The Free Speech Union has won its biggest ever legal victory at the Employment Tribunal, securing damages likely to exceed £800,000 for Carl Borg-Neal, a dyslexic Lloyds bank manager who was sacked following a workplace free speech row.

This is a fantastic result and it’s worth pointing out that Carl’s final compensation package – which includes damages for past loss of earnings, future loss of earnings, a pensions award, compensation for discrimination, aggravated damages and compensation for personal injury – is well in excess of the amount typically awarded to Claimants at the Employment Tribunal.

In July 2021, Mr Borg-Neal was one of around 100 senior Lloyds managers to participate in an online training session entitled ‘Race Education for Line Managers’. Provided by an external organisation, the training formed part of the bank’s ‘Race Action Plan’, launched in the wake of George Floyd’s death the previous year.

Carl had worked for Lloyds for 27 years without incident, was popular among colleagues and had risen to a managerial role at head office. Far from being indifferent to racial equality, he had recently joined a new scheme mentoring young colleagues from ethnic minority backgrounds and was working with three mentees, one of African descent, one of Asian descent and one of European (non-UK) descent.

At the start of the session, the trainer read out a script that established the parameters for what was to follow. “When we talk about race, people often worry about saying the wrong thing,” she said. “Please understand that today is your opportunity to practice, learn and be clumsy… The goal is to start talking, so please speak freely, and forgive yourself and others when being clumsy today.”

Carl was relieved to hear that since his dyslexia can occasionally cause him to ‘be clumsy’ when speaking ‘freely’. During a subsequent discussion on ‘intent vs effect’, he decided to take the trainer’s statement at face-value. Thinking partly about rap music, he asked how as a line manager he should handle a situation where he heard someone from an ethnic minority background use a word that might be considered offensive if used by a white person. Met with a puzzled look from the trainer, he added, “The most common example being use of the word n***** in the black community.”

Carl didn’t receive a response to his ‘clumsy’ question. In fact, he was angrily berated by the trainer. He tried to apologise for any offence, but was told if he spoke again he would be thrown off the course.

Other managers on the course complained that Carl’s question never received an answer – indeed, anonymous feedback collated after the session suggests the trainer’s behaviour was not well-received. “I was shocked by the manner and tone used by one presenter to a colleague,” said a respondent. “After saying at the beginning this would be a safe environment and [acknowledging] we may make mistakes, she launched into a vitriolic attack… I believe [Mr Borg-Neal] was trying to ask a valid question to aid understanding.”

After the course, the trainer claimed she was so offended by use of the n-word that she was too sick to work and took five days off – at which point the provider then complained to Lloyds Bank.

It was the fact that the trainer needed to take time off that triggered an investigation, with the bank subsequently accusing Carl of racism and launching a disciplinary process that led to his dismissal for gross misconduct.

After 27 years of unblemished service, he’d been publicly branded a racist by his employer and his career lay in tatters.

Following an unsuccessful attempt to appeal Lloyds’ decision to sack him, Carl joined the FSU. Having reviewed the case, we instructed Emma Hamnett at Doyle Clayton – a solicitors firm that specialises in employment law – and Cloisters chambers who helped Carl bring a claim against Lloyds in the Tribunal. We also agreed to cover all his legal expenses on the understanding he would repay us if he won his case, which he has.

Something that emerged particularly strongly from the hearing was the extent to which Lloyds focused on Mr Carl Borg-Neal’s use of the n-word, irrespective of context.

It was on the basis of this semantic fixation that the bank could concede that Mr Borg-Neal had not intended to cause any hurt, that he asked the question with no malice and that the question itself was valid, but still dismiss him for gross misconduct. The bank’s argument was that Mr Borg-Neal should have known better than “to use the full word in a professional environment”. 

However, thanks to Doyle Clayton, as well as tireless work behind the scenes by Karolien Celie, our Legal Counsel, the Tribunal was persuaded to take the context into account.

Explaining its unanimous decision to rule the dismissal unfair, the three-person Tribunal panel noted that: the incident had taken place during a race education session, and specifically during a discussion of “intent versus impact”; it was a well-intentioned relevant question regarding how to handle a situation of racially offensive language in the workplace; there was no suggestion that he was taking an opportunity to utter an abusive term under cover of a question; and his dyslexia affected his ability to formulate his question carefully.

Lloyds also relied heavily on the suggestion that Mr Borg-Neal had demonstrated a lack of concern for the impact of his actions on others. According to the Hearing Manager and dismissing officer, it was “because of the absence of any deeper acceptance as to why [Mr Borg-Neal’s] use of the word was so inappropriate [that it was] difficult to make the case that action short of dismissal such as further training or removing [him] from a position of influence as a role model would be sufficient”. 

The panel was unimpressed with this line of reasoning. “This is an unusual distinction given that the claimant had repeatedly apologised,” they wrote. “He told [the Hearing Manager] that he understood in hindsight that the trainer could be upset. He said a friend had told him use of the word was inappropriate and ‘I get that now’. He said he understood his conduct had fallen below expectations. One wonders what was expected of him.”

In the “very unusual and particular circumstances” of this case, the panel concluded, “no reasonable employer would have dismissed” Carl.

The tragedy here is that things didn’t need to be this way.

Following the initial ET judgment, Mr Borg-Neal had asked for his old job back, and it was only following what the remedy hearing panel described as “strong opposition” to this suggestion from the bank that he reluctantly withdrew his request and instead sought compensation. The result is that Lloyds has been ordered to pay Carl over £800,000 in compensation. The final amount is being determined as the respective legal teams calculate interest on the damages and grossed up tax.

It goes without saying that everyone at the FSU is delighted that Carl has been able to obtain justice. Not only did he lose a job where he’d found he could excel, in spite of his disability, but during the initial, unnecessarily lengthy disciplinary process and the legal battle that followed his health suffered. He is not able to return to work in financial services and earn the same salary, so the compensation he has recovered reflects this and means that Carl will be comfortable until retirement age.

“For me, a big chunk of the battle’s won, insomuch as I’ve cleared my name and I’ve got a bit of compensation,” says Carl. “But if I hadn’t had your help, God knows how I would have got through it… I am sure companies are getting away with stuff like this, purely because people can’t afford or take the pressure to go through and fight the battle. People have said to me, ‘Well done to you for fighting this.’ But I had to. I had to clear my name.”

Toby Young says: “The financial compensation Carl has secured is groundbreaking. But in addition, the Tribunal made various recommendations that Lloyds will have to follow.

“Senior members of the bank, including members of the Board, have been ordered to read and digest the judgment, learning, if they did not appreciate it already, that context is everything when deciding whether to dismiss someone for breaching a workplace speech code.

“In addition, The bank has to inform the Financial Conduct Authority that it got this one wrong – they have to tell the regulator that their dismissal of Carl was substantially and procedurally unfair and an act of disability discrimination.

“Finally, they have to correct their internal records and provide a reference for Carl to future employers.

“These recommendations mean this case will have a lasting footprint that should stamp out this kind of behaviour by employers when faced with similar complaints and, as Carl wants, stop this happening to others.”

You can read about Carl’s victory in the Telegraph here.