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Suing Your Employer: The Uphill Battle

04th July 2009
By Simon King in Legal
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The intense struggle employees, who have suffered employment related discrimination, can expect to experience when challenging a powerful employer is somewhat illustrated by the high-profile legal case Chagger v Abbey National plc & Hopkins (2006). The Employment Tribunal hearing the case found race discrimination and subsequently made the record breaking £2.8 million compensation award. Nigel Porter of 11KBW set of chambers has reported that the case has escalated to the Court of Appeal (the second highest court in the land), that it will be heard this month (July 2009), and that the hearing is only about compensation (not race discrimination also).

If an employee has suffered discrimination at work then he could decide to challenge the employer. The challenge may begin by the employee raising a formal grievance. The employee lodges the grievance with the employer, who will be responsible for hearing it and deciding its outcome. Thus, the employer is given the opportunity to deal with the dispute and to close it satisfactorily. Balbinder Chagger, of Indian origin, earned about £100,000 per annum and reported into Nigel Hopkins at Abbey National (the Spanish-owned high street bank which is re-branding as Santander from 2010, and is part of the Banco Santander Group). In 2006, Abbey National dismissed Mr Chagger, apparently for reasons of redundancy. The Employment Tribunal noted that Mr Chagger had tried to resolve the issues around his dismissal directly with Abbey National and Mr Hopkins. However, the Employment Tribunal found that his issues were simply dismissed out of hand.

Where the employee remains unsatisfied with the employer's handling of the formal grievance then to continue with the challenge requires the employee to initiate legal proceedings. Mr Chagger finally initiated legal action on the grounds of race discrimination and unfair dismissal against both Abbey National and Mr Hopkins and brought the matter to the attention of the Employment Tribunal.

For most employees, an employer (especially a large institution like a major bank) is likely to be a formidable opponent, possessing vastly superior levels of financial resources, legal experience, expertise and ample time to devote to the challenge.

In contrast, the employee will be relatively poor in financial resources, experience and expertise, will be encumbered by personal circumstances and commitments, and have to make time to devote to the challenge while he also mitigates the loss stemming from the discrimination. The employee may be further encumbered by the economic value of the challenge (i.e., the rewards less the costs), and by the prospect of being shunned by other employers for having brought legal proceedings against an employer (win or lose).

The employer will very likely exercise its superiority ruthlessly, without remorse, in order to coerce the employee into dropping his challenge for as little as possible. To persevere with legal proceeding against a formidable employer requires the employee to possess both an amazing level of resolve and lots of spare money.

Although the employer may hold significant advantages and be ruthless, a genuine case supported by sufficient evidence has the possibility to be successful, as demonstrated by Mr Chagger who satisfied the Employment Tribunal that both Abbey National and Mr Hopkins had unlawfully discriminated against him on the grounds of race. In order to remedy the unlawful wrong that it had committed, the Employment Tribunal ordered Abbey National to reinstate Mr Chagger (a step Tribunals rarely ever take). Abbey National refused to comply with the Tribunal's order.

Even though Mr Chagger's case was genuine and successful, his experience was that other prospective employers shunned him for having brought legal proceedings against an employer. This, along with Abbey National's failure to comply with the Tribunal's reinstatement order, eventually led to the record £2.8 million compensation order on the basis of career loss.

Even if the employee's challenge succeeds, the employer is likely to appeal against the Tribunal's decision, thus, continuing to apply pressure ruthlessly and eroding the economic value of the challenge. Mr Hopkins and Abbey National continued the case by appealing against the Tribunal's finding of race discrimination and compensation award. The Employment Appeal Tribunal (EAT) upheld the Tribunal's finding that Mr Chagger had been discriminated against on the grounds of race. The EAT overturned the Tribunal's compensation award of £2.8 million, remitting it (sending it back) to the original Employment Tribunal for reconsideration.

Even where the issue of liability (the wrong committed) has been closed off, employers are likely to continue to be ruthless in their handling of the issue of quantum (the compensation). Tt would appear that Abbey National and Mr Hopkins have not appealed against the EAT's decision that they had discriminated against Mr Chagger (their wrong of discrimination seems to have been finalised), and that Mr Chagger has appealed against the EAT's decision to remit the compensation for reconsideration.

Winning a discrimination case against a powerful employer is far from trivial: it is risky and highly stressful, possibly over a prolonged time period. From a financial perspective, the employee should have regard for the economic value of his challenge; if the challenge is based purely on principles (however admirable), or spite, then he should prepare to lose lots of money.


Abbey National plc & Hopkins v Chagger [2008] and Reputational Risk
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