Appeal No. UKEAT/0048/11/LA
EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
At
the Tribunal
On
24 June 2011
Before
HIS
HONOUR JUDGE McMULLEN QC
BARONESS DRAKE OF SHENE
MR S YEBOAH
WINCHESTER AND EASTLEIGH HEALTHCARE NHS TRUST APPELLANT
MRS
J M WALKER RESPONDENT
Transcript of Proceedings
JUDGMENT
SUMMARY
UNFAIR DISMISSAL – Compensation
PRACTICE AND PROCEDURE – Appellate
jurisdiction/reasons/Burns-Barke
The successful Claimant worked in the NHS from 1983 but for the
Respondent Trust only from 2006. The dispute about this was raised in
submissions on the basic award. The Employment Tribunal calculated back to
1983. The EAT allowed the jurisdictional point about Employment Rights Act
1996 s 218(8) to be raised and upheld the Trust’s appeal. Continuity
does not arise in the NHS unless s 218, or TUPE, applies.
HIS HONOUR JUDGE McMULLEN QC
1.
This case is about the calculation of a basic award on a finding of
unfair dismissal. It is the Judgment of the court to which all members
appointed by statute for their diverse specialist experience have contributed.
We will refer to the parties as the Claimant and the Respondent.
Introduction
2.
It is an appeal by the Respondent in those proceedings against part of a
Judgment of an Employment Tribunal sitting over six days, including time in
chambers, at Southampton, under the chairmanship of
Employment Judge Scott. The Judgment runs to 37 pages, and Reasons
for it were given on 3 November 2010. The parties are represented
respectively by Miss Heather Platt and by
Miss Nadia Motraghi, both of counsel.
3.
The essential issue on appeal could not be narrower, for it emerges from
the findings by the Tribunal that the Claimant’s claim of constructive unfair
dismissal and unlawful direct sex discrimination succeeded and a number of her
claims were dismissed. Claims under the Maternity and Parental Leave Regulations (MAPLE)
also succeeded, as did the claim for breach of contract, as a result of which
the total award for compensation was £36,907, which included a ten per cent
uplift on certain features pursuant to the Employment Act 2002.
The Claimant, we are told, made roughly 25 claims, and she has substantially
succeeded on several. The issue in the case concerns the basic award. The
basic award is made as a requirement of an award of unfair dismissal by
section 119 of the Employment Rights Act 1996.
4.
In practical terms the dispute between the parties hinges upon
continuity of employment. The Claimant contends she was employed with
continuous service from 1983, the Respondent says from 2006, and the difference
between the parties is £6,475. The Claimant contends the basic award is
£7,525, and the Respondent £1,050, and so there is a very significant
difference in the figures. Directions sending this appeal were given in
chambers by HHJ Serota QC.
The legislation
5.
The provisions of the legislation are not in dispute. On a finding of
unfair dismissal, an Employment Tribunal must make a basic award, and must do
so by calculating it in a rigid statutory manner prescribed by
section 119. Broadly speaking, the basic award reflects the Claimant’s
age, length of continuous service and pay, but all of those are defined by the
statute in artificial ways so that pay is not everything the Claimant receives
and it is capped. Age is not absolute but is reflected in the age at which the
work was done, and the multiplier of pay depends on it being calculated at 50
per cent, 100 per cent, or 150 per cent. This is contrasted with the approach
to a compensatory award, which is entirely discretionary based on the principle
of what is just and equitable, subject to reductions which must be made if
there are findings of, for example, contributory fault. Thus a Tribunal must
approach the calculation of the basic and the compensatory awards in different
ways. Generally speaking, when a decision is made to reduce the compensation
because of the conduct of the Claimant, the reductions will be of the same
percentage. But, as we have indicated, the basic award is a statutory
construct, and a Tribunal is under a duty to calculate the basic award in
accordance with section 119 and not otherwise.
6.
The formula for a week’s pay is set out in chapter 2 at
section 229 and following. Continuity of employment again is a statutory
construct and is regulated by part XIV. In the special case of employment
by a number of different employers, section 218 provides for certain
previous employment to be included:
“(8) If a person employed in
relevant employment by a health service employer is taken into relevant
employment by another such employer, his period of employment at the time of
the change of employer counts as a period of employment with the second employer
and the change does not break the continuity of the period of employment.
(9) For the purposes of
subsection (8) employment is relevant employment if it is employment of a
description—
(a)
in which persons are engaged while undergoing professional training which
involves their being employed successively by a number of different health
service employers, and
(b)
which is specified in an order made by the Secretary of State.”
7.
Regulations which are said to be analogous to those under
section 218 have been made. These are the Employment Protection National Health Service Order 1996/638,
which says the following:
“Specified descriptions of employment: The following
descriptions of employment are hereby specified for the purposes of [the
relevant statute].”
and there are there given the categories of employee which
include medical practitioners, scientist trainees and management trainees.
The facts
8.
It is common ground that the Claimant was a nurse; that is the finding
of the Tribunal, and, at least stripped of the controversial matter of the
employer, the finding that she was employed as a nurse from 1983 is one which
is not challenged. The Claimant was constructively unfairly dismissed and was
entitled to a basic award. The contractual material relating to her employment
by the Respondent indicates the following:
“Contract Start Date and Continuity of Service
Part B of this Contract confirms your start date in this post
and the date upon which your present employment with the Trust began, which is
your commencement date for statutory purposes. The date your continuous
employment within the NHS began may be different and this will be taken into
consideration for the calculation of certain benefits including annual leave,
sick leave and maternity leave entitlement. In addition aggregate service
within the NHS (by which is meant any employment with an NHS body) may be taken
into consideration for the calculation of certain benefits. Entitlement to
enhanced benefits will be subject to verification of previous service by the
Trust. Further detail is available from the Human Resources department.”
9.
There is a reference to continuation of service in paragraph 14 of
the particulars, but these take the matter no further since they are
essentially forward‑looking. The document was signed by the Claimant as
a contract on 6 November 2006 with a signature by the Respondent a
little earlier. Particulars attached to it in part B reiterated the point
about employment and the date is there specified as:
“Date of commencement in this post: 2 October 2006
[...]. Date statutory continuous employment with Winchester and Eastleigh NHS Trust commenced: 2 October 2006.”
10.
It is common ground before us that at no time prior to
2 October 2006 was the Claimant employed by Winchester, the
Respondent. The question of her length of employment was raised by the
Claimant in one of the two claim forms she raised, where she said the date of
commencement was 1983. In her detailed grounds she asserted the following:
“The Claimant’s employment with the Respondent commenced in
September 1983 and she has held her current position since
October 2006 […].”
11.
The Respondent’s response to this was that she was employed in 2006.
Apparently, she was not cross‑examined when she gave her evidence in
accordance with her witness statement. The witness statement said this: “I
have been employed by the NHS since September 1983 and I started working
in Andover Hospital in October 2006.” The material available to the
Employment Tribunal consisted of nothing more than the documents we have
referred to. We have seen in the hearing bundle index of the Employment
Tribunal a passage on contractual documentation, policies and procedure, none
of which pre‑dates 2 October 2006.
12.
The Employment Tribunal heard evidence over three days and sought
closing submissions from both counsel in writing. Miss Motraghi made the
point about the dispute over start dates. It was submitted the Claimant’s
basic award is to be calculated on the basis of her length of service with the
Respondent, not her length of service in various NHS employment. Thus the
matter was flagged for the Tribunal’s decision, as to which it said this:
“Pursuant to Section 119 Employment Rights Act 1996
the claimant is entitled to a basic award calculated with reference to her age
at the date of dismissal and her length of service. It was suggested on behalf
of the respondent that the claimant’s length of service ran only from
October 2006 when she started working at Andover Hospital. She has been
employed by the National Health Service, however, since September 1983 and
contends that her continuous service began on that date. Her evidence in chief
to that effect was not contested in cross‑examination. Her statement of
employment particulars (R77A) refers in paragraph 3 to continuous
employment within the NHS for the purpose of calculating ‘certain benefits’.
The statement of particulars relating to her current job in the NHS (R287)
refers to ‘commencement of continuous NHS Service’. The Tribunal is satisfied
that on the balance of probabilities the claimant’s basic award should be
calculated on her total NHS service ie 26 years. The claimant was aged 44 at
the date of dismissal. She is therefore entitled to a basic award of 21 and a
half weeks’ pay subject to the statutory maximum of £350 per week. The basic
award amounts to £7,525.”
The Respondent’s case
13.
The Respondent contends that the Tribunal failed to apply
section 218. It cannot be criticised for doing that, for neither counsel
raised the point, but Miss Motraghi contends that the central dispute
between the parties was live before it and the Tribunal made a decision upon
it. If this is a new point, she contends it is a hard‑edged question of
law which should be determined by us, since it goes to matters as fundamental
as the statutory construction of a basic award. In any event, the Tribunal’s
Judgment was perverse. In order to make this submission she draws attention to
the contractual documents to which we have referred, which she says go all one
way, and there is no reason for those documents not to mean what they say.
The Claimant’s case
14.
On behalf of the Claimant, objection is taken to the raising of what is
said to be the new point. Although the dispute as to the competing dates was
live before the Tribunal, the particular argument based upon section 218
and the Regulations was not put, and the EAT should not entertain it. As to
the documentation point, which is said to be perverse, Miss Platt contends
that the Tribunal heard evidence from the Claimant about her employment, and
that goes with the contractual documentation; it was open to the Tribunal to
make the decision which it did.
The legal principles
15.
The legal principles applicable to the opening of a new point were set
out in a Judgment I gave in Secretary of State for Health v Rance
[2007] IRLR 665, reassuringly relied on by both counsel, in paragraphs 48‑50.
A new point will not normally be entertained on appeal if it requires new
evidence to be sought, but sometimes a hard‑edged question of law, a
construction of a statute and so on can be dealt with as an exceptional case. Cases
sometimes are allowed, but more frequently refused (see Blackpool, Fylde and Wyre Society for the
Blind v Begg UKEAT/0035/05). The test for a perversity
appeal requires an overwhelming case to be made (see the eponymous Yeboah v Crofton
[2002] EWCA Civ 794).
Discussion and conclusions
16.
With those principles in mind we prefer the argument of Miss Motraghi.
The first point is that this issue was raised at the Employment
Tribunal, albeit not by reference to the statute. This may be a surprising
omission, given that both counsel were engaged there; but on the other hand, as
Miss Motraghi fairly points out, this was a complicated case involving a
lot of different claims, and it must be borne in mind that dealing with remedy
and particular parts of remedies for this group of statutory torts would be the
very last thing in anybody’s mind. The Claimant had the requisite service to
make the claims, and Miss Motraghi did flag up the dispute as to the
dates. It is common ground before us that the Claimant did not work for the
Respondent before 2006. So the issue is, how did previous employment come to be
part of the finding?
17.
In our judgment, this is not a new point, since the substance of it was
live. But if we are wrong about that, we are asked to make a decision on a
question of law. There are only two ways in which the Claimant could obtain
the benefit of her employment by NHS bodies up to 2006: the first is by TUPE
1981 or 2006, which plainly does not apply here; the other is to
invoke section 218.
18.
This is doomed to failure. We have attempted to take a realistic
approach to this and to ask what evidence might be available for the Claimant. On
the unchallenged finding of the Tribunal that the Claimant was employed as a
nurse since 1983 she cannot be described as a trainee scientist, medical
practitioner and so on, and would fall at the first hurdle. Whether or not any
of the bodies within the NHS that she worked for would be specified is an open
question, but she never gets past the first hurdle as a matter of construction.
19.
That is the hard‑edged question of law which has to be addressed;
it is appropriate to address it here. We have no indication as to what
evidence would be brought before the Tribunal. We have been told that in
correspondence the Claimant has accepted that she never worked for Winchester before October 2006; and since she was a nurse we hold that she would not
be able to invoke the statute.
20.
The Tribunal fell into error by dealing loosely with the concept of NHS
service. Both the Respondent and the Claimant are right in that the Claimant
did work in the NHS, but far more is required when addressing a statutory
construct such as basic award and continuity of service than that rather
general approach. The Trust is required to make payment of a basic award which
corresponds to the time she worked for it and for no one else. The Tribunal
wrongly, in its paragraph 116, did not take an analytic approach to the
period of employment in the NHS.
21.
It also appears to have been led into that error by considering the
circumstances which attended upon the dismissal of the Claimant. She obtained
work as a bank nurse at Basingstoke Hospital on 1 September 2009
after a gap of some months, and it was indicated that the date of commencement
of her continuous NHS service would be confirmed by her previous employer.
That appears to have led the Tribunal into error; it cites this document. We
allow the point to be raised with us, and it succeeds.
22.
If we are wrong about the exercise of that discretion we look at the
contractual documents. It would require very compelling evidence by the
Claimant to show that she was employed for the purposes of continuity of
service by the Respondent before 2006. All the documents that she produced are
wholly understandable. For certain purposes an employee is entitled to treat
employment by a former employer as counting. Frequently, for example, in local
government service and here in the NHS credit is given for the purposes of
certain benefits, but these are expressly itemised in the contract (annual
leave, sick leave, maternity and so on; and, it may be said, pensions). There
is a world of difference between recognising certain benefits based on service
to be continued with a new employer and injecting years into the statutory
construct of continuous service. This simply cannot be done by parties to a
contract, since it is a matter of statute, and this contract is in no way
misleading. One cannot see more clearly the intention of the parties, which
was to recognise the commencement date with this particular employer as 2006. There
was no evidence to gainsay the agreement which the parties had made and to
which the Tribunal was bound to give effect. So, irrespective of our approach
to the new statutory point, we would allow the appeal on the second ground. The
appeal is allowed.
23.
On agreement between the parties, in substitution for the figure given by
the Employment Tribunal of a basic award, there will now be a basic award of
£1,050, to which an uplift will be given of £105.
