Brown v J & J Baxter (t/a Careham Hall)

An employment tribunal has a broad discretion under section 31 of the Employment Act 2002 to determine the appropriate uplift for failure to complete statutory disciplinary procedures. A serious breach may justify an uplift in the top half of the range, but the precise percentage remains a fact-sensitive discretionary decision.

Under section 123 of the Employment Rights Act 1996, the tribunal must determine whether the loss was caused by the dismissal, attributable to the employer’s conduct, and just and equitable to compensate. Loss caused by a reference or safeguarding report which would have been made even without dismissal is not loss in consequence of the dismissal.

The claimant was summarily dismissed for alleged gross misconduct during her notice period. The Employment Tribunal found automatic unfair dismissal and breach of contract because the employer had failed to investigate the allegations properly or follow the statutory disciplinary procedure.

The Tribunal awarded breach of contract damages subject to a 30% uplift under section 31 of the Employment Act 2002. It rejected compensation for the loss of the claimant’s subsequent employment, finding that the relevant loss resulted from an unfavourable reference and a POVA referral which would have occurred even if she had not been dismissed.

The claimant appealed against the uplift and the refusal of compensation for the subsequent job loss. The respondents brought a conditional cross-appeal.

1. Section 31 uplift. The Tribunal had a broad discretion to increase an award by between 10% and 50% where the statutory procedure was not completed because of the employer’s failure. No formula or mandatory list of factors governed the discretion. The decision had to be just and equitable in all the circumstances.
2. A significant and serious breach could properly attract an uplift in the top half of the range, namely 30% to 50%. The precise position within that range remained a question of fact and discretion for the Tribunal. Although the procedures had been totally disregarded, the Tribunal had found no bad faith, wilfulness or blatant intention to flout the statutory regime. Its choice of a 30% uplift was therefore unimpeachable. The first ground was dismissed.
3. Compensatory award. Section 123 of the Employment Rights Act 1996 required the Tribunal to ask:
   1. whether the loss was occasioned in consequence of the dismissal;
   2. whether it was attributable to the employer’s conduct; and
   3. whether it was just and equitable to award compensation.
4. The question whether loss was in consequence of dismissal was one of fact. The Tribunal was entitled to find that the claimant’s subsequent loss resulted from the unfavourable reference and POVA report, rather than from the dismissal itself. The employer would have made those reports and given an unfavourable reference even if the claimant had merely been suspended. The loss therefore did not flow from the dismissal for the purposes of section 123.
5. Chagger v Abbey National Plc and Another [2010] IRLR 47 did not require a different result. That case concerned stigma loss flowing from discriminatory dismissal and the present case concerned reports and referrals which would independently have been made. The second ground was dismissed. The conditional cross-appeal was also dismissed.

• Employment Tribunal: Found automatic unfair dismissal and breach of contract, awarded damages with a 30% statutory uplift, and rejected compensation for loss of subsequent employment.
• Employment Appeal Tribunal: Dismissed the claimant’s appeal and the respondents’ conditional cross-appeal.