Kerry Ingredients (UK) Ltd v Little (Unfair Dismissal : Compensation) [2015] UKEAT 0356_13_1602
EAT
Kerry Ingredients (UK) Ltd v Little (Unfair Dismissal : Compensation)
[2015] UKEAT 0356_13_1602 · 2015-01-16
[34]“Having regard to those authorities, I am unable to accept Mr Blake's first three submissions. The employment tribunal's task, when deciding what compensation is just and equitable for future loss of earnings, will almost inevitably involve a consideration of uncertainties. There may be cases in which evidence to the contrary is so sparse that a tribunal should approach the question on the basis that loss of earnings in the employment would have continued indefinitely but, where there is evidence that it may not have been so, that evidence must be taken into account. ” 22. She further relied on the well-known guidance set out at paragraph 54 of Software 2000 Ltd v Andrews & Ors [2007] ICR 825 , as to which see below. 23. As to the decision whether the Judgment was Meek -compliant, it contained sufficient reasons, allowing that Rule 30(6) of the ET Rules provided a guide and not a straitjacket ( Balfour Beatty Power Networks Ltd v Wilcox [2007] IRLR 63 at paragraph 25 per Buxton LJ). What was required by the rule could be reasonably discerned from the ET’s reasoning. 24. Turning to the specific findings. Starting with the finding that the multiplicand should be set at 70% of the Claimant’s salary, the Respondent having conceded that there was a PCP which placed the Claimant at a substantial disadvantage there was an obligation upon it to consider different working arrangements other than full-time shifts and/or to make reasonable adjustments. It was relevant to note in this respect that the Respondent had been able to introduce an additional part-time engineering role (see paragraph7.24 of the ET’s Judgment). That would have relevance to the assessment of how much longer and on what basis the Claimant ought to have been engaged by the Respondent. 25. The ET had to reach a decision on remedy and to do the best with the facts before it. It correctly directed itself to the two factors necessary. First, it had to take a view as to what would have happened but for the unfair dismissal; and second, it had to calculate the actual loss for the period considered appropriate. As for the Respondent’s case that the ET failed to address the point that the Claimant only spent 20% of his time on productive work, that was the Respondent’s evidence not a finding of the ET. The Claimant would argue that the ET’s Reasons suggest it preferred the Claimant’s evidence to that of Mr Luke, although Miss Davies conceded that there was not an obviously clear finding on this point. 26. On the period of loss point (the multiplier rather than the multiplicand) the Respondent failed to put forward any evidential basis for its assertion that a fair dismissal could have taken place within 20 weeks. The ET had recorded that the Claimant had made clear on 25 April that he was not ready to return to work full-time or to work shifts, but that was different to an admission that he would never be able to work full-time or work shifts. The ET was bound to award what was just and equitable. That gave it a broad discretion. The case-law allowed that there may be a degree of speculation. The ET had found there was no basis for the Respondent to conclude that Occupational Health had advised it was not possible for the Claimant to return to his previous role working nights. It had criticised the Respondent for the lack of evidence to support its contention that it could not be expected to wait any longer. The Respondent had not even considered the Claimant to have been disabled and so had no regard to its obligations to him as a disabled person and thus had no evidential basis for saying what would have happened if it had complied with its duties under the Equality Act . The onus was on the Respondent to show dismissal would have occurred in any event. The ET’s reduction by only 20% was entirely within its discretion. 27. If, contrary to those submissions, the EAT was minded to allow the appeal, it should remit this matter to the same ET. This was an Employment Judge sitting with members; all three would be aware of their obligations to approach any remitted hearing without being blinded by the previous findings on remedy. The factors were intertwined with the liability findings and a fresh ET would have to hear a great deal of evidence because it had not determined liability. Although it was fair to say that the same ET might also wish to hear further evidence, it would necessarily be less than if an entirely new ET was charged with hearing this matter on remission. The Appellant in Reply 28. On the case of Thornett v Scope that was a case involving the question whether the evidence was so sparse that there should have been a finding that loss would have continued indefinitely. Where that was not the case, however, Pill LJ had, at paragraph 39, warned:[39]“It is important, however, that, when a conclusion is reached as to what is likely to have happened had the employment been allowed to continue, the reasons for that conclusion and the factors relied on are sufficiently stated. …”29. In relation to reasonable adjustments the ET had not engaged with the detailed possibilities suggested on the Claimant’s behalf. The finding was negative rather than positive on that issue and did not assist in bridging the gaps in the ET’s reasoning on remedy. On the question of disposal, if it was not reasonably practicable to remit to the same ET, justice could still be done as between the parties: the new ET would be approaching the questions of remedy on the basis of the existing findings on liability. There was no reason why it should not be done in any event, and that would allow for greater confidence in the remission. The Legal Principles30. There is no disagreement between the parties as to the relevant legal principles. Mr Duggan QC does not dissent from the applicability of the guidance set out in the case-law relied on by Miss Davies. The approach to the assessment of compensation in unfair dismissal cases is set down in the well-known passage from the Judgment of Elias J (as he then was) in Software 2000 Ltd v Andrews [2007] ICR 825 : “(1) In assessing compensation the task of the tribunal is to assess the loss flowing from the dismissal, using its common sense, experience and sense of justice. In the normal case that requires it to assess for how long the employee would have been employed but for the dismissal. (2) If the employer seeks to contend that the employee would or might have ceased to be employed in any event had fair procedures been followed, or alternatively would not have continued in employment indefinitely, it is for him to adduce any relevant evidence on which he wishes to rely. However, the tribunal must have regard to all the evidence when making that assessment, including any evidence from the employee himself. (He might, for example, have given evidence that he had intended to retire in the near future.) (3) However, there will be circumstances where the nature of the evidence which the employer wishes to adduce, or on which he seeks to rely, is so unreliable that the tribunal may take the view that the whole exercise of seeking to reconstruct what might have been is so riddled with uncertainty that no sensible prediction based on that evidence can properly be made. (4) Whether that is the position is a matter of impression and judgment for the tribunal. But in reaching that decision the tribunal must direct itself properly. It must recognise that it should have regard to any material and reliable evidence which might assist it in fixing just compensation, even if there are limits to the extent to which it can confidently predict what might have been; and it must appreciate that a degree of uncertainty is an inevitable feature of the exercise. The mere fact that an element of speculation is involved is not a reason for refusing to have regard to the evidence. (5) An appellate court must be wary about interfering with the tribunal's assessment that the exercise is too speculative. However, it must interfere if the tribunal has not directed itself properly and has taken too narrow a view of its role. (6) The section 98A(2) and Polkey exercises run in parallel and will often involve consideration of the same evidence, but they must not be conflated. It follows that even if a tribunal considers that some of the evidence or potential evidence to be too speculative to form any sensible view as to whether dismissal would have occurred on the balance of probabilities, it must nevertheless take into account any evidence on which it considers it can properly rely and from which it could in principle conclude that the employment may have come to an end when it did, or alternatively would not have continued indefinitely. …”31. The assessment of loss is plainly a matter for the ET using its common sense, experience and sense of justice. In many cases the assessment will inevitably involve a degree of speculation. That said, the ET is still obliged to have regard to all the evidence before it. The impression it forms, and the judgment it reaches, must have regard to the material before it and to the findings of fact that it makes upon that material. Where the ET considers that the employment would have continued, it must provide a sufficient statement of its conclusions on the evidence to enable the parties to understand the reasons for its assessment of the loss. It will be rare for the EAT to interfere in questions of the award of compensation, but it will do so - and is bound to do so - if an ET has erred in its approach or has failed to provide adequate (that is Meek -compliant) reasons for its conclusions. Discussion and Conclusions32. I start by reminding myself the ET is entitled to expect that its Judgment is taken as a whole and viewed overall. Doing so, it is here, it seems to me, tolerably clear that the ET did not accept that the Claimant was likely to return to full-time shift work, although the Claimant’s evidence before the ET had allowed for the possibility that he might have been able to return to full-time work within 16 weeks.33. Having reached that conclusion, it then had to make an assessment of what was likely to have happened had the Respondent acted fairly and in compliance with its obligations to the Claimant as a disabled person. So, if the Claimant would only have been able to work reduced hours, what would those hours have been and on what basis would he be working? On the Respondent’s case he was only working productively for 20% of the time and it was having to engage an agency worker to cover his other duties. The Claimant was suggesting - at least before the ET - that he would at some point have been able to return to full-time working. The ET concluded that the Claimant would have been able to increase his hours to a 70% basis. That was the ET’s somewhat speculative assessment of what was likely to have happened in the future given that the Claimant had already been able to increase his hours from 8 to 18, a 55% increase over the initial period of his phased return. Engaging in speculation - founded in what had happened in the past - was not wrong but the ET still had to have regard to all the evidence before it, which included the Respondent’s evidence that the Claimant was only working productively for 20% of the time. It may be that the ET rejected the Respondent’s evidence on that point, but that is not made clear. Given that was part of the evidential material before the ET, the parties needed to be able to understand why it felt the Claimant would then have been able to return to a 70% level of working so quickly.34. I am not satisfied that the reasons given enable the parties (or this court) to derive that understanding. Moreover, the finding that the Claimant would only have been able to return to a 70% level of working feeds into the Polkey finding and also the question of loss to the date of hearing and future loss thereafter. If he could not return to full-time shift working - as the ET found - then what was the ET’s assessment of how that might impact upon his future employment prospects with the Respondent given that it operated a 24/7 shift working basis?35. The answer to that question might be that the ET had taken into account the fact that the Claimant was disabled and any view as to the likelihood of his continued employment would need to take on board the Respondent’s obligations to make reasonable adjustments or address the indirect discrimination that he otherwise faced from the PCP of full-time shift working. I can certainly see that those matters would be relevant but, equally, I cannot see that the ET’s reasoning was actually based on such an assessment. The ET would have needed to make findings as to the basis of the Claimant’s future employment with the Respondent. Accepting that the Respondent was not obliged to create a job, which if any of the reasonable adjustments suggested by the Claimant before the ET did it conclude would have had to have been introduced? How would that have impacted on the Claimant’s employment?36. It is possible that the ET did take those matters into account in reaching the finding that he would be working 70% of the time and, if so, I can allow that might indeed be a legitimate conclusion to reach. It would, however, have needed to spell out those findings and that simply cannot be discerned from the reasons that have been given.37. Similarly a 20% reduction for the possibility of a fair dismissal might be an entirely permissible finding, given the positive obligations upon the Respondent under the Equality Act . On the ET’s Reasons, however, it cannot be said that it did base its conclusion on findings relevant to the Respondent’s obligations under the 2010 Act ; those reading the Judgment are simply left with the statement of the conclusion apparently absent any evidential basis.38. The same point also goes to the question of loss from the effective date of termination to the date of the hearing and for the future, albeit limited to 39 weeks. The starting point should have been for the ET to assess what it was that the Claimant would be doing, the hours he could work and - given the constraint that he could not work full-time (on the ET’s own finding) - in what capacity he would be working. In making that assessment the ET would need to make findings (and explain those findings) as to any obligations upon the Respondent under the Equality Act (the Respondent accepting that any assessment of how it would have acted fairly must imply that it would act lawfully and in a non-discriminatory fashion). There would then be some basis for the ET’s assessment of the amount of the Claimant’s loss, which might well justify a finding that he would have been entitled to something like 70% of his former pay but equally might well lead to the conclusion that he would be entitled to something less than that. The ET would further then be in a position to assess whether the Claimant would indeed have been employed from the date of termination to the date of the hearing and thereafter, thus to assess the period of loss and the possible chance that he would in fact have been fairly dismissed (the Polkey finding) in any event. 39. I am not saying that the conclusions reached are necessarily perverse but I am saying that I cannot be sure from the ET’s reasoning - either as provided in the original Reasons or as added to under the Burns/Barke procedure - that the ET adopted the correct, structured approach to its assessment. On that basis I conclude that the ET’s Judgment on remedy on pecuniary losses cannot stand and the appeal must be allowed. Disposal 40. During the course of argument I heard from both parties on the question of disposal should I be minded to allow the appeal. Both agreed the matter would need to be remitted but disagreed as to whether it should be the same ET: the Claimant suggesting it should; the Respondent suggesting it needed to go to a fresh ET. 41. I have considered the factors set out in the guideline case of Sinclair Roche Temperley v Heard and Fellows [2004] IRLR 763 . I am not entirely convinced that a different ET, bound as it would be by the existing ET’s findings of fact on liability, could not adjudicate on questions of remedy without unduly adding to time and cost. I do, however, allow that I am entitled to trust to the professionalism of the Employment Judge and lay members. There is no question here of bias or partiality or of a complete mishandling of the case below; indeed, both parties accept the ET’s findings and reasoning on liability in its entirety. I can also see the advantage of remitting this matter to the same ET, given its familiarity with the case and the fact it made the earlier findings of fact on liability. In those circumstances, to the extent it remains practicable, I remit this case to the same ET for re-hearing of the questions of remedy in terms of the pecuniary losses, and it should consider those matters afresh.