Veitch Penny LLP - Exeter | Crediton, Devon

Case

Dunnachie v Kingston upon Hull City Council
House of Lords - (15 July 2004)

Issues

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

Facts

Mr Dunnachie had been employed as an Environmental Health Officer. At first instance the Tribunal had found that he had been driven from his position due to a campaign of workplace bullying from his Manager and by the failure of management to deal with the problems. His treatment forced him to leave his job and get a less well-paid job located further away from his home.

The Tribunal found he had been constructively and unfairly dismissed and awarded him compensation for injury to feelings, loss of earnings and future earnings together with the additional cost of travelling to his new job, in line with the judgment in Johnson –v- Unisys Ltd (2001).

The Employment Appeal Tribunal allowed the Authority’s appeal confirming that only quantifiable financial losses could be recovered as compensation for unfair dismissal (under Section 123 of the Employment Rights Act 1996), that no award could be made for injury to feelings.

Dunnachie successfully appealed the decision at the Court of Appeal who confirmed that the proper interpretation of Section 123 allowed an award for injury to feelings, as it required compensation to be just and equitable having regard to the loss. The financial loss could be compensated, and then an additional award made if justice and equity required it.

The decision was then appealed.

Decision

The House of Lords allowed the appeal. It found that the Court of Appeal’s decision had been incorrect, and confirmed that damages for non-economic loss are not recoverable in unfair dismissal cases. Section 123 only allows a Tribunal to award financial losses, and did not allow for additional loss if it was just and equitable. The phrase “just and equitable” in this context was used to allow a tribunal some flexibility where an applicant was unable to prove every item of their financial loss.

Comments

After considerable litigation on this issue, this case now ends the confusion as to whether or not an award for injury to feelings can be made in cases of unfair dismissal.