Cumbria County Council and The Governing Body of Dowdales School v Bates

Background to the case

Post termination conduct can reduce the amount of compensation payable to a dismissed employee even if the dismissal is unfair.

As a reminder, the compensatory award for unfair dismissal is:

"such amount as the Tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal insofar as that loss is attributable to action taken by the employer".

In the Bates case (which was heard by the EAT) the claimant, Mr Bates, was a teacher. He was found by the original Tribunal to have been unfairly dismissed from his teaching post. The Tribunal, also, found he had contributed to his dismissal; his compensation was reduced by 15% to reflect that. That aspect of the case was not in issue.

However, post dismissal Mr Bates faced charges of sexually touching a 16 year old former pupil and he was subsequently found guilty of common assault and sentenced to 6 weeks imprisonment. Eventually he was banned from teaching.

Prior to his dismissal he had been convicted of drink driving.

The decision

The Tribunal decided that the post termination conduct was not relevant in determining the amount of the compensatory award which is just and equitable in all of the circumstances. This was differentiated from a situation where conduct occurs pre-termination but is discovered after dismissal. In those circumstances the Tribunal said it would be relevant to that test.

The Tribunal had assessed the compensatory award of some £69,000 which included loss of earnings up to the date of the hearing of some £25,000 and the remainder related to pension loss.

One of the questions considered by the Employment Appeal Tribunal (EAT) was that the Claimant would have been dismissed in any event because of the post termination conduct (the assault) and the compensatory award should have reflected that.

The EAT found that apart from any question of justice and equity, the Claimant’s conviction for assault and sentence of a term of imprisonment may have substantially reduced his pension loss and a Tribunal determining the proper compensatory award in his case would plainly be entitled to take into account that evidence. In the event the issue of pension loss was remitted to a Tribunal to be re-determined.

What does this case tell us?

In considering loss arising from an unfair dismissal there is a distinction between:

  • conduct of an employee that takes place before dismissal, that can lead to a deduction for "contributory fault"; and
  • conduct of an employee after their dismissal which might break the chain of causation when considering the employer’s responsibility for future loss.

However, post-termination conduct can lead to a reduction in compensation, which may affect whether or not an employee can be dissuaded from pursuing a claim or seeking substantial damages.