ABG Employment Newsletter – December 2010

New Compensation Limits

Under the usual annual up-rating the maximum compensatory award for unfair dismissal is due to increase to £68,400 with effect from 1st February 2011 (i.e. where the effective date of termination is on or after 1st February). In addition the maximum amount of a week’s pay for calculating statutory redundancy pay and the basic award for unfair dismissal will increase to £400.

Discrimination on the Grounds of Religion or Belief

In the case ofPower -v- Greater Manchester Police Authority it had been held at a pre-hearing review that the claimant’s belief in spiritualism and the ability of mediums to contact the dead was a religious or philosophical belief which was protected under the Religion or Belief Regulations.

However, in the subsequent merits hearing it has now been ruled by both the Employment Tribunal and the EAT that the claimant was not in fact discriminated against on the grounds of his protected beliefs. His employment as a police trainer had been terminated after only 3 weeks. One of the reasons was because of his previous conduct as a volunteer which showed that he was unsuitable to train young police officers – this had come to light only after his employment had started. The second reason for dismissal was that he had distributed spiritualist posters and CD ROMs at work. However it was ruled that this did not amount to discrimination on the grounds of his protected beliefs. The reason for dismissal was not because he held the protected beliefs, but because he had manifested those beliefs at work in an unacceptable manner.

Disability Discrimination and Reasonable Adjustments

In the case of Hinsley -v- Chief Constable of West Mercia Constabulary the EAT has upheld the Employment Tribunal’s ruling that the Chief Constable was in breach of the duty to make reasonable adjustments when he failed to reinstate a probationary police officer who had resigned from the police force whilst depressed.

In this case the claimant had tendered her resignation from the force shortly before Christmas. A Chief Inspector delayed processing her resignation and urged her to re-think, but early in the New Year she wrote a second resignation letter and left immediately. Her resignation was formally accepted.

Several weeks later the claimant visited her GP and was diagnosed with depression and she then asked to be reinstated saying she had made a hasty decision whilst she was in a distressed state of mind brought on by depression.

The Chief Constable refused to reinstate her, but did invite her to apply to re-join the force. She then brought a claim under the Disability Discrimination Act claiming that the Chief Constable had been in breach of the duty to make reasonable adjustments in failing to reinstate her. Her claim succeeded at the Employment Tribunal and has been upheld by the EAT. Nothing of substance had changed since the Chief Inspector initially tried to persuade her to retract her resignation and so she should have been allowed to do this after the medical diagnosis of depression.

In another case based on reasonable adjustments, Cordell -v- Foreign & Commonwealth Office, the claimant was unsuccessful because of the very substantial cost of the proposed adjustments.

The claimant in this case is profoundly deaf. She had been posted abroad to Poland and was provided with full-time lip speaker support at an annual cost of almost £146,000.

Subsequently she was promoted to a new post in Kazakhstan, but this would require more costly adjustments than the Poland post, at an annual cost of about £250,000. The Foreign Office concluded that these costs were unreasonable and so withdrew the offer of the Kazakhstan job.

An Employment Tribunal has decided that the Foreign Office were justified in withdrawing the job offer on the basis that on any objective test the cost of the adjustments was simply unreasonable. It took into account, inter alia, the fact that the cost of the proposed adjustments was more than 5 times the claimant’s annual salary and was more on its own than the entire annual cost of employing local staff at the Kazakhstan embassy. The fact that the Foreign Office had previously agreed to expensive adjustments in her former post did not make the adjustments required for this new post reasonable as they were substantially more expensive.

Pay in Lieu of Notice and Bonus

In the case of Locke -v- Candy and Candy Ltd the Court of Appeal has ruled that an employee’s entitlement under a pay in lieu of notice clause did not include the guaranteed bonus he would have received if he had still been employed during the notice period.

In this case the employee was entitled to a guaranteed bonus, but the bonus clause specified that he had to be employed in order to receive the bonus. His employment was subject to termination by 6 months notice, but his contract included a PILON clause under which the company reserved the right to make a payment in lieu of notice.

Following a disagreement, the company terminated the employee’s employment shortly before the bonus became due and opted to pay him 6 months pay in lieu of notice based on his basic salary.

The employee then brought High Court proceedings claiming payment of the bonus arguing that the pay in lieu of notice clause entitled him to receive the same payment as he would have received if the company had given him 6 months notice. However, his claim has been rejected by the Court of Appeal on the grounds that the bonus clause specified that he had to be in employment to receive the bonus and hence the PILON clause did not entitle him to receive a bonus payment where the company opted to terminate his employment with immediate effect.


The comments in this note are of a general nature only. Full advice should be sought on any specific problems.

ABG Employment Newsletter – August 2010

Christopher Gigg 
[email protected] 
+44 (0)115 934 3310

David Hardstaff
[email protected]
+44 (0)115 934 3323

Kathryn Meir
[email protected]
+44 (0)115 934 3308