In cases of dismissal relating to older employees where dismissal may lead to indefinite and potentially long-term future loss, financial compensation to reflect that a dismissal may be ‘career-ending’ should be considered.
Small v The Shrewsbury and Telford Hospitals NHS Trust
The case of Small v The Shrewsbury and Telford Hospitals NHS Trust [2017] concerned a project manager who commenced working for the Trust in May 2012 at the age of 56. He was originally employed through an agency on a temporary assignment but understood that there was a prospect of future permanent employment.
Following the termination of his employment two months later by the Trust, Mr Small successfully argued at Tribunal that his dismissal was related to a protected disclosure under the whistleblowing legislation. Mr Small was unrepresented in the Employment Tribunal and he claimed compensation for loss of earnings up to his anticipated date of retirement in 2022 and compensation for injury to feelings. He argued that he would have obtained a permanent appointment if it was not for the unlawful termination. He provided evidence that the dismissal and the absence of a reference from the Trust had prevented him obtaining new employment. He gave evidence that he had applied for over 500 vacancies and secured only six interviews and that, in all but one of the interviews, he had struggled to explain his departure from the Trust. He had managed to obtain only one short-term appointment from an employer who had not asked for a reference.
The Employment Tribunal awarded compensation of £54,126 including £33,976 for loss of earnings. The loss was calculated on the basis that it was likely he would have been retained until November 2013 and not up to his projected retirement date. However the judgment referred to Mr Small’s career being dependent on the outcome of his last job and acknowledged that the termination had been "career-ending".
The appeal
Mr Small appealed to the Employment Appeal Tribunal (EAT) and was represented by counsel for the first time at the hearing. He argued that the Tribunal should have ordered loss of earnings beyond November 2013 to reflect the ‘stigma’ that he had suffered in the labour market as a consequence of his dismissal. The EAT dismissed Mr Small’s appeal on the basis that a Tribunal was not expected to consider damages for stigma as a matter of course.
Mr Small appealed to the Court of Appeal who upheld his appeal on the specific circumstances of his case. The Court held that the Tribunal ought to have considered whether he had a claim in respect of loss after November 2013 which would, in principle, include a stigma claim. The Court pointed out that Mr Small had submitted evidence that his loss extended into the long-term future and that the Tribunal had itself recognised the career-ending consequences of the termination.
Conclusion
While this case is unusual and compensation for career-loss and stigma damages will not be relevant to the majority of cases, employers should be aware of the risk of significant awards of compensation for older employees in cases where compensation is not capped by statute.