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Insurers still face challenges over dismissal rates

In Eastwood and Williams v Magnox Electric (2004), the claimants were dismissed by their employer af...

In Eastwood and Williams v Magnox Electric (2004), the claimants were dismissed by their employer after, they claimed, harassment and victimisation.

Both claimants pursued claims for unfair dismissal and, following a finding in favour of Williams by the employment tribunal, both claims were settled.

Subsequently, they commenced proceedings in the county court for damages due to psychiatric injury. At first instance, and in the Court of Appeal, the claims were dismissed on the basis that they showed no reasonable prospect of success. The Court of Appeal found, following Johnson v Unisys (2001), that the manner and circumstances of a dismissal may stretch to a pattern of events lasting over a period of time. As the claims arose out of the dismissal, the jurisdiction for the claims lay with the employment tribunal.

In McCabe v Cornwall County Council (2004), the claimant was a teacher who was dismissed after allegations of inappropriate behaviour towards female pupils. He pursued a claim in the industrial tribunal and succeeded on the basis that the dismissal was in breach of disciplinary procedures, in that the allegations had not been investigated by a senior member of staff.

A subsequent claim in the High Court sought damages for psychiatric injury.

His claim was struck out at first instance, with the judge following the Court of Appeal decision in Eastwood. The Court of Appeal overturned that decision determining that the question raised was where the boundary should be drawn between the conduct before the dismissal and the dismissal itself, the latter being caught by the unfair dismissal legislation.

The proceedings before the House of Lords in the Eastwood and McCabe cases were concerned with where the boundary should be drawn.

The courts will need to draw a distinction between losses that flow from the dismissal and losses that flow from antecedent conduct. Lord Nicholls recognised the practical consequences of this boundary may not be straightforward.

The House of Lords has effectively confined the effects of Johnson to the actual act of dismissal itself. In Eastwood, the argument was essentially what is meant by the phrase 'manner of dismissal'; however, in Johnson, there is no such discussion and we are left to infer this must mean the act of dismissal itself.

Inevitably, the dividing line between the causative effect of the events leading up to a dismissal and the effects of the actual dismissal itself will not be easy to discern.

While these cases have provided some certainty on jurisdiction issues in an increasingly difficult area, the practical effects for insurers, employers and those advising them remain challenging. Parties need to be alive to the necessity for an investigation of the circumstances to see if there is a jurisdiction issue or other defence. - Vivienne Williams, BLM Manchester.

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