In a high profile employment dispute that highlights the enormous risks facing businesses that behave unlawfully, Santander UK (formerly called Abbey National) seems to have conceded that it did racially discriminate against a former employee. It now seems to be working on damage limitation; it appears to be fighting a rearguard action against the record-breaking £2.8 million compensation order issued against it.
Abbey National was the UK building society turned high-street bank. It was bought by Banco Santander in 2004, who changed its name to Santander UK in January 2010. The Santander UK name was unveiled in London together by the McLaren Mercedes F1 racing team driver Lewis Hamilton and Emilio Botin (the Banco Santander chief) in a promotion stunt.
Balbinder Chagger was an employee of Indian descent whom Abbey Santander UK dismissed from his post in 2006. Abbey Santander UK claimed the dismissal was the result of an entirely fair compulsory redundancy process. Balbinder Chagger, on the other hand, alleged that the real reasons behind his dismissal were unfairness and race discrimination.
In 2006, a London Employment Tribunal found that Abbey Santander UK had racially discriminated against Mr Chagger.
The Employment Tribunal then ordered Abbey Santander UK to reinstate Mr Chagger in order to remedy its unlawful acts. Abbey Santander UK refused to comply with the order, for reasons that the Employment Tribunal found as being unsatisfactory. The Employment Tribunal went on to order Abbey Santander UK to pay Mr Chagger the record-breaking £2.8 million compensation award.
Mr Chagger's compensation dwarfed the £1.4m awarded to Julie Bower, a former Schroders worker, for sex discrimination in 2002. The EAT ordered that the amount of compensation awarded against Abbey Santander UK should be reassessed. Lawyers have said that while the £2.8 million award is likely to be reduced, Mr Chagger could still expect a seven-figure payout.
High-value employment disputes tend to get settled in private, well before reaching a formal and public court hearing. Abbey Santander UK's decision to proceed to a public court hearing, given the reputational risk involved, appears to be astonishing.
Abbey Santander UK appealed to the Employment Appeal Tribunal (EAT) against the Employment Tribunal's ruling that it had racially discriminated against Mr Chagger. In 2008, the EAT upheld the original Employment Tribunal's finding of race discrimination and rejected Abbey Santander UK's appeal.
Abbey Santander UK did not appeal against the EAT's ruling on race discrimination and so, appears to have conceded that it did discriminate against Mr Chagger on the grounds of race.
More information
- Court of Appeal judgement: Chagger v Emilio Botin Abbey Santander share price
- What Drives Unethical Behaviour? Lessons from Lewis Hamilton and Lego bridge featuring Santander UK
