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Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Knox v Henderson Retail Limited [2017] NIIT 01160_15IT (13 November 2017)
URL: http://www.bailii.org/nie/cases/NIIT/2017/01160_15IT.html
Cite as: [2017] NIIT 1160_15IT, [2017] NIIT 01160_15IT
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THE INDUSTRIAL TRIBUNALS
CASE REF: 1160/15
CLAIMANT: Lindsay Knox
RESPONDENT: Henderson Retail Limited
DECISION ON REMEDY
The unanimous decision of the tribunal is that the claimant is entitled to a final award of £9,800.87 as set out in paragraph 19 of this decision.
Constitution of Tribunal:
Employment Judge: Employment Judge Crothers
Members: Mr J Barbour
Mrs L Torrans
Appearances:
The claimant was represented by Mr M Potter, Barrister-at-Law instructed, by Campbell Stafford, Solicitors.
The respondent was represented by Mr T Warnock, Barrister-at-Law, instructed by Pinsent Masons LLP, Solicitors.
BACKGROUND
1. The tribunal hearing on liability was held on 6 - 8 June 2016. The decision was issued on 6 July 2016 and subsequently appealed to the Northern Ireland Court of Appeal.
2. As recorded in the final paragraph of the tribunal's decision:-
"The tribunal found the evidence in relation to remedy unsatisfactory in a number of respects. In the absence of a resolution between the parties in the meantime, the tribunal proposes to relist the hearing to consider remedy".
3. The claimant was successful in her claim of constructive dismissal before the tribunal. This decision was upheld by the Northern Ireland Court of Appeal on 10 March 2017.
4. Thereafter the tribunal sought to arrange a remedy hearing. The remedy hearing was postponed in the circumstances referred to in a record of a Case Management Discussion dated 24 May 2017, which is attached to this decision.
5. The parties submitted an agreed bundle of documents prior to the commencement of the hearing on 30 June 2017. However, it became apparent that the claimant was relying on medical factors to rebut the respondent's allegation that she had failed to mitigate her loss. Regrettably, the hearing had to be postponed pending receipt of relevant GP notes and records.
6. Although available in June 2017, necessary and relevant payslips in relation to the claimant's employment with the Card Factory were not discovered by the claimant's representative until the morning of the hearing. The tribunal had also made a Discovery Order dated 24 May 2017, which was to be complied with by both parties by not later than 2 June 2017. Furthermore, the claimant's representatives provided an amended Schedule of Loss, also on the morning of the hearing. This, together with the late provision of available payslips, meant that the respondent had to revise its approach to the Schedule of Loss incorporated in a bundle of documents for the earlier hearing on 30 June 2017. The figures in the Schedule of Loss were however agreed subject only to the calculations in respect of the claimant's work in the Card Factory, rounded off by agreement for a period of 52 weeks ending on 13 April 2016. It was common case that the claimant was unemployed from 13 April 2016 until 23 April 2016 when she accepted a job in the Post Office. The respondent resumed responsibility for the Post Office in Northern Ireland, by way of a Transfer of Undertaking in October 2016. The claimant is therefore currently in the employment of the respondent.
ISSUE
7. The issue before the tribunal was:-
What compensation is the claimant entitled to pursuant to the tribunal's decision on liability?
SOURCES OF EVIDENCE
8. The tribunal heard evidence from the claimant and also received an agreed bundle of documentation together with an amended Schedule of Loss and relevant payslips from the claimant's representative.
FINDINGS OF FACT
9. Having considered the evidence insofar as same related to the issue before it, the tribunal made the following findings of fact, on the balance of probabilities:-
(i) It is common case that the claimant's effective date of termination of employment was 1 April 2015.
(ii) The claimant obtained employment with the Card Factory from 20 April 2015 until 13 April 2016. It was common case that she was unemployed from 13 April 2016 until 23 April 2016 before taking up a post in the Post Office on 25 April 2016, for which she had been "head-hunted". There is no evidence before the tribunal that the claimant made any other job application apart from those pertaining to the Card Factory and the Post Office.
(iii) The disputed area between the parties relates to her employment in the Card Factory and the respondent's contention, disputed by the claimant, that she was earning more in the Card Factory than in the Post Office. During her last two months of employment with the Card Factory, the claimant was ill and in receipt of SSP, together with an amount of wages from the Card Factory. She stated in evidence that she had no issues with the Card Factory, that she loved her job and that she left on good terms. The respondent contended that the claimant was earning more in the Card Factory than in the Post Office, that she ought to have continued her employment with the Card Factory, and that she should not be awarded anything by the tribunal after 13 April 2016.
(iv) An earlier agreed Schedule of Loss presented to the tribunal at the hearing on 30 June 2017 included the following:-
" COMPENSATORY AWARD
The claimant immediately sought employment
Loss of Earnings (unemployment)
Net pay (Henderson Retail Limited): £1,715.34 per month and £395.85 per week
Length of time unemployed before taking up new post: 2.5 weeks
2.5 weeks @ £395.85 £989.63
Loss of Earnings (net pay decrease- Card Factory)
Net pay (Card Factory) = £1,452.90 per month
(Difference in net pay between current position and old position per month)
£1,715.34 - £1,452.90 = £262.44
Length of time in Card Factory position (at 13 th April 2016): 52 weeks 2 days
Loss of £60.56 net per week
52 weeks x £60.56 up to 13 th April 2016 £3,149.12
Loss of earnings (unemployment)
13 th April 2016 - 23 rd April 2016- unemployment before taking up new post -
1 week @ £395.85
2 days @ £56.55 per day = £113.10 for the 2 days
£508.95
Loss of earnings (net pay -Post Office)
Net pay at Post Office- £300.82
(Difference in net pay between current position and old position per week)
£395.85 - £300.82 = £95.03
Time in Post Office to hearing of 6
th June 2016 - 6 weeks 25
th April -
6
th June 2016 @ £95.03 =
£570.18"
(v) The amended Schedule of Loss, presented by the claimant's representative to the respondent and to the tribunal at the hearing on 9 August 2017, included the following in relation to employment at the Card Factory and Post Office:-
"Loss of earnings (net pay decrease)
Net pay (Card Factory) - £1,248.99 per month (based on salary for previous 12 months)
(Difference in net pay between current position and old position per month)
£1,715.34 - £1,248.99 = £466.35 per month
Length of time in Card Factory position (at 13 th April 2016): 52 weeks 2 days
Loss of £116.59 net per week
52 weeks x £116.59 up to 13 th April 2016 £6,062.68
"Loss of earnings (unemployment)
13 th April 2016- 23 rd April 2016 - unemployed before taking up new post -
1 week @ £395.85 per week
2 days @ £56.55 per day = £113.10 for the 2 days £508.95
Net pay (Post Office) - £300.82
(Difference in net pay between current position and old position per week)
£395.85 - £300.82 = £95.03
Current length of time in Post Office position - 6 weeks 25 th April -
9 th August 2017 @ £95.03 = 65 x 95.03 =
£6,176.95"
("Current position" and "old position" refer to the respondent and Post Office respectively).
(vi) An examination of the wage slips relating to the claimant's employment with the Card Factory reveals that she received the following net pay:-
29/05/15: £ 1,302.66
26/06/15: £ 1,247.22
31/07/15: £ 1,552.37
28/08/15: £ 1,335.77
25/09/15: £ 1,309.48
30/10/15: £ 1,641.58
27/11/15: £ 1,237.65
23/12/15: £ 1,479.46
29/01/16: £ 1,726.00
26/02/16: £ 1,147.28
25/03/16: £ 521.15
29/04/16: £ 487.28
£14,987.90
Average monthly net pay over the entire period equals £1,248.99 net.
However, if the last two months are excluded, the total net pay for 10 months is £13,979.47 which is an average of £1,397.94 per month.
(vii) The tribunal was satisfied, had the claimant been medically fit to work in the Card Factory for the last two months of her employment, that she would have been earning at least the average monthly net salary of £1,397.94. Assuming this monthly net figure over a 12 month period her salary could have been £16,775.28. Taken over 52 weeks, this would equate to a net salary of £322.60 per week. The tribunal is satisfied that this is a just and equitable way of assessing what the claimant was earning on a weekly net basis in the Card Factory. She contended that the respondent was incorrect in its assertion that she was earning less in the Post Office than in the Card Factory. She also relied on the fact that she was being paid occasional bonuses by the Post Office but the tribunal was presented with no evidence in relation to any such payments and relied on the agreed amounts specified in the Schedule of Loss in relation to the Post Office. The agreed Schedule for the purposes of employment at the Post Office shows that the claimant's net weekly pay was £300.82.
(viii) Although the tribunal's date of assessment for the purposes of compensation is 9 August 2017, the claimant and the respondent clearly had radically different approaches regarding awarding compensation beyond 13 April 2016.
(ix) Counsel for the respondent also reserved the respondent's position regarding an application for costs in respect of the postponement of the hearing on 30 June 2017 until 9 August 2017, as being occasioned by the claimant and the issue of Discovery.
THE LAW
10. (1) Article 157(1) of the Employment Rights (NI) Order 1996 ("the 1996 Order") provides that the amount of the compensatory award shall be:-
"Such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal insofar as that loss is attributable to action taken by the employer".
(2) The compensatory award should not be increased out of sympathy for the claimant or to express disapproval of the respondent ( Lifeguard Assurance Ltd v Zadrozny (1997) IRLR 56).
(3) In Norton Tool Company Ltd v Tewson [1973] 1 ALL ER 183, the NIRC said that compensation should be assessed under four main headings:-
(a) Immediate loss of earnings, ie loss of earnings between the date of dismissal and the date of the hearing.
(b) Future loss of earnings, ie anticipated loss of earnings in the period following the hearing.
(c) Loss arising from the manner of the dismissal.
(d) Loss of statutory rights, ie compensation for being unable to claim unfair dismissal for a period of at least one year.
In Tidman v Aveling Marshall Ltd [1977] IRLR 218, the EAT held that it was the duty of each tribunal to raise and enquire into each of the four heads of compensation established by Norton Tool plus a fifth head of compensation - loss of pension rights. It should be noted that enquiring into a particular head of compensation does not mean that compensation has necessarily to be awarded under that head.
11. In the case of Wardle v The Credit Agricole Corporate and Investment Bank [2001] EWCA Civ 545, Lord Justice Elias stated at paragraphs 51 and 52 of his judgment as follows:-
"51. However, in my view the usual approach, assessing the loss up to the point where the employee would be likely to obtain an equivalent job, does fairly assess the loss in cases - and they are likely to be the vast majority - where it is at least possible to conclude that the employee will in time find such a job. In this case the Tribunal has in effect approached the case on the assumption that it must award damages until the point when it can be sure that the claimant would find an equivalent job.
12.
In the case of
NCP Services Ltd v Topliss UK EAT/0147/09/SM,
Lord Justice Langstaff stated in paragraphs 41 - 43 of his judgment as follows:-
42. All these are matters of fact just as there will be a factual basis for an assessment of whether the employee has taken appropriate steps to mitigate his loss. We have to ask whether the Tribunal should conduct an exercise which has an element of unreality about it, in putting itself back into the position it was in December and reconsidering the evidence then before it in order to determine what the loss has been since 11 December. One view might suggest that is what it should do. We do not agree. We consider that the starting point here is that no proper decision has yet been made upon the claim insofar as it concerns future loss. It is as if the claim for future loss had simply been adjourned until the date it will be reconsidered.
43. It follows that for an award properly to be made in respect of the losses from 11 December, the Tribunal will be entitled to consider what has been the factual position since. It seems to us this has three main benefits: First, and generally, the purpose of an award is to compensate for a wrong which has been done. The figure to be awarded is one which is just and equitable in respect of that loss. Where part of the loss is better known than by a process of estimation conducted at the time, even though aspects of it still remain uncertain it is, in our view, fairer, or to use the words just and equitable, to take that situation into account. It has the result of substituting certainty for that which was uncertain though estimated on the best available evidence. "
MITIGATION OF LOSS
13. The Court of Appeal in Wilding v BT PLc [2002] IRLR 524 stated that a tribunal has to apply the following principles:-
(i) it is the duty of the employee to act as a reasonable person unaffected by the prospect of compensation from their former employer;
(ii) the onus is on the former employer, as the wrongdoer, to show that the employee has failed in his duty to mitigate his loss by unreasonably refusing an offer of re-employment;
(iii) the test of reasonableness is an objective one based on the totality of the evidence;
(iv) in applying that test, the circumstances in which the offer was made and refused, the attitude of the former employer, the way in which the employee had been treated, and all the surrounding circumstances, including the employee's state of mind, should be taken into account; and
(v) the court of tribunal must not be too stringent in its expectation of the injured party.
These principles will apply equally to situations where the tribunal is assessing whether a claimant has mitigated his loss by actively seeking alternative employment.
In Wilding, Sedley LJ stated that:-
"It is not enough for the wrongdoer to show that it would have been reasonable to take the steps he has proposed. He must show that it was unreasonable of the innocent party not to take them. This is a real distinction. It reflects the fact that there is more than one reasonable response open to the wronged party, the wrongdoer had not right to determine his choice. It is where, and only where, the wrongdoer can show affirmatively that the other party has acted unreasonably in relation to his duty to mitigate that the defence will succeed".
14. In the context of mitigation of loss therefore, the onus of proof is on the respondent. The respondent must show that the claimant has acted unreasonably in failing to seek alternative work or turning down a job offer. Furthermore, the test is objective in all the circumstances of the case.
15. The tribunal also considered the relevant section in Harvey on Industrial Relations and Employment Practice at D1, paragraph 2269FF insofar as relevant.
16. The tribunal was also referred to the case of Bateman v British Leyland [1974] ICR 403 NIRC, and to the Industrial Tribunal remedy decision in Maria McKeith v Frank McCorry and Others (case reference: 1188/15).
SUBMISSIONS
17. Mr Potter, for the claimant, referred the tribunal to the relevant section in Harvey and to the principles in Wilding. He urged the tribunal to consider that the test in Wilding was an objective test based on the totality of the evidence and that the tribunal should not be too stringent in its expectations from an injured party. In referring the tribunal to its original decision, the claimant's credibility, and the severe adversity the claimant had experienced, he urged the tribunal to consider the fact that she had found another job and had significantly mitigated her loss. He also considered it relevant to refer to her strength of character in continuing to work for the respondent after October 2016, when the respondent took over the Post Office. In referring to the time period from the date of the tribunal's original decision and the material dates in the tribunal process prior to the hearing on 9 August 2017, Mr Potter urged the tribunal to calculate the loss until 9 August 2017, although acknowledging that the tribunal had a discretion in relation to the matter. He subsequently referred to the McKeith case as not having legal authority and, after referring to Wardle, urged the tribunal to consider the relevant section in Harvey, and paragraphs 42 - 43 of the judgment in the Topliss case. He urged the tribunal to proceed on normal principles and adopt a sensible view in approaching the issue of compensation. He submitted that the tribunal should proceed with reasonableness and discretion and not be over legalistic in its approach.
18. Mr Warnock who had provided written submissions for the hearing on 30 June 2017, which are appended to this decision, referred to the time-line in the case, to the fact that the tribunal decision was in excess of two years from the date of dismissal, and that the common approach to the calculation of loss to the date of hearing was not appropriate in this case. In referring to the various authorities of Wardle, Topliss, Bateman v British Leyland, and the decision of the tribunal in McKeith, he submitted that the claimant should not be compensated beyond 13 April 2016, that she was earning more in the Card Factory than in the Post Office, that she should properly have returned to the Card Factory after her two month period of sickness and that she had failed to mitigate her loss in accepting a job with the Post Office. He pointed out that the original Schedule of Loss which the claimant had produced prior to the hearing on 30 June 2017 referred to a loss of £60.56 in the context of the Card Factory which had been agreed by the respondent.
CONCLUSIONS
19. The tribunal having carefully considered the evidence before it and having applied the relevant principles of law to the findings of facts, concludes as follows:-
(1) The tribunal is satisfied in circumstances where the claimant acknowledged before the tribunal that she had no issues with the Card Factory, that she loved her job, and that she left on good terms, that it was unreasonable for her not to mitigate her loss by returning to work in the Card Factory. She was earning an average of £322.60 per week in the Card Factory, whereas in the Post Office her net weekly pay was £300.82. Apart from the mitigation argument, the tribunal was satisfied, having considered the relevant authorities and, in particular, Article 157(1) of the 1996 Order in relation to the compensatory award, that the claimant should be awarded the following:-
Basic award: 7 weeks x £490.00 per week = £3,430.00
2.5 weeks at £395.85 per week = £ 989.63
52 weeks x £73.25 (£395.85 - £322.60) = £3,809.00
(up to 13 April 2016)
Loss of statutory rights = £ 500.00
Loss of pension prior to employment with the
Card Factory (£22.88 x 2.5) = £ 57.20
Pension loss in Card Factory -
£19.52 x 52 weeks = £1,015.04
TOTAL £9,800.87
20. This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.
Employment Judge:
Date and place of hearing: 30 June 2017 and 9 August 2017, Belfast
Date decision recorded in register and issued to parties: