United Kingdom Employment Appeal Tribunal

BAILII case number: [1996] UKEAT 1233_94_2006

Appeal No. EAT/1233/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 20th June 1996

HIS HONOUR JUDGE PETER CLARK

MR I EZEKIEL

MR R JACKSON

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MR N J COCKING          APPELLANT

MOULINEX SWAN HOLDINGS LTD          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MS E NORMAN

(of Counsel)

Messrs Southall & Co

Solicitors

503 Coventry Road

Small Heath

Birmingham

B10 0LN

For the Respondents MR R G GREEN

(Solicitor)

Messrs George Green & Co

Solicitors

195 High Street

Cradley Heath

Warley

West Midlands

B64 5HW


 


JUDGE PETER CLARK: The appellant employee, Mr Cocking, was employed by the respondents from January 1977 until his dismissal by reason of redundancy with effect from 28th February 1994. At the date of dismissal he held one of two posts of National Sales Manager in the respondent's organisation. The number of National Sales Managers was reduced to one. Mr Cocking was selected for redundancy.

He presented a complaint of unfair dismissal on 18th May 1994, which came before the Birmingham Industrial Tribunal on 19th October 1994.

Before the Industrial Tribunal it was common ground that the reason for dismissal was redundancy. The appellant made no complaint about his selection for redundancy nor about prior consultation or warning. His point was that he ought to have been offered alternative employment as Area Sales Manager Northern Region ["the Northern job"], a post which fell vacant, and was available to be offered to him in early February 1994. His case was that had it been offered to him he would have accepted it at that time, but it was not offered to him.

There was a factual dispute. The respondents claimed that he had been offered the Northern job. The Industrial Tribunal resolved that dispute in favour of the appellant, holding that he should have been offered the job but was not, and that had it been offered to him in early February he would have accepted it. On that basis the tribunal found that the dismissal was unfair.

They then went on to consider the remedy of compensation. He had been paid his redundancy entitlement and therefore the question was what sum, if any, should be paid by the respondents by way of a compensatory award. The relevant provisions are to be found in Section 74 of the Employment Protection (Consolidation) Act 1978:

"74(1) ... 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 consequences of the dismissal in so far as that loss is attributable to action taken by the employer.

...

(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."

We see from the pleadings that his total gross salary with the respondents as National Sales Manager was about £35,500. His redundancy package totalled £15,263, made up as follows:

"Redundancy Pay £4305.00

Severance Pay £2583.00

Money in Lieu of Notice £8375.00

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TOTAL £15,263.00

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The respondents contended that the appellant had failed to mitigate his loss. The Industrial Tribunal correctly directed themselves that the onus lay on the respondents to make good that plea.

The respondents relied upon a letter to the appellant dated 16th March 1994 wherein he was offered the position of Eastern Regional Sales Manager ["the Eastern job"]. Mr Warren, the Human Resources Director who wrote that letter, indicated that he would hold the vacancy open until 31st March in order to see whether it was of interest to the appellant.

He replied on 28th March 1994 in these terms:

"Dear Peter,

Further to your letter of 16th March and todays telephone conversation, I would advise you that whilst your offer of Eastern Regional Sales Manager is appreciated I am afraid that I have to decline. As I explained some weeks ago, when I was notified of redundancy I had to make a decision as to my future career route, and whilst it is going to be quite some time before anything comes to fruition there are commitments made which do not enable me to accept your offer at this late stage."

The Industrial Tribunal found that that the Eastern job was convenient for the appellant and suitable. They then set out their findings and reasoning in relation to mitigation in paragraphs 11 to 13 of their extended reasons dated 14th November 1994.

"11 His refusal of the offer was based upon the business that he was establishing. As of the middle of March, he had a moral obligation to his partner, with whom he had been in serious consultation for at most, two months, and he was committed to premises. That, however, was on a monthly basis. We are satisfied that the cost involved was no more than £80, to be shared between them. There were ongoing expenses like rates, but his financial commitment to the new business and negligible. He had approached potential clients as suppliers and arranged to buy some stock, but there is no evidence that there was any contractual or financial impediment to the applicant's withdrawal from those commitments. He says his credibility was at stake, but we reject that. The respondents would provide the applicant with significantly better reward than he could hope for during 1994-95. During 1994, he has been in receipt of an enterprise allowance, £40 per week. He should receive another £1,000 in the spring 1995 and 996 combined. From his business, he hopes to earn about £700 per month from early 1995.

12 We have to decide whether the applicant was acting reasonably in refusing this offer. We have borne in mind that the applicant never explored this offer with the respondents or asked what affect it might have on the payment already made. What affect would it have on continuity of employment? That was a matter to discuss. He refused it out of hand. We consider that the business upon which he was embarking was if not in an embryonic stage, in a very preliminary stage indeed. There was little or no financial commitment. All that was really holding the venture together was his informal partnership.

13 We find the fact that, in all those circumstances, Mr Cocking has failed to mitigate his loss - the employers have discharged the burden of proof. This was a suitable job, offered by an employer with who he had not fallen out, and for whom he had worked for 17 years. While there had been a disagreement about whether he had been offered the Northern Sales job, there was nothing which caused mutual trust and confidence to break down - nor has that been asserted. His financial commitment to the partnership was negligible and the business was not up and running. There was time for him to withdraw and mitigate his loss. Accordingly we do not regard it as just or equitable to award any compensation."

The principal point taken by Miss Norman in support of the appeal against the Industrial Tribunal's finding that he had failed to mitigate his loss is that on the face of the Industrial Tribunal's reasons there are contradictory findings.

She relies upon two passages. At paragraph 6 of the reasons, the tribunal say:

"6 ... The only offer that was made post-dated termination, and arose after the applicant had committed himself to the new venture. In any event, it was a different job, namely, the Eastern Regional Sales Managers."

At paragraph 9 they say:

"9 We also have to decide whether any consequences flow from that. [i.e. The unfair dismissal] We find, had the offer been made at the time it should have been made, the applicant would have accepted it. Their later came a stage when the applicant was no longer in a position, because of his commitment to his business and his partner, to accept an alternative job, but at the time the offer should have been made, he was in a position to accept it and would have accepted it."

Thus, submits Miss Norman, the Industrial Tribunal are finding on the one hand that when the second offer of the Eastern job was made in March, following dismissal, the appellant was not in a position to accept it because of his commitment to the new business venture, and subsequently and inconsistently finding that his refusal of the Eastern job amounted to a failure to mitigate his loss, due to the new venture being at very preliminary stage.

We remind ourselves that Industrial Tribunal decisions must be read as a whole. Fine toothcombing or line by line dissection of the Industrial Tribunal's reasons in order to try and find a point of law on which to hang an appeal is to be discouraged.

In our judgment the findings by the Industrial Tribunal are not mutually exclusive. The issue which the tribunal was addressing in paragraphs 6 to 9 of the reasons was whether the employer had offered the Northern job to the appellant in early February, and if so, whether he would have accepted it. In deciding that second question in favour of the appellant they made a distinction between his lack of commitment to the new venture in February, as opposed to his subsequent commitment in March. That level of commitment was apparent from his letter to Mr Warren of 28th March.

Thus, at this stage of the enquiry, the tribunal found that the dismissal was substantively unfair, in that had the employer made the offer of alternative employment in the Northern job in early February it would have been accepted, the dismissal would have been avoided and his employment would have continued. Prima facie he was entitled to recover his full loss flowing from the unfair dismissal.

However, they then went on to consider a quite different question; whether or not he had failed to mitigate his loss by turning down the respondent's offer of the Eastern job after dismissal. That is not the same as deciding whether or not he would have accepted the northern job had it been offered. It moves away from the purely subjective question of whether he would have accepted the Northern job, to considering whether or not he ought to have accepted the Eastern job, notwithstanding his own commitment to the new venture. Accordingly we are satisfied that there is no contradiction within the tribunal's findings.

Miss Norman takes further points. She contends that the Industrial Tribunal failed to balance the appellant's moral obligation to his new partner with the lack of contractual and financial obligations to the new venture. We are not persuaded that the tribunal failed to carry out this balancing exercise. Secondly, we are satisfied that it was open to the tribunal to find as a fact that the appellant's credibility was not at stake had he withdrawn from the new venture and accepted the Eastern job.

Finally, she submits that the tribunal's finding that the appellant had failed to mitigate his loss was perverse. Mr Green takes the point that this contention does not appear in the Notice of Appeal, but only in Miss Norman's skeleton argument, recently served. It is unnecessary for us to rule on that pleading point. Having considered the question of perversity we are quite satisfied that this Industrial Tribunal correctly directed itself as to the law, and reached a conclusion on its primary findings of fact which was within the range of responses of a reasonable Industrial Tribunal. Whether we should have reached the same conclusion, sitting as an Industrial Tribunal, is an interesting, but academic exercise. It is not for us to substitute our view for that of the Industrial Tribunal.

In these circumstances we have reached the conclusion that there are no grounds in law upon which we can properly interfere with this Industrial Tribunal's finding, and accordingly the appeal must be dismissed.