Computerking Ltd v Warner [1998] UKEAT 686_97_2506

EAT

Computerking Ltd v Warner

[1998] UKEAT 686_97_2506 · 1998-06-25

JUDGE J HULL QC :

This is an appeal to us by a firm called Computerking Ltd against a decision of the Industrial Tribunal sitting at London South on 18 February 1997, chaired by Mr Mahoney with two Industrial Members. The Respondent to this appeal, Mr Anthony Warner, a gentleman in early middle age, a shop manager, had applied to the Tribunal complaining that he had been unfairly dismissed by Computerking.

The facts are shortly as follows: Mr Warner was first employed, he said, in September 1989 by, apparently, a predecessor firm, but there was no continuity of employment, as the Industrial Tribunal found. The date found for the commencement of his employment with Computerking, or their immediate predecessors, was 19 April 1993 and there was continuous employment since then.

The situation, briefly, was that he continued in employment managing at first a shop at Parsons Green and then a shop in Sloane Street; he moved to Sloane Street in August 1993. There then came a time, in 1996, when the profitability of the shop in Sloane Street was such that management decided that something had to be done about it. The conclusion was that they could not afford Mr Warner's services. But after discussion an arrangement was reached under which Mr Warner became assistant manager. He did not have the full status of manager and a director took over the responsibility for management and Mr Warner received less pay.

That arrangement, unfortunately, did not prosper and it was decided very shortly afterwards that in fact the company could not afford to employ Mr Warner any longer and he was dismissed with one month's pay in lieu of notice, his effective date of termination being 26 July 1996. He then complained that he had been unfairly dismissed and he also asked for payment of his commission.

Those were the subjects of his complaint to the Industrial Tribunal, which he made on 15 October. The Respondents, in their answer, said that he had been dismissed for redundancy.

The Industrial Tribunal heard evidence but we do not have the Chairman's Notes of Evidence and we do not know, of course, exactly what evidence was laid in front of them. There were documents, some of which they refer to, and one at any rate which we have been shown, which they do not refer to. There was also oral evidence and no doubt a number of matters were investigated.

They deal first of all with what they call the unlawful deduction of wages, which in fact related to a bonus which Mr Warner was claiming. They refer to several documents which are with our papers; they refer to a letter of 19 April 1993 welcoming Mr Warner to the company and offering him employment in Sloane Street and Parsons Green. The letter says:

"Your commission arrangements are as follows:- 2% commission on increased sales above £350,000.

In due course we shall be providing you with a contract of employment outlining full terms/conditions and entitlements."

Then the Tribunal look at the Terms and Conditions of Employment, a contract of employment. After setting out various matters this contract, or 'terms and conditions' says:

"You are entitled to receive an annual bonus of 2% of all sales over and above the agreed sales target of the Sloane Street shop. This bonus will be paid annually after receipt of the final audited accounts."

So that was what was said there. There was apparently, we are told, a suggestion that Mr Warner had not received that document but that does not matter for our purposes because the Tribunal say that he did, this was one of the contractual documents.

Then they refer to a document (p18). What is said about this document by Mr Auda, manager of Computerking is:

"this document was, at most, issued in draft. It is only a draft," he says, "it is not signed."

That is perfectly true. At the same time Mr Warner produced it in his bundle of documents and said that it was a contractual document and he was entitled to point to the fact that it was dated, 16 December 1994, correctly set out the date of commencement and said, among other things, under "Pay":

"You are entitled to commission/bonus in accordance with the terms of the letter offering you this job and any subsequent letters of review."

What the Tribunal say about that is this:

"(4) On 16 December the Respondent supplied the Applicant with revised written terms and conditions of employment. By Clause 3(b) the Applicant was entitled to commission/bonus in accordance with the terms of "the letter offering you this job and any subsequent letters of review". The Applicant accepted these new terms and conditions.

Mr Auda says to us that that is quite wrong. In fact this was not a contractual document. It was a draft. He invites our attention to the fact that it says at the start not "Branch Manager" but "Senior Branch Manager". He points to the fact it is not signed. But these were matters for the Tribunal and we have to emphasise that we are only, as an appeal tribunal, a court of law. The statute which creates our jurisdiction says that we can entertain points of law only, we are not allowed to re-try cases or go into the evidence unless it is suggested that the Tribunal received no evidence to support some of their conclusions or made conclusions against the only evidence, or matters of that sort. It was entirely for them to say, on the evidence which they heard, which documents were and were not parts of the contract and they referred to these.

To go on with what is said to us today, Mr Auda says "It is true that there was no further letter that we can find varying the original letter but if you look at page 16 what Mr Warner was entitled to was 2% of all sales over and above the agreed sales target of the Sloane Street shop. All through the time that we are talking about this sales target was altering." The management of course had to set a sales target and that was circulated regularly and it was not suggested to us that it was not agreed. But the fact is that it is the Tribunal that had to say what had been agreed and what had not been agreed and it is all very well for the employers to say well, it must be so, it must be taken that he agrees to the sales target and what is said in that. When the Tribunal had accepted that the statement of main terms and conditions at page 18 was part of the contract what the employers had to show was that the £350,000 figure had altered, that there had been a subsequent letter of review. That, we are told, there never was. There was simply a circulation of various sales and profits targets.

So the Tribunal go on and they say:

"(5) The only letter from the Respondent offering the Applicant a job," (they are quoting from this last document I have been referring to) "was the letter dated 19 April 1993. There were no later letters and, in particular, there was no letter written by the Respondent to the Applicant regarding the transfer from the Parson Green Branch to the Sloane Street branch. There were no subsequent letters of review.

(6) In the relevant period such sales at the Sloane Street shop were £416,120."

Mr Auda has urged, in addition to the matters I have mentioned, common sense. He said:

"is it to be suggested that Mr Warner was entitled to anything over £350,000 for the rest of his time?"

The answer to that one would have thought in common sense was "no, certainly not. All you had to do was look at the terms of the contract and send him a new letter, saying please sign below to show that you agree this as from such and such a date, the agreed sales target is to be so and so and your bonus will vary accordingly". Nothing like that was shown.

The question for us is not: would we have reached the same conclusion on the evidence? If it were, we should have to hear all the evidence, not merely see what it was or be told what it was but we should have to hear all the evidence again. We are not allowed to do that. The question for us is: were the Tribunal entitled as a matter of law to approach it in this way and reach the conclusion which they did? It appears to us, having heard all that has been said by Mr Auda, that although it can very well be said that a different Tribunal might have reached a different conclusion or that we ourselves might have reached a different conclusion having heard the evidence we cannot say that this Tribunal was wrong to reach such a conclusion. There is no reason, it seems to us, why they should not have said, "you, the employers, are tied by what you have said in the contracts and we are going to hold you to that. We are not persuaded by anything we have heard in the evidence from the parties that we are wrong to do that." So that was the conclusion which they reached and accordingly, having subtracted £350,000 from £416,000, they duly awarded the bonus.

We cannot on that ground fault the Tribunal as a matter of law. We do think that the Tribunal might have been helped a great deal more if the employers had kept full records and had been able to answer these points, written regularly to the employee or had obtained his signature to a contractual document which they could lay before the Industrial Tribunal. As it was the matter was up in the air. The Tribunal had to do what common sense and the evidence before it suggested was right and they reached their conclusion. It is not up to us to say whether it is the right conclusion. It is up to us to say whether there is an error of law. We cannot find an error of law in the conclusion of the Tribunal whether or not we think it is well expressed or whether or not we think that others might reach a different conclusion.

Then they came to the question of unfair dismissal. They found that there was no unfairness except that there should have been consultation. That, of course, again, they were entitled to do although some Tribunals might have thought there had been enough consultation in the trial period as assistant manager and so forth. They might have thought there was sufficient consultation; they did not. They thought that there should have been consultation before the actual dismissal and they thought, therefore, that time would have been taken in consultation and that a fortnight would be a reasonable period to allow during which, although the same result would have followed after the consultation, Mr Warner would still have been employed. They were entitled to take that view. What were they do about that? They made what I would call a 'customary award', they awarded him a sum of £406, being a fortnight's pay, net.

It is said they were wrong to do that. Mr Auda has told us that he rang up Mr Warner's wife immediately Mr Warner had left and she had said: "He's out at work." That, of course, is hearsay. The Tribunal could have received hearsay. It would be very unreliable. She might mean in the context "out looking for work" or something of that sort. Mr Auda also tells us that it was common gossip in the organisation that in fact Mr Warner had immediately found work. We do not know, of course, on what terms that work was. The Tribunal gave the conventional award assuming, which would normally be a safe assumption, that if a person as senior as a manager is dismissed it will take him at least a fortnight to find fresh employment and they therefore inferred that his damages would be in the order of the two weeks net pay.

They might have gone into the fine tuning of it. They might have said "well, perhaps he has saved on bus and train fares". They might have asked him about that. They would normally expect the parties to ask about that if there was any difficulty about it. They would certainly expect the employers, if they were going to say "well however unfair we were at any rate he suffered no loss by it, or very little loss," to ask about that. What we are told, again we do not have the Chairman's Notes or comments, but what we are told is that no party thought it desirable or necessary to go into the question of amount. No doubt this may have been in people's minds "well, the Tribunal will form a rather general assessment, on any view, not very much." Mr Warner may have thought, "I have not suffered very much loss, I am certainly not going to go into a lot of details about it." We do not know.

It is up to the parties to lay their case both as to liability and as to amount before the Tribunal and on this point the parties were silent, gave no evidence, addressed no cross-examination. In those circumstances we think that the sum being a modest one the Tribunal were entitled to make the obvious inference rather can call the parties back and ask for further evidence. If the parties had chosen not to go into this matter before the Tribunal why should the Tribunal do so? Had there been a much larger sum and had the Tribunal speculated on a much larger sum, it might well be said that they should have received evidence, as they often do have to make the best assessment they can, for example where an employee says:

"I have been unemployed ever since I was sacked and I don't believe I am going to get any more work."

The Tribunal might then have to look at all the circumstances and say: "we think that within three months you will obtain work" but in that sort of case they will have received some evidence and will have to show that they are relying on such expertise and such evidence as they have in reaching a reasonable assessment. Here they did that without receiving evidence. That was the act of the parties and we cannot criticise the Tribunal in such a small case for not recalling the parties and saying "we think we had better go into all this", it seems just that they should reach an assessment of this small sum. We think anybody who was used to Tribunals would suppose that that is what they would do in the circumstances, had the parties not actually chosen to address them or call evidence on the matter.

In those circumstances it may very well be, as we say, that another Tribunal might have reached a different conclusion, might have approached the matter differently; but we think in the way that this matter was put before the Tribunal they were entitled as a matter of law to reach the conclusion which they did. Although we have heard much that is said commenting on this decision favourably or unfavourably, we are unable to say that there is an error of law which appears from the decision and the other papers before us. The appeal falls to be dismissed. Those are the reasons of us all.