Compensatory Awards

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The problem

If you have the misfortune of a Tribunal claim landing on your desk, one of many questions you will want answered is ‘what is the worst case scenario, financially, for the business? In other words, if the claimant wins what compensation will be awarded to them?

The principal

Just as claimants are obliged to try to mitigate their loss, employers will try to find ways to limit the value of possible awards being made. For example, employers may want to run ‘Polkey’ arguments which say that even if a dismissal is found to be procedurally unfair the claimant would still have been fairly dismissed had a fair procedure been followed and thus the value of any claim is limited.

Occasionally employers may try more imaginative ways to limit losses. In Cumbria County Council v Bates [2013](UKEAT/0398/11), Mr Bates, a teacher, was found to have been unfairly dismissed.

At the remedies hearing, the Council advised the Tribunal that Mr Bates was facing criminal proceedings for assaulting a former pupil. The Council requested an adjournment until the outcome of those proceedings, on the grounds that they may affect Mr Bates’ future employment prospects (and were therefore relevant in assessing future loss of earnings).

The Tribunal rejected this application so the Council appealed. The EAT held that the Tribunal had made an error. The EAT decided that Mr Bates’ post-termination conviction for assault and subsequent 6 week prison sentence may have affected his future employment prospects and, consequently, could have substantially reduced any compensatory award.

The practice

It occasionally pays to keep your eyes and ears open once an employee has left employment. Facebook or Twitter, for example, may well reveal information about the former employee which you can use to limit the value of claims lodged. It may be something as simple as a Facebook announcement that they have found a new job (which you have not otherwise been advised about). It may also be something more explosive which you want to use to try to limit a claim’s value. This case says that, in some circumstances, post termination conduct can affect the assessment of compensatory awards.

For further information, help or advice please contact Tim Davies on 0191 211 7927.