Madarassy v Nomura International plc: [2007] EWCA Civ 33

CA: Mummery, Laws and Maurice Kay LJJ: 26 January 2007

The claimant, who was employed as a senior banker in the employer's equity capital markets department, informed her line manager in November 2000 that she was pregnant. While she was away on maternity leave between March and July 2001, there were significant redundancies in the department following deteriorating market conditions, and after her return the claimant was informed that she was at risk of redundancy. After she was given the lowest score in a redundancy selection process compared with two male colleagues, the claimant was made redundant in November 2001. On her complaint of sex discrimination contrary to the Sex Discrimination Act 1975, the employment tribunal directed itself on the burden of proof under section 63A(2), holding that it had to consider whether the claimant was treated any less favourably than a hypothetical male comparator would have been treated in the same circumstances, and, if so, whether it was on the grounds of her sex or her pregnancy, and, if she had been so treated, whether the employer had proved that it did not commit the act of unlawful discrimination. The tribunal dismissed various allegations of sex discrimination but found that the employer had failed to carry out a health and safety risk assessment in connection with her pregnancy, pursuant to regulation 16 of the Management of Health and Safety at Work Regulations 1999. On appeal by the claimant, the Employment Appeal Tribunal allowed the appeal in respect of two allegations of sex discrimination, which it remitted to the tribunal for review, and dismissed the appeal in respect of the other allegations. It allowed the employer's cross-appeal in respect of the health and safety risk assessment and remitted that matter to the same tribunal for review.

The claimant appealed.

The Court of Appeal held:
(1) On a complaint under the Sex Discrimination Act 1975 the complainant had to prove, pursuant to section 63A(2), facts from which an employment tribunal "could" properly conclude that the respondent had committed an unlawful act of discrimination. The section did not prevent the tribunal at that stage from hearing, accepting or drawing inferences from evidence adduced by the respondent disputing and rebutting the complaint. Once a prima facie case was established, the burden of proof moved to the respondent to prove that it had not committed any act of unlawful discrimination, but it did not shift simply on the complainant establishing the facts of a difference in status and a difference in treatment. It was only once the burden had shifted that the absence of an adequate explanation for the differential treatment became relevant. The employment tribunal had not erred in following the two-stage approach, considering at the first stage whether the claimant was treated less favourably than a hypothetical male comparator in the same circumstances and whether it was on the grounds of her sex or pregnancy, and, where the burden shifted, dealing at the second stage with the adequacy of the explanation provided by the employer for its alleged less favourable treatment of the claimant.

(2) Although there was no place for a hypothetical male comparator in the case of the dismissal of a female employee for being pregnant, it did not follow that it was wrong for an employment tribunal to make such a comparison in order to determine whether pregnancy or some other reason was the ground for the particular treatment of a pregnant female employee. Accordingly, the tribunal did not err in law in comparing the claimant's treatment with that of a hypothetical male comparator.

(3) The appeal tribunal was right to find that the employment tribunal had erred in law in upholding the claimant's complaint that the employer was in breach of regulation 16 of the Management of Health and Safety at Work Regulations 1999, since a finding that the claimant's work involved potential risk to the health and safety of the claimant or her baby was necessary before there was an obligation of the employer under regulation 16 to carry out a risk assessment, and the tribunal had made no express finding of a risk to health and safety and there was no evidence on which it could have made such a finding.

(4) The appeal tribunal's decision to remit three of the numerous allegations of sex discrimination to the same tribunal was a proportionate and appropriate response in terms of cost, time and efficiency without any real possibility of a risk of apparent bias, and the appeal tribunal clearly had power to remit those matters for review rather than for rehearing in the exercise of its discretion, and it did not err in exercising that discretion.

The appeal was dismissed.

Appearances: Robin Allen QC and Jonathan Cohen (Palmer Wade) for the claimant; Paul Goulding QC and Claire Weir (Osborne Clarke) for the employer.