Factual and Procedural Background
The Plaintiff commenced employment with Company A on 1 July 2018 as an office assistant and was later appointed office manager without a pay increase. The Plaintiff reported to the Second Respondent, who was a director and majority shareholder of Company A. During the employment, the Second Respondent frequently engaged in conduct towards the Plaintiff that was unwelcome and related to her sex, including inappropriate messages, comments, and behaviour. The Plaintiff was summarily dismissed on 16 April 2020 following a heated confrontation with the Second Respondent.
Subsequently, the Plaintiff brought claims against both respondents for harassment, victimisation, and direct discrimination on the grounds of sex under the Equality Act 2010. The claims followed the termination of the Plaintiff’s contract. Both respondents denied the dismissal date and the claims.
Several preliminary hearings and procedural steps occurred, including a refusal of a strike-out application against the respondents and a decision to proceed with the final hearing in their absence due to their non-participation. Evidence included witness statements, documents, WhatsApp message exchanges, and video recordings from the day of dismissal. The Plaintiff updated her schedule of loss after the hearing to reflect changes in earnings and claims.
Issues arose regarding the legality of the Plaintiff’s contract, as it appeared income tax and national insurance contributions were not paid during her employment. The Tribunal considered whether this illegality affected the enforceability of the Plaintiff’s claims.
Legal Issues Presented
- Whether the Plaintiff was subjected to less favourable treatment because of sex (direct discrimination under section 13 of the Equality Act 2010).
- Whether the Plaintiff was subjected to harassment related to sex or of a sexual nature in violation of section 26 of the Equality Act 2010.
- Whether the Plaintiff was victimised by the respondents due to making protected acts under section 27 of the Equality Act 2010.
- Whether the Plaintiff’s claims were time-barred and, if so, whether time should be extended on a just and equitable basis.
- Whether the illegality in the contract’s performance (non-payment of tax and national insurance) rendered the Plaintiff’s claims unenforceable.
Arguments of the Parties
Appellant's Arguments
- The Plaintiff’s evidence was credible and reliable and demonstrated ongoing harassment by the Second Respondent, including unwanted sexual conduct and degrading comments related to her sex.
- The conduct extended over a period up to the date of dismissal, making the claims timely, and any delay was due to intimidation justifying extension of time.
- The dismissal was alleged to be direct discrimination, with reliance on case law establishing that mixed motives suffice if one relates to a protected characteristic.
- The victimisation claim was supported by the respondents’ false and escalating allegations against the Plaintiff following her protected acts of making discrimination claims.
- The illegality of the employment contract did not preclude claims of unlawful discrimination, which constitute a statutory tort distinct from contract enforcement.
- The Plaintiff sought compensation for injury to feelings and loss, with reference to established benchmarks and a 25% uplift, arguing for joint and several liability of the respondents under the Equality Act 2010.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| O'Donoghue v Redcar & Cleveland Borough Council [2001] IRLR 615 |
Mixed motive test for direct discrimination: if one motive relates to protected characteristic, discrimination is established. |
The Court considered whether sex was a factor in dismissal and found it was not a sufficient cause to establish direct discrimination. |
| Nagarajan v Agnew [1994] IRLR 61 |
Clarifies the necessity to inquire why less favourable treatment occurred to establish direct discrimination. |
Applied to assess if dismissal was on grounds of sex; concluded it was not. |
| James v Eastleigh Borough Council 1990 ICR 554 |
Direct discrimination established by asking if treatment would be the same but for sex. |
Used to analyse factual criteria for dismissal; no discrimination found. |
| R (on the application of E) v Governing Body of JFS and the Admissions Appeal Panel of JFS and ors [2010] IRLR 136 |
Direct discrimination is unlawful regardless of employer’s motive or intention. |
Confirmed that motive is irrelevant; focus on factual criteria applied by employer. |
| Hall v Woolston Hall Leisure Ltd [2001] ICR 99 |
Illegality defence in tort claims requires an inextricable link between illegality and claim. |
Applied to determine illegality did not bar harassment and victimisation claims absent an inextricable link. |
| Hounga v Allen and another [2014] ICR 847 |
Distinguishes claims of unlawful discrimination (statutory tort) from illegal contract claims; illegality may not bar discrimination claims. |
Supported the view that illegality in contract performance did not preclude statutory discrimination claims. |
| Way and Another v Crouch [2005] ICR 1362 |
Joint and several liability of employer and employee for discrimination under section 109(2) of the Equality Act 2010. |
Confirmed respondents liable jointly and severally for compensation awarded. |
| Bungay and other v Saini and others, UKEAT/0331/10 |
Employer’s vicarious liability for discriminatory acts of employees or agents. |
Applied to hold Company A liable for acts of the Second Respondent. |
Court's Reasoning and Analysis
The Tribunal first addressed the claim of direct discrimination in dismissal. It analysed the evidence of the dismissal event and the relevant case law, concluding that the dismissal was not motivated by sex discrimination. The Tribunal noted that anger and frustration by the Second Respondent were contributing factors, but these did not amount to discrimination. The Tribunal found no sufficient causal link between the protected characteristic and the dismissal decision.
Regarding harassment, the Tribunal found that the Plaintiff was subjected to unwanted conduct related to her sex and of a sexual nature by the Second Respondent. This conduct violated her dignity and created an intimidating, hostile, degrading, humiliating, or offensive environment. The conduct included degrading comments, sexual innuendo, offensive messages, and inappropriate behaviour, all of which satisfied the statutory definition of harassment under section 26 of the Equality Act 2010.
On victimisation, the Tribunal accepted that the Plaintiff engaged in protected acts by making allegations of discrimination. Following this, the respondents made false and increasingly serious allegations against the Plaintiff, which the Tribunal found were retaliatory and amounted to victimisation under section 27.
The Tribunal considered the issue of illegality arising from the non-payment of tax and national insurance contributions. Applying the "inextricable link" test from relevant case law, the Tribunal concluded there was no such link between the illegality and the claims of harassment and victimisation. Therefore, illegality did not bar the Plaintiff’s claims.
On time-bar issues, the Tribunal found the conduct extended over a period ending shortly before the dismissal and that the claims were presented within the statutory time limits. Any delay was justified by intimidation, making extension unnecessary.
In remedy, the Tribunal awarded compensation solely for injury to feelings, as the direct discrimination claim failed and no loss of earnings was awarded. The award was set at £16,000 with interest of £2,984, totaling £18,984. The respondents were held jointly and severally liable.
Holding and Implications
The Tribunal allowed the claims for harassment under section 26 and victimisation under section 27 of the Equality Act 2010 against both respondents.
The claim of direct discrimination in dismissal under section 13 was dismissed.
The respondents were ordered to pay the Plaintiff £18,984 in compensation for injury to feelings and interest, jointly and severally.
The decision enforces statutory protections against harassment and victimisation in the workplace, affirming that such claims are not barred by illegality in contract performance absent an inextricable link. No new precedent was established beyond the application of existing legal principles to the facts.