The spirit of corporate social responsibility is that organisations should behave like 'good citizens' in their communities. Good citizens think about others beside themselves, and try to exercise ethical judgements when deciding how to behave.
This idea of corporate social responsibility is demonstrated here with the UK landmark Court of Appeal case Chagger v Abbey National & Hopkins (2009).
Abbey National is the Banco Santander owned UK high-street bank featuring Lewis Hamilton (F1 driver for the Formula 1 McLaren Mercedes team) in its advertising campaign. The bank was recently re-named as Santander UK. Lewis Hamilton and Emilio Botin (the Banco Santander chairman) unveiled the new name in London, during January 2010.
In 2006, Abbey Santander UK dismissed Balbinder Chagger from his job, claiming that his dismissal was the result of a fair redundancy exercise.
Balbinder Chagger, who was of Indian origin, alleged that the real reasons behind his dismissal were unfairness and race discrimination. He was employed by the Lewis Hamilton featuring Abbey Santander UK as a Trading Risk Controller, earning around £100,000 per annum and reporting into Nigel Hopkins.
In 2006, the Employment Tribunal that heard the case found that, in fact, Abbey Santander UK and Mr Hopkins had acted unlawfully by racially discriminating against Mr Chagger and dismissing him unfairly.
The Employment Tribunal ordered Abbey Santander UK to re-employ Mr Chagger. Abbey Santander UK refused to do as ordered, giving reasons that the Employment Tribunal ruled to be unsatisfactory. The Tribunal eventually went on to assess the amount of damage Mr Chagger had suffered from the discrimination, on the basis that he had not been re-employed and the discrimination had resulted in him losing his future career in the banking industry. The Tribunal calculated the damage suffered to be £2.8 million and ordered Emilio Botin's Abbey Santander UK to pay Mr Chagger the record-breaking £2.8 million compensation.
Most people would agree that acting within the law is a minimum requirement to behaving responsibly. Clearly, Emilio Botin's Abbey Santander UK and Mr Hopkins had acted unlawfully and, therefore, failed to act responsibly.
But the law does not spell out the entire duty of a 'good citizen'. So, how far should organisations go in considering others beside themselves and exercising ethical judgement in deciding how to behave? There appear to be two opposing answers to this question.
On one side, there is the answer that organisations should not bother at all to exercise ethical judgement in deciding how to behave because exactly what is required to act as good citizens is unclear and, so, the law can be assumed to have spelled out the requirements. Abbey Santander UK and Mr Hopkins demonstrated this answer in 2008 when they tried to overturn the Employment Tribunal's decision of race discrimination by appealing to the Employment Appeal Tribunal. They argued that UK law only prohibits discrimination on the grounds of Race, Nationality and Ethnicity. They argued that UK law says nothing about Colour and, therefore, does not prohibit discrimination on the ground of Colour. They argued that Mr Chagger had no case under UK law because he had also mentioned discrimination on the ground of Colour.
On the other side, there is the answer that organisations should exercise ethical judgement in deciding how to behave because a society's interests cannot be completely spelled out in the law. At the very least, it takes time for the law to develop and catch up with a society's needs. The Employment Appeal Tribunal (EAT) demonstrated this answer when it considered Abbey Santander's appeal against Mr Chagger. It found that there was a mistake in UK Law in that Colour had been left out as one of the grounds of discrimination. It indicated that Colour was a ground of discrimination. The EAT finally sent out the message that organisations should not play games with the wording of the Law in order to deny workers their cases.
The EAT rejected Abbey Santander's appeal because Mr Chagger had in fact clearly alleged discrimination on the grounds of Race and Ethnicity, meaning he had a case under UK law anyway. The EAT upheld the original Employment Tribunal's decision that both Abbey Santander UK and Nigel Hopkins had unlawfully racially discriminated against Balbinder Chagger.
The Lewis Hamilton featuring Abbey Santander UK and Nigel Hopkins did not appeal further to the Court of Appeal against the EAT's decision on race discrimination; they seem to have accepted that they had racially discriminated against Mr Chagger.
They now appear to be focusing only on reducing the amount of compensation awarded against them, despite having caused Mr Chagger to lose his future career in the banking industry.
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