Employment Law Cases

Base Childrenswear Ltd v Otshudi

A tribunal has made a 25% uplift to an employee’s award following her former employer’s failure to deal with a post-termination grievance.

In proceedings to which the ACAS Code of Practice on Disciplinary and Grievance Procedures applies, any unreasonable failure to follow it in respect of any disciplinary situation (which includes misconduct and poor performance/capability) or any written grievance brought by an employee can lead to a 25% uplift in compensation (where the employer is at fault) and 25% decrease (where the employee is at fault) – s. 207A of the Trade Union and Labour Relations (Consolidation) Act 1992.

Background

Ms Otshudi was dismissed after only three months’ employment. She complained of six acts of racial harassment during her employment, but these were dismissed by the tribunal on the basis that they had been brought out of time. However, the tribunal upheld her further complaint of racial harassment in respect of her dismissal.

At a remedies hearing the tribunal made awards for non-pecuniary losses under the following headings:

• Injury to feelings: £16,000 (in the middle Vento band).
• Aggravated damages: £5,000 to reflect the employer’s failure to respond to her grievance/appeal, its subsequent conduct of the litigation (its initial maintenance of the lie that she had been dismissed because of redundancy; its failure to respond to disclosure requests; its late alteration of its case to allege dismissal because of suspected theft) and its failure to apologise.
• Personal injury: £3,000 to reflect the fact that Ms Otshudi had suffered medical depression for three months.

The tribunal than applied an uplift of 25% in respect of the employer’s breach of the ACAS Code given its failure to respond to Ms Otshudi’s grievance/appeal.

Her employer appealed arguing that the awards made were manifestly excessive, the personal injury award failed to take into account Ms Otshudi’s other complaints of discrimination (for which it had not been found liable) and the tribunal had double-counted the factors taken into account and/or had taken into account irrelevant factors. There was no appeal against the 25% uplift.

EAT decision

The appeal was, in the most part, dismissed.

As regards the award for injury to feelings, the fact that the discrimination was a one-off act did not limit the tribunal to making an award in the lowest Vento bracket. These bands are not prescriptive and such awards are fact specific. Whether the discrimination was a one-off act or a course of conduct was a relevant fact but was not determinative.

As regards the aggravated damages and the ACAS uplift, the appeal was allowed in part. The tribunal had taken into account the employer’s failure to follow the code in respect of the post-termination grievance when making both the aggravated damages award and the 25% uplift. The EAT said that when then the tribunal decided that the employer’s failure to deal with Ms Otshudi’s grievance justified a 25% uplift, it should have revisited the aggravated damages award and removed that factor from its consideration under that head – to avoid double counting.

With the parties’ agreement, the EAT held that the aggravated damages award should be reduced by £1,000.

Link to judgment: https://www.bailii.org/uk/cases/UKEAT/2019/0267_18_2802.html

Comment

This case is a useful reminder about following the ACAS Code of practice for those with under two years’ service when there is the potential for the claimant to bring a tribunal claim – either because they have a protected characteristic or because they come within one of the numerous (32) exceptions for bringing an unfair dismissal claim with less than two years’ service.

It is also an important case based on the one aspect that was not appeal, although the EAT made no suggestion that it was not properly awarded. An uplift was awarded because the employer failed to deal with a post-employment grievance. The status of the post-employment grievance has been something of a grey area since the abolition of the statutory disciplinary and grievance procedures but this case makes it clear that an employer failing to deal with such a grievance faces a potential uplift in compensation.