MS F KHANUM v I B C VEHICLES LTD [1999] UKEAT 685_98_1509

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [1999] UKEAT 685_98_1509

Case No Appeal No. EAT/685/98

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

MS F KHANUMAPPELLANT

I B C VEHICLES LTDRESPONDENT

Before

Mr Justice Morison

Date 15 September 1999

[1]APPEARANCES For the Appellant MS A BROWN (of Counsel) Instructed By: Anunay Jha Principal Legal Officer Commission for Racial Equality Elliott House 10/12 Allington Street London SW1E 5EH For the Respondents MR D GRIFFITH-JONES (of Counsel) Messrs Manches & Co Solicitors Aldwych House 81 Aldwych London WC28 4RP MR JUSTICE MORISON: The appellant, Ms Farida Khanum is a Muslim Bangladeshi and was employed by the respondents, IBC Vehicles Ltd, from 11 January 1993 to 9 December 1996 when she was dismissed. On 6 January 1997 she filed an originating application with the Employment Tribunals complaining of unfair dismissal and both race and sex discrimination. A claim was also made that she had been subjected to discrimination on the basis of her religion, but, as the tribunal indicated at the hearing, there is presently no legislation preventing discrimination on this ground. Following four days of evidence the tribunal promulgated its findings on 29 December 1997. The appellant had been employed as a robotics apprentice technician. She had received excellent grades in her BTEC ONC and HNC Electronics examinations and had expressed to her employers her interest in pursuing a University course. It was her attendance at an Open Day at Hertfordshire University that had provided the employers with their justification for suspending the appellant on 7 October 1996 and subsequently dismissing her for "refusal to carry out a proper instruction and defrauding the company." This reason was dismissed by the tribunal which found that the dismissal was made on the basis of the appellant's sex and race, in particular her wearing of hijab on the employer's premises. The tribunal concluded by finding that the applicant had been unfairly dismissed and she had been subjected to racial abuse and harassment and to a detriment on the grounds of both race and sex.

[2]A remedies hearing was heard on 17 February 1998 and it is from that hearing that the appellant now appeals.

[3]The extended reasons from the remedy hearing were promulgated on 2 March 1998. The tribunal found that shortly before her dismissal the appellant had been diagnosed as suffering from depression. Immediately after the dismissal she made a number of job applications but there was evidence she was being blacklisted; in one case she was offered a job at an interview but subsequently heard nothing more from the potential employers. The tribunal accepted that there was no evidence of suitable posts for the appellant between the date of dismissal and the 5 th October 1997 and that it was reasonable for her not to have accepted work at any General Motors company.

[4]The tribunal found that the appellant realised that she would find it difficult to get employment without a degree. She therefore took up a place at Luton University studying for a Computer Systems Engineering Degree which commenced on 5 th October 1997. Whether the appellant was entitled to compensation for the period after the date when she started at University was the subject of argument. The tribunal made the following findings:

"The tribunal is satisfied that going to university was a sensible decision for Ms Khanum to take but also, notwithstanding Ms Brown's arguments, that it was inevitably a decision which broke the chain of causation. Whatever Ms Khanum's reasons for going to university (and they appear to be laudable), the fact of the matter is that in doing so she has chosen to take herself out of the job market for a period of some two years. We do not think it right to award compensation for any period beyond 5 October 1997. … And although we find that Ms Khanum's decision to take up a university course broke the chain of causation so far as compensation is concerned, she had in reality little choice but to take up a Degree Course which would give her a qualification more readily accepted by employers than the apprenticeship which she served with IBC. It is clear that Ms Khanum had been ambitious to succeed in IBC: her dismissal wholly frustrated that ambition."

[5]The tribunal then considered damages in relation to the claims of sex and race discrimination:

"The tribunal considers this to have been a serious case of discrimination…We have come to the conclusion that there should be awards both of compensation for injury to feelings and of aggravated damages. It is clear that Mrs Khanum has suffered a great deal of stress and unpleasantness. She has suffered from depression. She has lost her chosen career at a critical point…In the view of the tribunal, the injury has been aggravated by the respondents, in particular, by the arrogant manner in which they persistently brushed aside Ms Khanum's complaints of discrimination; in the conduct of the disciplinary proceedings; the doubts cast upon Ms Khanum's character; the size of the employer and the dominance of the employer in the local employment market. The total award that the tribunal has decided on is the figure of £8,000.00 which comprises £6,000.00 as injury to feelings and £2,000.00 aggravated damages."

[6]The tribunal's decisions on the chain of causation and on the quantum of damages were appealed by the appellant. In summary the grounds of appeal were two-fold: 1. The tribunal erred in finding that the appellant's decision to attend University "inevitably broke the chain of causation", thereby limiting damages to the date of 5 th October 1997. 2. The tribunal's award of £6,000 for injury to feelings was unreasonably low given the factual findings of the tribunal. The first issue:

[7]Ms Brown submitted on behalf of the appellant that the tribunal should have approached the issue of loss of future earnings on the principle that the appellant should be placed in the position as she would have been 'but for' the unlawful act of dismissal. Given the tribunal's following findings: that the appellant was blacklisted; that she had found it difficult to find employment; that the employers/General Motors dominated the local automobile industry; that she had lost her job at a critical point and "had in reality little choice but to take up a Degree Course", it was an error to then conclude that attending university broke the chain of causation.

[8]It was argued that the proper interpretation was that the decision to go to university was a direct and natural consequence of the dismissal. There was a finding of fact that the appellant had taken reasonable steps to mitigate her losses so she was entitled to look for a career to replace what she would have had. In support of that argument our attention was directed to Marshall v Southampton and South-West Hampshire Area Health Authority

[1993] IRLR 445

. The European Court of Justice said in that case that the level of compensation must be adequate to restore equality, and enable the loss and damage actually sustained as a result of the discriminatory dismissal to be made in full. As the appellant was unable to find work in her chosen field she was entitled to pursue a degree course. The decision to take herself out of the job market was therefore a direct consequence of her dismissal.

[9]In response, Mr Griffith-Jones' principal submission was that the loss she incurred from attending university did not arise directly from her dismissal; it was not the 'causa causans', or direct cause of her loss. Where dismissal causes loss in the sense of 'causa sine qua non', (or but for the dismissal I would not have incurred the loss) the loss is irrecoverable. It was argued that the appellant's loss was not directly caused by her employers as she consciously took herself out of the job market in order to maximise her long term earning potential at the expenses of her short term position. That decision was not taken as a consequence of her dismissal but was an inevitable decision to improve her employability particularly given the tribunal's findings that even before the dismissal the appellant had set her mind on pursuing a further education course and had investigated the position at Hertfordshire University. Taken against the background facts found by the tribunal, it was argued that attending university could not be a direct cause of the dismissal and she should not be compensated after the decision was taken.

[10]It was argued on the appellant's behalf that the tribunal misdirected itself by relying on the approach in Simrad Ltd v Scott

[1997] IRLR 147

and in so doing considered the issue of loss on a contractual, rather than a tortious basis. Mr Griffith-Jones argued that there was no undue reliance on that case by the tribunal. He also relied on the case as authority for the proposition that losses must be attributable to dismissal so that there is a direct and natural link between the losses claimed and the conduct of the employer in dismissing. We accept that proposition. It is an established principle that it is not enough to say that but for the dismissal the loss would not have occurred.

[11]In Simrad Ms Scott, an electrical technician, was dismissed on the grounds of redundancy. She could not find employment as an electronic technician and took a job which was lower paid. She eventually decided to retrain as a nurse and embarked on a three year course. The tribunal held that it was reasonable for Ms Scott to retrain and awarded compensation for her loss of income accordingly. On appeal the Employment Appeal Tribunal sitting in Scotland held that the quantification of compensation involved a three stage process. The first stage was the quantification of the losses claimed. Secondly, the tribunal had to consider the extent to which the losses were attributable to the dismissal and thirdly, whether in all the circumstances it was just and equitable to award compensation. On that basis the appeal tribunal held that although it was reasonable of Ms Scott to retrain, her losses stemming from that decision were too remote both in time and content to be linked to the dismissal. It could not be said that the decision to retrain was directly linked to the dismissal, although it was accepted that but for the dismissal, Ms Scott would not otherwise have embarked on the career change.

[12]In our opinion the decision in Simrad is to be considered in the light of its own facts. It was not creating a rule of law that the pursuit of further education subsequent to dismissal necessarily breaks the chain of causation. As in Simrad the tribunal in the present case found that the decision to retrain was reasonable. That however is not determinative of the issue. It is for the tribunal to determine in the light of the factual circumstances whether or not the decision to attend university was caused as a direct result of the dismissal. Given the tribunal's finding that she had no other choice but to attend university, the loss suffered by the appellant in so doing must be a direct result of her dismissal and not too remote.

[13]There are three special factors which govern this case. First, that the appellant had completed an apprenticeship with a view to being employed in a specialist job within the motor car industry. Second, that her employers hold a dominant position in the market and were in a position to prevent her pursuing her chosen career and there was evidence they were blacklisting her. Third, the she was not only unfairly dismissed by unlawfully dismissed. For those reasons it could be reasonably have been foreseen that the applicant would or might have to retrain for a different career following her dismissal.

[14]We also consider that the tribunal failed to consider what was 'just and equitable' as identified by the appeal court in Simrad . It is for the tribunal to consider whether it remains reasonable to make the relevant award. In the light of its findings of fact in relation to the appellant's difficulties in finding employment after her dismissal and her state of health, it was clear, it was submitted, that it had failed to direct themselves correctly on this third stage. On the basis of the tribunal's own findings we would have to agree with this.

[15]For these reasons, we consider that the tribunal erred in not making an award of future loss relating to the appellant's decision to start her degree course. Clearly, but for the dismissal the appellant would not have embarked on a full time degree; on the facts it was also open to the tribunal to find that the decision to enter full time education was taken as a direct result of the dismissal. We therefore propose to remit the matter of future loss back to the tribunal for further consideration of the compensatory award, under an express instruction that losses incurred after embarking on the university course may be taken into account. The second issue:

[16]On the issue of compensation for discrimination, Ms Brown argued that given the tribunal's findings regarding the appellant's suffering, the sum of £6,000 for injury to feelings was too little and unreasonable given the facts of the case. It was also contended that the tribunal should have considered the appellant's claims of race and sex discrimination separately: she received less compensation then she was due.

[17]Clearly the treatment meted out to the appellant by the respondents was appalling and an affront to both her sex and race. Her career has also been blighted. The facts were clearly set out by the tribunal in its decision on damages. We do not therefore accept that the tribunal did not have those matters in mind when calculating damages. It is most rare for a finding on damages to be overturned on appeal, and we accept Mr Griffiths-Jones' argument that we should be wary before intervening on the matter of quantum as we do not have the materials to properly consider the matter. We would say that the question of quantum on appeal is a question that really depends on the facts. In this matter the tribunal were clearly alive to the suffering of the appellant and they compensated her accordingly. We do not accept that the tribunal should have considered the causes of actions separately. Mr Griffith-Jones is right that the causes of actions essentially relate to the same factual complaints and the tribunal were entitled to consider the issue of compensation as a global figure. Whilst we would accept that the award is on the low side for a case of this gravity, we do not consider that it amounts to an error. Accordingly the second ground of appeal is dismissed.