440: Employee dismissed for using offensive term during race awareness training awarded over £470,000 in compensation

In Borg-Neal v Lloyds Banking Group plc, an employee who was dismissed for using an offensive racial term during a race awareness training session was awarded compensation of over £470,000 for unfair dismissal and disability discrimination.

Mr. Borg-Neal was dismissed by Lloyds Bank for using the N-word at a racial awareness training session. Following a hearing in June 2023, his claims of unfair dismissal and discrimination on grounds of disability were upheld by the Employment Tribunal, which concluded that the way he had misused language was consistent with his dyslexia and that it had not been reasonable to dismiss him in all the circumstances.

At the remedies hearing, the Tribunal issued several recommendations to Lloyds Bank and awarded Mr. Borg-Neal over £470,000 in compensation:

£98,553 for past loss of earnings, pension and benefits up to the hearing date

This included £82,120 in loss of earnings as well as compensation for pension benefits, loss of Lloyds shares and beneficial staff mortgage. There was no argument in this case about mitigation of loss since it was agreed that Mr. Borg-Neal had not been fit for work since his dismissal.

£295,112 for future loss of earnings and benefits

This element included future loss of earnings, pension, death-in-service benefit, and private health insurance, calculated on the basis that it would take up to two years for Mr. Borg-Neal to return to work due to his poor mental health caused by the dismissal. At that point he would be 61 and unlikely to secure a reasonably paid full-time position, particularly given the obstacles of his age, poor health, and dismissal for gross misconduct.

£15,000 for injury to feelings

This award was made in the middle of the Vento bands (a range of £9,900 to £29,600) to reflect Mr. Borg-Neal’s shock, hurt, and humiliation as well as the loss of a job which he loved.

£3,000 in aggravated damages

Aggravated damages were awarded because of Lloyds Bank’s resistance to reinstatement which included submitting a document to the Tribunal that distorted the liability judgment, used selective quotes and ‘rubbed salt in the wound.’

£23,000 for personal injury

The Tribunal awarded £23,000 for severe depression and anxiety caused by the circumstances of Mr. Borg-Neal’s dismissal. This also reflected the expectation that he would recover about a year after the Tribunal proceedings with the correct treatment.

5% Uplift for failure to follow Acas Code

A 5% uplift was applied to the unfair dismissal compensatory award and discrimination compensation due to the Bank’s failure to follow the Acas Code. Most notably, there had been delays in the investigation and the Bank had failed to notify Mr. Borg-Neal promptly that there had been a complaint about him.

Recommendations for Lloyds Bank

• To circulate the Tribunal’s liability judgment to all UK Board members;
• to note on Mr Borg-Neal’s records that a Tribunal had found his dismissal to be unfair and discriminatory, with a link to the liability decision;
• to inform the Financial Conduct Authority that the Tribunal had found his dismissal to be procedurally and substantively unfair and discriminatory, with a link to the judgment; and
• to provide wording for a neutral reference.

Although likely to be appealed, this remedies decision illustrates the various elements of compensation which may arise in unfair dismissal and discrimination cases, including loss of career earnings, injury to feelings, aggravated damages, personal injury, and loss of pension and other relevant benefits and expenses. In a complex case such as this, Tribunals will also look at the overall sum awarded and ensure that there is no double recovery because of overlap between the different heads of damage, for example, past loss of earnings under both unfair dismissal and discrimination law. The sums awarded will also be subject to added interest plus grossing up for tax as necessary.