United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR A ZIMUTO (of Counsel) Instructed By: Sam Mosley & Co Solicitors 146 The Strand London WC2R 1JA
For the Respondent	MS L CHUDLEIGH (of Counsel)


 


MR JUSTICE LINDSAY (PRESIDENT):

1. On the 30th March 1999 Ms Barbara Ledgister, represented by solicitors and herself a solicitor, presented an IT1 for unfair dismissal. She claimed to have been dismissed on the 12th January 1999 by North Lewisham Law Centre Ltd.. On the 20th May 1999 the Law
   Centre added particulars of its earlier IT3, claiming that 75% of its income came from the London Borough of Lewisham, that the Lead Officer of the London Borough had put considerable pressure on the Law Centre and had indicated that the continuation of such funding by the Council was in considerable doubt whilst Ms Ledgister remained there and that the Law Centre had felt it had no choice but to confirm the redundancy notice earlier issued to Ms Ledgister, with a number of others of the staff, in the interests of the staff as a whole and the Centre's clients..
2. The matter was then heard at the Employment Tribunal at Ashford Kent under the Chairmanship of Mr D.E. de Saxe over 2 days in late October 1999. Their decision was sent to the parties on the 4th November 1999. The decision was unanimous and was:-

"(1) The Applicant was unfairly dismissed;

(2) The Tribunal makes neither a basic nor a compensatory award;

(3) The Tribunal orders the Applicant to pay the Respondents the costs of the hearing on the 26th October [the second of the two day hearing] assessed at £250."

It had been conceded, in the course of the hearing, that Ms Ledgister had been unfairly dismissed. On the 10th December 1999 Ms Ledgister presented a Notice of Appeal which, on the 31st March 2000, at the preliminary hearing, the Employment Appeal Tribunal allowed to proceed to a Full Hearing on all grounds. Before us Ms Ledgister was represented by Mr Gumbiti-Zimuto and the Law Centre by Miss Chudleigh, both of whom had similarly appeared at the hearing at the Employment Tribunal.

3. Mr Zimuto's first argument concerned the absence of a basic award in Ms Ledgister's favour. She had been paid £7,192 as an enhanced redundancy payment and the Employment Tribunal had taken the view that, that being so, she was not entitled to a basic award. The Employment Tribunal had held, however, the Law Centre having conceded the point, that there had been no true redundancy. The reason for her dismissal was "If anything .... "some other reason"" within section 98 (1) (b) of the Employment Rights Act 1996. Accordingly, whilst the payment to Ms Ledgister had been ascribed by the Law Centre to redundancy, it was not truly on the ground of redundancy within section 122 (4) (b) and hence the Law Centre could not pray it in aid to reduce the basic award - see Boorman -v- Allmakes Ltd. [1995] IRLR 553 C.A.. The Law Centre by Miss Chudleigh concedes the point and has agreed to make payment of a basic award to Ms Ledgister.
4. As for the appeal against the order for costs made against Ms Ledgister, the Law Centre, in the light of the concession it has made in respect of Boorman supra, undertakes not to pursue Ms Ledgister in respect of the award of costs and accordingly that, too, is no longer a live issue before us. That leaves only Mr Zimuto's argument that the Tribunal was wrong to have made no compensatory award in Ms Ledgister's favour.
5. Section 123 of the 1996 Act provides that the amount of the compensatory award should be such amount as the Tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer. Leaving aside, for the moment, the possibility, that emerged in oral argument, that Ms Ledgister, on ceasing to work for the Law Centre, had developed her own private practice as a solicitor and was soon earning more than she had earned at the Law Centre, and assuming, in Ms Ledgister's favour, that there was, indeed, some loss sustained by her in consequence of the dismissal, Mr Zimuto's first argument as to the compensatory award was that the evidence did not justify the Tribunal's conclusion that no further funding from the London Borough would have come had Ms Ledgister not been dismissed.
6. As to that, the Tribunal found as facts that on the 4th January 1999 the Law Centre's finance and administrative worker, Ms Barnes, had been told by an officer of the Council who was acting as a locum for the Council's Grant Officer dealing with the Law Centre that there was no more money to come to the Law Centre for the financial year 1997/8. The Council also found as a fact that that meant that the financial position of the Law Centre was such that it could not continue to trade beyond the 12th January 1999 (the date when its current funding expired) because, if it had, it would have been trading whilst insolvent. The Law Centre was plainly extremely vulnerable to pressure from the Council. Accordingly when, as the Tribunal found to be the case, Mr Spencer of the local Council demanded that Ms Ledgister be summarily dismissed for gross misconduct and when the Council indicated, as the Tribunal also found, that as long as Ms Ledgister remained employed at the Law Centre it was a political fact that it was in the highest degree improbable that the Council would agree to fund the Law Centre any further, the threat had to be taken very seriously indeed by the Law Centre. The Tribunal held:-

"25. Having regard to our findings of fact, we have no hesitation in coming to the unanimous conclusion that if Ms Ledgister had not been dismissed, the Law Centre would have received no further funding from Lewisham Borough Council, and the Law Centre would have had to have closed on either the 12th or 15th January or it would have committed the criminal offence of trading whilst insolvent. Since Ms Ledgister's dismissal took effect on the 12th January, it follows that she has suffered no loss as a result of that dismissal."

Mr Zimuto argues that that conclusion was perverse in the sense that there was no evidence whatsoever to support it; that, though, is a conclusion at which we cannot possibly arrive. No request had been made earlier for Chairman's Notes and we have no basis at all upon which we could conclude that no adequate relevant supporting evidence was in front of the Tribunal. Miss Chudleigh argues that this limb of Mr Zimuto's argument fails in that the Tribunal's conclusions on fact have to be accepted as such and that that disposes of the appeal on that point. We agree. We see no error of law on this aspect of the Tribunal's decision to make no compensatory award.

7. The Tribunal continued in paragraph 25, immediately after the passage which we have cited above:-

"But if that be held to be wrong then we accept the second limb of Miss Chudleigh's argument. If the Law Centre had followed a fair procedure, we think that the overwhelming probability is that Ms Ledgister would have been dismissed and that carrying through a fair procedure would have taken appreciably less than 3 months. Since it is clear that Ms Ledgister's severance pay, including a statutory redundancy payment (or basic award for unfair dismissal) of £2,530 included payment of more than 3 months salary, once again, we conclude that Ms Ledgister has suffered no loss."

A little later the Tribunal concluded:-

"We should not make a compensatory award because Ms Ledgister sustained no loss in respect of her admittedly unfair dismissal."

What, it seems, had annoyed the local Council in relation to Ms Ledgister was their firm belief that she was carrying on a private practice as a solicitor in Law Centre time and from Law Centre premises and using Law Centre facilities. Members of the Management Committee of the Law Centre had sought to persuade the local Council otherwise, to no avail. The Law Centre had no reason to disbelieve the indication which it had received from the Council that it was, as we have already mentioned, "in the highest degree improbable that the Council would agree to fund the Law Centre any further" if Ms Ledgister had remained employed there. Mr Zimuto urges that for the Law Centre to have acted upon third party pressure, as it did, was improper. Miss Chudleigh refers us to Davenport -v- Taptonholme for Elderly People decided by the EAT under His Honour Judge C. Smith Q.C. at the EAT on the 14th January 1999 where, after a review of the authorities, the EAT concluded:-

"The up-shot of those authorities is that a dismissal at the behest of a third party, at least where no improper pressure is involved, is potentially a fair dismissal within section 98 (1) (b) as "some other substantial reason," provided the [Employment] Tribunal consider whether the employer had taken into account the potential injustice to the employee, in considering whether the dismissal is fair in all the circumstances as the [Employment] Tribunal is required to under section 98 (4) of the Act."

We respectfully agree. It was not suggested in our case that the local Council's reasons for advocating Ms Ledgister's dismissal were improper in the sense of being, for example, based on racial or sexually discriminatory grounds. Mr Zimuto argues that the Council's view of misconduct by Ms Ledgister was unfounded but the Law Centre could not ignore the threat, given that they believed it would be put into effect and had not been in a position to dislodge the local council from its view. Mr Zimuto argues that there was, in fact, no misconduct justifying Ms Ledgister's dismissal, but it has not been suggested that her dismissal was on the grounds of misconduct but rather, as was conceded and as the Tribunal accepted, that it was for "Some other substantial reason", namely because the Centre believed that without her dismissal its funding would be cut off and then not merely Ms Ledgister but all the staff would have had to have been dismissed and the whole business would have terminated.

8. Mr Zimuto argues that there was truly no "other substantial reason" properly identified by the Tribunal. However, that ignores, firstly, the Tribunal's conclusion, following from Miss Chudleigh's concession below (accepted also by Ms Ledgister's advisers, as it would seem) that there was no redundancy and that Ms Ledgister had been dismissed for "some other substantial reason" and, secondly, ignores also the first section of the Tribunal's paragraph 25 cited above. That passage identifies plainly enough the reason which the Tribunal held to have been the reason for the dismissal. The fact that the Tribunal did in fact continue in business, Ms Ledgister having been dismissed, in no way suggests that had she not been the Council would not have carried through their threat and would not have withdrawn all funding.
9. Mr Zimuto argues that a Tribunal cannot, in its findings of fact, "launder", as he puts it, a decision of an employer which is unfair and perverse by saying that had it not been done the employee would have been dismissed anyway. But there is no question here of "laundering" a decision; the dismissal was conceded to be unfair and all that is in issue is the compensatory award appropriate in respect of that unfair dismissal.
10. The second head of the Tribunal's paragraph 25 falls for consideration only if the first was wrong but we do not, in any event, see error of law in that second head. Indeed, Mr Zimuto's argument is in large part an invitation that, even without our having Chairman's Notes before us, we should look behind the findings of fact. We cannot do so.
11. We mentioned earlier the possibility, to put it no higher, that Ms Ledgister suffered no monetary loss at all by reason of the dismissal. She became able, by reason of the dismissal, to devote herself entirely to her private practice as a Solicitor. Remarkably, she, as it seems, laid no figures before the Tribunal and was unable to put any before us, even in outline. As she received £7192 from the Centre and will now be receiving a further basic award, it is not improbable that she would have to give credit to the Law Centre for some part at least of that total received from them and that even if she had suffered some short-lived drop in income she could not accordingly claim for it. It could thus be that this appeal as to the absence of any compensatory award has been wholly academic, a possibility which has created in us an unease which, in the absence of any figures as to earnings, we have been unable to dispel. However, as, in the absence of relevant figures, the subject is somewhat speculative, we say nothing more on the point.
12. Reverting to the arguments on the appeal, we have detected no error of law in the Tribunal's decision and we dismiss the appeal accordingly.