Aegon UK Corp Services Ltd v Roberts

Compensation for unfair dismissal is limited to financial loss attributable to the dismissal. The just-and-equitable wording permits flexibility and may justify an award below assessed loss, but not an award exceeding the loss sustained. Where later employment ends before the remedies hearing, the tribunal must decide whether it broke the chain of causation. If it did, the same causation principle applies to the remuneration package as a whole. Pension rights are deferred remuneration, not a separate category, and must be valued in money.

Ms Roberts was dismissed by Aegon for redundancy and was later found to have been unfairly dismissed. She immediately obtained employment with Just Retirement on more favourable overall remuneration terms, but that employment subsequently ended. The Employment Tribunal treated the new employment as breaking causation for loss of earnings, but not for loss of pension rights, and awarded £37,180.30. The Employment Appeal Tribunal upheld that distinction. Aegon appealed on the ground that pension loss formed part of the same remuneration package and could not remain attributable after causation had been broken.

1. Disposition. The appeal was allowed. The Employment Tribunal’s award was set aside and an award of £300 for loss of statutory rights was substituted.
2. Under section 123(1) of the Employments Rights Act, the compensatory award is based on financial loss attributable to the dismissal. The just-and-equitable formula permits flexibility in proving and assessing loss, and may justify awarding less than the loss incurred, but it does not permit an arbitrary award or compensation exceeding the loss sustained. The limited exception discussed in Norton Tool v Tewson was irrelevant on these facts. Dunnachie v Kingston Upon Hull CC confirmed the governing restriction to financial loss.
3. Where a claimant obtains later employment and that employment ends before the remedies hearing, the tribunal must determine on the facts whether the later employment broke the chain of causation. Permanent employment on equivalent or better terms does not automatically terminate loss attributable to the first dismissal. Applying Dench v Flynn and Partners, the tribunal was entitled to find that Just Retirement broke causation for remuneration. Any shortfall in the later remuneration package could still have remained recoverable, but there was no shortfall.
4. Pension rights are part of the overall remuneration package and are deferred remuneration. Their importance and valuation difficulties do not justify a separate causation rule. Pension values must be translated into money and assessed with the other elements of remuneration. Once the tribunal found that Just Retirement broke causation, it was required to apply that finding to pension loss as well. The overall package was more favourable than Aegon’s package, even allowing for pension loss.
5. The Court of Appeal should interfere with a compensation assessment only where the tribunal erred in principle or reached a perverse conclusion, as stated in Bentwood Bros (Manchester) Ltd v Shepherd. Applying different causation principles to pension and other remuneration was an error of principle.

• Court of Appeal (Civil Division) allowed Aegon’s appeal, set aside the tribunal’s award and substituted £300 for loss of statutory rights.
• Employment Appeal Tribunal upheld the Employment Tribunal’s decision to distinguish pension loss from loss of earnings.
• Employment Tribunal found unfair dismissal, treated the later employment as breaking causation for earnings but not pension loss, and awarded £37,180.30.