Employers may still be responsible for ex-staff

Many employers feel that provided termination is properly dealt with, liability to ex-employees ceases once employment has ended. However, the post-termination acts and omissions of employers have been the focus of a number of recent Court of Appeal decisions, and they cannot afford to be complacent.

Potential liability for post-employment events falls into two categories. First, the risk of statutory discrimination or victimisation claims. Second, liability under the general law in relation to the content of references.

A number of Court of Appeal decisions within the last two years have consistently held that UK discrimination legislation and the Employment Rights Act, as currently drafted, do not cover acts which occur after employment has ended. In D’Souza v Lambeth Borough Council, 2001, EWCA Civ 794, the court held that the Race Relations Act did not protect an employee who alleged his former employer refused to reinstate him as a result of previous tribunal claims brought by him.

Post-termination events

The Court of Appeal came to the same conclusion last year in Rhys-Harper v Relaxion Group plc, (2001, IRLR 460). Here, the Sex Discrimination Act was held not to cover an alleged incident of sexual harassment during an internal appeal following dismissal.

More recently, three joined appeals in Jones v 3M Healthcare and others, (EAT/1099/00; EAT 1220/00; EAT/0714/00; EAT/ 1487/00), confirmed that, similarly, the Disability Discrimination Act does not entitle a former employee to complain of discrimination or victimisation based on post-termination events. Finally, in Fadipe v Reed Nursing Personnel, 2001,EWCA Civ 1885, the same conclusion was reached in relation to section 44 of the Employment Rights Act, which also protects employees from victimisation.

Despite the Court of Appeal’s consistency in approach, there still remains doubt, however, about whether discrimination legislation is capable of covering post-termination events. There are two reasons for this. First, both D’Souza and Rhys-Harper are being appealed to the House of Lords. Second, the judgment of the European Court of Justice in Coote v Granada Hospitality Ltd, 1999, ICR 100, still leaves the door open for applicants to argue that, at least in relation to sex discrimination, post-termination events are covered by the Equal Treatment Directive.

This case involves a successful victimisation claim arising out of an employer’s failure to provide a reference to a former employee who had brought a previous sex discrimination claim. The ECJ held that Article 6 of the Equal Treatment Directive covered Ms Coote’s claim.

Perhaps as a symptom of the uncertainties surrounding post-termination statutory protection, the case law in relation to references has developed enormously in recent years. Employers are now obliged not only to ensure the accuracy of facts in a reference, but must also ensure that it is not misleading in any way and does not give an unfair overall impression of the individual.

Whatever the outcome of the D’Souza and Rhys-Harper cases in the House of Lords, this is an area which needs legislative attention. The Government is currently reviewing discrimination legislation, and has a golden opportunity to clarify the responsibilities of employers in the post-termination period.

In the meantime, employers should treat ex-employees on the same principles as apply during recruitment and employment.

Points to consider

l Liability to employees does not end with their employment

l References must be factually accurate and always give a true impression

l Remember that race, sex and disability discrimination legislation may still apply

Jonathan Chamberlain is a partner in the employment team at Wragge &Co

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