Eaton v Spencer (trading as Wiggles Experience)

A default judgment determining liability fixes the pleaded liability issues decided by it. A respondent cannot reopen those issues at a later remedy hearing. Questions concerning causation of loss and the assessment of compensation remain open, where they are genuinely remedy issues. In discrimination claims, it is sufficient that the protected characteristic was an effective cause of the impugned treatment. The assessment of injury to feelings must then proceed on the basis of the liability established by the default judgment, rather than on findings which reduce that liability.

The claimant brought claims arising from his dismissal, including discrimination, harassment and victimisation on grounds of sexual orientation, unfair dismissal and wage-related claims. The respondents failed to present a response. An Employment Judge therefore entered a default judgment under rule 8 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004, determining liability and listing the claim for remedy.

At the remedy hearing, a different Employment Judge made findings which limited the pleaded discrimination liability and awarded compensation for discrimination, harassment and victimisation. The claimant appealed, contending that liability issues determined by the default judgment had been impermissibly retried. The central issue was the effect of a default judgment entered on liability only.

1. The appeal was allowed in relation to the awards for sexual orientation discrimination, harassment and victimisation. The unfair dismissal award stood.

2. Per His Honour Judge Peter Clark, a default judgment determining liability prevents the respondent from challenging allegations in the claim which go to liability at the subsequent remedy hearing. The approach in Lunnun v Singh and Ors was applicable by analogy, although the Civil Procedure Rules did not apply directly to employment tribunals.

3. Issues of causation, namely what loss was caused by the established breach, and the assessment of that loss remain open at the remedy hearing. The remedy tribunal must therefore assess compensation on the basis of the liability determined by the default judgment.

4. The Employment Judge had erred by deciding that a heterosexual comparator would have been treated in the same way and by making findings which substantially limited the discrimination liability. She had also confused whether dismissal was on grounds of sexual orientation with the separate question whether the dismissal caused injury to feelings.

5. Sexual orientation need only be an effective cause of dismissal to establish unlawful discrimination. The discrimination remedy, including any question of aggravated damages, required reconsideration on the basis of the pleaded complaints established by the default judgment.

6. The discrimination remedy issue was remitted for rehearing before a different Employment Judge sitting alone, pursuant to section 4(3)(g) of the Employment Tribunals Act 1996.

• Employment Appeal Tribunal: appeal allowed in relation to the discrimination, harassment and victimisation awards; the unfair dismissal award stood; the discrimination remedy was remitted to a different Employment Judge sitting alone.
• Employment Tribunal: a default judgment determined liability and listed the claim for remedy. At the remedy hearing, compensation was awarded for unfair dismissal and discrimination, but aggravated damages were refused.