Uncapped compensation for forced resignation: A landmark ruling
A recent Appeal Tribunal ruling has cleared the path to uncapped financial compensation following a forced resignation. Furthermore, this decision sends a strong message to employers about covert workplace investigations. Don’t let discrimination lead to resignation or risk facing career compensation.
The background to the case
A longstanding social worker faced complaints raised by an interim service manager about her work. However, the ensuing investigation failed to inform her of the specific allegations. Moreover, she never learned their source or scope.
Consequently, this covert enquiry had a profound and detrimental effect on her mental health. As a result, she developed anxiety, depression and sleep disturbances. Subsequently, she submitted formal grievances that remained unresolved before her eventual dismissal.
The original Tribunal decision
The social worker successfully pursued a complaint of indirect disability discrimination. In addition, she won a claim for constructive unfair dismissal at Tribunal. However, she later appealed the assessment of compensation.
Initially, the Tribunal upheld her claims and awarded a total of £153,906. This sum included the following:
- Past loss of earnings
- Injury to feelings
- Expenses incurred
- A basic award
- £20,000 for pension loss
Nevertheless, the original Tribunal made no award for future loss of earnings.
The Appeal Tribunal’s forceful decision
The Appeal Tribunal firmly dismissed the Council’s cross-appeal. Specifically, it ruled that ongoing psychiatric injury from workplace discrimination is fully recoverable. Therefore, if severity drives an employee to lose their career, discrimination law covers it.
Furthermore, the Appeal Tribunal confirmed the legal principles for calculating compensation. Under Section 124 of the Equality Act 2010, tort law principles apply. Essentially, these principles restore the injured party to their original financial position.
In addition, the Judge ruled that financial losses from a ‘career crash’ need only stem from the unlawful act. Consequently, a single act of discrimination during employment can cause the ultimate loss of a career. In this case, an indivisible psychiatric injury resulted from a surreptitious investigation. Don’t let discrimination lead to resignation or risk facing career compensation.
The flawed grievance process
Importantly, the flawed grievance procedures did not break the chain of causation. Nor did they remedy the deep psychological damage already inflicted by the discrimination. Moreover, the Judge ruled that the original Tribunal had erred in arbitrarily reducing future loss of earnings.
Additionally, the original Tribunal failed to apply the official Principles for Compensating Pension Loss correctly. This oversight particularly affected calculations for her defined benefit pension scheme.
A stark warning for employers
Ultimately, this austere ruling delivers a clear warning to executives about clandestine workplace investigations. As a result, employers can no longer hide behind the pretext of protecting employees through secret enquiries.
Furthermore, if a workplace process isolates vulnerable employees, fuels toxic office rumour-mongering, or prevents self-defence, then legal consequences follow. Indeed, such conduct can be classified as a traumatising act of discrimination. Don’t let discrimination lead to resignation or risk facing career compensation.
Call to action
Are you concerned about workplace investigations or discrimination in your organisation? Then contact our expert employment law team today for tailored advice. Alternatively, book a free consultation to review your internal processes and safeguard your business. Don’t let discrimination lead to resignation or risk facing career compensation — get in touch now.
