United Kingdom Employment Appeal Tribunal

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Cite as: [1992] UKEAT 444_91_2107

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BAILII case number: [1992] UKEAT 444_91_2107

Appeal No. EAT/444/91

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 21 July 1992

Before

THE HONOURABLE MR JUSTICE HUTCHISON

MR T S BATHO

MR D A C LAMBERT

MR C WILSON APPELLANT

(1) GLENROSE (FISHMERCHANTS) LTD

(2) C CHAPMAN & OTHERS RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

APPEARANCES

For the Appellant MR B LANGSTAFF

(OF COUNSEL)

Legal Department

GMB

22-24 Worple Road

London SW19 4DD

For the Respondents MR A SUTCLIFFE

(ADVOCACY MANAGER)

Peninsular Business Services

Stamford House

361/365 Chapel Street

Manchester

M3 5JY

MR JUSTICE HUTCHISON: At hearings in March and April 1991, an Industrial Tribunal at Hull considered claims by, inter alia, the present respondent, arising out of the dismissal by the respondents on 23 September 1988, of a number of men employed by them as fish filleters. The April hearings were concerned with the assessment of compensation and the decision in that regard was sent to the parties on 4 June 1991. Mr Wilson whose claim of unfair dismissal had, like those of the other men, succeeded, appeals against the assessment alleging errors of law and misdirection on the part of the tribunal.

The material facts can be simply recited. Mr Wilson, aged 55 at the date of his dismissal, had been employed by the respondents for 6 years. He had for some time been suffering from spondylitis of the lower back and needed help when lifting kits of fish. His condition was known to the management and to his workmates and they helped him out when the need arose. It was, thus, a not uncommon situation where an unfit man was being "carried" by his workmates. He expected - and inferentially the tribunal accepted that his expectation was justified - that he would have continued in employment in this way until retiring age. He had been in the fish trade virtually all his life.

When he was dismissed Mr Wilson went looking for a job after the failure of his appeal against his dismissal. As the Tribunal found:

"....... he intensified his efforts but he realised that others knew that he had a spinal problem and he was simply rejected on health grounds. This limit of lifting meant that he was limited in any other jobs he might have contemplated through the services of the jobcentre or the local advertising in the press. He makes no bones about the fact that as he had no money coming in he went "on the sick" and the advice from the doctor had been, what it was before, to avoid lifting. He wrote for jobs with Yorkshire Electricity but nothing happened. Eventually his sickness benefit was transferred to invalidity benefit from May 1989 and it remained so until he was seen in this very building by the Department of Social Security doctors when he was taken off invalidity benefit and he is now back on unemployment pay, but, of course, he is permanently limited in his physical abilities and at this age, 58, with that persisting problem he is in very difficult straits as to getting employment."

It will be seen, therefore, that about 4 weeks after dismissal, and in the light of his failure to obtain a job, Mr Wilson obtained a medical certificate and signed on as sick in order to take advantage of the benefits he would thus receive. He is recorded as making some efforts thereafter to obtain a job but they appear not to have been particularly sustained efforts. After a hundred weeks he was taken off invalidity benefit and was once more in a position to sign on as unemployed and did so. The problems to which this case gives rise all revolve around his decision to go sick.

The Tribunal, having recited the arguments that were addressed to them on each side, said this:

"It seems to us that the reason he went on to the sick register, and therefore not available for work, was a reason which related to his health and was no doubt approved an authorised by his medical practitioners. Mr Wilson was out of the employment market for 100 weeks and, in our judgement we are not bound by any legal principle extracted or enshrined in Fougere's case. It would not be just and equitable to award Mr Wilson compensation, and it follows that coming back into the employment market now, so long away from the events of September 1988 that we think the chain of causation has been broken, and we make no order for future loss. We have to apply the law as we understand it to be, and we must do our duty by the law as we understand it to be, and do doubt if we are wrong, we will be put right by higher authority."

The tribunal went on to make a basic award of £1,287 and a compensatory award of £829.50 reflecting 6 weeks of unemployment rather than 4 weeks because, had he not signed on sick, "he would still have been enjoying his notice pay".

It was incumbent upon the tribunal to calculate the compensatory award in accordance with the provisions of section 74 of the Employment Protection (Consolidation) Act 1978. The material provisions of this section are as follows:

"74. Calculation of compensatory award

(1) Subject to sections 75 and 76, 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 in so far as that loss is attributable to action taken by the employer.

(2) ......

(3) ......

(4) In ascertaining the said loss the tribunal shall apply the same rule concerning the duty of a person to mitigate his loss as applies to damages recoverable under the common law of England and Wales or of Scotland, as the case may be."

By the amended grounds of appeal it is contended that the tribunal erred in law in failing to consider whether in "going on the sick" Mr Wilson acted reasonably or unreasonably in seeking to mitigate his loss; failed to ask themselves what he had lost be reason of his dismissal but instead directed themselves in relation to loss by imposing an arbitrary cut off date by reference to an event which would not have occurred had the appellant remained in employment; and failed to imply the inevitable consequence of their view that he would, notwithstanding his health problems, have remained in employment with the respondents until retirement had he not been dismissed.

The case of Fougere v Phoenix Motor Company Ltd [1976] ICR 495, was cited to us as it was to the Industrial Tribunal but, like the tribunal, we have concluded that it does not really bear on the present case. That was a case in which a man in poor health was unfairly dismissed and the tribunal in determining when it was likely that he would obtain alternative employment assessed the probabilities as though he were fully fit. That was held to be wrong. One can, of course, extract from the case the proposition that the employers must take their employee as they find him; but that is not really the issue in this case.

As his argument was eventually refined, what Mr Langstaff, on behalf of the appellant submitted was this:

(1) The tribunal accepted that Mr Wilson would, the dismissal apart, have been likely to continue in employment with the respondents until retirement. Accordingly, the prima facie measure of his loss occasioned by their action in dismissing him was the wages that he would have earned in that employment.

(2) However, (and quite apart from the statutory limit imposed by section 75) that prima facie loss fell to be reduced by such sums as the appellant earned, or was likely to earn, or could, by acting reasonably, have earned - the last of those being the reference to his duty to mitigate. Though commonly so expressed it is, of course, not a duty at all but the expression is conventionally used to embody the concept that a plaintiff is not entitled to charge a defendant by way of damages with losses which, by acting reasonably, he could avoid incurring.

(3) The appellant, in going sick, admittedly took himself out of the job market in the sense that he could no longer be on the employment register. From one point of view, therefore, he diminished his chances of making good the loss he was suffering by reason of the dismissal. On the other hand, the gain was the sums he received by way of sickness and invalidity benefit which go to diminish his loss and his claim.

(4) The crucial issue, in relation to mitigation, is whether the appellant can be said to have acted unreasonably in signing on sick. The resolution of that question involves balancing, on the one hand, the gains which he obtained by taking that step, and on the other hand the disadvantages which he suffered, in terms of reduction of job opportunities, by doing so.

(5) Accordingly, the approach of the tribunal was wrong because they never addressed the question of the applicant's reasonableness (though as we shall show Mr Langstaff submits that they found in his favour on this issue) and approached the question simply as one of causation.

Mr Langstaff supports this argument by taking an analogy. Supposing, he contends, one has a man of ordinary fitness who is in a similar position and who is offered a part-time job at a relatively modest wage. He has in the pipeline a job application for a full time job at a greater wage. He has to take a decision, either to take a bird in the hand, or to reject it on the chance that he will obtain the more advantageous employment. Whatever he does he is potentially open to criticism and events may demonstrate that he made the less advantageous decision. However, in such a situation it is plain that it is only if the decision which he takes is one which is shown to be unreasonable that he can be held to have failed to mitigate his loss. It will be plain, from this analogy, that Mr Langstaff seeks to equate the poorly paid part-time job with the sickness/invalidity benefit and the chance of the better paid job with the position that would have obtained had Mr Wilson remained on the job register.

Thus, Mr Langstaff's submission can, in the end, be compressed thus: that the Industrial Tribunal took a far too restrictive view as to what was the mitigation of loss available to an employee, approaching that question on the basis that the only way to mitigate one loss of employment was to apply for another. He submits that in the first of the passages we cited, indeed, the Industrial Tribunal betray a failure to appreciate that it is a question of mitigation at all; a question involving an enquiry as to the reasonableness of the appellant's conduct.

Mr Langstaff goes on to argue that it is implicit in what they do say that the Industrial Tribunal have found that the appellant's conduct in signing on sick was not unreasonable. For this he relies on the following passages in their decision:

"... he is now back on unemployment pay, but, of course, he is permanently limited in his physical abilities and at his age, 58, with that persisting problem he is in very difficult straits as to getting employment.

There is no doubt that somebody, somewhere, suggested to Mr Wilson that he go to his doctor to be put "on the sick" and that request was accommodated and genuinely so at that....

..... the reason he went on to the sick register, and therefore [was] not available for work, was a reason which related to his health and was no doubt approved and authorised by his medical practitioners ...."

This assessment of the extent of his disability and his poor prospect of obtaining work at the time of the tribunal hearing indicates, submits Mr Langstaff, that the tribunal was accepting that at the time that he signed on "sick" also Mr Wilson had scant chances of obtaining another job: and were, therefore, inferentially accepting that it was reasonable for him to follow the course that he did.

Mr Sutcliffe, in response to the appellant's submissions, argues that the Industrial Tribunal made no error of law and that their decision, as to what was just and equitable in all the circumstances, is in effect a jury decision with which we cannot interfere. He accepts that Mr Wilson had and was found to have a genuine back problem and that the medical certificate cannot be impugned: but it must be looked at closely, he argues, and its purpose was to exclude the necessity to attend work. Therefore, he submits, the appellant is trying to have his cake and eat it. He must either be fit or unfit and he cannot, while claiming to be unfit for work and obtaining a medical certificate to support that contention, assert that he is entitled to be compensated for what he would have been earning with the respondents.

Mr Sutcliffe accepts that the appellant is not someone who is totally unfit for work: he is only unfit for certain kinds of heavy work. However, he contends, by signing on sick he disabled himself from being on the job register and being considered for employment opportunities that would otherwise have been put in his way. Thus, he did not mitigate his loss - he did the reverse. Added to that is the fact that, a desultory attempt or two with Yorkshire Electricity apart, he failed, after signing on, to make any attempts to obtain employment on his own initiative. Thus, he disabled himself from pursuing either of the ways available to him of trying to get work.

Then, Mr Sutcliffe submits, when we reach the stage of his being signed off and again registered as unemployed and available for the job register, the tribunal were entitled to conclude that any loss thereafter was too remote.

In support of these contentions, Mr Sutcliffe referred us to Holroyd v Graveur Cylinders Ltd [1984] IRLR 259, and to paragraph 5 on which he particularly relied:

"Following his dismissal the appellant decided to undergo a 12 month post graduate course of study at Bath University. This began on 10.10.83. The Tribunal allowed for loss of earnings from the termination of his employment until that date. It was suggested on behalf of the appellant that the Tribunal ought to have allowed for loss of earnings beyond that date covering the period of his university course and perhaps even some unspecified time thereafter. We do not consider that the Tribunal fell into error in this respect. By deciding to embark upon this course the appellant effectively took himself out of the labour market and we do not consider that the Tribunal erred in deciding to terminate his loss of future earnings at the date when he undertook the course. Any suggestion of future loss at the termination of his university course is so remote as to be incapable in our view of calculation."

Mr Sutcliffe submits that the situation in the present case is precisely analogous to that described in that paragraph.

It seems to us that Mr Sutcliffe's arguments do no really address Mr Langstaff's point on mitigation. They are a justification for the decision as it stands, a decision which in our view contains a fundamental error. That error resides in the failure of the Industrial Tribunal to appreciate that the crucial question for them was whether, in the circumstances in which Mr Wilson found himself, he was acting reasonably or unreasonably in opting for signing on sick rather than waiting in the hope that a job would turn up. If the correct conclusion be that Mr Wilson was not acting unreasonably in doing what he was doing, then he was legitimately seeking to mitigate his loss and the fact that he did so at the price of diminishing his chances of obtaining employment is neither here nor there. It may be, though this is a matter for the tribunal, that they will take the view that he did, in fact, choose the more promising option: but that is not necessary for the argument to succeed. All that is necessary is that his actions in signing on sick were not unreasonable.

As will be apparent from what we have just said, we are not persuaded that there is sufficient material before us to enable us to say that the tribunal implicitly found that Mr Wilson was not acting unreasonably in signing on sick. Apart from anything else, it would be surprising to find that one could extract from a decision that he was not entitled to compensation after he signed on sick, a finding that in doing so he was acting reasonably. The truth is that the tribunal did not address the question of mitigation or reasonableness at all and, plainly, they should have an opportunity to do so.

They will, of course, want to consider not only the issue of whether in signing on in the first place he was acting unreasonably or not, but also the issue of his conduct thereafter - the reasonableness, or otherwise, of his making only such attempts as they find he made to obtain employment on his own initiative. In this connection, the tribunal will be informed by the view they have as to whether Mr Wilson had, in truth, any real chance - at his age and with his disability - of obtaining alternative employment given the then current employment situation. All these matters are for them to consider.

For these reasons we conclude that this appeal must succeed and the case must be remitted to an Industrial Tribunal (the same Tribunal if practicable), for them to reconsider the issue of compensation in the light of such assistance as they can derive from what we have said.