Settling Discrimination Claims – The Hidden Dangers

All strands of the discrimination legislation contain a prohibition on “victimisation”, preventing an employer from subjecting an employee to any detriment by reason of the fact that the employee has made an allegation or claim of unlawful discrimination. Without such protection from reprisals, the discrimination legislation would be significantly weakened.

In the case of St Helens Borough Council v Derbyshire, the House of Lords had to determine whether, by exerting pressure on employees to settle an equal pay claim, the Council had committed an act of victimisation.

The Facts

The case concerned 510 school dinner ladies, who argued that they were entitled to the same rate of pay as road sweepers. The majority of the catering staff reached a settlement with the Council but a group of 38 brought an equal pay claim in the Employment Tribunal. Shortly before the hearing, the Council wrote to all of the catering staff stating that, if the claims were successful, the additional cost would result in the need to cut back on the provision of school meals and this would lead to redundancies. The dinner ladies argued that this correspondence was intimidating and had caused them to suffer distress and reproach from colleagues. They therefore pursued an additional claim of victimisation.

The Decision

The central issue in the case was whether the Council had made an honest and reasonable attempt to settle the proceedings, or whether it had exerted undue pressure on the employees, so as to amount to a detriment by reason of them continuing their equal pay claims.

In finding that the existence of a “detriment” must be assessed from the point of view of the alleged victim, the House of Lord concluded that the Council was guilty of victimisation. Two issues tipped the balance in the employees’ favour:

Firstly, the Council had written to all catering staff, including those who had already settled. The obvious intention and/or effect of this was to bring indirect pressure on the dinners ladies through the anger and disapproval of their colleagues.

Secondly, the Council had written to the employees directly, rather than to their legal representatives. In the Tribunal’s opinion: “A professional representative can be expected to react calmly to such a letter. But…a letter pointing to the likelihood of dire, unpopular consequences is likely to frighten one not accustomed to legal controversy. It will provoke, not a dispassionate balancing of strengths and weaknesses, but fear and perhaps panic.”

Accordingly, the Council had gone further than necessary to protect its interests in the litigation.

Comment

The St Helens decision is a stark warning for employers that they need to tread extremely carefully when defending discrimination claims, putting themselves in the shoes of the claimant and considering whether their actions may be construed as causing unnecessary distress or intimidation.

However, employers also need to consider their legal obligation to notify all affected staff if a genuine redundancy situation does arise. In light of the St Helens decision, it is suggested that letters to the whole workforce should only be sent as a last resort, where cut backs have become inevitable.

AND IN OTHER NEWS…

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DRC ‘names and shames’

The amended DDA places a duty on public authorities to publish a disability equality scheme (DES), showing how they intend to eliminate unlawful discrimination and promote equality of opportunity for disabled people.

In April 2007, the Disability Rights Commission (DRC) published a list of 60 public authorities that had failed to produce a DES. Following up that list, the DRC has now issued compliance notices against nine public bodies (including councils, health trusts, a further education college and a national museum) requiring them to take action within 28 days or face legal action.