BILLFIELDS FOOD COMPANY LIMITED v (1) MR P KONTEMENIOTIS [2004] UKEAT 0096_04_0809

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2004] UKEAT 0096_04_0809Case No Appeal No. UKEAT/0096/04Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
BILLFIELDS FOOD COMPANY LIMITEDAPPELLANT(1) MR P KONTEMENIOTISRESPONDENT
Before
Her Honour Judge Wakefield Dr B V FitzgeraldDate 8 September 2004
[1]APPEARANCES For the Appellant MR MAURICE JOHNSTONE (Representative) The Employment Law Service Wembley Law Chambers 38 Napier Road Wembley Middlesex HA0 4UA For the First Respondent MR DANIEL TATTON-BROWN (of Counsel) Instructed by: Messrs Piper Smith & Bashman Solicitors 31 Warwick Square London SW1V 2AF For the Second Respondent No Appearance or Representation by or on Behalf of the Appellant SUMMARY Unfair Dismissal / Disability Discrimination Issue as to the factual basis upon which the ET proceeded - whether or not a concession had been made. Issue as to correct approach to mitigation of loss in UD. HER HONOUR JUDGE WAKEFIELD This is an appeal by Billfields Food Company Limited (to which I shall refer hereafter as Billfields) against a decision of an Employment Tribunal sitting at London (South), by which it was held that they had unfairly dismissed Mr Kontemeniotis and had treated him less favourably on grounds of his disability.[2]The undisputed background facts are that Mr Kontemeniotis had worked since the 2 February 1998, latterly as a poultry manager, at a factory in the Old Kent Road where meat and poultry were butchered for supply to the catering trade. Mr Kontemeniotis worked from 4am until noon, for a total of 45 hours per week. On September 2002, following a change in management personnel (of which more later) Mr Kontemeniotis was informed that his times for working the 45 hours were to change with immediate effect. He was not prepared to comply with the alterations proposed and, following further discussions in the ensuing days, he resigned with effect from 7 September 2002.[3]The Originating Application was presented to the Tribunal on 4 December 2002 and named two Respondents, Billfields and a Second Respondent Lillian and Sexton Limited. In circumstances which do not entirely appear from the Extended Reasons for the Employment Tribunal's decision but which we now understand was by agreement between the parties, the Second Respondent was discharged from the action. Billfields was found liable in respect of the compensation awarded to Mr Kontemeniotis for unfair dismissal and disability discrimination.[4]It is one of the grounds of the appeal before us today (added by amendment, following a decision made in Chambers on 10 August 2004 by a Judge of this Employment Appeal Tribunal) that Billfields was never the employer of Mr Kontemeniotis, any relevant transfer of undertaking only taking place some two months after he had resigned.[5]The reasons for the Employment Tribunal's findings as to there having been unfair dismissal are set out in paragraph 19 of the Extended Reasons. Having given in their paragraph 17 the reasons for preferring the evidence of Mr Kontemeniotis to that of Mr Darren North, a director of Lillian and Sexton Limited (but called, according to the Tribunal, on behalf of Billfields), the Employment Tribunal said this:
"19. We are therefore satisfied firstly that his contract of employment was to work from 4.00 am until midday on weekdays, secondly that the Respondents required him to change that, that change was a fundamental change which went to the root of this contract, that he was therefore entitled to and did accept that as an ending of his obligations under the contract. We therefore find for him that he was constructively dismissed and the Respondents having conceded that that was unfair that complaint succeeds"
[6]There is no appeal as regards that finding of unfair dismissal. Grounds (d) and (e) on the Notice of Appeal do however challenge the findings of the Employment Tribunal as to the award of compensation for unfair dismissal which comprised a basic award of £1,560, losses to date of the hearing of £6,930 and future losses of £19,182 - a total award on that aspect of £27,672. Billfields argue that because they had, by letter before Mr Kontemeniotis commenced the proceedings, offered to re-instate him on the same terms and for the same hours as previously, he had failed to mitigate his loss by failing even to acknowledge, let alone accept, that offer. The Employment Tribunal dealt with this issue in their paragraph 23 as follows:
"23. In the facts above we have recited that in answer to a letter before action the Respondent by a letter dated 9 October some five weeks after he had left offered to reinstate him in his former hours of work. He rejected this because he did not consider it sincere. The Respondents had not contacted him at all after he told them that he could not work the new hours and had waited until they received the letter before action before taking this course. In that letter that they had utterly denied his claim describing it as without merit and in those circumstances he did not consider that a proper employer-employee relationship could be re-established between them. We referred to the case of Wilding- v- British Telecommunications Plc [2002] EWCA 349 and we agree with Mr Kontemeniotis that his action in declining this offer was not unreasonable."
[7]The findings of fact upon which the Employment Tribunal based their decision as to disability discrimination are set out in their paragraph 10:
"10. He worked from 4.00 am to noon- what was called the day shift. In 1999 he tried to work from midnight to 9.00 am but he found he could not work those hours, because he found it difficult to sleep during the daylight hours and his nerves started to suffer. Panic attacks came on and when he saw the doctor he was diagnosed as having a recurrent depressive disorder. He described its effect upon his home life which, as the Respondents have admitted he is disabled, we need not repeat in this public document. We are quite satisfied that his illness, left untreated, would have had a substantial adverse effect on his day to day activities. Fortunately he was prescribed tablets which were able to control that situation and he was able to work quite regularly. However it is clear to us from Mr Kontemeniotis's evidence that he was constantly aware that he had that recurrent depressive disorder which was only controlled by tablets and he was quite fearful of it recurring."
They then in paragraph 20 (as originally drafted) said this:
"20. We further find for Mr Kontemeniotis on disability discrimination. We are satisfied that he was dismissed for a reason relating to his disability. To the extent that it requires knowledge by the employers in constructive dismissal cases we are satisfied that the employers whilst they may not have known that he was disabled for the purposes of the Disability Discrimination Act knew or should have known had they made the proper enquiries that he was a person who was receiving treatment for a condition and certainly their managers knew all about it. Therefore we cannot accept a defence that they did not know. We therefore find that they treated him less favourably by dismissing him for a reason connected with his disability."
The amended Notice of Appeal in ground (a) criticised that paragraph in the following terms:
"a. .At point 20 of the decision the Tribunal failed to show how it was that panic attacks through worrying about the safety of his family led to a disability that meant he was unable to work shift patterns and in particular only certain shift patterns. The Tribunal gave no regard as to how any employer in such circumstances led to the conclusion that their managers should have known the applicant faced difficulty with certain shift patterns. In fact he had worked those hours before."
[8]By the Order of this Employment Appeal Tribunal dated 10 August 2004 already referred to, the Chairman of the Employment Tribunal was invited:
"to record the Employment Tribunal's reasons for the finding (in paragraph 20) of disability."
This the Chairman has now done by a letter received in this Tribunal on 23 August 2004 as follows:
"……para 20 of the decision [is revised] as follows. We further find for Mr Kontemeniotis on disability discrimination. The facts we have found in paragraph 10 above satisfy us that he was suffering from recurrent depressive disorder, which, if untreated would have had a substantial and long term adverse effect upon his ability to carry out normal day to day activities. We are further satisfied that he resigned because the Respondents, in compelling him to change the only hours he could work to cope with his disability in effect forced him to resign therefore dismissing him for a reason which related to his disability. We are not satisfied that the Respondent could justify that action because other staff transferring from Wembley subsequently worked the 4.00 am to midday shift. We are satisfied that the employers knew enough about his condition to know that their insistence upon new hours would impact upon his disability. Their managers clearly knew about it and, having heard his objection, they had a duty to enquire."
[9]The first issue we have had to determine today is whether Billfields was properly held liable in respect of Mr Kontemeniotis's complaints. It appears to be agreed as a matter of fact that there was no relevant transfer of undertaking to Billfields of the business by which Mr Kontemeniotis had been employed until November 2002, after his employment had terminated.[10]On behalf of Mr Kontemeniotis it is said that there was a clear concession prior to the Employment Tribunal hearing and made by or on behalf of Billfields that in the event of Mr Kontemeniotis's claims succeeding on the merits, Billfields would accept liability. On behalf of Billfields, it is today denied that such a concession was made.[11]Having considered the documents and the submissions of Billfields' Representative and of Counsel for Mr Kontemeniotis, both of whom appeared before the Employment Tribunal, we are satisfied that the concession was made by or on behalf of Billfields and was acted upon by the Employment Tribunal. The following, in particular, led us to this conclusion (not in any order of importance):(1) Firstly, that the Employment Tribunal dismissed Lillian and Sexton Limited from the action but did not at any stage in the Extended Reasons address the issue of whether Billfields was the company liable for any compensation payable to Mr Kontemeniotis. The issue of who was Mr Kontemeniotis's employer at the relevant time was clearly raised in the Notices of Appearance by both the original Respondents and it seems inconceivable that the Employment Tribunal, in absence of the suggested concession, would not have addressed that issue;(2) The written closing submissions made on behalf of Billfields do not refer to the issue;(3) Having received the decision, sent to the parties 2 December 2003, Billfields did not request a review as they must surely have done if such a fundamental issue remained unresolved;(4) Correspondence and copies of e-mail's before us, (but not all before the Employment Tribunal) tend to evidence a concluded agreement as to the concessions suggested. Had there been any argument as to there being a concluded agreement on the concession, the Employment Tribunal would surely have been invited by the parties to consider all these documents and to give a ruling. As it was, the only issue that the Employment Tribunal did consider and resolve in favour of Billfields in relation to a relevant transfer was as to any requirement to consult (see paragraph 21 of the Extended Reasons). On that issue they found that the relevant transfer to Billfields was in November 2002 and that there had been no duty to consult;(5) Billfields only added this issue as a ground of appeal by amendment;(6) Counsel for Mr Kontemeniotis had a clear recollection that the concessions had been made without which the issue as to who was Mr Kontemeniotis's employer at the relevant time would have featured largely in argument before the Employment Tribunal, which it did not.[12]The appeal as regards Billfields being the company liable for any compensation payable to Mr Kontemeniotis therefore fails.[13]Turning then to the two other extant grounds of appeal. The first concerns the findings of the Employment Tribunal as to disability discrimination. It is argued on behalf of Billfields that the Tribunal in its paragraph 20, as amended by the Chairman's letter already referred to, inadequately explains the reasoning for the finding of less favourable treatment for a reason connected with the disability. It is also argued that the Employment Tribunal was wrong to find disability discrimination in absence of knowledge by the employer.[14]We are satisfied that the question of knowledge is relevant in this context only where issues of justification arise but is not relevant as to causation: see Quinn v Schwarzkopf Ltd [2002] IRLR 602 and HJ Heinz Co Ltd v Kendrick [2000] IRLR 144 . In the present case Billfields did not seek to justify any less favourable treatment (see the Extended Reasons from the Tribunal paragraph 5(5)). In any event, the Employment Tribunal found as a fact that Mr Kontemeniotis's managers, who remained managers with the changes of ownership, knew of Mr Kontemeniotis's condition.[15]As to alleged lack of proper reasoning, we reject the criticism made now that the Chairman has expanded upon the original paragraph 20. It is clearly incumbent upon an Employment Tribunal to explain its reasoning and not baldly to state its conclusions: see Mid Suffolk District Council v Edwards (2001) ICR 616 . We are satisfied that this Employment Tribunal has now fulfilled that obligation and made it abundantly clear why there was a finding of less favourable treatment.[16]Finally we turn to the grounds of appeal which criticised the findings of the Employment Tribunal as to mitigation of loss. It is argued on behalf of the Billfields that the Employment Tribunal adopted an improper approach to this issue in allowing Mr Kontemeniotis, who had not responded in any way to the letter offering reinstatement, to give evidence of his reasons for not accepting that offer before the Tribunal.[17]The question is posed on behalf of Billfields: if Billfields had at the time no idea what his objections to acceptance were, how could they precede and why should they, many months after the event, be faced with an explanation of which they had no prior knowledge and had been unable to address? It is also argued that the Employment Tribunal's findings, that in the circumstances Mr Kontemeniotis acted reasonably in mitigation of his loss, were perverse.[18]On the point of misdirection or an improper approach, as Counsel for Mr Kontemeniotis points out to us today, it was Billfields who raised and had the burden of proving any failure to mitigate loss. Once that issue was raised, clearly Mr Kontemeniotis was entitled to give his explanation for not taking up the offer to reinstate. We are satisfied that the procedure adopted by this Employment Tribunal in investigating this issue was the correct one.[19]Nor can it be said that the finding was perverse. By the time of the offer to reinstate, Mr Kontemeniotis had obtained alternative employment unlike, for example, the Applicant in the case of Wilding v British Telecommunications [2002] IRLR 524 . We consider that the Employment Tribunal was quite entitled in this case, given the terms and the timing of the Billfields letter, to conclude that Mr Kontemeniotis reasonably considered that a proper employer-employee relationship could not be re-established. On this ground also we cannot accept Billfields argument. This appeal is dismissed. COSTS[20]Having given our judgment in this matter dismissing the appeal on all grounds put forward, we have been asked to consider the question of the costs of Mr Kontemeniotis under Rule 34 of the Employment Appeal Tribunal Rules 1993. That Rule allows the Tribunal to make an award of costs where it appears to the Appeal Tribunal that any proceedings were unnecessary, improper or vexatious or that there has been unreasonable delay or other unreasonable conduct in bringing or conducting the proceedings.[21]In this particular case, we are satisfied that ground (f), which relates to the question of Billfields liability, was a matter which it was unreasonable to pursue, it being quite clear that the whole proceedings before the Employment Tribunal were conducted on the basis of the concession that we have found was made. Therefore, as to that aspect it was unreasonable conduct.[22]So far as the part of the appeal mounting a challenge to the reasoning on the disability discrimination aspect is concerned, we consider that it was quite proper up to the receipt of the Chairman's letter in August 2004 for that matter to be pursued by Billfileds. Until that stage there had not been sufficiently clear reasoning. That letter was received by Billfields Representative on 26 August 2004. We consider that thereafter there was no basis upon which this appeal should have been pursued. There was no arguable ground and that being so we are going to award Mr Kontemeniotis part of the costs of this hearing.[23]The whole of Counsel's brief fee could have been saved and therefore that sum will be ordered. We have considered what proportion it would be proper to allow of £1,650 which is asked for for the remainder of the costs and it is our view that £1,000 could have been saved had the matter been abandoned on 26 August 2004. We therefore order that Billfields shall pay the costs of Mr Kontemeniotis in the sum of £2,500.