ABG Employment Newsletter – June 2011

Liability for damages in discrimination cases

Claimants in discrimination cases often bring their claim not only against the employer but also against the individuals who they consider were guilty of discrimination. If the claim succeeds a tribunal can award damages against all the parties found guilty of discrimination. As a matter of law liability is “joint and several” which means that the claimant can recover the entirety of the damages from any of the guilty parties (although they cannot obtain double recovery).

In the recent case of London Borough of Hackney v Sivanandan the EAT has ruled that in such circumstances the tribunal has no power to apportion liability as between the guilty respondents, e.g. by splitting damages on a 50/50 basis.

In this case the tribunal had limited the award against one of the individual respondents to £1,250 in respect of injury to the claimant’s feelings and had made a joint and several award against the other respondents for substantial damages for financial loss and injury to health. The other respondents appealed against the joint and several award, arguing that damages should be apportioned, but this argument was rejected by the EAT. It pointed out that on general legal principles, where more than one person has contributed to the same act of discrimination or has contributed to the same loss by different acts, the concurrent discriminators will be jointly and severally liable for the loss and damage suffered by the claimant.

This ruling serves as a stark warning that employees could find themselves paying 100% of damages in discrimination cases, for example, where the employer has become insolvent.

Redundancy selection criteria and disability discrimination

In the case of Lancaster v TBWA Manchester the EAT has upheld a tribunal’s decision that the employer was not in breach of the duty to make reasonable adjustments under the DDA when it failed to adjust its redundancy selection criteria in respect of a disabled employee. This was on the basis that the suggested adjustments were not reasonably required as they would not have avoided the employee’s selection for redundancy.

The claimant suffered from a panic and social anxiety disorder which amounted to a disability for the purposes of the DDA. His role of Senior Art Director was identified for redundancy and he was placed in a selection pool with two other senior art directors. They were assessed against a range of selection criteria, including three criteria focusing specifically on communication skills. He received the lowest score and was made redundant.

In his claim to the tribunal he argued that it would have been a reasonable adjustment for the employer to have removed all of the three communication skills criteria and to have replaced all the selection criteria with objective criteria such as attendance, disciplinary and absence records. However, his arguments were rejected as the removal of the communication skills criteria would not have prevented his selection for redundancy because he would still have received the lowest score. In addition the employer was not required to replace all the criteria with purely objective criteria because the position of senior art director was a creative position at a senior level and therefore purely objective criteria might not have been sufficient.

Dismissal and procedural safeguards

The Court of Appeal’s ruling in the highly publicised case brought by Sharon Shoosmith, former Director of Children’s Services at Haringey, highlights once again the importance which the law attaches to procedural safeguards for employees.

Arising out of the Baby P scandal Ms Shoosmith had been dismissed by Haringey Council from her role of Director of Children’s Services. The decision followed a report published by Ofsted concerning the child protection system operated by Haringey and directions issued by the Secretary of State for Children, Schools and Families.

In addition to unfair dismissal proceedings in the Employment Tribunal, she issued proceedings for judicial review in the High Court. This remedy was potentially available to her because the role of Director of Children�s Services is a statutory post. The Employment Tribunal claim was adjourned pending the High Court’s ruling.

Although the High Court had dismissed the claim for judicial review, the Court of Appeal has reversed this ruling and has quashed the Secretary of State’s decision and Haringey Council’s decision to dismiss which was based on the Secretary of State’s direction. This was because Ms Shoosmith’s opportunity to comment on the matters relied on to support her dismissal had been limited to commenting on the Ofsted inspection process. Although the Secretary of State believed she had had the opportunity to put her case to the Ofsted inspection team, Ofsted had not been tasked with considering the roles of individuals. In her role of Director of Children’s Services she was personally accountable for the failings of Haringey’s Child Services and it followed that she should have been given an opportunity to explain this situation and to answer the allegations set out in the Ofsted report. As she did not have this opportunity, it meant that the procedure leading up to the Secretary of State’s directions was intrinsically unfair.

Haringey argued that it had little option but to dismiss Ms Shoosmith in the light of the Ofsted report and the directions of the Secretary of State. The Court of Appeal acknowledged that the Council was in a difficult and legally complex situation, but nevertheless ruled that its decision was unlawful as it had unfairly undertaken a pre-determined dismissal based on an unlawful direction.

This case highlights for all employers and managers who take dismissal decisions that the way the decision is arrived at can be just as important as the decision itself.

TUPE transfers and collectively agreed terms

In the case of Parkwood Leisure Ltd -v- Alemo-Herron the Supreme Court has decided to refer to the ECJ the question of whether TUPE requires transferees to honour changes in collective terms which are negotiated after the transfer.

The legal issue is said to be whether, in relation to collective terms, the principles in TUPE which govern the transfer of contract terms to the transferee should be given a “dynamic” or a “static” interpretation. Under the static model the transferee is only bound by the collectively agreed terms which were in force at the date of transfer. However under the dynamic model any future changes to those terms are binding on the transferee, even if the transferee is not a party to the collective bargaining process.

The case is of great importance in relation to public sector outsourcing. If the dynamic interpretation is upheld it will mean that employees who transfer into the private sector will have the right to benefit from future pay rises or other changes agreed through collective bargaining machinery with their former public sector employer.

The comments in this note are of a general nature only. Full advice should be sought on any specific problems.

Christopher Gigg 
[email protected] 
+44 (0)115 934 3310

David Hardstaff
[email protected]
+44 (0)115 934 3323

Kathryn Meir
[email protected]
+44 (0)115 934 3308