Recent media reports have focused on the dismissal of Sharon Shoesmith, her Claim arising from her dismissal and the compensation paid to her as a consequence.

Head of Employment, Mark Jones, explains the facts of the recent case of Shoesmith and how the settlement figure was reached. 

 Most of us are aware of this case because of media reports and public outcry about the very sad and disturbing facts surrounding the death of Baby P. 

At the time of his death Sharon Shoesmith was Haringey’s Director of Children’s Services, a statutory post which had been created a few years earlier in response to the tragic death of Victoria Climbie, also in Haringey.  The reports confirm that Ms Shoesmith was paid nearly £700,000.00 as a consequence of that dismissal, which followed the death of Baby P.

The Case

Contrary to some of the media reports, this case was actually a judicial review claim, which concluded in the Court of Appeal and not an Employment Tribunal Claim.

Ms Shoesmith did bring an Employment Tribunal Claim but this was stayed pending the judicial review proceedings. Had this been an Employment Tribunal Claim the current cap of £76,574.00 should have applied to restrict the amount of compensation she could have claimed for unfair dismissal.

The Background – the Judicial Review Application

You may recall some of the events which unfolded in the run up to Ms Shoesmith’s dismissal. At the time the then Secretary of State for Education, Ed Balls, (“the Secretary of State”) held a press conference, during which he gave a direction to Haringey Council (“Haringey”) that Ms Shoesmith should be removed from her employment. He then removed her, with immediate effect, from the statutory office of Director of Children’s Services. Haringey then dismissed her with immediate effect.

Ms Shoesmith responded by making an application to the court, asking that the decision of the Secretary of State to remove her, with immediate effect, should be reviewed under public law. She also asked for Haringey’s decision to be reviewed.

The Arguments

  • Ms Shoesmith argued that the Secretary of State’s decision was unlawful because he failed to observe the requirements of procedural fairness and impermissibly had regard to a Sun News Paper petition calling for her removal.
  • She also argued that Haringey’s decision was unlawful because it was made on the basis of the Secretary of State’s directive which was to begin with unlawful.
  • The Secretary of State said in answer that the case had a public dimension and that the circumstances justified urgent action, including immediate dismissal. Haringey said that, in the light of the Secretary of State’s direction, and the particularly adverse findings of an earlier OFSTED report, it had no alternative but to dismiss Ms Shoesmith with immediate effect.

 

The Verdict

The Court of Appeal   (“the Court”) agreed with Ms Shoesmith that her dismissal, by the Secretary of State and Haringey, was unlawful under public law.

The Compensation

The Court specified that an appropriate range for compensation would start from her notice pay ranging upwards to a sum equivalent to her back pay from December 2008 when she was dismissed to date (roughly £800,000). The Court sent the case onto the Administrative Court for a remedy hearing so that could decide how much Ms Shoesmith should be awarded. That court would also look at her request for a declaration that she was still employed by Haringey Council and was therefore entitled to back pay going back to December 2008. The Court also recommended that the parties consider settlement.

The remedy hearing to decide how much Ms Shoesmith should receive was due to take place in October 2013 and it was at this point that the parties agreed to settle her Claim.

The Settlement

Ms Shoesmith’s annual salary is understood to have been £133,000.00. A BBC report is said to state that Haringey’s accounts confirm her compensation was calculated along the following lines:-

  • £377,267 for salary, fees and allowances,
  • £217, 266 in compensation for loss of office, and
  • £84,819 in pension contributions.

 

So we have a rough explanation of how the figure of £679,352.00 may have been reached, at least from a legal perspective and from a specifically employment law perspective, we can also see how the settlement figure could have been calculated so much higher than the maximum of £76,574.00 which can currently be awarded in Employment Tribunal Claims.

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