Kings Castle Church v Okukusie

An unfair-dismissal compensatory award must reflect loss which is attributable to the dismissal and is just and equitable under Employment Rights Act 1996, section 123. It cannot compensate an employee for earnings from employment which, on the material facts, the employee was not lawfully permitted to perform.

Where immigration status is material to claimed future earnings, the Employment Tribunal must investigate and determine the relevant right-to-work period. An award based on an assumption that the employee could continue working is erroneous if the evidence establishes that permission to remain and work had expired.

The Church appealed against an Employment Tribunal judgment, sent to the parties on 22 November 2010, awarding the claimant compensation for unfair dismissal. The finding that the dismissal was unfair was not challenged.

The appeal concerned whether compensation could include loss of earnings after the claimant's entitlement to remain and work in the United Kingdom had ended, and whether he had failed to disclose immigration documents required to determine that issue. It was agreed before the Employment Appeal Tribunal that he had no right to work in paid employment after 10 May 2010.

1. Appeal allowed. The Employment Tribunal erred in awarding compensation on the basis that the claimant could have continued earning from employment with the Church after 10 May 2010.

2. Under Employment Rights Act 1996, section 123, compensation must be just and equitable, having regard to loss sustained in consequence of dismissal insofar as attributable to the employer's action. The material issue was whether the Tribunal could compensate the claimant as if he had been permitted to work during the relevant period. It could not.

3. The Tribunal had recorded the refusal of the claimant's application for indefinite leave to remain and knew that his ability to remain depended on an appeal. It therefore should have investigated whether an appeal had been brought and when it had been determined. It made no findings on those material matters.

4. A letter which should have been disclosed showed that the immigration appeal and subsequent review requests had been dismissed, and that the claimant's appeal rights were exhausted on 10 May 2010. The parties agreed that he had no right to work after that date. The Tribunal's assumption that he could continue in the Church's employment was consequently wrong.

5. Questions of causation based on the possibility that the employer might have supported a further immigration application were not material to the directed issue and were not determined. The compensatory award was set aside and replaced by an agreed award of £4,464.90, comprising loss of earnings to 10 May 2010 and the unchallenged elements of compensation.

• Employment Appeal Tribunal: Allowed the Church's appeal and substituted a reduced compensatory award.
• Employment Tribunal: Held that the claimant had been unfairly dismissed and awarded compensation of £19,210; the judgment was sent to the parties on 22 November 2010.