• Final salary pension loss

Employers may have to compensate an unfairly dismissed employee for the ongoing loss of a final salary pension scheme, even if the employee obtains a new job with a higher salary (but money purchase pension) which more than offsets the value of the pension loss.

Although credit will be given for the value of the new package whilst the employee has the new job, the loss of the final salary scheme is a continuing loss. If the employee subsequently loses the new job, the employer may have to compensate that ongoing pension loss.

This is because final salary pension is a unique benefit which an employee is unlikely to receive from another job and the loss of such a scheme cannot be quantified purely in monetary terms. In particular, in a final salary scheme the risk is on the employer whereas the risks lies with the employee in a money purchase scheme. (Roberts v Aegon UK, EAT)

  • No set off for earnings during notice

Employers will have to compensate an employee who has been unfairly dismissed without notice for their full remuneration during their notice period, even if they received earnings from another job during that period. The EAT has recently confirmed that this applies to constructive unfair dismissal as well as actual dismissal. There is a still a duty to mitigate loss and earnings from a new job will be taken into account when calculating loss after the notice period. (Stuart Peters Limited v Bell, EAT)