United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR STUART HILL (Consultant) Peninsula Business Services Ltd Riverside New Bailey Street Manchester M3 5PB
For the Respondent	MR TIMOTHY LEE (Solicitor) Messrs Young & Lee Solicitors No.6 The Wharf Bridge Street Birmingham B1 2JS


 


MR JUSTICE MAURICE KAY:

1. This is an appeal from an Employment Tribunal sitting in Birmingham. The Respondent, Mr Power, had worked for the Appellant and a predecessor company establishing continuity of employment from 6 March 1995 to 1 January 1999. Effectively he was a Sales Manager. There was a sales target set for him in that position. He did not achieve that target and, as a result, he was dismissed.
2. At a hearing on 23 July 1999 the Employment Tribunal found that he had been unfairly dismissed. The matter was adjourned for a Remedies Hearing and that took place on 31 March 2000. The outcome was that the Employment Tribunal decided that Mr Power should receive a basic award of £990 and a compensatory award of £12,000. The Recoupment Regulations applied as were set out in an annex to the Decision.
3. The Summary Reasons given by the Employment Tribunal are succinct. We here set them out almost in full:

"1 The applicant was unfairly dismissed on 1 January 1999. He claims compensation.

2 Basic Award

Mr Power was aged 50 at the time of dismissal, with three years service. We apply the maximum weeks pay applicable at that time of £220. We calculated the basic award to be £990.

3 Compensatory Award

It is common ground that there has been a net weekly loss of £476.20. We find that from the date of dismissal to the last hearing on 23 July, the applicant had made reasonable efforts to obtain alternative employment. He has produced correspondence … during that period relating to job applications. We accept that having regard to the applicant's age and his very specific experience in the cleaning services industry, he has found himself in a difficult and vulnerable position. However, we find he had a lengthy period to find suitable alternative work. Indeed, he does not seek loss of earnings beyond 23 July 1999 and we accept that as a reasonable period of loss of total earnings. We calculate the earnings loss as 29 weeks at £476.20, producing a figure of £13,809.80. We further award compensation for loss of statutory rights of £250.00.

4 The total compensatory award is £14,059.80. We apply the maximum of £12,000 and order the amount."

4. The Appellant now seeks to challenge that decision by way of appeal to this Tribunal. No issue is taken in relation to the basic award, nor is there any dispute as to the arithmetic. The statutory provisions governing the assessment of a compensatory award are set out in section 123 of the Employment Rights Act 1996. The starting point under section 123(1) is that the amount of the compensatory award:

"shall 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, insofar as that loss is attributable to action taken by the employer."

We pass over some other parts of section 123 which are not in issue in the present case and refer next to section 123(4) which is in the following terms:

"In ascertaining the loss referred to in subsection (1) the tribunal shall apply the same rule concerning the duty of a person to mitigate his loss as applies to damages recoverable under the common law of England and Wales … "

5. The case for the Appellant as advanced to us by Mr Hill seeks to criticise the decision of the Employment Tribunal on three bases. The central complaint is that the Employment Tribunal did not properly consider the issue of mitigation of loss. The other grounds of complaint which emanate from that central complaint are, first, that the Employment Tribunal gave insufficient reasons in relation to that issue and, secondly, - again particularly with regard to that issue – that the conclusion was perverse.
6. We have seen the evidence that was before the Employment Tribunal on the material which gives rise to the present complaint. Mr Power had made a Witness Statement dealing with his attempts to mitigate his loss and he read that statement to the Tribunal. He was asked some supplemental questions in chief by his solicitor and he augmented the contents of his Witness Statement explaining how he had sought employment during the period in respect of which he was complaining but without success. He indicated that he intended to attend a self-employment course at the Job Centre when the next course was available. The Chairman's Notes of Evidence then include this item:

"Hopefully, when I finish the Car Lease, I'll have money free to start a business. At the moment I have got no funds to draw on to start a business."

He was cross examined and, in the course of that cross examination, he explained his willingness to accept employment at a very much lower salary level than he had been receiving from the Appellant. He also explained how, through his period of unemployment, he had been "living on credit cards". There was no other evidence before the Tribunal save that given by Mr Power. The burden of proof in relation to an alleged failure to mitigate, of course, lies on the person making the allegation of failure - in this case, the Appellant. The Appellant's case on failure to mitigate was sought to be established through cross examination of Mr Power, no evidence having been called on behalf of the Appellant.

7. In the submissions advanced to us by Mr Hill much was said about the car lease. During his employment by the Appellant Mr Power had driven a Jaguar motor car which he had on lease. It was a three-year agreement with monthly instalments of £710.41. At the original merits hearing that lease had been an issue in that, in addition to claiming for unfair dismissal, Mr Power had been seeking to maintain a case of breach of contract by reference to the cost of maintaining the car lease. However, he failed to establish that breach of contract at the merits hearing. The documents that had been before the merits hearing, and which were in possession of both parties then and thereafter, included a letter from the Finance Company to Mr Power dated 15 October 1998 to the effect that if he were to terminate the car lease as at that date by handing back the car there would have been a shortfall of £8,342.66 which he would have had to find so as to satisfy the Finance Company. A second document dated 16 July 1999, in other words very shortly before the merits hearing, updated that position. It is clear from that document that by then the settlement figure was in the region of £6,300. At the heart of Mr Hill's submission is the proposition that there was a failure to mitigate in that Mr Power ought to have terminated the lease and paid the Finance Company whatever the current settlement figure had been, so as to release himself from further liability and liberate himself for self-employment at a point when he was no longer burdened with monthly instalments.
8. The first question we ask ourselves is whether it can be said that the Employment Tribunal did not properly consider the issue of mitigation of loss and, in particular, did not consider any issue relating to that in respect of the car. It is abundantly clear to us that by its decision and the reasons it gave the Employment Tribunal was entirely satisfied that Mr Power had taken all reasonable steps to mitigate his loss. The fact that there is no reference to the car in the course of those reasons seems to us to be neither here nor there. It may well be that it struck the Employment Tribunal, as indeed it strikes us, that the submission that was being made on behalf of the Appellant was a wholly conjectural one and would have come nowhere near discharging the burden of proving a failure to mitigate. We ask ourselves rhetorically, even if Mr Power had disposed of the car, upon what basis could it be found that having expended say £6,000 for the privilege of terminating the lease, he would have had sufficient investment to establish himself in self-employment in a way which would have produced an income or profit to him within the period for which he was claiming compensation. The hearing as to remedies had been a short one. It does not follow from the failure to mention the car in the reasons that the Employment Tribunal did not have it in mind. It was, in our judgment, a poor point in any event and we do not fault the decision because it does not expressly address that sub-issue.
9. That brings us to the second but related ground of appeal, namely the assertion that the reasons were insufficiently expressed. At the time the prevailing Regulations were the Employment Tribunals (Constitution and Rules of Procedure) Regulations 1993. Rule 10 of Schedule 1 to that Act includes this provision at sub-rule (3):

"The tribunal shall give reasons for its decision in a document signed by the chairman. That document shall contain a statement as to whether the reasons are given in summary or extended form and where the tribunal -

(a) makes an award of compensation, or

(b) comes to any other determination by virtue of which one party is required to pay a sum to another (excluding an award of costs or allowances),

the documents shall also contain a statement of the amount of compensation awarded, or of the sum required to be paid, followed either by a table showing how the amount or sum has been calculated or by a description of the manner in which it has been calculated."

10. As we have observed no issue arises as to the arithmetic in the decision. The central issue was one of mitigation of loss. In our judgment the Summary Reasons make it perfectly clear that the employer had failed to establish that Mr Power had unreasonably failed to mitigate his loss. We do not criticise the Employment Tribunal for one moment for expressing its conclusions succinctly. That can be a virtue. In the present case an application was made to the Chairman for Extended Reasons. The reply of the Chairman was as follows:

"There is nothing further I can usefully add to the Summary Reasons already given. The decision can be deemed to be in Extended Reasons form."

11. The duty to provide reasons for a decision is not a duty to address every aspect of the evidence and submissions that were before an Employment Tribunal. The test applied by the courts is the well known one in Meek v City of Birmingham District Council [1987] IRLR 250. It is abundantly clear from the reasons that were given in this case as to why the employer lost on the issue of mitigation. It lost because it had not proved a failure to undertake reasonable mitigation and that is both express and implicit in the succinct reasons.
12. It is the experience of this Appeal Tribunal that all too often Employment Tribunals are criticised for an alleged insufficiency of reasons. For what it is worth, it is the experience of the judicial member of this Appeal Tribunal that all too often similar suggestions are made in other jurisdictions, including the Administrative Court. Occasionally it happens that an insufficiency of reasons amounts to a legal error. In the overwhelming majority of cases where such an insufficiency is asserted no such legal error is found upon close scrutiny. It is difficult to escape the impression that insufficiency of reasons is often no more than the last resort of a bad loser. We certainly find no insufficiency in the present case.
13. The final ground of appeal is perversity, again directed towards the same factual issue in the case. Perversity is included in the grounds of appeal almost, it seems to us, as a throwaway line. We are entirely satisfied that the decision of the Employment Tribunal on mitigation of damage and in all other respects is totally free from any aspect which could be said to amount to perversity.
14. In our judgment this is a hopeless appeal and it will be dismissed.