Mrs P Thorpe v Pennine Acute Hospitals NHS Trust: 2401546/2019
JUDGMENT
[1]The claimant’s claim of unlawful deductions from wages fails and is dismissed.[2]The claimant’s claim that she was constructively unfair dismissed succeeds.[3]No reduction falls to be made to either the claimant’s basic or compensatory award by reason of contributory fault nor to reflect the possibility that she may have been fairly dismissed or resigned her employment in any event (‘Polkey’ reduction). Subject to that determination, the appropriate remedy is to be determined at a subsequent remedy hearing if not agreed between the parties. REMEDY JUDGMENT It is the judgment of the Tribunal that:-[1]The respondent is ordered to pay to the claimant the sum of £21,426.34 compensation for unfair dismissal pursuant to s.188 Employment Rights Act (“ERA”) 1996. This comprises a basic award of £9,171.07 and a partial compensatory award of £12,265.34.[2]The total sum due from the respondent to the claimant of £21,426.34 is payable forthwith.[3]There will be an additional element of the compensatory award, referable to the claimant’s pension loss, to be determined at a later date in accordance with the directions set out below.[4]The Employment Protection (Recoupment of Benefits) Regulations 1996 do not apply to this award.REASONS
[1](1) At a hearing taking place on 10 and 11 October 2019 Mrs Thorpe was successful in her claim of unfair dismissal. I determined, as part of that decision, that no deduction should be made to any compensation payable on the basis of the ‘Polkey’ principle, or on the basis of contributory fault. Mrs Thorpe was unsuccessful in a claim of unlawful deductions from wages. This hearing was convened to determine the appropriate remedy in respect of the unfair dismissal claim.(2) The parties agreed certain figures as to the claimant’s earnings, dates of employment etc. This enabled them to agree that the appropriate figure for the basic award was £9,171.07 and I have duly awarded that figure.(3) In respect of loss of earnings, Mrs Thorpe resigned on 17 October 2018 and her employment terminated on 22 October 2018. She obtained alternative employment on a part-time basis from 13 May 2019.(4) I heard evidence of Mrs Thorpe’s attempts to mitigate her loss in the period between October and May. She had made around seven job applications, several of which she secured interviews for. One of those applications, made in January 2019, was for the role of ward clerk at the Royal Oldham Hospital (also operated by the respondent Trust). She was unsuccessful in the interview for the role she applied for, but was contacted by the hospital with a view to offering her a new, weekend-only, role which was in process of being established. It was that role which she commenced in May 2019.(5) Mr Gibson, for the respondent, suggested that there had been a failure to mitigate in this period, although he did not pursue that submission with much force. I agree that the number of applications made by the claimant appears to be low, but the applications are spread out consistently across the time period. The applications demonstrated a willingness to travel across a relatively wide geographical area and to consider roles outside her immediate area of experience. There was no specific evidence from the respondent of any alternative roles which Mrs Thorpe could have applied for. In those circumstances, I was not prepared to accept a failure to mitigate in that period.(6) Given the lower hours in the new role, Mrs Thorpe has experienced an on-going shortfall in her net earnings, agreed by the parties to amount to £138.46 per week. After starting employment on 13 May 2019 Mrs Thorpe told the tribunal that she had applied for two full time roles in GP surgeries, both around July 2019. She has applied for nothing else since. Whilst Mrs Thorpe is entitled to take the view that she prefers to stay in her current role, if she seeks to look to the respondent to make good her shortfall, she remains under a duty to take reasonable steps to fully mitigate her loss. I find that that duty is not discharged by applying for two roles in July 2019.(7) Taking into account Mrs Thorpe’s age, experience and availability, I find she would have fully mitigated her loss of earnings within a further six months had she been acting reasonably. I therefore limit the loss of earnings which I will take account of to a further 26 weeks.(8) Using the agreed figures of 29 weeks at £288.46/week and 26 weeks at £138.46 gives a total loss of earnings figure of £11,965.34. The respondent’s schedule of loss suggested that notice pay had been paid, and should be deducted from this figure. Upon reviewing the documents, it transpired that the amount referred to was for accrued holiday pay. In fact, the Trust had agreed that Mrs Thorpe’s employment would terminate without any requirement for notice. This means that there is no element of double recovery in awarding the full amount set out above.(9) I also award £300 as compensation for loss of statutory rights, giving the total figure of £12,265.34.(10) The figures above do not take any account of pension loss sustained by Mrs Thorpe. It is agreed that the respondent made pension contributions of £224.11 per month. Compensating Mrs Thorpe for the contributions that would have been made until 14th November 2019 (when I have determined the respondent’s liability for loss of earnings ceases) would equate to approximately 13 months’ worth of contributions, or £2,913.43.(11) Mrs Thorpe, however, points to the fact that she was in a ‘good’ NHS pension scheme (which I take to mean that it was a defined benefit scheme, although this is not entirely clear from the limited documentation) and that she intended to work until she had paid off her mortgage at the age of 66 and take her pension thereafter. I accept, as a finding of fact, that she would have worked in her old role with the respondent until the age of 66, absent any unforeseen intervening factors. As a matter of common sense, it seems likely that there is significant value attached to the termination of her membership of the defined benefit scheme. Although her new role is with the same employer, she, along with other new starters, has been enrolled in a different, contribution-based scheme.(12) However, it is one thing to identify that a potential loss exists and another to quantify it. With assistance, and referring to the 2017 Principles for Compensating Pension Loss, Mrs Thorpe has quantified her pension loss in her schedule as being a little over £75,000. She has today produced a pension estimate document (dated 26/9/18) and she says the information set out in that document was the basis for the calculations. However, I cannot understand how she has obtained a multiplicand figure of £2,792.16 as set out in the schedule of loss. Without the person who helped her compile the schedule of loss, Mrs Thorpe is unable to explain this. Mr Gibson is also at a disadvantage, as he has only had sight of the estimate document today. Finally, it should also be noted that the pension loss calculation may be complicated by the fact that the claimant, in fact, began to take her pension from December 2019. Neither party has made detailed submissions as to how that fact (including the income she had received from doing so) should be factored into the pension loss calculations (if, indeed, it makes any difference at all).(13) In these circumstances, and given that pension loss is potentially a significant portion of the loss attributable to the unfair dismissal, I have invited both parties to make further written submissions on the matter, to be received by the tribunal (and sent to the other party) by no later than 17 March 2020. If any reply is necessary the parties have leave to reply by no later than 24 March 2020. If, at any point, either party considers that further directions are necessary (including for the listing of another hearing) they should write to the tribunal as necessary. This provision for reply was not set out in my oral directions at the conclusion of the hearing, but, on reflection, I consider it may be helpful.(14) As this is an ‘ordinary’ unfair dismissal claim, the compensatory award available is limited by the statutory cap. The claimant’s gross annual earnings were agreed to be £18,701.80 per annum. In accordance with University of Sunderland v Drossou [2017] IRLR 1087, however, the level of the statutory cap should also reflect the employer’s pension contributions that would be received during the one year period. Adding £2,689.32 to £18,701.80 gives a statutory cap of £21,391.12. Given the amounts already awarded, the ‘headroom’ to make an award for pension loss is £9,125.78. I raised both the Drossou authority, and the calculation with the parties, and neither sought to suggest that any different figure was appropriate for the cap.(15) That figure of £9,125.78 is therefore the maximum additional award I can make, even if Mrs Thorpe is entirely correct in assessing her pension loss at £75,000. Both parties should take account of that maximum in the written submissions that they make and it may of course be the case that they are able to resolve the matter by agreement, without necessitating a further decision. In that event, the tribunal should be informed promptly. REASONS[2](1) At a hearing taking place on 10 and 11 October 2019 Mrs Thorpe was successful in her claim of unfair dismissal. A further hearing was convened on 4 February 2020 to determine the appropriate remedy in the case. At that hearing, I made an award of £21,426.34 in favour of Mrs Thorpe which took into account all elements of compensation due, except in relation to pension loss.(2) It was agreed that the respondent made pension contributions of £224.11 per month. Compensating Mrs Thorpe for the contributions that would have been made until 14th November 2019 (when I have determined the respondent’s liability for loss of earnings ceases) would equate to approximately 13 months’ worth of contributions, or £2,913.43. The respondent contended that the award should be made on that basis.(3) Mrs Thorpe, however, believed that the true calculation of her pension losses would be much higher. She produced a document which purported to calculate that loss at around £75,000. That document referred to the 2017 Principles for Compensating Pension Loss (“the Guidance”). However, despite the reference to the principles, it was not at all clear to me how the £75,000 figure had been reached. It also did not seem that Mrs Thorpe had produced all the underlying evidence which would be needed to support the calculation. In particular, no evidence was produced about the pension scheme she is participating in as part of her new employment. As the document had been drafted by someone else on Mrs Thorpe’s behalf, she was unable to assist on these points. Mr Gibson was also at a disadvantage as he had not been shown the calculation in advance.(4) At the hearing, I made a finding of fact that Mrs Thorpe would have worked in her old role with the respondent until the age of 66, absent any unforeseen intervening factors (which are accounted for in the actuarial values used in the Guidance). I also identified that the application of the statutory cap on the compensatory award left ‘headroom’ of £9,125.78, which would be the maximum amount of compensation I could award in respect of pension loss. Unable to take matters further, I asked the parties to provide written submissions on the question of the appropriate calculation of pension loss, which they have duly done.(5) The claimant submits that the complex approach for calculating loss is appropriate in this case. This requires me firstly to ask what the claimant’s annual pension would have been at normal retirement age. From the pension estimate provided, the figure for this is £4,101.83. (Unhelpfully, the estimate does not specify what ‘normal retirement age’ would be, so this may not equate to the claimant’s 66th birthday but there is nothing in the documentation or the submissions from the parties to enable me to identify any alternative figure.)(6) Step 2 requires me to identify the pension income that will actually be received. Again, using the estimate document, that can be identified as £3,660.41. (In both cases alternative figures are given for cases where a larger lump sum is drawn down, but I have disregarded that alternative for the purpose of this comparison).(7) This gives an annual loss (or multiplicand) of £441.42. The claimant’s submission states that the correct multiplicand is £2,792.16, but I cannot understand how this is derived from the pension estimate document.(8) Before identifying and applying a multiplier, however, I have to take some account of the pension benefits the claimant will receive in her new employment. I have been given no information on this, beyond the claimant’s bare assertion that this is a ‘new NHS scheme’ which is ‘not as good’ as the ‘old NHS scheme’ she was previously a member of. It appears likely that this refers to the 2015 NHSPS, whereas her previous entitlements would have accrued under the NHSPS 1995 Section. The 2015 NHSPS is also a defined benefit scheme, albeit operating on a career average basis rather than a final salary basis. Given that the claimant is relatively close to retirement, and has not sought to suggest that she expected to make any further career progression, the switch to a career average scheme should not disadvantage her and may even work in her favour. Should she work to the age of 66 as intended, the claimant will accrue pension entitlements under this scheme which will significantly erode the annual loss figure of £441.42 set out above. Although I cannot identify this precisely, it seems probably that at least 75% of the on-going loss will, in fact, be made up given the claimant’s joining of the alternative scheme. This would give on-going loss of around £110.00 per annum.(9) I next identified a multiplier from the relevant table in appendix 2 of the Guidance. The claimant’s age at hearing date is 60 and anticipated age of retirement is 66, giving multiplier of 26.17. (The claimant had identified a multiplier of 27.12 without stating where this came from). Applying the £110.00 multiplicand would still result in an overall loss figure that is actually slightly lower than is given by the contributions-based approach.(10) I have no doubt that figure I have calculated is flawed, perhaps in numerous ways. However, having gone through that exercise, I am also satisfied that there is no basis for assessing pension loss at anything near the level contended for by Mrs Thorpe. I am therefore reassured that she will suffer no real injustice if I make the contributions-based award contended for by Mr Gibson and, indeed, that making the award on that basis is the best and most appropriate resolution to this case.