EWJ June 61 2025 web - Flipbook - Page 84
Gourlay v West Dunbartonshire Council A Tribunal’s Decision to Reduce a Claimant’s
Compensation was Based on “Perverse
Conclusions and Material Errors of Law”
by Chris Cuckney, Senior Associate - www.devonshires.com
In a recent judgment in the case of Gourlay v West
Dunbartonshire Council, the Employment Appeal Tribunal has provided useful guidance setting out how
tribunals should critically assess financial loss in discrimination claims. The case also reiterates the importance of preparing for remedy hearings,
particularly where the employer is running an argument that the employee’s compensation should be
reduced for some reason.
Having applied the 80% reduction, the Employment
Tribunal awarded him just under £125,000. Mr
Gourlay appealed this decision to reduce his
compensation by 80% to the Employment Appeal
Tribunal.
Employment Appeal Tribunal (EAT)
The EAT agreed with Mr Gourlay and overturned the
Employment Tribunal’s decision.
The EAT went as far as saying that the Employment
Tribunal had got itself “muddled” and trying to
decipher what they had decided and why was “challenging.” The EAT ultimately held that the decision to
reduce the compensation by 80% was based on
“perverse conclusions and material errors of law”.
Background
Mr Gourlay started working for West Dunbartonshire
Council (the Council) in April 2008 as a Corporate
Health and Safety Officer, and he was later dismissed
in September 2015 for gross misconduct. Mr Gourlay
brought a number of Employment Tribunal claims
against his former employer, including unfair dismissal, failure to make reasonable adjustments, and
victimisation.
The EAT went back to basic principles and
highlighted that the purpose of compensation in discrimination claims is to put the claimant back in the
position they would have been had the discrimination
never taken place. Having already found that the
Council’s discriminative actions had caused an ongoing psychiatric illness which rendered Mr Gourlay
permanently incapable of working, the Employment
Tribunal had failed to consider the key question:
Would a lawful non-discriminatory dismissal have left
Mr Gourlay permanently unable to work because of
psychiatric injury? If not, meaning that the Council’s
discriminatory acts caused the psychiatric injury, then
compensation should not have been reduced.
The failure to make reasonable adjustments arose out
of the Council’s failure to provide Mr Gourlay with
appropriate office equipment that would have helped
him manage his multiple sclerosis at work. The victimisation claim arose out of the Council’s decision to
suspend and dismiss Mr Gourlay, and their decision to
refuse his appeal. As a result of these events, Mr
Gourlay experienced a severe depressive episode
which rendered him permanently unfit for work.
Employment Tribunal
The Employment Tribunal ruled in Mr Gourlay’s
favour in his unfair dismissal, reasonable adjustments
and victimisation claims.
The EAT also held that the Tribunal’s conclusion that
Mr Gourlay’s employment might have ended by mutual agreement by 31 March 2017 was hypothetical
and without evidence. The Tribunal had again failed
to consider the key question set out in the above paragraph – whether a lawful non-discriminatory dismissal
would have resulted in the same psychiatric injury.
At the remedy hearing, Mr Gourlay was found to be
permanently unable to work and his total financial loss
until retirement was assessed to be almost £625,000
(which included past, future, and pension losses). The
Employment Tribunal has the power to reduce a
claimant’s compensation where it considers that they
would have been dismissed in any event. In this case,
the Tribunal applied an 80% reduction on the basis
that:
The EAT also ruled that the Employment Tribunal’s
conclusion that Mr Gourlay’s diabetes and multiple
sclerosis might have forced him to take ill health retirement anyway was pure speculation, and wasn’t
based on any medical or factual evidence.
1. Mr Gourlay’s employment would have ended by 31
March 2017, through either mutual agreement due
to a breakdown in the working relationship, or
through mutual agreement on agreed terms; or
Accordingly, the EAT determined that the
Employment Tribunal had taken the wrong approach
when calculating Mr Gourlay’s compensation and
should not have reduced his compensation by 80%.
2. Mr Gourlay may have taken early ill-health
retirement anyway because of his pre-existing type 2
diabetes and multiple sclerosis.
EXPERT WITNESS JOURNAL
Comment
Compensation in discrimination claims is uncapped,
meaning there is no legal maximum amount that can
be awarded against a respondent. In discrimination
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JUNE 2025
