Should an employer conceal the true reason for dismissal from an employee in an effort to avoid confrontation? The Court of Appeal in Base Childrenswear Limited v Otshudi  EWCA Civ 1648 responded with a quite resounding ‘no’, with the result being the employer facing a pay-out for a successful discrimination claim.
Ms Otshudi worked for Base Childrenswear Limited (the “Employer”) as a Photographer, taking photos for use on the Employer’s social media pages and promotional materials. Ms Otshudi was employed from 16 February 2016. She is of Black African ethnicity.
By all accounts, Ms Otshudi had been performing well in her role. However, on 19 May 2016, the Employer’s Managing Director called her to his office and informed her that she was being dismissed for redundancy. Ms Otshudi replied that she did not believe this was the real reason and that she felt she was being discriminated against. The Managing Director denied this, and “dared” her to repeat the allegation.
She subsequently raised a grievance detailing this point as well as alleged incidents of discriminatory treatment by colleagues. The Employer did not reply to her grievance. Ms Otshudi lodged a claim at the Employment Tribunal (“ET”).
Ms Otshudi was successful at the ET. Strongly in her favour was the fact that the Employer, after maintaining that the dismissal was for redundancy, dropped this explanation three weeks before the hearing by way of an amended Grounds of Resistance, admitting that the dismissal was not for redundancy, but was because they suspected Ms Otshudi of theft.
The Employer claimed items of clothing had been found “concealed” in the photography room, used solely by Ms Otshudi. A colleague had found the clothes and moved them out to a workbench. Subsequently, Ms Otshudi was seen returning the clothes to the stockroom (where they would normally be kept) and speaking French on the phone in an “agitated and suspicious matter”.
The Employer did not investigate the allegations, but proceeded to dismiss immediately based on the above occurrences. It was claimed the false reason was given in order to avoid confrontation.
The ET considered this to be flimsy reasoning, and concluded that the dismissal was tainted with considerations of Ms Otshudi’s race. She was awarded compensation of £27,505.29, plus interest and a 25% uplift for failure to comply with the ACAS Code of Practice.
The Employer made unsuccessful appeals to the Employment Appeals Tribunal (“EAT”) and finally to the Court of Appeal (“CA”).The CA summarised the reasons for the ET’s decision as follows:
“(a) Mr Granditer [the Managing Director]'s strong and “intimidatory” reaction to the Claimant's allegation of discrimination, in a context where he knew he had given a false reason for the dismissal…; (b) his refusal to address the Claimant's grievance; (c) his persistence in advancing a false reason for the dismissal in the ET proceedings, even when the supposed reason for the original lie (to ”minimise confrontation”) was evidently no longer operative.”
Although the CA commented that the ET’s reasoning might have been clearer, and that the case was “borderline”, it accepted that the ET was entitled on the facts to find that the reason for dismissal was likely to have been influenced by a predisposition that black people were more likely to be dishonest.
A two-stage test applies where there are allegations of discrimination. If an employee can establish a prima facie case of discrimination, the burden of proof shifts to the employer, who must show an alternative explanation. The Employer’s ability to do so was fatally hindered by its decision to lie about the reasons for dismissal. This exposed it to suspicion that it was motivated by a desire to conceal a racially tainted decision.
Additionally, employers should not make knee-jerk decisions on the basis of flimsy, circumstantial evidence. Dialogue with Ms Otshudi, and some form of investigation would have gone a long way toward resolving the apparent issue.