Defending discrimination claims can be time-consuming, expensive and stressful – no wonder employers will pull out all the stops to persuade a claimant to drop a claim or settle prior to a hearing.
But in doing so, could it run the risk of a victimisation complaint? Not necessarily, according to the Court of Appeal in St Helens Metropolitan Borough Council v Derbyshire & others.
In 1998, 510 catering staff brought equal pay claims against the council. Most of them were settled, but Derbyshire and 38 other claimants decided to continue with their claims.
Before the hearing, the council sent two letters: one general letter to the catering staff, and the other to the claimants personally. In both of these letters, the council pointed out that if the claims were successful, the subsequent salary costs might result in children being deprived of their school meals and staff losing their jobs. They clearly encouraged the continuing claimants to settle their claims on the same terms as the others.
The claimants were distressed by the perceived element of ‘moral blackmail’ in these letters, and accused the council of victimising them, contrary to section 4 of the Sex Discrimination Act 1975. This states it is unlawful for an employer to treat an employee less favourably because they have brought proceedings against it under the Equal Pay Act 1970.
So did the letters amount to less favourable treatment for that reason?
The claimants were successful before the tribunal and the Employment Appeal Tribunal (EAT), so the council appealed to the Court of Appeal. In dealing with this issue, the court had to perform a delicate balancing act between allowing the council to take reasonable steps to protect its legitimate litigation interests, and protecting the claimants from being less favourably treated for continuing their proceedings.
The court came down on the side of the council (by a majority only), and held that its actions in sending the two letters did not necessarily amount to victimisation.
The Court of Appeal referred to the leading case in this area, Chief Constable of West Yorkshire v Kahn (which concerned a complaint of victimisation under the Race Relations Act 1976 following the police’s refusal to provide a reference).
It held that an employer is entitled to take reasonable steps to protect its position in litigation without breaching the victimisation provisions. The fact that the council’s motive for sending the letters was to persuade the claimants to settle – and seemingly to get others to persuade them to do so – made no difference.
An employer is entitled to take ‘reasonable and honest’ steps to settle proceedings. It therefore referred the matter back to the tribunal to consider whether the council’s actions amounted to ‘honest and reasonable’ conduct for these purposes.
Lord Justice Mummery in the minority did not believe there had been any error of law. He said it was important to look at the detail of the way in which the council had treated the claimants when attempting to settle the claims. In particular, he noted that the letters had been sent directly to the claimants even though they were being legally represented, and they had also been sent to the catering staff, including those who had already settled.
He believed there was no need for the council to communicate with these individuals for settlement purposes, and that it had gone further than was reasonable in protecting its interests. Some may say he had a point, especially in the second respect.
Learning points for HR
- Employers can take ‘honest and reasonable’ steps to settle discrimination claims without infringing the victimisation provisions
- Employers should exercise caution when taking steps to settle proceedings as there is a fine line between putting legitimate pressure on a claimant to settle and the threat or reality of less favourable treatment
- A letter which uses overtly menacing language is more likely to constitute victimisation than something civilised and concerned.
Sue Nickson is partner and national head of employment, Hammonds