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When Might a Tribunal Award Several Years' Loss of Salary?

on Friday, 26 July 2019.

It is rare for a tribunal to award a compensatory award including over three years' loss of earnings.

In Acetrip Ltd v Dogra UKEAT/0238/18, the EAT took a close look at the tribunal's reasoning on valuing such a high compensatory award, providing employers with a valuable insight into the matters Tribunals may take into account.

Background

Mr Dogra (an Indian national) was brought to the UK on a Tier 2 visa by his employer, Acetrip, a travel agency, who agreed to pay Mr Dogra the minimum level of salary required by the visa of £23,000 pa. As well as paying Acetrip a substantial fee for training, his employer then demanded that Mr Dogra repay to his employer half of his monthly salary. Finding he could not live on such a sum, Mr Dogra complained and there was 'an altercation'. Mr Dogra then commenced a period of sickness absence and was then dismissed.

The Employment Tribunal unanimously held that Mr Dogra was automatically unfairly dismissed after asserting a statutory right in respect of his wages. This means that the statutory cap on unfair dismissal awards did not apply. The tribunal made a compensatory award in excess of £120,000.00 to Mr Dogra which was well in excess of what Mr Dogra had asked for as it included loss of earnings up to the end of his visa in 2020 and the tribunal also applied a 25% ACAS uplift.

Employment Appeal Tribunal (EAT)

In the EAT, Acetrip argued on various grounds that the tribunal's approach to the compensatory award was in error. The EAT agreed that the tribunal had not provided sufficient reasoning in respect of its approach to several aspects of the compensation award, however the EAT did not regard the sum of the award itself as excessive or unlawful.

Points to arise from the Judgment:

  • The EAT held that tribunal was entitled to award a higher sum than the amount of losses claimed by Mr Dogra. If it wished to do so, however, the employer should have been put on notice by the tribunal so that it could present evidence and arguments during the Remedy Hearing on this longer period of loss.

  • The EAT also held that this was a case in which a full 25% ACAS uplift might be applicable, as long as the tribunal had provided reasons both for why it was appropriate to award the uplift percentage as well as the actual monetary value of the uplift.

  • In considering the tribunal's award covering the remaining period of Mr Dogra's visa, the EAT criticised the tribunal for insufficient examination of why they thought it was reasonable for Mr Dogra to remain in the UK (without the right to work), rather than mitigating his losses by returning to India and seeking employment. The EAT held that the tribunal had failed to consider whether it would have been possible for Mr Dogra to continue with his litigation if he had left the UK and the likelihood that Mr Dogra might have chosen to leave the UK, prior to the expiry of his VISA.

  • The EAT directed that the tribunal should have also applied its mind to whether Mr Dogra would have been fairly dismissed in due course on the grounds of capability (ill health). The EAT ruled that the tribunal should have considered whether it was realistic to envisage Mr Dogra being genuinely dismissed for prolonged sickness absence in a manner that would be neither unfair nor otherwise unlawful.

These points were all remitted to the tribunal for further consideration, meaning that it is possible that the same, or similar, compensatory award might still be made by the tribunal - just with further reasoning's for its judgment being provided.

Comment

This case is likely an example of when a tribunal uses its considerable discretion in respect of the size of the compensatory award to financially penalise a rogue employer. Luckily, most law abiding employers are unlikely to face such prospects in a remedy hearing.

In order to support arguments for why long periods of losses should not be awarded, employers embroiled in tribunal proceedings should consider collating evidence of steps the employee could be taking to mitigate his/her losses - for example, jobs the employee could apply for, as evidence of the availability of employment in the local market.


For more information please contact Helen Clayton in our Employment Law team on 0117 314 5457, or complete the form below.

 

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