The £4.5m question

Was a recent £4.5m Employment Tribunal award to a doctor a one-off, or the shape of things to come? Richard Leslie examines the case.

Try as they might, employers cannot get it right all the time. They also know it can be costly if they get it wrong. Late last year, an Employment Tribunal awarded Dr Michalak compensation of £4.5m. Does this mean that employers should now be bracing themselves for multi-million pound awards if they make a mistake?

Dr Michalak was a consultant at the Mid Yorkshire Hospitals NHS Trust. When she went on maternity leave a locum was appointed to cover her duties. Nevertheless, some of Dr Michalak’s colleagues sought payments for additional work allegedly arising from her absence and a manager wrote to the payroll department saying, incorrectly, that the Trust had been unable to secure locum cover.

When Dr Michalak found out about the payments she asked if she was entitled to them. Her colleagues laughed at her. Dr Michalak thought the payments amounted to a pay rise: because they had been made to her colleagues with little or no increase in their work. She wrote to the Trust to say that she had been treated less favourably than her colleagues because she had been absent on maternity leave.

The Tribunal said that Dr Michalak’s letter was a grievance but it was not addressed by the Trust. Instead, the Trust held a meeting involving senior managers to discuss how they were going to get rid of her. The Tribunal were influenced by a note that said the Trust should be “seen to” support Dr Michalak before taking her down a “formal route”.

Dr Michalak was suspended for a lengthy period and then dismissed. The Trust sought to justify its actions on the basis of “spontaneous” complaints that had been made about her “improper or unreasonable” behaviour. However, the Tribunal found that many complaints had been orchestrated and that “one after the other they proved to be without foundation”.

You may say: “this couldn’t happen to us.” What if some of your most senior managers engaged in a campaign against an employee? Are you confident your HR systems or managers would pick it up? Are you sure that such a letter would be recognised as a grievance and dealt with as such?

The Tribunal did comment that the outcome could have been different if the Trust had heard Dr Michalak’s grievance. So, your starting point has to be clear and well publicised procedures allowing employees to air grievances and blow the whistle. Such procedures should maximise the chances that concerns are properly investigated and then considered by managers who are independent of both the employee and those about whom he or she has complained.

Secondly, your disciplinary procedure should be designed to ensure the proper and independent scrutiny of allegations faced by employees. In this case, the Tribunal found that the Trust had pursued an “unstructured disciplinary process” involving a “vast amount of documentation” that had been “deliberately designed to confuse both [Dr Michalak] and the panel”.

The Tribunal were unimpressed that none of the panel members could justify the decision to dismiss Dr Michalak by reference to the facts or events and that, when pushed, some members of the panel guessed what they were. The panel had failed to focus on the key questions. If the panel had done so perhaps Dr Michalak would not have been dismissed?

Thirdly, you should ensure that managers, especially those responsible for dismissals, are sufficiently experienced and/or trained to focus on the precise allegations and the evidence in relation to each of them – the key questions. In a complex case, it is all too easy to lose focus upon the “whom”, “what”, “where”, “when”, “how” and (most importantly) “why” of each event. The Michalak case illustrates the need for focus as the Tribunal found that the panel had fallen victim to the Trust’s strategy of bombarding them with unspecified allegations.

Within the Trust’s documents, there were repeated references to Dr Michalak’s ethnic origins (she was Polish) and “cultural issues”. The Trust suggested the different culture in the Polish medical profession may have explained Dr Michalak’s behaviour. One doctor gave evidence that because of his own ethnic origins he had commonly pointed his finger at colleagues and patients to add emphasis when he was conversing with them. He had ceased to do so when a colleague had had a “quiet word” with him to explain that this mannerism could be seen as aggressive.

In this case, however, the Trust faced two problems. Firstly, the Tribunal did not accept the complaints against Dr Michalak were well founded. If there was no good reason for the Trust to question Dr Michalak’s conduct then there was no good reason to consider the reason for that conduct. Secondly, no one had had a “quiet word” with Dr Michalak anyway so no steps had been taken to tackle the problem - if indeed there was one. Therefore, the Tribunal took the view that there was no justification for the references to Dr Michalak’s ethnic origins or the cultural issues.

You are entitled to address an employee’s behaviour or traits if they impact upon colleagues or patients, but such matters must be tackled sympathetically and the focus should be on the behaviour itself. You should be careful to avoid making inappropriate or stereotypical assumptions about the reasons for behaviour as that could lead to discrimination.

So, should you be bracing yourself for multi million pound awards in light of this case? No. The judgment does not herald a change in the principles applied by the Tribunals in dealing with discrimination claims or in calculating compensation and this case was truly exceptional: it concerned a campaign, involving some of the Trust’s most senior staff, to remove an employee who had merely complained of discrimination and of malpractice

The exceptional nature of the case and the treatment suffered by Dr Michalak is reflected in the awards of compensation for injury to feelings and exemplary damages. Moreover, the events had made Dr Michalak ill and the Tribunal found that it was unlikely she would ever work as a doctor again. Therefore, she was compensated for her lost earnings and pension rights to retirement.

The case does illustrate just how badly things can go wrong for an employer that is either unwilling or unable to grasp the opportunities to put matters right either informally or through the grievance or disciplinary procedures. It also serves as a timely reminder that there is no cap on compensation for discrimination claims and that, even in less exceptional situations, the sums can be high if that discrimination makes an employee too ill to work – especially a high earning employee with valuable pension rights.

Richard Leslie is a partner at 
Weightmans. He can be contacted on 0151 243 9586 or by email at This email address is being protected from spambots. You need JavaScript enabled to view it..

This article first appeared in the March 2012 edition of Primary Care Today.