United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MISS LOUISE CHUDLEIGH (of Counsel) Instructed by: Messrs Nabarro Nathanson Solicitors Lacon House Theobald's Road London WC1X 8RW
For the Respondent	Mr JONATHAN COHEN (of Counsel) Instructed by: Messrs Kimbells LLP Solicitors Harrison Close Knowlhill Milton Keynes MK5 8PA


 


SUMMARY

Unfair Dismissal – Compensation, Mitigation of loss

Tribunal found 20% contributory fault and that the employee was not entitled to future pension loss. Were the conclusions justified? Did the Tribunal provide clear reasons to justify the conclusion that had indeed concluded that there would be no further pension loss?


 


THE HONOURABLE MR JUSTICE ELIAS

1. This is an appeal against the decision of the Employment Tribunal sitting at London (central) on 21 February 2005 and 17 October 2005 in which it unanimously held that the Claimant's claim in respect of pension loss failed and was dismissed, and found that he had contributed to his dismissal by 20%.
2. This case has a somewhat complex history. The employee was employed by the Respondent company to this appeal, i.e. Metroline London Northern Limited, as a bus mechanical engineer for 21 years. He was then dismissed. He made a claim for unfair dismissal and for race discrimination. The latter claim failed, but the former was upheld by the Employment Tribunal.
3. The circumstances in which he was dismissed were that the Appellant was asked to give permission for his employers to contact the DVLA. They had to be satisfied that he able to drive buses in 2001. Apparently he was driving them at that stage but had ceased to do so by September 2002. The employee refused to give his consent. He sent a letter setting out in some detail why he objected to doing that and said that he considered it a serious violation of his integrity. He had shown his licence and he thought that this provided all the material information which the employers required. The Tribunal, as a matter of fact, found that he was wrong about that. They accepted that the employer had been advised that further information would be needed and that the DVLA would have to be contacted, and that would need the employee's permission. They summarised their findings at the first hearing, i.e. on 15 and 16 January 2004 at paragraph 9 (xi) of the decision:

"(xi) On 9 September 2002, the Applicant had been called in to see Mr Sheldon in his office. The Shop Steward, Mr Dougie Boyles, was also present. What was of concern to Mr Sheldon was whether the Applicant was lawfully able to drive in the year 2001. On the photo licence it stated that the licence was valid from 15 January 2002. On the counterpart he was able to drive buses from 12 September 1991 to 29 September 2002. There were no endorsements entered on the counterpart. Mr Sheldon had checked with the Respondent's driving school to ascertain whether the documents were in order and could he be satisfied that the Applicant was lawfully able to drive in 2001. He was advised that the counterpart may not necessarily be up to date regarding any endorsements. At the meeting on 9 September 2002, he wanted to check whether the Applicant was lawfully able to drive in that year. He informed the Applicant that the documents seemed to be in order but he wished to check the position in 2001 and requested his permission to speak to the DVLA. This required the Applicant to first make contact with the Agency who would confirm his identity. He would then be required to give his permission for Mr Sheldon to speak to the Agency directly. The Applicant refused to contact the Agency and to give his consent for them to disclose to Mr Sheldon whether he was lawfully able to drive in 2001. As far as he was concerned, his licence was in order and he saw no reason for him to ring the Agency. We do not accept that Mr Sheldon had deliberately stated to the Applicant that he had been banned from driving in 2001, but was likely to have said that based on the advice he had received from the driving school, that the endorsement part of the counterpart licence might not necessarily be up to date. As the Applicant refused to contact the Agency and to give his consent, the meeting came to an end."

4. Because the employee refused to permit his employers to contact the DVLA, he was suspended for failing to carry out that instruction. He was then asked to attend certain meetings which were termed fact finding interviews. He didn't do so, because he was ill and he submitted sickness certificates. He was subsequently dismissed on 15 October 2002 for failing to attend the fact finding interviews. The employers also believed that he was not truly ill but that that was simply a device to avoid the disciplinary process. The Tribunal found, and indeed this was conceded by the employers, that the dismissal was unfair.
5. It also, however, at that hearing considered the question of contributory fault. It took into account two matters about which it was critical of the employee and which it said justified a finding of contributory fault to 30%. The first was his refusal to give consent for the employers to approach the DVLA, but second, he was criticised for not obtaining any medical information from his GP as to when he would be able to attend the fact finding interview. There was then an assessment of compensation for the unfair dismissal claim on 9 March 2004. The Tribunal concluded that the Appellant would be able to obtain alternative employment by 8 July 2004. They also in fact found that he would obtain such employment on a final salary pension scheme. The reasons for so concluding are set out in their decision at paragraphs 3.9 and 3.10:

"3.9 The Applicant is a qualified and experienced bus mechanical engineer. Applying our industrial knowledge and having regard to Mr Happs' evidence, the Mayor of London is anxious to improve bus and underground services. The Respondent's business has increased in terms of the number of employees by 8% over the previous year. We find as fact that there is in general a demand not only for bus drivers but for engineers capable of servicing passenger vehicles. The Applicant is able to work not only for private companies but for public corporations. He said that he wished now to consider service as a minister of religion but he had not taken any practical steps with regard to pursuing that possible career option. His date of birth is 30 September 1957 and he is currently 46 years of age. We bear in mind that, from the medical evidence adduced, once these proceedings are over, he is likely to be able to work in near future. He has been unable to work since his dismissal. He would, however, have been aware that the Tribunal found in his favour at the last hearing and all that was left was compensation.

3.10 In the near future" or "in the not too distant future" we have construed as meaning that the Applicant is likely to find comparable employment or comparable alternative employment in the next four months, that is, by 8 July 2004. While we are conscious that many private companies are now operating money-purchase pension schemes, there are still a large number of both private, public corporations and local authorities who operate a final salary pension scheme. The Applicant stated that he was likely to obtain comparable employment in nine months. Applying our industrial knowledge, we find that the Applicant would be able to obtain comparable employment to include membership of a final salary pension scheme by 8 July 2004."

We simply note that at paragraph 3.9 there is a finding of fact about the general demand for - amongst others - engineers for servicing passenger vehicles.

6. It appears that during the course of that Tribunal hearing it emerged that the employee was then employed by Metroline, the Respondents, on a final salary scheme. It had been thought that it was a money-purchase scheme. The Tribunal made its finding with respect to his obtaining employment on a final salary scheme in the way that we have indicated, but at the end of the hearing the Tribunal noted that the employee's representative had reserved his position on the proper assessment of the applicant's pension loss.
7. The way in which the Tribunal calculated pension was simply to look at the employer's contributions up until 8 July 2004, as we understand it, on the assumption that it was entitled to conclude that he would probably obtain comparable employment with a final salary pension scheme that is an appropriate method of calculating that loss. He then appealed from that decision to the Employment Appeal Tribunal (EAT). That was heard by this Tribunal on 29 October 2004 with HHJ Prophet presiding. The Tribunal expressed "grave doubts" as to whether it could be culpable or blameworthy for the employee not to have advised his employer when he would be fit to attend interview or to seek medical information about that. It also expressed certain reservations about the way in which pension loss had been calculated. It was obviously concerned that the fact that the employee was on a final salary and not a money-purchase scheme had only emerged during the course of the hearing itself and it expressed the view that the Employment Tribunal could not, in the circumstances

"satisfactorily progress to making a proper assessment of pension loss in order to do justice to the case without giving both parties an opportunity to provide further information."

8. Some information was in fact provided to the EAT itself, including a document which has been shown to us which demonstrates that, very broadly, money-purchase schemes cover close on 80% of the working population and salary-related schemes cover just over 10% of all occupational pension schemes.
9. The matter was sent back to the Tribunal to reconsider these two issues. When the case went back to the Tribunal, it was heard first on 21 February 2005, but it appears that the Tribunal indicated that further information may be material and so it adjourned the matter for that information to be obtained. Unfortunately, for a variety of reasons, including the ill-health of the Chairman, the case was not reconvened until 17 October 2005.
10. We turn then to consider the findings and the challenge to them in relation to the question of contributory fault and pensions. The Tribunal in the renewed hearing again reached the conclusion that the employee would be able to obtain comparable employment by 8 July 2004. They noted that he had not applied for other vacancies, including vacancies within the public transport sector because, he said, it was a close community and he would be known as someone who was a troublemaker. But they were critical of the fact that he had not sought alternative employment. He had in fact decided, as had been made plain on the earlier occasion, to go into the Church of England. In the course of its decision, the Tribunal indicated at paragraph 7 that it was making certain further material findings of fact. We take that to mean further to the findings that it had made on the previous remedies hearing. More specifically, the Tribunal made the following observations at paragraph 30 in relation to the question of pensions:

"He did not apply for any employment within the public transport sector because he said that it is a closed community and he would be known as someone who had taken his former employers to the Tribunal. We acknowledged that if he had applied for employment with London Underground and was offered a position he would have been in a final salary pension scheme better than the Respondent's. He is able to drive buses and carry out motor engineering work."

Then at paragraph 35 it said this:

"Notwithstanding the statistical evidence regarding the prevalence of occupational final salary pension schemes, what would have assisted the Tribunal would have been attempts on the part of the Claimant to search for employment and then to determine the applicable pension scheme compared with the Respondent's. It was possible for him to have applied to Transport for London where there is a final salary pension scheme which he would be able to benefit from. On the other hand Arriva does not allow new members to join its final salary pension scheme but only its money purchase scheme.

11. We should say that there has been some dispute before us as to whether Transport for London is in fact a separate entity from London Underground and whether it does employ staff in its own right but we are not able to resolve that.
12. As to the question of blameworthy conduct, it was conceded by the employers at this renewed hearing that it would not be appropriate for the Tribunal to consider as part of culpable or blameworthy conduct the failure by the employee to get medical evidence. The Tribunal simply considered the issue of his refusal to permit his employers to contact the DVLA. The Tribunal noted that the employers were under a statutory duty to maintain up-to-date driving records, that others had given their consent, and they reiterated what they had found in their earlier decision. In view of the fact that one of the features that had led to the finding of 30% was no longer in play, they considered that the appropriate percentage would be 20%. Having considered the material in relation to pensions the Tribunal then concluded as follows, in paragraph 36 of its decision:

"36. Having considered the law and our findings of fact, we have come to the conclusion that the Claimant had failed in his duty to mitigate his loss by searching for comparable employment. His decision to become a Minister of Religion was a personal matter and was entirely his choice. Arriving at that decision without applying for a suitable comparable employment was in the circumstances unreasonable and can be distinguished from the case on Othet. Further, we accept his evidence, that had he searched for comparable employment he would have obtained it by 8 July 23004 certainly a position in Transport for London would have given him greater final salary pension benefits. It would, therefore, not be just and equitable to award the Claimant pension loss after 7 July 2004."

It therefore made no compensation in respect of future pension loss.

13. Miss Chudleigh, for the Appellant, submits that the Tribunal erred in both these matters. We will take the matter of contributory fault first. She submits that the refusal of the employee to permit the employers to go to the DVLA was not sufficiently related to the dismissal to relevant misconduct for the purposes of determining contributory fault. She also submits that, in any event, the Tribunal was not justified in finding that this was unreasonable or blameworthy conduct. We reject both those submissions. The Tribunal, in our view, were fully entitled to conclude that the conduct was connected with the dismissal. We note that as Sir Hugh Griffiths pointed out in Maris v Rotherham Corporation [1974] IRLR 147, that requires Tribunals to take a broad common sense view. In this case, the cause of the dismissal was the refusal to attend the fact finding interview but of course the reasons for the fact finding interview was the refusal to give permission to the employers. We have no doubt at all that the Tribunal was fully entitled to say that this was relevant contributory conduct.
14. The next question is, were they entitled to say it was culpable or blameworthy? Essentially the argument here is that the employers had all the relevant information from the licence itself but that, it seems to us, is not an argument that can be sustained in view of the finding of the Tribunal, to which we have already made reference: that employers needed further information which could only be obtained from the DVLA. The actual calculation of 20% was plainly justified in the circumstances and that in itself is not the subject of challenge.
15. We turn then to the question of pension loss. We were referred to the case of Gardiner-Hill v Roland Berger Technics Limited and the decision of this Tribunal with Mr Justice Browne Wilkinson, as he was then, presiding. In particular, our attention was drawn to the fact that in order to show a failure to mitigate, as the court put it:

"it has to be shown that if a particular step had been taken, Mr Gardiner-Hill would, after a particular time, on balance of probabilities gained employment, from then onwards the loss flowing from the unfair dismissal would have been extinguished or reduced…"

16. What is said here is that there was no finding that on the balance of probabilities this employee would have obtained employment in the public sector or elsewhere with a final salary scheme. The Appellant submits that if one looks in particular at the conclusion in paragraph 36, although it is stated that the employee would obtain comparable employment, that did not mean comparable employment including comparable pension rights. In particular, that finding of the Tribunal is based on the evidence given by the employee, and it was submitted that his evidence was that whilst he accepted that he could get comparable employment as from 8 July, that did not include a comparable pension scheme, and indeed, that was what the issue was about.
17. For the Respondent, Mr Cohen submits that comparable employment here does include the pension scheme and therefore there is an actual finding by the Tribunal that he would have obtained employment with a final salary pension scheme, but in any event, even if that is wrong, it submitted that it is plain from reading both decisions together that the Tribunal – relying both on its own knowledge and of evidence that it heard the first time round – was aware of the fact that there were vacancies for which this employee could apply, and by inference that they were satisfied that he could have obtained those vacancies and would have done so by 8 July. He submits that the material showing that nationwide there are relatively few final salary occupational pension schemes does not really take matters any further. The question is, what employment was open to this employee and whether he could have obtained, on the balance of probabilities, employment in a final salary pension scheme.
18. We have to look at this decision sensibly. We do not think that we should ignore entirely the earlier findings of fact in relation to the first remedies hearing. We do not accept Miss Chudleigh's submission that the whole matter had to be considered again and that we should only take account of those findings on the first occasion which were expressly identified by the Tribunal in its decision. On that basis, it seems to us that it is conclusive that the Tribunal had found that there was a demand for drivers and engineers and it was in that context that they considered in terms that the employee would obtain comparable employment, including a final salary pension scheme. But we have to say that even if we were wrong about that, we would say that the clear implication from this decision and from paragraph 36 is that they were satisfied on the balance of probabilities that such a position would be obtained. Had we had any serious doubt about that, we would have been willing to send the matter back to the Tribunal for further reasons in order for them to clarify whether that was indeed what they had found. But we are all of us unanimously of the view that there could be no doubt as to what the reply would be, and it would be an empty gesture and perhaps create undue hope for this employee.
19. It seems to us that it is absolutely plain that they were saying that were was employment available on a final salary pension scheme. The employee had not sought to take it up. They said that he would have obtained comparable employment. They conclude that he would have suffered no pension loss. We think, as we have said, that the only proper and reasonable inference is that they considered that he could have obtained that employment and on the balance of probabilities, would have done had he sought to do so. For those reasons we find that this appeal fails.