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On 19 December 2008, the Court of Appeal handed down judgment in Stephen English v Thomas Sanderson Limited  EWCA Civ 1421 (CA). Frederic Reynold QC, leading Marcus Pilgerstorfer, represented the successful Appellant.
The case turned upon the interpretation of the prohibition of harassment "on grounds of sexual orientation" contained in Regulation 5 of the Employment Equality (Sexual Orientation) Regulations 2003, and specifically whether it covered the situation where someone is repeatedly tormented by homophobic banter (including names such as "faggot") when (a) he is not gay, (b) he is not perceived or assumed to be gay by his tormentors, and (c) he accepts that they do not believe him to be gay.
The Court's Judgment
By a majority the Court allowed Mr English's appeal and found that such conduct did fall within Regulation 5. All of the judges were, however, concerned that the matter had progressed by way of a preliminary issue on assumed facts: this "eliminated all the potentially important nuance and detail" upon which a case ought to turn (per Sedley LJ, §36).
The Statutory Provisions
Regulation 5 provides:
(1) For the purposes of these Regulations, a person ("A") subjects another person ("B") to harassment where, on grounds of sexual orientation, A engages in unwanted conduct which has the purpose or effect of
(a) violating B's dignity; or
(b) creating an intimidating, hostile, degrading, humiliating or offensive environment for B.
(2) Conduct shall be regarded as having the effect specified in paragraph 1(a) or (b) only if, having regard to all the circumstances, including in particular the perception of B, it should reasonably be considered as having that effect.
The Regulations implement the Framework Directive 2000/78/EC which deems harassment to be discrimination in the following terms (art 2(3)):
Harassment shall be deemed to be a form of discrimination within the meaning of paragraph 1, when unwanted conduct related to any of the grounds referred to in Article 1 takes place with the purpose or effect of violating the dignity of a person and of creating an intimidating, hostile, degrading, humiliating or offensive environment. …
Article 1 indicates that the purpose of the Directive is to lay down a general framework for combating discrimination on the grounds of, inter alia, sexual orientation.
Approaching matters from first principles, Sedley LJ considered that it did not matter whether the claimant was gay or not: "The calculated insult to his dignity, which depended not at all on his actual sexuality, and the consequently intolerable working environment were sufficient to bring his case both within Regulation 5 and within the … Directive" (§37). Further, the fact that Mr English was not gay, and his tormentors knew it, "has just as much to do with sexual orientation – his own, as it happens – as if he were gay" (§37).
Sedley LJ did not see, as Laws LJ did, the opening of a Pandora’s box of difficulties, but rather a "consistent application of the principle that, while you cannot legislate against prejudice, you can set out in specified circumstances to stop people’s lives being made a misery by it" (§38). For Sedley LJ, it was important that by common ground the Regulations covered the situation where a man who is genuinely believed to be gay (but is not) is tormented as if he were gay. He considered "barely perceptible" the distance from there to a situation where the same man is not genuinely believed to be gay (§38).
There were also important policy reasons why the result should be so: sexual orientation is not an on-off affair and some people may desire to keep orientation to themselves (§39): it was not the purpose of the legislation that a claimant must declare his or her true orientation in order to establish a claim.
According to Sedley LJ, "What is required [is] that the claimant's (or someone else's) sexual orientation, whether real or supposed, should have been the basis of harassment directed at him or her." (§39).
For Sedley LJ, the words "on grounds of" imported no more than was postulated by Lord Nicholls in Nagarajan, viz "why did the other employee's harass the claimant? …If the harassment was based on his sexual orientation, whether real or imagined, the question "Why?" is answered. If one uses the "but for" test adopted by the House of Lords in James v Eastleigh Borough Council… then but for the sexual orientation they chose to attribute to him the appellant’s fellow employees would not have harassed him." (§40).
Thus Sedley LJ expressly recognised attributed discrimination as a form of transferred discrimination.
Whilst Sedley LJ shared Laws LJ's unease at the decision in Redfearn, he did not consider that it set any boundary or guideline material to the present case (§41).
Lawrence Collins LJ
The analysis of Lawrence Collins LJ started by considering the matter without the benefit of accumulated case-law; he took the view that from an objective approach to the characterisation of the conduct, "If one were to ask the question whether the repeated and offensive use of the word "faggot" in the circumstances of this case was conduct "on grounds of sexual orientation" the answer should be in the affirmative irrespective of the actual sexual orientation of the claimant or the perception of his sexual orientation by his tormentors" (§45). If the conduct was on grounds of sexual orientation, he considered it "plainly irrelevant" whether the claimant was actually of a particular orientation. (§46).
Lawrence Collins LJ further did not consider any of the relevant case-law required the alternative conclusion. In contrast to both Sedley LJ and Laws LJ, he did not experience the same difficulty with the Redfearn decision (§56). Additionally, he did not think that it followed from Nagarajan that Mr English's acceptance that the tormentors did not believe he was gay led to the inevitable conclusion that in the context of Regulation 5 the offensive remarks were not made on grounds of sexual orientation.
Laws LJ (dissenting)
Laws LJ's dissenting judgment addressed three questions.
First, he considered the ordinary meaning of the phrase "on grounds of sexual orientation" contained in Regulation 5 and specifically whether the assumed facts of the case were covered by the concept of transferred discrimination (§18). He noted that discrimination could occur where the perpetrators believed that the victim is gay, even if he is not, and further where there is a failure to comply with a discriminatory instruction (as in Showboat). However, Laws LJ found the Redfearn v Serco Limited a difficult decision (§20) because for him the decision to dismiss in that case seemed to include the race of most of Serco's customers, and yet the Court of Appeal, strongly influenced by the purpose of the Race Relations Act 1976, had found that the dismissal was not "on grounds of race" in that Act. Whilst Mr English's case was not at odds with the legislative policy, Laws LJ considered that Redfearn "shows the kind of difficulty that can arise if one seeks to extend the Showboat line or reasoning further than the statutory policy strictly requires" (§21). In his judgment, "harassment is perpetrated on grounds of sexual orientation only where some person or persons' actual, perceived, or assumed sexual orientation gives rise to it, that is, is a substantial cause of it." (§21). He considered that Mr English's case confused the reason for the conduct complained of with the nature of that conduct: the reason for the harassment was nothing to do with anyone's actual, perceived or assumed sexual orientation: the "homophobic banter" was simply the vehicle for the teasing.
Secondly, Laws LJ considered whether the Framework Directive's provisions made any difference to the outcome. Whilst he accepted that the phrase in Regulation 5 "on grounds of sexual orientation" imported a relation of cause and effect, he had difficulty with the proposition that the phrase "related to any of the grounds referred to in Article 1" contained in the Directive possessed a broader scope (§24). He saw a distinction between the wording subject of the Equal Opportunities Commission case – "related to the sex of a person" – (and therefore Burton J’s decision in that case) and the wording in the Framework Directive (which still referred to the term "grounds") (§26). Further, Laws LJ did not accept that unwanted conduct could be related to sexual orientation "if it does not touch or engage the possession of any of those characteristics by any person" (§27). To hold otherwise, in Laws LJ's view, would open a "Pandora's attic of unpredictable prohibitions" which was unintended by the European legislature (§28). When considering the Sex Directive, Laws LJ noted that the conduct must be related to the sex of "a person", which he considered was a specific person (§28). Laws LJ also considered the Coleman v Attridge Law decision of the ECJ but held that "the extended instances- Showboat here, Coleman in Luxembourg- are all connected with someone’s actual, perceived or assumed condition." (§30).
Finally, Laws LJ considered whether, if he were wrong about the second matter, whether the Marleasing obligation was strong enough to read down Regulation 5(1) in order to bring domestic law into compliance with European Law. Referring to the HMRC v IDT Card Services Ireland Limited decision, he recalled that the obligation runs "so far as is possible" and that any reading down must "go with the grain of the legislation" as drafted (§32). Following EOC, Laws LJ felt unable to read down "on grounds of" to equate to an extended meaning of "related to" (§33). This opinion contrasts with the approach of the Employment Tribunal in the Coleman case itself upon remission from the ECJ: there the Tribunal felt the Marleasing obligation was strong enough to read down the express reference to the claimant’s personal disability in the relevant provisions.
Mr English was supported by the Equality and Human Rights Commission in both the Employment Appeal Tribunal and Court of Appeal.