Employment alert – Compensation and career loss earnings
In the case of Secretary of State for Justice v Plaistow, the Employment Appeal Tribunal (EAT) considered the applicable principles when looking at damages for a loss of career, as well as other points that should be considered in determining the overall award.
Mr Plaistow was employed by the Prison Service for a number of years. He succeeded with a claim before the employment tribunal (ET) that he was subjected to a number of instances of discrimination on the ground of his sexual orientation. These included allegations of verbal and physical abuse and that his eventual dismissal was also discriminatory. The case highlights the rare but permissible circumstances in which the ET is entitled to award career loss damages. Such cases will usually require appropriate medical evidence. Both parties’ medical experts agreed that Mr Plaistow was suffering from post-traumatic stress disorder and other conditions. Mr Plaistow’s medical expert was firmly of the view that he was unlikely to work again and the employer’s medical expert under cross-examination was unable to give a definitive view as to when Mr Plaistow could return to the labour market. The EAT upheld the decision to award damages based on a loss of career, emphasising that the relevant test was what was likely to happen, rather than applying the higher threshold of the strict balance of probabilities.
The Prison Service did succeed with two other grounds of appeal, however. First, an appeal in relation to the ACAS Code of Practice adjustment. This is a process whereby the ET can reduce or increase any award because either party has failed to apply or engage in an adequate disciplinary or grievance procedure. The process is intended to encourage the parties to ensure that a fair and complete disciplinary or grievance procedure is used before litigation and the ET can penalise either party accordingly. The EAT accepted that, in applying the ACAS Code of Practice adjustment to the award and making a 20% increase to the overall award which totalled over £2 million, the ET had failed to take account of whether the overall increase was just and equitable.
Second, the EAT accepted that, while the ET had made a 5% reduction in the overall award to reflect the remote prospect of Mr Plaistow returning to work, the ET had not set out in its judgment whether it had considered the other vicissitudes of life, such as leaving work due to disability, death or other unforeseen circumstances and whether any further reduction was appropriate.
The case, which will be remitted to the ET to consider these two points, serves as a salutary lesson to employers to ensure that a safe and discriminatory free work environment is provided to avoid such claims. Where career loss damages are being claimed, employers must ensure that the medical evidence deals not only with the diagnosis of the condition but also, crucially, with the prognosis.
For further details, please get in touch with your usual Penningtons Manches Cooper contact, or Paul Mander.