Employment Appeal Tribunal Upholds University of Edinburgh Compensation Ruling
The EAT has dismissed an appeal concerning ACAS uplift and tax grossing up, upholding the tribunal's pragmatic approach to a significant compensation award.
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The Employment Appeal Tribunal (EAT) has rejected an appeal brought by Professor Roya Sheikholeslami against the University of Edinburgh. The ruling brings further clarity to a complex, long-running dispute involving unfair dismissal and disability discrimination.
Background to the Appeal
Professor Sheikholeslami was previously employed by the university as the Chair of Chemical Process Engineering. Following her dismissal in 2012, she successfully pursued claims for unfair dismissal, victimisation, and discrimination arising from disability. While liability was established, the subsequent remedy proceedings have been subject to extensive litigation, resulting in a substantial award now totalling over £1.7 million.
The ACAS Uplift Dispute
The appellant challenged the tribunal's decision to apply a 2.5% ACAS uplift, rather than the 25% rate applied in earlier, preliminary decisions. The EAT confirmed that the previous remedy findings had been set aside and remitted, meaning the tribunal was entitled to reconsider the uplift percentage based on the final, higher total award.
Lady Poole, presiding, noted that the tribunal correctly applied the "just and equitable" test required by law. She emphasised that there is no error of law in applying a lower percentage when the overall value of the award is very high, as this maintains proportionality and prevents excessive payments for procedural errors.
Addressing Tax and Grossing Up
The second ground of appeal concerned the tribunal's refusal to "gross up" the award for tax purposes. Given the complexity of the case and uncertainty regarding whether specific elements of the compensation were subject to tax, the tribunal opted for a pragmatic solution. Instead of grossing up at this stage, it recorded an undertaking from the university to indemnify the appellant against any tax liability should HMRC pursue it.
The EAT upheld this approach, stating it aligned with the principle in British Transport Commission v Gourley. The tribunal effectively ensured the appellant was not disadvantaged while avoiding the risk of over-compensation. Should HMRC determine that tax is payable, the appellant retains the right to apply back to the tribunal for a resolution.
Conclusion
The appeal was refused in its entirety. The EAT expressed concern over the length of time the appellant has waited for the resolution of her compensation, noting it is in the interests of justice for all outstanding matters to be concluded as quickly as possible.
Read the entire judgment here: Sheikholeslami v The University of Edinburgh [2026] EAT 96
