On 27 May 2011, the Court of Appeal handed down its judgement in the case of R on the application of Sharon Shoesmith v OFSTED and others, upholding Ms Shoesmith’s appeal against the decision of the High Court in respect of the actions of the Secretary of State for Education and Haringey LBC, but dismissing it against OFSTED.

The case was brought by Ms Shoesmith (Haringey Council’s former Director of Children’s Services) following her dismissal after the death of Baby P. Ms Shoesmith alleged that she had been dismissed without any proper process and that she had first learnt of her dismissal by watching a television interview with the Secretary of State at the time, Ed Balls. Previously, in April 2010, the High Court had dismissed a judicial review application by Ms Shoesmith alleging that the Secretary of State, OfSted and Haringey Council had acted unlawfully in dismissing her.

The Court of Appeal held that Haringey Council’s decision to dismiss Ms Shoesmith for gross misconduct was open to judicial review and that the dismissal was unreasonable. In addition, the Court of Appeal also determined that the Secretary of State’s direction to remove Ms Shoesmith from her post was unlawful. Although there had been an element of urgency to the decision, it was held that allowing Ms Shoesmith to answer the charges against her would not have delayed the process significantly and she should have been afforded this opportunity. The ruling also stated that the Council’s procedures were “tainted by unfairness”. Lord Justice Kay said “Whatever the shortcomings might have been (and, I repeat, I cannot say) she was entitled to be treated lawfully and fairly and not simply and summarily scapegoated”.

Ms Shoesmith has also submitted a claim of unfair dismissal against Haringey Council to the Employment Tribunal, which has been stayed pending the outcome of the judicial review process. However, the Court of Appeal found that the justice of the case required a decision on the merits. In terms of relief, a declaration was made that her dismissal was unlawful. The Court of Appeal was satisfied that it was also entitled to make an award of compensation. However, they will need to hear further submissions from the parties before being able to determine the appropriate award. The Court commented that the outer limits of the award that may be made are, at the low end, the compensation may be for 3 months loss of salary and pension, to reflect her contractual notice period, and at the high end could include compensation to reflect the period of loss (including loss of salary and pension) until she resigns or her tenure of office is lawfully terminated.

The fact that the Court of Appeal has allowed the dismissal of an office holder to be amenable to judicial review extends the circumstances in which judicial review proceedings may be used to challenge the dismissal of office holders within public sector organisations. For a local authority, this would include the Head of Paid Service, Chief Finance Officer, Monitoring Officer and the Director of Children’s Services or Director of Social Services, but might also include other chief officers of the Authority. Public sector bodies should therefore be conscious, when dismissing office holders, not only of their legal obligations in respect of employment law, but also in relation to their duty to exercise their public functions lawfully and fairly.

The current Secretary of State for Education, Michael Gove, has stated that he intends to appeal the ruling.