Unfair dismissal – loss of £20,000 not a “substantial injustice”
The President of the Employment Appeal Tribunal has refused an appeal against a Tribunal’s failure to gross up an unfair dismissal and compensation award to take account of tax which the Claimant would have to pay on an award which was calculated using net figures. The case is Bethnal Green and Shoreditch Education Trust v Dippenaar [2015] UKEAT 0064_15_2110 (21 October 2015) Given it is the duty of the Employment Tribunal, with or without assistance of legal representatives, to assess loss fairly so that a wronged party is properly compensated for the loss suffered, it seems extremely harsh to refuse to interfere with the decision on the basis that the legal representatives were responsible for not raising the point at first instance and that they should have asked the Tribunal to reconsider the award.
With respect, it seems justice is taking a back seat against a priority policy of not disturbing decisions of the Employment Tribunals. It must be remembered that the basis of unfair dismissal and discrimination awards is compensation for losses to put people in the position they would have been in if they had not been wronged. So what is striking is the further comment of the President that: “Nor do I see that any really substantial injustice will be done, since the Claimant will in any event have a substantial award even if not as beneficial to her as it could have been.”
When the net award was in the region of £108,000 it would have been apparent that the tax payable on this award, after allowing 30,000 to be payable tax free, would be in the order of £20,000. To say to Ms Dippennaar, or anyone else on modest income, that because she’s recovered £88,000 of her losses, to suffer a £20,000 loss should not be seen as any “really substantial injustice” is not only illogical but, regrettably, goes to support a view that the Judiciary are out of touch with financial reality for most people. It is the same as saying “Ms Dippennaar, congratulations…you haven’t lost £108,000. You’ve only lost £20,000. It’s your lucky day!….And now as a higher rate tax payer this year, you’ll only have to earn extra gross income of about £34,000 to get back that loss.”
(p.s. It may be noted that because the finding of discrimination was overturned by EAT, the award of £108,000 would be reduced to the maximum unfair dismissal award of approximately £74,000 so that discussion of grossing up becomes academic. Nevertheless, the President did not in his reasoning suggest the point was academic. Hopefully the Court of Appeal may be able to reconsider justice in this case.)