United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR M HAY (of Counsel) Instructed by: Messrs Hathaways The Law Firm 19 Regent Terrace Gateshead Tyne & Wear NE8 1LU
For the Respondent	No appearance or representation by or on behalf of the Respondent


 


SUMMARY

Unfair dismissal – Compensation – Polkey deduction

Automatically unfair dismissal; section 98A(1) ERA. Application of Polkey deduction to whole of compensatory award. 100 per cent deduction; therefore no uplift under section 31(3) EA 2002.

HIS HONOUR JUDGE PETER CLARK

1. This is an appeal by Christine Hope, the Claimant before the Newcastle Employment Tribunal, against part of the reserved judgment of that Tribunal promulgated with reasons on 10 September 2007.
2. By that judgement the Tribunal held: (1) that the Respondent, Jordan Engineering Ltd, has established that their reason for dismissing the Claimant, whom they had employed from 3 April 1995 until 8 December 2006 as a payroll/accounts supervisor, was redundancy and that dismissal for that reason was both procedurally and substantively fair for the purposes of section 98 of the Employment Rights Act 1996; (2) However, the Respondent had failed to notify the Claimant of her right of appeal against the dismissal Decision. Consequently the dismissal was automatically unfair under section 98A(1) ERA, by reason of their failure to comply with the statutory dismissal and disciplinary procedure; (3) However, as there was no substantive unfairness under section 98, there would be no compensatory award and thus no award which fell to be uplifted under section 31 of the Employment Act 2002.
3. Before turning to the grounds of appeal presently before us, we should for completeness record that the Tribunal did award the Claimant four weeks' pay under section 120(1)A ERA, (minimum basic award where dismissal is unfair under section 98A(1)). That award was subject to both a cross-appeal and review application to the Employment Tribunal by the Respondent. We understand that the review application succeeded so that the Respondent, which is not represented before us today but on whose behalf we have received written submissions from Sharon Langridge their solicitor, who appeared below, does not need to pursue the cross appeal and we dismiss it on withdrawal.
4. By her Notice of Appeal received on 19 October 2007, the Claimant, through Mr Hay, advanced 13 grounds of appeal, lettered (a)-(m), attacking the Tribunal's findings on both liability and remedy. That notice was considered by HHJ Serota QC at the paper sift stage. He directed that only two grounds of appeal, those lettered (b) and (c) and developed at paragraphs 2-5 of the grounds of appeal should proceed to a full hearing. All remaining grounds were rejected under EAT Rule 3(7) and there has been no attempt to vary that decision either by way of an application for an oral hearing before a judge of the EAT under Rule 3(10) nor by way of seeking permission to appeal to the Court of Appeal.
5. The two grounds of appeal before us relate solely to remedy. They are, using the Notice of Appeal lettering:

"(b), not making an award in respect of loss of right to long notice for her ten years' service and uplift in respect of the same, contrary to settled authority and wholly failing to reason the same;

(c) finding that no mandatory/other uplift would apply whatsoever, contrary to section 31(3) Employment Act 2002, failed to provide adequate reasoning in respect of the same."

6. We should also refer to ground (a), one of those rejected by HHJ Serota QC. It reads:

"(a) not making any award in respect of loss of statutory rights (unfair dismissal) and uplift in respect of the same contrary to settled authority and wholly failing to reason the same;"

Factual Background

7. In the redundancy exercise carried out by the Respondent in late 2006 it emerged that only a part-time administrator's post was required in the relevant area of the Respondent's operation. Another employee, Ms Dowson, worked part-time in that role. The selection pool consisted of the Claimant, a full-time employee and Ms Dowson. Consultation meetings took place with the Claimant on 22 and 30 November 2006. On the latter occasion she made it clear that she would not accept the part-time role. That post was offered to Ms Dowson, who did accept it. No alternative position was available for the Claimant. A third consultation meeting due to take place on 7 December was aborted. The Claimant did not attend, due to sickness. Mr Jordan, a member of the management team, telephoned her. She confirmed that she did not want the part-time role. He decided to dismiss her and did so by letter the following day. She was not required to work her notice but received her entitlement, ten weeks' pay in lieu of notice, together with a redundancy payment. She was not advised of any right to appeal.

The Tribunal Decision

8. The Tribunal found, so far as is material: (1) that the reason for dismissal was redundancy, a potentially fair reason under ERA 98(2)(c); (2) that dismissal for that reason was both procedurally and substantively fair under 98(4). Proper consultation took place, an appropriate pool for selection was chosen, no alternative employment was available, the Claimant did not want the part-time role eventually accepted by Ms Dowson; (3) the failure to offer the Claimant an appeal against Mr Jordan's Decision to dismiss her breached the statutory DDP, rendering the dismissal automatically unfair under section 98A(1) ERA. (4) However, an appeal would have made no difference to the outcome. Her dismissal by reason of redundancy would have taken place in any event, (Reasons paragraph 5.8). Applying Polkey principles, a compensatory award was assessed at nil; (5) There being no compensatory award, there was no compensation which fell to be uplifted by between 10 and 50 per cent by reason of the automatically unfair dismissal in accordance with section 31(3) EA 2002.

The Appeal

9. Loss of right to long notice. Mr Hay cites authority in this Appeal Tribunal for the proposition that where a Claimant is entitled to notice based on long service, (see ERA 5.86) following the unfair dismissal she is entitled to compensation for the loss of that intangible benefit in the future, see Daley v AE Dorsett [1981] IRLR 385, as limited in amount by SH Muffett Ltd v Head [1986] IRLR 488.
10. This Head of Loss seems to us no different from the sum awarded for loss of statutory rights, such as the right to protection from ordinary unfair dismissal, which requires one year's continuous service under section 108(1) ERA. All such loss falls under the same head and it is not immediately clear to us why HHJ Serota QC drew a distinction between grounds (a) (rejected) and (b) (allowed to proceed to this full hearing).
11. However the distinction is, in our view, immaterial. In an overly-long Skeleton Argument citing extensively from Harvey and from judgments in this EAT, Mr Hay mentions in passing (Harvey volume 1, D1, paragraph 2625) the case of Taylor v John Webster Civil Engineering [1999] ICR 561. Although that authority was not cited to us today, we have reminded ourselves in advance of this hearing of that case, decided by a division presided over by Lindsay P. I note that a division on which I sat at the preliminary hearing of that appeal offered certain provisional views, later endorsed by the President's division, see those view recorded at page 566, D-F, in particular, that an award for loss of statutory rights fell to be reduced by the Polkey deduction, which was 40 per cent in that case. That view was specifically endorsed following the full hearing by the President, see page 568 B-C. That proposition is replicated in the passage in Harvey to which we have referred and Taylor is there correctly cited as authority for that proposition.
12. In the present case, the Tribunal made a 100 per cent Polkey deduction because it found the dismissal would, in any event, have stood following an appeal. We mention in passing that this is not a Mining Supplies Longwall Ltd v Baker [1988] ICR 676 case. There the unfairness of the Claimant's dismissal lay in the employer's failure to consult with him over his impending redundancy before dismissing him. Had they done so, the result would have been the same but dismissal would have been deferred for a short time. The loss during the notional consultation period was recoverable as a Head of Loss within the compensatory award. Whilst that point is not before us in this appeal, we would observe that the position is different where the unfairness consists of a failure to advise the employee of her right of appeal. In this case she had been dismissed with ten weeks' pay in lieu of notice. If an appeal had taken place, it would, on the Tribunal's finding, have inevitably failed. There is no suggestion that the present contract of employment allowed for the dismissal to be suspended, pending the outcome of the appeal. Thus the absence of an appeal opportunity caused no loss to this Claimant.
13. This morning Mr Hay has bravely sought to persuade us that the Polkey deduction does not apply to this Head of Loss, that is, loss of right to long notice. We are wholly unpersuaded by his submissions. It seems to us that there is no warrant in Polkey v AE Dayton Services Ltd [1987] IRLR 503, see in particular the speech of Lord Bridge at paragraph 30, for the proposition that any head of compensatory award escapes the Polkey deduction. Once a Tribunal finds that it is a 100 per cent Polkey deduction case, there is no purpose in carrying out an assessment of loss under the compensatory award.

Section 31 Uplift

14. Section 31(3) is clear and Mr Hay does not submit to the contrary. The uplift applies to any award which the Tribunal makes, and "award" in section 31(3) means compensatory not basic award (see section 118(1)(b) read with section 124A ERA). In any event, the basic award in the present case was extinguished by the statutory redundancy payment which the Claimant received.
15. The Polkey deduction applies to a dismissal which is unfair under section 98A(1). Thus, if there is no compensatory award as here, no uplift falls to be applied under section 31(3). That makes sense to us. 10-50 per cent of 0 still equals 0.

Conclusion

16. For these reasons we shall dismiss this appeal.