More shock news: fish fail to see water

This is one of a series of short posts in which we’ll look at an Employment Tribunal decision and try to learn some lessons: much better than going through the ET ourselves and learning the hard way!

As always, it is fabulously easy to be critical when looking back. So, if anyone involved in the case reads this post, I admit to using the luxury of 20:20 hindsight.

Be warned that the Employment Tribunal decision in this case includes language that some people may find offensive.

In Rathod v Pendragon Sabre Limited [2021], the Tribunal found that Pendragon had unfairly dismissed Mr R and had breached his contract of employment by dismissing him without notice.

However, the Tribunal found that Mr R had contributed 50% to his dismissal through his own conduct and that there was a 25% chance that he could have been fairly dismissed for that conduct if Pendragon had acted fairly. The combined result was that Mr R would only receive 50% of his basic unfair dismissal award and 37.5% (75% of 50%) of his compensatory award.

This is an especially saddening case. The facts found by the Tribunal can be summarised briefly as follows:

• Pendragon is a car dealer. Mr R is of Asian origin.

• When Mr R joined Pendragon’s Porsche franchise as sales executive in 2018, the culture in the sales team was laddish, crude and immature. It included “deliberate and aggressive expressions of misogyny, hostility towards homosexuality and racism”.

• In an effort to fit in, Mr R went along with this culture and contributed to it, even though he was himself a target of racist abuse.

• The sales managers were aware of the culture, did nothing to curb it and participated in it to some extent.

• After returning from a period of furlough in 2020, Mr R complained to a manager that he was sick of the “banter”. The manager was initially dismissive, perhaps influenced by his knowledge of Mr R’s own participation in it. When approached again by Mr R, the manager simply advised him to speak to the others concerned or to “make it formal”.

• Eventually, after a period of ill-health absence, Mr R raised a formal grievance. This was investigated and substantially upheld. The main perpetrator resigned before any disciplinary action could be taken.

• The evidence considered in the grievance proceedings (and, later, in the Employment Tribunal) included sexually and racially offensive WhatsApp messages sent to the main perpetrator by Mr R.

• As a result of those messages, Mr R was disciplined and ultimately summarily dismissed for gross misconduct.

• The dismissing manager’s comments to Mr R included:

- “Banter is okay until it's not okay”; and

- “When it comes to harassment of a sexual and racial nature, as a company we have zero tolerance towards it. My view and my conclusion is I have no alternative to dismiss you from the business today.”

• Despite the "zero tolerance" claim, there was no evidence of any wider investigation of conduct in the sales team having been conducted.

For me, the top 5 lessons to learn from this case are:

1. Both sides often lose

On the face of it, Mr R won this case. In reality, both sides lost. Mr R’s compensation was very substantially reduced as a result of his own conduct. He was legally represented and (on the assumption that he was funding his own case) his costs probably ate heavily into (or exceeded) his compensation.

More importantly, having already suffered from stress-related symptoms as a result of the racially-aggravated abuse he had experienced, he had to live through the experience all over again. This included being cross-examined by Pendragon’s counsel.

In addition, Mr R’s own racially and sexually offensive comments were used against him (even though the Tribunal accepted that he had made them in an effort to fit in) and were exposed for the world to see.

The only winners in this case were the lawyers. Surely, a negotiated (or mediated) settlement at an early stage would have provided a better outcome for everyone else?

2. Fish can’t see water

Pendragon missed a number of opportunities to prevent this situation developing. Perhaps the most important of all was the opportunity to nip the toxic culture in the bud. Sadly, the sales managers were not only aware of the culture, they were swimming in it – so they saw no reason to do anything about it.

Even when the situation came to the attention of more senior management, it seems that nothing was done at the time to tackle the fundamental cultural issues in the sales team. The main perpetrator resigned and Mr R was dismissed – that was all.

3. “Making it formal” is not always best

In this case, as in many others, management were reluctant to do anything unless the concerned employee raised a formal grievance. Formal procedures are very blunt instruments. They tend to entrench people into polarised positions. Very often, as in this case, the result is a long internal process, followed by resignation or dismissal, followed by legal proceedings.

But what if a different approach had been taken? What if management had said to Mr R something along the lines of:

“Thank you for raising this with me. We were aware of some issues within the team and this confirms that we need to consider them. You have the right to raise them in a formal grievance if you wish.

However, first we’d like to see if we can deal with the issues informally. We’ll need to give some thought to how we do it, but one idea is that we engage the team in a discussion session, Chaired by a neutral external person, about what is (and what is not) acceptable behaviour in the context of work.

The aim would be to identify some standards of behaviour that we can expect people to comply with for the future. We wouldn’t need to disclose that you had raised this. Does that sound like a sensible way forward to you?”

I’m not suggesting that this approach would have been easy. However, it would at least have provided an opportunity a draw a line under the past and work towards promoting (and if necessary enforcing) acceptable standards of behaviour for the future.

4. Zero tolerance can be dangerous

Part of the basis for Mr R’s dismissal was that Pendragon purportedly had “zero tolerance” when it comes to harassment of a sexual and racial nature. On the face of it, this might be regarded as commendable. However, in reality it is dangerous for two main reasons:

• It risks resulting in knee-jerk reactions from managers: in this case it was translated as meaning that the use of sexist and racist language must result in dismissal, whatever the context. However, there was no evidence that the recipients of the messages were in any way offended by the sexist and racist language.

• It risks being applied inconsistently and selectively. In this case, it was patently not true that the company had a zero tolerance approach to harassment of a sexual and racial nature. Management were aware of the wider issues in the sales team and did nothing about them.

5. “Banter” is often a euphemism for abuse

There is, of course, a place for wit and humour in the workplace. If unchecked, however, gentle humour can descend into humiliating and offensive conduct. The use of the “banter” label should in my view be a red flag for management that something might be going badly wrong.

There are many other lessons that can be learned from this case. I would be interested to hear of any other points that occur to you.

Image: NPS photo - Larry Basch, Public domain, via Wikimedia Commons