United Kingdom Employment Appeal Tribunal

APPEARANCES

 

 

For the Appellant	MR PETER WALLINGTON (of Counsel): Instructed by: Messrs. Robbins Olivey Southern House Guildford Road Woking, Surrey GU22 7UY
For the Respondent	MR DANIEL BARNETT (of Counsel) Instructed by: Messrs. Warners 16 South Park Sevenoaks Kent TN13 1AN

SUMMARY

Sex Discrimination

The main issue in this appeal was whether in a sex discrimination case an Employment Tribunal has the power to make an award of compensation on a joint and several basis so that each respondent would be liable to pay the whole of the award of compensation.


 


HIS HONOUR JUDGE BIRTLES

Introduction

1.   This is an appeal from the decision of an Employment Tribunal sitting at Ashford, Kent in case number 1100645/2002 entered in the Register and sent to the parties on 24 May 2004. The Employment Tribunal awarded the Respondent £40,866.02 compensation for sex discrimination against the first and second Appellants jointly and severally. The Chairman was Ms V G Wallis and the members were Mr M J Dobson and Miss M D Roe.

The Material Facts

2.   This decision on compensation followed a hearing on the merits of the Respondent's claims before the same Tribunal on 3 March 2004. That decision was sent to the parties and entered in the Register on 18 March 2004. The Employment Tribunal in that decision held that the First and Second Appellants had discriminated against the Respondent on the grounds of her sex and that the second Appellant had wrongfully dismissed the Respondent.
3.   The first decision of the Tribunal made a series of findings of fact which are set out at paragraphs 10-24 of its decision. They are incorporated into this judgment. The Tribunal's conclusions which are relevant to this appeal are contained in paragraphs 45-47 of that first decision where the Employment Tribunal say this:

"45. We were therefore driven to the conclusion that the reason for the dismissal of the Applicant was not gross misconduct as alleged by the Respondents, but was that she had broken off her personal relationship with the First Respondent and refused to resume that relationship.

46. We concluded that the Applicant had proved facts from which we could conclude in the absence of an adequate explanation that the First Respondent had committed an act of discrimination which was unlawful and that the Second Respondent was, by virtue of Section 41 of the Act, to be treated as having committed such an act of discrimination. We therefore concluded that we should uphold the Applicant's complaint, as we were satisfied that the First Respondent and the Second Respondent had not proved that they had not committed or were not to be treated as not having committed that act of discrimination.

47. We therefore concluded that the Applicant had been treated less favourably on the grounds of her sex by the First Respondent and the Second Respondent. In other words, the Applicant would not have been dismissed if she had not formed a relationship with the First Respondent and then ended that relationship, and she would not have had that relationship with the First Respondent if she had been a man. The causation was clear; the Applicant was dismissed on the ground of her sex."

Against that decision on the merits there is no direct appeal to the Employment Appeal Tribunal.

4.   In its second decision on compensation which is the subject of a direct appeal to the Employment Appeal Tribunal, the Employment Tribunal made a number of findings which it is necessary for us to recite so that this judgment makes sense. The relevant paragraphs of the Tribunal's decision are as follows:

"4. On behalf of the Respondents Mr Ludlow had submitted that the Applicant's contract of employment was tainted by illegality because of the way in which payment was made to her and to Mr Wollen, and because she had entered into an adulterous relationship with the First Respondent, and because she had been convicted of fraud. He also submitted that these matters could amount to contributory conduct reducing any award of compensation.

5. We were satisfied that the arrangement that the Applicant had explained to us in her evidence, set out at paragraph 8 of her original witness statement, was entered into reluctantly by her and was separate from her contract of employment with the Second Respondent. We could see no evidence that her contract of employment was tainted by illegality. We could not agree that the personal relationship between the Applicant and the First Respondent affected the legality of her employment contract. Whilst it was correct to say that the Applicant had been convicted of fraud, in the circumstances set out in our previous decision, we were satisfied that the act of fraud had occurred after her dismissal and did not taint her contract of employment with illegality. Neither could we see that any of these matters amounted to contributory conduct on the part of the Applicant such as would justify reducing any compensation. We considered that it was just and equitable to make an award of compensation in this case.

6. Having heard evidence from the Applicant, and at our invitation from Mr Way on specific matters that we wanted clarification on, we reminded ourselves of the relevant law and in particular of the guidelines set out in the cases of Armitage and HM Prison Service v Johnson [1977] IRLR 162 and Vento v Chief Constable of West Yorkshire Police No. 2 [2003] IRLR 102.

7. We were satisfied that the Applicant had mitigated her loss. She had produced a letter from her GP saying that she had been unwell for some time after the dismissal and we accepted that, together with her own evidence, she had established she had been unable to seek work straight away. She obtained other employment on 10 June 2002, which we find to be as soon as possible in all the circumstances."

The Tribunal went on in paragraphs 19-22 to make an award of £9,000 for injury to feelings because it found that the case fell within the middle band of Vento v Chief Constable of West Yorkshire Police No. 2 [2003] ILR 102. Although there was originally an appeal against this sum it was withdrawn at the appeal.

5.   Finally the Employment Tribunal said this:

"25. In such cases we would normally order the employer to pay this compensation, perhaps with an order for a small lump sum to be paid by an individual Respondent. However, in this case, the First Respondent is the Managing Director of the Second Respondent and is answerable to nobody at the Second Respondent. There is no board of directors and he is the major shareholder. We think it appropriate therefore in this case to make the compensation order payable jointly and severally by the First and Second Respondents."

The Amended Notice of Appeal

6.   The amended notice of appeal raises a number of grounds of appeal which were supplemented by the skeleton argument and oral submissions of Mr Peter Wallington. The Respondent (the Applicant in the Employment Tribunal) was represented by Mr Daniel Barnett. We are grateful to both of them for their detailed submissions in this case. Indeed, the issue of whether or not an Employment Tribunal has jurisdiction to make a joint and several award for sex discrimination in an employment situation does not appear to have been directly raised in any previous judgment of the Employment Appeal Tribunal or the Court of Appeal. We take the grounds of appeal in the order in which they were argued before us.

Ground One

7.   The first ground of appeal is that the Employment Tribunal erred in law in misunderstanding the Appellants' submissions as to whether it was just and equitable to make any award of compensation, and in consequence, failed to give any or any proper consideration to that part of the Appellants' case. The Appellants' submission on illegality related solely to the arrangements for payments for the Respondent's husband and not (as the Tribunal stated) to her adulterous relationship with the First Appellant or her conviction for fraud against the Second Appellant.
8.   In support of this submission Mr Wallington referred to the written submissions made by the Appellants' solicitors at the Tribunal hearing: EAT bundle pages 56-60, which were read to the Employment Tribunal. Mr Wallington submits that as the Tribunal failed to give reasons for deciding to award compensation in this case it overlooked the fact that Section 65 (1) of the Sex Discrimination Act 1975 imposes a duty on an Employment Tribunal to consider first whether it is just and equitable to make any of the orders set out in Section 65 (1) including an order for compensation. Mr Wallington relies on the judgment of Mummery J (as he then was) in O'Neill v Governors of St Thomas Moore Roman Catholic Voluntarily Aided Upper School and another [1997] ICR 33 at 48B-E.
9.   We do not have the Chairman's notes of evidence and we accept that the Appellants' solicitor's submissions were read to the Employment Tribunal: EAT bundle pages 56-60 especially paragraphs 2-3. Further, a close and proper reading of paragraphs 4-5 of the Employment Tribunal's decision (set out above) make it clear that (a) the Tribunal had the Appellants' submissions in mind (b) they rejected the arguments of (1) illegality (not pursued here) and (2) contributory conduct but (c) it was just and equitable to make an award of compensation in this case: see the last line of paragraph 5. There can be only one reason why the Tribunal considered that to be so and that was because it rejected the arguments of the Appellants' solicitor. The reasoning is quite clear.

Ground Two

10.   The second ground of appeal relates to contributory conduct. Mr Wallington submits that sex discrimination is a statutory tort and as a matter of principle any award of compensation is subject to reduction for contributory conduct: Fife Council v McPhee (EAT/750/00 Unreported) per Lord Johnston at paragraph 17-18. Mr Wallington submits there was a failure in reasoning by the Employment Tribunal in explaining why it was not prepared to make a reduction for contributory conduct given that that submission was made by the Appellants' solicitor in his written submissions: EAT bundle page 58 paragraph 6.
11.   We accept as a matter of law that an award of compensation for sex discrimination is compensation "of an amount corresponding to any damages he could have been ordered by a County Court or by a Sheriff Court to pay to the Complainant if the complaint had fallen to be dealt with under Section 66": Sex Discrimination Act 1975 Section 65 (1) (b). The reference to Section 66 is a reference to claims brought under part 3 of the 1975 Act which can only be brought in the County Court. It follows that the award of compensation in a sex discrimination case (and by analogy in other discrimination claims) is subject to the Law Reform (Contributory Negligence) Act 1945 which allows for reduction in compensation in tortious claims where the Claimant's conduct itself amounts to negligence or breach of a legal duty and contributed to the damage. The Tribunal go on in paragraph 5 of its decision to analyse why none of the submissions made by the Appellants' solicitor amounted to either illegality or contributory conduct. It is obvious to us that the Tribunal rejected each of those submissions, either making no award for compensation (illegality) or reducing the amount of compensation because of contributory conduct. The reasoning was the same in each case. The Employment Tribunal were entitled to come to that conclusion.

Ground Three

12.   This ground of appeal relates to the First Appellant (Mr Way) only. Mr Wallington argues that Mr Way was an individual Respondent to the Originating Application in the Employment Tribunal. The Second Respondent was her employer. Whatever Mr Way's status or role within the Second Respondent company he was not personally her employer. It follows that only the Second Respondent could dismiss the Respondent. He relies upon the Employment Tribunal's conclusion at the beginning of its first decision paragraph (2) that "The Second Respondent wrongly dismissed the Applicant". Mr Wallington goes on to submit that the Employment Tribunal erred in its first decision that the act of discrimination was the Respondent's dismissal and that there were no findings to support any wider conclusion of discrimination by either Appellant: First decision paragraphs 45-46: EAT bundle page 24. In particular we note that in paragraph 46 the Employment Tribunal used the phrase:

"the First Respondent had committed an act of discrimination which was unlawful and that the Second Respondent was, by virtue by Section 41 of the Act, to be treated as having committed such an act of discrimination."

Within the same sentence the Employment Tribunal twice uses the phrase "an act of discrimination". Mr Wallington then submits that as the Respondent was not employed by Mr Way but by the company he could not have committed an unlawful act by dismissing her: Sex Discrimination Act 1975 Section 6 (2) (b). Mr Wallington goes on to submit that the Tribunal found that the Second Appellant was liable for the Respondent's dismissal by virtue of the action of the First Appellant in dismissing her: Decision paragraph 46. Mr Wallington does not seek to say that the Employment Tribunal were wrong about that but submits that the Tribunal confused the primary liability of the Second Appellant (because it was vicariously liable for the action of the First Appellant under Section 41 (1) of the Sex Discrimination Act 1975) with the personal liability of the First Appellant for knowingly aiding the Second Appellant in the dismissal: Sex Discrimination Act 1975 Section 42 (2). Liability for knowingly aiding unlawful acts of discrimination arises under the Sex Discrimination Act 1975 Section 42 (1). Mr Wallington concludes his submission by asserting that no such claim was pleaded in the Originating Application; it was not argued at the hearing and it was neither relied on nor referred to in the Employment Tribunal's reasoning.

13.   Mr Barnett points out that in fact the paragraph 16c of the Originating Application does make a clear allegation against the First Appellant: EAT bundle page 42. Although Mr Barnett did not refer to it that is made even clearer by paragraph 11 of the Originating Application: EAT bundle page 41. At the date of both hearings the relevant regulations were the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001 (SI 2001 No. 1171). Paragraph 1 of Schedule 1 requires that when an Applicant brings proceedings in an Employment Tribunal the Originating Application shall set out (c) "the grounds, with particulars thereof on which relief is sought." It does not require a reference to any section number of a Statute. The Notice of Appearance for both Appellants in the Employment Tribunal specifically admits paragraph 11 of the Originating Application: paragraph 11 EAT bundle page 52 and paragraph 16 (c) puts the question of whether or not the First Appellant aided and abetted the dismissal in issue: EAT bundle pages 53-54. Our conclusion is on the facts of this case there was ample material on which the Employment Tribunal could have found that the First Appellant (Mr Way) was personally liable for that act of dismissal under Section 42 (2) read with Section 41 (1) of the 1975 Act. What we think the Tribunal tried to do in paragraph 46 of its first decision was to abbreviate that position. It was unfortunate that it did so but we find no error of law here.
14.   If we are wrong about that then Mr Wallington seeks permission to appeal out of time against that part of the decision of the Tribunal which relates to this issue. That is because there has been no appeal against the first decision of the Employment Tribunal on liability. That decision was entered in the Register and sent to the parties on 18 March 2004. While it is true that the original Notice of Appeal dated 5 July 2004 and the amended Notice of Appeal dated 22 October 2004 seek such permission to appeal out of time we can see no reason for exercising our discretion permitting it. At all times the Appellants have been advised by solicitors and latterly by Counsel. We simply do not accept Mr Wallington's argument that because the Employment Tribunal made no findings about the allocation of liability as between the two Appellants in its decision on liability it amounts to a reason for granting permission to appeal out of time. It is quite clear from paragraph 46 of the liability decision that the Employment Tribunal found both Appellants liable for sex discrimination arising from the First Appellant's dismissal of the Respondent. It is simply not correct to say that there was nothing to appeal from the decision on liability.

Ground Four

15.   The final ground of appeal relates to paragraph 46 of the compensation decision. Mr Wallington made two submissions here. First he argued that the Employment Tribunal did not have jurisdiction to make an award of joint and several liability and second, he argued that in the alternative if it did it made an error of law in doing so in this case. We take each of those arguments in turn. Mr Wallington relied on remarks of the President in Sinclair Roche & Temperley and others v Heard [2004] IRLR 763 at paragraph 61 where the President appeared to contemplate that if there was joint and several liability in the Employment Tribunal there may be a need to consider new procedures in employment tribunals to deal with the issue. Mr Wallington referred us to the Civil Liability Contribution Act 1978 and pointed out that the entitlement to contribution is contained in Section 1. Section 1 (6) says this:

"References in this Section to a person's liability in respect of any damage are references to any such liability which has been or could be established in an action brought against him in England and Wales by or on behalf of the person who suffered the damage…"

The word "action" is defined in Section 6 (4) as meaning "an action brought in England and Wales". Mr Wallington submits that that means an action brought in a County Court or the High Court and refers to Section 2 (2) of the 1978 Act. He goes on to assert that as employment tribunals (or industrial tribunals) were in existence in 1978 if Parliament had intended to include them in the 1978 Act it would have done so by specific wording. The fact that there is no reference to such tribunals is a clear indication that Parliament did not intend that those tribunals should have the power to make joint and several awards. Mr Wallington goes on to point out that there is no reference in Section 65 or 66 of the Sex Discrimination Act 1975 which sets out the Employment Tribunal's powers to award compensation, to the making of an award jointly against two or more respondents. He relies on the fact that there is no direct authority and the usual practice of employment tribunals is to quantify the amount of an award against any individual respondent. Mr Wallington also points to the practical difficulties arising from such power, where for example, an employment tribunal might well make a joint and several award in a case where the employer might be a large and solvent company or a local authority and the claimant could choose to enforce the award solely against the individual Respondent even to the point of bankruptcy. The converse situation would be where an employer is insolvent or in administration or receivership and the employee could choose to enforce the award solely against the individual Respondent. Finally, Mr Wallington submits that the Equal Treatment Directive (2000/78/EC) which requires the State (via Employment Tribunals) to provide an effective remedy for individuals against acts of sex discrimination: Article 17 does not require joint and several liability.

16.   Mr Barnett relies upon the Equal Treatment Directive but also upon two decisions. The first is (1) AON Training Limited (formerly Totalamber PLC) (2) Mr Alan O'Neill v Ian Dore (Unreported 16 June 2004 EAT/0974/03). That case concerned a company and an individual respondent. The majority of the appeal is of no relevance to the present appeal but in relation to the issue of joint and several liability His Honour Judge Prophet said this:

"28. A question has arisen as to whether the compensatory loss could relate to disability discrimination as well as unfair dismissal. It is clear to us that by ascribing all the matters on remedy to both Respondents the Tribunal had in mind that that was the appropriate answer and we can see no reason why Mr O'Neill should not be responsible for compensatory loss arising from disability discrimination. The position therefore appears to be this. That so far as any matters are concerned which relate entirely to unfair dismissal then the first Respondent only is liable.

29. So far as any matters arising out of disability discrimination are concerned i.e. injury to feelings and compensatory loss they fall on both Respondents as indicated by the Employment Tribunal. In so far as there is compensation or an award in respect of matters relating to wages they fall only on the First Respondent."

17.   That case was appealed to the Court of Appeal and is reported at [2005] EWCA Civ 411 (18 March 2005). That was an appeal on the issue of the calculation of remedies. Although the Court of Appeal allowed the appeal because of the way in which the Employment Tribunal had calculated the amounts involved it did not criticise the passage in the judgment of His Honour Judge Prophet set out above. The other decision is that of the Court of Appeal in Ross v (1) Ryanair Limited (2) Stansted Airport Limited [2004] EWCA Civ 1751 (21 December 2004). Again, the facts of that case are not relevant to the present appeal. We note that it was an appeal from the County Court which had heard a case of disability discrimination under Part 3 of the Disability Discrimination Act 1995. In other words it was not an employment case. In paragraph 28 Lord Justice Brooke said this:

"Because a claim founded on unlawful discrimination contrary to the 1995 Act is treated pursuant to Section 25 (1) in the same way as any other claim in tort, I can see no reason why we should not be able to order contribution as between Ryanair and STAL [i.e. Stansted Airport Ltd] in the event that we were satisfied that they were both guilty of unlawful discrimination against Mr Ross. We receive no submissions to a contrary effect."

Lord Justice Brooke went on to consider the facts of the case and concluded that both defendants were a hundred per cent liable to Mr Ross. Then went on to determine the extent to which each had to contribute as to between themselves because that was not a task which the trial judge had undertaken himself, given the nature of his findings: Judgment paragraph 36.

18.   Lord Justice Brooke went on to dismiss Ryanair's appeal in so far as they sought an order that the claim against them be dismissed and granted a declaration that STAL also unlawfully discriminated against Mr Ross and ordered STAL to contribute 50% of Ryanair's liability as to damage and interest: Judgement paragraph 38.
19.   We agree with Mr Barnett. While this is a claim for sex discrimination and it may be that different issues arrive in other cases of discrimination we note that the power of an Employment Tribunal to award compensation in a sex discrimination case is found in Section 65 of the Sex Discrimination Act 1975. Section 65 (1) provides as follows:

"Where an Employment Tribunal finds a complaint presented to it under Section 6 (3) is well-founded the Tribunal shall make such of the following as it considers just and equitable -

(a) ( not relevant)

(b) an order requiring the Respondent to pay to the Claimant compensation of an amount corresponding to any damages he could have been ordered by a County Court or by a Sheriff Court to pay to the Complainant if the complaint had fallen to be dealt with under section 66;"

(c) (not relevant)

Section 66 deals with claims under Part 3 of the 1975 Act i.e. non-employment claims. Section 66 (1) provides that such a claim may be the subject of civil proceeding in like manner as any other claim in tort or (in Scotland) in reparation for breach of statutory duty. Section 66 (2) provides that:

"(2) Proceedings under sub-section (1) -

"(a) Shall be brought in England and Wales only in a County Court, and

(b) Shall be brought in Scotland only in a Sheriff Court.

But all such remedies shall be obtainable in such proceeding as, apart from this sub-section and Section 62 (1) would be obtainable in the High Court of the Court of Session, as the case may be."

Section 62 (1) is not relevant to this issue.

20.   In our judgment this statutory language make it quite clear that an Employment Tribunal in cases of sex discrimination is entitled as a matter of law to make an award on a joint and several basis. We note that there is similar language in Section 56 (1) (b) of the Race Relations Act 1975; Section 8 (6) (b); Section 8 (3) of the Disability Discrimination Act 1995; Regulation 30 (1) (b) of the Employment Equality (Religion or Belief) Regulations 2003 (SI 2003 No. 1660) and Regulation 30 (1) b) of the Employment Equality (Sexual Orientation) Regulations 2003 SI 2003 No. 1661.
21.   We do not accept Mr Wallington's submission that an Employment Tribunal is prohibited from making a joint and several award of compensation by the definition of "action" in Section 6 (1) of the Civil Liability (Contribution) Act 1978. Contribution between tortfeasors was introduced by Section 6 (1) (c) of the Law Reform (Married Women and Joint Tortfeasors) Act 1935. Section 6 of that Act was repealed by the Civil Liability (Contribution) Act 1978. It follows that contribution between tortfeasers was a remedy available in the County Court when the Sex Discrimination Act 1975 and the Race Relations Act 1976 became law. It must be assumed that Parliament had regard to that fact and intended that Employment Tribunals in cases of sex and race discrimination could make a joint and several award of compensation because such an award fell within Section 65 (1) (b) of the Sex Discrimination Act 1975 and Section 56 (b) of the Race Relations Act 1976. The later discrimination legislation we have referred to all came into force after the Civil Liability (Contribution) Act 1978 and there is no difference in the statutory language.
22.   It is quite clear that in the authority we have referred to above, namely (1) AON Training Limited (formerly Totalamber PLC) (2) Mr Alan O'Neill v Ian Dore both the Employment Appeal Tribunal and the Court of Appeal assumed that an award of compensation on a joint and several basis could be made in a case of disability discrimination. We note the persuasive authority of the Court of Appeal to the like effect in Robert Ross v (1) Ryanair Limited (2) Stanstead Airport Limited albeit that was a decision on appeal from the County Court.
23.   We are conscious that this is the first decision of the Employment Appeal Tribunal which has squarely held that a joint and several award of compensation can be made in a discrimination case. We therefore think it will be helpful for employment tribunals if we set out some of the factors they must have regard to when considering making such an award.

They are as follows:

(1) The practice of Employment Tribunals since 1975 confirms that in almost every case it will be unnecessary to make a joint and several award of compensation in a discrimination case. The present practice of apportioning liability (where appropriate) between individual employees and employers works well in practice and does justice to the individual case.

(2) If an Employment Tribunal considers it necessary to make a joint and several award of compensation then it should make clear its reasons for doing so.

(3) If an Employment Tribunal considers it necessary to make a joint and several award of compensation it must have regard to the language of Section 2 (1) of the Civil Liability (Contribution) Act 1978 which provides that:

"(1) Subject to Sub-section (3) below in any proceedings for contribution under Section 1 above the amount of the contribution recoverable from any person shall be such as may be found by the Court to be just and equitable having regard to the extent of that person's responsibility for the damage in question."

In other words, it is not appropriate in almost any case for an Employment Tribunal to make a joint and several award which is 100% against each respondent. That is to do violence to the language of Section 2 (1) of the 1978 Act which specifically directs the attention of the Employment Tribunal "to the extent of that person's responsibility for the damage in question".

(4) What Section 2 (1) of the 1978 Act makes clear is that it is not a permissible option for an Employment Tribunal to make a joint and several award of compensation because of the relative financial resources of the respondent. For example, an Employment Tribunal cannot make such an award because it believes that a company is more likely to be able to satisfy such an award or because a corporate respondent may be insolvent or in receivership or liquidation. That is to ignore the clear language of Section 2 (1) of the 1978 Act.

(5) In providing guidance to an Employment Tribunal about the meaning of Section 2 (1) of the 1978 Act, we can do no better than refer to the discussion in Clerk and Lindsell on Tort (17th edition 1995) at paragraph 4-63 (pages 154-155). The editors of that standard practitioners' work take the view that the word "responsibility" in Section 2 (1) of the 1978 Act refers both to the extent to which each tortfeasor caused the damage and to their relative culpability. There is extensive reference to the relevant case law in the footnotes to that paragraph of Clerk and Lindsell.

24.   We must also emphasise that the case before us does not involve a claim for unfair dismissal. For the avoidance of doubt we should make it clear that there is no power in an Employment Tribunal to make a joint and several award of compensation in an unfair dismissal case. The simple reason for that is that Section 111 read with Sections 112 and 117 of the Employment Rights Act 1996 make no provision for compensation to be assessed on the same basis that it is assessed in the County Court or a Sheriff Court. The award for unfair dismissal is created by statute and statute alone. There is simply no reference to the principles of compensation applicable in a County Court. This is in marked contrast to the compensation provisions for discrimination.
25.   We turn to the specific decision in this case. We remind ourselves of what the Employment Tribunal said on this issue in paragraph 25 of its decision:

"25. In such cases we would normally order the employer to pay this compensation, perhaps with an order for a small lump sum to be paid by an individual Respondent. However, in this case, the First Respondent is the Managing Director of the Second Respondent and is answerable to nobody at the Second Respondent. There is no Board of Directors and he is the major shareholder. We think it appropriate therefore in this case to make the compensation order payable jointly and severally by the First and Second Respondents."

26.   In our judgment the Employment Tribunal has not had regard to the clear language of Section 2 (1) of the 1978 Act and has therefore made an error of law. Indeed, the logic of the Tribunal's reasoning could point to a substantial award against Mr Way and a small award (if any) against the company. We simply do not understand the reasoning contained in paragraph 25.

Conclusion

27.   For these reasons the appeal will be allowed in respect of ground 4 only and the case remitted to the same Employment Tribunal to consider its award of compensation on a joint and several basis in the light of this judgment.