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United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Fox v British Airways Plc (Unfair Dismissal) [2012] UKEAT 0033_12_3007 (30 July 2012)
URL: http://www.bailii.org/uk/cases/UKEAT/2012/0033_12_3007.html
Cite as: [2012] UKEAT 0033_12_3007, [2012] UKEAT 33_12_3007, [2013] ICR 51
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EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON, EC4Y 8JX
At the Tribunal
Judgment handed down on 30 July 2012
Before
THE HONOURABLE MR JUSTICE LANGSTAFF (PRESIDENT)
(SITTING ALONE)
MR H O FOX (FATHER FOR MR G FOX (DECEASED)) APPELLANT
BRITISH AIRWAYS PLC RESPONDENT
Transcript of Proceedings
JUDGMENT
APPEARANCES
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(of Counsel) Instructed by: Darbys Solicitors LLP 52 New Inn Hall Street Oxford OX1 2DN |
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(of Counsel) Instructed by: Baker & McKenzie LLP 100 New Bridge Street London EC4V 6JA |
SUMMARY
UNFAIR DISMISSAL
JURISDICTIONAL POINTS
PRACTICE AND PROCEDURE
A former employee died within days of being dismissed, it was said both unfairly, and by because of discrimination. He had enjoyed the right to death-in-service benefit whilst in employment. The ET, rejecting an argument that the loss was real loss of substance to the deceased, and considering it was in reality a benefit to the dependents, held that a sum of around £350 akin to the conventional award for loss of statutory rights should be awarded (if liability were made out). The deceased’s father appealed against the assessment of quantum.
The father had initially issued proceedings without first obtaining appointment as a person authorised to bring them by application to the ET by appointment under s. 206(4) ERA 1996 – instead he included such an application in the body of his ET1. The EJ declined to apply Court of Appeal common-law authority to the effect that proceedings brought without authorisation were a nullity and could not retrospectively be validated, though purporting to take a literal approach to the wording of s.206; and regarded the claims as being in time; but in the alternative held that duplicate proceedings brought within a reasonable time of the father realising that an ET had not (yet) dealt with his application for appointment, and that there might be a problem with his entitlement to bring them, had been brought within time.
Held that the EJ was in error in assessing loss in the way he did: it was a real loss, which might normally be compensated for by payment of an appropriate premium to ensure death cover in the amount contracted for in employment, but since in the circumstances it was not argued that there should have been mitigation by obtaining such a policy, the loss was prima facie the loss of the full sum payable on death. The EJ was also wrong not to have held the initial proceedings a nullity incapable of retrospective validation. However, his alternative conclusion was open to him. The ET thus had jurisdiction.
THE HONOURABLE MR JUSTICE LANGSTAFF, PRESIDENT
1. Gary Fox died aged only 44. 20 days before he had had surgery which it was hoped would make him fit again for work. But he had been dismissed from work – because, it was said, he was not physically capable of it, only 5 days earlier than that. If he had still been in work when he died, he would have been entitled contractually to a death in service benefit of three times his annual salary (over £85,000). Because he was dismissed he had nothing. On the assumption that the dismissal was unfair, or discriminatory in breach of the Disability Discrimination Act 1995 could he claim to have lost that sum? Employment Judge Hyams at Watford Employment Tribunal thought not. He said that a much smaller sum, around £350, was payable. The effect of his reasoning was that if an employee is dismissed with effect from (say) the 21st of the month, and he dies at one minute to midnight on that day, his loss is to be measured in thousands of pounds, but if he survives one minute into the next day it is at most a few hundred. The principal issue for this Court on the appeal is whether the Judge was right.
The Judge’s Reasoning
2. Section of the 123 of the Employment Rights Act 1996 provides that:
“… the amount of the compensatory award shall be such an amount as the Tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the Claimant in consequence to the dismissal insofar as that loss is attributable to action taken by the employer”
Section 17 A of the Disability Discrimination Act 1995 provides by subsection 3 that where compensation is ordered:
“… the amount of the compensation shall be calculated by applying the principles applicable to the calculation of damages in claims in tort …”
No submission was made to him, nor to me, that different principles applied under the different statutes to the calculation of compensation to be awarded for the same event (dismissal).
3. The Judge thought he was being asked by the Claimant to have regard not to the loss sustained by the Complainant as required by Section 123 but the loss to those who would have received the death in benefit monies (the “beneficiaries”). As he put it, “the real loss suffered by the Claimant was the lack of the benefit of the life insurance cover which he could have obtained after his dismissal and before his death.” Although guidelines for assessing pension loss in the employment tribunals suggested that former employees might be compensated for the loss of death in service benefit by awarding as compensation the average market rate for equivalent cover, given that Gary Fox might not in practice be able to obtain such cover in the limited time before he died because he lacked funds and was undergoing an operation the Judge wondered whether the value suggested by average market rate might be too limited. That took him to common law authorities relating to tort. They were to the effect that it was the victim’s loss which had to be compensated, and not the loss which third parties or beneficiaries might suffer in consequence of the injury or death of the victim of the tort. He concluded that whereas the cost of replacing life cover was a reasonably foreseeable loss suffered by the Claimant, the loss of a life insurance payout was a loss which was not suffered by the Claimant but by others.
4. The nub of his decision is in paragraph 42:
“ … there was no evidence as to whether or not the Claimant sought replacement life insurance. However, if he had obtained insurance then this claim would probably not have been made. Assuming then that he did not seek to obtain alternative life insurance cover, what was his (as to opposed to his estate’s) loss? His loss was the loss of the comfort of knowing that his relatives would receive a lump sum insurance payment on his death. Was that capable of being the subject of compensation, whether under section 123 of the ERA 1996 or at common law? It is not precisely the sort of loss which is compensated for in unfair dismissal claims by a sum of (typically) £350 or so for the loss of the benefit of statutory rights, but it was comparable. I could see no good reason why that sort of level of compensation should not be awardable by an Employment Tribunal for the loss of value of insurance cover, and I noted that it was comparable to the kinds of awards which were made to Claimants (other than the wife of the deceased’s former employee) in Auty..” [a reference to Auty v National Coal Board [1985] 1WLR 784 CA]. .. “Given those factors it might be thought that a sum comparable to the sum awarded for the loss of statutory rights could be awarded to the deceased Claimant here. The fact that the loss was suffered only for a month before he died could be ignored, since the sum of “typically” £350 is a rough and ready sum which is not varied according to the length of time an unfairly dismissed employee is out of work after the dismissal.”
Submissions
5. Both Mr Coghlin for the Claimant and Mr Nawbatt for the Respondent produced impressive, well argued and well researched arguments in support of their respective positions. Mr Coghlin, for his part, argued that the Judge was in error in not recognising that there was a real loss to the Claimant, which was more than a loss of comfort, the value of which (there being no room for mitigation to have occurred given the speed at which death ensued following dismissal) was equivalent to the sum which would have been paid upon his death.
6. Mr Nawbatt emphasised that the only loss which the Tribunal could consider was a loss to the Claimant. He characterised the Claimant’s argument as depending upon a loss to the beneficiaries. The Law Reform (Miscellaneous Provisions) Act 1934 provides by section 1 (2):
“where a cause of action survives … for the benefit of the estate of a deceased person, the damages recoverable for the benefit of the estate of that person
(a) shall not include -
(i) …
(ii) Any damages for loss of income in respect of any period after that person’s death.”
He maintained that (a) this Act applied, and (b) created an obstacle insuperable by the Claimant since a lump sum death in benefit payment was “.. loss of income in respect of any period after .. death”. Loss of a death in service benefit was not a loss to Gary Fox, but to those others who would not benefit from it as they otherwise would have done. In Rose v Ford [1937] AC 826 Lord Atkin had pointed out (834): “There seems to me to be a substantial distinction between damages awarded to the living because life is shortened, and damages to a third person, because of some other person’s death.” Lord Wright in his speech (842C) had referred to insurance money falling due on death as irrelevant to the question what damages survived under the 1934 Act “ ..because the dead man could (not) have collected such gains …”
7. He argued that the way in which a claim in Auty in respect of benefits payable on death in service had been dealt with was instructive. The case concerned four claimants asserting pension loss under the Mine Workers Pension Scheme in consequence of an accident which had in the cases of three plaintiffs foreshortened their working lives in the pits, and in the fourth had resulted in the death of the mine worker. Under the Scheme, if a member died in service his widow would receive two thirds of the pension which would have been payable if the worker had retired on the ground of incapacity at the date of his death. She would also receive a lump sum. In the case of Mr Auty, who was aged 34 with a 34 year old wife, the calculation was set out in tabular form at page 790 of the Weekly Law Reports. The Judge at first instance had come to a figure for total loss of annually recurring pension as from age 65, taken together with the lump sum payable on retirement, of £800, to which he added £200 “for the chance of a widow’s pension payable on death in service.” An older mine worker, Mr Mills (he was 48, his wife 44), had a loss of prospectively payable pension and pension lump sum calculated at the rather higher sum of £3,046, but with a commensurately lower sum for the chance of a widow’s pension payable on death in service of £150. The third live claimant, Rogers, was 48 and his wife 46: his pension loss was £1,500, and the chance of widow’s pension payable on death in service £150. On (unsuccessful) appeal against those figures it was submitted by leading counsel for the workers that the figure for death in service was too low. Purchas LJ recorded counsel’s submission as being that the proper measure of damage would be the cost of obtaining insurance cover to meet the shortfall in prospect of the pensions available to the widows. He commented, in a passage upon which Mr Nawbatt placed heavy reliance:
“With respect to Mr Mortimer this submission has a clear fallacy in it, namely, that it is buying the damage suffered in fact by the widow, whereas the injury in respect of which damages can be awarded is that suffered by the Plaintiff. In effect the only loss recoverable is the loss of opportunity to continue to provide a higher widow’s pension in either event.”
He added (812 C – E):
“The Judge came to the conclusion:
‘in one sense the loss can only arise on death, but the Plaintiffs, as a consequence of the tort, have lost the right to contribute to the same extent from their wages in order to confer a benefit in the event of them pre-deceasing their wives. Is that loss recoverable by the plaintiffs and, if so, how is it to be valued? I think that the plaintiffs are able to recover damages for this consequence of the tort. After all, the rights under the scheme attach to the member.’
With respect, I agree entirely with the judge’s approach to this problem. The value of the right to contribute to an enhanced widow’s pension is not susceptible to any mathematical computation and must be one of impression. In my judgment the judge approached this head of damage in a perfectly proper manner.”
8. I have summarised the essence of the submissions of the parties. Further detail of them is appropriate. Mr Coghlin developed his argument in four stages. First, he accepted that the loss recoverable must be a loss to the deceased which would have been recoverable by him; on this essential starting point he was in agreement with Mr Nawbatt. Second, he submitted that where the equivalent of an insurance benefit was lost a real and valuable benefit had been lost – that of not being able to provide actual security for the employee’s family and beneficiaries. Third, the value of that loss to an employee was not fixed and immutable, but depended upon the circumstances of the case. Here, the court had to approach the valuation of the loss knowing what had happened: he had actually died, shortly after losing the contractual right to the benefit. Why, he asked rhetorically, quoting a phrase of Lord Bingham, should the court “be required to use a crystal ball when it can read the history book”? He relied, in support of this point on Golden Strait Corporation v Nippon Yusen Kubishika Kaisha [2007] UKHL 12; 2 AC 353 (a case of contract). Fourth, the rule of the law to be applied by the Tribunal is that full and fair compensation should be provided – in the circumstances of this case there is no relevant distinction between damages to be awarded in respect of disability discrimination, and the compensation which is just and equitable under section 123 of the Employment Rights Act 1996.
9. In developing his theme that, although he could not personally expect to enjoy the money paid as death in service benefit, the contractual right to it was something of real significance for Gary Fox, Mr Coghlin drew heavily on Pickett v British Rail Engineering [1980] AC 136 for two particular propositions – first, that the deprivation of an ability to make provision for beneficiaries is a real loss to a claimant; and second, it is not just a matter of emotion (whether viewed as comfort to the claimant by having the right to the benefit, or distress at losing it, as the judge here thought) but of real monetary value.
Discussion
10. Much of this case seems to me capable of simple expression and resolution. Whilst employed, the Claimant had the entitlement to a benefit. When he was dismissed, he lost that contractual right, since he was no longer in service. There was thus a loss, which was his loss, of the entitlement to have a sum paid to others on his death. There can be no doubt that that is a real benefit: he contracted for it as such. Tudor Evans J saw it that way in Auty, in the last two sentences of the passage quoted with approval by Purchas LJ in the Court of Appeal: damages should be recoverable for, “after all, the rights under the scheme attached to the member”.
11. In employment, benefits beyond the payment of salary are frequently highly valued, and subject of negotiation. If having death in service benefit is prized, as it is, its loss is one of substance and not merely of emotional significance.
12. Accordingly, any idea that there is simply no loss here because the deceased will by definition not be alive to enjoy it, or, as Mr Nawbatt puts it, because the sum is payable after death, must be rejected.
13. Further and separately, the point that an employee can never himself enjoy the benefit of money paid as his death in service benefit does not have the consequence that a loss of the right to require that such a benefit should be paid should not be regarded as a real loss. The logically decisive point arose in Pickett.
14. The central issue in Pickett was whether a live plaintiff could recover damages for earnings which he would never receive, because his life had been foreshortened, though he would have received them if his normal expectation of life had materialised. The House agreed by a majority (Lord Russell of Killowen dissenting) that he could. It had been argued before their Lordships (see 142 A-C) that any award in respect of loss of earnings during the “lost years” must cease with life because on death the legitimate purpose of the award would end; that there was no loss. It was this argument which was rejected. Lord Wilberforce (149 A) paraphrased the argument as being that nothing was of value except to a man who was there to spend or save it. As to that he asked:-
“But is (this) reasoning acceptable? Does it not ignore the fact that a particular man, in good health, and sound earning, has in these two things an asset of present value quite separate and distinct from the expectation of life which every man possesses? Compare him with a man in poor health and out of a job, is he not, and not only in the immediate present, a richer man? Is he not entitled to say, at one moment I am a man with existing capability to earn well for 14 years: the next moment I can only earn less well for one year? And why should he be compensated only for the immediate reduction in his earnings and not for the loss for the whole period for which he has been deprived of his ability to earn them? To the argument that “they are of no value because you will not be there to enjoy them” can he not reply “yes they are: what is of value to me is not only my opportunity to spend them enjoyably, but to use such part of them as I do not need for my dependence, or for other persons or causes which I wish to support. If I cannot do this, I have been deprived of something on which a value - a present value - can be placed”?
15. At 149G Lord Wilberforce disposed of a second argument that had been addressed to the house. He said this:-
“The respondent, in an impressive argument, urged upon us that the real loss in such cases as the present was to the victim’s dependents and that the right way in which to compensate them was to change the law.. so as to enable the dependents to recover their loss independently of any action by the victim. There is much force in this, and no doubt the law could be changed in this way. But I think that the argument fails because it does not take account, as in an action for damages account must be taken, of the interest of the victim. Future earnings are of value to him in order that he may satisfy legitimate desires, but these may not correspond with the allocation which the law makes of money recovered by dependents on account of his loss. He may wish to benefit some dependents more than, or to the exclusion of, others – this (subject to family inheritance legislation) he is entitled to do. …”
16. This reasoning was further supported by the authority of the High Court of Australia in Skelton v Collins 115 C.L.R. 94, a view which Lord Salmon shared (see 158 D - G): Windeyer J said in that case as a matter of principle that “The next rule that, as I see the matter, flows from the principle of compensation is that anything having a money value which the plaintiff has lost should be made good in money.”
17. In the present case, Gary Fox had something of value to him a moment before he was dismissed; a moment after he was dismissed he no longer had that asset. The principles in Pickett show that as a matter of common law, and subject to statute, this is to be treated as a real loss; and it is a loss of something upon which a value in money terms can be placed. The loss is not simply to be regarded as that of the dependents. The dependents did not contract for the death in service benefit, even though they might have had a reasonable expectation that they would profit if there were any payment of it. They had no right to it, save for a contingent expectation. But that is no reason for denying compensation to him who had the asset of value, and lost it: Gary Fox, the deceased, in whose shoes the Claimant stands if entitled to bring the claim. The statements of principle in Pickett seem to me consistent, too, with a conclusion that it is the value to the deceased, at the point of loss, which has to be assessed.
18. Before turning to matters of valuation, however, there is the question whether statute requires the argument in principle based upon the common law to be rejected. Here, Mr Nawbatt’s case in respect of the effect of the Law Reform (Miscellaneous Provisions) Act 1934 must be considered. The history leading to the enactment of the amendment to section 1 of the Law Reform (Miscellaneous) Provisions Act 1934, upon which he relies, is important. Potential legislation had been spoken of by Lord Wilberforce in the passage I have cited. That became a reality following the decision of Gammell v Wilson and others [1982] AC 27, HL. Whereas the action was brought in Pickett’s case by executors because Pickett had died following the hearing at first instance, in Gammell’s case the deceased did not survive even to commence an action. He was 15 when killed in a road traffic accident. He had no established earning capacity nor settled pattern of life. Though recognising that the courts were obliged to assess nonetheless what his earnings would probably have been during the “lost years” in order to compensate him under that head of loss, Lords Fraser and Diplock regarded the result as neither sensible nor just. Legislation followed. Section 1(2) of the 1934 Act was amended to read as it now does. The effect of it is that where someone dies, the damages recoverable for the benefit of their estate may not include “any damages for loss of income in respect of any period after that person’s death”. Thus, today, a “lost years” claim may be brought by a living plaintiff, where his expectation of life has been foreshortened; but may not be brought in respect of the victim of a tort where the victim has died. Here, submits Mr Nawbatt, the product of a death in service benefit is “loss of income”. Since death is a necessary precondition for payment, the estate cannot recover it. He commented that it would be very odd if the Act precluded the recovery of earnings in the “lost years”, which the claimant would have received had he lived, but enabled the recovery of lump sums which the deceased would never have received during his living years.
19. Neither party asked me to look at Hansard to understand the precise scope of the amendment which introduced section 1(2)(a)(ii) of the 1934 Act as it now stands. The vice which led to its introduction was the payment, to someone who was dead, of his putative earnings during the “lost years”. The whole expression “loss of income in respect of any period after that person’s death” suggests two linguistic features which are typical of earnings, but atypical of contractual entitlements which mature at a particular event: first, “income”, a word ordinarily used in contradistinction to capital; and second “in respect of any period”, which suggests both a periodic loss, and a sum which is calculated by reference to a period of time after death. A death in service benefit is more akin to capital than it is to income; and it is certainly not paid in respect of “any period after that person’s death”. It is paid in respect of death itself. It is payable in respect of an event, not a period of time. The loss cannot be said to be a periodic one.
20. The natural meaning of the words thus leads to the conclusion that a lump sum death in benefit payment is not excluded by section 1(2)(a)(ii). Moreover, there seem sound reasons in policy why this should be so. If it were otherwise, then a contractual right of the deceased to a death in service benefit could never lead to a successful action for its non-payment – for the cause of action (whether in contract or in tort) would survive the death under section (1) only to be excluded by section 1(2)(1)(ii). The very purpose of having the right to such a benefit is that there is a certainty of it being paid (or at least giving rise to an enforceable debt) upon death. The intention of the draftsman is to be taken to exclude loss of earnings, or sums in the nature of earnings, which would otherwise have been awardable in cases such as Gammell v Wilson. It should not be taken to have a wider scope.
21. During the hearing, a question arose whether the right to claim compensation in respect of unfair dismissal could properly be said to be “a cause of action”: it was only the latter to which the provisions of the 1934 Act would apply. The parties were invited to provide written submissions on the point after due consideration. It is sufficient to record that Mr Coghlin accepted that unfair dismissal was a “cause of action” caught by the Act. He argued however that the right to continue a claim in respect of unfair dismissal despite the death of the erstwhile employee was conferred by s.206 Employment Rights Act independently of the 1934 statute.
22. Section 206 provides, so far as material:
“(2) This section …. app(lies) to –
(a) Part 1, so far as it relates to itemised pay statements;
(b) Part 111
(c) Part V
(d) Part VI, apart from sections 58 to 60
(e) Parts VII and VIII
(f) In Part IX, sections 92 and 93, and
(g) Parts X to XII
3) Where an employee has died, any tribunal proceedings arising under any of the provisions of this Act to which this section applies may be instituted or continued by a personal representative of the deceased employee….”
23. Mr Coghlin’s argument is that some of the Parts of the Act to which the section applies create rights which cannot be said to be causes in action: Stuart-Smith LJ said as much at paragraph 22 of Harris (Representative of Andrews) v Lewisham and Guy’s Mental Health NHS Trust [2000] IRLR 320, CA, where the right to be given a pay statement was mentioned as one such right. Given the definition of “cause of action” accepted in that case as “a factual situation the existence of which entitles one person to obtain from the court a remedy against another person” this statement seems a little surprising, since not being provided with such a statement might be thought to be a factual situation, and appears to give rise to proceedings under s.11 and a remedy under s.12, such that any decision must depend entirely upon the necessary facts being proved so as to show entitlement to the right, but I am prepared to accept it loyally nonetheless. Accordingly, so the argument goes, s.206 must provide for a free standing code.
24. I cannot accept this argument. Section 206 is directed to giving title to bring proceedings, and not to the scope of the damages that might be claimed therein. The 1934 Act provides for that (where there is something which is recognisably a cause of action). A claim for unfair dismissal is such, as is a claim for compensation for discrimination. The scope of recovery in either case is limited by the restriction placed in respect of future loss in the 1934 Act.
25. Further and separately, Mr Nawbatt points out that a consequence of the acceptance of Mr Coghlin’s submissions (that section 206 applied to unfair dismissals as a free-standing code separate from the attentions of the 1934 Act) would be that whereas a claim for death-in-service benefit in a claim for discrimination would be subject to the 1934 Act, in a claim for unfair dismissal it would not be. This would create an undesirable anomaly. In Harris v Lewisham and Guy’s at paragraph 30(9), Mummery LJ rejected the idea that different rules should apply to claims for compensation post-death as between unfair and wrongful dismissals on the one hand, and discrimination claims on the other. I accept this point.
26. However, in this case, for the reasons I have expressed above, the restriction on recoveries imposed by the 1934 Act does not prevent the recovery of a sum in respect of the non-payment after (or on) death of death-in-service benefit.
27. Gary Fox thus suffered a loss of a benefit which was a real benefit to him, as held by Tudor Evans J in Auty at first instance – the last two sentences of the citation Purchas LJ made from his judgment (see paragraphs 7 and 10 above) sum it up.
28. Employment Judge Hyams did not in his judgment address any argument to the effect that the 1934 Act precluded any award of compensation. He concluded, rather, that his decision was consistent with that Act, which was making a rather different point. The Notice of Appeal merely resists the appeal on the grounds relied upon by the Employment Tribunal for making its decision. It does not suggest that the judge was in error in the way he applied the 1934 Act. Accordingly, it might be thought that even if I had accepted the correctness of the argument (which I do not, for the reasons already given) the entitlement of Mr Nawbatt to rely upon it would remain to be established: However, this would be unfair to the Respondent: the Appellant did not object to the argument, since the arguments were responsive to the reliance by the Appellant on the cases of Pickett and Gammell (to which the attention of the parties had been drawn by the court prior to the hearing) and deserve to be resolved on their merit and not on any procedural technicality.
Value of the Loss
29. In principle, valuation of what is a real loss to an individual should rarely create a problem. The principle upon which compensation should be paid is that such a sum should be paid as will as nearly as possible put the party who has suffered the wrong in the same position as he would have been if he had not sustained it (see e.g. per Lord Blackburn in Livingston v Rawyards Coal Company (1880) App Cas 25). Proper compensation in any case where there has been a loss of death in service benefit will be that sum which, when paid, will secure payment on death in the sum which it was agreed should be payable in the event of death. Usually, this will be the cost to the claimant of the insurance premium for a policy which will as nearly as possible provide the payment to which the wrong done to him has denied entitlement. That premium is bound to vary with the circumstances. If, for instance, it were known that a claimant suffered from an incurable disease likely to lead in the short term to his demise, the premium would inevitably be much higher than it would be for someone in the prime of health, and young, so that both medically and statistically he would be thought likely to survive the likely term of any policy; or, again, for someone with only a week to go before retirement, for whom the premium would only cover the risk of death during the period of that week, rather than be at an annual, and recurring, charge.
30. Accordingly, the sum which should have been payable to the estate of Gary Fox was the equivalent to that which in the circumstances would have been paid to secure that a death in benefit payment of some £85,000 was payable upon his death within the three weeks following his dismissal.
31. It must follow from these considerations that the judge was not only in error in concluding that the loss was that of dependents/beneficiaries, and not that of the Claimant (insofar as he based his decision on that proposition). He was also in error in concluding that the loss was merely “the loss of comfort of knowing that his relatives would receive a lump sum insurance payment on his death”. As Lord Wilberforce’s comments observe in the analogous context of Pickett, the loss was more than that. It was a real loss, of substance to the employee. It was, as Windeyer J would say, something which had a money value.
32. The judge did, it would appear from paragraph 42, find that there was some loss, but taking the approach that he did (that the real loss was that of relatives, and the deceased’s loss only that of comfort) chose a sum to compensate for that which would not vary from case to case whatever the circumstances. Since the loss per individual will vary depending upon that individual’s circumstances (see above) he was wrong to do so.
33. The judge did not determine what the value actually was. Here, Mr Coghlin submitted that the court could read the book, and did not have to look at the crystal ball (adapting the words of Lord Bingham): it would not be assessing the premium for an otherwise fit man of 44, or the premium for a man with a severe back condition aged 44, payable to secure life cover in a sum of excess of £85,000 for a term expiring at the hypothetical conclusion of the man’s working life. It would be dealing with the cost of providing for a benefit which, as the court now knows, would have to be paid within the next 25 days. It is inconceivable that the cost of providing for payment of a lump sum known to be due within a period as short as that would have been any less than the sum itself. Prima facie, therefore, Mr Coghlin argued the sum required to put the Claimant into the position in which he would have been had the principle of full compensation been applied would be no less than the £85,000 or so to which three times his annual salary amounted. Prima facie, that was the loss.
34. I accept this argument, in the present case. This is heavily influenced by the particular facts of the case itself. No argument as to mitigation of loss was advanced: Mr Coghlin argued that the factual findings of the Employment Judge effectively precluded it (paragraph 27). The contrary was not argued. It is likely to be a rare case in which there is no reasonable opportunity for a victim of unfair dismissal or tortious wrong to effect a policy of life insurance between dismissal and death. In any case, one would expect arguments as to mitigating loss to arise and to be critical in establishing the amount of compensation. But that is not this case where, almost certainly unusually, the Claimant has died soon after dismissal, with the circumstances of his last three weeks of life involving serious medical treatment, albeit that he was expected to survive.
Conclusion on the Appeal
35. The appeal itself must be allowed. The judge was in error. The Appellant is entitled to compensation for the real loss of death in service benefit, which in the circumstances would have been of a value to him no less than its prospective value in payment upon his impending death.
36. Whether the compensation would actually be payable, however, as compensation for unfair dismissal depends on the cross-appeal. This cross-appeal relates only to the claim for unfair dismissal: not to that for disability discrimination.
The Cross-Appeal
37. The Respondent argued that the originating application was out of time. Although a form was lodged on 11 December 2010 (in time) there was no right to bring it, and it was a nullity. That was because the deceased, plainly, could not bring the claim himself: it could only be brought on his estate’s or dependents’ behalf by someone properly authorised to do so. At the time of lodging the form, no one was. Section 206 (3) of the Employment Rights Act 1996 (see above) provides that proceedings may be instituted by a personal representative of the deceased employee: an executor, or administrator. In the case of an executor, his title as such, being granted by the will, dates from death. But in the case of a personal representative, a grant of letters of administration is needed first.
38. Mr Nawbatt relied upon a trilogy of cases. In Ingall v Moran [1944] KB160, C.A. a plaintiff issued a writ in an action under the Law Reform (Miscellaneous Provisions) Act 1934, claiming to sue in a representative capacity as administrator of his son’s estate, but he did not take out letters of administration until nearly two months after the date of the writ. The Court of Appeal held (contrary to the view which the County Court Judge had taken) that the action was incompetent at the date of its inception by issue of the writ, and that the subsequent grant of letters of administration did not retrospectively validate the proceedings. The action had been one for damages for the death of a son by the admitted negligence of the tortfeasor. Scott LJ said:
“The cause of action arose and was vested in the deceased lad, at the moment when he was injured, and the measure of his damages included fair compensation for such loss of expectation of life as was caused to him by the defendant’s tort. That chose in action was his. To it the Common Law Maxium ‘actio personalis moritur cum persona’..” [a personal action dies with the death of the person] “..would have applied on his death but for the Act of 1934 which caused it to survive. If he had left a will, it would at the moment of his death automatically have vested in his executor. As he died intestate, it vested in the President of the Probate, Divorce and Admiralty Division and remained in him until letters of administration were issued. Then – and not before – it would automatically pass from the President to the administrator.”
The case is notable for its comprehensive review of previous authority.
39. In Finnegan v Cementation Co. Ltd. [1953] 1QB 688, C.A., the widow of a workman who died in January 1952, as a result of an accident suffered whilst in the employment of Cementation, obtained a grant of letters of administration of his estate in Ireland, but did not obtain a grant of administration in England. She issued a writ claiming as administratrix of the estate of her husband in June 1952; but in February 1953 the defendants issued a summons seeking to strike out the proceedings on the ground that the plaintiff had no title to bring them. It was held that the fact she had obtained letters of administration in Ireland did not constitute her an administratrix for the purposes of suing under the Fatal Accidents Act 1846 in England, and she was therefore not entitled to sue. The writ had to be set aside.
40. The third case may be thought more modern: Millburn- Snell and Others v Evans [2011] EWCA Civ 577; [2012] 1 WLR 41. The claimants, purportedly acting as the personal representatives of the deceased, claimed entitlement to a 50% beneficial interest in a property and riding school business carried on at premises which had been owned by the defendant. The defendant sought to strike out the claim. Rule 19.8 of the CPR provided that where a person who had an interest in a claim had died, and had no personal representative, the court might order the claim to proceed in the absence of a person representing the estate of the deceased, or might order a person to be appointed to represent the estate of the deceased. Unless those provisions of the CPR made a significant difference to the previous common law as set out in Ingall v Moran, the proceedings would have to be struck out. Rimer LJ said (paragraph 26):-
“I regard it as clear law, at least since Ingall’s case that an action commenced by a Claimant purportedly as an administrator, when the Claimant does not have that capacity, is a nullity.”
He went on to say at (paragraph 29):
“What (Ingall v Moran) decided, by a decision binding upon us, is that a claim purportedly brought on behalf of an intestate estate by a Claimant without a grant is an incurable nullity.”
41. Lord Neuberger of Abbotsbury MR agreed, commenting (paragraph 41):-
“Arguments such as that which the Defendant successfully raised before the Judge in this case are never very attractive, and one of the purposes of the CPR is to rid the law of unnecessary technical procedural rules which can operate as traps for litigants. However, whatever one’s views of the value of the principles applied and approved in Ingall v Moran it is a well established principle, and, once one concludes that it has not been abrogated by CPR rule 19.8, it was the Judge’s duty to follow it, as it is the duty of this court, at least in the absence of any powerful contrary reason. The need for consistency, clarity and adherence to the established principles is much greater than the avoidance of technical rule, particularly one which has a discernable purpose, namely to ensure that an action is brought by an appropriate Claimant.”
42. Section 206 of the Employment Rights Act 1996 provides:
“(4) If there is no person or representative of a deceased employee, any Tribunal proceedings arising under the provisions of this Act to which this section applies may be instituted or continued on behalf of the state of the deceased employee by any appropriate person appointed by the Employment Tribunal.
(5) In sub-section (4) ‘appropriate person’ means a person who is – (a) authorized by the employee before his death to act in connection with the proceedings, or (b) a widow or widower, surviving civil partner, child, parent or brother or sister of the deceased employee …”
Here, therefore the first question for the Tribunal Judge to determine was whether the ET1 of 11 December 2010 was validly filed, given that the Tribunal had never determined the Claimant’s father’s application, made in the ET1 itself, to be appointed under section 206 (4) as his representative. If not validly filed, the second issue was whether the ET1 could be validated retrospectively.
43. He concluded that there was no good reason of policy to indicate that a claim could not validly be made before the appointment; that the only good reason for applying the ratio of Millburn - Snell to Section 206 of the 1996 Act was consistency; and that section 206:
“provides for a much more limited set of persons who may be appointed under Section 206 (4) than those who may be granted letters of administration in relation to the estate of a deceased person: Section 206 (5)(b) specifies only certain close members of the deceased family.”
He added:
“Furthermore, a claim of unfair dismissal falls to be determined in this regard by reference solely to the statutory framework, and not the Common Law (this much was recognised by Stuart-Smith LJ in Harris v Lewisham and Guys Mental Health NHS Trust [200] IRLR 320, (at paragraphs 22 – 24) In addition, Industrial Tribunals … were originally intended to provide an informal forum for the resolution of work place disputes (and it appeared that Parliament’s intention in this regard remained the same currently) …. thus, given Parliament’s encouragement to employers and employees not to use lawyers, in my view, unless there was any good reason to the contrary, Section 206 of the ERA 1996 has to be interpreted as enabling a deceased person’s close relative of the sort stated in Section 206 (5) (b) to apply for his or her appointment under Section 206 (4) in an ET1 in which the claim which was intended to be made was also stated, and as having the effect that once an Employment Tribunal made the appointment, the claim would be regarded as having been instituted (or, possibly, ‘continued’: the word used in Section 206 (4) after ‘instituted or’) by the appointed representative.”
44. He rejected the argument that Parliament must have intended a claim to be instituted validly in order to avoid the possibility of several persons of the sorts mentioned in section 206 (5) (b) fighting each other to present a claim on behalf of the deceased, as being contemplating a situation unlikely ever to arise, but if it did there was still no reason in that not to validate proceedings retrospectively.
45. The Judge recognised that the construction he favoured was purposive. There was no room, though, for any interpretation of the provisions before him other than a literal one. However (paragraph 19):-
“I could not see why an application for an appointment under Section 206(4) could not be made in same ET1 as that in which the claim was stated, and if that was so then if the application to be appointed under Section 206 (4) was successful, then it would be nonsensical to suggest that the claim made in the ET1 was not validly made. Accordingly, as a matter of simple statutory construction, making sense of the statutory framework as well as I could, I concluded that once an application for an appointment under Section 206 (4) of the ERA 1996 was granted, the claim made in the ET1 would be validly made. However, if the application for an appointment was considered only after the expiry time limit of 3 months, then the claim made in the ET1 in question could be said to have been filed out of time.
20. Yet even the latter proposition made no sense to me. Why, after all, should the date when an application, made in an ET1, for an appointment under Section 206 (4) of the ERA 1996 was granted affect the manner in which the Tribunal was to regard the time (i.e. the date) when a claim of (for example) unfair dismissal made in the ET1 was filed? I noted that it was only where a Claimant died before rather than after a claim was made that this problem would arise, and that the shortness of the limitation period for making most claims of the sorts referred to in Section 206 (2) of the ERA 1996 meant that there was a good practical justification for a different approach to such claims from that which was taken in relation to claims in tort.
21. I therefore concluded that if I granted the application made in the first ET1 to be appointed under Section 206 (2) of the ERA 1996, then the claim of unfair dismissal made in that ET1 was to be regarded as having been filed on the date when the first ET1 was in fact filed. If there was a difference in the regimes relating to claims within Section 206 (2) of the ERA 1996 and claims of unlawful discrimination, then that difference was catered for by the existence of the different regime relating to the grant of extensions of time for the making of claims of such discrimination.”
Submissions
46. Mr Nawbatt argued that section 206 (4) does not provide for any appointment of an appropriate person to have retrospective effect. There is no provision which permits an application to an Employment Tribunal to be conjoined with an application for the right to make the application to the Tribunal. The claim was not validly instituted. The language of the section is clear.
47. Mr Coghlin argued, however, that it is recognised that an application may be made in a claim for permission to extend time which, if granted, has the effect of conferring jurisdiction retrospectively on the claim although it was brought out of time. Similarly, applications to add a new respondent to a claim take effect as from the date when the claim was first submitted: see Cocking v Sandhurst (Stationers) Ltd and Another [1974] ICR 650. There was nothing in the wording of section 206 of the 1996 Act which required the Judge to adopt the technical approach advocated by the Respondent. An approach which promoted employees’ rights was appropriate for a section which is part of a charter protecting employees’ rights (as Lord Kerr said at paragraph 37 in Gisda Cyf v Barratt [2010] ICR 1475, SC (a case considering the interpretation of section 97 of the 1996 Act):
“Section 97 should be interpreted in its setting. It is part of a charter protecting employees’ rights. An interpretation that promotes those rights as opposed to one which is consonant with traditional contract law principles, is to be preferred.”
48. I cannot agree with the Employment Judge. The arguments of Mr Nawbatt are to be preferred. First, section 206 (4) deals with the institution or continuation of proceedings, in each case by someone who is appointed by the Employment Tribunal for that purpose. The appointment must logically precede the institution of the proceedings. If there is no entitlement to institute proceedings, then any proceedings instituted must be a nullity, subject only to any appointment having retrospective effect. Nothing in section 206 provides for any such retrospectivity.
49. Next, as Lord Neuberger recognised in Millburn-Snell the argument may be one of a technical nature: but the need for consistency, clarity and adherence to established principles is much greater than the avoidance of technical rule, particularly where that rule has a discernable purpose namely to ensure that an action is brought by an appropriate claimant. The principle of coherence and consistency applies no less to the view that proceedings could not retrospectively be validated by the subsequent appointment of a party to a status he did not have at the outset of the proceedings as it does to the conclusion that the proceedings are a nullity at the outset. The Employment Judge recognised (at paragraph 18) that there was no room here for any interpretation other than a literal interpretation, so long as it did not lead to an absurdity or was contrary to the intention of Parliament (neither of which applied in the present case). I agree. Yet he went on to say (paragraph 20) that there was a ‘good practical justification’ for a different approach in employment claims to those in tort. Although abjuring a purposive approach, it appears he was here adopting one. Whether that be so or not, his reasoning (upon the basis he expressly put it) at paragraph 19, namely one of simple statutory construction, was simply wrong for the reasons I have set out above.
50. The concern which the Judge expressed to the effect that the time which it would take to make an appointment under section 206, following the death of the dismissed employee would seriously shorten the period of time within which a claim could be made without an application having to be made for its extension, identifies a real problem, but produces no absurdity. Moreover, if it has the result that in any given case it would reasonably be impracticable for the ET1 to be filed in time – for instance, because the time taken to grant or with-hold the necessary status is outside the claimant’s control, as it will be once he has submitted his application for it – an Employment Tribunal will recognise that fact, and the rule will be that the claim must be brought within a reasonable time after the expiry of 3 months from the date of dismissal.
51. This brings me to those time limits. Section 111 (2) of the Employment Rights Act 1996 provides so far as is material:
“.. an Employment Tribunal shall not consider a complaint under this section unless it is presented to the Tribunal – (a) before the end of the period of three months beginning with the effective date of termination, or (b) within such further period as the Tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of that period of three months.”
52. Two different decisions thus have to be made by an Employment Tribunal. The first is whether it is satisfied that it was not reasonably practicable for the complaint to be presented within three months following the dismissal. If so satisfied, the second is whether it was brought within a reasonable period of time after the end of the three months (and not, it should be emphasised, whether it was not reasonably practicable to bring the complaint within the time that it was brought).
53. The Judge considered no case law in applying the statutory words, and concluding that on the facts it had not been reasonably practicable. The central matters of relevant fact were that although the Tribunal had been asked in the ET1 to make an appointment of the father under section 206 (4) it did not do so within the three month period. Indeed, a judgment in favour of the claim was issued in default of response on 8 February 2011. (By then, as it happened, letters of administration to Gary Fox’s estate had been granted.) The default judgment was set aside on 7 April 2011. By then, it was some seven months after the dismissal. Within a month, duplicate proceedings had been issued to guard effectively against the position that might pertain if the original proceedings were declared a nullity. Even that short period of delay, from April to May, was explained in part by holiday arrangements, and by settlement negotiations.
54. Thus the Tribunal effectively held that the representative bringing the proceedings (the Claimant’s father) would not have known that his application for appointment had not been determined within the first 3 month period. The Judge’s reasoning is at paragraph 50:
“However the Tribunal here had failed to deal with the application for an appointment under Section 206 (4). That meant that it was necessary to ask whether the Claimant’s father was entitled to assume from the fact that the claim had been accepted by the Tribunal that the application under Section 206 (4) had been successful. A lay person was probably not to be expected to divine from the absence of a specific reference to Section 206 (4) that the application made under that Sub-Section had not in fact been determined. Did that mean that in the circumstances it was not reasonably practicable to make the claim within a period of 3 months from the dismissal? In my view it did.”
He then went on to hold that the claim had been begun within a reasonable period thereafter. In doing so he took into account the fact that the time after the 3 months period had elapsed was reasonable “not least because a claim had in fact been made within that 3 month period, so there was no question of there being any prejudice to the Respondent”. This latter observation may have been open to the criticism both that a claim had not been made within the 3 months period validly, and more particularly, that prejudice or its absence is not the touchstone of whether the period time after the 3 months is reasonable, but this was not before me a ground of attack upon the decision. The Judge concluded that it was not unreasonable of the Claimant to wait until the default judgment had been set aside before deciding to make a fresh claim, and that to delay putting in a fresh claim whilst negotiations continued was also reasonable.
55. Mr Nawbatt argues that the Tribunal misdirected itself in law, failed to give adequate reasons for its conclusion, and reached a conclusion which was perverse when it decided that it was not reasonably practicable to bring a valid complaint of unfair dismissal within 3 months. The conclusion that a lay person was probably not to be expected to divine that the application had not been determined is criticised because no direct evidence of what was in the mind of Mr Henry Fox (Gary Fox’s father) was adduced. In any event, he contended, the deceased’s father could have applied for appointment, been appointed and then instituted proceedings within the 3 month period. This latter contention, however, forgets that the appointment is not in the gift of the applicant for appointment, but in the appointor. If a Tribunal simply did not appoint despite an application having been made to it to do so, it is difficult to see what more the applicant should be expected to do. Mr Nawbatt’s skeleton argument suggests this applicant could have chased the Tribunal within that first three months. This I regard as a counsel of perfection. What is practicable is not the test: the word ‘practicable’ is qualified by the very important word ‘reasonably’. It has to be borne in mind that the Tribunal Rules contain no detailed procedure which lays out what might be expected in response to an application for appointment under section 206(4). The argument also places insufficient weight upon the fact that a layman might well have understood (unless he was disabused of the notion) that his claim was in time if it were submitted together with the application for appointment. He could hardly be expected to be familiar with Ingall v Moran, or to have appreciated the niceties of legal reasoning which have lead me to the conclusion I expressed above as to nullity.
56. Mr Nawbatt also argued, on paper, that the Tribunal erred in law by applying a test of reasonableness rather than reasonable practicability. This, in my view, misstates the position. “Reasonable practicability” deals with the first 3 month period. The test is reasonableness (of the continuing delay) thereafter.
57. I accept the argument of Mr Coghlin that the question of reasonable practicability is an issue of fact for the Employment Tribunal (see e.g., Sims Ltd v McKee (UKEAT/0518/05) at paragraph 27, and if higher authority were needed, Wall’s Meat Co Ltd v Khan [1978] IRLR 499, CA), and that the cross appeal on this point attempts to re-argue a question of fact (or, it might be said, one of judgment based upon fact) without identifying any error of law. He points out that the Tribunal was addressed as to the assumptions which the deceased’s father had made, without any objection being taken at the time by Respondent’s counsel (not then Mr Nawbatt) that there was no direct evidence of this. Mr Fox had been present and could have given evidence if any such point had been taken. The Judge was thus entitled to proceed as he did on this point. Moreover, since the Respondent did not take the point below, when it should have been taken, Mr Coghlin argued that it was not entitled now to raise the point for the first time on appeal: although it is not necessary for the decision in this appeal, I consider he was right in this submission too. The procedure before a Tribunal is for the Tribunal itself to determine. Where part of that procedure involves a representative saying what his client would have been entitled to assume, and did assume in the circumstances, then if that is disputed it should be clearly indicated there and then that that is the case; and if any suggestion is to be made that there is no direct evidence of the point such that it could not form part of the material a Tribunal is entitled to consider, it should be made before the Tribunal and not taken for the first time on appeal. It was open to the (represented) Respondent to indicate that the version advanced on behalf of the father could not be accepted without the relevant witness having had his evidence tested by cross-examination.
Conclusion
58. The cross-appeal must be dismissed. Though the Judge was wrong to hold that an application for appointment under section 206 (4) could be made in an ET1, and if granted the ET1 would retrospectively be validated, he was entitled to hold (as he did in the alternative) that it was not reasonably practicable in the circumstances for the deceased’s father to bring a valid claim within 3 months of the dismissal, and that he had brought the claim he did within a reasonable period of time thereafter.
59. The matter was thus properly before the Tribunal. It was thus entitled to proceed to make a determination as to the quantum in respect of the loss of death in service benefit in the claim for unfair dismissal as it would be in the case of the claim for discrimination. It was, for the reasons I have given above, wrong in the conclusion it came to as to the level of compensation in respect of that loss.
60. The appeal will be allowed, and a decision substituted to the effect that the Claimant’s loss (in respect of both his claim for disability discrimination, if proved, and unfair dismissal, if established, and in that case subject to the statutory cap) is the equivalent of 3 years’ pay: a sum in the circumstances of just over £85,000.