Another Court of Appeal case has underlined the dangers of giving one reason for dismissing an employee and then later giving the true reason when defending a claim. In the case of Otshudi v Base Childrenswear the employee had worked for the company for only 3 months when she was dismissed for redundancy. She had not been told about an allegation of theft against her. The employer failed to respond to Ms Otshudi’s grievance or appeal against her dismissal. Ms Otshudi believed the real reason was because of her race and brought a discrimination claim.

 

In defending the claim, the employer argued that Ms Otshudi was dismissed on grounds that were “purely financial”, but weeks before the hearing, it amended its defence to state that the reason for the dismissal was suspected theft. The company claimed that they had not initially told Ms Otshudi that this was the real reason as they were acting in good faith and wanted to “minimise potential confrontation.”

The Employment Tribunal (ET) found that race was a factor in Ms Otshudi’s dismissal and accepted the discrimination claim. The ET found that the employer’s actions in putting forward a false reason for the dismissal suggested that it was trying to cover up the true reason for the dismissal, which was influenced by stereotypical prejudice based on race. The employer’s appeal to the Employment Appeal Tribunal (EAT) was unsuccessful, as was its appeal to the Court of Appeal.

Once again the point is made in support of a fair and reasonable procedure when dismissing an employee, even one who has relatively short service. A dismissal for redundancy, when redundancy is not the true reason for parting company with the employee, can end up being a very high risk dismissal. It can be tempting to use redundancy as a less ‘offensive’ reason when the reality is that performance or conduct is the real issue, but such a failure to be up front with the employee about their shortcomings can lead to expensive claims.

We’re always happy to advise on designing a process to handle tricky performance or conduct concerns so please do get in touch.