Employees can recover stigma loss for having
brought a discrimination claim
In Chagger v Abbey
National plc and anor, the Court of Appeal ruled that employees who suffer a
stigma when searching for a new job as a result of a discriminatory dismissal
can be compensated for that loss when it comes to assessing compensation.
A tribunal held that
Mr Chagger’s dismissal for redundancy was unfair and an act of race
discrimination. The tribunal awarded him £2,794,962, which included future loss
based on his inability to work in the financial services industry ever again.
Abbey National appealed.
The EAT rejected the
liability appeal but upheld Abbey’s appeal on remedy, holding that: (i) any
stigma loss was the result of third party conduct for which Abbey was not
liable; and (ii) the tribunal should have applied the Polkey principle and
considered making a reduction to reflect the chance that Mr Chagger would have
been dismissed in any event, discounting the discriminatory conduct. Mr Chagger
appealed.
The Court of Appeal
held that the EAT had been right to apply the Polkey principle and therefore, to
remit to the tribunal an assessment of the likelihood of Mr Chagger being
dismissed even if there had been no discrimination, and if he would have been
dismissed, to adjust compensation accordingly. As to stigma loss, the Court
disagreed with the EAT. In discriminatory dismissal cases, an employer should
be held liable for financial loss suffered by the employee due to the stigma
attached to a discriminatory dismissal. It will not normally need to be
considered as a separate head of loss, but was simply one of the factors which
impact on how long it will take the employee to find a new job.
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