificial” or otherwise wrong for it to try to discern some common threads: indeed it may be positively desirable to try to order what can often be quite intractable material in some such way.  Often the facts of an individual incident, even if apparently pleaded as a discrete “act complained of”, are intended primarily as illustrative of a more general course of conduct.  Of course it is true that there is a risk that in making patterns of this kind the tribunal may fail to make findings on the individual allegations (so far as necessary), or that it may fail to take an overview of the totality of the allegations where that is appropriate.  If that happens, to any extent which might make a real difference, there may be a good ground of challenge; but that is a particular rather than a general point, and Mr. Grundy made clear in his oral submissions that he was making a general point about methodology, rather than (under this head) challenging individual findings.  (We should record, for completeness, that we were told that there had in fact been some debate before the Tribunal as to the extent to which it was acceptable for the allegations to be “grouped” in the eventual Judgment; and that the Respondents had been relaxed about similar allegations being dealt with compendiously but that the Claimant had objected, though he had subsequently written to the Tribunal withdrawing his objection.  It is not entirely clear whether the Tribunal regarded itself in the end as having taken the course which had been discussed.  Our decision would be the same even if the discussion referred to above had never taken place.)

41.	Ground 7.  Vision contended that in treating the complaint at sub-para. 3.1 as being in practice a complaint about the more favourable treatment of Ms. Hoddell (see para. 38 (1) above) the Tribunal had found a different act of discrimination from that which was in fact made.  We do not accept this.  The original allegation was vague and rather general, as is often the case with a “home-made” pleading.  It is perfectly acceptable for the tribunal in the course of a hearing to try to get to the bottom of the real complaint and to deal with that once identified, even if it does not fit particularly easily within the terms of the pleading.  Of course if the allegation as so refined is one with which the respondent has had no chance to deal, there is a risk of injustice; but nothing of the kind was suggested here.      

42.	Ground 8.  This ground goes with ground 7.  Vision complains that no findings are made that precisely correspond with sub-para. 3.1.  That may be right, but it is clear that the case being made at the hearing had to some extent moved on.

43.	Ground 9.  Under this ground Vision develops a number of related challenges to para. 128 of the Reasons (see para. 38 (2) above).  One of the points made simply reproduces the general challenge considered at para. 40: we need not address it further.  But it is also contended that by reason of dealing with the allegations in question as a group the Tribunal had failed to make findings of primary fact on the individual allegations.  We do not believe that this is correct.  Ideally the Tribunal should, in the course of its factual findings, have identified with specificity the pleaded allegations as they fell to be dealt with.  It did not do so, and the rather general and allusive language of the pleading makes it difficult, at least for us as an appellate tribunal, now to make an exact correlation.  But, so far as we can see, the Tribunal’s findings of primary fact at paragraphs 23-92 of the Reasons do in fact address the gist of the pleaded allegations; and if this or that detail is in fact missed that is not a matter of essential importance given that the gist of the allegation, which the Tribunal clearly found proved, was that the Claimant was not treated as a manager of equivalent status to Ms. Hoddell.   Finally, Vision contends that the Tribunal could not properly make a finding that the Claimant was treated differently from Ms. Hoddell without making findings that she was treated differently in respect of each act complained of.  This is a misunderstanding of the role of the comparator in an exercise of this kind.  The essence of a complaint of racial discrimination is that the employee is, by reason of his race, being treated less well than he would have been if he had not been of the race in question.  How a named comparator was treated on a given occasion may be central to the complaint; but, equally, it may be of evidential value only or simply not relied on at all.  The Claimant’s essential point in the present case is that over a long period he was undermined and undervalued because of his race.  The different treatment of Ms. Hoddell was helpful to his case but it was unnecessary that he prove an exact point-for-point correspondence between his case and hers as regards each act complained of.

44.	Ground 10.  This Ground makes the same points about paras. 129-131 of the Reasons as are made about para. 128 under ground 9.  We need not repeat what we have said at para. 43 above.  There are, however, some particular points with which we should deal, as follows:

(a)	The finding that the Claimant’s inferior seating at Hanover Square was on account of his race is said to be “wrong” because there had been evidence that Mr. Meyer’s desk was in a similar position.  This point, which was not developed in Mr. Grundy’s skeleton or oral argument, raises no question of law.

(b)	The finding that the discrimination pleaded at sub-para. 3.17 was proved is said to be wrong because it is inconsistent with one of the primary findings of fact.  We do not understand this ground, which – again – was not developed by Mr. Grundy. 

(c)	The Tribunal is said to have “failed to make any findings of primary fact in respect of or otherwise address paragraph 3.19”.  The (sub-) paragraph in question reads:

Lack of recognition:  Was not allowed to communicate and gain recognition with a key client, which diminished my esteem & morale.  

It is correct that there is no express reference to sub-para. 3.19 in paras. 129-131 of the Reasons.  However, as we understand it the facts referred to are those which the Tribunal dealt with in para. 55 of the Reasons; and sub-paras. 3.17, 3.19 and 3.20 are all pleaded by the Claimant as instances of what he described as “lack of recognition”.  The Tribunal plainly found that that complaint of lack of recognition was well-founded (and was due to the Claimant’s race): the fact that there is, at this stage of the Reasons, no explicit reference to this particular allegation is a matter of no substantial significance.

(d)	The Tribunal is said to have “failed to make any findings of primary fact in respect of paragraph 3.20”.  The (sub-) paragraph in question reads:

Lack of recognition:  Was not allowed to take part in major IT infrastructure decisions.  My opinion was never sought.   

It seems to us, however, that this too is covered by para. 55 of the Reasons.  

45.	Ground 11.  Vision’s case here is that Mr. Armer was an inappropriate comparator because he had been dismissed five years previously, in different circumstances, and that Ms. Fish and Mr. Rowlandson were the obvious comparators.  But the Tribunal expressly considered and rejected those submissions (see para. 132 quoted at para. 38 (4) above), and we can see no error of law in its doing so.  Vision also made the point that Mr. Meyer had not been involved in Mr. Armer’s dismissal.  But the Claimant disputed that that was so, and there are no relevant findings from the Tribunal, nor did Vision seek to put any evidence before us.  That is a sufficient answer.  But in any event it was not essential to the Claimant’s case that Mr. Meyer should have been involved.  It would be perfectly legitimate for him to refer to Mr. Armer’s dismissal as setting the standard of how he would have been treated if he were white whether or not Mr. Meyer had been responsible for handling the dismissal.

46.	In our view, therefore, none of the Grounds of Appeal are well-founded.  We dismiss the liability appeal.

THE REMEDIES APPEAL

47.	The Claimant contended that the award of compensation in respect of his race discrimination claim was wrong in law in two respects – (a) because the compensatory award of £12,500 was inadequate and (b) because it failed to award aggravated damages.

(a)	The Compensatory Award

48.	The Tribunal gave its reasons for its award of £12,500 at paras. 82-84 of the Remedies Judgment as follows:

“82.	In relation to injury to feelings, the tribunal took into account that the First Respondent’s discriminatory treatment of the Claimant continued over a period of many years.  The tribunal did not accept the Respondents’ argument that a failure to act is in some way less hurtful than a positive action.  In the Claimant’s case, he was regularly and consistently undermined over a long period on the grounds of his race.  The Claimant has considerable ability and experience, which merited respect and the discriminatory manner in which he was treated was distressing to him.  The manner of his dismissal was particularly humiliating and would, on its own, have warranted compensation at the top of the lowest band in Vento.

83.	The tribunal reminded itself that the Claimant’s distress was not entirely linked to the discriminatory acts of the First Respondent but also to other frustrations, such as Ms Hoddell’s conduct. 

84.	It concluded that the appropriate award was £12,500 … .”

49.	The Claimant says that £12,500 was simply too little for the discrimination which he had suffered.  He submitted that he had suffered, in the language of Vento v. Chief Constable of West Yorkshire Police [2003] ICR 318, “a lengthy campaign of discriminatory harassment” such as to justify an award in the middle of the top band of awards there set out, even before the manner of his dismissal was taken into account.  The final sentence of para. 82 shows that the Tribunal believed that the latter element by itself justified an award of £5,000 (being “the top of the lowest band”): £7,500 for the whole of Vision’s other discriminatory conduct was plainly inadequate.  

50.	We can see no error of law in the Tribunal’s approach or conclusion.  While we would not seek to minimise the impact of the discriminatory conduct found by the Tribunal during the course of the Claimant’s employment, it was not of the gravest character.  It essentially consisted of an undervaluing of his work by Mr. Meyer which the Claimant (correctly) understood to be at least partly because of his race; but the Claimant remained an important and very well-paid employee, and Mr. Meyer’s racial motivation, which there is no reason to believe was conscious, was never expressed in any kind of racially offensive behaviour towards him.  This is very far from the kind of cases which fall into the Vento top band.  Further, as the Tribunal pointed out, many of the Claimant’s frustrations and unhappiness at work were the result of things which did not constitute discrimination.  The Claimant submitted that “the tribunal only … considered acts of established discrimination and not the peripheral behaviour that allowed the discrimination to flourish”; but we can see no error in that.  The Tribunal was very well-placed to make a finding as to the extent of the impact on the Claimant, and we can see no ground for interfering with its assessment.  

(b)	Aggravated Damages

51.	At para. 86 of the Remedies Judgment the Tribunal said
“The tribunal considered the submissions of both the Claimant and the Respondents in relation to aggravated damages.  The Respondents had unjustifiably concluded, as a result of the matters discovered following the Claimant’s dismissal, that the Claimant had been guilty of gross misconduct.  There had nevertheless been some reasonable grounds for suspicion, in particular in relation to the ceramics (art) business and in relation to the domain name.  Whilst the allegations made in relation to the “holiday business” and the allegations concerning the pornographic image were not justified on the evidence, taking all the allegations of misconduct as a whole, the tribunal did not consider that the Respondents’ conduct was high-handed, oppressive or malicious so as to justify an award of aggravated damages.”

In para. 87 it went on to review the conduct of the proceedings by both parties and concluded that there were faults on both sides.  It concluded at para. 88 that “it would be inequitable and inappropriate to make an award of aggravated damages”.

52.	The Claimant submitted that that reasoning is wrong in law in that the Tribunal could not reasonably have found that Vision had reasonable grounds to suspect misconduct having regard to its findings in the liability judgment.  The point is not developed with any specificity in the Notice of Appeal nor in the Claimant’s skeleton argument or oral submissions, and we do not therefore believe that we need to review it in detail here.  It is enough to say that the question whether Vision’s conduct satisfied the criteria necessary to justify an award of aggravated damages is a matter for assessment with which we would not interfere unless we were convinced that its conclusion was not open to it.  That is far from being the case.  The Tribunal was entitled to find that Vision’s suspicions of misconduct were not unreasonable.

53.	Accordingly we dismiss the remedies appeal.