Actions prior to dismissal

Case 4: The facts

Mr Eastwood, Mr Williams and Mr McCabe all suffered personal injuries in the form of psychiatric illness as a result of their employer's conduct over disciplinary matters. All were subsequently dismissed, and brought claims for both unfair dismissal and psychiatric injury.

The House of Lords heard both appeals together. The Lords had to consider whether a common-law claim for damages resulting from an employer's breach of contract prior to dismissal overlapped with a statutory claim for unfair dismissal brought under the Employment Rights Act (ERA).

The ruling

The Lords held that, if the complaint was that the act of dismissal itself was a breach of trust and confidence, the only remedy was a complaint of unfair dismissal under the ERA.

However, if injury resulted from a breach of contract prior to dismissal, a common-law claim for breach of contract could be pursued in the ordinary courts. The advantage of this is that a claim for damages for psychiatric injury is not subject to the statutory cap (currently £55,000) on compensation for unfair dismissal.

As their claims all related to breaches prior to dismissal, the three men were entitled to continue with their claims for personal injury.

Eastwood and another v Magnox; McCabe v Cornwall CC, House of Lords [2004] UKHL 35