18/11/2009

Employment e-Brief – Compensation recoverable for the stigma of being a discrimination claimant

In Chagger v Abbey National PLC and Anor, the Court of Appeal has held that employees who suffer a stigma when searching for a new job, as a result of having brought a discrimination claim against a previous employer, are entitled to be compensated for that loss by that employer.

Mr Chagger’s employment as a Trading Risk Controller with Abbey National PLC was terminated in 2006 reputedly by reason of redundancy.  Mr Chagger, however, believed that the real reason for his dismissal was race discrimination.  The Employment Tribunal agreed with Mr Jagger and held that Abbey National PLC had used highly subjective and un-measurable redundancy criteria in order to retain the other Trading Risk Controller (a female of European origin) instead of Mr Chagger (a male of Indian origin).

At the remedies hearing some six months after the judgment, Mr Chagger presented extensive evidence of his efforts to mitigate his loss by finding alternative employment and alleged that he had failed to secure employment as a result of the stigma of having brought a discrimination claim against his previous employer.  The Employment Tribunal made an award of £2,794,962.27 which represented ‘career long loss’ calculated on the premise that Mr Chagger would never again be able to obtain employment in his chosen field in the financial services industry.  The Employment Tribunal’s decision to award compensation for loss arising from the stigma of being a known discrimination claimant was initially reversed by the Employment Appeal Tribunal, however, has now been confirmed by the Court of Appeal.

If you have any queries in relation to the information contained in this e-brief please contact a member of the employment team.