On 31 July 2013, in Fox v British Airways plc [2013] EWCA Civ 972, the Court of Appeal substantively upheld the EAT's decision that the dependants of an employee, who died a few days after being unfairly dismissed, could claim the loss of the death-in-service benefit as this would have been available had the employee died during his employment.

The employee was dismissed by British Airways for medical incapacity and died one month after his employment terminated. During employment, he was contractually entitled to a death-in-service benefit. This was payable out of the pension scheme at the discretion of the trustees. The deceased employee’s father brought proceedings against British Airways for unfair dismissal and/or disability discrimination, with the principal object of claiming compensation for the loss of death-in-service benefit. However, British Airways argued that regardless of whether there was an unfair dismissal, the employee’s father would only stand in the shoes of the employees and so would not be entitled to recover compensation for the lost benefit (as this would not have been payable to the employee).

The Court of Appeal upheld the EAT’s decision that the loss of a death-in-service benefit was to be regarded as a pecuniary loss suffered by the employee and that, should liability be established, the employee’s estate would be entitled to receive the full amount of death-in-service benefit that the employee would have been entitled to receive had he not been dismissed. In other words, the employee’s estate was entitled to be put in the position it would have been in had the employee not been unfairly dismissed and remained in employment.

The Court of Appeal held that since the employee died shortly after dismissal, the loss amounted to the full sum that would have been payable on death, and not just the premium required to ensure continuous life assurance cover at the appropriate level.

However, the court noted that if liability for unfair dismissal and/or disability discrimination was established, the employment tribunal should consider whether to discount the deceased employee’s pensions contributions, which the trustees of the scheme had paid to the deceased’s dependants.