We deal with a lot of Settlement Agreements between employers and departing employees, and often an agreed reference forms part of the deal. Following on from our recent workshops on Settlement Agreements, and Nicola’s article last month on myths about Settlement Agreements, we now look at a recent case highlighting some of the issues that can occur when an employer strays from the agreed reference in a Settlement Agreement.
The recent case of Pnaiser v NHS England and Coventry City Council concerned whether a negative reference, and the subsequent withdrawal of a job offer because of that reference, amounted to discrimination arising from disability.
Ms Pnaiser was employed by Coventry City Council and had significant absences from work due to a medical condition which amounted to a disability under the Equality Act 2010. She was made redundant by the Council and signed a Settlement Agreement which included an agreed reference. Ms Pnaiser was later offered a job with the NHS, subject to satisfactory references. One reference, which was obtained from a Dr Fleming, mentioned that she had undergone surgical procedures, causing two occasions of absence. When the NHS requested a reference from the Council, they received a reference in the form that had been agreed in the Settlement Agreement. The reference was sent by Ms Pnaiser’s former line manager, Ms Tennant, with an offer to discuss the matter further. Professor Rashid, who had interviewed Ms Pnaiser, subsequently telephoned Ms Tennant.
Professor Rashid said Ms Tennant told him that Ms Pnaiser had had significant time off work, that she would not employ Ms Pnaiser in the role and that she did not think Ms Pnaiser would be able to undertake the role.
The NHS withdrew the job offer, and Ms Pnaiser brought claims of discrimination arising from disability against the NHS and the Council (the Respondents).
Discrimination arising from disability occurs when: A treats B unfavourably because of something arising in consequence of B’s disability. A will not be liable if it can show the treatment is a ‘proportionate means of achieving a legitimate aim’ (neither Respondent raised this argument in this case). There will be no discrimination arising from disability if A can show that it did not know, and could not reasonably have been expected to know, that B had the disability.
The Council conceded that they were aware of Ms Pnaiser’s disability. The Employment Tribunal found that Professor Rashid, and therefore the NHS, ought to have known of Ms Pnaiser’s disability because of the comments in Dr Fleming’s reference, Ms Tennant’s mention of significant absence and Professor Rashid’s own knowledge and understanding. Ms Pnaiser’s claims, however, were dismissed. The Tribunal found that she had failed to shift the burden of proof onto either Respondent to prove that their treatment of her was not discriminatory.
Ms Pnaiser appealed to the Employment Appeal Tribunal. The EAT allowed Ms Pnaiser’s appeal and found she had been subject to unlawful discrimination. The EAT found that the Tribunal had set an “impermissibly high hurdle” by requiring Ms Pnaiser to show that the only inference that could be drawn was a discriminatory one before it could conclude that the burden of proof shifted to the Respondents. The EAT said that the question should have been whether the absence was consciously or unconsciously a reason in Ms Tennant’s mind for giving the negative reference. The EAT felt that in this case, it had been.
This case highlights some of the risks faced by employers in straying from the reference that has been agreed as part of a Settlement Agreement and in giving verbal references. Prospective employers can find themselves in a difficult position when they receive a negative reference about a potential new employee which causes them to consider withdrawing the job offer, but which may also lead to claims of discrimination.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).