An alternative view on Canada Life v Reynolds
05 May 2015
Canada Life v Reynolds is an interesting case about the liability of employers and employees in discrimination cases.
Dr Reynolds worked as a consultant for Canada Life (having previously been their Chief Medical Officer). She was dismissed in 2006. She argued this was an act of age discrimination.
The Employment Tribunal disagreed. They concluded that Mr Gilmour, who made the decision to dismiss, came to that decision on the basis of a genuine judgment that Dr Reynolds was not providing services in the way Canada Life required and that this had nothing to do with her age.
On appeal to the Court of Appeal, Dr Reynolds argued that the tribunal had erred by focusing only on Mr Gilmour’s state of mind and not considering the extent to which his opinion had been tainted by the views of others, who had been motivated by discriminatory attitudes.
To draw back a bit from the facts, this is a example of a fairly common situation in the employment tribunal. How should a tribunal approach a case where the ultimate decision maker is innocent of any bias, but is misled by a less innocent informer?
Regulation 3(1) of the Equality (Age) Regulations 2006 may appear ambiguous:1
... a person ("A") discriminates against another person ("B") if on grounds of B's age, A treats B less favourably than he treats or would treat other persons
The Court of Appeal suggests that there are two ways of looking at this: the separate act approach and the composite approach.
In the separate act approach we treat the informer’s actions as separate to those of the decision maker. While in the composite approach we regard the informer’s discriminatory acts as being part of the ‘grounds’ of the decision to dismiss – thereby bring together the actions of the informer and the decision maker.
The difference is vital, because of the way that equality law assigns responsibility for acts of discrimination. An employer is liable for the actions of its employees (subject to the reasonable steps to prevent defence). And, in turn, an employee who creates a liability for their employer is personally liable.
This means, the Court of Appeal concluded, that under the the composite approach the decision maker, who had done nothing wrong, would be personally liable for the discriminatory act they had inadvertently been a part of.
This, the Court of Appeal found, would be unjust and they preferred the separate act approach. They unpacked this as follows:
- An informer makes a negative report on the claimant, motivated by a discriminatory bias.
- An innocent decision makes dismisses the claimant, on the basis of the tainted report.
- The informer’s biased report amounts to a detriment, on grounds of a protected characteristic.
- Therefore, if it is done in the course of the informer’s employment, the employer is liable for the consequences of the report, which might include dismissal.
- And the informer is also liable.
- The decision maker’s innocent decision to dismiss is also a detriment, but since it is not motivated by discriminatory bias, is not on ‘on grounds’ or ‘because of’ a protected characteristic.
- Therefore neither the decision maker or the employer is liable for it under the equality legislation.
Thus far, I think I agree with the Court of Appeal. I can see the common sense and pragmatism of simply saying ‘This dismissal was caused by someone’s bias, therefore it was discrimination’. But, once you start to unpack it, it does become problematic – particularly in relation to the personal liability of the decision maker.
But, I think there is another approach, at least with dismissal cases, which the Court of Appeal doesn’t appear to consider.
That is, to recognise that, although a company acts through its employees, it nonetheless acts. Someone who is dismissed by Acme Ltd, might be dismissed by Joe Bloggs, manager at Acme Ltd – but they’re also dismissed by Acme Ltd itself, as a corporate person.
That feels a little odd, in the context of discrimination cases, where we’re used to relying on the specific rules relating to the liability of employers and employees. But, nonetheless, I think it must be right – otherwise, for example, unfair dismissal law wouldn’t work. The Employment Rights Act lacks any employer / employee liability provision similar to that in the equality legislation. Nonetheless, we all agree that companies can dismiss people and be liable when they do.
This approach doesn’t work in lots of discrimination cases, because they really are about actions by the individuals a company employs, rather than the company itself. If your manager screams and shouts at you, that’s something that he’s doing, rather than something that the company is doing. And so the company can only be liable vicariously – hence the need for the employer / employee liability provisions.
But a company can dismiss people – and often does. And, surely one can look at that dismissal and ask ‘Was this because of the a discriminatory report?’
This undoubtedly creates some issues. Most obviously, how much influence does a biased report need to have on a dismissal in order to render that dismissal ‘because of’ a protected characteristic? But this is a well trodden path in case law – tribunals often have to consider such matters.
More significantly, does this get around the issue of liability on the part of dismissing manager? I’m not sure it does. Certainly, if both we treat the dismissal as being an action of both the company and the manager, both must be liable if either of them is.
You might, however, try to take a more granular approach. In one sense, a manager is not dismissing the employee at all – they can’t, only the employer can do so and the employer is the company. What the manager is doing is a series of actions leading up, and including the decision to dismissal, and then communicating that decision to the employee. At some crucial point, they are not acting as themselves, but as the company. If that’s right, they will avoid personal liability.
If all of this is right, it has some interesting implications. In particular, if a dismissal is ultimately the action of a company and not its managers, it means the reasonable steps defence is not available in dismissal cases.
The regs have been replaced by the Equality Act 2010 – but nothing turns on this since the relevant provisions are substantively the same. ↩