337: Financial loss for life awarded against employer

Compensation awards for successful discrimination claims are based on loss suffered by the claimant, with potentially no upper limit. The aim is for the claimant to be put in the same position they would have been in had the discrimination not taken place. In the recent case of Secretary of State for Justice v Plaistow, the EAT has upheld an Employment Tribunal’s decision to award compensation for sexual orientation discrimination and harassment based on career-long losses.

Mr Plaistow began working as a prison officer in 2003. After a transfer to HMO Woodhill in 2014, he was subjected to a continuous campaign of direct discrimination and harassment based on his sexual orientation or perceived sexual orientation. This included physical and verbal abuse, enquiries about his sexuality and failure to investigate grievances. After he wrote to his MP about his treatment, he was victimised and an allegation of gross misconduct was pursued against him, culminating in his dismissal in 2016 at the age of 38.

The Employment Tribunal upheld Mr Plaistow’s claims of discrimination, harassment and victimisation. He was awarded compensation which included £41,000 for injury to feelings, £15,000 for aggravated damages, and £8,000 for exemplary damages. Unusually, he was also awarded compensation for financial loss on a career-long basis. Medical evidence agreed by the experts for both parties indicated that the effects of his abuse included PTSD, depression, symptoms of paranoia and various functional impairments such as difficulty leaving his house. The Tribunal agreed with Mr Plaistow’s expert that these effects were likely to be permanent and that he would be unable to return to any work before his retirement age of 68. A 5% discount was applied to reflect the chance that he might have chosen to leave his employment early or be able to return to some form of employment in the future. The Tribunal also awarded a 20% uplift in respect of the Prison Service’s failure to follow the Acas Code of Practice on Disciplinary and Grievance Procedures.

On appeal, the Prison Service challenged the career-long basis for the award of compensation, the 5% discount and the 20% uplift. The EAT rejected the challenge to the career-long basis, ruling that the Employment Tribunal had been entitled to conclude from the expert evidence that Mr Plaistow’s conditions were likely to be life-long due to the severity of the abuse he had suffered. However, the questions of discount and uplift were remitted to be reconsidered by the Tribunal. When applying the discount, it was not clear whether the Tribunal had taken into account the possibility of Mr Plaistow’s working life being curtailed by early death, disability or other unforeseen circumstances. In addition, the Tribunal had not demonstrated that it had considered the overall financial value of the award (likely to be over £2 million) when assessing the uplift.

Assessing compensation inevitably involves some degree of speculation and is very case-specific. Awards for career-long losses are rare and will only be appropriate where there is no real prospect of an employee ever obtaining an equivalent job. Tribunals are also required to maintain a sense of proportion in terms of the overall award made. This case also illustrates the financial implications of unreasonably failing to follow the Acas Code when dealing with grievances and disciplinary issues involving discrimination. The absence of an upper limit on compensation means that an uplift of up to 25% may in itself amount to a very significant sum.