Appellant: I G Mitchell QC, D Campbell; Simpson & Marwick

Respondents: Cunningham; MacRoberts

8 December 2009

Introduction

[1] The appellant is a trained nurse and holds a diploma in social work. From 1977 he was employed by the respondents in their Social Work Department and held various posts concerned with the residential care of older people. From 1982 he held a senior management position. From about 1996 or 1997 he was Depute Unit Manager of a care home known as Balornock House. During 2000 he applied for the vacant post of Unit Manager of a care home known as Cheviot House. He was unsuccessful, another candidate being appointed.

[2] On 9 January 2001 the appellant submitted an application to the Employment Tribunal, claiming that he had been unlawfully discriminated against by the respondents in relation to his application for the post of Unit Manager, contrary to the Race Relations Act 1976. In a decision dated 14 November 2003, the Employment Tribunal sustained that claim and awarded the appellant compensation in the sum of £48,681. The respondents appealed to the Employment Appeal Tribunal, which in a decision dated 18 October 2004 reversed the Employment Tribunal's decision in respect of the finding of unlawful discrimination and quashed its decision. The Employment Appeal Tribunal stated that, if it had been with the then respondent on the matter of discrimination, it would in any event have remitted the case to the same tribunal to reassess compensation. In that regard, the Employment Appeal Tribunal stated:

"[8] Mr Miller [the solicitor representing the respondents] also attacked the findings of damages, not least in questions of multiplier, level of salary, point of impact and promotional assessment. He also pointed out that the Tribunal had proceeded on gross earnings.

[9] If this matter had been live before us we would have remitted it back to the same Tribunal for a complete reassessment of damages because we consider that Mr Miller is right in each one of these points."

[3] The appellant appealed to this court against the decision of the Employment Appeal Tribunal. At the hearing of that appeal, it was accepted that if the appellant were successful in having the decision of the Employment Tribunal on discrimination restored, the case should be remitted to the same tribunal, as envisaged by the Employment Appeal Tribunal, for compensation to be reassessed. On 1 December 2005 this court allowed the appeal. The court stated, at paragraph 13 of its opinion (reported at 2006 SC 293):

"In these circumstances we shall allow the appeal and remit the case to the employment tribunal (as originally constituted) to reassess the computation of compensation in light of the observations made by the Employment Appeal Tribunal in paras 8 and 9 of its decision."

The court did not specify in greater detail the respects in which the computation required to be reassessed, as to which there appeared to be no dispute between the counsel then appearing.

[4] When the case returned to the Employment Tribunal, the respondents sought to raise not only what might ordinarily be thought of as matters of computation, but also two matters of a more substantive character. One concerned the appellant's prospects of being appointed to the post of Unit Manager in the event that his application had been considered without any racial discrimination. The Employment Tribunal had originally assessed compensation on the basis that there was a 75 per cent probability that he would have been appointed, taking a broad view of the matter on the basis of the evidence before them. The respondents contended that that issue fell within the scope of the reassessment, and proposed to introduce additional evidence, including in particular the internal assessments which the respondents had made of the other candidates for the post of Unit Manager.

[5] The second matter concerned the appellant's transfer on 3 January 2002 from the post of Depute Unit Manager to a less well paid position as a social worker, following periods of absence on sick leave. The tribunal had found that the appellant's ill-health, and consequent transfer to a less well-paid post, had been caused by his discovery that he had been the victim of the racially discriminatory conduct complained of. The appellant had however submitted a separate application to the Employment Tribunal claiming that he had again been the victim of discrimination in relation to that transfer, in respect that he had not been transferred on the same salary as he had received as Unit Manager. That application, which was determined by a differently constituted tribunal prior to the determination of the application with which these proceedings are concerned, was unsuccessful: the tribunal found that the applicant had been treated in the same way as any other Unit Manager who applied for a post as a social worker. In the present proceedings, when the case was remitted by this court to the Employment Tribunal, the respondents sought to argue that compensation could not be awarded to the appellant in respect of the difference between his earnings as a social worker from 3 January 2002 onwards and the earnings which he would have received as Unit Manager, since it had been decided by the other tribunal that that difference was not attributable to racial discrimination: the matter was therefore res judicata. The Employment Tribunal decided to deal with these two issues before considering any others. In its decision, dated 27 September 2006, the tribunal rejected the respondents' contentions in respect of both matters.

[6] The respondents appealed to the Employment Appeal Tribunal, which in a decision issued on 28 November 2007 accepted their contentions in relation to both matters and remitted the case to a differently constituted tribunal to assess compensation, under direction that in the event that they were to make an award and it included an amount for loss of earnings after 3 January 2002, there should not be included in the calculation of that sum any shortfall between what the appellant would have earned as a Depute Unit Manager and what he had in fact earned since then. The Employment Appeal Tribunal subsequently refused an application for review of that decision, and also refused leave to appeal to this court. This court however granted the appellant leave to appeal.

[7] Before considering the merits of the appeal, we feel constrained to remark on the grotesque length and complexity of these proceedings. Almost nine years have passed since the appellant submitted his application to the Employment Tribunal. Four years have passed since this court remitted what appeared to be a relatively straightforward question of computation of the appropriate compensation. The number of hearings which have taken place during the intervening period, and the quantity of documentation which they have generated, are reflected in the number and size of the bundles lodged by the respondents for the purposes of the present hearing. The time and resources expended by the tribunal system and by the court, principally as a consequence of the position adopted by the respondents, are disproportionate to the amount which has in reality been at stake between the parties since the issue of discrimination was finally resolved in the appellant's favour. The respondents' undiminished appetite for further litigation was however apparent at the hearing of the present appeal. We have borne this in mind in our approach to the disposal of the appeal.

[8] It is also relevant to note that the appellant conducted this appeal without legal assistance until the hearing itself, when representation was arranged by the Free Representation Unit of the Faculty of Advocates. The willingness of counsel and solicitors to provide their services reflects the best traditions of the legal profession, and was of great assistance to the court. The difficulty which the appellant had earlier experienced in focusing the basis of his appeal, without legal assistance, was however reflected in a number of amendments and in consequent procedure before the court. The respondents successfully applied for awards of expenses against the appellant in respect of some of that procedure, and at the hearing of the appeal it was made clear that the respondents intend to make a further application for expenses. The practical effect of such awards is, of course, to whittle away the amount which the appellant will eventually receive as compensation for having been the victim of racial discrimination at the hands of the respondents. This consideration further demonstrates the importance of ensuring that further procedure in this case should, so far as possible, be expeditious and straightforward.

The present appeal

[9] As we have explained, following the remit by this court the Employment Tribunal decided to consider first the respondents' arguments in relation to res judicata and the introduction of additional evidence bearing on the probability that the appellant would have been appointed as Unit Manager in the absence of discrimination. Having done so, the tribunal rejected the respondents' contentions. On the respondents' appeal to the Employment Appeal Tribunal, however, that decision was reversed. In the present appeal, the appellant challenged primarily the decision of the Employment Appeal Tribunal in relation to res judicata, although the reasoning in relation to the admission of additional evidence was also criticised.

[10] In our opinion, the reasoning of the Employment Appeal Tribunal in relation to the question of res judicata is unsatisfactory. The Employment Appeal Tribunal concludes that it follows, from the decision that the appellant's drop in salary upon his transfer was not due to racial discrimination by the respondents in dealing with his request for a transfer, that his claim that the drop in salary resulted from ill-health brought on by his being the victim of earlier racial discrimination cannot be maintained. This is in our view a non sequitur. A finding that that the appellant had been treated in the same way as any other Unit Manager who applied for a post as a social worker did not address, let alone determine, the question whether the illness which led him to make the application was one of the consequences of earlier discriminatory conduct. The appeal must therefore be allowed.

A further remit

[11] It is necessary in the circumstances for the case to be remitted again to the Employment Tribunal for compensation to be reassessed. It is important that the effect of the remit should be as clear as possible, so that the risk of further protracted proceedings is minimised.

[12] We were requested on behalf of the respondents to allow a complete re-hearing before a differently constituted tribunal. It was pointed out that the evidence before the original tribunal had not included the respondents' assessments of the other candidates, which were relevant to the probability that the appellant would have obtained the post of Unit Manager in the absence of discrimination. There had also been some changes in circumstances since the date of the tribunal's original decision in 2003. Rates of pay had changed, and the appellant had taken early retirement during 2008, at the age of 60. One of the members of the original tribunal had in any event retired. If the remaining members of the tribunal were to be included in any freshly constituted tribunal, that (it was said) could in itself provide the basis for a further appeal by the respondents. On behalf of the appellant, on the other hand, it was pointed out that a complete re-hearing would further delay the conclusion of these proceedings, which had already been greatly delayed as a result of the unmeritorious points taken by the respondents. If it were necessary to investigate de novo the likely outcome of the process of appointing a Unit Manager, in the absence of discrimination, that would entail a rehearing of virtually the entirety of the evidence. The original hearing before the tribunal had occupied four days, and the respondents were proposing now to introduce additional evidence. If the respondents were permitted to found on the fact that the appellant had taken early retirement, the appellant must be permitted to seek to prove that his decision to take early retirement was a consequence of the racial discrimination to which the respondents had subjected him.

[13] There are a number of factors which may be relevant to the court's decision as to the scope and nature of a remit to the tribunal. In the present case, in particular, great weight must be attached to the need to minimise further delay and to secure, as far as possible, that future procedure in the case is proportionate to the nature of the dispute and the interests at stake. It is also, of course, necessary to secure a just result, but justice in the present case can best be achieved by ensuring that the compensation due to the appellant is speedily assessed, even if the assessment is in some respects imperfect. Rough justice can, in some circumstances, be the best justice available.

[14] It appears to us that the language used by this court in its earlier decision, and by the Employment Appeal Tribunal in the observations which this court adopted at that time, suggests that what was envisaged was a reassessment of compensation on the basis of the evidence already led. In particular, the remit cannot have been made on the basis that the Employment Tribunal had erred by failing to consider the probability of the appellant's appointment to the post of Unit Manager on the basis of the records held by the respondents relating to the applications made by the other candidates, since that exercise was not possible on the material before the tribunal. This court cannot therefore have intended that the remit was to include such an exercise. The respondents' subsequent decision to make the records available could not expand the scope of a remit which had already been made.

[15] For the avoidance of doubt, what is therefore required is for the tribunal to re-calculate the compensation due. The amount which should be awarded in respect of injury to feelings was agreed by the parties at the hearing of the appeal at £10,000, increased in line with the Retail Prices Index from 11 October 2000, that being the date when the appellant was discriminated against. It is also a matter of agreement between the parties that the appellant's pecuniary loss runs from that date. The pecuniary loss should be assessed on the basis that there is a 75 per cent probability that the appellant would have been appointed to the post of Unit Manager in the absence of discrimination. It is agreed that in calculating loss of earnings to date and future loss of earnings, the tribunal should use net rather than gross earnings. In the absence of agreement as to the relevant calculations, the tribunal will require to receive submissions from the parties in respect of such matters as net rates of pay and the appropriate multiplier. It should not however be necessary for the tribunal to admit additional evidence. The computation should be based on the material which is already before the tribunal (including material relating to rates of pay, even if those rates of pay are no longer up to date). The fact that the appellant has recently taken early retirement should be disregarded. Given the nature of the remit, it is desirable that the tribunal should include the two members of the original tribunal who remain available.

Conclusion

[16] In the circumstances, we conclude that the Employment Appeal Tribunal erred in law and that this appeal must be allowed. We shall remit the case to the Employment Tribunal, constituted so as to include two of the members of the original tribunal, to reassess the computation of compensation in accordance with the guidance given in the present opinion.