United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR G MANSFIELD (of Counsel) Instructed By: Messrs DLA Solicitors Princes Exchange Princes Square Leeds LS1 4BY
For the Respondent	MR G BURROWS THE RESPONDENT IN PERSON


 


HIS HONOUR JUDGE PETER CLARK:

1. We have before us an appeal by the Respondent employer before the Nottingham Employment Tribunal, Glen Dimplex Heating Ltd, and a cross-appeal by the Applicant, Mr Burrows, against that Tribunal's remedies decision promulgated with extended reasons on 22 January 2003.

Background

2. The Applicant was employed by the Respondent from 15 June 1992 until his resignation, found by the Tribunal to amount to a constructive unfair dismissal by an earlier liability decision dated 5 March 2002, on 31 July 2001. During that employment he was a member of the Respondent's Final Salary Pension Scheme (FSP). He was born on 24 August 1956 and was thus almost 45 years old at the effective date of termination (EDT).
3. On 1 September 2001 the Applicant took employment with the Stadium Group. He was eligible to join that company's pension scheme, a Money Purchase Scheme (MPS) after six months' service. However, he decided before entering that scheme that his future was uncertain and he resigned on 12 April 2002, commencing fresh employment with the Willan Group on 15 April 2002. On 1 August 2002 he joined that company's MPS.
4. The liability hearing took place on 18–19 February 2002. The remedies hearing was held on 9 May and 2 October 2002. The decision on remedies was reserved and it appears that the Tribunal met to consider that decision on 4 and 21 November 2002.

The Applicant's remuneration

5. It was argued in the Respondent's skeleton argument, that in relation to a number of small items of loss allowed by the Tribunal at paragraph 6(b) of their remedies decision the Tribunal failed to look at the overall level of benefits paid to the Applicant when comparing his position before and after dismissal. Leaving aside pension rights, which forms the principal ground of appeal, we accept Mr Burrows' formulation (bundle p.182) which shows that the difference in benefits was insignificant. We therefore reject that ground of appeal.

Cross-appeal

6. On the other hand it is clear from the Respondent's amended counter-schedule lodged in the Employment Tribunal (p.181) that the Applicant's claimed loss of use of his company car in the sum of £290.58 was agreed, but no award was made under that head of claim by the Tribunal. It was apparently overlooked.
7. It is that item which forms the basis of the Applicant's cross-appeal. Mr Mansfield does not oppose the cross-appeal in principle; his sole ground for resistance is that the Applicant's Answer raising the cross-appeal was lodged out of time. We shall extend time for cross-appealing and allow the cross-appeal. The Applicant is entitled to recover compensation in the sum of £290.58 in respect of his loss of use of the company car.

Pension loss

8. At the EDT the Respondent's contribution to the FSP scheme was 17.5 per cent of salary. On 1 April 2002 it increased to 19.5 per cent. At termination the Applicant's gross weekly wage was £408.65. The Tribunal accepted that that figure would have increased to £425 per week from 1 April 2002.
9. With the Willan Group the employer contributed 3 per cent of salary into the MPS during the first 12 months of an employee's pensionable service and 6 per cent thereafter. The Applicant's gross weekly pensionable salary with Willan from 1 August 2002 was £451.92.
10. The Tribunal heard evidence on behalf of the Respondent from its finance director, Mr George and from Mr Conlan, an actuary and adviser to the Trustees of the Glen Dimplex Group Pension Scheme.
11. In arriving at its assessment of the Applicant's pension loss flowing from the unfair dismissal the Tribunal asked itself three questions arising from the issues before them:

(1) Was it appropriate to use the 1991 Guidelines, that is the guidelines prepared by a committee of three Industrial Tribunal Chairmen in consultation with the Government Actuaries Department, in order to assess pension loss in this case?

(2) For how long was the Respondent's FSP scheme likely to continue in its present form for members?

(3) For how long was the Applicant likely to remain in the Respondent's employment?

12. They answered those questions as follows:

(1) They would rely on the guidelines and not accept Mr Conlon's approach, which was based on actuarial principles. At paragraph 12 of their reasons they stated that Mr Conlon was not to be regarded as an expert witness in circumstances where the Respondent's solicitors were unable to produce a copy of their letter of instructions to him.

(2) On the balance of probabilities the Applicant would have remained a member of the Respondent's FSP scheme until he left their employment.

(3) They found that he would have remained in the Respondent's employment until normal retirement age, that is age 65.

13. Based on those findings they assessed the Applicant's pension loss from the EDT to 21 November 2002 and future loss on the basis that he had lost the value of the Respondent's contributions to the FSP scheme for a full 19 years, less the equivalent employer's contributions into the Willan's MPS.

The Appeal

14. Mr Mansfield helpfully identified two bases for attacking the Tribunal's pension loss award totalling £36,117.63, the broad attack and the narrow attack.

The narrow attack

15. Even if the Tribunal was entitled to use the 1991 Guidelines Mr Mansfield submits that the Tribunal's application of the Guidelines was wrong in principle and resulted in a perverse result.
16. Mr Mansfield points out that in assessing loss the Tribunal made no discount for (a) accelerated receipt of the employer's contributions, (b) the possibility that the FSP scheme would close before the Applicant left the Respondent's employment and (c) that he would leave that employment before reaching the age of 65. (The contingencies.)
17. We accept that here the Tribunal erred in principle. The guiding statutory provision is to be found in section 123(1) of the Employment Rights Act 1996:

".... 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 in so far as that loss is attributable to action taken by the employer."

18. We see no distinction in principle between the assessment of future loss in a case involving the statutory tort of unfair dismissal and that of sex discrimination. What is here being assessed is the loss of a chance, as in the ordinary common law assessment of damages in tort.
19. In MOD v Cannock [1994] IRLR 509, one of the questions for the EAT (Morison J presiding) was how an Employment Tribunal ought to approach the hypothetical question of how long the Applicant's employment would continue into the future. The EAT rejected the Employment Tribunal's approach of making a finding on the balance of probabilities as to whether she would continue until normal retirement age in favour of an assessment of the lost chance of future employment, taking into account relevant contingencies. The EAT approach was approved by the Court of Appeal in Vento v Chief Constable of West Yorkshire Police (No.2) [2003] IRLR 102, paragraphs 32-33, per Mummery LJ.
20. In our judgment this Tribunal fell into the same error as the first instance Tribunal in Cannock. First, they found on the balance of probabilities that the Applicant would remain in the FSP scheme throughout his employment with the Respondent. That was not the question. The question was what, taking into account the evidence of Mr George, was the chance that the FSP scheme would remain in its present form during the Applicant's employment for existing members and secondly what was the chance of the Applicant remaining in that employment until age 65 given not only his wishes, but also the risk of redundancy and other contingencies.
21. It follows, as a matter of principle, that the Tribunal was wrong to assess pension loss on the basis of a full 19 year future loss of net employer contributions (after deducting prospective contributions by the new employer, Willans) without making any deduction for the contingencies and for accelerated receipt.

The broad attack

22. Mr Mansfield submits that the Tribunal was wrong to adopt the 1991 Guidelines approach where there was before them expert actuarial evidence from Mr Conlon. They were wrong to reject his evidence as not being expert evidence.
23. We bear in mind the reservations expressed as to the current value of the 1991 Guidelines (presently in course of revision) by Lindsay P in Clancy v Cannock Chase Technical College [2001] IRLR 331. However we do not accept that in the Employment Tribunal forum, where parties are frequently unrepresented, it is mandatory for Tribunals to accept actuarial evidence given on only one side. We have considered the Court of Appeal decision in Kapadia v London Borough of Lambeth [2000] IRLR 699. We distinguish that case. In Kapadia the issue was whether the Applicant was disabled within the meaning of section 1 of the Disability Discrimination Act 1995. The only medical opinion evidence was called on behalf of the Applicant. The Tribunal, by a majority, rejected that evidence in finding that he was not disabled.
24. The Court of Appeal, upholding the judgment of the EAT on which I sat reversing the Employment Tribunal decision, held that the Tribunal was wrong to find that there was no evidence of section 1 disablement. It was impermissible for the Tribunal majority to simply disregard the expert evidence called on behalf of the Applicant.
25. In the present case, although the Tribunal say that Mr Conlon's evidence was not to be regarded as that of an expert witness they then went on, as Mr Burrows points out, to consider that evidence and in part to accept it. For example, they accepted his evidence in rejecting the Applicant's claim for loss of enhancement of accrued pension rights (reasons paragraph 17(c)).
26. In these circumstances we have concluded that it was open to the Tribunal to adopt the 1991 Guideline approach. The difficulty is that, as Mr Burrows conceded, they did not explain why they did so (reasons paragraph 13).

Conclusion

27. It follows that the appeal must be allowed in relation to the Tribunal's assessment of pension loss. We are not persuaded that the outcome will necessarily involve wholesale acceptance of Mr Conlon's evidence, as Mr Mansfield urges us to say. There are a number of factual judgments which can only properly be made by the Tribunal of fact. We shall therefore remit the question of pension loss to a fresh Tribunal for rehearing. The remaining heads of loss found by the original Tribunal will stand, together with the loss of use of the company car item, the subject of Mr Burrows' successful cross-appeal.