Seagull Rest Home v Read [1995] UKEAT 960_94_1810

EAT

Seagull Rest Home v Read

[1995] UKEAT 960_94_1810 · 1995-10-18

MR JUSTICE MAURICE KAY : In this appeal, the appellant Seagull Rest Home challenges a decision of the Industrial Tribunal sitting at Southampton in respect of the amount of compensation that was ordered to be paid by the appellant to Mrs Theresa Read the respondent.

Mrs Read was employed at the Seagull Rest Home in Chichester between 1984 and 16th September 1993. According to the Industrial Tribunal, her title was `assistant manageress'.

She was dismissed in September 1993. We do not need to investigate the background to her dismissal. It was the subject of a four day hearing in the Industrial Tribunal in April and May 1994. The Industrial Tribunal concluded that she had been constructively dismissed; that the principal reason for that dismissal was one of re-organisation, and was some other substantial reason of a kind such as to justify the dismissal; but that in the circumstances of the case, the dismissal was unfair. The question of remedy was then adjourned to a further hearing.

That further hearing took place on 25th July 1994. It is appropriate that we should record the fact that whilst the two lay members of the Industrial Tribunal were the same as had been present on the substantive hearing, a different Chairman sat with them. We understand this was because of injuries sustained by the first Chairman in a road traffic accident.

In relation to the compensation hearing, the unanimous decision of the Industrial Tribunal was that the respondents should pay to the applicant Mrs Read, a basic award of £1,692.00, together with a compensatory award of £3,915.00.

Before this Tribunal, the appellant does not challenge the finding of unfair dismissal, nor does he or could he challenge the basic award. Mr Fender who has represented the appellant raises two matters in relation to the compensatory award.

Before we deal with these, we should place them context. The Tribunal which dealt with the matter of compensation came to the conclusion that, on a balance of probability, there ought to have been 4 week consultation period prior to Mrs Read's dismissal and that again, on a balance of probability, at the end of such consultation period, she would have been made redundant.

The compensatory award fell into three parts:

(a) 4 weeks pay @ £171.00 per week = £ 684.00

(b) 9 weeks in lieu of notice @£171.00 = £1,539.00

payment the applicant would then

have received = £1,692.00

The first point raised by Mr Fender relates to £1,692.00 being the sum equivalent to the appropriate redundancy payment, which Mrs Read "would" then have received.

In paragraph 10 of the decision the Tribunal went on to say:

"... As no redundancy payment was paid to the applicant, and as the Compensatory Award above reflects the applicant's loss and is not the award of redundancy payment per se, the provisions of Section 73(9) Employment Protection (Consolidation) Act 1978 do not apply."

Section 73(9) is the provision that relates the basic award to any amount of redundancy payment actually awarded or paid as a redundancy payment. Clearly the Tribunal was correct in saying that Section 73(9) has no bearing on the case.

The essence of Mr Fender's submission, was that by duplicating the basic award with a further sum of the same amount, £1,692.00, as compensation for the loss of the redundancy payment, the Industrial Tribunal was in fact providing Mrs Read with double compensation. We heard argument on this matter which was largely argument by way of analogy. Whilst we were in retirement, we observed the provisions of Section 74(3) and we then thought it appropriate to return to the Tribunal to bring it to the attention of the parties, and to allow them to make further submissions after a short adjournment.

Section 74(3) reads as follows:

"(3) The said loss [ i.e. the loss sustained by the complainant in consequence of the dismissal, pursuant to subsection (1) and (2) ], in respect of any loss of any entitlement or potential entitlement to, or expectation of, a payment on account of dismissal by reason of redundancy, whether in pursuance of Part VI or otherwise, shall include only the loss referable to the amount, if any, by which the amount of that payment would have exceeded the amount of a basic award ... in respect of the same dismissal."

Our provisional view was that that covered precisely the point raised by Mr Fender in this case. When invited to make further submissions, Mr Fender agreed with that view. Mrs Cooper, who represents Mrs Read, did not agree with it, and we have given further consideration to it. It seems to us clear beyond doubt that as a matter of law Section 74(3) does cover the present circumstances. It is precisely those circumstances that it was enacted to deal with.

It follows from this that the £1,692.00 referred to in paragraph 9(c) of the decision of 25th July 1994 was inappropriately awarded and the appeal in relation to it must be allowed.

The second point raised on this appeal is a short point. As we have observed the compensatory award included a figure for 4 weeks loss of earnings at £171.00, total £684.00. The Tribunal found as a fact that Mrs Read had been unemployed and in receipt of benefit for 2 weeks after her dismissal, but that she then obtained employment at £142.00 per week net. The submission of Mr Fender is that, to her credit, Mrs Read was taking reasonable steps to mitigate her loss. Section 74(4) provides that in ascertaining the loss sustained by the complainant in consequence of the dismissal, the Tribunal:

"... shall apply the same rule concerning the duty of a person to mitigate his loss as applied to damages recoverable under the common law of England and Wales ..."

The facts found in this case, are that in taking those steps, Mrs Read succeeded in earning money during that 4 week period. Mr Fender submits that the figure of £684.00 ought to be reduced by the amount she actually earned. The figure we are told was £202.86 nett. The question for us is whether the Industrial Tribunal erred in law by awarding her 4 weeks pay, without any such deduction. Having regard to the evidence found by the Tribunal and having regard to Section 74(4) it is our judgment that this does raise a point of law. Steps were taken to mitigate the loss and they did yield a figure, the one we have just mentioned. In those circumstances, since the Tribunal was purporting to compensate Mrs Read for her loss of earnings during that 4 week period, it seems to us that as a matter of law, they ought to have deducted that amount. Accordingly their decision as to the compensatory award ought again to be replaced by a decision that reduces the compensatory award by that figure of £202.86.

By way of summary, this appeal therefore succeeds on both grounds, and the compensatory award should be reduced accordingly. It seems to us, in all the circumstances that since no further evidence is necessary, and all submissions have been made here, this was not a case for remission to the Industrial Tribunal. It was an entirely appropriate for us to deal with the matter with finality here.