Severance offset

The point of a compensation award is to put successful claimants in the position they would have been, had the “wrong” not happened. In HM  Land  Registry v McGlue the Employment Appeal Tribunal (EAT) held that the compensation awarded to an employee who was indirectly discriminated against when she was excluded from a voluntary severance scheme, should not be offset to reflect the fact that she stayed in her job.

Basic facts

In order to save money, the Land Registry announced in December 2008 that it intended to merge a number of offices. To encourage staff to volunteer for redundancy, it devised an early release scheme and asked for expressions of interest by 5 February 2009.

Mrs McGlue, who was on a career break after a period of maternity leave said she was interested. On 25 March, however, management decided (without any consultation) to exclude from the scheme anyone on a career break who was not due to return until after 31 March 2010.

Having initially been told she remained eligible, Mrs McGlue was informed on 27 March that she was not. However, no one explained that she could still be selected if she indicated that she intended to return to work before 1 April 2010, which she was entitled to do under the terms of her career break.

She lodged a grievance on 20 May which was rejected and her appeal, which was heard in September, was finally dismissed at the end of December 2009. She claimed sex discrimination, among other things.

Tribunal decision

The tribunal agreed that she had been indirectly discriminated against because a provision criterion or practice of excluding people on career breaks had been applied to her. That criterion disadvantaged her in particular and was not justified by the Land Registry’s aim of achieving costs savings and head count reductions.

It awarded her £12,000 for injury to feelings; £5,000 in aggravated damages; and a compensatory award of almost £72,000 (the sum that she would have received had she been able to apply for voluntary severance).

EAT decision

Recognising the tribunal’s assessment that Mrs McGlue had suffered an “acute sense of disappointment” as a result of the discrimination, the EAT rejected the Land Registry’s appeal against the award for injury to feelings.

The fact that the Land Registry had the opportunity to deal with the discriminatory criteria and the effect of their discriminatory conduct (which deprived Mrs McGlue of a significant benefit), were important factors in the EAT’s decision that the tribunal award should not be overturned.

However, it agreed that the award of aggravated damages was not appropriate as the Land Registry had not acted “in a high-handed, malicious, insulting or oppressive way”.

As for the compensation award, the EAT said the principle behind it was to ensure that Mrs McGlue was placed financially in the position in which she would have been “had the wrong not been committed”. Mrs McGlue was therefore permitted to keep the compensation and her job for the simple reason that if she had received the money under the early release scheme, she could have found another job without giving credit for any new income she received.