Although the law says that employers can dismiss someone for incapacity, the Employment Appeal Tribunal (EAT) held in P2CG v Davis (which concerned a successful claim of disability discrimination) that a dismissal can be on “legitimate performance grounds, yet still be materially tainted by discrimination”.


Basic facts

Mr Davis started working as a Business Development Director in February 2015 for the company which provided project and programme management services to clients. It had three directors - Mr Peel, Mr Knight and Dr Rawling.

After a performance review meeting on 8 June 2016 with the three directors, Mr Davis was given a written warning for unsatisfactory performance which stated that if it did not improve in the next six weeks, further disciplinary action would be considered, up to and including dismissal. On 11 July 2016, Mr Davis was diagnosed with type 1 diabetes. He was dismissed on 4 August 2016, ostensibly because of his poor performance.

He brought a number of claims including direct disability discrimination, discrimination arising from disability, indirect disability discrimination, a failure to comply with the duty to make reasonable adjustments and harassment as a result of his disability.


Tribunal decision

The tribunal found that it was “inconceivable” that Mr Peel would not have known of Mr Davis’ diagnosis by the time of a meeting with him on client premises on 3 August 2016, the day before he convened an ad hoc board meeting where Mr Davis was dismissed.

Having made those findings, it concluded that Mr Davis’ disability significantly influenced the dismissal decision. The burden then passed to the three directors to prove that the dismissal was not because of his disability. As they had not discharged the burden, the tribunal upheld the two claims of direct disability discrimination. These were firstly the decision to dismiss Mr Davis, and secondly the refusal by Mr Peel and Dr Rawling to acknowledge his ill health despite being aware of his diagnosis from some point after 11 July and certainly by 4 August. It dismissed the remaining claims on the basis that they were irrelevant, given the decision with regard to direct discrimination.

The directors appealed arguing that the tribunal’s reasoning was perverse and/or inadequate. In particular, they argued that the tribunal had failed to properly apply the non-discriminatory reason put forward for the dismissal and/or had given inadequate reasons for concluding that they had not discharged the burden once it had shifted.


EAT decision

Dismissing the appeal, the EAT held that the tribunal had not failed to consider the non-discriminatory reason given for dismissing Mr Davis. On the contrary, it accepted that Mr Peel had been critical of Mr Davis’ performance prior to dismissal, but also found that he had exaggerated those concerns to bolster the company’s case.

The tribunal had also acknowledged that Mr Peel had issued a written warning to Mr Davis before knowing that he was disabled. Crucially, however, it then went on to conclude that Mr Peel “moved virtually directly from learning of his disability to dismissing him, and that he did so because the disability meant the Claimant’s performance was less likely to improve” (underlining in the original). The EAT interpreted this to mean that the tribunal viewed the company’s concerns about Mr Davis’ performance as “legitimate, albeit embellished”.

Despite that finding, the EAT held that the tribunal was still entitled to conclude that the directors had failed to discharge the burden of proving that the dismissal was in no sense whatsoever because of Mr Davis’ disability. “As a matter of principle, a dismissal can be on legitimate performance grounds, yet still be materially tainted by discrimination”.