Legal News

Unfair Dismissal - 'Lifetime Loss' Cases

When an employee succeeds in a claim for unfair dismissal, the compensation awarded by the Employment Tribunal (ET) will take into account any future loss of earnings. In the majority of cases, this will cover the period up until the time when the employee is likely to obtain a job equivalent to the one he or she had with the respondent. However, there are cases where there is no real prospect of the employee ever finding a job that is on a par with the one they have lost. A case in point concerned a finance director who found herself out of a job at the age of 47 (Lennon-Knight v Yakira Group Limited).

Mrs Lennon-Knight was employed by Yakira Group Limited as Group Finance Director, having joined the company in 2009. In January 2013, she resigned and contended that her reason for so doing was that she had blown the whistle on the Chief Executive Officer of the company in respect of a share deal and was exposed to detrimental treatment as a result. Her complaint that her constructive dismissal was automatically unfair, within the meaning of the Employment Rights Act 1996, was upheld by an ET.

The ET ruled, however, that a two-year cutoff should apply to her future loss of earnings claim. That was on the basis of medical evidence that she would by then have achieved optimum recovery from the trauma of her dismissal.

In upholding Mrs Lennon-Knight's challenge to that decision, the Employment Appeal Tribunal (EAT) found that this was plainly a 'lifetime loss' case. She was now in her fifties and, even after two years of rehabilitation, her recovery was not expected to be complete. She was unlikely ever again to attain her pre-termination career level of finance director, nor such a high level of remuneration.

The ET had acknowledged that the work that she was likely to find in the future was at best that of a financial controller. In the circumstances, the EAT found that Mrs Lennon-Knight's loss of earnings arising from her dismissal would continue throughout her working life.

The case was sent back to the same ET for the value of her claim to be reassessed.

    View my profile
      • View profile
    Cases where unfair dismissal has an indefinite impact on an employee's lifetime earnings are, thankfully, rare. However, where an employer's unfair treatment has a permanent effect, the compensation payable will reflect this.

    For further information please call one of our experts on:

    The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.