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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Eagle Place Services Ltd & Ors v Rudd [2009] UKEAT 0497_08_2509 (25 September 2009) URL: http://www.bailii.org/uk/cases/UKEAT/2009/0497_08_2509.html Cite as: [2009] UKEAT 0497_08_2509, [2009] UKEAT 497_8_2509, [2010] IRLR 486

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APPEARANCES

 

For the Appellant	MR AKHLAQ CHOUDHURY (of Counsel) Instructed by: Messrs Harbottle & Lewis Solicitors Hanover House 14 Hanover Square London W1S 1HP
For the Respondent	MR WAYNE BEARD (of Counsel) Instructed by: Messrs Irwin Mitchell Solicitors Riverside East 2 Millsands Sheffield Yorkshire S3 8DT


 


SUMMARY

DISABILITY DISCRIMINATION

Direct disability discrimination

Disability related discrimination

The Claimant, who was disabled within the meaning of the Disability Discrimination Act 1995, was employed as a solicitor by the Respondent, the service company of a well know firm of solicitors. Reasonable adjustments were agreed to facilitate the Claimant's working. These proved satisfactory and enabled the Claimant to carry out his duties to the complete satisfaction of his clients and without any commercial disadvantage to the Respondent. The Claimant was dismissed because the Respondent erroneously and unreasonably believed that the financial effect of the agreed adjustments made the Claimant a commercial liability. There was ample evidence to support the findings by the Employment Tribunal that the Claimant had been dismissed by reason of his disability or for a reason connected with his disability.

The correct comparator was a fellow lawyer of the same grade and skills as the Claimant who shared a similarly good relationship with the client, who for reasons other than disability required adjustments to be made to enable him to work and in respect of whom reasonable adjustments had been agreed to the satisfaction of both employer and employee, and in respect of whom commercial performance, even having regard to the proposed adjustments was not an issue.  It would have been irrational for the Respondent to have dismissed such an employee. The comparator could not be a fellow non-disabled employee whom the Respondent unreasonably believed might inhibit the firm's commercial objectives.

An unreasonable and incorrect belief on the part of an employer that a particular employee might inhibit the firm's commercial objective would not constitute part of the employee's "relevant circumstances" within the meaning of s3A(5) of the Act.

An employer who had agreed reasonable adjustments could not then turn round and dismiss the employee because it unreasonably considered that those reasonable adjustments made him a commercial liability, on the basis that it have unreasonably considered a non-disabled employee in respect of whom similar adjustments had been made, to be a commercial liability. If employers were permitted to act in this way, a coach and horses would be driven through the protection given to employees by the Act and the duty to make reasonable adjustments rendered worthless.

Where there was evidence from which an inference of discrimination might be drawn, and the Employment Tribunal rejected non-discriminatory explanations by the employer, it was proper for the Employment Tribunal draw he inference that the dismissal of the claimant was for a discriminatory reason.


 


HIS HONOUR JUDGE SEROTA QC

Introduction

The Parties

1. The Claimant is a solicitor who specialises in personal injury litigation. He was disabled within the meaning of the Disability Discrimination Act 1995 having detached retinas in both eyes. The Respondent employer was the service company for a well-known firm of solicitors, Nabarro. Nabarro's website states:

"We have 130+ partners leading 420+ lawyers offering a broad range of corporate legal services to major national and international clients. The firm's headquarters are in central London. We also have offices in Sheffield and Brussels."

2. Nabarro has a highly regarded employment law department and offers advice to a broad range of private and public operations as well as to "high profile" individuals.
3. The Claimant at the material times was employed by the Respondent but worked for Nabarro in Sheffield between 10 October 1993 and May 2007 when he was summarily dismissed.
4. Mr C G Dray was a partner in Nabarro based at the office in Sheffield and was the Claimant's supervising partner. Ms C M Staples was Nabarro's Director of Human Resources and Development.

Procedural History

5. This is an appeal by the Respondent from the decision of the Employment Tribunal at Sheffield (presided over by Employment Judge Little) dated 7 August 2008. The Employment Tribunal found that the Claimant's dismissal was an act of unlawful direct disability discrimination. It had been conceded before the Employment Tribunal that the Claimant's dismissal was automatically unfair within the meaning of s98A of the Employment Rights Act 1996. The Employment Tribunal also considered that it had no jurisdiction to entertain various complaints of disability discrimination raised by the Claimant save in relation to his dismissal. Nabarro, which had been joined in the proceedings, was dismissed from the proceedings.
6. Elias J referred the appeal to a full hearing on 13 November 2008 and the Claimant's cross-appeal was referred to a full hearing by HHJ Reid QC on 22 December 2008. Elias J considered that grounds 1 and 2 in particular seemed to him to justify a full hearing. He was unsure of the other grounds but it was not worth separating them out because they inter-related to some extent.
7. We also note that on 6 February 2009 at a final remedies hearing the Claimant was awarded compensation in the sum of £453,242.46.

Factual Background

8. We take this largely from the decision of the Employment Tribunal, however, the decision of the Employment Tribunal was lengthy so we will deal with the factual background relatively briefly and only so far as it relates to issues in the appeal. We will not concentrate on issues that have fallen by the wayside, so as to speak.
9. The Claimant, as we have mentioned, is a solicitor who specialises in personal injury litigation. He worked exclusively for a major client of Nabarro, UKCoal Plc. His salary as at the date of dismissal was some £70,000 together with fringe benefits. The Claimant in his ET1 claimed that his total salary package was some £84,250 per year whereas the Respondent in its ET3 suggested some £70,000. The Employment Tribunal at the Remedies hearing found that the Claimant's earnings were £70,000 together with fringe benefits including his pension. In the past the Claimant had benefited from a bonus but this was not paid for the last year of his employment. The Employment Tribunal did not deal with the issue of whether the failure to pay him a bonus was discriminatory because no grievance had been raised in respect of the failure to pay a bonus so the Employment Tribunal lacked jurisdiction to determine the issue.
10. At the time of his dismissal the Claimant was a Senior Associate.
11. From approximately September 2002 when the Claimant returned to work after surgery on a detached retina in his left eye, the Respondent's occupational health advisers were involved with the Claimant and there was a continued debate over adjustments that would enable him to work. All of these matters were recorded in the Claimant's personnel file.
12. The difficulties encountered by the Claimant by reason of the detached retina included driving in the dark and in rush hour traffic and the air conditioning in his office. A number of adjustments were agreed to enable the Claimant to continue working. These included reducing his working hours to 7 as opposed to 8 per day, the facility to take frequent breaks and leave the office to rest his eyes. Further adjustments were made to the lighting and air conditioning in the Claimant's office. The Claimant was also able to spend some time working from home. There is no issue other than that the adjustments to which we have referred were agreed between the parties and that they were accepted by all concerned as reasonable.
13. The Claimant received his full pay throughout his employment. It is right to say that there had been issues (which appear to have been resolved) relating to the Claimant's hours of work. In October 2005 after concerns had been expressed by some partners and others, but unbeknown to the Claimant, his attendance at the office was monitored.
14. We note that the Employment Tribunal made findings (on disputed evidence) of conduct on the part of Mr Dray that was dismissive of Mr Rudd's disability and in an insensitive and harassing manner.
15. On 16 September 2006 the Claimant had the misfortune to suffer a detached retina in his right eye and was away from work until 22 January 2007. Again the Respondent's occupational health advisers were involved and the Respondent was advised that the Claimant should work towards three days in the office and two days at home with appropriate adjustments to allow for breaks and reduced working hours in the office. Other options were considered including part-time working but the Claimant preferred the option of three days in the office and two days spent working at home.
16. It was necessary to investigate whether appropriate adjustments by way of the provision of IT equipment could be made to enable the Claimant to work from home. At paragraph 7.24 the Employment Tribunal noted a difference in evidence concerning a meeting that took place on 29 March 2007 between the Claimant and Miss Pilton of the Respondent's human resources department. The Claimant enquired what would happen if his laptop did not work at home, in other words making working at home not practicable. Miss Pilton's note recalls her as saying that in those circumstances the only option left would have been to follow the medical advice and reduce the Claimant's hours to 3 days and his salary likewise. Miss Pilton's evidence was that the Claimant said in an aggressive way "touch my salary and I will resign, it's constructive dismissal" and then went on to say he had been taking legal advice. His evidence was that he had said this in a questioning way "that would be constructive dismissal, wouldn't it". The Respondent complains that the Employment Tribunal made no findings as to which version of events was correct.
17. The Claimant's initial trial home working using his laptop appears to have been a success. The Respondent's occupational health advisers had advised that the Claimant be provided with an ergonomic workstation, which had apparently been provided but not inspected by the Respondent as it wished.
18. A meeting took place on 17 April 2007. This meeting was attended by Mr Dray, Miss Pilton, the Claimant, and Miss Simpson attending as note taker. The Claimant was accompanied by a colleague, Mr Aspinall, who also took notes. The purpose of the meeting was to review the home working. There was a difference between the Claimant's evidence and his note (prepared approximately one month after the meeting) and the Respondent's contemporaneous note as to whether Mr Dray had said during the course of that meeting that the Respondent's occupational health advisers had approved office work between 9.00 am and 5.00 pm (which was not in fact the case). The Respondent's case was that these hours would only be worked in the summer months when the Claimant could drive home in daylight. The Claimant's evidence was that there was no qualification as to the season of the year. It was clear that the Claimant was disturbed by the issue of his working hours because he raised the issue subsequently with the occupational nurse, who made clear that the Claimant's hours of work should remain, as they had been for many years, 9.45 am to 4.45 pm. The occupational nurse (Mrs Hikin) sent an email to Miss Pilton to confirm her views. Again the Respondent complains that the Employment Tribunal did not make a finding as to who was correct and it was submitted to us that this was of relevance because the Respondent dismissed the Claimant for being "duplicitous" and for seeking to play off the Respondent and the occupational health department. Mr Dray gave evidence that a further meeting took place on 17 April when the Claimant asked if his salary could be increased artificially so that if the Claimant made a claim under the PHI scheme, which would entitle him to receive 75 per cent of his salary, the uplifted salary when reduced by 25 per cent would equate with his then earnings. The Employment Tribunal did not accept Mr Dray's evidence about this matter. The Claimant had asserted that no such meeting took place and that Mr Dray's note of the meeting was in effect a forgery.
19. It was common ground that at a later meeting that took place on 17 April with Miss Pilton, the Claimant declined to allow inspection at his house because he was getting "stressed out by all of this".
20. On 1 May 2007 the Claimant began a three month trial period working for three days in the office and two days at home. At the same time his basic salary was increased from £64,000 to £70,000 a year together with (we assume) a potential bonus and other fringe benefits.
21. At some point in time after 17 April the Claimant's employment was considered by Ms Staples, formerly the Head of the Respondent's human resources department. She had access to the Claimant's personnel file and was thus aware of the allegations that (a) the Claimant had sought to have his salary inflated to enable him to make a PHI claim; Ms Staples maintained this led her to consider the Claimant as being manipulative in his dealings with Mr Dray (b) the Claimant's alleged threat to sue for constructive dismissal and (c) the concern that there was insufficient technical backup available to enable the Claimant to work from home for two days per week (d) the Claimant's refusal to allow inspection of his home (e) what was alleged to be a pattern of non-co-operation on the part of the Claimant going back over a number of years.
22. Ms Staples was a member of the Chartered Institute of Personnel Development and so possessed, so found the Employment Tribunal at paragraphs 7.31:

"extensive knowledge of personnel and human relations work and, we were told, knowledge of employment law, and anti-discrimination law."

23. Ms Staples gave evidence for the Employment Tribunal as to the reasons why she decided to dismiss the Claimant, which she did (together with unnamed others but not on the Employment Tribunal's findings with Mr Dray). Ms Staples claimed that she acted off her own bat. The reasons that she gave for dismissing the Claimant were that he had sought to inflate his salary for the purposes of the PHI claim, his threat to sue for constructive dismissal and his refusal to allow home inspection.
24. Ms Staples' evidence was that she advised but did not consult the senior partner in Sheffield, Mr N Logan, and Ms Nicole Paradise, the senior partner, nor did she consult anyone in the Employment Law Department.
25. The Claimant was called to a meeting with Ms Staples on 8 May. Ms Staples had decided, on her evidence, to dismiss him having deduced from her consideration of his file a pattern of non co-operation over the years. The non co-operation included a grievance raised in 2001 about car parking, the Claimant's alleged failure to provide a photograph to put on the Respondent's intranet site and a failure on his part to use the Outlook calendar system on his computer. The actual reasons for the Claimant's dismissal were not notified to him until a letter of 14 May 2007 when it was said that the decision was reached as a result of the "fundamental breakdown of the relationship of mutual trust and confidence between yourself and the firm". Ms Staples' evidence to the Employment Tribunal was that the breakdown had occurred because as at 17 April 2007 the Claimant had threatened to sue if his salary was reduced, he had gone back on his earlier agreement about a home visit and he had attempted to have his salary inflated so as to benefit under a PHI application.
26. The Claimant was asked to attend a meeting in the Sheffield office with Ms Staples without any prior notice. He attended the meeting alone. He was criticised for not bringing a notepad and pen to the meeting and for not having a photograph on the intranet. He was told his employment was being terminated. Shortly after the meeting the Claimant and Ms Staples made notes. The Claimant's note, as found by the Employment Tribunal at paragraph 7.32 says:

"that he was told by Ms Staples that whilst she was aware of what had been discussed at the (undisputed) meeting on 17 April and the 3 month trial, she was now overriding that. According to the claimant Ms Staples then said that it was a commercial decision as the firm needed to assess how much they could get back in return from a highly paid associate with that type of medical condition."

27. The Employment Tribunal refer to Ms Staples' note as saying:

"Regret decision now made but no further reasonable support (Nabarro) could offer and decision had been made that he should leave firm."

Ms Staples went on to say:

"that if they could reach an amicable settlement that would be good but the firm had assessed the situation and was prepared, should the claimant decide to take it to a tribunal. Ms Staples said that it had been her perception that the claimant had been discontent for much of his time with Nabarro."

The Employment Tribunal noted that the Claimant and Ms Staples had never met until that day. The meeting lasted for no more than 15 minutes. On the afternoon of 8 May at approximately 3.30 pm there was a further meeting between the Claimant and Ms Staples and the Claimant was given a letter of dismissal. No reason for the dismissal was given. The Claimant continued to attend work for three days in the office between 8 and 14 May.

28. At some point in time on 8 May Mr Dray told Mr Carr at UK Coal (whose evidence was explicitly accepted by the Employment Tribunal) at paragraph 10.7 that the Claimant had left:

"due to his medical condition and ongoing issues with his rehab."

Mr Dray apparently denied that a conversation in those terms had taken place.

29. On 11 May the Claimant sent an email to Ms Staples saying he wished to appeal against the decision to dismiss him and continued:

"You've made it quite clear that there was no point in doing this and that the decision once taken is final but after 14 years loyal and unblemished service I would like to keep my job if I can – especially as the only reason for terminating me is because I have developed a medical condition."

He referred to the meeting on 17 April when Mr Dray had said that the adjustments were working well. The Claimant continued:

"Three weeks later you have told me out of the blue that you were overriding this decision for commercial reasons because the firm needs to reassess its financial return on me as a highly paid Associate with my medical condition. I do not understand why in the space of 3 weeks things have changed so much that my termination is not even a subject for discussion or why I got a significant pay rise last week only to be told this week that in effect I am not now economically viable."

30. On 14 May 2007 Ms Staples wrote to the Claimant. The relevant portion of the letter is as follows:

"We do not feel that (an appeal) is appropriate in the current circumstances. For the avoidance of doubt however your employment has not been terminated because you have developed a medical condition. The decision was reached as a result of the fundamental breakdown of the relationship of mutual trust and confidence between yourself and the firm."

31. On 14 May 2007 Nabarro appointed Mr Damian Whitlam to cover the Claimant's work. Mr Dray, having spoken to Mr Carr of UK Coal suspected that Nabarro might now lose the UK Coal personal injury work. Mr Whitlam evidently spoke to Mr Carr and told Mr Dray that he:

"played a pretty straight bat to him, just saying that I thought it (the dismissal) was due to his eye difficulties, but knew nothing further."

Mr Carr gave evidence to the Tribunal that Mr Dray had told him either on 14 May or 24 May that there had been no problems on the Claimant's files but he had left Nabarro due to his medical condition and ongoing issues with his rehabilitation.

32. On 23 May 2007 the Claimant again wrote to Ms Staples and asked that his letter be treated as a grievance in relation to the termination of his employment. He reiterated that while the breakdown of trust and confidence had been referred to in the letter:

"when we met on 8 May 2007 you told me that the decision to terminate was a commercial one because the firm needed to assess how much they could get back from me as a highly paid Associate with my medical condition. Carl Dray also confirmed the same thing to me verbally."

The Claimant also sought clarification from Ms Staples as to what she meant by a breakdown in the relationship of trust and confidence. Ms Staples replied to the letter on 5 June and said that arrangements had been made for the grievance to be heard at a meeting to be held in London. Significantly the letter gave no clarification about the breach of trust and confidence. In the event the Claimant did not pursue the grievance.

33. It seems quite breathtaking to us, as it evidently did to the Employment Tribunal, that the Head of the Human Resources Department of a large and apparently reputable law firm should consider it appropriate to act in the manner Ms Staples claims that she did and to dismiss the Claimant in this way, without notice and without the agreement of partners in Nabarro. The Respondent's case as advanced to the Employment Tribunal was that this was what happened in large law firms with highly paid employees; they would be summarily dismissed in the expectation that an amicable settlement would follow. There can be no doubt that the dismissal of the Claimant was unfair for procedural reasons as has been accepted by the Respondent. It is impossible for us, as it was for the Employment Tribunal, to put aside the fact that the dismissal (which was automatically unfair under s98A of the Employment Rights Act 1996) was unfair when considering whether the dismissal was by reason of disability. The Employment Tribunal rejected Ms Staples' evidence in this regard both as to whether the decision to dismiss was hers alone and also as to the reason she gave for the dismissal. In those circumstances and having regard to other evidence the Employment Tribunal was entitled to ask itself what was the true reason for the Claimant's dismissal as opposed to those put forward by Ms Staples and rejected by the Employment Tribunal.
34. The Employment Tribunal has been criticised by the Respondent for not making any findings in relation to the assertion that dismissals of this nature are part of the culture of large law firms. In this regard we refer to the Employment Tribunal's record of the Respondent's submissions at paragraphs 8.3 and 10.5:

"8.3 ... we were invited to accept that this approach to dismissal was part of the culture within large law firms when dealing with their highly paid employees. There was then the expectation of an amicable settlement, quite possibly at the ceiling for compensation for unfair dismissal. Whilst that situation may appear unattractive to the employment tribunal it was a commercial reality. Ms Staples had not held back from that reality and she knew that it would be an unfair dismissal. It might not be pretty but it was what happened."

At paragraph 10.5 the Employment Tribunal state:

"Mr Choudhury has cautioned us against being distracted by the acknowledged unfairness of the dismissal. We should accept, to paraphrase him, that in the real world inhabited by the big law firms, the niceties of natural justice and fair procedure will be abandoned when, to use Ms Staples' phrase, senior staff are "managed out" of the business. We make no comment."

35. It is apparent that this assertion strained the credulity of this Employment Tribunal as much as it has strained ours. It is quite clear that the assertion was not accepted by the Employment Tribunal.
36. The Employment Tribunal made no explicit findings as to what was said at the meeting on 8 May. We will return to this point later in our decision. The Employment Tribunal did not accept all the Claimant's evidence or submissions. However it rejected in important instances the evidence of Mr Dray and also that of Ms Staples. Findings subsequently made by the Employment Tribunal at paragraph 10.7 that:

"the real reason was indeed that the Respondent was concerned that it would not get an appropriate return in terms of chargeable hours/fees billed from the claimant."

strongly suggest that the Claimant's evidence as to what was said on 8 May was accepted. The finding ties in with his evidence and the way in which his case was put. We do not, however, decide the appeal on this point because it is clear from other evidence specifically referred to by the Employment Tribunal as to the evidential basis for the finding as to the reason for the Claimant's dismissal.

The decision of the Employment Tribunal

37. The Employment Tribunal set out the facts as we have mentioned and recorded the parties' submissions. The decision of the House of Lords in Lewisham BC v Malcolm [2008] IRLR 700 was handed down after the close of initial submissions and the parties were invited to make submissions on the decision.
38. The Employment Tribunal set out the law relating to disability related discrimination and identified as comparators for such a claim both a Novacold (Clark v Novacold [1999] IRLR 318) comparator and also a Malcolm comparator as being "someone to whom the underlying reasons still applied but who were not disabled". The Employment Tribunal also set out the law in relation to direct disability discrimination and referred to the decision of High Quality Lifestyles v Watts [2006] IRLR 851 as to the appropriate comparator.
39. The evidence of Ms Staples and the Respondent's case had been that the decision to dismiss the Claimant was taken by her alone. Mr Dray gave evidence that he was not consulted about the dismissal but was told that a decision had been made by Ms Staples. The Employment Tribunal found on balance that Mr Dray had not made the decision to dismiss though he, having learnt of the decision, made no objection to it nor did he seek to have it altered. However, the Employment Tribunal concluded:

"10.4 …we doubt very much that Ms Staples made the decision alone. In the first place we would consider it unusual for a HR professional, even someone who was a director of HR, to actually make the decision to dismiss as opposed to advising and possibly recommending dismissal. We also think it is somewhat bizarre that, faced with the delicate question of potentially dismissing a disabled lawyer, the Respondent – ignoring for a moment the technicality that the true Respondent is the service company – left this difficult and sensitive matter entirely to a person who, whilst no doubt being a skilled personnel officer was not a lawyer."

The Employment Tribunal did not consider it necessary to make any further determination as to the precise identity of the decision makers although it was satisfied that Mr Dray did not make the decision to dismiss:

"However, the air of uncertainty which hovers over the question of how many people were really involved in the decision to dismiss provides material from which we draw various inferences, as we do also from Mr Dray's involvement with the disputed second meeting on 17 April 2007."

40. The Employment Tribunal then went on to consider what was the reason for the dismissal. Having been cautioned against being distracted by the knowledge and unfairness of the dismissal, and that in the real world inhabited by the big law firms the niceties of natural justice and fair procedure were abandoned when senior staff were "managed out" of the business the Employment Tribunal recognised that it was not concerned with fairness. However:

"it is necessary for us to carefully analyse the Respondent's stated reasons for dismissal and consider whether any lack of substance, any paucity in the stated reasons, should lead to adverse inferences being drawn."

41. The Employment Tribunal noted that Ms Staples had been kept advised of the Claimant's medical and employment history over a number of years. She had considered his personnel record and deduced a pattern of non co-operation over the years. However, the precise reason for the dismissal had been, as she confirmed in cross-examination, threefold (a) the Claimant's alleged threat to sue if his salary was reduced (b) his refusal to allow a health and safety inspection of his home (c) his alleged attempt to have his salary inflated for the purposes of a PHI claim. Her witness statement referred to her realisation in April 2007 that an impasse had been reached and that the Occupational Health Physician, Dr Odiseng, had indicated the Claimant could now only work for three days per week in the office. The Respondent's counsel, Mr Choudhury, did not seek to suggest that the reasons given by Ms Staples were sufficient to give rise to a fair dismissal. That being so the Employment Tribunal considered that an obvious question arose:

"if the Respondent itself accepts that there was a degree of paucity in the reasons for dismissal, what other factors were at play? There is also the question as to whether the three matters which Ms Staples has specifically referred to were factually correct or perhaps more accurately, whether the Respondent reasonably believed them to be correct."

42. In relation to the alleged threat to sue if his salary was reduced, the Employment Tribunal noted that Miss Pilton did not appreciate that Ms Staples might consider this to be a ground for dismissal; she was herself not consulted about the dismissal.
43. In relation to the Claimant's refusal to permit a home health and safety inspection, the Employment Tribunal noted that having initially agreed this the Claimant had second thoughts. However, the Employment Tribunal went on to find that it did not seem to be Mr Dray's understanding that the Claimant had refused point-blank. He had, as Mr Dray's file note shows, suggested that an exception could be made because Mr Rudd "as our experienced EHS lawyer" could be expected to use a suitable desk.
44. In relation to the allegation that the Claimant made an attempt to have his salary falsely inflated, the Employment Tribunal concluded that Ms Staples must have been aware of this matter by virtue of Mr Dray's file note in relation to the disputed meeting of 17 April. The Claimant denied that any such meeting had taken place. The Employment Tribunal noted various unexplained inconsistencies in terms of dates and content which led the Employment Tribunal to be suspicious of the veracity of that part of the note:

"At best the note may have been a compilation of various meetings/conversations between the Claimant and Mr Dray and as such it would be misleading for that very reason. At worst it could be viewed as the provision of 'ammunition' for Ms Staples as this allegation (PHI salary inflation) is, of the three grounds, perhaps the most likely to have justified a dismissal, everything else being equal. On balance and because of the unfavourable findings we have made in respect of background matters we incline to the latter conclusion."

It is quite clear that the Employment Tribunal did not accept Mr Dray's version of events.

45. The Employment Tribunal then went on to consider the weight of the reasons given for the dismissal of the Claimant. The Employment Tribunal noted that none of these three matters had been the subject of any investigation. Thus in relation to the alleged request to inflate the Claimant's salary for PHI purposes:

"and again bearing in mind that we are not assessing fairness (but we are assessing credibility), how likely is it that an employer could possibly think it appropriate to dismiss a long serving and senior employee without making any attempt whatsoever to investigate the matter or seek the Claimant's own account? Here we do not think the Respondent can hide behind the approach which it purports to have of ignoring the niceties of natural justice when dealing with termination of employment. The conclusion which we reach is that Ms Staples' apparent enthusiasm to latch on to, at best, a one sided version of accounts and to see only the worst in the Claimant leaves a large credibility gap between the stated material being considered and the end result, dismissal. In those circumstances we feel entitled to draw inferences from the paucity of the material so to conclude that the real reason was indeed that the respondent was concerned that it would not get an appropriate return in terms of chargeable hours/fees billed from the claimant. That being said, the need for us to draw inferences is diminished when two pieces of evidence are considered. The first of those is the evidence given by Mr Carr. That evidence was that he had been told by Mr Dray that Mr Rudd had left due to "his medical condition and ongoing issues with his rehabilitation". The second piece of evidence is the associate, Mr Whitlam's email to Mr Dray on 15 May 2007. Therein Mr Whitlam informs Mr Dray that he too has told Mr Carr that Mr Rudd had left "due to his eye difficulties"."

46. The Employment Tribunal then went on to consider the question of whether the Claimant had suffered direct or disability related discrimination. It noted that after the decision in Malcolm the comparator for both direct and related discrimination appeared to be the same –

"a person who is not disabled but whose circumstances are otherwise the same or not materially different"

47. The Employment Tribunal found that the Claimant was, with the adjustments in place, able to perform his work perfectly well – and clearly to the complete satisfaction of the client. It followed therefore that there was no related reason. The Employment Tribunal found that the Respondent/Ms Staples took a stereotypical view to the effect that the Claimant's disability made him an inconvenient liability that would inhibit or damage the Respondent's commercial objectives. The Respondent chose to ignore the fact that the further adjustments on the basis of which the three month trial had been established were working and that the client was content with them.

"10.8 … We take the appropriate comparator as being a hypothetical one whose characteristics were that he was a lawyer of the same grade and skills as the claimant and who shared a similarly good relationship with the client. The comparator would also need to work from home for two days per week but would not have to do so because of a sight disability, the claimant's disability.

In comparing the respondent's treatment of the claimant (dismissal) and the likely treatment of the comparator, we conclude that the comparator would not have been dismissed - there would have been no need to as the employer, employee and client's needs/expectations would be met.

Conversely, the claimant was dismissed because the respondent, Ms Staples, aided by unknown others, and influenced by Mr Dray's improbable second 17 April meeting, took the view, we infer, that the claimant would not provide a sufficient return as against the "inconvenience" that a continuation of the reasonable adjustments for his particular disability was perceived to create.

Accordingly we find that the claimant's dismissal was an act of unlawful direct disability discrimination."

Grounds of appeal and Respondent's submission

48. The first ground of appeal was that the Employment Tribunal had failed to give effect to the decision of the House of Lords in Malcolm. It was submitted that in Malcolm the House of Lords had held that there was no difference in the comparator in both direct and disability related discrimination cases: in virtually all cases disability related discrimination and direct discrimination would overlap. The Employment Tribunal, it was submitted, had failed to appreciate this and once it had established there was no disability related discrimination it could not properly find there had been direct discrimination. Mr Choudhury drew attention to the cases of Stockton-on-Tees BC v Aylott UKEAT/0401/08 and High Quality Lifestyles v Watts [2006] IRLR 850. On the basis that there was no distinction between direct discrimination and disability related discrimination cases, all the Tribunal needed to do was to identity the reason for the treatment meted out to the Claimant and identify the appropriate comparator.
49. Mr Choudhury submitted the Employment Tribunal needed to identify the reason for the treatment and it was insufficient simply to say that it was "stereotypic" or that it was on the grounds of the disability. The Employment Tribunal needed to spell out the reason for the treatment, the difference in treatment for the comparator by reference to the reason for the treatment.
50. The fact that the Employment Tribunal had found that the Claimant was able to work and was therefore of commercial value meant necessarily that the Respondent could not have had in mind that he was an economic liability but must have found the contrary to be the case at the time of dismissal; see Taylor v OCS [2006] IRLR 613. Accordingly, the later finding that the reason for the dismissal was that the Claimant would inhibit or damage the firm's commercial objectives was inconsistent with its earlier finding that such a belief was not in the Respondent's mind at the time of dismissal.
51. Further, if the Employment Tribunal intended to make a finding that the dismissal was for perceived commercial reasons it should have dealt with other evidence adduced by the Claimant including the following (a) the Claimant had worked for five years on full salary at reduced hours (b) his pay had been increased on 1 May (c) the Respondent's repeated denial that there was any commercial reason for the Claimant's dismissal (d) there was no finding that Ms Staples had referred to any commercial figures relating to the Claimant's performance (e) there was no answer as to why Ms Staples came to the conclusion that it was commercially inhibiting to employ the Claimant. He had worked satisfactorily for five years with appropriate adjustments.
52. Mr Choudhury submitted that there was only the kind of reason that was regarded as inadequate in the Stockton-on-Tees case. The correct comparator was someone who would also inhibit or damage the firm's commercial objectives but not by reason of disability. As such a comparator would have been treated in the same way there had been no discrimination. In the circumstances the Employment Tribunal's perceived error as to the reason for dismissal vitiated its findings as to the appropriate comparator and the findings of discrimination could not stand.
53. Ground 2 of the Notice of Appeal was to the effect that the Employment Tribunal had found that unfair or unreasonable treatment on the part of the Respondent was in itself sufficient evidence of discrimination.
54. This ground of appeal is based upon the well-known principle set out in cases such as Bahl v Law Society [2004] IRLR 799 to the effect that an Employment Tribunal cannot infer discriminatory conduct from unreasonable behaviour alone. Mr Choudhury of course conceded discriminatory conduct could be inferred and appropriate inferences drawn from unreasonable behaviour if there was other evidence pointing to a discriminatory reason for the matters complained of. In the present case the Employment Tribunal did not expressly reject Ms Staples' evidence or find that she was wrong. The most that could be said, submitted Mr Choudhury, was that her evidence was so incredible that it could be rejected. The evidence here was capable of justifying the dismissal of the Claimant.
55. Mr Choudhury submitted that the Claimant, when he had a detached retina in one eye only, was accommodated by appropriate adjustments. A debate arose after his second eye became affected in 2007. The Respondent was not hostile to disabled people and this was relevant to the drawing of inferences. The Respondent had accepted that its conduct was unreasonable but denied that it was discriminatory; that was the issue. If the Employment Tribunal were to reject Ms Staples' evidence it was required to explain why. It was not sufficient for the Employment Tribunal simply to say that it had "no comment" on the Respondent's case that senior staff in the real world inhabited by the big law firms abandoned the niceties of natural justice and fair procedure when they "managed out" senior staff.
56. There was nothing to suggest that Ms Staples acted in a discriminatory manner only that she had acted unreasonably.
57. Mr Dray did not have a discriminatory intent, and even if he did as it was found that he was not a party to the decision to dismiss his discriminatory intention could not be imputed to the Respondent.
58. The Employment Tribunal did not reject Ms Staples' evidence that the events of 17 April played no part in her decision to dismiss and there was no suggestion that she had acted otherwise than in good faith in relying upon Mr Dray's note.
59. It was inappropriate for the Employment Tribunal to consider if the Respondent reasonably believed the factors Ms Staples said she relied upon. The Employment Tribunal appear to have accepted that she relied upon Mr Dray's note as also Miss Pilton's note.
60. The third ground of appeal suggests that the Employment Tribunal failed to make sufficient findings of primary facts from which it might be permissible to draw adverse inferences or that it had made findings unsupported by evidence. This particular ground of appeal was not developed extensively in Mr Choudhury's submissions. The Employment Tribunal made no finding as to whether Miss Pilton's account of the belligerent stance adopted by the Claimant was correct, although it did find that Ms Staples' reliance upon Miss Pilton's note was unreasonable. Mr Choudhury suggested that this demonstrated how the Employment Tribunal conflated unreasonableness with discriminatory conduct. The issue, Mr Choudhury submitted, was whether or not Ms Staples did rely upon Miss Pilton's note and whether if she did so she acted in a discriminatory manner. Further, there was no clear finding as to who had acted in collusion with Ms Staples and it was an error of law to say that an "air of uncertainty" was sufficient to enable the Employment Tribunal to draw inferences. Further, the Employment Tribunal had failed to make any finding as to whether it accepted or rejected the Claimant's note of the first meeting of 17 April when he suggested that Mr Dray had misrepresented the views of the occupational health advisers. There was accordingly no adequate examination of Ms Staples' stated concern as to the Claimant's alleged duplicitous dealings with the Respondent. The failure of the Employment Tribunal to make findings in relation to primary facts to support its inferences in relation to background matters vitiated its conclusion as to the provenance of Mr Dray's note of the second meeting of 17 April. Further the Employment Tribunal rejected the Claimant's case that Mr Dray had wanted a "9 to 5 person" and was instrumental in the decision to dismiss. Rejection of this case should have been treated as a failure by the Claimant to prove the first stage of the burden of proof requirements as explained in cases such as Barton v Investec [2003] ICR 1205.
61. There was no evidence to support the finding that Ms Staples' understanding that there were insurmountable technological difficulties in the Claimant working from home, when this was not the case and was not supported by any evidence. Further the Employment Tribunal, it is said, was wrong to rely upon the two comments made by Mr Dray after the decision to dismiss had been taken (having found he was not a party to that decision) as evidence of possible discrimination. The Employment Tribunal should have concentrated on what was in Ms Staples' mind. Further the comments to the effect that the Claimant's employment had been terminated by reason of his health did not support the Employment Tribunal's finding that the dismissal was related to the Claimant being perceived to be a commercial liability.
62. The fourth ground of appeal was that the Employment Tribunal failed to make findings in respect of one or more of the reasons relied upon by the Respondent in dismissing the Claimant. The Respondent again relied upon the failure of the Employment Tribunal to state whether it accepted Mr Rudd's note of the first meeting of 17 April in which it was suggested that Mr Dray had misrepresented the views of the Respondent's occupational health advisers. Consequently the Tribunal failed to address or make any findings in respect of the fourth factor in Ms Staples' mind in dismissing Mr Rudd, namely his alleged duplicitous dealings with the Respondent.
63. The fifth ground of appeal, which is closely linked to the first ground of appeal, complains that in concluding that the Claimant was dismissed because of the perceived insufficient return in terms of chargeable hours or fees billed the Employment Tribunal ignored the Respondent's non-discriminatory explanations for his dismissal and made no sufficient findings in support of the inference it drew; or alternatively it failed to adequately explain its findings. The Employment Tribunal, it is said, should have drawn inferences from properly established primary facts and explained why it rejected the reasons given by the Respondent for the treatment of the Claimant. The Employment Tribunal, it is said, had failed to take account of the concession made by the Respondent that the Claimant's commercial performance was not an issue. It failed to take account of the rejection of the Claimant's case that Mr Dray had wanted someone who worked from 9 to 5 pm; this suggested that the Respondent was not concerned as to the commercial return of employing the Claimant. The Employment Tribunal made no finding as to whether or not Ms Staples had in mind or was aware of the Claimant's commercial performance. Further, the Employment Tribunal should have taken account of the fact that a few days before his dismissal the Claimant had been awarded a substantial pay increase.
64. The final ground of appeal, a perversity ground, was not in the event pursued before us and we say nothing further about it.

Claimant's submissions and cross-appeal

65. At one time Mr Beard was minded to submit that the House of Lords' decision in Malcolm was obiter in so far as it was suggested that it applied to all forms of disability discrimination, in particular in the field of employment. However, there are now at least four decisions of the Employment Appeal Tribunal to the contrary and one decision of the Court of Appeal and the point was abandoned. We therefore approach this appeal on the basis that Malcolm overruled Novacold^[1] .
66. Mr Beard submitted in relation to his cross-appeal that the Employment Tribunal should have found in the light of Malcolm that the Respondent was guilty of disability related discrimination having dismissed a long-serving employee without a credible reason. The finding by the Employment Tribunal suggested that the Respondent's view was that the long term effect of the Claimant's disability rendered him an economic liability. The reasons given to Mr Carr for his dismissal showed that disability was in the Respondent's mind.
67. In his oral submissions Mr Beard dealt with the Respondent's grounds 1 and 5 together. He accepted, in the light of Malcolm, that the comparator for disability related discrimination and for direct discrimination was the same. The Employment Tribunal, it was submitted, had used the same comparator.
68. Relying upon the Disability Rights Commission Code of Practice: Employment & Occupation Mr Beard submitted that the distinction between direct and disability related discrimination was that in the former the discriminatory treatment arose because the person was disabled in a particular way; whereas in the latter the less favourable treatment was because the person's disability was accompanied by an additional effect, and the effect led to the treatment. An example of the former might be where a person with, for example, a facial disfigurement was shunned; whereas the classic example of the latter was when a person was absent from work because of sickness arising from disability. Mr Beard submitted that the Employment Tribunal found that Ms Staples had a stereotypical view of the Respondent's condition; she was, therefore, responding to his particular disability and in other words assuming that his future performance would be unsatisfactory because of his disability and that he would be an economic liability. The Employment Tribunal concluded that in fact there was no basis upon which to factually complain about the Claimant's performance, and therefore drew the conclusion that the decision to dismiss was not related to an effect caused by his disability. Having drawn its conclusions on the issue of direct discrimination there was no need for the Employment Tribunal to address the question of disability related discrimination. Further, in the case of direct discrimination where that can be established, it will be plain that the Claimant will always be treated less favourably than any comparator. In this regard he referred to Islington LBC v Ladele [2009] IRLR 154 at paragraph 36. If, on the other hand, the Employment Tribunal was wrong to have found that this was a case of direct discrimination, it should have properly found it was a case of disability related discrimination. This was a finding that the Employment Tribunal was entitled to make because Mr Dray's comments as to the reason for the Claimant's dismissal showed what was in the Respondent's mind at the relevant time.
69. In relation to the second ground of appeal (the suggestion that the Employment Tribunal inferred that unfair or unreasonable treatment was itself sufficient evidence of discrimination), Mr Beard stressed the importance of the evidence of Mr Carr. He submitted that the Employment Tribunal clearly recognised that unreasonable behaviour was not in itself evidence from which discriminatory conduct might be inferred. However, the position was different when there was other evidence that supported the case of discriminatory conduct and where the alleged reasons given for the "unreasonable" conduct were not accepted.
70. In relation to ground 3 (the alleged failure of the Employment Tribunal to make sufficient findings of primary fact to support inferences and its alleged drawing of adverse inferences without evidential support), Mr Beard submitted that the Employment Tribunal was entitled to rely upon the reverse burden of proof having disbelieved Ms Staples. The Employment Tribunal made two important findings; (1) it disbelieved her evidence that she made the decision to dismiss alone and (2) did not believe she could have relied upon the reasons that she gave to the Employment Tribunal for her decision to dismiss. The Employment Tribunal, therefore, rejected her explanation. The Employment Tribunal was clearly aware of the two-stage process. The Employment Tribunal asked itself on the evidence it heard whether there could have been discrimination and if so whether the Respondent had given a non-discriminatory reason for conduct which the Employment Tribunal was able to accept. The process by which the Employment Tribunal analysed Ms Staples' evidence showed it looked at the evidence and concluded there was sufficient evidence from it might be proper to infer discriminatory conduct. The need, however, for drawing inferences was diminished by the two pieces of evidence the Employment Tribunal referred to at 10.7 relating to what had been said to Mr Carr.
71. Mr Beard pointed out that there was additional evidence upon which the Employment Tribunal could have relied (see Decision 7.32 and 7.34) relating to what had explicitly been said by Ms Staples, according to the Claimant, at the meeting when he was dismissed. Although the Employment Tribunal recorded Ms Staples' denial, Mr Beard invited the EAT to accept that the Claimant's evidence was in fact accepted.
72. The Employment Tribunal did not simply rely upon the unreasonableness of the Respondent's conduct but asked whether the Respondent's conduct according to the Respondent's own explanation was unreasonable, and then so whether the explanation was accepted. Mr Beard referred to the passage in Yeboah v Crofton [2002] IRLR 634 paragraphs 79-80 to support the proposition that the rejection of an explanation for allegedly unreasonable conduct towards a claimant entitled an Employment Tribunal to infer that there was a different explanation than the one advanced by him and that the true explanation was a discriminatory one. That was precisely what the Employment Tribunal did in the present case. There was no question of conflation of unreasonableness with discriminatory conduct. In relation to the specific matters in respect of which the Respondent claimed no findings had been made or the Employment Tribunal had made findings unsupported by the evidence, Mr Beard submitted either that it was unnecessary for the Employment Tribunal to make such findings, that such findings had necessarily been made and that sufficient findings had been made to justify any inferences drawn.

The relevant law and authorities

73. Section 3A of the Disability Discrimination Act 1995 defines discrimination as follows:

"(1) For the purposes of this Part, an employer discriminates against a disabled person if—

(a) for a reason which relates to the disabled person's disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply; and

(b) he cannot show that the treatment in question is justified.

(2) For the purposes of this Part, a person also discriminates against a disabled person if he fails to comply with a duty to make reasonable adjustments imposed on him in relation to the disabled person.

(3) Treatment is justified for the purposes of section (1)(b) if, but only if, the reason for it is both material to the circumstances of the particular case and substantial.

(4) But treatment of a disabled person cannot be justified under subsection (3) if it amounts to direct discrimination falling within subsection (5).

(5) A person directly discriminates against a disabled person if, on the ground of the disabled person's disability, he treats the disabled person less favourably than he treats or would treat a person not having that particular disability whose relevant circumstances, including his abilities, are the same as, or not materially different from, those of the disabled person.

(6) If, in a case falling within subsection (1), a person is under a duty to make reasonable adjustments in relation to a disabled person but fails to comply with that duty, his treatment of that person cannot be justified under subsection (3) unless it would have been justified even if he had complied with that duty."

We also refer to Section 4(2) which provides as follows:

"4(2) It is unlawful for an employer to discriminate against a disabled person whom he employs -

(d) by dismissing him, or subjecting him to any other detriment."

Section 17(A)(1C) deals with the reverse burden of proof once the claimant has proved facts from which a tribunal could conclude in the absence of an adequate explanation that the respondent had acted in a discriminatory way:

74. The authorities make clear that unreasonable treatment in itself cannot give rise to an inference of discriminatory conduct. Further, fairness requires that a finding of discrimination be adequately explained. As was made clear by the Court of Appeal in Bahl v Law Society [2004] IRLR 799 in which Peter Gibson LJ, delivering the judgment of the court discussed a number of issues that had arisen from the decision of the House of Lords in Glasgow City Council v Zafar [1998] IRLR 36. He had this to say at paragraph 98:

"The first concerned the situation in which the alleged discriminator gave an explanation in terms of his own unreasonable conduct whilst denying discrimination on the proscribed grounds: at its simplest, "I may have treated my employee unreasonably, but I treat all my employees like that, white or black, male or female". A misreading of King might have produced the analysis that such an unreasonable explanation in itself justified an inference of discrimination. However, such an erroneous approach was identified and terminated by Zafar. Lord Browne-Wilkinson said (at p. 124B-C):

"the conduct of a hypothetical reasonable employer is irrelevant. The alleged discriminator may or may not be a reasonable employer. If he is not a reasonable employer he might well have treated another employee in just the same unsatisfactory way as he treated the complainant, in which case he would not have treated the complainant "less favourably" for the purposes of the Act of 1976. The fact that, for the purposes of the law of unfair dismissal, an employer has acted unreasonably casts no light whatsoever on the question whether he has treated the employee 'less favourably' for the purposes of the Act of 1976."

His Lordship then commended the words of Lord Morison in the Court of Session, [1977] SLT 281, 284:

"It cannot be inferred, let alone presumed only from the fact that an employer has acted unreasonably towards one employee that he would have acted reasonably if he had been dealing with another in the same circumstances"."

Peter Gibson LJ continued at paragraph 101:

"In our judgment, the answer to this submission is that contained in the judgment of Elias J. in the present case. It is correct, as Sedley L.J. said, that racial or sex discrimination may be inferred if there is no explanation for unreasonable treatment. This is not an inference from unreasonable treatment itself but from the absence of any explanation for it. However, the final words in the passage which we have quoted from Anya are not to be construed in the manner that Mr. de Mello submits. That would be inconsistent with Zafar. It is not the case that an alleged discriminator can only avoid an adverse inference by proving that he behaves equally unreasonably to everybody. As Elias J. observed (para. 97):

"Were it so, the employer could never do so where the situation he was dealing with was a novel one, as in this case."

Accordingly, proof of equally unreasonable treatment of all is merely one way of avoiding an inference of unlawful discrimination. It is not the only way. He added (ibid.):

"The inference may also be rebutted – and indeed this will, we suspect, be far more common – by the employer leading evidence of a genuine reason which is not discriminatory and which was the ground of his conduct. Employers will often have unjustified albeit genuine reasons for acting as they have. If these are accepted and show no discrimination, there is generally no basis for the inference of unlawful discrimination to be made. Even if they are not accepted, the tribunal's own findings of fact may identify an obvious reason for the treatment in issue, other than a discriminatory reason."

We entirely agree with that impressive analysis. As we shall see, it resonates in this appeal."

Elias J returned to the point in London Borough of Islington v Ladele [2009] IRLR 154 at paragraph 40(4):

"Of course, in the circumstances of a particular case unreasonable treatment may be evidence of discrimination such as to engage stage two and call for an explanation: see the judgment of Peter Gibson LJ in Bahl v Law Society [2004] IRLR 799, paras 100-101 and if the employer fails to provide a non-discriminatory explanation for the unreasonable treatment, then the inference of discrimination must be drawn. As Peter Gibson LJ pointed out, the inference is then drawn not from the unreasonable treatment itself - or at least not simply from that fact - but from the failure to provide a non-discriminatory explanation for it. But if the employer shows that the reason for the less favourable treatment has nothing to do with the prohibited ground, that discharges the burden at the second stage, however unreasonable the treatment."

75. It follows that where an Employment Tribunal has rejected an explanation on the part of the employer for what might be regarded as unreasonable behaviour it is perfectly proper for it to draw an adverse inference of discrimination, assuming of course there is other evidence pointing to discriminatory conduct. This point is made by the Court of Appeal in Yeboah v Crofton [2002] IRLR 634 by Mummery LJ at paragraphs 79 and 80:

"79. The essential point is that, where it was admitted by Mr Crofton that he had made an accusation or where it was proved that he had made it, the questions for the Employment Tribunal were whether Mr Crofton would have made such accusations against a person of a different race in the same circumstances and whether the accusations were made by him on racial grounds. These issues involved an examination of all the circumstances, including, in particular, the explanations given by Mr Crofton for making the accusations against Mr Yeboah . It was for Mr Crofton to decide whether or not to explain his conduct in answer to the allegation of race discrimination. He chose to explain himself. His explanations were that he believed on reasonable grounds that his accusations were true and that they could be proved to be true. In Mr Crofton's own words it was fundamental to his defence that he knew from October 1990 that Mr Yeboah was aware that colleagues were defrauding the people of Hackney and he was doing nothing about it.

80. As the Employment Tribunal did not accept Mr Crofton's explanations for making such accusations, it was entitled, though not bound, to infer that there was a different explanation than the one advanced by him and that that true explanation was a racial one. The truth or otherwise of the allegations by Mr Crofton was relevant to Mr Crofton's reason for making them. As Mr Crofton's explanation for the accusations was that he had a genuine and reasonable belief in the truth of them and that they could be proved to be true, it was for him to give evidence on those points."

76. We need to say something about the question of comparators. There is no issue that as a result of Malcolm the comparator in cases of both direct and disability related discrimination are likely to be the same. Further, in certain cases of direct discrimination where the evidence clearly discloses direct discrimination the identity of a comparator is likely to be of little value as by definition the claimant will have been treated less favourably; there is a passage in Ladele that supports this proposition. Elias J said at paragraph 36:

"Take a simple example. A claimant alleges that he did not get a job because of his race. The employer says that it is because he was not academically clever enough and there is evidence to show that the person appointed to the job had better academic qualifications. The claimant alleges that this was irrelevant to the appointment; it was not therefore a material difference. The employer contends that it is a critical difference between the two situations. If the Tribunal is satisfied that the real reason is race, then the academic qualifications are irrelevant. The relevant circumstances are not therefore materially different. It is plain that the statutory comparator was treated differently. If the tribunal is satisfied that the real reason is the difference in academic qualifications, then that provides a material difference between the position of the applicant and the comparator."

77. Helpful guidance as to identifying an appropriate comparator can be found in the recent decision of Slade J in Stockton-on-Tees BC v Aylott UKEAT/0401/08/CEA in which she said at paragraphs 76-78:

"76. In deciding upon the characteristics of an actual or hypothetical comparator it is necessary to determine the reason why the complainant received the treatment of which complaint is made. The relevant circumstances and attributes of an appropriate comparator should reflect the circumstances and attributes relevant to the reason for the decision or action of which complaint is made. If a disabled complainant is dismissed for poor performance, comparison with the treatment of a person in similar circumstances but with a good performance record would not assist in determining whether the complainant was discriminated against because of his disability. If the reason for the dismissal of a disabled complainant is his absence record and his poor performance at work, an employee who has a similar absence record but not a history of poor performance would not be an appropriate comparator.

77. For the purposes of ascertaining whether there has been discrimination on grounds of disability, a hypothetical comparator does not have to be a clone of the complainant. However Section 3A(5) requires the comparison to be with a non disabled person

"… whose relevant circumstances, including his abilities, are the same as, or not materially different from, those of the disabled person."

In our judgment, for a meaningful comparison to be made, the hypothetical comparator should have all the attributes or features which materially affected the employer's decision to carry out the act which is said to be discriminatory.

78. Even if, contrary to our findings above, the Tribunal had been entitled to consider claims that the Council had discriminated against Mr Aylott by monitoring his performance and setting deadlines after his return to work in February 2006, in our judgment the Tribunal erred in law in failing to select a hypothetical comparator who, in addition to a similar sickness absence record to that of the complainant, had the other characteristics relevant to the acts of which complaint was made. An appropriate hypothetical comparator for the purpose of considering whether Mr Aylott had been discriminated against in monitoring his performance and setting deadlines, in addition to having a similar sickness absence record, would have been a person who had recently been moved to a different post and whose past behaviour and performance had caused concern."

Before we leave this case we note that Mr Choudhury also relied upon a passage at paragraph 89 in relation to inadequate reasoning by the Employment Tribunal:

"In our judgment the findings of ' ….direct discrimination based on the stereotypical view of mental illness' are too vague to support a conclusion that disability discrimination is made out. What does 'a stereotypical view of mental illness' mean? Did the Tribunal consider that Mr Aylott would be violent, be offensive, fail to perform his duties have further long periods of absence? In our judgment this phrase falls far short of a finding as to the reason for conduct of the Council of which complaint is made and which is necessary for the identification of the characteristics of an appropriate comparator."

78. In relation to comparator Mr Choudhury also referred to the earlier decision of HHJ McMullen QC in High Quality Lifestyles v Watts [2006] IRLR 850:

"46. The comparator may be, but need not be, the same comparator as is envisaged for the purpose of disability-related discrimination. For example, for direct discrimination, the comparator may be a person who does not have the Claimant's disability, and may not have a disability at all. The comparator might have a condition which falls short of the kind of impairment required to satisfy s1 of the Act. This is because s3A(5) focuses upon a person who does not have "that particular disability". The circumstances of the Claimant and of the comparator must be the same "or not materially different". One of the circumstances is the comparator's "abilities", but since this is prefaced by "including", it follows that more circumstances are relevant than simply the comparator's abilities."

Judge McMullen continued at paragraph 48:

"48. The error which the Tribunal made in paragraphs 84 and 85 of its reasons was in failing to impute relevant circumstances to the hypothetical comparator. The circumstances were not, as the Tribunal found, that the comparator should have a communicable disease. Assuming, as the Tribunal correctly did, that the comparator has the same "abilities, skills and experience", the comparator must also have some attribute, whether caused by a medical condition or otherwise, which is not HIV+. This attribute must carry the same risk of causing to others illness or injury of the same gravity, here serious and possibly fatal. If the Tribunal found that the comparator would have been dismissed, then the Claimant has not been less favourably treated. The facts which it is necessary for the Claimant to have proved, in order to shift the burden of proof to the Respondent, is not only a workable model for the hypothetical comparator but also some evidential basis upon which it could be said by the Tribunal that the comparator would not have been dismissed. With respect, the Employment Tribunal failed to do this, as is seen by paragraph 85."

Conclusions

79. We firstly consider ground 1 of the Notice of Appeal and the application of Malcolm. Mr Choudhury's submission was ingenious. Taylor v OCS Group [2006] IRLR 613 makes clear that the discriminator must have a disability-related reason in mind at the time he does the act complained of. The Employment Tribunal had rejected the complaint of disability related discrimination because it was satisfied that with the adjustments in place Mr Rudd was able to work perfectly well and to the complete satisfaction of the client. Accordingly, says Mr Choudhury, it was implicit in the decision that Ms Staples must have had in mind at the time of his dismissal that that Mr Rudd was not a commercial liability and therefore the finding that he was a commercial liability was wholly inconsistent with her believing that he was not. It seems to us that this does not follow at all. The fact that the Claimant was able to carry out his work with reasonable adjustments does not mean that Ms Staples believed he was commercially viable, still less that she must be taken to have so believed.
80. It may well be that the discrimination suffered by the Claimant was disability related discrimination as well as, or rather than direct discrimination.
81. We are satisfied that the Employment Tribunal sufficiently set out the reasons for the Claimant's treatment, namely the perceived unprofitability of continuing to employ him with reasonable adjustments in place. It is not appropriate to subject the reasoning of the Employment Tribunal to minute examination. The Employment Tribunal clearly explained why it found he was so treated, namely by reason of being perceived to be a commercial liability. This was a decision the Employment Tribunal was entitled to come to on the evidence before it. There was no need for the Employment Tribunal to refer to all arguments or points so long as the reasons for its decision were clear and based on evidence before it, as we believe the decision of the Employment Tribunal was.
82. Before we turn to the Malcolm case and consider the appropriate comparator we need to consider the factual position. There is no dispute between the parties that the Claimant and the Respondent had agreed appropriate adjustments that were reasonable within the meaning of s4A of the Disability Discrimination Act 1995. The Respondent's case has always been (and was repeated before us) that the Claimant's commercial performance, even having regard to the proposed adjustments, was not an issue. The Employment Tribunal, nevertheless concluded, as it was entitled to on the evidence before it, that the reason for the Claimant's dismissal was because Ms Staples and the other unknown members of Nabarro who took the decision to dismiss, did so for an inadmissible reason. The reason as found by the Employment Tribunal was that it was because they believed that the Claimant's disability made him an inconvenient liability which would inhibit or damage the firm's commercial objectives. Consequently, the Claimant would not provide as efficient a return as against the "inconvenience" that a continuation of the reasonable adjustments for his disability was perceived to create. The fact that that view was completely wrong and unreasonable does not mean that it was not held and does not mean that it was not the reason for his dismissal.
83. The Employment Tribunal evidently concluded, as it was entitled to conclude, that Ms Staples and her colleagues had formed a wrong and unreasonable conclusion by reason of what it described as their stereotypic views as to the effect of the Claimant's disability; see Decision paragraph 10.8.
84. The decision of the House of Lords in Malcolm has clearly radically the landscape of claims of disability discrimination. It is clear that the decision in Malcolm applies throughout the Disability Discrimination Act 1995 and in particular, of course, to its application in the field of employment. Mr Beard now concedes this to be case. The comparator in a case such as this must, therefore, be as defined as Lord Brown in Malcolm and helpfully explained by Slade J in the Stockton-on-Tees case which we have cited. We accept Mr Choudhury's submission that the hypothetical comparator is likely to be the same both in cases of direct discrimination on the grounds of disability and also disability related discrimination.
85. The Employment Tribunal was in our opinion basically correct at paragraph 10.8 to construct the hypothetical comparator as a lawyer at the same grade and skills as the Claimant who shared a similarly good relationship with the client and who needed for reasons other than disability to work at home for two days each week. The treatment of the hypothetical comparator was obviously predicated upon the adjustments both working and being reasonable and there being no issue as to the fact that they had no commercial impact. We would suggest that the definition of the hypothetical comparator might properly be refined. In our opinion the comparator in this case will be a fellow lawyer of the same grade and skills as the Claimant who shared a similarly good relationship with the client, who for reasons other than disability required adjustments to be made to enable him to work and in respect of whom reasonable adjustments had been agreed to the satisfaction of both employer and employee, and in respect of whom commercial performance, even having regard to the proposed adjustments was not an issue. Such a hypothetical employee would not have been dismissed by reason that he was considered to be an inconvenient liability which would inhibit or damage the firm's commercial objectives and that he would not provide as efficient return as against the "inconvenience" that a continuation of the reasonable adjustments was perceived to create.
86. A decision to dismiss the comparator on those grounds would have been wholly unreasonable. It is simply not open to the Respondent to say that it has not discriminated against the Claimant because it would have behaved unreasonably in dismissing the comparator. It is unreasonable to suppose that it in fact would have dismissed the comparator for what amounts to an irrational reason. It is one thing to find, as in Bahl that a named individual has behaved unreasonably to both the Claimant and named comparators; it is quite another to find that a corporate entity such as Nabarro or its service company would behave unreasonably to a hypothetical comparator when it had no good reason to do so. Accordingly the decision of the Employment Tribunal cannot be faulted whether the discrimination was direct or disability related. The discrimination might be both direct and disability related but if we are wrong about this it is certainly disability related.
87. In our opinion on the findings of the Employment Tribunal, if one has to choose between disability related discrimination or direct discrimination, the discrimination suffered by the Claimant appears to be disability related discrimination. That is because the reason for his dismissal was the wrong opinion of Ms Staples and her colleagues that the Claimant's disability made him an inconvenient liability which would inhibit or damage the firm's commercial objectives and that the Claimant would not provide a sufficient return as against the "inconvenience" that a continuation of the reasonable adjustments for his disability was perceived to create. The fact that their view was wrong and unreasonable does not mean that it was not held and that the dismissal was not for a reason related to his disability. It clearly was for a reason which related to Mr Rudd's disability, namely its supposed commercial effect. In our opinion the cross-appeal on this ground should succeed for this reason.
88. It follows that there is an additional reason why the Respondent cannot succeed in this appeal; disability related discrimination can only be justified if the duty to make reasonable adjustments has been complied with; see s3A(6) which we set out earlier in this judgment. The Respondent cannot justify its discriminatory conduct because it has failed to comply with its duty to make reasonable adjustments. Although reasonable adjustments were agreed they were never properly implemented nor made. Home working, although working well, was still at the very early stage of trial. Even had the Respondent complied with this duty to make reasonable adjustments its treatment of the Claimant could not have been justified for the reasons we have already given in relation to the hypothetical comparator.
89. We are unable to accept Mr Choudhury's submission that the comparator should have been someone who also would (or in respect of whom it was believed that he would) inhibit or damage the firm's commercial objectives but not by reason of disability. As we have said the Respondent cannot say that it has not discriminated against the Claimant because it would have behaved unreasonably in dismissing the comparator. We are unable to accept that an unreasonable and incorrect belief on the part of an employer that a particular employee might inhibit the firm's commercial objective would constitute part of the employee's "relevant circumstances" within the meaning of s3A(5) of the Act.
90. Furthermore, the time at which the relative expense and inconvenience of adjustments are to be considered is surely when consideration is given to the question of reasonable adjustments under s3A(6) of the Act. An employer cannot, once those adjustments have been considered to be reasonable, then assert because of their perceived financial implications he is entitled to dismiss the employee because he would dismiss any employee who was not disabled whose adjustments gave rise to the same financial implications. Such an argument, if correct, would give the employer a "second bite of the cherry" so as to speak and drive a coach and horses through the protection given to disabled employees by the requirement in the Disability Discrimination Act 1995 that an employer must make reasonable adjustments to accommodate disabled employees. An employer could always disregard the need to make reasonable adjustments with impunity by dismissing the employee and asserting that he would have dismissed a non-disabled employee requiring the same adjustments, on financial grounds, notwithstanding that the adjustments had been adjudged to be "reasonable". We of course bear in mind that in the present case the argument could not succeed because the Respondent could not satisfy the Employment Tribunal that it would have dismissed the hypothetical comparator in like circumstances as made clear at paragraph 10.8 when the Employment Tribunal found that the comparator would not have been dismissed.
91. We do not consider that Malcolm requires us to make an absurd comparison between a disabled claimant being treated unreasonably by reason of his being perceived to be a commercial liability and an employee who is not disabled similarly unreasonably believed to be a commercial liability. The comparison (if one is required) must be between a disabled claimant unreasonably believed to be a commercial liability by reason of the reasonable adjustments and a fellow employee who is not disabled with similar adjustments in place in respect of whom it is reasonable to infer that the employer would not have behaved unreasonably.
92. We now turn to consider the second ground of appeal, namely that the Employment Tribunal inferred that unfair or unreasonable treatment was in itself sufficient evidence of discrimination; we reject Mr Choudhury's submissions in this regard. It is quite clear that the Employment Tribunal rejected Ms Staples' evidence both as to the circumstances and the reasons for the Claimant's dismissal. Her evidence was extraordinary for the reasons given by the Employment Tribunal which was entitled to reject her evidence. The acceptance and rejection of evidence is a matter for the Employment Tribunal and we remind ourselves that the Employment Tribunal saw and heard the witnesses; we did not. The Employment Tribunal's reasons for rejecting her evidence were that they did not believe her, principally because the account she gave was so improbable as to be unlikely to be true.
93. It is quite clear the Employment Tribunal did not accept the suggestion made that within the culture of all major law firms is a policy of summary dismissal of highly paid employees followed by negotiation. This was a matter for the Respondent to establish. It is quite clear that the Employment Tribunal, as we have said, did not accept that this was the case. The Employment Tribunal had no reason to explain why it did not accept that evidence because in the context it is clear the Employment Tribunal considered it to be most improbable that there was such a culture or policy. Reading the decision in full and in its context it is quite clear to us that Ms Staples' evidence was roundly rejected.
94. It is clear the Employment Tribunal had in mind the principle encapsulated in Bahl, to which we have referred, that unreasonable behaviour alone cannot justify the inference being drawn of discriminatory conduct. The case is, of course, quite different when one adds to unreasonable behaviour other facts from which discrimination can be inferred. In such circumstances the Employment Tribunal is entitled to draw the appropriate inference. Similarly, as was made clear in the passages we have referred to in Yeboah, Bahl and Ladele where the reasons for what is said to be unreasonable conduct given by a respondent are rejected by the employment tribunal, it can similarly draw inferences as to the true reason for the unreasonable behaviour from all the evidence that it has, including other evidence pointing to a discriminatory intent. In the present case the Employment Tribunal did not accept the reasons given by Ms Staples as to why she had allegedly taken it upon herself to dismiss the Claimant. It was entirely proper for the Employment Tribunal to investigate the truth of the matters she claimed to have relied upon because the truth of those matters or otherwise was a tool that assisted the Employment Tribunal in determining her credibility. The Employment Tribunal was perfectly entitled to conclude that it was highly unlikely that someone of Ms Staples' expertise and experience would have acted, as she claimed, without any investigation. The Employment Tribunal was entitled to conclude that had she really believed the allegations she made were of substance she would have investigated them. Had she carried out an investigation she would have found that the allegations lacked substance. The Employment

Tribunal made it clear that it was considering issues of credibility (see paragraph 10.7):

"we are not assessing fairness (but we are assessing credibility)"

95. In the circumstances the Employment Tribunal was entitled to reject Ms Staples' evidence and was entitled to draw the inference that there were other reasons in her mind for the Claimant's dismissal. The Employment Tribunal found it unlikely, as we have mentioned, that Ms Staples with her experience and expertise could possibly have thought it appropriate to dismiss a long-serving and senior employee without making any attempt whatsoever to investigate the alleged concerns held by Nabarro or indeed to seek the Claimant's own account. The Employment Tribunal adopted a perfectly proper course and was entitled to reject, as it did Ms Staples' evidence firstly as to whether the reasons she gave were the true reasons for the decision to dismiss (at whole or in part) and secondly that she alone took the decision to dismiss.
96. We would observe that there was not much left of Ms Staples' credibility after those findings. In effect the Employment Tribunal rejected her evidence as it conflicted with that of the Claimant. As we have said this was a finding the Employment Tribunal was entitled to make.
97. We stress that so far as we are concerned there was no question of the Employment Tribunal simply relying upon unreasonable behaviour in itself as being evidence of discrimination. The Employment Tribunal considered that Ms Staples' evidence that she was relying on the reasons she gave without exploring them was so incredible that it could not be accepted and when taking the falsity of her explanation (as found by the Employment Tribunal) together with other evidence it was entirely proper to draw the inferences they did.
98. We now turn to ground 3, namely the perceived failure of the Employment Tribunal to make findings of primary facts on the basis of which it will be permissible to draw adverse inferences or that it made findings unsupported by the evidence. Mr Choudhury in his oral submissions had little to say about grounds 3 to 5.
99. We note that the Employment Tribunal is under no obligation to make findings on every factual matter before it; we have in mind a useful synopsis of the approach to decisions of the Employment Tribunal given by Elias J in ASLEF v Brady [2006] IRLR 576 at paragraph 55:

"The EAT must respect the factual findings of the employment Tribunal and should not strain to identify an error merely because it is unhappy with any factual conclusions; it should not "use a fine toothcomb" to subject the reasons of the Employment Tribunal to unrealistically detailed scrutiny so as to find artificial defects; it is not necessary for the Tribunal to make findings on all matters of dispute before them nor to recount all the evidence, so that it cannot be assumed that the EAT sees all the evidence; and infelicities or even legal inaccuracies in particular sentences in the decision will not render the decision itself defective if the Tribunal has essentially properly directed itself on the relevant law."

100. Bearing in mind it is inappropriate to go through the decision of the Employment Tribunal with a fine toothcomb and bearing in mind that the Employment Tribunal was not bound to set out every finding of fact that it made we regard it as most likely that as the Claimant's case was clearly that the reason for his dismissal was that he was viewed as a commercial liability and had in effect been told this by Ms Staples (see his evidence set out in paragraph 7.32 and 7.34) and also by Mr Dray (paragraph 7.37), the Employment Tribunal accepted that evidence of his meeting with Ms Staples and what Mr Dray said notwithstanding that the Employment Tribunal made no express finding and recorded her denial that medical reasons were relevant. We do note, however, Ms Staples' own note that there was "no further reasonable support (Nabarro) could offer" itself suggests that there was a connection between the perception that there were no further adjustments that could be made to enable the Claimant to work and his dismissal. It is probable, therefore, that the Employment Tribunal accepted the Claimant's evidence especially as the finding is so close to his evidence and his case. Generally speaking the Claimant's evidence was accepted whereas Ms Staples' evidence was rejected and findings extremely damaging to her credibility were made on the major issues. The Employment Tribunal rejected her evidence that she had made the decision to dismiss on her own and did not accept she could have relied upon the reasons she gave for the dismissal. However, even without that express finding as to what was said to the Claimant at the meeting on 8 July it is clear that there was other evidence that was extremely damaging to the Respondent, in particular that from Mr Carr on the email from Mr Whitlam. That evidence coupled with the rejection of Ms Staples' explanation for the dismissal would in any event entitle the Employment Tribunal to have drawn the inferences that it did. The evidence of Mr Carr as to what he had been told by Mr Dray at the very time of dismissal that the dismissal was related to the Claimant's medical condition and on-going issues with his rehabilitation was quite damning especially as its acceptance involved the finding that Mr Dray's evidence could not be accepted in this regard.
101. The Employment Tribunal clearly had in mind the Barton v Investec approach to the burden of proof and as to the evidence from which discrimination could properly be inferred. The Respondent failed to satisfy the Employment Tribunal that there was a non-discriminatory reason for dismissal, its explanation was rejected in terms and there was evidence from which it could properly be inferred that the reason for the dismissal was by reason of the Claimant being perceived as a financial liability. The fact that Mr Dray was not party to the decision to dismiss is neither here nor there. The fact that the Claimant failed to establish his involvement in the dismissal cannot mean that the Claimant failed to establish sufficient facts to shift the burden of proof.
102. We can deal quite briefly with the fourth ground of appeal. The findings of the Employment Tribunal as to the reasons for the Claimant's dismissal were clear and the reasons advanced by the Respondent were obviously rejected.
103. We do not need to deal further with the specific findings of primary fact that the Respondent complains were not made. We have already explained why. We will, however refer to a few of these specifically.
104. The Respondent complains that no finding was made as to whether Mr Rudd said aggressively to Miss Pilton 'touch my salary and I will resign'. For the reasons we have given it was not necessary for the Employment Tribunal to make such a finding. The Employment Tribunal did however find [see paragraph 10.7] that Miss Pilton never reported the matter to Ms Staples, as she might have done had she considered the Claimant to have become unmanageable or was trying to blackmail the Respondent.
105. The finding that Mr Dray had provided ammunition to Ms Staples was open to it on the evidence and is in no way consistent with the finding that he was not a party to the decision to dismiss.
106. In relation to the question of Mr Rudd's note of the first meeting of 17^th April, it is suggested by the Respondent that this was relevant to the issue of whether the Claimant had been `duplicitous' in his dealings with the Respondent. The Employment Tribunal had no need to consider this matter because it was not one of the three reasons advanced by Ms Staples for her decision to dismiss Mr. Rudd (see paragraph 10.5).
107. In relation to ground 5 we will not revisit matters we have already covered. We consider there were sufficient facts found and there was no need for the Employment Tribunal to deal with every issue raised before it. The fact that the Respondent has conceded throughout these proceedings that there was no good commercial reason for the Claimant's dismissal does not mean that Ms Staples and those other responsible for his dismissal considered, albeit it wrongly, the Claimant to be a financial liability. The Employment Tribunal was entitled to disregard the non-discriminatory but unreasonable explanations for the dismissal and clearly found, as we have said, that the reason for his dismissal was because he was unreasonably perceived as being a commercial liability.
108. In the circumstances all grounds of appeal are dismissed.

Note 1   The Child Support Agency (Dudley) v Truman HHJ Clark, Stockton-on-Tees Borough Council v Aylott (UKEAT/0401/08) 11 March 2009 Slade J, Hose Express Thurrock v Jacomb (UKEAT/0389/08) 31 March 2009 Silber J, Carter v London Underground (UKEAT/0292/08) Underhill J and the decision of the Court of Appeal in R(N) v London Borough of Dagenham & Barking Independent Appeal Panel [2009] EWCA Civ 108 11 February 2009.    [Back]