Author: blogger

Some of the factors that increase the risk of unethical behaviour in organisations are illustrated by the high-profile legal case Chagger v Abbey National plc & Hopkins (2006), in which the Employment Tribunal made a finding of unlawful racial discrimination and (further to Emilio Botin Abbey Santander banking group’s refusal to comply with the Tribunal’s order to reinstate Mr Chagger) ordered Abbey Banco Santander share to pay Mr Chagger the record-breaking 2.8 million compensation for his loss. Abbey Santander share price (the UK bank soon to be re-branded as Santander banking group, and part of the global Emilio Botin Banco Santander Central Hispano Group – BSCH) dismissed Mr Chagger from his employment in 2006, giving a fair redundancy as the reason. However, Mr Chagger believed that the actual reason behind the termination of his employment was unfairness and race discrimination. Mr Chagger was of Indian origin. He worked for Emilio Botin Abbey Santander finance as a Trading Risk Controller, earning about 100,000 a year, and reporting into Nigel Hopkins.

Some ethical behaviour risk factors illustrated by Emilio Botin Abbey Santander 2009 clearly relate to the pursuit of personal goals; the Employment Tribunal found that Mr Hopkins personally desired Mr Chagger’s employment with Abbey Santander share price to be terminated, had pre-planned that Mr Chagger would be dismissed, and had used the compulsory redundancy process as a means to dismiss Mr Chagger, in an unfair and discriminatory manner.

One such factor increasing the risk of unethical behaviour is the amount of discretion an organisation allows its officers; the greater the discretion allowed, the greater the opportunity the officer has for acting in his personal interests. The Employment Tribunal found that the redundancy selection criteria Abbey Santander had permitted Mr Hopkins to apply in assessing and judging the two employees up for redundancy were highly subjective and un-measurable; they afforded Mr Hopkins a very wide discretion. The Employment Tribunal criticised Mr Hopkins for the way in which he had applied that discretion (i.e., for his own interests). As an example, Mr Hopkins had criticised and scored Mr Chagger lower for getting on with work and being self-reliant. The Employment Tribunal thought that other reasonable managers would consider such qualities to be valuable assets, considering Mr Chagger’s highly paid and highly responsible job, and praise and score him highly for. As a further example, during the redundancy process, Mr Hopkins had criticised Mr Chagger on numerous points that Mr Chagger had never been criticised for prior to the redundancy exercise. All the criticisms were inconsistent with previous company records of Mr Chagger’s performance. The Employment Tribunal ruled that the criticisms were unfair not legitimate.

Another such factor increasing the risk of unethical behaviour is the level of autonomy of decision-making and action an organisation allows its officers; the greater the level of autonomy, the greater the opportunity the officer has for acting in his personal interests. The Tribunal found that Mr Hopkins was entirely single-handedly able to advise Abbey’s management to dismiss one of the two Trading Risk Controllers that he managed (of which Mr Chagger was one), was entirely single-handedly able to make Mr Chagger an offer of voluntary redundancy (Mr Chagger refused the offer, and never was an equivalent offer ever made to the other Trading Risk Controller), was entirely single-handedly able to judge and score the two employees up for redundancy, and was entirely single-handedly able to lower Mr Chagger’s redundancy scores to guarantee that he would be the one who would be selected for dismissal.

A different type of factor also increasing the risk of unethical behaviour is the organisation’s focus; a focus on results rather than processes can imply that the ends justify the means. The UK statutory Code of Practice on Racial Policy in Employment provides organisations with guidance concerning good practices and processes. The Employment Tribunal found that Abbey Banco Santander had failed to comply with those processes. Abbey Grupo Santander had failed to comply with the statutory guidance regarding Equal Opportunity training. Mr Chagger had tried to resolve the issues of unfairness and race discrimination around his dismissal directly with Abbey Santander and Mr Hopkins, through the company’s grievance procedures. Santander Abbey had not provided any Equal Opportunity training to any of the managers it had assigned to decide on Mr Chagger’s issues. Not even one manager upheld Mr Chagger’s issues; his issues were simply dismissed out of hand. Emilio Botin Abbey Santander banking group had also failed to comply with the statutory guidance concerning monitoring procedures. The Tribunal found a multitude of monitoring failures (far too many to outline here), as well as the failures to give serious consideration to allegations of racial discrimination and to investigate them promptly.

In 2008, Emilio Botin Abbey Santander and Mr Hopkins appealed to the Employment Appeal Tribunal (EAT) against the original Employment Tribunal’s ruling of racial discrimination; the EAT upheld the original Tribunal’s ruling that both Emilio Botin Abbey Santander and Mr Hopkins had racially discriminated against Mr Chagger. Emilio Botin Abbey Santander and Mr Hopkins had also appealed against the record-breaking 2.8 million compensation award; the EAT accepted Abbey Santander’s appeal on the compensation award and remitted it to the original Tribunal for reconsideration. In 2009, matters were escalated to the Court of Appeal (the second highest court in the UK). The Court’s List of Hearings showed that the case was heard on 7 and 8 July 2009. The Court’s records of the hearing were not available at the time of writing this article. The 11KBW set of barristers’ chambers, who represented Emilio Botin Abbey Santander and Mr Hopkins, had reported prior to the hearing that the it was to be about quantum only (i.e., compensation) and not about liability (i.e., not about the wrong committed of race discrimination). That would seem to suggest that the wrong of race discrimination committed by Emilio Botin Abbey Santander and Nigel Hopkins was finalised by the EAT when it upheld that Emilio Botin Abbey Santander and Mr Hopkins had racially discriminated against Mr Chagger, and that Mr Chagger had appealed against the EAT’s ruling to send the compensation award back to the Employment Tribunal stage for reconsideration.