Unfair dismissal - pensions benefits are not unique says the Court of Appeal

In April our alert "Unfair dismissal – think twice before dismissing members of a final salary scheme" reported that the Employment Appeal Tribunal (EAT) confirmed that a Tribunal is entitled to differentiate between a final salary pension scheme and a money purchase scheme when awarding compensation to an unfairly dismissed employee.

In this case, a former employee immediately obtained a new job after being unfairly dismissed. As would be expected, the Tribunal did not award compensation for future loss of earnings in light of the new employment. Unexpectedly, the EAT did agree that ongoing pension loss could nonetheless be considered. As a result, a significant award was made for ongoing final salary pension scheme loss.

The Court of Appeal has now overturned the EAT decision. Accordingly, the former employee was not entitled to compensation for ongoing pension loss.

This will be welcome news for employers who offer final salary pension schemes.

Wragge & Co's Combine Human Resources Solutions team provide an analysis and comment on this important judgment.