United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR G CHAPLIN (Representative)
For the Respondents	NO APPEARANCE BY OR ON BEHALF OF THE RESPONDENTS


 


JUDGE PETER CLARK:

1. This is a claim of unfair dismissal, presented by the applicant, Mr David Slocombe, to the Employment Tribunals as long ago as 24th November 1995. He alleged that his employment with the respondent, commencing on 20th November 1984, was terminated unfairly by the respondent on 31st August 1995. By a series of promotions he had then reached the position of product manager. The claim was resisted.
2. It first came on for hearing before an Employment Tribunal sitting at Brighton, chaired by Mr C J Cleugh, on 2nd May 1996. The applicant was represented by Mr Chaplain of the Brighton Unemployed Centre; the respondent by Mr Smith, a personnel consultant. That hearing was adjourned to 28th May and finally 11th July 1996.
3. By a reserved decision promulgated with extended reasons on 4th October 1996 ["the first decision"] the tribunal found that the applicant had been unfairly dismissed by reason of redundancy. There had been no consultation with the applicant prior to his dismissal and no consideration given to the possibility of alternative employment with the respondent.
4. At paragraph 15 of their reasons the tribunal considered the question, identified by the House of Lords in Polkey v A E Dayton Services Ltd [1988] ICR 142, as to the chances of proper consultation avoiding redundancy. They held that there was a 60% chance that after a two week consultation period the applicant would have been retained in the employment in the capacity of Field Sales Engineer.
5. They adjourned any further issues on remedy, to be restored if not agreed.
6. Against the first decision the applicant appealed by a Notice dated 29th October 1996 ["the first appeal" – EAT/1241/96]. That appeal was listed for preliminary hearing before a division of this tribunal on which I sat on 11th February 1997. The case was permitted to proceed to a full hearing on amended grounds initialled by me to indicate the leave to amend which was given. The nature of the case was that the tribunal had decided the Polkey issue without hearing representations from the parties and, having done so, reached a perverse conclusion. The Chairman commented on the amended grounds of appeal by a letter dated 25th March 1997.
7. The first appeal was listed for hearing before a division presided over by Judge Hull QC on 1st July 1997. The appeal was adjourned generally with liberty to restore on that occasion. We have seen no judgment by Judge Hull's tribunal explaining the reasons for that adjournment, but it appears that the appeal was adjourned to allow the applicant to apply to the Employment Tribunal for a review of the first decision. That application was made by letter dated 2nd July 1997.
8. The review application was considered by the Employment Tribunal on 11th December 1997. The basis for the application was that the tribunal had acted prematurely in deciding the Polkey issue at the liability hearing without receiving evidence and submissions on the point. The application was granted, in the interests of justice, and the second paragraph of paragraph 15 of the first decision reasons was excised from that decision. We shall call that the first review decision. It was promulgated on 29th April 1998.
9. On 19th February 1998 a remedies hearing took place before the Employment Tribunal. Having received evidence and submissions the tribunal again reached the conclusion that the applicant had a 60% chance of being offered alternative employment as a Field Sales Engineer at a salary of £18,500 per annum gross. They went on to calculate the applicant's loss. They found that he was paid £21,480 per annum gross as a product manager, compared with the Field Sales Engineer salary of £18,500 gross. They calculated the respective net earnings figures; £261.92 per week as product manager, £255.63 as a Field Service Engineer.
10. The remedies decision with extended reasons, also promulgated on 29th April 1998 shows that compensation was calculated in this way. The applicant was awarded two weeks net pay at the Product Manager rate for a notional consultation period. The remainder of his lost earnings were calculated on the basis of the Field Service Engineer rate, less the whole of the monies earned net in alternative employment, first with Jay Electronics and then with Kiddle Fire Protection up to the date of the remedies hearing. With Kiddle he earned £21,580 gross per annum, more than he would have earned as a Field Service Engineer with the respondent. That calculation was based on the principle in Ging v Ellward [1978] ICR 265. With other items of compensation, and having deducted 40% under the Polkey principle, the net award totalled £2,230.78.
11. Having promulgated the remedies decision the tribunal of its own motion and by a letter dated 29th April 1998, proposed a review of the remedies decision in the light of my judgment in Whelan v Richardson [1998] IRLR 114. We shall return to that case.
12. The applicant was unhappy with the remedy decision. By letter dated 18th May 1998 to the EAT Registrar Mr Chaplin applied to "resurrect" the first appeal which had been adjourned by Judge Hull's tribunal.
13. That application was acceded to and the first appeal was restored for hearing before a division presided over by Judge Hicks QC sitting on 22nd September 1998. On that occasion the first appeal was again adjourned. The basis for that adjournment, we see from a judgment delivered by Judge Hicks on that day, was to allow the applicant to make application to the Registrar for leave to appeal out of time against that part of the remedies decision (reasons, paragraph 3) which reinstated the Polkey finding first set out in paragraph 15 of the first decision.
14. On 28th September 1998 the applicant lodged the second appeal (EAT/1329/98) against the remedies decision, insofar as it reinstated the 40% Polkey deduction. That was followed by a letter from Mr Chaplin dated 24th October 1998. Meanwhile, on 14th October 1998 Mr Smith, on behalf of the respondent, wrote to the Registrar contending that the proposed second appeal raised no point of law. The respondent accepted the tribunal's remedies decision. Having considered the correspondence the Registrar granted an extension of time for bringing the second appeal by her Order dated 3rd November 1998.
15. On 15th December 1998 the Employment Tribunal held the second review hearing, and announced their decision orally. Before that decision was promulgated with extended reasons on 19th February 1999 ["the second review decision"] Mr Chaplin wrote to the tribunal Chairman on 16th December 1998, contending that the basis for the calculation of lost earnings was incorrect on the grounds that the tribunal took the applicant's earnings with the respondent at the notional Field Service Engineer's rate, and not the higher Product Manager rate.
16. The second review decision proceeded on the basis, following Whelan rather than Ging v Ellward, that the applicant's loss ended when he took better paid employment with Kiddle on 4th December 1996. That had the effect of increasing the net award to £2,944.43. We should point out that Whelan has since been qualified by the Court of Appeal in Dench v Flynn [1998] IRLR 653, but in a way which Mr Chaplin accepts is not unfavourable to the applicant in this case.

The Appeals

17. The first appeal is listed before us today for an inter partes hearing; the second appeal for an ex parte preliminary hearing, held to determine whether the second appeal discloses any arguable point of law to go forward to a full appeal hearing.
18. The respondent does not appear and is not represented before us today; however, we have taken into account Mr Smith's letter to the Registrar dated 13th April 1999. In that letter he indicates that the respondent accepts the various decisions of the Employment Tribunal up to and including the hearing held on 15th December 1998, resulting in the second review decision promulgated on 19th February 1999. There is no proposed cross-appeal. It is further submitted that in the remedies decision the tribunal was entitled to find that a 40% Polkey deduction was appropriate, based on the chances of the applicant being retained as a Field Service Engineer.
19. Mr Chaplin concedes that the first appeal is now redundant in view of the first review decision, excising paragraph 15 of the first decision reasons. We shall therefore dismiss that appeal.
20. As to the second appeal, Mr Chaplin makes the following submissions:

(1) Having found that the dismissal was substantively unfair, the tribunal was wrong to make any Polkey deduction in light of the Court of Session judgment in King v Eaton (No. 2) [1998] IRLR 686. The issue in King (No.2) was whether the Employment Tribunal erred in refusing to admit, for the purposes of assessing remedy, evidence from the respondent employer designed to show that if a fair procedure had been followed the result, dismissal, would have been the same. That ruling was upheld by the EAT and in due course by the Court of Session.

That point does not arise in this case. The respondent led such evidence at the remedies hearing without objection from Mr Chaplin. In the event, the tribunal did not accept the respondent's evidence, but made its own assessment, on the state of affairs as it appeared to the tribunal at the time of dismissal, of the percentage chance of the applicant retaining employment with the respondent, and the capacity in which he would then have been employed. That seems to us to be a permissible approach as identified by the EAT, Tucker J presiding, in Red Bank Manufacturing Co Ltd v Meadows [1992] IRLR 209, applying the dictum of Lord Bridge in Polkey page 163H, adopting the words of Browne-Wilkinson J in Sillifant v Powell Duffryn Timber [1983] IRLR 91, 96.

Mr Chaplin suggests that there is some tension between that passage in the speech of Lord Bridge and the speech of Lord Mackay of Clashfern also given in Polkey. We disagree. Both noble Lords agreed that the fact that a proper procedure would have made no difference to the result was irrelevant to the question of the fairness of the dismissal. We can see nothing in the speech of Lord Mackay which conflicts with Lord Bridge's approach to the assessment of compensation once the dismissal has been found to be unfair.

(2) Mr Chaplin submits that, in accordance with his letter to the Chairman dated 16th December 1998, the Employment Tribunal fell into error in the remedies decision and the second review decision by calculating the applicant's lost earnings with the respondent, after the notional two weeks consultation period, on the basis of a Field Service Engineer's rate of pay, rather than that of the Product Manager post.

He sought to argue that the respondent might have red-circled the applicant's pay, had he been appointed to the Field Service Engineer's post, at his Product Manager rate of pay. The short answer to that is that the point was not raised by Mr Chaplin or the applicant at the remedies hearing. We shall not allow that new point, which requires further findings of fact by the Employment Tribunal, to be raised for the first time on appeal. See Jones v Burdett-Coutts School [1998] IRLR 521.

Alternatively, he submits that as a matter of principle the loss should be assessed on the basis of the applicant's pre-dismissal earnings. Again, we disagree. That is the second question raised in Red Bank and answered by the tribunal in this case.

21. It follows, in our judgment, that the tribunal reached a permissible finding in their remedies decision, as varied in favour of the applicant by the second review decision, and in these circumstances the second appeal also must be dismissed.