Overview
This case review examines a remedy judgment in the case of Miss S Khan MBE v Blue Stockings (UK) Limited.
Following a successful claim for victimisation and wrongful dismissal, the Employment Tribunal ordered the employer to pay a substantial sum over £234,000, highlighting how a single act of discriminatory dismissal can lead to massive financial liabilities for a business.
What happened?
Miss Khan, a professional working in production safety within the film industry, was promoted to Health and Safety Manager. Even though she was a manager, she operated more like a Head of Department.
Blue Stockings also recruited a H&S Advisor, Mr Bond, following an assessment by the HSE, to which Miss Khan made a complaint about his appointment saying she was “uncomfortable that a white man was coming in above her”.
Mr Bond then filed a harassment complaint alleging Miss Khan had used highly offensive and racial language towards him. This resulted in a disciplinary hearing for Miss Khan, which ultimately led to her dismissal without notice, despite her contract entitling her to one weeks’ notice in this situation.
However, during the hearing, she alleged that she herself had faced discrimination because Mr Bond had received a pay rise and she had not, claiming the difference being that she was a woman of colour.
Employment Tribunal
Miss Khan brought several claims, including race and sex discrimination, and whistleblowing, but these were dismissed by the court.
However, the Tribunal found that her dismissal was an act of victimisation under the Equality Act 2010 as there had been no legitimate, or non-discriminatory reason (such as poor performance) for her removal from the business.
The Tribunal ruled in favour of Miss Khan victimisation and wrongful dismissal, ordering a payout of £234,112.66. The reasoning included:
- Wrongful Dismissal: The employer breached the contract by failing to provide or pay for the one week notice period.
- Victimisation: The Tribunal concluded the respondent had decided to remove Miss Khan for discriminatory reasons rather than performance. They found that had it not been for the victimisation, she would have completed her fixed-term contract.
- Injury to Feelings: Miss Khan was also awarded £15,000 with the Tribunal noting that the dismissal derailed her from a career she had embarked upon with high hopes, leading to a significant deterioration in her psychological wellbeing.
- Loss of earnings: The award included £36,142 for the remainder of her contract and an additional £70,500 for the loss of subsequent work she likely would have secured in the industry.
- Tax “grossing up”: Because the total award far exceeded the £30,000 tax-free limit, the Tribunal added an extra £81,645 to the award to ensure the claimant received the intended net amount after paying her taxes.
Employer guidance:
- If an employee has raised concerns that qualify as “protected act” under the Equality Act, dismissing them shortly after without a clear, documented, non-discriminatory reason (like redundancy or proven gross misconduct) is a high-risk move that often leads to victimisation claims.
- In this case, the Tribunal found no reason for the Miss Khan to be dismissed regarding her performance. If you intend to dismiss for performance, you must have a clear paper trail of warnings and improvement plans.
- Unless you can prove gross misconduct, always pay the contractual notice period. Failing to do so is a straightforward wrongful dismissal that adds unnecessary legal costs.
- Employers can successfully limit loss of earnings claims by providing expert evidence on industry norms. Here, the respondent used an expert witness to prove that the claimant’s future salary expectations were unrealistic, which helped prevent an even higher payout.
- Be aware that if a dismissal is found to be discriminatory, the financial award will be higher if it can be shown that the dismissal derailed the employee’s career trajectory in their specific field.
