In discrimination cases, trade union officials invariably recommend that members claim against both the harasser and their employer.

And with good reason. For the first time, an employment appeal tribunal (EAT) has decided in Way & Intro-Cate Chemicals v Crouch that courts can make both parties liable for the full amount of compensation on a joint and several basis.

 

What were the basic facts?

Ms Crouch brought a claim of sex discrimination against her employer and an individual employee (Mr Way), claiming that she had been dismissed because she had ended her relationship with Mr Way.

The tribunal made an award of just over £40,000 against both the company and Mr Way, on the basis of joint and several liability. In other words, that each of them was liable to pay the full amount in the event that one of them could not pay up.

It decided this was fair because Mr Way was the managing director of the company and the major shareholder. Both the company and Mr Way appealed against the decision on compensation.

 

What did the company argue at appeal?

At the EAT, Mr Way and Intro-Cate Chemicals argued, firstly, that the tribunal should either not have awarded any compensation, or should at least have reduced it because of Ms Couch's contributory conduct.

Secondly, they argued that Mr Way could not be held to have committed the unlawful act of discrimination (of dismissing Ms Crouch) because only her employer, Intro-Cate Chemicals, could do that.

Finally, they argued that the employment tribunal did not have jurisdiction to make an award of joint and several liability, but that if it did, it made an error of law in this case.

 

What did the EAT decide?

The EAT rejected every ground of appeal, bar the last, stating that, in cases of sex discrimination (but not unfair dismissal), tribunals are entitled to make an award on a joint and several basis. It noted that there was similar language in all the discrimination legislation Ð race, disability, religion and belief and sexual orientation.

As this was the first decision of an EAT allowing joint and several awards of compensation in a discrimination case, it set out a number of factors that tribunals should bear in mind:

  • In most cases, the present practice of apportioning liability between individual employees and employers should continue
  • If a tribunal makes such an award, it should set out its reasons clearly
  • Tribunals must take into account section 2 (1) of the Civil Liability (Contribution) Act 1978 which provides that "the amount of the contribution recoverable from any person shall be such as may be found by the Court to be just and equitable having regard to the extent of that person's responsibility for the damage in question." In other words, it will hardly ever be appropriate for a tribunal to make a joint and several award which is 100 per cent against each respondent
  • It is not permissible for tribunals "to make a joint and several award of compensation because of the relative financial resources of the respondent." For example, tribunals cannot make the award because it thinks a company is more likely to satisfy it, or because it may be insolvent
  • The word "responsibility" in Section 2 (1) of the 1978 Act refers both to the extent to which each wrongdoer caused the damage and to their relative blame.
  • The EAT then went on to say that it was certainly not permissible for a tribunal to make a joint and several award of compensation because of the relative financial resources of the respondents, as it had done in this case. On that basis alone, the EAT allowed the appeal against compensation.