Race discrimination: Important lessons for employers from a recent Court of Appeal case

Failure to preserve documentary evidence and disclose relevant documents contributed to finding of race discrimination.

A recent case in the Court of Appeal has highlighted the importance for employers of ensuring that HR processes are consistently managed and rigorously documented to mitigate the risks of discrimination claims. In particular, reasons for an employer’s actions and decisions should be documented and the HR paper-trail preserved where it might be relevant evidence in the defence of a tribunal claim.

In the case of Leicester City Council v Parmar, the claimant brought a successful claim of direct race discrimination against Leicester City Council (the Council) in the Employment Tribunal. The Tribunal decision was subsequently upheld in the EAT and the Court of Appeal.

The case also provides a useful reminder of the way in which a tribunal will consider comparators in direct discrimination claims. 

Direct discrimination and the need for a comparator

Direct race discrimination occurs where, because of race, a person treats another less favourably than they treat or would treat others.

When an employee claims direct discrimination they need to show they have been treated less favourably than a comparator. The comparator can be a real person or, if no real comparator is available, the Employment Tribunal will consider a hypothetical comparator. Whether real or hypothetical, the comparator must be in similar circumstances to the person bringing the claim save for the protected characteristic – which in this case was race.

Direct discrimination and the burden of proof

The burden of proof in direct discrimination cases is different to unfair dismissal cases. In the first instance the burden of proof lies with the claimant. This means the claimant must show “on the face of it” or “prima facie” that there is enough evidence to support the claim of discrimination for the claim to proceed. Some claims fall at this hurdle, but if the judge considers there is sufficient evidence to infer the employer has acted in a discriminatory way, the burden of proof shifts to the employer. At that point the employer must give an explanation for its actions and the Tribunal considers whether the explanation is sufficient to show the employer didn’t discriminate. 

The facts of this case

Mrs Parmar, a British national of Indian origin with over 30 years of social work experience, was employed as a head of service by the Council.

In January 2021, Mrs Parmar’s senior manager, Ms Lake, decided to temporarily transfer Mrs Parmar from her post and to start a disciplinary investigation. This followed internal disagreements and complaints between different departments under the supervision of Ms Lake.

In February 2021, Ms Lake held a disciplinary investigation meeting with Mrs Parmar. Ms Lake raised two general failures against Mrs Parmar but gave no details such as dates, conduct, people, or the provisions or standards which she was said to have breached.

The claimant was off work with stress in February and March 2021. While she was on sick leave another senior manager, Ms Tote, took over responsibility for the disciplinary investigation. In preparation Ms Tote watched recordings of several remote interviews undertaken by Ms Lake. Neither the recordings nor transcripts of the interviews were provided to Mrs Parmar at any time, including as part of the disclosure during the subsequent Tribunal proceedings. The Council justified this decision on the basis that the transcripts were not relevant.

In April 2021, at a second investigation meeting, Mrs Parmar claimed she did not understand what she had done wrong. Ms Tote arranged a “re-convened investigation meeting” in May 2021 at which Mrs Parmar was told there was no case to answer and the disciplinary process was concluded.

The tribunal decision

Mrs Parmar brought a claim in the Employment Tribunal alleging direct race discrimination by the Council. Her complaints were that the Council had:

• made false allegations against her;

• transferred her from her role as head of service;

• commenced a disciplinary investigation;

• required her to attend several investigatory meetings only to tell her that there was no case to answer;

• failed to consider lesser and more proportionate ways of dealing with the complaints against her, such as mediation.

Mrs Parmar argued that the facts as set out above demonstrated that she was treated less favourably than others due to her race. Mrs Parmar identified two white heads of service as actual comparators. She argued that they had not been treated in the same way as her by the Council and that, in similar circumstances to her own, their treatment was less harsh and more reasonable.

Mrs Parmar made a data subject access request, through which she identified that since 2017 two Black, Asian and Minority Ethnic (referred to as BAME in the judgment) senior managers had been the subject of disciplinary action while no white senior manager had been disciplined.

The Tribunal decision

The Tribunal agreed that Mrs Parmar had been treated less favourably because of race and the EAT and Court of Appeal subsequently agreed with this decision.

Facts from which the Tribunal inferred less favourable treatment

The Tribunal found Mrs Parmar had presented evidence from which it could infer that she had been treated less favourably because of her race, and so the burden of proof shifted to the Council.

The facts from which an inference of discrimination could be drawn were:

• Ms Lake had previously dealt with complaints against other heads of department who were not BAME in a different way, by offering mediation or handling it informally. However in Mrs Parmar’s case Ms Lake took more serious action by transferring her out of her role and instigating a disciplinary investigation.

• The Tribunal took the view Ms Lake knew the complaints against Mrs Parmar were not serious as they were not clearly set out or explained to her at any time, even at the point of litigation.

• Ms Tote decided to discontinue the investigation once she reviewed the evidence.

The Tribunal also drew an inference from the fact the Council had not disclosed the interview transcripts or notes made by either of the managers. The notes and transcripts were not made available to the claimant or the Tribunal. This fact made the Tribunal draw adverse inferences about the Council’s motivation and they concluded there was no good explanation for this behaviour. For example, Ms Tote said her notes relating to the investigation were destroyed after 6 months; however in that time the claimant had brought her claim for direct race discrimination so the Tribunal thought it would be obvious the notes needed to be retained.

The employer did not provide evidence to show a non-discriminatory reason for the treatment

The burden of proof then shifted to the Council to establish a non-discriminatory reason for the treatment. After hearing the Council’s explanations, the Tribunal found that the Council had not established, on the balance of probabilities, a non-discriminatory explanation for Mrs Parmar’s treatment. The tribunal did not find the Council’s explanations plausible, so the Council did not succeed in meeting the burden of proof.

The Tribunal considered the evidence relating to the two non-BAME comparators who did not suffer the same unfavourable treatment and concluded in those cases Ms Lake did not and would not have initiated a disciplinary investigation or suspended such an employee from their head of service role. It also took into consideration evidence of two other BAME service leaders being treated in a similar way to Mrs Parmar, which again supported the view that people from ethic minority backgrounds had been treated differently to white people.

Key learning points for employers to mitigate the risk of discrimination claims

The facts in this case are clear and uncomplicated: the employee was able to identify two actual comparators who were service managers and who were not from an ethnic minority background; she was also able to show inconsistency of treatment by using two other BAME examples.

Investigations into misconduct offences sometimes end with a finding of “no case to answer.” That is the nature of investigations and this is not inconsistent with a good and thorough investigation having taken place; so what went wrong in this case? How could the employer have decreased the risk of a claim?

When commencing a disciplinary investigation employers should consider the following:

• Be as clear as possible (in the circumstances) as to what is being investigated. 

• In circumstances where an employer suspends an employee, or demotes or moves an employee to an alternative post, the employer should be clear about the nature of the allegation against the employee and set this out clearly in a letter explaining the action taken.

• If the employer is unsure as to what it is dealing with, an initial investigation should take place to ascertain whether there is a matter to investigate further and before speaking to the employee.

• Consider whether there is a less draconian approach to handling a potential disciplinary matter rather than suspending an employee or moving them to an alternative role. Removing a senior manager from their post and placing them elsewhere is a very public act and risks breaching confidentiality and leading to allegations of unfavourable treatment.

During a disciplinary investigation employers should;

• Undertake the investigation in a timely matter and ensure all relevant witnesses are interviewed. In this case, despite the manager interviewing 9 witnesses, the employee alleged to be the subject of victimisation by Mrs Parmar was never interviewed. The Tribunal inferred from this fact the likelihood that the case against Mrs Parmar was weak.

• Ensure the employee understands the allegations put to them during the investigation and has sufficient information to be able to respond to the allegations.

• Keep transcripts and notes securely on file for an appropriate period. It is advisable to retain documents and recordings for at least 12 months from the end of the disciplinary process to ensure they are available for disclosure if a claim is brought in the Employment Tribunal. If a claim is brought in that period, documents should be retained for longer as potentially disclosable evidence.

At all times during a disciplinary process employers should follow a fair process irrespective of the length of service of an employee. This case demonstrates how acting unreasonably or taking actions without any reasonable explanation can lead to a court considering the employer’s evidence lacks credibility which in turn may lead to the court making negative inferences about the employer’s actions and motivation.

When undertaking a disciplinary process employers should be conscious of inconsistency of treatment of employees which may cause problems when defending both unfair dismissal and discrimination claims. Employers should also monitor trends in disciplinary processes that may reflect conscious or unconscious bias against people with different protected characteristics.

It is not always essential or advisable to share documents relating to an investigation with the person under investigation if the matter does not proceed to a disciplinary hearing. However, careful consideration should be given to the duty to disclose documents to a tribunal as part of proceedings. The duty is to disclose any documents on which the party relies in bringing or defending the claim, which adversely affect their own case or another party's case, and which support another party's case.

Employers should seek legal advice at an early stage before making decisions about employees which might be alleged to be discriminatory. They should also ensure that legal advice is taken in relation to the Tribunal process, including disclosure and the retention of documents.

If you would like to discuss any aspect of this article further, please contact our employment team on 0113 244 6100. 

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The information in this article is necessarily of a general nature. The law stated is correct at the date (stated above) this article was first posted to our website.

Specific advice should be sought for specific situations. If you have any queries or need any legal advice please feel free to contact Wrigleys Solicitors.