A recent Court of Appeal case demonstrated that giving inaccurate information about the reasons for dismissing an employee and then later amending the defence to include the true reason is conduct that can indicate that an allegation...

...of discrimination is well founded.

The Dismissal

Ms Otshudi had worked for Base Childrenswear for three months when her manager suspected that she was stealing clothes and dismissed her, telling her that the reason for the termination of her employment was her redundancy. Ms Otshudi believed the real reason was because of her race and brought a discrimination claim. The employer failed to respond to Ms Otshudi's grievance or appeal against her dismissal.

The employer argued that Ms Otshudi was dismissed on redundancy grounds that were "purely financial." However, three weeks before the hearing, it amended its defence to change the reason for the dismissal to suspected theft. Base Childrenswear 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 accepting the discrimination claim. The ET found that the employer's actions in putting forward a false reason for the dismissal inferred 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, and it appealed again to the Court of Appeal.

Decision

The Court of Appeal dismissed the appeal and agreed with the ET and EAT that Base Childrenswear's persistence in lying and then the sudden switch to the true reason for the dismissal was enough to shift the burden of proof to the employer. This meant that the employer had to show that race played no part in Ms Otshudi's appeal, which, on the facts of this case, it had failed to do.

What Can You Learn from This Case?

Employers should avoid covering up the real reasons for dismissing an employee, even if the false reason is given in good faith. Employers should be clear and honest about the reasons from the outset.

This case also serves as a reminder of the importance of following a fair and reasonable procedure when an employer is considering dismissing an employee. If an employer is dismissing an employee by reason of a restructure or redundancy, it is important to keep an evidential trail to document those reasons and the process taken, even where that dismissal takes place within the first two years of employment, as in this case.