Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Employment law

Guilty by association: What recompense when mud sticks?

by Personnel Today 5 Mar 2010
by Personnel Today 5 Mar 2010

Guilt by association is an ugly thing, but tribunals can, in rare cases, award damages.

“A good reputation is more valuable than money”. So said Syrian writer Publilius Syrus in the first century BC â€“ and so declaim claimants today, who make this point time and time again to judicial bodies when seeking large awards of money for loss to reputation. A recent case has brought this back into sharp focus.

As experienced HR practitioners will know, the general rule is compensation for loss of an employee’s reputation arising from dismissal may be awarded only “on the very rarest of occasions”.

In the mid 1990s, the collapse of Bank of Commerce and Credit International (BCCI) turned out to be just such an occasion, so a narrow exception to the general rule was born. For the first time, ‘stigma damages’ were identified and it was held that, in principle, claimants who have been very seriously tainted by association with a dishonest and corrupt employer could claim damages to compensate them for their inability to secure alternative employment as a result of such stigma. In practice, such damages are very difficult to obtain.

The recent Court of Appeal decision in Chagger v Abbey National and Another has revived the concept in the mind of employers and employees. Chagger, of Indian origin, was selected for redundancy. The employment tribunal upheld his complaints of unfair dismissal, racial discrimination and breach of contract (relating to a failure to pay a bonus) and awarded him compensation of £2.8m. Chagger had made unimpeachable efforts to mitigate his loss. He had applied for 111 roles, used 26 employment agencies and had offered to work voluntarily for Abbey National. He had subsequently re-trained as a teacher. The tribunal found part of a reason for Chagger’s difficulty in finding a job was that he had brought his complaints against Abbey National in a tribunal and been stigmatised by doing so.

The case eventually came before the Court of Appeal, which ruled that the tribunal had been right to take into account losses that flowed from the stigma of bringing proceedings after a discriminatory dismissal.

But it will not be sufficient for a claimant merely to assert that he or she has been stigmatised (usually there should be no reason why a prospective employer would be aware that a candidate is engaged in legal proceedings). Any such claimant would have to show that their case was the exception, and would have to provide extensive evidence of mitigation efforts, like Chagger.

In a large jobs market, such claims will be difficult to prove, particularly for any employee who self-sabotages their efforts to find alternative employment by needlessly volunteering the fact they have brought proceedings against their former employer.

Successful claims for stigma damages are more likely, however, in small or specialised industries, where vacancies are few, or to involve a claimant with a particularly high profile, such as football manager Kevin Keegan.

Keegan raised a claim for £16m in stigma damages against Newcastle United in connection with his constructive dismissal from the club in September 2008. That part of his claim was unsuccessful because his losses were limited by an express contractual clause. But the Premier League Managers’ Arbitration Tribunal asked itself whether, if that clause had not been valid, Keegan would have been entitled to substantial stigma damages.

The tribunal found the publication of its judgment in Keegan’s favour (that he had been constructively dismissed by Newcastle United and had not walked away of his own volition) would restore his reputation. Keegan had accepted this in cross-examination, and also accepted that he did not know whether anything that had happened at Newcastle United would stop him from getting a job. Accordingly, even if he had been entitled to stigma damages, they would have amounted to very little.

Key points

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

Employers should aim to minimise the risk of successful claims being brought against them by:

  • Ensuring their disciplinary and grievance procedures, and their equality policies, are up to date and properly and consistently enforced
  • Formulating and enforcing a consistent policy on the provision of standard, neutral references
  • Training staff not to give ‘informal’ references and to refrain from referring to any proceedings (even unsuccessful ones) brought against the employer.

Jessica Corsi, partner, Doyle Clayton

Personnel Today

previous post
Kraft under fire over ‘hasty’ Cadbury job cuts
next post
Train to Gain helps millionth employee

You may also like

Fire and rehire: the relocation question

22 May 2025

Minister defends Employment Rights Bill at Acas conference

16 May 2025

CBI chair Soames accuses ministers of not listening...

16 May 2025

EHRC bows to pressure and extends gender consultation

15 May 2025

Contract cleaner loses EAT race discrimination appeal

14 May 2025

Construction workers win compensation claim against defunct employer

9 May 2025

Zero-hours workers’ rights to be extended from beyond...

8 May 2025

Employment tribunal backlog up 23% in a year

7 May 2025

Ministers urged to outlaw misuse of NDAs

7 May 2025

Employment Rights Bill must be tightened to protect...

1 May 2025

  • 2025 Employee Communications Report PROMOTED | HR and leadership...Read more
  • The Majority of Employees Have Their Eyes on Their Next Move PROMOTED | A staggering 65%...Read more
  • Prioritising performance management: Strategies for success (webinar) WEBINAR | In today’s fast-paced...Read more
  • Self-Leadership: The Key to Successful Organisations PROMOTED | Eletive is helping businesses...Read more
  • Retaining Female Talent: Four Ways to Reduce Workplace Drop Out PROMOTED | International Women’s Day...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+