Employment lawBy Martin Edwards, Mace & Jones, LiverpoolCompensation for manner of dismissalJohnson v Unisys Ltd [2001] IRLR 279, HLMr Johnson, who had a history of work-related stress, was unfairly dismissed for an alleged irregularity and he was awarded the maximum compensation.Subsequently, he brought civil proceedings.

He claimed that, as a result of the manner and fact of his dismissal, he suffered a mental breakdown which made it impossible for him to find work.He considered it unlikely that he would ever again find a paid job and estimated his loss of earnings at in excess of 400,000.He argued that various implied terms in his contract of employment, including the implied term of trust and confidence, had been breached.

Alternatively, the company was in breach of its duty of care because it ought reasonably to have foreseen that psychological injury was likely to result from dismissing him in the way in which it did.

A judge at first instance threw out the claim, considering that Mr Johnson was seeking to circumvent the ceiling on compensation established by legislation.

The Court of Appeal dismissed an appeal (1999) IRLR 90.

From there, Mr Johnson appealed to the House of Lords, but it dismissed that appeal.

The judge had not erred in striking out the claim for damages on the ground that it disclosed no cause of action at common law.

In the light of the statutory right to compensation for unfair dismissal, it would be improper for the courts to develop a common law remedy for the manner in which an employee is dismissed.Tribunals have a broad jurisdiction to award what they consider is just and equitable, subject to a limit on the amount.

However and significantly the ruling in Norton Tool Co Ltd v Tewson (1972) IRLR 86, that the loss sustained can only mean financial loss, is too narrow.In an appropriate case, Lord Hoffman said, it is open to an employment tribunal to award compensation for distress, humiliation, damage to reputation in the community or to family life.

The tribunal may also compensate an employee for the financial loss flowing from psychiatric injury which is said to be a consequence of the unfair manner of the dismissal.

So in the present case, all matters of which the employee complained were within the jurisdiction of the tribunal.

It would not be wise to imply a separate term that the power of dismissal would be exercised fairly and in good faith.

Addis v Gramophone Co Ltd (1909) AC 488 prevents an employee in a wrongful dismissal case from recovering damages for injured feelings, mental distress or damage to reputation arising out of the manner of dismissal but it does not stand in the way of recovery for breach in the other implied term of the contract, as in Malik v BCCI (1997) IRLR 462.Mr Johnson could not rely on the fact that he was dismissed without a fair hearing and in breach of the employers disciplinary procedure in order to establish that his dismissal was a breach of the implied duty of trust and confidence.

An implied term cannot contradict an explicit term of the contract that the employer was entitled to dismiss without cause or giving due notice.

In any event, it is not appropriate to apply the implied duty of trust confidence which is concerned with preserving the continuing relationship between employer and employee to a dismissal.Finally, the statutory requirement that a written statement of particulars of employment shall contain a note of any applicable disciplinary rules is not intended to give rise to a common law action in damages which would create the means of circumventing the limitations on unfair dismissal compensation.