The Court of Appeal has held that when assessing compensation for a discriminatory dismissal, tribunals should award damages only up to the point when it was at least possible that the claimant would find an equivalent job. Only in rare cases where there is no real prospect of the claimant ever obtaining an equivalent job will it be appropriate for tribunals to award career-long compensation.

Key facts

The Claimant brought a race discrimination claim following his unsuccessful application for a promotion. After the employer received the claim the Claimant was called to a meeting on short notice at which he was summarily dismissed. The Claimant successfully brought claims for unfair dismissal and victimisation. The Tribunal assessed the Claimant's loss by reference to the whole of his future career, applying discounts to reflect its findings about the percentage chances of the Claimant (i) leaving his employment in any event and (ii) finding a job with equivalent remuneration by a certain date. The Tribunal also applied the maximum 50% uplift to the award to reflect the employer's failure to comply with the statutory dispute resolution procedures. On appeal the EAT held that the Tribunal should have applied a sliding scale to reflect the increasing likelihood of the Claimant finding a job with equivalent compensation and substituted a 10% uplift for the 50% uplift. Both parties appealed to the Court of Appeal.

The decision

The Court of Appeal held that the tribunal had been wrong to assess the Claimant's losses by reference to the whole of his future career. The tribunal ought to have awarded compensation for future loss only up to the point where there was a better than 50% chance that he would have obtained an equivalent job. It would only be appropriate to assess losses by reference to the whole of a claimant's future career in those rare cases where there is no real prospect of the claimant ever obtaining an equivalent job. The maximum 50% uplift would only be appropriate in very exceptional cases and was not justified in this instance.

What this means for employers

The case is reassuring for employers as it emphasises the rarity of cases where career-long losses will be an appropriate basis for assessing compensation. In most cases the tribunal will be required to make a finding as to when the claimant would be likely to get an equivalent job and award compensation only up to that point. Although the statutory dispute resolution procedures have now been repealed, the principle relating to uplifts applies equally to the tribunal's discretion to award an uplift of up to 25% where an employer has unreasonably failed to follow the ACAS Code of Practice on Disciplinary and Grievance Procedures.

Wardle v Credit Agricole Corporate and Investment Bank [2011] EWCA Civ 545