England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT
APPEAL TRIBUNAL

		Royal Courts of Justice Strand, London, WC2A 2LL
		12 November 2003

Lord Justice Schiemann :

Procedural background

1. Before the Court is an application for permission by Mr Flatman to appeal a judgment of the EAT out of time. It is conceded that time ought to be extended.
2. Mr Flatman was employed as a residential social worker by Southwark. On 6.10.00 he suffered a back injury. He went off on holiday and when he came back he reported his injury and stopped work on 08.11.00. The Council initially took the view that this injury was caused by something he had done on holiday. He resigned on 31.10. 01 - some 55 weeks after his injury. Hereafter I shall refer to this period of 55 weeks as 'the First Period'. He went to an ET to get compensation. That tribunal heard his case on 31.05.02. The period between his resignation and the ET hearing of some 30 weeks I refer to as 'the Second Period'. At the hearing the Council conceded that the injury had arisen in the course of his employment and that they had constructively dismissed him. The ET, by a decision sent to him on 02.07.02 awarded him £16,258.18. This sum was made up of (i) a sum in respect of the First Period during which the Council had unlawfully deducted sums from his salary, and (ii) various sums each of which was awarded under the general heading of compensation for unfair dismissal, namely, (a) the basic award, (b) an award in respect of the Second Period, (c) an award in respect of future loss calculated on the basis that the appropriate period was 13 weeks ("the Third Period"), and (d) an award in respect of injury to feelings.
3. Mr Flatman did not think this enough and appealed to the EAT on a number of points. One does not need permission to appeal to the EAT. However, the EAT has a well tried procedure which is employed at its discretion, of having a preliminary hearing where it tries to identify grounds of appeal which it considers have some prospect of success and also grounds which it regards as having no such prospect. Where a case seems suitable for this approach the appellant is heard without the respondent being present and if the Tribunal is of the view that some grounds have no prospect of success whereas others have such prospect, the Tribunal gives a preliminary judgment in which it orders that the appeal be allowed to proceed solely on the grounds which have such a prospect. That is what has happened here.
4. On 11.11.02 the EAT ordered that "the Appeal be allowed to proceed to a full hearing of the EAT solely in respect of paragraph xxviii of the notice of appeal". This paragraph related to increments and I shall return to it shortly.
5. On 30.01.03 the EAT sent a transcript of its judgment to Mr Flatman.
6. Once Southwark had been served with that decision they decided to concede the point which the EAT considered might have some merit. They paid Mr Flatman £1000 in respect of increments and he accepted it.
7. He nevertheless wishes to have permission to appeal to this court in relation to some of the matters which the EAT thought should not proceed to a full hearing.
8. His application for permission to appeal to this court came before Ward LJ on 14.04.03. The Lord Justice did not have counsel before him and expressed uncertainty as to whether in principle it is open to this court to give permission to appeal in circumstances such as the present where some grounds have not been allowed by the EAT to proceed to a full hearing but have in effect been struck out before the respondent has been called upon to deal with them. He therefore adjourned the application for permission to appeal to this court.
9. Having been referred to the practice of the EAT which I have described above, we indicated that we were satisfied that in principle this court has jurisdiction to grant permission to appeal to an applicant who has had part of his claim struck out by the EAT at a preliminary hearing. The respondents do not argue to the contrary.

SUBSTANTIVE POINTS

10. The three grounds which the EAT held were unarguable included one which concerned invalidity benefit. It is not sought to argue that permission should be given by this court to pursue that point. So we may put it on one side. Before us the following were pursued

A. Pay increments

11. Although as I have indicated the EAT allowed the appeal in relation to increments it did so on the basis that this claim only referred to the second and third periods. Mr Flatman now wishes permission to pursue before us his claim for increments in respect of the First Period. The background is as follows.
12. It appears that some employees of the Council received various increments to their pay from time to time during the First Period. However Mr Flatman was not awarded an increment by the Council during this period.
13. At the hearing before the Employment Tribunal Mr Flatman was asked to clarify precisely what he was claiming under what head. He thereupon prepared a Schedule of Loss for the ET. This contains, under the heading 'Immediate Loss' a claim for 'Increment' against which appears a figure of £500 coupled with a further claim for £30 in respect of the employers' Pension Contribution on increment. This claim was not expressly dealt with by the ET.
14. Paragraph 12 of the reasons of the ET reads as follows

"The Applicant submits that the calculation of any assessment of compensation should be based on earnings for the year to March 2000 the last complete tax year prior to his injury. If that were the case the gross earnings would have been £12,362.43 and we take that from the copy pay slip page 15 of the Respondent's bundle being the pay slip for March 2000. On that basis net weekly pay would be £239.95. The Respondents submit that the correct way is to deal with the 12 months up to September 2000 which would give a gross of £11,819.74 being a gross weekly pay of £223.70 and a net of £184.23."

15. The difference between the parties in relation to the First Period seems indeed to have been about £530 – the figure referred to by Mr Flatman's Schedule of Loss mentioned in paragraph 13 above. The ET adopted the Council's submissions.
16. In paragraph xxviii of his grounds of appeal to the EAT dated 08.08.02 Mr Flatman complains that "… in calculating the basic wage no increments or pay awards were added and would have added a further £1000 to the calculation. Used £11819.74 pa (para 12 reasons)".
17. The EAT in its preliminary judgment stated that Mr Flatman had effectively accepted in the course of his submissions that so far as the First Period was concerned the Tribunal had found a salary figure which included a figure for increments. It held however that in relation to the Second Period and also in relation to the Third Period it was arguable that he should receive something and that how much this should be was something in relation to which the appeal should be allowed to proceed.
18. Mr Flatman then prepared an Amended Notice of Appeal to the EAT which he served on the Council on about 15.11.02. In that amended notice he states that he "should have received all increments and wage awards from 06.10.00". So it is clear that he is not there making a claim solely in respect of the First Period. It is submitted on his behalf that that this is because the EAT had indicated that the appeal to the EAT could only proceed in relation to increments for the second and third period.
19. On the 21.02.03 Mr Flatman lodged a draft Notice of Appeal to this Court. In that, in relation to the question "What decision are you asking the Appeal Court to make" he states the following order should be substituted for that of the EAT "That the appeal proceed on point xxviii without the provisos of the judgment and all increments and salary increases from October 2000 be given. The whole of the Personal Injuries Allowance Scheme be allowed to proceed to a full EAT with directions as to eligibility and how to proceed, given the scheme is intended to be implemented while still in employment but is not restricted to that. The appeal court order a new remedies trial if appropriate." It is submitted on Mr Flatman's behalf that by that notice he was seeking permission to argue that the award in respect of the First Period should have included an element in respect of increments.
20. It will be recalled that ground xxviii read as follows : "in calculating the basic wage no increments or pay awards were added and would have added a further £1000 to the calculation".
21. There then follows an exchange of letters between the Council and Mr Flatman:

" 26 February 2003

Dear Sir

Mr T Flatman –V- London Borough of Southwark at the Employment Appeal Tribunal

We write with regards to your appeal No. EAT/0886/02 which is currently before the Employment Appeal Tribunal. Your ground of appeal is that in addition to the compensation for loss of earnings awarded to you by the Employment Tribunal you should also have been awarded a sum to reflect any pay award or increment to which you would have been entitled during the period covered by the compensation. The Respondent does not concede that you are entitled to the additional amount claimed, however in an effort to resolve your appeal the Respondent is prepared to make you an offer of £1000 (one thousand pounds) in full and final settlement of your appeal. The settlement would be paid on the basis that you withdraw your appeal from the Employment Appeal Tribunal.

We would be grateful if you would respond to this offer of settlement by Wednesday 5 March 2003. Please note that should this offer be accepted, payment would be made within 14 days of a formal agreement being signed by both parties. The agreement would include a clause requiring the parties not to disclose the contents of the agreement to any third party except professional legal advisors or as required by law.

We trust that we will be hearing from you in due course.

Yours faithfully

Dawn Martin (For Head of Legal (Contract) Services)"

"For the attention of Mr Robert Newton

Dear Sir

I have been contacted by Southwark, by letter and phone and it is with regret that I withdraw the part of my appeal, Case No. EAT/0886/02 that was allowed to proceed to a full hearing. I also withdraw my cross appeal Case No. EAT/0775/02. …

I understand from Southwark that permission to withdraw will be decided by yourselves, and that also my opinion would be sought. As such I agree to Southwark's withdrawal and reiterate that I wish to also withdraw my cross appeal

Yours faithfully

T. Flatman."

22. Case EAT/0775/02 was an appeal by the Council in relation to an award of £5000 which had been made to Mr Flatman for injury to feelings which his dismissal had caused. It seems that the cross appeal by Mr Flatman concerned his desire that the amount should be increased.
23. On 4 March the Council wrote a further letter to Mr Flatman:

" 4 March 2003

Dear Sir

Further to my letter of 26 February 2003 and to our telephone conversation today when you informed me of your decision to withdraw your appeal Ref: EAT/0886/02/RN. I write to confirm that upon receipt of written confirmation from the Employment Appeal Tribunal that you have withdrawn your appeal the Council will arrange for a cheque in the sum of £1000 (one thousand pounds) to be issued to you. The cheque will be issued within 14 days of confirmation being received from the EAT.

Yours faithfully

Dawn Martin (for Head of Legal (Contract) Services)"

24. In due course the cheque was sent and cashed by Mr Flatman. The Council withdrew its appeal to the EAT in relation to the hurt feeling award and Mr Flatman withdrew his cross appeal. Mr Flatman also withdrew his appeal to the EAT in relation to ground xxviii.
25. The Council say that in so far as Mr Flatman wishes to pursue any claim in relation to increment which might have been paid had he not been injured, that claim has been settled by the payment and acceptance of the £1000.
26. As matters finally crystallised before us, it became clear that the issue here relates solely to increments which might have been paid to Mr Flatman during the First Period during which he was still employed by the Council but was not actually working. Mr Flatman accepts that his claim in relation to the Second and Third Periods has been settled. His case is before us is that in relation to the First Period the EAT did not allow the appeal to it to go forward because it had misunderstood him as not wanting to pursue the increment point in relation to this period. He says that the settlement related only to the increments during the second and third periods and that he should therefore be free to pursue before this Court an argument to the effect that the EAT erred in refusing to let him argue further his increment claim in relation to the first period.
27. I would not give permission for this point to be argued. I can quite see that it is arguable that the wording of the settlement letters refers to the appeal which was pending to the EAT and that the EAT had not allowed any increment claim in respect of the First Period to proceed. I understand fully that what it is sought to raise in the Court of Appeal relates to the First Period. However, it seems to me clear that in paragraph xxviii of his original grounds of appeal to the EAT which I have quoted in paragraph 16 above that all that Mr Flatman was seeking under the head of increments was £1000.
28. At the time of the settlement it was not made clear to the Council that Mr Flatman was seeking more than £1000 under the heading of increments. This Court is required by the overriding objective set out in Part 1 of the Civil Proceedings Rules to deal with cases justly. In my judgment where a litigant seeks £1000 and receives £1000 justice does not require that he be given permission to appeal so as to argue that he should receive more than £1000.

B. Rate of an office based job

29. The point which Mr Flatman wished to argue before the EAT under this head is set out in paragraph 10 of the decision of the EAT as are its reasons for refusing to allow him to proceed further with that point. The EAT held as follows

"10. The Tribunal's decision, as we have indicated, was to limit that further future loss to thirteen weeks, having heard the evidence. The case that the Appellant would wish to make, as he explains it to us today, by way of appeal, is that no allowance or provision was made for continuing loss because, he says, an office job would be likely to pay, at any rate, to start with, less that he was receiving and was deemed entitled to receive under the Personal Injury Allowance Scheme in his old job. Thus, for example, there could have been some provision for some continuing period of partial loss once he found a new job. This is, he accepts, not an argument that he ran at all below, and it appears to us that it is not possible for him now to run it on appeal. There is no evidence as to whether the kind of job with the computer qualification, albeit an office job, would indeed mean less money that he is earning in his old job, and in any event, it appears to us that the Tribunal was making a broad brush decision that the loss here was thirteen weeks, after taking into account the arguments by the employers that he could and should have mitigated his loss earlier than he had done. In those circumstances we do not believe that it is right to grant him permission to appeal or allow an appeal to proceed in respect of this head."

30. I would refuse permission to appeal on this ground. There is no realistic prospect of success for an attempt to persuade this court that the EAT has erred in its judgment and that it is just now to remit the matter.

C Claim under Clause 7 of the Personal Injury Allowance Scheme

31. This clause reads as follows

"7. In addition to the foregoing payments, the following benefits shall be paid to or for the benefit of an employee who dies from or suffers an injury sustained in the circumstances mentioned in the preamble paragraph to this Scheme:

Conditions	Current Benefit (as of 1/1/96) £
Death (leaving a dependant or dependants)	45,428
Death (leaving no dependants)	1,979
Total and permanent loss of all sight in both eyes	45,428
Total and permanent loss of all sight in one eye	22,708
Total loss of one hand or one foot	22,708
Total deafness in two ears	22,708
Total deafness in one ear	9,087

Provided:

That in the event of an employee suffering impairment or partial but not total loss of limbs or faculties the Council shall consider each case on its merits and apportion any benefit which they may in their discretion think fit to pay according to the degree of impairment or loss in the light of the scale of benefits in this paragraph; …"

32. The EAT disposed of this head of Mr Flatman's claim in short order. It said

"The Appellant has told us that he has been determined to be fourteen percent partially disabled in respect of a physical injury suffered during the course of his employment. It is quite plain that any payment, except in respect of the specified sums, was entirely within the discretion of the Respondent, and we cannot conclude that it is arguable that the Appellant was entitled to any sum under Clause 7 awardable by the Employment Tribunal, or at all, in those circumstances."

33. Mr Flatman submits that it is properly arguable that the Council failed ever to consider whether it should make an award under this head and that he was entitled at the least to have the matter considered. From the material which has been put in front of us, I see force in this point.
34. Mr Flatman claims that an award should have been made under this clause in respect of his back injury. Mr Robin Howard, who appeared for the Council, was at first inclined to accept that in principle a back injury can qualify under the proviso for a payment. The court suggested that it might be that the proviso covered partial blindness or deafness or loss of part of a hand or foot but not something such as a back injury which was unrelated to the matters itemised in the table. That suggestion having been made, Mr Howard adopted it. For my part, while I still see a good deal of force to this narrow approach to the construction of the proviso, I would not think it right either to adopt or reject it without proper argument on the point. The Clause appears to be one in wide use and, if this case does not settle, the point is worthy of proper argument after consideration of the authorities on what is quite a common type of insurance provision. I therefore proceed on the basis that, in principle, Mr Flatman might have been awarded a sum under this head.
35. Mr Howard submitted that the ET had no jurisdiction to make an award under this head. He submitted that the claim under paragraph 7 of the PIAS was a contractual claim but that the ET had no jurisdiction because it was a claim for damages or for a sum due in respect of personal injuries.
36. The jurisdiction of the ET to award damages in respect of contractual claims is conferred by the [Employment] Tribunal Extension of Jurisdiction (England and Wales) Order 1994 made the Employment Protection (Consolidation) Act 1971. That Act in section 131 and its current successor the Employment Tribunals Act 1996 in section 3 have two subsections of relevance.

"(2) Subject to subsection (3) this section applies to –

(a) a claim for damages for breach of a contract of employment or other contract connected with employment

(b) a claim for a sum due under such a contract, and

(c) …

if the claim is such that a court in England and Wales or Scotland would under the law for the time being in force have jurisdiction to hear and determine any action in respect of such a claim.

(3) This section does not apply in respect of any claim for damages, or for a sum due, in respect of personal injuries."

37. The Order provides

"Proceedings may be brought before an [Employment Tribunal] in respect of a claim of an employee for the recovery of damages or any other sum (other than a claim for damages, or for a sum due, in respect of personal injuries) if –

(a) the claim is one to which s.132(2) of the 1978 Act applies

…."

38. Although the precise position in relation to the PIAS is obscure it was common ground before us that it gave contractual rights to the employee. The Order clearly is intended to exclude contractual claims which are also claims in respect of personal injuries. Such claims typically involve the calling of doctors and psychiatrists as witnesses and raise matters which might be thought to be unsuitable for resolution by an Employment Tribunal.
39. Mr Flatman's complaint was that the Council had not given him that to which he was entitled under the contract. It had not even considered whether it should make an award which, I am prepared to assume for the purpose of this part of the argument, could have been made under paragraph 7 of the Scheme. It was submitted on his behalf that a sum should be awarded for the loss of the chance that he would have received an award had the Council properly considered the matter as it should have done.
40. As it seems to me it is clear that if the claim had been for, say, £9,087 for total deafness in one ear pursuant to the last item set out in the table, such a claim would be a claim for "a sum due under the contract" and thus fall within section 3(2) but that such a claim would be one "for a sum due in respect of personal injuries" and thus be excluded under section 3(3) and the opening words of Article 5. So would a claim in relation to a sum apportioned by the Council under the proviso which it then decided not to pay.
41. Any rationale, such as the one suggested in paragraph 38, for excluding from the jurisdiction of Employment Tribunals claims such as those identified in paragraph 40 would equally apply to a claim for the loss of a chance of being awarded a sum pursuant to an argument such as the one summarised in paragraph 39. In my judgment, the phrase "a claim for damages … in respect of personal injuries" is wide enough to embrace a claim such as the one which Mr Flatman wishes to advance here. I am reinforced in that view by two cases about the Limitation Act 1980 which were not cited to us – Howe v David Brown tractors (Retail) Ltd [1991] 4 All ER 30 CA and Walkin v South Manchester Health Authority [1995] 1 WLR 1543 which indicate that the phrase "in respect of personal injuries" is to be construed broadly.
42. Mr Howard submitted that, even if jurisdiction to make such an award existed, the ET were entitled to refuse to exercise it. No claim for breach of the contractual duty owed under paragraph 7 of PIAS is to be found in the application to the ET nor does it appear from the decision of the ET that it applied its mind to such a claim. However it is fair to say that this was not the basis upon which the EAT refused to allow this part of the claim to go forward and it may be, as Mr Flatman asserts that he did attempt to make out a claim under this head before the ET. It is certainly made in paragraph xxv of the notice of appeal from the ET and paragraph xxx of that notice asserts that Mr Flatman was, because they had not been clearly foreshadowed in the application to the ET, shut out by the chairman of the ET from developing contractual claims. In the light of my conclusion on jurisdiction it is not necessary to express a concluded view on this point.

Conclusion

43. I would refuse permission to appeal on any of the points.

Lord Justice Sedley :

44. I agree.

Lord Justice Jacob :

45. I also agree.