APPEARANCES
| For the Appellant |
MS C E BONE
(The Appellant in Person) |
| For the Respondents |
MS J SHEPHERD
(of Counsel)
Instructed by:
London Borough of Newham
Legal Services
Newham Town Hall
East Ham
London E6 2RP
|
SUMMARY
SEX DISCRIMINATION: Other losses
UNFAIR DISMISSAL: Compensation
Appeal allowed on various issues of calculation of remedy where the Employment Tribunal did not set out the relevant evidence to justify its conclusions.
HIS HONOUR JUDGE BIRTLES
Introduction
- This is an appeal from the judgment of an Employment Tribunal sitting at Stratford on 9 to12 March 2007 and 7 to 8 June 2007. The reserved judgment was sent to the parties on 26 June 2007.
- The judgment under appeal is a judgment on remedy which followed a lengthy hearing on liability before the same Tribunal which resulted in a judgment sent to the parties on 5 January 2007: EAT bundle pages 99-167. That judgment found for the Appellant on various claims of sex discrimination, victimisation, unfair constructive dismissal and sex discrimination by way of the dismissal. There was a subsequent appeal to the Employment Appeal Tribunal and to the Court of Appeal which do not affect this appeal.
- There was also a subsequent judgment on remedy by the same Tribunal in a judgment sent to the parties on 7 August 2008: EAT bundle pages 168-187. There is no appeal against the judgment and it does not affect the present appeal. The present appeal is concerned only with the judgment on remedy sent to the parties on 26 June 2007.
- The Appellant, Ms C E Bone, represented herself and the Respondents were represented by Ms Jude Shepherd of Counsel. We pay tribute to the skill and moderation with which Ms Bone presented her appeal.
The Employment Tribunal Judgment
- It is not necessary for us to set out the facts on liability which were found to be proved by the Employment Tribunal in its decision on liability because the appeal is focussed only on the way the Tribunal approached some of the issues of compensation. There is also a cross-appeal on two of the findings by the Employment Tribunal. In the circumstances it seems to us that the sensible thing to do is to set out the Notice of Appeal and cross-appeal on each of the relevant points argued before us in turn, then set out the Employment Tribunal judgment on that point and finally to give our decision on each point in turn. Before doing so we note that Ground 7 of the Notice of Appeal (injury to feelings) was withdrawn on 12 September 2008; Ground 8 (injury to health) was dismissed on 28 April 2008; Ground 10 (statutory grievance procedure) was dismissed on 28 June 2008 and Ground 11 (preparation time order) was withdrawn on 12 September 2008. Ground 3 of the cross-appeal was withdrawn prior to the hearing.
Ground 1 of the Notice of Appeal and Ground 1 of the cross-appeal
- In paragraphs 4-15 of its judgment the Employment Tribunal considered the Appellant's loss from the effective date of termination of her employment, 25 May 2005, to the date of calculation of remedy, 8 June 2007. In considering the period 25 May 2005 to 31 March 2006 the Tribunal say this at paragraph 6 of its judgment:
"The Tribunal has first of all considered the Claimant's loss for the period 25 May 2005 to 31 March 2006. At the time of the Claimant's employment being terminated, her gross salary at spinal column point 41, inclusive of London weighting was £31,554 a year. Her weekly gross salary was £31,554 ÷ 52 = £606.81 and 44 × that gives a gross salary for 44 weeks of £26,699.54. The Tribunal has to consider what the likelihood is that the Claimant may have been appointed to a PO7 post in July 2004. The Tribunal considers that the Claimant would have applied for one of the two available PO7 posts advertised in 2004 but for the unlawful discrimination. Had she applied, the Tribunal assesses the likelihood she would have been appointed to such a post at 40%."
- The Tribunal then go on to do a financial calculation on the basis of that loss of a chance of promotion to a PO7 post.
- Ms Bone submits that there is simply no reasoning which explains to her how the Tribunal reached its loss of a chance figure of 40% that she would have been appointed to a PO7 post in July 2004. There is nothing in the substantive judgment on liability dated 5 January 2007 or indeed in the subsequent judgment on remedy dated 7 August 2008: see paragraph 26 of that decision EAT bundle page 178.
- We agree with Ms Bone that she is entitled to know the reasons why the Employment Tribunal came to its assessment of a figure of 40%. The passage I have quoted does not comply with the reasoning of Meek v City of Birmingham District Council [1987] IRLR 250.
- The Appellant also appeals under Ground 1 on the basis that the figure of 40% is too low and invites us to substitute a finding that her prospects of the promotion to PO7 in July 2004 were 66% on the basis that there were two posts available and she knew of two internal candidates which (together with her if she had applied) would have made three. The First Respondent cross-appeals on the basis that the assessment of a 40% likelihood that the Claimant would have been appointed to a PO7 post in July 2004 had she applied for that post is a perverse decision and there was no evidence that she would have been appointed that post given that at July 2004 she was only on a grade PO3.
- We are unable to accede to either submission because the material is simply not either in any of the judgments of the Employment Tribunal or in the bundle before us (which runs to some 327 pages).
- The Appellant also appeals on the basis that the Employment Tribunal have erred in law in failing to take account of her potential promotion after July 2004. In other words, the only promotion prospects they looked at were those arising from the PO7 vacancies in July 2004. The Appellant contends that the Employment Tribunal should have looked at her promotion prospects up to say 2012. There is no doubt that these submissions were made to the Employment Tribunal by the Appellant: see paragraphs 44-47 and 133 of her written submissions to the Tribunal: EAT bundle pages 202 and 217. The Respondent submits that the Appellant did not submit to the Tribunal that she would have been promoted beyond PO7. In the light of the written submissions I have referred to, that submission is untenable. The Respondent also submits that the Appellant adduced no evidence at all on this issue; it was not even raised as an assertion in her witness statement, nor was it included in her schedule of loss. We have seen no notes of evidence or the Appellant's witness statement. It is clear to us that such a submission was made and there is nothing in the Employment Tribunal's judgment (or in the later judgment on remedies dated 7 August 2008) which addressed this issue. Having been identified by the Appellant in her written submissions to the Tribunal the Tribunal should have dealt with this issue.
- Our decision on the error of 40% of course runs through other parts of the judgment and in particular paragraphs 7-9, 12, 25-26 and 37-40.
Ground 2: bonus
- At paragraph 12 of its judgment on remedy the Employment Tribunal say this:
"Loss of bonus to date
12. The Tribunal has first of all considered loss of bonus the Claimant would have enjoyed at the London Borough of Newham from 23 May 2005 to 7 June 2007. Bonus is payable twice a year in March and September at a PO 3 salary the Claimant would have anticipated a bonus of £1500 twice a year. There are 4 bonus periods and her loss of bonus at PO 3 level is £6,000. The Tribunal has then added on to that 40% of £2,000 which is the difference in bonus she would have expected to recover at PO 7 level (£5,000 a year). £6,000 plus £1600 is £7,600. The Tribunal has then deducted 27% tax from that figure in the sum of £2,052 giving a net loss of bonus to date of £5,548."
- The Appellant appeals on two points relating to this paragraph of the judgment. The first is that the Tribunal have again taken the 40% figure without any explanation as to how that figure is arrived at. The second point is that there is a missing bonus period in the Tribunal's calculation. Bonus is payable in arrears (there is no dispute about this) and the Tribunal have simply missed out the bonus for the period 31 March 2007 to 8 June 2007. The cross-appeal under Ground 1 of course also relates to the 40% assessment for the bonus.
- We agree with the Appellant. It follows that if the decision in respect of the 40% assessment for loss of earnings for the period 25 May 2005 to 31 March 2006 (and thereafter) is an error of law then it follows that applying the same percentage to the calculation of bonus without giving any reason for how the figure of 40% is arrived at is also an error of law. We also agree with the Appellant that the Tribunal have inadvertently omitted the calculation of the bonus for the period 31 March 2007 to 8 June 2007.
Ground 3: loss of funding of post-graduate study facility
- This issue is dealt with in paragraph 18 of the Employment Tribunal's decision where they say this:
"Loss of funding at post-graduate study facility
18. The Tribunal has carefully considered the submissions of both parties on this matter. The Tribunal is confident that the Claimant would have wished to seek funding to undertake post-graduate study and that the course she wished to undertake was a course which would have been beneficial to her in her on-going employment with the Respondent. The Tribunal has then gone on to consider what is the chance the Respondent would have funded her attendance on such a part time diploma course. The Tribunal considers there is a 20% chance the Respondent would have funded her attendance on such a course. The Tribunal is not satisfied the Respondent made no contribution to courses attended by Mr Abu and Mr Patel. The Tribunal is satisfied the Claimant would have sought funding to attend this course during her employment but for the unlawful discrimination. 20% of £5,400, the sum claimed by the Claimant, for a part time diploma in the College of Estate Management is £1,080."
- The Appellant challenges this finding on the basis that first there is no reasoning as to how the Tribunal reached its figure of 20% and second that the evidence before the Tribunal did not support such a finding. There is a cross-appeal on this ground because the Respondent argues that first the Tribunal were in error in finding there was a 20% likelihood when the figure should have been nothing. In other words, the finding that the figure was 20% was perverse because the evidence before the Tribunal was that funding of courses for employees was not guaranteed; and second that there was no evidence before the Tribunal that the Appellant had since leaving her employment with the Respondent undertaken such a course or intended to do so.
- We agree with the Appellant that there is no explanation as to how the Employment Tribunal reached its figure of 20%. That part of the decision is therefore not Meek compliant. We are not able to agree with the Appellant's second argument or either of the arguments for the Respondent because we simply do not have the evidence before us.
Ground 4: increased travel cost/car depreciation
- The Employment Tribunal deal with this at paragraph 19 of its judgment:
"Travel costs and car depreciation
19. The Tribunal has then considered the Claimant's travel costs and the depreciation in the value of her car and considers that these losses are too remote. The Claimant, of her own accord, purchased a new car. She has a car allowance in her new job. She also has the opportunity of having a car."
- The Appellant told us that shortly before taking up her new employment in the private sector on 26 January 2007 she had purchased a new automatic motor car. The EAT bundle contained a copy of the job offer to the Appellant from Lambert Smith Hampton dated 5 February 2007: EAT bundle page 294-295. The provision as to the company car says this:
"Company Car
The Company will provide a car in accordance with the company's car policy from time to time, subject to you being fully qualified to drive. The Company will pay all running costs of the car, excluding the cost of private petrol, private parking, parking tickets, speeding fines and related costs, and any unrecoverable insurance losses. Alternatively, you may opt to take a monthly car allowance of £370 per month."
- The Appellant's new job was based at offices in Ipswich. She told us (and there is no dispute) that she was required to drive around the county of Essex as part of her employment. While she was employed by the First Respondent she drove from her home in Newham to her office which was a round trip of four miles a day. During the time she was employed in her private sector job in Ipswich she drove a round trip of 60 miles a day simply to get to the office. She does not claim for driving the motor car around Essex in the course of her work.
- We do not understand the Tribunal's reasoning. The Appellant's starting salary in her private sector job was £30,000 per annum: letter from Lambert Smith Hampton 5 February 2007: EAT bundle page 294. The Employment Tribunal have added the monthly car allowance to her basic salary to reach an annual gross salary for £34,440: Tribunal decision paragraph 11: EAT bundle page 5. Although we fully understand that the Appellant purchased a new car of her own volition the Employment Tribunal appeared to have engaged in double counting in adding the car allowance to the Appellant's basic salary but also taking it into account in respect of travel costs and car depreciation. It seems to us that the increased costs of private travel i.e. 60 miles per day instead of 4 miles per day are not too remote and are recoverable in law; they follow as a direct consequence of a constructive unfair dismissal. However we agree with the Employment Tribunal that the Appellant is not entitled to recover the costs of car depreciation because she purchased the car "of her own accord" when she already had an existing motor car albeit not a new one.
Ground 5: future loss of earnings
- In paragraph 26 of its judgment the Employment Tribunal deal with future loss of earnings and bonus for the period April 2008 to 2009 in the following way:
"26. The Tribunal have then considered whether any loss should be awarded for the period April 2008 to March 2009. The Tribunal has assumed that the Claimant would enjoy an increase of her PO 3 salary of 2.5% which together with London weighting would bring it up to £35,870. The Tribunal has then considered the amount by which a PO 7 salary would have increased, namely from £41,652 by 2½% to £42,694 making a difference between the two salaries £6,824. 40% of that is £2,730. The Claimant's annual salary would therefore have risen to £38,600 gross and her net salary would have risen to £28,178. Her weekly salary net would have been £541.88. The Tribunal has then considered what increase in salary the Claimant is likely to enjoy in her new job. The Tribunal has already said that the Claimant was taken on at a very low salary for someone with her qualifications and experience. This reflects her length of time out of the workforce and the circumstances in which she left her previous employment. The Tribunal is confident the Claimant's solid local government experience will stand her in good stead and that she will enjoy at least a 20% increase in salary in 2008 and that her annual net salary will rise by £5,197.20 to £31,183.20. That is a higher net salary than she would enjoy in local government, even after taking into account bonus she might expect to receive in local government for that year of £3,800 gross, £2,774 nett. In the circumstances the Tribunal declines to make any award for future loss of salary beyond 31 March 2008. The Tribunal does, however, award the Claimant the loss of bonus she would have expected to enjoy between 8 June 2007 and 31 March 2008 of $1700 less tax of 27% in the sum of £1,387 nett. That makes a total award for future loss of £2,427.33.
- The Appellant submits that again this decision is not Meek compliant. There is simply no reasoning given as to why the Appellant will "enjoy at least 20% increase in salary in 2008" other than the Tribunal is "confident" that it will be so. We agree. Furthermore, we do not understand the reasoning of the Tribunal, which at the beginning of paragraph 26 asserts that the Appellant would enjoy an increase of her PO3 salary of 2.5 % (together with London weighting) when in the same paragraph they confidently assert that the Appellant will enjoy a 20 % increase in her private sector salary in 2008. There is no reference to any evidence before the Employment Tribunal to substantiate this figure. Furthermore, the Employment Tribunal did not appear to have taken into account the fact that the London weighting allowance which the Appellant was paid during her employment by the first Respondent does not apply to Chelmsford.
Ground 6: pension loss
- The Tribunal deal with this in their judgment at paragraphs 33-42. The material paragraphs are 33-35 and 40. They say this:
"Pension loss
33. The Tribunal has read the booklet 'Compensation for loss of pension rights'. It has also carefully considered the submissions of the Claimant and Respondent as to what approach to take to the Claimant's pension loss. The Claimant has argued in favour of the substantial loss approach. The Respondent says the Tribunal should follow the simplified loss approach. The case does not fall neatly into either category. After careful consideration of all the matters before it, the Tribunal has decided to adopt the simplified loss approach to calculating the Claimant's pension loss. The Tribunal has done this because of the following facts.
34. The Claimant was in a final salary scheme and had made 14 years' contribution into that scheme at the time of her employment ending in May 2005. The Claimant has now found new employment in the private sector which the Tribunal finds will result in her sustaining no future loss of salary after 31 March 2008. The Tribunal anticipates the Claimant will enjoy significant increases in salary in the private sector to reflect her considerable experience in the public sector once she has settled down with her new employer. Over time her period of unemployment and before that on sick pay with the Respondent will no longer be factors working against her.
35. The Claimant is in her new employment receiving contributions of 3% of gross salary towards a money purchase pension scheme. The Tribunal find that it is likely the Claimant will return to local government work within 4 years. As time passes the small world of local government will no longer be one where the Claimant will need to feel her previous experience at Newham will continue to result in prejudice against her. While many local government employees stay in that employment for a considerable period the sound experience the Claimant will over time gain in the private sector alongside her previous experience will make her an attractive recruit. The Claimant enjoyed the life/work balance she experienced in local government and but for what happened the Tribunal finds it extremely likely she would have remained there throughout her working life. The Tribunal does not know for certain whether she will be able to re-join with the benefit of access to a local government final salary scheme. However, the evidence is and the Tribunal finds there will still be good prospects for in-house chartered surveyors in local government at the level the Claimant is likely to be able to re-enter local government, namely at PO 7 and above. While more and more jobs at PO 3 level and below are being undertaken on an agency or consultancy basis, the Tribunal accepts the Claimant's own evidence that jobs at PO 7 and above will continue to be in-house jobs and eligible for local government final salary schemes. In the circumstances the Tribunal finds there is a greater than 50% likelihood the Claimant will return to a local government post with a final salary scheme within four years. In these circumstances and having regard to the increased salary the Tribunal expects her to earn in the meantime in the private sector, the Tribunal has decided to calculate her pension loss on the simplified basis, as set out in the guidelines on compensation for loss of pension rights, 3rd edition. The Tribunal has first of all considered the loss of enhancement of her pension rights.
…
40. The Tribunal has then gone on to consider the Claimant's future loss of pension. The Tribunal has decided to calculate loss of pension for a further 4 years because it considers it will take the Claimant 4 years to consolidate her experience in private practice and to be able to return with confidence to the public sector. She need have no concerns about her previous experience in the public sector affecting her job opportunities and the Tribunal has found that despite the small word of local government and the length of time some members of staff stay in the same place there will be no concerns and the Claimant will be an attractive recruit."
- The Appellant criticises the Employment Tribunal for adopting the simplified approach rather than the substantial loss approach. She refers to the guidance contained in the booklet Compensation for Loss of Pension Rights (third edition 2003) and Orthet v Vince-Cain [2004] EAT/0801/03 (2) at paragraphs 53-56. We note that there is no authority cited to us which appears to have followed that part of the judgment of the Employment Appeal Tribunal which is in any event somewhat brief.
- We find the following difficulties with the Employment Tribunal's reasoning. First it is not clear what the evidential basis was for the Tribunal anticipating "the Claimant will enjoy significant increases in salary in the private sector to reflect her considerable experience in the public sector once she has settled down with her new employer". That ties in with our criticism of the Tribunal's estimate that the Appellant's salary would increase by 20% in 2008. Second, it is not clear on what reasoning the Tribunal found "that it is likely the Claimant will return to local government within 4 years". The reasoning which does follow appears to have much more to do with the Tribunal's assessment of the Appellant's personality rather than any as to her future career prospects.
- While the Employment Tribunal has set out its reasoning in accordance with the guidance given by the Employment Appeal Tribunal in Greenhoff v Barnsley Metropolitan Borough Council [2006] ICR 1514 we are not satisfied that the reasoning of the Employment Tribunal is adequate on the two matters we have mentioned. In addition the Employment Tribunal will need to make a recalculation of the pension loss based upon its fresh findings in relation to the matters under grounds 1-5 which we are remitting to it.
Conclusion
- For these reasons the appeal is allowed. The issue of remedy will be remitted to the same Employment Tribunal for its reconsideration on grounds 1-6 in the light of this judgment.
- We are conscious that this will mean that the same Employment Tribunal will revisit some of the issues in this case for the fourth occasion. However, we see no alternative. We simply do not have the material before us on which we can make any decisions ourselves nor do we think on matters of this nature that we should do so. However, we are conscious of the cost and time involved in the history of this case and we do strongly urge the parties to find an accommodation if that is possible in order to avoid a fourth tribunal hearing.
