The Court of Appeal holds that when the consequences of making a protected disclosure are ‘career-ending’ for an individual, tribunals should consider awarding compensation for long-term loss of earnings.
Small v Shrewsbury and Telford Hospitals NHS Trust, Court of Appeal
Mr Small was engaged by the Trust at the age of 56 through an agency, to work on a temporary assignment in the estate management department. He had understood there to be a prospect of full time employment, but two months later his engagement was terminated by the Trust.
He succeeded in his claim that his dismissal was automatically unfair for making a protected disclosure, which related to the existence of asbestos in properties owned by the Trust. At the remedy hearing, Mr Small claimed compensation for loss of earnings up to his anticipated date of retirement, a period of 10 years. This was claimed on the basis that he would otherwise have been given a permanent appointment by the Trust. He also submitted evidence that he had been hampered in his search for alternative employment by the fact of his dismissal and the lack of a reference.
The employment tribunal awarded compensation including a sum for 18 months’ loss of earnings, although it accepted that the termination had been ‘career-ending’ for Mr Small. His appeal to the EAT that compensation for loss of earnings should have been awarded for a longer period of time was rejected. He appealed to the Court of Appeal.
Court of Appeal decision
The Court of Appeal allowed Mr Small’s appeal and remitted it to be reconsidered by the employment tribunal. In the particular circumstances of his case, the tribunal should have considered whether Mr Small had a claim for a longer period of loss, including a claim for the ‘stigma’ he may suffer in the labour market. It was evident (and the tribunal had acknowledged) that the consequences of the termination were ‘career-ending’ for the claimant, so it should have considered whether it was appropriate to award compensation for long-term loss of earnings rather than limiting it to a period of 18 months.
The ability for a claimant to claim ‘stigma’ damages for loss of earnings suffered as a result of termination was previously confirmed by the Court of Appeal in the case of Chagger v Abbey National plc. In this case, the court was satisfied that it was something the tribunal should have considered, even though it had not been expressly argued by the claimant.
The case serves as a useful reminder of how in whistleblowing cases, the amount of compensation awarded is unlimited and can include significant amounts for future loss of earnings, particularly when the claimant is nearing the later years of their working life.