United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR T NEWTON (Employment Law Adviser)


 


JUDGE PETER CLARK: This is an appeal by the Applicant before the Middlesborough Industrial Tribunal against that Tribunal's assessment of the compensatory award made to him following a finding of unfair dismissal against his former employers, the Respondents.

The Respondent is a national cleaning company. The Appellant was employed by the Company from 16 September 1991 until his dismissal by reason of redundancy on 28 October 1996. Prior to his dismissal the Appellant held the position of Contracts Manager in charge of a large contract for cleaning British Telecom telephone kiosks in the North of England. He received a gross salary of £17,000 per annum. He had four to five Area Managers reporting to him.

Following the loss of certain major cleaning contracts the Respondent decided to abolish that layer of middle-management in the structure to which the Applicant's post belonged. He was seen on 21 October 1996 by the Operations Manager, Mr Knowles and informed that he was one of ten people to be made redundant, although there was a possibility of his taking alternative employment as an Area Manager at a salary of £12,000 per annum gross. The Appellant was prepared to accept that alternative position provided he received a redundancy package. That proposal was not acceptable to the Respondent.

On 28 October 1996, the effective date of termination of the contract of employment, a meeting took place between the Appellant, Mr Knowles and Mr Khan, the Personnel Director. On that occasion the Appellant finally refused the offer of alternative employment as an Area Manager. He told the Tribunal he was not prepared to accept a position which would involve him in serving under those he had previously managed.

However, the Tribunal found as a fact that the offer of alternative employment remained open until 23 March 1997, the day before the first Tribunal hearing.

Following his dismissal he presented an Originating Application to the Tribunal on 10 January 1997, alleging unfair dismissal and breach of contract. A liability hearing took place before the Tribunal on 24 March 1997. That Tribunal found that the dismissal was unfair for the Summary Reasons promulgated on 28 April 1997. In essence, they found that the dismissal took place with no adequate warning, no meaningful consultation and no evidence of objective criteria used for redundancy selection, nor, it followed, application of such criteria to the Appellant.

The breach of contract claim, based on a contention that the Appellant was contractually entitled to have a redundancy payment based on his service and actual salary, as opposed to the statutory maximum, failed and was subsequently dismissed. The question of remedies was adjourned.

At the resumed remedies hearing held on 22 May 1997 the Tribunal, in Extended Reasons dated 3 July 1997, concluded that the compensatory award should be limited to the sum of £688 made up of £200 for loss of statutory rights and a further £488 representing approximately two weeks' wages.

The Appeal

The sole point taken in the Notice of Appeal is that the Tribunal erred in law in finding that the Appellant had failed to mitigate his loss in not accepting the offer of alternative employment made before the effective date of termination of his employment.

We accept that there is authority at this appellate level, applying the general law of contract, that an employee cannot be said to have failed to mitigate his loss by refusing the employer's offer of alternative employment before he is dismissed: see McAndrew v Prestwick Circuits Ltd [1988] IRLR 514, paragraph 21 applying Savoia v Chiltern Herb Farms Ltd [1981] IRLR 65, paragraph 16. We note that those were both cases in which the Applicant quit the employment in response to a repudiatory breach by the employer, amounting to constructive dismissal. We leave open a case in which the employee is dismissed on contractual notice. That question does not arise in this case because the Tribunal here expressly found that the offer of alternative employment remained open after the effective date of termination. In these circumstances the cases to which we have referred may be distinguished. In our judgment the Tribunal was entitled to conclude, if it did, that the Appellant's continuing failure to accept the alternative employment offered following his dismissal amounted to a failure to mitigate his loss for the purpose of Section 123(4) of the Employment Rights Act 1996. Accordingly the present ground of appeal is, in our view, misconceived.

Mr Newton, appearing on behalf of the Appellant, accepts that analysis, but he seeks leave to argue the following further points:

(1) In paragraph 4 of the Tribunal's Extended Reasons it considered it more likely than not that the Appellant would have been fairly dismissed had the correct procedure been followed. However, the Tribunal makes no finding as to the proper "Polkey deduction", expressed in percentage terms arising out of that finding;

(2) there is no calculation of the full loss, if any, subject to that deduction, arising out of the dismissal;

(3) there is no express finding as to whether the Appellant failed to mitigate his loss in not accepting the continued offer of the Area Manager post after his dismissal; even if he was so found to have failed to mitigate, he could still have suffered a continuing partial loss comparing his pre-dismissal salary with that applicable to the Area Manager post;

(4) alternatively, submits Mr Newton, no reasons are given for the assessment of two weeks loss. He argues under the well known principles in Meek v City of Birmingham District Council [1987] IRLR 250, per 251 per Bingham LJ, that the Appellant is entitled to know how that figure was arrived at, as being just and equitable compensation in his case.

We think that these matters raise questions of law which ought to be addressed at a full hearing of this Appeal Tribunal and accordingly, we grant leave for the matter to proceed, not on the basis of the existing grounds of appeal, which we strike out, but on the basis of grounds to be added by way of amendment within seven days of today's date, which grounds are limited to the format which we have expressly identified in this judgment.