Where an employment tribunal holds that an employee has been unfairly dismissed, one of the main remedies available is an order for reinstatement; this returns the employee into their old job and they are compensated for the earnings/benefits they have lost in the meantime. The EAT has recently considered how a tribunal should approach the calculation of compensation where the employer has failed to comply with a reinstatement order.
D, a senior lecturer, was held to have been unfairly dismissed by his university employer and the employment tribunal made an order for reinstatement. After the university failed to comply with the reinstatement order, the tribunal disapplied the statutory cap that would ordinarily apply to the compensatory award and awarded D just over £90,000 in compensation.
The EAT upheld the university’s appeal and held that the tribunal had erred in its approach to the calculation of compensation after the university failed to reinstate D. The EAT held that the tribunal had correctly recognised that, after the university failed to reinstate D, the amount of compensation it awarded to D should be treated as part and parcel of the compensatory award. The tribunal has the power to disapply the statutory cap, but only where the aggregate of the compensatory and additional awards would be less than the amount ordered on reinstatement. This mechanism is designed to ensure that the employer does not obtain a financial benefit from its failure to comply with the order and reinstate the employee. The tribunal had erred when calculating D’s compensation because it had ignored the ‘additional award’ it was making for the university’s failure to reinstate D. The tribunal’s power to disapply the statutory cap only applied ‘to the extent necessary’ to ensure that ‘the aggregate of the compensatory and additional awards fully reflect’ the sum identified within the reinstatement order.
In D’s case, the maximum compensatory award (£63,532.81) and the additional award (£27,300) produced a total aggregate compensation sum of £90,832.81. This was considerably more than the £67,469.78 due under the reinstatement order, so it was not ‘necessary’ for the tribunal to disapply the statutory cap. A tribunal only has the power to disapply the statutory cap for failure to reinstate where the aggregated total falls short of the sum that would otherwise have been payable had the employer complied with the reinstatement order.
University of Huddersfield v Duxbury [2023] EAT 72
For further information, please contact:
Fiona McLellan, Partner, Hill Dickinson
fiona.mclellan@hilldickinson.com
