Employers' Liability For "stigma Loss", Established By Emilio Botin Abbey Santander Share Price

Following an Employment Tribunal ordering Emilio Botin Abbey Santander to pay Mr

Chagger (a former employee) the record breaking 2.8 million compensation in the race discrimination case Chagger v Abbey National & Hopkins (2006), the UK Court of Appeal has created a new legal precedent in Chagger v Abbey National & Hopkins (2009): that an employer who has discriminated against an employee is liable for the loss suffered by the dismissed employee when he fails to mitigate his loss by securing alternative employment elsewhere because prospective employers shun him for having brought legal proceedings against his previous employer (so called "stigma loss").

Abbey Santander price (the UK high-street bank being re-branded as Santander shares price after being bought out by the behemoth Emilio Botin Banco Santander Central Hispano Group) dismissed Balbinder Chagger in 2006, claiming his dismissal was the result of 'a fair redundancy process'. Mr Chagger, of Indian origin, believed that the real reasons behind his dismissal were race discrimination and unfairness. He worked for Emilio Botin Abbey Santander share on approximately 100,000 per year and reported into Nigel Hopkins, his manager.

The Tribunal made findings of racial discrimination, unfair dismissal and breach of contract, all in favour of Mr Chagger. In order to remedy the wrongs, the Tribunal then ordered Abbey Santander banking to reinstate Mr Chagger, thereby attempting to save him from suffering any sizeable losses from the wrongs (which Mr Chagger originally estimated would be around 300,000 without reinstatement). Mr Chagger would have to have had opted for reinstatement in order for the Tribunal to be able to make such an order. However, Santander Abbey refused to comply with the Tribunal's reinstatement order, giving reasons that the Employment Tribunal regarded as being unsatisfactory.

Following Abbey Santander's failure to reinstate Mr Chagger, he increased his loss arising from the wrongs he had suffered to around 4 million, on the grounds that as a result of the wrongs and the failure to reinstate he had lost his ability to pursue his chosen career.

In his attempts to mitigate his loss, Mr Chagger had applied for 111 jobs, including several at Abbey Santander. He had also offered to work for Abbey Santander on a voluntary basis, with the view to improve his prospects of employment elsewhere. All his attempts to mitigate his loss had failed.

The Employment Tribunal ordered Abbey Santander to pay the record-breaking financial compensation of 2.8 million to Mr Chagger to cover his loss on the basis that he had not been reinstated and suffered 'career long loss'. Although Mr Chagger had identified and given evidence about four specific employers that he believed had refused him employment at least in part because he had taken legal action against Abbey Santander, the 2.8 million award did not include any compensatory amount for any so called "stigma" Mr Chagger may have suffered in the job market as a consequence of taking legal action against his former employer.

In Abbey National & Hopkins v Chagger (2008), Santander Abbey and Mr Hopkins appealed to the Employment Appeal Tribunal (EAT) against the Employment Tribunal's finding of race discrimination (the liability). The EAT wholly rejected Abbey Santander's appeal on liability, thus upholding the original Employment Tribunal's finding that both Santander Abbey and Mr Hopkins had discriminated against Mr Chagger on the grounds of race.

At the same time, in Abbey National & Hopkins v Chagger (2008), Santander Abbey and Mr Hopkins had also appealed to the EAT against the record 2.8 million compensation award (the remedy). The EAT accepted their appeal in part and made some rulings in favour of Abbey Santander.

The EAT ruled that Mr Chagger's future loss should be limited to the period during which he would have remained with Abbey Santander had he not been the subject of unlawful discrimination.

It also ruled that Abbey Santander could not be held liable for the losses resulting from Mr Chagger having been unlawfully stigmatised by prospective employers who shunned him because he had taken legal action against his former employer.

With regard to redundancy situations, the EAT ruled that if selection of an employee for redundancy is tainted by unlawful discrimination, then in assessing the compensation to be awarded to that employee an Employment Tribunal must make a percentage estimate of the likelihood that the employee would have been selected for redundancy anyway, and reduce the compensation accordingly.

The EAT ordered the compensation to be sent back to the original Employment Tribunal for reconsideration in accordance with its rulings.

In Chagger v Abbey National & Hopkins (2009), Mr Chagger appealed to the UK Court of Appeal against the EAT's rulings on remedy.

The Court of Appeal found that the EAT had erred in law in ruling that Mr Chagger's future loss should be limited to the period during which he would have remained with Abbey Santander had he not been the subject of unlawful discrimination. It said the EAT's approach had failed to have regard to the extent to which the discriminatory dismissal had affected Mr Chagger's career prospects.

The Court of Appeal also found that the EAT had erred in finding that Abbey Santander could not be held liable for the losses resulting from Mr Chagger having been unlawfully stigmatised by prospective employers who shunned him because he had taken legal action against his former employer. The Court of Appeal found that the original Employment Tribunal had adopted the correct approach to the evidence of stigma given by Mr Chagger, by treating it as a part of the evidence relating to his attempts to mitigate his loss and not awarding any compensation for it.

The Court of Appeal went on to rule that the original employer must remain liable for the loss the employee suffers as a result of being shunned by prospective employers for having brought legal proceedings against his previous employer. The Court of Appeal did not accept Abbey Santander's broad submission that the mere fact that prospective employers contribute to, or are the immediate cause of, the loss resulting from their refusal to employ of itself breaks the chain of causation. The Court of Appeal reasoned that if prospective employers could lawfully refuse to employ on the grounds that they did not wish to risk recruiting someone who had sued his employer and whom they perceived to be a potential trouble maker, it saw no reason why that would not be a loss flowing directly from the original unlawful act. The fact that the direct cause was their decision not to recruit did not of itself break the chain of causation. Nor could the employee's action in taking legal proceedings conceivably be treated as such an act; legal action was a necessary step in order for the employee to obtain a remedy for the employer's wrong. Therefore, it would be absurd if it were to distance the employer from the effects of that wrong. The Court of Appeal concluded that such loss (so called "stigma loss") was recoverable and was one of the many difficulties facing an employee on the labour market.

The Court of Appeal upheld the EAT's ruling that, in assessing loss, the Employment Tribunal ought to have considered whether to reduce the compensation referable to future loss to take account of the chance that Mr Chagger would have been dismissed in any event, and referred the compensation back to the original Employment Tribunal for reconsideration on that ground.

Santander Abbey and Mr Hopkins did not appeal against the EAT's ruling on liability and appear to have conceded they discriminated against Mr Chagger on the grounds of race.

by: Simon King

POST COMMENT

Opportunities Abound For Models Young Choosing The Right Garage Door Sizes For Your Home Or Business Bridgend Accountants: Essential For Taxpayers Accountants Cardiff On The Rise: Proof Of Business Growth What Goes Into Truly Enjoyable Escape Games Now Dont Get Tensed About The Shifting Of Goods How Your Can Promote Your Self Storage Business Through Blogs Disvantages And Disadvantages Buying Used Cars Selecting A Chlorinator That Is Perfect For You Pack And Move Your Goods In An Efficient Manner Loading And Unloading Of Goods Is Now The Responsibility Of Packers And Movers Shift Your Goods In A Safe And Secure Way Make Your Relocation Efficient With Packers Movers Professionals