Konczak v BAE Systems (Operations) Ltd (Sex Discrimination : Other losses)

Before apportioning compensation for psychiatric injury, an Employment Tribunal must first decide whether the injury or state of health is divisible. A vulnerable personality does not remove that inquiry. Nor does a finding of disability discrimination necessarily prevent apportionment of loss attributable to other, non-tortious causes.

A tribunal must give a cogent evidential explanation for the date on which a claimant first failed to mitigate loss. It cannot select a date merely because it is mathematically convenient. Where interest is awarded under the Employment Tribunals (Interest on Awards in Discrimination Cases) Regulations 1996, the tribunal must apply the prescribed rate or an appropriate median or average rate; it cannot select an arbitrary rate.

The claimant had succeeded before an earlier Employment Tribunal on claims arising from sex discrimination, victimisation, disability discrimination and automatically unfair dismissal. Following a prior 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 apportionment of psychiatric injury, had inadequately explained its finding of failure to mitigate from July 2010, and had wrongly adopted the substantial approach to pension loss. The claimant cross-appealed on calculation and interest errors and on the restriction of cross-examination of the employer's psychiatric expert.

The central issues were whether the psychiatric injury required a divisibility inquiry, whether the mitigation date was adequately reasoned, and how the remedy calculations and statutory interest should be addressed.

1. The employer's appeal was allowed in part and the claimant's cross-appeal was allowed in part. The remedy issues were remitted to the same Employment Tribunal on the evidence already heard and the facts already found.

2. The Tribunal had erred by treating the workplace origin of events as determinative of causation. It had confused vicarious liability with causation of compensable loss. It should first have determined, on the available evidence, whether the claimant's psychiatric injury or state of health was divisible. If it was divisible, it then had to decide whether apportionment was appropriate. A predisposition to psychiatric injury did not eliminate that inquiry.

3. A finding of disability discrimination did not necessarily mean that all consequential loss was caused by that discrimination or could not be apportioned. The Tribunal had to consider whether all compensation flowed from the discriminatory conduct, or whether divisible loss was attributable to other causes.

4. The finding that mitigation failed from 24 July 2010 was inadequately reasoned. Deterioration in health and the failure of CBT did not explain why refusal of medication was reasonable before that date but unreasonable afterwards. The Tribunal had to reconsider and explain the date, without selecting it for calculation convenience.

5. The employer's pension-loss ground failed. Having found stable employment, the Tribunal was entitled to adopt the substantial approach recommended by the applicable guidance.

6. The Tribunal had erred in preventing a challenge to the independence, competence or propriety of the employer's psychiatric expert. However, no remittal or further order was made on that issue because the error had caused no identified disadvantage and the other remittal rendered it academic.

7. Apparent mathematical errors, including benefit and future-loss calculations, were remitted. The Tribunal also erred by selecting 0.5% interest. Under the Employment Tribunals (Interest on Awards in Discrimination Cases) Regulations 1996, it had to apply the prescribed rate under regulation 3(2), or an appropriate median or average under regulation 3(3).

• Employment Appeal Tribunal: Allowed the employer's appeal on divisibility/apportionment and mitigation, dismissed its pension-loss ground, and remitted limited remedy issues to the same Tribunal. Allowed the claimant's cross-appeal on calculation and interest issues; found an error concerning expert cross-examination but made no further order.
• Employment Tribunal (Sherratt Tribunal): On a rehearing of financial remedy following an earlier remission, awarded £318,629.66 compensation.
• Earlier Employment Tribunal (Cook Tribunal): Found sex discrimination, victimisation, disability discrimination and automatically unfair dismissal. An earlier remedy appeal was allowed in part and financial remedy was remitted to a differently constituted tribunal.