There may be more than one or two senior executives at News Corporation thinking about their position right now, amid public clamour for heads to roll because of alledged serious wrongdoing went on while they were in charge. But does it necessarily follow that because something has gone badly wrong on their watch, they automatically have to go? A recent Court of Appeal decision in the Sharon Shoesmith case provides some important lessons in that respect.
What was the Sharon Shoesmith case about?
Sharon Shoesmith was Haringey Council’s director of children’s services (“DCS”) at the time of the death of Baby P. On 3 August 2007, while in the care of Haringey Social Services, and when he was only 17 months old, Peter Connelly died at the hands of his mother, her boyfriend and the boyfriend’s brother. All three were later convicted of causing the baby’s death. When the OFSTED enquiry ordered by Ed Balls, the then secretary of state, reported on 30 November 2007, it was very critical of the child safeguarding arrangements at the council, but it did not attribute misconduct to any of the individuals involved.
Mr Balls decided to act immediately. He removed Miss Shoesmith from her statutory role as DCS, and the next day held a press conference at which he announced that Haringey would be considering her employment. This was all news to Miss Shoesmith, who had no advance notice that this was to be the case. She was then immediately suspended by the council, and, at a hearing the following week, summarily dismissed. She appealed, but to no avail. However, rather than just bringing an unfair dismissal claim to the employment tribunal (for which compensation awards are limited by statute) she also chose to bring separate proceedings for judicial review of the decision to remove her from her post as DCS. This is the case that she won in May 2011 in the Court of Appeal.
Unless her case is settled in the meantime, or successfully overturned in the Supreme Court, the Court of Appeal ruling means that Miss Shoesmith will be entitled to what are known as McLaughlin damages, on the basis that the decision to remove her from her post was held to be void and, since she never received formal notice, unless and until she either gives notice herself or notice is given to her, she remains in post and should continue to be paid as such. She is therefore likely to recoup considerably more than she would by winning an unfair dismissal claim.
What is so significant about the case?
The Court of Appeal decided that it was wrong simply to remove the person in charge of children’s services because of all the criticism of that department, without giving her a proper opportunity to address her own individual role in the matter. It was not prepared to accept that in those circumstances there was nothing such a person could say which “could conceivably explain, excuse or mitigate their predicament”.
What about cases in the private sector?
Sharon Shoesmith won her case because she was not just an employee, she also held a statutory office in the public sector from which she was removed. That is why she could make an application for judicial review (it should be noted that other public sector employees may not be able to make such an application unless they are also statutory office holders). Nevertheless, this case may have significance more generally, as the principle that heads can automatically roll because something has gone badly wrong on the employee’s watch was plainly rejected by the Court. It will serve as a useful reminder in situations such as that potentially facing News Corporation, where, even if much wrongdoing is ultimately found to have taken place, courts and employment tribunals will still want to ensure that employees, however senior, are given an adequate opportunity to address allegations as to their individual culpability, and not just forced out because of the failings of the organisation for which they are responsible.
Are there any other lessons to be learned?
For reasons that are not clear, in Miss Shoesmith’s case the council chose not to serve notice as a fall back. As the Master of the Rolls pointed out, there was absolutely nothing to stop it serving notice on Miss Shoesmith expressly without prejudice to its primary contention that her dismissal had already been validly effected. In that way, if the original dismissal was held to be void (as was indeed the case here) the Council would have had the notice to fall back upon and this would have considerably reduced the worth of Miss Shoesmith’s claim. One would assume that in the future a public sector employer in similar circumstances would be most unlikely to make the same mistake again.
Is this the end of the story so far as Miss Shoesmith is concerned?
Probably not. Leave to appeal to the Supreme Court was initially refused by the Court of Appeal, but the Department of Education has announced it is seeking leave from the Supreme Court itself. Many expect that permission to be granted. If it is, the Appeal is unlikely to be heard before next year. In the meantime, it is still possible that the parties might get together to agree a settlement, or at least agree to mediate, but there is no sign of a resolution to this case any time soon.
Richard Fox, head of employment law at Kingsley Napley LLP
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