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EAT: Tribunals can take post-termination activity into account when deciding on an unfair dismissal award

Employment tribunals can take a former employee's post-termination conduct into account when calculating the compensation to be awarded for a successful unfair dismissal claim, according to the Employment Appeal Tribunal (EAT).

In a recent ruling, the EAT said that there were certain circumstances, consistent with previous case law, in which it was appropriate for a tribunal to do so. This included where the post-termination conduct could affect employment prospects and therefore future loss of earnings and pension loss, it said.

Employment law expert Maria Passemard of Pinsent Masons, the law firm behind Out-Law.com, said that the decision was "dictated by pure common sense". The former employee in the case, a teacher, had been convicted of assault and sentenced to six weeks in prison after his dismissal from Dowdales School in Cumbria; a dismissal which an employment tribunal had found to be unfair.

"It must be proper for a tribunal to take account of conviction and imprisonment, albeit after dismissal, in assessing future losses – to do otherwise would simply be bizarre," Passemard said.

"The claimant's conviction and sentence may have substantially reduced his pension loss and the employment tribunal determining the compensatory award would be entitled to take into account that evidence, and should have done so in the present case. The tribunal would also need to consider how likely it was that an employee would have been dismissed in any event," she said.

The teacher, Mr Bates, taught at the school from 1 September 1999 until he was dismissed for misconduct on 24 April 2009. In September 2010, an employment tribunal found that he had been unfairly dismissed although it also concluded that he had contributed towards the dismissal. A remedy hearing was set for February 2011.

Bates' former employer, Cumbria County Council, asked the tribunal to postpone this hearing as Bates was due to appear at Preston Crown Court in June 2011 to face charges of sexually assaulting a 16-year-old former pupil of the school in July 2010. The council argued that although the acts occurred after Bates was dismissed, the outcome of the criminal trial could be relevant to the amount of compensation he should receive.

The tribunal refused, making reference to a previous case in which it was held that a tribunal should disregard events that took place after a dismissal. Bates was later found not guilty of the sexual assault charges, but was sentenced to six weeks' imprisonment for common assault.

Under the Employment Rights Act, when deciding on the compensatory portion of an unfair dismissal award a tribunal must consider all matters that its finds "just and equitable" bearing in mind "the loss sustained by the employee" as a result of the dismissal. In this case, the tribunal had already reduced Bates' compensation by 15% due to his contribution towards the dismissal. Previous case law allows misconduct pre-dismissal but discovered after dismissal to be taken into account when deciding on the compensatory award, but not post-termination conduct.

However, the EAT said that this case law did not forbid a tribunal from taking into account whether post-termination conduct "had an impact on the claimant's ability to work". In this case, Bates' assault conviction was of potential relevance as his loss of pension claim was "made on the basis that [he] would have continued working", it said.

"Quite apart from any question of 'just and equitable', the claimant's conviction for assault and sentence of a term of imprisonment may have substantially reduced his pension loss and a tribunal determining the proper compensatory award in his case would plainly be entitled to take into account that evidence," said Mr Justice Supperstone in his ruling.

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