The claimant in Griffin v Plymouth Hospital was 34 when she resigned from her post as a specialist clinical technician.  She successfully brought claims for constructive unfair dismissal and for disability discrimination on the basis of a breach by the hospital Trust of its duty to make reasonable adjustments.  The tribunal found that if the Trust had made reasonable adjustments the claimant would have been able to continue in employment with it indefinitely but that it would not now be possible for her to return to the Trust and, since it was not reasonable to expect her to leave the Plymouth area and the Trust was the only employer in that area with a need for her specialist skills, she would not be able to find other employment as a clinical technician.  Following an appeal on remedy, a reconstituted tribunal decided that she would equal her pre-dismissal earnings within a 12 year period.  The Court of Appeal agreed with this but not with the assessment by the tribunal of the component of the financial loss compensation representing lost pension rights.

The claimant was a member of the NHS pension scheme, a "final salary" scheme – one where the benefits are calculated by reference to salary and years of service, as opposed to the (now) more common "money purchase" type of occupational pension scheme where benefits depend on the amount of contributions put into the scheme.  The loss of her employment plainly meant a diminution in her rights under the pension scheme; the issue was how those rights should be valued.

There is Guidance for tribunals: "Compensation for Loss of Pension Rights – Employment Tribunals" which recommends that tribunals use one of two alternative approaches – "simplified" or "substantial loss".  Put very simply, the key difference between the two is in the calculation of "future rights" – if the employment had continued the employee would have had further years of service which would have boosted their pension entitlement at retirement.  In the simplified approach, this is measured simply by looking at the loss of the employer's contributions for the period of time until the claimant is expected to have found a job with similar benefits.  The substantial loss approach, by contrast, uses actuarial tables to assess the capitalised value of the pension rights which would have accrued up to retirement – this is known as "whole career loss".

The Guidance indicates that the simplified approach will be appropriate in most cases but that the substantial loss approach should be used if the claimant is unlikely ever to find another job, or a job with either a comparable pension (or higher remuneration which compensates for this).  It goes on to recommend the use of the substantial loss approach in cases where the individual has been in a stable job, unlikely to be affected by the economic cycle, for a considerable time and has reached an age where he or she is "less likely to be looking for new pastures".

The claimant put in a report from an actuary, showing a loss of £97,527.  The Trust calculated the loss under the simplified approach at £32,827.69, based on employer contributions for four years' future employment before she would find another job with the benefit of a pension.  Both the original tribunal and the reconstituted one agreed with the use of the simplified approach.

The Court of Appeal disagreed.  The case fell squarely within the Guidance – the claimant had been in her job for 15 years and would have remained in the final salary scheme to retirement.  The Tribunal was wrong to have treated the claimant's age as decisive – the issue was not simply her age but the likelihood of her staying in employment up to retirement date.  And the fact that she would eventually regain her pre-dismissal earnings was irrelevant; what mattered was her pension rights.  A claimant may return to a job at a comparable salary but never get a comparable pension.

Lord Justice Underhill also issued a strongly worded caution about the use of the (non-statutory) Guidance, saying that its application should be considered critically in each case, and called for a review in the light of important changes to pensions law and practice since the Guidance was drawn up in 2003.