United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR T NEWTON (Adviser) NELC Unit 23 Brougham Enterprise Centre Hartlepool TS24 8EY
For the Respondents	MR A BURNS (of Counsel) Kosky Seal & Co Solicitors Ambassador House 2 Cavendish Avenue Sudbury Hill Harrow Middlesex HA1 3RW


 


MR JUSTICE MORISON (PRESIDENT): This is an appeal against a decision of an Industrial Tribunal held at Leeds on 29th May 1996. There is a very short point in relation to this appeal which has been widened somewhat in the very able submissions made to us by Mr Burns.

The Industrial Tribunal's decision was sent to the parties on 17th June 1996. By that decision they concluded that the applicant, Mr Swift, had been unfairly dismissed by his employers, Pagendam and Pratt. They also ruled on his claim for damages for wrongful dismissal which by virtue of the Extension of Jurisdiction Provisions England & Wales Order 1994 the Industrial Tribunal now has power to deal with. Their conclusion on the damages issue was that by reason of his length of service the applicant, Mr Swift, was entitled to 12 weeks notice. But because he was sick at the time and because his entitlement to sick pay under his contract would only have lasted for seven of those weeks, and because he would have remained sick for the remaining five weeks, they only awarded him the amount of sick pay that he would have received from the date of his summary dismissal to a period of seven weeks thereafter which they assessed as £367.50 in all.

There was a Notice of Appeal presented against that decision. The Notice of Appeal says as the grounds on which the appeal is brought:

"The Industrial Tribunal failed to award damages for breach of contract when the appellant was dismissed whilst absent from work through ill-health."

That Notice of Appeal was signed by a professional representative on behalf of Mr Swift who had at the Industrial Tribunal stage been represented by Counsel.

The matter came on for a preliminary hearing before a division of this Court on 21st November 1996, and having listened to Mr Newton's argument, the Court ruled that the appeal was suitable for a full hearing on what was described as a short arguable point of law. The point of law was not elaborated in the Notice of Appeal and no direction was given by this Court that the Notice of Appeal should be amended.

Under the Appeal Tribunal's Practice Direction parties are required under paragraph 8(6) to exchange skeleton arguments and they should serve them on the Employment Appeal Tribunal not less than two weeks before the date fixed for the hearing of the full appeal. That was not done in this case. The appellant's skeleton argument was served on the respondents yesterday.

In the skeleton argument lodged on behalf of Mr Swift, Mr Newton refers to Schedule 3 of the Employment Protection (Consolidation) Act 1978 which sets out certain statutory provisions giving employees statutory rights to pay during their period of notice. Those provisions are repeated in s.86 to s.88 of the Employment Rights Act 1996.

In response to the appellant's skeleton argument, Mr Burns on behalf of the employers, has submitted to us three points. Firstly, he says that the Notice of Appeal did not raise this particular line of argument, namely that the tribunal failed consider the statutory scheme applying to notice periods. He said that the Notice of Appeal was general and did not clearly define the point of law at issue in breach of paragraph 2(3) of our Practice Direction. He said that it was important that this point should have been properly identified because it looks as though the Industrial Tribunal gave no consideration to the statutory scheme at all when it was giving its decision.

Secondly, he submitted, that because this was not a point which was raised in the Industrial Tribunal, in accordance with this Court's decision in the case of Kumchyk, we ought not to allow it to be argued now. He said that it would be wrong for us to depart from the well laid down practice in the case Kumchyk. We were not being invited to correct an error of law made by the Industrial Tribunal, rather, we were being invited to correct an error made on behalf of the appellant's Counsel in not taking this point before the Industrial Tribunal.

Thirdly, he submitted to us, that there are factual matters which will require to be investigated, and that it may be under the provisions of s.87(4) that the statutory scheme would not have applied in any event.

It seems to us that this is one of those very rare and exceptional cases where although the point was not apparently addressed below, it would be appropriate for the Employment Appeal Tribunal to entertain an argument here for the first time. The reason why we take that view is that it seems to us that ss.86-88 provide a statutory scheme which defines in clear terms the employee's entitlement to payments from his employer during a period of notice. It was the duty of the Industrial Tribunal to give effect to that statutory scheme in their decision, and whilst we are sympathetic to the position they found themselves in because they did not have the benefit of argument, we think that on balance it was partly their responsibility to have identified the scheme and to have applied it, even if it was not drawn to their attention by representatives on behalf of the parties.

It seems to us that that distinguishes this case from the two authorities to which we were referred, namely Kumchyk v Derby City Council [1978] ICR 1116 and GKN v Lloyd [1972] ICR 214.

In the latter case the employers wished to argue for the first time in front of the National Industrial Relations Court that the employee was not entitled to a redundancy payment by reason of the employers having offered reinstatement or other suitable employment. It seems to us obvious that that was a point which the employers could or could not have raised as the case might be, and we can well understand the National Industrial Relations Court accepting the employee's submission that it was too late to run that argument before the appellate tribunal.

In the Kumchyk case, the employee wished to run an argument that his contract of employment was subject to some kind of sophisticated implied term. That argument had not been raised before the Industrial Tribunal and it raised a whole series of questions of fact which the tribunal would have had to have addressed had the argument been raised before them.

In this case, we are not persuaded that there is any significant factual exploration to be undertaken by the Industrial Tribunal, save as to the quantification of the award. The tribunal have clearly found that the notice to which the applicant was entitled was the statutory period of notice, namely 12 weeks. Therefore, what has happened in this case has been most unfortunate. The parties and the tribunal appear to have overlooked an important statutory provision.

It seems to us that the Notice of Appeal was apt to cover this point, but we recognise that it can be criticised as lacking the clarity of definition that is to be expected in a Notice of Appeal. It seems to us that that would not have caused any difficulty at all had the skeleton argument been exchanged two weeks before the hearing. Had that been done, we anticipate that Mr Burns would not have submitted to us that the point was not covered by the Notice of Appeal. As it was, Mr Burns was first aware of this point being made late yesterday afternoon, and we can understand his irritation and difficulty that a late skeleton argument had caused in this case. But be that as it may, we are satisfied that Mr Burns has had a proper opportunity to consider the point at issue, and to make representations to us, albeit that he may have had to work late last night to enable him to do so. In those circumstances, we believe that this appeal is competent despite the general terms of the Notice of Appeal and, despite the fact that it raises a point which was not considered by the Industrial Tribunal.

We turn, therefore, to the question as to the correct interpretation of the statutory provisions. S.86(1) defines the notice which is required by an employer to be given when terminating a contract of employment of a person who has been continuously employed for one month or more. In Mr Swift's case, he was entitled to 12 weeks' notice as the tribunal has found, because he had twelve years, at least, continuous service. S.87(1) says:

"(1) If an employer gives notice to terminate the contract of employment of a person who has been continuously employed for one month or more, the provisions of sections 88 to 91 have effect as respects the liability of the employer for the period of notice required by section 86(1)."

It seems to us that the argument which Mr Burns raised under s.87(4) is not open to him in the light of the tribunal's decision at paragraph 16, where, as we read it, they were finding as a fact that he was entitled to 12 weeks' notice.

S.88 then provides that:

"(1) If an employee has normal hours under the contract of employment in force during the period of notice and during any part of those normal working hours-

...

(b) the employee is incapable of work because of sickness or injury,

the employer is liable to pay the employee for the part of normal working hours covered ... a sum not less than the amount of remuneration for that part of normal working hours calculated at the average hourly rate of remuneration produced by dividing a week's pay by the number of normal working hours."

Those complicated sounding words simply amount to this, that Mr Swift was entitled under the statute during any period of notice to which he was entitled, to be paid the normal week's pay, even though during that period he was unable to work because of sickness or injury.

It follows that, in our judgment, the Industrial Tribunal, in ignorance of the statutory scheme, have approached the matter in an incorrect way. Mr Swift is entitled to such sums as he would have earned under his contract of employment during the 12 week period, regardless of the fact that he was off work because of sickness or injury, in accordance with s.88(1), but that he must give credit under 88(2) for the payments which would have been made or were made to him and received by him during the relevant period.

Accordingly, when calculating damages for wrongful dismissal, the Industrial Tribunal should have asked themselves what sum would he have been entitled to receive had his employer given him the statutory notice to which he was entitled. The answer to that question is that he would have received that which he was statutorily entitled to receive under the scheme of the legislation. It seems to us that that is an error which must be corrected. We would hope very much that the parties would be able to agree the amount to be paid to Mr Swift without the need to go back to the Industrial Tribunal.

Accordingly, it seems to us that regrettable as the late supply of the skeleton argument was in this case, we should allow the appeal and we cannot fix the amount of compensation ourselves because we do not know and cannot know how much the employee has received during the 12 week period in question.

I should add to this judgment that Mr Burns had asked us to adjourn this case because he wished to take instructions from his clients before he embarked upon an argument. We rejected that application for an adjournment. It seemed to us that he was quite capable, as he proved to be, of dealing with the argument when it was presented to us.

In relation to any question of mitigation, that is again a matter for the Industrial Tribunal. We would be very surprised if in the context of the ill health of Mr Swift that was going to take much of their time, but it may that he was entitled to benefits which he did not claim for, but that is entirely speculative. It suffices to say that that point is open for debate before the Industrial Tribunal if the matter goes back before them.

[Application for costs from the respondents]

We understand your position Mr Burns, but we are not minded to make an order for costs in this case. But I want to make it perfectly plaint to you Mr Newton, that if I had power to fine you or punish you in some way for having done what you have done, I would have willingly done so in this case. But I think there is a difference between doing that on the one hand, and categorising your behaviour as unreasonable so as to cause me to make an order of cost against you on the other.

[Application for leave to appeal to the Court of Appeal on behalf of the respondents]

We do not grant your application for leave to appeal. We do not think there is any arguable point of law. Kumchyk does not say that in no circumstances can this Court entertain an appeal on a point which was not raised below. This case is a good example of the rare circumstances in which the Court should entertain such an appeal.