Roberts v Wilson's Solicitors LLP & Ors UKEAT/0339/15/RN

Appeal against the striking out of the Claimant's claim for compensation for post-termination financial losses following the termination of his membership of the LLP. Appeal allowed.

The Claimant was a member of the Respondent LLP and a Managing Partner and Compliance Officer of the firm. He investigated a complaint by an employee but the other members of the Board refused to meet to discuss the findings. The other members of the LLP demanded that the Claimant resign from the position of Managing Partner.  They voted to remove him from that post, and thereafter removed him from the position of Compliance Officer. The Claimant said that the LLP and members had acted in repudiatory breach of the terms of the Members Agreement and his Deed of Adherence.  The Claimant wrote to the Respondent accepting the alleged repudiatory breaches and the consequences flowing there from which he asserted as including the immediate termination and gave a month's notice to cease being a member of the LLP. However, the Member's Agreement said that 6 month's notice must be given and when the Claimant did not return to work after the month was up, the members voted to expel him from the LLP for not complying with the agreement. The Claimant claimed compensation for detriment suffered by a worker as a result of the making of protected disclosures. The Claimant did not complain that his expulsion from the LLP was itself an unlawful detriment. The EJ concluded that Flanagan case presented an insurmountable hurdle for the Claimant's case and struck out as having no reasonable prospect of success his claim that his membership terminated when he accepted the LLP's allegedly repudiatory breaches of contract. No challenge was made to that decision but the Claimant appealed against the striking out of the compensation claim.

The EAT allowed the appeal. An LLP member who is a worker and protected by the whistleblowing provisions in the ERA can claim compensation for post-termination financial losses even if lawfully expelled as a member, provided that he demonstrates that such losses are attributable to the earlier unlawful detrimental treatment. This is a question of fact and judgment to be assessed and determined by the Employment Tribunal on the evidence. The Employment Tribunal was not entitled to strike out this claim for compensation without hearing evidence, or making any findings of fact, and accordingly the appeal was allowed.

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Appeal No. UKEAT/0339/15/RN

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8AE

At the Tribunal

On 23 March 2016

Handed down 21 April 2016

Before

MRS JUSTICE SIMLER DBE (PRESIDENT)

SITTING ALONE

ROBERTS (APPELLANT)

WILSONS SOLICITORS LLP AND OTHERS (RESPONDENT)

Transcript of Proceedings

JUDGMENT

**APPEARANCES**

For the Appellant Mr James Laddie QC (Of Counsel)

For the Respondents Mr Jonathan Cohen QC (Of Counsel) Mr Craig Rajgopaul (Of Counsel) Instructed by Wilsons Solicitors LLP Alexandra House St Johns Street Salisbury SP1 2SB

**SUMMARY**

VICTIMISATION DISCRIMINATION - Whistleblowing

An LLP member who is a worker and protected by the whistleblowing provisions in the ERA can claim compensation for post-termination financial losses even if lawfully expelled as a member, provided that he demonstrates that such losses are attributable to the earlier unlawful detrimental treatment. This is a question of fact and judgment to be assessed and determined by the Employment Tribunal on the evidence. The Employment Tribunal was not entitled to strike out this claim for compensation without hearing evidence, or making any findings of fact, and accordingly the appeal was allowed.

**MRS JUSTICE SIMLER DBE (PRESIDENT)**
  1. Mr Roberts is a solicitor and was a member of Wilsons Solicitors LLP ("the LLP") until his expulsion with effect from 30 April 2015. He brought proceedings in the Employment Tribunal claiming compensation for detriments suffered by him as a worker as a result of the making of protected disclosures pursuant to section 47B Employment Rights Act 1996 (the ERA). He claimed that his membership of the LLP ceased with effect from 5 February 2015 by virtue of his purported acceptance of repudiatory breaches of the LLP Members Agreement, as identified in letters dated 5 January and 5 February 2015, and characterised this cessation of membership as one of a number of acts of unlawful detriment under section 47B. The LLP did not accept that there had been any repudiatory breach of the Members Agreement and insisted that Mr Roberts remained a member albeit in breach of the Members Agreement because he had failed to provide any service. By letter dated 30 April 2015 the LLP gave notice expelling him from the LLP with immediate effect.
  1. Following judgment in Flanagan v Liontrust Investment Partners LLP and others [2015] EWHC 71 (Ch), in which Henderson J concluded that there was no place for the operation of the doctrine of automatic termination following acceptance of a repudiatory breach in a case involving an LLP with more than two members, a preliminary hearing was listed to determine "whether the Claimant's claim that there was a constructive termination of his membership of the respondent LLP should be struck out as having no reasonable prospect in light of the judgment in ..Flanagan…".
  1. This appeal is from the reserved judgment of Employment Judge Salter with reasons promulgated on 8 November 2015 following that preliminary hearing. I refer to the parties as they were before the Tribunal. Employment Judge Salter concluded that Flanagan presented an insurmountable hurdle for the Claimant's case and struck out as having no reasonable prospect of success his claim that his membership terminated when he accepted the LLP's allegedly repudiatory breaches of contract. No challenge is made to that decision and neither side has sought to challenge the correctness of Flanagan in this appeal, though the Claimant reserves the right to do so on any further appeal.
  1. However, at paragraph 50 the Employment Judge ruled in exercise of his powers under Rule 37 that

"the losses that flow from that termination should be struck out."

No reasons or explanation were provided for that decision and strictly speaking, it may have been an enlargement of the scope of the application to strike out for which permission was neither sought nor granted. No procedural point is taken however and the appeal has proceeded as an argument based on principle that, in striking out the claim for compensation for post-termination financial losses following the termination of his membership of the LLP, the Employment Judge erred in law by treating Flanagan as dispositive of this claim when the question whether he could claim financial losses in these circumstances was a question of fact and judgment.

**The facts**
  1. Because the preliminary hearing proceeded on the basis that it involved a hard edged question of law no evidence was heard and the Employment Judge proceeded (correctly) on the assumption that the facts claimed by the Claimant would be made out on the evidence. On that understanding the essential facts can be summarised as follows.
  1. The Claimant was admitted to membership of the LLP on 1 May 2008. His membership was governed by a Deed of Adherence dated 4 April 2008 by which he undertook to observe, perform and be bound by all the provisions of the LLP Members Agreement dated 24 July 2007 made between the members and the LLP as varied from time to time. The LLP Members Agreement provided inter alia as follows:

(i) by clause 18.1.1 each member was at all times required to "devote to the business of the LLP the whole of his time and attention during usual business hours save where otherwise agreed in accordance with the terms of clause 18.2…".

(ii) By clause 25.2 if any member was at any time guilty of any material breach of any of the provisions of the Agreement or any other serious breach of his duties as a member… a three quarters majority was entitled by notice in writing to expel that member from the LLP.

(iii) By clause 27.1 any member was entitled to retire as a member at any time on giving not less than six months prior written notice to expire on the last day of a financial year (defined as 30 April of each year).

(iv) By clause 33 it was agreed that section 459 of the Companies Act 1985 applied.

  1. At all material times until his removal from those posts, the Claimant held the position of Managing Partner and Compliance Officer of the LLP. He also sat on the LLP's Board.
  1. On 29 July 2014 a complaint of bullying against the Senior Partner, Christopher Nisbet, was received by the Board. The Claimant investigated the complaint and the associated compliance issues. He reported his findings to the Board by 30 September 2014 and produced a detailed report on 7 October 2014. The report was due to be discussed at a Members' meeting on 21 October 2014 but before that meeting could take place a majority of the other members delivered a notice to the Claimant dated 9 October 2014, stating that they would not attend the scheduled meeting on 21 October 2014.
  1. On 26 November 2014 the other members of the LLP demanded that the Claimant resign from the position of Managing Partner. They voted to remove him from that post, and thereafter removed him from the position of Compliance Officer.
  1. The Claimant's case is that this conduct and those actions made his position as a member of the LLP untenable. By letter dated 5 January 2015 to the Respondents the Claimant said that the LLP and members had acted in repudiatory breach of the terms of the Members Agreement and his Deed of Adherence. He stated that the most significant breaches arose by decisions made by the members at the meeting held on 26 November and having taken legal advice he had decided to accept the repudiatory breaches and the consequences flowing there from which he asserted as including the immediate termination of the Members Agreement and the Deed of Adherence. He explained (page 242) that such termination was without prejudice to rights accrued to date including any and all claims he may have had for damages for losses and other remedies arising from the breaches of contract. He also said (page 244) that:

"the severity of the breaches referred to above and the detriments arising from my making protected disclosures mean that it is impossible for me to carry on as a member of the LLP. This letter therefore constitutes notice to the LLP and all members of my intention to cease being a member of the LLP in one calendar month's time, or at such other time as all parties may agree or a court or tribunal may determine to be reasonable in all the circumstances."

  1. By letter dated 2 February 2015 the First Respondents denied that there had been any repudiatory breaches of the Members Agreement, rejected the contention that the Members Agreement and the Deed of Adherence had been terminated and rejected the notice the Claimant had given. They stated that it was expected that the Claimant would continue as a member of the LLP and would return to work as soon as certified fit to do so.
  1. By a letter dated 5 February 2015 the Claimant maintained his position that his membership would end that day.
  1. By a further letter dated 20 April 2015 the Respondents reiterated the firm view that the Members Agreement remained in force and that the Claimant continued as a member of the LLP because he had not provided a valid resignation notice in accordance with the Members Agreement. However, the letter continued that given the fact that the Claimant had been absent from the office since at least 6 February 2015 asserting that he was no longer a member, he was considered to be seriously in breach of the agreement. That was regarded as non-compliance with clause 18.1 since the Claimant had failed to devote the whole of his time and attention during usual business hours to the business of the LLP and the Claimant was told that the Managing Partner intended to serve a written notice expelling him from the LLP as from 30 April 2015. Subsequently by letter dated 30 April 2015 Mr Parker, the Managing Partner, enclosed a notice signed by more than three quarters of the members expelling him from the LLP.
  1. The Claimant commenced proceedings in the Employment Tribunal on 4 March 2015. He claimed compensation for detriment suffered by a worker as a result of the making of protected disclosures (under s. 47B). He claimed that he had suffered stress-related illness as a consequence. His claim for compensation was for "detriment suffered whilst a worker; ongoing detriment suffered after I ceased to be a worker; detriment and loss arising from the Respondents' breaches of the Members Agreement; …". His case on compensation was expressed in general terms and did not specify how precisely the loss arose and nor did he assert that the losses he claimed flowed from acceptance of the repudiatory breaches on which he relied.
  1. The ET3 filed on behalf of the Respondents dated 24 April 2015, denied that the Claimant had suffered any detriment on the ground that he made any protected disclosure and denied in any event that he had suffered any loss. As at the date of the ET3 it was asserted that the Claimant remained a member of the Respondent LLP and if and in so far as he had lost any sum, that was as a result of his refusal to work. It was further denied that he had suffered any stress-related illness and it was asserted that he was perfectly able to work and could do so whether as a member of the Respondent LLP or in another firm.
  1. It is common ground that the Claimant did not and does not complain that his expulsion from the LLP was itself an unlawful detriment.
**The applicable law**
  1. Section 47B of the ERA confers a right on "workers" not to be subjected to any detriment on the ground that they have made a protected disclosure. "Worker" is defined by s. 230(3) ERA. The question whether the definition of "worker" extends to a partner in an LLP was considered by the Supreme Court in [Bates Van Winkelhof v Clyde & Co LLP ]()[2014] ICR 730. The Supreme Court concluded that the complainant in that case undertook to perform personally certain work or services for the firm and her status was not by virtue of her contract that of a client or customer, so that she fell within the definition construed in a conventional way without reference to the LLP Act 2000, and the LLP Act 2000 did not prevent this conclusion. She was therefore entitled to claim the protection of the whistleblowing provisions of the ERA.
  1. Before the Employment Tribunal the Respondents conceded that the Claimant was a worker and protected by the whistleblowing provisions accordingly. The preliminary hearing also proceeded on the assumption that he would establish the making of protected disclosures and the causal nexus between the fact of making protected disclosures and the detriments to which he claimed to have been subject.
  1. Section 48(1A) of the ERA provides that a worker may present a complaint to an employment tribunal that he has been subjected to a detriment in contravention of s.47B and remedies are provided for by s.49 as follows:

49 (1) "Where an employment tribunal finds a complaint under section 48 well-founded, the tribunal –

(a) shall make a declaration to that effect, and

(b) may make an award of compensation to be paid by the employer to the complainant in respect of the act or failure to act to which the complaint relates.

(2) The amount of the compensation awarded shall be such as the tribunal considers just and equitable in all the circumstances having regard to –

(a) the infringement to which the complaint relates, and

(b) any loss which is attributable to the act, or failure to act, which infringed the complainant's right.

(3) The loss shall be taken to include

(a) any expenses reasonably incurred by the complainant in consequence of the act, or failure to act, to which the complaint relates, and

(b) loss of any benefit which he might reasonably be expected to have had but for that act or failure to act.

(4) In ascertaining the loss the tribunal shall apply the same rule concerning the duty of a person to mitigate his loss as applies to damages recoverable under the common law of England and Wales or (as the case may be) Scotland."

  1. Accordingly, where a tribunal finds a detriment complaint well-founded it must make a declaration to that effect: s.49(1)(a). In addition it may make an award of compensation under s.49(1)(b) in respect of the act or failure to act complained about. The amount of compensation awarded is determined by reference to what the tribunal considers just and equitable in all the circumstances having regard to the infringement and "any loss which is attributable to the act or failure to act which infringed the complainant's right not to be subjected to a detriment".
  1. The language of s.49 ERA is different from the language providing for compensation for the statutory tort of unlawful discrimination under the Equality Act 2010 (and its predecessor legislation). It is closer to the language of s.123(1) ERA dealing with compensation for unfair dismissal. Nevertheless courts have treated the compensation principles applicable to unlawful discrimination claims as applicable in whistleblowing detriment claims: see Virgo Fidelis Senior School v Boyle [2004] ICR 1210 and [Commissioner of Police of the Metropolis v Shaw]() [2012] ICR 464 at paragraph 13 (Underhill P), albeit that in the latter case the Employment Appeal Tribunal expressed itself as being content to follow Virgo Fidelis since neither side contended that it was wrongly decided.
  1. Mr Cohen QC, who appears on behalf of the Respondents, does challenge the correctness of Virgo Fidelis, at least to the following extent. To the extent that the decision focused on questions of recoverability of damages for injury to feelings and aggravated damages he accepts it as correct. However, he argues that there was inadequate focus on the difference between the statutory wording of s.49 ERA and common law damages for the statutory torts of unlawful discrimination, and that however desirable it may be for all forms of unlawful discrimination to be treated in the same way in terms of compensation, the statutory wording of s.49 is different and means something different. In his submission, the requirement that loss claimed is "attributable" to the unlawful act necessarily imports a strict causational concept so that for the loss to be attributable to the unlawful act, it must be the proximate cause of it and that although this is generally a question of fact, no factual issue requiring resolution arises in this particular case.
  1. Mr Laddie QC, who appears on behalf of the Claimant, contends that s.49 (2) ERA imports a classic "but for" test. He submits that the loss referred to in s.49(2)(b) is defined by s.49(3)(b) which expressly applies a but for test, and by virtue of this and the principles in relation to damages for statutory torts (including claims for victimisation, in relation to which whistleblowing is analogous), he argues that s.49(2) establishes that the determination of loss in a s.47B claim depends on a "but for" test. Mr Laddie submits that he does not have to succeed on this argument to win this appeal. Irrespective of whether the test is one of "but for", the question is simply whether as a matter of fact the losses claimed by the Claimant are attributable to the unlawful acts relied on so that the determination of loss is itself a question of fact that does require resolution in this case.
  1. I am not fully persuaded by either of these submissions, although I accept parts of each. I do not accept that the word "attributable" imports a requirement that the infringement or unlawful act must be the proximate cause of loss. That would impose an artificial and mechanistic approach. Depending on the circumstances, a loss may be attributable to a particular act whether that act is closest in time to the loss or not, and two or more consecutive (or concurrent) acts may combine to bring about a particular consequence or loss. Proximity by itself is not the determining factor, though it is obviously relevant, and the further away in time a loss is from the infringement to which it is said to be attributable, the harder in practice it is likely to be to prove that case. Rather, it is a question of fact and judgment in every case for the tribunal whether a particular consequence or loss is attributable to a particular unlawful act or infringement or to something else or both and if so, to what extent. The mere fact that an infringement is less close in time to the loss or consequence than something else to which it is also said to be attributable, does not inevitably or necessarily negate the infringement as also having relevant contributing attribution.
  1. Nor do I consider that a "but for" test applies. Section 49(3) ERA is concerned with quantification of the losses claimed, mandating the inclusion of certain specified or particular losses, and does not establish that the determination of loss in a s.47B claim is on a "but for" basis.
  1. The wording of s.49(2)(b) does not expressly adopt the ordinary common law principles or language of causation. Parliament has chosen to use the word "attributable" instead of cause or caused; no doubt for good reason. Attributable is an ordinary English word that is well understood and is capable of being applied flexibly by tribunals of fact on a broad common-sense basis. The statutory test imposed by s.49(2)(b) provides that in deciding what compensation should be awarded, tribunals have discretion to determine what is just and equitable in all the circumstances. But in exercising that discretion, there are two mandatory considerations: first they must have regard to the infringement itself, in other words the nature and gravity of that infringement; and secondly, they must have regard to the loss attributable to the act or failure to act which infringed the individual's rights. So the connection that must be established between infringement and loss is expressed in wider language than that of pure causation, and not in terms of a "but for" approach.
**The appeal**
  1. There is a single ground of appeal. Mr Laddie argues that the Employment Judge erred in striking out the Claimant's claim for compensation for post-termination financial losses following the termination of his membership of the LLP because he wrongly concluded that the decision in Flanagan was dispositive of the claim for losses flowing from that termination. He submits that whether the Claimant could claim financial losses from termination of his membership of the LLP as being attributable to the earlier unlawful detriments to which he was subjected, is a question of fact to be decided by applying the statutory test set out in s.49(2) to the facts found; and not a question of law. It was therefore wrong to strike out this claim for compensation for termination in advance of consideration of the evidence and the facts.
  1. In light of my conclusions as to how the test in s.49(2) is to be applied and for the further reasons set out below, I accept that submission. Just as in Mr Flanagan's case, where his purported acceptance of the repudiatory breach was of no legal effect and his relationship with the LLP therefore continued but that did not prevent him from claiming damages for loss caused by the repudiatory breach of contract, the fact that the Claimant's purported resignation was not effective for the purposes of LLP law does not determine the question of what loss was attributable to the unlawful detriments on which he relied. If the unlawful 'victimisation' of the Claimant made his position untenable and led him to withdraw his labour, thereby exposing him to the likelihood of expulsion, it is hard to see why that should as a matter of law (or inevitable fact) be regarded as too indirect or unnatural a consequence to attract compensation in accordance with the statutory test, provided it is satisfied. In the particular circumstances asserted by the Claimant, this seems at least arguably, a natural and likely consequence of the unlawful conduct alleged.
  1. Irrespective of my approach to attribution s.49(2) ERA, Mr Cohen emphasises that the Claimant did not and does not allege that his expulsion from membership of the LLP was itself an unlawful detrimental act. In these circumstances, he submits that in a case where there is a lawful termination of LLP membership that post-dates the earlier, alleged detrimental treatment, the termination must be the cause of any post termination losses and such losses cannot be said to be attributable to the earlier detrimental acts. He relies on a passage in the judgment of Rix LJ at [31] in Prison Service v Beart No.2 [2005] ICR 1206 and on Ahsan v The Labour Party UKEAT/0211/10/ZT.
  1. In my judgment, neither case establishes the point on which Mr Cohen relies. The mere fact that the Claimant has not challenged the expulsion as a detriment in itself does not entail that his argument that losses following his expulsion are attributable to the earlier unlawful treatment is doomed to fail. In Prison Service v Beart the Court of Appeal concluded that a defendant could not rely on a wrong perpetrated by himself in order, in whole or in part, to break the chain of causation put forward by a claimant to establish and quantify the damage sustained by reason of the defendant's tort. For the same reason, an unfair dismissal could not be described as an intervening act that broke the chain of causation when it was the act of the tortfeasor itself. That is of course not this case.
  1. The passage relied on by Mr Cohen does not form part of the ratio of the case. It reads:

"31. Of course, if a claimant commits a repudiatory breach of his own contract of employment, thereby entitling a defendant employer to terminate that contract by dismissing him, then it is possible, if necessary, to describe that as a new intervening act. The fact that the defendant reacts as he is entitled to do, by accepting the repudiation as bringing the contract to an end, does not make his reaction the critical new act: it is the repudiatory conduct of the claimant which is significant, unless perchance it is waived. In any event, the repudiatory conduct might have taken place even prior to the tort of discrimination and be discovered only later: but if the contract was already potentially doomed to be lost upon discovery of the repudiatory conduct, then again the claimant has lost the value of that contract, once the employer had acted as he was entitled to do properly to accept the repudiation as bringing the contract to an end".

  1. This addresses a situation where a claimant has committed a repudiatory breach of his own contract of employment that entitles the defendant employer to dismiss, bringing an end to any loss claimed. But that has not been established here. It has not been proved that there was 'wrongdoing' by the Claimant, still less wrongdoing that could be described as a new intervening act bringing his asserted losses to an end. On the Claimant's case his position as a member was made untenable by the unlawful actions and conduct of the LLP and its members and he withdrew his labour. He may wrongly have attached the legal label of constructive termination to that situation, but that does not mean that his conduct in withdrawing his labour was as a matter of law, wrongful or in repudiatory breach. He may have acted reasonably and been justified in doing so. These questions remain to be determined. A tribunal dealing with this question will need to consider whether the Claimant's own conduct was repudiatory in circumstances where there was (if he is right) repudiatory conduct by the LLP which he did not waive, and although as a matter of law he is unable to treat himself as discharged, his right to claim damages remains. The tribunal will need to consider whether the LLP was entitled to treat his conduct in absenting himself as terminating the contract, and whether it amounts to a new intervening act that effectively obliterates any earlier wrongs done by the LLP. Whether or not the intervening termination by the LLP (claimed by the Respondents to be in accordance with the Members Agreement, so, on the Respondents' case, lawful) although its lawfulness is disputed by the Claimant) brings any loss claim he might otherwise have had, to an end, is a question of fact not law, and does need to be resolved.
  1. Ahsan too is a case on its own facts and does not assist Mr Cohen. The Claimant in that case was found to have been prevented from being selected as a Labour Councillor in elections in 1998, 1999 and 2000 on the basis of unlawful discrimination. He claimed that he would have remained a Councillor until retirement in 2021 and accordingly claimed compensation for loss of allowances for his whole career. His claim for compensation for lost allowances for the period up to June 2004 was allowed but he was held by the Employment Appeal Tribunal not to be entitled to any compensation in respect of lost allowances from June 2004 onwards since the reason he had not been selected or elected on that occasion or thereafter was because he had left the party and not because of his unlawful non-selection in the earlier years. The Employment Appeal Tribunal observed that selection and election to the post of Labour Councillor was a fresh exercise each time whose outcome was dependent on the circumstances prevailing in the particular year in question. The Employment Appeal Tribunal accepted that it was arguable that a candidate who failed to achieve selection in year five as a result of a wrongful deselection in year one could claim that that failure and any financial consequences were direct and natural consequences of the original wrong, though there might be formidable difficulties of proof and quantification. However, the question for the Employment Appeal Tribunal was whether that argument was available on the facts of the present case and the Employment Appeal Tribunal's ultimate conclusion was that it was not. The opposite conclusion, on different facts, was reached in [Bullimore v Pothecary Witham Weld No.2]() [2011] IRLR 18 which underlines the fact that these are fact sensitive questions dependant on the evidence and circumstances of the particular case.
  1. Mr Cohen also argues that, following Flanagan, the law of contract has diverged in respect of LLP members from that which applies to any other type of worker contract. Whereas an employer can bring an end to the contract of any worker by repudiating the contract if the worker elects to accept that breach and does not affirm the contract, an LLP member cannot be relieved from performance in this way. The LLP member can retire or be expelled but cannot regard himself as discharged by breach. So far so good. However, he submits that the effect of this is that whereas a worker who is not an LLP member can rely upon a constructive termination as an unlawful act by reference to which losses may be attributed, an LLP member who voluntarily retires from the LLP cannot claim that any loss thereby suffered is attributable to the unlawful act about which complaint is made.
  1. For the reasons already given I disagree. Whilst the Claimant's purported resignation may have been legally ineffective to bring his membership of the LLP to an end, nevertheless his case was that his position as a member became untenable and he withdrew his labour because of the grave and unlawful detriments on which he relied. He says this led inevitably to his expulsion on 30 April 2015. He does not contend that his financial losses are attributable to his acceptance of the repudiatory breaches as terminating his membership but puts his case on compensation in more general terms. If he can demonstrate that the detriments were so serious as to make his position as a member untenable and to prevent him from attending work, I cannot see why he should be barred from making this claim. The question is ultimately one of fact and judgment for the tribunal and involves no necessary conclusion one way or the other.
  1. Mr Cohen submits that if it is right that an LLP member can voluntarily retire yet seek to claim termination related losses under s. 49, that puts the LLP member in a significantly more favourable position than a worker claiming constructive dismissal or termination because the latter would be bound to establish a repudiatory breach, whereas the LLP member would not need to do so. I do not agree that an LLP member is in a significantly more favourable position than an ordinary worker as Mr Cohen contends. First, the LLP member must establish that he has been subjected to a detriment by an act or deliberate failure to act by his employer done on the ground that the worker made a protected disclosure. In many (perhaps most) cases such unlawful conduct will amount to a repudiatory breach though, as Mr Cohen submits, it will not automatically do so (see Amnesty International v Ahmed. Secondly, in seeking to recover termination related losses in such circumstances, the LLP member will have to prove loss attributable to the infringing act, and may face formidable difficulties in proving this. The LLP member must also persuade a tribunal that it is just and equitable to award compensation having regard to the infringing act (its nature and seriousness) and any loss proved to be attributable to it. It seems to me that no more favourable regime applies. Tribunals can be relied on to exercise the statutory discretion entrusted to them robustly and appropriately; and in a manner that ensures that compensation is only awarded in cases where the statutory test is fully established.
  1. Finally Mr Cohen submits that the drafting of s.49 ERA is incompatible with the notion that an on-notice retirement of an LLP member can allow for the recovery of termination related losses based on a detriment claim. He relies on the cap in s.49(6) on the recovery of damages for a worker where the detriment to which the worker is subjected is the termination of his or her contract (applied so that, by analogy, the worker is treated as an employee, who would be limited to the damages recoverable under Chapter II of Part X ERA) and submits that termination must mean an express or constructive termination, and that if an LLP member can claim for post-termination losses without an express or constructive termination, s.49(6) is avoided and more favourable damages can be recovered by the LLP member.
  1. Although initially attracted by this argument, I reject it. Since the normal statutory cap on compensatory awards does not apply to unfair dismissal claims under s.103A, it follows that there is no statutory limit on compensation where the detriment complained of is dismissal of a worker. In practice no incompatibility arises.
  1. On the face of s.49(6) it does not address different heads of loss that might be claimed and refers only to compensation not exceeding that which would be payable under Chapter II if the worker had been an employee. If and to the extent that s.49(6) is interpreted (as Mr Cohen does) as preventing a worker claiming dismissal contrary to s.47B from obtaining a head of loss such as injury to feelings that would not be available to an employee who is successful in establishing unfair dismissal, s.49(6) makes clear that it only applies where "the detriment to which the worker is subjected is the termination of his worker's contract". In a case where a worker suffers detriment prior to termination injury to feelings can be claimed in respect of that detriment but not in respect of the termination. Accordingly, no incompatibility arises. An LLP member whose sole detriment complaint is about termination or expulsion cannot recover for injury to feelings on this basis. An LLP member, permitted to claim for post-termination losses based on detriment other than termination, can obtain injury to feelings compensation in relation to the earlier detriments (just as any other worker can) but not in relation to the detriment of termination, and is accordingly in no better position.
  1. Accordingly, for all these reasons the appeal is allowed. The Claimant may pursue his claim for post-termination losses said to be attributable to the alleged unlawful conduct of the Respondents prior to his expulsion. If he establishes liability, it will be a question of fact and judgment for the tribunal to determine whether his claim for compensation on this basis satisfies the requirements of s.49(2) ERA, and if so, what compensation is just and equitable in this case.

Published: 26/04/2016 10:26

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