Manyservice Ltd v Wilton [1999] UKEAT 1478_98_1803

EAT

Manyservice Ltd v Wilton

[1999] UKEAT 1478_98_1803 · 1999-03-18

HIS HONOUR JUDGE LEVY QC: This appeal raises a short point of law. It comes to us on the ex-parte hearing of an appeal by Manyservice Limited in proceedings commenced by Mr B Wilton by an Originating Application to an Industrial Tribunal in which he claimed that he had been unfairly dismissed. He sought redundancy pay and payment in lieu of notice.

The matter came before an Industrial Tribunal sitting in London (North) on 1 September 1998. It's decision was sent to the parties on 20 October 1998. The unanimous decision of the Tribunal was that:(1) the Applicant's claim for unfair dismissal failed and was dismissed;

(2) the Applicant's claim in respect of breach of contract (eight weeks' pay in lieu of notice) succeeded. The Respondent was ordered to pay the Applicant the sum of £2,768.64 in respect of eight weeks' pay in lieu of notice.

From that decision, the Respondent did two things:

It issued a notice of appeal dated 25 November 1998 in which it claimed that the Tribunal erred in law by awarding damages in lieu of notice based on the Appellant's gross pay. The notice of appeal says that because the Applicant will not be obliged to pay tax on the damages he receives, he will be overcompensated if he receives the gross amount. He should have been awarded the net amount of £2,000.96 only. Reliance was placed on the very well know decision in the House of Lords in BTC v Gourley

[1956] AC 185

The second thing the Respondent did was to seek a review of its decision from the Industrial Tribunal by notice dated 2 November 1998. The Industrial Tribunal duly reviewed its decision by decision sent to the parties on 30 November 1998 in which the Tribunal said the following in paragraph 4:

"The contention that there was no argument on the award is misconceived. Counsel for the Respondent had the opportunity to argue that point had he wished to do so. He did not do so. It is not a matter which can be described as new evidence which only came to light subsequent to the conclusion of the hearing within the meaning of rule 11(1)(d) of the 1993 Regulations. More importantly, the Tribunal would in any event have rejected the argument that the award should have been calculated at the net rate because such calculations are not unusual. Moreover, had we awarded £2,000.96 to the Applicant, the beneficiary of the difference between that figure and the award made by the Tribunal should have been the Inland Revenue and not the Respondent."

Mr Maitland-Jones for the Applicant here puts his case quite clearly. BTC v Gourley states that an award of damages should be net of tax. In the passage set out from the Review decision, it is clear that the Tribunal avers that in calculating the quantum of an award, the amount of salary due is often calculated in gross and not net terms. My colleagues today say it is the norm within their experience that when payments are made in lieu of notice for monies due to the employee, payments are made without deduction of tax. If the Applicant had worked his notice, the tax would have been deducted. If he had not worked during his notice period, he would be entitled to be paid the gross sum due to him for that period without deduction. This is well established industrial practice, in which the decision in Gourley plays no part.

While we see the force of Mr Maitland-Jones' submissions based on Gourley , they are not arguments which find favour in the employment field when damages for unfair dismissal fail to be awarded. In our judgment, this appeal has no hope of success if it is allowed to go to a full hearing. The practice of an Employment Tribunal to assess damages in the way this Tribunal did is well established. We therefore dismiss this appeal at this stage.