2010 case round up (part 1)

2010 was a very busy year for employment tribunals and courts with plenty of interesting cases.  Here are our chosen case highlights:

1. Compensation in discrimination cases – stigma loss
Chaggar v Abbey National plc [2010] IRLR 47

The Court of Appeal accepted for the first time the principle that, where a claimant is dismissed on discriminatory grounds, he or she may recover “stigma damages” to reflect the fact that employers might be unwilling to hire someone who has brought discrimination proceedings against a previous employer.  This case does not establish that a claimant can claim stigma damages just because they found it hard to find a new job.  Rather, the stigma affects the period of future loss of earnings the individual is to be compensated for.  The Court also held that, when calculating the compensation to be awarded in relation to a discriminatory dismissal, it is necessary to take into account the chance that the individual would have been dismissed anyway.

In this case, it was found by the lower courts that the claimant would never find another job in the financial services sector and he was therefore awarded over £2.8m in damages relating to lost earnings for the rest of his working life.  However, that figure was greatly reduced as a result of the Court of Appeal’s findings in relation to the principle that he might have been dismissed anyway. 

2. Disability discrimination – guidance on determining whether a mental illness is a protected disability
J v DLA Piper UK LLP [2010] IRLR 936

The question in this case was whether the claimant was “disabled” for the purposes of the Disability Discrimination Act 1995 (“DDA”), although the same principles apply under the Equality Act 2010.

The Employment Appeal Tribunal (“EAT”), found that the claimant was “disabled” and provided the following guidance for Employment Tribunals (“ET”) going forward when dealing with mental impairment cases:

  • ETs do not need to take a rigid consecutive approach to the questions they consider when trying to determine whether a person is disabled.  If the question of whether there is an impairment (usually the first question to be addressed) is difficult and requires extensive medical evidence, ETs can instead make findings about whether the claimant’s ability to carry out normal day to day activities is adversely effected and then move on to consider the impairment question in light of those findings.
  • Tribunals should be aware of the distinction between “clinical depression” (which does constitute a disability under the DDA) and a reaction to adverse circumstances (which does not).  The symptoms of both can be similar but the question of whether the condition has a “long term” adverse affect may draw the line between them.

3. Whistleblowing
BP plc v Elstone and another [2010] IRLR 558

The EAT held that an individual must be a “worker” at the time he makes a protected disclosure in order to be protected under the whistleblowing legislation.  It agreed with the ET’s approach of looking at the wording of the relevant statute (i.e. the Employment Rights Act 1996), which refers to a “worker” and not a “person” making a protected disclosure.

The EAT also held, taking a purposive approach to the legislation, that a whistleblowing claim brought against the claimant’s current employer may be in relation to a disclosure that was made to a previous employer.  In this case, BP refused to engage the claimant for further consultancy work because his previous employer had dismissed him for gross misconduct (for raising safety concerns to people outside his then employer).  The Claimant brought a whistleblowing claim against BP and the question was whether he was protected given the fact that he was employed by another entity when he made the protected disclosure in question.  The ET and EAT held that he was on the basis that the purpose of the law (which is to protect those who blow the whistle in the public interest) would not be served if protection is lost once an individual’s employer changes.  BP has appealed against this decision. 

4. Constructive dismissal
Buckland v Bournemouth University Higher Education [2010] IRLR 445

This case establishes that a repudiatory/fundamental breach of contract, once committed, cannot be cured.  This is on the basis that the wronged party should have an unfettered right to accept that breach and treat himself as having been constructively dismissed.  Based on the facts of this case, therefore, an internal inquiry carried out by the employer which vindicated the employee did not remedy the employer’s initial repudiatory breach which entitled him to resign and claim constructive dismissal.  

5. Breach of contract
Bateman and others v Asda Stores Ltd [2010] IRLR 370

In this case, the EAT confirmed the principle that an employer may reserve a contractual right to amend unilaterally particular aspects of the employee’s employment contract as long as clear language is used in the wording of such a provision. 

The employer’s Employee Handbook in this case (which included contractual terms) contained a provision under which the employer reserved the right to review, amend or replace the content of the Handbook from time to time.  The employer sought to rely on that clause in unilaterally amending the contracts of certain employees in order to ensure that all its employees had the same pay structure.  The EAT held that this was not a breach of contract. 

Note, however, that the employees in this case had not sought to argue that the employer’s action in unilaterally amending their contracts amounted to a breach of the duty to maintain trust and confidence. 

6. Disciplinary proceedings
Secretary of State for Justice v Mansfield [2010] EKEAT/0539/09/RN

This case concerned disciplinary proceedings and concurrent police investigations.  The normal view in such cases is that the existence of a police investigation is not a valid excuse for a delay in completing an internal disciplinary process (unless perhaps at the request of the police to assist their investigation).  This is also in line with the ACAS Code of Practice on Disciplinary and Grievance Procedures which requires each step of the relevant procedures to be carried out “without unreasonable delay”.  The EAT in this case, however, has held that there may be cases where an employer’s decision to postpone its internal disciplinary process during a police investigation may be reasonable.  Whether this is in fact that case is to be determined on a case by case basis and we recommend you seek legal advice if ever faced with such a situation.  Nevertheless, the decision of the EAT provides employers with a degree of discretion. 

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.