The Employment Equality (Sexual Orientation) Regulations 2003 (“the Regulations”) came into force on 1 October 2004.  Since that date, lawyers have been keenly awaiting cases and decisions arising out of these Regulations.  Prior to 1 October 2004, individuals who had been discriminated against on the grounds of their sexual orientation did not have a right under employment law to bring tribunal proceedings.  There were some attempts, most notably the case of Pearce v the Governing Body of Mayfield Secondary School (2001/IRLR 669) to bring claims for discrimination based on the grounds of sexual orientation.  However, they were unsuccessful.  Therefore the first City case alleging sexual orientation discrimination attracted huge amounts of publicity.  Peter Lewis, HSBC’s former Global Head of Equity Trading in the London office brought a claim that he was dismissed because of his sexual orientation.

Mr Lewis had worked at HSBC for only two months when he was accused of sexual harassment by a colleague.  It was alleged that he sexually harassed a male colleague in the Bank’s gym changing rooms.  HSBC immediately suspended him for gross misconduct and he was subsequently dismissed summarily.  Mr Lewis disputes that a heterosexual colleague accused of similar conduct would have been dismissed.  Given that Mr Lewis earned over £1,000,000 a year his claim for damages, if it had been successful would have been substantial and it is understood that his schedule of loss claimed of £5,000,000.

HSBC has defended Peter Lewis’ claims vigorously.  The Bank denied that it treated him any differently because he was gay.  An HSBC spokesman said that Peter Lewis was treated in the same way as any other employee facing a complaint of sexual harassment by another member of staff. In order to succeed in his claim for discrimination,  Mr Lewis would have had to have shown that a heterosexual comparator accused of the same allegation would not have been treated in this fashion and that he was subject to less favourable treatment. HSBC would have needed to provide a non discriminatory reason for the difference in treatment between Mr Lewis and a heterosexual colleague.

Mr Lewis also complained that he was called a “nonce” and a “faggot” at work.  He alleged that he received nuisance phonecalls at his home and on his mobile phone after joining HSBC.  If this had been proven, this behaviour would have constituted harassment under the Regulations. Employees can bring a free standing claim for harassment if their working environment has been made hostile or intimidating as a result of comments or behaviour by their work colleagues.

Another issue which arose out of the HSBC case was that Peter Lewis tape recorded his disciplinary meetings with HSBC without seeking the Bank’s permission to do so. Under the Regulation of Investigatory Power Act 2000 (RIPA) it is not illegal for individuals to tape conversations providing the recording is for their own use. However, if the tape were to pass into a third party’s hands, this is illegal.  This topic has been particularly in the news recently as Sir Ian Blair, the  Metropolitan Police Chief recorded a conversation with the Attorney General, Lord Goldsmith last September without his knowledge.  Human Rights Groups have criticised Ian Blair for covert surveillance.  Employers should therefore be wary of employees tape recording disciplinary hearings. If you are suspicious that an employee may be recording a meeting, it would be sensible to clarify with them up front whether this is their intention. Obviously, best policy would be to reach an agreement between the parties that a hearing is to be recorded. 

On 5 May 2006 the Employment Tribunal gave its decision and ruled that Peter Lewis was not dismissed because he was gay, and consequently, he was unable to claim for future loss of earnings.

However, the Tribunal did find that Mr Lewis received less favourable treatment on the grounds of his sexual orientation during HSBC’s internal investigation.  He will therefore receive only limited compensation of an injury to feelings award at most, and no future losses.

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