Brian Gourlay v West Dunbartonshire Council

Compensation for discrimination must place the claimant in the position they would have occupied absent the unlawful conduct. Where a tribunal considers a hypothetical lawful dismissal, it must assess whether that dismissal would have caused the same impediment to obtaining work, not merely whether employment would have ended.

A reduction for a possible alternative ill-health retirement requires an evidential basis. The tribunal must keep separate the questions of fitness for work and whether a fit employee would have continued working. It must also value any lost enhanced retirement benefit. Psychiatric harm may be apportioned only where the evidence permits a rational finding that part of the harm was caused by factors other than the employer’s wrong.

The Employment Tribunal upheld the claimant’s complaints of failure to make reasonable adjustments, victimisation and unfair dismissal. At remedy stage, it accepted uncontradicted psychiatric evidence that the respondent’s discriminatory conduct caused a severe depressive episode which had rendered him permanently unfit for work.

The tribunal assessed wage and pension loss to normal retirement age, but reduced the resulting sum by 80%. It considered that the claimant might otherwise have taken ill-health retirement or that his employment would have ended lawfully by 31 March 2017 because of an irretrievable breakdown in relationships.

The claimant appealed the reduction. The respondent cross-appealed, contending that loss should end at the date of the hypothesised lawful dismissal or be apportioned between causes.

1. The principal appeal was allowed and the cross-appeal refused. The Employment Tribunal’s award for past and future wage loss and pension loss was set aside and remitted to a differently constituted tribunal.

2. Under Equality Act 2010, compensation for discrimination is assessed on the tortious basis of restoring the claimant, so far as money can, to the position they would have occupied but for the unlawful conduct. A tribunal may take account of a chance that the employer would lawfully have caused the same loss. However, applying Chagger, the inquiry following a discriminatory dismissal is not confined to whether employment would have ended lawfully. It must ask whether the lawful dismissal would have left the employee on the labour market in materially the same position.

3. The tribunal had found that discrimination caused a career-long psychiatric illness preventing work from at least September 2015. It did not consider whether a lawful dismissal would have caused that same illness or equivalent labour-market disadvantage. There was apparently no evidence on that issue. Its 80% reduction on the basis of a possible lawful termination was therefore founded on a material error of law.

4. The tribunal also conflated whether the claimant would have remained fit for work absent discrimination with whether, if fit, he would have continued until normal retirement age. The psychiatric evidence addressed incapacity caused by discrimination; it did not support speculation that multiple sclerosis or diabetes would independently have produced incapacity or ill-health retirement. Nor could the claimant’s pleaded reference to ill-health retirement rationally be read as asserting retirement for non-discriminatory reasons.

5. Even if an alternative ill-health retirement had been evidentially available, the tribunal had to allow for the value, or chance of obtaining the value, of enhanced Tier 1 retirement benefits. It also needed an approximate retirement date before applying a percentage reduction.

6. Apportionment required evidence permitting a rational division of psychiatric harm between the respondent’s wrongdoing and another cause. The tribunal was entitled to accept the uncontradicted psychiatric evidence that discrimination was the only cause. No basis for apportionment arose.

7. The remitted tribunal may decide loss on the existing findings and this guidance, or receive evidence on the updated financial position if appropriate. Any attempt to adduce evidence that was available at the 2023 remedy hearing remains subject to the principles in Ladd v Marshall.

• Employment Appeal Tribunal: principal appeal allowed, cross-appeal refused, and the economic-loss award set aside and remitted: [2025] EAT 29.
• Employment Tribunal, Glasgow: remedy judgment dated 30 January 2024 awarded compensation after reducing wage and pension loss by 80%.