At the end of May, the Employment Appeal Tribunal published its judgement in the case of the London Borough of Hackney v Sivanandan.The long-running case clarifies the way that tribunals award compensation, which has been misunderstood up to now
In 1999, Ms N Sivanandan applied for two different posts with the charity Hackney Action for Racial Equality, set up to promote good race relations in the borough and funded by Hackney Council. Sivanandan brought claims of sex and race discrimination because Hare failed to shortlist her for the two posts she applied for. She alleged that the failure was victimisation on the grounds of race in view of a past successful claim for race discrimination she had brought against the organisation.
The latest claims were brought against the Hare executive committee, Olivene Howell, the former director of Hare, and members of both interview panels, which included Ms White, who was an employee of the council. Sivanandan also brought claims against Hare and the local authority on the basis that, as employers of the alleged discriminators, they were vicariously liable for the acts of their employees.
Hare closed in 2003 - while the case was continuing - after a critical report was published by the Commission for Racial Equality.
The legal decisions
The tribunal dismissed the claims against the executive committee (as Hare was the correct respondent) but upheld the claims against the remaining respondents. It awarded Sivanandan £421,415 and said that all of the respondents, excluding White, were "jointly and severally liable" - meaning all parties were equally liable - for the compensation. At a previous hearing, White was ordered to pay £1,905 (including interest).
Hackney appealed against the finding that all parties were jointly and severally liable because tribunals had previously apportioned compensation between discriminators on the basis of the seriousness of the respective respondents' actions. Sivanandan also appealed that the award was too low. The Appeal Tribunal dismissed both of these appeals. It upheld the tribunal's decision that the award was joint and several, and said it was not appropriate to apportion liability between the respondents (albeit for different reasons).
Lessons for charities
This is an important reminder that charities can be responsible (ie vicariously liable) for discriminatory acts of their employees and that the compensation for discrimination is uncapped. The principle of joint and several liability means that, in the event of non-payment, the claimant can claim the entire amount from any respondent. This is more likely to be claimed from the charity than an individual, because of their financial resources - but not necessarily. Employees at charities should be aware that they might end up with personal liability for their actions if, for example, a charity is disbanded or insolvent.
To avoid facing such claims, charities should ensure they take reasonable steps to prevent discrimination. This includes having an equal opportunities policy and providing appropriate training, particularly to those involved in recruitment. Charities should also explicitly notify employees of their potential liability, which should prevent inappropriate behaviour arising in the first place.
Victoria Willson is a partner at Levenes Employment, third sector specialists