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Taylor v. Dumfries And Galloway Citizens Advice Services [2004] ScotCS 88 (26 February 2004)

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

Lord Hamilton

Lady Cosgrove

Lord Bonomy

XA10/03

OPINION OF THE COURT

delivered by LORD HAMILTON

APPLICATION FOR LEAVE TO APPEAL

from a decision of the Employment Appeal Tribunal

ANTHONY JOHN TAYLOR

Appellant;

against

DUMFRIES & GALLOWAY CITIZENS ADVICE SERVICES

Respondents;

_______

Act: Party (Appellant)

Alt: D. B. Ross; Russel & Aitken (Respondents)

26 February 2004

[1] The appellant was at one time employed as a salesman. In about 1985, as a result of intestinal problems and other difficulties, he required to give up that employment. At about that time he was first registered under the Disabled Persons (Employment) Act 1944 (as amended); he remained so registered at the dates specified in para. 7(1) of Schedule 1 to the Disability Discrimination Act 1995. He has also suffered from severe arthritis. Some time after 1985 he began undertaking work on a voluntary basis with the Newton Stewart Welfare Rights Office. This continued until 1997 when he accepted part-time remunerated employment with the then Wigtownshire Welfare Rights Office (subsequently absorbed into the respondents' organisation). He was dismissed from that employment in April 1999.

[2] Prior to, and again subsequent to, his dismissal the appellant presented complaints to an employment tribunal. These complaints were later conjoined. They gave rise to a number of complex but related issues. A complicated procedural history followed. Eventually matters came for a hearing before an employment tribunal. That tribunal then sought to identify, and thereafter to determine, the outstanding issues. Evidence was heard over five days. Thereafter the tribunal adjourned with a view to the parties making written submissions on the evidence. Such submissions were duly lodged and considered by the tribunal, which then issued its decision on 10 April 2002.

[3] Various claims made by the appellant were rejected by the tribunal. The rejected claims included one that he had, under the Disability Discrimination Act 1995, been "directly" discriminated against by the respondents. However, the tribunal held that the respondents had not fulfilled their duty under section 6 of the Act to make reasonable adjustments and had not shown that such failure was justified. The tribunal accordingly held that the respondents had discriminated against the appellant within the meaning of section 5(2) of the Act. Options which, the tribunal held, the respondents ought to have considered included, for example, a reduction in the appellant's working hours, an allocation of some of his duties to another individual and alterations to where he worked.

[4] The tribunal then proceeded to consider remedies and, in particular, to assess compensation. It had no difficulty in assessing an award for injury to feelings at £1,500 (an aspect of the award not now in dispute). On other aspects of compensation it had more difficulty. At page 16 of its written decision it stated:

"As to any other heads of claim, the position is more complicated. As in other areas of discrimination, the applicant is entitled to be put, so far as is possible, back into the position he would have been in had the discrimination not occurred. However, on the authority of Ministry of Defence v. Hunt 1996 I.C.R. 544 it is appropriate for us to assess the chance that the applicant would, but for the discrimination, have retained his employment in some form. We have to say that the prospects are small but not impossible, and we have assessed that chance as 10 per cent.

The applicant has a duty to minimise his loss. He has not actively sought other remunerative employment for reasons which we understood to be connected with the level of disability benefit entitlement currently enjoyed by him. The respondents should not bear the consequences of this. We think that the situation is best met by awarding the applicant one year's loss of earnings (628 times 12) = £7,536, subject to the chance assessment of 10 per cent - £753".

[5] The appellant being dissatisfied with the tribunal's assessment of his pecuniary loss (and with certain other matters, to which we shall return), appealed to the Employment Appeal Tribunal. His appeal was there dismissed on 10 December 2002. On 13 January 2003 the presiding judge refused to grant him leave to appeal to this court.

[6] The appellant has now presented to us an application for leave to appeal. In accordance with the usual practice, we heard submissions also on the substantive appeal. The appellant appeared in person, as he had at every stage of the proceedings. The respondents were represented by counsel.

[7] Before we record the appellant's submissions to us, it is appropriate to say a word about his manner of presentation. The employment tribunal noted (page 4) that the appellant

"presented as a very complex man, meticulous to a fault. As is often the case with such individuals, he accepted that he was happier expressing himself on paper than verbally, since it gave him time to reflect and record detail".

In the event his written submissions to the tribunal comprised "175 pages of typed text, analysing every aspect of the evidence in minute detail" (page 8). His presentation to us was complex and at times difficult to follow; in this Opinion we record only what we finally understood to be the essence of his submissions on the matters in issue. His manner of presentation may help to explain why he failed before the Employment Appeal Tribunal and why the presiding judge refused him leave to appeal.

[8] The appellant submitted that the employment tribunal had misdirected itself in law on both aspects of its computation of his claim for loss of earnings, namely, (1) in its assessment of the chance that the appellant would, but for the discrimination, have retained his employment in some form and (2) in its approach to mitigation of loss. The Employment Appeal Tribunal in turn had erred in law in failing to recognise and correct the employment tribunal's errors. It had also confused the two errors. On the first aspect, the employment tribunal had relied upon Ministry of Defence v. Hunt. But that case was distinguishable since it was concerned solely with whether the persons discriminated against (female members of the armed services) would after childbirth, a future event, have chosen not to accept an offer to return to employment. Here the question was whether, had the respondents fulfilled their statutory duty, the appellant would have retained employment with them in some form. There was nothing in the evidence before the employment tribunal to suggest that, if the respondents had fulfilled their duty to make reasonable adjustments, the appellant would have declined to take up and retain such an adjusted post with them. In any event the employment tribunal had failed to give adequate reasons for its conclusion that the prospects of the appellant retaining his employment in some form were small - in particular as low as 10%, a percentage which was wholly at odds with the tribunal's other findings. The tribunal appeared to have been addressing the prospect of the appellant retaining his pre-existing job, not an adjusted job. In any event, in the circumstances of this case no question of the evaluation of a "chance" arose. The question was simply one of fact, namely, whether the appellant would have accepted the adjusted job which it was the respondents' duty to offer to him - to which, on the evidence, the answer was clearly in the affirmative; the respondents had led no evidence on this matter. The decision of the employment tribunal on this aspect was perverse.

[9] As regards the second aspect, the appellant had given evidence before the employment tribunal that, having been dismissed by the respondents, he had sought to obtain alternative work but had been unable to find it. He had in early 2000 set up a new welfare rights organisation for which he had obtained some public funding. At the time of the hearing before the employment tribunal that funding was sufficient only to meet outlays and expenses. He had accordingly required to work on a voluntary unpaid basis; that remained the position, though he retained hopes that funding in due course would be obtained to provide him with a salary for his work. Meantime he was reliant on incapacity benefit. It was for the respondents to prove that he had failed to mitigate his loss (Ministry of Defence v. Hunt). They had led no evidence nor made any submission on this aspect. The only material before the employment tribunal touching on the appellant's post-dismissal work situation had been provided by the appellant himself; that material (which was unchallenged) could not on any fair reading justify an inference of failure by him to mitigate his loss. Moreover, where the person discriminated against was a disabled person and an issue arose of possible failure to mitigate loss, the employment tribunal had a responsibility to investigate that matter in depth, the ability of persons with particular disabilities readily to find alternative work being limited. Reference was made to Buxton v. Equinox Design Ltd. [1999] IRLR 158. In the present proceedings there had been no separate remedies hearing before the employment tribunal, with the result that the issues of compensation and mitigation had not been fully explored. Up to and at the hearing itself the primary remedy sought by the appellant had been reinstatement rather than compensation. There was, in any event, at least serious doubt as to whether a duty to mitigate loss could arise in a case of this kind.

[10] In response to these submissions counsel for the respondents reminded the court of the criteria for granting leave to appeal from the Employment Appeal Tribunal. He referred to Campbell v. Dunoon & Cowal Housing Association [1992] IRLR 528, per Lord Murray at para. 3, where the court indicated that

"applicants for leave to appeal must generally show something of the nature of probabilis causa in relation to a genuine point of law which is of some practical consequence".

He also reminded the court that an appeal lay from an employment tribunal to the Employment Appeal Tribunal and from the Employment Appeal Tribunal to this court only on a question of law. Reference was made to Melon v. Hector Powe Limited 1980 S.C. 188, per Lord President Emslie at page 198. He submitted that none of the issues raised by the appellant in argument (not all of which were anticipated in his written application for leave to appeal) raised a genuine point of law of practical importance. He accepted, however, that if the employment tribunal had not given adequate reasons for its decision on the quantification of compensation for financial loss, he would be unable to resist the appeal. The appellant's challenge to the employment tribunal's decision on quantification was, he submitted, essentially an attempt to obtain a reversal of its decision on the evidence. It was accepted that the Employment Appeal Tribunal had confused the issues of mitigation and of chance but the important matter was whether the employment tribunal's decision was sound in law. The latter tribunal had, in assessing the appellant's prospects of continued employment with the respondents, rightly relied on Ministry of Defence v. Hunt, which was not significantly different from the present case. On a fair reading of its decision the tribunal had been addressing the question of a choice to be made by the appellant (rather than by the respondents) and had concluded on the evidence before it that, if the respondents had offered to the appellant an adjusted post which satisfied performance of their statutory duty, it was very unlikely that he would have accepted it. The tribunal's reasoning satisfied the criteria identified by Bingham L.J. in Meek v. City of Birmingham District Council [1987] IRLR 50 at paras. 8-11. There was no significant difference, as regards futurity, between the present case and Ministry of Defence v. Hunt. The assessment of loss by reference to a percentage chance was more favourable to the appellant than by asking whether it had been established, on a balance of probabilities, that he would have accepted and retained an adjusted post. On the issue of mitigation of loss, no proper question of law was raised. Again the appellant was attempting to reverse the employment tribunal's decision on the evidence. The Employment Appeal Tribunal was correct in observing that Buxton v. Equinox Design Limited was not concerned with any issue about mitigation. It was plain that in calculating compensation for disability discrimination the principles applicable to calculation of damages in claims in reparation for breach of statutory duty applied (Disability Discrimination Act 1995 section 8(3)); these principles included the obligation on a claimant to take reasonable steps to mitigate his loss. It was accepted that the onus of establishing a failure to mitigate loss rested on the respondents as the party in breach. It was not clear whether this issue had been specifically addressed at the oral hearing or in the written submissions lodged thereafter. The employment tribunal had, however, been entitled to draw the necessary inference from the appellant's own evidence.

[11] In Campbell v. Dunoon & Cowal Housing Association the sole issue before the court was whether it should grant or refuse leave to appeal. In more recent practice it has been customary, in most applications for leave to appeal, to consider the substantive merits of the challenge and, if these are shown to be well-founded, to grant both leave to appeal and the appeal itself but, if they are not shown to be well-founded, to refuse leave. That involves addressing the sole ground on which an appeal may be brought from the Employment Appeal Tribunal to this court, namely, on a question of law (now Employment Tribunals Act 1996 section 37). Where it is contended that the employment tribunal has erred in law (and that the Employment Appeal Tribunal has failed to correct that error), it is necessary to consider the decision of the employment tribunal. That body is, of course, final on questions of fact but failure to give adequate reasons for conclusions of fact may, as counsel accepted, constitute an error of law.

[12] The primary issue which now arises is concerned with an aspect of quantification of the compensation to which the appellant is entitled by reason of the (now undisputed) breach by the respondents of their statutory duty. Before the employment tribunal the parties were in dispute over the merits of a number of claims made by the appellant, upon only one of which (breach of section 4(2), as read with section 5(2), of the Disability Discrimination Act 1995) did he succeed. The hearing before the employment tribunal appears to have been elaborate and protracted. After five days the evidence had been completed but submissions on the evidence had not yet been made. These were subsequently presented by the parties in writing. In the circumstances it is perhaps unsurprising that the employment tribunal dealt with the issue of remedies in relatively short compass. It, however, is for us to consider whether its treatment of that issue discloses an error or errors of law.

[13] In addressing the calculation of the appellant's loss of earnings the employment tribunal relied on Ministry of Defence v. Hunt. The appellant presented to us (as, he said, he had presented to the Employment Appeal Tribunal) a contention that Hunt had no application to the circumstances of the present case. In so far as his argument challenged the use of percentage chance as the appropriate mode of assessing loss of earnings in discrimination cases, we do not find it necessary or appropriate in this case to express a view. Ministry of Defence v. Hunt followed on this aspect Ministry of Defence v. Cannock [1994] I.C.R. 918 (another sex discrimination case). The use of percentage chance for the purposes of assessing uncertain and hypothetical events, both past and future, has a certain currency, at least in some fields of law. However, on the assumption that it is, in principle, applicable in the field of disability discrimination, it is necessary to examine the decision of the employment tribunal to determine whether it is reasonably clear that, in applying that method, the relevant questions were asked and answered.

[14] In Meek v. City of Birmingham District Council Bingham L.J., while emphasising that "the decision of an [employment] tribunal is not required to be an elaborate formalistic product of refined legal draftsmanship", observed that "[t]here should be sufficient account of the facts and of the reasoning to enable the EAT or, on further appeal, this court to see whether any question of law arises ... ". These observations apply equally to a tribunal's treatment of its assessment of compensation as they do to its treatment of the merits.

[15] In the present case the employment tribunal assessed the chance "that the appellant would, but for the discrimination, have retained his employment in some form" at 10%. It expressed no factual or other basis for that assessment and, in particular, for so low a figure. The context in which the assessment required to be made involved the hypothesis that the respondents had fulfilled their statutory duty by making reasonable adjustments to the appellant's job such as would have afforded him an opportunity of retaining in some form his employment with them. It was to be assumed that the offer of such an adjusted job was genuine and that the respondents would not, in breach of their statutory duty, discriminate against him in that adjusted employment. In that context the tribunal required to ask itself, among other questions, the series of questions (appropriately adapted to the present situation) posed in Ministry of Defence v. Hunt at page 560A - concerned primarily with the response the appellant would have chosen and been able to make if such an adjusted job had been offered to him. It is not at all clear that the tribunal asked itself any such questions or, if it did, how, on the basis of the evidence which it had heard, it was able to conclude that the prospects of the appellant in such circumstances retaining his employment in some form with the respondents were as low as 10%. In the absence of any explanation this court is unable to see whether, on this aspect, the tribunal addressed itself to the correct questions and, if so, reached answers which were legally sound. In that respect the tribunal, in our view, erred in law.

[16] As regards mitigation of loss, there is no doubt that that principle is applicable to the assessment of compensation for disability discrimination. There is also no doubt that the burden of proving any failure by the appellant to mitigate his loss of earnings rested on the respondents (Ministry of Defence v. Hunt). It is far from clear that the respondents undertook such a burden either at the oral hearing or in their written submissions. The marginal extent to which this issue may have been entered into before the tribunal is perhaps indicated by the tentative observation by it that the reasons for the appellant not actively seeking other remunerative employment were "understood" to be connected with his receipt of a certain level of disability benefit. While mitigation is essentially a matter of fact, we are left with the distinct impression that the tribunal, in considering this issue, did not duly take into account the extent to which the appellant's opportunities for obtaining in the short term alternative remunerative employment may have been limited by the nature and extent of his disabilities. The tribunal does not adequately explain the factual or other basis upon which it found that a failure to mitigate loss had been made out. In our view, the tribunal in that respect also erred in law.

[17] So far as concerns the Employment Appeal Tribunal, all that it is necessary to say is that, apart from its confusion of the two aspects of the appeal on compensation (see in particular para 7, final sentence where it said " ... the appellant complained about the approach of the tribunal to remedy, not least in relation to the issue of mitigation which reduced a finding they might otherwise have made, by 90%"), it failed to notice and correct the two errors of law which we have identified. This, as indicated earlier, may at least in part have been due to presentational difficulties.

[18] We record for completeness that two other grounds of challenge were advanced by the appellant in his application to this court for leave to appeal. The first was a contention that the employment tribunal had failed to comply with the requirement of Regulation 12(3)(a) of The Employment Tribunals (Constitution and Rules of Procedure)(Scotland) Regulations 2001 that the document giving reasons for its decision contain a statement, in tabulated or descriptive form, of how the amount of compensation awarded had been calculated. There is, in our view, no substance in this contention and, in light of page 16 of the decision document, we find it unnecessary to expand on that view. The second challenge was that the employment tribunal, in summarising the matters which were outstanding at the time of the hearing before it, had omitted a claim which the appellant had made for wrongful dismissal by reason of breach of contract (involving a relatively small claim on the basis of failure to give contractual notice of dismissal) and had accordingly failed to deal with that claim. It is, however, unnecessary to discuss this challenge further since the appellant accepted before us that, if we were with him on his primary argument, he would not insist in this challenge.

[19] In all the circumstances we shall allow the application and grant leave to the applicant to appeal the decision of the Employment Appeal Tribunal dated 10 December 2002, hold the application as the appeal and allow the appeal on the ground that the employment tribunal failed adequately to explain its conclusions in respect of (i) the appellant's prospects of retaining his employment in some form and (ii) mitigation of loss. We shall recall the decision of the Employment Appeal Tribunal dated 10 December 2002 and the decision of the employment tribunal dated 10 April 2002 and remit to a differently constituted employment tribunal for a hearing on the grounds referred to in (i) and (ii) above. Otherwise we shall refuse the appeal.

[20] Any award made by the differently constituted employment tribunal in respect of loss of earnings will, of course, be additional to the award made by the original employment tribunal in respect of injury to feelings and in respect of interest on that award.