ROYAL MAIL GROUP PLC v MR A SHARMA [2005] UKEAT 0839_04_2202

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2005] UKEAT 0839_04_2202

Case No Appeal No. UKEAT/0839/04

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

ROYAL MAIL GROUP PLCAPPELLANT

MR A SHARMARESPONDENT

Before

Mr Justice Burton

Date 22 February 2005

[1]APPEARANCES For the Appellant MS R THOMAS (of Counsel) Instructed by: Messrs Hammonds Solicitors 2 Park Lane Leeds LS3 1ES For the Respondent MR A ELESINNLA (of Counsel) Instructed by: Messrs J R Jones Solicitors 56A - 56A The Mall Ealing London W5 3TA SUMMARY Disability Discrimination / Practice and Procedure After initial liability and remedies hearings, at which no future loss was claimed or awarded, the Applicant's advisers, by way of afterthought, sought and obtained a Review at which the Applicant was eventually awarded £100,000 for 15 years' career-long loss. Quite apart from flaws in the calculation and as to other aspects, future loss (for 15 years or otherwise) is plainly not recoverable for breach of the section 6 Disability Discrimination Act 1995 duty to make reasonable adjustments during employment, when the Employment Tribunal dismissed the claim under section 5(1) of the Disability Discrimination Act 1995 , finding the Applicant's dismissal justified, and concluded that the dismissal was not substantively unfair. Loss under the Disability Discrimination Act is recoverable on the tortious basis, and any such loss did not continue after the employment was lawfully and non-discriminatorily terminated, and could have been fairly terminated. Further, the Employment Tribunal, having found that the two Review Hearings were solely the result of (at best) unreasonable conduct by the Applicant's advisers, wrongly found that they had no power to order costs under Rule 14: in the light of the Employment Tribunal's findings no other result than an order for such costs could follow. THE HONOURABLE MR JUSTICE BURTON (PRESIDENT) This has been the hearing of an appeal against the Decision of the Employment Tribunal at Watford, in Reasons sent to the parties on 2 March 2004, after a hearing on 6 February 2004, that on a Review of an earlier Decision, to which we will refer, not to award compensation for ongoing loss of earnings to the Applicant, the sum of £114,783.44 (subject to various reductions) would be awarded in that regard. The eventual figures, as set out in paragraph 25 of the Decision, referred to parameters of £105,904.93, and £91,371.14.

[2]This whole episode has been an unfortunate affair so far as the operation of employment tribunals is concerned, and there have been in this case four hearings before the same Employment Tribunal, and this is the second visit to the Employment Appeal Tribunal. What ought to have been a straightforward case has been massively overcomplicated by what have been described as 'second bites at the cherry' by this Employment Tribunal itself, and has proliferated beyond any justification.

[3]The Applicant was a postman, employed by the Respondent, Royal Mail Group plc; and the Tribunal at the first hearing, the Liability Hearing, on 21 and 22 January 2003, in Reasons handed-down on 17 February 2003, described his employment latterly as a higher-grade postman from October 1987. In paragraph 2 of the Decision, the Tribunal recorded as follows:

"In 2000 he was working in the London Air Mail Unit at Greenford. In September 2000 he was transferred, as a result of disciplinary action, to Heathrow International Distribution Centre (HIDC), but on his first day of work there (22 September 2000) he had a road accident which caused him whiplash injuries from which he developed low back pain. [We emphasise that that road accident was not one for which the Appellant, Royal Mail Group plc, is suggested to have had responsibility] He commenced sick leave and submitted his first sickness certificate on 25 September 2000. He did not return to work before his dismissal which took effect on 26 July 2002."

[4]The Applicant brought before that Employment Tribunal Liability Hearing three complaints. He made two complaints by reference to the Disability Discrimination Act 1995 . His first was under section 5(1) of the Act , namely whereby:

"5(1) …. an employer discriminates against a disabled person if— (a) for a reason which relates to the disabled person's disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply; and (b) he cannot show that the treatment in question is justified."

The unfavourable treatment on grounds of disability which he relied upon was his dismissal.

[5]His second complaint was by reference to section 5(2) of the Act , which reads as follows:

"(2) For the purposes of this Part, an employer also discriminates against a disabled person if— (a) he fails to comply with a section 6 duty imposed on him in relation to the disabled person; and (b) he cannot show that his failure to comply with that duty is justified."

His third complaint was of unfair dismissal.

[6]The Tribunal made findings of fact, and then addressed its decision; and its first decision was that there was no liability under section 5(1) of the Act on the Respondent. This conclusion was addressed in paragraphs 33 and following of the Reasons after the Liability Hearing of 17 February 2003:

"33.(b) Liability Under the Disability Discrimination Act In the view of the Tribunal the concession that the dismissal of the Applicant was by reason of disability and that that disability fell within the Act leads to the conclusion that the dismissal of the Applicant was less favourable discriminatory treatment under the Act. The question the Tribunal has asked itself in relation to Section 5(1) is, therefore, whether that discrimination (that is to say the dismissal) was justified. That justification has to be for a reason which is both material and substantial and the Tribunal has derived assistance in that respect from the decision in Jones v Post Office [2001] IRLR 384 …. 34. In the view of this Tribunal the Respondent had ample medical evidence indicating that the Applicant was likely to be off work for a further two or three years. In our view this is plainly a material and substantial consideration which would have brought dismissal of the Applicant within the band of reasonable responses applied in respect of unfair dismissal. 35. In the view of the Tribunal, therefore, the Respondent in this case has produced a material and substantial reason for the discrimination under Section 5(1) and liability does not arise under that section."

[7]In the course of his skeleton argument before us on this appeal, Mr Elesinnla, of Counsel, who has appeared for the Applicant at all times throughout these six hearings (as has Ms Thomas appeared for the Appellant Company), sought to cast doubt upon the finding by the Tribunal dismissing his client's claim under section 5(1). But that decision was never appealed and no attempt to appeal it has ever been made, even by a purported application to amend the Notice of Appeal now before us, which, in any event, would, in our judgment, have been unlikely to succeed; and consequently, that decision must be accepted as the foundation for all consideration of this case. What that means is that the dismissal by the Appellant of the Applicant was not a discriminatory dismissal; and consequently, no claim can be made, so far as the Disability Discrimination Act is concerned, arising out of the consequences of that dismissal, at any rate by reference to section 5(1) of the Act .

[8]The matter that was then addressed was section 5(2) of the Act . The Tribunal deal with its findings in that regard in paragraphs 36 to 38 of its Decision. It addressed the period between 2000 and 2002, and it noted that it was only effectively after February 2002 that the Tribunal began to make inquiries in regard to alternative possibilities for the Applicant. It is plain that the Tribunal did not find that there was any alternative job available, which, by dint of the making of adjustments, the Applicant could at any time have carried out. The Tribunal records: "All the Respondent ever did was to consider the availability of whole jobs, to observe that all but one of those jobs involved [an] element of physical effort which would disqualify the Applicant and, accordingly, to offer the Applicant the only non-physical job available." and the Tribunal found that that was an insufficient compliance with its duty.

[9]As Mr Elesinnla has accepted, in the course of argument, at no stage, either expressly or impliedly, does the Tribunal make any finding whatever that there was any job that could have been offered, any adjustment that could have been made, which would have enabled the Applicant to have remained in employment with the Respondent; and, indeed, it is quite plain that if there had been such a finding, the Tribunal would not have found, as it did, that the dismissal in July 2002 was justified, as we have described.

[10]The Tribunal then went on to deal with the issue of unfair dismissal, and in paragraph 39 it concludes, significantly for the purposes of this appeal, as follows:

"We do not accept the submission on behalf of the Applicant that dismissal of the Applicant was unfair dismissal on substantive grounds. That submission relies on the contention that the standard of reasonableness for unfair dismissal is the same as the standard applied to justification under Disability Discrimination Act. The Decision of the Court of Appeal to which we have already referred Jones v The Post Office is to the effect that so far as concerns the issue of materiality and substance set out in Section 5(3) the test of range of reasonable responses might apply to both situations. For that reason we have concluded that the employer has a defence under Section 5(1) of that Act because he could be said to have acted reasonably within the normal meaning of that term in relation to unfair dismissal. That does not mean, however, that the failure of an employer to act under Section 6 of the Disability Discrimination Act inevitably leads to the conclusion that a dismissal is unfair. In the view of the Tribunal the requirements of Section 6 of the Act go well beyond the requirements of the band of reasonable responses to which a Tribunal should address itself when considering unfair dismissal. An employer would not necessarily, or perhaps even normally, be considered to have dismissed unfairly a person who was long term sick but not within the Disability Discrimination Act if that employer had failed to take the sort of steps set out in Section 6(3). The duty of an employer towards a non-disabled person who is long term sick and being considered for dismissal is not in our view on a par with the duty of an employer to a disabled person under the Act."

The Tribunal consequently found that there was not unfair dismissal on substantive grounds. That had a consequence, as will be seen, in terms of remedies; but suffice it to say at this stage that there was no appeal against that finding by the Tribunal, then or at any stage hereafter.

[11]The Tribunal continued, however, as follows:

"40. In the view of the Tribunal, however, the dismissal of the Applicant is plainly unfair on procedural grounds…" and that was by reference to the absence of a fair appeal. It is in that regard that when it came to the Remedies Hearing, held on 3 April 2003, the Decision by the same Tribunal which was handed-down on 24 June 2003, the Tribunal concluded as follows: "

Turning to the question of compensation, it is the view of this Tribunal that, had the Applicant brought the appeal against termination of his employment which he wished to bring by alleging failure to implement his request for change of post, that appeal would certainly have failed. It would almost certainly have failed on the grounds that we have outlined making re-engagement in some alternative post not a reasonable practicality. In our view, the Applicant, had he been accorded a fair appeal procedure, would have been dismissed within no more than six weeks after the date when he was actually dismissed. It follows that his compensation for unfair dismissal should be limited to the basic award to which he is entitled and to loss of wages for that six-week period alone." That, of course, chimes, as the Tribunal makes clear itself, with its own conclusions that re-engagement was not an option. But it is equally made clear, contrary to the submissions that Mr Elesinnla, of Counsel, has made to us today, that its consideration of the availability of alternative employment was looked at specifically at the time of the dismissal, and it was concluded, as part of the Tribunal's thinking, that there was no loss, over and above the period of an extended but inevitably hopeless internal appeal, that there was no alternative job available. That too, of course, is entirely consistent with its finding that the dismissal was justified on discrimination grounds also.

[12]In those circumstances, it is not surprising that there was no finding made of any future loss. But it is particularly not surprising given that the Applicant did not put forward any claim for future loss, even when the claim that he was making included, because it had not yet been dismissed, a claim under section 5(1) of the Disability Discrimination Act . There was no oral evidence given at the Liability Hearing by the Applicant as to any continuing future loss, nor were there any submissions made in closing at the Liability Hearing, or at the Remedies Hearing, when again oral evidence was given; so that when the Tribunal came to give its decision at the end of the Remedies Hearing, as it did orally in short form, there had been no evidence, no submission made, in support of any claim for future loss.

[13]It is worth looking, at this stage, at the Schedules of Loss, which are in our bundle. The first Schedule, described in our bundle as Appendix 1, was the Schedule dated 16 January 2003, prepared prior to, and for the purposes of, the Liability Hearing. In that claim, the Applicant put forward a case for loss up to 22 January 2003, with no future or continuing loss thereafter, at the rate of £278.11 per week; and there was a claim for loss of bonuses in the sum of £700.00. The second Schedule that was then produced is dated 6 March 2003, and it is Appendix 2 in our bundle, and it was prepared between the Liability Hearing and the Remedies Hearing. That claimed loss up to 6 March 2003, an additional six-week period, once again with no continuing loss, and, at that stage, there was a claim for 12 months' loss of future earnings, calculated at the same rate of £278.11 per week; and there was a claim of loss of bonuses, now increased to £875.00.

[14]The Third Schedule of Loss, as it is expressly described (and also Appendix 3 in our bundle) is dated 2 April 2003, and was the schedule, plainly overtaking the first two, which was presented for the purpose of the Remedies Hearing on the following day. This claimed loss to 3 March 2003, still at £278.11 (that is the same period); it no longer claimed any continuing loss, and there was a claim for loss of bonuses, now minimally increased to £962.50.

[15]At the Remedies Hearing, as we have indicated, there was no evidence or argument directed towards recovery of future loss. So far as bonus is concerned, the Tribunal made the following finding:

"13. The Applicant claims compensation for loss of team bonus payments. It is for the Applicant to prove his loss in all respects and no evidence has been supplied to the Tribunal to indicate that any such bonus payments have ever been made to the Applicant. There is no reason for us to suppose that the Applicant would not be in possession of some documentary evidence indicating receipt of such bonus payments had they been paid, and in the absence of such evidence out conclusion is that the Applicant fails to prove this element of his loss."

So far as the loss that was awarded is concerned, which was up to 3 March 2003, exactly in accordance with the Third Schedule, Appendix 3, it was awarded not at the rate claimed of £278.11, but at the net sum of £229.52.

[16]We understand that the Tribunal gave its decision at the end of the Remedies Hearing, on 3 April 2003, orally, setting out, effectively, those conclusions and those sums, but not giving its reasons; and as, or after, it did so, Mr Elesinnla rose, and, for the first time, asserted that the Applicant could, would or should have been entitled to claim ongoing loss of wages after 3 March 2003. We say the first time: that is apart from the fleeting mention of it in the withdrawn second Schedule, Appendix 2, so far as the actual hearings before the Tribunal is concerned, although we understand there may have been some suggestion of a possible claim at a time, of course, when section 5(1) was still pursued before the first Liability Hearing, which of course itself would have been overtaken by the provision of the first Schedule, Appendix 1, to which we have referred, which contained no such claim.

[17]The Chairman, Professor Rideout, it seems indicated that, as no claim had ever been adumbrated in respect of ongoing loss, the Tribunal was not prepared to consider it; and it would have to be, if anything, the subject matter of some future application for Review. What is utterly clear is that no such claim had ever been argued, and consequently no case had ever been considered by the Tribunal against the recoverability of any future loss from Ms Thomas, on behalf of the Appellant Company.

[18]When it came to the delivery of the Reasons, as a result of the Remedies Decision, of course, that oral exchange at the end of the hearing was known to the Tribunal and came to be mentioned in the Extended Reasons. At paragraph 10, the Tribunal referred to the matter of continuing loss of wages, and said as follows:

"Had we been asked to consider ongoing compensation for future loss, we would have wished to receive medical evidence in support of a prognosis of the length of time for which the Applicant's disability might be expected to continue. In our view, that is a central factor in deciding upon his duty to mitigate in the future."

The point was expressly addressed in paragraph 18, as follows:

"We were not asked by the Applicant at this hearing to make an award of compensation for ongoing loss of wages. An earlier schedule of loss included in the bundle of documents [this is a reference, clearly, to Appendix 2] had requested compensation for 12 further months of unemployment. This schedule was, however, withdrawn and replaced by an amended schedule [that is a reference to Appendix 3]. Neither that amended schedule nor the Applicant's submissions at this hearing made any reference to a claim in respect of ongoing loss. Moreover, the schedule specifically claimed loss to 3 March 2003. In arriving at its decision, this Tribunal assumed that what appeared to be a deliberate amendment had been made to take into account the fact that the Applicant's ongoing loss of wages had ceased. Counsel for the Respondent appears also to have made the same assumption and did not address the question of ongoing loss in her submissions. Only after the Tribunal had already delivered this decision orally did Mr Elesinnla state that the omission of the claim for ongoing loss from the third schedule must have been a mistake. He invited us to reconsider our decision, but we took the view that it would be unfair to the Respondent to address the claim without further evidence to support it. In particular, it would be necessary to consider the claim in the light of any failure to mitigate ongoing loss. It also appeared to the Tribunal that it would be impossible to proceed with any discussion of that situation unless and until it was explained to it why the third schedule of loss had indicated termination of the claim on 3 March 2003. Mr Elesinnla was unable to shed any light on this. We presume the schedule of loss had been prepared by the Applicant's solicitors. Our decision not to enter, without further notice, upon what would amount to a review of our earlier decision is, therefore, not on purely procedural grounds, but on grounds of established injustice to the Respondent and inadequacy of the evidence before us. In our view it is open to the Applicant to request a review of this aspect of our decision but we would emphasise that that request will be considered in the light of the appropriate considerations to apply to any request for a review. We would also draw attention to the fact that, if we were to re-open this decision, we would require evidence to enable us to decide the question of mitigation and that evidence would involve medical evidence of the likelihood of the Applicant recovering from his disability."

At paragraph 19, the Tribunal says:

"There is much to be said for procedural strictness in this respect, by which strictness parties are not permitted a second chance to repair the effect of their failure properly to prepare the case for this Tribunal."

[19]Such an application for Review was made by the Applicant's advisers, and it was supported by a fourth Schedule of Loss, Appendix 4 in our bundle. That took the loss, now, up to 3 April 2003, which, of course, was the date of the Remedies Hearing, still at £278.11 per week. But the claim for loss of future earnings was now resurrected, still at £278.11 per week, for the period of 12 months: a total claim of £13,349.28. The loss of bonus claim remained at £962.50.

[20]The application for Review came on in front of the same Tribunal on 30 October 2003, and the application was granted, in Reasons delivered to the parties on 12 December 2003. The Tribunal set out the history in paragraph 6:

"6. …. The alleged omission is solely the result of a failure by solicitors acting for the Applicant finally to submit a claim for ongoing loss, and the consequent failure at the Remedies Hearing to adduce any evidence to support such a claim. We have been told that the mistake was obvious. If this is so, we regret that it was not apparent to us. The fact that loss was to have been calculated to 3 March, rather than to 3 April (which was the date of the Remedies Hearing), only goes to strengthen our belief that the earlier date had been deliberately selected as a significant cut-off point for loss. 7. The granting of an opportunity to correct the omission, therefore, will inevitably permit the Applicant to adduce evidence and plead a ground of loss which he did not present before this Tribunal at the appropriate time and after he had had adequate opportunity to do so. In that case he is plainly being given a second bite at the cherry and an opportunity to correct the omissions of his own legal advisers."

[21]The application, supported, of course, by Mr Elesinnla, was opposed by Ms Thomas, and it was, notwithstanding those strictures, and the prejudice which it was recognised would be caused to the Respondent, granted by the Tribunal; and the Tribunal records, at paragraph 9(4) that the fact that the Applicant was disabled was not by any fault of the Respondent or even due to employment with the Respondent. Nevertheless the application was granted, but in paragraph 12, the Tribunal said this:

"We wish to make it clear, however, that we allow the application for review only to the extent that it covers ongoing loss of wages and other direct monetary benefits of employment, and not so as to cover pension loss. On the 3 April the Tribunal had before it a specific claim for pension loss Accordingly it considered that claim. No attempt was made during the hearing to give evidence in support of that claim. The Tribunal disallowed that claim on the ground that it as for the Applicant to prove his loss and that he had failed to do so by his failure to produce any indication whatsoever of pension entitlement."

The Tribunal did not specifically address the question of bonus, to which the same point might, in the circumstances, have also applied.

[22]There was an appeal to the Employment Appeal Tribunal against the grant of that application for Review, which came before a panel of the Employment Appeal Tribunal on 29 September 2004, and Ms Thomas' appeal, on behalf of the Appellant, was dismissed on the grounds that the decision was within the discretion of the Employment Tribunal. It is plain that there was no consideration, and indeed Mr Elesinnla has accepted as much, as to whether future loss was recoverable; that was left over for the Review itself – the issue was whether it was to be entitled to be claimed. The Appeal Tribunal concluded that it was quite satisfied that in this case the Tribunal had carried out the necessary balancing exercise, thus dismissing the appeal.

[23]The Review Hearing came on (and that is the Decision against which this appeal is now brought by the Appellant), as we have described, on 6 February 2004. There was a fifth version of the Schedule of Loss, produced for the purposes of the Review Hearing, which shows a staggeringly different sum, in terms of the history, which we have described, from any of the previous schedules of loss. The loss of future earnings, which was now, in terms, claimed, was for 15 years to retirement; and it was calculated at £577.16 net per week, totalling £450,184.80 . The bonus claim, which, if it is entitled to be pursued at all, had only ever been claimed in the sums, to which we have referred, of less than £1,000.00, now arrived on the scene as "loss of bonuses - £1080.00 per year" (and it is common ground, by reference to a document in our bundle, that this was, for some reason, calculated gross) times the 15 years to retirement, totalling £16,200.00 . There was then credit given for income support and disability living allowance, totalling a claim of £373,315.20.

[24]The Decision of the Tribunal, handed-down, as we have indicated, on 2 March 2004, did not grant all that amount to the Applicant, but nevertheless awarded 15 years' worth of loss, making certain deductions from the sums claimed in that fifth Schedule; and we have indicated the amounts of approximately £100,000.00 awarded for future loss, instead of nil, to the Applicant. The earlier future loss claim of 12 months, at £278.11 per week, of £13,349.28 had thus itself been dwarfed by the amount that was awarded. So far as bonus is concerned, those sums were awarded, subject to the deductions, in full, as is apparent from paragraphs 20 and 21, and gross, without any explanation either as to how they could be gross, or how it could be concluded that a bonus was a certain entitlement, every year, for the next 15 years.

[25]The appeal by Ms Thomas is against the award of future loss at all. She has a number of subsidiary arguments as to how it should possibly by justifiable that, if there be any claim for future loss, it could have been sought or granted in the sums eventually put forward and awarded. But her fundamental case is, as she puts it, one of causation. The employment of the Applicant came to an end in July 2002. It was not suggested to have been other than a lawful termination, so far as a contractual claim is concerned, because there was no claim for damages for breach of contract. So far as unfair dismissal is concerned, the Tribunal's Decision, as we have recorded, in paragraph 9 of the Remedies Decision, was that, although it was unfair dismissal, the Applicant could have been and would have been fairly dismissed within no more than six weeks after the date when he was actually dismissed. There was no basis upon which the Applicant could be re-engaged, as was found by the Tribunal at the Remedies Decision in paragraph 8. The disability of the Applicant was not the Respondent's fault or responsibility, as appears from paragraph 9(4) of the Review Decision, to which we have referred. The claim that the dismissal was discriminatory, and that compensation should be paid under section 5(1) was dismissed, as set out in paragraphs 32 and 36-37 of the Tribunal's Liability Decision.

[26]The only basis, therefore, upon which any compensation could be awarded was for the breach that was found, in relation to the failure by the employer adequately to comply with its duties under section 6 of the Act , during the Applicant's employment. As we have indicated, there was no alternative job which the Respondent could have found, which would have enabled the Applicant's continued employment, and that was the basis of the unappealed decisions of the Employment Tribunal, to which we have referred.

[27]It is not in any doubt that the basis upon which compensation is awarded under the Disability Discrimination Act 1995 is the tortious basis: see section 8(3) of the Act : "Where a tribunal orders compensation… the amount of the compensation shall be calculated by applying the principles applicable to the calculation of damages in claims in tort…" and, if it needed clarification, that position is made clear in Hurley v Mustoe (No 2)

[1983] ICR 422

, per Browne-Wilkinson P at the EAT. The only finding that was made by the Tribunal is that there was a breach of section 5(2).

[28]Mr Elesinnla valiantly sought to say that somewhere it could be said to be found, in the Tribunal's decisions, that the failure by the Respondent to comply with section 5(2) led to or had the result of the dismissal. Not only did he have to accept that that was not expressly or impliedly stated anywhere in the Liability Decision, or indeed the Remedies Decision, but it is also, plainly, inconsistent with the express findings by the Tribunal that the dismissal was not discriminatory and was justified, and was not substantively unfair, and would have been procedurally fair some short time thereafter. If the Tribunal had found that there was some alternative job in which the Applicant could have been retained, by virtue of compliance with section 5(2) of the Act , it would not have made the findings it did, and, indeed, it would have made the findings that it did not.

[29]In any event, that is not the basis upon which the Tribunal rejected the submission of Ms Thomas, the same as now made before us, which was made before the Tribunal at the Review Hearing on 6 February 2004. Her submission is recorded, very shortly, in paragraph 11:

"Miss Thomas submits that the fact that the Tribunal expressed the view that the Applicant would have been fairly dismissed within 6 weeks of his actual dismissal and that there was no disability discrimination contrary to Section 5(1) of the Disability Discrimination Act means that the chain of causation of loss associated with a failure to make reasonable adjustments must have been broken. We do not accept that this is correct. The Applicant's claim for compensation now before us arises from disability discrimination contrary to Section 5(2) of the Act, that is to say from failure to make reasonable adjustments. Whether or not the Applicant was dismissed, that failure would have remained as indicative of disability discrimination for which the Applicant was entitled to compensation."

[30]On that short paragraph hangs the Tribunal's award of approximately £100,000.00 to this Appellant. It is a paragraph which we completely fail understand, and Mr Elesinnla has not been able to indicate to us any basis upon which it could be understood. The findings of the Tribunal we have already recited, all of which are inconsistent with any future loss after the determination of the employment, and the loss flowing from the failure to make adjustments during the employment must have been broken by its determination. Mr Elesinnla points out what was said by the Tribunal in paragraphs 10 and 18 of its Remedies Decision, in which, after the words expressed by him at the end of the hearing, and after the oral Decision, the Tribunal did not rule out the possibility of future loss; and the Tribunal having indicated that there could be the possibility of a review, it may be that this bandwagon simply continued to run, without any thought being paid to the basis upon which it was running or could run.

[31]But the fact is, at this Review Hearing on 6 February, however the parties may have been led to that eventual meeting point, this decision had to be made; namely as to whether, on a proper consideration, with both sides putting forward arguments which had not previously been put forward because, as the Tribunal itself pointed out, Ms Thomas had not had that opportunity, future loss could be recovered. It was, in our view, inevitable that the Tribunal should then have concluded that the loss could not possibly flow after the period when the employment could have been non-discriminatorily and/or non-unfairly determined, and certainly could not continue for 15 years, simply because this ex-employee of the Respondent was, and continued to be, unfortunately disabled, through no fault of the Respondent. It would only have been if there had been a case found by the Tribunal, which there was not, that the Applicant should have remained in the employment of the Appellant that there could be a claim for future loss. That was a finding that was not only not made, but was contrary to the finding that was made.

[32]We cannot understand the Tribunal's words "whether or not the Applicant was dismissed, that failure would have remained as indicative of disability discrimination for which the Applicant was entitled to compensation". If it simply means that the Applicant does not lose his entitlement to claim loss flowing from the section 5(2) breach, of course that is straightforward. But what it does not do is to trigger any continuing loss thereafter, or to justify any implicit finding in that regard.

[33]In those circumstances it is quite plain to us that the decision of the Employment Tribunal cannot possibly justified, cannot be upheld, and was simply wrong in law. We do not, therefore, need to deal with the other points, which in any event Ms Thomas would have wished us to consider, namely:(i) Whether in those circumstances the Tribunal was entitled, after granting a Review on the basis of a compassionate allowance of adding in a claim for one year at £270 per week, to accept that that claim suddenly be enlarged to 15 years at £570 per week, plus a bonus claim which had previously been rejected.

(ii) We do not need to deal with the point made by Ms Thomas that in any event the calculation of the future loss was wholly inconsistent with such authorities as Vento v Chief Constable of West Yorkshire Police

[2003] IRLR 102

, Council of the City of Sunderland v Newsome

EAT/0036/02

, and, indeed, Dunnachie v Kingston Upon Hull CC (No.3)

[2004] IRLR 727

[34]We turn to the second basis of appeal before us, which arises in respect of costs. We have already recorded that, at the grant of the application for Review, the Tribunal noted that the Applicant was plainly being given a second bite at the cherry, and an opportunity to correct the omissions of his own legal advisers. That second bite of the cherry having been given, it had in fact led, arising out Mr Elesinnla rising to his feet at the close of the Remedies Hearing, to the Application for Review Hearing, and the Review Hearing itself. The Tribunal records Ms Thomas's application for costs in paragraph 24 of its Review Decision as follows:

"Miss Thomas for the Respondent applied for costs totalling £4,482.20 incurred by the Respondent in respect of the two days of the Review Hearing and preparation [therefor] on the ground that none of that cost would have been incurred but for the unreasonable failure of the Applicant's legal advisers to include the element of ongoing loss in the finally revised Schedule of Loss presented to the Remedies Hearing. We believe it to be quite correct to say that these two hearings and the associated preparation work for them have been occasioned solely by that failure which we regard, at best, as unreasonable and, at worst, as incompetent."

That of course, therefore, is a finding, on the face of it, that there was unreasonable conduct by the Applicant through his advisers, which had led to identifiable cost loss. The terms of the Employment Tribunal Rules , which governed costs at the material time, were contained in the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001 . Rule 14 of those Rules reads as follows:

"14(1) Where, in the opinion of the tribunal, a party has in bringing the proceedings, or a party or a party's representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by a party has been misconceived, the tribunal shall consider making, and if it so decides, may make - (a) an order containing an award against that party in respect of the costs incurred by another party"

There, in that passage, which we have read, is a finding by the Tribunal that the Applicant's representative had, in conducting the proceedings, acted unreasonably, indeed at best unreasonably. It continued as follows:

"The power of the Tribunal to order costs arises under Rule 14 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001. Mr Elesinnla rightly pointed out that Rule 14 could not properly be regarded as applying to Review Proceedings."

That is a proposition which is plainly unsupportable, and which Mr Elesinnla has told us is not one that he made or, if he was misunderstood as so making it, not one that he supports. The Tribunal continued as follows:

"The only element in Rule 14 applicable to the present case would be that described as unreasonable behaviour. In our view the context in which that word is used in the Rule does not apply to errors and omissions in pleadings even if negligent."

That too is a plainly unsupportable proposition, which Mr Elesinnla does not seek to support before us. The Tribunal then continued as follows:

"But even if this is not the correct interpretation, this Tribunal would not be entitled to regard a situation which it has been permitted to be dealt with by Review Proceedings as amounting to unreasonable conduct, especially where that Review has accepted, in principle, the case of the party seeking a Review. In our view, although the extra cost to the Respondent has been occasioned solely by the shortcomings of the Applicant's legal advisers, Rule 14 confers on this Tribunal no power to award costs."

[35]Insofar as the decision of the Tribunal was in any way coloured by the fact that it had, in the event, awarded substantial sums for future loss to the Appellant, that of course has now been overtaken by events because, in our judgment, it is wholly clear that it was not possible, and not correct, for the Tribunal to have awarded any sum in favour of the Applicant; and by virtue of this appeal, and by the Appellant succeeding, the Applicant has retrospectively lost the hearing. But that apart, the Tribunal concludes that it had no power to award costs, although the expense and time spent by the Respondent, all caused by the unreasonable conduct of the Applicant's legal advisers, had led to that wasted cost.

[36]How far the conclusion at the end of paragraph 24 was coloured by the misconceptions, as they plainly were, earlier in the paragraph, is not clear, although, on the face of it, the Tribunal does begin its final conclusion by saying "[even] if this is not the correct interpretation". But it is totally clear that the Tribunal regarded itself as disentitled to regard as unreasonable conduct the situation in which, notwithstanding and indeed because of the unreasonable conduct of the Applicant's advisers, a Review had been compassionately allowed, and a second bite of the cherry had, on balance, and in order to avoid prejudice to the Applicant as it was then thought, been allowed.

[37]We are quite satisfied that the Tribunal erred in law in considering that it did not have the power to award costs under Rule 14. The Decision of the Tribunal must, therefore, be quashed, that it had no power to award costs.

[38]Mr Elesinnla asks us to conclude that, if we were to decide, as we do, that the Tribunal erred in concluding that it had no power to award costs, then it in any event it had a discretion, which it could have exercised in favour of not awarding costs, by reference to the use, in Rule 14, of the word "may". He also draws attention to the fact that, in general, the jurisdiction in the Employment Tribunal is intended to be costs free. But we have made entirely clear, on more than one occasion and most recently as set out in Salinas v Bear Stearns International Holdings Inc

EAT/0596/04/TM

, that, insofar as there are references in cases, and indeed in the Court of Appeal, to the use of the costs jurisdiction being rare, it is rare because it is, fortunately, infrequent that there is conduct which can be characterised as unreasonable, such as to justify the operation of Rule 14. It is not an additional hurdle over which the claimer of costs must jump to show that this is either an exceptional or rare situation. The hurdle over which the claimer of costs must jump is to establish, before a tribunal, that there was unreasonable conduct, and that this is a case where costs should be awarded.

[39]We are entirely satisfied that, in the light of the findings inevitably made by the Tribunal in paragraph 24 of its Decision, no other course was conceivably possible on the exercise of the Tribunal's discretion, had it exercised it or alternatively, as it did not exercise it, on the exercise of our discretion, than an order for costs of the two Tribunal hearings which were found by the Tribunal to have been solely caused and wasted by the unreasonable conduct of the Applicant's legal advisers.

[40]Mr Elesinnla urges us to send the matter back to the Employment Tribunal, but it is quite clear to us that this is one of those cases where we can be entirely satisfied that no other conclusion can reasonably be reached by a tribunal than, in the light of the Tribunal's own findings, the making of that order.

[41]We are not invited by Mr Elesinnla, and in the absence of consent we do not propose to take this course, to assess a fixed sum today. We propose to take the course of ordering that these costs be assessed. Mr Elesinnla has asked us to consider making an order for a stay for 14 days, to give the parties the opportunity to agree figures. That, of course, is always open to the parties, because ordering, as we do, assessment, there will be time before such assessment takes place, and it is our experience almost always the case that these assessments do not proceed, but that agreement can be sensibly reached.

[42]It is worth recording, particularly in a situation in which the Applicant was originally properly awarded some £7,700.00, and has thought that he was going to get, until today, some £100,000.00, which he has now, in our view inevitably and justly, lost, because he did not suffer the loss, and the finding by the Tribunal that all those costs have been expressly caused by his advisers and their shortcomings, that the source of any such costs, although strictly the Applicant's, would be likely to be those whom the Tribunal has, in our judgment, correctly described as having been negligent. This is not, of course, a conclusion in this regard as between the Applicant and his advisers, because that matter, if necessary, might have to be sorted out somewhere else. But suffice it to say that we are hopeful that those advisers will recognise that that is the inevitable result.

[43]In those circumstances, this appeal is allowed on both grounds, and there is a substitution of a dismissal of the further claim for future loss, and an Order that the costs in relation to the two Review Hearings, the Application for the Review and the Review Hearing, should be assessed and paid, after assessment, by the Applicant to the Appellant.

[44]Permission to appeal is not granted. The parties shall have a transcript. So far as costs are concerned, we are not going to order costs from the beginning of this appeal, although it does appear to us that resistance to the appeal was always without much hope of success; but we do take the view that once the Appellant's skeleton was served, and once the offer in those two Calderbank letters were made, it is quite plain that the costs of today could have been avoided, and, indeed, at considerable financial advantage to someone – whoever is going to pick up the costs – because it would have included an abandonment of the costs appeal as part of the deal, as is clear from the without prejudice letters. In those circumstances, we propose to make an Order for costs in the sum of £1,000.00, not to be enforced without leave of the Employment Appeal Tribunal. That means that it is wholly unlikely ever to be enforced against the Applicant, because he will need to become considerably wealthier than he is at the moment before that arises; and, in any event, it would need the permission of the court. But we conclude that that Order should be made in those circumstances; and, of course, we shall Order the legal aid costs to be assessed on the usual basis.