Rank Nemo (DMS) Ltd & Ors v Coutinho

Post-termination victimisation may in principle be justiciable where a former employer’s non-payment of an employment tribunal compensation award is alleged to be less favourable treatment because of proceedings under the Race Relations Act 1976. The tribunal’s lack of power to enforce its judgment does not itself remove jurisdiction. Nor does judgment-creditor status sever every link with former employment. The tribunal must investigate the alleged reason for non-payment, comparative treatment, the detriment or lost employment benefit, and whether a sufficiently close or proximate connection with the former employment exists. A claim based on failure to reinstate is distinguishable where unfair-dismissment legislation supplies an exclusive statutory remedy.

Mr Coutinho had been employed by Vision Information Services (UK) Limited until his redundancy in March 2004. The undertaking transferred to Rank Nemo under the Transfer of Undertakings Regulations. An employment tribunal later awarded him more than £72,000 for automatic unfair dismissal and racial discrimination. The award was registered and a county court order was obtained, but it remained unpaid.

Mr Coutinho presented a further complaint alleging victimisation, relying on the non-payment and on less favourable treatment compared with other creditors. The employment tribunal declined jurisdiction. The Employment Appeal Tribunal allowed his appeal in UKEAT/0315/08/LA, holding that the claim should proceed. Rank Nemo appealed, raising the jurisdictional question whether the complaint was an enforcement claim or a potentially justiciable post-termination victimisation claim.

1. Disposition. The appeal was dismissed unanimously. Lord Justice Mummery gave the leading judgment, with Lord Justice Rix and Lord Justice Moses agreeing. The Employment Appeal Tribunal was right that the employment tribunal had erred in rejecting the claim for want of jurisdiction.
2. At a jurisdictional challenge, the facts alleged in the complaint had to be assumed in the claimant’s favour, although disputed. Rank Nemo, as the transferee under Regulation 5(2) of the Transfer of Undertakings Regulations, stood in the shoes of the former employer for the relevant liabilities. The claim therefore could not be rejected solely because Rank Nemo was not the employer which carried out the original discriminatory acts.
3. The complaint was not an attempt to enforce either the employment tribunal award or the county court judgment. It alleged that non-payment was discriminatory because it was motivated by retaliation for protected proceedings, involved less favourable treatment than that given to other creditors, and caused loss of an employment benefit or other detriment. The enforcement mechanism in section 15(1) of the Employment Tribunals Act 1996 did not exclude the separate statutory right not to be victimised under the Race Relations Act 1976.
4. The House of Lords decision in D’Souza v Lambeth LBC, [2003] UKHL 33, was distinguishable. Failure to reinstate after a reinstatement order had its own express and specific statutory remedy under the unfair-dismissment legislation, leaving no room for a further victimisation claim based on the failure to reinstate. The present case concerned non-payment of compensation and did not necessarily fall within that exclusive-remedy reasoning.
5. The employment tribunal had to investigate why the award and judgment debt remained unpaid, whether the reason was retaliation for the earlier discrimination proceedings, how comparable creditors were treated, what benefit or detriment was alleged, and whether the circumstances disclosed a sufficiently substantial, close or proximate connection with the expired employment. Subject to double recovery, enforcement of the judgment and damages for a distinct victimisation loss could in principle coexist.
6. The claim form was to be accepted and the matter remitted to the employment tribunal for investigation and adjudication according to law.

• Court of Appeal (Civil Division) dismissed Rank Nemo’s appeal on 20 May 2009 and upheld the EAT’s conclusion that the victimisation claim should be accepted.
• Employment Appeal Tribunal allowed Mr Coutinho’s appeal on 16 September 2008 in UKEAT/0315/08/LA, holding that the claim should proceed rather than be rejected at the jurisdictional stage.
• Employment Tribunal refused to accept the victimisation complaint on 2 May 2008 and refused a review on 20 May 2008.