Monday 11 August 2003

Loss of Chance to Claim Unfair Dismissal

Since publication of a summary law report in the Daily Telegraph on 19th July, employment lawyers have been awaiting the transcript of the EAT's decision in Virgin Net Ltd. v Harper (HHJ Peter Clark, 9th July 2003).

The case is authority for the proposition that employees cannot circumvent the one-year qualifying period for unfair dismissal by bringing a claim for wrongful dismissal and claiming loss of a chance.

Previously, following Raspin v United New Shops (1999), when an employee was dismissed in breach of contract (ie without notice), and his/her contractual notice period would have taken him beyond the one year qualifying period, s/he could bring a breach of contract claim where the damages would include compensation for loss of a chance of claiming unfair dismissal. In a case where the dismissal would plainly have been unfair, an employee could theoretically recover 100% of the compensation s/he would have had if claiming unfair dismissal properly (subject to the £25,000 cap if the contract claim was brought in a tribunal).

However, the EAT has now declined to follow Raspin on the basis that it is not consistent with the House of Lords' decision in Johnson v Unisys (2001). In other words, the EAT in Virgin Net Ltd v Harper has held that the award of damages for 'loss of a chance' is exactly the type of circumvention of the unfair dismissal statutory framework castigated by the House of Lords in Johnson, and is therefore impermissible.

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