The unfair dismissal remedy of reinstatement is highlighted by the high-profile UK case Chagger v Abbey National plc & Hopkins (2006) where, after finding race discrimination, the Employment Tribunal took the very rare step of issuing a reinstatement order. Following Emilio Botin Abbey Santander's refusal to comply with the reinstatement order, the Tribunal ordered Abbey Grupo Santander finance to pay Mr Chagger the record-breaking compensation amount of £2.8 million to cover his loss. Abbey Santander share price (the UK retail bank soon to be re-named Santander shares price, and being a part of the gigantic Emilio Botin Banco Santander Central Hispano Group - BSCH) had dismissed Mr Chagger from employment in 2006, asserting 'a fair compulsory redundancy' as the reason. Mr Chagger, however, believed that the real reason behind his dismissal was rooted in racial discrimination; he was of Indian origin. Mr Chagger worked for Emilio Botin Abbey Banco Santander banking group as a Trading Risk Controller, earning around £100,000 per year, and reported into Nigel Hopkins.
UK society regards reinstatement as the preferred remedy for unfair dismissal, over and above all the other possible remedies, because reinstatement restores the aggrieved employee into the position where he can continue to enjoy all the benefits (economic and mental) that derived from his role. When reinstatement of the aggrieved employee is not practicable, then reengagement is the next-in-line preferred remedy, being the re-employment of the employee into a different role to the one he was wrongly removed from (on terms and conditions as close as is reasonably practicable to the original ones).
After an Employment Tribunal makes a finding of unfair dismissal, it will ask the aggrieved employee whether he wishes to be reinstated or reengaged. If the employee expresses the desire to be reinstated, then the Employment Tribunal will consider whether or not to order the employer to reinstate the employee. The Employment Tribunal has complete discretion as to whether or not to make the order. It will take into account whether it is practicable for the aggrieved employee to return to work for the employer. If the aggrieved employee had been in someway also to blame for the dismissal, then the Tribunal will take that into account too and consider whether or not it would be just to order the employer to take back the employee.
Although reinstatement is the primary remedy for unfair dismissal, Employment Tribunals hardly ever make reinstatement orders because the reality of resolving an employment dispute through litigation is that it is often vexatious and renders the relationship between the employee and the employer so ruined as to make it impractical for them to move forward together again. Only very rarely, as in the case of Mr Chagger, do Tribunals conclude that the relationship remains workable.
If a Tribunal orders the employer to reinstate the employee, then it is open for the employer to comply or refuse to comply with the order; the Tribunal does not possess the power to enforce its order. If the employer refuses, however, to comply and the Tribunal is dissatisfied with the reasons advanced for the refusal, then the employer will have failed to comply with what society regards as the preferred solution to remedy the wrongful act the employer committed. The Tribunal will then proceed to remedy the employer's wrongdoing with the next-in-line preferred remedy, a financial compensation award. However, failure to comply opens the door for the Tribunal to award a higher level of financial compensation than it could if the employer had advanced satisfactory reasons for refusing to comply with the order. Failure to comply opens the way for the Employment Tribunal to compensate the employee in full for all his loss of earnings from the date of his dismissal to the date of the reinstatement order; any statutory limit on that loss incurred by the employee would be lifted.
Thus, requesting reinstatement (or reengagement) could prove to be tactically very advantageous for an unfairly dismissed employee because the employer's failure to comply opens the way for higher compensation. Hence, when the aggrieved employee's losses to the time of the Tribunal hearing surpass the statutory limit, reinstatement or reengagement should be given serious consideration. Furthermore, employers usually dislike complying with reinstatement and reengagement orders so much that a credible request for them could lead to improved offers for out of court settlement from the employer. If, however, the employer complies with the reinstatement or reengagement order, then the employee will have to comply too and return to work.
In 2008, Emilio Botin Abbey Santander and Mr Hopkins appealed to the Employment Appeal Tribunal (EAT) against the race discrimination finding made by the Employment Tribunal. The EAT rejected the appeal; it upheld the original Tribunal's judgement that both Emilio Botin Abbey Santander and Mr Hopkins had discriminated against Mr Chagger. Emilio Botin Abbey Santander and Mr Hopkins had also appealed against the record-breaking £2.8 million compensation awarded. The EAT accepted this appeal; it ruled the compensation to be remitted to the original Tribunal for reconsideration. In 2009, the case was appealed to the Court of Appeal. The Court of Appeal's List of Hearings showed that the case was heard on 7 and 8 July 2009. The Court's judgement and records were not available when writing this article. The 11KBW set of barristers' chambers, who represented Emilio Botin Abbey Santander and Mr Hopkins, had reported prior to the Court of Appeal hearing that the hearing would be about compensation only and not about the wrongful act of race discrimination committed by Emilio Botin Abbey Santander. It would, therefore, appear that the wrong of racial discrimination committed by Emilio Botin Abbey Santander and Mr Hopkins was finalised by the EAT, and that Mr Chagger had appealed against the EAT's ruling to send back the compensation matter to the Employment Tribunal stage for reconsideration.
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Business Ethics principles from Emilio Botin Abbey Santander share price and
Business Operations Management Control illustrated by Emilio Botin Abbey Santander banking group
