Brown v J & J Baxter t/a Careham Hall
The Respondents ran a residential care home for the elderly. The Claimant was employed as an assistant care manager, having commenced her employment in November 1982. On 6 June 2008 the Claimant was summarily dismissed for gross misconduct. That misconduct related to the alleged mistreatment of residents in the home. In a judgment promulgated with reasons on 16 February 2009 the Tribunal found her claims of automatic unfair dismissal and breach of contract/wrongful dismissal to be well-founded, on the basis of the employer's failure to conduct any meaningful investigation ot utilise proper procedures.
The Claimant had been able to secure a new job, also in the care industry. She alleged that she lost that job as a result of an inaccurate reference and unfounded accusations made against her by the Respondents to her new employers. She sought compensation for the loss of this new employment. The Tribunal held that they had no jurisdiction to make an award of compensation for unfair dismissal under this head. The Claimant contended that they were wrong. The Claimant's case was that, on the Tribunal's findings, and relying on section 123 Employment Rights Act 1996, that her loss was in consequence of her dismissal and attributable to the acts of her employer. Section 123 ERA 1996 provides:
"(1) Subject to the provisions of this section and sections 124, 124A and 126, the amount of the compensatory award shall be such amount as the Tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer.
Relying on Chagger v Abbey National Plc and Another [2010] IRLR 47, the Claimant submitted that the principles set out in the decision should apply in this case. That case suggested that an award for unfair dismissal compensation can include damages to compensate not only for stigma arising from the process of litigation, but for the damage to reputation caused by a dismissal. So long as the relevant events flow naturally from the dismissal, compensation is recoverable. The Claimant argued the stigma arose naturally from the dismissal and the communications which followed it, namely the reference from the employer (in fact the reference that was provided was unauthorised) and a POVA referral, and the Tribunal erred in considering the matter on a "but for" basis. These events were attributable to the Respondents. It was an unusual feature of this case that the Claimant could actually point to a particular job she had secured, but which she then lost as a result of her employer's actions.
THe EAT had sympathy with "these were interesting and attractively presented submissions but," concluded that on the facts the Tribunal were not in error, and that it was open to them to conclude that the Claimant's claim under this head was not justiciable.
The Tribunal had concluded that the Respondent's initial intention was to suspend the Claimant. It was not in dispute that they would then have been under a statutory duty to report the Claimant and would have given her an unfavourable reference in any event. This also applied to the POVA referral. Ultimately therefore this was not a case about stigma damages. It was a case concerning the loss which flowed from reports and referrals, which the employers were required to make and, as the Tribunal found, would have made in any event, even if the Claimant had not been dismissed. The loss of the new job was not therefore sustained in consequence of the dismissal.
Full case at http://www.bailii.org/uk/cases
Appeal No. UKEAT/0354/09
