Employers Ability to Pay – Tao Herbs and Acupuncture Limited v Mrs Y Jin

Mrs Jin was employed by Tao Herbs and Acupuncture Ltd, and experienced a “rocky” relationship with her employer. She was dismissed on 23 December 2008, and issued a clam for unfair dismissal.

Mrs Jin claimed she had been dismissed unfairly, as her dismissal followed her questioning whether she was being paid the national minimum wage. She was awarded £11,000 –  £9,951.34 of which was comprised of a compensatory award for unfair dismissal.

Tao Herbs appealed, arguing that pursuant to section 123 of the Employment Rights Act 1996, it would not be “just and equitable”[1] for the award to be made as it would effectively force the company into liquidation.

The Tribunal stated that the correct approach in the calculation of an award for unfair dismissal “does not pay attention to the ability of the employer to pay”, and directed that Tao Herbs had no grounds on which they could appeal the decision.

This decision serves as a timely reminder, when some UK businesses are still experiencing difficulties, of the consequences of an adverse finding from an employment tribunal.


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Filed under Case Law Update, Costs, Employment Tribunal Focus

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