H Shittu v South London & Maudsley NHS Foundation Trust

The Employment Appeal Tribunal considered the correct approach to assessing loss of earnings in remedy proceedings following a finding of constructive unfair dismissal and disability discrimination under the Equality Act 2010. The tribunal had directed itself that losses should be assessed by reference to what would have happened 'but for' the unlawful conduct, allowing for a percentage deduction to reflect the chance the claimant would have left employment in any event (the Polkey approach). It applied a loss of a chance analysis and, on the facts, found a 100% chance that the claimant would have resigned on the same date even absent the unlawful pay deduction and the respondent’s failure to investigate. The EAT held that the tribunal’s approach was permissible, that it had given adequate reasons, and that the Supreme Court decision in Perry v Raleys (a professional negligence case) did not displace the established employment-law approach to loss of a chance in unfair and discriminatory dismissal claims.

This was an appeal from remedy findings of an Employment Tribunal which had earlier found that the claimant was constructively unfairly dismissed and that the respondent had committed disability-related discrimination by unlawfully deducting one day’s pay for a cancer-related hospital appointment and failing to investigate the complaint.

Procedural posture: Liability judgment was reserved (15 December 2018); remedy judgment was reserved (26 May 2020); permission to bring the appeal to the EAT was granted by Cavanagh J on 10 December 2020; the EAT heard the appeal on 13 July 2021.

Nature of the application: The appellant challenged the Employment Tribunal’s refusal to award any compensatory award for loss of earnings on the grounds that the tribunal had either improperly assessed loss on the balance of probabilities rather than as a loss of a chance, or had given inadequate reasons for its conclusion.

Issues for the court:

• Whether the Employment Tribunal assessed loss of earnings on the balance of probabilities or as a loss of a chance;
• If the tribunal applied the balance of probabilities, whether that approach was permissible in constructive unfair dismissal and discrimination claims in light of Perry v Raleys Solicitors;
• Whether the tribunal’s reasons were adequate.

Facts (concise): The claimant, employed since 2004, missed one day’s pay after a cancer-related hospital appointment on 10 April 2015 and repeatedly complained. The tribunal found that the deduction and the respondent’s failure to investigate amounted to a fundamental breach of the implied term of trust and confidence and to disability discrimination (failure to make reasonable adjustments and discrimination arising from disability). The claimant resigned on 10 August 2016. At remedy the tribunal awarded a basic award, injury to feelings and certain statutory sums but awarded no loss of earnings, concluding that the claimant would have resigned in any event.

Court’s reasoning and decision: The EAT concluded that the tribunal had approached the loss issue by reference to a loss of a chance and, on the facts and detailed findings, was entitled to conclude there was a 100% chance the claimant would have resigned on the same date regardless of the unlawful deduction or the respondent’s failure to investigate. The EAT rejected the submission that Perry required tribunals to apply the balance of probabilities whenever the question turned on what the claimant would have done; Perry was limited to professional negligence contexts and does not displace the long-established employment-law approach which permits loss-of-a-chance evaluations (including 100% findings) when assessing compensatory awards under the Employment Rights Act 1996 and the Equality Act 2010. The EAT also held the tribunal’s reasons were adequate.

Appeal dismissed. The EAT held that the Employment Tribunal had applied a loss-of-a-chance approach and, on the detailed factual findings, was entitled to conclude there was a 100% chance the claimant would have resigned on the same date; the Supreme Court decision in Perry does not require tribunals to abandon loss-of-a-chance assessments in unfair or discriminatory dismissal remedy proceedings.

Appeal from the Employment Tribunal (liability judgment reserved 15 December 2018; remedy judgment reserved 26 May 2020). Permission to appeal to the EAT was granted by Cavanagh J on 10 December 2020. EAT hearing 13 July 2021, decision [2022] EAT 18.