United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Mr P Kirby (of Counsel) Instructed by: Messrs Shranks Solicitors Ruskin House 40-41 Museum Street London WC1A 1LT
For the Respondent	Mr D Barnett (of Counsel) Instructed by: Messrs Batchelors Solicitors Charles House 35 Widmore Road Bromley Kent BR1 1RW


 


SUMMARY

Unfair Dismissal – Compensation / Mitigation of Loss

Compensation for loss of earnings for unfair dismissal awarded from dismissal to hearing and 6 months thereafter. Appeal based on lack of reasons for rejecting Respondent's case as to mitigation and future loss. Held that the reasons, although sparse, were sufficient. In the absence of a perversity challenge, appeal dismissed.


 


HIS HONOUR JUDGE BURKE QC

The Issues

1. This is an appeal by the Respondent, Jeremy Ticktum, trading as Shranks Solicitors, against two aspects of the judgment of the Employment Tribunal, sitting at London (Central), chaired by Mr Stewart and sent with written reasons to the parties on 24 April 2006.
   
2. The Respondents are a firm of solicitors in Museum Street in Central London. The Tribunal found, at paragraph 7, that their founder, Mr Shrank, who unfortunately died of cancer, did work which was mainly residential conveyancing, commercial conveyancing, wills, probate and trust work.
3. The Claimant, Miss Heather Bannister, claimed that she had been wrongfully and unfairly dismissed by and the victim of disability discrimination on the part of the Respondent by her dismissal on 27 May 2005, she having been employed by Shranks since 1983, latterly as a legal secretary. She had joined them at the age of 16, originally working under the YTS scheme. Her dismissal occurred after she had had a series of lengthy absences from work in 2004/2005 as a result of symptoms which were eventually diagnosed as those of Crohn's Disease.
4. The Tribunal found that the reason for dismissal was medical capability but that the statutory procedure set out in Schedule 2 of the Employment Act 2002 had not been complied with, and therefore, pursuant to section 98A(1) of the Employment Rights Act 1996, the dismissal was automatically unfair. They also concluded that the dismissal was substantively unfair. They further found that Miss Bannister had been dismissed for a reason relating to her disability, Crohn's Disease; justification does not appear to have been an issue. We need say no more about the findings because the details are irrelevant to this appeal, which concerns the Tribunal's assessment of compensation for loss of earnings.
5. The Tribunal appear to have heard the Claimant's evidence on liability and then heard the Claimant give evidence and be cross-examined, again, on quantum, before hearing a witness called on behalf of the Claimant and then hearing Mr Ticktum. They made an uncontroversial basic award for unfair dismissal of £5,040 and awarded £260 for loss of statutory rights. As to loss of earnings they said this, at paragraph 48:

"As regards future loss of earnings, we have come to the view that the Claimant, who we find has mitigated her loss by attempting to find work in the South London area from a number of different sources, is liable to be out of work for another six months from the date of the hearing. In respect of that we award a further £11,623.27 for that future loss of earnings".

They also made an award of £7,500 in respect of injury to feelings.

6. These awards were increased as appropriate, by 40%, pursuant to section 31 of the 2002 Act.
7. In this appeal two elements only of the awards of compensation are now attacked. They are, firstly, the Tribunal's decision that Miss Bannister was liable to be out of work for six months from the date of the hearing, which took place in February 2006, nine months after her dismissal, and should therefore be awarded six months future loss of earnings, and, secondly, the Tribunal's decision that Miss Bannister had, to use the Tribunal's expression, "mitigated her loss"- in other words she had actively pursued work and had not failed to take reasonable steps to mitigate her loss.
8. Miss Bannister has cross-appealed on the ground that the Tribunal failed to make an award for wrongful dismissal. The Tribunal declined to make such an award although they found that Miss Bannister had been paid only two weeks money in lieu of notice, having been summarily dismissed, when she was entitled to twelve weeks notice. They declined to make an award because they said that such an award was subsumed into the award for past loss of earnings. It is accepted that this was a correct approach; but if the loss of earnings award is successfully attacked on this appeal, then the duty to make an award for wrongful dismissal is, or may be, revived and that is why the cross-appeal has been put forward.

Future Loss

9. Mr Kirby, in his skeleton argument, though not in oral argument, has first directed our attention to section 123(1) of the Employment Rights Act 1996, which of course provides, in broad terms, that the Tribunal should award such compensation as they regard as just and equitable. He makes the point that the Tribunal did not refer to either statute or authority in the remedies sections of their judgment; but section 123(1) is very well known and does not need to be set out in every judgment which involves an assessment of compensation for unfair dismissal. No authorities, as Mr Kirby has accepted, were put before the Tribunal on remedy issues; or, to put it perhaps more fairly, Mr Kirby is not in a position to suggest that any were; and therefore the absence of any reference to the statute or to authority does not, in our judgment, begin to establish any valid criticism of the Tribunal in respect of either of the conclusions which are now attacked. That is by way of introduction.
10. The fundamental submission made by Mr Kirby, in relation to future loss, is that the Employment Tribunal failed to provide any reasons for their conclusion that, after the hearing, Miss Bannister would be out of work for a further six months, she having been out of work for nine months since the dismissal.
11. There was, he submits, evidence before the Tribunal in the form of a letter from an agency called ASA Law, which letter says that the writer, Mr Whiting, a legal division manager, confirms that the market is buoyant at present (the present being 16 February 2006, the date of that letter) and very much candidate-driven. Mr Whiting goes on to say that he at the time had a plethora of corporate and company law vacancies on his books.
12. The case of the Respondent, based on that letter, was that the market in Central London for legal secretaries (and Mr Ticktum's evidence was that ASA Law specialised in legal secretaries) was buoyant, and that if the market was buoyant Miss Bannister should have had employment earlier than the hearing and had failed to mitigate her loss properly (a point to which we shall come later) and, therefore, should have be awarded no future loss of earnings. Mr Kirby submits that the Tribunal did not refer to this evidence, and did not explain how they came to reject the Respondent's case; and applying the well known standards set out in the decisions of the Court of Appeal and EAT in Meek v City of Birmingham District Council [1987] IRLR 250, English v Emery Rheinbold [2003] IRLR 710, and Burns v Royal Mail Group PLC [2004] ICR 1103, the Tribunal, he submitted, had failed to give sufficient reasons to comply with those standards, in particular so as to show to the Respondent why he had lost on that issue.
13. We do not think it is necessary to go in to the three authorities to which have just referred; as we have said, the principles which they set out are familiar and not in contest between the parties in this appeal.
14. Because of the nature of the points taken in the Notice of Appeal as to the lack of reasons on this and the mitigation issue, the Tribunal was asked by the EAT, in the run up to this hearing, to set-out (a) the basis for their finding that the Claimant was likely to be out of work for another six months from the date of the hearing; (b) the basis for the finding that the Claimant had mitigated her loss by attempting to find work in the South London area from a number of different sources. The answer to question (a), given by the Tribunal on 4 May 2007, having referred to the Chairman's Notes of evidence, says this:

"The basis of the finding that the Claimant will be out of work for another six months from the date of the hearing was, 1, the information we were supplied, that suggested the Claimant had recovered sufficient from her illness so as to be fit for work; 2, the Tribunal's knowledge of the present employment market, informed by the evidence of market conditions presented by both parties".

15. Mr Kirby submits that this answer takes the reasons given in paragraph 48 of the Tribunal's decision no further and that, with or without that answer, the Tribunal simply did not deal properly with the Respondent's case.
16. Mr Barnett, on behalf of Miss Bannister, begins his response by drawing attention to the lack of any statement on behalf of the Respondent as to what his case was before the Tribunal as to future loss, in the event that his mitigation argument failed, and that the Respondent's case was that Miss Bannister had failed to mitigate her loss in the period between being, again, able to work and the Tribunal hearing. By definition their case was therefore that there would be no future loss.
17. What if it was found that there had not been a failure properly to mitigate her loss on the Claimant's part? The answer to that, in our judgment, is that it was not incumbent on the Respondent to have a specific or fall back position, and it appears they did not have one. They were, plainly, running their case on the basis that the question of future loss should simply not arise at all. If they had put an alternative position forward, Mr Kirby would, no doubt, have told us about it; at least if he knew what it was; but they did not have to have such a position.
18. More persuasive is Mr Barnett's next point, that calculation of future loss of earnings is always, in Employment Tribunals (and in personal injury cases), an uncertain and speculative exercise, which as is well known, involves, in the absence of specific evidence - for example medical evidence that a Claimant can only work part time at the date of trial but in two years will be able to work as fully as before the accident or dismissal - a substantial element of 'picking a figure from the air', which means choosing a figure which appears to reflect the realities of the individual case. It is commonplace for judges and Employment Tribunals to settle on a round figure as a reaction to their feel and assessment on the basis of the information before the court and their knowledge, particularly the lay members' knowledge in the case of an Employment Tribunal, of local market conditions. This approach is, in our judgment, regularly found and is, in law, permissible.
19. There is some authority, which has not been discussed before us, but is mentioned in Mr Barnett's skeleton argument, in the case of Shingler v AJ Manson Ltd (UKEAT/05/1803), that the standards required for reasons may be properly seen to be at a lower level when the reasons which are given relate to the kind of issue which is in discussion in this appeal; but it is not necessary for us to go that far in this case, in our judgment.
20. What we have to consider is, in the light of Mr Kirby's submissions and the submissions of Mr Barnett, whether there is in the Tribunal's judgment sufficient by way of reasoning and finding of fact to support their conclusion as to future loss when paragraph 48 of the judgment is considered together with the answers given by the Tribunal to the Employment Appeal Tribunal's question. In our judgment there is. Firstly, there is the fact that the Claimant was fit for work. Her evidence was that she was fit for work from 12 September 2005; it is not suggested that that was in issue before the Tribunal; and it is specifically referred to in the Tribunal's answer to the EAT's question. Secondly, it was not disputed that the Claimant had taken steps to find work. Indeed the Tribunal evidently found that she had sought work from a number of sources but had not found work by the time of the Tribunal hearing. Thirdly, the Tribunal, in the answer to the EAT, said that they relied on their own knowledge of the present employment market, which they were entitled to rely on, informed by the evidence of market condition presented by both parties. That demonstrates that they did consider the Respondent's evidence as to market conditions, and Miss Bannister's evidence as to market conditions, and that they reached a conclusion, on the basis of that material, that Miss Bannister would be unlikely to get work for a further six months after the hearing.
21. When paragraph 48 and the answers to the question posed by the EAT are put together, there is there to be found, in our judgment, ample reasons for the conclusion which the Tribunal reached to be sufficiently explained and for the Respondent to understand why, on the future loss issue, the Tribunal reached the decision that they did. Mr Barnett points out that for the Respondent to say, "We do not know why we lost", when, on analysis of the evidence, it might be taken that they had actually done rather better than otherwise they might have done, is unrealistic; but it is not necessary for us to determine whether that is or is not so. We are entirely satisfied that the reasons for the particular finding as to future loss are sufficiently to be found in the material which we have described.
22. If and in so far as the Tribunal had to deal with the evidence in the ASA Law letter, it must be taken from what the Tribunal have said that they were not dissuaded by it away from a six month period.
23. Only in our judgment, in a very clear case, where there is plain perversity, or a total absence of discernible reason (and perversity is not advanced in this appeal) will the EAT find an error of law in the case of a conclusion such as that now under attack. This is not such a case.

Mitigation

24. Although we have been taken, both orally and in skeleton arguments, to a number of authorities, the principles of law which apply in this area are well established. They are; (1), any Claimant who seeks to recover compensation for loss of earnings is under a duty to take such steps as are reasonable, to mitigate that loss - see Gardiner Hill v Roland Berger Technics Ltd [1982] IRLR 498; (2) the burden is on the Respondent who asserts a breach of that duty, to prove it either by calling evidence or by obtaining satisfactory answers in cross-examination of the Claimant, or both. The burden of proof does not at any stage switch; see Ultra Electronics Ltd v Krishnakumar (UKEAT/0392/05/DM); 3) the Tribunal should carry out the steps described in Gardiner Hill and in Savage v Saxena [1998] ICR 357, in order to ascertain what amounts should be deducted if there has been a failure to mitigate; but of course it is open to a Tribunal to conclude that there has not been failure to mitigate, in which case the second and third stages of the steps set out in the relevant authorities do not arise; and this is a case in which the Tribunal did so conclude. How they should have approached the case if they had had found that there had been a failure in the duty to mitigate is not material.
25. Mr Kirby's attack on the Tribunal's conclusion as to mitigation, is similar, indeed closely related to that developed in relation to the future loss of earnings conclusion of the Tribunal. It is purely an insufficient reasons attack; he has abandoned if it was ever raised any question of criticising the Tribunal's conclusion as perverse.
26. The basis of the criticism is that the Tribunal, it is submitted, have given no or insufficient reasons for their conclusion in paragraph 48, that Miss Bannister had mitigated her loss by attempting to find work in the South London area. He submits, as is the case, that the mitigation issue here was flagged up at a very early stage of these proceedings, in paragraph 15(g) of the Respondent's response, and that the specific case which was advanced was that, however much Miss Bannister had searched for work in the South London area in which she lived, she had failed to look for work in Central London where she had worked for the Respondent for 22 years, and that, if she had taken steps to seek work in Central London, on the basis of the ASA Law letter, to which we have already referred, such work would have been easily found in a buoyant market. The Tribunal at paragraph 48, he submits, do not say why that central thrust of their case that Miss Bannister had failed properly to mitigate her loss failed; the Respondent does not know why that case failed and why the evidence of the ASA Law letter did not find favour. In this area too, he submits, that the answers given by the Tribunal to the EAT's question do not amplify the reasons given originally in paragraph 48.
27. The answer given to the EAT's question so far as the mitigation issue is concerned is this:

"The basis of the finding the Claimant had mitigated her loss by attempting to find work in the South London area from a number of different sources, was contained in her witness statement as to remedy, supplemented by the documents contained in the bundle of documents to accompany statement of Heather Bannister as to remedy. We repeat that this is not a perversity challenge. Mr Kirby does not complain that if the Tribunal had preferred the evidence of Miss Bannister, about how she had made strenuous efforts to find work, both in South London and Central London, in preference to the letter from ASA Law, that would have been the finding that was vulnerable to attack on a perversity basis. His submission is that the respondents simple do not know how their case, as to Central London, came to be rejected".

28. It is necessary, in our judgment, to consider what the Tribunal said on this issue in the light of the issues of fact before them. There was, it would seem, no challenge, or no substantial challenge, to Miss Bannister's evidence about her efforts to find work in South London. Her witness statement, supported by a considerable bundle of documents, so far as those efforts were concerned, was detailed. It seems that there was an issue as to whether she had made the attempts she said she had made to find work on a broader basis, and if so when, and whether the reality was that she had not made such attempts, because on the basis of the ASA Law letter, she would have found such work if she sought it.
29. Mr Barnett points out that there was no cross-examination of the writer of the ASA Law letter (the status of which, in any event, is unclear), that the letter refers only to company and corporate work of which Miss Bannister had no experience and that the letter did not identify any specific jobs. He makes other criticisms of the strength of that letter; but that is not the point because the question of perversity is not in issue before us.
30. However, the issues of fact which we have described are the key, in our judgment, to understanding the basis of the Tribunal's claim. There was, as we said, no issue as to the many steps that Miss Bannister had taken to get work in South London. There were issues as to what, if any, steps she had taken to get work in Central London and whether they were reasonable or not; but the Tribunal did not, on the basis of their conclusion, need to resolve those issues because they found that it was sufficient to discharge her discharge her duty to mitigate for her to have attempted to find work, as she did, in the South London area from a number of different sources. On the basis of that finding, on her evidence and on the documents, in our judgment lies the answer to Mr Kirby's point. The Tribunal, on the basis of the evidence, came to a decision that Miss Bannister had not failed in her duty to mitigate because she had done enough to comply with that duty by looking for work in the South London area from a number of different sources. It was, therefore, unnecessary for the Tribunal to resolve the issues of fact, as to whether she had, in addition, looked or looked sufficiently for work in Central London and what, if anything, would have happened if she had. The Tribunal were not rejecting what the ASA Law letter said or accepting what it said. On their conclusions it was not necessary to do either, because, whatever was the situation about Central London, and leaving that out of the equation, she had done enough by looking as she did, to the degree that she did, in South London. That conclusion is not attacked as perverse; and seen that way, which in our judgment is the right way to read this part of the Tribunal's judgment, there is no lack of reasoning; the reasoning is brief and concise but clear and tells the parties precisely why, on this issue, they respectively won or lost.

Conclusions

31. For the reasons we have set out the appeal is dismissed. In the light of the fact that the appeal is being dismissed, the cross-appeal does not arise and is also dismissed.

Costs

32. We do not propose to make any costs order in this case. Our reasons are these: we are shocked by the fact that monies which could not be in dispute have not been paid to the Claimant by the Respondent, which is a solicitors firm; but we are unable to go so far as to draw the inference that that has happened and that the appeal has been pursued because of, in effect, bad faith on the part of the Respondent. The scatter-gun approach of the Notice of Appeal, not quite attacking everything in sight but certainly attacking the Tribunal's decision on multiple fronts and without any justification for it, might have been regarded as unreasonable and we might have had to consider whether that approach had actually caused any expenditure of cost on the Claimant's side; but Mr Barnett has, with professional honesty, told us in answer to a direct question that it did not; and therefore we need say no more about that. What then about the arguments that were pursued? Mr Barnett rightly says that the President took the view that there was nothing in this appeal but accepts that HHJ Birtles, at the preliminary hearing (or it may have been a Rule 3(10) hearing, it matters not which) took a different view. We accept that the fact that a case has been let through, either at the sift stage or at a preliminary hearing or at the Rule 3(10) stage, to a full hearing, does not mean that it has reasonable prospects of success or provides a guarantee to an appellant, in such circumstances, against a finding that he should pay costs; but we take the view, in this case; firstly that paragraph 48 of the decision could have been substantially more complete; secondly that it was not until it was amplified by the Tribunal's subsequent answers to the EAT's questions that more completeness was available and, thirdly, that it cannot be said or should not be said that, in the light of material as a whole, the attack on the reasons was one which had no reasonable prospect of success and was so lacking in merit that a costs order should follow. As to perversity, it is right that that was abandoned at a very late stage; but it has not been suggested that the perversity issue and the survival to a late stage of the perversity issue of itself, caused any extra expenditure or cost; it is highly unlikely that it did; and although we have a great deal of sympathy for the Claimant, who has been put to expense by this appeal which has failed, looking at the matter in the manner that we have described we do not regard it as the sort of case in which we should find that liability to costs has been incurred and /or that we should exercise our discretion to make a costs order. We do, however, hope that (subject to any further appeal, should there be one) the outstanding money will be paid, together with interest, without any further delay, and we would be horrified to find that that had not taken place in very short order.