Law firms could risk aggravated damages in employment tribunals if they promote or award pay rises to staff who are under internal investigations for discrimination or harassment, a solicitor warned this week.

Simon Whysall, assistant solicitor at City firm Reynolds Porter Chamberlain, said promoting an individual could give the impression that a firm’s investigation was already a foregone conclusion.



In the Court of Appeal case British Telecommunications v Reid & another [2004] IRLR 327, an employee was awarded £2,000 in aggravated damages for injury to feelings because his alleged harasser was given a promotion.



The company took 14 months to investigate a complaint of racial abuse against the individual, which it ultimately concluded was unfounded.


Mr Whysall pointed out that the judgment should serve as a warning to law firms and other employers that investigations should be dealt with first, before employees are promoted or given pay rises, wherever possible.


He said: ‘In an ideal world, a firm should expedite the investigation before any promotion procedure runs its course. If that can’t be done, the firm will at least need to make it clear to the alleged victim that the promotion in no way affects the outcome of the inquiry. Otherwise, pay rises or promotions could be seen by the victim as an endorsement of the alleged harasser’s behaviour.


‘In the BT case, the internal investigation concluded that the complaint had been unfounded. That doesn’t mean that BT believed that at the time of the promotion, but you can see how it would have looked to the complainant that the employer had already made up its mind about the allegations.’

He added: ‘But this is a difficult area. An employee who is cleared of discrimination charges could have a claim for constructive dismissal on the basis that they missed out on a promotion as a result of the investigation.’