A few weeks ago, Stephanie Villalba’s lawyers submitted a detailed appeal to the Employment Appeal Tribunal on a number of grounds. Although Ms Villalba was successful in her unfair dismissal claim and a discrete aspect of her victimisation claim, the most significant parts of her case (sex discrimination and equal pay) were rejected by the Employment Tribunal at first instance. Accordingly, the unfair dismissal compensation she can recover will be capped at the statutory maximum applicable as at the termination of her employment (£53,500) together with a small basic award. The compensation for her victimisation complaint will also be limited given that the Tribunal did not find that the victimisation led to her dismissal.

Appeals to the Employment Appeal Tribunal have to be made on a point of law. Ms Villalba could not simply appeal the decision just because she did not like the findings of fact made by the Tribunal. For her appeal to be successful, Ms Villalba will have to show that the Tribunal has made an error of law or that its reasoning was so perverse that no reasonable Tribunal would have reached that decision.

The appeal submissions are in no way light reading, as Ms Villalba’s legal representatives assert that the Tribunal has made errors of law, applied the burden of proof wrongly and made perverse findings of fact. Arguably, the most interesting point of appeal is against the Tribunal’s decision that victimisation was not the cause of Ms Villalba’s removal from her post and ultimate dismissal.

In legal terms, victimisation occurs when someone makes a complaint of discrimination and because of having made that complaint, is treated less favourably. In this case, Ms Villalba argued that the reason for her removal from her post as market executive was because she had complained of sex discrimination. However, the Tribunal found that Ms Villalba had only been victimised in the manner in which she was appraised by her line manager, Mr Abbas, and focussed on a number of his emails to her and her increased isolation in the workplace. Significantly the Tribunal determined that Mr Abbas victimised Ms Villalba, saying that: ’the only plausible explanation for such treatment was her allegations of sex discrimination’.

However, crucially, the Tribunal did not find that the victimisation caused her to be removed from her role as market executive. It said instead that ‘it was only a very small factor, not a significant influence, in the decision to remove her from her role as market executive’. As Mr Abbas subsequently went on to offer an assessment of her role to Mr Yu (his own line manager who took the decision to remove Ms Villalba), the appeal concentrates on the fact that any of his views must have been tainted by victimisation.

The appeal places great emphasis on this aspect, arguing that the Tribunal erred in law by failing to consider whether Mr Yu’s assessment of her performance was tainted by Mr Abbas’ views. It is submitted in the appeal that if the Tribunal had asked that question, that the Tribunal would have been bound to find that Mr Abbas’ assessment of Ms Villalba was tainted by her having complained of sex discrimination. As such, any assessment by Mr Yu of her performance, was discriminatory.

In addition, the Tribunal concluded that some of the Respondents’ witnesses ‘were not accurate’ in relation to their evidence on Ms Villalba’s complaint of sex discrimination. It is argued in the appeal that because the Tribunal found that the Respondents’ witnesses failed to give accurate evidence (and the appeal asserts that there must have been a concerted decision on the part of these witnesses to lie on oath), this means that the Respondents failed to discharge the burden of proof and show on the balance of probabilities that Mr Yu’s assessment of Ms Villalba was not tainted by discrimination.

If Stephanie Villalba is able to show that the Tribunal erred in law in failing to find that Merrill Lynch victimised her in removing her from her role (which ultimately led to her dismissal), then the Tribunal could either substitute this finding with its own finding on this point, or remit the case back to the same tribunal or a differently constituted tribunal for rehearing. If Ms Villalba succeeds in showing that the victimisation caused her dismissal, then her compensation could be substantially higher as there is no cap on damages that can be awarded for discrimination and she will be able to claim consequential loss.

Other aspects of the appeal relate to the Tribunal’s findings on sex discrimination and equal pay. In particular, the appeal questions whether the Tribunal has adequately addressed its concerns about the ‘haphazard and subjective’ nature of Merrill Lynch’s system for the allocation of bonuses and the associated risks of favouritism and discrimination. Although the Tribunal posed these questions about the bonuses, Ms Villalba submits that the Tribunal erred in law by subsequently failing to answer them in its decision. Therefore the transparency and structure of the Merrill Lynch bonus scheme is likely to be revisited in the appeal hearing.

In order for the Employment Appeal Tribunal to determine whether the appeal has any merit, there will be a preliminary hearing. It would seem that there may well be enough grey areas (particularly in relation to victimisation) for this appeal to proceed to a full hearing, but without first seeing Merrill Lynch’s response to the grounds of appeal, it is difficult to predict with certainty. However, what is clear is that it is not necessarily the end of the road for Merrill Lynch, and the City (where bonus arrangements are notoriously shrouded in secrecy) will need to keep a watchful eye over how this case develops.

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