Default judgment leads to £37k award for unfair dismissal and disability discrimination

This case shows what can happen when an employer chooses not to defend a tribunal claim. The former employee, who was dismissed by Alnmaritec Limited, presented her claim in November 2021. The company, which was in creditors' voluntary liquidation, did not respond, leading to a default judgment in July 2022 that found the dismissal was both unfair and an act of disability discrimination.

With liability already decided, the next step was to work out compensation. The employee's solicitors asked for the remedy to be decided on the papers rather than at a hearing, given the financial circumstances and the fact that the company was in liquidation. The tribunal agreed, and Employment Judge Brewer assessed the award based on the evidence provided.

The compensatory award for unfair dismissal covered loss of earnings of £22,701.64, plus £450 for loss of statutory rights. The tribunal noted that the employee had made reasonable efforts to find new work, which is a key factor in calculating loss of earnings. In addition, she received £12,500 for injury to feelings caused by the disability discrimination. Because the total compensation exceeded £30,000, the tribunal applied 'grossing up' to account for tax on the excess, bringing the final figure to £37,064.55.

What could the employer have done differently? By failing to defend the claim, Alnmaritec lost the chance to argue about whether the dismissal was fair or whether there was a justification for the discrimination. Even a company in liquidation can still participate in proceedings, and doing so might have reduced the amount of compensation. For employees, this case highlights the importance of pursuing a claim even if the employer appears to have no assets – default judgments can still lead to awards, and the National Insurance Fund may cover some payments if the employer cannot pay.