Two recent cases before the Suffolk ET highlighted the risks that employer face when making redundancies.  In this particular matter, Obikwu v British Refugee Council and Ukwaja v British Refugee Council (BRC), two (black) immigration workers were selected for redundancy by their employer, the BRC.  The ET found in favour of both workers in April 2008, but it was only in the last few days that Mr Obikwu’s remedies hearing took place which settled the level of compensation to be paid to him. Ms Ukwaja’s case was determined last January.

They both worked at the Oakington immigration centre in Cambridge.  Plans were announced to close it in May 2006 but were subsequently suspended.  However five months after the decision to close it was put on hold both of the claimants were made redundant.  Their departure removed the only two non-white employees from the staff at the building.  Not surprisingly, both brought claims for unfair dismissal and race discrimination. 

How did this situation arise?  The ET held that the manager in charge of selecting candidates for redundancy, one Anne-Marie Leech, had “subconsciously” favoured colleagues with whom she was friendly.  The Claimants alleged that she was “consciously biased” against them (although the ET rejected that allegation), which was probably not surprising because Ms Leech hosted a party at her house (to which the two Claimants were not invited) and none of those people who did attend were selected for redundancy. It’s not clear from the newpaper reports whether Mr Obikwu and Ms Ukwaja were the only employees made redundant, or just the only two ethnic minority employees amongst a wider cohort.  The ET Chairman noted that white workers with less experience were selected to remain in employment over the two Claimants.  In the circumstances it is not surprising that they both won.

There are two legal issues raised in this case.  One concerns the need for employers to have fair and reasonable (and objective) selection criteria when choosing which employees to select for redundancy.  If an employer fails to make an objective choice then the affected employee may have a claim for unfair dismissal (if they have more than 12 months continuous employment experience at the date of termination).  The maximum compensation that an ET can award for unfair dismissal is capped at £66,200 plus a basic award of £350 per year of service. However, and this is the second legal issue raised in this particular case, if the employer selects an employee for redundancy on grounds of their race, colour, nationality or ethnic or national origin that will amount to an automatically unfair dismissal.  An employee who believes they have been discriminated against on grounds of their race will probably be advised to bring a claim under the Race Relations Act 1976 for compensation because, unlike the compensatory award for unfair dismissal under the Employment Rights Act (ERA), that award is not capped.  That can lead to a very substantial award being made, because the ET can also award compensation for injury to feelings, as well as loss of earnings and other financial losses.  There is also no 12 month qualifying period required under RRA claims.  The employee cannot claim compensation under the RRA and a compensatory award under the ERA.

Mr Obikwu was awarded £65,475 for unfair dismissal, racial discrimination, psychiatric injury and loss of earnings.  I haven’t seen how the award was broken down so it is hard to say what value the ET put on each head of claim.  However, in the case of Ms. Ukwaja, she was apparently awarded £30,000, which comprised £15,000 for injury to feelings due to racial discrimination, £8,349 for unfair dismissal, £5,000 for discrimination and £2,643 for interest on lost earnings.       

From a legal point of view there was nothing particularly noteworthy about these cases.  What caught the eye of the media though was the fact of a charity involved with refugees unfairly dismissing and racially discriminating against two ethnic minority staff: the BRC deserved to be censured for that. However, not everyone might agree with that:  I found one report of the cases on The Independent’s website and read some of the comments that followed the report.  Sadly, some of the respondents saw this story as an example of “another utterly baseless thought crime!  Another opportunity to redistribute monies to chosen victim groups, taken with relish” and “It’s a bit naughty taking a charity to court, surely the funds raised by the Refugee Council would be better spent on helping everyone in [the] developing world move to Europe than on handouts to disgruntled employees”.  No, actually.  The anti-discrimination laws exist for a reason; no employer is exempt.  The whole episode leaves a nasty taste in the mouth.

Related posts:

1. Redundancy and Age Discrimination
2. Redundancy – know your rights!
3. Bankers and Age Discrimination

Race Discrimination and Redundancy originally appeared on Jobsworth by Michael Scutt on 05/06/2009.