United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	Mr K W Hogg, Solicitor Of- Messrs Allcourt Solicitors 1 Carmondean Centre Carmondean LIVINGSTON EH54 8PT
For the Respondent	Mr D Gardner, Solicitor Of- Community Help & Advice Initiative 1 Murrayburn Gate EDINBURGH EH14 2SS


 


THE HONOURABLE MR JUSTICE BURTON (PRESIDENT)

1. This is an appeal brought by Robert Kane Transport Services Ltd, the respondent below, against a decision by the Employment Tribunal sitting in Edinburgh on 26 November 2001 and 22 March 2002. The conclusion of the Employment Tribunal, so far as liability was concerned, was that the applicant, Mr Kevin Nelson, was unfairly dismissed and that the respondents were in breach of contract and the award that the Tribunal made is that which is now in issue on this appeal, that is, the award for unfair dismissal. That award amounted to £10, 649.35 inclusive of the basic award.
2. The brief history, procedurally, is that the matter came on for hearing on 26 November and the Tribunal Chairman, we are informed by Mr Hogg, who represented the respondents, both below and before us, immediately, or early in the hearing, indicated that he considered that there was insufficient evidence adduced at that stage by the applicant to evidence adequately what loss he would be claiming if he were successful so far as unfair dismissal is concerned. In the event, that day's hearing was spent entirely on liability and the matter was adjourned so that evidence supporting a case by way of compensation, could be produced by the applicant, and the time scale for such production was laid down. We do not need to deal with that time scale because, in the event, Mr Hogg has hardly relied upon the matter but, in the first instance, it seemed some evidence was adduced which was illegible and the case was not restored for a hearing until it was so restored at the instance of the respondent on 22 March 2002, when the issue of compensation was addressed. The Tribunal reserved its decision and, by decision dated 23 August 2002, entered in the Register on 30 August 2002, it delivered its decision, both on liability and on quantum.
3. It is plain that the Tribunal was not impressed by the conduct of the respondents and in what we have numbered, in the absence of paragraph numbering, as paragraph 18 of the Decision, it stated as follows:-

"The Tribunal determined that the respondents had no reasonable basis for concluding that the applicant had been guilty of misconduct far less gross misconduct. The respondents had patently failed to carry out any reasonable investigation into the matter and Mr Kane had reached conclusions regarding the matter without in any way discussing the matter with the applicant. Where Mr Kane's and the applicant's versions of events were in conflict we had no difficulty in accepting the applicant's as being the more reliable and credible."

4. Thus, there was not only a finding, but a clear and emphatic finding, on liability in favour of the applicant.
5. The relevant paragraphs on quantum in the decision are those which we have numbered as paragraphs 22 and following:-

"22. The applicant had been unemployed from the date of his dismissal until 13 July 2001. He had then been engaged as a "self-employed" courier driver with another courier company. The applicant did not, at the first hearing, have sufficient detail regarding this engagement for the Tribunal to reach any conclusions regarding the net income that the applicant would derive from this engagement. The applicant advised the Tribunal that he was being paid gross and that he would have to account for his own tax and self-employed national insurance contributions. From the description of the applicant's work the Tribunal doubted that his engagement could be properly categorized as being on a self-employed basis since it appeared to bear many of the hallmarks of employment. However, the engagement was without security, when the business ceased to have a base in Edinburgh, the work effectively dried up, and his engagement ended. Satisfactory documentation showing the amounts earned by the applicant during this engagement were subsequently provided.

23. As from 15 January 2002 the applicant obtained permanent employment with the University of Edinburgh (we interpose that although that employment was not described by the Tribunal, we have been told today that it was of the nature of caretaker work) at an average take home wage of £169 per week. Having regard to S123 of the Employment Rights Act 1996, and the decision in Dench v Flynn and Partners [1998] IRLR 653, the tribunal concluded that it would not result in an award of a just and equitable amount of compensation if the tribunal were to limit the award of compensation to the date of the termination of the engagement of the applicant with the courier company. The tribunal determined that any appropriate award of compensation in respect of the loss sustained by the applicant, attributable to the action taken by the respondent, would include the losses attributable to the applicant's dismissal from the date of that dismissal to the date of the continued hearing on 22 March 2002 and for one year thereafter based on his continued loss of income as at that date."

The calculations then set out, to arrive at the award to which we have referred, are based on those findings.

6. So far as the conclusions in paragraph 22 are concerned, and the reference to Dench v Flynn and Partners, Mr Hogg has not sought to challenge the Tribunal's conclusion that it was entitled not to regard the taking up of what turned out to be short term employment as a driver with the company which folded at Christmas 2001, as the end of the applicant's entitlement as against the respondents. It is clear from Dench v Flynn and Partners that an Employment Tribunal is entitled to look at a continuing period after a first employment has ended, once someone is entitled to say that he or she was unfairly dismissed and was driven out onto the labour market. Of course, some employments can immediately close off any loss, even though there may be some unfortunate break in the chain of causation later resulting in the applicant finding himself back in the labour market. But this was a case in which the Tribunal found, and Mr Hogg does not suggest it was not entitled to find, that this employment was always insecure and should only be seen as part of the applicant's efforts to mitigate, and not as closing off any continuing loss. But if one ignores that important finding by the Tribunal which is not challenged, the basis upon which a continuing loss after that employment ceased is awarded is contained in the very brief passage in paragraph 23 of the Decision, to which we have referred, and contained there alone.
7. In his grounds of appeal, Mr Hogg included matters which, in the event, he did not pursue, or pursue very vigorously, before us today. He asserted that the applicant came to a hearing without evidence of loss, and should not have been given the benefit of the adjournment that, in fact, occurred, in order to produce evidence which he had not previously produced. In those circumstances he submits that this applicant should be seen as someone who had no evidence of loss. If that is wrong, and we are entirely satisfied that it is, not least because no objection was taken by the respondent at the time to the course proposed by the Chairman, nor any submission made that, after the hearing in November, the case should not be allowed to proceed further on questions of compensation because no loss was shown, then Mr Hogg falls back on his more substantial case. As we have indicated, he does not seek to say that there should not be, in all the circumstances, some loss recoverable by the applicant. He submits that this would be calculated by comparing what he would have obtained had he remained in the employment of the respondent with what he would have obtained (after a short period of unemployment in June and July 2001) in the employ of the courier company and then continuing until he obtained new employment with the University of Edinburgh on 15 January 2002 which, once again, had involved a short period of unemployment, effectively over Christmas 2001.
8. He had a job with the respondents in charge of couriers. He found temporary, as it turned out, employment as a courier with the company that folded at Christmas, and he now had permanent employment apparently as a caretaker as from 15 January 2002 and that, says Mr Hogg, should be the end of that. If that is right, then this Tribunal should now say that no loss is shown in respect of the period after 15 January, and there would be no need, if we were persuaded on the strength of that case, and were otherwise considering whether to remit, because the figures would be clear.
9. Mr Nelson has today been represented before us by a MacKenzie friend or consultant, a Mr Gardner, who is from the same organisation, CHAI, as was the representative, Mr Weston, who looked after the applicant's interests below. Neither Mr Weston nor Mr Gardner is legally qualified but they have looked after Mr Nelson's interests as best they can and, certainly before us today, Mr Gardner has been both full and courteous in his approach.
10. Mr Gardner, on behalf of Mr Nelson, submits that there was continuing loss shown before the Tribunal, and he refers to the production (A1) which was put before the Tribunal and, in fact, contains all the figures. After setting out the comparative earnings in respect of the period prior to 14 January 2002, (that is, unemployment, courier company and, once again over Christmas 2001, a short period of employment), it recites "15 January 2002 to present date employed by Edinburgh University", with the nett salary obtained from Edinburgh University, falling to be compared with the salary had he remained with the respondents. That shows a shortfall of £936, by dint of a difference between £1521 and £2457 in respect of the period for 15 January 2002 to the hearing. And then there is the following paragraph added:

"5. Future Loss

Employed in open-ended contract with Edinburgh University @ £169 per week (nett).

Ongoing loss = £104 per week."

11. Mr Gardner submits that there was thus evidence of continuing loss, and that in paragraph 23, to which we have referred, the Tribunal applied section 123 of the Employment Rights Act 1996 ("the 1996 Act") and concluded that the appropriate period and amount of loss was up to 22 March 2003, at that differential rate. There was thus, he submits, evidence before the Tribunal which enabled them to come to a conclusion and, albeit in short form, they had nevertheless done so.
12. A number of important principles appear to be illustrated by this, albeit short case. The first, and, most obvious, is the obligation on Courts and, in particular, Employment Tribunals, to give reasons for their decision. The usual enunciation of that obligation is in order to enable the parties to understand why they have won and they have lost but, certainly, in these Human Rights days, it is regarded as part of the obligation of the Court to enunciate its reasons, rather than simply announcing its result. The seminal decision is usually regarded as the case of Meek v City of Birmingham District Council [1987] IRLR 250. That case is very often too frequently relied upon by appellants who have no other grounds of appeal, and is too often the resort of the desperate, and we find Meek referred to in appeal after appeal. But the fact that it is sometimes referred to inappropriately is not any ground for detracting from its importance, and that concept applies as much to decisions on quantum as on to decisions on liability, because, particularly now that the statutory limit has been increased, there can hang a considerable sum of money upon a decision of a Tribunal on quantum.
13. Very often it is possible for an appeal Tribunal, albeit concluding that insufficient reasons were enunciated by a Tribunal, to get at what those reasons, in fact, were, or must have been, in some other way. Sometimes that is done by looking at the balance of the Tribunal's decision other than the actual paragraph in which the result is announced. Sometimes it can be done by reference to Notes of Evidence, if they are obtained, or by agreements between the parties, pursuant to the new Practice Direction Rule 7, as to what the evidence was before the Employment Tribunal. Sometimes it is quite clear to an appellate tribunal what the reasons were, so that their absence can be made good on the basis that there is no point in sending the matter back, if the answer is obvious. But if the decision not only does not set out the reasons, but gives no way in which, at any rate, an appellate tribunal can be sure that it knows what those reasons were, or would have been, so as to support the conclusion, then an appellate tribunal must interfere at least to the extent of remitting the decision.
14. The second important principle, is that which can be said to be best enshrined in the case of Lifeguard Assurance Ltd v J Zadrozny & Another [1977] IRLR 56, in which, in those early days of Employment Tribunals, Industrial Tribunals as they then were, Mr Justice Phillips, the then President, reminded Industrial Tribunals, as the industrial jury, that they should not award compensation simply because of their distaste for the conduct of an employer. At paragraph 11, Phillips, P, said as follows:-

"It is always necessary that the Industrial Tribunal in assessing compensation, should not fall into the benevolent error of awarding compensation, not for some loss due to the unfair nature of the dismissal, but more out of sympathy for the predicament in which the employee finds himself."

15. The risk that can be said to arise, in relation to this decision, is that the Tribunal begin their consideration, brief as it is, with the statement, in paragraph 23, which we have already recited, that the Tribunal concluded that it would "not result in an award of a just and equitable amount of compensation if the Tribunal were to limit the award of compensation to the date of the termination of the engagement of the applicant with the courier company." Decisions of course must not be read as if they were statute, and it is important to state that the Tribunal then does go on immediately to consider properly, on the face of it, section 123 of the 1996 Act. But there is the risk that it may be thought, particularly in the absence of any reasoning, that what this Tribunal was doing was acting more out of compassion, and arriving at what appeared to be an appropriate sum, and not larger than it might otherwise have been if a different course had been taken and the Tribunal had acted as a careful calculator of actual loss. We are not saying that that is what has happened but that is an additional risk, where no sufficient reasons are given for what is being decided.
16. But the third important principle is more a matter of substantive law. In the field of proof of loss under section 123, it is not only obvious but, indeed, is specifically provided for under section 123 subsection (4), that, in ascertaining the loss referred to in subsection (1), the Tribunal shall apply the same rules "concerning the duty of a person to mitigate his loss as applies to damages recoverable under the common law of England and Wales, or, as the case may be, Scotland." Consequently, the Tribunal was obliged to consider questions of mitigation and yet, on the face of the brief passage that we have quoted, neither causation nor mitigation are expressly addressed but only, on the face of it, the "appropriate" sum to be awarded.
17. We turn briefly to our consideration of paragraph 23 against that background. We are satisfied that if the Tribunal did have reasons which it would have been able to put forward to justify the amount and period it awarded, they do not appear on the face of the decision. As we have indicated, no challenge is taken by Mr Hogg to any period up to 14 January 2002, once his primary attack, on there being any loss at all, is rejected, as we have rejected it. In respect of the subsequent period, clearly a number of questions arise:

1. Why did Mr Nelson take a job as a caretaker, which inevitably would be likely to be less well paid and, in the event, was less well paid than either his job in charge of couriers with the respondent or the job he managed to obtain for the period of July to December 2001 as a courier driver?

2. Did he, before taking such a job, explore the possibilities for employment either in some other position but, nevertheless, for a wage which approximated to his own wage or, in particular, as a courier or an organiser of couriers? If he did try, what luck did he have and why did he fail? And what is, or was at the material time, the employment market for such jobs?

3. Mr Nelson's advisers have relied on authorities such as Bateman v British Leyland UK Ltd [1974] IRLR 101 which established that an Employment Tribunal is entitled to use its members' collective knowledge of industrial conditions in the area, but there is no sign as to whether that factor emerged here, i.e., as to whether there was any consideration, still less conclusion, as to whether there was, at the material time, or would have been, difficulty for him in finding a job as a courier or a job similarly well paid to that which he had had with the respondents.

4. Even assuming that the respondent did satisfactorily surmount the hurdle of showing that he adequately mitigated his loss by taking, even for a short time, the job as a caretaker, the next issue arises as to how long that shortfall is to be made good by the employer. If the conclusion were that no job as a courier was available, or was likely to be available for a reasonable or possibly a lengthy time, then, subject to any consideration of any other job which the respondent would have been able to have taken, a continuing loss would be justified. Of course it may be that the job as a caretaker was taken because the respondent had decided to change his lifestyle and that his job satisfaction would be likely to be greater in such a position, than in his old job. None of that is canvassed, and, if it were the case, the question would need to be considered, as to whether that would amount to reasonable mitigation, and the shortfall should be leviable at the employer, in such a situation. If, in fact, it was justifiable, after reasonable mitigation to take a less well paid job, how long should that continue? The Tribunal, without explanation, chose a period of up to 22 March 2003. Of course it is entirely a matter of speculation and hypothesis for a Tribunal, and it is entirely within its discretion as to what period it is to take, but it seems to us that some explanation is required for the period chosen. It might be that in some circumstances no period might be appropriate, and it might be regarded as sufficient that the applicant, having not taken steps to mitigate his loss, had now taken a job which he liked. Another possibility would be that the Tribunal would assess the availability of employment as a driver and, would conclude that, having looked at the market, although it was reasonable to take a short term job, there would be jobs as a driver available within a three or four month period. It might, on the other hand, be that the Tribunal would decide that the applicant would never be able to get another job as a courier for one reason or another such that the loss would be, subject to the statutory cap, a permanent one. Of course a Tribunal would be entitled to say that it concludes, for whatever reason, that a medium term loss is what is required and to settle on a period of 15 months from January 2002. But some explanation, some reference to the evidence, is in our judgment, clearly required in this case, particularly, where the effect of the three principles, to which we have referred, is cumulative.

18. In those circumstances we conclude that we cannot uphold this decision, and that the matter must be sent back. We would suggest that plainly it should be sent back for fresh evidence to be given, and be subject of cross-examination, so that the picture as to the applicant's employment can become clear. It may even be that by now he has left the University of Edinburgh employment and is in yet some further job, or even back in driving. It may, on the other hand, be that the evidence is all the clearer that he will never, or not for some relevantly long period, be able to acquire a job as well paid as he had with the respondents.
19. But those are the questions which, consistent with the law of causation and mitigation, will be required to be considered. Particularly as we understand that the Chairman who presided over this Tribunal is no longer sitting as an Employment Tribunal Chairman, but, in any event, we conclude that it is appropriate that the remission in this case should be to a differently constituted Tribunal, which will decide what loss if any, subsequent to the period 15 January 2002, should be awarded pursuant to section 123 of the 1996 Act. To that extent this appeal is allowed.