Compensation - Unfair dismissal
Konczak v BAE Systems (Operations) Ltd: Employment Appeal Tribunal: 3 May 2012
The employee was employed by the employer as a secretary from about November 1998 until her dismissal in July 2007. She presented three complaints to the Employment Tribunal (the tribunal), alleging sex discrimination, disability discrimination and unfair dismissal. The employee succeeded in part, the tribunal (the first tribunal) found: (i) one act of direct sex discrimination was made out; and (ii) her complaints of disability related dismissal, substantive unfair dismissal and victimisation by way of victimisation under the Sex Discrimination Act 1975 and failure to make reasonable adjustments under the Disability Discrimination Act 1995 also succeeded.
The first tribunal adjourned the question of remedy. Before the first tribunal could address this question of remedy, a preliminary issue arose as to whether the employee had waived privilege in relation to without prejudice settlement negotiations between the parties (the negotiations). The employee had included in the remedy bundle a document which referred to the negotiations and the employer asserted that that act had waived privilege in respect of the negotiations. The first tribunal referred that issue to another tribunal (the second tribunal). The second tribunal found that the employee had waived privilege in respect of the negotiations (the privilege decision).
The first tribunal then dealt with the issue of remedy. The first tribunal awarded compensation totalling approximately £45,000. Central to the remedy decision was the first tribunal’s finding that: (i) on the basis of the medical evidence, the employee’s medical condition and hence her inability to work was caused by the on-going litigation; and (ii) that, on 11 July 2008, the employer had made a reasonable offer of settlement in the sum of £75,000 which the employee ought then to have accepted.
By refusing that offer she had failed to mitigate her loss so that no loss of earnings claim persisted beyond that date (the remedy decision). The employee appealed against both the privilege and remedy decisions to the Employment Appeal Tribunal (EAT). With regard to the privilege decision, the employee submitted that the document referring to the negotiations had been included by mistake. In respect of the remedy decision, she submitted that the first tribunal had not explained why it had reached the conclusion that her conduct had been so unreasonable as to break the chain of causation.
The court ruled: (1) In the instant case, the document referring to the negotiations had formed part of the employee’s case. The employee had deliberately waived privilege in respect of the negotiations and the employer had been entitled to accept that waiver and to rely on the offer (see ,  of the judgment). Accordingly, the appeal against the privilege decision would be dismissed (see  of the judgment). Somatra Ltd v Sinclair Roche & Temperley  All ER (D) 400 (Oct) applied.
(2) In the instant case, the first tribunal had not explained why it had concluded that the employee had acted so unreasonably in refusing the employer’s offer that the chain of causation had been broken. Against the background of all of the negotiations and the employee’s schedule of loss, it had been legally impermissible for any reasonable tribunal to have found that the refusal of the offer of £75,000 had been so unreasonable as to terminate the loss otherwise flowing from the employer’s tortuous act of dismissal.
Absent a wholly unreasonable refusal to countenance settlement, which on the evidence was not shown in the instant case, the employee had been perfectly entitled to pursue her remedy for what the first tribunal had found had been her unfair and discriminatory treatment at the hands of the employer. Provided the condition was genuine the employer had to take its victim as it found her (see ,  of the judgment).
Accordingly, the employee's appeal against the remedy decision would be allowed and the matter would be remitted to a fresh tribunal (see ,  of the judgment). McKew v Holland and Hannen and Cubitts (Scotland) Ltd  3 All ER 1621 applied.
Deshpal Panesar (instructed by the Bar Pro Bono Unit) for the employee; Paul Gilroy QC (instructed by Eversheds LLP, Manchester) for the employer.