Labour & European Law Review Weekly Issue 424 17 June 2015
The Court of Appeal has held in CLFIS (UK) Ltd v Reynolds that an employer cannot be held liable for acts carried out by individual employees if they were not motivated by discrimination. That applies even if they relied on information from other employees who were motivated by discrimination.
Having worked for Canada Life as the chief medical underwriter for almost 35 years, Dr Reynolds started working as a consultant for the company in 1992. This arrangement was then terminated in December 2010 by Mr Gilmour, the company’s UK general manager, following concerns expressed in a report about her performance by two managers. The managers did not recommend Dr Reynold’s dismissal, but Mr Gilmour understood that was the logical consequence of what they had said.
Given his own knowledge of Dr Reynolds, combined with the views expressed by the two managers, Mr Gilmour decided that Dr Reynolds could not help take the business forward. She brought a claim for age discrimination.
Tribunal and EAT decisions
The tribunal concluded that the reason that the company terminated the consultancy agreement was not connected to Dr Reynolds’ age, but arose instead from Mr Gilmour’s genuinely held belief that she could not provide the services of a chief medical officer in the way that the company wanted. Although a reluctance to embrace change is a characteristic sometimes attributed to older people, Mr Gilmour’s belief was based on the fact that he had known her for many years and was aware of her personal circumstances. As such, there was nothing inherently discriminatory in his decision to terminate her contract.
Although the EAT accepted the tribunal's finding that Mr Gilmour was the only decision‑maker it found that his decision had been influenced by others, including the two managers. The tribunal should therefore have examined the mental processes of the others to see if they were based on Dr Reynolds’ age.
Decision of Court of Appeal
The Court of Appeal held that, had the decision to dismiss been made jointly by Mr Gilmour and others, the tribunal would have had to consider the motivation of all those responsible, because if any of them had a discriminatory motivation, that would be sufficient to taint the decision. However, it was clear in this case that Mr Gilmour had made the decision to dismiss on his own. Although it was now being argued that he had been influenced by information supplied by other employees whose motivation was allegedly discriminatory, the Court of Appeal held that there were two problems with that argument.
Firstly, under the legislation, employers can only be held liable in circumstances where an individual employee or agent (for whom that employer is responsible) had carried out an act which satisfied the definition of discrimination. It must be shown, therefore, that that individual was motivated by the protected characteristic. There was nothing in the law whereby that act could be said to be discriminatory even though someone else was motivated by discrimination. Otherwise an employee in Mr Gilmore's position could potentially be made individually liable for assisting an act of discrimination despite not having any discriminatory motivation.
Secondly, the tribunal focused solely on Mr Gilmour because he was the only person identified by Dr Reynolds in her application to the tribunal. She had not alleged during the hearing that either of the two managers had been motivated by age, nor did she provide any evidence of discrimination. The tribunal could not therefore be criticised for failing to address a case that was never advanced.
This judgment does not necessarily mean that employers can hide behind a decision made by a manager if it was based on discriminatory allegations as they are still liable for the acts of employees committed in the course of employment. Instead it says that the act of discrimination may not be the ultimate decision for the dismissal. Employees must therefore pay close attention to time limits because the date of dismissal may be much later than the discriminatory act (such as the report in this case) which they are partly relying on. The time limit runs from the date of the act of discrimination not from the date of dismissal that arises from it.