Lennon-Knight v Yakira Group Ltd

Where agreed medical evidence establishes that an employee has no real prospect of regaining equivalent employment and remuneration, future loss is ordinarily assessed as a continuing, albeit partial, loss for the remainder of working life. A tribunal errs in principle if it imposes a rehabilitation-period cut-off which leaves that continuing loss uncompensated.

The uncertainties of future employment, recovery and career progression may justify adjustments to the multiplier and multiplicand. They do not justify treating a permanent earnings disadvantage as ending when rehabilitation reaches its optimum.

The Claimant, formerly the Respondent’s Group Finance Director, succeeded in a complaint of automatically unfair constructive dismissal under section 103A of the Employment Rights Act 1996. A previous appeal against the first remedy decision resulted in remittal of the issues of grossing up and future loss.

On the remitted remedy hearing, the Employment Tribunal awarded two years’ partial future loss. It accepted that the Claimant would not return to equivalent Finance Director employment. The issue on this second appeal was whether the two-year cut-off was lawful in light of the agreed psychiatric evidence and the Tribunal’s findings.

1. Appeal allowed. The Employment Tribunal erred in principle by limiting future loss to two years. The agreed evidence, the Respondent’s concession and the Tribunal’s findings established that the Claimant would never recover her former career level and remuneration.

2. Applying Wardle v Crédit Agricole Corporate and Investment Bank, [2011] ICR 1290, this was a rare case in which there was no real prospect of equivalent employment. It was therefore a lifetime-loss case. Future loss had to include the continuing partial difference between the former Finance Director salary and the earnings reasonably expected in less senior work.

3. The two-year rehabilitation period did not end that loss. At its conclusion, the Claimant could at best obtain a lower-paid role. The Tribunal had not compensated the resulting continuing earnings shortfall.

4. Matters such as the Claimant’s future recovery, work preferences and career progression remained relevant. They could affect the multiplier and the multiplicand. Any reduction from a standard multiplier required explanation, and the expected level of future earnings could vary over time.

5. The first three lines of the remedy judgment dated 14 January 2016 were set aside. The future-loss question was remitted, if practicable, to the same Employment Tribunal for determination afresh. The Respondent was ordered to pay £1,600 in fees.

• Employment Appeal Tribunal: Allowed the Claimant’s appeal against the remitted remedy decision and remitted future loss for reconsideration: [2016] UKEAT 0186_16_1611.
• Employment Tribunal: At the remitted remedy hearing, limited partial future loss to two years in a judgment dated 14 January 2016.
• Employment Appeal Tribunal: An earlier appeal against the first remedy judgment was allowed on 12 December 2014, and grossing up and future loss were remitted.
• Employment Tribunal: Upheld the automatically unfair constructive-dismissal complaint on 24 February 2014 and made the first remedy award on 14 April 2014.