United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR B NAPIER (of Counsel) Nabarro Nathanson 50 Stratton Street London W1X 6NX
For the Respondent	MR S WOOD (of Counsel) Conrathe Chivers Brown 420-424 Ewell Road Tolworth Surrey KT6 7EH


 


JUDGE PETER CLARK: Mr Thomas was continuously employed by R.H. Thompson & Co Ltd ("the Company") or its predecessors from August 1968 until his dismissal on 13 May 1994. At that time he held a position of Office Manager at the Company's Croydon depot.

Following dismissal Mr Thomas ("the Applicant") presented an Originating Application to the Central Office of Industrial Tribunals complaining of racial discrimination and, we infer from the reference to the Employment Protection (Consolidation) Act 1978, unfair dismissal. His grounds of complaint conclude with these words:

"I believe I was unfairly dismissed and subjected to detrimental treatment because of my race".

He describes himself as being of black Caribbean origin.

By their Notice of Appearance the Company averred that its reason for dismissal was redundancy and that race played no part in its criteria for making him redundant.

The complaint came on for hearing before the London (South) Industrial Tribunal on 6, 7, and 8 September 1995. In a decision with full reasons dated 9 November 1995 the Tribunal concluded:

"(a) the Applicant was unfairly dismissed and did not contribute to his dismissal; and

(b) the Applicant was unlawfully discriminated against on the ground of race contrary to section 4(2)(c) read with section 1(1)(a) of the Race Relations Act 1976 ... in that he was selected for redundancy on racial grounds.

The Tribunal awarded compensation of £69,874.94 of which £15,194.98 constituted the prescribed element. Interest is to apply six weeks from the date of promulgation of this decision."

The Appeal

Against that decision the Company appeals. The appeal against the findings of liability are now abandoned, and this is an appeal against the Tribunal's award of compensation only. However, before turning to the issues relating to compensation we should set out the Tribunal's material findings on liability.

Unfair Dismissal

The Company decided to merge their Kingston and Croydon depots. Only Croydon was to remain. At a meeting held on 17 March 1994 attended by a director, Mr Greenstreet; the Kingston Depot Manager, Mr Morden; Mr Richardson, later Deputy Manager at Croydon and Mr Bishop, the Managing Director, it was decided to retain Mr Morris, the Office Manager at Kingston and dismiss the Applicant on grounds of redundancy.

The Tribunal appear to have found at paragraph 6 of their reasons, that the reason for the Applicant's dismissal was some other substantial reason, in that the amount of work at Croydon had increased since the merger. As a matter of law, it is common ground between Counsel, and we agree, that that approach is not correct. The question is not whether there was a diminution in the amount of work to be done, but in the requirement for employees to do work of a particular kind. Before the merger there were two Office Managers; following the merger there was only one. The true reason for dismissal was redundancy. Indeed, thereafter the Tribunal treat this as a redundancy dismissal and go on to find that the dismissal was unfair under what was section 57(3) of the 1978 Act.

Race Discrimination

(1) The Industrial Tribunal has found that the Applicant, a black man with more skills and longer service was selected for redundancy in preference to a white man (Mr Morris) with less service and fewer skills.

The Tribunal rejected the Company's case that the selection was based on efficiency and they found that an operative cause of the selection was the Applicant's colour.

(2) That the Applicant had been subjected to racial harassment in the form of racial banter from and since 1987, when the Company took over the business. In particular, it found that Mr Richardson and Mr Morden were racists, who racially abused the Applicant.

(3) The significance of those findings, say the Industrial Tribunal, was that Mr Richardson and Mr Morden were parties to the decision taken on 17 March 1994 to select the Applicant for redundancy rather than Mr Morris. It found in terms that an operative cause for selecting the Applicant for redundancy was the fact that he was a black man. That they held was unlawful discrimination contrary to sections 1(1)(a) and 4(2)(c) of the 1976 Act.

Remedies

In calculating compensation the Tribunal awarded

(1) £10,000 for injury to feelings

(2) Loss of earnings from the date of dismissal until the final hearing date: £15,194.98.

(3) Future loss until the age of 65, with a five per cent reduction for accelerated payment; a total of £38,349.96.

(4) Loss of pension contributions until age 65: £6,030.

(5) Loss of statutory rights: £300.

(6) The basic award was cancelled out by the redundancy payment received by the Applicant on dismissal.

Finally, a Recoupment Order was made. The prescribed element was said to be £15,194.98, representing the loss of earnings between dismissal and the final Tribunal hearing date.

Issues in the Appeal

(1) Mr Napier has advanced a sophisticated argument, based on the distinction between the Applicant's selection for redundancy and his dismissal. He submits that the Tribunal found only that an operative cause of the selection was the Applicant's colour; it then impermissibly jumped from that finding to a finding that he was dismissed on grounds of his race.

In support of that submission he relied on the decision of the Employment Appeal Tribunal in Timex Corporation v Hodgson [1982] ICR 63. There, the employer had three supervisors; two men and one woman. It decided to make two supervisors redundant and appoint a single supervisor to a revised post instead. Both male supervisors were dismissed, and the female supervisor retained.

An issue arose as to whether the admitted discrimination on grounds of sex lay in the dismissal of the male complainant, or the refusal to transfer him to the remaining supervisor post, a distinction which was material to the defence of genuine occupational qualification which the employer wished to advance.

An Industrial Tribunal found that it was the former, so that the employer could not raise the GOQ defence under section 7 of the Sex Discrimination Act 1975. The Appeal Tribunal overruled that finding, holding that on the facts the employer discriminated against the complainant by selecting the woman to do the revised job, not in dismissing the man who was not selected for the revised job, on the basis that additional duties were genuinely introduced into the new post.

In our judgment the facts in this case are quite different, making the distinction between selection for redundancy and dismissal illusory. Here, the Tribunal found that the Applicant was selected for redundancy on the grounds of his colour; but for his colour he ought to have been retained in preference to Mr Morris. The causative link between the Applicant's selection for redundancy on the grounds of his race and his dismissal is made out. As a matter of causation the unlawful discrimination was an effective cause of the dismissal. See O'Neill v Governors of St Thomas More RCVA Upper School & Another [1997] ICR 33, 43E (per Mummery J).

Accordingly we reject Mr Napier's principal submission.

(2) Injury to feelings. Mr Napier accepts that if we are against him on his first point, then an award of £10,000 for injury to feelings based on the Applicant's dismissal, as opposed to his selection for redundancy only, is an award with which we cannot interfere. We think that concession was properly made. Indeed, we find it odd that in assessing their award under this head the Tribunal excluded from consideration the history of racial harassment to which they found the Applicant had been subjected. Had those matters been included the award may well have been higher. See Armitage v Johnson[1997] IRLR 162. However, there is no cross-appeal on this point, and therefore we have not gone on to consider whether the award was too low.

Further, we are quite satisfied that there is no element of double recovery here in relation to the award in respect of pension loss. Mr Napier has, we think, taken the words of the Industrial Tribunal in paragraph 25 of their reasons out of context. All that the Industrial Tribunal was there saying was that the Applicant had put up with racial abuse in order to see out his time and draw his pension at his normal retirement age.

Future Loss

(3) Mr Napier criticises the Tribunal for not reducing the future loss award on the basis that the Applicant had lost the chance of continuing until normal retirement age in the Company's employment. He might have been made redundant on grounds other than his race before reaching the age of 65. That, it seems to us, was a question of fact for the Industrial Tribunal after considering the evidence led before it. It was satisfied that if the Applicant had not been selected for redundancy in the circumstances which they found existed in March 1994, he would have gone on to reach retirement age in the employment. We are unable to say that such a finding was not open to the Industrial Tribunal.

Generally

The assessment of compensation for unlawful racial discrimination is governed by section 56(1)(b) of the 1976 Act which provides:

"(1) Where an industrial tribunal finds that a complaint presented to it under section 54 is well-founded, the tribunal shall make such of the following as it considers just and equitable -

(b) an order requiring the respondent to pay to the complainant compensation of an amount corresponding to any damages he could have been ordered by a county court to pay ... to the complainant if the complaint had fallen to be dealt with under section 57."

Section 57 treats a claim for racial discrimination in the same way as a civil claim in tort.

Section 57(4) provides:

"(4) For the avoidance of doubt it is hereby declared that damages in respect of an unlawful act of discrimination may include compensation for injury to feelings whether or not they include compensation under any other head."

Thus the measure of compensation is the tortious measure of damages. Damages for injury to feelings may be equated with general damages for pain, suffering and loss of amenity in a claim for damages for personal injury. The financial loss will include loss of earnings, past and future, caused by the dismissal, and loss of pension contributions. We can see no error in the Tribunal's calculation of loss under these heads.

However, where there is also a finding of unfair dismissal the Tribunal must be careful not to award double recovery. See the Employment Rights Act 1976 section 126. It must be borne in mind that the limit on the compensatory award for unfair dismissal (£11,000 at the time of the Applicant's dismissal) no longer applies to awards for unlawful discrimination.

Here, the only additional award for unfair dismissal is the sum of £300 for loss of statutory rights. Thus, in our view there has been no double recovery.

The one area which concerns us relates to the Recoupment provisions, which apply to unfair dismissal claims, but not unlawful discrimination awards. It seems that the loss of earnings from dismissal to the date of hearing before the Industrial Tribunal is recoverable under both claims. This Tribunal appears to have treated that head of loss as arising in the unfair dismissal claim for the purpose of making a Recoupment order, although it did not go on to limit the compensatory award to the statutory maximum for the purpose of the unfair dismissal claim.

Again, there is no cross-appeal by the Applicant against the Recoupment order, and therefore we are not required to consider whether it was open to the Tribunal to disregard that head of loss under the assessment of unfair dismissal compensation in favour of solely making an award for racial discrimination in respect of the loss of earnings to the final date of hearing. What we would say, as a matter of general practice, is that Tribunals should separately set out their calculations in relation to both unfair dismissal and racial discrimination, and then indicate how their final calculation is made, ensuring that there is no double recovery.

Cross-Appeal

Mr Wood submits that the Tribunal has not spelt out the interest recoverable under the Race Relations (Interest on Awards) Regulations 1994. We think that complaint is well-founded; we have invited the parties to reach agreement on this aspect. Failing agreement the calculation of interest under the regulations must be remitted to the same Industrial Tribunal for determination.

The Tribunal has made an order for interest on the judgment from a date six weeks after the promulgation of their decision. However, that does not deal with the specific heads of interest which are recoverable in a race discrimination claim. Those matters remain to be resolved.

Conclusion

We shall not interfere with the Tribunal's award of compensation in this case. The appeal is dismissed. The cross-appeal is allowed; in the absence of agreement between the parties as to the amount of interest properly due that matter is remitted to the same Industrial Tribunal for determination.

For the avoidance of doubt, the principal sum ordered by the Tribunal of £69,874.94 is now due and payable. It will be a matter for the Applicant as to whether he wishes to restore the matter of interest before the Industrial Tribunal.