Regarding the issue of race discrimination in the UK, employers must follow fair, objective and rational redundancy procedures lest the capacity to defend against accusations of discrimination is lost. In race discrimination cases the burden of proof is placed on the employee. If an employee can establish a prima facie case based on factual information suggesting there has been direct or indirect discrimination, then the burden of proof could shift to the employer. Then, unless the employer can disprove the discrimination accusation, the claimant will surely win the case. This concept is known as the "reverse burden of proof" and was introduced in 2003 with the introduction of section 54A as an amendment to the Race Relations Act 1976 ('RRA').



A landmark case of racial discrimination in the UK was Chagger v Abbey National plc & Hopkins of 2006, where the Employment Tribunal applied the reverse burden of proof provisions and also made an unprecedented compensation award of £2.8 million.

The wording of section 54A moves the burden of proof to the employer only in cases where there are allegations that the employer has committed an act of discrimination on grounds of race, ethnic or national origins. Discrimination on grounds of colour is not mentioned by the RRA 1976. In 2008, The Employment Appeal Tribunal (EAT) considered if Mr Chagger, the claimant in the Chagger v Abbey National plc & Hopkins case of 2006, was due the benefit of the burden of proof being reversed, despite having referred to discrimination on the basis of colour in his evidence before the Employment Tribunal.

The EAT's transcript of proceedings shows that Abbey National, part of the Banco Santander Group, employed Balbinder Chagger, of Indian origin, as a Trading Risk Controller, reporting into Nigel Hopkins. He earned a considerable amount, around £100,000 per year. In 2006, Abbey National swiftly dismissed Mr Chagger ostensibly for reasons of redundancy, in a situation where the pool of selection was he and a white female colleague. Abbey National selected Mr Chagger for dismissal based on criteria on which Mr Chagger scored lower in comparison with his white female colleague. Before his dismissal, Abbey did not supply Mr Chagger with a 'step one' letter as required under the statutory disciplinary and dismissal procedures. Consultations, however, were held with Mr Chagger. In the run-up to his dismissal Abbey awarded Mr Chagger a performance related bonus which was significantly lower than the previous year's amount. Mr Chagger attempted to resolve the issues surrounding his dismissal and bonus directly with Abbey National and his manager, Mr Hopkins, through the company's internal complaints and grievance procedures. However, his issues were dismissed out of hand. He then began legal action on the basis of race discrimination and unfair dismissal against Abbey National and Mr Hopkins.

The Employment Tribunal found, amongst other things, that Mr Chagger had been unfairly dismissed and that Abbey National and Mr Hopkins had discriminated against him on the grounds of race in respect of his dismissal. The Tribunal asserted that the dismissal was unfair given that Abbey National did not follow the relevant statutory procedures and because the redundancy exercise had been a pre-determined plan to remove Mr Chagger from his position; Mr Chagger had been picked on unfairly and the criteria used were too irrational, subjective and not measurable.

The dismissal was stained with race discrimination UK. The Tribunal mentioned a plethora of evidence supporting this notion such as the unfair redundancy process itself and Mr Chagger's victimisation in it; the lack of equal opportunities training for those employed in senior and middle management at Abbey; Abbey National's failure to reply to Mr Chagger's race discrimination questionnaire and failure to observe the relevant code of practice. Thus, the Tribunal applied the reverse burden of proof provisions in section 54A of the Race Relations Act 1976. Abbey National and Mr Hopkins were unable to convince the Tribunal that their reasons for their shoddy treatment of Mr Chagger were not a matter of race discrimination UK.

The Tribunal ordered Abbey to re-instate Mr Chagger in order to remedy its wrongdoing. Abbey, however, refused to comply with the Tribunal's order. The Tribunal then ordered Abbey to pay Mr Chagger the unprecedented £2.8 million in compensation for his loss on the basis that he had not been re-instated. This figure was based on an estimate of loss of earnings for the rest of his career.

Abbey National and Mr Hopkins appealed to the Employment Appeal Tribunal (EAT) against the verdict of race discrimination and the amount of the compensation award.

Essentially, with regards to Mr Chagger's plea, the EAT said it was clear that the discrimination meted out was based on race, colour and ethnic or national grounds. Once the relevant case law had been reviewed and the wording of the EU Directive examined, the EAT said it was inconceivable that the Race Equality Directive was not proposed to apply to discrimination on grounds of colour. While it was possible to discriminate on the grounds of race or ethnic origin without discrimination on the ground of colour, the reverse was not so; discrimination on the ground of colour which could not also properly be characterised as discrimination on the ground of race and/or ethnic origin was inconceivable. Thus, the EAT upheld the original Tribunal's findings of race discrimination and Abbey National's appeal on the race discrimination verdict failed.

Abbey National's appeal on the unprecedented size of the compensation award was accepted and the EAT sent back ('remitted') the compensation to the original Employment Tribunal for reconsideration on the basis of the likelihood of Mr Chagger leaving Abbey National's employment in any event.