Davidson-Hogg v Davis Gregory Solicitors & Anor

Under the Polkey approach, compensation for unfair dismissal is limited when the employment would have ended, by fair dismissal or resignation, for reasons unrelated to the unlawful dismissal. Loss caused by the manner of dismissal may continue in an appropriate case, including through psychiatric injury, but an intervening unexceptionable termination may prevent further attributable loss. The comparison must reflect the claimant’s actual employment status at the hypothetical termination date. Where compensation covers distinct statutory wrongs, the tribunal must attribute an appropriate sum to each wrong and consider interest under the applicable regulations, although the award of interest remains discretionary.

The Claimant succeeded before an Employment Tribunal on claims concerning detriment and dismissal following protected disclosures, and post-employment victimisation. The Tribunal awarded compensation, including damages for injury to feelings, personal injury and aggravated damages, but limited economic loss to 16 January 2007, when it found that the employment would probably have ended through fair dismissal or resignation. It made no award of interest on injury-to-feelings or personal-injury damages.

The Claimant appealed the remedy decision, challenging the limitation of future loss and the failure to attribute part of the award to victimisation for the purpose of considering interest.

1. Appeal allowed in part. The Tribunal was entitled to limit forward loss to 16 January 2007. Its finding was that, absent the actual unlawful dismissal, the employment would have ended at the close of the probationary period either by fair dismissal for relationship difficulties or by voluntary resignation.

2. The intervening termination would not have involved the unpleasantness or unlawfulness of the actual dismissal. Accordingly, later economic loss was not attributable to the unlawful act. The Tribunal’s approach was consistent with Polkey and the principles explained in Gover and Software 2000.

3. The Tribunal had to reconsider the comparison between the Claimant’s old and prospective employment. By 16 January 2007 she would have been admitted as a solicitor, rather than remaining a trainee or legal executive. The question of any resulting difference in labour-market position was remitted.

4. The Tribunal erred in failing to attribute part of the global award to the post-employment victimisation. The victimisation was not treated as trivial, and compensation had been awarded for it. The Tribunal therefore had to identify an appropriate amount referable to that wrong and consider interest under the Employment Tribunals (Interest on Awards in Discrimination Cases) Regulations 1996. The making of an interest award remained discretionary.

5. The matter was remitted to the same Employment Tribunal, applying the factors in Sinclair Roche & Temperley v Heard.

• Employment Appeal Tribunal: appeal from the Employment Tribunal’s remedy judgment registered with reasons on 10 August 2009. Appeal allowed in part and issues concerning future loss and interest remitted.