Stephen Levinson, head of the employment and pensions department of City law
firm Paisner & Co, gives his view of some topical issues
Can you really get £200,000 if you are refused a reference? The press has
recently been much exercised by the story of Ms Coote, the former bingo-hall
manager, and the headlines have concentrated on the money. The fact that her
job lasted all of 10 months and that her annual salary was £20,000 a year has
helped to pile on the indignation.
Most of the recent fuss was based on an over-the-top press release from the
Equal Opportunities Commission. As well as stressing the total value of the
award (without detail) the press release claimed that, in future, employers
would be under a legal obligation to provide references to their former
In truth this was what lawyers call an interesting case, which is usually
dire news for everyone else. The essential facts were that the lady brought a
sex discrimination case after the termination of her employment: the claim was
Later no references were given by the employer despite several requests.
This prompted a claim of victimisation – that is, an allegation that the reason
that the references were not given was the fact that the sex discrimination
case had been brought. But, said the ingenious employer, the lady was a former
employee and the law only protects existing employees from discrimination. Nice
one, said the English tribunal and held for the employer.
Off to Europe went the employee where the ECJ cried foul on the employer and
said that a purposive application of the Equal Treatment Directive (which the
Sex Discrimination Act implements) requires former employees who suffer such
detriment to be protected if a mockery is not to be made of the law. So back
everyone came to the employment tribunal and the result, five years after the
dismissal, was the headline award.
The most absurd aspect is not the amount of the award, which may well have
been exaggerated. No, the real nonsense is the discrepancy that now exists
between claims based on sex and those based on race. There is, as yet, no
European directive on racial discrimination to which the those relying on the Race
Relations Act could refer in parallel circumstances. This fact prevents the
same purposive approach being taken. Ironically, because English race law is
more progressive than European law in this respect, our minority communities
are worse off.
What about that claim that there is an obligation to give references? The
general rule is that no obligation exists. The regulated financial sector is
one exception to this rule.
In fact it has been common for employers to react to being sued (for any
reason) by refusing to give a reference. They will be at risk (and always have
been) if it can be established that the reason for this retaliation is a
complaint of discrimination or one of the other areas of law which prevents
victimisation. But by far the most common reasons for dismissal are conduct and
capability, where there is no such protection. In such cases there is no legal
obligation to give a reference.
We know the Inland Revenue is not really mean and grasping but they do know
how to try our patience. Some employers have been reacting to all of the
publicity about workplace stress by providing counselling to their staff. Very
laudable too you might think.
What says the Chancellor? He smells a benefit in kind which is taxable in
the hands of the employee. With his usual gift for positive PR the tax man
distinguishes between stress caused by work alone (no tax) and stress caused by
other reasons (taxable). Imagine the stress caused if you have to make that
sort of enquiry every time you try to help your employees by providing
The Revenue’s solution is to say that if the benefit was generally available
to all employees it will be exempt. So you spend more and they get less? Who
was it that said the law is a ass?
Test of fairness
The judicial attack on the band of reasonable responses test in unfair
dismissal cases continues. In Scotland Lord Johnson, the president of the
Scottish EAT, said in Wilson v Ethicon, 2000, IRLR 4 that he wanted "to
endorse completely" the observations of Mr Justice Morison in Haddon v Van
den Berg Foods,1999, IRLR 672 encouraging tribunals to concentrate of the test
of fairness without the baggage of precedent clouding their vision.
Some might think this a radical view for a lawyer. A third president to get
in on the act is the learned head of employment tribunals in England and Wales
who has written to all tribunal chairmen drawing their attention to Haddon. We
can expect a lot of grief from all of this and a great deal of inconsistency
around the country. Well, who said we were here to enjoy ourselves?