Employment: The High Court limits damages in wrongful dismissal cases
Court confirms limit on damages for failure to follow contractual disciplinary procedure
A doctor sought to claim loss of earnings of more than £4 million, in a wrongful dismissal claim. The High Court ruled that in a wrongful dismissal claim damages must not exceed the income the employee would have earned up until the employer would have lawfully terminated the employment.
The claimant was dismissed for professional and personal misconduct following a disciplinary hearing. The claimant alleged his employer had adopted the wrong disciplinary procedure which amounted to a breach of contract. He argued that had the procedure been properly adhered to he would not have been dismissed. He claimed damages for loss of earnings during the time he would have been employed while the disciplinary process was completed and on the basis of what he would have received had he retained his position.
The court was not concerned about whether the employee “would have been” dismissed had the contract been followed, but rather the length of time it would have taken for the correct disciplinary procedure to be completed and for the appropriate notice to be given. The court said it would have to be assumed that the employer would have dismissed the employee at the earliest opportunity, that is, once the disciplinary procedures have been completed. Therefore, the maximum amount the claimant can recover should reflect the income he would have earned during the period that the disciplinary procedure would have taken place as well as the notice period.
Employees with less than 51 weeks' service to the date of termination have no right to bring unfair dismissal proceedings in ordinary circumstances. However, where disciplinary procedures are contractual they can claim for breach of contact if those procedures are not followed. In the public sector many such procedures are contractual. Private sector employers should consider ensuring that such procedures remain discretionary to avoid cases such as this, even though the courts have limited the scope of the claim for damages.
For further information or to discuss the issues raised, please contact Colina Greenway (firstname.lastname@example.org on +44 (0) 203 051 5711.]
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