The written judgment given by Croydon employment tribunal confirmed that Lord Irvine of Lairg's appointment of Garry Hart as his special adviser was in breach of sex and race discrimination laws.
Finding in favour of Jane Coker, a solicitor who had hoped to be appointed, the tribunal said Lord Irvine had also breached European law. Ms Coker said: "The Lord Chancellor must resign in light of today's decision ... the pounds 2.6m a year the Government spends on employing its mates must be repaid to the taxpayer."
Giving the full reasons behind its decision, announced earlier this year, the tribunal criticised the failure of Lord Irvine to look beyond his immediate circle of friends for someone to act as his special adviser. Just because it was accepted convention, dating back to before equal opportunity legislation, that such appointments were not subject to normal civil service recruitment rules, that did not justify unfair procedures.
The 18-page written determination made clear that a "Minister should take account of the imbalance of gender or race in the circles in which he is minded to find someone for an appointment. There is no evidence that the Cabinet's circle of friends are evenly balanced in terms of women and black people. The opposite appears to be true. The evidence is that the Cabinet reproduces itself in terms of race and gender." The tribunal said it was not declaring that all such posts should be brought within normal civil service standards, but that "the particular Minister should ensure that his selection is free from discrimination". The judgment said: "We accept ... that 'word of mouth' recruitment tends to perpetuate discriminatory situations and is therefore undesirable.
"The Tribunal is of the opinion that a minister ... should take account of the imbalance of gender or race in the circles in which he is minded to find someone for an appointment."
Mr Hart , a City lawyer, is a friend of both Lord Irvine and Tony Blair and godfather to Mr Blair's daughter, Kathryn. Among those that could be affected by the judgment are key advisers such as Ed Balls, adviser to Gordon Brown, David Clark, who works for Robin Cook, and Jack Straw's special adviser, Ed Owen.
The tribunal also said it disagreed with Lord Irvine's decision not to attend the hearing to give evidence.
Jane Deighton, Ms Coker's solicitor, said the decision had serious implications for the Government and put at risk all positions filled in this way. The Lord Chancellor's Department said that Lord Irvine would be studying the reasons for the finding of indirect discrimination and then making an appeal.
However, Ms Coker stated her intention to consider bringing a second claim, this time for contempt of court over "demeaning and insulting" remarks he made about her and a co-complainant's character and motivation.Reuse content