Greetings to all our readers. I hope that the frost hasn’t bitten and your disposition remains sunny.

This week’s case asks a perennial HR question, a question so evergreen that it never goes out of fashion.

This week’s question: When dismissing a short service employee does the employer tell the truth about the reason or dress the issue up and give an untrue but less hurtful reason?

This is always a difficult one for employers as well-intentioned employers sometimes dress the truth up to spare the employee’s feelings, particularly if the employee in question is perceived as some sort of discrimination risk. Redundancy is far less confrontational and personal than gross misconduct.

As the saying goes, and as the case shows, the road to Employment Tribunal hell is paved with good intentions. Well-intentioned deeds can and do come back to haunt employers. Fittingly enough in the case of Base Children’s Wear v Otshudi the employer, who sold children’s clothes, decided to dress the truth up to disguise the real reason for dismissal.

Ms Otshudi, of black African ethnicity, a photographer for the business, was a short service employee, having joined in February 2016. Her role, consistent with the times we live in, was to take photos of the children’s clothes and post the pictures on various social media accounts and in marketing material. There was no criticism of Ms Otshudi’s work or work record, which was exemplary.

In May 2016 it came to the Managing Director’s attention that a box of designer clothes had been found in an area of the business where only the photographer worked.

The Managing Director came to the conclusion that the photographer was intending to steal the clothes.

Pausing there, it is entirely possible that sub-conscious discrimination was in play at this point and the Managing Director’s conclusion of intended theft may have been influenced by Ms Otshudi’s racial origins. Would he have drawn the same conclusion about a white employee? Was his decision tainted by race?

Rather than confront the issue of a misplaced stock head-on, the Managing Director called the Claimant into his office and dismissed her.

The reason given for dismissal at the meeting was redundancy based on an alleged budgetary consideration. Ms Otshudi queried this and said she believed race discrimination was at work. The Managing Director took umbrage at this and dared the Claimant to repeat the allegation outside. To add ballast to a crumbling façade, the Managing Director called in another manager to the meeting who was asked to confirm that there was a redundancy situation.

Not satisfied with this, the Claimant a few days after being dismissed lodged a grievance alleging discrimination. Assuming the ostrich position, the employer elected to ignore the grievance.

Ms Otshudi, not surprisingly, decided to go to Employment Tribunal alleging, in a roundabout way via harassment, that the dismissal was racially discriminatory.

The employer elected to carry on digging their very huge hole. The Managing Director completed the ET3 form on behalf of the employer. The response called the allegation of discrimination “vile”. The employer elected to stick with its story in the ET3 and maintained that redundancy was the real reason for dismissal.

Fifteen months down the line and three weeks before the hearing, reality reared its head, the employer woke up and the coffee was smelt. The employer engaged Solicitors. The ET3 was amended to give the real reason for dismissal, namely suspected theft.

Witness statements were produced which repeated the real reason for dismissal, suspected theft. Quite properly, the truth was given in the witness statements and in the amended response. If the employer hoped to scare the Claimant by this allegation, made very late in the day, then the tactic misfired spectacularly leaving the Respondent’s case, and face, well and truly egged.

The Employment Tribunal was unimpressed by the employer’s late decision, to tell the truth. The Employment Tribunal found the evidence of intended theft “flimsy” and also drew the inference that race tainted the decision to dismiss. They awarded £27,000 in compensation, together with a 25% uplift for failing to deal with the grievance.

The employer appealed unsuccessfully to the EAT and then to the Court of Appeal.

Although the Court of Appeal Judge, Lord Justice Underhill, accepted that he would not necessarily have found race discrimination in these circumstances, he found that there was sufficient material before the Employment Tribunal to infer race discrimination.

Critical and key to the adverse inferences being drawn by the Employment Tribunal was as LJ Underhill put it:

Giving a wholly untruthful response when discrimination is alleged is well-recognised as the kind of conduct that may indicate that the allegation is well-founded.”

So the lessons to be drawn are:

  1. Consider carefully what reasons to give an employee when they are dismissed.
  2. Short service does not mean any risk. It means reduced risk.
  3. Don’t jump to conclusions. Reacting and assuming, before analysing, can be tainted by discrimination. We all know what assumptions make out of you and me!
  4. Be guided by reason, not emotion. Making threats about repeating allegations”outside” is not a great look. Calling an allegation of discrimination “Vile” speaks of protesting too much and a lack of objectivity.
  5. Deal with any grievance. The mistake made at the point of dismissal could have been put right internally via the grievance procedure or could have been settled via a settlement agreement during that grievance procedure.
  6. It is better and far cheaper to eat humble pie inside your business at the grievance stage than on the steps of the Royal Courts of Justice.
  7. If legal proceedings are brought, honesty is the best policy from the off.
  8. Defending yourself is unwise, particularly her, where the Managing Director had taken the whole issue very personally.
  9. When in a hole the sooner you put the shovel down the better.

Oh yes, in case you need reminding, engage solicitors sooner rather than later, particularly specialist solicitors.