Compensation in the Employment Tribunal: Tribunals should consider compensating for ‘career ending losses’ in appropriate cases

In the case of Small v Shrewsbury and Telford Hospitals NHS Trust, the claimant, Mr Small began working for the NHS Trust Respondent in May 2012. He was 56 years of age at the time and was engaged as an agency worker on a temporary assignment, although he understood that he might be offered full time and permanent employment in due course. His engagement was terminated after only two months. He brought proceedings in the Employment Tribunal alleging that the reason for the termination of his contract was that he had made a protected disclosure, and the Tribunal found in his favour, specifically that he had been subjected to an unlawful detriment because he had made a protected disclosure under section 47B Employment Rights Act 1996.

Mr Small claimed compensation for lost earnings up to his anticipated retirement date in 2022. He produced evidence that he had been unable to find alternative work in the same field of work, despite making numerous applications, and he argued that the reason that he had not been successful in his applications was the fact of his dismissal and particularly that the Trust would not provide him with a reference. The Tribunal acknowledged that the dismissal had had a ‘career ending’ impact for Mr Small, but declined to award him compensation through to retirement as claimed. Mr Small was awarded lost earnings for an 18 month period only. He appealed and the matter fell to be considered by the Court of Appeal.

The Court of Appeal found in Mr Small’s favour. They relied on the previously decided case of Chagger v Abbey National PLC where it was held that, in principle, a claimant can recover for loss of earnings beyond the date on which employment would have otherwise terminated and can, in principle, claim for the ‘stigma’ that he or she suffers in the labour market. The court determined that, notwithstanding the fact that Mr Small had not raised this argument himself before the Employment Tribunal (Mr Small had been unrepresented at the Tribunal hearing), in the circumstances of the case, including the Tribunal’s own findings about the stigma Mr Small faced in the labour market following his dismissal, the Tribunal should have considered this matter of its own volition. The matter of Mr Small’s compensation will be sent back to the Employment Tribunal to be re-considered.

While Mr Small was initially awarded a sum exceeding £50,000 in compensation, his successful appeal may mean that he is awarded a significantly higher sum. While not all cases will involve career ending losses, this case is a timely reminder of the potential significant consequences should claimants be able to establish that an unlawful act has taken place (such as being subjected to an unlawful detriment because they have made a protected disclosure) which has effectively ended their ability to secure new employment.