Smith v Zeneca (Agrochemicals) Ltd

Factual and Procedural Background

The appeal arises from a decision of an Employment Tribunal sitting at Reading, with Extended Reasons issued on 21 October 1998. The proceedings involved two Respondents before the Tribunal: the Second Respondent and the Appellant. The Second Respondent and the Appellant reached a settlement, resulting in the dismissal of the Applicant's claim against the Second Respondent by withdrawal.

The Tribunal found that Company A (the First Respondent) did not unlawfully discriminate against the Applicant. The Tribunal's factual findings reveal that the Applicant began working for Company A in 1995 as a temporary telephonist/receptionist and was later offered a one-year fixed term contract from January 1997 to January 1998. The contract included a waiver of redundancy and unfair dismissal rights.

Between February and September 1997, the Applicant experienced repeated unwarranted sexual harassment primarily by the Second Respondent, who admitted some inappropriate conduct but denied physical contact allegations. The Tribunal, on balance, accepted that some physical contact occurred. The Applicant made a formal complaint in September 1997, leading to the suspension and eventual resignation of the Second Respondent following disciplinary proceedings.

Company A had an established equal opportunities policy, including detailed anti-harassment procedures, which were provided to the Applicant. Despite prior warnings and incidents involving the Second Respondent, no complaints had been made against him immediately before the Applicant's complaint.

The Applicant went on sick leave in September 1997 and did not return to work. Company A was in the process of restructuring reception duties, considering outsourcing to a security company, which led to the decision to offer only fixed term contracts for receptionist roles. The Applicant's contract was not renewed in January 1998, which she contested as discriminatory.

Legal Issues Presented

1. Whether Company A was vicariously liable for the sexual harassment committed by the Second Respondent under the Sex Discrimination Act 1975.
2. Whether Company A took all reasonably practicable steps to prevent the discriminatory acts under Section 41(3) of the Sex Discrimination Act 1975.
3. Whether the handling of the Applicant's sexual harassment complaint by Company A constituted further harassment or discrimination.
4. Whether the non-renewal of the Applicant's fixed term contract amounted to discriminatory dismissal or victimisation under the Sex Discrimination Act 1975.
5. Whether the Employment Tribunal erred in refusing to consider an alternative claim that the conduct of the investigation into harassment amounted to sexual harassment.

Arguments of the Parties

Appellant's Arguments

• The Employment Tribunal erred in law by failing to adequately consider the European Commission's Recommendation on the Protection of the Dignity of Women and Men at Work, particularly regarding the reluctance of employees to complain about sexual harassment.
• The Tribunal's conclusion that Company A took all reasonably practicable steps to prevent harassment was perverse.
• The handling of the Applicant's complaint by Company A itself constituted harassment and discrimination.
• The non-renewal of the Applicant's fixed term contract was discriminatory dismissal and victimisation due to her sex and her complaint of harassment.
• The Tribunal wrongly refused jurisdiction to consider the alternative claim that the investigation process was itself sexual harassment.

Respondent's Arguments

• The Tribunal properly considered the European Commission's Recommendation and the reluctance of employees to complain.
• Company A had a clear, unambiguous equal opportunities and harassment policy, which was effectively implemented, satisfying Section 41(3) of the Sex Discrimination Act 1975.
• The handling of the complaint did not amount to harassment or sexual discrimination.
• The non-renewal of the fixed term contract was due to legitimate restructuring and security considerations, not discrimination or victimisation.
• The alternative claim regarding the conduct of the investigation was not pleaded or amended properly and was out of jurisdiction for the Tribunal to consider.

Table of Precedents Cited

Court's Reasoning and Analysis

The court examined the Employment Tribunal's findings and reasoning in detail. It noted the Tribunal's acceptance of the Second Respondent's partial admissions and the credibility given to the Applicant's evidence of physical sexual harassment. The Tribunal correctly found Company A vicariously liable for the Second Respondent's acts under Section 41(1) of the Sex Discrimination Act 1975, a finding not appealed.

Regarding the defence under Section 41(3), the Tribunal found that Company A had a clear and effectively implemented equal opportunities and harassment policy, including training and disciplinary measures, and had taken all reasonably practicable steps to prevent harassment. The court upheld this conclusion, rejecting the Appellant's argument that the Tribunal failed to consider the European Commission's Recommendation on dignity at work, noting that the Tribunal had implicitly considered the issues raised by the Recommendation.

The Tribunal declined jurisdiction over the claim that the handling of the harassment complaint constituted harassment itself, holding that this claim was not pleaded in the originating application and no amendment was made to include it. The court agreed, emphasizing the seriousness of such allegations and the need for proper notice and opportunity to prepare a defence, which was lacking here.

On the issue of dismissal, the Tribunal found that the non-renewal of the Applicant's fixed term contract was due to legitimate restructuring and security considerations, not sex discrimination or victimisation. The court found no perversity in this conclusion.

The court further analysed case law on amendments and time limits for claims under the Sex Discrimination Act 1975, concluding that the additional claim regarding the investigation's conduct was a new "act complained of" requiring amendment and permission, which had not been granted. It rejected the Appellant's reliance on the Quarcoopome case to circumvent these requirements, affirming that fairness and procedural rules necessitated refusal to consider the unpleaded claim.

Holding and Implications

DISMISSED

The appeal against the Employment Tribunal's decision was dismissed. The Tribunal's findings that Company A was not liable for unlawful discrimination beyond vicarious liability for the Second Respondent's acts, that it took all reasonably practicable steps to prevent harassment, and that the non-renewal of the Applicant's fixed term contract was not discriminatory or victimisation, were upheld. The Tribunal's refusal to consider an unpleaded alternative claim regarding the conduct of the harassment investigation was also upheld as lawful and fair.

The decision directly affects the parties by affirming the original Employment Tribunal ruling without setting any new legal precedent or expanding the scope of claims that can be introduced without proper procedural compliance.