Roberts v Aegon UK Corporate Services
Ltd
Taking on a new job can bar an employee from making a claim for unfair dismissal
against their previous employer, both in relation to loss of earnings and pension
rights.
The employee, Ms Roberts, made a claim for unfair dismissal against her former employer,
Aegon UK Corporate Services Ltd.
Ms Roberts had obtained new employment immediately following her dismissal however
within nine months she had left her new employment.
The Employment Tribunal made no award for loss of earnings. The Tribunal held that
because she had obtained employment immediately after her dismissal at an overall
higher level of remuneration, she should not receive any compensation for loss of
earnings as the link of causation had been broken.
However she was awarded compensation for her loss of pension rights. Aegon had provided
a final salary scheme whereas she had only had access to a money purchase scheme
in her new position. The Tribunal decided that a pension loss consequent upon unfair
dismissal would not necessarily cease when an employee gained new permanent employment.
It found that a final salary pension is a unique type of benefit that Ms Roberts
was unlikely to find in any other employment. The Tribunal considered that it was
a continuing loss and the chain of causation was not broken by finding work that
pays the same or more after dismissal. The Tribunal therefore considered it appropriate
to distinguish between pension loss and loss of earnings.
Aegon appealed on the grounds that the Tribunal had erred in awarding compensation
for pension loss when it had decided that as a result of Ms Roberts’ new employment
there was no claim in relation to loss of earnings. However the Employment Appeal
Tribunal (EAT) upheld the decision. The EAT determined that the Tribunal was entitled
to differentiate between “the purely arithmetic exercise in comparing the remuneration
packages of the two employments coupled with the permanent qualities of the second
employment” and the “significant loss of pension rights”.
However the Court of Appeal has allowed the employer's appeal. The Court determined
that a final salary pension scheme is not a unique benefit but, rather, an important
part of the total remuneration package. Consequently, the EAT was not entitled to apply different tests to different aspects of the remuneration package.
The Court determined that when Ms Roberts gained new employment elsewhere, this
was a break in the chain of causation which meant that she could neither claim ongoing
salary
nor pension-related loss.
The Tribunal’s award was duly set aside.
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Email:
Matthew
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