United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 777_93_2410

Appeal No. EAT/777/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 24th October 1995

Before

THE HONOURABLE MR JUSTICE MUMMERY (PRESIDENT)

MRS R CHAPMAN

MR R SANDERSON OBE

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MR M PUGLIA          APPELLANT

C JAMES & SONS          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised (6 February 1996)


 


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APPEARANCES

For the Appellant IN PERSON

For the Respondents MR J CAVANAGH

(of Counsel)

Messrs Price & Kelway

Solicitors

17 Hamilton Terrace

Milford Haven

Dyfed SA73 3JA


 


MR JUSTICE MUMMERY (PRESIDENT)

History of Proceedings

This case has a long history. Mr Michele Puglia was employed as a farm worker at Marlowes Farm near Haverfordwest from 19th October 1959 until his employment ended in December 1988. His claim for unfair dismissal against his employers, C James & Sons, succeeded at a hearing before the Industrial Tribunal held at Haverfordwest as long ago as 17th November 1989. At the hearing Mr Puglia was represented by counsel. By a majority, the Tribunal, for extended reasons sent to the parties on 15th December 1989, decided that Mr Puglia was unfairly dismissed, but that it would be necessary to hold another hearing on the question of remedy. That might involve difficult questions, because Mr Puglia had sustained an injury which resulted in him being absent from work for part of the notice period and in receipt of Invalidity Benefit.

The remedy hearing did not take place because the decision on liability was taken by C James & Sons on appeal to this Tribunal. On the hearing of the appeal, at which Mr Puglia was represented by different counsel, the appeal was allowed and the matter was remitted to the same Industrial Tribunal for reconsideration in accordance with the judgment of the Employment Appeal Tribunal. At that time Mr Puglia was legally aided.

The remitted hearing took place before the Industrial Tribunal held at Carmarthen on Wednesday 23rd September 1992. Mr Puglia made unsuccessful attempts to have the hearing adjourned. At the hearing he represented himself and gave evidence, including evidence on matters relevant to remedy. In the Full Reasons notified to the parties on 17th December 1992 the majority of the Tribunal decided that Mr Puglia had been unfairly dismissed. There is no appeal against the decision on liability. The present appeal arises out of what subsequently happened on the question of remedy.

In paragraph 13 of the Full Reasons the Tribunal said, in relation to remedy -

"We all wish to dispose of this matter without a further hearing. There are, however, one or two details which will be essential if we are to calculate compensation. Letters will be sent to the parties explaining exactly what is needed. Unless either party requests it a further hearing will not be required before a decision as to remedy."

In correspondence between the Tribunal and the parties from December 1992 down to May 1993 the Tribunal requested the provision of information by the parties relevant to remedy. In particular, the Tribunal asked Mr Puglia to obtain from the DSS details of sickness benefit paid to him between November 1988 and December 1992. Under cover of a letter dated 1st January 1993, Mr Puglia enclosed the DSS details as requested. He made it clear in the letter that he intended "to claim damages and costs" and asked "Could you please inform us as to how we are to go about it?" The enclosed DSS letter showed that Mr Puglia was in receipt of sickness benefit from 28th December 1988 to 7th July 1989 and that from 8th July 1989 continuing to 23rd December 1992 he was in receipt of invalidity benefit.

On 4th January 1993, the Tribunal acknowledged receipt of the letter and informed Mr Puglia that the Tribunal would consider his application for costs when it dealt with the question of remedy.

Further representations were made in correspondence, including submissions on behalf of C James & Sons on points relating to the assessment of compensation. There was also correspondence about the production of documents relevant to compensation. In particular, Mr Puglia requested disclosure of the wages record of another employee. Mr Puglia was informed that, if the records were not released as requested by him, it would be necessary to relist the matter for hearing. Arrangements were made for hearing to take place on 7th May. In the event, it was not necessary to hold that hearing for disclosure of wages records relating to the other employee, because C James & Sons provided to the Tribunal the only records available. In a letter dated 4th May 1993 the Industrial Tribunal informed both parties that "in those circumstances no purpose would now be served by the hearing; which is therefore cancelled". At no time in the correspondence between December 1992 and May 1993 did Mr Puglia indicate that he expected there to be a full oral hearing on remedy. He did not raise that question in a letter he wrote on 7th May 1993 in response to the Tribunal's decision that the hearing on that day was cancelled, as the solicitors for the other side had provided the other employee's records.

The Decision on Remedy

In Full Reasons notified to the parties on 4th June 1993, the Tribunal decided that Mr Puglia was entitled to a compensatory award of £4,195.70. They explained in paragraph 1. of the decision that the matter had last come before the Tribunal on 23rd September when they heard evidence and argument, both as to liability and quantum and that they had dealt with the issue of liability in a decision sent to the parties on 16th December. They stated -

"We have been asked to resolve the question of the compensatory award without a further hearing."

Three points in the majority decision are relevant to this appeal.

(1) The fact that there was no further hearing to deal with remedy. The decision states that an Industrial Tribunal was held at Carmarthen on 7th May 1993. That was not a hearing attended by the parties. It was a meeting between the members of the Tribunal for the purposes of resolving remedy.

(2) The deduction of benefits from the estimated loss of earnings. According to the calculations in paragraph 7 of the Full Reasons the total loss of earnings from 23rd December 1988 to 30th June 1990, chosen as the appropriate period for assessing compensation, was £10,638.95. The Tribunal then deducted the benefits received by Mr Puglia from the State, both Statutory Sick Pay and Invalidity Benefits, totalling £6,443.25. The total compensatory award was therefore £4,195.70. No award was made for loss of statutory rights in view of the fact that the Tribunal assumed a fair dismissal at a date later than the effective date of termination.

(3) Mr Puglia's application for costs was rejected. The Tribunal pointed out that they could only make an award if the Respondents had behaved frivolously, vexatiously or otherwise unreasonably. They noted that no application for costs was made in respect of the 1989 hearing. The costs of the appeal were not a matter for the Industrial Tribunal. At the hearing on 23rd September 1992 Mr Puglia was not represented. The subsequent delay, though due to the unreasonableness of the Respondents' solicitors, had not occasioned any expense to Mr Puglia. For those reasons the Tribunal did not consider it appropriate to make an award.

The Appeal

Mr Puglia served a Notice of Appeal dated 23rd June 1993. The only ground of appeal was that the Tribunal erred in not awarding costs against C James & Sons.

On 10th November 1994 the appeal came before the Tribunal on a preliminary hearing. Mr Puglia was represented by different counsel than had previously represented him. He had been granted legal aid. The Tribunal ordered that the appeal should be allowed to proceed to a full hearing on condition that Mr Puglia swore an Affidavit in relation to events relevant to the deliberations of the Industrial Tribunal on 7th May and that the Notice of Appeal be amended. In the amended Notice of Appeal dated 5th January 1995 four grounds of appeal are stated. They relate to the hearing on 7th May 1993, to the refusal to order costs, to the deductions of State sickness and invalidity benefits and to the failure to make an award for loss of statutory rights.

On 22nd November 1994, Mr Puglia swore an Affidavit stating his version of the circumstances in which the hearing of the Industrial Tribunal took place on 23rd September 1992 and 7th May 1993. On 8th March 1995 the Chairman of the Industrial Tribunal provided to the Employment Appeal Tribunal his comments on Mr Puglia's Affidavit. He enclosed with his letter copies of some of the relevant correspondence which he said was voluminous.

The Course of the Appeal

Before we deal with the individual grounds of appeal it is necessary to summarise what happened at the substantive hearing of the appeal on 24th October 1995. Prior to the hearing Mr Puglia asked for an adjournment. The reasons for the application were explained in a letter from his MP. He was appealing against the discharge of his legal aid certificate. Mr Puglia was without legal advice and representation. That application was refused. At the start of the hearing of the appeal Mr Puglia, with the support of his wife, again applied for an adjournment. He informed us that he now wished to present the case himself. He had lost faith in lawyers and wanted three weeks to prepare the appeal. He and his wife referred to a large file of documents which they wished to put before the Tribunal on the hearing of the appeal. Mr Cavanagh, who appeared for Respondent employers, opposed the application. An adjournment would add to the delay and costs already incurred in this case. The points on the appeal are clearly identified in the Notice of Appeal. All the evidence relevant to those points is contained in the Affidavit sworn by Mr Puglia and the comments and correspondence supplied by the Industrial Tribunal Chairman. Mr Puglia had successfully conducted his own case before the Industrial Tribunal on 23rd September 1992.

After considering these arguments we decided that it was in the interests of all concerned to proceed with the hearing of the appeal. We asked Mr Puglia to deal with the grounds stated in his Notice of Appeal. During the course of discussions with the Tribunal, Mr Puglia referred a number of times to evidence which had been suppressed and to his wish to place various documents before the Tribunal. He produced some of those documents, including his application for legal aid dated 22nd September 1994 and various letters. We made little progress in persuading Mr Puglia to make submissions on the grounds of appeal. At about 12 noon Mr and Mrs Puglia stated that they should have been granted an adjournment and that, in the circumstances, it was impossible for them to present their case. They said they did not wish to stay to listen to the submissions of Mr Cavanagh on behalf of the Respondents. They then left the Tribunal.

We informed Mr Cavanagh that we did not regard Mr Puglia as having discontinued or withdrawn his appeal and asked him to present the Respondents' arguments on the grounds stated in the amended Notice of Appeal. Mr Cavanagh discharged with diligence and impartiality the traditional duty of a counsel to assist the Tribunal in the absence of representation of the opposing party. We are grateful to him for his assistance.

Conclusions

We shall deal with each ground of appeal in turn.

(1) The Remedies Hearing Point

The first ground of appeal is that the Industrial Tribunal deprived Mr Puglia of a promised further hearing on compensation and costs. In paragraph 6(i) of the Notice of Appeal it is stated that -

"The Tribunal indicated to the Appellant that there would be a hearing on 7th May 1993 to consider the issues of compensation and costs following its earlier finding of unfair dismissal. The hearing was then called and the Tribunal proceeded to a decision on the issue of compensation and costs. It was not made clear to the Appellant that the Tribunal intended to decide these issues without a further hearing and he was therefore deprived of an opportunity to put forward evidence and address the Tribunal on these aspects of the case. The Tribunal therefore erred in law as it failed to comply with Rule 9(2) of the Rules of Procedure and the general principles of natural justice."

The reference to Rule 9(2) of the Rules of Procedure appears to be a typing mistake for Rule 8(2) of the 1985 Regulations which were in force at the material time. They provide that at the hearing of the Originating Application a party entitled to appear is "entitled to give evidence, to call witnesses, to question any witnesses and to address the Tribunal".

In his Affidavit of 22nd November 1994 Mr Puglia gives his account of the circumstances in support of his complaint. He refers to the hearing on 23rd September 1992 in which he successfully represented himself. At the conclusion of the hearing he asked for damages and costs. He was informed by the Chairman of the Tribunal that he would have to wait until he received the decision and that there would be a further hearing at which the Tribunal would decide the remedy and assess compensation. He says in paragraph 2 of the Affidavit -

"I made it clear to the Tribunal that I wish to be heard on the matter of compensation and costs."

He refers to the notice he received from the Industrial Tribunal that there would be a hearing on 7th May 1993 at Cardiff, but received a message on 5th May that that hearing had been cancelled. The cancellation was confirmed in a letter which he received from the Tribunal on 6th May. He waited to hear from the Industrial Tribunal. He then received "a transcript of evidence from the Industrial Tribunal which indicated that the hearing of 7th May 1993 had proceeded in my absence at Cardiff". After receipt of the "second transcript" he contacted the Tribunal by phone and letter about the fact that the hearing had proceeded in his absence. He was informed that no hearing had taken place. He asked, if that were the case, how a decision could have been made? He received no satisfactory answer to that question.

In his comments on the Affidavit the Chairman of the Tribunal explains, by reference to the Full Reasons for the decisions on liability and on remedy and to the relevant correspondence, that it was intended that the Tribunal should on 23rd September deal with all the issues arising, including (if appropriate) the question of remedy. When it became clear to the Tribunal during the course of the hearing on 23rd September that the finding of unfair dismissal would stand, the Tribunal proceeded to take evidence with regard to remedy. Evidence was given by Mr Peter James for the Respondent. Mr Puglia gave evidence on his own account as to the loss occasioned by his dismissal. After they had reserved a decision the Tribunal decided that they had insufficient evidence to make the calculation. They wanted to see the earnings of another employee who had been retained in employment in preference to Mr Puglia. For that reason correspondence took place between the Tribunal and the parties about to the earnings of the other employee. We have already referred to that correspondence. Mr Puglia was asked to provide details eg of State benefits paid to him after November 1988. After referring to the correspondence about to further information from the parties the Chairman explains that, as the Respondents declined to comply with a request for inspection of wages records, the case was re-listed for hearing on 7th May. The Chairman makes it clear that the case was only re-listed in order to obtain details which were subsequently provided in correspondence prior the hearing date. The Chairman makes it clear that the intention always had been to determine the matter of remedy on the basis of evidence heard on 23rd September 1992. That was explained to the parties in correspondence. On the basis of the evidence heard on 23rd September 1992 and the further information provided in correspondence, the Tribunal were able to complete their deliberations, including the calculation of the compensatory award. The Chairman states that the decision correctly records that there had been a "session" on 7th May, but the parties knew that they were not required to attend and had not attended. The members alone conferred. That is not unusual with reserved decisions. The Chairman disputes Mr Puglia's assertion that he was informed at the end of the hearing on 23rd September that there would be a further hearing to decide remedy. It was made clear on 23rd September that there was no intention to hold a further hearing. The Tribunal would have proceeded to make an award immediately, but found that it needed details of the other employee's wages and of the benefits received by Mr Puglia.

In our judgment, there was no error of law in the procedure adopted by the Industrial Tribunal for the determination of remedy, compensation and costs. On a full consideration of Mr Puglia's Affidavit, the Chairman's comments, the contemporaneous correspondence and the Full Reasons for the two decisions we are satisfied that there has been no breach of Regulation 8(2) of the Industrial Tribunal Rules of Procedure and no violation of the rules of natural justice. The Tribunal heard evidence relevant to compensation and costs at the hearing on 23rd September 1992. They obtained in subsequent correspondence further information which they needed to make the calculations of compensation. No further hearing was promised or was necessary. Mr Puglia has laboured under a misunderstanding about the hearing of 7th May 1993, fixed solely to resolve the dispute between the Tribunal and the Respondent's solicitors about the disclosure of details of the earnings of the other farm worker. It never was intended that there should be further evidence and argument at a hearing on 7th May. There is no procedural irregularity in the Tribunal members holding a meeting in the absence of the parties for the purposes of reaching their decision on evidence and argument already before them. This point was not raised in the original Notice of Appeal served by Mr Puglia. Even now Mr Puglia has failed to identify the further evidence which he would bring to the attention of the Tribunal at a new hearing on compensation.

For those reasons we reject the first ground of appeal.

(2) Costs

The second ground is that the Tribunal erred in law in failing to make an award of costs against the Respondent. The point is elaborated in paragraph 6(ii) of the Notice of Appeal:

"In considering the question of costs the tribunal misapplied or misconstrued its power to award costs under Rule 12 of the Rules of Procedure in concluding that as Mr Puglia was unrepresented at the hearing on 23rd September 1992 it was not appropriate to make an award of costs. The Appellant had incurred legal costs in bringing the proceeding, although he was unrepresented at the hearing on 23rd September 1992. The tribunal in considering the question of costs should have considered whether the Appellant had incurred any costs in any part of the proceedings and then gone on to consider whether any order should be made in respect of these costs pursuant to Rule 12."

The relevant Rule in force at the time of the Tribunal's decision was Rule 11 of the 1985 Regulations which provided that -

"A Tribunal shall not formally make an award in respect of the costs or expenses incurred by a party to the proceedings but where in its opinion a party ... has in bringing or conducting the proceedings acted frivolously, vexatiously or otherwise unreasonably the Tribunal may make [an order for costs]."

In our judgment, there was no error of law in the exercise of the Tribunal's discretion on the matter of costs. The Tribunal correctly directed itself to the factors relevant to the award of costs under Rule 11. They found that the only way in which the Respondents had behaved unreasonably was in the manner in which their solicitors dealt with the question of the earnings of the other employee after the hearing of 23rd September, but did not award costs because they concluded that that conduct did not occasion any expense to Mr Puglia. In our view, the Tribunal adopted the correct approach. Costs may only be awarded in respect of expenses actually incurred.

(3) Deductions of Statutory Sick Pay and Invalidity Benefit

Mr Puglia's third ground in his amended Notice of Appeal is that, in considering the question of compensation, the Tribunal misdirected itself in deduction his sickness benefit and/or invalidity benefit from the compensatory award.

(a) Statutory Sick Pay

In our judgment, the Industrial Tribunal correctly applied the law in deducting from the estimated loss of earnings the Statutory Sick Pay received by Mr Puglia over the relevant period. The law on this topic was settled by the Appeal Tribunal in Sun and San Ltd v. Fitzjohn [1979] ICR 268 at 269 D-F. That case concerned the deduction of sickness benefit from the compensatory award. Arnold J. stated -

"The matter for consideration seems to us to depend upon whether the amount of the loss sustained by the employee in consequence of her dismissal was the whole amount of loss to pay or was the amount of loss to pay less the sickness benefit. If the employee was entitled to retain the sickness benefit to which she was justly entitled so long as her employment continued, in addition to receiving her pay, the loss would in our judgment be the net pay lost without any deduction; but if either she was obliged to accept some reduced amount of pay by reference to the sickness benefit she had received or so long as she was being paid under a continuing contract of employment was disentitled from receiving sickness benefit at all, then in either of those cases it seems to us that the compensatory award for lost pay should be reduced by the amount of the sickness benefit which she received."

It was not suggested in this case that Mr Puglia's contract of employment provided that he would be entitled to his full wages in addition to any statutory sick pay which he received. The Industrial Tribunal were therefore correct in making a deduction for the statutory sick pay received by Mr Puglia.

(b) Invalidity Benefit

The deduction of invalidity benefits received by Mr Puglia over the relevant period is more controversial and places us in some difficulty in the absence of proper argument from Mr Puglia. It could be argued on behalf of Mr Puglia, relying on the recent decision of the Appeal Tribunal in Hilton International Hotels (UK) Ltd v. Faraji [1994] ICR 259, that the Tribunal erred in law in deducting invalidity benefits from the compensatory award. Judge Hargrove QC, in giving the decision of the Appeal Tribunal, held that invalidity benefits should not be deducted from the compensatory award. The reasoning was as follows:-

(1) A compensatory award under S.74 of the Employment Protection Act 1978 is of 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 the action taken by the employer. That measure of compensation is not necessarily the same as common law damages for personal injuries.

(2) An exception to the general principle that damages should be assessed so as to put the injured party in the same position as he would have been if he had not sustained the damage is to be found in cases of insurance. See British Transport Commission v. Gourley [1956] AC 185, 197 - 198.

(3) Invalidity benefits come within that exception because

"...invalidity benefit arises as a result of the National Insurance Scheme. Those in employment have no option but to pay the sums levied by Central Government. While some would compare such levies to additional taxation, they are more properly classified as insurance premiums. The invalidity benefit is dependent to some degree on the amount of payments made. If an employer who has unfairly dismissed an employee is entitled to deduct the sum paid by way of invalidity benefit, he is benefiting from the employee paying, albeit involuntarily, the levies." P.263 E-F

The Tribunal therefore concluded at p.264A that -

"The receipt of invalidity benefit can properly be categorised as coming within the "insurance" group of benefits."

(4) The Tribunal considered that that view was reinforced by the provisions of Regulation 5 of the Employment Protection (Recoupment of Unemployment and Supplementary Benefits) Regulations 1977 which provides for those two named benefits to be subject to recoupment, but the Regulations contain no such provision in relation to invalidity benefit. The judgment reasoned that -

"...If Parliament intended that such sums should for the purposes of S.74 be subject to recoupment or as a deduction from the compensatory award it would have said so."

Mr Cavanagh argued that the decision in Faraji was per incuriam and should not be followed. His submissions were as follows -

(1) Two relevant earlier decisions were not cited to the Appeal Tribunal in Faraji. The first decision was Palfarey v. GLC [1985] ICR 437, a personal injuries case decided by Mr Piers Ashworth QC sitting as a Deputy High Court judge. He held that Statutory Sick Pay payable under the Social Security and Housing Benefits Act 1982 should be taken into account in assessing damages for loss of earnings. The plaintiff had to give credit for the amount of Statutory Sick Pay that he had received and damages for loss of earnings would be correspondingly reduced by that amount. After a full review of the authorities the judge said at p.444D -

"It seems to me from these decisions that the common law position is that benefits received from the State must be taken into account in the assessment of damages. Whether or not that should be the law it is not for me to say but it seems to me clear from these decisions that that is indeed the law and I do not think that any valid distinction can be drawn between unemployment benefit, supplementary benefit, sickness benefit, industrial injury benefit and so on. ... Were it not for the statutory provisions in S.2 of the Law Reform (Personal Injuries) Act 1948 the whole of those benefits would fall to be deducted in assessing damages. That section applies to certain State benefits, including invalidity benefit and provides that half of the relevant benefits received for the period of five years from the date of the accident should be taken into account.

Mr Cavanagh pointed out that the 1948 Act only applies to personal injuries cases. It does not apply to claims for unfair dismissal compensation under S.74 of the 1978 Act. It follows that the common law position should be followed with the result that the full amount of the invalidity benefit should be deducted from loss of earnings.

The decision of the Appeal Tribunal in Sun and Sand Ltd v. Fitzjohn (supra) was not cited to the Appeal Tribunal in Faraji. As mentioned earlier, a deduction is made for Statutory Sick Pay in cases where there is no provision in the contract of employment which entitles the employee to receive full wages in addition to Statutory Sick Pay. Mr Cavanagh argued that there was no distinction in logic or principle why Invalidity Benefit received by an employee should be dealt with in a different manner than Statutory Sick benefit. If no deduction were made for invalidity benefit the result would be an employee receiving compensation for unfair dismissal would find himself in a better position than if he had never been dismissed. Regard must be had under Section 74 to loss sustained by the employee.

(2) The reasoning of the Appeal Tribunal was also open to criticism in the support that it purported to find in the absence of provision for recoupment of invalidity benefit in the 1977 Regulations. Mr Cavanagh submitted that that was a misconceived argument. He contended that the fact that there was no reference to invalidity benefit in those Regulations indicated that Parliament assumed that Invalidity Benefit would be deducted from the compensatory award before it was made and that it was not therefore appropriate to make provision for recoupment of that benefit.

(3) Mr Cavanagh also cited the decision of the Court of Appeal in Lincoln v. Hayman [1982] 1 WLR 488, a personal injuries case in which the Court of Appeal held that a Supplementary Benefit allowance paid to the plaintiff as of right under the Supplementary Benefits Act 1976 should be the subject of credit and was therefore deductible in order to avoid the plaintiff receiving double recovery for the loss resulting from the accident. If the receipt of supplementary benefit was not taken into account and deducted, the plaintiff would receive more damages than he had suffered and that would be a "fortuitous windfall". In the view of the Court of Appeal the fact that the defendant had to pay less damages as a result did not alter the position.

At the end of Mr Cavanagh's argument we were left in doubt as to how we should proceed. The decision in Faraji was reserved and is recent. Although the Appeal Tribunal is not bound by its own decisions, those decisions are persuasive. There are legal virtues in consistency and certainty. On the other hand, if it appears that a decision was reached without the Appeal Tribunal's attention being drawn to all the relevant authorities, it is per incuriam. If wrong, the error should be corrected. It has come to our attention since the conclusion of argument that in a more recent decision of the Appeal Tribunal (McGloughlin) dated 19th September 1995 (not reported), doubts were expressed about the correctness of the decision in Faraji on the non-deductible nature of invalidity benefits. In the reserved judgment of the Tribunal, given by Judge Hicks QC, the Tribunal stated that they could not see how the Recoupment Regulations supported the decision and observed that -

"...the fact that Parliament did not intend invalidity benefit in that regime cannot, insofar as we can see, be an indication either that it should be deducted or that it should not."

The Tribunal also entertained doubts as to how far it was proper to classify invalidity benefits with insurance premiums or benefits. They were unable to obtain any clear guidance from the place of invalidity benefit in the social security system. The Tribunal reached the tentative conclusion, on a consideration of the scope of S.74(1), that, having regard to the analogy of the statutory system as well as to more general considerations of equity, one half of the Invalidity Benefit received should be deducted. The conclusion was tentative because the Tribunal pointed out that they had not heard full argument on the matter. It is apparent from the decision that the cases cited to this Tribunal were not cited to the Appeal Tribunal. The Tribunal directed that its Order should not be entered until 28 days after the judgment was handed down, during which period either party could make further written submissions on that point.

The present position is confused and uncertain. At one point we considered adjourning the matter for assistance from an amicus, but we are reluctant to incur further delays and costs in this matter. We have been persuaded by the citation of authority not cited to the Appeal Tribunal in Faraji or in the case of McGloughlin, that there was no error of law in the deduction of both Invalidity Benefit and Statutory Sick Pay. We therefore dismiss the appeal on that point.

(4) Loss of Statutory Rights

Mr Puglia's amended Notice of Appeal alleges a misdirection by the Tribunal in failing to make an award for loss of statutory rights. In its Full Reasons the Industrial Tribunal made it clear that it was assuming a fair dismissal at a date later than the effective date of termination. In those circumstances we agree that it was not appropriate for the Tribunal to make an award for loss of statutory rights. The purpose of an award for loss of statutory rights is to reflect the fact that the applicant will have to work for two years in fresh employment before reaching the qualifying threshold for unfair dismissal rights (S H Muffett v. Head [1987] ICR 1 at 2 E-G). The Tribunal's finding that Mr Puglia would have been fairly dismissed at some time later in any event means that, even if there had been no unfairness, he would have found himself in a position where he was looking for a new job with no statutory protection for two years. There is no error of law in the Tribunal's reasoning.

(5) Larger Redundancy Payment Point

Finally, the amended Notice of Appeal alleges an error of law in a misdirection by the Tribunal in not making a award to represent the larger redundancy payment which Mr Puglia would have received on an assumed later fair dismissal. On this point Mr Cavanagh admitted difficulty in presenting a contrary argument. He pointed out, that on the assumption that Mr Puglia was right on this point, the additional compensation would amount only to £92.

The final position is, therefore, that this appeal is dismissed. The sum of compensation remains as awarded by the Industrial Tribunal, save for the addition of £92. to reflect the larger redundancy payment which Mr Puglia would have received upon the assumed later fair dismissal.

[note]

I have amended this on 6 February 1996

pages 13 and 14

Iris