Cooper Contracting Ltd v Lindsey UKEAT/0184/15/JOJ
Appeal against a remedy judgment after the claimant succeeded in his unfair dismissal claim. Appeal dismissed.
The claimant, a carpenter, won his claim of unfair dismissal despite the respondent arguing that he was in fact self employed. After his dismissal the claimant went back to working as a self employed carpenter, preferring to work for himself than another employer. The respondent argued that he could have earned more money by being employed and had therefore failed to mitigate his loss. The ET rejected this argument but did limit his future loss to what was just and equitable, assessed broadly at a period of three months. The respondent appealed.
The EAT dismissed the appeal. A ground that the Judge had not adequately reasoned his conclusion of fact that the claimant had acted reasonably between dismissal and the date of the Employment Tribunal hearing was dismissed, with observations about the proper approach to mitigation of loss; a second ground that the Employment Tribunal was wrong to assess future loss as being restricted to three months loss was also dismissed on a proper reading of the Judgment; a third ground as to computation of the net loss was similarly dismissed since the material to support the appeal had not been advanced, nor was there material to show that the argument had been advanced below, and in its absence there was no proper basis to think the Judge had been in error of law; and a fourth ground (that an award for loss of employment rights should not have been made since the claimant intended to remain self-employed and had in effect suffered no real loss) dismissed because it had not been argued below, but in any event there was no proper basis for thinking the assessment of loss was flawed.
Appeal No. UKEAT/0184/15/JOJ
EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8AE
At the Tribunal
On 22 October 2015
THE HONOURABLE MR JUSTICE LANGSTAFF (PRESIDENT)
COOPER CONTRACTING LIMITED (APPELLANT)
Transcript of Proceedings
For the Appellant MS KATHERINE REECE (Representative) Peninsula Business Services Ltd The Peninsula 2 Cheetham Hill Road Manchester M4 4FB
For the Respondent No appearance or representation by or on behalf of the Respondent**SUMMARY**
UNFAIR DISMISSAL - Compensation
UNFAIR DISMISSAL - Mitigation of loss
An employer appealed against an award in respect of unfair dismissal, where the Claimant had worked as a carpenter for the employer but he had been treated for tax purposes as self-employed. The ET found that it was reasonable for him to have gone back to self-employment (which he had enjoyed for some eight years prior to entering into the service of the employer) but that there were employment opportunities "out there" in which he might earn more, though he chose deliberately to remain self-employed. A ground that the Judge had not adequately reasoned his conclusion of fact that the Claimant had acted reasonably between dismissal and the date of the Employment Tribunal hearing was dismissed, with observations about the proper approach to mitigation of loss; a second ground that the Employment Tribunal was wrong to assess future loss as being restricted to three months loss was also dismissed on a proper reading of the Judgment; a third ground as to computation of the net loss was similarly dismissed since the material to support the appeal had not been advanced, nor was there material to show that the argument had been advanced below, and in its absence there was no proper basis to think the Judge had been in error of law; and a fourth ground (that an award for loss of employment rights should not have been made since the Claimant intended to remain self-employed and had in effect suffered no real loss) dismissed because it had not been argued below, but in any event there was no proper basis for thinking the assessment of loss was flawed.**THE HONOURABLE MR JUSTICE LANGSTAFF (PRESIDENT)****Introduction**
- This is an appeal against a decision made by Employment Judge Foxwell at Colchester on 24 February 2015. The appeal is essentially in respect of remedy, but the circumstances giving rise to liability are important in understanding the nature of the appeal against the remedy decision. Mr Lindsey, the Claimant, provided services as a carpenter that were dispensed with by his employer on 29 December 2013 after 21 months service. He was recruited as a servant after having traded for some years on his own account using the MyBuilder website to attract custom. No reason was given for the termination of the contract between him and Cooper Contracting, the Respondent. The Respondent contended that he had been self-employed; so, no reason was needed. The Claimant insisted that he was an employee and thus was entitled to succeed. He raised a claim that he had been unfairly dismissed. The Tribunal found in favour of the employee: it found that he had been an employee, and there is no appeal against that finding.
- The Judge proceeded at the same hearing to deal with quantum. The decision he gave was succinct. One of the issues before me is whether he should have gone into greater detail in respect to some of the conclusions to which he came. At paragraph 43 he said:
"43. In the course of evidence Mr Lindsey was asked what he had been doing since his dismissal. He told me that he has resumed working as a tradesman on his own account advertising principally on the My-builder website. He was asked whether he had considered taking up another employed post either with a local employer or perhaps on building sites further afield. He and Mrs Lindsey were very clear that working on building sites, whilst being something he had done in the past, would not be suitable now for [health] and family reasons and I accept that there may come a time in a person's working life when some types of work are no longer appropriate. As far as looking for another employed position is concerned, Mr Lindsey's evidence was that he preferred to be his own boss having had the experience of employment with the Respondent. It is very much his own choice, therefore, to continue with the financial ups and downs of self employment as a jobbing tradesman."
- The Judge had before him a statement of accounts showing the Claimant's income after his dismissal and between that date and 15 January 2015, just before the hearing began. At paragraph 45 he set out his conclusions:
"45. The conclusions that I have reached are these. Firstly, I find that it was reasonable for the Claimant to resume his previous life as a self-employed tradesman upon his dismissal: that is what he knew and where his recent experience lay. I find that it has been reasonable for him for continue in that way to the present date. I am satisfied however that there are other opportunities out there for employed work with higher remuneration if the Claimant wished to look for them but the Claimant has plainly decided that self-employment is the path he prefers for the future. Whilst I am satisfied that his past losses to date ought to be reflected in the compensatory award I think the fact that he is unwilling to consider alternatives in the future makes it just and equitable for there to be a more limited award of future compensation than might otherwise be justified on a strict analysis of the figures. I have therefore determined that as far as loss of earnings is concerned the Claimant should recover his loss of earnings to date and that I should assess future loss of earnings over a period of three months. Thereafter, whilst I am sure there will be a continuing loss of earnings, it will reflect the Claimant's desire to be his own boss rather than his value on the employed market for tradesmen."
- Having made those findings of principle, rejecting the claim that the Claimant should be awarded a lower sum because of his failure as alleged to mitigate his loss prior to the hearing but limiting the claim that he made in the future on the basis of what was just and equitable, assessed broadly at a period of three months, the Judge turned to his calculations.
- At paragraph 49 he set out the details of the compensatory award that he proposed to make. He began by awarding £250 for loss of statutory rights. As to loss of earnings, he began with the rate of pay as it should have been had the Claimant been paying tax and National Insurance as an employee. It was established in the evidence that the Claimant had not been. He had been registered as self-employed for tax purposes (paragraph 27) and had had the advantages of a lower National Insurance rate in connection with that. One of the submissions made to me by Ms Reece is that it was in evidence before the Tribunal, or it was agreed, that the Claimant drew up his own accounts whilst in employment because he was taxed on a self-employed basis and in the process of doing so offset against the money he received from the Respondent sums in respect of expenses that he had incurred but which had he been an employee he could not have claimed to offset the money received by way of tax. This was not referred to at all, if it was said or agreed, in the Tribunal's decision, nor is there any evidence of it before me, the matter resting entirely upon what I am told by Ms Reece, who herself was not the advocate for the company before the Tribunal.
- The Judge calculated therefore the agreed rate of £130 per day that had been found as a fact to have been the basis upon which the Claimant would be remunerated whilst in employment. Since he was working five days a week, that gave £650 per week. He calculated what that gross sum would produce if tax and National Insurance had been applied to him as if he were an employee. No issue arises directly as to that calculation. It should be noted, however, that £130 per day was not the only money that the Claimant received from the employer. The agreement was (see paragraph 11) for £130 plus the cost of materials and, it is plain, a mileage allowance; thus materials and transport were provided by the employer in addition to £130 per day.
- The Judge offset against the net sum produced in the manner I have described the sums that the Claimant had set out in his accounts as having received after his dismissal whilst working self-employed until 15 January. He awarded past earnings upon that basis and future loss of earnings on a similar basis for the period of three months in accordance with his approach at paragraph 45.
- Four grounds of appeal are raised. The first relates to mitigation of loss. The Tribunal, it is said in the grounds of appeal, made no reference to mitigation and referred to the duty as being a duty of the person who was the victim of the wrong to take all reasonable steps in mitigation, adding that reasonableness is not subjective from the Claimant's point of view but should be decided by the ET based on all of the circumstances. The principal argument there set out, it might be thought, was that the Judge had concluded in paragraph 45 that there were "other opportunities out there for employed work with higher remuneration if the Claimant wished to look for them", he had decided that the Claimant had chosen not to do so because he preferred self-employment and it must therefore be the case that he had failed to mitigate. The point was emphasised by the decision in respect of future loss of earnings. The Judge plainly thought that it would be reasonable for the Claimant to take an employed post three months after the date of hearing. If the logic supported that conclusion, it equally must have supported a similar conclusion throughout the period of the dismissal and until the hearing, during that period too. On the Judge's findings there were, submitted Ms Reece, opportunities for higher remuneration in employment against which the Claimant had turned his face.
- The Claimant is not present in court to fight his corner, nor is he represented. He wrote to this Tribunal to explain the reason for not attending. It was a combination of the illness of his wife and the fact that he could not afford to lose a day's work on a tight schedule, and he invited the court to have regard to written submissions that he had sent; I have done so. It does, however, mean that I have no assistance from him as to what might have been said or agreed or was not in contention at the hearing.
- As to mitigation, it seems to me there are very considerable dangers in an approach that suggests that the duty to mitigate is a duty to take all reasonable steps to lessen the loss. This may divert focus away from the legal principles that apply to mitigation and demand too much because it may seem to lead to a conclusion that if a Respondent can show one reasonable step that was not taken the Respondent will succeed. Recent experience in this Tribunal shows that the principles by reference to which an assertion of failure to mitigate loss is advanced are too often mis-stated, misunderstood or misapplied. In part this may be because when applying those principles a court may express it in shorthand appropriate to the argument before it and in context of the particular facts but which when applied as a precedent can easily lead to error if too casually extrapolated to those other cases.
- In her oral argument Ms Reece was clear in her acceptance of the basic principles. They accord with a bundle of authorities that she put before me, to which the court added three more. It is worth restating those principles before turning to the facts of the instant case. The burden of proof of a failure to mitigate is on the wrongdoer. A Claimant does not have to prove that he mitigated the loss. Authority for this is at the highest level and binding. It begins with Banco De Portugal v Waterlow & Sons Ltd  AC 452, a decision of the House of Lords. Lord Macmillan said at 506:
"… Where the sufferer from a breach of contract finds himself in consequence of that breach placed in a position of embarrassment the measures which he may be driven to adopt in order to extricate himself ought not to be weighed in nice scales at the instance of the party whose breach of contract has occasioned the difficulty. It is often easy after an emergency has passed to criticise the steps which have been taken to meet it, but such criticism does not come well from those who have themselves created the emergency. The law is satisfied if the party placed in a difficult situation by reason of the breach of a duty owed to him has acted reasonably in the adoption of remedial measures and he will not be held disentitled to recover the cost of such measures merely because the party in breach can suggest that other measures less burdensome to him might have been taken. …"
- That was referred to and adopted in a decision of the Court of Appeal in Wilding v British Telecommunications plc  ICR 1079. At paragraph 37 in the leading Judgment, that of Potter LJ, it was observed that the various authorities were apt to establish the following principles:
"37. … (i) It was the duty of [the Claimant] to act in mitigation of his loss as a reasonable man unaffected by the hope of compensation from … his former employer; (ii) the onus was on [his former employer] as the wrongdoer to show that [the Claimant] had failed in his duty to mitigate his loss by unreasonably refusing the offer of re-employment; (iii) the test of unreasonableness is an objective one based on the totality of the evidence; (iv) in applying that test, the circumstances in which the offer was made and refused, the attitude of [the former employer], the way in which [the Claimant] had been treated and all the surrounding circumstances should be taken into account; and (v) the court or tribunal deciding the issue must not be too stringent in its expectations of the injured party. I would add under (iv) that the circumstances to be taken into account included the state of mind of [the Claimant]."
- The principle that the Respondent must prove that a Claimant acted unreasonably in failing to mitigate was further emphasised in the Judgment of Sedley LJ, who drew attention to the difference between a test of acting reasonably on the one hand and not acting unreasonably on the other; they are different. At paragraph 54 he gave this example:
"54. Take a not uncommon case: an employee who has been subjected to harassment at work is offered his job back with the same colleagues but with promised safeguards against repetition. He refuses it in circumstances in which the employment tribunal consider that it would have been reasonable to accept it; but they accept, too, that his decision to refuse was in all the circumstances not an unreasonable one. …"
- His judgment is to the effect that in such a case the Respondent will fail to prove that the employee has acted unreasonably. As he said in paragraph 55:
"55. … it is not enough for the wrongdoer to show that it would have been reasonable to take the steps he has proposed: he must show that it was unreasonable of the innocent party not to take them. This is a real distinction. It reflects the fact that if there is more than one reasonable response open to the wronged party, the wrongdoer has no right to determine his choice. It is where, and only where, the wrongdoer can show affirmatively that the other party has acted unreasonably in relation to his duty to mitigate that the defence will succeed."
- That might be thought sufficient authority, but at the Appeal Tribunal level it is supported too by Ministry of Defence v Hunt  ICR 554 (see in particular the discussion in the Judgment of Maurice Kay J, presiding over the Tribunal, at pages 561F-563D); see also the decision heard shortly before the hearing in Hunt but by the same Judge, though before a differently constituted Tribunal, whose Judgment was given after that in Hunt, namely Ministry of Defence v Mutton  ICR 590, in particular under the heading "Mitigation of loss" beginning at page 599. There, the submission was accepted that it was for the Ministry of Defence (in that case) to prove that a servicewoman who chose after dismissal from the service to go into education to better equip herself for future work had not acted unreasonably, and that a Tribunal's decision as to mitigation was a question of fact as to which the Tribunal's findings were unassailable unless perverse. See also, to the same effect, the decision in Fyfe v Scientific Furnishings Ltd  ICR 648, in which in a lengthy discussion this Tribunal, presided over by Wood J, rejected a line of authority that had begun to grow up that suggested that the burden of proof did not necessarily lie upon the Respondent. That case, as it happens, contained at an early stage the phrase (see page 650C-D):
"… To state the basic rule broadly it is that the plaintiff must take all reasonable steps to mitigate the loss to him consequent upon the defendant's wrong and cannot recover damages for any such loss which he could thus have avoided but has failed through unreasonable action or inaction to avoid. …"
It may be this case that spawned the "all reasonable steps" approach, but it has to be read in the context of the decision as a whole, which is consistent with the more recent authorities I have just mentioned.
- It is plain, given those authorities, that it should be understood as a very broad-brush summary by way of introduction to the principles that Wood J then went on to elaborate. It does not and cannot affect the statement of principle in the higher authority to which I have referred and to which the subsequent Appeal Tribunal authorities of Hunt and Mutton give voice. Therefore:
(1) The burden of proof is on the wrongdoer; a Claimant does not have to prove that he has mitigated loss.
(2) It is not some broad assessment on which the burden of proof is neutral. I was referred in written submission but not orally to the case of Tandem Bars Ltd v Pilloni UKEAT/0050/12, Judgment in which was given on 21 May 2012. It follows from the principle - which itself follows from the cases I have already cited - that the decision in Pilloni itself, which was to the effect that the Employment Tribunal should have investigated the question of mitigation, is to my mind doubtful. If evidence as to mitigation is not put before the Employment Tribunal by the wrongdoer, it has no obligation to find it. That is the way in which the burden of proof generally works: providing the information is the task of the employer.
(3) What has to be proved is that the Claimant acted unreasonably; he does not have to show that what he did was reasonable (see Waterlow, Wilding and Mutton).
(4) There is a difference between acting reasonably and not acting unreasonably (see Wilding).
(5) What is reasonable or unreasonable is a matter of fact.
(6) It is to be determined, taking into account the views and wishes of the Claimant as one of the circumstances, though it is the Tribunal's assessment of reasonableness and not the Claimant's that counts.
(7) The Tribunal is not to apply too demanding a standard to the victim; after all, he is the victim of a wrong. He is not to be put on trial as if the losses were his fault when the central cause is the act of the wrongdoer (see Waterlow, Fyfe and Potter LJ's observations in Wilding).
(8) The test may be summarised by saying that it is for the wrongdoer to show that the Claimant acted unreasonably in failing to mitigate.
(9) In a case in which it may be perfectly reasonable for a Claimant to have taken on a better paid job that fact does not necessarily satisfy the test. It will be important evidence that may assist the Tribunal to conclude that the employee has acted unreasonably, but it is not in itself sufficient.
- Those principles therefore indicate why at the outset of this part of this Judgment I suggested that a phrase such as "a duty to take all reasonable steps" is likely if too generally applied to divert focus away from those which are the legal principles and may seem to lead to a conclusion that may be erroneous: that if the Respondent could show one reasonable step that was not taken the Respondent is bound to succeed.
- The submission made by Ms Reece, as advanced orally by her, emphasised the contrast between the conclusion at the start of paragraph 45 and the finding that there were "other opportunities out there for employed work … if the Claimant wished to look for them". She argued that this was a case in which the Claimant had turned his face against those opportunities; that was the effective finding of the Judge. At paragraph 43 the Judge had set out the subjective position of the Claimant but had not himself given any objective evaluation of it. It was far too flimsy a set of reasons to say that it was reasonable for the Claimant to have acted as he did for over a year before the Tribunal hearing and to in effect accept that it would not be unreasonable for him to go on doing that for a further three months. The basis was simply that the previous life was "what he knew and where his recent experience lay". "Recent experience" should also have included the experience as an employed person. He knew work as a carpenter. The work he was doing for the Respondent was work on his own on most occasions, since he was engaged in restorative maintenance. It was therefore likely to be very little different in practice from that which he would have done and was doing on a self-employed basis. The Judge was required to say more as to why he made the conclusion, one of fact, that it was reasonable for the Claimant to act as he did.
- I have not found the decision on this part of the appeal to be an easy one. It is important, as I see it, to take a broad view of the Judgment as a whole. It is also important to look with some care at the words that the Judge used. He was applying the approach that he was bound to take in accordance with statute as set out in section 123 of the Employment Rights Act 1996 that the amount of the compensatory award:
"(1) … 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."
- Under section 123(4), in ascertaining the loss:
"(4) … 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 or (as the case may be) Scotland."
- The approach is compensatory, as Ms Reece submits. What the Judge said was not that he considered that the duty to mitigate was such that it would no longer be reasonable for the Claimant to continue working as a self-employed builder for more than a further three months, that being the best point estimate he might make, but it was rather to make an adjustment on the basis that it was just and equitable to do so. That is the phrase the Judge uses; he was there reflecting section 123 and adjusting the award to ensure fairness and prevent over-compensation. His wording, as I read it, reflects his view that the Claimant's desire to be his own boss if continued had a cost to the Claimant of the difference between that which he would earn in that capacity and that which he could earn if one of the available opportunities were sought out and taken as an employee, and that it would not be fair for the employer to subsidise that choice beyond that period. I do not see what he said in paragraph 45 as saying either expressly or implicitly that it was unreasonable of the Claimant to fail to take one of the opportunities that was "out there". Further, though this may be in context a small point, he was recognising that there are other opportunities, the word being in the present tense. He was considering here his approach to future loss. He did not find that there "had been" earlier opportunities, even though that might be a reasonable inference. His approach to past loss was that the Claimant had not been shown to have acted unreasonably in doing what he did thus far.
- The reasoning in paragraph 45 is slim. I have been exercised by whether it is too thin to satisfy the principle that a party must know why they have lost and a Tribunal on appeal be able to review the decision. Ultimately, what has persuaded me otherwise is this: first, the Judgment taken as a whole includes as part that which the Judge set out, with no sense of disapproval, at paragraph 43. It is true, as Ms Reece submits, that he did not himself expressly adopt those as his justification for the conclusion he reached in paragraph 45, but the reasoning in paragraph 45 has nonetheless to be read in that light, as it must in the evidence reflected generally in the Judgment that the Claimant, having had the experience of employment with the Respondent, which would necessarily have included the circumstances of his dismissal, had exercised a choice to be self-employed in the light of that experience and his previous life.
- Secondly, what occurs to me is that an assessment of what is reasonable may take account of a number of factors but it can ultimately be expressed in a few words only by saying the particular behaviour was reasonable; unless perverse, that is a Judgment that must stand. This is not perverse. The Claimant was working. He was capable of earning, albeit on a fluctuating basis. He preferred it. He was put on the labour market by the employer's actions. It was open to the Tribunal to conclude he might have acted unreasonably by seeking to re-enter the market as an employee rather than on his own account; it chose to reflect that by saying he had acted not unreasonably, indeed positively found it was reasonable, to act as he did. The expression "what he knew and where his recent experience lay" indicated that this was somebody who (the Tribunal Judge thought having seen him) preferred the devil he knew to the devil he did not know very well. That, it seems to me, is a just sufficient basis on which to explain the Judgment. The Judge might have added more, but I do not think on consideration that he needed to do so to avoid being in error of law.
- The second ground is that it was an error of law to award three months future loss; the Judge should, rather, have stated a time by which the Claimant would have obtained employment at a higher rate of pay. This submission derived in part from the decision of this Tribunal in Gardiner-Hill v Roland Berger Technics Ltd  IRLR 498, in which, as it happens, an employee had not been held to be in breach of his duty to mitigate his loss where he chose self-employment having been employed in a well-paid job. Every case, of course, turns on its own facts, and Ms Reece rightly points out that the circumstances of that case factually were very different - the Appellant was 55 years old, for 16 years he had been the sole managing director of a specialist business, it was indeed specialist work, and it might be thought entirely reasonable for him to trade on his own account - but the Judge suggested that (paragraph 12):
"12. … In order to show a failure to mitigate, it had to be shown that if a particular step had been taken, Mr Gardiner-Hill would, after a particular time, on balance of probabilities have gained employment …"
And, in fixing the amount to be deducted for failure to mitigate:
"… it is necessary for the Tribunal to identify what steps should have been taken; the date on which that step would have produced an alternative income and, thereafter, to reduce the amount of compensation by the amount of the alternative income that would have been earned. Since that is the principle of mitigation, a reduction of a percentage of the total sum representing compensation for the whole period is inappropriate. …"
- I do not think the case helps particularly, since it was considering the question where there had been said to be a failure to mitigate in the past. Here it is the opposite: in a case where there has been no failure to mitigate in the past, it is not incumbent, obviously, for a Tribunal to decide when the Claimant would have obtained an alternative post. The Judge in paragraph 45 was both looking backward (whether the Claimant had mitigated his loss) and forward (what his losses in the future should be taken to be). The latter is a predictive enquiry. It must take account of the possibilities, many of which will be far less than certain. In that context it is entirely permissible to adopt a period of time to express a fair assessment of the losses. The same point was well put by Underhill LJ at paragraph 9 of his Judgment in Griffin v Plymouth Hospital NHS Trust  IRLR 962, in which he was considering an award of one year's loss of earnings that was awarded by a Tribunal after considering various likelihoods. He commented:
"9. … At the risk of spelling out the obvious, that is not a finding that it was more probable than not that the claimant would find a job after precisely one year. Rather, it is an estimate, made on the assumption that the claimant continued to make reasonable efforts to mitigate her loss, of the mid-point of the probabilities. In Wardle v Crédit Agricole Corporate and Investment Bank  IRLR 604, at paragraph 52 (p. 610) Elias LJ said:
'… In the normal case, if a tribunal assesses that the employee is likely to get an equivalent job by a specific date, that will encompass the possibility that he might be lucky and secure the job earlier, in which case he will receive more in compensation than his actual loss, or he might be unlucky and find the job later than predicted, in which case he will receive less than his actual loss. The tribunal's best estimate ought in principle to provide the appropriate compensation. The various outcomes are factored into the conclusion. In practice the speculative nature of the exercise means that the tribunal's prediction will rarely be accurate. But it is the best solution which the law, seeking finality at the point where the court awards compensation, can provide.'
It is, however, convenient to refer to it, as the tribunal did, as the date on which it was likely that she would obtain employment."
- Here, as I have already pointed out, the assessment was more of the sum that would be fair, just and equitable to award than it was an estimate of when it was likely that the Claimant could by taking reasonable steps have obtained work elsewhere. In short, I do not see this Judgment, properly read, as suggesting that the Judge thought that the Claimant would be failing to mitigate his loss by deciding that he would remain in the market as a self-employed person if he did so for more than a further three months, taking that as a mid-point, but that it would be unfair, given those opportunities and given a reasonable decision by the Claimant to be self-employed, for the Respondent to have to pay the Claimant for that privilege. On that basis I do not see that there is any error of law in the approach of the Judge.
- The third ground relates to the Employment Tribunal's approach to calculating losses. The Judge took as a starting point the £130 per day. What he did not take into account, submits Ms Reece, was what she tells me was uncontroversial between the parties before the Tribunal, which was that the Claimant had been submitting accounts throughout the time that he was employed and that those accounts offset against the money he was receiving from the employer sums that he claimed as expenses. In order to compare what he would have earned had he not been dismissed with what he did earn and would earn in self-employment it would be necessary to reduce the £130 to the extent that the Claimant was offsetting it by expenses. Alternatively put, the Claimant's gross income as self-employed should be contrasted with his gross income as employee. I see the force of an argument that in examining the earnings as would have been against those as had been and will be it is necessary to compare as far as possible like with like. It is appropriate to take into account that net earnings from self-employment may include an allowance for sums that would be paid out of net income in employment but in respect of which no claim against tax could be made.
- The difficulty for this ground of appeal in the present case is first that the money that the Claimant got from his employer included sums in respect of materials and transport in addition to the £130 per day. So far as I have been shown accounts that were in evidence below, they are rudimentary, but indicate that the two biggest allowances against gross receipts as a self-employed worker were in relation to purchases and motoring, which, on the face of it, might be the same as materials or consumables and travel allowance.
- More fundamentally still, this is an argument that depends at its heart upon a case being made to the Judge with which he failed to deal. An appeal to this Tribunal lies only on an error of law. A Judge will not be in error of law if when assessing compensation the argument now depended upon was not put to him.
- I am told that some submission to this effect was made. The difficulty is for Ms Reece that although there were apparently written materials before the Tribunal I have not been provided with them; they are not present in court. The Claimant is not present to assist, and would have had no reason to anticipate this particular point. The Practice Direction 2013 of this Tribunal is clear that if a point depends upon the evidence given below it should be clearly set out in the Notice of Appeal, and steps may be taken thereafter to obtain a copy of the Judge's notes for his observations upon the submission that was made.
- Further, the order that this Tribunal made on 11 June 2015 setting down this case for hearing provides that a party contending that a point of law cannot be argued without reference to evidence given or not given at the Tribunal must give notice to the other party and should seek to co-operate in the agreement of a statement or note in that regard, or in the absence of there being such an agreement may request the Employment Appeal Tribunal to ask for the Judge's notes (paragraph 3 of the standard order on appeal). In this case, that has not happened. I am happy to accept Ms Reece's telling me that she did not anticipate a dispute about this particular point, but it seems to me quite clear that this head of appeal, if it is to show an error of law by the Judge, must show that he did not deal properly with an argument put to him below. Though a Tribunal must strive to calculate compensation carefully, it cannot do so other than on the evidence before it. In an accusatorial system it is not for the Tribunal to supply that evidence or, unless it chooses to do so, to make enquiries about it; it is for the parties to provide it. The absence of that material before me has the effect that this ground of appeal cannot display or does not display an error of law because the material simply is not put before this court to enable it to do so. In the circumstances of this appeal, it seems to me that the appropriate course is to refuse the appeal.
- Finally, the Judge awarded £250 for loss of statutory rights. Ms Reece submits that those rights are there to protect the employee. The effect of dismissal is to remove that protection until the qualifying period in respect of the various rights is served in fresh employment. This was a case in which the Claimant did not wish to accept employment. He would not take employment, therefore he had suffered no loss in this respect. I invited Ms Reece to tell me whether this point had been made to the Judge below, and she readily accepted it had not been. In those circumstances, it is a new point pursued on appeal for the first time, and I do not think in the exercise of my discretion this is such an exceptional case that I should permit the point to be taken here.
- I would, however, simply add this: that the sum is by way of compensation for a number of rights and their loss. Those rights are related to protection in employment, but they are lost as a consequence of the dismissal. If Ms Reece were right in thinking that the court had in mind in paragraph 45 not just that it would be just and equitable to reduce compensation on the basis that the Claimant could take up employment at a higher wage but that he would be acting unreasonably in failing to mitigate his loss if he did not do so, then the implicit assumption there would be that he would be having to earn his protected rights again. If ever he takes employment again, he will have to qualify then for replacement rights. It may be that sometimes too easily a Judge adopts a conventional figure without considering whether the loss is a real loss that needs to be compensated for a Claimant. It is however a loss, and the Judge put a figure on it; even if the argument had been open, I could not have seen that he was necessarily in error to take the figure he did, particularly since, as I have said, no argument was actually addressed to him upon it, and therefore the reasoning was no more explicit than I have already indicated.
- In summary, I dismiss the appeal on each ground upon which it has been argued. I would, however, like to pay tribute to Ms Reece's arguments. They have, orally, been thoughtful and careful, and she has argued her corner well, giving me pause for thought that I had not anticipated I might have when I first came into court.
Published: 16/12/2015 09:53