Eyebrows have certainly been raised by reports that a £600,000 settlement sum is to be paid to Sharon Shoesmith who was the head of Haringey Children’s Services at the time of the death of Baby P.

However, the large pay-out is not compensation for an ordinary unfair dismissal claim brought in the Employment Tribunal (where compensation is capped at £74,200), but instead settles Ms Shoesmith’s judicial review claim which quashed her employer’s decision to dismiss. As a result of the Court of Appeal’s ruling in May 2011 that Ms Shoesmith’s dismissal was unlawful and void, she became entitled to compensation based on  her  annual salary of £133,000 and pension contributions going back to her dismissal in December 2008.

Ms Shoesmith was able to challenge her dismissal by judicial review because her position as Director of Children’s services was a statutory office. However the reason she succeeded in that claim was because her employer had failed to follow a fair procedure before dismissing her. In particular they did not conduct a proper investigation, failed to give her precise details of the allegations against her and failed to give her all relevant documents.

The fate of Ms Shoesmith can be contrasted with two social workers at Haringey involved in the Baby P case who also lost their jobs as a result. However Haringey council did follow a fair procedure before dismissing Mrs Christou and Ms Ward which involved an investigation,  a disciplinary hearing where documents were exchanged beforehand and witnesses could be called in support and a full re hearing appeal.

Last year their dismissals were held to be fair by the Employment Appeal Tribunal. As a result they received nothing.

These decisions demonstrate that failing to follow a fair disciplinary procedure, which as a minimum must be in accordance with the ACAS code, before deciding to dismiss an employee, can prove to be a very expensive mistake.

Graham Irons, Howes Percival employment law partner