No right to damages for “lost opportunity” to claim unfair dismissal

In the case, Harper v Virgin Net, a senior executive started at Virgin in April 2000 but her employment was terminated in March 2001, 33 days short of the date when she would have completed the qualifying one-year period of employment. The Employment Tribunal had assessed her damages at just over £30,000 which represented the award she would have received if she was entitled to unfair dismissal, although it capped her total award at the statutory maximum of £25,000. The Employment Appeal Tribunal reduced her award to just less than £10,000 representing three month’s notice pay – the Appeal judges upheld the EAT’s approach.
“There is a conflict between what the legislation says about the qualifying period for unfair dismissal and the concept of damages for breach of contract,” commented Tony Thompson, an employment partner at law firm Macfarlanes. “The Appeal judges are making it absolutely clear that Parliament, having legislated in this way, then its will is superior and the courts must give effect to the legislation.”

The judgment in Harper was given by Lord Justice Brooke, who as the dissenting voice in the recent case of Dunnachie v Kingston Upon Hull City Council which held that workers would have the right to claim compensation for the stress and harassment caused when they were dismissed unfairly. Both judgments follow the ruling in Johnson v Unisys where the House of Lords held that an employee could not recover, by way of damages for breach of contract, loss flowing from the fact of or manner of the dismissal.

“On the one hand the Court of Appeal is saying in Dunnachie that where you have a genuine unfair dismissal claim, compensation can be awarded for injuries to feelings and that is compensation that derives from the manner of the dismissal,” Thompson explains, while “at the same time, in a differently constituted Court of Appeal with Lord Justice Brooke in common, they are saying that where you have a wrongful dismissal claim you cannot have in effect damages for the manner of the dismissal. If dismissal is in breach of contract it doesn’t give rise to a claim other than those that arise out of the contract.”