United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR FLOOD (of Counsel) Instructed by: Messrs Poole Alcock Solicitors 238-240 Edleston Road Crew Cheshire CW2 7EH
For the Respondent	MR S CRAMSIE (of Counsel) Instructed by: Messrs Bullivant Jones Solicitors State House 22 Dale Street Liverpool L2 4UR


 


HIS HONOUR JUDGE J BURKE QC

1. The Appellant, Mr Wilde, appeals against the Decision of the Employment Tribunal sitting at Liverpool and chaired by Mr E T Connolly, sent to the parties with Extended Reasons on 9 August 2001.
2. In an earlier Decision the Tribunal, similarly constituted, had concluded that Mr Wilde had been unfairly dismissed by his employers, Pure Fishing (UK) Ltd, and had not contributed by his conduct to that dismissal.
3. The Decision now the subject of appeal was made after a remedies hearing on 18 June and was that Mr Wilde should receive a basic award of £3910 and a compensatory award of £2770 for loss of earnings, loss of pension rights at £410 and other losses. The total was £7510. The compensatory award, insofar as it related to earnings and other benefits derived from earnings, was limited to a period of 10 weeks from the date of dismissal. It is that limitation upon the compensatory award which is now under attack.
4. The Appellant was employed by the Respondents for 12 years prior to his dismissal on 25 April 2000. He was the Warehouse Manager of the Respondents' business premises at Middlewich in Cheshire where they sold and distributed fishing tackle. He had an entirely clear disciplinary record in that employment; but he was summarily dismissed on 25 April 2000, at the end of a disciplinary hearing on the day of the dismissal, for gross misconduct consisting of his allegedly having bullied a junior employee or junior employees.
5. The Tribunal found in their first Decision that the Appellant's unfair dismissal claim succeeded. They made no reduction for any contribution on his part and they rejected what we can in employment law argot describe succinctly as a Polkey submission. Hence, at the remedies hearing, the Appellant was entitled to 100% of whatever loss he proved by way of compensatory award.
6. The remedies hearing took place 14 months after the dismissal and about 1 month after the liability decision had been promulgated. Until the liability decision was known to the parties the Appellant could not have established that he had been unfairly dismissed, although we assume that he believed he had been unfairly dismissed.
7. At the remedies hearing the Appellant told the Tribunal that he had, when he was dismissed, registered with the local job centre, had been advised to look in newspapers and advertisements for jobs and had done so. He had been a Warehouse Manager throughout his employment with the Respondents for the 12 years to which we have referred. Although he held an HGV license and a fork lift truck driving qualification, it was not in dispute that he had no actual experience in driving HGV vehicles; and there was no evidence that he had actually driven fork lift trucks or at least had done so recently in his job as Warehouse Manager.
8. We, and in particular the lay members of the Employment Appeal Tribunal sitting today, take the view that it is highly unlikely that as Warehouse Manager he would have driven fork lift trucks without considerable protest from those whose job it was to drive fork lift trucks.
9. He told the Tribunal that he had applied for 7-8 jobs in the 10 week period after his dismissal but had not obtained any employment and indeed had got no replies to his applications. He had, perhaps not surprisingly in the face of the failure of his applications, not sought to follow up his applications to ask why not.
10. At the beginning of July he learnt from the Department of Employment or the Department of Social Security, whichever it was to whom he was looking for benefit, that that department was looking at the reasons for his leaving his previous employment and that he might lose his benefits.
11. It is not difficult to envisage that he must have realised what that meant because, of course, at that stage he knew that he had been dismissed for gross misconduct and had not yet been vindicated. So he decided that, instead of making job applications, he would set up in business on his own selling fishing tackle at local markets. By the date of the remedies hearing he had been doing that from 4 July of the previous year (10 weeks after the dismissal) and had derived from his new business an average net income of £70 per week in comparison to his average net pay in his employment by the Respondents of £277 per week.
12. We have been told that, since the hearing, in the period May to December 2001, he has achieved net earnings in excess of £277 per week; but he did not do so in the early days; and of course the Tribunal at the remedies hearing would not and could not have had such information in front of them.
13. In paragraph 9 (3) of the Extended Reasons the Tribunal say this:

9 (iii) "The Applicant has an HGV Class 1 license which he possessed at the time of his dismissal and also a fork lift truck driver's qualification. We were also satisfied from the evidence given to us that there were ample vacancies for such jobs following his dismissal and which were within reasonable travelling distance of his home address. Furthermore, he had held a managerial position with the Respondents and since his dismissal there have been vacancies advertised for managerial positions within reasonable travelling distance of the Applicant's house prior to and after 4 July 2000. We found that it was likely that if the Applicant had applied for the advertised vacancies for lorry drivers or the managerial positions referred to above he would, by 4 July, have obtained employment which would have produced for him a weekly income and benefits which he had immediately prior to dismissal."

14. The Tribunal, having reached that conclusion, then went on as follows:

9 (iv) "However, on 4 July 2000, having used monies which he possessed in purchasing stock in order to become self-employed as a trader in fishing tackle etc on local markets, he went into business as a trader in selling fishing tackle. He ceased claiming Job Seekers' Allowance from 4 July 2000. The average net weekly income which he received from this business is approximately £70.00 per week.

(v) The Applicant did not take any financial advice from his bankers nor from the Department of Employment before he decided to go into business on his own account. He intends to continue in this business venture for the foreseeable future."

15. The Tribunal then proceeded to direct themselves as to the duty of an employee who succeeds in a complaint of unfair dismissal to mitigate his or her losses and to record the Respondents' submission that the Appellant had not taken reasonable steps to do so in particular by going into business on his own which the Respondents described "as an unreasonable decision and a huge error".
16. The Tribunal conclude in paragraph 11 as follows:

11 "We found that the Applicant's decision was not only foolhardy but unreasonable. He was qualified to drive fork lift trucks and heavy goods vehicles and he had considerable management experience. It was clear that there were vacancies for such employment within a reasonable travelling distance of his area following his dismissal and up to 4 July 2000. Furthermore, he had made this decision without taking any professional financial advice. We found that the Applicant had not taken reasonable steps to mitigate his financial loss and that in the circumstances it was just and equitable that the Compensatory Award for financial loss to the Applicant should not extent beyond 4 July 2000."

17. Mr Flood on behalf of the Appellant does not contend that the Tribunal have expressly misdirected themselves in law. The general principles of law which apply for present purposes are not in dispute. An employee who has been unfairly dismissed must take reasonable steps to mitigate his loss. The burden lies on the employer in such a case to prove, if they can, that he has failed to do so. Those principles are not in issue in these proceedings.
18. Mr Flood submits, however, that the Tribunal erred in their conclusion in three ways. He firstly submits that the Tribunal's essential conclusion that there was a cut-off point for the assessment of loss as at 4 July 2000, the day on which the Appellant set up his own business, because if he had made reasonable attempts to find work he would have obtained one of the vacancies in his area, which the Tribunal found to exist, was perverse and he submits that it was perverse for two reasons.
19. The first reason is that the Tribunal in reaching that conclusion, failed, submits Mr Flood, to take into account factors which made it difficult, indeed very difficult using common sense, for a man in his position to obtain any job – at least to obtain any job quickly. Those factors were central to the Appellant's case and to his decision to go into business on his own. Those factors were:

(1) the fact that he had been dismissed for gross misconduct and was not, until after the decision on liability had been promulgated, able to show that he had been vindicated;

(2) that he had been dismissed from a position which he had held for 12 years and could not demonstrate that he had been dismissed for reasons which did not redound to his discredit;

(3) he had no other recent experience;

(4) he could provide no useful references; and

(5) he was, by the time of his dismissal, aged 51.

These, submits Mr Flood, were important factors which militated strongly against his getting a job with ease and speed to which the Tribunal made no reference and which the Tribunal did not consider.

20. The second way of putting this part of the case, as Mr Flood submitted, was that in any event the decision that he could have obtained such a job within 10 weeks or soon thereafter in all the circumstances, including those factors which we have enumerated, was one which no reasonable Tribunal could reach.
21. Secondly, Mr Flood submitted that the Tribunal's decision that the Appellant was unreasonable and foolhardy in going into his own business was also perverse. Having regard to the difficulties which we have set out and to his experience and knowledge of the world of fishing tackle in which he had worked for many years, it was a natural thing for him to do; and the Tribunal erred in failing to take those factors into account and in taking into account what actually happened to his business in its first months, namely the product of only £70 per week net on average, which was a factor which involved the improper use of hindsight.
22. Thirdly, Mr Flood submitted that the Tribunal erred in not assessing the good sense of going into business over a longer period.
23. Mr Cramsie on behalf of the Respondents submitted, firstly, that Mr Flood's attack was an attack of findings of fact made by the Tribunal, which findings the Tribunal was entitled to reach and which should not be overturned unless it was plainly established that they were perverse according to familiar principles and that it was not so established.
24. So far as Mr Flood's first set of arguments were concerned, Mr Cramsie fairly pointed out that there was no concrete evidence of any of the difficulties in obtaining employment in the Appellant's case on which Mr Flood fundamentally relied. The Appellant's evidence about his efforts to obtain work was not accepted; although it is not entirely clear from the Tribunal's decision how many applications they thought he had made, they plainly did not accept that he had made as many as he claimed; and that put him at a disadvantage evidentially. The Tribunal were plainly unimpressed by his account of what he had done. Thus, submitted Mr Cramsie, the factors on which Mr Flood founds his argument were theoretical factors in this case and not real factors.
25. Mr Cramsie further reminded us, entirely correctly, that it is an important principle that an Appellant body should not look too closely at a Tribunal's decision so as to see whether some relevant factor in a balancing exercise or in a judgment upon facts has been left out. A Tribunal cannot be expected to set out each and every relevant factor which the parties put before the Tribunal and one must not assume that the Tribunal has not considered a factor or group of factors merely because they do not expressly refer to it or them.
26. As to the perversity of the findings on the basis that they were findings as to the likelihood that the Appellant would have obtained work and as to the unreasonableness of his going into business on his own, Mr Cramsie submitted that the Tribunal had before them material on which they could find as they did and that they were entitled to reach the findings that they did, which were entirely reasonable having regard to the evidence as a whole.
27. He pointed out that in paragraph 11, which is the Tribunal's conclusion paragraph as opposed to paragraph 9 which contains their findings of fact, they did not refer to the outcome of the first period of the Appellant's carrying on his business and therefore could not be criticised for having built hindsight into their conclusion.
28. Mr Flood referred us to a decision of the Employment Appeal Tribunal, presided over by the then President, Browne-Wilkinson J, in a case Gardiner-Hill v Roland Berger Technics Ltd [1982] IRLR 498. In that case a 55 year old Applicant had worked for 16 years as the sole Managing Director, and indeed as the sole employee, of a specialist business. The decision does not reveal why he was dismissed; but after his dismissal he did not make any effort to seek paid employment but set up in business on his own. The Tribunal found that, in not looking for paid employment, he had failed properly to mitigate his loss and reduced his compensation by 80%, that being the proportion of his time, they concluded, that he had spent upon his own business.
29. The Employment Appeal Tribunal reversed the Tribunal's decision. The relevant paragraph is paragraph 10 in which the Employment Appeal Tribunal said this:

"In the present case, it seems to us that the Industrial Tribunal have taken the view that because Mr Gardiner-Hill did not apply for another job (i.e. paid employment) he was therefore as a matter of law automatically failed to mitigate his loss. In our view, that is not correct. The duty on a Claimant is to take such steps as in all the circumstances are reasonable to reduce the loss he suffers from the Respondent's wrongful act. In the circumstances of this case, Mr Gardiner-Hill was some 55 years old at the time of his unfair dismissal. For upwards of 16 years he had been sole managing director of a specialist business. It is not, in our view, self-evident – indeed the contrary – that in those circumstances the right and reasonable course for him to adopt was to seek alternative employment. Indeed in our view it was at least as prudent of him to seek to exploit his own expertise by conducting his own business and gaining an income from his own business to replace the income which he had previously received from his employment."

30. There are two principles which are to be derived from that case. The first is that the fact that an employee who has been dismissed does not apply for paid employment does not automatically mean that he has failed properly to mitigate his loss; the second is that the principle on which the Tribunal acted of reducing the compensation by a proportion of the time which Mr Gardiner-Hill had spent on his new business was wrong.
31. Neither of those principles applies to this case. In other respects, there is nothing new about this authority which is an example, but only an example, of a view which can properly be taken. It is also, perhaps, an example of the obvious fact that there may be more than one reasonable choice which an employee can take in such circumstances.
32. However, while we do not take the view that Mr Flood's submissions are advanced by his reliance upon the case of Gardiner-Hill v Roland Berger Technics (although we certainly do not criticise him for referring to it) we have reminded ourselves forcefully that we must not expect the Tribunal's decision to set out every relevant factor which they considered in reaching a conclusion on the facts. However, the position is different in our judgment where there is a number of factors which together go to the heart of a party's case and to which the Tribunal has made no reference at all in their decision.
33. Although we understand and accept Mr Cramsie's argument that no concrete evidence was put before the Tribunal that the Appellant had suffered specifically any of the difficulties which we earlier enumerated, in practice such difficulties are unlikely to emerge so that an Applicant for employment can say in positive terms that they have in fact affected his search for work.
34. It is wholly understandable, as we see it, that a job seeker should not when he gets no reply to a job application, look for feedback. In our judgment in this case, before the Tribunal could take the step of proceeding from the finding that there were jobs available, in the absence of any evidence, we should add, as to how many other people who did not have the handicaps from which the Appellant suffered, were actually looking for such jobs, to the finding that if the Appellant had made reasonable efforts he would have obtained one of those jobs, the Tribunal had to consider, and if they had considered, should and would have said that they had considered, the important factors which we have already set out, namely the fact that the Appellant had been dismissed for gross misconduct in respect of which at that stage he had not been vindicated, that he had been dismissed from a long-held post in circumstances in which he could not describe his dismissal in favourable terms, that he had no other recent experience, that he had no useful references that he could put forward if asked, and his age.
35. Those factors would necessarily have put him at a serious disadvantage as compared with other job seekers who did not have those factors standing in their way. That seems to us to have been a consideration which, had this Tribunal borne it in mind, they would certainly have set out in their conclusions. We conclude that they failed to take this important aspect of the Appellant's case into account.
36. Accordingly we come to the conclusion that in their finding that the Appellant would have had employment as a manager or as a HGV driver by July 4 (and we omit fork lift truck driver because the Tribunal do not seem to have found that he should have obtained such a job, but if they did then it should be included), if he made reasonable efforts, in our judgment the Tribunal fell into error and this decision cannot stand.
37. That error, in our judgment, has an effect upon Mr Flood's second point. In considering whether it was reasonable or unreasonable for the Appellant to set up in business on his own, as and when he did, the degree of difficulty in obtaining paid employment was a relevant consideration. If the Tribunal had considered the factors which we have outlined, which it appears to us they did not, then they would or might have reached a different conclusion as to whether or not it was reasonable for the Appellant to set up his own business; and thus the conclusion that the Tribunal reached on that issue too cannot stand independently of the first conclusion to which we have referred, which we have already said cannot stand for the reasons that we have set out.
38. In those circumstances there is no need for us to consider further any of the other submissions which were made, for instance as to whether the Tribunal ought to have looked at the business over a longer period than they did. We conclude that the appeal must be allowed.
39. Mr Flood, somewhat tentatively, suggested that we might be able to substitute our own view as to what the outcome would or should have been, had all the considerations we have enumerated been taken into account, for the view expressed by the Tribunal. However, with fairness, he conceded that he could see some force in the point taken on behalf of the Respondents that, if we were to come to conclusions such as those which we have expressed, the only proper course would be to remit this case for the assessment of compensation to be reheard.
40. We do not see how we could possibly substitute our own view. We do not know what the Tribunal which made this decision, or any future Tribunal, would have decided or would decide had those considerations been properly taken into account. It is unfortunate for the parties but we see no alternative to a remission of the issue of remedies (or to put it more accurately, of the issue of compensation because no other remedy is in issue) to a fresh Tribunal. The appeal will therefore be allowed in those terms.