Appeal No. UKEAT/0145/13/BA
UKEAT/0267/13/BA
EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON, EC4Y 8JX
At
the Tribunal
On
19 July 2013
Judgment handed down on 22 October 2013
Before
HIS
HONOUR JUDGE DAVID RICHARDSON
BARONESS DRAKE OF SHENE
MR S YEBOAH
MR
MARTIN SYMONDS T/A SYMONDS SOLICITORS APPELLANT
MISS
S REDMOND-ORD RESPONDENT
Transcript of Proceedings
JUDGMENT
SUMMARY
UNFAIR DISMISSAL – Constructive dismissal
The Respondent
employer refused to permit the Claimant employee to return to work at the agreed
date; and the Claimant, after attempting unsuccessfully to pursue a grievance,
resigned. The Tribunal found that she was constructively and unfairly dismissed
and awarded her compensation which included her loss of earnings from the date
at which she should have been permitted to return to work. The Respondent
employer sought to amend the notice of appeal to argue that compensation should
have run only from date of dismissal (see GAB Robins (UK) Limited v
Triggs [2008] ICR 829). In the circumstances permission to amend was
refused; there was no substance in the other point taken on appeal, which
related to the length of the period of compensation; and the appeal was
dismissed.
The Claimant had applied successfully to the Tribunal for a
review to correct errors of calculation in her compensation. The Respondent
employer sought to renew at the review hearing an argument that compensation
should run only from the date of dismissal. The Tribunal refused to entertain
that argument. Held: in the circumstances the Tribunal did not err in
law by refusing to entertain a review on the question.
HIS HONOUR JUDGE DAVID
RICHARDSON
Introduction
1.
By a judgment dated 13 June 2012 the Employment Tribunal sitting in Exeter (Employment Judge Griffiths presiding) found that Miss Stephanie Redmond had been
unfairly dismissed from her employment by Mr Martyn Symonds. The Tribunal
awarded £7,922 by way of compensation. Later the Employment Tribunal held a
review as to the amount of compensation. On review by judgment dated 31
October 2012 the amount of compensation was increased to £11,143.
2.
We have before us appeals by Mr Symonds concerning these two judgments
challenging the amount of compensation. His principal point flows
fundamentally from the decision of the House of Lords in Johnson v Unisys
[1999] ICR 809. This appeal is yet another illustration of the
difficulties to which that decision gives rise.
3.
Although the sums involved are not large, this appeal is the latest
round in what has become lengthy and hard-fought litigation. As we shall see,
the matter has been the subject of a hearing in the Employment Tribunal, an
appeal, remission to a further hearing before the Employment Tribunal, a review
hearing and now this further appeal. There has also been an unsuccessful civil
claim by Mr Symonds which (he told us) is subject to appeal.
The background facts
4.
Mr Symonds was a solicitor and the sole principal of his practice which
was entitled Symonds Solicitors. Miss Redmond was employed by him as a
secretary. The Tribunal found that she was an effective worker and that she
and Mr Symonds worked closely together.
5.
During 2009 Miss Redmond was affected by difficulties in her health and
personal life. She proposed to take a number of months off work and away from
the UK to help her recovery. She took unpaid leave with Mr Symonds’ agreement.
6.
On 16 October 2009 a meeting took place between them so that she could
tell him her plans. There was a dispute as to what occurred at this meeting.
The Tribunal, preferring Miss Redmond’s account, found that the terms of her
unpaid leave were that it would extend until her return from Nepal in February 2010.
7.
On 15 February 2010 Miss Redmond went to see Mr Symonds, taking gifts
from her travels. She informed him that she was ready to return to work. But
Mr Symonds told her that he had employed a secretary in January on a six-month
contract expiring in July and had no space for her. In a conversation a week
or so later he told her that she could not come back to work immediately but
would have to wait until July.
8.
This left Miss Redmond in a difficult position. She was receiving no
income but – still being employed – was not receiving any state benefits. She
raised a formal grievance in a cogent and careful letter dated 16 March. A
month passed. Mr Symonds took no steps to deal with the grievance. Miss
Redmond resigned on 19 April. She claimed constructive dismissal. She found
some temporary work and then permanent work at a comparable (but slightly
lower) salary by 30 November 2010.
The Tribunal proceedings and reasons
9.
In April 2010 Miss Redmond brought a claim of constructive unfair
dismissal. She did not articulate any separate claim for breach of contract or
unpaid wages: she did not, for example, tick the box on the claim form for
“other claims”. However she did say in clear terms that she was seeking
compensation for her loss of earnings “from February 2010”.
10.
The claim was originally heard in October 2010. But it was remitted by
the Employment Appeal Tribunal for rehearing. It came on again before a
freshly constituted Tribunal on 6 and 7 June 2012.
11.
The Tribunal found that Mr Symonds committed breaches of contract by
preventing Miss Redmond from returning to work and by failing to deal with her
grievances. It found that she was entitled to resign in April and had been
unfairly dismissed. Based on a schedule provided by Miss Redmond the Tribunal
calculated her compensation (including a 25% uplift) at £7,922.
12.
Although not expressly stated in the Tribunal’s reasons it can be seen
by reference to the schedule of loss which Miss Redmond produced that the
Tribunal took 22 February as its start date. That was common ground before us
at the hearing of the appeal.
13.
Mr Symonds argued that Miss Redmond’s compensation ought to be limited
to the period up to July 2010, because he had told Miss Redmond that her job
would be available from that time. The Tribunal said:
“The respondent argues that in failing to return to work in July
2010, she has failed to mitigate her loss. We find it was reasonable, in all
the circumstances for her to have accepted the breach of her employment
contract and not to have been prepared to return to work in July. We find that
she has acted reasonably in seeking to mitigate her loss.”
14.
There were significant errors in the calculation of compensation to Miss
Redmond’s disadvantage. The Tribunal directed a review which was held on 31
October 2012. Based on revised calculations which were not, as calculations,
in dispute the Tribunal increased the award to £11,143. Again, although it is
not made explicit, the Tribunal took 22 February as its start date.
15.
At the review hearing the Tribunal recorded a submission by Mr Symonds
that “the date from which actual loss is sustained should be 19 April, when the
claimant resigned and not 22 February when she was unable to return to work”.
The Tribunal said that the issue “was considered and dealt with at the
substantive hearing and was not raised as a matter for this review”.
Civil proceedings
16.
For reasons which will shortly become apparent it is relevant to note
that following the judgment of the Employment Tribunal in this case Mr Symonds
brought a civil claim against Miss Redmond for the return of some £1300 which
he said was the balance of a loan made to her during the employment. Miss
Redmond disputed the claim on the basis that the sum was not a loan but an
emolument of her employment. The claim was dismissed; but Mr Symonds informs
us that the result is currently the subject of an appeal.
End date of loss
17.
Essentially Mr Symonds took two points on this appeal. We can deal
quite shortly with one of the points – a submission that Miss Redmond’s loss
should be limited to the period until July 2010.
18.
Mr Symonds argued that Miss Redmond’s job became open again for her in
July 2010; that she chose not to return to work for him, and that her loss
should be limited to that date. He says it would be unjust and inequitable for
her to be awarded any loss after that date. He relies on section 123(1) of the
Employment Rights Act 1996. He also referred us to the Law Reform
(Contributory Negligence) Act 1945: the closest equivalent in unfair
dismissal law is of course section 123(6) of the 1996 Act. The argument below
seems to have been that Miss Redmond’s loss was limited to the period up to
July 2010 by reason of her failure to mitigate her loss: see section 123(2).
19.
Section 123 of the 1996 Act, so far as relevant, provides –
“(1) Subject to the provisions of this section and sections 124
[124A and 126], the amount of the compensatory award shall be such amount as
the tribunal considers just and equitable in all the circumstances having
regard to the loss sustained by the complainant in consequence of the dismissal
in so far as that loss is attributable to action taken by the employer
.......
(4) In ascertaining the loss referred to in subsection (1) the
tribunal shall apply the same rule concerning the duty of a person to mitigate
his loss as applies to damages recoverable under the common law of England and
Wales or (as the case may be) Scotland.
.........
(6) Where the tribunal finds that the dismissal was to any
extent caused or contributed to by any action of the complainant, it shall
reduce the amount of the compensatory award by such proportion as it considers
just and equitable having regard to that finding.”
20.
In our judgment there is no force in Mr Symonds’ argument on this
point. Miss Redmond had been constructively dismissed by Mr Symonds. On the
Tribunal’s finding she had accepted a repudiatory breach of contract on his
part. By virtue of section 123(1) she was entitled to loss sustained in
consequence of that dismissal in so far as it was just and equitable for that
loss to be awarded. There would be no warrant for imposing a “cut-off” in July
2010 unless she behaved unreasonably in failing to return to work for him.
This is the very question which the Tribunal considered and decided against Mr
Symonds. In the context of this appeal it makes no practical difference
whether the matter was considered under section 123(1), (4) or (6) of the 1996
Act.
21.
In our view the Tribunal committed no error of law. It applied the
correct test and stated a conclusion which cannot possibly be described as
perverse. It would have been helpful if it had added, in a sentence or two, an
explanation of its conclusion, but it is plain from a reading of its reasons as
a whole what the Tribunal thought. Mr Symonds had committed serious breaches
of contract, refusing to allow Miss Redmond to return to work and entirely
failing to deal with her grievance. It cannot sensibly be said that it was
unreasonable for her to decide that she wished to work for someone else.
Start date of loss
22.
Mr Symonds’ other point, although it concerns only a relatively small
sum of money (about £2727) requires fuller consideration.
23.
He argued that loss should run from 19 April, not 22 February. This
point was not taken in the notice of appeal against the original judgment. It
was taken in the notice of appeal against the review judgment. The President,
when directing a full hearing of the appeal against the review judgment, said
that the ground had “an air of legal technicality interfering with delivering
fair justice”.
24.
We drew to Mr Symonds’ attention that the point was not taken in the
notice of appeal against the original judgment. We pointed out to him that
different considerations might apply to the two appeals. We gave him time to
consider his position. He then applied for permission to amend the notice of
appeal against the original judgment to take the point.
25.
We must therefore consider (1) an application for permission to amend
the notice of appeal against the original judgment, and if granted, the way in
which the matter was dealt with in the original judgment and (2) in any event,
the way in which the matter was dealt with on review.
The argument
26.
It is first necessary to state the argument which Mr Symonds seeks to
make. His argument is that (1) the contract terminated only with Miss
Redmond’s resignation on 19 April 2010, (2) loss prior to this date cannot be
awarded as compensation for unfair dismissal – see GAB Robins (UK)
Limited v Triggs [2008] ICR 829, and (3) the Employment Tribunal
therefore erred in law awarding loss from 22 February 2010 in respect of the
claim for unfair dismissal.
27.
In our judgment Mr Symonds’ argument is legally correct. The loss which
can be claimed in respect of a constructive unfair dismissal does not include
loss flowing from wrongs inflicted on an employee by the employer’s conduct
prior to termination for which she has an independent claim for breach of
contract.
28.
In Triggs the employers had conducted themselves in breach
of the implied term of trust and confidence owed to an employee, essentially by
bullying her and imposing an excessive workload upon her. She claimed that
this behaviour had affected her health, by reason of which she had suffered
loss of earnings and earning capacity. She resigned and successfully claimed
that she had been constructively and unfairly dismissed. As part of her loss
in respect of constructive unfair dismissal she claimed the loss of earnings
and earning capacity resulting from the breaches of contract which caused her
to resign. It was held, following and applying the decision of the House of Lords
in Eastwood v Magnox Electric plc [2004] ICR 1064, that she was
not entitled to do so.
29.
It is sufficient to cite the judgment of Rimer LJ at paragraph 34.
“To the question whether Mrs Trigg's reduced earning capacity by
reason of her illness was a loss suffered by her "in consequence of the
dismissal" (section 123), the answer is no. It is correct that the
dismissal was a constructive one, that is that it was the result of, and
followed upon, her acceptance of the employer's antecedent breaches of the
implied term of trust and confidence that had caused her illness and, in turn,
her reduced earning capacity. But it is fallacious to regard those antecedent
breaches as constituting the dismissal. The dismissal was effected purely and
simply by her decision in February 2005 that she wished to discontinue her
employment. On a claim for unfair dismissal, that entitled her to compensation
for whatever loss flowed from that dismissal. But that loss did not include
loss (including future loss) flowing from wrongs already inflicted upon
her by the employer's prior conduct: those losses (including any future lost
income) were not caused by the dismissal. They were caused by the antecedent
breaches of the implied term as to trust and confidence and Mrs Triggs had an
already accrued right to sue for damages in respect of them before the
dismissal. The ET's error in concluding that it was suffered in consequence of
the dismissal was to treat the unfair dismissal claim as, in effect, a claim
for damages for the employer's fundamental breach and repudiation of the
employment contract that Mrs Triggs had accepted by her decision to leave. But
her claim was not such a claim. It was simply a statutory claim for unfair
dismissal.”
30.
The existence of a rigid and sometimes counter-intuitive demarcation
line between what can be claimed for anterior breaches of contract and what can
be claimed in respect of dismissal follows from the decision of the House of
Lords in Johnson v Unisys Limited [1999] ICR 809, applied by the
House of Lords itself in Eastwood and by the Court of Appeal in Triggs.
31.
The difficulties caused by Johnson v Unisys are well
known: see, for example, Lord Nicholls in Eastwood at paragraphs
30-33, where he described the demarcation line as producing “awkward and
unfortunate consequences” and said that it merited “urgent attention by the
Government and the legislature”. In Triggs itself Rimer LJ said
that he had “instinctive sympathy” for the position of Mrs Triggs. Recently
the application of Johnson v Unisys led to sharp divergences of
approach in the Supreme Court: see Edwards v Chesterfield Royal Hospital NHS Trust [2012] ICR 201. It continues to produce strange and
apparently unfair results: see Smith v Trafford Housing Trust [2013] IRLR 86, especially at paragraph 103 (demoted employee was in effect dismissed
and therefore could not claim damages in contract for consequences of
demotion).
32.
Speaking for ourselves, we doubt whether Parliament, when it passed the
unfair dismissal legislation with a power to award compensation on a broad just
and equitable basis, intended consequences such as these: see the criticisms of
Johnson v Unisys in Deakin & Morris, Labour Law (6th
ed) at para 5.43. The law is, however, now well established.
33.
If we were simply to allow the appeal on the ground which Mr Symonds
seeks to argue, Miss Redmond would in our opinion suffer an injustice. As we
have seen Miss Redmond’s claim form included an express claim for compensation
running from February 2010. The whole basis of her claim for constructive
unfair dismissal was an assertion that Mr Symonds was in breach of contract by
failing to employ her between February and April 2010. On the Tribunal’s
findings, Mr Symonds was in breach of contract by failing to employ her between
February and April 2010. Miss Redmond, who is not a lawyer, can be forgiven
for thinking that her claim for constructive unfair dismissal would include
losses caused by the very breaches which gave her the right to resign and make
the claim. Her only remedy would be a claim in the small claims court - yet
another set of proceedings over a very small sum.
Permission to amend the Notice of Appeal
34.
As we have said, the notice of appeal against the original judgment did
not take the point which Mr Symonds now takes. When we pointed this out to him
he applied orally for permission to amend the notice of appeal. Miss Redmond
opposed that application.
35.
The Employment Appeal Tribunal has a wide discretionary power to allow a
Notice of Appeal to be amended. General principles governing the exercise of
this discretion are set out in Kudados v Leggate [2005] ICR 1013
at paragraphs 79-87, especially paragraph 86. We have borne those principles
in mind. Each case, however, turns on its own facts. We will set out below
the considerations which appear to us to be important in this case.
36.
Firstly, we think it is relevant to take into account whether and to
what extent Mr Symonds argued the point at the Tribunal hearing which he now
seeks to argue on appeal. We accept his assertion that he raised with the
Tribunal the question whether loss should begin only from the date of
dismissal: this is borne out by the Tribunal’s own reasons given at the time of
review, which we have already quoted.
37.
Equally, however, it is plain that he did not know of, or cite to the
Tribunal, Triggs or the line of cases leading to Triggs.
If he had done so the Tribunal would have seen the point and explained to Miss
Redmond that her claim in respect of the period from February 2010 to April
2010 had to be put as a claim of breach of contract.
38.
If this point had been appreciated at the hearing below, the Tribunal
would have had power to amend the claim form so that Miss Redmond could make a
breach of contract claim. Jurisdiction to entertain such a claim exists: see
article 3 of the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994. It is true that the time limit for bringing a complaint of
breach of contract had expired (see article 7) but on well established principles
the Tribunal still had power to grant the amendment, especially where as here
the amendment involved putting a new label on facts already pleaded. In our
judgment the arguments in favour of allowing an amendment would have been very
powerful indeed.
39.
Secondly, we think it is relevant to take into account the lateness of
the application for permission to amend. The point did not surface at all
until the notice of appeal against the review decision, and the application to
amend the notice of appeal against the original judgment was only made at the
hearing of this appeal. If the Triggs point had been identified at
the outset of the appeal process Miss Redmond might have raised her breach of
contract claim as a cross claim in the civil proceedings which Mr Symonds
brought. Those proceedings have now been decided, subject only to Mr Symonds’
outstanding appeal.
40.
Thirdly, we think it is relevant to take into account that on the
Tribunal’s findings Miss Redmond is entitled to compensation for the period
from February to April. In substance the Tribunal has heard both sides on the
question whether there was a breach of contract by Mr Symonds causing loss to
Miss Redmond, and it has found on the facts that there was. The issue has in
substance been decided and is binding upon Mr Symonds.
41.
The significant point which tells in Mr Symonds’ favour on the question
of permission to amend is that the point he seeks to argue is, as we have
found, a good point. But we agree with the way the President put it: in the
context of this case, the point is a legal technicality standing in the way of
doing substantial justice between the parties. For the reasons we have
explained, Mr Symonds would benefit unduly from the lateness with which he has
raised and placed reliance on Triggs. Allowing him to take the
point might lead to yet another round of civil litigation to no good purpose.
For these reasons we refuse permission to amend.
42.
In passing, we would observe that if we had granted permission to amend
the notice of appeal an interesting question would have arisen as to whether
the Appeal Tribunal itself, in exercise of powers under section 35 of the Employment
Tribunals Act 1996, might have granted permission to amend the claim form
and awarded compensation for breach of contract. It is arguable that, given
the Tribunal’s findings on the question of breach of contract and loss, the
Appeal Tribunal’s powers would have been wide enough to permit this course to
be taken; and (subject to giving the parties an opportunity to argue the
matter) we might have been minded to take it. However, since we have refused
the application for permission to amend, we need consider this no further.
The review
43.
As we have already explained, Mr Symonds sought to raise the question of
the start date for loss at the review hearing. He did not refer to Triggs
or to the line of cases leading to it. The Tribunal dealt with this matter
briefly, saying that the issue “was considered and dealt with at the
substantive hearing and was not raised as a matter for this review”.
44.
By the time he instituted his appeal against the review decision Mr
Symonds had become aware of Triggs and he took the point in terms
for the first time in his notice of appeal against the review decision.
45.
It is, however, important to keep in mind the difference between the
original hearing and the review hearing. Miss Redmond had applied for the
review hearing to correct errors of calculation. The Tribunal had granted a
review for this purpose. It does not follow that the Tribunal was bound to
consider other aspects of the case at the review hearing. It was fully
entitled to restrict the review hearing to the purpose for which it had been
granted and committed no error of law in doing so.
46.
A Tribunal has, of course, power to correct an obvious error of law by
way of review: see Trimble v Supertravel Ltd [1982] ICR 440.
But it should not generally entertain a review for the purpose of entertaining
essentially the same argument a second time. Mr Symonds renewed his argument
about the start date for loss but he did not cite any authority. The Tribunal
committed no error of law by declining to re-open the matter. The Tribunal’s
error in failing to recognise the principle in Triggs occurred at
the substantive hearing and the notice of appeal in which it should have been
challenged was the notice of appeal concerning the substantive hearing.
47.
For these reasons the application to amend the notice of appeal against
the original judgment will be refused and both appeals will be dismissed.
