Employment Law Cases

Ellis v Bacon & Advanced Fire Solutions

A director who was dismissed while divorcing her husband, a director at the same company, was not subjected to marital discrimination.

Background

Ms Bacon joined Advanced Fire Solutions (AFS) in 2005, becoming a director in 2008. In the same year, she married fellow director, Mr Bacon. In 2012 Mr Ellis joined AFS and in 2017 became the Managing Director. In August 2017 Ms Bacon told Mr Bacon she wished to separate and thereafter acrimonious divorce proceedings ensued.

False allegations were raised against Ms Bacon that she had misused company IT. She was suspended from the company on 18 January 2018 and dismissed by a letter which was signed by Mr Ellis on 29 June 2018. The tribunal found that Mr Ellis sided with Mr Bacon in relation to the marital dispute and was compliant with him in removing Ms Bacon’s directorship, not paying her dividends, reporting her to the police (on baseless grounds) and suspending and dismissing her on spurious grounds. Ms Bacon raised a grievance about her treatment but this was left unresolved.

Ms Bacon brought claims of unfair dismissal and direct discrimination on sex, marriage, and civil partnership. The tribunal unanimously concluded that Mr Ellis, had distanced himself from Ms Bacon following her separation and that he was complicit with Mr Bacon in urging the police investigate Ms Bacon’s IT usage. It also found that Mr Ellis believed everything he was told by Mr Bacon and that Mr Bacon was pulling the strings. The tribunal held that Ms Bacon was fired from her role as director, after her divorce from another employee and had been a victim of marital discrimination. Mr Ellis appealed.

EAT decision

The appeal was allowed.

The issue here was whether Mr Ellis treated Ms Bacon in the unfavourable ways that have been identified because she was married. The question is not whether she was badly treated because she was married to a particular person. Another way of looking at the issue was to ask oneself whether an unmarried woman whose circumstances were otherwise the same as hers, including being in a close relationship with Mr Bacon, would have been treated differently.

The EAT said that it was plain that the tribunal (no doubt because the merits were so clearly in Ms Bacon’s favour and because it did not have the relevant case law drawn to its attention), failed to address its mind to the real issue or, which is really the same thing, to construct the appropriate hypothetical comparator. Because of this (and despite the way that Ms Bacon had been so badly treated at her ex-husband’s behest), the appeal had to be allowed, albeit,as the EAT said, ‘with a heavy heart’.

Comment

It is often overlooked that the Equality Act (s. 8) makes it illegal to discriminate against someone because they are married (or in a civil partnership) – it is one of the lesser-known characteristics protected from unlawful discrimination. While prejudice against married people is hardly widespread - and there are few circumstances in which an employer might treat an employee less favourably because they were married - it does happen, albeit that cases concerning it are pretty rare.

These situations will more often arise in family companies where relationships have broken down, or where a family company has been purchased and the managing director dismissed for good reason and the acquiring business concludes it would be impossible for the partner to continue in the business and dismisses them as well. It is important, to ensure that an erroneous claim of marital discrimination is not made and costs and time wasted, to emphasise that the reason for the dismissal is because of their close relationship, and not because the individual is married or in a civil partnership with the dismissed employee.

However, married employees in US listed companies who have affairs at work may also find themselves being sanctioned by the US Securities and Exchange Commission (SEC). Former McDonald’s Chief Executive Steve Easterbrook, who left after his affair with a senior female employee was uncovered, was charged with making ‘false and misleading statements to investors about the circumstances leading to his termination’. The SEC said Easterbrook and McDonald’s were not honest with investors about the reason that led to Easterbrook’s termination, and this ‘allowed him to retain substantial equity compensation that otherwise would have been forfeited’ - $40 million in fact. They concluded that he had concealed the extent of his misconduct and so misled shareholders. He has been barred from being a company officer/director for five years and fined $400,000.