United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	THE APPELLANT IN PERSON
For the Respondent	MR B DIAMOND (Consultant) Instructed by Employee Management Ltd 4 Worsley Court High Street Walkden Manchester M2 8NT


 


JUDGE CLARK

1. The broad question in this appeal, identified by a division presided over by Lindsay J at the Preliminary Hearing held on 31 March 2000, is whether the Employment Tribunal sitting at Abergele under the chairmanship of Mr Guy Prichard, adjudicating on the various claims brought by the Appellant, Mr Henderson against his former employer Northern Leisure Plc, including a claim of unfair dismissal, fell into error in finding that he had failed to mitigate his loss at a time when he was in receipt of Job Seekers Allowance (JSA).
2. The only facts material to this question, as found by the Employment Tribunal in their decision with extended reasons promulgated on 9 November 1999 are that the Appellant was summarily dismissed by the Respondent on 29 March 1999 without notice or pay in lieu of notice. The dismissal was found to be both wrongful and unfair.
3. In addition to a basic award for unfair dismissal calculated in accordance with the statutory formula at £880 the Employment Tribunal awarded him a compensatory award made up of 12 weeks net pay at the rate of £325 per week, £3,900 plus £200 for loss of statutory rights.
4. The loss of earnings claim was limited to 12 weeks loss despite the fact that the Appellant had not worked between his dismissal and the hearing before the Employment Tribunal held on 2 and 24 September 1999. Their reasons for so limiting the award are expressed at paragraph 17 of their reasons thus:

"We accepted Mr Smith's (for the Respondents) submission that the applicant bears the burden of proof when it comes to proving his loss as a consequence of the unfair dismissal. The applicant tells us that he has earned no money since he ceased working for Tivoli Nightclub, and he tells us he has been in receipt of Job Seekers Allowance of some £121 a week. We were not satisfied that he had taken sufficient steps to find himself alternative employment. It was evident from the earlier hearing that the applicant had ambitions to embark upon a career in health and safety and he told us that he has been taking courses and applying to go on courses in this area. The lack of earnings from this cannot in justice, be laid at the respondent's door. We also think that the applicant is extremely well paid for a man of his particular qualifications in that job and he should realistically have been looking for a job at a lower rate to tide him over whilst he bettered himself. The Tribunal were unimpressed by the applicant's evidence of efforts he had made to seek employment. He had not secured a single interview, which surprises us for a man of his capabilities. Even if it were the case that he had tried his utmost and still failed to secure an interview the Tribunal thought that he should have been prepared to work for lesser pay very much sooner. In these circumstances we are not prepared to award loss even up to the date of this hearing, and the Tribunal was of the view that the applicant should only receive compensation for the period of twelve weeks."

5. Mr Henderson argues first that since he was in receipt of JSA throughout the period between dismissal and the Employment Tribunal hearing and that it is the requirement of receipt of that State Benefit that the claimant has taken all reasonable steps to obtain employment. In these circumstances he cannot be said to have failed to mitigate his loss under s123(4) ERA 1996, which provides that in ascertaining the loss sustained by the Complainant the Employment Tribunal shall apply the Common Law rule concerning the duty of a person to mitigate his loss.
6. We cannot accept that proposition as a matter of law. The question as to whether a claimant has satisfied the requirements of entitlement to JSA according to the relevant government department is a relevant factor, but cannot answer conclusively the judicial question as to whether or not he has mitigated his loss for the purposes of s123(4). We think that Mr Diamond draws a useful analogy with the question as to whether a person is an employee within the meaning of s230(1) of the Act. Although the same definition applies to employees for the purposes of tax and National Insurance legislation, a determination by the relevant authorities as to employee status for either of those purposes is not conclusive of the same question to be answered by an Employment Tribunal under s230(1). Mr Diamond also contrasts the binding nature of a certificate that a person is registered disabled for the purposes of the Disability Discrimination Act 1995. No such provision is contained within the ERA in relation to the job seekers allowance.
7. It follows that we resolve the first point in the appeal against the Appellant. However, he takes a second point, that in the passage cited above from paragraph 17 of the Employment Tribunal's reasons for their substantive decision they observe, correctly that the burden of proving loss lies on the Applicant, however he submits they appear to have gone on to assume that he also bears the burden of showing that he has taken reasonable steps to mitigate the loss. He does not. Although a division of the Employment Appeal Tribunal presided over by Kilner Brown J held that the onus lay on the Applicant to establish that he had taken reasonable steps to mitigate his loss, see Scottish and Newcastle Breweries Plc v Halliday (1986) ICR 577, that approach was disapproved by later divisions in Morganite Electrical Carbon Ltd v Donne (1988) ICR 18 and by Wood J in Fyfe v Scientific Furnishings Ltd (1989) ICR 648. We are satisfied that the later decisions are correct on this point, following as they do the earlier Court of Appeal decision in Bressenden and Properties v Corness (1974) IRLR 338, which in turn follows the Common Law approach to mitigation of loss which Employment Tribunals are enjoined to apply by s123(4). For the Common Law rule see, for example Yelton v Eastwoods Froy Ltd (1966) 3 AER 353; Edwards v SOGAT (1970) 3 AER 689.
8. Mr Diamond accepts that as a matter of law the onus of showing a failure to mitigate loss lies on the Respondent, but submits that there is nothing in paragraph 17 to indicate that the Employment Tribunal misplaced the burden of proof. We are unable to accept that submission.
9. It seems to us clear from the Employment Tribunal's self direction particularly:

"We were not satisfied that he had taken sufficient steps to find himself an alternative employment "

and the Employment Tribunal were unimpressed by the Applicant's evidence of efforts he had made to seek employment that the Employment Tribunal were incorrectly placing the burden on the Applicant to show that he had taken reasonable steps to mitigate his loss.

10. In those circumstances we find that the Employment Tribunal has fallen into error as a matter of law and their finding as to mitigation loss cannot stand. We think that the appropriate course in those circumstances is to remit the case to the same Employment Tribunal chaired by Mr Prichard to reconsider the question of mitigation.
11. For that purpose it would be open to both parties to adduce further evidence on the question of mitigation. That will include those documents which the Applicant subsequently sought to put before the Employment Tribunal but was not permitted to do so by the chairman who dismissed his application for review under rule 11(5) of the Employment Tribunal Rules of Procedure by a decision dated 21 December 1999.
12. Before leaving this case we should also mention a point which was raised before us by Mr Diamond with conspicuous fairness, a point which he felt obliged to make in circumstances where the Appellant is un-represented.
13. It is this. In paragraph 17 of their reasons the Employment Tribunal observed that the Appellant was extremely well paid for a man of his particular qualifications in the job which he held with the Respondent and he should realistically have been looking for a job at a lower rate to tide him over whilst he bettered himself.
14. They later find that the Applicant should have been prepared to work for lesser pay very much sooner. However the Employment Tribunal do not appear to have followed through those findings but have terminated the Appellant's loss 12 weeks after dismissal and have made no finding as to the nature of the employment which they say he ought to have obtained at that stage. In particular, whether that would have been less well paid than his remuneration with the Respondents so that he then suffered a continuing partial loss for such period as the Employment Tribunal may determine.
15. With these observations in mind the Employment Tribunal is directed to reconsider the question of compensation and in particular the question of mitigation of loss.