Employment Tribunal Remedies Handbook cited in Shifferaw v Hudson Music Co Ltd UKEAT/0294/15/DA

The problem with calculating Tribunal awards has once again been highlighted in the recent case of Shifferaw v Hudson Music Co Ltd UKEAT/0294/15/DA.

One of the more awkward calculations can be when the Claimant has been found to have been wrongly and unfairly dismissed, as in this case. The Tribunal has to be careful not to double count the notice period when calculating the award, which the ET was fully aware of in [Shifferaw]() but unfortunately did not appreciate that the two different methods available could give rise to different figures if adjustments are applied (in this case the ACAS uplift was applied to the compensatory award).

As quoted in the [Shifferaw]() case, page 16 of the Employment Tribunal Remedies Handbook 2015-16, (page 15 in the 2016-17 edition) explains the two possible ways in which double counting can be avoided as follows:

  1. Calculate the damages for wrongful dismissal and then deduct this figure from the compensation awarded for unfair dismissal;

OR

  1. Award the damages and then start the unfair dismissal period from the day after the damages period.

In the case of Shifferaw the ET used method 2.

In most cases, both methods will result in the same figure but as explained in the Handbook, the authors feel that the second method is preferable for two reasons:

a) there is no danger of the recoupment regulations being applied to the damages award because the 2 awards have been calculated separately (remember that recoupment does not apply to damages for wrongful dismissal); and

b) if the compensatory award has to be adjusted, for example for contributory conduct, it is much easier to determine the figure that should be used in the calculation.

To explain how the different figures may arise using the 2 different methods, the following worked examples are using made up figures to make the maths easier: Damages = £2,000; Compensatory award from EDT to hearing = £7,000; Uplift on compensatory award = 10%.

Method 2

The damages were calculated but not uplifted: £2,000.

Next the compensatory award was calculated from the day after the damages period ended (thus avoiding double counting) and uplifted (5,000 x 1.1) to give £5,500.

The Claimant would thus be awarded £7,500.

The Claimant argued that if the first method had been used instead, her award would have been higher as follows:

Method 1

Damages of £2,000.

Compensatory award from EDT to hearing including uplift (7,000 x 1.1) comes to £7,700.

Compensatory award plus the damages award comes to £9,700.

Then, deducting the £2,000 damages (to avoid double counting) leaves the Claimant with £7,700, £200 more than in method 2.

The matter was remitted to the ET as it was unclear whether the ET considered this permissible exercise of discretion and whether it intended to apply the uplift only to the unfair dismissal award in respect of the period of loss arising at the end of the notice period.

The 2016-17 edition of the Employment Tribunal Remedies Handbook has now been published. Order your copy here for just £40 plus £3.50 P&P (£60 + VAT for the print/digital bundle, free P&P).

Also, the Employment Claims Toolkit will automatically handle the issue of double counting and uses method 2 as standard. Try the Toolkit out for free here. An annual subscription for one user costs just £120 plus VAT.

Published: 31/08/2016 13:23

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