Egerton & Ors v Hewitt Refractories Ltd [1994] UKEAT 326_92_2306

EAT

Egerton & Ors v Hewitt Refractories Ltd

[1994] UKEAT 326_92_2306 · 1994-06-23

JUDGE HULL QC:

Mr Egerton and Mr Alcock were two of four employees who complained to the Industrial Tribunal, sitting at Birmingham under the Chairmanship of Mr Hardwick, with two Industrial Members, that they had been unfairly dismissed by the Respondent employers, Hewitt Refractories Ltd. Mr Egerton is aged, according to the papers, 32. He had begun his employment in 1978 with the employers and Mr Alcock began in 1976: they were skilled men, maintenance fitters who had been with the Company for a substantial time.

We do not need to go into the details of the complaint. Those are all gone into in the decision of the Industrial Tribunal which starts at page 8 of our papers. The Tribunal found that there was unfairness in the dismissal of these men which had taken place on the 24 May 1991. They found that there had been a failure to consult, they were dissatisfied with the way in which these employees had been dismissed. They therefore held that they were entitled to compensation. They had to go on and decide what was the appropriate amount for compensation. In order to do that they had to consider a number of matters.

First of all they had to consider the loss which was suffered as a result of the dismissal. They did that in respect of Mr Egerton and Mr Alcock and the other two employees as well. Basically they found that the loss consisted of loss of pay, which of course meant that a calculation had to be carried out dealing with what they would have earned had they remained in their employment and what, if anything, they had earned after leaving the employment.

So that was the first part of the calculation. Then also, on principles of law which are now very very well settled and which of course they had to follow, they had to consider that even if the employers had acted completely fairly, dismissal might have resulted. In other words, the same thing might have happened even if they had been perfectly fair.

They said in paragraph 8 of their decision:

"We did not agree with the respondent's representative who stated that dismissals would have occurred in any event whether consultation had taken place or not. It could well have been the case that as previously stated the maintenance team would have come up with counter proposals. In attempting to assess the probabilities of the situation we consider that had the respondents acted reasonably and carried out proper consultation, the chances of the applicants retaining their employment was 50-50. Accordingly any compensatory payment would be reduced by a factor of 50%."

Now that is applying a well known principle and the Tribunal were certainly entitled and indeed bound, if that was their finding, to reach that conclusion and reduce compensation accordingly to take into account the fact that even had the employers acted perfectly fairly they would, as a matter of equal chance perhaps, still have dismissed. Then, of course, if they had acted perfectly fairly there would have been no compensation payable. So they had to apply that to the loss which they found that each of the employees had suffered.

We do not need to deal with the case of Mr Hackney and Mr Locker, but in the case of Mr Egerton they said:

"This applicant found employment albeit at a lesser amount and for immediate losses we award the sum of £1,370 being 10 weeks net pay at £137 when he was out of work. We also award the sum of £696.60 being 25.4/5ths weeks at a sum of £27 being the difference in net pay of the two jobs. For future losses we award 13 weeks pay on the differential of £27 being £351 and we award the sum of £100 in respect of loss of statutory rights. These amounts total £2,517.60 ..."

Now up to that point there is no complaint about their calculations. Clearly these were not exact matters. They had to apply an element of assessment to them, particularly with regard to the future. That was their assessment. The total loss was £2,517.60. They then set out that Mr Egerton had received a payment in lieu of notice of £1,903.80. They applied their 50% finding like this. They applied the 50% to the £2,517.60 loss and brought that down to £1,258.80. They then looked at what he had received in lieu of notice, £1,903.80, deducted that, and said "well of course there is therefore no loss".

There is an appeal from that part of the calculation with Mr Egerton saying, or rather Solicitors saying on his behalf, that the calculation is wrongly carried out. If, as here, the Industrial Tribunal are going to take account of payments which have been made, as indeed they are bound to do, and if they are going to apply a deduction of 50% or any other, then they ought to do the calculations in this order. They ought first of all to deduct the payment which has been made from the gross loss and then apply the 50% to the balance. What they have done is to do the calculation in the wrong order, and that is wrong. This is a ground which appears to us to be correct.

What the Industrial Tribunal are required to do is to apply the appropriate reduction to the loss which is suffered as a result of the unfairness and the loss which is suffered as a result of the unfairness is £2,517.60 minus £1,903.80 and it is to that figure, the difference, that it should be applied.

We have looked at the calculations. It appears to us that if one carries out that calculation for Mr Egerton, taking from £2,517.60 the sum of £1,903.80 one gets £613.80 and if one takes 50% of that one gets £306.90. It appears to us that that is the correct calculation and that so far from receiving nothing Mr Egerton should have received the £306.90.

That is the only ground which is put forward on Mr Egerton's behalf in the Notice of Appeal. Mr Egerton told us that he felt that there were other elements of injustice but he did not go into details, and we are confined to what is said in the Notice of Appeal.

With regard to Mr Alcock he puts forward other matters. He says that in fact his rate of pay, which was taken as £137 net by the Industrial Tribunal, was £200 or £250 a week shortly before Christmas, and probably would have gone on at the same level. He says that after Christmas the Company (probably with a view to limiting any liability they might have) reduced his hours, but his hours before that had been much higher.

Of course, it was for the Industrial Tribunal to consider that. Mr Alcock says that they were represented, all four of them, by the Union and the Union represented them very badly and this matter was not properly investigated. It may be, if that were correct, that they could have asked the Tribunal, either formally or informally, to review its decision and take into account evidence which had not been adduced before it, or should have been adduced, matters of that sort. But as it is, it is a finding of fact as to what his loss of earnings is. We cannot possibly go behind the findings of fact of the Industrial Tribunal. Nor can we go into matters which are not raised in the Notice of Appeal.

The Notice of Appeal is put in by Solicitors who are acting for all four men, because all four appealed; it is signed by Rowley Ashworth, Solicitors, and dated the 13 May 1992. It took on behalf of both Mr Egerton and Mr Alcock only the point which I have dealt with concerning the 50% deduction and at what stage that should be applied. Therefore, although we do not doubt anything that Mr Alcock has said to us, we cannot possibly help him about that matter. All we can do is to give effect to our finding about the correct stage at which to apply the 50% deduction. Doing the arithmetic there it appears to us that the correct calculation is to take from the £2,193.42, which is referred to on page 11, at the bottom, the £2,048.40 which he received in lieu of notice. That results in a very modest sum of £145.02 and when the necessary 50% deduction is made from that one gets to the sum of £72.51.

We have received a letter from the Respondents conceding that interest is due on top. That interest is put at £67.95 for Mr Egerton, and in respect of Mr Alcock, £16.05, and there is a sum added for another matter and the Respondents say that whatever happens they are content, apparently, to pay those sums.

The total in respect of Mr Alcock is £154.56 which is conceded. So what we propose to do is to award the sums of £306.90 to Mr Egerton and £72.51 to Mr Alcock in place of the sums awarded the Tribunal. Relying on the calculations which have been sent to us, we award the additional sums conceded by the Respondents, making a total for Mr Egerton of £374.85 to include interest and a total for Mr Alcock of £154.56 to include interest and payment of another sum which is conceded by the Respondents. I am afraid that is all we can do. We substitute the sums of £374.85 and £154.56 for the nil awards which were made to you.