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3 October 2013 0 Comments
Posted in Employment, Opinion

Compensation for death in service benefits

Author headshot image Posted by , Partner

In a case which has been reported in the Update as it has made its way through the lower Courts, the Court of Appeal has given its decision in British Airways Plc v Fox. This was a case concerning whether the estate of a deceased employee, who had been dismissed and died shortly thereafter, could bring a claim for loss of the death in service benefit which was enjoyed by the employee whilst in employment (and alive). The Court of Appeal has held that the estate can indeed bring a claim for this. British Airways contended that he could never have received the monies while he was alive so consequently there was no claim for its loss, and it was the putative beneficiaries who had suffered the loss and not him so they had no claim either. However the Court of Appeal did not agree, saying that employment law would be in serious difficulties if an employee could not claim compensation merely because the benefit was payable to others and not him. The benefits formed part of the employee’s remuneration and consequently it was a financial loss suffered by him. It also held that the usual remedy in these circumstances, being the cost of securing the equivalent benefit in the market place, was inappropriate here and that, since that the employee had died so soon after dismissal, the value of the lost benefit was the full £85,000.

This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.

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