United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR JOHN HAND QC (of Counsel) Instructed by: Messrs Ward Hadaway Solicitors Sandgate House 102 Quayside Newcastle upon Tyne NE1 3DX
For the Respondent	MR JOHN HENDY QC (of Counsel) Instructed by: Messrs Hunt Kidd Solicitors City Office Norfolk House 90 Grey Street Newcastle upon Tyne NE1 6AG


 


HER HONOUR JUDGE WAKEFIELD

1. This is an appeal by South Tyneside Healthcare NHS Trust against an Interlocutory Order made by an Employment Tribunal sitting at Newcastle upon Tyne on 9 May 2003. The Order, together with Reasons, was sent to the parties on 21 May 2003. Insofar as the Order purports to revoke part of a "Reserved Further Decision as to Remedy" made by the Employment Tribunal and sent to the parties on 5 March 2003, it is said by the Appellant to be wrong in law if the effect of such revocation is to allow Dr Awotona (the original Applicant to the Employment Tribunal and the Respondent to this appeal) to claim compensation for loss of fees she could have earned from undertaking family planning procedures during the period between her dismissal on 1 December 1998 and 1 April 2003, the date ordered by the Employment Tribunal for her reinstatement. Compensation for that period is said by the Appellant to have already been finally determined by the Employment Tribunal and cannot be reopened.
2. The relevant history, stated briefly as is relevant to this appeal, is the following. Dr Awotona was employed by the Appellant from 1 February 1995 as a Consultant in Obstetrics and Gynaecology at South Tyneside District Hospital. On 1 December 1998 she was dismissed, allegedly for gross misconduct. By Originating Applications presented to the Employment Tribunal in January 1999 Dr Awotona complained of unfair dismissal, sex discrimination and race discrimination. The hearing of the complaints occupied 41 days between March 2000 and April 2001, with the Employment Tribunal panel holding a further 3 days of deliberations in July and November 2001. By the decision, sent to the parties on 3 April 2002, the Employment Tribunal found that Dr Awotona had been unfairly dismissed and racially discriminated against by way of victimisation.
3. The remedies hearing took place over five days in December 2002. On the last of those days there was insufficient time for submissions to be heard from the parties' Counsel and the matter was therefore adjourned until 21 January 2003. What then occurred is set out in paragraph 5 of the subsequent Reserved Further Decision as to Remedy, sent to the parties with Extended Reasons on 5 March 2003, as follows:

"5 When the Tribunal reconvened on 27 January 2003 in order to hear counsel's final submissions, Mr Cape made application to re-open the applicant's case so as to recall her to give evidence with regard to a financial benefit (in the form of a sum which it was said was paid by the respondent whenever a particular procedure was carried out), which she was said to have forgotten about by reason of her illness since her dismissal and which was said to be worth some £8,000 to £9,500 gross a year. Mr Hand opposed that application on the basis that the matter had been raised at much too late a stage and made it clear that, if the Tribunal was prepared to allow it, he would not be in a position to deal with it that day but, as Mr Cape conceded, would require a postponement of uncertain length. Having considered the matter, we refused the application. Not only had the applicant already closed her case, the respondent had called its evidence and done likewise. Indeed, but for our agreement that counsel should make their final submissions on the same day, those of Mr Hand would already have been given. We fully appreciated that the applicant had been unwell as a result of that which might be referred to as depression – that was common ground between the parties although there was a dispute as to extent and in particular whether or not she had been suffering from a clinical condition – but that did not explain her failure, over a very long period, to claim through her solicitors a sum which was now said to be substantial. We took full account of the importance of the matter now raised by her, in relation both to loss to date (which would still be relevant in the event of an order for reinstatement) and to any question of compensation for future loss of earnings. However, her loss had been the subject of a detailed schedule the preparation of which had been delayed pending the report of an expert who had been instructed jointly by the parties (and whose report was also in the bundle of documents) and had even been revised. That schedule made claims in various respects, not only that which would have been the applicant's basic salary (updated each year) but also additional matters such as the loss of discretionary points which, she maintained would have been awarded, lost income from private practice which she contended she would have had and the lost benefit of pension contributions. There was no satisfactory explanation for the failure to identify and include that which was now said to be a significant further head of claim. If the application was to be allowed, there would have to be a postponement of uncertain and possibly substantial length. Further delay would be unconscionable. There was evidence that such delay was having a detrimental effect upon the applicant's state of mind, impeding her recovery from such problems as she had suffered. Indeed, when we had been attempting to fix another day on 20 December 2002, she had expressed before us a great deal of concern at the prospect that the date initially suggested would have to be put back by a matter of days. It appeared that the point of particular concern to the applicant was the fact that she did not know whether or not she would be reinstated. As we have said, we came to the conclusion that the application should be refused."

4. By that decision, the Employment Tribunal ordered that Dr Awotona be reinstated by 1 April 2003 and be paid by the Appellant compensation for unfair dismissal, calculated in accordance with the provisions of section 114 of the Employment Rights Act 1996. The sum ordered was such as would, after payment of Income Tax and National Insurance Contributions, leave a net amount of £148,704. Issues as to remedy for race discrimination were adjourned to a date to be fixed.
5. Following that decision, the Employment Tribunal made orders for directions on 27 March 2003 and 4 April 2003 and a further hearing was then fixed "for the determination of any issue as to whether either party might adduce, at the final remedies hearing, any further evidence other than that which relates to practicability of reinstatement" (see para. 1 of the reasons give for the Interlocutory Order made following the hearing on 9 May 2003).
6. There had been no compliance with the Order for reinstatement by the time of the Interlocutory Hearing on 9 May 2003 and it was therefore apparent that the Further Remedies Hearing would be concerned not only with compensation for race discrimination but also with the consequences of that non-compliance. Dr Awotona then applied to reopen the question of calling evidence to substantiate a claim for loss of income from family planning procedures. In paragraph 7 of the Reasons for the Interlocutory Order made following the hearing on 9 May 2003, sent to the parties on 21 May 2003, the Employment Tribunal said, as regards this application:

"7 … The lengthiest argument related to the question of whether the applicant should be able to call further evidence relating to the financial loss which she claims to have suffered with regard to Family Planning procedures. Further to a direction previously made, she produced a written statement in which she sought to explain why this had not been raised at any stage until after the closure of her case (and indeed the respondent's case) at the previous remedies hearing the outcome of which had been an order for her reinstatement with which the respondent had not complied. In essence, she said that her emotional state since her dismissal had been such that she had entirely forgotten about these fees until a colleague had reminded her at a very late stage. Mr Hand did not challenge that explanation or require the applicant to give evidence about it. His position was that the Tribunal had already rejected an application made by counsel then acting for the applicant and that it was precluded by its previous ruling from further looking into the matter. The issue is dealt with in the fifth paragraph of the Extended Reasons to the Decision entered in the register and sent to the parties on 5 March 2003. That was the decision which ordered the reinstatement of the applicant as a result of the first hearing of issues of remedy. Upon the closure of the respondent's case, the matter had been adjourned for some weeks and we had reconvened to hear closing submissions. It was at that stage that the applicant's then counsel made application to re-open her case on this point. It was not until after we had considered the issue and announced our ruling that he sought to explain the applicant's failure to raise the matter at an earlier stage. That explanation was the same as that placed before us by the applicant. However, we considered that it would not be appropriate then to reconsider the question. Mr Hand pointed out that, but for the delay caused by this application, we would have heard submissions on all issues (and then retired to deliberate the same) not just on reinstatement and furthermore that we had calculated the benefits payable to the applicant under section 114(2)(a) of the Employment Rights Act 1996 on the basis of our findings of fact which - pursuant to our ruling -took no account of any of the losses which the applicant was now trying to raise again. Mr Hand contended that we had reached a final decision on the issue, completed our function and could not now look at the matter."

7. The Employment Tribunal then concluded:

"10 Our previous ruling on this matter was not a decision: it was an interlocutory order. At the further hearing as to remedy, the Tribunal will have to calculate the amount of compensation due to the applicant. That must be viewed in the context of the respondent's failure to comply with the order for reinstatement. By virtue of section 117(2) of the 1996 Act, subject to Section 124 (which deals with the maximum under the statute) "the amount of the compensation shall be such as the tribunal thinks fit having regard to the loss sustained by the-complainant in consequence of the failure to comply fully with the terms of the order". That is the situation whether or not the tribunal eventually concludes that reinstatement was not practicable. Mr Hand contended that if our previous ruling was final for the purpose of section 114(2)(a), it was final in relation to this provision as well. We were unable to agree with that proposition. In our judgment, section 117(2) is so phrased effectively as to re-open the position. The applicant will be entitled to give evidence and make representations as to the loss which she maintains she will suffer in consequence of the failure to reinstate her. She wishes and in our view is entitled to maintain that that loss includes fees which, if reinstated, she would receive in relation to Family Planning procedures. In giving evidence about this matter, she would not be taking issue with a previous finding of fact: the Tribunal reached no such finding, having taken no account of any such loss in its calculations to date. Accordingly, in our judgment our previous ruling does not now preclude her from giving evidence about these matters. In any event, even if that was not correct, that ruling was an interlocutory order which we would be entitled to revoke if circumstances were to change and in our judgment that was precisely what had happened in this case. Our reasons for refusing the application on the previous occasion were twofold: it was made at a very late stage in the proceedings without a satisfactory explanation for the failure to identify and include that which was said to be a significant further head of claim; and its very late inclusion was bound to result in substantial delay because the respondent would have sought and been entitled to an adjournment in which to investigate the position and it was important to decide the issue of reinstatement as soon as possible. In the event, this is what happened. However, the issue having been decided in favour of the applicant, the respondent did not comply with the order. The Tribunal must now look at all issues of compensation. In that regard, there has now been and will continue to be substantial delay. The respondent would have adequate time in which to investigate the applicant's contentions before the further hearing as to remedy. If, however, we had allowed the applicant's application on the previous occasion, that delay would have occurred even before we had decided the issue of reinstatement. The fact that there will still be considerable delay is a significant change in circumstances. Even if we had accepted Mr Hand's primary submission in this context; that change would have been sufficient to persuade us to revoke our previous ruling and to allow the applicant to give evidence on the point in issue. In either event, the applicant is not bound by that previous ruling."

8. Paragraph (2) of the Interlocutory Order itself was therefore in the following terms:

"at and in relation to that hearing, the applicant is at liberty to adduce evidence as to her loss consequent upon the failure of the respondent to comply with the Tribunal's order for reinstatement including any loss of revenue in relation to Family Planning procedures and in so far as it is necessary there is revoked the interlocutory ruling set out in the fifth paragraph of the Extended Reasons to the Reserved Further Decision entered in the Register and sent to the parties on 5 March 2003."

9. By the Notice of Appeal it is contended that this part of the Interlocutory Order contained an error of law in that the "Reserved Further Decision as to Remedy" was not an Interlocutory Order but was a final decision which could only be altered by a review or on appeal. This stance was initially contested on behalf of Dr Awotona but by the time of oral argument at the hearing before us, the position of each party had moved and the area of contention was narrow.
10. On behalf of the Appellant it was conceded that it would be open to Dr Awotona to claim for losses arising as regards Family Planning procedures, subsequent to 1 April 2003 (the date ordered by the Employment Tribunal for reinstatement). What remains in issue is whether the Employment Tribunal was entitled, once the order for reinstatement was not complied with, to reopen the amount of the award already made under section 114 (2) (a) of the Employment Rights Act 1996 as regards the period from dismissal to 1 April 2003.
11. On behalf of Dr Awotona it is now conceded that the "Reserved Further Decision as to Remedy" was a decision and not an Interlocutory Order and therefore that the Employment Tribunal did not have jurisdiction to revoke any part of that decision. It is however contended that once there had been non-compliance with the Order for reinstatement the Employment Tribunal, in exercising the jurisdiction under section 117 (3) (a) of the 1996 Act, is entitled to reconsider all aspects of compensation for the whole period following dismissal and not withstanding any earlier award under section 114 (it being accepted that there can be no double recovery).
12. Both parties agree that the Employment Tribunal wrongly referred in paragraph 10 of the Reasons for the Interlocutory Order, to section 117 (2) of the Act when the apposite subsection was section 117 (3), the former subsection dealing with a failure fully to comply with reinstatement and the latter dealing with total non-compliance which is the present situation.
13. The starting point for our decision must be the relevant provisions of the 1996 Act. These are:

"114 Order for reinstatement

(1) an order for reinstatement is an order that the employer shall treat the complainant in all respects as if he had not been dismissed.

(2) on making an order for reinstatement the tribunal shall specify -

(a) any amount payable by the employer in respect of any benefit which the complainant might reasonably be expected to have had but for the dismissal (including arrears of pay) for the period between the date of termination of employment and the date of reinstatement,

(b) any rights and privileges (including seniority and pension rights) which must be restored to the employee, and

(c) the date by which the order must be complied with."

…

117 Enforcement of order and compensation

…

(2) Subject to section 124, the amount of the compensation shall be such as the tribunal thinks fit having regard to the loss sustained by the complainant in consequence of the failure to comply fully with the terms of the order.

(3) Subject to sections (1) and (2), if an order under section 113 is made but the complainant is not reinstated or re-engaged in accordance with the order, the tribunal shall make –

(a) an award of compensation for unfair dismissal (calculated in accordance with sections 118 to 127A, and

(b) except where this paragraph does not apply, an additional award of compensation of an amount not less than twenty-six and not more than fifty-two weeks' pay.

to be paid by the employer to the employee.

…

124 Limit of compensatory award etc

…

(4) Where -

(a) a compensatory award is an award under paragraph (a) of subsection (3) of section 117, and

(b) an additional award falls to be made under paragraph (b) of that subsection, the limit imposed by this section on the compensatory award may be exceeded to the extent necessary to enable the aggregate of the compensatory and additional awards fully to reflect the amount specified as payable under section 114 (2)(a) or section 115 (2)(d)."

14. In the Reserved Further Decision as to Remedy of 5 March 2003 the Employment Tribunal calculated the compensation due to Dr Awotona from 1 December 1998 to 1 April 2003 in accordance with her unamended Schedule of Loss and under section 114. We are satisfied that the outcome of that remedies hearing was indeed a decision of the Employment Tribunal (as the Respondent now concedes) and not an Interlocutory Order, and therefore that in May 2003 there was no jurisdiction in the Employment Tribunal to revoke any part of that earlier decision.
15. We are also satisfied that, reinstatement not having been effected, wholly or in part, in accordance with the decision, the Employment Tribunal must proceed in a subsequent remedies hearing to award compensation under section 117 (3).
16. Having regard to the wording of paragraph 10 of the Reasons for the May 2003 Interlocutory Order, and of paragraph (2) of the Order itself (both already recited above) it is by no means clear to us that the Employment Tribunal envisaged that their section 117 calculations could or would cover losses for any period prior to 1 April 2003. The wording of that part of the decision and that paragraph of the reasons seems to us entirely consistent with the Employment Tribunal determining that Dr Awotona would be entitled to include in her claimed losses for the period following the failure to reinstate, fees she would have earned from Family Planning procedures. As already referred to, the Appellant no longer contends that Dr Awotona should not be allowed to include a claim for such fees in that the post-reinstatement period.
17. In order, however, to put the matter beyond doubt, we are satisfied from the words of the statute in the provisions quoted above, that in calculating compensation under section 117 (3) the Employment Tribunal would not be entitled to reopen any issues as to quantum of losses in the period for which the award had already been made under section 114 (2).
18. The appeal is therefore allowed in that the Employment Tribunal was wrong to purport to revoke part of the earlier decision. In the remedies hearing yet to take place Dr Awotona is entitled to claim as regards losses of fees for Family Planning procedures only in respect of the period from 1 April 2003 and not for any prior period.