Small v The Shrewsbury and Telford Hospitals NHS Trust [2017] EWCA Civ 882

Case No A2/2015/1887[2017] EWCA Civ 882
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
(MR JUSTICE LANGSTAFF)
Venue The Royal Courts of Justice, Strand, London, WC2A 2LLDate Thursday, 27 April 2017
Before
LORD JUSTICE LLOYD JONESLORD JUSTICE UNDERHILL
Between
LESLIE SMALLAppellantTHE SHREWSBURY AND TELFORD HOSPITALS NHS TRUSTRespondent
(DAR Transcript of WordWave International Ltd trading as DTI8 th Floor, 165 Fleet Street, London EC4A 2DYTel No: 020 7404 1400 Fax No: 020 704 1424Web: www.DTIGlobal.com        Email: TTP@dtiglobal.eu(Official Shorthand Writers to the Court)
Mr Philip Jones (instructed under the Direct Public Access Scheme) appeared for Applicant.Mr Giles Powell (instructed by Hill Dickinson LLP) appeared for Respondent.
Judgment
[1]In May 2012 the Appellant, who was then aged 56, started work for the Respondent (“the Trust”) as a project manager in its estate management department – effectively what used to be called a clerk of works. He had previously not been in permanent employment but was undertaking temporary assignments through an agency. His engagement by the Trust was also temporary and on a self-employed basis, but it is his case that he was given to understand that there was a prospect of an offer of full-time employment in due course.[2]On 23 July 2012 the Appellant’s engagement was terminated with immediate effect. I will refer to this for convenience as a dismissal even though he was not an employee in the narrow sense. It was his case that he was dismissed because he had tried unsuccessfully to get the Trust to notify the previous occupiers of a group of properties owned by it that they might have been exposed to asbestos.[3]By a decision promulgated on 17 December 2013 an Employment Tribunal chaired by Employment Judge Warren found that the Appellant’s dismissal constituted an unlawful detriment contrary to section 47B of the Employment Rights Act 1996, which applies to “workers” within the meaning of the Act as well as to employees under a contract of service. There was a hearing on 3 February 2014 to consider remedy. The Appellant was unrepresented. The Trust was represented by Mr Giles Powell of counsel, who appeared also in the Employment Appeal Tribunal and appears before us.[4]In advance of the remedy hearing the Appellant lodged a Schedule of Loss claiming compensation for loss of earnings, both up to the date of the hearing and, thereafter, up to his anticipated date of retirement in 2022. This was on the basis that the permanent appointment which he said he had been led to expect would indeed have eventuated but for his unlawful dismissal. He also claimed compensation for injury to feelings. (I should mention one slight complication, which is that he produced at the start of the hearing itself a further schedule, in which (apparently by accident) he omitted to claim for future loss of earnings; but no point is taken on that for the purpose of the issue before us.)[5]The Appellant also served in advance of the hearing a witness statement in which he said that he had since his dismissal, been unable to obtain work as a project manager, save once and for a short period. He said, at paragraphs 16 to 18:
“16. I have continued my job hunting without success and have applied for more than 576 vacancies. I have only secured interviews for six of these vacancies, I believe this is for the following reasons: a. I was dismissed and am unable to provide a reference from my last employerb. I have presented a claim relating to the dismissal.c. I have been unemployed for a while and my work skills are outdated d. My credit record is no longer good. “17. In all but one of the interviews I have had difficulty when the interviewer asked me to explain the job I did at the hospital and the reason for me leaving, when asked I have had no choice but to mention my dismissal and claim in detail. I try to present my answers in a positive light, focussing on my respect for Health and Safety and its effect on individuals but feel that the interviewer is not comfortable. “18. After an interview I find it difficult to get any feedback to the point that my questions go unanswered and ignored. When I do get a response it is usually hard to believe the reason given.”
He said at paragraph 21 that, in the case of the one short job which he had been able to find, the employer had not in fact asked him for a reference. He emphasised that the provision of a reference from the immediate previous employer was, in the field in which he worked previously, virtually essential. In support of his claim that he had applied for nearly 600 vacancies he supplied a very substantial bundle of documents. He also lodged a one-page written submission, which included the statement:
“Mr Small will show that he has mitigated his loss by attempting to secure new employment and that his search for employment has been hampered by the fact that he was dismissed and the lack of a reference from his last employer the respondent.”
[6]The Appellant was cross-examined fairly extensively at the remedy hearing by Mr Powell, but essentially only on the question whether he did indeed have any prospect of full-time employment with the Trust. There was no challenge on the basis that he had failed to mitigate his loss.[7]The Employment Tribunal reserved its decision on remedy. By a judgment sent to the parties on 3 April 2014 the Appellant was awarded compensation in the amount of £54,126, comprising £33,976 for loss of earnings, £15,150 for injury to feelings and £5,000 by way of “aggravated damages”. The figure for loss of earnings was arrived at on the basis that he would not have been given the permanent employment which he said he had been led to expect but that he would have been retained until 14 November 2013: that is, about 16 months longer than he in fact was. That date was chosen on the basis that the replacement who was engaged immediately after his dismissal was retained until then. Having made the finding that the Appellant would have been given work by the Trust up to 14 November 2013 but no longer, the Tribunal simply said “we have not therefore awarded any future loss beyond that date.”[8]This appeal is concerned only with the amount awarded for loss of earnings, but I need nevertheless refer to two other passages in the Tribunal’s Reasons dealing with the other heads of award. In connection with the claim for injury to feelings it said:
“3… As an interim worker, we accept that his career is dependant on the outcome of his last job, he is only as good as his la st reference, which is, we were advised, an absolute and common requirement within the field in which he works predominantly public sector. 4. The outcome of the dismissal has it appears, been career ending for the claimant. The claimant, a man of few words, and not given to exaggeration, we found to be principled and professional. He has been honest with prospective employers, who, once told of the circumstances of his dismissal, do not progress his applications.”
In connection with the award for aggravated damages the Tribunal referred to the Trust’s failure to give him a reference even when he offered (as he at one point did) to withdraw his claim altogether if a satisfactory reference were given. It said:
“There is no evidence that the claimant has ever received a satisfactory reference from the respondent. He has moved towards interviews on some jobs, only to have the interview cancelled without explanation. The effect of that is realistically to remove the claimant from the work environment. Without a reference from his last employer he will not qualify for further temporary contracts from the NHS, which is the work environment which has a significant market demand for his skills, and where he wants to work. A significant element of his career has been in the public sector, which generally has similar requirements for a reference from the last place of work. The fact that he has applied for 600 suitable positions since his dismissal and has failed to achieve work in any other than one for 7 weeks (where no reference was required), speaks volumes.”
[9]The Appellant appealed to the Employment Appeal Tribunal, where he was represented for the first time by counsel, Mr Philip Jones, who also appears before us. He initially advanced various grounds, but in the event the appeal proceeded on only one, namely that it had been incumbent on the Employment Tribunal, if (as it did) it held that the Appellant would not have worked for the Trust beyond November 2013, to consider what loss he had suffered in the following period, in accordance with the well-known decision of this court in Chagger v Abbey National plc [2010] ICR 397. That case establishes that, in the case of a discriminatory dismissal, the period which the employee would have worked for the respondent employer but for the dismissal does not represent an automatic cut-off in assessing compensation: see paragraphs 65 to 72 of the judgment of this court given by Elias LJ. The case also establishes that, in principle, a claimant can recover for the consequences of any disadvantage he suffers on the labour market, by reason not only of having been dismissed by his previous employer but also of his having brought proceedings against that employer (so-called “stigma loss”): see paragraphs 85 to 99. The court makes the point that normally that factor will not require separate quantification, because it will feed into the overall assessment of the claimant’s loss of earnings to the extent that it affects the time which it has taken, or may take, or should have taken him to find alternative employment (see paragraph 95); but it accepts that there may be unusual circumstances in which it represents a distinct head of loss on its own (see paragraph 99). The term “stigma loss” is sometimes used loosely to cover loss going beyond the particular case considered in paragraph 99, but I will refer to a claim for loss as a result of a failure to obtain alternative employment following the period for which the claimant would otherwise have remained employed by the respondent as a “Chagger claim”.[10]It is common ground that the Appellant did not himself expressly advance a Chagger claim in the Employment Tribunal – not perhaps surprisingly, given that he was a litigant in person. He put his claim entirely on the basis that he expected to be given a permanent job in which he would remain employed until his retirement. But Mr Jones argued in the Employment Appeal Tribunal that it was sufficiently clear that such a claim was open to him, if the Tribunal did not accept his primary case, for it to have been under an obligation to consider it in any event. He relied on the decisions of the Employment Appeal Tribunal in Tidman v Aveling Marshall Ltd [1997] ICR 506 and Langston v Cranfield University [1998] IRLR 172. On the basis of those authorities he submitted that the Chagger point was not in truth a new point but merely a different way of putting the Appellant’s claim in respect of future loss of earnings. But he also contended, by way of fall-back, that this was one of those exceptional cases in which a new point could properly be taken on appeal. There is a good deal of case law about that, most commonly referred to through the summary in the judgment of the Employment Appeal Tribunal in Secretary of State for Health v Rance [2007] IRLR 665.[11]In the Employment Appeal Tribunal the then President, Langstaff J, dismissed the appeal, albeit expressing some regret. He held that the existence of the Chagger claim was not sufficiently obvious for the Tribunal to have been under any obligation to consider it if it was not expressly raised by the Appellant. He also held that, that being so, there were no exceptional circumstances that would justify allowing it to be taken for the first time on appeal. As regards the first point I should record what he said at paragraph 22 of his judgment. Having set out the authorities on which Mr Jones relied, he said this:
“I accept the force of those authorities for those points. Indeed Mr Powell does not take issue with them. I would go so far as to say that it is important where there are litigants in person, ever more familiar in Tribunals, that a Tribunal should approach what is a matter of such familiarity as the redundancy questions addressed in Langston v Cranfield or the unfair dismissal liability criteria addressed in Burchell and Iceland Frozen Foods or in general terms the heads of loss identified in Norton Tool v Tewson in dealing with compensation. But this approach is one which is not of universal application. It applies only where the principle is so well-established that an Industrial Tribunal might be expected to consider it as a matter of course.”
He then went on to conclude that this was not such a case: see in particular paragraph 32 of his judgment.[12]It is convenient to say at this stage that, irrespective of whether Langstaff P was right in his eventual conclusion, I would endorse the observations which I have quoted about the importance of an employment tribunal taking for itself points which arise, in his phrase, “as a matter of course”, irrespective of whether they have been taken by the parties before them.[13]Mr Jones has taken essentially the same points before us as he took in the Employment Tribunal, and Mr Powell has sought to uphold the reasoning of Langstaff J. I should say that both made their submissions extremely well.[14]I have come to the conclusion that, in the particular circumstances of this case, the Employment Tribunal ought indeed to have considered whether the Appellant had a claim in respect of his loss after 21 November 2013 (in other words, a Chagger claim), which would in principle include a stigma claim. The Tribunal had before it, in the form of the passages from the Appellant’s witness statement which I have read, very explicit evidence that he was suffering a loss extending into the indefinite, and probably long-term, future, partly (though not only) due to the stigma associated with the circumstances in which he was dismissed and/or his consequent claim against the Trust. What is more, and importantly, the Tribunal itself, in the context of its consideration of the other heads of claim, found that the consequences of the dismissal appeared to be “career-ending”: see the passages which I have already read. In those circumstances it seems to me that the question whether the Appellant should receive some, and if so what, compensation for the pecuniary consequences of his loss after 14 November 2013 should have been considered. The Tribunal may not have had the best evidence on which to decide that question, but it certainly had some. If it had raised the issue for itself, as I believe it should have, it may be that the Trust would have raised an objection and/or sought an adjournment, which might or might not have had to be granted, but that is now impossible safely to reconstruct. What can be said is that the Appellant has lost the opportunity to make submissions on an aspect of his claim which the Tribunal should in my view have considered on the basis of the particular material before it “as a matter of course”. I do not say that that will always be so as regards a Chagger claim still less a stigma claim. I only say that it was so here.[15]Mr Powell submitted that any such step on our part would be a step too far. He fully acknowledged, following Tidman, that it was the duty of a tribunal to draw the attention of a claimant to the possibility of a claim for future loss when such a claim seemed to be justified, that being one of the four broad heads of claim identified in the seminal case of Norton Tool Company Ltd v Tewson [1972] ICR 501. But he pointed out that the Appellant had here made a perfectly clear claim for “future loss” in the form of his claim that the Trust would have employed him on a permanent basis. The Tribunal had rejected that claim, and it could not, he submitted, be right that it was under an obligation to consider some different way of formulating a claim for future loss. In my view it would be artificial to constrain the Tribunal’s obligations in the way suggested. The Chagger claim was, in the particular circumstances of this case, an obvious alternative or fall-back to the very specific and (it might be thought) rather ambitious claim that the Appellant was advancing. I do not think that he should be regarded as having given up the right to have that alternative considered by the Tribunal simply because they could both be labelled as claims for “future loss”.[16]In those circumstances I need not consider whether this would otherwise be a case falling within the limited exceptions to the general rule against allowing new points to be taken on appeal in Employment Tribunal cases.[17]It follows, in my view, that the case will have to be remitted to the Employment Tribunal for consideration of the Chagger claim, which the Tribunal should have considered but did not. The award already made will not be affected. It was accepted by both counsel that, if that was our decision, neither party should be confined to the evidence or submissions that were advanced on the previous occasion, save that the Tribunal’s finding that the Appellant would have continued to work for the Trust up to but not beyond 14 November 2013 should stand. Mr Powell made it clear that there were aspects of the Appellant’s mitigation case that he had not explored on the previous occasion because of the basis on which he understood the claim to be being put and which the Trust might now wish to explore either in cross-examination or by adducing evidence which had not been adduced on the last occasion. It seems to me right in principle that he should be allowed to do so. Mr Powell also submitted that the Tribunal would be at a real disadvantage in now looking for such evidence, particularly evidence about the motivation of employers who had refused to engage the Appellant so long after the event. I confess to a slight scepticism about how much useful evidence of that kind the Trust would have been able to procure even much nearer to the time. But, to the extent that the Trust may be at some such disadvantage, that cannot justify denying the Appellant the chance to develop a claim that is in principle open to him.[18]Subject to anything which the parties may submit, I see no reason why the remission should not be to the same tribunal (if the members are still available) but I would not specifically so direct so as to allow the Regional Employment Judge flexibility if difficulties are encountered.[19]I would wish to end by saying this. This is now a very long-running case, which began with a most regrettable act of victimisation by the Trust, of which the tribunal was rightly very critical. Considerable costs have no doubt already been incurred, but more will be incurred if the case has to be re-fought in the Employment Tribunal (and with the prospect of further appeals). The Appellant should appreciate that there are likely to be many uncertainties attending the quantification of any Chagger award that he might receive. I would strongly, therefore, encourage the parties to see if they cannot reach a sensible compromise. I would hope that they might be able to do so by direct discussion between their representatives, particularly if Mr Jones remains involved – though if, as I understand it, he is engaged on a direct access basis I do not know to what extent that is practicable. If direct negotiation is not likely to be fruitful, the parties should certainly consider mediation. Litigation is both expensive and undermining to those involved, and it is worth real compromises by both parties to bring the litigation to an end sooner rather than later.

Lord Justice Lloyd Jones:

[20]I agree.

Order

Appeal allowed

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