Employment Law Case Update: Redundancy or Discrimination

Identifying and documenting the true reason for dismissing an employee can go a long way when it comes to defending a tribunal claim against you, and ensuring that you are not being discriminatory at any step along the way can help even further.  Our Employment Law team today reviews the case of Coulson vs RentPlus UK Ltd, where the Employment Tribunal considered whether the redundancy of a female employee was the true reason for dismissal or whether it was a case of discrimination. 

Susan Coulson, aged 59, was employed as a senior executive by Rentplus from 2015 until her dismissal in August 2018.  She had worked in the industry for 20 years and was earning £95,000 per year, plus an annual vehicle allowance of £5,000.  A new chief executive was appointed in 2017, at which stage, Ms Coulson states, she began to be ‘frozen out’, was ‘marginalised’ and did not develop the same close relationship that she did with his predecessor.  The all-male board instructed her that costs needed to be cut and gave her the ultimatum to either take a £35,000 pay cut or move 250 miles to position in another office.

Ms Coulson was concerned that due to her age she would not be able to secure another position and so declined both options. She was therefore dismissed, with Rentplus claiming that she was being made redundant as there were no alternative posts at the same level for her. Ms Coulson argued that this could not have been the case as the company then went on to expand dramatically, doubling the number of staff. 

Ms Coulson subsequently brought claims for unfair dismissal and sex discrimination against Rentplus.  The company argued that there was no longer a need for employees at Ms Coulson’s level, that her responsibilities could be completed by others and that their request for her to either move or take a pay-cut was reasonable. 

The ET ruled in Ms Coulson’s favour, stating that due to the ultimatum presented to her by the board, she had been placed in a ‘perilous’ position as she was less likely to find an alternative role at her level due to her age.  They went on to state that her situation was made even more precarious than a comparable man as “ageism is worse for women than men, and she would have the risk of double prejudice as a woman” and that clearly the all male board “undervalued her contribution and ability by reason of her gender, in a way they would not if she had been male”. 

With this in mind, the ET ruled that redundancy had not been the reason for dismissal and that the company purely wished to remove Ms Coulson from her role, not providing enough evidence to dispute that the true reason for dismissal was her gender.  Rentplus will now be required to pay £43,410.00 as compensation for unfair dismissal and £20,721.92 for her sex discrimination claim. 

This case delivers an important lesson for employers when considering the reasons for dismissing an employee, particularly when considering redundancy.  A tribunal will require you to prove that you have not been discriminatory towards an employee so when embarking on any dismissal it is vital that you follow a fair procedure, keep a paper trail and take care when managing employees with a potential protected characteristic. 

If you have any questions regarding this article, you can call our Employment team today on 023 8071 7717 or email employment@warnergoodman.co.uk.

This was previously part of our weekly Employment Law Newsletter. If you would like to subscribe, please email us at events@warnergoodman.co.uk or just fill in our subscription form.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.