Wardle v Credit Agricole Corporate and Investment Bank

An uplift for failure to follow statutory employment procedures applies only to compensation attributable to the claim affected by that failure. The tribunal must begin with the statutory minimum, assess whether culpability justifies an increase, and then ensure that the resulting sum is proportionate. The maximum uplift is reserved for the most egregious cases.

Future loss should ordinarily be assessed to the date by which the employee is likely to obtain equivalent employment. Career-long compensation is exceptional and requires evidence that there is no real prospect of equivalent employment. A probable voluntary move to equivalent or better work does not itself reduce loss caused by a discriminatory dismissal.

The claimant was denied promotion because of his nationality and was subsequently unfairly dismissed and victimised for bringing discrimination proceedings. The Employment Tribunal awarded compensation extending to retirement and increased the entire award by 50% because the employer had not followed the statutory dismissal procedure.

The Employment Appeal Tribunal removed one reduction from the future-loss calculation, varied other future-loss discounts and reduced the uplift to 10%. It nevertheless upheld career-long compensation and permitted the uplift to apply to losses arising from both the dismissal and the earlier discriminatory refusal to promote.

The claimant appealed and the employer cross-appealed. The principal issues concerned the proper scope and amount of an uplift under section 31 of the Employment Act 2002, and the correct method of assessing future employment loss.

1. The claimant’s appeal was dismissed and the employer’s cross-appeal was allowed in part. Compensation had to be recalculated according to the principles stated by the court. Elias LJ delivered the judgment, with which Smith LJ and the Master of the Rolls agreed.

2. Under section 31(3) of the Employment Act 2002, the tribunal must begin with the compulsory 10% uplift. It must then identify circumstances which clearly justify a further increase by reference principally to the nature, consequences and culpability of the procedural breach. The maximum uplift of 50% should be very rare and confined to the most egregious cases. Complete disregard of the procedure will often justify an increase, but does not by itself justify the maximum.

3. After selecting a percentage by reference to the gravity of the breach, the tribunal must consider the resulting monetary amount. The size of the underlying award is relevant to what is just and equitable under section 31(3), even without exceptional circumstances under section 31(4). The resulting sum must be proportionate. Although 50% was unjustified here, the EAT’s 10% assessment had rested on an award which would now change and therefore required reconsideration.

4. The uplift applies only to compensation attributable to the particular claim affected by the procedural failure. It could not apply to injury to feelings or to income lost through the discriminatory refusal to promote. The later dismissal did not change the character of continuing promotion-related loss: that loss remained rooted in discrimination. The EAT therefore erred by permitting an uplift on the whole award.

5. Career-long compensation is exceptional. The ordinary approach is to make the tribunal’s best estimate of when equivalent employment will probably be obtained and award loss only to that date. Lifetime loss is appropriate where the evidence establishes no real prospect of ever obtaining equivalent employment. The finding of a 70% chance of equivalent employment by the end of 2011 precluded any award beyond that date. On the Tribunal’s findings, the probable cut-off was the end of June 2011.

6. A probable voluntary departure from the former employer for equivalent or better work did not reduce the loss. Such evidence ordinarily concerns a different labour-market path and does not show that the claimant would have accepted inferior or no employment. The parties were directed to seek agreement on the recalculated compensation and, if necessary, make written submissions.

1. Court of Appeal (Civil Division): By [2011] EWCA Civ 545, dismissed the claimant’s appeal, allowed the employer’s cross-appeal in part and directed recalculation of compensation.
2. Employment Appeal Tribunal: In UKEAT/0535/09 and UKEAT/0536/09, removed the 80% future-loss reduction, retained career-long loss subject to revised discounts, reduced the statutory uplift from 50% to 10%, and permitted that uplift to apply to the whole award.
3. Employment Tribunal: Found discriminatory refusal of promotion, unfair dismissal and victimisation. It awarded career-long loss and applied a 50% statutory uplift to the total compensation.