Tribunals
are coming down heavily on employers who fail to follow procedure and act
unreasonably in disputes by making hefty awards. Through a series of fictional
but familiar tales, Pauline Matthews analyses recent developments
Manner
of dismissal
Anna
works for a stockbrokers. She is sacked for an alleged expenses fiddle but no
disciplinary procedure is followed. When she is sacked Anna is ordered off the
premises after being accused of theft and fraud in front of all her colleagues.
She is very distressed by this and finds it impossible to get a job afterwards.
PM
comments It may now be possible to claim for damages for the manner in
which the dismissal was carried out if it was particularly harsh. In Johnson v
Uniysis, 2001, HL, the applicant had been dismissed summarily without a
disciplinary procedure and suffered psychiatric damage. He sought to claim
damages in the county court for breach of the implied term of trust and
confidence. He relied on Malik v BCCI (stigma damages case) as authority for
claiming damages for injured feelings arising from the dismissal.
Nevertheless,
the House of Lords decided Johnston could not proceed with his claim because of
the existence of the statutory scheme of unfair dismissal. It drew the conclusion
that it was intended compensation should only be awarded through the statutory
scheme and not through a breach of contract action. It further stated it would
be difficult to claim damages in any event in these situations because the
applicant would have to show that his psychological damage arose from the
manner of dismissal rather than the actual fact of dismissal.
But
the Law Lords said such a claim could not be ruled out in relation to
constructive dismissal because the right to claim breach of contract was
preserved alongside the right to claim statutory unfair dismissal.
Therefore,
to avoid a situation where a complainant of express dismissal was in a worse
position than a complainant of constructive dismissal, "in appropriate
cases" tribunals should award "compensation for distress,
humiliation, damage to reputation in the community or to family life".
They said limiting loss in unfair dismissal claims to financial loss only was
too narrow a construction. Anna could therefore have a claim for damages for
injury to feelings in relation to the way she was dismissed, if she can show
she has suffered serious psychiatric damage, such as clinical depression, as a
result.
Psychiatric
injury
Kay
is sexually harassed by her boss who will not take no for an answer. He
constantly asks her out, buys her chocolates and flowers. It is well known that
he writes her poetry. She complains to personnel who tell her to "get a
life". Subsequently her boss arranges for her to accompany him on a
business trip. When they arrive it turns out he has booked a double room for
both of them. She leaves immediately. She is traumatised by her
experience,suffering severe depression and she does not return to work but
issues tribunal proceedings claiming sex discrimination, constructive unfair
dismissal and psychiatric injury in respect of the discrimination. The employer
says her depressive illness is due to a pre-existing condition.
PM
comments An applicant with a sex discrimination claim resulting in
psychiatric injury can include such a claim when issuing proceedings for the
discrimination in the employment tribunal (following Sheriff v Klyne Tugs, CA
1999). Note that such a claim cannot be brought after the resolution of the
tribunal proceedings. Kay would need to show that her psychiatric illness was
caused by an unlawful discriminatory act.
While
average awards appear to be around £5,000, they could be much higher. In a
recent sexual harassment case against the Prison Service, Mrs Salmon recovered
£15,000 for her psychiatric injuries plus £20,000 for injuries for feelings and
£45,000 for loss of earnings – though in that case it was pointed out that the
tribunal must ensure any award for injury to feelings does not reward the
applicant again for matters already dealt with in respect of psychiatric
injury.
The
fact that Kay has suffered from a psychiatric disorder in the past could lead
to a reduction in damages as with Mrs Salmon who was given a 25 per cent
reduction. The important point is that the tribunal can still make an award if
an appli- cant can show that the particular injury resulted from the unlawful
treatment.
However,
an employment tribunal recently awarded £12,000 for injury to feelings which
were heightened by the sexual abuse that the applicant had experienced as a
child. In A v B the tribunal stated that "the respondent must take the
applicant as he finds her and the possibility that a more robust individual –
at least one who had not suffered abuse in the past – would not have been
affected as much as she has was irrelevant".
Kay
might also be awarded aggravated damages because of the cavalier way the
personnel department dealt with her earlier complaints. Aggravated damages can
be awarded in addition to injury to feelings where there is conduct likely to
add to the injury. This was the case in Alexander v Home Office, CA, 1988, where the employer was described as having
behaved in a high-handed, malicious, insulting and oppressive manner. She may
also consider a Johnson v Unisys-type claim in respect of the manner of her
constructive dismissal.
Aggravated
damages
Trevor
has made a number of allegations of race discrimination against his employer, a
building contractor. After three unsuccessful tribunals his employer is fed up
with him and decides to sack him. He is accused of fiddling his expenses claim
by £20 for drinks at Christmas and dismissed with no disciplinary procedure.
Trevor claims race discrimination and victimisation. He says that everyone
claimed the £20 and at the tribunal it emerges that even the managing director
claimed it.
The
press reports the case widely under the headline "Days of whine are over
for Trevor". At tribunal the employer attacks the applicant’s credibility
by referring to a conviction 10 years ago, arguing he is a dishonest and
unreliable witness.
PM
comments In the case of Tchoula v ICTS, EAT, 2000, a similar situation
occurred and the tribunal awarded Mr Tchoula £22,000 for injury to feelings and
£5,000 for aggravated damages. On appeal this was reduced to £7,500 for injury
to feelings and £2,500 for aggravated damages. The EAT said this was a case at
the lower end of the scale of injury to feelings, implying £7,500 was a fair
award for a case at that end of the spectrum.
The
tribunal compared Tchoula’s case to that of Chan v The London Borough of
Hackney, ET, 1996, where Mr Chan had to endure months of pressure and
humiliation and received a much larger award of £30,000. A high award could be
made for injury to feelings in Trevor’s case in the light of Virdi v CPM, ET,
2000, where, because of the national publicity surrounding the case the
claimant’s reputation was severely damaged. The tribunal therefore awarded
£100,000 for injury to feelings.
It
is open to Trevor to argue he should receive a minimum of £7,500 in respect of
injuries to feelings for victimisation or discrimination, although it is
arguable the decision in Tchoula applies in cases where only a limited
detriment could be shown.
In
addition, as we have already seen, the court can award aggravated damages where
the respondent’s behaviour is high handed, oppressive and so on. In
Tchoula because the charges were
engineered by the employer he received aggravated damages. However, in this
case an additional award for aggravated damages may also be made because of the
employer’s attempts to undermine Trevor’s good character.
In
Virdi an award of £25,000 was made for aggravated damages because the
respondent had behaved high-handedly and refused to apologise. It is important,
therefore, to think carefully in advance before using this type of information
and only to use information to discredit the applicant where strictly relevant
to the issues in question. Where an apology is appropriate – make it. Usually a
form of words can be devised which preserves everyone’s pride.       n
Pauline
Matthews is an employment associate at DLA
Key
points
–
Employers should follow disciplinary procedures carefully, as damages for the
manner of dismissal may now be sought in unfair dismissal cases
–
Employees bringing discrimination cases can claim for personal injury with
their tribunal claim
–
The fact that an applicant has a pre-existing psychiatric condition does not
rule out an award for personal injury, although there may be a percentage
reduction if part of the injury related to the pre-existing condition
–
The principle that the wrongdoer "takes his victim as he finds him"
could be applied
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–
The EAT has arguably set a benchmark of £7,500 in the "lower
category" of injury to feelings cases
–
Employers should be aware that the manner in which they treat discrimination
complainants could lead to aggravated damages awards
