by Laurie Anstis on August 1, 2013
Can a reduction in discrimination compensation be made based on an employee’s own contribution to their loss?
Reductions in compensation for unfair dismissal are regularly made under section 123(6) of the Employment Rights Act 1996 on the basis that the employee has caused or contributed to their own dismissal, but can a similar rule apply in discrimination claims? If so, in what circumstances should such a reduction be made?
Harvey on Industrial Relations and Employment Law says it can. At para L it says:
“Although there is no equivalent to s 123(6) of the Employment Rights Act 1996 … in anti-discrimination legislation, it has been held that, as a matter of principle, a reduction in compensation can be made in an award of compensation for sex (and other forms of unlawful) discrimination on the basis of contributory negligence … This is because statute deems the wrong which unlawful discrimination comprises, to be compensated as though it were a tort (delict), and in tortious (delictual) claims, a deduction for contributory negligence on the part of the claimant (pursuer) is permitted under the Law Reform (Contributory Negligence) Act 1945.”
Section 1(1) of the Law Reform (Contributory Negligence) Act 1945 says:
“Where any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons, a claim in respect of that damage shall not be defeated by reason of the fault of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the claimant’s share in the responsibility for the damage.”
In Fife Council v McPhee, Lord Johnson took the proposition that there can be a reduction in compensation to be self-evident, and criticised the tribunal for not applying the same reduction to compensation for disability discrimination as it had for unfair dismissal, holding that:
“We would not suggest that in some cases, a finding of contributory fault in relation to a successful claim for unfair dismissal necessarily would bear on a quite separate claim for discrimination whether on race or disability grounds at the instance of the same employee in respect of the same employment. However, where the two are inextricably bound up as in here, inasmuch that it is the employee’s conduct that led to dismissal but the employer’s failure, it is said, to look after his interests in relation to the [Disability Discrimination] Act that rendered the dismissal unfair, it is to be observed at once that these two elements are totally intertwined. Logic therefore dictates that if there is to be a 50% contribution in relation to unfair dismissal, the same must apply in respect of discrimination having regard to the fact … compensation in … discrimination cases is to be assessed as a claim for reparation at common law where contributory negligence or contributory fault is a highly relevant element, if applicable.”
However, HHJ McMullen QC refused to decide the point in Blackpool Fylde and Wyre Society for the Blind v Begg, suggesting that a reduction under the Law Reform (Contributory Negligence) Act 1945 would not necessarily be the same as a reduction under section 123 of the Employment Rights Act 1996, and that if he had had to decide the question of the application of contributory negligence to discrimination compensation he would have wanted to hear submissions from the statutory equality commissions.
Harvey cites Way v Crouch as authority for the proposition that a reduction can be made. HHJ Birtles held at para 11 that:
“… the award of compensation in a sex discrimination case (and by analogy in other discrimination claims) is subject to the Law Reform (Contributory Negligence) Act 1945 which allows for reduction in compensation in tortious claims where the Claimant’s conduct itself amounts to negligence or breach of a legal duty and contributed to the damage.”
Way v Crouch has since come under some doubt as its findings on apportionment of compensation have been criticised in cases such as Sivanandam v Hackney.
Carmelli Bakeries v Benali
The issue arose obliquely in the case of Carmelli Bakeries v Benali, handed down yesterday by the EAT.
In the Benali case, the tribunal found as a fact that the Claimant had been guilty of gross misconduct (using non-kosher jam in products prepared by the kosher bakery that he worked for). However, they also found that the principal reason for his dismissal was not that misconduct, but instead was that the employer had taken against the Claimant after he had brought a disability discrimination claim against them and had continued to raise issues relating to reasonable adjustments. The tribunal concluded in relation to the Claimant’s dismissal:
“We find that it was an act of victimisation. The claimant’s on-going complaints about the lack of adjustments plus the complaints of his line managers to senior management about what they saw as malingering on the claimant’s part meant that the respondent saw the claimant as a problem employee. When faced with the non-kosher jam incident, the respondent was not prepared to show the claimant any leniency. The resulting dismissal was tainted therefore by his complaints in relation to his disability and is therefore an act of victimisation.”
On the unfair dismissal point, the tribunal found that the investigation had been cursory, and the whole disciplinary process flawed. They found the dismissal to be unfair, but went on to say:
“We find that the claimant did commit an act of gross misconduct; that is knowingly using non-kosher jam in a product made at a kosher establishment. That is an act of misconduct which would entitle the respondent to dismiss summarily, although, as we found, that was not the operative cause of the dismissal.”
The EAT dismissed the employer’s appeal that the tribunal’s decision was perverse, but held that having found that the Claimant had been guilty of gross misconduct the tribunal was then obliged to consider a reduction in the compensatory award for unfair dismissal on the basis of contributory fault. The case was remitted for the tribunal to assess contributory fault in relation to the unfair dismissal claim. However, Mrs Justice Slade observed that: “The award for victimisation under the EqA is unaffected by the error of the ET in failing to consider reducing for contributory fault the compensatory award for unfair dismissal.“, and strongly hinted that any reduction in the compensation for unfair dismissal might then be made up by the tribunal in an increased award for the concurrent victimisation. The tribunal had previously not made any award for financial losses caused by victimisation on the basis that this was completely covered by the compensatory award they had made for unfair dismissal. (Note: The summary at the start of the judgment says “The outcome may not make any or any substantial difference because of the overlap with compensation for victimisation.“, although it is not put exactly like that in the judgment itself.)
It seems clear that reductions for contributory fault in unfair dismissal claims and reductions for contributory fault in discrimination claims would be separate concepts, and that a reduction in one would not necessarily mean a reduction in the other. It also seems clear the extent that any reduction is to be made in either respect depends on the detailed facts of the case – but I would welcome full discussion in an appellate case on:
1 Whether any reduction in compensation on account of contributory fault can, in principle, be made in a discrimination claim,
2 If so, what facts would justify such a reduction, and
3 How the following proposition from Practical Law‘s article on the subject might apply: “In the alternative, the established principles of causation and mitigation could be used to reduce a successful claimant’s compensation.”
I’d welcome any practical experiences or arguments on the issues raised in this post in the comments below.