In what has been called “a very welcome decision for employers”, the Court of Appeal has sent a £2.8m race discrimination award case back to the Employment Tribunal and told it to reconsider the level of compensation.
It is the latest twist in the case of Balbinder Chagger v Abbey National, which saw the former £100,000-a-year trading risk controller win his race discrimination case against the high-street bank. He was made redundant in 2006 and claimed he lost his job because of racial discrimination, and was targeted ahead of a similarly performing woman because of the colour of his skin.
The Employment Tribunal and the Employment Appeal Tribunal (EAT) found for Chagger and awarded him almost £2.8m in compensation. Abbey appealed, and the Court of Appeal’s ruling – the details of which were released this week – has asked the tribunal to re-assess the huge award, one of the highest ever for discrimination.
The court said that an employer will only be liable for the loss caused by discrimination, so when assessing damages it is appropriate to ask whether the individual would have been dismissed anyway if there had been no discrimination. It also decided that the tribunal should take into account any difficulty a claimant may have in finding another job, if employers are unwilling to hire him because of the discrimination claim.
At the time of the EAT decision, Abbey said it would appeal against the huge award made to Indian-born Chagger. At the EAT, he said he had applied unsuccessfully for 111 financial services jobs, but gave up and retrained as a maths teacher, earning about £35,000 a year.
This gave rise to the tribunal’s view that the damages calculation should take into account an annual net loss for Chagger of about £80,000.
Commenting on the Court of Appeal’s ruling, Rachel Dineley, head of diversity and discrimination at Beachcroft, said: “This is a very welcome decision, and employers will be relieved to learn that former employees cannot unduly profit from an act of discrimination committed in the course of a redundancy process.
“However, it is also a valuable reminder that the exercise of the right to bring a claim in the tribunal can, occasionally, leave the employee marked out as a troublemaker, so that no-one else will hire him, and that makes it difficult for him to mitigate his loss.
“This can come home to roost. Whatever the business pressures, employers need to ensure they are fair and consistent in their conduct of redundancies if they are to save themselves the cost and the grief of claims of this kind.”
An Abbey spokesperson said: “We are pleased that the Court of Appeal has recognised in part both the merits of Abbey’s arguments and the decision of the EAT. There are certain parts of the court’s judgment that are in favour of the claimant, and Abbey will give serious consideration as to whether it wishes to appeal any of these.
“When the matter again goes before the tribunal, Abbey will present a strong and robust case to ensure that the amount of damages is decided strictly in line with the Court of Appeal’s guidance.”