United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR P LAX (Solicitor) Bell Lax Mitigation Mill House 2 High Street Sutton Coldfield West Midlands B71 1XA


 


MR JUSTICE KIRKWOOD: This is the preliminary hearing of an appeal by an employee from a remedy decision by an Industrial Tribunal sitting at Birmingham on 5th February 1997. The extended reasons were sent to the parties on 3rd March 1997.

It arises in this way. Mrs Roberts is a hair stylist. She was employed by a Mr Leonard and a Miss Iannou at their hairdressing business, Beyond the Fringe, in Sutton Coldfield. For reasons we need not go into, a restructuring of the business took place in 1996, so that it became owned by Boldmere Promotions Ltd, the respondent. By reason of the transfer of undertaking legislation, Mrs Roberts' employment continued. However, for somewhat complicated reasons, which again we do not need to detail, the employment ended on 20th August 1996. The Industrial Tribunal held that Mrs Roberts had been unfairly dismissed.

The Industrial Tribunal made findings of fact as to what happened next. Those were in these terms:

"10 Within a very short space of time after her employment ended on 20 August, Mrs Roberts had spoken to the owner of a neighbouring salon known as Bumbles and had agreed to start work for him. She started on 1 September. It is clear that although originally it was on the basis of a 3 month trial either way, by the end of that week both parties were satisfied with each other and the employment was to all intents and purposes permanent. Or rather it would have been permanent but for a decision by Mrs Roberts that she wanted to learn to be a teacher of hairdressing. She would have had to pay the fee for the College course herself had she remained at Bumble, but she learned that if she entered the employment of a most prestigious salon in Birmingham known as Umberto's she would not have to pay a fee because they ran their own academy which gave its own teaching qualification. She applied for a job and was offered it. She left Bumbles in order to work for Umberto's but had a week of unemployment in between. In fact she was at Bumbles only a week. Whether there was a misunderstanding or whether she had been misled by Umberto's is merely by the by, but the grass on that side of fence was not as green as she had been led to believe that it would be. Within 6 weeks she was so disillusioned with the terms and conditions that she left Umberto's and took up self-employment as a mobile hairdresser visiting peoples homes."

The statutory provision as to the approach to compensatory awards is contained in s.123 of the Employment Rights Act 1996. Subsection (1) reads:

"(1) Subject to the provisions of this section and sections 124 and 126, 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 consequence of the dismissal in so far as that loss is attributable to action taken by the employer."

So the first task of the tribunal in this regard was to address two particular questions. What was the loss attributable to action taken by the employer? And having regard to that, what amount was just and equitable? The tribunal addressed those questions in this way:

"11 The question for us is whether any loss after she left the employment of Bumbles "is attributable to action taken by the employer." In one sense it must be arguable that it is because she would not have been working for Bumbles and therefore would not have been in a position to leave Bumbles had it not been for the original dismissal. But it seems to us that, at the end of the day, that it is almost unarguable that any loss after her decision to leave Bumbles, was not loss attributable to action taken by the employer but loss attributable to action taken by her. The chain of causation is therefore broken. At Bumbles she had secured what seems to have been permanent employment which, (but for the question of commission to which we will turn in a moment,) would have remunerated her as well as her old employment. But because she thought she could do even better she decided to leave. She did not do better she incurred additional loss. But it can hardly be just and equitable that that loss should be laid at the door of the respondents as her decision to leave Bumbles had nothing whatever to do with them. Therefore, her compensation for loss of earnings is confined to the difference between the commission which she received at the respondents and the commission which she might have received at Bumbles, the basic salaries being identical. It is common ground that she received initially no commission from Bumbles. She suggests that she would not have begun to receive commission until the end of the 3 month trial. But that apparently was the arrangement that she had when she first started with the respondents. Because things went well, she started to receive commission at a much earlier date. The possibility must therefore exist that she would have received commission from Bumbles before the 3 month period elapsed. It seems to us, taking the broad brush approach that it is appropriate on these occasions, that the best way to resolve these imponderables is to say that, on balance, we are satisfied that for the 13 week period which had been originally designated as the trial period she would have received no commission, but thereafter the commission that she would receive from Bumbles would be equivalent to the commission which she had received from the respondents. Her loss of earnings therefore is £50 for the 13 weeks of the trial period which is £650. ..."

The appellant seeks to challenge that. The primary argument presented before us today is that the Industrial Tribunal erred in not giving specific consideration in their extended reasons to the provisions of s.123(4) of the 1996 Act. That says:

"(4) In ascertaining the loss referred to in subsection (1) 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 (as the case may be) Scotland."

That subsection focuses on the ascertainment of loss. It imports into calculation of compensation in unfair dismissal cases the common law duty imposed upon somebody in the position of Mrs Roberts to mitigate that loss. But flowing from that it is argued in the Notice of Appeal and to some extent elaborated before us, that if in taking reasonable steps to mitigate her loss Mrs Roberts incurred further expense or further loss, that may be recovered from the employer even if the resulting damage is greater than it would have been had the mitigating steps not been taken. Secondly, this argument is said to flow, that if Mrs Roberts acted reasonably in adopting remedial measures, then she is not disentitled to recover the cost of such measures merely because the employer can suggest other measures less burdensome to him. And thirdly, that the tribunal should have asked whether or not Mrs Roberts acted reasonably in the steps that she took in an attempt to mitigate her loss. In asking itself if the loss was attributable to action taken by her the Industrial Tribunal asked the wrong question.

The fallacy in the argument presented thus far is in trying to put the question arising as to reasonableness in mitigation of loss in subsection (4) on an equal footing with the questions that the tribunal has to consider under subsection (1) of s.123; in particular, what is just and equitable in all the circumstances? What is just and equitable in the circumstances having regard to the loss sustained by the complainant attributable to action taken by the employer? It is not right to say that the question to be posed under subsection (4) ranks with that question under subsection (1), so as to import a special test of reasonableness in considering what is just and equitable in all the circumstances.

The way the case is put is, we think, that the job at Bumbles paid less well than the job with the respondent. That Mrs Roberts was offered a job at Umberto's which she was led to believe, so the Notice of Appeal says, would pay her higher remuneration. She would then have mitigated her loss and the respondent's liabilities further. The argument is that if the respondent acted reasonably in mitigating her loss, but in the result aggravated it, she is nonetheless entitled to compensation for that loss, even though it is greater than it might otherwise have been.

The Notice of Appeal goes on to contain arguments as to the reasonableness of Mrs Roberts' step in taking the job at Umberto's, which have not been developed before us but which we have nonetheless considered. They do not seem to us to be substantiated by the findings of fact by the tribunal.

This preliminary hearing has been argued and argued by reference to selected passages from Halsbury's Laws of England and from an edition of McGregor on Damages. It has, we think, emerged during the course of this hearing that to argue propositions of law from such commentaries is far from satisfactory. It is necessary in order to establish a proposition of law to go to the authority for that proposition, namely the text of the decision of the Court, rather than place reliance upon the summary and supposed propositions found by the commentators and text book writers. It is really a most unsatisfactory way of proceeding.

The appeal contains what is, in our judgment, the fundamental flaw of seeking to rely on facts not found by the Industrial Tribunal and ignoring facts found by it. There is no finding of fact that the remuneration provided at Umberto's was higher than that earned or capable of being earned at Bumbles. The findings of fact were that having gone to Bumbles, Mrs Roberts decided she wanted to learn to teach hairdressing. That whilst at Bumbles she would have had to pay her own tuition fees; if she was at Umberto's she would not have had to pay the tuition fees. Subject to the question of commission with which the tribunal dealt, Bumbles would have remunerated her as well as her previous job. Mrs Roberts left because she thought she could do even better.

Accordingly it was not part of the case, as the tribunal found, that Mrs Roberts went to Umberto's to mitigate or further mitigate loss. She went purely for her own reasons to better herself. This is not a case of incurring expense in an attempt to mitigate loss. It is not a case in line with those, properly understood, of taking remedial steps to mitigate loss. And we do not find that the passages in Halsbury prayed in aid to support such propositions are helpful. That is particularly because they have little bearing on the circumstances of the case as the tribunal found.

In our unanimous judgment, the Industrial Tribunal applied the right test. Section 123(1) required it to identify the loss attributable to the action of the employer. Accordingly it had to distinguish between loss attributable to the actions of the employer, and loss attributable to the actions of the employee. In carrying out that exercise, the tribunal was engaged in making findings of fact and we have referred to its findings.

This was a simple case. Mrs Roberts was dismissed from her job as a hair stylist; she soon got another job as a hair stylist nearby; there was no loss of status; her basic remuneration was the same. Within quite a short time commission payments would have been added. She would have been no worse off. She could have stayed permanently, but she chose to leave because the grass looked greener elsewhere.

We are not in anyway persuaded that the Industrial Tribunal erred in law; or that, on analysis, there is any viable argument that it did. Indeed having heard the argument for the appellant, and having considered this matter, it seems to us clear that the tribunal's decision was quite right. The appeal is, in our judgment, unarguable. It is without any merit, and will accordingly be dismissed.