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29th August 2013

Employment Tribunals to Take Post-Dismissal Conduct Into Account When Awarding Compensation

In the recently decided case of Cumbria County Council and Governing Body of Dowdales School v Bates, the Employment Appeal Tribunal (EAT) considered the effect on the calculation of an unfair dismissal compensatory award of an employee’s post-dismissal conduct.

In reaching its decision, the EAT held that an Employment Tribunal had made an error when it failed to consider the effect of an employee’s post-dismissal conviction and imprisonment for assault when calculating an unfair dismissal compensatory award.

By way of background, the Employment Rights Act states that the compensatory award for unfair dismissal is: “such amount as the Tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal insofar as that loss is attributable to action taken by the employer”.  In most cases, this will include future loss of earnings.  While the compensatory award may be reduced by an Employment Tribunal because of the employee’s conduct prior to dismissal, that does not extend to taking account of the employee’s conduct after the dismissal.  However, an Employment Tribunal does have the discretion to find that, in spite of an unfair dismissal, an employee would have been fairly dismissed for another reason shortly afterwards in any event.

The facts of the above case were that prior to his dismissal for misconduct on 24 April 2009, Mr Bates was employed as a teacher at Dowdales School by Cumbria County Council.

Mr Bates issued a claim for unfair dismissal and the Employment Tribunal upheld his claim.  However, the Employment Tribunal also stated that his compensation should be reduced by 15% to reflect his contribution to his dismissal.

A further hearing was listed in 2011 in order to determine the amount of compensation that Mr Bates would receive.  However, Mr Bates was subsequently charged with having sexually touched a 16-year old former pupil of the School on 16 July 2010 and was due to stand trial on 20 June 2011.

The Council and the School applied to adjourn the hearing on the basis that the outcome of the criminal trial might be relevant to the level of compensation, potentially cutting off Mr Bates’ future loss of earnings.  The application for an adjournment was unsuccessful and the Employment Tribunal successfully awarded Mr Bates £70,925 (which included a compensatory award of £66,200).

On 26 June 2011, Mr Bates was convicted of common assault and jailed for six weeks and he was subsequently banned from teaching for life.

On appeal, the EAT invited the original Employment Tribunal to review its decision in relation to Mr Bates’ compensation in view of his conviction.  The Employment Tribunal also received evidence from the Council’s Chief Adviser for Children’s Services which addressed the likelihood that Mr Bates would have been dismissed as the result of his assault conviction.  However, the Employment Tribunal refused to take the additional evidence into consideration and went on to hold that Mr Bates’ employers had not discharged the burden of showing that he would have been dismissed following his conviction.

The EAT subsequently remitted the assessment of the compensatory award to be determined by a freshly constituted Employment Tribunal.  In doing so, the EAT held that Mr Bates’ conviction for assault and imprisonment may have substantially reduced his loss and an Employment Tribunal determining the proper compensatory award would “plainly” be entitled to take into account that evidence.

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