Manager with hepatitis C was unfairly dismissed in ‘sham redundancy’

Tribunal rules that employer did not make prospect of job loss clear after business hit financial difficulties

A business development manager who was living with a debilitating liver condition was unfairly dismissed by her employer because of her disability, an employment tribunal (ET) has ruled.

Carol Smith, who worked for cosmetics wholesaler Amalgamated Euro Products, was made redundant after the firm faced financial difficulties when it lost a major customer. The redundancy took place shortly after Smith had taken a number of days off work for medical appointments related to her condition.

The London South tribunal accepted that the firm was in financial difficulties, but ruled that the explanation for Smith’s redundancy was “not made out in the evidence”, and that her dismissal was an act of unlawful discrimination.

The tribunal also found in favour of the claimant for a breach of contract regarding an agreement to increase her salary, but a number of other claims of sex and disability discrimination and harassment were found to have been presented out of time.

Smith worked at Amalgamated Euro Products – a London-based distributor of health and beauty products – from 10 April 2013 until her dismissal on 6 April 2017. At the time of her dismissal, Smith held the position of new business development manager, and was working across a number of different brands.

Smith was diagnosed with hepatitis C in 2000. The tribunal heard she no longer has the condition following successful treatment, but ruled that at the relevant times, Smith was a disabled person and that the impact of her condition included pain, insomnia, fatigue and depression.

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The tribunal heard Smith rarely took sick days because of her condition, but between March and July 2016 she did take time off to attend regular hospital appointments. She informed her operations manager, Mike Mirzaee, who was also the business’s director, of her appointments, but did not disclose that she had hepatitis C.

Instead, Smith told Mirzaee she had a chronic illness that caused liver damage, and that her health was at risk of serious further deterioration.

In his evidence, Mirzaee said he was aware that Smith was attending a large number of hospital appointments but he did not know what they were for, and denied knowledge of her disability at the relevant times.

But the tribunal found Amalgamated Euro Products “ought reasonably to have known from the information provided that the [claimant] had a disability”, adding: “The respondent had constructive knowledge of a disability that was chronic, long-lasting and debilitative, with the prospect of becoming worse and even terminal, that the [claimant] required a large amount of time off to attend hospital appointments and that she wanted to work less hours because of her exhaustion/tiredness.”

Around the same time, in July 2016, the firm lost the business of a major supermarket. The tribunal heard it had already been losing money, and from August faced worsening financial difficulties. As a result, Mirzaee said the firm made a number of staff redundant.

The financial situation had not improved by December, and Mirzaee claimed he held a meeting with Smith where he advised her that her role might be made redundant. He told the tribunal that he advised Smith she could apply for a role as field sales manager or office manager, but she said she was not interested in either.

However, while accepting Mirzaee “mentioned in passing” the possibility of redundancy, Smith told the tribunal she was assured her job was safe and denied there was a meeting in which she was given the chance to apply for alternative roles.

In April 2017, Smith claimed Mirzaee attempted to get her to resign. After Mirzaee sent an all-staff email advising he could not pay the full March wages. Smith alleged she told him she would incur bank charges as a result, after which she claimed Mirzaee said she could “resign now if she wanted”, offering to sell his car to pay her outstanding wages if she left.

After subsequently reporting she would have to work from home as she could not afford to travel to work, Smith said Mirzaee paid her outstanding wages and told her he expected her to be in the office.

Smith told the tribunal she could not understand how Mirzaee “had mysteriously got the money to pay her” and that “given his comments about her resigning, she felt that the financial issue was orchestrated to get her to leave”.

On 6 April, Mirzaee held a meeting with Smith where Mirzaee said he explained that, as a result of a downturn in sales of one particular brand – Figurite – for which Smith was the only responsible employee, she had to be made redundant.

Mirzaee told the tribunal he had no reason to want to dismiss the claimant other than the fact that the brand she was in charge of was no longer profitable, and while he accepted it may have been procedurally unfair, Smith’s dismissal was still justified.

But Smith argued this was a “sham redundancy”, that she was not consulted and that there were no selection criteria for the redundancy.

She told the tribunal Mirzaee had told her she had to be let go because of financial reasons, but said he did not characterise it as a redundancy.

Smith also alleged there was no reduction in business or change in the organisational structure that would warrant getting rid of her role, and said the respondent advertised for a new account manager position, which covered similar duties to her own, shortly after she was dismissed. This role was at a different company, but one closely connected to Amalgamated Euro Products and of which Mirzaee was the sole director. 

The tribunal found that, while it accepted the firm was going through financial difficulties and needed to either increase sales or make redundancies, it ruled that the respondent’s explanation for the redundancy – that Smith solely dealt with the Figurite brand – was “not made out on the evidence before us and so calls into question the genuineness of the reason given for the claimant’s dismissal”.

The tribunal was also concerned by the lack of the use of the word ‘redundancy’ by Mirzaee, and by “the lack of any consultation or semblance of a redundancy process in the sense of prior warning, discussion, offering alternative employment at the time of the dismissal… and the lack of any right of appeal.”

“Taking the above into account as well as forming an overview of the events and also considering our general findings, we find that the primary facts could support a finding that the respondent, in the absence of any other explanation, dismissed the claimant because of her disability,” the tribunal concluded.

A remedy hearing will be scheduled to resolve the case.

Amalgamated Euro Products has been contacted for comment. Smith could not be reached for comment.