United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 195_94_0407

Appeal No. EAT/195/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 4th July 1994

Before

THE HONOURABLE MR JUSTICE MORISON

MR T S BATHO

MR A C BLYGHTON

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SYSMATIC LIMITED          APPELLANTS

MR J GAWLEY          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MR J EVANS JONES

(Of Counsel)

Messrs Ensor Byfield

73-75 Equity Court

New Brook Road

Southampton

SO1 OXP

For the Respondent MR S GAWLEY

(Representative)


 


MR JUSTICE MORISON: On the 13th December 1993 Mr Gawley's complaints that he had been unfairly dismissed and that his employers had made unlawful deductions from his wages, contrary to the Wages Act 1986, were heard by an Industrial Tribunal at Reading. The unanimous decision of the Industrial Tribunal, which was sent to the parties and entered in the Register on the 17th January 1994, was that the Applicant had been unfairly dismissed and that there had been unlawful deductions from his wages. In relation to his claim for unfair dismissal he was awarded a basic award of £1,230 and what the Industrial Tribunal believed to be the maximum applicable compensatory award of £10,000. The amount of the unlawful deductions were found to be £2,330.18 and he was awarded that sum under the 1986 Act.

The circumstances relating to the case which are relevant to this appeal may be shortly stated. Mr Gawley, whom we shall call, if we may, "the employee" was born on the 8th July 1933, thus he reached the age of 60 in July 1993. He started with Sysmatic Limited, "the employers" on the 1st June 1989 as a workshop engineer. Much of his work was done from his home using his own tools. He is an experienced and accomplished engineer and his services were, apparently, well regarded by his employers. Around the beginning of 1993 the employers appeared to be getting into financial difficulties and there also appeared to be a shortage of work. There was a problem and delay over the payment of his wages in February and succeeding months, with shortfalls on the payments for the months of March, April and May of 1993. Apparently the employers had been making deductions from wages for his pension contributions but may not then have been making payment of those deductions into the Pensions Fund.

On the 14th May the employee received a letter from his employers alleging that he had refused to work since March and they regarded him as having left their employment. They asserted that his employment had ended at the end of March 1993. On receipt of that letter the employee regarded his employment as having been terminated and accordingly he presented to the Industrial Tribunal his application, IT1, on 28th May 1993 making the complaints to which we have referred, and asking for reinstatement.

Having applied for and been granted an extension of time of 21 days for filing their Notice of Appearance, the employers filed such a document on 22nd July 1993. In it they denied that they had unfairly dismissed the employee and said that he had been dismissed because he had been taking strike action against them.

The case was listed for hearing on 27th August 1993. The employers did not appear and a new date had to be rearranged for the 13th December 1993. On the 10th December 1993 the employer's solicitors wrote to the Industrial Tribunal saying that they did not dispute either of the two claims but they made representations about the amount of any compensatory award that the Tribunal should award.

On the 12th December, the employee wrote to the Industrial Tribunal a three page letter making representations to, as it was described, `redress the balance'. The employee made it clear that he regarded as hurtful a suggestion that he had not tried to mitigate his loss and he said this:

"I have tried long and hard to get a job since May. It is not easy these days but it is extra difficult when you are 60. It is also not helpful when you tell prospective employers that you are taking your last employer to the Industrial Tribunal. Where would I get a reference from?"

He also pointed out that he had not exercised the right which he had because of his age not to sign on but had elected to remain on the job market at a cost to himself of a weekly sum of £23 or thereabouts.

When the matter came before an Industrial Tribunal the Industrial Tribunal had before it documents submitted by the employee, who together with a former work colleague also gave oral evidence. Having found unfair dismissal the Industrial Tribunal then turned to the question of compensation. They considered first whether the Appellant would have retired in any event when he reached 60 and concluded, having heard the evidence, that he would have retired at the age of 65. Secondly, they rightly address their mind to the possibility that due to its financial circumstances the employment might have come to an end, shortly, in any event and they considered this to be, as they use the expression, "a distinct possibility". They then considered the question of mitigation. They recorded the fact that whilst the employee had given evidence that he had not actively sought further employment, for the reasons they gave, they found as a fact, the employee had not failed to "take all reasonable steps to mitigate his loss". Taking all the matters into account they said that they would assess the loss on the basis of one year's loss of employment from 14th May 1993 which presumably was what they regarded as the effective date of termination.

Shortly before time for appealing expired the employer served a Notice of Appeal contending that the Industrial Tribunal had erred in law in their conclusion as to the mitigation of damage and the fact that the employee had not unreasonably behaved in that respect.

Before turning to the appeal it would be as well if we were to dispose of one point which arises from a consideration of the employee's submissions which have been recorded in writing. He says, in effect, that if you take a period of one month being the notice to which he was entitled and add it to the effective date of termination, that would take the effective date of termination to beyond the 1st June 1993. On the 1st June and as from the 1st June 1993, the provisions of the Unfair Dismissal Increase of Compensation Limit Order 1993 came into effect, increasing the limit on unfair dismissal compensation from £10,000 to £11,000. Thus it was suggested by the employee in this case that his compensation should not have been limited as it was to the £10,000 figure but should have been up to the full amount of the compensation which was some £500 odd more than that figure.

Having had the benefit of an opportunity to consider the point it seems to us that, in fact, there is no merit in it. So far as the effective date of termination is concerned, that is, as we say, the 14th or 15th May, depending on whether one takes the date of the letter or the date when it would have been presumed to have been received in the normal course of post. For certain purposes the effective date of termination is extended, so that an employer can not seek to take advantage of his failure to give proper notice and thus limiting in some way the employees rights. However, those circumstances are specified, and it seems to us, that they do not operate in this case. It is not open to an employee to say that the effective date of termination has been extended so as to accommodate an increase in compensation which takes effect from a particular date. That is not one of the grounds on which the effective termination date can be extended. Accordingly, we are satisfied that the Tribunal were correct in the way that they approached the limitation of the award.

We turn, therefore, to the grounds of appeal which have been succinctly and properly argued before us by Counsel, to whom we are grateful for the clarity of his submissions and for what I think is the fair way in which he has responded to a whole series of questions which have been put to him by us during the course of this hearing. What he says, in effect, is this. Having regard to the finding by the Tribunal in paragraph 10 of their decision that:

"The applicant gave evidence that he had not actively sought further employment."

it was perverse of them to have gone on to conclude that the Applicant had not failed to take all reasonable steps to mitigate his loss. Secondly, reliance is placed in particular on a letter which was sent to this Tribunal on the 23rd May 1994 in which he refers for the first time to certain matters relating to his attempts to mitigate his loss and he indicates that he and his brother had invested some money and time into trying to put together a business which involved operating a vehicle recovery trailer. It is said by Counsel on behalf of the employers that this gives some grounds for unease, misgivings or a sense of justice not being done if the matter is allowed to rest here, because it is said that the reason why the employee had not mentioned this endeavour previously, was because he was frightened that the Department of Employment might find out and therefore deduct his benefit and that that was not a proper reason for non-disclosure.

It seems to us that there is nothing in either of the two points which have been presented to us, even though they have been presented to us attractively. The question of mitigation is a matter that the Tribunal had to deal with. It was raised in the written representations of the employers. However, it is for the employer to discharge the burden of showing that an employee has not mitigated his loss, or not taken reasonable steps to mitigate his loss, it is a matter for them to prove and not for the employee to disprove. It seems to us, having regard to the totality of the evidence which was given and having regard to the letter of the 12th December 1993, which the Tribunal must have had before them, that it would have been a perverse decision on their part to have reached any other conclusion than that the employee had taken reasonable steps to mitigate. The Notes of Evidence show that he had not been working since the 14th May 1993. He went to the Job Centre about another job. He had been told by the Company's former solicitors that he was a striker. The Notes read:

"Didn't think I would be able to get another job. Have been looking for jobs but haven't applied for any. Have been studying electronics. Haven't done any paid work."

In the light of the material which the Industrial Tribunal therefore would have had, it seems to us quite clear, as we have said, that any other conclusion than that which they have arrived at would, itself, have been perverse.

As to the second ground, it seems to us that it is really not open to the employers now to seek to have those matters explored. They had the opportunity to appear before the Industrial Tribunal and to cross-examine the Applicant at a time when he was giving evidence about the steps that he had, or had not taken to mitigate his loss. It was at that moment that they would have had the opportunity to question him and to discover, if such be the case, that he had indeed been obtaining other employment during this time albeit through a partnership with his brother. On the facts as stated in the letter of the 23rd May 1994 we have no reason to believe that in fact there has been any deception of the Department of Employment or that any monies have been received by the employee which go to mitigate the loss which he otherwise sustained.

Accordingly, in terms of the Notice of Appeal and the grounds therein set out on the limited basis on which it has properly been put, it seems to us that this is an appeal which is no more than an appeal on a finding of fact.

Before leaving this case and having indicated, therefore, that we will dismiss this appeal we should say this: when we read the papers in this case we were concerned about the fact that it might appear that the employee's pension contributions were being deducted but not then put in to the pension fund. However, we have been assisted by Counsel who has suggested to us that whilst there may have been irregularities, nothing improper as such has occurred. Putting it at its best from the employer's point of view it seems that the employer's conduct could be characterised as incompetent and extremely bad practice. Employees when they are paid are entitled to know how their pay has been calculated on an "actual" basis and not merely on a hypothetical basis. Putting it at its worst from the employer's point of view, there may be grounds for believing that a criminal offence or offenses have been committed. We cannot for ourselves decide where the truth lies and it would be beyond our remit to attempt any evaluation, but it does seem to us that where pensioners are involved and where, on one view, employees may have had apparently false representations made to them that monies were being deducted for a purpose but then not applied for that purpose, an assessment of the position should be made by the relevant authorities.

Accordingly, we propose to refer these papers to the Crown Prosecution Service so that they can undertake such enquiries and investigations, if any, as they think fit.