Compensation

Bentwood Bros (Manchester) Ltd v Shepherd [2003] IRLR 364

An employment tribunal awarded compensation in excess of 190,000 to an employee made redundant while pregnant.

The Court of Appeal held that the tribunal was wrong to discount the total award of compensation for future loss by a single deduction of 5% to take account of the fact of accelerated payment, notwithstanding that such loss covered two years future earnings and ten years' pension payments.

A tribunal should not ignore the fact that an employee receiving compensation has the benefit of receiving immediately what he or she would otherwise have had to wait to receive in instalments over the period of loss.

The conventional discount of 5% applied by a tribunal is designed to reflect the annual yield that would be obtainable on investment of the sum paid.

Although tribunals may take the fact of accelerated receipt into account in more than one way, in this case, there was nothing to indicate that the tribunal had taken it into account other than by the single 5% deduction.

Since it was arguable that a discount rate of 5% was on the high side and out of line with rates in other areas of the law, in particular the 2.5% now applied by statute in personal injury cases, the matter would be remitted for reconsideration.

The tribunal was also wrong to award interest on gross compensation rather than on the net sum after deductions for income tax and national insurance.

There is no logic in awarding interest on sums which the employee would never have received.

But the tribunal was not wrong to award loss of pension rights for ten years, even though the finding that the 35-year-old applicant would never again find pensionable employment was 'surprising'.

Time limits

London Borough of Southwark v Afolabi [2003] IRLR 220

Almost nine years after the expiry of the statutory time limit, the applicant presented a complaint that the employers unlawfully discriminated against him on the ground of race when they failed to appoint him to an auditor's post.

A tribunal exercised its discretion to consider the claim and the Court of Appeal upheld that ruling.

The tribunal did not err by failing to consider the matters listed in section 33(3) of the Limitation Act 1980.

In considering whether it is just and equitable to extend time, a tribunal is not required to go through those matters, provided that no significant factor has been left out of account by the tribunal in exercising its discretion.

Parliament limited the requirement to consider the matters in section 33(3) to actions relating to personal injuries and death.

Lord Justice Peter Gibson commented: 'If Southwark wanted to make good a case that it was not possible to have a fair trial so many years after the appointment, it is surprising that it did not put in evidence directed to that point.'

Reasonable adjustments

Beart v HM Prison Service [2003] IRLR 238

The Court of Appeal upheld a tribunal's finding that there was a duty on the Prison Service, under section 6 of the Disability Discrimination Act 1995, to make an adjustment by relocating the applicant after she became ill with depression because of difficulties encountered at work.

The tribunal had not misdirected itself by not considering whether such an adjustment was reasonable and had not erred by failing to apply the principles set out in Morse v Wiltshire County Council [1998] IRLR 352.

It is not an error of law for a tribunal to have failed to follow sequentially the series of steps indicated in Morse, provided that it is apparent from the tribunal's decision that it properly applied itself to considering whether the requirements of the statute were satisfied.

By Martin Edwards, Mace & Jones, Liverpool