No, held the Employment Appeal Tribunal in Davidson v National Express Ltd.
The decision to cut off the claimant’s future losses at the age of 65 appeared to be based on nothing more than an ‘overall feel’ that this was just and equitable. The tribunal also appeared to take into consideration that there would be some element of underestimate because it could not predict the likely future pay increases her new employer might make.
The EAT held that this did not constitute a reasoned assessment of future loss.
The key issue was how long the claimant might continue working in her new role. It was relevant to her case that she intended to work until age 70. This was based on her personal and financial circumstances.
Another issue was, however, that her intention might be thwarted by other life contingencies. Making a precise assessment would be difficult.
Ms Davidson, a coach driver for National Express, had been dismissed for gross misconduct after failing three consecutive alcohol breath tests. Her dismissal was found to be unfair due to a flawed appeal process. She was 63 at the time of the employment tribunal hearing and had found a new role, albeit at a lower rate of pay. Her claim was for future loss to age 70. Her financial award had already captured 2.5 years of lost earnings, but she appealed the decision to cut off her future losses at 65 to the Employment Appeal Tribunal.
Section 123(1) of the Employment Rights Act 1996 specifies that it is not sufficient for a tribunal to merely refer to what is just and equitable in assessing loss: it must evaluate as best it can the loss that has been sustained as a result of the dismissal. Predicting what might have been, the tribunal must take into account any evidence which might assist it in fixing adequate and just compensation. This requires an element of speculation, but that is not a reason to refuse to consider the evidence being presented. The key question was how long the claimant would continue to work at a lower rate of pay, and this should have formed the basis of the tribunal’s assessment of the award.
This blog was written by Manuela de Castro, Senior Solicitor at didlaw.
