Compensatory Awards - Deductions

The EAT (HHJ McMullen presiding) has handed down an important decision dealing with a common problem for tribunals when assessing the compensatory award.

Knapton v ECC Card Clothing Ltd is authority for the proposition that:

• if an employee chooses to draw his pension early, following dismissal, the value of his pension benefits should not be deducted from any compensatory award;
• if his remuneration package includes life insurance, the compensatory award should not include compensation for the cost of purchasing that insurance, to the date of the hearing, unless the employee actually purchased alternative insurance cover. Assuming the employee has not died, he has suffered no financial loss by being uninsured. Whilst this decision was only dealing with unfair dismissal compensatory awards, the EAT's reasoning makes it clear that the principles will similarly apply to discrimination awards.

Knapton v ECC Card Clothing Ltd

[Thanks to Andrew James of Thompsons solicitors, solicitors for the Appellants, for notifying me of this decision]