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In the case Base Childrenswear Ltd v Otshudi UKEAT/0267/18/JOJ , the Employment Appeal Tribunal (the “EAT”) held that the Employment Tribunal (the “ET”) had double counted when they failed to reduce an aggravated damages award after deciding to also award an uplift for a failure to follow the Acas Code.

The facts in Base Childrenswear Ltd v Otshudi

Miss Otshudi (the ‘Claimant’) worked for Base Childrenswear Limited (the ‘Respondent”) as an in-house photographer.  In May 2016 the Respondent’s Managing Director told the Claimant that she was being made redundant after only three months of employment. The Claimant challenged this in a meeting, asking if the real reason she was being dismissed was due to her race (she had already made a complaint about harassment from colleagues). At the meeting the Managing Director and two other managers surrounded the Claimant and feeling intimidated and upset she began to cry. She was then told to collect her belongings and leave.

The Claimant appealed the decision to dismiss her and submitted a grievance. Both were ignored by the Respondent.  She commenced the Acas early conciliation process, but the Respondent refused to engage in it. The Claimant went on to bring a claim for race discrimination in respect of a series of discriminatory acts throughout her employment with the Respondent and for her dismissal and subsequent treatment. 

The decision of the Employment Tribunal

At the ET, the Respondent began its defence by maintaining that the reason for the Claimant’s dismissal was redundancy.  They then went on to argue that, in fact, she was dismissed for stealing.  However, the theft  allegation was unproven, and the ET determined that there were facts from which it could infer discrimination. These included the employer’s failure to respond to the grievance and its dishonest approach in defending the claims by arguing there was a genuine redundancy situation and then subsequently putting forward to the ET another unfounded reason for the dismissal.

The ET went on to dismiss the Claimant’s claim in respect of the six acts of racial harassment that occurred during the course of her employment as they were out of time.  They did uphold her complaint of racial harassment in respect of her dismissal.

At a remedies hearing the ET awarded the Claimant £16,000 for injury to feelings(in the middle Vento band).  She was awarded £5,000 for aggravated damagesto reflect the Respondent’s failure to respond to her grievance and appeal, its subsequent conduct of the litigation and its failure to apologise.  Her personal injuryaward was£3,000 to reflect the fact that the Claimant had suffered medical depression for three months. They also awarded an uplift of 25% for the Respondent’s breach of the ACAS Code given its failure to respond to the Claimant’s grievance and appeal.

Her employer appealed arguing that the awards made were manifestly excessive, that, although serious, the dismissal was a one-off event and accordingly the injury to feelings award should have been placed in the lower Vento band.  They also argued that the personal injury award failed to take into account the Claimant’s other complaints of discrimination (for which it had not been found liable) and the ET had double-counted by making an award in respect of the failure to respond to the grievance and appeal in both the aggravated damages award and the ACAS uplift.  There was no appeal against the 25% uplift.

The decision of the Employment Appeal Tribunal

The appeal was, in the most part, dismissed.

The EAT held in respect of the injury to feelings award, the fact that the discrimination was a one-off act did not limit the ET to making an award in the lowest Vento bracket. The 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 factor but was not determinative.

As regards to the aggravated damages and the ACAS uplift, the appeal was allowed in part. The ET had taken into account the Respondent’s failure to follow the ACAS code in respect of the grievance when making both the aggravated damages award andthe 25% uplift. The EAT said that when then the ET decided that the Respondent’s failure to deal with the Claimant’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.

The EAT went on to reduce the aggravated damages award should by £1,000.

Our solicitors’ views on the case of Base Childrenswear Ltd v Otshudi UKEAT/0267/18/JOJ)

Sacha Barrett, a Senior Associate in the employment department at Redmans, made the following comments on the case: “This case reinforces the point that Employment Tribunals are willing to penalise employers who fail to follow the ACAS Code of practice and where it is a discrimination claim, the financial penalty can be particularly significant.  It is also important to remember that, even when an employee does not have two years’ service, it is always best practice to follow the Code due to the numerous claim’s employees can make even without two years’ service.  Finally, and importantly, in this case the EAT confirmed that just because a Claimant has experienced a single incident of discrimination, does not mean that their injury to feeling award will automatically fall into the lower Vento band.’

The decision of the Employment Appeal Tribunal in Base Childrenswear Ltd v Otshudi UKEAT/0267/18/JOJ can be found here.

About

Redmans Employment Team deal with employment matters for both employers and employees, including drafting employment contracts and policies, advising employers and employees on compromise agreements, handling day-to-day HR issues, advising on restructures, and handling Employment Tribunal cases for both employers and employees Call 020 3397 3603 to speak to one of the members of our employment team or email us on enquiries@redmans.co.uk. Redmans have offices in Richmond, Chiswick, Hammersmith, Fulham, Kingston, Wimbledon, Ealing, Kings Cross and Marylebone (meetings strictly by appointment only).

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