Posted by Gemma Ospedale, Partner
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Discriminatory exclusion from voluntary severance scheme elicits full payment
In HM Land Registry v McGlue, the EAT found that an employee who was excluded from a voluntary severance scheme on grounds which were found to be discriminatory, and remained in employment, was nonetheless entitled to receive the full compensation for the amount of the severance package which she would have received had she not been discriminated against. It also held that there should be no deduction for the fact that she remained in post. Her evidence was that, had she been selected, she would have taken the payment and found another job with an equal salary so would have remained working, so therefore there was no basis on which to off-set any financial benefit gained by her for remaining in employment with the Respondent.
The discrimination involved the fact that when HMLR needed to reduce staff numbers, its first port of call was a voluntary severance package inviting expressions of interest but excluding anyone on a career break who was not due to return until after March 2010. The Claimant had been on a career break since March 2008 which was approved for up to 5 years but she could return at any time on giving reasonable notice. When she applied for the voluntary severance scheme, she was told that she was excluded because of the career break, but was not told that if she gave notice to return before April 2010 she would be eligible. Her grievance and appeal were both rejected and she brought a claim for indirect sex discrimination, amongst other things.
The Tribunal found that the policy of excluding employees on a career break from such a scheme was indirectly discriminatory and could not be justified. She was awarded £12,000 for injury to feelings, £5,000 for aggravated damages (unusual) and compensation for economic loss of £72,000. This was the figure she would have received had she been able to apply, and been accepted, for the voluntary severance scheme. The Tribunal accepted the evidence that she would have been successful had she applied.
The employer appealed on the basis that the payment was a redundancy payment designed to compensate her for loss of a job and that since she had not lost her job, no compensation should be awarded.
The appeal was rejected by the EAT. It held that the assessment of financial loss started from the fact that, had she not been discriminated against, she would have applied, and would have been successful, for voluntary severance and so would have been paid £72,000. If she had been accepted for the scheme, this would not have been on the assumption that she would subsequently be unemployed and her evidence that she would have sought and obtained alternative employment at a similar salary was unchallenged.
The appeal against this figure and the injury to feelings award were rejected but the EAT allowed the appeal against the award for aggravated damages (unsurprisingly) on the basis that there was no foundation for such an award.
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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