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Former Clarks CEO fails in claim for unfair dismissal after sexist, racist and homophobic comments at work

Often employees believe that when it comes to regulations over conduct in the workplace, it is one rule for them and another for managers and executive officers within the organisation. Many will be reassured to note that a recent tribunal decision resoundingly confirmed that if Directors of an organisation behave contrary to the company’s code of conduct, they can be dismissed or asked to resign in the same way as any other employee.

Top CEO sees unfair dismissal claim dismissed

Former Clarks CEO Mike Shearwood recently brought a claim for unfair dismissal, alleging he was asked to resign in June 2018 after threatening to disclose the state of the company’s finances to shareholders.

However, the tribunal heard evidence from board members that Shearwood was asked to leave after serious allegations of inappropriate workplace language which clearly breached the company’s code of ethics had been brought to the attention of the board. At the time of his dismissal, the company said in a statement:

“Clarks recently learned that aspects of Mr Shearwood’s conduct, conversations and expressions fell short of the behaviours expected of all its employees on a number of occasions. In these circumstances the board has accepted Mr Shearwood’s resignation.” Allegations of ‘Whistleblowing’ dismissed

During the Tribunal, Shearwood had alleged that the reason for being asked to leave was that he planned to disclose the state of company finances to shareholders and had been asked to leave to prevent him from whistleblowing.

The Public Interest Disclosure Act 1998 protects employees who make disclosures of certain types of information, and Whistleblowers are protected by UK law if they report a criminal offence, a health and safety violation, risk or damage to the environment, or a miscarriage of justice. They are also protected if they believe someone is covering up wrongdoing.

However, the board said the information Shearwood planned to disclose was already in the public domain, viewable to anyone and that they had acted following an internal enquiry after senior employees had brought a number of serious and significant incidents to their attention.

Inappropriate language and conduct in the workplace

The tribunal heard evidence that Shearwood’s language in the workplace included him describing a client as a “f***ing faggot”, saying another employee was “hot” and talking about “violent blacks”.

Some of these comments had been made in the US. A senior employee testified that “a large portion of the region had been exposed to his inappropriate behaviour”, and two female employees had indicated that they would consider leaving the company if Shearwood had remained in post.

Judge Derek Reed said he was satisfied that “very serious allegations” were made against Shearwood. He continued:

“It’s obvious why the respondent regarded these matters as serious. “Mr Shearwood was the Chief Executive and these allegations had occurred in America and they were clearly concerned about the prospect of damaging the company’s position in the US… they were also concerned about the possibility of employees leaving if these matters were not resolved. “It seems to us that it is overwhelmingly likely the real reason for Mr Shearwood’s dismissal was the contents of the report into the allegations. “In other words, the reason for his dismissal was not as he asserted because he had made protected disclosures.” A Clarks spokesperson said: “Clarks welcomes the tribunal’s ruling and the rejection of Mr Shearwood’s claims. It has always been Clarks’ belief the allegations raised by Mr Shearwood were unfounded. With the tribunal ruling as it has, we hope this matter will now remain closed. “We stand by our decision in relation to Mr Shearwood’s departure and are pleased to see the tribunal rule in our favour. We made it clear at the time of Mr Shearwood’s resignation that we would make no further comment on the particulars of his conduct and intend to maintain that stance. “Clarks was founded on principles of integrity, equality, and community almost 200 years ago, and these values continue to underpin everything we do as a business.” CEO Subject to Company Policies and Workplace Code of Conduct

The message from this tribunal is resoundingly clear – officers within any organisation are expected to behave in accordance with company codes of conduct in the same way as ordinary employees and can be dismissed or asked to leave without a golden handshake or settlement agreement if they fail to do so.

Therefore, our advice to employees who feel uncomfortable over comments made by managers or senior officers is to raise their concerns in accordance with their workplace grievance policy, and if are unhappy with the outcome, to seek legal advice. We can also help ex-employees who feel they have experienced workplace discrimination or unfair dismissal.

Employers who are not sure whether their Employment Law policies or company handbook are up to date can take advantage of our free HR policy review service.

Call us for advice on 01286 872779 or send us a message