Make your mind up – Changing your reason for dismissal can shift the burden of proof

Ms Otshudi was employed as a photographer, taking photos of the clothing produced by Base Childrenswear. In May 2016, she was called into an office with the MD who told her that she was being dismissed by reason of redundancy. This was unexpected and Ms Otshudi had received no prior warning that this would happen. She alleged that the real reason for her dismissal was discriminatory and subsequently raised a grievance to this effect whilst appealing against the decision to dismiss. Neither the appeal nor the grievance were dealt with by the company. As a result, Ms Otshudi brought various claims including unfair dismissal and race discrimination. Many were withdrawn, but her race harassment claims continued.

Base Childrenswear defended the claim, without legal assistance, on the basis that it was a genuine redundancy, “purely for financial/economic reasons”. They also vehemently denied racial discrimination. As the claim moved forwards, the company were unable to disclose any documents discussing any redundancy. 3 weeks before the hearing, an amended response was filed by recently instructed solicitors who raised a wholly new reason for the dismissal – they alleged that Ms Otshudi had been found concealing items. No investigation into this was made and it was decided by the management of the company that she was guilty of theft. However, the MD had decided not to raise this with Ms Otshudi in order to minimise the risk of confrontation with her.

Needless to say, the employment tribunal found that she had been discriminated against. They also awarded an uplift of 25% for failure to follow the ACAS Code and even aggravated damages, although these damages were reduced on appeal. The crux of the matter was that the company’s inconsistent defence, which the Tribunal found unconvincing, was enough to shift the burden of proof from Ms Otshudi to them. The EAT and the Court of Appeal agreed with the Tribunal’s conclusions. The fact that the company had lied to Ms Otshudi after she had alleged discrimination gave credence to her allegations of discrimination, shifting the burden of proof to the company, who then failed to show that Ms Otshudi’s race had no bearing on the decision to dismiss.

What does this mean for you or your business, and what should you be doing now?

There are three key points to take from this case.

First, follow due process (something the company did not do). When dismissing, you must dismiss for one of the fair reasons (capability, conduct, redundancy, “some other substantial reason” and statutory illegality). Here, the company originally picked redundancy. In order to dismiss fairly by way of redundancy, a fair process needs to be followed including consultation with affected candidates. This did not happen. The reason for dismissal was subsequently amended to gross misconduct. If this was alleged, a disciplinary process inclusive of an investigation should have been followed. This also did not happen. If there is a possibility that an employee will be dismissed, they should be informed and be given the opportunity to have a companion at a disciplinary hearing. Yet again, the claimant was given no such opportunity. In an ideal world, when dismissing, advice should first be sought to ensure there is a fair reason to dismiss and a fair process is followed.

The second point is to deal with appeals and grievances. These should have been picked up, separately, by people not previously involved in the decision to dismiss (and ideally by a person more senior than the decision maker in the case of the appeal). This would have given the company an opportunity to state its case and show that its reasoning was fair. To make matters worse, by not responding to either, the company did not comply with the ACAS code and so an uplift was provided on her award.

The third and final point: be honest (or at the very least, stick to your story)!

Recommended Reading

The full judgment from the Court of Appeal can be read HERE.

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.