As well as being liable for their own acts of discrimination, organisations are also vicariously liable for the discriminatory acts of their employees. This is demonstrated by the UK landmark case of Chagger v Abbey National plc & Hopkins [2006] where the Employment Tribunal's judgement of race discrimination led (after Abbey National's refusal to comply with the Tribunal's order to re-instate Mr Chagger to remedy its wrongdoing) to the record £2.8 million compensation order.
Abbey National (reported to be re-branding as Santander from next year, being part of the Banco Santander Group) employed Balbinder Chagger as one of the two Trading Risk Controllers reporting into Nigel Hopkins. Mr Chagger is of Indian origin and earned about £100,000 per year. In 2006, Abbey National terminated his employment, ostensibly for reasons of redundancy. The redundancy pool of selection was Mr Chagger and the other Trading Risk Controller, a white female.
If an employee of the organisation carried out the discrimination, then it is a good idea to name the employee as a respondent in legal proceedings, as well as the organisation itself. Mr Chagger had tried to resolve the issues surrounding his dismissal directly with Abbey National and his manager (Mr Hopkins) through the company's internal grievance procedures. However, his issues were neither taken seriously, nor investigated promptly, and were simply dismissed out of hand. Mr Chagger finally escalated the matter to the Employment Tribunal by initiating legal action on the grounds of race discrimination and unfair dismissal, naming both Abbey National and Mr Hopkins as respondents.
An organisation could defend against vicarious liability if it can satisfy the Employment Tribunal that it took all reasonably practical steps to prevent the discrimination. Abbey National was unsuccessful with such a defence. Amongst other things, the Tribunal found that Abbey National had not complied with the steps recommended in the statutory Code of Practice on Racial Policy in Employment, designed to ensure equal opportunity and to prevent racial discrimination. Abbey National was in breach of the Code of Practice by: failing to provide Equal Opportunity training to the managers it had assigned to hear and conclude on Mr Chagger's complaint; failing to implement monitoring procedures aimed at discovering and investigating any disparities between racial groups; failing to take allegations of race discrimination seriously; and failing to investigate the allegations promptly. Alongside a plethora of other relevant factors, the Tribunal concluded that Abbey National had discriminated against Mr Chagger on the grounds of race in respect of his dismissal.
If the organisation succeeds with its defence, the employee who has suffered the discrimination can still pursue his claim against the employee named as the respondent. The Tribunal found that Mr Hopkins personally desired Mr Chagger's employment to be terminated. He had pre-planned that Mr Chagger would be the employee that would be unfairly scored lower in the redundancy selection exercise and selected for redundancy. He had used the redundancy process as a vehicle to remove Mr Chagger from his position unfairly. Alongside a multitude of other relevant factors, the Tribunal also concluded that Mr Hopkins too had discriminated against Mr Chagger on the grounds of race in respect of his dismissal.
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Abbey National plc & Hopkins v Chagger [2208] and
Code of Practice on Racial Discrimination in Employment
