In Roberts v Aegon UK Corporate Services Ltd the Employment Appeal Tribunal (EAT) upheld the employment tribunal’s decision to compensate a claimant for losing her final salary pensions benefits after she was unfairly dismissed.

Under section 123 of the Employments Rights Act 1996 the tribunal has discretion to grant a compensatory award if an employee is unfairly dismissed.

In this case the claimant was unfairly dismissed by her employer but subsequently obtained alternative employment. Before she was dismissed she had been a member of the employer’s final salary pension scheme. The employment tribunal at first instance refused to compensate her for any loss of future earnings because the claimant found alternative employment. The tribunal found that the second employment broke the link between the unfair dismissal from the first employment and future loss of earnings.

The tribunal however awarded compensation for the loss of pensions benefits because it viewed the claimant as unlikely to find employment that will offer a final salary pension in light of the current trend of pension provisions.

The tribunal found it very likely that she would have remained with her employer until the age of 50 and calculated the amount of her pensions loss on this basis. The main issue in this case was whether the tribunal had been correct to treat loss of pension rights and loss of earnings flowing from the unfair dismissal as two separate issues.

The EAT upheld the tribunal’s decision to treat loss of earnings and loss of pension rights as separate issues. The EAT agreed with the tribunal that the loss of the final salary pension scheme rights could not merely be quantified in monetary terms. It could not be simply calculated as part of the remuneration package.

The EAT was further satisfied that the fact that the claimant had entered into fresh employment after she had been dismissed did not by itself “stop the clock running” as far as pension losses flowing from the original dismissal are concerned, even though it had done so for the purposes of assessing loss of earning.

The EAT also held that in quantifying the pensions loss the tribunal was entitled to assess at what age she would have remained with the first employer had she not been unfairly dismissed.