When will career-long loss be used as the basis for compensation in discrimination cases?

This article considers the most recent example of career-long loss being used as the basis for calculating compensation in discrimination cases and highlights the dire consequences employers may face where they harbour a discriminatory workplace culture.

The Equality Act 2010 (EqA 2010) prohibits discrimination in employment and provides for uncapped compensation where a claimant succeeds in their claim. Claims can be brought in respect of the nine protected characteristics, namely: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation. In circumstances where the claimant is unable to work again following discriminatory acts, for example where discriminatory acts have resulted in psychiatric injury, the Employment Tribunal will have to calculate financial loss on the career-loss compensation basis.

The decision at the heart of this article, which concerned a claim for direct sexual orientation discrimination and harassment, is the Employment Appeal Tribunal decision in Secretary of State for Justice v Plaistow.

Mr Plaistow worked as a prison officer. Over a period of 2 years, from 2014 to the termination of his employment in 2016, he was subject to what the Employment Tribunal described as a ‘campaign of direct discrimination and harassment’ related to his sexual orientation or perceived sexual orientation. Acts complained of included, but were not limited to, physical and verbal abuse, threatening behaviour, harassment, vexatious enquiries regarding his sexuality from management, and victimisation. Grievances, and repeated attempts to pursue them, were made to no avail and his employment was terminated by his dismissal in August 2016.

As a direct result of the discriminatory behaviour and harassment, Mr Plaistow suffered from PTSD, depression, paranoia and suffered functional impairments. The Employment Tribunal concluded that his injuries were likely permanent and that he was very unlikely to work again before retirement age. Mr Plaistow had a promising career as a prison officer ahead of him, and the Employment Tribunal decided that financial loss compensation should be calculated on the career-long basis. In addition, the Employment Tribunal awarded compensation for injury to feelings, aggravated damages, and exemplary damages. However, the Employment Tribunal applied a 5% discount to reflect the possibility that Mr Plaistow may have returned to work and to account for the possibility that he may have left his employment early. In addition, the Employment Tribunal exercised its discretion to award an uplift of 20% in respect of the prison service’s failure to follow the ACAS Code of Practice on Disciplinary and Grievance Procedures (the ‘ACAS Code’) in relation to Mr Plaistow’s dismissal for gross misconduct.

The prison service appealed the decision on a number of grounds. The most significant basis of appeal for employers concerned the prison service’s unsuccessful appeal against the career-long compensation award. In a previous case, the Court of Appeal had held that compensation on the basis of career-long loss is only appropriate in rare cases where there is no real prospect of an employee ever obtaining an equivalent role. In Mr Plaistow’s case, it was decided that these rare circumstances applied. As a result, the Employment Tribunal was entitled to such an approach, which highlights the severe consequences employers can face where they have permanently forced an employee out of the workforce due to their discriminatory behaviour.

The only successful elements of the appeal were that the 5% discount was deemed to have not factored in the likelihood of working life being cut short through unforeseen circumstances, and the ACAS uplift did not factor in the substantial size of the award, and so should not have been applied at 20%. These points were remitted to the Employment Tribunal for consideration.

What does this mean for you or your business?

The decision highlights the serious implications employers may face as a result of toxic and discriminatory workplaces. The judgment serves as a reminder that employers can, in exceptional circumstances, be liable for career-long loss where an employee suffers life-long harm due to discrimination and harassment in the workplace.

Moreover, the case emphasises that employers must take grievances seriously. The decision underlines how a failure to deal with grievances effectively inevitably leads to severe issues further down the line.

Additionally, businesses should take notice of the importance of following the ACAS Codes of Practice, especially when considering dismissing an employee.

What do you need to be doing now?

Businesses should consider the culture they foster in the workplace and ensure that they have an up-to-date company handbook with the necessary policies in place to guide employees’ behaviour and to ensure managers deal with grievances appropriately.

Relevant policies may include:

• anti-harassment and bullying;
• IT and communications;
• equal opportunities

as well as grievance and policy and disciplinary procedures.

Ensuring employees have read and understand the importance of these policies is critical in reducing issues in the workplace. Critically, Employment Tribunals would want to see training records of managers that have been trained on these policies. 

BPE’s Employment team have excellent experience in dealing with and providing training in respect of the issues dealt with above and have a strong reputation crafting effective, bespoke workplace policies to help your business thrive. Contact the team today if you need assistance with any workplace issue. 

Recommended reading

Click here to see the Employment Appeal Tribunal judgment. 

These notes have been prepared for the purpose of articles only. They should not be regarded as a substitute for taking legal advice.