United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MS J McNEIL (of Counsel) ELAAS


 


MR JUSTICE KEENE: This is a preliminary hearing of this appeal to determine whether the appeal raises a reasonably arguable point of law.

1. The appeal is against a decision of a London (North) Employment Tribunal entered in the Register on 6th December 1999 in respect of the amount of a compensatory award made to the appellant. The Employment Tribunal had earlier decided that the appellant had been unfairly dismissed but had contributed to her dismissal and it concluded that it was just and equitable that the reduction in compensation should be 80%. There is no challenge to that. The Tribunal made a basic award of £210 and compensatory award of £396.80, the latter representing 20% of a figure of £1,979. The principal element in that latter sum was an amount for immediate loss of wages. The Tribunal assessed that on the basis of 12 weeks loss of earnings less her earnings during that period of 12 weeks.
2. The effective date of termination of the appellant's employment was 6th October 1997. Then from 17th November 1997 to 16th January 1998 she was employed through an agency as a sales assistant earning £175 per week net, £11 per week less than she had been earning with the respondents. From 19th January 1998 she was employed by Eta Lingerie Ltd of King's Road, Chelsea, receiving a higher weekly amount than she had done with the respondent. That employment ended on 30th January 1998. The appellant subsequently obtained other employment.
3. The appellant has been represented this morning by Ms McNeil who seeks leave to amend the grounds of appeal in this case. We give that leave and we deal with the appeal on that basis.
4. There are now, in essence, three matters which are being raised on behalf of the appellant. The third can be very briefly dealt with. It is alleged that the Employment Tribunal erred because it did not take into account in its calculations the loss of the BUPA benefit to which the appellant was entitled under her contract of employment. This is a matter which has been dealt with in a letter of March 2000 from the Chairman of the Tribunal in which it is stated that under cross-examination Miss Japal expressly stated that she could not substantiate her claim in relation to the BUPA health insurance and it was as a result of that that no award was made to her in that respect. In the light of that passage Ms McNeil has not sought to press that third ground of appeal. It seems to us that the approach adopted by the Tribunal is not open to criticism, given the evidence with which it had to deal.
5. That leaves the other two grounds of appeal, which it is fair to say have been presented as the two main grounds upon which the appellant relies. The first is that the Employment Tribunal erred in law because of the way that it treated the termination of the appellant's employment with Eta Lingerie Ltd. It is said that the Tribunal ought to have considered whether there was any or any sufficient causative connection between the appellant's losses after 28th December 1997 and her unfair dismissal.
6. Ms McNeil relies upon the recent Court of Appeal decision in the case of Dench v Flynn & Partners [1998] IRLR 653, a decision which makes it clear that one cannot treat the obtaining of permanent employment as automatically and necessarily bringing to an end the chain of causation flowing from the original unfair dismissal. What the Court of Appeal indicated is that the Employment Tribunal has to apply its mind as to whether the consequences of the unfair dismissal continue on beyond the taking of that permanent employment and it is said that in this case the Employment Tribunal failed to do that. Secondly, it is submitted that it was perverse for the Employment Tribunal to limit the period of compensation to a period of 12 weeks, a period which expired on 28th December 1997. That is attacked by Ms McNeil as being arbitrary and perverse. In particular, she emphasises that that end date did not correspond with any date of subsequent employment or cessation of subsequent employment. Those, therefore, are effectively the two issues which it is sought to have ventilated at a full hearing
7. In its extended reasons, the Tribunal drew attention to Miss Japal's evidence that:

"6. … of the twenty five months since her dismissal by the Respondent, she had been employed for twenty and a half months and during the other four and half months, she had signed on for state benefits."

It then set out the employment details, to which we have already referred, including the fact that her employment by Eta Lingerie Ltd ended on 30th January 1998. As to that the Tribunal stated:

"Miss Japal's evidence as to why that employment ended was very inconclusive and vague and merely based on supposition on her part, so far as she explained to the Tribunal. She referred to the fact that she was only employed as a trainee manager with Eta Lingerie Limited as an explanation for employment only lasting two weeks. However, her contract of employment stated that she was actually employed as Manager. The Tribunal is not satisfied with her evidence relative to termination of that employment."

The Tribunal subsequently said this on that particular topic:

"9. The Tribunal finds that the Applicant's employment with Eta Lingerie Limited being terminated after two weeks was nothing to do with the Respondent and her letter of appointment for that position was not subject to references. …"

That sentence is setting out findings of fact which were matters properly falling within the responsibility of the Employment Tribunal. Subsequently the Tribunal in its extended reasons concluded as follows:

"For the reasons and circumstances hereinbefore stated, the Tribunal accepts the submissions made for the Respondent that an appropriate period of time for immediate loss of earnings, inclusive of a five weeks' notice period, should be twelve weeks. If follows that no award is made for future loss of earnings."

8. What we have to ask ourselves is whether the Tribunal's approach gives rise to an arguable point of law. Generally, of course, its task on this aspect of the compensatory award was to decide what amount was "just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal insofar as that loss is attributable to action taken by the employer." See section 123 of the Employment Rights Act 1996. Section 123(4) requires that the rule as to the duty to mitigate loss be applied in circumstances such as this.
9. With that background, we turn to the first ground of appeal which it is sought to advance, that is to say the one relating to the Tribunal's treatment of the employment with Eta Lingerie Ltd. In dealing with an assessment of loss of earnings between dismissal and the date of the assessment hearing, a Tribunal will have regard to an applicant's net loss of earnings during that period subject to the duty to mitigate and to the recoupment rules. When during that period of time an employee obtains alternative employment which he or she subsequently loses, consideration has to be given as to whether losses after the second termination are attributable to the earlier unfair dismissal. The correct approach was put in this way by Beldam LJ in the Dench decision at page 655, (at paragraphs 20 and 21):

"Although causation is primarily a question of fact, the principle to be applied in deciding whether the connection between a cause, such as unfair dismissal, and its consequences is sufficient to found a legal claim to loss or damage is a question of law. The question for the industrial tribunal was whether the unfair dismissal could be regarded as a continuing cause of loss when she was subsequently dismissed from her new employer with no right to compensation after a month or two in her new employment. To treat the consequences of unfair dismissal as ceasing automatically when other employment supervenes is to treat as the effective cause that which is simply closest in time.

Causes in my view, are not simply beads on a string or links in a chain, but, as was said many years ago, they are influences or forces which may combine to bring about a result. A tribunal of fact has to consider the appropriate effect of the wrongful or unfair dismissal and the effect of the termination of any employment which is subsequently obtained. That is a function which an industrial tribunal is called upon frequently to perform and, provided it does not regard itself as rigidly bound in every case to take the view that a subsequent employment will terminate the period of loss, it seems to me that it will be able, fairly and equitably, to attribute to the unfair dismissal the loss which has been sustained."

10. In the present case the Employment Tribunal does not seem to us to have regarded the employment by Eta Lingerie Ltd as automatically putting an end to the appellant's losses. In essence it considered whether her loss after the second termination could be attributed to the respondent's unfair dismissal of her and it held that they could not. It said, in terms "that the Applicant's employment with Eta Lingerie Limited being terminated was nothing to do with the Respondent". That may not be applying the precise words used in the Dench case, but it seems to us that it was nonetheless applying the essence of that test and seeing whether there was some causative link between the unfair dismissal and any loss experienced by the appellant after that particular time. We can see nothing wrong in law in the approach adopted by the Employment Tribunal here to the termination of the appellant's employment with Eta Lingerie Ltd.
11. That takes us, therefore, to the second ground of appeal, namely whether the Tribunal were perverse or arbitrary in arriving at the period of 12 weeks as being the appropriate period to adopt to assess loss. It is perfectly true, as Ms McNeil has pointed out, that that period ends on 28th December 1997 which has no connection with any particular period of employment which the appellant had subsequently obtained. But that was not the exercise which the Tribunal was performing here. It is quite clear from the passage cited earlier in this judgment that the Tribunal arrived at that 12 week period as a result of the submissions made on behalf of the respondent. What was suggested on behalf of the respondent was that the appellant should have obtained alternative employment quite quickly as she was not dismissed for dishonesty, and the subsequent employment by Eta Lingerie Ltd at a higher salary than she had previously enjoyed was used as evidence to demonstrate that particular possibility. An Employment Tribunal in a situation like this has to make broad assessment of how long it would and should have taken an appellant to get an alternative job if she had been acting properly to mitigate her loss, as she is required by law to do. The Eta Lingerie employment was merely an illustration of what could be achieved. But it is quite clear to us that what the Tribunal was doing here was accepting the respondent's argument that if the appellant had acted properly in an attempt to mitigate her loss, she would have obtained employment of a suitable and comparable nature after a period of 12 weeks. That is a perfectly normal and proper approach for a Tribunal adopt when it is considering the duty upon an applicant to mitigate his or her loss. There is no reason why it should coincide with any period of subsequent employment, particularly when the subsequent employment initially obtained was at a lower figure of earnings. The Tribunal had to deduct the actual lower earnings made from the sum for the earnings which the appellant would have achieved had her employment not been terminated unfairly by the respondent.
12. It seems to us that there was no error of law in the approach which the Tribunal adopted in arriving at that 12 week period, which was not arbitrary but was a proper assessment as to the period during which the appellant would have been out of work and suffering losses, had she acted promptly to mitigate her loss. We can find, therefore, nothing in ground two either which justifies allowing this appeal to go to a full hearing. In those circumstances, it must follow that this appeal is dismissed.

Application for leave to appeal to the Court of Appeal

13. It is unanimous that we are not prepared to grant leave to appeal in this case. We can see no new matter of law which arises as a result of the judgment which we have just given.