By Ozlem Mehmet, Associate At Fox Williams
Headlines in the press were dominated at the end of 2011 with the decision of an Employment Tribunal to award a consultant £4.5 million in relation her successful claims of unfair dismissal, sex discrimination and race discrimination against her employer and a number of named individuals.
A large amount of the awarded sum related to Dr Michalak’s future loss of earnings. The Tribunal effectively awarded her compensation for “career loss” — i.e. loss of earnings up to retirement. You could, therefore, be forgiven for doubting the principle set out by the Court of Appeal in the recent case of Wardle v Calyon that “career loss” will only be appropriate in the most extreme cases. Are those employed in certain professions with particular qualifications, more likely to establish that they are an “extreme case” (the Tribunal in Michalak decided that Dr Michalak would not be able to continue her career as a doctor)?
Principle in Wardle
In summary, the main principle laid down by the Court of Appeal in considering the amount of compensation to be awarded in successful discrimination claims is that, in relation to career loss, Tribunals should assess future loss of earnings up to the point when it determines that it is more likely than not that the individual would secure an equivalent job. Career-long compensation will therefore only be appropriate in exceptional cases.
The facts in Michalak
Dr Eva Michalak, a 53 year-old consultant of Polish origin, was dismissed after a long campaign mounted against her whilst she was on maternity leave. The Tribunal found that senior members of staff at the Trust began a plan to get rid of her at a secret meeting that took place in March 2003, when she was seven and a half months pregnant.
On her return from maternity leave, Dr Michalak received a number of complaints and criticisms, including accusations of bullying junior doctors. She was suspended in January 2006. Disciplinary proceedings against her began in May 2007 and resulted in her dismissal in July 2008.
Dr Michalak’s health suffered as a result of the treatment she was subjected to and she was diagnosed as suffering from “chronic post-traumatic stress disorder”, depression and anxiety which was a “chronic and disabling” condition leading to an “enduring personality change”. She struggled to carry out the simplest of tasks and needed to be cared for by a close relative.
The Tribunal’s decision
The Tribunal held that Dr Michalak was unfairly dismissed and subjected to sex and race discrimination. It also upheld her claim for personal injury.
Factors that were taken into account by the Tribunal in its findings of discrimination included the fact that Dr Michalak was probably the first consultant physician at that hospital to have become pregnant and gone on maternity leave. Her taking maternity leave also created discontent among her colleagues because, having recently been appointed to her position, she had become pregnant with the consequence that they were going to have to carry out the rounds that she was undertaking.
There were also a number of references to “cultural factors” in relation to Dr Michalak’s behaviour noted in the paperwork in the case and the Tribunal found that Dr Michalak’s ethnic origins did play a part in the respondents’ treatment of her. The Tribunal also noted in this regard the fact that, despite over 50% of the consultant body of the Trust coming from an ethnic minority background, decisions about her future (taken either at meetings held by management, or by the disciplinary panel, etc) were taken by groups of people consisting either entirely or predominantly of white British people.
No explanation was provided for this and the Tribunal held that the Trust had “failed entirely to have regard to the need to ensure diversity amongst such groups”.
The compensation awarded to Dr Michalak included, among other things, compensation for:
- unfair dismissal;
- personal injury;
- injury to feelings (she was awarded £30,000 under this head — i.e. the maximum amount that can be awarded);
- loss of earnings to date;
- the cost of past and future care given and to be given to Dr Michalek by her husband and relatives as a result of her being unable to accomplish the simplest of tasks without oversight and supervision due to her health condition;
- future loss of earnings; and
- loss of benefits (including pension).
In relation to future loss of earnings, the Tribunal held, in light of its findings of fact and the medical evidence put before it, that Dr Michalak would never be able to practice as a doctor again. It therefore awarded her loss of earnings up to retirement, which the Tribunal found to be when she would reach the age of 68. The Trust argued that most consultants tend to retire at age 60 and that Dr Michalak’s damages should therefore stop at that point. The Tribunal, however, found that Dr Michalak’s case was different in that she had joined the Trust’s pension scheme quite late. She would therefore have to work longer to maximise her benefits under the plan. The Tribunal also took into account the fact that Dr Michalak had a young child who she would fund up to and through higher education and would have worked up to that point.
Although the award in Michalak is very high, it is clear, once the unfortunate facts of this particular case are considered, that it is an exceptional case and one which would fall within the exceptions to the Courts’ and Tribunals’ general approach to compensation for career-long future loss of earnings and their general desire to limit large payouts under this head of claim. Most employers can therefore continue to take comfort from Wardle.
Özlem Mehmet (neé Kulle) is an Associate in the employment department and can be contacted for more information on this feature at firstname.lastname@example.org.
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