Veitch Penny LLP - Exeter | Crediton, Devon

Case

Dunacchie v Kingston upon Hull Council & other appeals
Employment Appeal Tribunal - (22 May 2003)

Issues

(1) Unfair dismissal
(2) Compensation
(3) Jurisdiction to award compensation

Facts

Three cases were brought in the Employment Tribunal following the case of Johnson –v- Unisys [2001]. The Applicants all made claims of unfair dismissal, and for compensation under sections 111, 112, 118 and 123 of the Employment Rights Act 1996. Claims were also made for non-economic loss. The cases, two appeals and a cross appeal were being taken to the Tribunal on the basis of what was described as “ Johnson point”. They were listed to be heard together at the same time.

The employee, Dunnachie, in the first case, had been bullied at work. He was awarded £10,000 for injury to feelings. His employer, the city council, appealed this decision.

In the second case, the Tribunal found for the employer (the institute), indicating that it had no jurisdiction to make an award to the employee for non-economic loss. The employee, Williams, appealed this decision.

In the third case, the employee, Dawson, was awarded £8,000 for injury to feelings, but this was reduced to £3,200 as a result of the aetiology of the condition evidenced in the medical report. Consequently, the employer (the housing association) appealed and the employee cross-appealed with respect to quantum.

The Appeal Tribunal had to consider the following issues:

1. What had the law originally been with regard to the recovery of such non-economic loss?
2. What was the effect of the Johnson case? and
3. Was non-economic loss now recoverable for unfair dismissal?

Decision

The tribunal ruled as follows:

(i) Prior to the case of Johnson, it had not been possible to recover non-economic loss in claims for unfair dismissal. In addition, Johnson had not required there to be any change in the law. Following the hearing of argument with respect to construction and policy, the Appeal Tribunal were satisfied that the fundamental nature of claims in the employment tribunal was a limited economic claim, both for claims of unfair dismissal (limited to £53,500) and for wrongful dismissal or damages for breach of contract of employment (which expressly does not include damages for personal injury) (limited to £25,000). This structure appeared to be what was the legislation had intended. The Tribunal made no distinction between the manner and the fact of dismissal. Therefore, there could not be an unconsidered extension into every unfair dismissal case of a claim for general damages for distress, depression, stress, humiliation, injury to feelings, loss of family life, etc resulting from a dismissal. If a mechanism was needed for the recovery of severe non-economic losses (such as a psychiatric injury) arising from the manner of a dismissal, then the Appeal Tribunal was satisfied that the tribunals were not available. It was noted that a common law route might yet appear, but, unless Parliament chose to change and enlarge the jurisdiction and remove the statutory cap, the statutory route was closed.

(ii) In the case of Dunnachie, the city council’s appeal in respect of the award of £10,000 for non-economic loss would be allowed. Even if there were a jurisdiction to grant compensation, there had been no or no sufficient consideration of causation, and no explanation or reasoning as to how the sum was arrived at.

In the second case of Williams, the appeal in respect of the refusal by the employment tribunal to award any sum in respect of non-economic loss would be dismissed.

Finally in Dawson, with respect to the appeal against the award with regard to non-economic loss of £3,200, instead of £8,000, the whole award fell away as a result of the Appeal Tribunal’s finding that there was no jurisdiction to make it. Accordingly, Dawson’s appeal would be dismissed and the housing association’s appeal allowed.

Comments

The Appeal Tribunal appears to have ruled that compensation of unfair dismissal (unlike damages for common law wrongful dismissal) should be limited to compensation for economic loss only and may not include compensation for injury to feelings, although at the time of writing, the full judgement had not been published. Clearly, this decision will be of great interest to all given that claims for non-economic loss have been on the increase since the Johnson case.

Peter Taylor - Managing Partner and Head of the Commercial Department at Veitch Penny.
Tel: 01392 278381, Fax: 01392 410247, Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .