United Kingdom Employment Appeal Tribunal

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Cite as: [2012] UKEAT 0050_12_2105, [2012] UKEAT 50_12_2105

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Appeal No. UKEAT/0050/12/DM

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX

At the Tribunal

On 21 May 2012

Before

HIS HONOUR JUDGE HAND QC

MR M CLANCY

MR M WORTHINGTON

TANDEM BARS LTD APPELLANT

MR G PILLONI RESPONDENT

Transcript of Proceedings

JUDGMENT

APPEARANCES

For the Appellant

MR SIMON GOLDBERG

(of Counsel)

Direct Public Access

For the Respondent

No appearance or representation by or on behalf of Respondent

SUMMARY

UNFAIR DISMISSAL - Mitigation of loss

The Employment Tribunal failed to assess whether the steps taken by the Respondent employee were such as would have been taken by a reasonable employee.

Procedural Irregularity

The Employment Tribunal awarded the maximum uplift of 25% pursuant to section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992 as amended without giving the Appellant any opportunity to make submissions on the matter.

In respect of both errors the matter was remitted to the same Employment Tribunal for re-hearing on those points.
HIS HONOUR JUDGE HAND QC

Introduction

1. This is an appeal against the Judgment of an Employment Tribunal, comprising Employment Judge Drake, Mr Brain and Mr Curtis, sitting at North Shields on 23 September 2011. The Employment Tribunal found that the Appellant had unlawfully dismissed the Respondent. The appeal is not against that finding, however, but against the quantum of remedy. Mr Goldberg of counsel has appeared on behalf of the Appellant and made helpful submissions in accordance with his skeleton argument. The Respondent, Mr Pilloni, has not attended, having written to the Tribunal to say that he did not have sufficient funds to travel from Newcastle, but has submitted a skeleton argument, which, in essence, submits that the Tribunal have made a finding of fact, or a series of findings of fact, that are not appealable.

2. He had worked as a waiter and porter for 14 months at the Appellant’s restaurant. The Employment Tribunal calculated his net weekly loss at £174 and awarded loss of earnings to the date of the hearing and future loss of earnings at the same rate for 13 weeks. Together with an award for the loss of statutory rights of £250, the compensatory award thus arrived at was £6,244.40. Additionally, the basic award was £243.75, and so the total was £6,488.15. The Employment Tribunal then applied an uplift of 25 per cent under section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992 as amended, thus increasing the total to £8,111.19. It is against that the present appeal is lodged.

The appeal

3. The grounds of appeal raise two points. The first ground addresses the Employment Tribunal’s assessment of the loss of earnings, and the issue is mitigation of loss. The second point is that the uplift under section 207A was never raised or debated during the hearing.

4. The Employment Tribunal directed itself as to mitigation in a very limited way, Mr Goldberg submits. The matter is first dealt with at paragraph 4, in the first sentence, which reads:

”The respondent also submitted that even if we were not to find this was a fair dismissal, there was a serious question mark hanging over the issue of whether the Claimant mitigated his loss sufficiently.”

5. The factual findings are at paragraphs 5.4 and 5.5 of the Judgment. These read:

“5.4 The claimant lives near (some three miles away from) Rothbury and had some distance to travel to work in Newcastle. He lived at his cousin’s premises and paid a modest rent and no doubt benefited from what the respondent described as a subsidised basis with his cousin. He had worked in a number of restaurant establishments principally in the Newcastle area. During the course of his working history he had worked in a number of establishments in company with or for his cousin, but in many cases not with his cousin. In evidence he affirmed that he would not otherwise have chosen to leave the employ of the respondent because he didn’t wish to continue to live and work on the basis of living with his cousin and then working for him. We accept his evidence on that as he was largely unchallenged, but in any event we found his evidence to be given candidly. We accept it at face value.

5.5 So in the past he had worked in this particular way and he gained his employments at various times largely by personal introduction or personally asking to be employed. It was not in the past his practice to make written applications for employment. This is not perhaps surprising given his limited command of the English language and his continental cultural background as apparent to us in the evidence he has given today.”

6. Then, at paragraphs 5.8 and 5.9, the Tribunal deal with work for the cousin, and that bears more on the issue of whether the dismissal was fair or unfair. Mitigation is dealt with at paragraph 5.11, where the Tribunal say this:

“5.11 We are satisfied that once the claimant was dismissed, he signed on and obtained Job Seekers Allowance. He undertook a search for alternative employment in the manner to which he was accustomed by reason of his past practice by going round restaurants and asking whether they had work of a kind for which he had previously been engaged or work of any kind to do. The claimant undertook immediate job searching and continued to do so up to 10 May 2011 when he underwent surgery following which he resumed job search. We accept that in any event, even if still employed, he would have been absent for legitimate reasons to undertake surgery for varicose veins. During that time he would only have been entitled to statutory sick pay. But had he not been dismissed he would have continued in employment. We have seen no reason and no evidence to suggest that that situation would have changed. That of course significant [sic] when we look at issues relating to remedy.

5.12 We are urged to take the view that in fact the claimant did little or nothing to mitigate his loss. We do not agree. We are satisfied that the claimant did what he had done in the past to find work but that means he had done something, and that he is still so far as yet unemployed. That is an issue which hasn’t been challenged by the respondent. There is unchallenged evidence on the Tribunal’s file of a letter (copied to the respondents) from Mrs Bratton (an employee of the claimant’s cousin) stating that certainly the claimant’s cousin is not employing the claimant at this time. So we are satisfied that the claimant has taken steps to mitigate his loss.”

7. At paragraph 7.6 the Tribunal direct themselves as to the approach to mitigation by reference to a judgment of a division of this Tribunal presided over by the then President, Wood J, in Fyfe v Scientific Furnishings Ltd [1989] ICR 648. The passage that is quoted at paragraph 7.6, in essence, comes from page 650C‑F. The Employment Appeal Tribunal identified that the basis of mitigation is the taking of reasonable steps to obtain alternative employment and that the burden of proving a failure to mitigate is on the employer. The Employment Tribunal go on at paragraph 7.6 to say:

“Having concluded that there is evidence that the claimant has at least attempted to mitigate his loss, we are not satisfied that the respondent has established to our satisfaction on the basis of evidence that he has failed to do so to the extent that we should be minded to reduce his compensation on the basis of failure to mitigate.”

8. Mr Goldberg submits that decision on mitigation is flawed by a misdirection. The Employment Tribunal have looked only at what the Appellant actually did, not as to whether he had taken reasonable steps in order to avoid the loss. The Employment Tribunal have considered what the Respondent did to find work, found it to be consistent with his previous practice, and concluded that amounted to him having mitigated his loss. They conclude that without reminding themselves that reasonableness is the basis of the common‑law doctrine of mitigation, which is introduced into employment law by the provisions of section 123(4) of the Employment Rights Act 1996 in these terms, namely that:

“[…] the Tribunal shall apply the same rule concerning the duty of a person to mitigate his loss (this applies to damages recoverable under the common law of England and Wales […]).”

9. The Tribunal having therefore to decide what steps reasonably ought to have been taken by the Respondent, they have contented themselves with focussing only on what the Respondent actually did. Mr Goldberg submits that is clearly an error.

10. We have not found that such a simple matter as it might at first sight appear to be. The Employment Tribunal have correctly directed themselves at paragraph 7.6 that they should look at what steps have been taken in terms as to whether those are reasonable steps to have taken. Nevertheless, we have come to the conclusion that simply to reiterate what they have found to be the employee’s past practice is not the same as considering that which it was reasonable for the employee to do in the circumstances. The evidence is that Mr Pilloni did go to the Jobcentre, but Mr Goldberg submits that what the Employment Tribunal had to do was to consider whether his attendance there and what he did there was reasonable and whether it was reasonable for him to confine his job search simply to his contacts in respect of restaurants in the local area. It may be that the Tribunal did have that in mind when they decided the matter at paragraph 7.6 by saying that he has at least attempted to mitigate his loss and thus reached the conclusion those were reasonable steps for a person in his situation, but they certainly do not explain why the steps that might usually be expected of a person in that situation, namely to make written job applications and to invoke the assistance of the Jobcentre in finding jobs, are reasonably not undertaken by the Respondent in this case.

11. Accordingly, we have reached the conclusion that there was an error of law in the Employment Tribunal’s Judgment, that there was a misdirection, and that the matter ought to be remitted. We take the view, having regard to the fact that mitigation is essentially a question for a Tribunal at first instance on the evidence before it, that the matter should go back.

12. We will deal with the terms of the remission after we have dealt with the second point. This relates to whether or not the Employment Tribunal have reached a conclusion without offering the Appellant an opportunity to engage through submissions with the proposition that was being advanced. The matter is dealt with very shortly in four lines at paragraph 12, where the Tribunal simply says that there has been “a total and we find unreasonable failure of disciplinary procedure in circumstances where there exists a relevant Code of Practice per ACAS”, and they go on to say:

“[…] the Tribunal is satisfied that it is just and equitable to uplift the total award of compensation by a factor of the maximum extent available to us and thus by 25%.”

13. As Mr Goldberg explains in his skeleton argument, this is a matter upon which the employer would have wished to make submissions; something useful could be said about this matter, in Mr Goldberg’s submission, because it is at least arguable that the uplift should not have been at the maximum, and the Tribunal ought to have heard submissions on why this was not a case where there had been such a condign failure. Mr Goldberg has referred us to two authorities: Launahurst v Lamer [2010] EWCA Civ 334, and in particular to paragraph 19 of the judgment; that simply echoes the earlier stance of this Tribunal in Laurie v Holloway [1994] ICR 32, where, at page 38, this appears:

“[…] where a tribunal is minded to take a point taken by neither of the parties before it, it is of the first importance that the parties should clearly be alerted to that possibility, or as it may be, probability […].”

14. It seems to us that that disposes of any case where a matter is addressed for the first time by an Employment Tribunal in its judgment save for the very clearest of cases. In our judgment, this is not the very clearest of cases, and that is a matter that ought to go back to the Tribunal. It is a matter that requires, we have concluded, no evidence but simply submissions to be made on the evidence as it exists.

15. Mr Goldberg submits, however, that mitigation is a matter that really ought to be dealt with by further evidence being called and by a differently constituted Employment Tribunal. This is, he submits, a case where there is a real danger of there being a second bite of the cherry, in the sense in which that expression is used by Burton J in the well‑known case of Sinclair Roche & Temperley v Heard [2004] IRLR 763 decided by a division of this Tribunal over which he presided. We have given careful consideration to that and to his other point that this is a vitiating error made by the Employment Tribunal. We do not accept that this is a vitiating error. It is a case in which the Tribunal has misdirected itself, but not in such a way that it is either inevitable that the Tribunal will reach the same conclusion when it sees that it ought to consider the reasonableness of what was done by the Respondent, nor do we think that it is a case in which a professional Tribunal cannot reach a different conclusion either on that matter or on the issue of the amount of uplift, if any.

Conclusion

16. Accordingly, this matter will be remitted to the same Tribunal of the same constitution, subject, of course, always to further direction from the Regional Employment Judge should there be any practical difficulties about that. We do not think this is a case where any further evidence should be heard – it can be dealt with on the evidence that already exists – but again, if there is some practical reason why the matter cannot be heard by the same Tribunal, then the Regional Employment Judge may have to give directions about the hearing of further evidence, having regard to the difficulties that might arise if none or only some of the previous members of the Tribunal are available to rehear the issues of mitigation and uplift on remission.