“12. …represents in simple terms that the appellant itself makes provision (‘runs a scheme’) for pay during long-term disability or illness, and spells out what the provision is. …”
“13. In my judgment, there is no foundation for incorporating the policy terms either directly or by reference into this contract of employment….” 32. Mr Duggan contended that the ET wrongly referred to and relied upon the Insurance Policy in construing the Booklet which set out the agreement between the Claimant and the Respondent. It was pointed out that in the Liability Judgment at paragraphs 30 and 36 the ET held the Insurance Policy to be irrelevant to the Respondent’s obligations to the Claimant. 33. Counsel for the Respondent submitted that properly directing themselves the ET should have concluded that entitlement to disability benefit ceased when the Claimant would be able to engage in suitable full-time employment. The ET found this would be the case four years from the date of the Remedy Hearing. Accordingly it was submitted that there was no loss based on such benefits and that no loss should be awarded in respect of the period after that date. 34. Mr Isaacs for the Claimant contended that the answer to the submission made on behalf of the Respondent that the phrase ‘return to work’ in Section G of the Booklet is the same as able to work, is clear. They are different. The construction advanced by Mr Duggan ignores the word ‘return’. The words considered in Jowitt relied upon by Mr Duggan were ‘unable to work’ not ‘return to work’. Mr Isaacs described the submission made by Mr Duggan as ‘linguistic fancy footwork’. 35. Counsel for the Claimant pointed out that the provisions in Section G of the Booklet set out a two stage process. The first answers the question of what triggers the entitlement: it is absence from and inability to perform the work the employee is engaged to perform. In the case of the Claimant this is the work of International Security Co-ordinator. The parties were agreed on the trigger for entitlement to disability benefit. The issue between them is at the second stage: when would that entitlement cease. 36. Mr Isaacs pointed out that the two parts of the disability benefits provision was another distinction between this case and that of Jowitt . As shown in paragraph 2 of the judgment in that case the clause in Jowitt provided a unitary test. Inability to work was the test for both the trigger for and duration of the entitlement. Clause 5.3 of the handbook in Jowitt provided that disability benefit was triggered: “…after 26 weeks’ continuous absence through illness and disability, for as long as they are unable to work up to the date of retirement…” 37. Counsel for the Claimant submitted that the ET did not err in referring to the Insurance Policy to construe the provision in Section G of the Booklet specifying for how long entitlement to disability benefit would continue. In this case the parties were advancing different constructions of Section G insofar as it provided for the duration of entitlement to benefit. That provision was ambiguous. In these circumstances it was necessary to construe the clause in its commercial context. In this case the ET did not err in having regard to the terms of the Insurance Policy which the then employer had in place to provide the disability benefits. There is no conflict between the decision in the Liability Judgment that the Respondent was liable to pay disability benefit and the existence of an Insurance Policy. Taking into account the Insurance Policy in construing the meaning of Section G of the Booklet did not detract from the Respondent’s obligation to pay LTDB to employees. 38. Mr Isaacs referred to the judgment of the Court of Appeal in Briscoe v Lubrizol Ltd[2002] IRLR 607 in which Lord Justice Potter stated at paragraph 18 that it was the clear contractual intention of the parties to confer on the claimant in that case the benefits provided in the ‘Lubrizol continuous disability scheme’. It was held that the handbook therefore contained the plainest possible reference to the scheme entered into between Lubrizol Ltd and the insurers. Its terms ‘made the position quite clear’. Counsel for the Claimant submitted that the words in Section G could not be said to be quite clear. Therefore they had to be construed in their factual context. Lord Justice Sedley made it clear in paragraph 13 of Jowitt that the decision in Briscoe was consistent with the reasoning that where a contract refers to an insurance scheme it is incorporated. However where it is not it is not. Lord Justice Sedley held that where the meaning of a contractual provision is uncertain it is permissible to refer to other sources for details. Mr Isaacs submitted that this was such a case. It was permissible and not an error of law for the ET to consider the context and have regard to the Insurance Policy entered into between the then employer and L&G who were to fund the benefits the employer was liable to pay to the employee. 39. Mr Isaacs submitted that the ET did not err in taking into account in paragraph 20 the definition of ‘Disabled Members’ in the Insurance Policy in concluding that it was the Claimant’s job immediately before he went absent on sick leave that was being referred to in the phrase ‘return to work’ in the Booklet. 40. Mr Isaacs referred to paragraph 23 of the Remedy Judgment. The ET quoted from a letter from the Respondent of24 July 2014 in which they stated: ‘Unfortunately there isn’t anything of a non-security nature available at Heathrow’. The ET observed that it had never been suggested that there was the possibility of future work at the Respondent company at a more junior level which the Claimant could have performed entitling him only to partial benefits. Therefore even if ‘return to work’ meant return to any work for the employer there was none available. 41. Mr Isaacs submitted that the ET did not err in holding at paragraph 25 that the only circumstances under which the Claimant would cease to be entitled to the annual pay of two thirds of his annual base salary less state invalidity pension would be his return to his original job, death or his retirement. 42. Mr Isaacs rightly drew attention to the fact that the ET did not grapple with the issue of mitigation. Counsel submitted that as in Simon Earl v Cantor Fitzgerald International[2000] EWHC 555 the Claimant was under no duty to mitigate his loss. Mr Justice Moore-Bick (as he then was) held at paragraph 44 that the scheme in that case did not impose any duty on an incapacitated member to seek alternative employment; he simply became entitled to receive benefits for so long as he remained unable to resume his normal job. 43. Counsel submitted that even if the Claimant were under a duty to mitigate his loss, consideration would have to be given to what work it was reasonable for him to undertake. This would depend on the Claimant’s medical condition and the availability of work in the market place. It was said that the ET did not consider these issues. 44. Whilst not a ground of appeal, quite properly Mr Duggan made submissions on the issue of mitigation. It was clear that whilst the individual is unable to work he is under no duty to mitigate his loss. In this case if the Claimant were able to do some suitable full-time work, his entitlement to compensation for loss of LTDB would cease and the question of mitigation does not arise. There may be a point in time when he could do some work and the question of mitigation would arise. Discussion and conclusion on the Appeal of the Respondent 45. By reason of the application of TUPE the contractual terms between the Claimant and AA applied to his employment with the Respondent. The relevant terms of the contract regarding eligibility for and duration of his entitlement to disability benefits were contained in the Statement of Terms and Conditions of Employment of15 April 1992 (‘the Statement’) and other relevant documents. The Statement explained that the Company had established a Pension and Death and Disability Benefits Plan (‘the Plan’) which when integrated with public disability benefits, will pay an annual payment of two thirds of salary at the time of disability. The Statement provided: “Information on this Benefit plan, including eligibility requirements, benefit levels and administrative procedures are to be found in the Company’s booklet, Employee Retirement, Death and Disability Plans.” (‘the Booklet’)”
“(G) LONG TERM DISABILITY BENEFITS Should you be absent from, and unable to work due to sickness or injury for a continuous period of twenty six weeks or more, you will receive a Disability Income of 2/3rds of your Base Annual Salary less the State Invalidity Pension. The disability income will commence twenty six weeks after the start of your absence. It will continue until the earlier date of your return to work, death or retirement. The disability income is treated as normal pay and is subject to the necessary PAYE deductions. Any long-term benefits that you receive from the State will be payable directly to you and not via the Company. All Employees During the period that you receive disability income you will remain a member of the UK Life Assurance Plan and will be covered for the appropriate death-in-service benefits.”
“… ‘unable to work’ in the present context cannot mean incapacitated from any and every purposeful activity. In my judgment, an employee is ‘unable to work’ for the purposes of clause 5.3 if there is no continuous remunerative full-time work which he can realistically be expected to do…” 51. In my judgment, as was submitted by Mr Isaacs, the argument advanced by Mr Duggan requires linguistic sophistry. The words giving the Claimant continuing entitlement to LTDB are different from those considered in Jowitt . ‘Return to work’ is not the same as ‘unable to work’. Return means going back. Unable does not have that meaning. ‘Going back’ means going back to work for the original employer for whom the Claimant remained an employee. 52. Without the assistance of resort to the Insurance Policy in my judgment the words ‘return to work’ in the Booklet clearly mean return to work for the Claimant’s then employer, the Respondent. 53. The significance of the reliance by the ET on the Insurance Policy is in deciding whether ‘return to work’ means return to the work performed when going absent due to illness or return to the Respondent to carry out any suitable full-time remunerative work. 54. The Court of Appeal in Jowitt decided there was no foundation for incorporating the terms of the insurance policy into that contract in that case. However Lord Justice Sedley continued at paragraph 13: “…The decision of this court in Briscoe v Lubrizol[2002] IRLR 607 , which reached a different result on the facts, seems to me wholly consonant in its principles with this reasoning. In some cases, no doubt, a clause like this would be uncertain without reference to some other source for details, but here sufficient is spelled out for the parties to be able to quantify the amount payable….” 55. The Booklet containing the long term disability benefits at issue in this appeal states: “The Long Term Disability benefits are provided by an Insurance Policy.”
“This definition also added weight to the conclusion that it was the Claimant’s job immediately before he went absent on sick leave that was being referred to in the term “return to work”.” 57. The relevant Insurance Policy provided: “Part 3 Disablement …an Insured Member will be entitled to benefit under the Policy but only so long as he is a Disabled Member (as defined in Appendix A to this Policy).”
“(i) …is incapacitated by an illness or injury which prevents him from performing his own occupation, and… … For the purposes of (i) above ‘own occupation’ means the essential duties required of the Insured Member in his occupation immediately prior to the commencement of the Deferred Period, and … .”
“payment of Member’s Benefit will continue so long as the Insured Member is a Disabled Member but not in any event after [retirement date] or, if earlier, the death of the Insured Member.” 58. In my judgment the ET did not err in relying on an Insurance Policy which had been referred to in the Booklet to interpret an ambiguous provision: the type of work return to which would bring an end to entitlement to disability benefit. The terms of the Insurance Policy provided that subject to the other terminating events, LTDB continues so long as the Insured Member is a Disabled Member. A Disabled Member is defined as incapacitated from carrying out the duties of the job he was carrying out when he became incapacitated. The ET did not err in so holding. 59. The appeal of the Respondent is dismissed. The Appeal by the Claimant 60. By his grounds of appeal the Claimant contended that the ET erred in failing to award any additional amount over and above£14,000 for injury to feelings. Mr Isaacs contended that the ET failed to give adequate reasons for not awarding an additional amount for aggravated damages in the circumstances of this case. 61. Counsel for the Claimant referred to the agreement between the parties recorded by the ET in paragraph 54 that the sum of£14,000 was to be awarded for injury to feelings. The ET considered the application for aggravated damages. However counsel submitted that they erred in failing to make a separate award for aggravated damages or include an additional sum in the amount ordered for injury to feelings in recognition of the reprehensible conduct of the Respondent in this case and its effect on the Claimant. 62. The factual basis for the application for aggravated damages was different from that for the claim for injury to feelings. It was the covert surveillance of the Claimant and his family. In his skeleton argument for the ET Remedy Hearing, Mr Isaacs referred to the scope of the surveillance being intimidatory, inappropriate and causing significant upset to the Claimant and his family. Trawling through the Claimant’s wife’s social media pages was mentioned. This evidence was not referred to in the Remedy Judgment. Further it was submitted that the ET erred in accepting at paragraph 59 that the surveillance arose as a result of the Claimant’s refusal to attend an interview with Dr Banks. Mr Isaacs referred to the evidence before the ET that the Respondent had instructed surveillance to be undertaken on24 May 2016 which was before any refusal to attend an appointment with Dr Banks. 63. Mr Duggan rightly recognised that the ET did not make a separate award or attribute part of the award for injury to feelings to aggravated damages. Whilst the passage in the Remedy Judgment dealing with aggravated damages was relatively brief, counsel submitted that the ET were entitled not to place such weight on the surveillance as to merit increasing the award for injury to feelings. 64. The parties had reached agreement on a sum to be awarded for injury to feelings of£14,000 . This agreement did not include any award for aggravated damages. 65. In my judgment the challenge to the decision of the ET not to include an additional sum in the award for injury to feelings or to make an award for aggravated damages is well founded. 66. Mr Isaacs is right to challenge the decision as not Meek compliant ( Meek v Birmingham City Council[1987] IRLR 250 ). The ET failed to make material findings of fact relating to the surveillance. The acceptance of the ET in paragraph 59 that the surveillance arose as a result of the Claimant’s refusal to attend an interview with Dr Banks was inconsistent with the evidence before them. The evidence in the Supplementary Bundle for the EAT which was before the ET, showed that the Respondent instructed investigators to conduct surveillance before a date for an interview with the Claimant had been arranged. 67. The ET referred to the judgment of the EAT in Commissioner of Police of the Metropolis v ShawUKEAT/0125/11 . The judgment of Mr Justice Underhill P (as he then was) sets out a thorough review of the law on aggravated damages in discrimination cases in the ET. At paragraph 22 the Judge referred to what was described as a helpful description by the Law Commission in their report No 247 on Aggravated, Exemplary and Restitutionary Damages. Particular reference was made to a section on aggravated damages in which the manner in which the wrong was committed was to be considered. What may justify an award of aggravated damages is that: “…the distress caused by an act of discrimination may be made worse by it being done in an exceptionally upsetting way. In this context the phrase ‘high-handed, malicious, insulting or oppressive’ is often referred to…”
“…Ultimately the most important thing is that they [the ET] identify the main considerations which have led them to make the overall award for injury to feelings, specifying the aggravating or mitigating features….” 68. In this case the parties had reached agreement on the sum to be awarded for injury to feelings. As the claim for aggravated damages was to be considered separately it is clear that they did not agree that such an award should be made or, if so what facts justified such an award and its amount. In my judgment the ET failed to make the necessary and accurate findings of fact relevant to a decision whether to make an award for aggravated damages. In paragraph 58 the ET held that the sum of£14,000 was sufficient to compensate the Claimant for injury to feelings including that aspect caused by surveillance of his movements and any issues arising from it. However by reason of the agreement on ‘ordinary’ damages for injury to feelings, if any award was to be made in recognition of aggravating features and included in that for injury to feelings it would have led to an increase in that sum. If no award for aggravated damages was to be made sufficient fact based reasons for that decision would have to be made. Although they referred to surveillance, the ET erred by failing to give any or any adequate reasons for not increasing the award for injury to feelings or to properly consider the claim for aggravated damages. 69. The appeal of the Claimant succeeds. Disposal 70. The appeal of the Respondent is dismissed. 71. At the conclusion of the hearing there was some discussion with counsel as to the consequences of different outcomes of the Respondent’s appeal. The effect of the dismissal of the Respondent’s appeal is that whilst the Claimant remained an employee he was a disabled member of the LTDB scheme entitled to disability benefit until fit to return to his own occupation, death or attainment of retirement age, subject to any other relevant conditions of the scheme. 72. By the Liability Judgment the ET held that the dismissal of the Claimant was unfair and an act of discrimination related to disability. 73. In paragraph 39 of the Liability Judgment the ET set out the passage in the judgment of the Court of Appeal in Briscoe v Lubrizol Ltd[2002] IRLR 607 in which Lord Justice Potter held at paragraph 21: “There has been no dispute before us that it was an implied term of the claimant’s contract of employment that the defendants would not terminate that employment save for a cause other than ill health so as to deprive the claimant of the continuing entitlement to the very disability benefit which it was the primary purpose of the defendants’ scheme to provide for him until age 65 (should such disability last until that date). …”
“…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 in so far as that loss is attributable to action taken by the employer.”
“In ascertaining the loss referred to in subsection (1) the tribunal shall apply the same rule concerning the duty of a person to mitigate his loss as applies to damages recoverable under the common law of England and Wales...”
“…corresponds to the amount which could be awarded by the [county court]…under section 119.”