Constructive Dismissal, Harassment, and Tax on Injury to Feelings Awards

The Employment Appeals Tribunal (EAT) has recently considered a claim involving a cross-over between constructive dismissal and harassment.

In the case of Timothy James Consulting v Wilton, the Claimant had claimed that the fact that he had been constructively dismissed, in itself, constituted harassment.

To give some background, the Claimant was successful with her career in the recruitment industry, and eventually started to work for the Respondent.

The basis of the Claimant’s claim was related to issues arising following some incidents involving a director, Mr O’Connell, with whom the Claimant had previously had a personal relationship.

Along with a number of other complaints, the Claimant said she was subjected to “a tirade of criticism” and that she was described as a “green eyed monster”. This comment was made with reference to the Claimant’s alleged jealousy of another female colleague with whom Mr O’Connell had now formed a relationship.

The Employment Tribunal found that the Claimant was subjected to this treatment because she had previously had a relationship with Mr O’Connell, and, as a result, it related to the protected characteristic of the Claimant’s sex. In total, the Employment Tribunal found three instances of sexual harassment.

The Claimant had eventually resigned from her employment as a result of the way that she had been treated, and claimed constructive dismissal, alongside her claim for harassment.

In a decision that may seem surprising, the Employment Tribunal agreed with the Claimant that the constructive dismissal was also an act of “harassment” under the Equality Act 2010.

The Respondent appealed against the Employment Tribunal’s decision on this point.

Under s.26 Equality Act 2010, a person is harassed if they are subjected to unwanted conduct related to a relevant protected characteristic, and that conduct has the purpose or effect of violating that person’s dignity, or creating an intimidating, hostile, degrading humiliating or offensive environment for them.

Following a detailed consideration of the sections of the Equality Act 2010 relating to harassment, the EAT did not agree with the Employment Tribunal’s decision. It was held that an act of constructive dismissal does not, in itself, fall within the meaning of “harassment”.

Tax on awards for injury to feelings

On a separate issue, the Respondent also appealed to the EAT because the Employment Tribunal had not only decided to award £10,000 to the Claimant for injury to feelings for the harassment that occurred, but they also “grossed-up” the compensation in order to take into account the effect of income tax.

The EAT agreed with the Respondent, and confirmed that, in accordance with the Income Tax (Earnings and Pensions) Act 2003, an award for injury to feelings under the Equality Act 2010 is not subject to income tax.

If you have been harassed, bullied or treated unfairly by your employer, for any reason, and this has caused you to resign from your employment, please contact the dedicated employment department at Michael Lewin Solicitors, and we will be happy to discuss your situation with you.

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