The law says that once a worker has established facts from which discrimination could be inferred, the burden of proof passes to the employer. In Base Childrenswear Ltd v Otshudi, the Court of Appeal held that, if an employer initially hides the true reason for dismissing someone, then that, in itself, is enough to shift the burden of proof.
Ms Otshudi, who is of black African ethnicity, was told that she was being dismissed for redundancy which she attributed to discrimination. In response, her manager claimed to be very upset and dared her to repeat the allegation.
She brought tribunal claims of unfair dismissal and discrimination (later amended to harassment) on the ground of her race. The company initially claimed that she had been dismissed “purely for financial/economic reasons”, but later lodged amended grounds that the real reason was suspected theft. It had not given this reason at the time “in order to minimise the potential confrontation”.
Tribunal and EAT decisions
Dismissing the company’s defence, the judge held that it had given a false reason for her dismissal because it knew it could not prove the allegation, not least because it had not carried out an investigation. Nevertheless it had persisted in this lie.
The judge was also sceptical as to why the company had not volunteered the “true” reason for her dismissal when Ms Otshudi initially brought proceedings. Despite claims by her manager that he wanted to avoid a confrontation, he had reacted in an “intimidatory” way to her allegation.
These matters indicated that the manager was trying to cover up a dismissal which was “tainted by considerations of the Claimant’s race”. The tribunal therefore concluded that, in all the circumstances of the case, it was appropriate to infer that there was a racial element that had contributed to or caused her dismissal.
The company appealed unsuccessfully to the Employment Appeal Tribunal. It appealed again arguing that the fact that Ms Otshudi was black and had been dismissed only raised the possibility of discrimination. The facts were not, in and of themselves, indicative of a racial motivation. Alternatively, it argued that even if they were, the tribunal’s reasoning was flawed because it had failed to make a clear finding under section 136 of the Equality Act that she had been dismissed because the manager fabricated the story that she had been stealing.
Section 136 states that if there are facts from which a court could decide, in the absence of any other explanation, that someone (such as an employer) contravened a section of the Equality Act, then the court must conclude that the contravention occurred. The employer then has to show that they did not contravene the relevant section.
Decision of Court of Appeal
Dismissing the appeal, the Court held that although the tribunal did not specifically refer to section 136 in its reasoning, it was clear that it intended to apply the burden of proof provisions.
As such, once the tribunal had concluded that race had played a part in the manager’s decision to dismiss Ms Otshudi based on the manager’s persistent lying, the burden of proof then transferred to the company to show that it had not engaged in unlawful harassment of her.
As the manager had reached the “adverse conclusion” that Ms Otshudi was stealing, the question was why he did so on the basis of such flimsy evidence. The implicit answer was that he was predisposed to believe that, as a black person or as an African, she was dishonest. In other words, he was influenced in coming to that conclusion by a stereotypical prejudice based on her race.
The facts of this case were quite unusual, but the Court of Appeal found that the original tribunal had been entitled to infer from the manager’s repeated lies about the real reason for dismissing a black employee that her dismissal was tainted by race discrimination.