Compensation for Illness in Unfair Dismissal Cases

In Adey-Jones v O’Dowd, the Employment Appeal Tribunal (EAT) considered the extent to which an employee could claim compensation from her former employer for illness she suffered after she had been unfairly dismissed

Mrs O’Dowd was responsible for the day-to-day management of a care home, in Cheshire, that was owned by Mrs Adey-Jones. She had an unblemished service record until November 2005, when she was arrested by police on suspicion of stealing benefits from residents of the home. Mrs O’Dowd always denied any wrongdoing and was never charged, although police continued to investigate the allegations up until a year after her dismissal.

The care home was assessed by Cheshire County Council and the Commission for Social Care Inspection, which produced a report that was heavily critical of Mrs O’Dowd and put pressure on Mrs Adey-Jones to commence disciplinary proceedings against her employee. Following an unsuccessful appeal, Mrs O’Dowd was dismissed on 20 January 2006.

After her dismissal, Mrs O’Dowd was unemployed for 14 weeks and then took up a temporary post at a lower salary. However, she then fell ill and was on sick pay for nine months. This was followed by a period on Jobseeker’s Allowance before she decided to pursue a different career.

The Employment Tribunal (ET) found that the disciplinary proceedings were seriously mismanaged. No attempt appeared to have been made to investigate the criticisms levelled against Mrs O’Dowd in the report. In its view, she had been unfairly dismissed. The ET also found that Mrs O’Dowd’s illness was a direct result of the way she had been treated by Mrs Adey-Jones and the ongoing police and council investigations and it would therefore be appropriate to award compensation for loss of earnings up until the end of February 2007.

Mrs Adey-Jones appealed against the decision that she was wholly responsible for compensation payable to Mrs O’Dowd for her consequent loss of earnings throughout the entire period during which she was unable to work.

The EAT found that the ET had given very little explanation for the conclusion it had been given in support of Mrs O’Dowd’s claim. It noted that her illness had manifested itself some 20 weeks after her dismissal and the fact that police and council investigations were still ongoing should be taken into account. When deciding on the level of compensation payable by the employer for unfair dismissal, if there is more than one cause of an illness that prevents someone from working, a ‘percentage’ approach is needed to determine what extent the illness is attributable to the employer’s conduct. The EAT therefore remitted the case to the original ET.

Unusually, no medical evidence was before the Tribunal and no mention was made of the exact illness in question.