United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR P STEWART (of Counsel) Messrs Gisby Harrison Solicitors Goffs Oak House Goffs Lane Cheshunt EN7 5HG
For the Respondents	MRS S O'DONNELL (Representative) Personnel Manager John Menzies (UK) Ltd Hanover Buildings Rose Street Edinburgh EH2 2YQ


 


JUDGE D M LEVY: Mr Matthew Lee Walker was employed by John Menzies (UK) Limited ("the Company") at its Deptford Branch as a packer/driver and was dismissed either in October or November 1994. He complained to an Industrial Tribunal that his dismissal was unfair by an application received on 20 January 1995 which was later amended. The Company put in a Notice of Appearance dated 19 September which was also later amended.

There was a hearing of Mr Walker's complaint before an Industrial Tribunal sitting at Stratford on 12 February 1996. The decision was sent to the parties on 13 February 1996 and was marginally corrected on 9 May 1996. The Tribunal held that the Appellant had been dismissed by reason of redundancy and that his dismissal was unfair. He was awarded a sum to be quantified once he had provided take-home pay details to the Industrial Tribunal.

The Appellant appealed from that decision in circumstances to which we will shortly turn. The Tribunal held that prior to the Appellant being dismissed there had been no proper selection of employers for redundancy by the Company and that there was no consultation with the employees or with the union.

Further, the Tribunal found that the decision to select Mr Walker had been a personal choice of the Branch Manager, which was wholly subjective and unsatisfactory. This appears from paragraph 3 of their Full Reasons. As a consequence of the selection Mr Walker was dismissed but a Mr Easter and a Mr Hammond were not.

The Industrial Tribunal found that Mr Walker had been offered a lower paid job at the Silvertown branch of the Company. It further found that on the day he was told there was no more work for him at Deptford, that is on Friday 28 October 1994, he rejected this offer.

In the Full Reasons the Tribunal went on to say that, even if the job offer at the Silvertown Branch came within section 82 of the Employment Protection (Consolidation) Act 1978, the Company still acted unreasonably in their selection of Mr Walker for redundancy, making the dismissal unfair within Polkey - v A E Dayton Services Limited [1988] ICR 152 paragraph 4.

The Tribunal refused to adopt a proper percentage approach, as is often undertaken within the Polkey principles, as it felt unable to determine what would have occurred had a proper selection procedure been undertaken by the Company. The Tribunal then determined that Mr Walker was entitled to a compensatory award to cover his loss of wages for a reasonable period, which they held to be for one year from the last day when Mr Walker worked for the Company, that is 28 October 1994.

The Tribunal then went on to state that Mr Walker was under a duty to mitigate his loss and that by refusing the job at Silvertown he failed to mitigate his loss. In the circumstances, the Tribunal awarded to Mr Walker, for a period of a year, the difference between the take-home pay he would have received had he continued in the Deptford post and the take-home pay for the job at Silvertown.

From this decision Mr Walker appealed. The grounds of the appeal are these:

The Industrial Tribunal do not appear to have determined whether the job at Silvertown was suitable alternative employment within section 82(3) or (5) of the 1978 Act, nor whether Mr Walker was reasonable or otherwise in rejecting it. The Tribunal considered mitigation alone. By Section 74(4) of the 1978 Act the Tribunal is under a duty to consider mitigation as common law when calculating the compensatory award. But the duty on the employee to mitigate does not arise until the employee is dismissed. That is a principle which is clearly stated in McGregor on Damages, 15th Edition paragraph 291.

The principle was applied by a Scottish EAT in McAndrew v Prestwich Circuits Ltd [1988] IRLR 514. It followed a decision in Savoia v Chiltern Herb Farms Ltd [1981] IRLR in which common law principles of mitigation were applied.

In the present case the Industrial Tribunal did not state exactly when the dismissal of Mr Walker took place. It appeared to be of the view that it could have occurred on Friday 28 October or some time later. The Tribunal therefore appears to have accepted the possibility that Mr Walker was offered the job at Silvertown before his dismissal by the Company. Mr Stewart submitted that from any sensible reading of the Extended Reasons, it must have been the position that on 28 October, Mr Walker refused an alternative job. Thereafter, the employer expected him to return to go to work at the new place. He did not wish so to go. The Company repudiated his contract and by his actions Mr Walker accepted that repudiation. Consequently, he was unfairly dismissed. We accept Mr Stewart's submission that this correctly reflects the factual findings which resulted in the Tribunal's decision.

There was evidence of the offer of a transfer before the Effective Date of Termination - this was at a time when Mr Walker was not under a duty to mitigate. There was apparently no evidence that the offer to transfer was made after termination, when Mr Walker was under a duty to mitigate. Accordingly, submitted Mr Stewart, the Industrial Tribunal erred in law when they purported to reduce the compensation award on the grounds that Mr Walker failed to mitigate.

Mrs O'Donnell, who appeared for the company, had no answer to Mr Walker's submissions that Mr Stewart was constructively dismissed, that the offer of transfer preceded the dismissal and there was no subsequent offer which Mr Walker unreasonably refused. In our judgment Mr Stewart's submissions are correct.

In these circumstances it is open to us, as Mr Stewart asked us to do to correct an apparent error of law. It was not open to the Tribunal to reduce the award as it did due to lack of mitigation. Mr Stewart has asked us, in the circumstances of this case, the position being clear, to make a declaration which will enable adjusted calculations to be made. Mrs O'Donnell does not object to us taking this course.

In these circumstances, we think it right to allow the appeal and make the declaration which Mr Stewart asks us to make. We will ask Mr Stewart to help us further as to the actual wording of the declaration.

Declaration

1 The offer of continued employment by John Menzies (UK) Ltd to Mr Walker on or prior to 28 October 1996 but at a reduced wage constituted a repudiatory breach of Mr Walker's contract of employment entitling Mr Walker to terminate the contract of employment with or without notice.

2 Mr Walker thereafter did treat the contract as at an end by refusing the offer of continued employment but at a reduced wage.

3 Consequently Mr Walker was dismissed within the meaning of Section 95(1)(c) of the Employment Rights Act 1996.

4 Mr Walker's common law duty to mitigate his loss arose upon dismissal and did not encompass a duty to accept the repudiatory breach of contract which led to the dismissal.