The Case For Managing Equality And Diversity Illustrated With Emilio Botin Grupo Santander Banking

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An active approach to managing equality and diversity in the workplace can boost

business performance and contribute towards the attainment of business targets; Rosabeth Moss Kanter, in 'The Change Masters: Corporate Entrepreneurs at Work' (1994) noted that organisations that take diversity seriously produce better financial performance.

Nevertheless, there are organisations that marginalise parts of their workforce by neglecting the diverse needs of their employees, as highlighted by the high profile Employment Tribunal (ET) case Chagger v Abbey National plc & Hopkins (2006). The ET hearing the case found unfairness and discrimination on the grounds of race. The ET ordered Emilio Botin Abbey Santander shares price to re-employ Mr Chagger, in order to remedy the situation and, thus, avoid the need to award financial compensation. However, Abbey Grupo Santander price refused to comply with the ET's re-employment order. The ET then addressed the situation by ordering Abbey Banco Santander share to pay a record 2.8 million compensation to cover Mr Chagger's loss. Abbey Santander (the UK retail bank previously managed by Luqman Arnold and Stephen Hester, and soon to be re-branded as Santander banking group, being a part of the gigantic Emilio Botin Banco Santander Central Hispano Group) had dismissed Mr Chagger from employment in 2006. Emilio Botin Abbey Santander claimed Mr Chagger's termination was the outcome of a fairly conducted redundancy process. Mr Chagger claimed that the actual reasons behind the termination of his employment were unfairness and race discrimination. He was of Indian origin. Balbinder Chagger worked for Emilio Botin Abbey Santander shares price as a Trading Risk Controller, earning about 100,000 per annum. Nigel Hopkins was his line-manager.

Actively managing equality and diversity (rather than merely adopting equal opportunity policies) can help an organisation to acquire and sustain business competitive advantage in today's highly competitive and dynamic markets. It can open up new business opportunities and improve an organisation's market share. A diversified workforce is able to think things through from a broader range of perspectives and produce a wider range of ideas than a workforce that is not diversified. Hence, actively managing equality and diversity can contribute towards business competitiveness through innovation and creativity. Furthermore, it can contribute to building a larger, diversified customer base by reflecting customers' values, particularly in customer care. Indeed, some customers may be deterred if they perceive the business is failing to reflect their values or care for them satisfactorily. Active management of equality and diversity means that employees are recruited and promoted on merit, based on their skills and abilities. Employees in such working environments tend to be more motivated and committed to the business, thus benefiting productivity and achievement of business goals. The business will find it easier to attract and retain staff. On the other hand, if the workplace is associated with inequality, or is perceived as being inequitable, then issues such as absenteeism, higher staff turnover, higher employment costs, and the inability to attract quality employees may become prominent and competitively disadvantage the business.

Due to a variety of factors, corporate ethical behaviour and corporate values have become prominent topics in today's society. Businesses are required to behave ethically, and to be seen to be behaving ethically. Hence, expectations of equality and diversity in employment have gained importance; businesses are expected to view harassment, bullying, victimisation, and discrimination as contravening ethical behaviours and to treat such incidents as serious disciplinary matters. The ET in the Abbey Santander case discovered that Mr Chagger had tried to address the issues of unfairness and racial discrimination surrounding his dismissal directly with Abbey Santander and Mr Hopkins, through the company's grievance and appeals procedures. The ET also uncovered at Abbey Santander a culture of denial and refusal of Mr Chagger's issues, and simply dismissed his issues out of hand. The ET highly criticised Abbey Santander for its failures to take allegations of race discrimination seriously and to investigate them promptly.

The cost of failing to comply with equal opportunity and diversity laws, in terms of reputation and public image a business may suffer, can be significant. The Abbey Santander case was widely reported by the media, including by the Financial Times newspaper, on its front page, in October 2008. The Financial Times newspaper reported that legal experts had expressed astonishment at Abbey National's decision to fight the case at all given, amongst other things, the reputational risk involved. This seems to suggest a general recognition that reputation and public image is an important factor (an asset or liability) that contributes to an organisation's market value. Indeed, many financial sector organisations regard reputation as a valuable source of business competitive advantage.

The financial costs of defending against a legal action for failing to comply with equal opportunity and diversity laws can be significant. In addition to the 2.8 million compensation awarded by the ET, imagine the other financially quantifiable costs associated with the Abbey Santander case, costs which did not cease at the ET stage but continued on. In 2008, Santander Abbey and Mr Hopkins appealed to the Employment Appeal Tribunal (EAT) against the ET's ruling of racial discrimination; but the EAT upheld the original ET's ruling that both Abbey Santander and Mr Hopkins had discriminated against Mr Chagger on the grounds of race. At the same time, Abbey Santander and Mr Hopkins had also appealed to the EAT against the compensation award of 2.8 million; the EAT accepted this appeal and ordered the compensation to be remitted to the original ET for re-working. In 2009, the case rose to the Court of Appeal (CA). , The CA's List of Hearings showed that the case hearing was on 7 and 8 July 2009. The records of the hearing and the CA's judgement were not available when writing this article. The 11 KBW barristers' chambers, who represented Santander Abbey and Mr Hopkins, had reported that the hearing would only be about compensation, not also the wrong committed of race discrimination. That would suggest that the wrong of race discrimination committed by Santander Abbey and Nigel Hopkins was finalised by the EAT, and that Mr Chagger had appealed to the CA against the EAT's ruling to send the compensation back to the ET stage for re-working.

by: Simon King

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