Damages for loss of professional status not precluded by Johnson v Unisys
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28.5.2010 The Court of Appeal in Edwards v Chesterfield Royal Hospital NHS Foundation Trust held that a claim for damages based on the breach of a contractual disciplinary procedure was not excluded by the decision of the House of Lords' in Johnson v Unisys. The Court rejected the argument that Johnson provided a general principle that breaches of disciplinary procedures prior to dismissal do not provide recourse in damages. The Claimant was a consultant trauma and orthopaedic surgeon with the Respondent and was summarily dismissed for gross misconduct following a disciplinary hearing. He brought a claim for damages, arguing that: The High Court overturned the finding that any damages should be limited to loss of earnings in respect of the Claimant's three-month contractual notice period and found that if the claim succeeded, loss of earnings could also be awarded in respect of the period during which the Claimant would have remained employed had the contractual disciplinary procedure been observed. However, the Claimant appealed this decision further to the Court of Appeal, arguing that this was still too limited a scope for damages. The Court of Appeal found that the question was whether a person could recover damages “at large” where they have suffered damage as a result of findings of misconduct made in disciplinary proceedings which were carried out in breach of contract, where the findings would not have otherwise been made and where they led to dismissal and a loss of professional status. The Respondent argued against that proposition using the judgement in Johnson v Unisys, where the House of Lords held that an employee could not rely on the implied contractual duty of trust and confidence to claim damages for the manner of dismissal. It was later clarified, in Eastwood and anor v Magnox Electric plc, that a distinction should be drawn between events leading up to the dismissal, where a common law breach of contract claim may be brought, and the dismissal itself, for which the remedy is a statutory claim for unfair dismissal. The Trust argued that the Johnson v Unisys decision applied to the breaches of the contractual disciplinary procedure that the Claimant claimed to have suffered, meaning that his only potential remedies were for unfair dismissal and damages for contractual notice. The Court of Appeal rejected this argument. It was noted that Johnson and Eastwood were not concerned with an employee's general right to damages for breach of an express contractual term and Johnson did not establish that disciplinary procedures of the kind at issue were not meant to sound in damages. Instead, those two cases were concerned with the implied term of trust and confidence and its application to the manner of dismissal. It was noted in Eastwood that statutory unfair dismissal does not impinge on any right the employee may have for breach of contract. The Court did not accept the idea of a more general rule that a breach of contract, in the form of a failure to comply with an agreed disciplinary procedure, gives rise to no claim. Where an employee relies on an express term of the contract, there does not need to be a distinction drawn between acts forming part of dismissal and those preceding it – this is only required where it is a question of a breach of trust and confidence.
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