United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MISS S MOOR (of Counsel) Messrs Gosschalks Solicitors Queen's Gardens Hull HU1 3DZ


 


JUDGE PETER CLARK: This is an appeal by the employer, Dixon, against the remedies decision of an Employment Tribunal sitting at Leeds, promulgated with extended reasons on 20th April 1999 ['the remedies decision'], in the following circumstances.

1. The applicant, Miss Hayton, was employed by Dixon from 15th April 1996 until her dismissal by reason of redundancy effective on 15th June 1998.
2. On her complaint of unfair dismissal the tribunal found, in a decision with summary reasons promulgated on 19th February 1999 ['the liability decision'], that the dismissal was unfair; there had been no adequate warning of impending redundancy nor consultation by Dixon prior to the applicant's dismissal; nor had objective selection criteria been applied nor was any adequate consideration given to the possibility of her redeployment to alternative employment with Dixon.
3. The tribunal went on to find, at that stage, that had a proper procedure been followed there was a 75% chance that she could not have been dismissed. The reference to 70% chance in paragraph 4 of the summary reasons appears to be an error in transcription.
4. The consequent remedies hearing was held before the same tribunal on 29th January and 24th March 1999. Both sides were represented by Counsel, not, in the case of Dixon by Miss Moor who appears before us today. The material issue on the assessment of the compensatory award under s.123(1) of the Employment Rights Act 1996 arose in this way. The applicant was unemployed from 15th June to 10th August 1998. On that day she obtained fresh employment as a Business Development Executive with an Hyundai dealership, Horbury Bridge Garage Ltd. With Dixon, also motor dealers, she held a middle management position in New Business Development. With Dixon she earned £18,000 per annum gross plus bonus; with Horbury she earned a basic salary of £15,000 per annum. Although she was, in theory, on a bonus scheme, no bonus was paid to her during her employment with Horbury. Further, the tribunal found that Horbury was not well organised; it was struggling financially'; the general ethos was such that she left that employment on 1st December 1998. She was then out of work until she obtained employment with Auto Windscreens Ltd as an Area Sales Executive earning £14,000 per annum plus bonus. She was also provided with a car, as she was with Dixon and Horbury.
5. The question which arose on these facts was whether the applicant's loss flowing from her unfair dismissal by Dixon ended when she completed her employment with Horbury, or whether it continued at the rate of her earnings with Dixon, subject to deduction of earnings received from Horbury and Auto Windscreens, neither of which paid as well as Dixon.
6. In this connection the tribunal was referred to the Court of Appeal decision in Dench v Flynn [1998] IRLR 653. We should say something about that case.
7. In Whelan v Richardson [1998] IRLR 114, this Appeal Tribunal considered the earlier cases and, in a judgment which I gave in that case we set out a series of propositions in an attempt to clarify the proper approach for Employment Tribunals to take when assessing loss under s.123(1) without interfering with the tribunal's undoubted discretion on the facts of each case. The final proposition was expressed as follows:

"As soon as the applicant obtains permanent alternative employment paying the same or more than his pre-dismissal earnings, his loss attributable to the action taken by the respondent employer ceases. It cannot be revived if he then loses that employment either through his own action or that of his new employer. Neither can the [respondent employer] rely on the employee's increased earnings to reduce the loss sustained prior to his taking the new employment. The chain of causation has been broken."

Commenting on that statement, Beldam LJ in Dench felt that it required qualification. It was too rigid an approach. His lordship considered that there may be cases in which the circumstances, which I envisaged, do not necessarily break the chain of causation. It is for the tribunal of fact to decide in each case.

8. In the present case the tribunal accepted the applicant's submission that by taking employment with Horbury, employment which turned out to be unsatisfactory, the chain of causation had not been broken. Accordingly they assessed her loss of earnings based on her pre-dismissal earnings with Dixon to the date of the remedies hearing, second day, and for the future over 26 weeks, less her net earnings with both Horbury and Auto Windscreens.
9. In support of Dixon's appeal against that approach, Miss Moor submits that the tribunal reached a perverse conclusion in not taking into account relevant considerations and, in particular, the conduct of the second employer, Horbury, for which, she submits, Dixon should not be responsible.
10. In addition, she has drawn our attention to an unreported case Salveson Logistics v Tate, a decision of this tribunal presided over by Lindsay J, in which she appeared as Counsel. We have not considered the transcript of that judgment, but we express some concern as to the approach taken by the Court of Appeal in Dench in circumstances where an unreported decision of the Court of Appeal namely Mabey Plant Hire Ltd v Richens decided on 6th May 1993, reference EATRF/92/0566/B, was not cited to the Court in Dench. We think it may be arguable that the approach of the Court in Richens expressed in the judgment of the then Master of the Rolls, Sir Thomas Bingham, is in conflict with the observations made by Beldam LJ on behalf of the Court of Appeal in Dench. We are told by Miss Moor that Mabey was referred to Lindsay J's tribunal in the case of Tate, however we think that this matter requires further consideration by the Appeal Tribunal.
11. In these circumstances, we shall allow the matter to proceed to a full hearing. It will be listed for four hours, Category B. There will be exchange of skeleton arguments between the parties not less than 14 days before the date fixed for the full appeal hearing. There are no further directions, in particular, Miss Moor does not pursue an application on behalf of Dixon for the Chairman's Notes of Evidence taken at the remedies hearings.