In Gourlay v West Dunbartonshire Council, the claimant, a Corporate Health and Safety Officer, was dismissed for gross misconduct. He successfully brought claims for unfair dismissal, disability discrimination, and victimisation, with the tribunal accepting that the respondent’s discriminatory treatment left him permanently unfit for work due to severe depression.
At the remedy stage, the tribunal calculated the claimant’s past and future wage loss and pension loss. However, it then reduced the award by 80%, based on two key assumptions:
The claimant appealed, arguing that the tribunal’s compensation reduction was legally flawed. The EAT upheld his appeal and found that the tribunal made errors in how it assessed financial loss.
The purpose of compensation in discrimination claims is to restore the claimant to the position they would have been in had the employer not acted unlawfully. The tribunal wrongly assumed that the claimant would have been lawfully dismissed within a few years. However, because the discriminatory dismissal caused his inability to work, the tribunal needed to consider whether a lawful dismissal would have had the same effect. There was no evidence to suggest that it would have.
The tribunal also wrongly speculated that the claimant might have retired early due to other health conditions. The EAT found that this assumption was made without any medical evidence and contradicted the expert psychiatric opinion that the claimant’s condition was caused entirely by the respondent’s unlawful treatment.
As a result, the EAT overturned the 80% reduction and remitted the compensation assessment to a new tribunal.
Employers should be aware that tribunals will critically assess financial loss in discrimination claims. If an employee is dismissed in circumstances involving discrimination, an employer cannot assume that compensation will be reduced based on hypothetical future events.
Where a dismissal causes long-term ill health or incapacity, the burden is on the employer to provide clear evidence that the same outcome would have occurred lawfully. Without such evidence, full compensation may be awarded.
This case also underscores the importance of properly engaging with remedy hearings. The employer did not present medical evidence to support its case, which contributed to the EAT’s rejection of its arguments.