Unlike unfair dismissal compensation, which has a maximum basic and compensatory award, damages for disability discrimination are unlimited.

The Court of Appeal has decided (not surprisingly), in Beart v HM Prison Service, that damages for loss of earnings as a result of discrimination should not stop at the date of the unfair dismissal. Otherwise, employers would effectively be rewarded for unfairly dismissing their employees.

What was the background to the case?

Mrs Beart brought a successful claim against the prison service for disability discrimination as a result of depression, brought on by an argument with her immediate manager about a request to work part-time. She ended up in a lower status job, with considerably less pay and went off sick in September 1997.

Her employer obtained a medical report in May the following year that said she should be redeployed to another prison. This option was not pursued and she was eventually dismissed in February 1999, allegedly because she had been working in her own shop part time during her sick leave.

Mrs Beart then made a successful claim of disability discrimination and unfair dismissal. The employment tribunal said that by failing to relocate her, the prison service failed to make a reasonable adjustment and were therefore guilty of disability discrimination. Had they done so, she would probably still be working for them.

It also found she had been unfairly dismissed because, although the deputy governor honestly believed in Mrs Beart's guilt, she had been unreasonable in that belief. It said, as a matter of fact, that the investigation had been seriously flawed, that the disciplinary hearing had itself been unfair, and that dismissal was not within the range of reasonable responses.

What happened next?

The prison service then appealed - unsuccessfully - to the employment appeals tribunal (EAT) and the Court of Appeal against the findings of disability discrimination and unfair dismissal.

At a subsequent remedies hearing, the tribunal awarded her loss of earnings from 1 November 1998 (when the prison service should have relocated her), until retirement age (62). She was also awarded damages for personal injury, injury to feelings and unfair dismissal.

The prison service then appealed again to the EAT, arguing that the fact of her dismissal (even though it had already been shown to be unfair), terminated their liability for the disability discrimination.

On that basis, it reasoned that all further losses from the time of dismissal had to be assessed as part of unfair dismissal compensation and should therefore be capped. The EAT disagreed.

What did the court of appeal decide?

The prison service then appealed to the Court of Appeal against the award of loss of earnings. It relied again on the argument that by dismissing Mrs Beart, it had broken the chain of causation between the earlier disability discrimination (which went back to 1 November 1998) and her subsequent dismissal (of 11 February 1999).

In other words, that by dismissing Mrs Beart, the prison service should no longer be liable for the disability discrimination. The Court of Appeal decisively rejected that argument, saying: "The argument that the Prison Service's own act of unfair dismissal can be said to break the chain of causation is very puzzling".

Apart from anything else, it said that the dismissal could not be justified and therefore could not be relied on to escape liability for the acts of disability discrimination against Mrs Beart.

In effect, the prison service had committed two wrongs: the act of unfair dismissal and the failure to make a reasonable adjustment by relocating their employee. It could not rely on one of those wrongs to escape liability for the other.