United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	Ms A Pitt (of Counsel) Messrs Smith & Graham Solicitors Church Square Chambers Hartlepool TS24 7HE
For the Respondent	MS J OMAMBALA (of Counsel) Mr L Gluck UNISON 1 Mabledon Place London WC1H 9AJ


 


JUDGE PETER CLARK: The applicant, Mr Blane, commenced employment with the Ambulance Service as an ambulanceman on 28th June 1976. In April 1992 the respondent NHS Trust was formed and the applicant's employment was transferred to the respondent. In August 1992 he qualified as a paramedic.

For some years he had been an active trade unionist. In 1985 he was elected a shop steward by fellow members of his trade union, then NUPE, now UNISON. Following that appointment he was involved in representing his members in negotiations and disputes with the employer.

Following formation of the respondent Trust the union was derecognised for the purposes of collective bargaining.

Staff were offered new personal contracts or the option of continuing employment under the former collectively agreed terms and conditions of employment. The applicant opted for the latter.

On 9th April 1995 the respondent advertised two vacancies for trainee/relief staff officers. These were management posts. The applicant applied, with 21 others, all qualified paramedics. He was not one of the eight candidates short-listed for the posts.

On 19th July 1995 he complained to an Industrial Tribunal that he had not been short-listed because of his trade union activities. That was a complaint of action short of dismissal on grounds related to union membership or activities contrary to section 146(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 ["the 1992 Act"]. The claim was resisted.

The Industrial Tribunal decisions

The complaint was dealt with at three separate hearings before the Middlesborough Industrial Tribunal, chaired by Mr Jeremy Hargrove, as follows:

(1) On 5th-7th February 1995 the tribunal heard and determined the issue of liability. In a decision with extended reasons dated 18th March 1996 the tribunal found the complaint to be well-founded and made a declaration to that effect. ["The liability decision"].

(2) On 14th June 1996 a remedies hearing was held. On that occasion the tribunal awarded £1,000 for injury to feelings pursuant to section 149(1) of the 1992 Act, and further declared that he was entitled to compensation for pecuniary loss representing 25% of any difference in pay between:

(a) his pay as a paramedic on the Whitley scale and seconded as a Health & Safety Manager with the South Tees Acute Hospital Trust, on the one hand, and

(b) his pay as if in post as a paramedic on the respondent's Trust scale and as a Relief Staff Officer, on the other hand.

Extended reasons for that decision ["the first remedies decision"] are dated 7th August 1996. Pay information was not available for the tribunal to assess the multiplicand, nor was material available on which to assess the multiplier. Liberty to restore was granted.

(3) The matter was restored for a further remedies hearing on 7th November 1996. On that occasion the tribunal assessed the applicant's loss of earnings to date in the sum of £595, and for future loss in the sum of £1,134. Extended reasons for that decision ["the second remedies decision"] are dated 22nd November 1996.

The Appeals

The Liability decision

There is no appeal against the liability decision. One issue which was canvassed at the liability hearing was whether the non-shortlisting of the applicant for the vacancies was capable of amounting to action short of dismissal within the meaning of section 146(1) of the 1992 Act. For the respondent it was submitted that this amounted to an 'omission' and could not be action under the section, relying upon the House of Lords decision (by a majority) in the conjoined appeals of Associated Newspapers Ltd v Wilson and Associated British Ports v Palmer and Others [1995] ICR 406. The tribunal purported to distinguish that case and hold that the section applied to the circumstances of this case. We express no view as to the correctness of that reasoning, there being no appeal before us on that aspect of the case.

The remedies decisions

The respondent has appealed against both the first and second remedies decisions, respectively EAT/1046/96 and EAT/14/97. We shall deal with both appeals together.

Issues

A number of points are raised by Ms Pitt in support of the appeals. They fall into two categories in our view. Two substantive points of law have been argued and we shall consider each of them in turn. The remaining matters, in our judgment, were essentially factual questions for the Industrial Tribunal. We shall deal shortly with those matters later. First, the substantive questions of law.

The Industrial Tribunal's award of £1,000 compensation for injury to feelings

Ms Pitts' principal submission is that the tribunal had no power to make such an award in this case. It is not a permissible head of compensation under section 149(2) of the 1992 Act.

Section 149 provides:

"(1) Where the industrial tribunal finds that a complaint under section 146 is well-founded, it shall make a declaration to that effect and may make an award of compensation to be paid by the employer to the complainant in respect of the action complained of.

(2) The amount of the compensation award shall be such as the tribunal considers just and equitable in all the circumstances having regard to the infringement complained of and to any loss sustained by the complainant which is attributable to the action which infringed his right."

Sub-sections (3)-(6) follow the same form as section 123(2), (4)-(6) of the Employment Rights Act 1996 ["ERA"] substituting 'action' for 'dismissal'. Section 123 is the successor to section 74 of the Employment Protection (Consolidation) Act 1978 which sets out the basis for assessing the compensatory award following a successful complaint of unfair dismissal.

Her argument below was considered and rejected by the tribunal at the first remedies hearing. Its reasons for so doing are set out in paragraph 3 of the first remedies decision in this way:

"3 ... The respondent's argument was that it would be illogical to award compensation for injury to feelings in a case of action short of dismissal, when common law rules and case under section 74 of the Employment Protection (Consolidation) Act 1978 clearly establishes that such compensation is not payable in cases of wrongful or unfair dismissal. Miss Pitt referred us to Ridgway & Fairbrother v NCB [1987] IRLR p80. This was a Court of Appeal decision. In the course of the judgment of May L.J. at page 84, paragraph 19, he indicated that, insofar as Brassington v Cauldon Wholesale Ltd [1977] IRLR 479 and Cheall v Vauxhall Motors [1979] IRLR 253 were authorities for the proposition that compensation was payable for injury to feelings, they were wrongly decided. Miss Pitt very properly provided copies of these two other decisions and we are grateful to her for her industry. With some trepidation we have decided to follow the decision of Brassington's and Cheall's cases. We do so because we consider that the observations made by Lord Justice May in Ridgeway were obiter, whereas the decisions of the EAT in Brassington and of the Industrial Tribunal in Cheall were directly on point. In addition we observe that the remedies section for action short of dismissal (section 149 of the 1992 Act) and the compensation section for unfair dismissal (section 74 of the Employment Protection (Consolidation) Act 1978) are differently drafted. Section 74 refers to "the loss sustained by the complainant in consequence of dismissal". Section 149 requires the Tribunal to have regard to "the infringement complained of an to any loss sustained by the complainant ..... attributable to the action .....". The words in section 74 are in our view much more limited in their compass than those in section 149."

The point has been developed in argument by Counsel on each side before us. It merits full consideration.

It is now firmly established at common law that damages for injury to feelings (non-pecuniary loss) are not recoverable in an action for wrongful dismissal. So held that House of Lords in Addis v Gramophone Company Ltd [1909] AC 488, 491, per Lord Loreburn LC. It appeared that the effect of Addis had been circumvented in Cox v Phillips Industries Ltd [1976] ICR 138, where Neil Lawson J awarded damages for vexation, frustration and distress to a plaintiff who had been demoted in breach of his contract of employment. However Cox was expressly overruled by the Court of Appeal in Bliss v South East Thames Regional Health Authority [1987] ICR 700, 718C, per Dillon LJ; and approach further endorsed by the Court of Appeal in O'Laiore v Jackel International Ltd (No.2) [1991] ICR 718, 731 B-D, per Sir Nicholas Browne-Wilkinson V-C.

In these circumstances it is perhaps not surprising that when the courts were required to consider the proper approach to assessing compensatory awards for unfair dismissal under the original Industrial Relations Act 1971, the National Industrial Relations Court decision in Norton Tool Co Ltd v Tewson [1972] ICR 510 was that a compensatory award could not include a sum in respect of injury to feelings. That principle has never since been doubted.

Nevertheless, damages for injury to feelings may be recoverable in actions for breach of contract. Two examples lie in the 'spoiled holiday cases', see Jarvis v Swan's Tours [1973] QB 233 and the distressed litigant let down by her solicitors. Heywood v Wellers [1976] QB 446.

When Parliament came to draft the sex and race discrimination Acts of 1975 and 1976, it took care to make clear that compensation for unlawful discrimination could include an award for injury to feelings (SDA section 65(1)(b) and 66(4); RRA 56(1)(b) and 57(4)).

Against that general background we turn to the three appellate decisions cited to the Industrial Tribunal. The case of Cheall v Vauxhall Motors [1979] IRLR 253 was itself an Industrial Tribunal decision.

In Brassington v Cauldon Wholesale Ltd [1978] ICR 405 the appellant employees successfully complained to an Industrial Tribunal that their right not to have action short of dismissal taken against them by the employer in respect of their trade union membership or activities had been infringed. The tribunal granted a declaration that their complaints were well-founded, but added that they did not propose "to impose any pecuniary penalty" on the employer, they simply awarded one days out of pocket expenses incurred by the employees in attending the tribunal hearing.

On their appeal to the Employment Appeal Tribunal (Bristow J presiding) against the tribunal's refusal to order compensation the employees were represented by experienced Counsel; the company did not appear and was not represented. The Employment Appeal Tribunal therefore did not have the benefit of full argument on both sides.

This tribunal rejected an argument that the Industrial Tribunal had power under what was then section 56 of the Employment Protection Act 1975 (now section 149 of the 1992 Act) to impose a 'quasi-fine' on the employer, but went on to hold that there was power to award compensation for injury to health, in the shape of stress engendered by the unlawful action by the employer. The case was remitted for hearing before a different Industrial Tribunal on the question of compensation.

The question of whether Brassington was correctly decided arose for consideration by the Court of Appeal in National Coal Board v Ridgway [1987] ICR 641. The decision in Ridgway has since been overruled by the House of Lords in the case of Palmer, insofar as it was held by a majority that "action" in section 23(1) of the 1978 Act (now section 146(1) of the 1992 Act) included omission. However, consideration of Brassington arose in relation to a preliminary objection by the Board that the appeal by the applicants was academic and should not be heard. The two named appellants had received the relevant pay increase awarded to members of the rival union, back dated to the date of complaint. There was there no lis between the parties. For the appellants it was argued that other cases were waiting in the wings, in which claims would be pursued, inter alia, for compensation for injury to feelings. It was in this context that Counsel for the Board argued that Brassington and indeed Cheall had been wrongly decided. The way the submission was summarised by May LJ appears at page 648D of the report:

"... counsel for the board submitted that this part of the decision in Brassington's case was wrong in law. He pointed out that an aggrieved employee cannot obtain damages for injury to feeling or the like in wrongful or unfair dismissal claims and that a fortiori this form of compensation was not available in actions based on less serious matters, such as the claims under sections 23 and 26 with which we are concerned in the instant appeal."

May LJ expressed his view of the argument at page 650 B-C thus:

" For my part I respectfully took the view that the part of the decision in Brassington's case [1978] I.C.R. 408, to which I have referred, [see 414 A-D] as also the decision in Cheall v. Vauxhall Motors Ltd. [1979] I.R.L.R. 253, were wrongly decided and now that the board had rescinded and backdated the pay cuts which they had imposed on these applicants in the circumstances outline, there was in truth no continuing lis between the parties and that we should decline to hear these appeals further. Further, in my opinion, the argument that until the appeal is heard the costs of it cannot properly be provided for, merely begs the question. However, Nicholls and Bingham L.JJ. disagreed with my view on these points and accordingly we proceeded to hear the substantive appeal on its merits."

However, in the course of their judgment both Nicholls LJ (656C) and Bingham LJ (668A) deliberately expressed no view on the submission, Nicholls LJ pointing out that full argument was not addressed to the Court.

Finally, we should mention the Employment Appeal Tribunal case of Wright v Doncaster Metropolitan Borough Council [30th October 1990. EAT/198/89. Knox J presiding. Unreported]. There the employee appealed against an award of compensation, following a finding that his right under section 23 of the 1978 Act had been infringed, which included an award of £1,000 for injury to feelings. That award did not form part of his complaint on appeal; nor was there any cross-appeal by the employer against that part of the award; indeed the employer did not appear and was not represented before the Employment Appeal Tribunal.

It follows that so far as we are aware, this is the first time that the point has arisen directly for determination at the appellate level, following full argument by Counsel on both sides. We say at once that we shall follow the approach of Bristow J in Brassington in preference to the minority, obiter view expressed by May LJ without reasons and without the benefit of full argument in Ridgway. Our reasons for doing so are as follows:

(1) If the wording of section 149(2) of the 1992 Act had followed precisely the wording of what is now section 123(1) of the ERA, subject to the different claims being mentioned, we should have had no hesitation in following the line of authority beginning, at common law, with Addis, and imported into the statutory law of unfair dismissal by Tewson's case.

(2) However, there is a significant difference. Section 149(2) adds the words:

"... having regard to the infringement complaint and ..."

It seems to us that those words grant the Industrial Tribunal a power to award compensation over and above the pure pecuniary loss suffered by the applicant. Given the scope for awards to complainants who have suffered by way of sex or race discrimination to reflect injury to feelings, we see no reason in principle why the words of the section cannot extend to such award. Put another way, what do the words add to the normal formulation of available pecuniary loss claims for unfair dismissal, if not to include an award for non-pecuniary loss including injury to feelings?

(3) It is not fatal to our construction that the SDA and RRA contain specific references to awards for injury to feelings, and section 149(2) does not. Those provisions were inserted 'for the avoidance of doubt', not to create an otherwise otiose head of claim.

(4) We are unimpressed by the argument advanced by the employer in Ridgway, and implicitly adopted by Ms Pitts before us. It is nothing to the point that an award for injury to feelings cannot be recovered in a wrongful dismissal or unfair dismissal claim. They are different claims, compensated in different ways. We do not accept that a complaint under section 146(1) can simply be categorised as less serious and therefore cannot allow of a head of compensation not provided for in claims of unfair dismissal or wrongful dismissal. Apart from the different wording of the section the intention behind it is clear; an employee who is unfairly dismissed will normally suffer pecuniary loss, and that Parliament has decided will adequately compensate him for the wrong. In a case of action short of dismissal it may very well be that he can point to no pecuniary loss; nevertheless, Parliament has decided that he should be able to recover financial compensation 'having regard to the infringement complained of'. That must, in our judgment, include injury to his feelings occasioned by the unlawful act.

(5) A more compelling argument might appear to be that the effect of our construction is this; a complainant who succeeds in showing action short of dismissal by his employer for his trade union membership or activities may recover compensation for injury to feelings, whereas a complainant who has been unfairly dismissed on the same grounds cannot. However, that overlooks the fact that the employee dismissed in these circumstances may, in addition to the ordinary compensatory and basic award, be entitled to a special award under section 158 of the 1992 Act where an order for his reinstatement or re-engagement is made but not complied with by the employer. The special award is not compensatory; it is punitive. It will of itself normally exceed any award for injury to feelings. We see no difficulty in these circumstances.

Ms Pitts further submits that even if the tribunal had power to make the award, as we find, affirming the tribunal's decision on this point, that it did, there was no evidence before it on which such an award could be made in the proper exercise of its discretion. We reject that submission. Adequate findings of fact and reasons for making the award in principle are set out in paragraph 4 of the first remedies decision. Further, we see no grounds for interfering with the quantum of the award, which is set at a level well within the proper range for such awards on those facts.

The award of 25% of the difference in pay between the posts of paramedic and Relief Staff Officer

Ms Pitts' first submission is that such an award is inconsistent with the tribunal's earlier finding in paragraph 8 of the tribunal's liability reasons which reads:

"8 For the assistance of the parties, we indicate that on the basis of our findings of fact on the evidence to date, we do not consider that the applicant has established that if the proper and fair procedure had been applied he would have been appointed to one of the vacant posts as Relief Staff Officer."

We are unable to accept that contention. In our judgment, at the end of the liability reasons, the tribunal were doing no more than to give an indication to the parties that on the evidence then received the tribunal were not satisfied, we infer on the balance of probabilities, that the applicant had established that he would have obtained a post as Relief Staff Officer but for the respondents' infringement of his right. That is not the same as saying that he would not have succeeded; merely that he had not established that fact on balance. Accordingly we can see no grounds for interfering with the tribunal's assessment of the loss of a chance at 25% following the first remedies hearing, based on their findings of fact contained in paragraph 5 of the first remedies reasons.

However, Ms Pitts makes an alternative submission, that on the tribunal's finding that the respondent had not established on balance of probabilities that he would have obtained the post he has not made out his case for any compensation under this head.

In our judgment the tribunal adopted the correct approach by assessing the loss of a chance.

That approach is to be found, first, in the assessment of compensation for unfair dismissal where the dismissal is found to be procedurally unfair. See Polkey v AE Dayton Ltd [1988] ICR 142, 163H, per Lord Bridge, and the subsequent Employment Appeal Tribunal decisions in Hough and Apex v Leyland Daf [1991] IRLR 194; Redbank v Meadows [1992] IRLR 209 and Campbell v Dunoon and Cowell Housing Association [1993] IRLR 496.

Secondly, it is a method used to asses a claim for the loss of promotion prospects in cases of sex discrimination. Ministry of Defence v Cannock [1994] ICR 918, 953A, per Morison J.

Such a method of calculating loss is well-established in the law of tort. For example, in a case of professional negligence by a solicitor or other legal adviser who fails to issue a writ on behalf of the plaintiff within the limitation period. Liability being established it is then for the court to assess the plaintiff's chances of success in the original action which by the solicitor's negligence he is prevented from pursuing. Kitchen v Royal Air Forces Association [1958] 2 AER 241.

We have considered whether any support for Ms Pitts' submission may be derived from the House of Lords decision in Hotson v East Berkshire Area Health Authority [1987] 2 AER 909. In that case the plaintiff injured his hip in a fall. He was taken to hospital. The medical treatment which he received was negligent. He was left with permanent disability.

The trial judge concluded that following the fall, for which the defendants were not liable, the plaintiff had a 75% chance of suffering permanent disability, but that the negligence of the hospital staff had turned that chance into an inevitability, thus depriving the plaintiff of a 25% chance of a good recovery. He was awarded 25% of the full value of the claim by way of damages. That award was overturned by the Court of Appeal whose decision was affirmed by the House of Lords.

The House of Lords approached the case on the basis of causation. Had the plaintiff established on the balance of probabilities that the cause of his lasting condition was the negligence of the defendant, rather than the fall? On the judge's findings he had not. Accordingly the claim failed; he could not prove any loss so as to complete the tort.

In our view the position here is quite different, and akin to the solicitors' negligence cases. Here, the sole cause of the position in which the applicant finds himself is the unlawful action of the respondent. There is no other causative factor for which the respondent is not responsible. In these circumstances the correct approach to compensation is to assess the chance of promotion.

Miscellaneous

The remaining points taken by Ms Pitts relate to factual findings by the Industrial Tribunal. They relate to the three year multiplier taken by the Industrial Tribunal; their finding in relation to performance related pay and the possibility of the applicant being appointed to a further vacancy for a staff officer.

Having considered these submissions we have concluded that these were all matters of fact and argument for the Industrial Tribunal. We are quite unable to say that their findings on these aspects were perverse.

Conclusion

It follows that we are unable to discern any error of law in the tribunal's reasoning in either of the remedies decisions under appeal. Accordingly the appeal is dismissed.