Termination of Employment

In England, the amount of damages that may be awarded by an Employment Tribunal is determined by the extent of the employee’s financial loss. In assessing the employee’s financial loss, a Tribunal will look closely at whether the employee has satisfied his or her duty to mitigate such loss. We examine a recent decision of the Employment Tribunal on the duty to mitigate in the context of a sex discrimination claim.

In our second article, we briefly look at a recent High Court decision on territorial jurisdiction for a breach of contract claim by an employee who did not habitually carry out his work in Great Britain.

And finally, we take the opportunity to remind employers of their obligations under the Data Protection Act 1998 in relation to sharing employee data.

Termination of Employment – Employee’s Duty to Mitigate Financial Loss

The Employment Tribunal will compensate a successful claimant for actual financial loss suffered as a result of the dismissal (and estimated future loss where appropriate) but it will generally not make a punitive award against the Employer (with some exception in discrimination cases). An employee has a duty to take reasonable steps to mitigate his or her loss and a failure to do so may result in the compensation being reduced as the tribunal considers appropriate.

The extent of an employee’s duty to mitigate his or her financial loss was considered by the Employment Appeal Tribunal (EAT) in the recent case of Debique v Ministry of Defence UKEAT/0075/11/SM. Ms Debique, a single mother, who served in the British Army as a soldier, found it difficult to combine motherhood with her responsibilities as a soldier and became subject to a disciplinary procedure as a result. Ms Debique resigned from her job and brought indirect sex discrimination proceedings against the Ministry of Defence (MoD) on the basis that she had received detrimental treatment as a result of her childcare responsibilities. During her notice period Ms Debique turned down an offer from the MoD of a new position which would resolve her childcare problems.

The EAT upheld the claim for indirect sex discrimination but decided that Ms Debique should have accepted the “unique” offer of alternative employment by the MoD as she had a duty to mitigate her loss. Consequently, Ms Debique was not awarded any compensation for loss of earnings and was only entitled to the injury to feelings part of the compensation (only in discrimination cases) which amounted to £15,000.

Had the MoD not made an offer of re-engagement to Ms Debique it would have been ordered to pay a much larger compensation payment to Ms Debique. We recommend to our clients that they keep this in mind (and especially in vicarious liability cases), where the employee is employed in a large organisation and could be offered employment in a different department or on a different site as this may significantly reduce any subsequent tribunal awards if the employee refuses.

Jurisdiction – Where should the Claim be heard when Respondent Employer is a Non-English Company?

Under the Brussels Regulation (Council Regulation 44/2001), an employee can issue proceedings against his or her employer either: a) in the country in which the employee habitually carries out his or her work; or b) a country in which the employer is domiciled. However, an employer can only issue proceedings against an employee in the courts of the country in which the employee is domiciled.

Difficulties arise where the employee does not habitually carry out his or her work in any one country in which case proceedings can be brought against the employer in the country in which the business that engaged the employee is situated.

In Wright v Deccan Chargers Sporting Ventures Ltd & Anor [2011] EWHC 1307 (QB) the claimant was employed by an Indian company and was initially based in London but had a duty to travel to India when necessary. The employer subsequently directed the claimant to relocate to India and the claimant issued proceedings in the English civil courts for breach of contract. Although the employment contract stated that governing law was English law, it was silent as to jurisdiction.

The High Court held that England was the appropriate forum for bringing the claim on the basis that the agreement was governed by English law. Further, the court believed that the claimant would not receive a fair trial in India (due to the delays in Indian courts) and therefore concluded that a court in England would be best suited to resolve the dispute.

When to Share Employee Data

Employers will typically hold personal information regarding their employees (personnel files etc) and will therefore be processing personal data for data protection legislation purposes. As such employers have a number of legal obligations to protect that information under the Data Protection Act 1998 (DPA).

Employers must also ensure that they take the DPA into account when disclosing employee data to third parties. The DPA generally prohibits the transfer of personal data outside the EEA subject to certain exceptions.

Employers who agree to provide references for employees can be exposed to claims from both the employee and the recipient of the reference. Therefore it is fundamental that employers ensure that they comply with the DPA when handling personal information especially in light of the latest heavy fines imposed by the Information Commissioner’s Office (ICO) for breaches of the DPA when handling personal data.

We can assist you with your questions on data sharing and also prepare a Data Protection Policy for your organisation to minimise the risk of inadvertent breaches of the DPA.

If you have any questions on the issues raised in this newsletter or any general employment queries, please do not hesitate to contact us.

The material contained in this newsletter is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for specific circumstances and before action is taken.

© , November 2011

Please contact:

Sara Kennedy - Solicitor

DD +44 (0)20 7553 9937

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