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Rank Nemo (DMS) Ltd and ors v Coutinho

Ex-employees can claim protection against acts of discrimination and victimisation by a former employer after their relationship has come to an end. In Rank Nemo (DMS) Ltd and ors v Coutinho, the Court of Appeal held that an ex-employee could claim victimisation against a TUPE transferee for failing to pay him the compensation awarded to him for race discrimination and automatic unfair dismissal against the transferor company.

Basic facts

Mr Coutinho worked for Vision Information Services (VIS) until his dismissal for redundancy in March 2004. A few months later the company transferred under TUPE (Transfer of Undertakings (Protection of Employment) Regulations) to Rank Nemo (DMS) Limited.

Mr Coutinho brought a claim of automatic unfair dismissal and race discrimination in a tribunal and was awarded over £72,000 in compensation. Liability for the award passed to Rank Nemo under TUPE, but the company failed to pay it, even after Mr Coutinho obtained a county court order to enforce the award (as tribunals cannot enforce their own judgments) at the end of 2006.

Mr Coutinho lodged a tribunal claim on 30 April 2008 against Rank Nemo arguing that its failure to pay the award amounted to post-termination victimisation.

Tribunal and EAT decisions

The tribunal decided that it had no jurisdiction to consider the victimisation claim, because it was really a question of enforcement of his award, something it could not deal with. It also decided there was no link between the potential victimisation claim and the less favourable treatment he claimed he had suffered.

The EAT, however, allowed the appeal saying that the central issue was not enforcement and that there was a link between the acts that Mr Coutinho complained about and the proceedings. It concluded that the order to pay him compensation was “inextricably linked to the employment relationship”.

Arguments on appeal

Rank Nemo appealed, arguing that Mr Coutinho’s claim of victimisation was simply another way of asking the tribunal to enforce his award, which it did not have jurisdiction to do. It also argued that it could not have victimised him because he no longer worked for them, nor had he recently been employed by them.

For his part, Mr Coutinho argued that he had been treated less favourably than other creditors who had not brought claims against the company as they had been paid. He had already proved that the company had discriminated against him in the past, and the failure to pay the award was an act of continuing discrimination.

Court of Appeal decision

And the Court of Appeal agreed with him.

It distinguished the case of D'Souza v Lambeth LBC, saying that it was a complaint about a failure to honour an order for reinstatement (as opposed to compensation). Mr D'Souza had only one statutory remedy available to him, and could not claim victimisation under the legislation.

It also rejected the idea that his claim must fail because the tribunal had no power to enforce its decisions. Mr Coutinho had not brought his complaint to enforce either the tribunal judgment or the county court order. Instead, he had brought it because Rank Nemo’s failure to comply with the judgment constituted unlawful discrimination, and he had a specific right not to be victimised. This right was not lost just because he was also a judgment creditor.

Equally, his status as a judgment creditor did not mean he had severed all links with his past employment and as a result, lost all his statutory protection from victimisation. In any event, his claim was not based solely on the employer’s failure to pay the judgment debt.

The case therefore needed to go back to a tribunal to look at why Rank Nemo had not paid the award nor obeyed the county court order. If it could be shown (or inferred) that it was because Mr Countinho had brought a claim against the company, that could establish the necessary link to his previous employment relationship with the company to support his claim for post-termination discrimination.