In this case, the EAT held that where an employer's discriminatory conduct had caused an employee to suffer a severe depressive episode that made him permanently unfit for work, the employment tribunal was wrong to reduce the employee's compensation on the basis that he might in any event have been lawfully dismissed at a later date or taken ill-health early retirement due to another illness.
Facts
Mr Gourlay was employed by West Dunbartonshire Council (the Council) as a corporate health and safety officer from 2008 until his dismissal for gross misconduct in 2015. An employment tribunal upheld his claims for unfair dismissal, disability discrimination, and victimisation.
At a remedy hearing, the tribunal accepted expert medical evidence that the Council's failure to make reasonable adjustments (by providing office equipment to reduce the disadvantage Mr Gourlay experienced as a result of his multiple sclerosis (MS)) and victimisation (suspension, dismissal, and refusal of his appeal against dismissal) had caused Mr Gourlay to suffer a severe depressive episode which made him permanently unfit for work. The tribunal assessed Mr Gourlay's total financial loss to retirement age (including past and future loss of earnings, and pension loss) at almost £625,000. However, it then applied an 80% reduction to that figure, on the basis that it was likely that Mr Gourlay would:
- Have been dismissed lawfully or left by mutual agreement by 2017 due to a breakdown in workplace relations between him and his managers, or
- Have taken ill-health early retirement due to his unrelated medical conditions (MS and diabetes)
Mr Gourlay appealed and the Council cross-appealed.
The EAT upheld Mr Gourlay's appeal, noting that the purpose of compensation in discrimination claims is to put the claimant back in the position they would have been in had the discrimination not taken place. In this case, the tribunal had accepted that the Council's discriminatory dismissal of Mr Gourlay had caused his permanent incapacity for work. A finding that his employment may have ended lawfully at a later date had the discriminatory dismissal not occurred did not justify a reduction in his compensation. Such a reduction would only be appropriate if a lawful dismissal would also have caused Mr Gourlay to be unable to work, but the tribunal had failed to consider this question.
Nor could the tribunal's finding that it was likely Mr Gourlay would have taken ill-health early retirement due to his MS and/or diabetes justify the reduction in compensation. The EAT held that this finding was based on speculation and there had been no medical or other evidence before the tribunal to support it.
In its cross-appeal, the Council argued that the tribunal should not have awarded any compensation beyond 31 March 2017 (the date by which it found Mr Gourlay would likely have been dismissed lawfully). However, the EAT rejected this argument for the same reason that it upheld Mr Gourlay's main ground of appeal – namely, the possibility that Mr Gourlay’s employment may have ended lawfully was not, of itself, relevant in the absence of further evidence as to the effect of such a lawful dismissal on his mental health. The EAT also rejected the Council's argument that the tribunal had failed to consider other possible causes for Mr Gourlay's depressive episode and apportion responsibility accordingly. It was clear from the tribunal's judgment that it had engaged with this issue and had accepted the uncontradicted medical evidence that the sole cause of Mr Gourlay's mental ill-health was the Council's discriminatory conduct.
The EAT remitted the case to a new tribunal for reassessment of compensation.
What does this mean for employers?
Awards of career-long loss remain relatively rare, but they may be made where an employee's long term incapacity is found to have been caused by a discriminatory dismissal. This decision highlights the importance for employers of fully engaging with remedy hearings, as it demonstrates that an employer wishing to reduce a career-long loss award will need to present clear evidence to support its case, including seeking its own medical evidence where relevant. For example, seeking any evidence that the employee would have suffered the same impact had they been dismissed lawfully, or that there were other contributing factors that caused the employee's incapacity, such that liability should be apportioned and the employer should not be held solely responsible, would reduce the amount of any award.
