In doing so it has overruled the Court of Appeal, which had held that an employee could recover damages for career long losses if an employer dismissed them without following a contractual disciplinary procedure.
Michael Edwards was a consultant trauma and orthopaedic surgeon at Chesterfield Royal Hospital. He was dismissed in 2006 following a disciplinary hearing for alleged gross professional and personal misconduct.
Under Edwards' employment contract, the Trust was obliged to follow its disciplinary procedure in cases of misconduct. Edwards claimed that the Trust breached those procedures by failing to appoint someone who was legally qualified to chair the disciplinary hearing, failing to include a clinician with the same medical discipline as that of Edwards on the disciplinary panel, and refusing to allow Edwards legal representation at the hearing.
He also claimed that no finding of misconduct would have been made if procedures had been followed properly. Because of the misconduct finding against him, Edwards claimed he was unable to pursue his medical career and was only able to obtain work as a locum, but not as a Consultant. As a result, he claimed damages of the continued loss of earnings until his intended retirement in 2022 at the age of 65, and in May 2010 the Court of Appeal held that he was entitled, in principle, to these.
This morning's decision by the Supreme Court has held that the level of damages an employee is entitled to is limited to the salary they would have received if the employer had terminated their employment lawfully. In other words, damages are restricted to the value of the employee's notice pay together with salary representing the time it would have taken to follow any contractual disciplinary procedure properly.
Whilst it comes as a blow to employees in similar situations, today's judgement does not mean that they are left without remedy. As well as breach of contract damages, compensation claims can be pursued in the Employment Tribunal if an employee feels dismissal is not justified.
James Wilders, employment partner at law firm, Dickinson Dees