United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR P NICHOLLS (of Counsel) Instructed by: Messrs McGrigor Solicitors Princes Exchange 1 Earl Grey Street Edinburgh EH3 9AQ
For the Respondents	MR K HARRIS (of Counsel) Instructed by: Messrs Pattinson & Brewer Solicitors 71 Kingsway London WC2B 6ST

SUMMARY

Unfair Dismissal

Appeal in respect of compensation awarded by ET for loss of pension rights. Error of law in assessing loss by reference to booklet "Compensation for Loss of Pension Rights – Employment Tribunals" without explaining why if rejected submissions as to the parties' assessments. Remitted to same ET.


 


HIS HONOUR JUDGE PROPHET

1. Mr Birch, Mr Talbot, Mr Hall and Mr Beck were all found by an Employment Tribunal sitting at Stratford, where the Chairman was Mr M F Haynes and the lay members Ms P Kudhail and Ms M Spanswick, to have been unfairly dismissed by their former employer, Port of Tilbury (London) Ltd; but that each had contributed to their own dismissals to an extent which would require 25% reduction in any compensation awarded to them. The decision to that effect was promulgated on 7 October 2003.
2. The assessment of compensation was dealt with by the same Employment Tribunal at a later date at a hearing on 12 December 2003 followed by a chambers meeting on 19 February 2004. At that chambers meeting the Employment Tribunal considered written submissions from both sides which had been prepared and submitted after the 12 December hearing.
3. By a reserved second decision promulgated on 17 March 2004 Mr Birch was awarded compensation of £33,396.64, of which £8,498.23 was for loss of pension rights prior to the 25% reduction; Mr Talbot was awarded £33,702.75, there being no loss of pension rights in his case; Mr Hall was awarded compensation of £39,263.17, of which £26,733.15 was in respect of loss of pension rights prior to the 25% reduction; and Mr Beck was awarded compensation of £28,816.64, of which £15,840.89 was in respect of loss of pension rights prior to the 25% reduction.
4. It has always been understood in general terms that the assessment of awards of compensation in unfair dismissals is essentially a matter for the Employment Tribunal to determine and it has been repeatedly indicated by both this Tribunal and the Court of Appeal that the higher courts will not interfere with those assessments unless it emerges that the Employment Tribunal has gone materially wrong in its approach to the assessment of those awards.
5. The Notice of Appeal by the employer in this case was lodged on 23 April 2004 in respect of the awards and by an order of Cox J on 2 June 2004 the case was set down for a full hearing before this Tribunal. We are constituted today to conduct that full hearing. The employer is represented by Mr Nicholls of Counsel and the four ex-employees by Mr Harris of Counsel.
6. The main thrust of the appeal is in respect of the assessment by the Employment Tribunal for loss of pension rights, which affects all the four with the exception of Mr Talbot. What Mr Nicholls says about that is that the Employment Tribunal was wrong to reject the evidence and submissions forthcoming from them as to how to assess that loss; and instead to proceed entirely on the basis of the "Compensation for loss of pension rights…Employment Tribunals" booklet.
7. In paragraph 5 of the Extended Reasons the Tribunal say:

"5. … We have to record that neither party has, in our view, approached this issue [that is to say, loss of pension rights] adequately."

Then in paragraph 6, having referred to the booklet, they say:

"6. … When we came to consider the submissions made by both advocates at our remedy hearing, we found that neither had approached the matter on any of the bases suggested in that booklet. The Tribunal is therefore faced with a situation where they find themselves unable to accept the approach suggested by either party. [and then, in a crucial sentence] We do so entirely on the basis that neither approach is one that is suggested in the booklet. We find ourselves entitled to discount both their arguments; firstly, because they have not addressed the approach which we suggested; and, secondly, because we find the suggestions of both parties do not adequately approach the question of calculating pension loss. The booklet contains a thorough evaluation of how the loss of pension rights should be evaluated and is clearly based upon considerable research. Whilst we are not bound to follow its advice, we are persuaded that it is both appropriate , just and equitable to do in this case… For this reason, we have decided that it is not necessary to go into a detailed analysis of the arguments put to us.

7. …In view of the matters mentioned above, we do not find it necessary to comment further on the parties submissions about pension rights."

8. We are persuaded by Mr Nicholls' argument that that approach was an error of law. The point about the booklet is that it may assist an Employment Tribunal when there is little forthcoming from the parties as to how to approach what is recognised to be a difficult area, that is to say assessing a proper compensation of loss of pension rights.
9. However, there is no duty on an Employment Tribunal to follow the guidelines in that booklet (Bingham v Holborn Engineering Ltd [1992] IRLR 298). In particular where the parties or one of the parties puts forward credible evidence and submissions on that matter it seems to us that the first duty of the Tribunal is to consider that evidence and those submissions in order to ascertain whether a fair and equitable assessment of the loss of pension rights can be worked out on that basis. If it cannot, the Employment Tribunal must adequately explain why not. To say, as this Employment Tribunal does, that it rejects the parties' submissions entirely on the basis that it is not one suggested in the booklet is in our view an error of law.
10. That justifies the appeals in respect of the assessment of the loss of pension rights for Mr Birch, Mr Hall and Mr Beck being allowed. It follows from that that the matter of the appropriate compensation for loss of pension rights will have to be determined on remission. We have no doubt that the Employment Tribunal on reviewing this matter will ensure that each of the three employees referred to are considered individually.
11. In the case of Mr Hall, where loss of pension rights was a major part of his award, there is a challenge also in the appeal to the period of over 22 years being used. That is, on the face of it, a very long period. However, since it is a consequence of our allowing the appeal for the reason already given, it will be open on remission for that period to be reviewed with no doubt consideration given to the judgment of the Court of Appeal in Bentwood Brothers (Manchester) Ltd v Shepherd [2003] IRLR 364. That will also be the position in respect of the period of 6 years and 45 weeks in Mr Beck's case.
12. Turning now to the appeal in respect of Mr Talbot, the Employment Tribunal's award for future loss was based on a period of 5 years which was not only in excess of that proposed by the employer, it was also in excess of that asked for in Mr Talbot's schedule of loss. Mr Nicholls says that it is wrong for an Employment Tribunal to award more than that which is claimed for by the employee. Although it seems unlikely that this matter has never arisen before, neither he nor Mr Harris have been able to find any authority which bears on this point.
13. We take the view that it is unlikely that an Employment Tribunal will award in any compensation assessment more than an Applicant claims, but it is not necessarily an error of law to do so. There may be particular circumstances in any individual case, especially perhaps where an Appellant is not legally represented, where an Employment Tribunal feels that to do justice it is necessary to do so. However, in the cases which we are considering, where both parties had the benefit of legal representation, we feel that it is incumbent on an Employment Tribunal, if minded to award more than is claimed, to do so only after having given both sides an opportunity of making submissions on that matter. That was not done in this case and accordingly we allow the appeal also on the future loss as awarded to Mr Talbot. That too will have to be re-determined on remission.
14. Arising from this point, we would also take this opportunity of observing that it can be unwise in some cases for Employment Tribunals to rely on written submissions proposed and submitted after the ending of the hearing. Time allocations in Employment Tribunal cases are designed to include for submissions before the hearing ends. Whilst it is always helpful for submissions to be reduced to writing, the opportunity of presenting those submissions to an Employment Tribunal at a hearing gives more opportunity for consideration to be given by each representative to adding additional points or making observations on the other side's submissions.
15. Mr Nicholls has submitted that the appropriate course should be remission to a differently constituted Employment Tribunal, but we agree with Mr Harris that the appropriate course here is to remit to the same Employment Tribunal. The Employment Tribunal has clearly approached its task conscientiously. All other aspects of the compensation award remain valid and the only matters to be reconsidered in the light of our judgment are loss of pension rights and the future loss in the case of Mr Talbot. Accordingly, we remit to the same Employment Tribunal.