In St Helens Borough Council v Derbyshire and others, the court held that letters sent by the council to equal pay claimants, indirectly pressurising them to accept a settlement, amounted to victimisation.
Although the council had settled a number of equal pay claims, a group of dinner ladies rejected its offer. The council then sent out two letters. The first was sent directly to the claimants, in which the council explained the negative consequences that successful claims could have on council spending plans. The letter suggested that the claimants’ actions could deprive children of their school dinners and may cause redundancies among their colleagues. In the second letter, which was sent to all catering staff, the council again urged the claimants to settle.
The claimants were very distressed at receiving these letters and felt under pressure to settle. As a result, the group brought victimisation claims. The issue was whether the council had discriminated against the dinner ladies by treating them less favourably because they had raised equal pay proceedings.
The House of Lords accepted that while an employer has a right to protect itself in litigation, it does not extend to sending letters that could be perceived as threatening. It overturned the Court of Appeal’s decision, and upheld the tribunal’s findings that the council’s actions amounted to victimisation.
The distress the claimants suffered from the souring of their relations with colleagues and fears over the wider public reaction amounted to a detriment. The council’s actions had crossed the line and amounted to an unreasonable pressure on the recipients to concede their claims.
The court adopted the reasoning of the earlier House of Lords victimisation case of Chief Constable of the West Yorkshire Police v Khan. In Khan, the employer successfully defended a victimisation claim after refusing to provide a reference when race discrimination proceedings were pending. This was held to be an honest and reasonable attempt to protect its position during litigation.
Employers should carefully consider the content of any letter that seeks to encourage settlement. Such letters should avoid setting out the financial consequences of a successful claim in case as this could be perceived as an indirect threat.
This case affects all employers who are defending discrimination proceedings and not just those involved in equal pay litigation. The test to be adopted is whether the employer’s behaviour amounts to reasonable and honest conduct to protect its position. The difficulty arises over the interpretation of what is ‘reasonable’ in the emotive context of litigation.
While the House of Lords did accept that an employer has some latitude to avoid litigation and achieve a compromise, this should not go as far as an indirect threat. Lord Hope said: “The fact that he [the employer] wanted to dissuade the employees from pressing their claims to adjudication [a tribunal hearing] does not, of itself, mean the employees were being victimised.”
Public sector employers also need to ensure that wider communications regarding the budgetary implications of equal pay litigation do not attribute fault to equal pay litigants for bringing or continuing their cases, which could be perceived as unreasonable or threatening.
By Mandy Laurie, a partner in the employment group at Dundas & Wilson