I confess to being puzzled by the reporting of this highly emotive and complex case involving issues of judicial review and unfair and wrongful dismissal. Not surprisingly given the dreadful events it isn’t merely an employment law matter because it was brought as a claim by Ms. Shoesmith for judicial review. However, the decision she complained of had the effect of terminating her employment and, effectively, her career. The media has reported that because she won her case before the Court of Appeal she is now potentially able to win substantial compensation for dismissal, possibly as much as one million pounds. See here for a very considered pierce by the Guardian -. As many people know, the maximum compensatory award that can be made for unfair dismissal by an Employment Tribunal is currently £68,400 (less at the time Ms Shoesmith was dismissed).
How is it possible that she could bring a claim for many times that amount?
And, lest we forget, this is the woman who was virtually public enemy number 1 following the end of the trial of the adults responsible for the death of Baby P in 2007. There was a high profile media campaign, including a petition by The Sun newspaper, to have her sacked. Should she be able to sue at all? If you boil this case down to a nutshell it is this “to what extent does accountability outweigh the need for fairness?”
The answer requires an analysis of her fairly unusual status. She was an employee of Haringey but was also an office holder – appointed to the role of Director of Children’s Services by the Secretary of State. The day following the conclusion of the criminal trial on 11 November 2008, the then Secretary of State for Education, Ed Balls, ordered an urgent enquiry into child safeguarding arrangements in Haringey and requested their report by 1st December 2008. On the 1st December Ed Balls held a press conference and announced that he had appointed another person to the position of DCS in Haringey. He also said that Haringey as her employers would be reviewing her employment position “this afternoon and immediately”. He also said that she should not be rewarded with “compensation or payoffs”.
On the 8th December Ms Shoesmith was summoned to a disciplinary hearing and was summarily dismissed on the basis of a fundamental breach of trust and confidence without any notice pay or other compensation. She appealed that decision and lost. Ms Shoesmith then applied for judicial review of the findings of the OFSTED report, the Secretary of State’s actions and those Haringey. She also applied to an Employment Tribunal for unfair dismissal but those proceedings were stayed pending the outcome of the judicial review case.
At first instance, the Judge hearing her claim for judicial review rejected it. He thought that the urgency of the situation outweighed the need for procedural fairness toward Ms Shoesmith. The Court of Appeal on the other hand took a different view
“The fact that the 2004 Act, in creating the singular post of DCS, identified as a matter of policy one individual with ultimate responsibility and accountability in relation to children’s services does not mean that that person is to be denied the protections that have long been accorded to responsible and accountable office-holders. Nor does the fact that the Secretary of State is not the employer of a DCS relieve him of the obligation to be fair. (para 65)
And at para 66
“I find it a deeply unattractive proposition that the mere juxtaposition of a state of affairs and a person who is “accountable” should mean that there is nothing that that person might say which could conceivably explain, excuse or mitigate her predicament. “Accountability” is not synonymous with “Heads must roll”. I do not consider it likely that Parliament when creating the position of DCS, intended those who may be attracted to such an important and difficult position to be volunteering for such unfairness in their personal position. Accountability requires that the accountable person is obliged to explain the state of affairs tohttp://www.judiciary.gov.uk/Resources/JCO/Documents/Judgments/shoesmith-v-ofsted-others-judgment-270511.pdfwhich it attaches. The corollary is that there must be a proper opportunity to do so. If the explanation is unacceptable, then consequences will follow.” (my emphasis)
Consequently Mr Balls’ decision to dismiss Ms Shoesmith from her position as DCS was held to be unlawful. That was as a matter of public law. However, because she was employed by Haringey as DCS, it had an obvious impact on her employment position. That is why she commenced a claim in the ET as a fallback if her claim for judicial review was unsuccessful or, and this is an interesting aspect of this case, the court held that she should pursue her claim only via the ET.
Haringey acted swiftly and dismissed Ms Shoesmith relying on fundamental breach of the implied term of trust and confidence. If more time had allowed they might have wished to perform a capability assessment (aka performance improvement process) or similar to see to what extent she was personally failing in her job. The timescales here could have allowed it because her replacement was in post. There are obviously arguments that Ms Shoesmith could have raised before an ET about the decision to terminate her employment. The Court of Appeal commented that summary dismissal for “(lack of) competence and capability” was harder to justify than for breach of the implied term of trust and confidence.
However, English law does not allow litigants to bring claims in multiple fora. The Court of Appeal had to consider whether Ms Shoesmith should pursue her claim before an ET rather than before the court for Judicial review. It was her employment that had been terminated, but as a result of a public law decision. The lead Judgment in the Court of Appeal was given by Lord Justice Maurice Kay and he took the view that Ms Shoesmith should not be required to abandon her Judicial Review proceedings for the following reasons;
- She was suing three public bodies, Haringey, OFSTED and the Secretary of State for Education – it made sense to keep all the proceedings in one court and to avoid duplication of costs.
- If she pursued a claim at the ET the amount of compensation she might recover would be much restricted by the statutory cap
- Further her legal costs would not be recoverable from the other side if she won at the ET because there is (ordinarily) no costs-shifting regime. Therefore any compensation that she was awarded would be swallowed up by her legal costs and it would not be reasonable in a complex case to expect her to instruct “inexperienced, in-expert or apparently inexpensive lawyers” (I wonder if he meant lawyers acting on a no win no fee basis?)
- In short, the trial Judge was wrong to defer to the ET proceedings as a claim for unfair dismissal was not “equally convenient and effective”
Employment lawyers often struggle with the difficult issue over which forum to pursue a claim in when there are potential claims for more than just unfair dismissal, or large breach of contract claims. Judges in the civil courts generally take the view that the ET is the best place to hear employment related claims but that isn’t always the case and can be a significant issue if the amount of the potential claim is likely to exceed the statutory cap.
Furthermore, Ms Shoesmith’s claim was not just about unfair dismissal: her employment was terminated summarily and, because the Secretary of State acted unlawfully, the failure to pay her notice pay rendered it a wrongful dismissal (ie a breach of contract). The normal remedy for that would be damages limited to the notice period.
However, the involvement of the Secretary of State further complicated that position because it raised the difficult issue of whether Haringey were liable for an act that was initially lawful but subsequently held to be unlawful. One answer is that the original decision to dismiss should be treated as a “nullity” and she should be entitled to all the pay and pension contributions that she would otherwise have received had she not been dismissed up to date, known as a “McLaughlin-type order”. At this point the Court of Appeal rather ducked the issue of compensation, saying it did not have sufficient information and L J Maurice Kay recommended the parties mediate a settlement themselves. Failing that there will have to be a further hearing in the Administrative Court (a branch of the High Court) for a decision on quantum.
Ms Shoesmith was reputedly earning c. £130,000 p.a and would undoubtedly have been a member of the Local Government Final Salary pension scheme (which is not ungenerous). If she is awarded arrears of pay and benefits since December 2008 it is easy to see that she could eventually be awarded a very substantial sum. By the time the case reaches the Supreme Court, the overall outlay in legal costs and compensation (if she wins) will probably be £1 million if not more.
Is that right? I can’t comment on whether she was doing her job well or badly. She was though, as the Court of Appeal pointed out, “scapegoated”. The announcement of the termination of her employment was made on live TV against a background of public hysteria over the Baby Peter tragedy, against a department that had failed badly before over the equally tragic death of Victoria Climbie (which was before Ms Shoesmith had taken up her post as DCS). Everyone is entitled to a fair hearing and whilst public anger is rightly or wrongly focused on Ms Shoesmith, it should not be forgotten that Ed Balls’ actions in playing to the gallery have handed Ms Shoesmith a valuable legal claim and cost the taxpayer far more in legal fees than if she had been given her notice and her contract terminated in the proper way.
Ed Balls has said that he would take the same action again. The Prime Minister, David Cameron has said that he backs an appeal and
“It does seem to me important that governments are able to manage their organisations and provide accountability when things go wrong.”
Surely that should not be at the expense of fairness? What if it was you who was accused?
For an excellent analysis of this case by Darren Newman please see here.