United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Mr S Miller, Solicitor Of- Messrs Macroberts Solicitors 152 Bath Street GLASGOW G2 4TB
For the Respondents	Mrs G Peebles, Advocate Instructed by- Messrs Bond Pearce Solicitors Bristol Bridge House Redcliff Street BRISTOL BS1 6BJ


 


LORD JOHNSTON:

1. This appeal raises a short but sharp point in relation to section 123(7) of the Employment Rights Act 1996 ("The Act").
2. The appeal is taken at the instance of the appellant employee against the decision of the Employment Tribunal in this respect which is to be found on page 28 of the decision as follows:-

"We then considered the effect of Section 123(7) of the Act upon the compensatory award. Section 123(7) provides:-

"If the amount of any payment made by the employer to the employee on the ground that the dismissal was by reason of redundancy (whether in pursuance of part X(1) or otherwise) exceeds the amount of the basic award which would be payable but for Section 122(4), that excess goes to reduce the amount of the compensatory award."

We have already found that the applicant is entitled to enhanced redundancy payment of £19,952.

Mr Miller suggested that the compensatory award, and the award for an enhanced redundancy payment could sit side by side, without crossover, due to the fact that the enhanced redundancy payment was not deemed to be compensation for the future. The words of the statute however are explicit and Section 123(7) make it clear that where redundancy compensation is paid to the employee in an amount equivalent of the basic award (usually the statutory element) it will be set off against that award and the surplus will be set off against the compensatory award. The applicant in this case has already received his statutory redundancy entitlement which extinguishes his entitlement to a basic award. The enhanced redundancy payment, to which we have found the applicant is contractually entitled is payment for compensation on redundancy and therefore clearly falls within the ambit of Section 123(7) and that being the case, the redundancy compensation of £19,952 should be applied to the compensatory award which extinguishes it, (and therefore we considered it just and equitable to make no compensatory award)."

3. The issue is purely one of statutory construction and the submission made by Mr Miller on behalf of the appellant was, that properly understood, section 123(7) operated only when a payment had in fact been made relating to redundancy by the employer and not to one that was simply due. Mr Miller accepted that if the enhanced redundancy payment which was awarded by the Tribunal in this case had been in fact paid voluntarily by the employer at the time of dismissal, it would have been a relevant feature in any compensatory process under section 123 (7) of the Act. It now, however, he submitted, became damages and section 123(7) did not apply. It should not therefore have been applied by the Tribunal to reduce or extinguish the compensation award they actually made.
4. The point is certainly novel but what concerns us at once is it was not argued on the matter of submission before the Tribunal of first instance. It appears the Tribunal went to consider the matter of their own volition, neither party having raised the question.
5. Not only is this practice to be condemned inasmuch that it offends the principle that a party against whom an order is being made must have an opportunity to defend the position in advance, it also raises a broader question as to whether or if not Mr Miller's construction is correct, section 123(7) of the Act should not come into play to remedy the injustice of the employer having to pay twice.
6. In any event, we are of the view that the Tribunal at first instance must consider this matter afresh in respect of submissions from both parties. Given that is our position, it would not be appropriate for us to offer any view, save, as presently advised, we consider given the fact that the enhanced redundancy payment is precisely that, even if it has been awarded for breach of contract, on the face of it, section 123(7) would apply.
7. In these circumstances we will allow this appeal and remit the matter back to the same Tribunal to consider the application of section 123(7) in the context of this case, inviting submissions from both parties in that respect.