Race Discrimination and Redundancy

Two recent cases before the Suffolk ET highlighted the risks that employer face when making redundancies.  In this particular matter, Obikwu v British Refugee Council and Ukwaja v British Refugee Council (BRC), two (black) immigration workers were selected for redundancy by their employer, the BRC.  The ET found in favour of both workers in April 2008, but it was only in the last few days that Mr Obikwu’s remedies hearing took place which settled the level of compensation to be paid to him. Ms Ukwaja’s case was determined last January.

They both worked at the Oakington immigration centre in Cambridge.  Plans were announced to close it in May 2006 but were subsequently suspended.  However five months after the decision to close it was put on hold both of the claimants were made redundant.  Their departure removed the only two non-white employees from the staff at the building.  Not surprisingly, both brought claims for unfair dismissal and race discrimination. 

How did this situation arise?  The ET held that the manager in charge of selecting candidates for redundancy, one Anne-Marie Leech, had “subconsciously” favoured colleagues with whom she was friendly.  The Claimants alleged that she was “consciously biased” against them (although the ET rejected that allegation), which was probably not surprising because Ms Leech hosted a party at her house (to which the two Claimants were not invited) and none of those people who did attend were selected for redundancy. It’s not clear from the newpaper reports whether Mr Obikwu and Ms Ukwaja were the only employees made redundant, or just the only two ethnic minority employees amongst a wider cohort.  The ET Chairman noted that white workers with less experience were selected to remain in employment over the two Claimants.  In the circumstances it is not surprising that they both won.

There are two legal issues raised in this case.  One concerns the need for employers to have fair and reasonable (and objective) selection criteria when choosing which employees to select for redundancy.  If an employer fails to make an objective choice then the affected employee may have a claim for unfair dismissal (if they have more than 12 months continuous employment experience at the date of termination).  The maximum compensation that an ET can award for unfair dismissal is capped at £66,200 plus a basic award of £350 per year of service. However, and this is the second legal issue raised in this particular case, if the employer selects an employee for redundancy on grounds of their race, colour, nationality or ethnic or national origin that will amount to an automatically unfair dismissal.  An employee who believes they have been discriminated against on grounds of their race will probably be advised to bring a claim under the Race Relations Act 1976 for compensation because, unlike the compensatory award for unfair dismissal under the Employment Rights Act (ERA), that award is not capped.  That can lead to a very substantial award being made, because the ET can also award compensation for injury to feelings, as well as loss of earnings and other financial losses.  There is also no 12 month qualifying period required under RRA claims.  The employee cannot claim compensation under the RRA and a compensatory award under the ERA.

Mr Obikwu was awarded £65,475 for unfair dismissal, racial discrimination, psychiatric injury and loss of earnings.  I haven’t seen how the award was broken down so it is hard to say what value the ET put on each head of claim.  However, in the case of Ms. Ukwaja, she was apparently awarded £30,000, which comprised £15,000 for injury to feelings due to racial discrimination, £8,349 for unfair dismissal, £5,000 for discrimination and £2,643 for interest on lost earnings.       

From a legal point of view there was nothing particularly noteworthy about these cases.  What caught the eye of the media though was the fact of a charity involved with refugees unfairly dismissing and racially discriminating against two ethnic minority staff: the BRC deserved to be censured for that. However, not everyone might agree with that:  I found one report of the cases on The Independent’s website and read some of the comments that followed the report.  Sadly, some of the respondents saw this story as an example of “another utterly baseless thought crime!  Another opportunity to redistribute monies to chosen victim groups, taken with relish” and “It’s a bit naughty taking a charity to court, surely the funds raised by the Refugee Council would be better spent on helping everyone in [the] developing world move to Europe than on handouts to disgruntled employees”.  No, actually.  The anti-discrimination laws exist for a reason; no employer is exempt.  The whole episode leaves a nasty taste in the mouth.

The new Equality Bill

This is something we will be hearing a lot more about over the next few months and years.  At last the government has introduced legislation that seeks to rationalise the current miasma of anti-discrimination legislation and bring it all into one piece of legislation. 

At the moment, in the workplace environment, six types of discrimination are outlawed – age, race, sex (gender), sexual orientation, religious belief and disability.  Each piece of legislation behind each type is different in certain respects so a new Act that contains all the relevant definitions, duties and defences is to be welcomed.  Whether, in practice, the Equality Act (if it gets that far) will be is another matter.  Undoubtedly it will change as it goes through Parliament but here are the current headlines

1. The Secretary of State will be given power to order employers with more than 25o employees to publish information about male and female pay levels, with a view to thus highlighting discrepancies in pay between the sexes.  This won’t be enforced for at least the next four years though.

2. Secrecy clauses in employment contracts forbidding staff discussing their pay and bonuses (what’s a bonus?) will be outlawed.

3. Associative discrimination will be made illegal.  This means that, as in a recent case, a carer of a disabled person is dismissed because of her caring obligations, she will be able to claim disability discrimination even though she is not herself disabled. 

4.  There will be new definitions of indirect discrimination and disability discrimination.

5.  Positive discrimination at recruitment in favour of disadvanteged groups will be allowed when the candidates are otherwise equally matched.  

6. Public bodies also have duties imposed upon them to promote equality.

 

The Bill has been mooted for some time now and it will be interesting to see how much survives the scrutiny of Parliament, especially at a time when the economy is in deep recession.  Many employers, no doubt, will not relish having additional burdens placed upon them by government.

Redundancy – know your rights!

Judging from the traffic on this site, redundancy is the big employment law issue at the moment and not surprisingly given the current climate. 1,000 job losses announced this week at Nomura, 650 at Credit Suisse and that on top of the losses at Goldman Sachs and Lehman Brothers. In my day job I am seeing plenty of people from investment banks and beyond, all with concerns and queries about either being told they’ve been selected for redundancy or are at risk. If you’re one of those people what do you need to know?

1. Are you an employee? Most employment protection legislation (apart from that involving discrimination issues) only covers employees and not self-employed people, for instance.

2. How long have you been continuously employed by your employer? To be able to claim a redundancy payment you need two years continuous employment experience. If you have this then you are entitled to be paid a “statutory redundancy payment” (SRP) in addition to your notice monies. SRP is not generous – £330 per complete year of service if you’re between 22-41 and £495 if you’re over 41. Your notice entitlement will be as set out in your contract of employment or as stipulated by the Employment Rights Act 1996 – basically 1 week per year of service up to a maximum of twelve weeks (four weeks notice minimum to be given by the employer once the employee has one month’s service).

3. If you have more than one year’s continuous employment experience then you have acquired the right not to be unfairly dismissed. This is a big topic but, in brief, it may allow you to argue that your selection for redundancy was unfair.

4. Have you been discriminated against? There are six main grounds for discrimination – race, sex, age, disability, religious belief and sexual orientation in addition to other grouds such as being subject to less favourable treatment because of being a fixed time or part-time worker. In addition whistleblowing is another type of claim that might be available. Remember it is your role that needs to be redundant, not you. What will happen to the work you do once you’ve left?

5. Most of the employees I see have been given a compromise agreement by their employer and they need an independent solicitor to advise them on their legal rights under the agreement. I have written elsewhere in this blog on compromise agreements and the issues they raise – see the page headed “compromise agreements” on the tab at the head of this blog for more information. One main reason why employers offer compromise agreements is that they want the employee to waive their rights to sue for unfair dismissal, discrimination, breach of contract etc. This is particularly the case if the employer is offering an enhanced package (in the City this is often, but not always, one month’s full pay per year of service).

6. If you have been given a compromise agreement then you will need to have it reviewed by a solicitor; give me a call if you want me to help. If you are unhappy about your selection or want further advice, get to see a solicitor and get some advice.

7. It is always helpful when seeing a new client to see the contract of employment, all correspondence relating to the redundancy situation and, of course, the compromise agreement.

Please call me on 0207 464 8433 or email me at michaelscutt@dalelangley.co.uk if I can help you at all.