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Shoesmith case an important lesson for employers

Shadow chancellor Ed Balls has been quoted as saying the pay-out to Sharon Shoesmith, reported to be as much as £600,000, left a “bad taste” in the mouth.

But responsibility for that "bad taste" may lie at his own door and that of his advisers. No proper or adequate procedure was followed to allow Shoesmith to put forward her case. This is an important lesson for all employers.

The issue, as we know, involves the sad and tragic death of 'Baby P' (Peter Connolly) in 2007. Sharon Shoesmith had been director of Children's Services in Haringey. The day after the criminal trial in which Baby P's mother, boyfriend and boyfriend's brother were convicted of causing or allowing Peter Connolly's death (contrary to the Domestic Violence, Crime and Victims Act 2004), Balls, then Secretary of State, commissioned an OFSTED report.

The report was critical and identified serious concerns, but it did not name individuals. Immediately upon receipt of that report on December 2008, Balls appointed, on a temporary basis, a new director of Children's Services and 18 days later, he appointed another director of Children's Services for a period of three years.

The first Sharon Shoesmith heard about her removal from office was when she saw coverage of Balls' press conference on the news. Unsurprisingly, she complained about the lack of procedure that was used in removing her from office. Haringey subsequently terminated her from her contract of employment with them because Balls had removed her from her office and her internal appeal was turned down.

Whatever may have motivated Balls to take that decision, he failed, and this was crucial, to afford Sharon Shoesmith the opportunity to respond to the case against her. That was fundamental and unforgiveable. This was not, after all, a case of a "front line" social worker, who left in place for a minute longer might have caused harm to individuals in her care. There was no such urgency.

In the current debate, it might be assumed by some, that there was nothing Shoesmith could have said in defence of her position that might have produced a different outcome. That line of argument found no favour in the Court of Appeal, which decided liability in this case in 2011.

Lord Justice Maurice Kay said: "I find it a deeply unattractive proposition that the mere juxtaposition of a state of affairs and a person who is accountable should mean that there is nothing that that person might say which could conceivably explain, excuse or mitigate her predicament. 'Accountability' is not synonymous with 'heads must roll'."

Some might say that even if Balls had "messed up" his procedure, it should not have had the financial consequences that it did. After all Shoesmith was an employee on a reported annual salary of £133,000. How come she managed to secure a negotiated settlement said to be as much as £600,000?

The consequences for Balls and his department may have been disastrous. That meant Shoesmith could theoretically claim arrears of salary and pension contributions from December 2008 and continuing until her employment is lawfully terminated.

Given these ramifications, it somewhat perplexed two of the Court of Appeal judges, why Haringey did not protect its position by serving a contractual notice terminating Shoesmith's contract of employment. They could have done so "without prejudice" to their contention that it was entitled to dismiss her summarily. For reasons that have not been explained, it did not do so.

What is unforgiveable is that before moving to remove such a person from office, Shoesmith was accorded no proper or adequate procedure to allow her to put forward her case. That goes against the most basic tenets of natural justice and all employers would do well to heed this message, however extreme the circumstances of the case they are dealing with.

Richard Fox (pictured) head of employment law at Kingsley Napley