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Issue 96 (January 2005)
In the news
To pay or not to pay
Taking on TUPE
Arguing about equality rights
Back to porridge on pay
The cost of sex discrimination
Looking after an award
No justice for NUJ
Unlike unfair dismissal claims which have a cap on both the basic and the compensatory award, compensation is unlimited in sex discrimination cases. In Orthet v Vince-Cain (2004, IRLR 857), the EAT said that a tribunal was justified in making awards for loss of earnings and injury to feelings while the claimant was at university. It should not, however, have compensated her for the loss of pension rights.
Ms Vince-Cain started work for Orthet in August 1992 as a store manager in the Emporio Armani store in Manchester. Three years later she was promoted to regional manager.
However, she was dismissed in October 2001 after two periods of maternity leave. She successfully complained of unfair dismissal, victimisation, breach of contract and sex discrimination to an employment tribunal and was awarded the following:
a basic award of £2,400 plus £500 for loss of statutory rights
a further award for loss of earnings of almost £95,000 (£30,000 of which was to be paid as a gross amount, without deduction of tax) under the Sex Discrimination Act
an award of £15,000 for injury to feelings, with £2,160 interest (including a sum for aggravated damages).
The sum for loss of earnings reflected the tribunal's view that Ms Vince-Cain had discharged the duty to 'mitigate' her loss. She had taken other work and continued to look for suitable retail work as a regional manager between the date of her dismissal and the final hearing date in June 2003.
However, the tribunal also recognised that she had no realistic chance of finding retail work at the same level, given her childcare responsibilities and that her decision to retrain as a dietician if she could not find work was, therefore, a reasonable alternative.
It also included almost £5,000 for future pension loss from the date of her dismissal until 2006.
The employer appealed on a number of points:
whether a tribunal award for injury to feelings should include some recognition of taxation (as it was not entirely clear whether 'grossing up' was included) in case Ms Vince-Cain asked for this to be reviewed at a later stage
whether the company should have to pay compensation while she was at university
what approach should be taken to the assessment of pension loss for a period of four-and-a-half years.
Injury to feelings: The EAT said that, strictly speaking, there was no ground for appeal on this point. However, it made a finding that the tribunal was right to make an award of compensation for injury to feelings without grossing-up the award. As far as the EAT could ascertain, there is no authority that says that tax is payable on an award for injury to feelings.
The decision to go to university: The employment tribunal was also right to award Ms Vince-Cain compensation for loss of earnings during her time at university, as it was under a duty to consider all the losses flowing from her dismissal. It was entitled to find that her decision to change careers was a reasonable step, particularly in the light of her assertion that if she found suitable work, she would abandon the course. In any event, the company had been unable to prove that there was suitable work that she could have done, but which she refused to do.
Loss of pension rights: However, the tribunal was wrong to award money for loss of pension rights simply because her employers were about to introduce a scheme when she was dismissed. It was compensating Ms Vince-Cain in 2003 for a loss which might not occur at all, or which might change significantly by the time she finished her course. This was remitted to the employment tribunal.