There was an interesting decision by the Court of Appeal a few weeks ago, concerning compensation for unfair dismissal. Unfortunately, the judgment has yet to appear but the key background reading in any event is the Employment Appeal Tribunal judgment in Aegon v Roberts, earlier in the year, which it overturned. The facts are unremarkable but the same cannot be said of the approach taken to the law.

The original tribunal noted that the pension scheme of the dismissing employer was far more generous than that of the job which was subsequently taken by the claimant. Accordingly, she was able to claim the difference as part of her loss. This would have been uncontroversial were it not for the fact that the second job also provided a larger salary and so it would be expected that any loss of pension would be offset by this additional income. The tribunal took another view, reasoning that there had been a break in the chain of causation with respect to the loss of salary but not with respect to the loss of pension.

The Employment Appeal Tribunal upheld the decision but this is no longer surprising. It once described the approach of tribunals to compensation as “rough and ready” and it continues to be very reluctant to interfere with such assessments. The problem is that this is an area in which there is a great deal of case law, which cannot readily be ignored. There is no point in tribunals making referemce to a break in the chain of causation if they are going to conclude that there can be a partial break or that it can be broken more than once, which is not unknown. Therefore, there is an increasingly common sequence of events in which a tribunal makes a rough and ready assessment of compensation which is upheld by the Employment Appeal Tribunal and then overturned by the Court of Appeal, as happened in this case.

In many ways, the approach of the Employment Appeal Tribunal is understandable. It wants to prevent tribunal litigation from becoming complicated by technical points of law and it wants to avoid endless appeals concerning small sums of money. However, I agree with the Court of Appeal on this issue. The overriding objective requires proceedings to be conducted in a manner proportionate to the amount of money at stake. Therefore, it is right that one-hour wage claims worth a few hundred pounds do not get bogged down in technicalities but, conversely, when tens of thousands of pounds are being claimed, as in this case, tribunals surely ought to take the time and care to produce a more thorough analysis of the losses of a successful party. It should also go without saying that, however badly an employer has acted, compensation should reflect actual loss and should not be a punishment for these actions or for failing to settle, or a reward for a claimant whose successful mitigation means the case has little value.