United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	The Appellant in person


 


MR RECORDER UNDERHILL QC

1. We propose to allow this appeal to proceed, save in one respect It is convenient to proceed by reference to the headings in the Appellant's grounds of appeal.

A " Method of calculation of award for damages for breach of contract"

2. The Appellant makes two distinct submissions of law under this heading.
3. First, he says that it was wrong for the Tribunal to make any deduction in respect of his earnings in the notice period. He relies on the decision in Babcock FATA Ltd v Addison [1987] ICR 805 in which the Court of Appeal held that, generally, no such deduction should be made in respect of the contractual notice period and in so doing confirmed the old authority of Norton Tool Co Ltd v Tewson [1972] ICR 501. Those decisions have strictly no application to the claim for damages for breach of contract, which is the heading under which the Appellant has put them, since they are concerned with unfair dismissal rather than wrongful dismissal. But that is not a substantial answer, since the Tribunal did not make any separate unfair dismissal award in respect of this period, evidently because it believed that was already covered by its award of damages for breach of contract. If the compensation for unfair dismissal was more generous in respect of this period than damages for wrongful dismissal, because of the Babcock decision, then a separate award should have been made. The Tribunal does not address this issue at all and it seems to us clear that there is an arguable point, albeit strictly put under the wrong heading.
4. Secondly, the Appellant argues that the Tribunal was wrong to award him compensation in respect of this period based on net figures, because Section 148 of the Income and Corporation Taxes Act 1988 provides that payment in connection with the termination of a person's employment are chargeable to tax only to the extent that the amount exceeds £30,000. In our view, this point is plainly wrong. What the Appellant is being compensated for is what he would actually have been entitled to receive during this period if the Respondents had given him three months notice. That is so even if the employer, lawfully or unlawfully, was not deducting tax under PAYE: the essential point is that tax was payable on the earnings in question. This was made clear by Sir John Donaldson in Norton Tool, to which we have already referred (see page 506 B - C) and has been trite law in these cases ever since. It is true, as Mr Chong has pointed out, that if the Respondents had paid money in lieu of notice, that could have been paid gross, but the Appellant's contractual entitlement was to wages and not to money in lieu of wages. The reasoning in Norton Tool v Tewson that the employer "ought", as a matter of good industrial practice, to pay money in lieu of notice has never been extended to justify calculation of compensation for the notice period on a gross basis, and indeed in that case the National Industrial Relations Court did the opposite. Accordingly we are satisfied there is no arguable point here, and we dismiss the appeal on this issue.

B/C "Refusal to make an award in respect of interim loss of earnings/and future loss of earnings".

5. These headings raise similar points. The Appellant makes a number of particular criticisms of the findings of the Tribunal, in particular at xii, xiii, and xiv: we have had some difficulty in understanding the Tribunal's reasons on these points, and believe that the issue deserves to be considered at the hearing of the full appeal. However, these particular points arise against the background of an overriding point. The Tribunal held that the Appellant had failed to prove that he suffered any loss at all in the period between the end of the notice period and date of the hearing - and, by extension, any future loss thereafter. This was explicitly on the basis that he had failed to provide documents supporting the figure for income which he says he had earned in the period in question. There is a complicated history here, as appears from the bundle of correspondence which the Appellant has supplied us with. The history includes an apparent breach by the Appellant of an Order for Discovery, which, though not expressly referred to, may lie behind the course which the Chairman took. It may be that the Chairman was indeed justified in adopting the strict approach which he did, but we are not confident, on the material which we have seen and the arguments that we have heard, that that is the case, and we believe that the appeal should proceed on this basis also.

D Printer

6. This head relates to a comparatively small point in relation to the Tribunal's substitution of a figure of £250 for the sum claimed by the Appellant for the cost of a laser printer, £793. We are content to allow that point to be argued in full appeal.

E "Refusal to make an award in respect of set up costs to be incurred"

7. The Tribunal did not allow the Appellant to recover in respect of certain set-up costs which he had not at the date of the hearing incurred, and indeed made the finding that he:

" deliberately included the cost of items not purchased, in order to inflate his claim"

It was explained to us by the Appellant that the position was that as at the date of the hearing some of the equipment belonging to the Respondents had not yet been returned to them, and that is borne out by the solicitors' correspondence which we have seen. While he had the use of it, says the Appellant, it had not made sense for him to replace it, but he was plainly going to have to do so shortly. If that explanation is indeed correct it would be hard to justify the finding which the Tribunal made against him, but we are not, again, in a position on this summary hearing to determine the rights and wrongs of the matter, and the issue is one which will have to be determined at a full hearing.

Bias

8. There is one further matter. In his skeleton argument and accompanying witness statement, but not in his grounds of appeal, the Appellant alleges bias on the part of the Tribunal, and in particular the Chairman. We wish to make it clear that we do not regard this as constituting an independent ground of appeal. The allegation is based on an incident in which the Chairman was apparently critical of some of the correspondence written by the Appellant's solicitors. We have read the correspondence in question. It is not necessary for us to enter into any detailed analysis of this; but we can say that, having read the letters in question, there was certainly material in them which would have amply justified the Chairman particularly if there was a dispute as to the account given us by the Appellant of why the set-up costs were not incurred (see paragraph 7 above) in passing comment. We do not believe that it is arguable that a reasonable observer would have concluded, from any criticism of the Appellant's solicitors on the basis of those letters, that the Tribunal was unable to consider the substantive issues of the case in a fair and impartial manner. For the avoidance of doubt, therefore, we do not regard this as a separate ground of appeal.

Conclusion

9. We accordingly allow the appeal to proceed save on the point identified at paragraph 4 above.
10. The Appellant's grounds of appeal, though articulate, are somewhat discursive. We have considered whether it would be helpful for the Tribunal at the full hearing to have more focused grounds of appeal; but we have formed the view that, on the basis of this judgment, the present grounds are sufficient to identify what the issues are.
11. The Appellant has made no application for the Chairman's Notes. We have had no indication from the Respondents of any particular direction that they may seek. It is possible, however that one or other party, but in particular the Respondents, may take the view that it will be necessary to have the Chairman's Notes. In that case a separate application will have to be made, and I will direct that it be dealt with so far as possible, by myself, since I have the necessary background. We are not to be taken as encouraging such an application, but it seems prudent to identify it as a possibility.
12. We direct that the case be listed in Category C, with an estimate of three hours. The Appeal Tribunal will need to see the bundle of documents which the Appellant put before us, which we understand includes the material before the Employment Tribunal.