The Court of Appeal has ruled that career-long compensation will only be awarded in cases where an employee has little to no prospect of ever finding an equivalent job. (Wardle v Credit Agricole Corporate and Investment Bank).

Mr Wardle, aged 44, brought a race discrimination claim against his employers, the French bank Credit Agricole, when a French candidate was awarded a promotion ahead of him. Mr Wardle was dismissed immediately after having lodged his claim, but found lower paid alternative employment quickly afterwards. The employment tribunal found that his dismissal was both unfair and victimisation for bringing the discrimination proceedings.  Both parties took issue with the amount awarded as compensation and the uplift that was applied for Credit Agricole's failure to follow a fair procedure when it dismissed Mr Wardle.

The Court of Appeal held that the tribunal's reasoning was flawed when it decided that damages could be awarded for the remainder of Mr Wardle's career as it was unsure as to the prospects of him finding an equivalent job. It was not correct to award damages to the point where it could be certain that Mr Wardle would find a job, but rather up until the point where it was more than likely that he would find one. The Court further held that career long compensation would only be appropriate in extremely rare cases, such as the case of Chagger v Abbey National, where the particular circumstances of the case meant that there was little to no chance of the claimant finding another job owing to the stigma attached to him by bringing a claim against his employers. Whilst taking this approach may not ultimately turn out to predict an accurate result, it is the best way of achieving finality when awarding a compensatory payment.

The second part of the Court of Appeal's judgement related to the percentage uplift that could be applied under the statutory dispute resolution procedures (subsequently repealed). The Court found that the maximum 50% uplift would only be applied in exceptional circumstances and that, in deciding the appropriate level of uplift, the tribunal should take into account the overall size of the award.  Further, the uplift should be applied only to the part of the compensation attributable to the act of dismissal itself and not any of the other heads of loss (such as injury to feelings, which cannot be awarded in an unfair dismissal case).

Impact on employers

  • The Chagger case caught the headlines for the huge sums of compensation awarded. Employers can seek some relief in the guidance provided in this case regarding the very restricted circumstances when such sums can be awarded.
  • The statutory provisions applicable to uplift in this case have been repealed, however similar provisions exist allowing an uplift of up to 25% to be awarded if an employer has unreasonably failed to follow the ACAS Code of Practice on Disciplinary and Grievance procedures.