Most people are now familiar with the fact that compensation for whistleblowing and discrimination claims in the employment tribunal is uncapped. It is also becoming more widely known that this compensation can include elements for loss of earnings, injury to feelings, aggravated damages and even personal injury.

Another head of loss, recently considered by the Court of Appeal (Small v Shrewsbury and Telford Hospitals NHS Trust), relates to stigma damages. Stigma loss can arise where an ex-employee, who is found to have been dismissed on grounds of whistleblowing or discrimination, finds it difficult to secure new employment because of bringing proceedings against their ex-employer.

Although there may be evidential difficulties in establishing a link between the employment tribunal claim and an inability to secure new employment, a successful claim for stigma loss could result in an award for losses extending for the whole of a claimant’s remaining career. Employment Tribunals have in the past awarded compensation for future loss (including stigma damages) into the millions of pounds.

In the NHS Trust case referred to above, Mr Small did not make an express claim for stigma damages and the employment tribunal limited the compensation to the period which he would have been employed by the Trust but for his dismissal. The Court of Appeal disagreed with this approach noting that there was evidence to suggest that Mr Small was suffering indefinite and probably long-term loss due, in part, to the stigma associated with the circumstances of his dismissal and/or his claim against the Trust. In the circumstances, the Court of Appeal found that the employment tribunal should have considered whether Mr Small should have received compensation for this long-term loss even though he did not make an express claim for stigma damages.

The implications of this decision for both employers and employees involved with claims may be significant if it opens the door to greater compensation awards at employment tribunals.