In the past few months, the Employment Appeal Tribunal has corrected two common misconceptions about when an employer’s liability for loss of earnings stops accruing, once it has been found to be in breach of employment legislation.

The more recent of the two decisions involved a solicitor who received a poor reference from her former employer because she had previously brought a sex discrimination claim against it. In what the employment tribunal concluded was an act of victimisation, the reference explicitly referred to her claim, which led to the unlawful withdrawal of a job offer from a prospective employer. The employment tribunal had thought that this new act of victimisation broke the chain of causation, so that the former employer should not be liable for loss of earnings after that point. The Employment Appeal Tribunal said this was wrong: a new act of victimisation does not have this effect, though it may give rise to a separate claim.

The earlier decision considered what happens if the claimant becomes ill after being unfairly dismissed. Many had assumed that loss of earnings can not be claimed after that point, but the EAT has ruled that this is not correct. The employment tribunal should have worked out what would have happened if the claimant had still been in employment at the point the illness struck. It should have assessed the provision the former employer would have made for sick pay, and, in the case of a long-term illness, how long the employer should have waited before being in a position to dismiss the employee fairly on capability grounds.