UKEAT/0606/07/RN & UKEAT/0037/08/RN 1) ABBEY NATIONAL PLC 2) MR N HOPKINS v MR B S CHAGGER [2008] UKEAT 0606_07_1610

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2008] UKEAT 0606_07_1610Case No Appeal No. UKEAT/0606/07/RN UKEAT/0037/08/RN, UKEAT/0041/08Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
UKEAT/0606/07/RN & UKEAT/0037/08/RN 1) ABBEY NATIONAL PLC 2) MR N HOPKINSAPPELLANTSMR B S CHAGGERRESPONDENTUKEAT/0041/08/RN MR B S CHAGGERAPPELLANT1) ABBEY NATIONAL PLC 2) MR N HOPKINSRESPONDENTS
Before
Mr Justice Underhill Mr P GammonDate 16 October 2008
[1]19 ), at paras. 69-71 (pp. 1091-2). It may therefore be too glib to say merely that stigma of the kind for which compensation is sought is not a "direct" or "natural" consequence of the Appellants' wrongful acts because it depends on the Claimant's choice to sue and/or on the (unlawful) acts of third parties; or that those same factors "break the chain of causation". Nevertheless in this particular context the fact that the loss in question arises only indirectly, and that the immediate cause is the unlawful conduct of third parties, does seem to us a powerful reason for holding it to be too remote. There is no analogy with "duty of care" cases, in which the obligation undertaken may well involve protecting parties against the acts, including the unlawful acts, of others. The natural scope of liability for a discriminatory dismissal does not seem to us to extend beyond the injury inherent in the loss of the employment in question. [10] Claimants will be entitled to full compensation for the loss of that employment; and if the fact that they have sued their employer has impacted on their ability to mitigate that loss that will be reflected in the compensation. But it is another matter for the employer to be made liable for the potential loss of other jobs from other employers. We note, though this is not central to our reasoning, that if such a claim were admissible in principle it would be available in the case of every claim for dismissal in breach of the employment protection or anti-discrimination legislation. It is not without significance that no such claim has, so far as we are aware, ever been upheld (or indeed advanced). If such claims were admitted, the difficulties of proof and evaluation would be formidable, since it would be necessary to make judgments about the conduct of other employers which would be of their nature speculative and unquantifiable. It follows that the Tribunal was wrong in our view to award compensation for anything other than the Claimant's lost earnings (and any associated pension loss) from employment with Abbey . The claim will have to be remitted for reconsideration on that basis. Again, we see no reason why that reconsideration may not be carried out by the same Tribunal. Having reached this conclusion, we need not consider the Appellants' other grounds of appeal in relation to this step. Nevertheless, we deal with them briefly in case the matter goes further and because issues raised by them may remain indirectly relevant to the Tribunal's reconsideration. Balance of probabilities/loss of a chance. In para. 52 of the Reasons (see para. 96 above) the Tribunal found "on the balance of probabilities" that the Claimant would not have left Abbey voluntarily: it also used the same phrase in para. 51, though it is rather less clear there to what finding it is being applied. By ground 1 of the Notice of Appeal the Appellants contend that the Tribunal was wrong to seek to resolve the issues in question on the balance of probabilities: it is well-established that an employment tribunal engaged in an exercise of the kind in question must adopt a "loss of a chance" approach - see, e.g., Vento (above), per Mummery LJ at para. 32 (p. 327). In our view that submission is plainly right. Ms. Heal in her oral submissions was constrained to accept that the Tribunal had erred in this respect. She submitted however that the error made no real difference, because if (contrary to what we have held) the true question was indeed not whether the Claimant would have left Abbey at all but whether he would have left except for equivalent or better employment, the chances that he would have deliberately made a change for the worse were negligible. That may well be right; but the point is not significant in view of our conclusion on the prior issue. The chances of the Claimant leaving Abbey voluntarily. By ground 3 of the Notice of Appeal the Appellants advance a number of reasons in support of their contention that the chances were high that the Claimant would have left Abbey voluntarily in any event, and they complain that the Tribunal gave no or no sufficient weight to those matters. Mr. Jeans did not develop this ground in his oral submissions, since he said that it did not arise if the Tribunal had, as he submitted and as we have found, asked itself the wrong question anyway. Ms. Heal did not demur from this approach. Strictly speaking, however, the Tribunal's finding that on the balance of probabilities the Claimant would not have left Abbey voluntarily prior to his retirement date implies a finding that the chances of his doing so were less than 50% [11] . In those circumstances we think it right to say, on the basis of the written submissions, that we do not regard the reasons given by the Tribunal for its conclusion as adequate. The Appellants advanced a number of substantial reasons in support of their submission that the Claimant was not likely to have remained at Abbey for long, and those reasons required fuller consideration in the Reasons than they were given. In those circumstances the finding that there was a more than 50% chance that the Claimant would still have been employed at Abbey at age 65 cannot be regarded as binding when the issue returns for reconsideration. Step (B) On the basis of the conclusions reached above, we do not need to consider the Tribunal's reasoning on this step (or step (C)). But we will, again, do so briefly in case the matter goes further. We should note that neither party dealt in their skeleton arguments with the question of the use by the Tribunal of the Ogden Tables, and we heard only very limited oral argument on the point. We invited counsel to submit written submissions following the hearing, and they did so: these have been useful in explaining what the Tribunal did, but they were otherwise limited in their scope. There is of course nothing unusual in an employment tribunal using a multiplier/multiplicand approach when assessing future loss of earnings in a dismissal case: it will indeed almost inevitably do so when the loss extends much over a year. It is, in our experience, much less usual for it to use the Ogden Tables. These are tables published by the Government Actuary as an aid to the calculation of damages in personal injury cases. Tables 3-14 in the current (6 th ) edition [12] identify multipliers (for men and women separately) from any given age up to retirement age (with alternatives at five-yearly intervals from ages 50 to 75). These multipliers take account of – only -(a) accelerated receipt and(b) mortality risk. In most dismissal cases the tribunal will not normally be concerned with a loss continuing to retirement date, and tables 3-14 will accordingly be of no assistance [13] : it will have to choose a multiplier which it judges best balances all the contingencies affecting the duration of the loss (and, unless this is insignificant, accelerated receipt). But if, contrary to our decision, the Tribunal here had indeed been concerned with loss extending for the entirety of the Claimant's career there could be no objection to it using the appropriate Ogden table – though only, as explained at para. 114 below, as a starting-point. The appropriate table in the present case would be table 9, which gives multipliers for loss of earnings for men to age 65. Taking the discount rate now approved by the Courts of 2.5% [14] , and the Claimant's age of 42 at the date of assessment, the appropriate multiplier is 16.92. (In fact the figure given by the Tribunal is not 16.92 but 16.65: we explain the discrepancy below.) Step(c) (C) Even in a case where it is appropriate to use the Ogden Tables, it will never be right to use the multiplier taken from the main tables without considering the contingencies which those tables do not reflect. For a claimant to be compensated in full (subject to accelerated receipt) for his assumed annual loss for every year and month of the rest of his career involves treating as a certainty the assumption that he would have continued for the rest of his career to receive his pre-dismissal earnings. But that cannot be a certainty. On the contrary, it is subject to a number of contingencies: he might have died or become too ill to work, or his employer might have gone out of business, or he might have been dismissed for some other good cause or have left voluntarily for any one of a number of reasons. The only one of those contingencies taken into account in the main Ogden tables is the possibility of death (and even that may be inadequately represented if there is reason to believe that the claimant's risks are substantially worse than those of the general population from which the Ogden figures derive). Those other contingencies must be properly reflected in the ultimate multiplier used. There may be cases where a tribunal believes the contingencies in question are balanced by "upside" contingencies not reflected in the multiplicand (e.g. promotion); but otherwise the multiplier will fall to be reduced. Although the Explanatory Notes to the Ogden Tables emphasise that the main tables do not take account of contingencies other than mortality, section B of the Notes "suggests ways in which allowance may be made to the multipliers for loss of earnings to make allowance for certain risks other than mortality" (see para. 19). In the 4 th and 5 th editions tables were included in section B setting out percentage adjustments which could be applied to the figures in the main tables in order to take account of risks such as "illness and unemployment", varying according to geography and the nature of the claimant's occupation. However, these came with a warning that they had been shown to be methodologically flawed and that work was under way to produce more reliable adjustments; the tables were only being included to "give an indication of the factors that should be included" (see para. 25 of the Introduction to the 5 th edition). By the time of the 6 th edition the promised further work had been done, and section B now contains different and more elaborate tables. The Tribunal in the present case appears to have made two reductions in the multiplier derived from the main Ogden tables – one consciously and the other possibly unwittingly. The adjustment which it avowedly makes is that from 16.65 to 16: this reduction was in order to reflect the chance of short "career breaks" of the kind which it identified and is unexceptionable. The other adjustment is less obvious. As noted above, the multiplier appearing in table 9 was 16.92. The Tribunal however started with a figure of 16.65. This appears to be because it was using not the Ogden Tables themselves but the practitioners' book to which it refers at para. 79 of the Reasons, Thompson's Facts and Figures. This publication contains tables which roll up the main Ogden tables with the supplementary "other contingencies" tables in section B. Accordingly the Tribunal was, though it may not have appreciated it, making some deduction for "other contingencies". If we were still concerned with a whole-career loss, we would have to consider whether this approach was adequate. Since we are not, and since we have had no submissions on the question, we prefer not to do so. We would only note two points. First, since the Tribunal was using a 2005 edition of Facts and Figures the tables in question will have been the old unimproved 4 th or 5 th edition versions, so that there must be a question-mark as to their reliability. Secondly, we doubt whether it is right to assess contingencies in a given case, at least in the employment field, only on the basis of discounting factors of the kind used in section B of the Ogden Tables. These are based on general population figures, and they will in any event contain no allowance for the possibility of the claimant leaving his employment voluntarily. An employment tribunal should normally be in a position to make a case-specific assessment for contingencies applicable to the claimant's own case. We do not wish by these observations to discourage tribunals from using the Ogden Tables in cases where sophisticated calculations of long-term future loss are required. But if they are used they must be used with care and with a proper understanding of their limitations. ISSUE (3): MITIGATION Ground 4 It was the Claimant's case that he had taken all reasonable steps to find fresh employment in the financial services industry but that he had been unable to do so, which was why he had eventually decided to re-train as a teacher. He had applied unsuccessfully for some 111 jobs, and the Tribunal described the evidence which he produced demonstrating the extent of his search as "the most thorough, extensive and well documented any member of this Tribunal could recall having ever seen" (Reasons, para. 34). Having reviewed that evidence the Tribunal held, at para. 56, that the Appellants had not shown that he had failed to mitigate his loss. A major strand of the Appellants' case on failure to mitigate was that the Claimant had, at least in the later period of his search, damaged his prospects of obtaining employment by unnecessarily volunteering to potential employers that he had brought proceedings against Abbey for race discrimination. As to that case the Tribunal's finding, in the first part of para. 56, was as follows:
"So far as those matters are concerned, the Tribunal was overwhelmingly of the view that the suggestion that the Claimant had in some way acted over zealously in advancing the fact that he had been dismissed unfairly and of race discrimination and brought proceedings in order to put himself in a position to take compensation from the Abbey, was wholly fallacious. It imputes a dishonest motive to Mr Chagger. His evidence was clear that he volunteered the information about his dismissal and the circumstances for it and the Tribunal's findings to recruitment agents after the Tribunal decision had been made and the he only told employers directly when asked a direct question. It was evidence that the Tribunal accepted. No question was raised in the Tribunal's mind as to Mr. Chagger's integrity. The Tribunal were satisfied that Mr. Chagger was an entirely honest witness and rejected any suggestion that he would have behaved towards future employers in that way."
By ground 4 of the Notice of Appeal the Appellants contend that that reasoning was bad in law because the Tribunal had asked itself not, as it should have, whether the Claimant's conduct was reasonable but only whether it was honest. We do not accept that contention. The passage in question does indeed appear to focus on the question of honesty. But Ms. Heal submitted that that reflects the fact that Mr. Sutton's cross-examination and submissions had, in effect if not in so many words, accused the Claimant of deliberately volunteering the information about his claims against Abbey in order to scupper his chances of being recruited - which amounted to an accusation of dishonesty. We have looked at the notes of the relevant passages in Mr. Sutton's cross-examination and at his (and Ms. Heal's) written closing submissions on remedy. Although we can detect no explicit allegation of dishonesty, they do seem to us to support Ms. Heal's contention. We note in particular paras. 4.20-21 of Mr. Sutton's submissions, which make the point that the Claimant "fully appreciated" that "volunteering information about litigation with a previous employer is highly likely to impede his prospects" and then introduce a submission about the impact of his doing so by the phrase "whatever the Claimant's motives": it is not difficult to detect the innuendo. In those circumstances the Tribunal's focus on the issue of honesty is understandable. That is not of course a complete answer. Even if the Tribunal had good reason to address the issue of honesty, it still had to consider the reasonableness of the Claimant's conduct: an employee may act honestly but unreasonably. But it is important to read para. 56 in the light of the two immediately preceding paragraphs, which recite Ms. Heal's submissions. In para. 54 the Tribunal sets out in full a passage from the headnote of Fyfe v Scientific Furnishings Ltd [1989] IRLR 331 (also at [1989] ICR 648), on which Ms. Heal had relied, stating "the basic rule of mitigation" as being that "… the plaintiff must take all reasonable steps to mitigate the loss to him consequent upon the defendant's wrong and he cannot recover damages for any such loss which he could thus have avoided but has failed to avoid through unreasonable action or inaction". In para. 55 Ms. Heal is recorded as having submitted "that the Claimant had acted reasonably". Her explanation for the Claimant "volunteering" the information in question is given, namely that the Claimant felt obliged to give truthful answers to employers who asked him in terms about the circumstances of his dismissal. In our view it is reasonably plain that the Tribunal intended to accept those submissions. In other words, it directed itself in accordance with the (very well-known) principles stated in Fyfe and accepted that it was reasonable for the Claimant to mention to prospective employers his litigation against Abbey in the circumstances and for the reasons that he did. We do not therefore believe that the Tribunal regarded the fact that the Claimant had acted honestly as decisive of the mitigation issue. Grounds 6 and 7 As noted above, the Tribunal had heard evidence on the issue of compensation at the hearing on 3 rd January 2007. That included cross-examination of the Claimant by Ms. Noons, apparently for some three hours, on his mitigation efforts up to that date. In ground 6 of the Notice of Appeal the Appellants claim that at the resumed hearing in August the Chairman unfairly prevented Mr. Sutton from cross-examining the Claimant about any aspect of the mitigation issues relating to 2006. Although prima facie it might seem reasonable case management to prevent counsel returning to an issue which had already been fully covered, Mr Jeans submitted that that would be to overlook the extraordinary features of the case. There had been an interval of over seven months since the earlier cross-examination; the Claimant's case had been transformed in the meantime; the Appellants had had a change of representation; it had, he submitted, been understood at the abortive hearing in April that at the resumed hearing the Claimant could be cross-examined "afresh" – he referred us to a passage from Ms. Gollop's submissions on that occasion; and it was in any event impossible to draw a neat line between cross-examination on 2006 and cross-examination on 2007. It was true that the Claimant's fresh evidence purported to deal with events only from 2007 onwards but that was not in fact the case. The starting-point is to establish what in fact the Chairman decided, and how he implemented his decision. Although the Appellants rely on the affidavit from Ms. Noons she was not in fact present when the Chairman gave his ruling, and the best guide is the notes made by the Appellants' solicitors. These show that, some way into his cross-examination, Mr. Sutton started to question the Claimant about the use which he made of out-placement consultants at the time of his dismissal, i.e. in 2006. Ms. Heal objected. She submitted that Ms. Noons had already cross-examined the Claimant on his mitigation efforts in 2006 and that it was neither a good use of time nor fair to the Claimant for him to be asked about that period again. A rather inconclusive exchange ensued about what had been said at the abortive hearing in April. The Tribunal then retired. When the hearing resumed the Chairman said that he had refreshed his memory from his notes of the January hearing; that there had been extensive cross-examination on that occasion; and that Mr. Sutton should cross-examine only "from January 2007". Mr. Sutton then said that he had himself had access to Ms. Noons' notes of the earlier hearing and that the points which he wanted to make were "new issues around [the Claimant's] attitude to job search"; that most of them depended on events in 2007 but there were "a handful of points prior to this"; and that he could make them in submissions anyway but it seemed fair to put them to the Claimant. The Chairman suggested that perhaps Mr. Sutton could agree something with Ms. Heal, but Mr. Sutton stuck to his guns and said that the points would not take long and that it was "now seven months since evidence". The Chairman is then noted as saying "OK [but] [15] not be a retrial", to which Mr. Sutton responded, as noted, "Agreed". Mr. Sutton then proceeded with his cross-examination – the first question relating to an e-mail of April 2006. There was no further attempt to inhibit his questioning. We regard the Chairman's conduct as wholly unobjectionable. The general principle of preventing Mr. Sutton going over ground already covered was routine case management. It is true that the circumstances were unusual, and some Employment Judges might have preferred to adopt a "start again from scratch" approach; but the course taken was well within the Chairman's discretion. The passage from Ms. Gollop's submissions on which Mr. Jeans relied does not demonstrate that there had been any agreement that the events of 2006 could be re-opened. To the extent that there was overlap between new matters on which Mr. Sutton legitimately wished to cross-examine and the events of 2006, then no doubt the ruling needed to be applied flexibly; but that is just what the Chairman did. We accordingly reject ground 6. Ground 7 is not strictly concerned with mitigation but it is convenient to mention it at this point since it too comes under the rubric of procedural unfairness. It concerns the problems said to have been caused by the late delivery of the Judgment and Reasons. We have dealt with this at para. 21 above. Unfortunate though the delay was, we do not believe that it gave rise to any substantial injustice. THE CROSS-APPEAL The Claimant's cross-appeal concerns the uplift of 2% applied under s. 31 of the 2002 Act because of Abbey's failure to go through a statutory dismissal procedure (see paras. 9 and 35 above). S. 31 (3) reads as follows:
"If, in the case of proceedings to which this section applies, it appears to the employment tribunal that — (a) the claim to which the proceedings relate concerns a matter to which one of the statutory procedures applies, (b) the statutory procedure was not completed before the proceedings were begun, and (c) the non-completion of the statutory procedure was wholly or mainly attributable to failure by the employer to comply with a requirement of the procedure, it must, subject to subsection (4), increase any award which it makes to the employee by 10 per cent and may, if it considers it just and equitable in all the circumstances to do so, increase it by a further amount, but not so as to make a total increase of more than 50 per cent."
S-s. (4) provides (so far as material):
"The duty under subsection … (3) to make [an] … increase of 10 per cent does not apply if there are exceptional circumstances which would make [an] … increase of that percentage unjust or inequitable, in which case the tribunal may make no … increase or [an] … increase of such lesser percentage as it considers just and equitable in all the circumstances."
The Tribunal initially thought that the 10%-50% uplift which it was required to impose by s. 31 (3) would apply only to the part of the award attributable to the finding of unfair dismissal. On that basis it notified the parties in its initial oral decision that it believed that an uplift of 35% was appropriate. But Ms. Heal submitted that any uplift necessarily applied to the entirety of the award. On reflection the Tribunal accepted that submission, and it believed that it ought on that basis to reconsider the question. Its eventual decision contained in the Judgment and Reasons was, as we have said, that it should apply s-s. (4) and limit the uplift to 2%, for reasons which we review below but which included the exceptional size of the overall award. The Claimant contends that it should not have done so, and that the uplift of 35% initially proposed should apply to the entire award. In view of the fact that the award of compensation is now to be reconsidered the Tribunal may need to reconsider its decision on this aspect also; but we should nevertheless decide whether its decision was open to it on the basis of the award which it in fact made. It was common ground before us that any uplift would indeed apply to the whole award. The result is somewhat surprising, but we can see how it may appear to follow from the wording of s. 31 (3), and since the point was not argued we will not consider it further. The Tribunal was only entitled to apply an uplift of less than 10% if there were exceptional circumstances which would make an uplift of that amount "unjust or inequitable". Its reasons for believing that this was the case are given at para. 66 of the Reasons as follows:
"Upon reconsideration the Tribunal, unaided because of the total lack of authority on the point, considered section 31(4) and decided that in circumstances such as these where compensation was to be awarded not only for unfair dismissal but in substantial sums for race discrimination as well, which we apprehended would exceed £1 million, it was appropriate to say that those were exceptional circumstances permitting the Tribunal either to make no award or uplift by some lesser amount than the normal minimum of 10%. The effect of such an award is, punitive as regards a Respondent and may give the Claimant a substantial benefit beyond compensation for actual loss."
In so far as the Tribunal's reasoning was based on the consideration that an uplift of 10% or more would be "punitive" rather than compensatory, this seems to us misconceived. Uplifts under s. 31 (3) are of their nature punitive (though we note that in its recent decision in Redcar and Cleveland Borough Council v. Bainbridge [2008] IRLR 776 the Court of Appeal preferred to characterise them, at least at the lower percentages, as providing "incentives" to an employer to make use of the statutory procedures (see para. 311 at p. 814)). The real question is whether the punishment in the present case is disproportionate. The Tribunal appears to have had in mind two exceptional circumstances as rendering an uplift of 10% or more unjust or inequitable – first, simply the size of the award; and secondly, the fact that the lion's share of that award results not from the claim for unfair dismissal but from the claim for race discrimination. As regards the latter point, we would not agree that the mere fact that the Claimant's dismissal was held to be not simply unfair but racially discriminatory should be decisive: had the statutory procedure been gone through, the Claimant could have claimed that his proposed dismissal was on racial grounds. But it is true that there was nothing in the circumstances faced by Abbey at the time when it failed to implement the procedure which might have led it to suppose that a claim of race discrimination was on the cards. The consequences of a failure to employ the procedure, had it considered them, would have appeared to be an uplift on an unfair dismissal award which, at most, could not have exceeded five figures. It seems to us that that was a legitimate consideration for the Tribunal to take into account. Likewise, we can see no reason why the fact that an award is of exceptional size should not itself be a relevant consideration. On the Claimant's case the Tribunal was obliged to "fine" Abbey a minimum of almost £300,000 – and in fact on the case asserted before us about £1m. - for a purely procedural failure. The Tribunal was fully entitled to regard that as wholly disproportionate to the offence, even if it was right to regard the failure as "substantial" (as it had held at para. 62 of the Reasons). Our conclusion on this point is consistent with the views expressed, albeit obiter , by this Tribunal in Home Office v. Khan and King UKEAT/0257/07, at para. 41. Ms. Heal submitted that any such reasoning would be inconsistent with the decision of this Tribunal in Aptuit (Edinburgh) Ltd. v. Kennedy UKEAT/0057/06. In that case a decision to apply an uplift of 40% was overturned because of the width of the matters which the employment tribunal had taken into account in arriving at that figure. Lady Smith said, at para. 47:
"… [I]t is plain, in our view, that the circumstances in question are those surrounding the failure to complete the statutory procedure. We agree … that the Tribunal took irrelevant matters into account here in respect that they were, apparently, influenced in arriving at 40% by the fact the failures (i.e. not just the failure to complete the statutory procedure but the other failures identified by them) were "serious", that the respondents are a large organisation, that there appeared to have been "no consultation whatsoever" and that they had treated this "long standing" employee in a "shoddy" manner. These matters should not have influenced the decision on uplift at all since they did not relate to any failure to complete the statutory procedure."
Ms. Heal submitted that the factors on which the Tribunal relied in this case could not be described as "circumstances surrounding the failure to complete the statutory procedure". That may as a matter of words be so, but it is necessary to bear in mind the nature of the complaint in Aptuit : as is apparent from the passage quoted, the Tribunal had explicitly taken into account other aspects of the employer's conduct of which it disapproved. The Appeal Tribunal was not considering circumstances like those which arise in the present case and its language cannot be read as intended to apply to such circumstances. We see no reason why the factors relied on by the Tribunal here cannot fall within the wide terms of s-s. (4). It was not suggested to us that if we held that the Tribunal was entitled to proceed under s-s. (4) the figure of 2% was open to challenge. Ms. Heal submitted that if we endorsed the Tribunal's approach we would in practice be saying that the size of the award is a relevant consideration for the purpose also of judging the amount of an "ordinary" uplift under s. 31 (3). That would be contrary to the evident scheme of these provisions; it would also mean that whenever an award of compensation was altered on appeal it would be necessary for the amount of any uplift to be reconsidered by the Tribunal. We do not accept this. We agree that it seems to follow from the way that s. 31 (3) is formulated that Parliament expected that the uplift would take the form of a percentage of the amount awarded; and we accept that in routine cases the Tribunal will arrive at the percentage which it considers appropriate without considering the size of the award to which it will be applied. But we do not believe that that excludes the possibility of it having regard to the size of the overall award in a particular case to the extent that it considers it just and equitable to do so. If it does, it should say so: as observed in Khan and King (above) the factors influencing the choice of uplift should be specified. That would enable the Appeal Tribunal to decide, in the scenario raised by Ms. Heal, whether a remission was necessary. CONCLUSION ON THE REMEDY ISSUES We allow the appeal on grounds 1, 3 and 5, though it is grounds 2 and 5 that principally undermine the Tribunal's reasoning. We dismiss the cross-appeal. The case should be remitted to (if possible) the same Tribunal to decide: (a) what were the chances that the Claimant would have been made redundant on the occasion that he was even if the Appellants had not discriminated against him in the way that the Tribunal held them to have done; (b) what compensation fairly reflects the loss of the Claimant's employment with Abbey (and associated pension loss) after 18 April 2006, dealing fully with the factors relied on by the Appellants as likely to have curtailed that employment; and (c) what level of uplift is appropriate to the final award of compensation made. As regards (a), the Tribunal should express its finding as a percentage discount, which will then (unless it is nil) be applied to the loss assessed under (b). As regards (b), no doubt the Tribunal will, in the usual way, assess the loss in terms of a number of years' loss of earnings (that is, if it is more than one). It may or may not, depending primarily on the length of the period of loss that it is considering, find the Ogden Tables useful as a guide to the appropriate discounts for mortality and accelerated receipt; but it should bear in mind the cautions expressed at para. 114 above. Its findings on mitigation remain intact. In principle the issues should be decided on the basis of the evidence already heard, provided that the Tribunal believes that its notes (supplemented by any that the parties may supply) are adequate to enable it to do justice between the parties; but of course in the circumstances there will need to be an opportunity for very full submissions. It will be necessary to fix a case management discussion to consider those and other matters. The Claimant in these proceedings was employed by Abbey National plc, to which we will refer as "Abbey", from 26 November 2001 until his dismissal for redundancy with effect from 18 April 2006. On 14 July 2006 he presented a claim complaining of (i) unfair dismissal (including "automatic" unfair dismissal pursuant to s. 98A (1) of the Employment Rights Act 1996 ); (ii) race discrimination; and (iii) breach of contract. We will return to the details of these claims in due course. As regards the race discrimination claim he included his manager, Mr. Nigel Hopkins, as a second respondent.[2]The issue of liability was heard in the London Central Employment Tribunal by a tribunal chaired by Mr. T.P. Ryan between 4 and 15 December 2006. The parties' submissions were concluded on 12 December, and the Tribunal deliberated in chambers throughout the following day. On 15 December the Chairman announced that the Claimant had succeeded on all aspects of his claim and gave very brief oral reasons; but it is a regrettable feature of the case, to which we will have to return, that the Tribunal's formal Judgment and Reasons were not promulgated until 23 August 2007, i.e. over eight months later.[3]Immediately following the informal announcement of its decision on liability the Tribunal heard submissions on whether a reinstatement order should be made, and it made such an order the same day. On 3 January 2007, Abbey having made clear that it did not propose to reinstate the Claimant, there was a further hearing at which it was determined that an additional award should be made pursuant to s. 117 (3) of the 1996 Act. Evidence was heard, and apparently completed, on the issue of compensation; but there was no time for submissions and the issue was accordingly adjourned to a further hearing.[4]The adjourned remedy hearing was fixed for 12 and 13 April 2007. For reasons which appear below, that was further adjourned to a four-day hearing which took place between 21 and 24 August. (It was in the course of this hearing that the delayed Judgment and Reasons on liability were promulgated.) By a Judgment with Reasons sent to the parties on 8 November 2007 the Claimant was awarded compensation for the totality of his claims amounting to £2,794,962.27 (plus interest). The principal element in that award was compensation for future loss of earnings, calculated as a net figure of £1,325,322.72 but then grossed up in accordance with Shove v. Downs Surgical Ltd. [1984] ICR 532. There were also elements for past loss of earnings (£118,303), pension loss (£276,508) and injury to feelings (£15,300). Each of those figures incorporated a 2% uplift in accordance with s. 31 (3) of the Employment Act 2002 .[5]Abbey and Mr. Hopkins have appealed against both the liability decision dated 23 August 2007 and the remedy decision dated 8 November 2007. In the case of the remedy decision, there is also a cross-appeal by the Claimant. The Appellants have been represented before us by Mr. Christopher Jeans QC, leading Mr. Mark Sutton. Mr. Jeans did not appear below. Mr. Sutton appeared at the remedy hearing in August 2007 but not at the previous hearings, where the Appellants were represented by Ms. Imogen Noons of DLA Piper. The Claimant has been represented before us by Ms. Joanna Heal. She appeared for him at all stages before the Tribunal, except on 12 April (as to which see para. 74 below). We are grateful to counsel for their clear and helpful submissions in a case raising an unusual number of substantial points.[6]We consider separately the liability appeal and the appeal and cross-appeal on the issue of remedy. A. LIABILITY THE FACTS IN OUTLINE[7]The facts necessary to understand the nature of the Claimant's claims can be summarised as follows. In so far as it is necessary to consider some particular aspects in more detail, we do so in the context of the consideration of the issues in question.[8]Dramatis personae. The Claimant is of Indian origin. He was born on 29 July 1965. He was originally a chartered accountant but had since 1993 been working in City institutions in the field of risk control. He joined Abbey on 26 November 2001 as a risk analyst. At the time material to his claims his job title was Trading Risk Controller. His annual earnings (taking into account both salary and bonus) were of the order of £100,000 before tax. He was part of a Trading Risk team which comprised himself and a Ms. Mastronikola, as the two Controllers, together with two "associates". From mid-2004 he and Ms. Mastronikola reported to Mr. Hopkins, whose title was Head of Risk Control and Reporting. Mr Hopkins in turn reported to Mr. Steven Oon, the Director of Market Risk. The Claimant and Mr. Hopkins did not get on well together.[9]Redundancy. In August 2005, Mr. Oon was told that each mature business unit, which included the Risk Management division, must achieve a 5% saving on its 2005 budget figure. On 17 October he told his department heads, including Mr. Hopkins, to find these savings and mentioned redundancies as a way in which they could be achieved. Mr. Hopkins volunteered to Mr. Oon that he thought that he could dispense with one of the two Trading Risk Controllers - that is, the Claimant or Ms. Mastronikola. At that time the Claimant was off work, having broken his leg; but on 22 November, shortly after his return, Mr. Hopkins had a meeting with him to see if he was interested in voluntary redundancy, in which he had (so it was said) expressed an interest during the previous year. He said that he was not. Mr. Hopkins then began the process for making one of the two Trading Risk Controllers compulsorily redundant. He obtained advice from Ms. Cunningham of the Human Resources department. In accordance with a process recommended by her, both the Claimant and Ms. Mastronikola were scored on nine "competencies", the range of marks being 0, 1 or 2 for each. Ms. Mastronikola scored the maximum of 18, whereas the Claimant was marked down on two competencies, giving him a total score of 16. The process also took into account the candidates' interim rating on their annual appraisals (called Personal Development Plan ("PDP")). The Claimant was rated 5 out of 7 in the "do" scale and 4 out of 7 in the "be" scale; it is not clear from the Reasons how Ms. Mastronikola was rated, but she appears to have done better (or at least no worse). On 11 January 2006 the Claimant was told that he was at risk of redundancy; on the same day the other members of the team were told that, although a redundancy exercise was being carried out, they were not at risk. Prior to that, Abbey had consulted the recognised trade union, but it had not taken the first step required by the statutory dismissal procedure (see para. 1 of Part 1 of Sch. 2 to the 2002 Act), namely giving the Claimant a written statement of the circumstances leading it to contemplate dismissing him and asking him to a meeting, nor did it do so subsequently (though there were a series of "consultative" meetings between them over the next two weeks). On 23 January the Claimant initiated a formal grievance over his redundancy selection. He was dismissed for redundancy by letter from Mr. Hopkins dated 26 January, with effect from 18 April (unless he had found another job with Abbey before that date). A review by Mr. Oon on 9 February resulted in the confirmation of the dismissal. An appeal was dismissed on 20 March.[10]Bonus. As is standard in financial institutions, a large part of employees' remuneration at Abbey is by way of annual bonus. On 9 February 2006 – by which date he had already received notice of dismissal - the Claimant was notified that his bonus for the calendar year 2005 would be £45,000, in addition to his salary of £88,000. That was £10,000 less than he had received in the previous year. On 9 March he raised a formal grievance about the bonus decision.[11]Race discrimination grievance. On 14 June 2006 – by which time his dismissal had taken effect – the Claimant raised a formal grievance complaining of race discrimination. Mr Wilson, whose title (according to the Tribunal's Reasons) is "Head of Fraud", dismissed the grievance on 18 July 2006. THE CLAIMANT'S CLAIMS AND THE TRIBUNAL DECISION[12]The Claimant in his original ET1 (which incorporated separate fully-pleaded Particulars of Claim) raised claims of unfair dismissal and race discrimination. At some point subsequently it appears to have been accepted that he was also raising a claim for breach of contract in relation to the assessment of his bonus for 2005.[13]So far as the claim for unfair dismissal is concerned, the broad case as pleaded in the Particulars of Claim was(a) that Mr. Hopkins had decided, from the point at which Mr. Oon first raised the possibility of redundancies, to use that as an opportunity to get rid of the Claimant, whose selection for redundancy was thus "predetermined"; and in any event(b) that the conclusion that it was he rather than Ms. Mastronikola who should be selected was irrational. Abbey's case was that there was a genuine redundancy situation and that it was reasonable to select the Claimant rather than Ms. Mastronikola.[14]As for the race discrimination claim, there are complications about how the case was put – see paras. 42-52 below – but, in summary, it was that Mr. Hopkins was prejudiced against the Claimant on the grounds of his race and that that affected not only the decision to dismiss him for redundancy but also the assessment of his bonus and the handling of his grievance. The Appellants denied that they had acted on the ground of the Claimant's race in any respect.[15]The contractual claim was to the effect that Abbey was under a contractual obligation to exercise its discretion as to bonus on legitimate grounds, and that if Mr. Hopkins was to a significant extent motivated in setting the figure by the Claimant's race that necessarily involved a breach of that obligation. It thus added nothing of substance to the discrimination claim.[16]As already noted, the Tribunal found in the Claimant's favour on each of the pleaded claims (save only that it made no finding of discrimination against Mr. Hopkins in relation to the bonus and the handing of the grievance). The formal Judgment reads as follows:
"1. The Claimant was unfairly dismissed contrary to s. 98A of the Employment Rights Act 1996. 2. The Claimant was unfairly dismissed contrary to s. 98 of the Employment Rights Act 1996. 3. The First and Second Respondent discriminated against the Claimant on grounds of race in respect of his dismissal. 4. The First Respondent discriminated against the Claimant on grounds of race in respect of dismissing his grievance to Mr. Wilson and in the award of bonus. 5. The First Respondent was in breach of contract in relation to the allocation of bonus."
THE APPEAL[17]The original Notice of Appeal contained five numbered grounds. Ground 4 was not pursued before us. At a rule 3 (10) hearing on 14 December 2007 Judge Reid QC allowed the Appellants to amend to add a ground 2A. In the course of the appeal before us we allowed a further ground to be advanced, identified (rather eccentrically) as ground 6B.[18]The first of the grounds relates to the Tribunal's delay in promulgating its decision; and if it is good the entirety of the Judgment is impugned. The remaining grounds are concerned only with the discrimination case (though that includes the contractual claim, which, as noted above, is parasitic on the discrimination claim), and there is no challenge to the decision that the Claimant was unfairly dismissed. Those grounds themselves divide into two categories. Ground 6B raises a question of law about whether the "burden of proof provisions" of s. 54A of the 1976 Act apply in the circumstances of the present case. The remainder – grounds 2, 2A, 3 and 5 – are concerned with particular aspects of the Tribunal's detailed reasoning. It is convenient to deal with them in that order. GROUND 1: DELAY IN PROMULGATING THE REASONS[19]This is not a case where the parties had to wait eight months to know the Tribunal's decision. They were given the decision, and the reasons in outline, with commendable promptitude. The eight-month delay was in the promulgation of a formal Judgment and Reasons. But that delay was still plainly unacceptable, particularly since we were told that the Appellants' solicitors had been pressing for some time for their production and had been assured at the abortive remedy hearing in April 2007 that they would be forthcoming shortly. We understand and sympathise with the pressures on Employment Judges, particularly those sitting in regions where there is a high proportion of heavy and complex cases; but it is essential in all ordinary circumstances that parties receive formal decisions, and reasons, within the timescales indicated by this Tribunal in Kwamin v. Abbey National plc [2004] ICR 763. We have not been made aware of any exceptional circumstances explaining the delay in the present case. In his response to this Tribunal dealing with the affidavit of Ms. Noons referred to below the Chairman has expressed his regret for the delay.[20]However, the fact that there was unacceptable delay in the promulgation of the Tribunal's Judgment and Reasons does not by itself constitute an error of law vitiating the decision. That is clear from the decision of the Court of Appeal in Connex South Eastern Ltd. v. Bangs [2005] ICR 761. As Mummery LJ said in his judgment in that case (para. 44, at p. 778 D-E), the essential question is whether, due to the delay, there is a real risk that the appellant has in substance been denied or deprived of his right to a fair trial so that it would be unfair or unjust to allow the delayed decision to stand. Mr. Jeans accepted that that was the right test (though he reserved the right to contend otherwise if the case were to reach the House of Lords). He submitted that it was met in the circumstances of the present case. He made essentially two points.[21]First , he submitted that the absence of any full and authoritative account of the Tribunal's reasons created serious difficulties for the Appellants in the conduct of the remedy hearing. It was not until after close of business on 22 August (the second day of the remedy hearing), by which point the evidence was already complete, that a copy of the Judgment and Reasons was supplied by e-mail (as a "draft"); and the signed version was not provided until the following day. Factual issues which had arisen during the liability hearing were relevant to the issue of remedy – particularly as to the Claimant's relationship with Mr. Hopkins and his prospects of remaining with Abbey in the longer term if he had not been dismissed in January 2006 – and the Appellants had no way of knowing to what extent those issues had already been decided against them. In an affidavit lodged for the purpose of this appeal Ms. Noons refers to an occasion when Ms. Heal objected to one aspect of Mr. Sutton's cross-examination of the Claimant on the basis that it "went behind" the liability decision and points out that that objection was irresoluble in the absence of the Reasons; and she also refers to at least one occasion in the course of the cross-examination when the Chairman observed that it was unfortunate that Mr. Sutton did not know what conclusion the Tribunal had reached on the issues in question. Mr. Jeans took us to the notes of the relevant passages of cross-examination [1] , which broadly support Ms. Noons' account. We can quite see the awkwardness of the position for both parties, but particularly the Appellants; and this makes the delay in providing the Reasons particularly regrettable. However, even if that awkwardness amounted to real prejudice we cannot see that that would be a ground for impugning the liability decision, as opposed to the decision on remedy; and indeed the Appellants repeat their complaint as part of their grounds of appeal against that decision. In any event, it is convenient to say at this stage that we do not believe that any real prejudice was caused. The essential point is that, despite Ms. Heal's objection and the observation from the Chairman which we have quoted, it is clear from the notes that we have seen that Mr. Sutton was not prevented from asking any question that he wished to ask, and indeed Ms. Noons does not go so far as to suggest that he was. The fact that the Appellants did not seek an adjournment of the August remedy hearing is a further indication that they did not feel that they were unable fairly to proceed without sight of the Reasons.[22]Secondly , Mr. Jeans submitted that it was simply not possible for the parties to be confident that after a lapse of eight months the members, and in particular the Chairman, could have a sufficient recall of the evidence to give an accurate account of the reasons for the decision which the Tribunal had reached: he submitted that there was a real risk that they were not so much the true reasons as an ex post facto rationalisation or reconstruction. We are not sure that this would be a valid objection even if established. The formal decision of the Tribunal is that promulgated on 23 August 2007. If the detailed reasons supporting that decision are good, we doubt whether it matters whether those reasons had been fully articulated by the members in their considerations prior to the informal announcement of the result made on 15 December 2006 or whether they had been developed or modified in some respects before final promulgation. But in any event we do not accept that a delay of this kind justifies the conclusion that there was a real risk that the Tribunal would no longer be able to recall the evidence or address the arguments. The Court of Appeal declined to reach such a conclusion in Bangs , where the delay was of over a year. The position seems to us to be a fortiori here, not only because the period was shorter but also because the Tribunal had already given a summary decision and reasons. Mr. Jeans referred us to the decision of this Tribunal in Cumbria County Council v. Dow (no. 1) [2008] IRLR 91 ; but the difficulty which arose in that case was entirely different. Mr. Jeans also referred to various alleged errors or defects in the Reasons which he said were indicative of the effects of delay. In so far as those errors are relied on as free-standing grounds of appeal, we will deal with them in their place, but none are of a character which leads us to infer that the Tribunal was unable properly to recall the evidence.[23]We should mention one related point which was raised before us. At the request of this Tribunal the Chairman and the lay members provided responses to Ms. Noons' affidavit. The response of one of the lay members, Mr. Buckley, appears, at least on one reading, to say that following the announcement of the decision on 15 December (in which of course they had been fully involved) the lay members had no involvement in the drafting of the Reasons. Mr. Jeans suggested in his oral submissions that if that was correct it was "bad practice". Since no complaint on this basis had been raised before, it was impossible to establish to what extent the lay members had been involved in the drafting; and it does not constitute a ground of appeal. That being so, we would only say that we would see nothing in the least surprising in the lay members having had no involvement in the detailed drafting of the Reasons, although we would certainly expect them to have been given the opportunity to comment on a draft before signature. The drafting of written reasons is in our experience a task almost universally carried out by chairmen alone. It is of course important that reasons so drafted should reflect the actual reasons adopted by the tribunal as a whole in reaching its decision, but Mr. Buckley states in terms that that the Reasons "accurately reflect the judgments of the Tribunal reached in chambers on 13 December 2006". GROUND 6B: THE APPLICABILITY OF S. 54A[24]The Claimant, conventionally for such a case, submitted that the Tribunal should apply the provisions of s. 54A of the Race Relations Act 1976 . That section was inserted by reg. 41 of the Race Relations Act 1976 (Amendment) Regulations 2003 (SI 2003 no.1626) in order to give effect to art. 8 of Council Directive 2000/43/EC , which required member states to provide for what is generally described as a reverse burden of proof in claims of "discrimination based on racial or ethnic origin" (see art. 2.1).[25]Ms. Noons however submitted to the Tribunal that s. 54A had no application because the Claimant's pleaded case was that he was discriminated against on the grounds of his colour. The argument goes as follows:(1) Discrimination within the meaning of s. 1 (1) (a) of the 1976 Act is defined as less favourable treatment "on racial grounds". "Racial grounds" are defined in s. 3 (1) of the Act as … "… any of the following grounds, namely colour, race, nationality or ethnic or national origins". The sub-section thus identifies four types of discrimination on racial grounds, of which discrimination on the ground of "colour" is one.(2) S. 54A (1), which defines the scope of the application of the section, reads as follows: This section applies where a complaint is presented under section 54 and the complaint is that the respondent— (a) has committed an act of discrimination, on grounds of race or ethnic or national origins, which is unlawful by virtue of any provision referred to in section 1(1B)(a), (e) or (f), or Part IV in its application to those provisions, or (b) … . (The alleged discrimination in the present case was said to be unlawful under s. 4 (2) of the 1976 Act, which falls under Part II. The provisions of Part II are among those referred to in s. 1 (1B) (a).)(3) As will be noted, of the four grounds identified in s. 3 (1) as constituting "racial grounds", s. 54A (1) identifies only two – namely "race" and "ethnic or national origins". Ms. Noons submitted that the effect of that departure from the terminology of s. 3 (1) is that s. 54A has no application where the complaint is of discrimination on the ground of the complainant's colour (or nationality).[26]The Tribunal rejected that argument. It gave its reasons in brief terms at para. 114 of the Reasons as follows:
"The Tribunal accepted the submission [sc. by Ms. Heal] that it was appropriate to deal with this on the basis of section 54A albeit that colour was referred to when the allegation was first made. The Claimant's amplifications show that he defined his race by more than colour alone."
[27]The Appellants did not until shortly before the hearing of the appeal seek to challenge that aspect of the Tribunal's reasoning. When they belatedly applied to do so the Registrar refused permission to amend. The Appellants appealed. We considered the appeal at the start of the hearing. Ms. Heal contended that the application was made too late and without any real explanation of the delay. We decided to allow the appeal and permit the point to be taken. Although it was raised late in the context of the appeal, it had been argued below. We accepted that no good reason had been advanced why the point was not taken in the original Notice of Appeal (or indeed why it had not been raised at the 3 (10) hearing, when ground 2A was added), and that the failure thus appeared to be the result simply of an oversight or perhaps of second thoughts; but we did not regard that as determinative. The proposed ground raised a genuine point of law, of some general importance, and we could see no prejudice to the Claimant if it were advanced at this stage: the relevant facts and documents were all before us. Ms. Heal referred us to the well-known decision of this Tribunal in Khudados v. Leggate [2005] ICR 1013 . We can see nothing in that decision which would be inconsistent with our granting permission to amend to add this ground.[28]Mr. Jeans advanced the argument of statutory construction set out in para. 25 above. He pointed out that it had, since the decision of the Tribunal, been accepted by this Tribunal in Okonu v. G4S Security Services (UK) Ltd . [2008] ICR 598 . At para. 23 of the judgment in that case Judge Birtles QC referred to the difference in wording between s. 3 (1) and s. 54A (1) and continued (at pp. 603-4):
"(b) … Thus the 2003 Regulations could not, and do not, cover race discrimination complaints brought on grounds of colour or nationality. This means that the new definitions of indirect discrimination and harassment, the shift in the burden of proof and the new provisions relating to the genuine occupational requirement exception will apply only to discrimination on the grounds of race, ethnic or national origin and not to colour or nationalities. Whether that is desirable is not for this Tribunal to say. We note that the same view is taken by the Editors of Harvey on Industrial Relations and Employment Law volume 2 at paragraph 1138 and by the Editor of the Industrial Relations Law Reports in an article in Equal Opportunities Review: EOR No.119/July 2003 page 20. (c) That was quite clearly the view of the Government during the debate on the 2003 Regulation in the House of Lords: Hansard House of Lords 11 June 2003 in a passage cited in Mr Rose's skeleton argument. (d) Council Directive 2000/43/EC cannot be of direct effect in this case because the Respondent is not an emanation of the State. If the Directive is an interpretive aid only then it cannot assist the Appellant in this case. The language of section 54A (1) (a) is crystal clear. No amount of purposive construction can override the clear words used in section 54A (1) (a) and insert the words "colour" and "nationality" in that paragraph."
We have been shown the Hansard report of the debate referred to at sub-para. (c) in that passage, together with the passages in Harvey and Equal Opportunities Review. It is clear that both commentators and members of the House of Lords (including Lord Lester of Herne Hill QC) understood the effect of s. 54A to be to exclude "colour discrimination" from the additional protections introduced by the 2003 Regulations and that they regarded that as a worrying lacuna. The position taken by the Government spokesman, Lord Filkin, was somewhat equivocal, but he certainly did not contradict the understanding of those objecting. The penultimate sentence of para. 53 (b) of Judge Birtles' judgment tends to suggest, albeit between the lines, that the Appeal Tribunal in Okonu shared the concern that this state of the law was unsatisfactory.[29]Mr. Jeans submitted that the Claimant's case before the Tribunal was unequivocally that he had been discriminated against on the basis of his colour, to the exclusion of any of the other three kinds of "racial grounds" identified in s. 3. He relied essentially on the terms of the Claimant's witness statement, in which he twice explicitly accused Mr. Hopkins of acting on the basis of his "colour" and in which, in the paragraph headed "Conclusion", he said this:
"I believe that my selection for redundancy was made on grounds of race ( i.e. colour ) and that the Second Respondent decided to select me for redundancy because, unlike [Ms. Mastronikola], I was non-white . In turn, his decision not to select [Ms. Mastronikola] was based on the fact that she was white, like the Second Respondent [ emphasis supplied ]."
The letter before action had also referred only to discrimination on the basis of colour. Mr. Jeans acknowledged that the paragraph in the Particulars of Claim which raised the allegation of race discrimination (para. 8) used the phrase (on three occasions) "on grounds of race", as did the paragraph summarising the claim (para. 12); also that in the introductory paragraph the Claimant pleaded that he was "of Indian origin". But, he submitted, the phrase "on grounds of race" does no more than pick up the general language of s. 1 (1) (a): in order to see what kind of race discrimination is alleged – which is a necessary exercise because of the differences between s. 3 and s. 54A – it is necessary, in the absence of any clear pleading, to look at how the case was advanced in the Claimant's evidence, where it was squarely put on the basis of colour. As for the Tribunal's reasoning in para. 114, Mr. Jeans submitted that it was wholly unclear what "amplifications" the Tribunal was referring to, and there was in fact no basis for holding that the Claimant was complaining of anything more than discrimination on the grounds of his colour: he had not done so only "when the allegation was first made" but repeatedly. Further, the relevant question was not how "[the Claimant] defined his race" but on what ground he was asserting that he had been discriminated against.[30]In response, Ms. Heal insisted that the right place to look for the nature of the Claimant's complaint was the pleadings. There was nothing in the Particulars of Claim indicating that his claim was confined to discrimination on the ground of colour: indeed the reference to his "Indian origin" suggested to the contrary. She pointed out that the ET3 itself regularly used the language of "race", not colour. Ms. Heal also drew our attention to the terms of an agreed list of issues lodged at the start of the hearing [2] . This has separate headings for "Section 98(4)" (i.e. unfair dismissal) and "Race Discrimination". Under the former, point (5) asks what was the reason for the dismissal and then adds:
"the claimant says it was his colour, race or ethnic origin ; the respondent says it was redundancy [ emphasis supplied ]."
Under the "Race Discrimination" heading, the following points appear:
"(8) The Claimant is non-white, of Asian race and of Indian ethnic origin. … (11) Is the comparator of a different colour, race and/or ethnic origin from the claimant? (12) Has the claimant proved facts from which the tribunal could conclude that the treatment was on grounds of his race, colour or ethnic origin? (13) Has the respondent proved that it did not treat the claimant less favourably in any respect whatsoever on grounds of race or ethnic origin? (14) In relation to the claim based on colour, has the respondent given an explanation for the less favourable treatment? (15) Is that explanation inadequate or unsatisfactory? (16) Is it appropriate to draw an inference that there has been discrimination on grounds of colour?"
It was clear from that formulation that the Claimant's case was being advanced on the basis of three of the four "s. 3 grounds", namely his race (defined as "Asian"), his colour, and his ethnic or national origins (defined as "Indian"). [3] Consistently with that approach, in her written closing submissions Ms. Heal had continued to refer to "race, colour and ethnic origin" (see para. 64). In those circumstances, Ms. Heal submitted, it was impossible to treat the pleaded case as restricted to one based on colour simply on the basis of the language used in the witness statement. It is the pleadings and the list of issues that should stand as the authoritative statement of a party's case, not what may be said in evidence. In any event, the Claimant also referred in his witness statement to his "race" and his ethnic origins: at para. 87 he said - "I was born in India to Asian parents and I am therefore Asian in both origin and appearance".[31]We agree with Ms. Heal that the starting-point must be the pleadings and the list of issues. There may be cases where it is becomes clear during a hearing that a party has abandoned or modified a part of his case as originally advanced; but such a change will only be binding where it is made unequivocally. We do not accept that the passages on which Mr. Jeans relied in the Claimant's witness statement constitute an unequivocal abandonment of the case explicitly advanced by his representatives. Put at its highest (and this is probably too high), there is a contradiction between his own summary of his case in his evidence, referring only to discrimination on the ground of his colour, and the case as stated in the list of issues and maintained by Ms. Heal in her closing submissions. But the witness statement does not trump the pleadings and the list of issues. Indeed, it is of lesser status, since a witness statement ought in principle to be confined to the witness's evidence on matters of fact and eschew advocacy or expressions of opinion: those should be left to submissions. The Claimant's assertions about Mr. Hopkins' motivation could not be within his own knowledge and had no special status. No doubt in practice the distinction between pleadings and witness statements is often somewhat blurred, and there may be cases where a witness statement can legitimately be of value in elucidating the scope of a party's case where that is in doubt. But there was no such doubt in the present case: the pleadings and list of issues are (on this point) clear. We accept that the way that the Tribunal dealt with the point at para. 114 was unsatisfactory, for the reasons given by Mr. Jeans. But that does not matter if it reached the right result in law.[32]That is sufficient to dispose of this ground of appeal. But we wish to address also the Appellants' underlying submission, namely that s. 54A does not apply to claims of discrimination on the ground of colour: that issue is of some importance and we heard full argument on it. We recognise that conceptually there is a difference between discrimination on the ground of colour on the one hand and discrimination on the ground of race or ethnic or national origin on the other. But in the real world the different kinds of discrimination referred to in s. 3 (1) overlap to a very considerable extent; and in many, perhaps most, cases they will be practically indistinguishable. That is all the more so because "race" and "ethnic origin" are themselves not neat scientific concepts but "rubbery and elusive" in their meaning - see the speech of Lord Fraser in Mandla v. Dowell Lee [1983] 2 AC 548 , at pp. 560-562. When an employer is prejudiced on racial grounds against an employee from a "visible ethnic minority", it will often be not only impracticable but meaningless to seek to establish whether his prejudice is based on the colour of the employee's skin or his race (however defined) or his ethnic or national origin - or simply on the fact that that he is evidently not "native English": the different factors will generally meld into one another indistinguishably. The overlap is particularly pronounced in the case of colour. While it is of course common enough to find discrimination on the ground of race or ethnic origin without discrimination on the ground of colour, the reverse is not the case: it is very hard to conceive of a case of discrimination on the ground of colour which cannot also be properly characterised as discrimination on the ground of race and/or ethnic origin [4] . It could indeed be said that colour is significant primarily as an outward and visible manifestation of race or ethnic origin. An employer who said "I discriminated against you because of the colour of your skin but not because of your race or ethnic origin" would hardly be understood, let alone believed. It may be asked why, if this is so, s. 3 (1) refers to colour at all, since the reference would be for all practical purposes redundant. But the terminology of s. 3 (1) – which derives, with one exception which is immaterial for present purposes [5] , from s. 1 (1) of the Race Relations Act 1965 ( via s. 1 of the Race Relations Act 1968 ) - are evidently not intended to be mutually exclusive:
"race" also might be thought to be largely subsumed in "ethnic origin"
. It seems clear that the draftsman wished to include all the terms commonly used in this context. That being so, it was entirely natural that he would wish to refer explicitly to colour, particularly at a time when discrimination expressed in terms of colour – "no blacks admitted" – was still common and when such phrases as "the colour bar" and "the colour question" featured more prominently in public discourse than they do now.[33]Thus claimants who formulate their claim on the basis of "colour discrimination" will inevitably in fact be complaining, whether or not they appreciate it, of discrimination on the ground of race and ethnic origin, and therefore of two of the factors which explicitly attract the operation of s. 54A. No doubt those who are properly advised will, to avoid any room for argument, make clear in their pleadings that, even if the discrimination of which they complain was expressed in terms of colour, they are alleging discrimination on the ground of race or ethnic origin as well. But in cases where that has not been done we would expect the position to be clarified - with the assistance of the Tribunal if necessary - at the case management discussion. While it remains important that the grounds of discrimination are properly identified, parties should not be permitted to play pleading games with the statutory language so as to prevent the full substantive complaint being advanced.[34]It follows that, while we understand how the issue came to appear significant in the present case, we doubt whether it was ever really an issue of substance. The Claimant made a rod for his own back by placing as much emphasis as he did on his colour. He could perfectly legitimately have left it that Mr. Hopkins was prejudiced against him as "Asian": the essential case would have been the same. It also follows that the concerns referred to above which were expressed when the Act was amended in 2003 may have been misplaced, at least as regards discrimination on the ground of colour [6] .[35]We appreciate that the foregoing paragraphs are at least to some extent inconsistent with the reasoning in Okonu . The Appeal Tribunal in that case was understandably impressed by the fact that s. 54A omits any reference to discrimination on the ground of colour. While on our analysis this would be unsurprising if the draftsman were starting from scratch – cases of "colour discrimination" necessarily being also cases of discrimination on the ground of race and/or ethnic origin – we accept that the departure from the formula used in s. 3(1) must have been deliberate. The explanation which immediately presents itself is that the draftsman, conscious that the section was to be introduced by statutory instrument under the powers conferred by s. 2(2) of the European Communities Act 1972 , wished to confine himself to forms of discrimination explicitly covered by the Directive. But that explanation is problematic since he did not take the obvious course of using the terminology of the Directive itself, and the language which he adopts instead introduces an element - "national origins" – which is not referred to at all in it. It may therefore be that he did in fact share our view that reference to colour was simply unnecessary. But in the end we do not believe that the correct approach to the construction of the section is to be found in pursuing the will-o'-the-wisp of trying to establish the draftsman's thought-processes. The starting-point is that the purpose of s. 54A is to give effect to art. 8 of the Directive. In our view it is inconceivable that the Directive is not intended to apply to discrimination which is expressed as being on the ground of colour: for the reasons already given, such discrimination is in practice necessarily an aspect or manifestation of discrimination based on "racial or ethnic origin". We have no doubt that the European Court of Justice would not give even the time of day to a submission that a claim of "colour discrimination" did not attract the operation of the Directive. That being the position in EU law, s. 54A must of course be construed so far as possible to give effect to that position. So far as the actual words of the section are concerned there is no difficulty whatever in doing so. The most that can be said is that construing the section to cover race discrimination which is expressed as colour discrimination creates a drafting anomaly – falling well short of an actual contradiction - by reference to the language of s. 3 (1). But, whatever might be the position in a purely domestic case employing the usual "canons" of statutory construction, we cannot believe that the fact of such an anomaly justifies refusing to give the section the effect required by art. 8. GROUNDS 2-5: ALLEGED DEFECTS IN THE TRIBUNAL'S REASONING The Tribunal's Reasons[36]The Tribunal's reasons for its decisions are given in the "Conclusions" section of its Reasons at paras. 102-124. They can be summarised as follows. Unfair dismissal[37]Although there is no substantive challenge to the Tribunal's reasoning on the issue of unfair dismissal some aspects remain relevant to the issues which we have to decide. The relevant paragraphs are 103-112. We need not be concerned with paras. 103-5, which address the claim of "automatic" unfair dismissal. The only point that we need to note, because of its relevance to the Claimant's cross-appeal on remedy, is that Abbey accepted that it had not complied with the requirements of the statutory dismissal procedure. The issue was whether the case fell within the exception which applies where the duty has arisen to consult a recognised trade union under s. 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (see reg. 4 (1) (b) of the Employment Act 2002 (Dispute Resolution) Regulations 2004 ): the Tribunal held that it did not.[38]At para. 106 the Tribunal said this: "In any event and in the alternative this dismissal was unfair having regard to section 98 (4). Ms. Heal's primary submission was that the selection of the Claimant was predetermined. Mr. Hopkins had volunteered to lose one Trading Risk Controller. He suggested the approach to the Claimant be made. He did it himself. He would not have done it unless he were personally content for the Claimant's employment to be terminated. Nobody else was approached on the same basis. Mr. Hopkins then did the redundancy scoring. The Claimant was the only person whom he had marked down on the PDP. … " (For the remainder of the paragraph see para. 67 below.)[39]The Tribunal went on to make various criticisms of the consultation process which we need not set out. At paras. 110-112 it dealt with the scoring of the Claimant and Ms. Mastronikola by Mr. Hopkins. It said this:
"110. The selection criteria themselves, even had they been agreed with the Union were criteria such as range of influence, empathy, self insight and the ability to win hearts and minds. These are either un-measurable or all but un-measurable and are very subjective. Added to their subjectivity, Mr. Hopkins' approach compounded the Respondent's difficulty. He marked the Claimant down for being self-reliant and not consulting him. Another manager might well consider that for a person in the Claimant's position such an attribute was an asset and would have scored him more highly in relation to it. Although Ms. Heal submitted that Mr. Hopkins and Ms. Cunningham did not understand "
Conversion" we were not persuaded by that submission. It was clear from the documents that this was a label to describe the least 2 pipeline competencies. It was those that Mr. Hopkins identified and knew he ought to have been addressing. 111. With regard to the marking of the criteria themselves Mr Hopkins' evidence in relation to single stocks changed. He said in evidence that the need to pre-notify was clear. He said this to Mr. Brener. Neither Mr. Hopkins nor Ms. Mastronikola had thought so at the time as shown by page 519. If he had thought there was a need to pre-notify one would have expected him to challenge Mr. Chagger at the time. He did not do so and in fact no comment was made about that until the PDP in December 2005. It was unreasonable to lower the Claimant's score on that basis. In relation to the issue of the Managed Returns book Mr. Hopkins' case again changed, as Ms. Heal submitted. On page 246 of the bundle he complained that the failure was of ensuring that the FSA were informed against the line manager's advice. On page 73 of his statement he complained that Mr. Chagger changed the decision without consultation. Page 413 appears to contradict both accounts. Mr. Chagger clearly told Mr. Hopkins what he intended to do and yet Mr. Hopkins did not protest or disagree. It was submitted that no reasonable manager would have lowered the score on that ground. The Tribunal agreed with both these submissions. With regard to the failure to embrace change there was a similar variation in Mr. Hopkins' account. It later became a suggestion that Mr. Chagger failed to accept change once it had been implemented. Yet Mr. Hopkins accepted that Mr. Chagger had worked to implement the change and accepted it, as shown by pages 530 and 531 when Mr. Chagger e-mailed him while he was unwell saying that he did accept the change. Mr. Chagger had raised challenges. That was part of his job. These criticisms however stretch back well beyond the period for which the PDP and the redundancy were being assessed and accordingly one would expect to see previous criticisms of Mr. Chagger. There were none and it was unreasonable to mark the PDP down or use that as a basis for selection for redundancy. 112. Those matters were the most dramatic examples of inconsistencies and excessive criticism of Mr. Chagger by Mr. Hopkins in the process. The Tribunal accepted the criticisms made by Ms. Heal in relation to the other matters as well as such as overstating that the Claimant was failing to discuss issues, not making earlier comment about the Claimant's remarks about patronising comments and measuring one candidate against the other. As to the last, it was clear from placing the two assessments side by side that the two potentially redundant employees had had their assessments completed in similar way with sections being "cut and pasted" from one to the other. Yet where Mr. Chagger was marked down Ms. Mastronikola was marked up. Finally, it was clear that Mr. Hopkins misinterpreted the final criterion of conversion in the way in which he has treated it. The way in which it should be treated is as an assessment of personal development. Mr. Hopkins treated it as an opportunity to add in those matters which bore upon Mr. Chagger's relationship with his Line Manager. For all those reasons the selection of the Claimant as redundant was unfair." It is unnecessary for the purpose of this judgment to seek to elucidate the particular points made in those paragraphs. The broad point was that the criticisms of the Claimant made by Mr Hopkins as part of the process of PDP assessment and scoring him against Ms. Mastronikola were unfair and unreasonable. Race discrimination[40]The Tribunal started (at para. 113) by identifying the three detriments alleged by the Claimant –(1) "the selection for redundancy" – i.e. dismissal;(2) the rejection of his race discrimination grievance; and(3) the alleged under-payment of bonus. It is of course the first that is the most important. Having at para. 114 briefly considered the burden of proof (see above), the Tribunal then considered the three detriments in turn.[41]"Selection for redundancy" . It is necessary that we set out the entirety of the Tribunal's reasoning on this issue. It is as follows:
"115. There was no doubt that the Claimant had been selected for redundancy and dismissed and that Ms. Mastronikola had not been dismissed. There was a difference in race, colour and ethnic origin between the two. There was further evidence from which the Tribunal could draw the inference of discrimination. 116. In particular the matters identified at paragraph 65 of Ms. Heal's closing submission were highly persuasive that there was evidence from which the Tribunal could draw, in the first instance, the inference of discrimination. First, the selection was grossly unfair. Taking that into account we reminded ourselves specifically of the need to avoid drawing inferences simply because of unreasonable treatment as demonstrated in Law Society v. Bahl. However, there was, as Ms. Heal submitted, strong evidence Mr. Hopkins used the selection exercise to remove Mr. Chagger from his team. It was established that Mr. Chagger had his redundancy score reduced on matters which no reasonable employer would have taken into account. No warning was given to the Claimant of impending criticisms suggesting that they were not legitimate or at least not sufficiently serious to justify the reduction in the PDP and redundancy selection scores. The First Respondent provided no equal opportunities training for any of the managers required to make a decision in this case. In the cases of Mr. Wilson and Mr. Brener in particular there was in the Respondent's dealing with the Claimant's grievances culture of tending to deny and refuse Mr. Chagger's complaints, including complaints of race discrimination. Indeed Mr. Wilson and Mr. Brener appeared to believe that because there was no overt "racial prejudice" as it was described there could be no race discrimination in the redundancy selection process. 117. Furthermore, there was a failure to answer the Claimant's Race Relations Act Questionnaire. Question 21 required the provision of details of Tribunal claims for race discrimination brought against the Respondent or associated companies since 1 January 2001. Reference was made in the answer to a table. Within the table of the 17 incidents cited, in respect of six dating from 2001 and 2002 the Respondents simply stated that the outcome of the claims were unknown and it was unable to obtain information regarding the outcome during the period in which the questionnaire had to be answered. Ms. Noons accepted that no further answer was ever provided to the Claimant. To that extent the Respondent's answer was evasive. 118. Moreover, in this case the Respondents were in breach of the Code of Practice on Racial Policy in Employment with regard to monitoring. This related in particular in relation to paragraph 3.27 of the Code and sub-paragraphs: (d) results of performance appraisals (e) grievances and disciplinary action and (f) terminations of contract. Further breaches were apparent in relation to paragraphs 4.53–4.55 in that there was no training courses for managers on equal opportunities; 4.56 no monitoring the results of performance assessment by racial group; 4.65 not taking allegations of race discrimination seriously and investigation them promptly; 4.68 no monitoring of workers who had brought grievances by racial group; and 4.71 not using the monitoring data on grievances and disciplinary action to see if there are significant disparities between racial groups. None of those steps were taken by the Respondent in this case. 119. Weighing all those factors, the Tribunal was satisfied that this was a case in which the burden of proof passed to the Respondent to show that there was no discrimination whatsoever in respect of the Claimant's selection and dismissal. 120. The Respondent's explanation for the dismissal was that it was on grounds of a genuine and reasonable selection for redundancy and carried out fairly. This reason was itself rejected for the reasons given above. It was unfair and was the means by which Mr. Hopkins effected the removal of the Claimant. Although there was a redundancy reduction in head count generally within the Respondent's organisation the selection of the Claimant was predetermined by Mr. Hopkins. The Respondents failed to prove that the reason for identifying the Claimant was in no way on racial grounds on the part of the First or Second Respondent. An alternative explanation was put forward by Mr. Oon for what had occurred, namely that Mr. Hopkins and Mr. Chagger simply could not have any reasonable working relationship. This was an explanation which itself was not accepted by Mr. Hopkins. In the circumstances, the Tribunal could not place any reliance upon that. 121. The Tribunal therefore rejected the reasons for the treatment advanced by the Respondents. The Respondents thus put forward no alternative, non-discriminatory reason in circumstances where inferences of discrimination could be made in any event by reason of the answer to the Questionnaire and the admitted breaches of the Code of Practice. The effect of s.54A is thus that the Respondents failed to discharge the burden upon them of proving on the balance of probabilities that the reason for the Claimant's selection and dismissal was in no respect on racial grounds."
[42]Dismissal of grievance/bonus . We need not set out the reasoning on these issues, which are the subject of paras. 122 and 123 of the Reasons, since none of the grounds of appeal relates to them. It is sufficient to say that the Tribunal decided the claims on the basis of s. 54A: it found sufficient indications of race discrimination to shift the burden of proof, which it then held that Abbey had failed to discharge. Breach of contract[43]As we have already indicated, the Tribunal held that, since the decision about the Claimant's 2005 bonus had been influenced by race discrimination, it must necessarily have been irrational/capricious and thus made in breach of the contractual duty of trust and confidence: see para. 124. Ground 2[44]The Appellants say that in the Particulars of Claim and consistently thereafter there is a clear distinction made between(a) Mr. Hopkins' decision to make one of the Trading Risk Controllers redundant (elsewhere described as the creation of a "sham pool") and(b) his selection of the Claimant rather than Ms. Mastronikola; and that only the latter decision was alleged to have been discriminatory. But, they say, it appears from the Reasons that the Tribunal decided the discrimination case on a wider basis, namely that the whole redundancy exercise – including therefore "element (a)" - was predetermined and tainted by discrimination. It was not open to the Tribunal to decide the case on that basis. Not only was that so as a matter of principle – Mr. Jeans referred to Chapman v. Simon [1994] IRLR 124 – but it was seriously unfair to Abbey since if such a case had been pleaded the evidence called would have been materially different.[45]The starting-point must be the terms of the Particulars of Claim. These consist of thirteen paragraphs. The structure appears to be that paras. 1-6 plead the broad nature of the Claimant's complaint, including the outline facts, but without attempting to characterise it in legal terms; paras. 7-14 set out the case in law (though para. 14 does no more than reserve the right to add further particulars); and paras. 15-16 address remedy.[46]So far as the broad factual case is concerned, para. 3 reads as follows:
"Although the First Respondent purported to enter into a "consultation exercise" with the Claimant, the decision to select him as the candidate for redundancy, as opposed to Ms. Mastronikola, had already been made. This decision was made by the Second Respondent. The Claimant contends that the consultation exercise was a sham, and that both (a) the decision to make one of the two risk controller positions redundant and (b) the decision made by the Second Respondent on behalf of the First Respondent that he, and not Ms. Mastronikola, was to be selected for redundancy, were predetermined."
That was essentially repeated in para. 5, with the point being explicitly made that "both the pool of candidates and the decision to select the Claimant for redundancy were decisions made by [Mr. Hopkins]".[47]When it comes to the advancing of the legal case, para. 7 contains a general allegation that "the procedure employed by [Abbey] was unfair". Para. 8 then pleads the discrimination case, as follows:
"The Claimant also contends that his selection for redundancy by the Second Respondent as supported by the First Respondent was motivated by race and made on grounds of race in that factors which the First Respondent and Second Respondent took into account when applying its selection criteria were tainted by discriminatory treatment applied to him as against Ms Mastronikola by the Second Respondent, the Claimant's line manager. The Second Respondent had carried out appraisals of the Claimant and Ms Mastronikola and the difference in treatment can, the Claimant contends, be explained only on grounds of race. The Claimant, by his solicitors, wrote to the First Respondent on 12 th May 2006 setting out full grounds of the matters which are, therefore only summarised below [ emphasis supplied ]." (A final sentence of the paragraph appears to revert to the unfair dismissal case, averring that "the marks given to [the Claimant] by [Mr. Hopkins] … were irrational and perverse".) The reference in the final sentence quoted to "summarised below" must be to the Particulars discussed at para. 48 below. Para. 9 pleads the case against Mr. Hopkins. So far as material it reads: "
The Second Respondent was responsible for (a) approaching the Claimant in respect of voluntary redundancy in November 2005, (b) carrying out the appraisals which were relied on [in] the redundancy process and (c) selected [ sic ] the Claimant for redundancy."[48]There then follow one-and-a-half pages headed "Particulars of Unfair Selection/Discrimination". Although as a matter of lay-out these read as if they are part of para. 9 of the pleading, it is clear from their title and other indications that they are in fact intended to particularise the case pleaded in the whole of paras. 7-9. The particulars are pleaded in eight sub-paras, numbered (a)-(h). We need not set them out here. They identify a number of particular instances in which it is said that the Claimant was "marked down" in the scoring exercise as between himself and Ms. Mastronikola and/or criticised in his appraisal (which, as we have said, was relied on as part of the selection process) when there had in fact been no real difference between his conduct and attitudes and those of Ms. Mastronikola. That difference of treatment is said not only to be "unjustified" – which appears to be directed at the claim of unfair dismissal – but to be explicable only on the basis that Mr. Hopkins was prejudiced against the Claimant on account of his race. Of the two stages in the process leading to the Claimant's dismissal identified in para. 3 – i.e.(a) the decision to make one of the Controllers redundant and(b) the choice of the Claimant rather than Ms. Mastronikola – the particulars are directed entirely at (b) [7] .[49]The case as so pleaded is a little puzzling. Paras. 3 and 5 might appear to be paving the way for a case that Mr. Hopkins was, from the beginning of his attempt to use the redundancy process to get rid of the Claimant, acting on racial grounds. But what is actually pleaded in para. 8 and in the particulars which follow para. 9 is more limited. From these it does indeed seem that the discrimination complained of was only at the stage of selecting between the Claimant and Ms. Mastronikola: they contain no complaint of the prior decision to make one of the two Controllers redundant. As a matter of strict analysis it should be the terms of those paragraphs which are determinative. On that basis the wider case alleging predetermination from the start has to be explained as directed only at the issue of unfair dismissal. But while that works on paper it does not seem to bear much relation to reality. Given that it was the Claimant's case that Mr. Hopkins took both the decisions identified in para. 3, it is on the face of it hard to see why his discriminatory motivation should have infected the latter but not the former.[50]The scope of the issues was considered at a case management discussion on 4 September 2006. In his record of the discussion the Chairman (Mr. Ryan) says this:
"At the Case Management Discussion it was confirmed that the Claimant's complaints were of unfair dismissal, race discrimination and breach of contract. The claims of race discrimination are in relation to the acts set out at paragraph 9 (a)–(h) and paragraph 13 of the Particulars of Claim , namely the events leading up to and including and following upon the Claimant's dismissal. The Claimant's claim of breach of contract concerns an allegation of underpayment of bonus. The Chairman agreed with the parties that the allegations of discrimination are clearly and succinctly set out in paragraphs referred to above and they are not repeated in this decision. However, the parties have agreed to prepare a combined list of legal and factual issues for the use of the Tribunal at the outset of the hearing … [ emphasis supplied ]."
The reference to "paragraph 9 (a)-(h)", i.e. to the particulars described at para. 48 above, clearly reinforces the strict view that the discrimination case was focused exclusively on Mr. Hopkins' decision to choose the Claimant out of the "pool" consisting of him and Ms. Mastronikola and not on any prior act.[51]Overall the effect of the Particulars and the note of the case management discussion seems reasonably clear, despite our observations at para. 49 above. But the list of issues submitted at the start of the hearing muddies the waters. As noted above, it has separate headings for "Section 98 (4)" and "Race Discrimination". Under the latter head, para. 9 asks:
"Has the Claimant been treated less favourably than a real comparator (Katerina Mastronikola) has been treated in that he has been selected for redundancy, dismissed and treated unfairly in the respects set out above?"
The "respects set out above" can only be the details of the unfair dismissal case given under para. 7. Although these include (at (vi)-(viii)) complaints about the selection criteria and the scoring process as between the Claimant and Ms. Mastronikola, they also raise (at (ii)-(iv)) a wider case to the effect that "the Claimant was pre-selected for redundancy before any consultation and/or selection was carried out" and that accordingly "the consultation process was a sham". The wording of para. 9 reads most naturally as incorporating all of those complaints, particularly given the compendious phrase "and treated unfairly" – although it is fair to say that the identification of Ms. Mastronikola as a comparator, which is really only apt to the selection complaints, might be said to point in the opposite direction.[52]The upshot of this somewhat laborious analysis is that, in view of the terms of the list of issues, it might (we put it no higher) have been possible for the Tribunal to treat the Claimant's discrimination case as applying to the whole sequence of events from when Mr. Oon first raised with Mr. Hopkins the possibility of redundancies, notwithstanding the effect of the pleadings if strictly construed. But in her oral submissions before us Ms. Heal said unequivocally that the Claimant's case on discrimination was indeed based only on the selection process: she explicitly confirmed, by reference to para. 3 of the Particulars of Claim, that the Claimant was relying on "3 (b)" but not on "3 (a)". The broader case that the entire dismissal was predetermined, essentially from the moment when Mr. Hopkins responded to Mr. Oon's requirement for budget savings by proposing to make one of the Trading Risk Controllers redundant, remained part of the unfair dismissal case and indeed was accepted by the Tribunal; but it was not relied on as part of the discrimination case. We must therefore proceed on the basis that the case was limited in the way that Ms. Heal has accepted.[53]The question therefore is whether the Tribunal's Reasons include findings of discrimination going beyond the pleaded case. Mr. Jeans relied on three passages as showing that they did. We take them in turn:(1) He referred us to para. 106 (see para. 38 above). We can see nothing in this paragraph, which is of course concerned with the unfair dismissal case, to suggest that the Tribunal purported to find discrimination on any unpleaded basis.(2) He relied on the statement in para. 116 of the Reasons (see para. 41 above) that "there was … strong evidence Mr. Hopkins used the selection exercise to remove Mr. Chagger from his team". That does not seem to us to be inconsistent with the pleaded case. The fact that – as the Tribunal plainly found, although in this passage it refers only to "strong evidence" - Mr. Hopkins abused the selection process in the way alleged is perfectly capable of raising a question about whether in doing so he may have been motivated (in whole or in part) by the Claimant's race. The fact that the Claimant chose to allege that only the latter part of the process was tainted by a discriminatory motivation does not alter that fact.(3) He relied on the observation at the start of para. 120 that "[the] selection for redundancy … was the means by which Mr. Hopkins effected the removal of the Claimant". This is essentially the same point as at (2). The fact that the Claimant was running two cases on the same facts – one broad (unfair dismissal) and one more narrowly-focused (discrimination) – makes it difficult to be entirely sure that the Tribunal always respected the distinction between them. But we have been shown no unequivocal sign that the Tribunal decided that the Appellants had discriminated against the Claimant on the basis of anything other than the acts pleaded.[54]Mr. Jeans submitted that even if it was not clear from the Reasons for the liability decision that the Tribunal had erred in the way alleged, it would become clear that it had done so if we considered the terms of the Reasons for the remedy decision. It was his submission that paras. 43-47 of those Reasons explicitly proceeded on the basis that not only the selection between the Claimant and Ms. Mastronikola but also the setting up of the pool in the first place was discriminatory. We do not in fact believe that that is a correct analysis of the Tribunal's reasoning: see paras. 81-85 below. But, even if it were, we would not regard it as legitimate to imply an error – not otherwise apparent – in the liability decision from the terms of the remedy decision.[55]Mr. Jeans' submission does however illustrate that the real importance of this point is not so much for liability as for remedy. The fact that the Tribunal found discrimination in one particular respect that had not been pleaded would be of little significance in itself. But the scope of the findings of discrimination has, potentially, an important impact on the assessment of compensation: see paras. 84 and 94 below. Ground 2A[56]Consequent on its decision that s. 54A applied, the Tribunal followed the two-stage process endorsed by the Court of Appeal in Igen Ltd. v. Wong [2005] ICR 931 . At paras. 115-119 (see para. 41 above) it decided that the Claimant had proved matters from which an inference of discrimination could be drawn. Accordingly at para. 120 it turned to consider Abbey's explanation. We set out again the opening sentences:
"The Respondent's explanation for the dismissal was that it was on grounds of a genuine and reasonable selection for redundancy and carried out fairly. This reason was itself rejected for the reasons given above. It was unfair and was the means by which Mr. Hopkins effected the removal of the Claimant [ emphasis supplied ]."
Mr. Jeans focused on the words which we have emphasised and submitted that they show that what the Tribunal was doing was dismissing the Appellant's explanation simply because it involved unfair conduct: it had accordingly fallen into the well-known error, exposed in Glasgow City Council v. Zafar [1998] ICR 120 (see at p. 124 A-C) and Bahl v. Law Society [2004] IRLR 640 (see at p. 809, paras.100-101), of confusing the question whether the employer had acted reasonably with the question whether his explanation, however unreasonably it showed him acting, was true.[57]Mr. Jeans submitted that this reading of the decision was confirmed by the terms of the informal summary decision given on 15 December 2006. In Ms. Heal's note of that summary (the accuracy of which is not disputed), under the heading "Discrimination", point 4 reads:
"The only explanation advanced by the Respondent in relation to dismissal was that it was fair, and this has been rejected by the Tribunal. In those circumstances the complaint of discrimination in relation to the dismissal is upheld."
[58]The reasoning expressed in the summary decision is plainly wrong, for the reason given by Mr. Jeans. But the authoritative reasoning is that contained in the written Reasons. The apparent mistake in the oral summary may justify a particularly careful scrutiny of the terms of those Reasons, but it cannot be used to justify reading them in a way which they do not support. That seems to us to be right in principle; but we should also recognise that it is easy for an Employment Judge giving a short informal summary of this kind to express himself in a way which does not accurately reflect the true reasoning of the Tribunal (which may be a reason why such summaries should be eschewed as far as possible).[59]We therefore turn to examine the Reasons, and specifically the wording of para. 120. We accept that the passage relied on by Mr. Jeans is not well drafted and that it is capable of bearing the meaning that he puts on it. But it is necessary to read the paragraph as a whole, and in the context of the Tribunal's overall findings. Having done so, and after anxious consideration, we have come to the conclusion that the error of law alleged under this ground has not been made out. Our reasons are as follows.[60]In the first sentence of para. 120 the Tribunal identifies Abbey's proffered explanation for having selected the Claimant rather than Ms. Mastronikola as being "that it was on the grounds of a genuine and reasonable selection for redundancy and was carried out fairly". That is not quite accurate. The Appellants' case was that Mr. Hopkins had decided, on the basis of a structured comparative assessment concerned only with their respective merits as employees, that Ms. Mastronikola was the better employee to retain. If that was the true (and complete) explanation, then whether the comparative assessment – which comprised both the PDP assessments and the scoring exercise suggested by Ms. Cunningham - was "carried out fairly" or whether the selection of the Claimant was "reasonable" were immaterial: what mattered was whether it was the true reason. Thus it was confusing of the Tribunal to incorporate references to fairness or reasonableness in its characterisation of Abbey's explanation. However, it is important to appreciate that those concepts were not irrelevant: if the process was unfair and/or if the conclusions reached were unreasonable, that might be strong evidence that Mr. Hopkins' decision was not in fact (or not wholly) based on a genuine assessment of the candidates' relative merits. We do not therefore think that the very fact that reasonableness and fairness are mentioned is by itself conclusive evidence of misdirection.[61]In the second sentence of para. 120 the Tribunal says that it "rejects" the Appellants' explanation "for the reasons given above". It then goes on in the following sentence to say "it was unfair …". Mr. Jeans submitted that that is intended as a summary of the "reasons given above" referred to in the previous sentence, so that the two sentences can be read together as saying, in effect, "Abbey's explanation was rejected because the selection process was unfair". It is not possible to reach a view on that submission without considering what were "the reasons given above". Mr. Jeans submitted that they were the reasons given at paras. 106-112 (see paras. 37-39 above). Ms. Heal submitted that the primary reference was to para. 116 (though she accepted that that in turn might involve reference back to the paragraphs suggested by Mr. Jeans). We do not entirely accept either submission. We do not believe that the Tribunal had any specific paragraphs in mind. In our view what it meant was simply that the factual conclusions which it had already reached necessarily entailed the rejection of Abbey's explanation.[62]The question is thus whether the Tribunal's previous findings were limited to findings that Abbey had behaved unfairly and that the selection of the Claimant was unreasonable, or whether they went further and encompassed a finding that Mr. Hopkins had (consciously or unconsciously) been influenced, at least in part, by matters other than his assessment of the comparative merits of the candidates for redundancy. In our view it is reasonably clear that the Tribunal did indeed intend to make such a finding. Although it is not at that point expressly stated, the effect of the findings in paras. 106-112 is that the reason for the unfairnesses and other deficiencies which the Tribunal found in Mr. Hopkins' conduct of the comparative assessment is that he wanted to get rid of the Claimant. This was not a case of "mere" unreasonableness or unfairness: it was targeted. That point is then picked up explicitly in para. 116, where the Tribunal finds "that there was … strong evidence [that] Mr. Hopkins used the selection exercise to remove Mr. Chagger". We note also the finding in para. 116 that some criticisms of the Claimant made during the assessment had not been notified to him previously "suggesting that they were not legitimate". The clear implication of that finding is that the exercise was not conducted by reference only to the candidates' merits.[63]That that was the effect of the "reasons given above" to which the Tribunal refers in para. 120 is confirmed by how the paragraph continues. In the second part of the selfsame sentence as is relied on by Mr. Jeans the Tribunal describes the selection exercise as "the means by which Mr. Hopkins effected the removal of the Claimant". And in the next sentence the Tribunal says that "the selection of the Claimant was predetermined by Mr. Hopkins".[64]The upshot is that in our judgment the reason why the Tribunal rejected Abbey's explanation was not because of its finding that Mr. Hopkins had behaved unfairly or unreasonably but because it did not believe that the explanation was true, or in any event the whole truth: the Claimant's selection was not wholly the result of an assessment of the comparative merits of himself and Ms. Mastronikola. We reach that conclusion the more readily in view of the fact that in para. 116 the Tribunal expressly refers to Bahl and reminds itself "of the need to avoid drawing inferences simply because of unreasonable behaviour". It would be surprising if the Tribunal, having directed itself correctly at that point, had lost sight of that direction four paragraphs later.[65]Once one pierces the confusion caused by the Tribunal's unfortunate drafting, the reasoning resolves itself into a straightforward application of s. 54A. The Tribunal held at para. 119, for the reasons given in the preceding paragraphs, that this was a case where the burden of proof had shifted: it has not been submitted that that conclusion was not open to it, subject to "ground 6B" and the two particular points considered below. The Tribunal then rejected the primary explanation advanced by Abbey. It also rejected the alternative explanation advanced by Mr. Oon, referred to at the end of para. 120, of – in effect - a personality clash between the Claimant and Mr. Hopkins: that rejection has not been challenged. Once that point was reached, the Tribunal was bound to make a finding of discrimination. Perhaps if Mr. Hopkins had himself frankly acknowledged that he wished to get rid of the Claimant and had put forward a non-discriminatory (even if unfair) reason for that wish the outcome would have been different; but he did not. Findings of discrimination reached by this route are not always comfortable, and tribunals should guard against mechanically applying s. 54A where the circumstances do not raise a real possibility of discrimination so as to satisfy stage (1). But it is not suggested that this is such a case. Ground 3[66]One aspect of the Claimant's case that his selection for redundancy was predetermined was the fact that, as mentioned at para. 9 above, Mr. Hopkins approached him, but not Ms. Mastronikola, before the start of the formal process to ask whether he would be interested in voluntary redundancy. The Appellants denied that that approach had any significance. They said that it was a natural course to take because in the summer of 2004 – some eighteen months previously - the Claimant had, as they understood it, expressed an interest in voluntary redundancy. The Claimant acknowledged that he had indeed said something at that time about voluntary redundancy; but he said that he had done so only as, in effect, a debating point in the course of a dispute about certain organisational changes to which all the members of the team objected. He said that the context was that Mr. Hopkins had commented that the team's objections could not have been all that serious because no-one had resigned; and that he had responded by asking if voluntary redundancy would be available if they did. It was his case that it was perfectly apparent that he was speaking "out of frustration" and was not expressing any actual interest in voluntary redundancy.[67]The Tribunal accepted the Claimant's case on this point. At para. 106 of the Reasons it said this:
"… Mr. Hopkins' reason for the approach, that the Claimant had made a request for voluntary redundancy a few months earlier, was on balance not plausible. The lapse of time between the "request" for voluntary redundancy and the facts surrounding that namely that it was the Claimant speaking out of frustration as to what he perceived as an inappropriate instruction in the department was such that it was unlikely to be the reason why the Claimant was approached. There was no other example of such a matter being common policy within the Respondent as was asserted in evidence."
On that basis, the Tribunal treated the fact of the voluntary redundancy offer to the Claimant as one of the factors supporting its finding that his selection was "predetermined" – which in turn, as we have seen, fed into its finding that it was discriminatory.[68]The Appellants contend that the basis on which the Tribunal rejected Mr. Hopkins' explanation for his approach to the Claimant was flawed. Its acceptance that the Claimant had been "speaking out of frustration" was, Mr. Jeans submitted, beside the point: the question is not what his motivation in fact was but how Mr. Hopkins understood it – if he believed, albeit wrongly, that the Claimant had expressed a genuine interest in voluntary redundancy, that afforded a complete and innocent explanation for the approach which he later went on to make.[69]There is obvious force in Mr. Jeans' submission if the Tribunal's words are read literally. But the passage in question is very short and, if we may say so, not very elegantly drafted. On balance we think that the Tribunal intended to find – even though it failed to spell out – that Mr. Hopkins must have appreciated that the Claimant's words were not intended as a serious request for voluntary redundancy and that his contention that he took them as such was a mere excuse. That was the case squarely put by the Claimant in his witness statement (see paras. 9-11) and also (from the admittedly cryptic note of Ms. Heal's cross-examination) the case put to Mr. Hopkins. We have the clear impression that the Tribunal intended to accept the entirety of the Claimant's case on this point.[70]Even if we were wrong about that, we do not believe that any flaw in the Tribunal's reasoning on this point materially affected its conclusion that the Claimant's selection for redundancy was predetermined. As appears from the passages from the Reasons set out above, it relied for that conclusion on a number of factors, of which Mr. Hopkins' approach to the Claimant in November 2005 was not the most important. Ground 5[71]By this ground, on which it is fair to say that Mr. Jeans did not place much emphasis, the Appellants challenge the decision of the Tribunal that Mr. Hopkins' comparative assessment of the Claimant and Ms. Mastronikola was unfair and unreasonable, which fed into its decision to reject their explanation for the selection of the Claimant. It is submitted that in paras. 110-112 of the Reasons the Tribunal failed to take account of the fact that Mr. Hopkins had to make what was inevitably, however it was structured, an essentially subjective judgment of a kind which a tribunal should be slow to second-guess. Mr. Jeans relied in particular on para. 110 of the Reasons, where the Tribunal appeared to criticise Mr. Hopkins for an attribute which another manager might have considered an asset. We agree that, read in isolation, that criticism might seem unjustified. But it is necessary to read these paragraphs as a whole. It is clear in particular from para. 111, in relation to which the Appellants advance no criticism, that the Tribunal, which had heard Mr. Hopkins cross-examined in detail, formed the view based on numerous instances that he had not approached the assessment in a neutral manner but had gone out of his way to mark the Claimant down as against Ms. Mastronikola. Read in that context, the observation in para. 110 is unexceptionable. CONCLUSION[72]We accordingly dismiss the liability appeal. B. REMEDY INTRODUCTORY[73]In September 2006 the Claimant submitted a Schedule of Loss quantifying his total claim for both unfair dismissal and discrimination (on the basis that he was not reinstated) at £323,240.05. The principal element in that claim was loss of earnings calculated on the basis that he would be not be able to obtain equivalent employment until December 2008. The claims in the schedule were supported by passages in the Claimant's witness statement dated 20 November 2006. At the hearing on 3 January 2007 he was cross-examined on that evidence by Ms. Noons.[74]Shortly before the remedy hearing fixed for 12 April the Claimant submitted a revised schedule claiming that it would never be possible for him to obtain equivalent employment and that he should be compensated on the basis that he would suffer an approximately 75% loss of earnings for the rest of his working life, i.e. to age 65, with consequent pension loss thereafter. The total claim on that basis was no less than £4,332,204. He sought leave to amend accordingly. The Appellants were understandably taken aback at an amendment involving a tenfold increase in the size of the Claimant's claim. They contended that his change of position not only came too late but was inconsistent with the basis on which the hearing of 3 January had been adjourned and with the terms of discussions which had occurred between Ms. Noons and Ms. Heal. They resisted the application to amend accordingly. At the hearing the Tribunal heard evidence from the representatives (with the result that Ms. Heal could not act for the Claimant, who was represented by Ms. Gollop of counsel). In the end it decided to grant permission to amend, but the hearing had to be adjourned in order to allow the Appellants to consider the new case. It is evident that the Appellants feel aggrieved at the turn that events took; but they have not felt able to challenge the Tribunal's decision.[75]By a witness statement dated 8 August 2007 the Claimant explained in considerable detail the steps that he had taken to find suitable alternative employment in the financial services industry but that these had proved unsuccessful. He said that in May he had applied for a place on a PGCE course to qualify as a mathematics teacher. He was due to start the course in September.[76]At the start of the adjourned remedy hearing on 21 August 2007 it was agreed that the Tribunal would be asked to decide only what were described as "issues of principle", on the basis that once those were determined it would be possible for the parties to agree the appropriate figure. Those issues are identified at paras. 5 and 6 of the Reasons, apparently in terms formulated by Mr. Sutton. We need not set them out in full. Those relevant to this appeal are as follows:
"(1) If the redundancy selection process had been conducted in a fair and non-discriminatory way, would the Claimant's employment still have been terminated? (2) If, contrary to the Respondents' primary submission, the Claimant had survived redundancy with Katerina Mastronikola being selected and dismissed instead, how long would the Claimant have remained in the First Respondent's employment? (3) Has the Claimant discharged his mitigation duty? … (5) What level of statutory uplift should be applied to the Claimant's dismissal compensation for the First Respondent's failure to comply with the statutory procedures? … ."
[77]Those issues as formulated did not specifically address the question of how as a matter of arithmetic, if the Tribunal's answers on issues (1)-(3) were favourable to the Claimant, the resulting future loss should be calculated. But the Chairman expressed the view at an early stage of the hearing that the right course was to use a multiplier based on the Ogden Tables, and although Mr. Sutton apparently demurred that was the course eventually taken.[78]The Tribunal adopted the same course as it had in relation to the liability hearing – that is, of announcing its decision on the specified issues at the conclusion of the hearing while deferring its formal Judgment and Reasons. That meant that it was able in its eventual Judgment – promulgated, as we have said, on 8 November 2007 - to incorporate by reference the figures which the parties had worked out in the meantime.[79]We need not at this stage analyse in detail the Tribunal's answers to the questions set out at para. 76 above: we will do so, so far as necessary, in considering the issues raised by the appeal and cross-appeal. In essence it found that, but for the discrimination, the Claimant's employment would not have been terminated and he would have remained employed by Abbey, or by another employer paying at least equivalent earning rates, until the age of 65. On that basis, using the Ogden Tables, it arrived at a multiplier for loss of earnings of 16. It found that the Claimant had made reasonable attempts to mitigate his loss by finding other jobs in the industry. It found that it was reasonable in the circumstances for him to retrain and seek employment as a mathematics teacher and that future loss should be calculated on the basis of the earnings that he would receive in that role. That gave a net annual loss of about £80,000. Applying the multiplier of 16 to that figure accounts for the bulk of the compensation award. We deal with the question of uplift at paras.128 ff. below. THE APPEAL[80]The Notice of Appeal raises seven grounds. It does not make sense to deal with them in the order pleaded. Instead, we will do so by reference to issues (1)-(3) identified at para. 76 above. ISSUE (1): THE CHANCE THAT THE CLAIMANT WOULD HAVE BEEN DISMISSED ANYWAY The Submissions before the Tribunal[81]It was the Appellants' submission before the Tribunal – summarised at para. 43 of the Reasons - that the starting-point for its assessment of compensation should be to decide what were the chances that the Claimant would have been dismissed for redundancy, at or about the same time, if there had been no discrimination on the part of the Appellants. In other words it should ask an equivalent question to that routinely asked in cases of unfair dismissal. In Polkey v. A.E. Dayton Services Ltd. [1988] ICR 142 Lord Bridge, at p. 163 G-H, (adopting observations of Browne-Wilkinson J. in the Employment Appeal Tribunal in Sillifant v Powell Duffryn Timber Ltd. [1983] IRLR 91) pointed out that, in a case of unfair dismissal based on the manner of the dismissal, the chance (which might in principle amount to a certainty) that the employee would have been fairly dismissed if the dismissal had been handled differently could be reflected by an appropriate reduction in the award of compensation. Mr. Sutton submitted that if that question were asked in this case the only possible answer on the evidence was that the Claimant would certainly have been dismissed. The best that he could have done was to score the maximum on the nine competencies, as Ms. Mastronikola had; and Mr. Sutton pointed out that the evidence was that in the event of a tie the choice would have been made on the basis of the candidates' disciplinary records and, if those were identical (as they were), of their sickness absence records. On that basis Ms. Mastronikola would have "won" because the Claimant had recently had a prolonged period off work as a result of his leg injury. It followed, submitted Mr. Sutton, that the Claimant should receive no, or minimal, compensation for pecuniary loss.[82]Ms. Heal's response, as recorded by the Tribunal at paras. 43-46 of the Reasons, was twofold. It is convenient to summarize her contentions in the reverse order to that in which they were given by the Tribunal.[83]First , she submitted that "the Polkey question" (to use the convenient shorthand, though arguably it begs the question – see below) simply did not arise: see para. 46. She submitted, as reported by the Tribunal, that the only question was whether Mr. Hopkins' discriminatory conduct had made a material contribution to the Claimant's dismissal: if it had, "the Claimant was entitled to recover compensation for the entire loss".[84]Secondly , she submitted (see para. 44) that even if the Polkey question required to be answered it was not correctly formulated by Mr. Sutton. The question was not what the chances were of the Claimant being dismissed if the selection had been carried out without any discrimination, but what they were if he had not been targeted by Mr. Hopkins at all – i.e. if Mr. Hopkins had not volunteered to Mr. Oon to make one of his Trading Controllers redundant and so had never set up the "sham pool" in the first place. Mr. Sutton submitted (see para. 45 of the Reasons) that that response was inconsistent with the Claimant's pleaded case and the basis on which he had succeeded on liability. That case was, unequivocally, based exclusively on discrimination in the selection as between himself and Ms. Mastronikola: see para. 52 above. It was accordingly illegitimate when considering the consequences of that discrimination to take into account prior acts, however reprehensible, which were not the subject of any finding of discrimination. Ms. Heal responded in turn that it had always been part of the Claimant's case, advanced without any objection from the Appellants, that Mr. Hopkins had targeted him for dismissal as soon as the possibility of redundancies arose: she referred to the terms of para. 3 of the Particulars of Claim (see para. 46 above) and specifically to the explicit contention – accepted by the Tribunal - that not only the choice of the Claimant but the prior decision to make one of the two Trading Risk Controllers redundant was "predetermined". The Decision and the Appeal[85]The Tribunal's conclusion was shortly expressed at para. 47 of the Reasons as follows:
"Weighing those arguments the Tribunal accepted the submission of the Claimant. On the basis of the Tribunal's earlier findings there was no doubt that the acts of discrimination relied upon and found by the Tribunal had made a material contribution to the loss and that, applying tortious principles the "
Polkey " basis for a reduction in the award was not available to the Respondent." Although that could perhaps be understood as accepting the entirety of Ms. Heal's submissions, the better reading seems to us to be that the Tribunal accepted her primary submission but expressed no view on her alternative case.[86]By ground 5 of the Grounds of Appeal the Appellants contend that the Tribunal's reasoning was wrong in law and repeat the submissions advanced by Mr. Sutton. Ms. Heal sought to support the Tribunal's reasoning but submitted in the alternative that, even if the Polkey question fell to be asked, the Appellants' formulation of it was wrong and that if it were correctly formulated it did not lead to the conclusion for which they contended. We consider the two issues in turn. (1) Should the Tribunal have taken a Polkey approach?[87]Ms. Heal submitted that the phrase "the Polkey question" was misleading, because wholly different statutory provisions were involved as between discrimination and unfair dismissal claims. S. 56 (1) (b) of the 1976 Act provides that in a case of race discrimination brought in the employment tribunal any award of compensation should "[correspond] to any damages he could have been ordered by a county court … to pay to the complainant if the complaint had fallen to be dealt with under section 57". Under s. 57 (1) a race discrimination claim may be brought in the county court "in like manner as any other claim in tort …". It is well-established that the effect of those two provisions is that a race discrimination claim should be treated for compensation purposes as a claim in tort: see, most recently, Essa v. Laing Ltd. [2004] ICR 746 . By contrast, the right not to be unfairly dismissed, with which Polkey was concerned, is a sui generis statutory right, the breach of which is not classifiable as a tort. The assessment of compensation for unfair dismissal is governed by s. 123 (1) of the 1996 Act, which reads (so far as relevant) as follows:
"… the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal …"
. It is well recognised that the adoption of a touchstone of what appears "just and equitable" - albeit "having regard to" the complainant's loss - gives the tribunal the right to take into account wider considerations than simply the loss caused by the dismissal: see W. Devis & Sons Ltd. v. Atkins [1977] ICR 662 (esp. per Viscount Dilhorne at p. 679 E-F).[88]In our view that submission is formally correct. Polkey cannot be taken definitively to decide the present question. It is necessary to consider whether "the Polkey question" would fall to be asked in an analogous case in tort. As to that, the general rule governing compensation at common law, and regularly applied to claims in tort, was classically formulated by Lord Blackburn in Livingstone v. Rawyards Coal Co. (1880) 5 App Cas 25 , at p. 29, where he said:
"… Where any injury is to be compensated by damages, in settling the sum of money to be given for reparation of damages you should as nearly as possible get at that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation."
What therefore is required is the comparison of the Claimant's current position with what would have been his position if the wrong had not been done. The first step must be to define the wrong in question. The provision of the 1976 Act on which this part of the Claimant's claim was based must be s. 4 (2) (c), which renders it unlawful to discriminate against an employee " by dismissing him or subjecting him to any other detriment": that is nowhere spelt out, but it is self-evident and is reflected in the Tribunal's identification of dismissal as the relevant detriment (see para. 40 above). It might therefore be contended that the relevant question was, straightforwardly, what would have happened if the Claimant had not been dismissed, which would at least arguably exclude consideration of whether he might have undergone the same dismissal but on different grounds. But in our view that is an inadequate formulation. Dismissal is not itself a wrong: what renders it unlawful in a case under s. 4 is the discriminatory grounds on which it occurs. It is the discrimination which is the essence of the wrong. If that is the right characterisation, then the correct question is what would have happened if the Claimant had not been discriminatorily dismissed: that formulation plainly requires consideration of whether the same dismissal might have occurred but on legitimate grounds. Accordingly, we believe that the Tribunal was wrong not to consider that question.[89]Having, in deference to Ms. Heal's point, reached that conclusion by reference to general principle, we do in fact believe that it draws some support from the practice followed in the unfair dismissal cases following Polkey . Neither Browne-Wilkinson J. in Sillifant nor Lord Bridge in Polkey spelt out the basis on which they believed that it was right for tribunals to consider what would have happened if the dismissal had been handled differently; nor, we believe, has this been explicitly considered in the subsequent case-law [8] . There is thus no particular reason to believe that the practice is dependent on the reference to justice and equity, as distinct from the complainant's loss, in s. 123 (1) of the 1996 Act; and the very absence of any elaborate discussion suggests that it has been regarded simply as an application of the familiar principles governing compensation. Despite the conceptual difference between unfair and discriminatory dismissal, they are alike to the extent that dismissal itself is not inherently unlawful and that it is only the additional vitiating factor – unfairness or discriminatory grounds – which renders it so. It would be unsatisfactory if there were a radically different approach to the assessment of compensation between the two situations.[90]We believe that the reliance placed by Ms. Heal and the Tribunal on "material contribution" is, with respect to them, misconceived. In order to establish liability in the case of common law torts where damage is a necessary part of the cause of action, a claimant only has to show that the alleged tortfeasor materially contributed to the damage in respect of which he claims, and not that his wrongful act was the only or main cause. There is of course a similar rule in cases of discrimination, though the label "material contribution" is not generally used. But that rule is not relevant to the different issue which arises here – namely whether in assessing compensation it is relevant to take into account the chance that the respondent might have caused the same damage lawfully if he had not done so on discriminatory grounds.[91]It might seem unattractive that a discriminator can reduce, and perhaps in some cases extinguish altogether, the compensation which he would otherwise have to pay by taking credit for potential legitimate grounds for his action when ex hypothesi his actual grounds were illegitimate. But the same objection might be taken to the rule in unfair dismissal cases: the answer in both cases is the same, namely that an award on ordinary compensatory principles requires the Polkey question to be asked. It will only assist the respondent if he is able to show that the victim would or might have been dismissed anyway – which will only be an available argument in a fairly limited class of cases (of which discriminatory selection for redundancy may be the most obvious example). In such cases it could equally be said to be unattractive that a claimant should make a "windfall" 100% recovery in circumstances where he was likely to be dismissed in any event, simply because his employer had – it may be subconsciously and only to a small extent – allowed himself to be influenced by discriminatory considerations. There is nothing in the statute to suggest that discrimination is to be treated as a specially heinous wrong to which special rules of compensation should apply. [9] (2) The answer to the Polkey question[92]Because of its conclusion on the prior issue the Tribunal did not go on to consider the Polkey question. Unless the answer is clear from the facts already found, the issue will have to be remitted. We do not believe that the answer is clear. The Appellants' case to the contrary depends on the submission that even if the Claimant had scored the same as Ms. Mastronikola he was bound to lose on the tie-break (see para. 81 above). But Ms. Heal pointed out that that involved the assumption that the only way in which Mr. Hopkins sought to achieve the Claimant's selection was by marking him down, whereas the Tribunal had found in terms that he had also marked Ms. Mastronikola up: see para. 112 of the Reasons (para. 39 above). It is fair to say that that observation was not made in the context of this particular issue, and if the case is remitted it might not be right to treat it as a conclusive finding; but it confirms that Ms. Heal's point is arguable. Mr. Jeans submitted in reply that that was not the way in which the Claimant's case had been put before the Tribunal, but it was not demonstrated to us that that was correct and we are certainly not in a position to hold that the point is not open to the Claimant. We would add that it is also unclear to us how the PDP scores fed into the decision.[93]The case will therefore have to be remitted in order that the Tribunal can assess the chance that the Claimant would have been made redundant on the same occasion even if the Appellants had not discriminated against him. We can see no reason why the remission should not be to the same Tribunal: indeed there are strong reasons why it should be, if its reconstitution remains possible. (We were told that Mr. Ryan now sits in a different Region, but we would hope that that does not present an insuperable obstacle.) The Tribunal can of course consider any submission made to it by the Appellants that any particular argument which the Claimant wishes to run is not open to it because of the way the case has been put previously. It will be well-placed to decide any such point.[94]There remains the issue whether what the Tribunal has to assess on such a remission is, as Mr. Jeans submitted, the chance that the Claimant would not have been dismissed if the Appellants had not discriminated against him in the selection process or, as Ms. Heal submitted, what the position would have been if they had not "targeted" him at all – see para. 84 above. There is no doubt that the correct approach in principle is that the Tribunal is concerned only with what would have happened if the Appellants had not done the acts which it has found to be discriminatory. As we understand it – see para. 53 above – the only discrimination found by the Tribunal was in the selection process. It must follow that Mr. Jeans' formulation of the question is correct. Only if the Claimant were permitted to resile from the narrow way in which the case was put would it be open to the Tribunal to approach compensation on the basis contended for by Ms. Heal. ISSUE (2): THE CLAIMANT'S EMPLOYMENT PROSPECTS IF NOT DISMISSED[95]The issue for the Tribunal under this head was how to assess the Claimant's employment prospects, and thus his prospective earnings, if he had not been dismissed for redundancy at the beginning of 2006. The Tribunal's Reasoning[96]It was the Appellants' case that the Claimant would have left Abbey voluntarily within a short time even if he had not been selected for redundancy, either because of his poor relationship with Mr. Hopkins or in any event because his career pattern showed that, not untypically for employees in the City, he tended to change jobs every few years. The Tribunal reviewed the evidence about the Claimant's relationship with Mr. Hopkins and some general evidence about patterns of employee mobility at Abbey. Having done so, it said, at the end of para. 51 of the Reasons, that the only conclusion which the evidence justified was "… that there was some chance that the Claimant would leave at some stage but that is to say no more than the Claimant's Counsel said which is that, if he left, would not be leaving so as to deliberately place himself without income or work. The only circumstances in which the Claimant was likely to leave in the Tribunal's judgment on the balance of probabilities was if he found equivalent or better paid employment." It continued, at para. 52:
"The same reasoning provides an answer to the fact that the Claimant's own career path shows frequent change. The Tribunal was satisfied with the Claimant's evidence that the further up the pyramid or the ladder the employee rises within this sort of role the less likely he or she is to move."
It then dealt with two further particular points and concluded:
"In the circumstances the Tribunal does not accept the submission that the Claimant would on the balance of probabilities have left at some stage. In the Tribunal's judgment he almost certainly would not have left to put himself in a position of disadvantage in the way that has in fact occurred. The Tribunal accepts that there is a chance that there would be some breaks in career of a slight degree, bearing in mind that there is a requirement to give long notice and sometimes a requirement to defer bonuses. The argument that is raised by Mr. Sutton can in the Tribunal's judgment be met by making an appropriate albeit slight reduction in the multiplier used in considering the Claimant's continuing losses."
[97]On the basis of that reasoning, therefore, the Claimant fell to be compensated for any loss of earnings suffered for the rest of his working life, i.e. to age 65. For the purpose of assessing that loss the Tribunal adopted a multiplier/multiplicand approach, with a multiplier of 16. It said this:
"78. At an early stage of the Hearing the Tribunal suggested to the parties that this was an appropriate case, bearing in mid the extent of the loss, for compensation to be assessed on a multiplier/multiplicand approach. Although such an approach may not generally be appropriate in claims of unfair dismissal and race discrimination the Tribunal did not understand either of the parties to object to that approach in principle. At the conclusion of the proceedings the Tribunal settled on a multiplier of 16. 79. The reason we did so is as follows. The Tribunal consulted Thompsons Facts and Figures Tables for the Calculation of Damages and in particular considered Section A2 of the Ogden tables as set out there concerning loss of earning multipliers adjusted for occupation and geography. The appropriate table was Table A2 for a male at 2.5% based on loss of earnings in medium economic conditions in both low risk occupation and favourable geographical region. The Claimant was clearly in a low risk occupation and the employment in the South or the South East is clearly a favourable geographical region. The parties checked, because the latest book available for the Tribunal was 2005, that the table had not changed and confirmed that it had not. For a male aged 42 the multiplier to a retiring age of 65 given there is 16.65. The Tribunal noted that for a male aged 43 it was 16.11 and for a male aged 44 it was 15.55. The Tribunal considered that the starting point for the multiplier was 16.65 as given by the table and adjusted that downward to 16 having regard to its finding that whilst the Claimant was unlikely to leave Abbey's employment had he not been dismissed for less favourable or no employment there was a chance that there would be some short term career breaks in the future. Accordingly therefore it reduced the multiplier to something between 1 or 1½ years purchase to reflect that chance. On that basis it arrived at the multiplier of 16."
[98]The reasoning apparent from those passages can be summarised as follows:(a) (A) The loss for which the Claimant should be compensated was not just his earnings from his hypothetical future employment with Abbey but his earnings for the rest of his working life in "equivalent or better paid employment". The Tribunal acknowledged in paras. 51 and 52 that the Claimant might have left Abbey's employment voluntarily at some point in the next 23 years but it decided that that did not matter because "on the balance of probabilities" he would "not have left to put himself in a position of disadvantage".(b) (B) A multiplier/multiplicand approach was appropriate for assessing that loss. Using the Ogden Tables the correct starting-point in the Claimant's case was a multiplier of 16.65.(c) (C) That multiplier should be rounded down to 16 to reflect the chance that the Claimant might have experienced "short term career breaks", by which the Tribunal apparently meant the kind of short-term loss of earnings that might be experienced when he moved from one employment to another (either because there was an interval when he was not in work at all or because he might suffer a loss of bonus in the year in which he left) – see the end of para. 52. It should be noted that the situation here is not the same as that in the well-known "career-loss" cases of Ministry of Defence v. Cannock [1994] ICR 918 and Vento v. Chief Constable of West Yorkshire Police (no. 2) [2003] ICR 318 . In those cases the claimants were employed in occupations in which they would (or very probably would) remain with a single employer – the armed forces or a particular police force – for the whole of their careers. The cases were not concerned with a field of employment where job mobility was common.[99]The Appellants' challenge to that reasoning is to be found under heads (1)-(3) of the grounds of appeal, but those do not entirely correspond to the steps in the Tribunal's reasoning as we have analysed them above. We prefer to consider each of those steps in turn. Step (A)[100]Under ground 2 of the notice of appeal the Appellants contend that the limit of the Claimant's recoverable loss under this head is his hypothetical future earnings from Abbey . The wrong – or detriment – which he suffered is the (discriminatory) termination of his employment with Abbey, and the only question for the Tribunal was how long that employment would have continued. As to that, the Tribunal expressly acknowledged that there was a chance that the Claimant might have left voluntarily – indeed to hold otherwise would have been perverse – but it ignored that chance on the irrelevant ground that if he had left it would not have been in order to make a change for the worse.[101]Ms. Heal submitted that the Appellants' approach was wrong because it ignored the fact that the Claimant was likely to have suffered a stigma on the labour market by reason of the fact that he had had to bring proceedings against Abbey for discrimination: employers would be less likely to employ such a person. That stigma meant that a multiplier representing a best estimate of whether, and if so when, he might have left Abbey would not put the Claimant in the position that he would have been in if he had not been dismissed. Ms. Heal's submission implicitly recognises, but it is worth spelling out, that the question of stigma damage is academic as regards the period of the Claimant's hypothetical employment by Abbey. In respect of that period he will be fully compensated by a conventional award for loss of earnings. It kicks in only at the point that such compensation ceases.[102]We should start by noting that the Tribunal did not in fact approach the question of "post-Abbey loss" in accordance with Ms. Heal's submission. It did not explicitly address the question of "stigma loss" at all but simply, in effect, held that the Claimant's employment with Abbey and any successor employer could be conflated. We have therefore no direct findings as to the extent or effect of any stigma. However, it was part of the Appellants' case on mitigation that potential employers were likely to be more cautious about recruiting the Claimant if they knew that he had sued his previous employers for discrimination; and it seems to us right therefore to proceed on the basis that at least some potential employers might learn that he had done so and be influenced by that fact.[103]Mr. Jeans contended that any claim for stigma damages would be inadmissible in law for three reasons:(a) The award of compensation for the effect of stigma departs from the proper approach to an award of compensation in tort, namely to ask what would have happened if the discrimination had not occurred.(b) A discriminator's liability for compensation should be limited to the "direct and natural" consequences of his act: see Essa v. Laing (above, at para. 39 - p. 760). Stigma loss of the kind alleged would not be the "direct and natural" result of the Appellants' discrimination and would accordingly, to use the old-fashioned shorthand, be too remote.(c) If an employer decided not to recruit the Claimant because of his previous claim against Abbey, that would constitute victimisation contrary to ss. 2 (1) (a) and 4 (1) (c) of the 1976 Act. It was wrong in principle that the Appellants should be made liable for the unlawful acts of third parties. Mr. Jeans also submitted that at common law "stigma damages" were frowned on, though he cited no authority for that proposition.[104]We do not accept submission (a). If the Claimant had not been (discriminatorily) dismissed, he would not have lost his employment with Abbey: that is one head of loss. But he would also not have had to bring proceedings against Abbey and thus have acquired the stigma with which (we assume for present purposes) he is now marked: that is another head of loss. The two claims are not conceptually inconsistent – though, as already noted, the second does not bite to the extent that the Claimant is compensated for the first.[105]We take submissions (b) and (c) together. We should observe by way of preliminary that the alleged stigma with which we are here concerned is different from that considered in Malik v Bank of Credit and Commerce International SA [1997] ICR 606 . In that case the stigma of which the claimants complained was the direct result of the way in which the employer had conducted its business, which it was held constituted a breach of contract as against the employee. Likewise, in Norton Tool Ltd. v. Tewson [1972] ICR 501 , to which Lord Nicholls referred at para. 34 of his speech in Malik , the National Industrial Relations Court referred to the possibility of awarding compensation for damage to future employment prospects arising out of "the manner of the dismissal", i.e. the unfair way in which the dismissal had been carried out – see at p. 506. In the present case, by contrast, the stigma arises from the employee's conduct in bringing proceedings against the employer, albeit that that was itself a response to the employer's unlawful act.[106]We accept the Appellants' submission. In our view the risk that future potential employers may decline to employ the Claimant because of the claim which he has brought against the Appellants is not a matter which can be reflected in his compensation. It is well recognised that wrongdoers cannot be saddled with every consequence of their actions. The ways in which the limitations on recovery have traditionally been expressed and justified, employing sometimes the language of causation and sometimes of remoteness, are confused and confusing. It is increasingly recognised that these conceal what are in fact, and necessarily, intuitive and/or policy judgments about the extent of liability for consequences: see the speech of Lord Nicholls (extensively cited in Essa v. Laing ) in Kuwait Airways Corpn v. Iraqi Airways Co (nos. 4 and 5) [2002] AC 883 ( [2002] UKHL 19 ), at paras. 69-71 (pp. 1091-2). It may therefore be too glib to say merely that stigma of the kind for which compensation is sought is not a "direct" or "natural" consequence of the Appellants' wrongful acts because it depends on the Claimant's choice to sue and/or on the (unlawful) acts of third parties; or that those same factors "break the chain of causation". Nevertheless in this particular context the fact that the loss in question arises only indirectly, and that the immediate cause is the unlawful conduct of third parties, does seem to us a powerful reason for holding it to be too remote. There is no analogy with "duty of care" cases, in which the obligation undertaken may well involve protecting parties against the acts, including the unlawful acts, of others. The natural scope of liability for a discriminatory dismissal does not seem to us to extend beyond the injury inherent in the loss of the employment in question. [10] Claimants will be entitled to full compensation for the loss of that employment; and if the fact that they have sued their employer has impacted on their ability to mitigate that loss that will be reflected in the compensation. But it is another matter for the employer to be made liable for the potential loss of other jobs from other employers.[107]We note, though this is not central to our reasoning, that if such a claim were admissible in principle it would be available in the case of every claim for dismissal in breach of the employment protection or anti-discrimination legislation. It is not without significance that no such claim has, so far as we are aware, ever been upheld (or indeed advanced). If such claims were admitted, the difficulties of proof and evaluation would be formidable, since it would be necessary to make judgments about the conduct of other employers which would be of their nature speculative and unquantifiable.[108]It follows that the Tribunal was wrong in our view to award compensation for anything other than the Claimant's lost earnings (and any associated pension loss) from employment with Abbey . The claim will have to be remitted for reconsideration on that basis. Again, we see no reason why that reconsideration may not be carried out by the same Tribunal.[109]Having reached this conclusion, we need not consider the Appellants' other grounds of appeal in relation to this step. Nevertheless, we deal with them briefly in case the matter goes further and because issues raised by them may remain indirectly relevant to the Tribunal's reconsideration.[110]Balance of probabilities/loss of a chance. In para. 52 of the Reasons (see para. 96 above) the Tribunal found "on the balance of probabilities" that the Claimant would not have left Abbey voluntarily: it also used the same phrase in para. 51, though it is rather less clear there to what finding it is being applied. By ground 1 of the Notice of Appeal the Appellants contend that the Tribunal was wrong to seek to resolve the issues in question on the balance of probabilities: it is well-established that an employment tribunal engaged in an exercise of the kind in question must adopt a "loss of a chance" approach - see, e.g., Vento (above), per Mummery LJ at para. 32 (p. 327). In our view that submission is plainly right. Ms. Heal in her oral submissions was constrained to accept that the Tribunal had erred in this respect. She submitted however that the error made no real difference, because if (contrary to what we have held) the true question was indeed not whether the Claimant would have left Abbey at all but whether he would have left except for equivalent or better employment, the chances that he would have deliberately made a change for the worse were negligible. That may well be right; but the point is not significant in view of our conclusion on the prior issue.[111]The chances of the Claimant leaving Abbey voluntarily. By ground 3 of the Notice of Appeal the Appellants advance a number of reasons in support of their contention that the chances were high that the Claimant would have left Abbey voluntarily in any event, and they complain that the Tribunal gave no or no sufficient weight to those matters. Mr. Jeans did not develop this ground in his oral submissions, since he said that it did not arise if the Tribunal had, as he submitted and as we have found, asked itself the wrong question anyway. Ms. Heal did not demur from this approach. Strictly speaking, however, the Tribunal's finding that on the balance of probabilities the Claimant would not have left Abbey voluntarily prior to his retirement date implies a finding that the chances of his doing so were less than 50% [11] . In those circumstances we think it right to say, on the basis of the written submissions, that we do not regard the reasons given by the Tribunal for its conclusion as adequate. The Appellants advanced a number of substantial reasons in support of their submission that the Claimant was not likely to have remained at Abbey for long, and those reasons required fuller consideration in the Reasons than they were given. In those circumstances the finding that there was a more than 50% chance that the Claimant would still have been employed at Abbey at age 65 cannot be regarded as binding when the issue returns for reconsideration. Step (B)[112]On the basis of the conclusions reached above, we do not need to consider the Tribunal's reasoning on this step (or step (C)). But we will, again, do so briefly in case the matter goes further. We should note that neither party dealt in their skeleton arguments with the question of the use by the Tribunal of the Ogden Tables, and we heard only very limited oral argument on the point. We invited counsel to submit written submissions following the hearing, and they did so: these have been useful in explaining what the Tribunal did, but they were otherwise limited in their scope.[113]There is of course nothing unusual in an employment tribunal using a multiplier/multiplicand approach when assessing future loss of earnings in a dismissal case: it will indeed almost inevitably do so when the loss extends much over a year. It is, in our experience, much less usual for it to use the Ogden Tables. These are tables published by the Government Actuary as an aid to the calculation of damages in personal injury cases. Tables 3-14 in the current (6 th ) edition [12] identify multipliers (for men and women separately) from any given age up to retirement age (with alternatives at five-yearly intervals from ages 50 to 75). These multipliers take account of – only -(a) accelerated receipt and(b) mortality risk. In most dismissal cases the tribunal will not normally be concerned with a loss continuing to retirement date, and tables 3-14 will accordingly be of no assistance [13] : it will have to choose a multiplier which it judges best balances all the contingencies affecting the duration of the loss (and, unless this is insignificant, accelerated receipt). But if, contrary to our decision, the Tribunal here had indeed been concerned with loss extending for the entirety of the Claimant's career there could be no objection to it using the appropriate Ogden table – though only, as explained at para. 114 below, as a starting-point. The appropriate table in the present case would be table 9, which gives multipliers for loss of earnings for men to age 65. Taking the discount rate now approved by the Courts of 2.5% [14] , and the Claimant's age of 42 at the date of assessment, the appropriate multiplier is 16.92. (In fact the figure given by the Tribunal is not 16.92 but 16.65: we explain the discrepancy below.) Step(c) (C)[114]Even in a case where it is appropriate to use the Ogden Tables, it will never be right to use the multiplier taken from the main tables without considering the contingencies which those tables do not reflect. For a claimant to be compensated in full (subject to accelerated receipt) for his assumed annual loss for every year and month of the rest of his career involves treating as a certainty the assumption that he would have continued for the rest of his career to receive his pre-dismissal earnings. But that cannot be a certainty. On the contrary, it is subject to a number of contingencies: he might have died or become too ill to work, or his employer might have gone out of business, or he might have been dismissed for some other good cause or have left voluntarily for any one of a number of reasons. The only one of those contingencies taken into account in the main Ogden tables is the possibility of death (and even that may be inadequately represented if there is reason to believe that the claimant's risks are substantially worse than those of the general population from which the Ogden figures derive). Those other contingencies must be properly reflected in the ultimate multiplier used. There may be cases where a tribunal believes the contingencies in question are balanced by "upside" contingencies not reflected in the multiplicand (e.g. promotion); but otherwise the multiplier will fall to be reduced.[115]Although the Explanatory Notes to the Ogden Tables emphasise that the main tables do not take account of contingencies other than mortality, section B of the Notes "suggests ways in which allowance may be made to the multipliers for loss of earnings to make allowance for certain risks other than mortality" (see para. 19). In the 4 th and 5 th editions tables were included in section B setting out percentage adjustments which could be applied to the figures in the main tables in order to take account of risks such as "illness and unemployment", varying according to geography and the nature of the claimant's occupation. However, these came with a warning that they had been shown to be methodologically flawed and that work was under way to produce more reliable adjustments; the tables were only being included to "give an indication of the factors that should be included" (see para. 25 of the Introduction to the 5 th edition). By the time of the 6 th edition the promised further work had been done, and section B now contains different and more elaborate tables.[116]The Tribunal in the present case appears to have made two reductions in the multiplier derived from the main Ogden tables – one consciously and the other possibly unwittingly. The adjustment which it avowedly makes is that from 16.65 to 16: this reduction was in order to reflect the chance of short "career breaks" of the kind which it identified and is unexceptionable. The other adjustment is less obvious. As noted above, the multiplier appearing in table 9 was 16.92. The Tribunal however started with a figure of 16.65. This appears to be because it was using not the Ogden Tables themselves but the practitioners' book to which it refers at para. 79 of the Reasons, Thompson's Facts and Figures. This publication contains tables which roll up the main Ogden tables with the supplementary "other contingencies" tables in section B. Accordingly the Tribunal was, though it may not have appreciated it, making some deduction for "other contingencies". If we were still concerned with a whole-career loss, we would have to consider whether this approach was adequate. Since we are not, and since we have had no submissions on the question, we prefer not to do so. We would only note two points. First, since the Tribunal was using a 2005 edition of Facts and Figures the tables in question will have been the old unimproved 4 th or 5 th edition versions, so that there must be a question-mark as to their reliability. Secondly, we doubt whether it is right to assess contingencies in a given case, at least in the employment field, only on the basis of discounting factors of the kind used in section B of the Ogden Tables. These are based on general population figures, and they will in any event contain no allowance for the possibility of the claimant leaving his employment voluntarily. An employment tribunal should normally be in a position to make a case-specific assessment for contingencies applicable to the claimant's own case.[117]We do not wish by these observations to discourage tribunals from using the Ogden Tables in cases where sophisticated calculations of long-term future loss are required. But if they are used they must be used with care and with a proper understanding of their limitations. ISSUE (3): MITIGATION Ground 4[118]It was the Claimant's case that he had taken all reasonable steps to find fresh employment in the financial services industry but that he had been unable to do so, which was why he had eventually decided to re-train as a teacher. He had applied unsuccessfully for some 111 jobs, and the Tribunal described the evidence which he produced demonstrating the extent of his search as "the most thorough, extensive and well documented any member of this Tribunal could recall having ever seen" (Reasons, para. 34). Having reviewed that evidence the Tribunal held, at para. 56, that the Appellants had not shown that he had failed to mitigate his loss. A major strand of the Appellants' case on failure to mitigate was that the Claimant had, at least in the later period of his search, damaged his prospects of obtaining employment by unnecessarily volunteering to potential employers that he had brought proceedings against Abbey for race discrimination. As to that case the Tribunal's finding, in the first part of para. 56, was as follows:
"So far as those matters are concerned, the Tribunal was overwhelmingly of the view that the suggestion that the Claimant had in some way acted over zealously in advancing the fact that he had been dismissed unfairly and of race discrimination and brought proceedings in order to put himself in a position to take compensation from the Abbey, was wholly fallacious. It imputes a dishonest motive to Mr Chagger. His evidence was clear that he volunteered the information about his dismissal and the circumstances for it and the Tribunal's findings to recruitment agents after the Tribunal decision had been made and the he only told employers directly when asked a direct question. It was evidence that the Tribunal accepted. No question was raised in the Tribunal's mind as to Mr. Chagger's integrity. The Tribunal were satisfied that Mr. Chagger was an entirely honest witness and rejected any suggestion that he would have behaved towards future employers in that way."
[119]By ground 4 of the Notice of Appeal the Appellants contend that that reasoning was bad in law because the Tribunal had asked itself not, as it should have, whether the Claimant's conduct was reasonable but only whether it was honest.[120]We do not accept that contention. The passage in question does indeed appear to focus on the question of honesty. But Ms. Heal submitted that that reflects the fact that Mr. Sutton's cross-examination and submissions had, in effect if not in so many words, accused the Claimant of deliberately volunteering the information about his claims against Abbey in order to scupper his chances of being recruited - which amounted to an accusation of dishonesty. We have looked at the notes of the relevant passages in Mr. Sutton's cross-examination and at his (and Ms. Heal's) written closing submissions on remedy. Although we can detect no explicit allegation of dishonesty, they do seem to us to support Ms. Heal's contention. We note in particular paras. 4.20-21 of Mr. Sutton's submissions, which make the point that the Claimant "fully appreciated" that "volunteering information about litigation with a previous employer is highly likely to impede his prospects" and then introduce a submission about the impact of his doing so by the phrase "whatever the Claimant's motives": it is not difficult to detect the innuendo. In those circumstances the Tribunal's focus on the issue of honesty is understandable.[121]That is not of course a complete answer. Even if the Tribunal had good reason to address the issue of honesty, it still had to consider the reasonableness of the Claimant's conduct: an employee may act honestly but unreasonably. But it is important to read para. 56 in the light of the two immediately preceding paragraphs, which recite Ms. Heal's submissions. In para. 54 the Tribunal sets out in full a passage from the headnote of Fyfe v Scientific Furnishings Ltd [1989] IRLR 331 (also at [1989] ICR 648), on which Ms. Heal had relied, stating "the basic rule of mitigation" as being that "… the plaintiff must take all reasonable steps to mitigate the loss to him consequent upon the defendant's wrong and he cannot recover damages for any such loss which he could thus have avoided but has failed to avoid through unreasonable action or inaction". In para. 55 Ms. Heal is recorded as having submitted "that the Claimant had acted reasonably". Her explanation for the Claimant "volunteering" the information in question is given, namely that the Claimant felt obliged to give truthful answers to employers who asked him in terms about the circumstances of his dismissal. In our view it is reasonably plain that the Tribunal intended to accept those submissions. In other words, it directed itself in accordance with the (very well-known) principles stated in Fyfe and accepted that it was reasonable for the Claimant to mention to prospective employers his litigation against Abbey in the circumstances and for the reasons that he did.[122]We do not therefore believe that the Tribunal regarded the fact that the Claimant had acted honestly as decisive of the mitigation issue. Grounds 6 and 7[123]As noted above, the Tribunal had heard evidence on the issue of compensation at the hearing on 3 rd January 2007. That included cross-examination of the Claimant by Ms. Noons, apparently for some three hours, on his mitigation efforts up to that date. In ground 6 of the Notice of Appeal the Appellants claim that at the resumed hearing in August the Chairman unfairly prevented Mr. Sutton from cross-examining the Claimant about any aspect of the mitigation issues relating to 2006. Although prima facie it might seem reasonable case management to prevent counsel returning to an issue which had already been fully covered, Mr Jeans submitted that that would be to overlook the extraordinary features of the case. There had been an interval of over seven months since the earlier cross-examination; the Claimant's case had been transformed in the meantime; the Appellants had had a change of representation; it had, he submitted, been understood at the abortive hearing in April that at the resumed hearing the Claimant could be cross-examined "afresh" – he referred us to a passage from Ms. Gollop's submissions on that occasion; and it was in any event impossible to draw a neat line between cross-examination on 2006 and cross-examination on 2007. It was true that the Claimant's fresh evidence purported to deal with events only from 2007 onwards but that was not in fact the case.[124]The starting-point is to establish what in fact the Chairman decided, and how he implemented his decision. Although the Appellants rely on the affidavit from Ms. Noons she was not in fact present when the Chairman gave his ruling, and the best guide is the notes made by the Appellants' solicitors. These show that, some way into his cross-examination, Mr. Sutton started to question the Claimant about the use which he made of out-placement consultants at the time of his dismissal, i.e. in 2006. Ms. Heal objected. She submitted that Ms. Noons had already cross-examined the Claimant on his mitigation efforts in 2006 and that it was neither a good use of time nor fair to the Claimant for him to be asked about that period again. A rather inconclusive exchange ensued about what had been said at the abortive hearing in April. The Tribunal then retired. When the hearing resumed the Chairman said that he had refreshed his memory from his notes of the January hearing; that there had been extensive cross-examination on that occasion; and that Mr. Sutton should cross-examine only "from January 2007". Mr. Sutton then said that he had himself had access to Ms. Noons' notes of the earlier hearing and that the points which he wanted to make were "new issues around [the Claimant's] attitude to job search"; that most of them depended on events in 2007 but there were "a handful of points prior to this"; and that he could make them in submissions anyway but it seemed fair to put them to the Claimant. The Chairman suggested that perhaps Mr. Sutton could agree something with Ms. Heal, but Mr. Sutton stuck to his guns and said that the points would not take long and that it was "now seven months since evidence". The Chairman is then noted as saying "OK [but] [15] not be a retrial", to which Mr. Sutton responded, as noted, "Agreed". Mr. Sutton then proceeded with his cross-examination – the first question relating to an e-mail of April 2006. There was no further attempt to inhibit his questioning.[125]We regard the Chairman's conduct as wholly unobjectionable. The general principle of preventing Mr. Sutton going over ground already covered was routine case management. It is true that the circumstances were unusual, and some Employment Judges might have preferred to adopt a "start again from scratch" approach; but the course taken was well within the Chairman's discretion. The passage from Ms. Gollop's submissions on which Mr. Jeans relied does not demonstrate that there had been any agreement that the events of 2006 could be re-opened. To the extent that there was overlap between new matters on which Mr. Sutton legitimately wished to cross-examine and the events of 2006, then no doubt the ruling needed to be applied flexibly; but that is just what the Chairman did.[126]We accordingly reject ground 6. Ground 7 is not strictly concerned with mitigation but it is convenient to mention it at this point since it too comes under the rubric of procedural unfairness. It concerns the problems said to have been caused by the late delivery of the Judgment and Reasons. We have dealt with this at para. 21 above. Unfortunate though the delay was, we do not believe that it gave rise to any substantial injustice. THE CROSS-APPEAL[127]The Claimant's cross-appeal concerns the uplift of 2% applied under s. 31 of the 2002 Act because of Abbey's failure to go through a statutory dismissal procedure (see paras. 9 and 35 above). S. 31 (3) reads as follows:
"If, in the case of proceedings to which this section applies, it appears to the employment tribunal that — (a) the claim to which the proceedings relate concerns a matter to which one of the statutory procedures applies, (b) the statutory procedure was not completed before the proceedings were begun, and (c) the non-completion of the statutory procedure was wholly or mainly attributable to failure by the employer to comply with a requirement of the procedure, it must, subject to subsection (4), increase any award which it makes to the employee by 10 per cent and may, if it considers it just and equitable in all the circumstances to do so, increase it by a further amount, but not so as to make a total increase of more than 50 per cent."
S-s. (4) provides (so far as material):
"The duty under subsection … (3) to make [an] … increase of 10 per cent does not apply if there are exceptional circumstances which would make [an] … increase of that percentage unjust or inequitable, in which case the tribunal may make no … increase or [an] … increase of such lesser percentage as it considers just and equitable in all the circumstances."
[128]The Tribunal initially thought that the 10%-50% uplift which it was required to impose by s. 31 (3) would apply only to the part of the award attributable to the finding of unfair dismissal. On that basis it notified the parties in its initial oral decision that it believed that an uplift of 35% was appropriate. But Ms. Heal submitted that any uplift necessarily applied to the entirety of the award. On reflection the Tribunal accepted that submission, and it believed that it ought on that basis to reconsider the question. Its eventual decision contained in the Judgment and Reasons was, as we have said, that it should apply s-s. (4) and limit the uplift to 2%, for reasons which we review below but which included the exceptional size of the overall award. The Claimant contends that it should not have done so, and that the uplift of 35% initially proposed should apply to the entire award. In view of the fact that the award of compensation is now to be reconsidered the Tribunal may need to reconsider its decision on this aspect also; but we should nevertheless decide whether its decision was open to it on the basis of the award which it in fact made.[129]It was common ground before us that any uplift would indeed apply to the whole award. The result is somewhat surprising, but we can see how it may appear to follow from the wording of s. 31 (3), and since the point was not argued we will not consider it further.[130]The Tribunal was only entitled to apply an uplift of less than 10% if there were exceptional circumstances which would make an uplift of that amount "unjust or inequitable". Its reasons for believing that this was the case are given at para. 66 of the Reasons as follows:
"Upon reconsideration the Tribunal, unaided because of the total lack of authority on the point, considered section 31(4) and decided that in circumstances such as these where compensation was to be awarded not only for unfair dismissal but in substantial sums for race discrimination as well, which we apprehended would exceed £1 million, it was appropriate to say that those were exceptional circumstances permitting the Tribunal either to make no award or uplift by some lesser amount than the normal minimum of 10%. The effect of such an award is, punitive as regards a Respondent and may give the Claimant a substantial benefit beyond compensation for actual loss."
[131]In so far as the Tribunal's reasoning was based on the consideration that an uplift of 10% or more would be "punitive" rather than compensatory, this seems to us misconceived. Uplifts under s. 31 (3) are of their nature punitive (though we note that in its recent decision in Redcar and Cleveland Borough Council v. Bainbridge [2008] IRLR 776 the Court of Appeal preferred to characterise them, at least at the lower percentages, as providing "incentives" to an employer to make use of the statutory procedures (see para. 311 at p. 814)). The real question is whether the punishment in the present case is disproportionate.[132]The Tribunal appears to have had in mind two exceptional circumstances as rendering an uplift of 10% or more unjust or inequitable – first, simply the size of the award; and secondly, the fact that the lion's share of that award results not from the claim for unfair dismissal but from the claim for race discrimination. As regards the latter point, we would not agree that the mere fact that the Claimant's dismissal was held to be not simply unfair but racially discriminatory should be decisive: had the statutory procedure been gone through, the Claimant could have claimed that his proposed dismissal was on racial grounds. But it is true that there was nothing in the circumstances faced by Abbey at the time when it failed to implement the procedure which might have led it to suppose that a claim of race discrimination was on the cards. The consequences of a failure to employ the procedure, had it considered them, would have appeared to be an uplift on an unfair dismissal award which, at most, could not have exceeded five figures. It seems to us that that was a legitimate consideration for the Tribunal to take into account. Likewise, we can see no reason why the fact that an award is of exceptional size should not itself be a relevant consideration. On the Claimant's case the Tribunal was obliged to "fine" Abbey a minimum of almost £300,000 – and in fact on the case asserted before us about £1m. - for a purely procedural failure. The Tribunal was fully entitled to regard that as wholly disproportionate to the offence, even if it was right to regard the failure as "substantial" (as it had held at para. 62 of the Reasons). Our conclusion on this point is consistent with the views expressed, albeit obiter , by this Tribunal in Home Office v. Khan and King UKEAT/0257/07, at para. 41.[133]Ms. Heal submitted that any such reasoning would be inconsistent with the decision of this Tribunal in Aptuit (Edinburgh) Ltd. v. Kennedy UKEAT/0057/06. In that case a decision to apply an uplift of 40% was overturned because of the width of the matters which the employment tribunal had taken into account in arriving at that figure. Lady Smith said, at para. 47:
"… [I]t is plain, in our view, that the circumstances in question are those surrounding the failure to complete the statutory procedure. We agree … that the Tribunal took irrelevant matters into account here in respect that they were, apparently, influenced in arriving at 40% by the fact the failures (i.e. not just the failure to complete the statutory procedure but the other failures identified by them) were "serious", that the respondents are a large organisation, that there appeared to have been "no consultation whatsoever" and that they had treated this "long standing" employee in a "shoddy" manner. These matters should not have influenced the decision on uplift at all since they did not relate to any failure to complete the statutory procedure."
Ms. Heal submitted that the factors on which the Tribunal relied in this case could not be described as "circumstances surrounding the failure to complete the statutory procedure". That may as a matter of words be so, but it is necessary to bear in mind the nature of the complaint in Aptuit : as is apparent from the passage quoted, the Tribunal had explicitly taken into account other aspects of the employer's conduct of which it disapproved. The Appeal Tribunal was not considering circumstances like those which arise in the present case and its language cannot be read as intended to apply to such circumstances. We see no reason why the factors relied on by the Tribunal here cannot fall within the wide terms of s-s. (4).[134]It was not suggested to us that if we held that the Tribunal was entitled to proceed under s-s. (4) the figure of 2% was open to challenge.[135]Ms. Heal submitted that if we endorsed the Tribunal's approach we would in practice be saying that the size of the award is a relevant consideration for the purpose also of judging the amount of an "ordinary" uplift under s. 31 (3). That would be contrary to the evident scheme of these provisions; it would also mean that whenever an award of compensation was altered on appeal it would be necessary for the amount of any uplift to be reconsidered by the Tribunal. We do not accept this. We agree that it seems to follow from the way that s. 31 (3) is formulated that Parliament expected that the uplift would take the form of a percentage of the amount awarded; and we accept that in routine cases the Tribunal will arrive at the percentage which it considers appropriate without considering the size of the award to which it will be applied. But we do not believe that that excludes the possibility of it having regard to the size of the overall award in a particular case to the extent that it considers it just and equitable to do so. If it does, it should say so: as observed in Khan and King (above) the factors influencing the choice of uplift should be specified. That would enable the Appeal Tribunal to decide, in the scenario raised by Ms. Heal, whether a remission was necessary. CONCLUSION ON THE REMEDY ISSUES[136]We allow the appeal on grounds 1, 3 and 5, though it is grounds 2 and 5 that principally undermine the Tribunal's reasoning. We dismiss the cross-appeal. The case should be remitted to (if possible) the same Tribunal to decide:(a) what were the chances that the Claimant would have been made redundant on the occasion that he was even if the Appellants had not discriminated against him in the way that the Tribunal held them to have done;(b) what compensation fairly reflects the loss of the Claimant's employment with Abbey (and associated pension loss) after 18 April 2006, dealing fully with the factors relied on by the Appellants as likely to have curtailed that employment; and(c) what level of uplift is appropriate to the final award of compensation made. As regards (a), the Tribunal should express its finding as a percentage discount, which will then (unless it is nil) be applied to the loss assessed under (b). As regards (b), no doubt the Tribunal will, in the usual way, assess the loss in terms of a number of years' loss of earnings (that is, if it is more than one). It may or may not, depending primarily on the length of the period of loss that it is considering, find the Ogden Tables useful as a guide to the appropriate discounts for mortality and accelerated receipt; but it should bear in mind the cautions expressed at para. 114 above. Its findings on mitigation remain intact. In principle the issues should be decided on the basis of the evidence already heard, provided that the Tribunal believes that its notes (supplemented by any that the parties may supply) are adequate to enable it to do justice between the parties; but of course in the circumstances there will need to be an opportunity for very full submissions. It will be necessary to fix a case management discussion to consider those and other matters. Note 1 It proved impossible for the parties fully to agree a note of the relevant part of the evidence, and we were where necessary provided with each side’s version. There was no sufficiently material difference to require the obtaining of the Chairman’s notes. Note 2 This was drafted by Ms. Heal and accepted by Ms. Noons as fairly reflecting the issues before the Tribunal. It had been agreed at a previous case management discussion that such a list of issues would be prepared. Note 3 The formulation also shows that the Claimant’s advisers understood that a different test applied depending which way the case was put. We do not in fact believe that that is correct – see paras. 32-35 below – but it is irrelevant to the present point. Note 4 There could in theory be cases where a difference in skin colour was not associated with a difference in race or ethnic origin – for example where it was caused by a medical condition or, perhaps, in cultures where significance is attached to fine distinctions of skin colour; but such cases will in practice be vanishingly rare. Note 5 The word “nationality” was added in the 1976 Act in order to reverse the effect of the decision of the House of Lords in Ealing London Borough Council v Race Relations Board [1972] AC 342 . Note 6 We did not hear argument about the effect of the exclusion in s. 54A of any reference to nationality. Note 7 The only anomaly is sub-para. (h), which refers to the approach made to the Claimant in November 2005 to see if he was interested in voluntary redundancy and points out that Ms. Mastronikola was not so approached. As a matter of strict analysis it is not clear how this belongs in these particulars, since that approach was not part of the selection process. No doubt, however, it was included as evidence supporting the allegation of discriminatory decision-making made in the other sub-paragraphs. Note 8 Ms. Heal referred us to para. 14 of the judgment of Buxton LJ in Gover v. Propertycare Ltd. [2006] ICR 1073 (at p. 1079), in which he described “all rules on this aspect of compensation for unfair dismissal” as springing from s. 123 (1); but that does not address the particular point under consideration here. Note 9 That is subject to one qualification. In Livingstone v. Rawyards (above), immediately following the passage cited, Lord Blackburn noted that a different approach would be justified in cases where the damage complained of is done maliciously and/or knowingly. That distinction is picked up in the context of discrimination in Essa v. Laing (above), where, in considering the (different) question of the test of remoteness, the Court of Appeal tentatively recognised a distinction between cases of overt discriminatory abuse such as that before them and cases where the discrimination “takes other forms” ( per Pill LJ at para. 39 (p. 760)). Ms. Heal, rightly, did not argue that the present case was of that kind. Note 10 NB that the issue is different from that considered in Essa v. Laing, which was concerned with the different “control mechanism” of foreseeability. But it is noteworthy that the Court of Appeal in that case recognised that the question was essentially one of determining what should be the extent of liability having regard to the policy of the Act - see, e.g., per Clarke LJ at para. 48 (pp. 761-2) – and also that, as noted above (see n. 9) the Court contemplated that different approaches might be appropriate for different forms of discrimination. Note 11 In this connection we should also note that Mr. Jeans in his skeleton argument referred to an exchange between the Chairman and Mr. Sutton immediately following the Tribunal’s oral announcement of its decision. Mr. Sutton asked for an indication of when the Tribunal had found that the Claimant would have left Abbey. The Chairman – consistently with the reasoning that appears in the eventual Reasons – said that that was not relevant; but he nevertheless agreed to retire with the members, and having done so he announced that it was their view that the chances of the Claimant leaving voluntarily before age 50 were 20% and of his doing so after age 50 were 5%. There is no such finding in the Reasons, and even if accurately reported the finding has no formal status. Note 12 This was published on 3rd May 2007 and was accordingly the version current at the date of the hearing. Counsel in fact supplied us with the 5th edition; but we have been able to consult the 6th edition online. Note 13 Table 27, which gives discount factors for accelerated receipt only, may be of value if the award is for several years’ loss; but, given the inevitable uncertainties in the process as a whole, a sophisticated calculation involving the separate calculation of a discount for acceleration will often be inappropriate. Note 14 Morison J.’s reference in Cannock ( loc. cit. ) to 4.5% has been superseded by later authority. Note 15 The “but” is our interpolation, but it is clearly to be understood.