Supreme Court Gives Judgment In Edwards v Chesterfield

On 14 December 2011 the UK Supreme Court issued its decision in the consolidated appeals in Edwards v Chesterfield Royal Hospital NHS Foundation Trust and Botham (FC) v Ministry of Defence [2011] UKSC 58. The issue was whether damages for future losses could be awarded arising from the unfair manner of dismissal in breach of an express term of an employment contract. If successful, this would expose employers to damages claims far in excess of the usual measure of loss, losses suffered in respect of their notice periods. Further, such a decision would enable employees to bring high-value claims for future losses outside the legislative framework designed to provide the exclusive jurisdiction for such employment claims (i.e. in particular, unfair dismissal).

The UK Supreme Court held that employees may not recover damages in civil courts for loss suffered as a result of a breach of their contract of employment in relation to the manner of their dismissal, unless the loss can be said to precede and be independent of the dismissal. The position therefore remains as it was; a qualifying employee has unfair dismissal rights through which to pursue future losses in the Employment Tribunal, limited to the cap imposed on awards by legislation. Under the common law a claimant may claim for damages, limited to damages had the contract of employment been performed lawfully (i.e. the employee's earnings during the notice period the employer should have given in order lawfully to terminate the employment and, in some cases, also during the period it would have taken an employer to follow a contractual dismissal procedure, known as the Gunton extension). See Gunton v Richmond-upon-Thames London Borough Council [1981] Ch448, [1980] All ER 577, 79 LGR 241.

Background

Mr Edwards was subjected to disciplinary proceedings following an allegation he undertook an inappropriate examination of a female patient. A disciplinary hearing was convened and Mr Edwards was summarily dismissed for gross misconduct. Mr Edwards claimed a contractual disciplinary procedure applied to his employment with the Trust, which was breached by reason of the panel not being properly constituted. As a result of this breach, the panel made incorrect findings, which he claimed it would not have done if correctly constituted and which damaged his reputation. Mr Edwards argued that as a result of the breach, he was now highly unlikely to secure future employment within the healthcare...