Employment Tribunals Don’t Punish, They Compensate

September 9, 2019

Some employers treat their staff disgracefully but, no matter how bad their conduct may be, the objective of the tribunal system is not to punish them but to compensate those who suffer at their hands. A case on point concerned an immigrant worker who was plunged into depression after suffering extortion at his boss’s hands.

The man, an Indian national, was employed as a PR consultant and sales adviser by a travel agency which had sponsored his entry into the UK on a five-year visa that required him to be paid at least £23,000 a year. He purportedly received that salary, but the agency’s managing director threatened that if he did not repay half of his wages each month, his employment would be terminated.

Although he complained that he did not have enough to live on, he initially complied with that demand. Following an angry confrontation with his boss, however, he went on sick leave, suffering from anxiety and depression. He had been in the job for only about six months and was still on sick leave when he was dismissed.

After he launched proceedings, an Employment Tribunal (ET) found that he had been automatically unfairly dismissed for making a protected disclosure. His boss’s demand was nothing short of extortion and, in subsequently claiming that he had been given two previous warnings and had committed an act of gross misconduct, the agency had sought to contrive bogus reasons for his dismissal.

Despite the relatively brief duration of his employment, the ET awarded him a total of £124,658 in compensation. That included the pay he should have received had he remained in the agency’s employ throughout the period of his visa. A 25 per cent uplift was applied to the award to reflect the agency’s complete failure to comply with the Acas Code of Practice.

In upholding the agency’s challenge to the award, the Employment Appeal Tribunal (EAT) found that the ET had erred in law in a number of respects. Amongst other things, it had awarded full loss of earnings in respect of the man’s post-dismissal sickness period without making any finding as to whether, or to what extent, the dismissal had worsened or prolonged his depression.

The ET had also failed to consider whether he could have been lawfully dismissed on the basis of long-term sickness absence and whether he could reasonably have been expected to mitigate his loss by returning to India in search of alternative work. The ET should also have stood back and considered the overall size of the award before deciding to apply the full 25 per cent uplift. Given that the man had valued his claim at only about £64,000 in his schedule of loss, the award of almost double that sum had effectively taken the agency by surprise.

The EAT noted that, in cases of such serious employer misconduct, there is always a danger that ETs may, consciously or subconsciously, adopt a punitive approach. However, it was satisfied that the ET in this case had not fallen into that trap. In the circumstances, the matter was sent back to the same ET for reassessment of the man’s compensation in the light of the EAT’s ruling.

Our Chartered Legal Executive, Lucy Watson, comments that “the purpose of the Employment Tribunal is to compensate employees, not punish employers when awarding compensation. In this case, the ET were found to have erred when awarding an employee compensation for the equivalent of five years salary post employment”.

If you require advice about an Employment Tribunal claim, speak to our specialist employment team on 01452 222340 and book an initial consultation today.

Acetrip Limited v Dogra. Case Number: UKEAT/0238/18