Wealmoor Loses Appeal Over Disability Discrimination Remedy
The Employment Appeal Tribunal has partially upheld Wealmoor Ltd's appeal, finding errors in how the original tribunal calculated injury to feelings and assessed mitigation of loss in a disability discrimination case.
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Wealmoor's Appeal Against Disability Discrimination Remedy Succeeds in Part
The Employment Appeal Tribunal (EAT) has allowed an appeal by Wealmoor Limited against a remedy judgment in favour of Mr R Poniatowski, who had successfully claimed failure to make reasonable adjustments, discrimination arising from disability, unfair dismissal, and wrongful dismissal at the original Employment Tribunal.
His Honour Judge Tayler found that the initial Employment Tribunal had erred in law regarding two aspects of the remedy awarded to Mr Poniatowski.
Injury to Feelings Award: Grossing Up Error
The EAT found that the Employment Tribunal incorrectly grossed up the entire award for injury to feelings without properly considering the tax implications. Specifically, the tribunal failed to differentiate between the portion of the award relating to pre-dismissal conduct and the portion relating to the dismissal itself. Under UK tax law (Income Tax (Earnings and Pensions) Act 2003, sections 401, 403, and 406, and HMRC guidance EIM12965), injury to feelings awards related to dismissal are taxable, whereas those arising before dismissal may not be.
The EAT stated that the Employment Tribunal should have considered apportioning the award and only grossing up the element related to the dismissal.
Failure to Mitigate Loss: Insufficient Reasoning
The second ground of appeal concerned the Employment Tribunal's assessment of loss of earnings and the argument that Mr Poniatowski had failed to adequately mitigate his losses. Wealmoor argued that Mr Poniatowski had not taken reasonable steps to find alternative employment.
While the Employment Tribunal found that Mr Poniatowski had taken reasonable steps to mitigate his losses, the EAT concluded that the tribunal provided insufficient reasoning to support its finding. The EAT noted the original judgement did not specify what steps were taken, what evidence was presented, or whether the evidence was accepted, concluding the reasoning was "so inadequate" that the appeal on this ground must be allowed.
Remittal to the Original Tribunal
Despite the errors, the EAT remitted the case back to the same Employment Tribunal, rather than a newly constituted one. The EAT considered this proportionate, as the original tribunal had already heard evidence on mitigation and could potentially address the issues solely through further submissions. The EAT expressed confidence in the tribunal's ability to apply a professional approach on remission, likely drawing on its existing notes of evidence.
The appeal was therefore allowed, and the case remitted to the original Employment Tribunal for reconsideration of the injury to feelings apportionment and the assessment of mitigation of loss.
Read the entire judgement here: Wealmoor Ltd v Mr R Poniatowski [2025] EAT 48
