Racist language – immediate dismissal or ill-judged mistake?

Sep 6, 2023

A recent decision by the Employment Tribunal has received media attention when a 58-year-old Lloyds Bank employee, with no prior disciplinary record, was unfairly dismissed for using the N-word at work. This has highlighted the importance of employers needing to consider the context of a situation before moving to dismissal.


Mr Carl Borg-Neal was dismissed from Lloyds Bank for using the N-word in a race education session as part of the bank’s ‘Race Action Plan’. In a question to the trainer leading the session and in front of other employees, Mr Borg-Neal queried how he should handle a situation where the N-word was used by someone else. In doing so, Mr Borg-Neal stated the full word in example. The trainer was taken aback and offended. The Bank was made aware of this. The Bank started disciplinary procedures against Borg-Neal for use of this language. Mr Borg-Neal’s defence was that he was asking an innocent question related to the session with no malice intended and that his dyslexia played a key role in his difficulty in processing sentences and information quickly prior to speaking.

Lloyds Bank dismissed Mr Borg-Neal on the basis that the full N-word is appalling and should not be used at work. Additionally, even if no malice was intended, hearing the word can be ‘intensely painful and shocking’. Even so, Mr Borg-Neal believed his dismissal was disproportionate and therefore brought a claim for unfair dismissal and disability discrimination. This was on account of his dyslexia and that this had not been considered.

The Tribunal upheld Mr Borg-Neal’s claims of unfair dismissal and disability discrimination. Whilst it was accepted Mr Borg-Neal used the word and that this was in breach of Lloyds’ internal policies, the Tribunal decided that it was outside the band of reasonable responses to dismiss him.


The Tribunal took the time in their judgment to set out their reasoning as to why Mr Borg-Neal had been unfairly dismissed. The Tribunal accepted that Lloyds Bank genuinely believed Mr Borg-Neal was guilty of gross misconduct and that they held this belief on reasonable grounds. However, the Tribunal went on to consider that the word was only stated once, after which Mr Borg-Neal issued an apology and sat quietly for the remainder of the session.

It was also held that, on reviewing the matter as a whole, whilst a reasonable employer would find the full use of the word misconduct, this would not constitute gross misconduct in these circumstances. Further, the size of Lloyds, the number of people in attendance at the training session, the diversity of its members and the context of the conversation was considered. It was found that there was no suggestion that Mr Borg-Neal was taking an opportunity to say an abusive term under cover of a question.

Another finding was that whilst a reasonable employer would take the view that the N-word is a shocking and hurtful word, by investigating the surrounding context and evaluating Mr Borg-Neal’s apology, disability, and unrepeated actions, it was ruled potentially a warning and further training on the subject may have been more proportionate.

Learning Points

The Tribunal has set a clear message in relation to the investigation prior to dismissing employees and the importance of the context behind an act of misconduct.

This case serves as a powerful reminder to all employers on the risks associated with not considering the very particular circumstances of an issue. Additionally, the need for a thorough and timely investigation into a matter instead of taking an action at face value is key. It is always important to have comprehensive policies, procedures and training in place.

How we can help

With so many factors to consider, understanding how to respond appropriately in matters of potential misconduct and how to carry out further investigation properly, could avoid a lengthy and costly Employment Tribunal process.

For further information, or to discuss the issues raised within this case, please contact us to speak to a member of our Employment Team.

This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

Darren Smith

Darren Smith

Partner, Employment Law

Bridget Bailey

Bridget Bailey

Trainee Solicitor

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