BAE Systems (Operations) Ltd v Konczak

Where an employee’s psychiatric illness may have both tortious and non-tortious causes, a tribunal must first decide as a question of fact whether the injury is divisible. If it is divisible, it must then consider whether compensation should be apportioned. A vulnerable personality does not remove that prior inquiry, nor does a finding of disability discrimination necessarily make every resulting loss irreducible.

A finding that a claimant failed to mitigate loss from a particular date requires a cogent explanation founded on the evidence. A date cannot be selected merely because it is convenient for calculation.

The employee succeeded before an earlier Employment Tribunal on claims arising from sex discrimination, victimisation, disability discrimination and automatically unfair dismissal. Following an earlier partial appeal and remission on remedy, the Sherratt Tribunal awarded compensation of £318,629.66.

The employer appealed the remedy award, contending that the Tribunal had failed to address divisible psychiatric injury and apportionment, had inadequately explained its finding that failure to take medication became unreasonable in July 2010, and had used the wrong approach to pension loss. The employee cross-appealed on restrictions placed on the cross-examination of the employer’s psychiatric expert and on calculation and interest errors.

1. Appeal and cross-appeal allowed in part. The remedy decision was remitted to the same Employment Tribunal on the evidence already heard and after further submissions.

2. The Tribunal had erred in its approach to causation and compensation for psychiatric injury. It had treated workplace events as sufficient because they were vicariously attributable to the employer, although many of those events had not been found unlawful. The correct prior question was whether the injury or state of health causing loss was factually divisible. If it was divisible, the Tribunal had to consider apportionment between loss caused by actionable conduct and loss caused by other causes. A vulnerable personality, and the fact that disability discrimination had been established, did not remove that inquiry. The Tribunal had also to consider how the causes related to the unlawful dismissal and discrimination.

3. The finding that the employee failed to mitigate loss from 24 July 2010 could not stand. Although the Tribunal had found that her condition deteriorated, it had not explained why refusal of medication was reasonable before that date but unreasonable afterwards. The failure of cognitive behavioural therapy and the convenience of using a three-year period did not supply an adequate evidential analysis.

4. The challenge to the substantial approach to pension loss failed. The Tribunal had found stable employment, which entitled it to use that approach.

5. The Tribunal erred by preventing cross-examination of the employer’s psychiatric expert on independence, competence or propriety. However, the error caused no identified disadvantage and no separate remission was ordered.

6. Apparent mathematical errors and the interest calculation were remitted. Under The Employment Tribunals (Interest on Awards in Discrimination Cases) Regulations 1996, the Tribunal could not simply select 0.5 per cent. It had to apply the rate required by Regulation 3(2), or an appropriate median or average under Regulation 3(3).

• Employment Appeal Tribunal: The employer’s appeal against the Sherratt Tribunal’s remedy award, and the employee’s cross-appeal, were allowed in part. The matter was remitted to the same Tribunal.
• Employment Tribunal (Sherratt Tribunal): Following an earlier partial appeal and remission, it awarded the employee £318,629.66 in compensation.
• Employment Tribunal (Cook Tribunal): It upheld claims of sex discrimination, victimisation, disability discrimination and automatically unfair dismissal. Its remedy decision was subsequently appealed and financial loss was remitted for rehearing before a differently constituted tribunal.