The largest Employment Tribunal award to date is made against an NHS Trust for unfair dismissal and discrimination

In Michalak v Mid Yorkshire Hospitals NHS Trust, Dr Michalak was awarded nearly £4.5 million for unfair dismissal, sex and race discrimination.

Background

The maximum award for a claim of unfair dismissal is currently £68,400 (see the In a Nutshell section for the 2012 increase in awards). However, awards for discrimination are uncapped and an Employment Tribunal (ET) has the discretion to award an amount which is just and equitable in the circumstances in a successful case.

Case Summary

Dr Michalak worked at Mid Yorkshire NHS Trust as a consultant, earning £88,000 per year. She alleged that there had been discrimination in relation to what she considered unjustified payments received by her colleagues in December 2003.  She was then subjected to numerous complaints about her conduct and criticism which the ET found was “part of a discriminatory plan designed to get rid of her”, resulting in her suspension in January 2006, which was described by the ET as a “lengthy and wholly unauthorised period of suspension until disciplinary action was commenced in May 2007 and concluded by her dismissal on 14 July 2009”.  The ET found that Dr Michalak had been the victim of a “concerted campaign” by senior employees in the Trust and expressed outrage in its decision about this treatment, ultimately deciding that Dr Michalack had been dismissed for no good or justifiable reason and that her dismissal related to her pregnancy – noting that she was the first consultant to take maternity leave at the Hospital.  The ET was convinced that the matter could have been avoided if the Trust had appointed an external investigator when Dr Michalak’s grievance was first raised.

The Claimant was successful in winning her claim for unfair dismissal and discrimination (on sex and race grounds) in June 2010. However, the judgment on the level of award (remedy) was considered separately in December 2011.  The main points to note from the remedy judgment are:

  • the majority of the award was for future loss of earnings (£991,800) and loss of pension (£666,260). The Claimant who was 53 claimed (predictably) that she would have worked until a retirement age of 75, with the Trust contending that she would have retired at 60. The Tribunal decided that it was likely that the Claimant would have continued to work until her son had finished at university, when she would have been 68, and used this age to calculate future loss (amongst others);
  • the Claimant’s psychiatric condition was considered in detail. The Tribunal concluded that her illness was so extreme that the Claimant would never return to work as a doctor and the loss of status and also “undergoing those experiences with all the unpleasantness, anxiety, worry and fear that it caused” justified an award for injury to feelings of £30,000” (the top of the injury to feelings award scale);
  • psychiatric injury was calculated as £56,000 with care and treatment a further £124,000;
  • the total award was £2.4 million, which included an uplift of 15% for the Trust failing to follow the statutory grievance procedure which was in existence at the time. However, as part of the award was taxable, that figure was grossed up to £4.5 million so that the Claimant received £2.4 million in her hand.

A peculiarity in the case was that the discrimination award was made against three named respondents, colleagues of Dr Michalak, who were found to be joint and severally liable with the Trust for the total sum of £4,452,206.60.  The ET stated it was inclined to make a specific award against the named respondents, in order to relieve the public purse but was persuaded this was not appropriate by previous Employment Appeal Tribunal case law, specifically disapproving of that practice.

Conclusion

This is a stark reminder of ET’s powers in making discrimination awards. The ET did not flinch in its criticism of the Trust or in the scale of the penalty on a public body. The only time that the fact of the Trust being a public body was taken into account, to mitigate the award, was when the ET awarded the uplift for the failure to follow the statutory grievance procedure. The ET said it was minded to award a 50% uplift due to the Trust’s handling of the internal processes, but this would have equated to an additional sum of about £3 million, which the ET conceded would have been “wholly disproportionate and would not command public respect”.