A recent decision of the Court of Appeal has potentially widened the circumstances in which an employer could be liable for the future losses of a dismissed employee.

An employment tribunal found that Abbey National plc had discriminated against Mr Chagger on grounds of race when they selected him for redundancy.

The Tribunal held that, despite ‘the most extensive and well-documented efforts [we] can recall ever seeing’, Mr Chagger had not been able to find employment in the financial services sector, and would not be able to do so in future.  This was in large part due to the ‘stigma effect’ that Mr Chagger said he was experiencing with prospective employers as a result of having brought discrimination proceedings against Abbey National.  The Tribunal therefore awarded Mr Chagger a ‘career long’ loss of almost £3,000,000.

Abbey National appealed to the Court of Appeal arguing, amongst other points, that it should not be penalised for the actions of the prospective employers, and instead Mr Chagger should bring claims against them if they were unlawfully refusing him employment.

The Court of Appeal rejected Abbey’s appeal on the ‘stigma point’ thereby requiring it to ‘take the hit’ for the future unlawful conduct of other prospective employers.

This decision may ring alarm bells, both because of the quantum of the award and the nature of the finding against the original employer.  However it does serve as a timely reminder about the particularly serious nature of discrimination proceedings (with potentially uncapped compensation).

Posted: November 24th, 2009 under Employment/HR.
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