Brash-Hall v Getty Images Ltd

Compensation for discrimination is assessed by the no-discrimination hypothesis: the claimant must be placed in the position she would have occupied had the unlawful conduct not occurred. The assessment includes employment events and contractual entitlements arising on that hypothesis. An unreasonable refusal of suitable alternative employment may remove statutory redundancy entitlement under the Employment Rights Act 1996, section 141, but does not extinguish a separate contractual right to pay in lieu of notice. An enhanced severance payment conditional on signing an agreement is recoverable only if acceptance is proved. The appeal was therefore allowed only to add proven notice pay.

The appellant took maternity leave while employed by the respondent. She resigned after being told that her former post would disappear in an earlier restructuring and succeeded before the Employment Tribunal in claims including unfair dismissal, wrongful dismissal and sex discrimination.

For remedy, the Tribunal found that she would have returned to work, remained employed until a genuine restructuring at the end of October 2003, and refused a suitable alternative post. It awarded compensation on the basis of three months’ notice from August 2003 and found no entitlement to a statutory redundancy payment. The Employment Appeal Tribunal upheld that decision. The central issue before the Court of Appeal was whether contractual notice pay and an enhanced severance package should have been included in the discrimination compensation.

1. Disposition. The Court of Appeal unanimously allowed the appeal to a limited extent. The compensation award was increased to include pay and benefits for the balance of the three-month contractual notice period from 1 November 2003, namely an additional period of ten weeks and five days, less the seventeen days already covered by the award.
2. Compensation hypothesis. Lord Justice Lloyd, with whom Wall LJ and Laws LJ agreed, applied the approach in Ministry of Defence v Cannock [1994] ICR 918. Compensation for sex discrimination must reflect the position the claimant would have occupied had the unlawful conduct not occurred. On the Tribunal’s findings, the appellant would have returned to her former post, worked until the genuine restructuring, and then refused the National Account Manager role.
3. Effect of statutory redundancy provisions. Under section 141 of the Employment Rights Act 1996, the unreasonable refusal of suitable alternative employment meant that the appellant would not have been entitled to a statutory redundancy payment. That provision did not determine her separate contractual entitlement to pay in lieu of notice. Nor was it open to the respondent to argue that refusal of the alternative post, by itself, deprived her of the severance terms previously offered.
4. Enhanced severance. The enhanced payment was conditional on signing a standard severance agreement. The appellant neither advanced that issue properly below nor proved that she would have signed the agreement. The Court therefore declined to speculate or remit the matter for further findings. The notice payment was unconditional and remained recoverable. Wall LJ also emphasised the disproportion between the sums at stake and the costs of further proceedings, and Laws LJ agreed that remission would be wrong in principle.

• Court of Appeal (Civil Division): allowed the appeal to the limited extent of increasing compensation for contractual pay and benefits during the balance of the notice period.
• Employment Appeal Tribunal: dismissed the appellant’s appeal and found no error of law in the Employment Tribunal’s approach.
• Employment Tribunal, London Central: upheld the claims of unfair dismissal, wrongful dismissal and sex discrimination. At the remedy stage it found that the appellant would have refused suitable alternative employment in the genuine restructuring and awarded compensation without a statutory redundancy payment or enhanced severance payment.