The impact of jurisdictional loopholes on a discrimination claim
24th January, 2020
In Walker v (1) Wallem Shipmanagement Ltd and (2) Mr Brian Phipps, the Employment Appeal Tribunal held that the Employment Tribunal did not have jurisdiction to hear a sex discrimination case due to the Claimant not working within Great Britain.
Ms Walker, a newly qualified cadet deck officer, applied in the UK for a role with a Hong Kong based employment service provider (Wallem), who specialised in recruiting employees to work on foreign registered cargo ships destined for foreign waters. Generally, Wallem didn’t recruit within the UK; however, they made an exception on this occasion.
Ms Walker’s application was rejected. Ms Walker was provided with an email from Mr Phipps, Regional General Manager (Marine Human Resources), stating that Wallem was an “equal opportunities company“, but that they would not offer positions to women as it would be unable to offer an appropriate on-board environment. This was described by the EAT as “plainly, an act of direct sex discrimination“.
Ms Walker submitted a formal complaint to Wallem, stating that his views were “ignorant, degrading, offensive and thoroughly disrespectful to all female mariners“. On 20 July 2016, Mr Phipps was suspended and the managing director issued a letter of apology to Ms Walker, confirming that Mr Phipps’ personal views were not held by Wallem. As a result of this incident, Mr Phipps was dismissed from his role.
On 11 December 2016, Ms Walker brought an Employment Tribunal claim on the grounds of direct sex discrimination and victimisation / harassment.
During ACAS early conciliation, Wallem did not seek to engage with the process, fearing that this may inadvertently acknowledge that the Employment Tribunal had jurisdiction over the matter, something that Wallem were denying.
Employment Tribunal (ET)
Wallem argued that the ET had no jurisdiction to hear the claims as they had no presence in the United Kingdom and all of the roles they were recruiting for were on foreign registered vessels in foreign waters.
Wallem’s arguments were based around the Equality Act (Work on Ships and Hovercraft) Regulations 2011, which stated that the Equality Act 2010 would only apply to those working on ships or hovercraft when such vessels were registered in Great Britain. It was argued that these regulations took Wallem outside the jurisdiction of the ET.
Wallem accepted, however, that Mr Phipps’ email was an act of direct sex discrimination.
The ET accepted Wallem’s submissions and concluded that it did not have the jurisdiction to consider Ms Walker’s claims, stating that the Equality Act 2010 did not apply to situations where recruitment was for foreign registered vessels.
If the ET had jurisdiction to hear the case, Ms Walker would have been successful in her direct discrimination claim, with Wallem admitting their actions amounted to discrimination, and would have been awarded £9,000 in injury to feelings.
Employment Appeal Tribunal (EAT)
Ms Walker appealed the decision; however, was unsuccessful.
Wallem’s argument to the EAT (which Ms Walker resisted), was that the 2011 Regulations applied to pre-employment discrimination, in addition to discrimination in employment. Wallem argued that there would otherwise be an absurdity where an employer could be liable for discrimination during a recruitment process, but be protected from liability as soon as the employment relationship began.
The EAT supported this position, noting that the construction of the Regulations did not support Ms Walker’s position. This was called the “uncomfortable but inescapable proposition” by the EAT.
The EAT agreed with Ms Walker, however, on the fact that the Regulations grant those caught by them complete immunity from challenges in relation to their discrimination, which was a matter of great concern.
The judgment of the EAT shows the difficulty caused in reaching a decision that plainly assisted injustice. Indeed, the EAT stated that Wallem’s conduct was “reprehensible” and that they are dismissing the appeal “with some misgivings“. However, the EAT confirmed that the ET had not erred in law when considering the jurisdiction issue and was correct to hold that it could not determine Ms Walker’s claims.
This was an unfortunate decision and brought into question whether the legislation conforms with the EU’s Equal Treatment Directive. Ms Walker has no recourse against Wallem, with her only potential remedy lying within a claim against the United Kingdom. The EAT were clear in giving their advice that the injustice caused by these Regulations should be reviewed by the Secretary of State and potentially amended.
This case highlights how important it is for the Employment Tribunal to have jurisdiction in a matter, otherwise even in a clearly discriminatory case, they are unable to assist a claimant. The Employment Tribunal do not have inherent jurisdiction to hear matters and rely on the powers given to it by Parliament.
It is also an illustration that legislation and regulations are open to abuse by those who wish to exploit the loopholes available. In such situations, the Tribunals can do no more than advise the Government to review such loopholes, as they did so here.
If you have any questions on the above and how it will affect you, please do not hesitate to get in touch with a member of our employment team.