Factual and Procedural Background
An appeal was brought by the Appellant against the Brighton Employment Tribunal's judgment following a hearing in November 2005 and deliberations in December 2005. The Appellant, who was born female but identified as male and underwent gender reassignment, had been employed by the Respondent, a local council, in a temporary post related to community safety for the Lesbian, Gay, and Bisexual community. His appointment was extended several times but ultimately ended with his resignation in January 2003.
The Appellant’s role involved working with a community safety forum and related initiatives. From April 2002, he identified as transsexual but did not disclose this at work. The Respondent was found not to have knowledge of the Appellant’s gender reassignment before his resignation.
The Appellant filed claims for unlawful sex discrimination under the Sex Discrimination Act 1975 (as amended) and constructive unfair dismissal. The discrimination claim was based on the statutory provision prohibiting less favourable treatment on grounds of gender reassignment. The constructive dismissal claim relied on a breach of the implied term of mutual trust and confidence in the employment contract.
The Tribunal dismissed both claims, finding that the Respondent lacked knowledge of the Appellant’s gender reassignment and that the alleged discriminatory conduct, including the appointment of a panel member with alleged transphobic views, did not amount to unlawful discrimination or breach of trust and confidence.
Legal Issues Presented
- Whether the Respondent unlawfully discriminated against the Appellant on grounds of gender reassignment contrary to s2A of the Sex Discrimination Act 1975.
- Whether the Respondent breached the implied term of mutual trust and confidence, constituting constructive unfair dismissal.
- The proper formulation of the implied term of mutual trust and confidence in employment contracts, particularly whether the employer’s conduct must be both "calculated and likely" or "calculated or likely" to destroy trust and confidence.
Arguments of the Parties
Appellant's Arguments
- The appointment of a panel member known or believed to hold transphobic views amounted to unlawful discrimination and a breach of trust and confidence.
- The Tribunal erred in rejecting the claim that the Appellant’s perception of potential discrimination constituted unlawful discrimination.
- The formulation of the implied term of mutual trust and confidence should be disjunctive ("calculated or likely"), lowering the threshold for breach, which was met in this case.
Respondent's Arguments
- The Respondent did not have knowledge of the Appellant’s gender reassignment prior to his resignation, a necessary precondition for discrimination under s2A SDA.
- The panel member did not discriminate against the Appellant as he did not treat the Appellant less favourably.
- The Appellant’s resignation was due to perceiving the alternative post as a demotion, not because of the Respondent’s conduct.
- The implied term of mutual trust and confidence requires conduct that is both calculated and likely to destroy trust, a higher threshold not met here.
- The Tribunal’s factual findings should not be disturbed on appeal as the appellate tribunal’s role is limited to errors of law.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Mahmud v Bank of Credit and Commerce International S.A [1997] ICR 606 |
Formulation of the implied term of mutual trust and confidence in employment contracts. |
Confirmed the existence of the implied term and its wording, cited for the legal test on breach of trust and confidence. |
| Woods v W. M. Car Services (Peterborough) Ltd [1981] ICR 666 |
Implied term that employer shall not conduct itself in a manner calculated or likely to destroy trust and confidence. |
Preferred formulation of the implied term as disjunctive ("calculated or likely") and used as basis for analysis. |
| Lewis v Motorworld Garages Ltd [1986] ICR 157 |
Endorsement of the implied term and recognition of cumulative conduct as repudiatory breach. |
Supported the Woods formulation and principles regarding constructive dismissal. |
| Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] ICR 524 |
Employer's duty of good faith and trust towards employees. |
Reinforced the implied term and its application beyond direct employer-employee relations. |
| British Telecommunications plc v Sheridan [1990] IRLR 27 |
Limits appellate tribunal’s role to correcting errors of law, not retrying facts. |
Applied to refuse re-examination of factual findings of the Employment Tribunal. |
| Jones v Sirl [1997] IRLR 493 |
Relevant breach must be an effective cause, not necessarily sole cause, of resignation. |
Applied to assess causation in constructive dismissal claims. |
| Johnson v Unisys Ltd [2001] ICR 480 |
Consideration of implied term of mutual trust and confidence and its formulation. |
Referenced the BCCI case but did not alter the established formulation of the implied term. |
| Courtaulds Northern Textiles Ltd v Andrew [1979] IRLR 84 |
Implied term of trust and confidence and repudiatory breach. |
Supported the disjunctive test and approach to breach of implied term. |
| Post Office v Roberts [1980] IRLR 347 |
Assessment of conduct cumulatively for breach of implied term. |
Used to support looking at employer conduct as a whole. |
| Meikle v Nottinghamshire County Council [2005] ICR 1 |
Confirmed the disjunctive test ("calculated or likely") for breach of implied term. |
Supported the Court of Appeal’s acceptance of the EAT’s approach consistent with Woods. |
Court's Reasoning and Analysis
The court analysed the discrimination claim under s2A of the Sex Discrimination Act 1975, concluding that knowledge of the Appellant's gender reassignment by the Respondent was a necessary condition for unlawful discrimination. Since the Respondent lacked such knowledge, the claim failed except for an isolated incident involving a panel member alleged to be transphobic. The court examined whether this incident constituted discrimination or breach of trust and confidence and found it did not, as the panel member did not act as the Respondent’s agent in a discriminatory manner, nor did his presence cause the Appellant's resignation.
On the constructive dismissal claim, the court undertook a detailed review of the implied term of mutual trust and confidence. It resolved a significant legal question about the proper formulation of this term, concluding that the test is disjunctive ("calculated or likely") rather than conjunctive ("calculated and likely") to destroy trust and confidence. This interpretation aligns with established case law and avoids imposing an unnecessarily high threshold on claimants.
Applying this test, the court found that the Tribunal's factual findings did not support a breach of the implied term by the Respondent. The Appellant’s resignation was primarily due to perceiving the offered alternative post as a demotion, not the Respondent’s conduct. The court also declined to re-examine the Tribunal’s factual findings, emphasizing the limited scope of appellate review to errors of law.
Holding and Implications
The appeal was DISMISSED.
The court upheld the Employment Tribunal's decision dismissing both the unlawful sex discrimination and constructive unfair dismissal claims. The ruling confirms that knowledge of gender reassignment by the employer is essential to establish discrimination under s2A SDA. It also clarifies the formulation of the implied term of mutual trust and confidence as disjunctive, which has implications for future constructive dismissal claims. No new precedent was set beyond reaffirming established principles, and the decision primarily affects the parties by affirming the dismissal of the Appellant’s claims.