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An £800,000 lesson in how not to do diversity training

Lloyds should never have fired Carl Borg-Neal

The Free Speech Union (FSU) has just won its biggest ever legal victory at the Employment Tribunal (ET), securing damages likely to exceed £800,000 for Carl Borg-Neal, a dyslexic Lloyds bank manager who was sacked following a workplace free speech row.

This is a fantastic result for Carl, and it’s worth pointing out that his final compensation package — which includes damages for past loss of earnings, future loss of earnings, a pensions award, compensation for discrimination and compensation for personal injury — is well in excess of the amount typically awarded to Claimants at the ET.

In addition to this groundbreaking financial compensation, the remedy judgment (which was handed down late last year, and only recently made publicly available) makes a series of important recommendations that Lloyds will now have to follow.

Senior members of the bank, including members of the Board, have been ordered to read and digest the judgment, learning, if they did not appreciate it already, that context is everything when deciding whether to dismiss someone for breaking a workplace speech code.

The bank will also have to inform the Financial Conduct Authority that it got this one wrong, telling the UK’s financial services watchdog that their dismissal of Carl was substantially and procedurally unfair and an act of disability discrimination.

Finally, they must correct their internal records and provide a neutral reference for Carl, which it will be required to provide on request to any future employer. 

The ramifications of these recommendations will be felt in the HR departments of every major company up and down the country, meaning this case will have a lasting footprint that should stamp out this kind of behaviour by employers when faced with similar complaints. 

So how did we get here — to a case in which one of the UK’s “Big Five” high street banks is ruled to have unfairly dismissed an employee for something he said during a workplace-based diversity training session, before walking away with a total bill of around £1 million, and the chastening words of a distinctly unimpressed panel of Employment Tribunal Judges ringing in its senior executives’ ears?  

In July 2021, Mr Borg-Neal was one of around 100 senior Lloyds managers who logged on to an online training session entitled “Race Education for Line Managers”. Provided by an external organisation, the training formed part of the bank’s “Race Action Plan”, launched in the wake of George Floyd’s death the previous year.

Carl had worked for Lloyds Bank for 27 years without issue, was popular among colleagues, and had risen to a highly technical managerial role at head office. Far from being indifferent to racial equality, he had recently joined a new scheme mentoring young colleagues from ethnic minorities and was working with three mentees, one of African descent, one of Asian descent and one of European (non-UK) descent.

At the start of the session, the trainer read out a script that established the parameters for what was to follow. “When we talk about race, people often worry about saying the wrong thing,” she said. “Please understand that today is your opportunity to practice, learn and be clumsy… The goal is to start talking, so please speak freely, and forgive yourself and others when being clumsy today.”

Carl was relieved to hear that, since his dyslexia can occasionally cause him to “be clumsy” when speaking “freely”

Carl was relieved to hear that, since his dyslexia can occasionally cause him to “be clumsy” when speaking “freely”. At a relevant point during a subsequent discussion on “intent vs effect”, Mr Borg-Neal decided to take the trainer’s statement at face-value and “speak freely”. Thinking partly about rap music, he asked how as a line manager he should handle a situation where he heard someone from an ethnic minority use a word that might be considered offensive if used by a white person. Met with a puzzled look from the trainer, he added, “The most common example being use of the word n***** in the black community.”

Carl didn’t receive a response to his “clumsy” question. In fact, he was angrily berated by the trainer. He tried to apologise for any offence, but was told if he spoke again he would be thrown off the course.

Other managers on the course complained that Carl’s question never received an answer — indeed, anonymous feedback collated after the session suggests the trainer’s behaviour was not particularly well-received. “I was shocked by the manner and tone used by one presenter to a colleague,” said a respondent. “After saying at the beginning this would be a safe environment and [acknowledging] we may make mistakes, she launched into a vitriolic attack… I believe [Mr Borg-Neal] was trying to ask a valid question to aid understanding.”

After the course, the trainer claimed she was so offended by the use of the n-word that she was too sick to work and took five days off — at which point the provider then complained to Lloyds Bank.

It was the fact that the trainer needed to take time off that triggered an investigation, with the bank subsequently accusing Carl of racism and launching a disciplinary process that led to his dismissal for gross misconduct.

After 27 years, he’d been publicly branded a racist by his employer and his career lay in tatters.

Following an unsuccessful attempt to appeal Lloyds decision, Carl joined the FSU. Having reviewed the case, we instructed Emma Hamnett at Doyle Clayton — an expert firm of employment solicitors — who brought a claim against Lloyds in the Tribunal. We also agreed to cover all his legal expenses on the understanding he would repay us if he won his case, which he has.

Something that emerged particularly strongly from the hearing was the extent to which Lloyds focused on Mr Carl Borg-Neal’s use of the n-word in isolation, irrespective of what a linguist would describe as the “context of situation” in which he’d used it.

It was on the basis of this semantic fixation that the bank could concede that Mr Borg-Neal had not intended to cause any hurt, that he asked the question with no malice, and that the question itself was valid, but then still dismiss him for gross misconduct. The bank’s argument was that Mr Borg-Neal should have known better than “to use the full word in a professional environment”. 

However, thanks to top-drawer representation from Doyle Clayton, as well as tireless work behind the scenes by Karolien Celie, our Legal Officer, we were successfully able to steer the panel towards an appreciation of the wider context in which the n-word had been uttered.

Explaining its unanimous decision to rule the dismissal unfair, the panel noted variously that: 

… the incident had taken place during a race education session, and specifically during a discussion of “intent versus impact”; it was a well-intentioned relevant question regarding how to handle a situation of racially offensive language in the workplace; there was no suggestion that he was taking an opportunity to say an abusive term under cover of a question; and that his dyslexia affected his ability to formulate his question carefully.

Lloyds also relied heavily on the suggestion that Mr Borg-Neal had demonstrated a lack of concern for the impact of his actions on others. According to the Hearing Manager, it was “because of the absence of any deeper acceptance as to why [Mr Borg-Neal’s] use of the word was so inappropriate [that it was] difficult to make the case that action short of dismissal such as further training or removing [him] from a position of influence as a role model would be sufficient”. 

The panel was distinctly unimpressed with this line of reasoning. “This is an unusual distinction given that the claimant had repeatedly apologised,” they wrote. “He told [the Hearing Manager] that he understood in hindsight that the trainer could be upset. He said a friend had told him use of the word was inappropriate and ‘I get that now’. He said he understood his conduct had fallen below expectations. One wonders what was expected of him.”

In the “very unusual and particular circumstances” of this case, the panel concluded, “no reasonable employer would have dismissed” Carl.

The tragedy here is that things didn’t need to be this way.

Following the initial ET judgment, Mr Borg-Neal had asked for reinstatement as a Lloyds employee, and it was only following what the remedy hearing panel described as “strong opposition” to this suggestion from the bank that he reluctantly withdrew his request and instead sought compensation. 

The rest, as they say, is history — although for Lloyds Bank, there is a fairly humiliating coda to this story. 

In the remedy judgment, the panel is particularly scathing of the manner in which the bank articulated its “strong opposition” to Mr Borg-Neal’s return as an employee.

The bank’s initial response to the tribunal’s decision, and in particular, paragraphs 1-2 of its “Grounds for refusing reinstatement” document were found by the panel to be “high-handed and rubbed salt into the wound by distorting the tribunal’s liability judgement, and using selective quotes to make the tribunal sound like it was saying something it did not say”. 

As the panel pointed out, the bank’s continued fascination with Mr Borg-Neal’s use of the word in isolation meant that this document “omits the tribunal’s constant emphasis on context”. 

Paragraph 1b was singled out for particular disapproval, with the panel describing it as “a deliberate misreading of what we chose to say”.

On the basis of this accumulated evidence of injury to feelings, the panel awarded Mr Borg-Neal an additional £3,000 aggravated damages. 

That’s bad enough, of course. But it then gets even worse for Lloyds. In a remarkable passage, the panel go on to express “concern” that paragraph 4 of the document, in which it is suggested that Mr Borg-Neal’s decision to bring a race discrimination claim against the bank influenced its subsequent decision not to reinstate him, “in our view amounts to victimising the claimant for bringing [that claim]”.

Just let the significance of that statement sink in for a moment: A major UK bank that was ruled by an employment tribunal to have unfairly dismissed an employee for raising a perfectly legitimate question in a race awareness training session, has at the subsequent remedy hearing been found to have victimised that same employee for launching a race discrimination claim against it.

It goes without saying that everyone at the FSU is delighted for Carl.

His victory serves as a reminder to employers of the importance of context when it comes to matters of workplace free speech.

As per the ET ruling handed down in Carl’s case, any given word or phrase in the EDI lexicon may well have an accepted dictionary definition — and yes, some of those meanings will be deeply unsettling to some employees.

But when HR departments set out to ascribe certain meanings to ostensibly unsettling words uttered by employees in the workplace, they must now consider a host of other, contextually relevant factors, including the speaker’s intentions, tone, style of delivery, and the specifics of the setting.

As Mr Borg-Neal’s case so grimly demonstrates, to proceed otherwise is to curtail employees’ speech right and to cause a chilling effect on workplace dialogue and discussion around matters pertaining to equality, diversity and inclusion.

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