ANTHONY JON TAYLOR v DUMFRIES & GALLOWAY CITIZENS ADVICE SERVICES [2006] UKEAT 0014_06_1508

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2006] UKEAT 0014_06_1508Case No Appeal No. UKEATS/0014/06Venue 52 MELVILLE STREET, EDINBURGH, EH3 7HF
Between
ANTHONY JON TAYLORAPPELLANTDUMFRIES & GALLOWAY CITIZENS ADVICE SERVICESRESPONDENT
Before
Lady Smith Mr J Keenan McIpd Dr W SpeirsDate 15 August 2006
[1]APPEARANCES For the Appellant MR A J TAYLOR In Person For the Respondents MR S SWAN Solicitor Messrs Miller Samuel & Co Solicitors RWF House 5 Renfield Street Glasgow G2 5EZ SUMMARY The claimant had been successful in establishing that he was discriminated against on grounds of disability. He had appealed successfully against the tribunal's award of compensation and the Inner House of the Court of Session had pronounced an order remitting the case back on the grounds that the tribunal had erred in reducing the award in respect of the prospects of the claimant retaining his job and in respect of mitigation of loss. The second tribunal made a higher award but had arrived at the figure on the basis of the claimant's prior actual earnings and after having deducting incapacity benefit received by the claimant and they limited the time in respect of which he was to be compensated for loss of earnings on the view that he would probably have been dismissed on incapacity grounds prior to retiral age. They did not award interest. The claimant appealed arguing that the tribunal should not have deducted any sum in respect of his receipt of benefits, that they should have used a different salary figure as their basis for awarding compensation and that they should have awarded interest. The tribunal had found that the claimant had not failed to mitigate his loss and the respondents cross appealed against that finding. The Employment Appeal Tribunal dismissed the appeal and sisted the cross appeal pending a reference back to the tribunal in respect of certain specific questions. THE HONOURABLE LADY SMITH Preliminaries These cross appeals arise from a claim at the instance of Mr A J Taylor ("the claimant") that the Dumfries and Galloway Citizens Advice Services ("the respondents") discriminated against him in which the claimant was successful. The claimant represented himself before the tribunal and before us and the respondents were represented on both occasions, by Mr S Swan, solicitor. We will refer to parties as claimant and respondents. Introduction[2]In about 1985, the claimant began to suffer intestinal difficulties and other health problems. He became registered as a disabled person under the Disabled Persons (Employment) Act 1944 (as amended) and he remained so registered at the date specified in paragraph 7(1) of Schedule 1 to the Disability Discrimination Act 1995 ("the 1995 Act"). He has also suffered from severe arthritis. He began working for the Newton Stewart Welfare Rights Office on a voluntary basis some time after 1985 and in 1997, he began part-time remunerated employment (20 hours per week) with what was then the Wigtownshire Welfare Rights Office, which was later absorbed into the respondents' organisation. He was dismissed by the respondents in April 1999 for redundancy. He presented complaints to the Employment Tribunal prior to and after his dismissal, all of which were conjoined.[3]The claimant's claims were heard and considered by an Employment Tribunal sitting at Stranraer, Chairman Mr M W J MacMillan. In a decision registered on 10 April 2002, it determined:
"DECISION OF THE EMPLOYMENT TRIBUNAL The unanimous decision of the Tribunal was (first) that the respondents discriminated against the applicant on the grounds of his disability under reference to the provisions of Section 6 of the Disability Discrimination Act 1995; (second) that the respondents shall make payment to the applicant by way of compensation in the sum of £2,253 (Two thousand, two hundred and fifty three pounds); (third) that in relation to the sum of £1,500, (One thousand, five hundred pounds) (the element of compensation which relates to injury to feelings) the respondents shall pay interest to the applicant in the sum of £362 (Three hundred and sixty two pounds)."
[4]That decision arose from the tribunal having held that the respondents had not fulfilled their duty under s.6 of the Disability Discrimination Act 1995 to make reasonable adjustments and had not shown that their failure to do so was justified. The tribunal accordingly held that the respondents had discriminated against the appellant within the meaning of s.5(2) of the 1995 Act. Options which, the tribunal held, the respondents ought to have considered included, for example, a reduction in the claimant's working hours, an allocation of some of his duties to another person and alterations to the place where he worked.[5]The tribunal assessed compensation and made the abovenoted award. They had difficulty in respect of aspects of the claim for compensation other than the award for injury to feelings. At p.16 of their decision, they said:
"As to remedies, there is no doubt that the applicant suffered injury to his feelings, and he is entitled to recompense for that. As to any other heads of claim, the position is more complicated. As in other areas of discrimination, the applicant is entitled to be put, so far as is possible, back into the position he would have been in had the discrimination not occurred. However, on the authority of Ministry of Defence v Hunt 1996 ICR 544 it is appropriate for us to assess the chance that the applicant would, but for the discrimination, have retained his employment in some form. We have to say that the prospects are small but not impossible, and we have assessed that chance as 10 per cent. The applicant has a duty to minimise his loss. He has not actively sought other remunerative employment for reasons which we understood to be connected with the level of disability benefit entitlement currently enjoyed by him. The respondents should not bear the consequences of this. We think that the situation is best met by awarding the applicant one year's loss of earnings (£628 times 12) - £7,536, subject to the chance assessment of 10 per cent - £753."
[6]The claimant was not satisfied with the tribunal's assessment of compensation and appealed to this tribunal. His appeal was unsuccessful. Leave to appeal was refused by the presiding judge and he sought leave from the Inner House of the Court of Session. The court granted leave and upheld the appeal. That judgment is reported at 2004 SLT 883 . At p.887, in the opinion of the court delivered by Lord Hamilton, it is stated:
"[15] In the present case the employment tribunal assessed the chance 'that the appellant would, but for the discrimination, have retained his employment in some form' at 10%. It expressed no factual or other basis for that assessment and, in particular, for so low a figure. The context in which the assessment required to be made involved the hypothesis that the respondents had fulfilled their statutory duty by making reasonable adjustments to the appellant's job such as would have afforded him an opportunity of retaining in some form his employment with them. It was to be assumed that the offer of such an adjusted job was genuine and that the respondents would not, in breach of their statutory duty, discriminate against him in that adjusted employment. In that context the tribunal required to ask itself, among other questions, the series of questions (approximately adapted to the present situation) posed in Ministry of Defence v Hunt at page 560A – concerned primarily with the response the appellant would have chosen and been able to make if such an adjusted job had been offered to him. It is not clear that the tribunal asked itself any such questions or, if it did, how on the basis of the evidence which it had heard, it was able to conclude that the prospects of the appellant in such circumstances retaining his employment in some form with the respondents were as low as 10%. In the absence of any explanation this court is unable to see whether, on this aspect, the tribunal addressed itself to the correct questions and, if so, reached answers which were legally sound. In that respect the tribunal, in our view, erred in law. [16] As regards mitigation of loss, there is no doubt that the principle is applicable to the assessment of compensation for disability discrimination. There is also no doubt that the burden of proving any failure by the appellant to mitigate his loss of earnings rested on the respondents ( Ministry of Defence v Hunt ). It is far from clear that the respondents undertook such a burden either at the oral hearing or in their written submissions. The marginal extent to which this issue may have been entered into before the tribunal is perhaps indicated by the tentative observation by it that the reasons for the appellant not actively seeking other remuneration employment were 'understood' to be connected with his receipt of a certain level of disability benefit. While mitigation is essentially a matter of fact, we are left with the distinct impression that the tribunal, in considering this issue, did not duly take into account the extent to which the appellant's opportunities for obtaining in the short term alternative remunerative employment may have been limited by the nature and extent of his disabilities. The tribunal does not adequately explain the factual or other basis upon which it found that a failure to mitigate loss had been made out. In our view, the tribunal in that respect also erred in law."
[7]The court then pronounced an order remitting the case to a differently constituted tribunal for hearing on two grounds. At the end of their opinion, they state:
"In all the circumstances we shall allow the application and grant leave to the applicant to appeal the decision of the Employment Appeal Tribunal dated 10 December 2002, hold the application as the appeal and allow the appeal on the ground that the employment tribunal failed adequately to explain its conclusions in respect of (i) the appellant's prospects of retaining his employment in some form and (ii) mitigation of loss. We shall recall the decision of the Employment Appeal Tribunal dated 10 December 2002 and the decision of the employment tribunal dated 10 April 2002 and remit to a differently constituted employment tribunal for a hearing on the grounds referred to in (i) and (ii) above. Otherwise we shall refuse the appeal."
They added:
"Any award made by the differently constituted employment tribunal in respect of loss of earnings will, of course, be additional to the award made by the original employment tribunal in respect of injury to feelings and in respect of interest on that award."
[8]The claimant wrote to the employment tribunal by letter dated 19 July 2004 to seek clarification as to the scope of the hearing. An attempt was made to hold a directions hearing by way of conference call which proved abortive. The Chairman, Mr H Murphy, thereafter wrote a note dated 20 September 2004 setting out what he referred to as his tentative and provisional views. They included:
"It appears to me that the new tribunal's jurisdiction will be limited and as defined by the Inner House. It follows that the new tribunal will be bound by the previous tribunal's quantification of the applicant's total loss. I ask parties to confirm that this is also their view within 14 days of the date of this note. If, on the other hand, a party takes a different view, that party is invited to define his or their position and the reason for it. I am satisfied that, subject to any representation that may yet be made to me that the onus of proof in relation to both the matters remitted for consideration by the Inner House lies with the respondent s and do not understand that the respondents dispute this. Again, however, I invite the respondents to define their position within 14 days."
The Tribunal's Decision[9]A hearing was fixed for 1 September 2005 but was postponed until 18 and 10 October 2005. On those dates, the hearing proceeded before an employment tribunal sitting in Stranraer, Chairman Mr C S Watt. The claimant represented himself and the respondents were represented by Mr S Swan, solicitor. The tribunal proceeded on the basis that the findings in fact of the original tribunal were binding on them apart from the two issues remitted by the Inner House. They accordingly decided to hear evidence relevant to those two matters. However, they explain, at paragraph 12:
"[2] In fact, while hearing evidence on the first day, it became clear to the Tribunal that, in order to arrive at a just and equitable amount of compensation, evidence would have to be heard on two further matters. The first was the level of incapacity benefit received by the claimant during the period from 12 April 1999 until 21 March 2005 and whether these benefits should be deducted from any compensation awarded and secondly, evidence on the question of the possibility that Mr Taylor's employment might have been terminated prior to his 65 th birthday, because his health was such that he was incapable of carrying out his post. It appeared to the Tribunal that although these two issues were not specifically remitted to the newly formed Tribunal by the Court of Session, evidence had to be heard on these points in order that a fair level of compensation for loss of earnings could be arrived at by the Tribunal. The Tribunal took the view that that it would be too restrictive not to hear evidence on these points. The Tribunal considered that the Court of Session wanted a newly formulated Tribunal to arrive at a new award in respect of loss of earnings once they had arrived at conclusions on the two remitted points. The alternative would have been to make findings on the two points and then to fix a new hearing to consider the appropriate compensation. This would simply have extended a case which has already taken more than six years to hear."
[10]Having considered the evidence led, the tribunal determined that if a reasonably adjusted job offer had been made to the claimant, he would have seriously considered it and attempted to keep his job in some form. It was not, accordingly, appropriate to make any reduction in compensation to allow for the prospects of the claimant not retaining his job.[11]Regarding failure to mitigate loss, the tribunal found:
"43. The Tribunal heard evidence from Mrs Mungall and Mr Taylor on this question. 44. It is trite law that the burden of proof lies with the respondents to prove failure to mitigate. There was no evidence at all presented by the respondents that there was failure on the part of Mr Taylor to accept any job offered to him after April 1999. 45. On the contrary, Mr Taylor was an individual who suffered from two serious disabilities and was aged 59 in April 1999. He could not start work before approximately 11am in the morning and could not drive far because of his disabilities. His skills were limited, his only real skill being as a Welfare Rights Adviser. He lived in a rural location with a high unemployment rate. 46. The Tribunal accepted the evidence of Mr Taylor that he attended the Jobcentre regularly looking for jobs, read the local paper for job vacancies and had contacted some local employers with a view to obtaining employment. 47. The Tribunal can see no reason at all for saying that there was any failure to mitigate on the part of Mr Taylor and consider that there should be no deduction of compensation for a failure to mitigate on his part. 48. The original Tribunal said in the extended reasons for their decision the following: 'The applicant has a duty to minimise his loss. He has not actively sought other remunerative employment for reasons which we understand to be connected with the level of disability benefit entitlement currently enjoyed by him. The respondents should not bear the consequences of this.' 49. The Tribunal found nothing in the evidence presented to them which would suggest that the amount of incapacity benefit being received by Mr Taylor disinclined him to find other work."
[12]The tribunal then went on and assessed compensation. They noted that the Employment Protection (Recoupment of Jobseekers Allowance and Income Support Regulations 1996) do not apply to discrimination cases. That meant that they required to take account of any benefits received in calculating a claimant's net loss since otherwise he would receive more compensation than was required to put him into the position that he would have been had the discrimination not occurred.[13]The claimant sought compensation from the date he was last paid by the respondents, 12 April 1999, up to the date of his 65 th birthday, 21 March 2005. The tribunal held, however, that the period should be restricted to allow for the high probability that the claimant would not, on account of ill health, have retained his job with the respondents until his 65 th birthday. They restricted it to a period extending to the end of June 2003. That was on the basis that the claimant had accepted that he probably would have been absent around 50% of the time from 2003. At paragraph 20, they state that he:
"…had indicated that his illnesses had got progressively worse and, from 2003, he considered that if he had been working for the respondents he would have been absent for about 50% of that year." and that the respondents, through their Mrs Mungall said that in that event: "…the respondents would have had to have looked at the viability of keeping Mr Taylor on. She thought that the procedure would have been that his absence would have been monitored and when the absences became considerable, the respondents would have obtained an occupational health report on Mr Taylor. Mrs Mungall considered that the respondents could not continue to employ Mr Taylor indefinitely, because the claimant was only in a part-time job and this made it more difficult to be flexible. Her view was that Mr Taylor's employment would probably have been terminated if the absences reached the 50% level."
[14]The tribunal proceeded on the basis that the claimant would have earned £7,536 net in 1999 and would have received annual increases in salary at the rate of 2% net. On that basis, the claimant would have earned £32,979 had he remained in the employment of the respondents until the end of June 2003. The tribunal also considered the benefits position. Evidence had been led to the effect that the claimant had received incapacity benefit for the whole period between 1999 and 2005. He would not have been receiving that benefit, at least until the end of June 2003, had he remained in the respondents' employment. The tribunal accordingly took the view that it would not be just and equitable to make an award without taking that into account. In doing so, they took account of two relevant authorities: Chan v Hackney Borough Council [1997] ICR 1014 and Morgans v Alpha Plus Security Ltd [2005] IRLR. The claimant had received £14,421 in incapacity benefit in the relevant period. The tribunal accordingly awarded the claimant the difference between the two sums, namely £18,558.[15]The tribunal considered whether or not they should award interest, taking account of their obligations in terms of paragraph 2(1) of the Employment Tribunals (Interest on Awards etc) Regulations 1996 ("the 1996 Regulations"). They decided, however, that they would not exercise their discretion to award interest on the view that the sums were so small that had the claimant received the loss of earnings component of his award at the time, it would have been spent not saved. Relevant Law[16]The provision of the Disability Discrimination Act 1995 ("the 1995 Act") in force at the time of the original tribunal's decision relating to compensation for discrimination was s.8(2)(b) . It empowered the tribunal to make an award of compensation if it considered that it was just and equitable to do so. No specific guidance was given in the statute as to the calculation of compensation. The provision in force at the time of the tribunal decision on 16 November 2005, was s.17A of the 1995 Act. Both sections provided that the amount of the compensation shall be calculated by applying, in Scotland, the principles applicable to the calculation of damages for breach of statutory duty. Thus, in either event , the well known general principle when awarding damages applies, namely that the purpose of any award of compensation is to put the claimant into the position that he would have been had it not been for the conduct complained of, as best as money can do (see e.g. Ministry of Defence v Cannock [1994] ICR 918).[17]Regarding the deductibility of benefits in a case where the recoupment provisions do not apply, the two cases relied on by the tribunal are relevant. In Chan , the Employment Appeal Tribunal said:
"Where a benefit is paid only because of incapacity on a wage, this benefit ending immediately such incapacity is removed, it cannot ………be right in assessing compensation to allow both the lost earnings and that benefit."
[18]In Morgans , in similar vein, the Employment Appeal Tribunal, chaired by the President, said:
"The applicant has suffered a lesser loss by virtue of his receipt of benefit, which would not have been paid had he remained employed and he must give credit for them. The concept of justice and equity does not lead to recovery of a greater sum than the actual loss suffered and neither by way of penalising an employer for an unfair industrial practice nor by way of adopting some broad brush just and equitable approach is there any basis in our judgment for treating a loss which has not occurred as having occurred."
[19]We also note that, prior to the decision in Morgans , a contrary view regarding the deductibility of benefits had been expressed in some decisions including one that was relied on by the claimant, Hilton International Hotels (UK) Ltd v Faraji [1994] IRLR 267. There was, in short, a prior inconsistency of approach. That inconsistency was, however, roundly and soundly resolved in favour of the view that it was only just and equitable to deduct non – recoupable benefits otherwise claimants would be overcompensated.[20]Regarding interest, paragraph 2(1) of the 1996 Regulations provides that when making an award under the 1995 Act, a tribunal:
"(a) may ….include interest on the sums awarded; and (b) it shall consider whether to do so, without the need for any application by a party in the proceedings."
[21]If interest is awarded, it will normally, in the case of an award of compensation for loss of earnings, run from the date that is midway between the date of the act of discrimination complained of and the date that interest is calculated by the tribunal. Only in cases where there will be serious injustice if interest is awarded for that period does the tribunal have the power to award interest for a different period or periods (see: paragraph 6 of the 1996 Regulations). The tribunal does not have the power to vary the rate of interest in any circumstances. The relevant rate is currently 6%. No specific guidance is given in the regulation as to the basis on which a tribunal might consider awarding such interest. A tribunal will require to bear in mind the overriding objective of dealing with cases justly. It would also be appropriate for it to bear in mind the principle that interest is normally awarded on the basis that money has been wrongfully withheld. Overall, it will also, of course, be incumbent on it to consider the whole facts and circumstances.[22]If the tribunal decides not to award interest, it must, to comply with paragraph 7 of the 1996 Regulations, give its reasons for doing so in its judgment. The Submissions on Appeal A. The Claimant's Appeal: Submissions for the Claimant[23]The claimant had five grounds of appeal. (1) Deductibility of Incapacity Benefit : the claimant drew attention to the fact that the deductibility of his incapacity benefit had not been considered by the original tribunal. Therefore, if they had not erred in respect of mitigation of loss and the prospects of his retaining his employment, they would not have deducted any sums in respect of benefits. Therefore it was not just and equitable for the tribunal to do so when calculating the award made in November 2005. Further, the decision of the original tribunal predated the decision in Morgans . There were conflicting decisions as to the deductibility of non-recoupable benefits at that time, of which the Hilton International Hotels case was an example. It should be assumed that the original tribunal knew he had been in receipt of such benefits – they made no enquiries about the matter – it could be assumed therefore that they took the view that such benefits were not deductible. In any event, they might have favoured the "no deduction" view.[24]The claimant also submitted that it was not within the remit of the tribunal to consider the matter of deductibility of benefits. (2) The tribunal failed to consider the claimant's loss of earnings in its entirety : the claimant referred to a letter from the respondents to him dated 26 November 1998 (p.74 of the bundle) which showed that the post of Welfare Benefits Officer at Dumfries which he did not accept because of the restrictions that his disabilities imposed upon him, would have commanded a salary of £11,500 gross per annum. The tribunal had calculated compensation under reference to his pre redundancy salary of £7563 per annum. They should have used the annual salary of £11,500 quoted in the respondents' letter as the basis of their calculation since that was what the salary would have been in the new post he was being offered. (3) The tribunal erred by making an assessment of chance that the claimant would have been dismissed by the respondents prior to his 65 th birthday: The claimant submitted that he knew the state of his health at the time of the hearing in 2005. He asserted that that was that at no time from the beginning of 2003 and the date of his 65 th birthday had he suffered any lengthy periods of incapacity. To fix the date at which he was likely to have lost his employment in any event as being 30 June 2003 was too early. The tribunal should not have done so. (4) The tribunal should have considered what would have been the effect of reasonable adjustments in 2003. The claimant submitted that the tribunal should also have considered what would have been the position had the respondents made reasonable adjustments in 2003; he did not indicate what reasonable adjustments he had in mind. They had, in effect, found that the respondents would have had a substantial reasons for dismissing him which was not discriminatory but they should not have done so without addressing the question of reasonable adjustments. (5) Interest : The claimant submitted that since the original tribunal might have made the same award as the tribunal that decided his claim in November 2005, he should have been awarded interest. He would have had the lump sum determined on in November 2005, earlier, in 2002, and it was not just and equitable that he be deprived of the interest that he could have earned on the money had he received it then. He did not suggest that there had been any wrongful withholding by the respondents. Indeed, he confirmed that they had promptly paid the sum assessed by the original tribunal as due. It was though, in his submission perverse for the tribunal not to have awarded him interest. It seemed that he was looking for interest to run from the date of the original tribunal's award. Submissions for the Respondents[25]In respect of the claimant's first ground of appeal, Mr Swan submitted that the tribunal had not erred. The matter of benefits was subsumed in the mitigation of loss issue that had been remitted by the Inner House; if a claimant did not claim benefits then he might be regarded as having failed to mitigate his loss. The decision to deduct benefits was not perverse. Reference was made to the case of Yeboah v Crofton [2002] IRLR 634 .[26]In respect of the second ground of appeal, Mr Swan submitted that the tribunal had approached their calculation of compensation correctly and it would not have been appropriate for them to take account of the potential for income that was not going to arise, into account. It would not have been possible to say, on the evidence, what remuneration would have resulted from a suitably adjusted post. The onus was on the claimant to prove his loss of earnings. The only definite figure that the tribunal could work from was his previous salary of £628 net per month.[27]In respect of the third ground of appeal, Mr Swan drew attention to the fact that it was the claimant who had volunteered the information that he would probably have been absent from work for 50% of the time in 2003. The tribunal had reached a sustainable conclusion. The respondents could have argued that they should have fixed the end date earlier in 2003 but they accepted that it was open to the tribunal to approach matters as they had done.[28]In respect of the fourth ground of appeal, Mr Swan submitted that the tribunal had made findings in fact that were open to them and considered what would have been the most likely outcome. They had not erred.[29]Regarding the final ground of appeal, Mr Swan submitted that the tribunal had a discretion, they had not exercised it in favour of the claimant and that was something that they were entitled to do. B. The Respondents' Cross-Appeal Submissions for the Respondents[30]Mr Swan submitted that it could be seen from the tribunal's judgment that they had fallen into error when reaching their decision on mitigation of loss. They had, at paragraph 22, made a clear series of findings in fact regarding the steps taken by the claimant after losing his job with the respondents. They record that he had looked at job vacancies in the local paper, that he had regularly visited the Job Centre, that he had made phone calls and that he had contacted two specific named prospective employers looking for work with them, all in the period April to November 1999. Then, at the end of that paragraph, they had noted that early in 2000, the claimant had set up a Welfare Rights Organisation on an "expenses only" basis, that is that he received no income from it. That showed, it was submitted, that the claimant had, at that point, chosen to take up an unremunerated occupation.[31]However, when the tribunal came to consider what conclusions they reached on the matter of mitigation of loss, they had taken account only of the steps taken by the claimant in 1999. They made no reference to the claimant choosing to set up the Welfare Rights Organisation. Their decision was, accordingly, flawed in such a way as to amount to an error of law. We should, he submitted, restrict the award to the claimant on the basis that he had, as of the beginning of 2000, failed to mitigate his loss. Submissions for the Claimant[32]The claimant submitted that the tribunal's decision on mitigation of loss was not perverse. He said that the Welfare Rights Organisation had been intended as a means of getting an income. The tribunal had looked at matters as a whole and were entitled to decide as they did. Discussion and Conclusions[33]Regarding the matter of the deductibility of the claimant's incapacity benefit, we are not persuaded that the tribunal erred in any respect. Firstly, we are satisfied that the Inner House remit was wide enough to cover the matter. All that remained intact of the decision of the original tribunal was that the claimant was entitled to the sum of £1,500 in respect of injury to feelings. The award of 10 April 2002 had otherwise been recalled. The new tribunal required, accordingly, to make a decision in respect of the remainder of the claimant's claim for compensation. Further, they had been put on notice, given the grounds on which the award had been recalled, that the reasons given by the original tribunal for reducing its award had been found to be inadequate. However, there was no question of it having been demonstrated to them that the original tribunal had erred in any way in respect of the deductibility of benefits. There was a simple reason for that; it had not been considered at all. When the fact of the receipt of a significant amount of incapacity benefit became known to the second tribunal, they could not ignore it. It would have been wrong of them to do so. Further, it would have been wrong of them, at the time that they were assessing compensation, to do other than deduct the incapacity benefits, given the decision in Morgans .[34]The claimant's submission was really to the effect that if the original tribunal had made no error and it had also considered the benefits question, then they might not have deducted them, Morgans not having been decided at that time. It would be wrong for us to speculate about that or about what might have been decided on any appeal. In any event, we do not agree with the claimant's approach. The second tribunal did not err in applying Morgans , the then current law, to the decision that they had to make on a matter that had not previously been decided in this case, in response to the Inner House remit.[35]Regarding the second ground of appeal, we find the claimant's approach to be misconceived. There was no evidence before the tribunal that he would ever have earned £11,500 gross. That was the salary that would have been paid for the job he was offered but he would not agree to taking that job. That was what, as we understand it, precipitated the circumstances in which his claim arose. Whilst the tribunal found that he had been discriminated against that was on account of the respondents' failure to make one or more reasonable adjustments all of which, on the face of it, had the potential to have an impact on the earnings that his job would command. There was, though, no evidence about that. In those circumstances, the best that the tribunal could do, in our view, was to do as they did. That was to proceed on the basis of what they knew the claimant had been earning prior to his departure, not to use as their first building block in the calculation of compensation a salary that he had never earned and in respect of which there was no evidence that he was ever likely to have earned.[36]Regarding the third ground of appeal, we are not persuaded to uphold it either. The tribunal had evidence before them which they accepted that the claimant would probably have been absent from work, due to a deterioration in his health for about 50% of the time in 2003. They had evidence that the respondents would have taken steps to monitor and assess him on the basis that they would have had to look at the viability of keeping on a part time employee whose ill health was causing that level of absence. In these circumstances, it was clearly open to them to conclude that at some point in 2003, the claimant's job would have come to an end. They reached, we consider, a result that was fair to both parties in allowing three months for monitoring and three months for assessing the claimant[37]Further, the tribunal appropriately took into account, under reference to a disability discrimination case ( Callaghan v Glasgow City Council [2001] IRLR 724 ) that the termination of an employee's contract on account of high absence levels can be justified. That would seem to be correct. Much will depend on the facts and circumstances of the case but we can envisage that there may be cases such Callaghan where an employer can demonstrate that an employee's sickness and absence record were of such materiality and substance that they were past the stage of considering reasonable adjustments ex proprio motu and entitled to dismiss. The claimant did not give any indication of what reasonable adjustments had in mind as being appropriate to meet the circumstances in 2003 when he was, on his own evidence, liable to have been absent through ill health for 50% of the time. The matter was not raised before the tribunal at all, although the issue of whether or not the claimant could have held onto his job after 2003 clearly was. In all these circumstances, we are not persuaded that there is any merit in the fourth ground of appeal.[38]Regarding the matter of interest, the tribunal had a discretion in terms of paragraph 2(1) of the 1996 Regulations. They decided not to exercise that discretion. They fulfilled their obligation to give reasons for not having done so. We are not aware of having seen such reasoning being adopted by a tribunal before but that is not to say that it is wrong. We accept that the underlying principle that the tribunal indicated that they had in mind , namely that the claimant should not receive more in compensation than is needed to put him in the same financial position as he would have been in had the discrimination not occurred is a correct statement of principle. Their view that the money would have been spent at the time each payment of salary was made would appear to be a reasonable one and was not challenged by the claimant.[39]Further, it was plain from the claimant's submissions that the reason he felt that he should have received was interest was that the original tribunal should not have erred and if they had not done so, he would have received a lump sum payment at that time. He did not, in any way, seek to blame the respondents for the delay in payment. Nor did he address at all the question of how it would be fair to award interest from the mid point date that is provided for in paragraph 6 of the 1996 Regulations, to which we have referred, the date that interest would have had to be awarded from unless the high test of serious injustice was overcome by the respondents. That mid point date would, in the present case, have been a date earlier than the date of the award of the original tribunal.[40]In all these circumstances, we are not persuaded that there is any basis on which we could interfere with the tribunal's decision not to penalise the respondents by making an award of interest which, we observe, would have been a significant amount. The Cross Appeal[41]We have given careful consideration to the submissions advanced in support of and against the cross appeal. We find ourselves in the position that we are unclear as to whether or not the tribunal did have regard to the fact that in early 2000, the claimant commenced, evidently of his own volition, working in an occupation that was effectively unremunerated. They clearly should have done so and should have considered what effect, if any, that had on the view that they took of the question of whether or not the claimant had taken all reasonable steps to mitigate his loss. In these circumstances, we have decided that the appropriate way to proceed is to sist the cross appeal pending a reference back to the tribunal to answer, if practicable within 28 days, the following questions:
"1. whether or not it made any findings as to basis on which the claimant decided to set up the specialist Welfare Rights Organisation ('WRO') to which they refer at paragraph 22? 2. if so, what were those findings? 3. whether or not they took account of the claimant having decided to set up the WRO when considering whether or not he taken reasonable steps to mitigate his loss? 4. if so, to what effect? 5. whether they considered that, in setting up the WRO, the claimant was reasonably mitigating his loss? 6. if so, why and how? 7. if not, why they did not take that into account when reaching their conclusion that the claimant had taken reasonable steps to mitigate his loss?"
[42]The tribunal will be requested to give its answers (which will be supplied by this tribunal to parties) by reference to its notes of evidence and without the need to adduce or allow the adduction of further evidence, unless it were to decide of its own initiative pursuant to Rule 34(5) to review its decision. It will, however, be at liberty to call for written submissions from parties to be lodged and exchanged. Disposal[43]We will pronounce an order dismissing the appeal, sisting the cross appeal and referring back to the Employment Tribunal the issues which we have outlined above.