Marlborough House

The Commonwealth Secretariat has lost a second employment tribunal claim for breach of contract in less than a year and faces a potentially crippling bill for compensation and legal costs at a time when it already faces difficulties over its finances.

The specially convened tribunal found substantially in favour of Josephine Ojiambo, a former deputy secretary-general (DSG), in December over her claim that the Secretariat acted improperly in not renewing her contract. Costs and compensation have yet to be awarded at the time of writing. It follows a similar setback for the Secretariat in April, when a tribunal ruled in favour of Ram Venuprasad, who had claimed for breach of contract when he was blamed for leaking stories to the press and resigned his position as deputy head of office to the secretary-general (SG).

The Daily Mail, which had first published the leaked documents in question, put the Secretariat’s legal bill for the two-year dispute at near to £1m – an unverifiable estimate. It comes after several years of increasingly straitened circumstances for the Secretariat, which relies on member states for running costs and development funds. In 2016–17, according to the latest audited financial results, its expected income was £36.2m but not much more than half of this had been received by December 2016 so expenditure had to be scaled back from £51.9m to just £28.6m. To put the financial implications of the tribunal rulings in context, the likely cost will be approximately the same as the entire annual contribution to the Commonwealth Youth Programme by the British government, which is the Commonwealth’s largest financial contributor.

Ojiambo resigned from a senior United Nations post in New York to become DSG in 2015. Within a year Patricia Scotland, the new SG and a former UK attorney-general, had decided not to renew the terms of the three DSGs as part of a review of the Secretariat’s finances but keep the posts vacant. Ojiambo disputed the non-renewal of her contract as two terms was the norm. Although her contract said employees did not have a right to automatic renewal, and the tribunal accepted that there were real and pressing financial constraints on the Secretariat, it nevertheless ruled that the SG did not give due consideration to the renewal of Ojiambo’s contract in light of all relevant factors at that time and thus the Secretariat had breached its legal obligations to the DSG.

After Ojiambo had launched a grievance procedure against the Secretariat, the SG then offered a three-month extension of her contract on condition that all claims would be settled. The tribunal declared that this was a ‘misuse’ of the Secretariat’s discretionary powers, was ‘retaliation’ against Ojiambo and not how a reasonable employer behaved. However, the tribunal did reject Ojiambo’s complaint that she had been ‘side-lined and undermined’ in the last six months of her contract and rejected her request that the original decision not to renew it be reversed. The tribunal concluded that the former DSG had been ‘substantially successful’ in her claim and awarded her costs. At the time of writing, both parties were making submissions over costs and compensation.

The Ojiambo case has compounded an equally damaging ruling last April and September when another arbitral tribunal (also led by the New Zealand QC David Goddard) found in favour of Venuprasad, who had worked for the Secretariat for 15 years to 2016. Though he had been highly rated in his post, ‘tensions arose’ after Scotland took office as the new SG in April 2016 and their working relationship deteriorated, according to the judgment. He was suspected of passing confidential internal documents to the Daily Mail and suspended. Disciplinary proceedings were then brought against him over his alleged leak and the internal board hearing the case, which met without Venuprasad while he was ‘seriously unwell’ and on sick leave, ruled that the claims had been substantiated. He was given a final written warning, just weeks before his contract came to an end [interim judgement]. Long before this, however, relations had soured to such an extent that by October Venuprasad had become so convinced that the SG was determined to have him dismissed that his solicitors asked for an appeal date to be set before the board had even met.

Though the disciplinary board ruled that Venuprasad had breached IT confidentiality policy (then tried to ‘hide his tracks’), and found circumstantial evidence pointing to Venuprasad as being the most likely source of the leak, it could not prove this. Moreover, Venuprasad noted, the Mail had published information that was leaked after he was suspended and which it would have been impossible for him to provide. This was confirmed by Gary Dunn, the DSG investigating the allegations. It was largely for this reason that Venuprasad was issued with a final written warning rather than dismissed.

Venuprasad went before the tribunal to challenge his suspension, the disciplinary procedure, the ensuing final warning and his internal appeal, and sought compensation and the reversal of these decisions. He was the victim of a ‘smear campaign’, he complained. ‘The overarching theme,’ the tribunal concluded, was that ‘he was subjected to a campaign of intimidation and hostility which was designed to punish him, and to damage him reputationally and psychologically’. Evidence given later by Simon Gimson, a former head of office to the SG, made it clear that the use of personal IT and emails for work purposes had been commonplace at the Secretariat and Venuprasad was the only person he knew of to be disciplined for this.

According to the Indian Express, the ‘tipping point’ in Venuprasad’s relationship with Scotland came when she told a major meeting that no one outside the Commonwealth had ever heard of her predecessor, Kamalesh Sharma. ‘That really did not go down well,’ Venuprasad recalls, claiming that Scotland had suggested she was a big name who was going to raise the Secretariat’s profile. ‘I thought her criticisms were very unfair as [Sharma] was not there to defend himself. I saw it as a question of common courtesy. And she did not like that,’ he said.

Venuprasad claimed he was then victimised by Scotland because of his concerns about her ‘magisterial attitude’ in appointing friends to senior positions in the Secretariat, the Daily Mail reported. She would become ‘very angry’ when he gave her candid advice, such as not to appoint several consultants, the Times reported. One was a fellow Labour peer and friend of Scotland’s, Kamlesh Patel, who was awarded a £90,000 three-month contract to review efficiency at the Secretariat. The appointment gave rise to accusations of cronyism, which Scotland denied. However, the Secretariat disputed this version of events in a statement issued to a Times reporter on 11 November, calling Venuprasad’s allegations ‘a whole series of false, misleading and distorted allegations and outright lies made by a profoundly disaffected individual’.

In its findings, the tribunal concluded that the Secretariat had not shown why it was necessary to suspend Venuprasad. The tribunal also questioned how appropriate it was to issue a final written warning when Venuprasad was only likely to return to work for a few weeks, considering that he was ill and due to leave anyway. It said this sanction was ‘disproportionately severe’ and therefore an ‘abuse of power’.

The tribunal declared the Secretariat’s public attacks on Venuprasad to be ‘wholly inappropriate’ in what should have remained a private process, even if it had led to censure. It also criticised Scotland for not giving evidence. Failing to do so ‘overlooks the Secretariat’s responsibility to assist the tribunal to reach an informed decision, and the real risk of adverse inferences being drawn’, it noted.

In summing up, the tribunal said the disciplinary board’s decision was ‘flawed in a number of respects and should be set aside’, that Venuprasad’s suspension breached his contract, and that ‘adverse statements about him to the media … were calculated to discredit him and harm his reputation’. Accordingly, it awarded him compensation and costs, though deferred the decision on the amount to allow the Secretariat and Venuprasad to reach an agreement.

Venuprasad had claimed £662,100 in total as financial compensation [Judgment No 2], which the Secretariat called ‘manifestly excessive, disproportionate and not supported in fact or law’. It suggested he should be awarded £15,000 at most, as it was ‘a state-funded organisation with increasingly limited resources’. It also cited Venuprasad’s ‘egregious media contact’ and argued that he had ‘never offered a defence to the allegations that started the disciplinary process’. He in turn strongly disputed the claim that he had ever behaved improperly in his work, ‘courted press attention’ or leaked any confidential information. In arguing that it had not impaired his reputation, the Secretariat claimed that his standing had already been irretrievably damaged by the fact that he had been questioned as part of his tangential connection to a fraud inquiry in India some 15 years previously. This was rejected as irrelevant to the present case and his role in that investigation ‘cast no shadow at all’ on his reputation, the tribunal declared.

‘The Secretariat seeks to portray Mr Venuprasad as the author of its own misfortunes,’ the judgment noted, though it accepted that the Commonwealth body had acknowledged that the internal disciplinary process had been ‘unfair’ and it had ‘acted inappropriately’ in making critical statements about him to the media. The Secretariat had nevertheless tried to portray Venuprasad and his lawyers as behaving improperly in relation to the media before and after the interim judgment – inferences that the tribunal called ‘illogical and unpersuasive’. It also rejected the Secretariat’s suggestion that an unflawed inquiry would have found Venuprasad to be responsible for the leaks.

The tribunal ruled that Venuprasad was entitled to £292,700 in compensation for the Secretariat’s ‘serious breaches of its obligations’, comprising £233,000 for financial losses, £30,000 for moral injury, £22,000 for injury to health and medical costs, and £8,000 for legal and travel costs. Crucially, it rejected the Secretariat’s plea for the award to be reduced in light of its precarious finances.

The tribunal’s final comments were highly critical of the Secretariat, urging it to pay more heed to its own rules and ‘basic principles of natural justice’ and to ‘reflect on the uncompromising and aggressive manner’ in which it pursued the disciplinary process and litigation. It concluded by calling for a ‘more sensitive and humane approach’ from the Secretariat.

In a statement after the ruling released through his lawyers, Leigh Day, Venuprasad said: ‘The last two years have been a harrowing time for me, both emotionally and financially, during which I have felt powerless, crushed and without a voice in the face of such public hostility from my former employer.’

His solicitor, Paula Lee, said: ‘The aggravating and unusual feature in this case was the aggressive press line taken by the Commonwealth Secretariat against my client … all too often we see cases of senior individuals misusing internal disciplinary procedures for a collateral purpose. The harmful effect on the individual employee cannot be overstated.’

The Commonwealth Secretariat was approached for comment but did not respond.