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15th November 2019

Tribunal Tale – Base Childrenswear v Otshudi

Background

While every employer hopes for harmonious and trouble-free working relationships with their employees, that is for most an unattainable utopia. Having to dismiss employees, however rarely, is generally an unavoidable part of employing people.

Dismissal is never a pleasant situation for anyone (albeit it’s generally worse for the employee). Many employers find it challenging to have difficult conversations with employees, particularly in relation to the reasons for dismissal, and it can be tempting to ‘fudge’ the reason for the dismissal to avoid calling an employee out on misconduct or poor performance.

However, the old adage in terms of good intentions rings true, and not being honest about the reasons for a dismissal can lead to worse difficulties down the line, as experienced by the employer in this case.

The facts of the case

Ms Otshudi was dismissed because Base thought that she was stealing from the business. However, in her dismissal meeting, she was told that she was being terminated due to redundancy. Ms Otshudi raised a grievance and appealed against her dismissal, and in both made an allegation of race discrimination, but neither were responded to by Base.

Ms Otshudi lacked the service to claim unfair dismissal but instead claimed race discrimination in the Employment Tribunal. Base initially stuck to its story that Ms Otshudi was dismissed for economic reasons, but shortly before the hearing changed tack and stated that she was dismissed because of theft.

In support of the changed contention, Base stated that designer clothes had been found in a concealed area used by Ms Otshudi, and that she had been heard speaking French in a ‘suspicious manner’.  Base also told the ET that the redundancy explanation was given at the time of dismissal to avoid any confrontation with Ms Otshudi.

The ET found that the decision to dismiss Ms Otshudi constituted race discrimination, for three primary reasons:

  1. Base failed to properly investigate the alleged theft, which the ET said implied racial taint in relation to the belief that she had committed theft (i.e. an assumption that she would steal because she is black African).
  2. The grievance and dismissal appeal both alleged race discrimination but were ignored.
  3. A false reason was given for the dismissal, and that reason was not changed when confrontation with Ms Otshudi was no longer avoidable and the purpose of the initial lie was irrelevant.

The Employment Appeal Tribunal upheld that decision, and the case then proceeded to the Court of Appeal (CA).

The CA’s decision

The main question for the CA was whether Base’s actions had shifted the burden of proof onto it, i.e. whether the circumstances suggested that the decision to dismiss Ms Otshudi was discriminatory, and that Base then had to prove otherwise.

Ultimately, Base was unable to persuade the CA that race had played no part in its decision, with the CA taking into account the ignored grievance and appeal, and the fact that Base had maintained the lie for so long, even when the reason for doing so (avoiding confrontation) was futile.

Interestingly, the CA stated that it might not have come to the same conclusion as the ET on whether race was a factor, which is a polite way of saying that it most likely would have come to a different factual conclusion on the issues. However, an appeal can be only on a point of law and not fact, and as such the ET’s decision remained intact.

Ms Otshudi was awarded around £30,000 compensation plus interest, and a 25% increase for Base failing to follow the ACAS Code. In addition, Ms Otshudi was awarded costs for having to deal with the redundancy argument in Base’s defence to the claim, which was total fiction.

What does this mean?

A few things went wrong for Base on this one. As well as lying to Ms Otshudi it lied to the ET in its initial defence to the claim, maintaining that the reason for the dismissal was redundancy. It doesn’t take a solicitor to know that courts tend to take a dim view of that sort of thing.

Base might have managed to escape the decision had it conducted an investigation into the allegations of theft and had a better basis for its belief in the misconduct than simply hearing Ms Otshudi ‘suspiciously’ speaking another language. As it hadn’t done so, the ET attributed the belief to the dismissing manager having an opinion that black Africans are prone to theft.

The moral of the story is therefore to investigate serious allegations before founding a dismissal on them, and after having done so, be honest with the employee that that is why they are being dismissed.

If you have any questions on any of the issues raised in the above article, please contact Seanpaul McCahill.

15th November 2019