MR P E SCHLESINGER v SWINDON & MARLBOROUGH NHS TRUST [2004] UKEAT 0072_04_2408

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2004] UKEAT 0072_04_2408Case No Appeal No. UKEAT/0072/04Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR P E SCHLESINGERAPPELLANTSWINDON & MARLBOROUGH NHS TRUSTRESPONDENT
Before
His Honour Judge Ansell Mr P R A JacquesDate 24 August 2004
[1]APPEARANCES For the Appellant MR A HALDEN (of Counsel) Instructed by: Messrs Davies & Partners Solicitors Rowan House Barnett Way Barnwood Gloucester GL4 3RT For the Respondent MISS A MORGAN (of Counsel) Instructed by: Messrs Bevan Ashford Solicitors 4th Floor Chancery Lane London WC2A 1LF SUMMARY Unfair Dismissal Polkey - loss of privilege on dismissal would have occurred. Basic award reduced to nil - (for Ridgeway contract - assessment) HIS HONOUR JUDGE ANSELL This is an appeal from a decision of an Employment Tribunal sitting at Bristol, who after a hearing in the autumn of last year which was a remedies hearing, awarded compensation in the sum of £12,918.54. The written Reasons were sent to the parties on 31 October.[2]The appeal is brought by Mr Schlesinger, Consultant Surgeon, in respect of two items of loss which were not allowed by the Tribunal. Those items were the loss of private income, which he contended flowed from the dismissal by the Swindon & Marlborough NHS Trust, which was deemed unfair and the refusal of the Tribunal to make any award in respect of those sums, and the Tribunal's award of a very small amount of future loss, arising from their finding that it was likely that he would remain employed in the public health service sector.[3]The background facts are that Mr Schlesinger, who is a Consultant Gynaecologist, with some specialism in cancer work, worked for the Trust under what is known as a maximum part-time contract which is a form of contract which allows Consultants to work within the public sector, and if they so choose, to also work part-time in the private sector. Prior to his dismissal, he was working a number of sessions at the Ridgeway Hospital in the Swindon area, and indeed had net monthly earnings there of just under £2,800.[4]He was suspended in January 1999, following his arrest and being charged for certain criminal offences, on which he was eventually acquitted in November 1999. Apart from being suspended from the Trust, he was also effectively suspended from working for the Ridgeway Hospital. In theory he was able to return to work, in late 1999 but in fact that never took place. There were discussions about his planned return to work, in the face of complaints that began to be received by the Trust from a number of colleagues. Those complaints escalated and resulted in disciplinary proceedings being commenced in November 2000 and his eventual dismissal in March 2001, that dismissal being confirmed by an internal appeal in September 2002. The merits hearing took place in June 2003, resulting in the finding of unfair dismissal which then led to the remedies hearing, the subject of this hearing today.[5]The appeal, as we have said, relates to two findings, one in relation to private earning and one in relation to future losses. Compensation, as is well known, is governed by section 123 of the Employment Rights Act 1996 and provides that the:
" amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer."
There are thus two tests to be considered, one is whether the loss is attributable to the employer's action, and even if that loss is attributable, is the amount being claimed just and equitable in all the circumstances?[6]What approach should the Court take as to causation? The matter has been considered in a number of cases and we refer only to one decision of this Court, by His Honour Judge Clark in Pacific Direct Ltd -v- Miss N Riaz EAT/0072/02 , judgment delivered on 14 April 2003. At paragraph 10 of that judgment, Judge Clark referred to the dicta of Lord Johnston in Simrad Ltd v Scott [1997] IRLR 147 , where Lord Johnston has said thus, dealing with the predecessor to section 123:
"The process is a three-stage one, requiring, initially, factual quantification of losses claimed; secondly, but equally importantly, the extent to which any or all of those losses are attributable to the dismissal or action taken by the employer, which is usually the same thing, the word 'attributable' implying that there has to be a direct and natural link between the losses claimed and the conduct of the employer in dismissing, on the basis that the dismissal is the causa causans of the particular loss and not that it simply arises by reason of a causa sine qua non, i.e. but for the dismissal the loss would not have arisen. If that is the only connection, the loss is too remote. The third part of the assessment in terms of the reference to the phrase 'just and equitable' requires a Tribunal to look at the conclusions they draw from the first two quarters and determine whether, in all the circumstances, it remains reasonable to make the relevant award. It must again be emphasised, however, what has to be considered under the third test already has to have passed the second. Finally, it has to be observed that while the facts relating to a question of mitigation will frequently bear upon the question of causative link, mitigation is essentially an equitable plea to be judged in the context of reasonableness at common law and thus on not too fine a balance."
Later, in paragraph 12

Judge Clark said thus:

"It is for the Tribunal of fact to consider the appropriate effect of the unfair dismissal in those circumstances. As Sir Christopher Stoughton put the matter at paragraph 28 of Dench v Flynn [1998] IRLR 653 , was the loss in question caused by the unfair dismissal or by some other cause? The Tribunal must ask and answer that common sense question and then ask itself what amount it is just and equitable for the employee to recover."
And later at paragraph 15 he said thus:
"It is for the Tribunal to assess and weigh the evidence which it hears"
. The appeal, as regards the private earnings, indeed in relation to the future losses, is really bought on a perversity basis that the Tribunal have ignored important and substantial portions of evidence, and as a result come to an erroneous conclusion.[7]The Court's approach with regard to perversity has again been set out in a number of decisions, most recently in Yeboah -v- Crofton [2002] IRLR 634 where the Court of Appeal in a speech by Mummery LJ at paragraphs 93 said thus:
"an appeal ought only to succeed where an overwhelming case is made out that the employment tribunal reached a decision which no reasonable tribunal, on a proper appreciation of the evidence and the law, would have reached. Even in cases where the Appeal Tribunal has 'grave doubts' about the decision of the Employment Tribunal, it must proceed with 'great care': British Telecommunications plc v Sheridan"
Later he said thus at paragraph 95:
"Inevitably, there will from time to time be cases in which an employment tribunal has unfortunately erred by misunderstanding the evidence, leaving it to make a crucial finding of fact unsupported by evidence or contrary to uncontradicted evidence. In such cases the appeal will usually succeed. But no appeal on a question of law should be allowed to be turned into a rehearing of parts of the evidence by the Employment Appeal Tribunal."
With those principles in mind how did the Appellant put the case with regard to the two issues that they raise?[8]With regard to the finding as to the alleged loss of private earnings from the Ridgeway, the Tribunal dealt with the matter at paragraphs 9 and 10. In Paragraph 9 they pointed out that the Respondents had no control over the Ridgeway Hospital, nor any connection with them, and any agreement for private practice privileges was between the Appellant and those managing the hospital. In paragraph 10 they went on as follows:
"Correspondence between the applicant and those managing the Ridgeway indicate that the fact that the applicant was not employed at the respondent was a factor in not reinstating his privileges. They have not since been reinstated. However, the evidence is conflicting. The letter appearing at page 36 of the supplementary bundle indicates that The Ridgeway believed that the date of that letter that the applicant was employed by the Swindon & Marlborough NHS Trust following a letter from him on 31 March 2002 to that effect and rejecting his application for practising privileges on an ad hoc basis - not because he was not employed by the NHS Trust. The applicant's own evidence was that the Ridgeway could do as they pleased. He indicated that they did not have to give any reason for refusing to grant practising privileges. We are not satisfied, therefore, that the applicant's dismissal was the determining factor in refusing him the return of practising privileges."
And their conclusions came in paragraph 18:
"We find that the loss of earnings sustained by the applicant in relation to his private income were not attributable to the conduct of the respondent. We come to that conclusion because the respondent had no control whatsoever over the Ridgeway Hospital. The applicant's arrangement for his private work were entirely between him and the Ridgeway Hospital. If they chose to terminate his arrangements for whatever reason, that was a matter for them. We must consider what is just and equitable in all the circumstances and we find that it is not just and equitable to award the applicant compensation in respect of his loss of private income."
[9]It is submitted today, on behalf of the Appellant, that the Tribunal failed to give proper consideration to all the correspondence that had been put before them, and although they referred to two particular letters in paragraph 10 of their Decision, they failed to mention and give significance to later correspondence, and particularly a letter to which we have been referred, dated 26 September, written by the Managing Director of BMI Healthcare, the owners of The Ridgeway, to Mr Schlesinger where they say in that letter; "In order for us to consider reinstating your privileges, you would need to provide evidence to the Hospital Director that the issues surrounding your suspension have been fully resolved, you have been reinstated by the Trust and that you have kept up your levels of CME and surgical skills such that you remain competent to deal with all the complications that may arise in your private practice. When provided with that evidence, the Hospital Director will review your application. It is the usual practice that applications will be discussed with the Medical Advisory Committee and, having given all due consideration to the merits of each individual case, a decision will be taken by Mrs Maslin." [who is the Director of The Ridgeway]. Whilst that letter is not specifically referred to in the Tribunal's Decision, it is clear from paragraph 10 that they do refer to conflicting correspondence and it is not in dispute that these letters were indeed before the Tribunal, indeed we are told that the remedies hearing was in fact adjourned for the specific purpose of having all the correspondence placed in front of them. We are quite certain, therefore, that the Tribunal were able to weigh up all the relevant correspondence.[10]However, at the end of the day, the Decision was for them, and within paragraph 10 it is clear that they weighed up a number of factors before coming to the conclusion that they did. In particular, they seemed to have placed reliance on the Appellant's own evidence that the hospital could, as he put it, do as they pleased, and thus even though one particular letter is not mentioned within the body of the Tribunal's Decision, we do not see that failure to mention that particular letter approaches the high hurdle that is required to be crossed in a perversity appeal.[11]A second part of this appeal was to suggest that the Tribunal had been influenced by evidence from Linda Hill-Tout, who was the Chief Executive at the time of the remedies hearing of the Trust, and who gave evidence. Particular complaint is made of paragraph 23 of her statement, where she refers to a meeting with Mrs Maslin, the Director of Ridgeway on 21 August, when Mrs Maslin is supposed to have informed her that she had received no application to have those admitting privileges reinstated. That clearly is in conflict with the correspondence, to which we have already made reference.[12]As far as that evidence is concerned, we would make the following comments: first of all there is no indication within the Tribunal's Decision that indeed they paid any reliance to what Ms Hill-Tout had said in that particular paragraph. Earlier on in their Decision they refer to other pieces of evidence from Ms Hill-Tout which they accepted. Secondly, it is clear from paragraph 10, and from their reference to the correspondence, that they accepted that there had been application by Dr Schlesinger for continuation or reinstatement of his privileges at The Ridgeway, and on the basis that they accepted that that correspondence had taken place, that clearly superseded and overrode the evidence in Ms Hill-Tout's statement. Again we are satisfied that the Tribunal weighed up the evidence that was in front of them and came to proper conclusions on the correspondence and on the oral evidence that they heard.[13]In addition, they chose to make a finding also that it was not just and equitable for amounts earned in the private sector, and in a private hospital unconnected with his employment, to flow from his unfair dismissal. They had been referred to a case of Jones -v- Lingfield Leisure , (C A) [1999] EWCA Civ 1456 although they made no specific findings as to whether self-employed income could ever flow as damages within an unfair dismissal claim. In that case, the employee had worked as a duty manager and studio co-ordinator in a health club gym and had lost her employment. She was only working part-time and had been permitted by her employers to take private classes as an aerobics teacher and to act as a personal fitness trainer. The Tribunal found that her employment as a duty manager undoubtedly helped her private practice because she could allocate herself as an aerobics instructor for a class, and could use the facilities of the club in her work as a personal trainer, without payment of a fee to her employers, and she had built up a substantial practice as a personal fitness trainer at the time of her dismissal.[14]The argument arose as to whether the loss of earnings from her private work was a loss she sustained in consequence of her dismissal, and whether section 123 entitled her to claim the loss of this private income. Pill LJ, towards the end of his judgment said this:
"I consider the third of Mr Davison's submissions. Whether one thing can and should be said to be a "consequence" of another (the language of Section 123) is a subject which fills large tracts in the law reports. It involves a judgment of fact in each case. Under Section 123 the tribunal of fact must consider what amount is just and equitable in all the circumstances. The test in section 123 clearly gives and leaves with the tribunal of fact a discretion as to what award is appropriate on the facts of a particular case. Applying a provision which deals with unfair dismissal, the result reached by the industrial tribunal was, in my judgment, entirely justified. The claim for an award based on the loss of substantial sums of money earned in a self-employed capacity was, they were entitled to hold, not within the terms of the section. In my judgment, there was no error of law on the part of the Tribunal in holding that those self-employed earnings should be a part of the Section 123 award. I do not state a proposition of law that no award could ever be made under Section 123 for loss of self-employed earnings or, at any rate, the loss of an opportunity to earn them. Without deciding the point, I do not exclude the possibility that there could be a situation under a contract of employment where the opportunity to earn other money, using the employer's facilities, in a self-employed capacity, could come within Section 123 when an award was quantified. However, on the facts of this case the Tribunal were, in my judgment, entitled to hold on an application of Section 123 that the very large earnings as a self-employed person by an appellant employed for only one or two shifts a week were not within the terms of the section."
[15]Whilst it is not directly for us to rule as to whether the self-employed earnings of Mr Schlesinger would flow from the unfair dismissal by his employers, we have serious doubts as to whether they are losses that would naturally flow as a direct and natural consequence. There was no direct contractual linkage between his work for the Trust and his work for The Ridgeway, and whilst we accept that the form of his contract with the Trust did allow him the opportunity to take on private work, that was a matter for the particular specialist as to whether he did or did not take on that work, where he took it on and the hours that he chose to work, and it seems to us that even if he could have established that his work at The Ridgeway was dependent on the existence of his work at the Trust, in terms of permission to work, we do not find that there is a sufficient contractual link to allow him to claim his losses in the private sector, arising out of his unfair dismissal.[16]The second limb of the appeal relates to the award, or lack of it, in terms of his future losses. That was dealt with in paragraph 22 of the Tribunal's Decision thus:
"We now turn to future losses. The applicant contends that his future is uncertain and asks the tribunal to make an award for future loss. He does not specify the period. In coming to our conclusions we bear in mind that, apart from two weeks in April, the applicant has remained employed in the NHS albeit as a locum Consultant. However, his salary since April is at a broadly similar rate amounting to a net monthly loss of £12.29. We note that he has the support of his current colleagues and those in Leeds. Bearing in mind the past history and the fact that the applicant now has a finding of unfair dismissal we consider it more likely than not that the applicant will succeed in remaining employed in the NHS in the future. In determining future losses we take into account that his current contract may well end shortly. In the circumstances we considered it appropriate to award 6 months' future loss …."
Earlier on in the Decision, they had dealt with his existing work at Southmead Hospital and made findings as far as that was concerned.[17]The appeal, as far as that aspect of the matter is concerned, is that the Tribunal failed to have regard to a number of important factors. First of all, it is said that the Tribunal referred to him remaining employed in the NHS, not making the proper distinction that in fact he would have to remain employed by appropriate NHS Trusts, rather than the NHS, and also making no distinction between full-time and locum positions.[18]Secondly, the Tribunal failed to have regard to the fact that he had been unsuccessful in many applications for substantive posts; thirdly, that the locum posts were by their nature temporary; fourthly that the finding of unfair dismissal, some three months earlier on, had not made any difference, and, lastly, a number of factors what Mr Schlesinger had referred to in his statement relating to his lack of up-to-date specialist qualification in relation to cancer work, in particular that the nature of qualifications had changed since 1995.[19]However, when one looks at the Tribunal's Decision and their earlier findings, most of these factors were in fact taken into account. The Tribunal had correctly referred to the fact that he had made unsuccessful applications, and earlier in their Decision, they had referred to his locum status at the Southmead Hospital, as opposed to having a full time position, and also to locum positions that he had held at other Trusts in Bristol and in Leeds. We are therefore satisfied that those factors were taken into account by the Tribunal.[20]The Tribunal clearly weighed up the statement that Mr Schlesinger had put in and the difficulties that he had raised with regard to cancer work, but in their conclusions in paragraph 22, it seems to us that they took a proper view of the various factors that were placed in front of them in terms of the likelihood of his future employment. Indeed, we note that they had taken into account in paragraph 22 the fact that his current contract might indeed end shortly. We are satisfied that they did in fact take into account all the appropriate factors, and insofar as particular matters were not specified by them, this does not, in our view, amount to a decision which comes within the category of perverse, as defined in Yeboah -v- Crofton .[21]Accordingly, for the reasons that we have indicated, we would dismiss this appeal.