Beware of discrimination claims from ex-employees

Employers would be wise to review their equal opportunities policies in
light of recent cases concerning discrimination claims for staff after they
have left employment

Now that the House of Lords has brought post-employment discrimination
squarely within the ambit of race, sex and disability discrimination
legislation, employers need to rethink their equal opportunities policies.

Prior to the House of Lords decision in Relaxion Group plc v Rhys-Harper,
along with several other conjoined appeals including D’Souza v London Borough
of Lambeth, and Jones v 3m Healthcare Limited, the general rule was that
post-employment discrimination could not be actioned.

The Government acknowledged the potentially far-reaching consequences that
post-employment discrimination can have on employees (for example, a refusal to
provide a reference) in its Equality and Diversity: The Way Ahead consultation
paper, which proposes widescale reforms to discrimination laws in the UK. One
of the proposals put forward was the prohibition of post-employment
discrimination on all grounds. However, the House of Lords has now overtaken
the Government reforms in Relaxion and brought the matter to a head.

In Relaxion, a female employee claimed sex discrimination as a result of
sexual harassment which occurred during an appeal following her termination of
employment. She also claimed that the investigation into her complaint was
handled in a discriminatory manner.

When the case was heard by the Court of Appeal, it was held that as the
employee ceased to be employed by the date of the act complained of, she could
not bring her complaint under the Sex Discrimination Act 1975 (SDA), as this
only covered current staff and job applicants.

The same reasoning was applied by the Court of Appeal in D’Souza, where an
employee claimed victimisation under the Race Relations Act 1976 as a result of
his employer’s allegedly discriminatory refusal to comply with a tribunal order
for reinstatement.

In Jones, an employee claimed victimisation based on his employer’s refusal
to return business cards after his dismissal, which had generated a complaint
under the Disability Discrimination Act 1995. Three other disability
victimisation claims dealt with the provision of post-employment references.
The Court of Appeal rejected the complaints because the DDA only prohibits
discrimination against job applicants and those that the employer
"employs" as opposed to ex-employees.

In spite of the uniform approach adopted by the Court of Appeal in the above
cases, there was one problem: a sex discrimination claim – Coote v Granada
Hospitality Limited – heard by the European Court of Justice.

In Coote, an employee who claimed her dismissal was discriminatory went on
to claim victimisation under the SDA when her previous employer refused to
provide a reference. The ECJ (and subsequently the EAT) upheld her complaint.
It held that a narrow interpretation of the wording in the SDA which excluded
ex-employees, deprived women of an effective remedy against acts of sex
discrimination under the Equal Treatment Directive.

Coote and cases of victimisation under the SDA therefore became the
exceptions to the general rule that post-employment discrimination was not
within the ambit of discrimination laws in the UK. However, the House of Lords
has now made the exception the rule.

By a majority decision in Relaxion, the Lords found the employment
relationship can outlast the actual contract of employment for the purposes of
bringing a discrimination complaint. According to Lord Nicholls: "…it
would make no sense to draw an arbitrary line at the precise moment when the
contract of employment ends, protecting the employee against discrimination in
respect of all benefits up to that point but in respect of none
thereafter."

By Julie Quinn, partner employment, pensions and incentives, Allen &
Overy

Comments are closed.