Gab Robins (UK) Ltd v Triggs

The Court of Appeal allowed the employer's appeal against the Employment Appeal Tribunal's directions on remedy. The key legal principle is that under section 123 of the Employment Rights Act 1996 an employment tribunal may award compensation only for loss "sustained by the complainant in consequence of the dismissal" and attributable to action taken by the employer. Loss caused by the employer's antecedent breaches of the implied term of trust and confidence (for example illness and a consequent reduction in earning capacity incurred before the effective date of termination) does not "flow from the dismissal" and therefore is not recoverable as part of an unfair dismissal compensatory award; such loss may give rise to a separate common law claim. The court applied the guidance in Johnson v Unisys Ltd and Eastwood to draw the boundary between statutory unfair dismissal remedies and common law damages.

Background and procedural posture:

• The claimant, Mrs Gillian Triggs, brought a claim for constructive unfair dismissal after a period of alleged bullying and overwork which the Employment Tribunal found had caused her stress-related illness. The ET upheld the claim and gave directions that compensation under the unfair dismissal claim could include loss of future earnings attributable to the employer's antecedent conduct. The Employment Appeal Tribunal upheld those directions. The employer appealed to the Court of Appeal, with the only issue before this court being whether the ET properly included loss flowing from pre-dismissal wrongful conduct in the assessment of compensation under section 123 ERA.

Nature of the relief sought: Compensation for constructive unfair dismissal (basic and compensatory awards), and directions as to the basis for assessing the compensatory award.

Issues framed by the court:

1. Whether compensation under section 123 ERA for unfair dismissal can include loss which flowed from the employer's antecedent breaches of the implied term of trust and confidence that caused illness and reduced earning capacity before the dismissal.
2. How to apply the boundary identified in Johnson v Unisys Ltd and the House of Lords' guidance in Eastwood to constructive dismissal cases.

Court’s reasoning and conclusion:

The court analysed Johnson and Eastwood and concluded that a distinction must be maintained between loss that "flows from the dismissal" and loss which was caused by antecedent wrongful conduct by the employer. Even in a constructive dismissal, the dismissal itself is effected by the employee's acceptance of the employer's repudiatory conduct; losses already incurred as a result of that earlier conduct (including future loss attributable to illness caused before termination) were not caused by the later act of dismissal and therefore fall outside the compensatory award under s.123. Those losses gave rise, if at all, to an accrued common law claim that is not to be litigated in the unfair dismissal forum. On that basis the Court of Appeal allowed the employer's appeal and indicated the appropriate remedial order should clarify the correct assessment approach for the tribunal.

The court noted the practical difficulties created by the boundary (duplication of proceedings, causation questions) but applied the established authority rather than extending tribunal compensatory jurisdiction.

Appeal allowed. The Court of Appeal held that compensation under section 123 of the Employment Rights Act 1996 is confined to loss sustained in consequence of the dismissal itself; loss caused by the employer's antecedent breaches of the implied term of trust and confidence (including illness and reduced earning capacity that arose before the employee accepted repudiation) is not recoverable in unfair dismissal proceedings and is properly pursued, if at all, in a separate common law claim. The ET and EAT had misdirected themselves in treating such antecedent losses as recoverable in the unfair dismissal remedy hearing.

Employment Tribunal decision promulgated 28 December 2006 upheld the claim for constructive unfair dismissal and gave directions on remedy. Employment Appeal Tribunal upheld the ET's decision and directions (EAT order dated 13 June 2007). Appeal to the Court of Appeal ([2008] EWCA Civ 17) allowed on 30 January 2008, quashing the ET/EAT approach to the assessment of compensatory award insofar as it included loss flowing from antecedent breaches.