Homan v A I Bacon Co Ltd [1996] UKEAT 1154_94_1502

EAT
Homan v A I Bacon Co Ltd
[1996] UKEAT 1154_94_1502 · 1996-02-15

JUDGE D PUGSLEY:

The unanimous decision of the Tribunal is that the appeal is allowed in that the period to which the prescribed element relates, is a period of 26 weeks from 12 November 1993 and not to 15 September 1994, save and except for that the appeal is dismissed.On 15 September 1994 an Industrial Tribunal sitting at London (North) decided that the Applicant (the Appellant before us) had been unfairly dismissed and awarded her the sum of £1,823.38. The Appellant's claim under the Wages Act was dismissed.On 6 October 1994 a summary decision was sent to the parties and entered on the register. Although it was a summary decision it did set out various primary findings of fact. It would be helpful to set out in full paragraphs 2, 3 and 4 of that decision:-
"2 The Applicant's dismissal resulted from an incident which occurred in the staff room of the bacon factory where she worked. She was involved in an altercation with another fellow-worker, Deborah Tarbuck.
3 The Respondents held a disciplinary interview on 11 November 1993. They did not notify the Applicant of the date of hearing or invite her to attend. In these circumstances we therefore consider that a substantial breach of a fair procedure occurred namely, that the Applicant was given no opportunity to present her side of the case. Following the decision of the House of Lords in Polkey vAE Dayton Services at the end of 1988, this tribunal is obliged to hold that the Applicant's dismissal was unfair and we accordingly do so.4 That leaves us with the question of what her chances would have been of retaining her job if the procedure had been fair. Having carefully considered all the circumstances and observing the following:-(a) that what took place at the altercation between Debbie Tarbuck and the Applicant was a matter of one person's word against the other and that Debbie Tarbuck herself admitted that it was she who first laid hands on the Applicant; and(b) that no employee of the Respondent had ever previously been dismissed for fighting,we consider that the Applicant's chances of retaining her job were 50%. Accordingly, we reduce the amount of compensation to be awarded to her by that percentage."Further on in paragraph 4 the Tribunal under Compensatory Award made this finding:-
"For loss of earnings from date of dismissal to date of hearing (12.11.92 to 15.9.94), we consider that the Applicant has not made a sufficient effort to obtain alternative employment and that if she had done so she would have found something suitable by the expiration of six months from the date of dismissal. Accordingly, we calculate her loss in respect of those 26 weeks."
To summarise the position Mrs Homan was found to have been unfairly dismissed. The Tribunal reduced the sum to which she would otherwise have been entitled by 50% as it considered there was only a 50% chance that had a fair procedure been observed she would have retained her job. Further, in assessing her financial loss it limited her loss of wages to a period of six months from the date of dismissal.At that hearing Mr Shah, who was a Welfare Rights Adviser, represented the Appellant and a Mr Pritchard, a Consultant with Peninsula Business Services Ltd, represented the Respondent employer. Mr Pritchard has not appeared before us today but Mr West, a Consultant with the same organisation has had the opportunity of discussing the matter with him. It is common ground between Mr Shah and Mr West that at the hearing no mention was made by the Chairman that the recoupment provisions would apply to the award. It is true that the decision mentions a word "prescribed amount" and calculates that as £1,474.33, being half of the amount of loss of wages, but it is also right that the decision announces that the Respondents (the Respondents before us) are ordered to pay the sum awarded to Mrs Homan forthwith which suggests that the issue of recoupment was not in the Tribunal's collective mind.Mr Shah tells us that he knew something about the recoupment provisions. However, he thought that they were a matter of discretion for the Chairman of the Tribunal. He tells us that because of the overall monetary award his client did not wish to pursue an appeal at that stage. On 17 November 1994, Mr Shah received a statement relating to the recoupment of unemployment benefits, the IT31. This showed the monetary award accurately as £1,823.38: the prescribed element as £1,474.33 and the period to which the prescribed element related as 12 November 1992 to 15 September 1994; the date of the hearing.By a letter dated 21 November 1994, Mr Shah wrote in these terms to the Tribunal:
"We thank you for sending us IT31 which we received on 17.11.94, and we submit as follows, by way of a request for review:
In the said document, period to which prescribed element relates has been incorrectly stated which needs amendment, as follows:(a) Firstly, which is a typing error, 12.11.92 should be stated 12.11.93(b) Secondly, and it is important, the period from 12.11.93 to 15.9.94 needs to be cut down to six months. It is submitted that the Applicant was awarded future loss of earnings for six months from the date of dismissal. Hence the deduction or recoupment of unemployment benefit should not be for a period more than six months. We feel an oversight has been made which will be corrected as soon as possible."By a letter dated 29 November 1994, the Tribunal replied and enclosed an amended annex to the decision of the Tribunal which corrected the clerical error as to the year. However, the Tribunal said:
"The period to which the prescribed element relates is correctly stated as extending to 15 September 1994, the date of the hearing, even though the Tribunal reduced the amount payable by the Respondent in respect of that period on account of the Applicant's failure to mitigate her loss."
On 30 November 1994 Mr Shah wrote to the Tribunal and requested full written reasons. He pointed out that, although summary reasons were sent on 6 October 1994 the annex the IT31, had only been received on 17 November and therefore he believed that the Appellant was within the 21 days period for the request for full written reasons. By a letter dated 9 December the Chairman refused that application saying that the annex was not an integral part of the decision which was promulgated on 6 October and accordingly, the application was not in time, as the period had expired on 27 October.It would seem that there was some confusion among the Tribunal staff as to whether the recoupment provisions did or did not apply. We have before us in the bundle a letter from Peninsula Business Services Ltd, who represented the Respondents dated 7 November 1994, and in that Mr Pritchard, the Personnel Consultant, was saying:
"The Industrial Tribunal office have informed me that the award made to Miss Homan is not subject to recoupment and therefore, the full amount was payable to her [and he reminded him of the amount concerned]. ..."
Thereafter, the Respondent company wrote to the Mrs Homan saying that they were now being told it was subject to recoupment and asking that the cheque should be stopped. It would seem from what we were told at the appeal hearing that there is some doubt whether the recoupment notice was ever sent to the employer or the employee.The Employment Appeal Tribunal is concerned with two appeals and by agreement their hearing is consolidated. In one such ground of appeal the Tribunal is asked to order that there should be full written reasons provided by the Chairman. In the other ground of appeal the employee is appealing against the award of compensation, its calculation and recoupment of unemployment benefit.We consider we can deal with one matter summarily because in our view, the decision of the Industrial Tribunal is wrong. The amended IT31 shows the period to which the prescribed element relates as 12 November 1993 to 15 September 1994. As we have noted, despite the request from the employer's representative to bear in mind that the period for which compensation had been ordered, was only six months, the Tribunal still persisted in suggesting that the period should run from the date of the effective termination of the contract on 12 November 1993 to the date of hearing, namely 15 September 1994. On the proper construction of Regulation 5 of the Employment Protection (Recoupment of Unemployment Benefit and Supplementary Benefit) Regulations 1977 , it is clear that the prescribed element relates to the period in respect of loss of wages and under Regulation 5(3)(c) the Tribunal is under a duty to set out the dates of the period to which the prescribed element is attributable. In Harvey's Industrial Relations and Employment Law the position is stated thus at paragraph D 2704.
"Where the tribunal makes an award and the employee has received unemployment benefit or income support, the tribunal must specify two elements in its award. One is the payment made in respect of the period of time beginning with the effective date of termination, and ending with the date when compensation for loss of wages is awarded, or the tribunal proceedings are concluded, whichever is the sooner."
In our view the prescribed element deals with the element in the award which is attributable to loss of wages and the only period to which it can apply was the period to which compensation was awarded. Mr Shah was right to draw this to the attention of the Tribunal and the IT31 should have been amended to reflect that fact. We therefore allow the appeal to that extent, that the period should run for 26 weeks from 12 November 1993 and not to the date of the hearing on 15 September 1994. Mr West, who appears for the Respondents has not sought, in any way, to suggest that is not the correct position.We turn now to the question of whether the Chairman was justified in refusing to supply extended reasons. Rule 10 in Schedule 1 of The Industrial Tribunals (Constitution and Rules of Procedure) Regulations 1993 sets out the circumstances in which a decision shall be recorded in extended form. The relevant parts of Rule 10 read as follows:-
"10(2) The decision of a tribunal, which may be given orally at the end of a hearing or reserved, shall be recorded in a document signed by the chairman.
(3) The tribunal shall give reasons for its decision in a document signed by the chairman. That document shall contain a statement as to whether the reasons are given in summary or extended form and where the tribunal -(a) makes an award of compensation, or(b) comes to any other determination by virtue of which one party is required to pay a sum to another (excluding an award of costs or allowances),the document shall also contain a statement of the amount of compensation awarded, or of the sum required to be paid, followed either by a table showing how the amount or sum has been calculated or by a description of the manner in which it has been calculated.(4) The reasons for the decision of the tribunal shall be given in summary form except where -(a) ...(b) a request that the reasons be given in extended form is made orally at the hearing by a party;(c) such a request is made in writing by a party after the hearing either - (i) before any document recording the reasons in summary form is sent to the parties, or(ii) within 21 days of the date on which that document was sent to the parties;(d) ...

and in those circumstances the reasons shall be given in extended form."

It is true that this Industrial Tribunal was not mindful of its obligations imposed by the Employment Protection (Recoupment of Unemployment Benefit and Supplementary Benefit) Regulations 1977 , in that Regulation 5(4) stipulates:
"Where the industrial tribunal at the hearing announces to the parties the effect of a decision which includes a monetary award, it shall inform those parties at the same time of the amount of any prescribed element included in the monetary award and shall explain the effect of Regulations 8 and 9 below in relation to the prescribed element."
It is common ground between the parties that the Industrial Tribunal did not follow that course. Further, the summary reasons did not set out the dates of the period to which the prescribed element is attributable. These dates were, as we have already noted, set out in the IT31.We have come to the view that the summary reasons given by the Chairman did comply with the requirements for summary reasons set out in Regulation 10 of Schedule 1 of The Industrial Tribunals (Constitution and Rules of Procedure) Regulations 1993 . The requirement to comply with the provisions in Regulation 5(3) of the Employment Protection (Recoupment of Unemployment Benefit and Supplementary Benefit) Regulations 1977 was only complied with by the service of the annex to the Tribunal at the IT31.However, it was perfectly possible for the employee's representative to ask for full reasons, either at the hearing before he received the summary reasons, or within 21 days thereof. In that the IT31 misapplied, in our view the recoupment regulations, we have been able to deal with that because the error of law, in our view, is patent on the face of the document.Whilst one has sympathy for the fact that the Applicant's representative had misunderstood the fact that recoupment regulations were not discretionary, the true position is if the Applicant wished to appeal the finding of the Industrial Tribunal they had ample opportunity to do so. The Applicant has suffered no injustice from the fact that the IT31 was served so much later than the original summary decision, because by order of the President of the Employment Appeal Tribunal, this is a case where, as far as the appeal is concerned, the rules have properly been interpreted as only allowing time to run from the service of that late notice. So the matter has been before this Tribunal and we have allowed the appeal in respect of the error contained therein.The position is that the Appellant is seeking to appeal the finding that she was only allowed six months loss of wages and also the reduction in her monetary award. These are obviously matters the Tribunal considered and, as we have noted, the summary reasons were given in rather greater detail than is sometimes the case. In our view, it is quite clear the Tribunal addressed their minds to the issue. We can see no error of law at all in the way it approached the questions. It is clear from the Notice of Appeal and Skeleton Argument that Mr Shah has submitted, that the reality is Mrs Homan understandably does not accept that the Tribunal reached, from her point of view, the right result and that whilst she was prepared to live with that, if she was to receive the sum awarded, when she appreciated it was subject to recoupment she wished to appeal.In our view, there is no error of law in respect of which we could allow an appeal on the finding that the Appellant was only to receive 50% of the monetary award and that her period in respect of which she was compensated for loss of wages was limited to six months. We consider the Chairman was within his legal right to refuse to provide extended reasons. If the Appellant wished to pursue a question of perversity then an application for extended reasons should have been made well within the time limit. We have allowed, as I have indicated, the appeal as far as reducing the period to which the prescribed elements relate, to six months. We do not have the power as Mr Shah has asked us to declare that the IT31 was invalid and had no legal force. Under Regulations 11 of the Employment Protection (Recoupment of Unemployment Benefit and Supplementary Benefit) Regulations 1977, it is quite clear that a dispute about the amounts in a recoupment notice are matters for the Secretary of State for Social Security. It is however noted that under Regulation 11(5) the Secretary of State is bound by any decision reached by the Tribunal in consequence of an appeal or re-hearing to alter the recoupment provisions accordingly to take into account the changed decision. In those circumstances it may be that our allowing the appeal on one matter has been of benefit to the Appellant. The appeal will be allowed by substituting the date 26 weeks after the dismissal; namely 13th May 1994.