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FIRST DIVISION, INNER HOUSE, COURT OF SESSION
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Lord President
Lord Philip
Lord Kingarth
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[2007] CSIH 28
XA198/06
OPINION OF THE COURT
delivered by THE LORD PRESIDENT
in
APPEAL
by
ANTHONY JON TAYLOR
Appellant;
against
DUMFRIES & GALLOWAY
CITIZENS ADVICE SERVICES
Respondents (No. 2):
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Act: Party; (Appellant)
Alt: D. Ross; Russel & Aitken (Respondents)
18 April 2007
[1] This is a
further appeal to the Court of Session in protracted proceedings arising out of
the appellant's claim against the respondents for compensation following his
dismissal from their employment in 1999.
The earlier appeal to this court resulted in an opinion and interlocutor
dated 26 February 2004 (Taylor v Dumfries
& Galloway Citizens Advice Services 2004 SLT 883). By that interlocutor the court allowed, in
part, the appeal (which was concerned only with certain issues relative to the
quantification of compensation) and remitted to a differently constituted employment
tribunal ("the second tribunal") for a hearing on certain aspects of the
appellant's claim for loss of earnings.
[2] The second tribunal,
having heard further evidence, awarded to the appellant compensation for loss
of earnings in the total sum of £18,558.
Against that determination the appellant appealed on five grounds to the
Employment Appeal Tribunal; the
respondents cross-appealed on one ground.
The Employment Appeal Tribunal dismissed the appeal, sisted the
cross-appeal and referred certain issues back to the second tribunal. The appellant sought from the Employment
Appeal Tribunal, and was granted, leave to appeal to this court. Two grounds of appeal (again related to the
quantification of the appellant's loss of earnings) were presented to this
court. Before discussing these it is
appropriate that we rehearse the factual and procedural background.
[3] In 1997 the
appellant accepted part-time remunerated employment with the, then,
Wigtownshire Welfare Rights Office, which was subsequently absorbed into the
respondents' organisation. He was based
at Newton Stewart, where he also lived.
Towards the end of 1998 the respondents, a company limited by guarantee,
determined upon a restructuring. Its
General Manager, Mrs. Mungall, having met the appellant, wrote to him on 26
November 1998
in the following terms:
"Dear Tony,
Restructuring
Following our meeting together to
discuss your position within the restructuring of the Company I now wish to
confirm in writing what you are being offered with effect from 1
April 1999.
The post of Welfare Benefits Officer
presently based in the Newton Stewart Office is being moved to the Head Office
in Dumfries and will form part of the Central
Support Team. Your place of work
therefore will no longer be at the Newton Stewart Office and you will be
expected to work from the Dumfries Office.
The hours will remain the same, 24 hours per week, however the salary is
being increased from APII (£9,652) to APIV.1 (£11,500).
The post will report directly to the
General Manager.
You have already indicated that you
will not be prepared to move.
I wish to advise you that the
consultation period is being extended to 7 December and that there is also
an appeal process for any member of staff who feels they are being unfairly
treated.
Please let me have your confirmation
in writing that you accept/do not accept the proposal in relation to your own
individual circumstances.
Yours sincerely".
[4] The appellant
did not accept that proposal. He had
suffered for some years from severe arthritis and from intestinal and other
problems. He felt himself incapable of
undertaking, in the terms in which it was offered, the post based at Dumfries, some 50 miles from his home. He was then dismissed.
[5] He presented
various claims to an employment tribunal.
One of these was that the respondents had not fulfilled their duty under
section 6 (as originally enacted) of the Disability Discrimination Act 1995 to
make reasonable adjustments and had not, under section 5(2), shown that such
failure was justified. By its decision
dated 10 April 2002 the Tribunal upheld that claim. It found that the respondents had
discriminated against the appellant within the meaning of section 5(2) of the
Act in respect that they had failed to comply with the section 6 duty imposed
on them in relation to the appellant as a disabled person and could not show
that their failure to comply with that duty was justified. In discussing this aspect of the claim the tribunal
stated in its judgment:
"The Disability Discrimination Act
requires us to have regard to the Code of Guidance and practice issued by the
department. This code gives some
examples of what might be regarded as 'reasonable adjustments' (at para. 4.20):
(b) the
allocation of some of the disabled person's duties to another
individual
(d) alterations
to the disabled person's working hours
(e) assignation
of him to a different place of work.
We also had regard to the guidance
offered by Morse v Wiltshire C.C. 1998 IRLR 354.
It seems to us that some of these
options ought to have at least been considered.
For example, a reduction in working hours at Newton Stewart (with Mrs.
Mills in post there) and only one day per week at Dumfries for the purpose of attending
Tribunals, might have been an option.
The applicant accepted that he was already travelling to Dumfries on four or five occasions per month
and this situation was apparently acceptable to him, with difficulty. Allocation of duties to another individual
might for example have involved the applicant doing only Tribunal work, with others interviewing the clients or
customers at Dumfries, and passing the files to him at
Newton Stewart for study and preparation.
We are not convinced that an arrangement of this type could not have
been entered into, to reduce the travel time involved, and it is insufficient
for the respondents simply to state that such arrangements would have been
impractical when they did not even consider them at the time. A move to Dumfries was not the only option available, although
the respondents did their best to convince us that it was ... ".
[6] The tribunal
then proceeded to assess compensation.
It made an award for injury to feelings, which has at no stage been
challenged. It assessed compensation for
loss of earnings at £753. It arrived at
that figure by taking the appellant's annual net earnings while employed at
Newton Stewart (£7,536) and dividing that figure by ten. That calculation proceeded on the basis that
the appellant had failed to mitigate his loss (hence only one year's earnings
was appropriate as a starting figure) and that his chance of retaining his
employment in some form should be assessed at 10%.
[7] That approach
was unsuccessfully challenged by the appellant before the Employment Appeal
Tribunal but on further appeal to this court he was in part successful. This court remitted two issues bearing on the
quantification of compensation to the second tribunal, namely, (1) the
appellant's prospects of retaining his employment in some form and (2) mitigation
of loss. The second tribunal, having
interpreted that remit broadly, made its award of £18,558 for loss of earnings.
[8] Two grounds
of appeal were urged before us by the appellant. The first was that the second tribunal had
erroneously taken, as the basis for calculating the appellant's loss, the
salary (subject to annual increments) which he had been earning in the job at
Newton Stewart, rather than the salary for the job based at Dumfries with
respect to which the respondents had been found not to have made reasonable
adjustments. It was the loss of earnings
with respect to the latter job, subject to deduction of income tax and national
insurance contributions, which was the true measure, it was submitted, of his
loss. The second ground was that the
second tribunal had erred in restricting the appellant's annual loss to the
years 1999-2003 rather than making an award for the whole period from his
dismissal until his ordinary retiral age in 2005. The Employment Appeal Tribunal, it was
submitted, had erred in law in failing to recognise and correct the errors in
law made by the second tribunal in respect of each of these matters.
[9] It should be
noted that the Disability Discrimination Act 1995 has in the course of these
proceedings been amended and recast by the Disability Discrimination Act
(Amendment) Regulations 2003 (SI 2003/1673) and by the Disability
Discrimination Act 2005. At the hearing
we were referred to the provisions as originally enacted. So far as appears, however, no amendment affects
the issues arising. We shall refer only
to the original statutory provisions.
[10] With respect
to the first of the two grounds of appeal to this court the Employment Appeal
Tribunal said:
" ... we find the claimant's approach
to be misconceived. There was no
evidence before the tribunal that he would ever have earned £11,500 gross. That was the salary that would have been paid
for the job he was offered but he would not agree to taking that job. That was what, as we understand it,
precipitated the circumstances in which his claim arose. Whilst the tribunal found that he had been
discriminated against that was on account of the respondents' failure to make
one or more reasonable adjustments all of which, on the face of it, had the
potential to have an impact on the earnings that his job would command. There was, though, no evidence about
that. In those circumstances, the best
the tribunal could do, in our view, was to do as they did. That was to proceed on the basis of what they
knew the claimant had been earning prior to his departure, not to use as their
first building block in the calculation of compensation a salary that he had
never earned and in respect of which there was no evidence that he was ever
likely to have earned".
[11] We have come to
the view that this reasoning discloses an error of law. We have already narrated the basis upon which
the first employment tribunal reached the conclusion that the respondents had
failed in their duty under section 6(1) to make adjustments. The tribunal then went on to calculate loss
of earnings on the basis of the appellant's prospective earnings in the job
held by him prior to April 1999. The tribunal
did not explain why it used that basis, rather than take his prospective
earnings for the job in respect of which he had been discriminated
against. It may be that it did not do so
because no argument to that effect was presented to it (no argument that the
first tribunal had erred in this respect was presented in the course of the
first hearing before this court).
However that may be, such an argument was presented before the second tribunal
and thereafter on appeal.
[12] In our view
the proper measure of loss, in accordance with general principles of damages
(see section 8(3)), is with reference to prospective earnings in the job in the
respondent's employ which was available to be filled from April 1999. The obtaining of that job would have involved
for the appellant a transfer or promotion in that employ. It was unlawful for the respondents to discriminate
against the appellant in the opportunities which they afforded him for such
promotion or transfer (section 4(2)(b)) or by refusing to afford him or
deliberately not affording him any such opportunity (section 4(2)(c)). The travelling arrangements and the hours of
employment incidental to the job at Dumfries placed the appellant at substantial disadvantage in
comparison with persons who were not disabled.
It was accordingly the duty of the respondents to take such steps as were
reasonable, in all the circumstances of the case, for them to have to take to
prevent those arrangements having that effect (section 6(1)). The tribunal, having considered possible
adjustments to the job at Dumfries, concluded that the respondents had failed to make such adjustments
as were reasonable; indeed they had
failed to consider what adjustments to that job were reasonable. In determining whether it was reasonable for
the respondents to have taken any of the particular steps envisaged by it, the
tribunal must be taken to have had regard, among other things to the financial
and other costs (including the payment of a gross annual salary of £11,500 to a
person who by reason of his disablement was unable to fulfil the whole
requirements of the job) which would be incurred by the respondents in taking
such a step (section 6(4)). As regards
the options which the tribunal thought should at least have been considered,
there is nothing which expressly or by necessary implication indicates that any
accompanying reduction in salary would have been reasonable or capable of being
justified. By having failed in their
duty to make such adjustments and having been unable to show that their failure
to comply with that duty was justified, the respondents discriminated against
the appellant. The job in respect of
which they discriminated was that which carried that higher salary. No other job was in issue. The loss which the appellant sustained was
not only his previous remunerated employment but the opportunity to obtain a
job which commanded that higher salary.
The compensation to which he is entitled must be calculated accordingly.
[13] The second of
the grounds of appeal before us concerns the period of time over which the
appellant's loss of earnings should be calculated. The hearing before the second tribunal took
place in October 2005, its decision being issued in November of that year. The appellant had attained 65 years of age
(his ordinary retirement age) in March 2005.
The appellant submitted to us that in these circumstances the issue of
his capacity to fulfil the (adjusted) duties of his employment in the years
immediately preceding his 65th birthday was a matter of fact, not one of
conjecture. He had put before the tribunal
evidence that he would have been capable, at least until January 2005, of
fulfilling these duties. A statement by
him that, by reason of worsening of his illnesses in 2003, he would by that
time have been absent from work for approximately 50% of the time had been
taken out of context. The tribunal had
failed to address and to make findings on the question of what further
adjustments might reasonably have been required to allow him to continue in
post notwithstanding any deterioration in his health. Reference was made to the Code of Practice at
paragraphs 6.19 and 6.21 and to Callagan v
Glasgow City Council [2001] IRLR 724. In that case the facts had been
quite different from those in the present.
Even if, as at 2003, he would have been so ill as to be unable to fulfil
even any further adjusted duties of his employment, he would have been entitled
to full sickness pay for six months and to half pay for a further six
months. The benefits of the employment
to which he would, if not discriminated against in 1999, have been entitled
would in practice have amounted to full pay until aged 65. The Employment Appeal Tribunal had failed to
identify the errors of law of the employment tribunal, including its errors as
to where the onus of proof lay. It had
itself made a similar error.
[14] We are not persuaded
that the second tribunal or the Employment Appeal Tribunal erred in this
respect. As the appellant accepted, an
appeal lies to this court only on the basis of an error of law. Although by the time of the hearing before
the second tribunal the appellant had passed the age of 65 and there could
accordingly be taken into account his actual state of health up to that age,
the tribunal nonetheless had to make an assessment of how that state of health
would have impacted on his capacity to work in the Dumfries-based job which, in
the event, he had never had. That
assessment inevitably involved some imponderables. On the evidence before it the second tribunal
was entitled to conclude that by 2003 the appellant's health had deteriorated
to an extent that, had he been employed in the Dumfries-based job (as
originally adjusted to allow for his disabilities), he would have been off work
for about 50% of the time. It was also
entitled to accept that in such circumstances his employers would have
seriously considered terminating his employment. To do so lawfully, the respondents would have
had first to consider whether there were any further adjustments which they
could and ought to make to allow him to continue. But it is clear, from its reference (page 15 lines
26-28) to the appellant's mentioning in this context the Disability
Discrimination Act, that the tribunal recognised that the possibility of
further adjustment would require to have been considered. The tribunal concluded, however, that if
absences reached a level of 50%, the respondents had much less flexibility to
consider alternatives to dismissal. In
our view the tribunal was entitled, on the material before it, to conclude, as
it did, that there was, at the end of June 2003, a high probability that the
appellant's employment would have been (lawfully) terminated by that time. Their decision does not conflict with any
principle of law noted in Callagan v Glasgow City Council. In these circumstances the appellant's loss
of earnings from his employment is properly calculated up to and not beyond
June 2003.
[15] The appellant
placed before us certain calculations of his net loss of earnings based on a
gross salary of £11,500 per annum (with annual increments of 3% per annum
thereafter). Although it appears that
there was a minor error in the method of calculation, Mr. Ross for the
respondents stated that the end results of the calculation could be accepted
for present purposes. According to these
calculations the net figures for the (presumably fiscal) years 1999/2000,
2000/2001, 2001/2002, 2002/2003 and 2003/2004 were respectively £9,360, £9,498,
£9,586, £9,667 and £9,564. The second tribunal
calculated compensation by reference to calendar years, taking the figures
£7,536, £7,686, £7,838, £7,994 and £8,152 for the years 1999, 2000, 2001, 2002
and 2003 respectively. The years 1999
and 2003 were adjusted to respectively 5/7th and one half to reflect the
relative proportions of these years for which loss fell to be calculated. Each figure was then subject to deduction of
invalidity benefit received. If the
agreed figures (albeit apparently for fiscal rather than for calendar years)
are substituted for those adopted by the Tribunal, the resulting figures for the
years 1999-2003 appear to be as follows:
£6,686 (5/7ths of £9,360), £9,498, £9,586, £9,667 and £4,782 (half of
£9,564), giving a total of £40,219. From
that total falls to be deducted the total figure for invalidity benefit
received during the relevant period, namely, £14,421, giving an award by way of
compensation for loss of earnings of £25,798.
[16] For the
reasons given above we shall allow the appeal to the extent of substituting the
figure of £25,798 for that of £18,558 awarded by the second tribunal. Quoad
ultra we shall refuse the appeal.
Thereafter we shall remit to the second tribunal the issues in the
cross-appeal identified by the decision of the Employment Appeal Tribunal dated
15 August 2006.
