Konczak v BAE Systems (Operations) Ltd 2012 AER 83

Ms Konczak was employed as a secretary from November 1998 until her dismissal in 2007. She succeeded in part in her claims for discrimination and unfair dismissal. The Tribunal awarded her compensation of £45,000. Her employer argued that in July 2008 it had made her an offer of settlement in the sum of £75,000 which she had refused and therefore she should not recover any loss of earnings beyond that date. The Tribunal agreed. She appealed and her appeal was allowed. It was not reasonable for the tribunal to have found that her refusal of an offer of £75,000 had been so unreasonable so as to terminate the loss otherwise flowing from her employer’s act of dismissal. Absent a wholly unreasonable refusal to countenance settlement, she had been entitled to pursue her remedy for what the tribunal had found to be unfair and discriminatory conduct.

Interestingly Ms Konczak had included in her remedy bundle a document which referred to the without prejudice negotiations with her employer. She submitted that it had been included by mistake but the Tribunal held that the documents had formed part of her case. She had deliberately waived privilege in respect of the negotiations and her employer was entitled to accept that waiver and to rely on the offer when contesting her mitigation.

Key point: Employers should consider making a reasonable offer of settlement in weak cases even if not relevant from a costs perspective if it is to be relied on to reduce the compensation amount for the loss following the dismissal.