Contract Damages for Injury to Reputation

AuthorNelson Enonchong
Publication Date01 July 1996
DOIhttp://doi.org/10.1111/j.1468-2230.1966.tb02102.x
The Modern Law Review
[Vol.
59
definitively on the matter.*’ Looking at the
1993
Labour Force Survey, the number
of women compared with men engaged upon temporary fixed term contracts is
approximately
3:
1.
It
is
arguable that the impact of this ruling is a form of indirect
discrimination, since a greater number of women than men are affected by the lack
of protection afforded to them by this interpretation
of
the
Sex
Discrimination Act
1975.
However, the Court would probably be favourable to a defence of ;yh
policy if it was based upon objective grounds unrelated to sex discrimination. It
is
important that EC law does not allow the justification of such forms of
pregnancy-related discrimination since there are a number of reasons why women
may want to resort to the sex discrimination legislation rather than the unfair
dismissal legislation,
as
well
as
other situations falling short of dismissal where a
woman suffers pregnancy -related discrimination. For example, there is no statutory
limit to the amount of compensation awarded, compensation can be awarded under
a wide range
of
heads (such as injury to feelings), and the questionnaire procedure
can
be
used to discover information from the employer.
Contract Damages for Injury
to
Reputation
Nelson
Enonchong*
Recently, in
Malik
v
BCCI,‘
the Court of Appeal was confronted with the question
whether in an action for breach of contract, damages
are
recoverable for injury to
the plaintiffs reputation. The facts are not complicated. The plaintiffs were
employed by the (now) collapsed
Bank
of Credit and Commerce (BCCI).
Unbeknown to them, the bank was involved in dishonest and fraudulent activities.
Following the collapse of the bank, these fraudulent activities were discovered.
The plaintiffs’ contracts of employment were terminated by the bank’s liquidators;
and the plaintiffs were unable to gain fresh employment because of the stigma
attached to them as former employees of the bank. They claimed damages for this
injury to their employment prospects. The claim failed. Why?
After reviewing the cases in this field, Morritt LJ, who delivered the main
judgment, concluded that these cases show that there are ‘three well-established
principles,’ which he listed
as
follows:*
First, an employer has no obligation to employ or pay the employee for longer than the
period
of notice for which the contract provides. Second, damages
are
not recoverable in
~~ ~~
20
For example, Case C-132J92,
Birds Eye Walls Ltd
v
Roberts
[1993] ECR 1-5579; Case C-152@1,
Neath
v
Hugh
Steeper Lrd
[I9941 ECR 1-6935.
21 Comparable arguments were raised in relation to part-time work
in
R
v
Secretary
of
Sure for
Employment,
exp
EOC
119941
IRLR
176 and Case C-189/91,
Kirshammer-Hack
v
Sidal[
19931 ECR
1-6185, where the Court considered the exclusion
of
small businesses employing five or less
employees from the German unfair dismissal legislation
in
the context
of
Articles
2(
I)
and
5(
1)
of
the
Equal Treatment Directive. The Court ruled that indirect discrimination would occur
if
it were
established that small businesses employ
a
considerably greater number of women than men
-
a
fact
not shown in this
case.
*Faculty
of
Law, University of Leicester.
1
2
ibid
558.
[I9951
3
All
ER 545.
592
0
The
Modem
Law Review Limited
1996

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