Injury to feeling damages for unfair dismissal possible

The Court of Appeal has allowed injury to feelings awards in unfair dismissal cases.

The Court of Appeal has just overturned an existing case that said that an award for unfair dismissal could only reflect economic loss. In other words, compensation for unfair dismissal could not include money for such things as distress, humiliation, damage to reputation or family life or psychiatric injury. The new case says that in appropriate cases it will be possible to make such an award. As such, the new decision is important for both employers who may have to pay more out for unfair dismissal and for employees who correspondingly might get more.

The main aspects of the Court of Appeal’s judgment are:

It is not in every case that ‘non-pecuniary’ loss in unfair dismissal cases will be made. However, in some cases, such an award can be made. Section 123 of the Employment Rights Act 1996, which defines the compensatory award in an unfair dismissal case as ‘such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal’, is sufficiently wide to embrace non-pecuniary losses caused by the unfair dismissal. Not every upset caused by an unfair dismissal will result in compensation. Tribunals may only compensate an employee for real injury to his or her self-respect.

It may be that Tribunals will now award such compensation but the final work must come from the House of Lords, to whom this case may be appealed.