The claimants, who were husband and wife and tenants of a pub, were dismissed without notice and not only lost their jobs but also their home. The wife became very depressed as a result. They won their unfair dismissal claims at the ET. The husband was awarded compensation for 54 weeks, up to when he got a new job as a taxi driver. The wife was awarded compensation for the weeks between dismissal and the hearing, plus 26 weeks of future loss. To those sums, the ET added various amounts for loss of statutory rights and expenses incurred, and they uplifted the awards by 25% because of the respondent's failure to comply with the ACAS Code of Practice. The respondent appealed on the bases that 1) the husband was unable to work for a period not because of the dismissal but because he was looking after his wife and 2) the wife was not only suffering from stress and depression caused by the dismissal but also physical ailments which were not attributable to the dismissal. Both types of illness contributed to her not being well enough to get another job and therefore the compensation should be reduced. There was also a query about double counting by awarding notice pay as well as compensation.

The EAT dismissed the appeal. On the "attribution issue", the Employment Tribunal had found that the depression caused the disputed absence "in no small part". The correct test, derived from the Court of Session's decision in Dignity Funerals v Bruce ([2005] IRLR 189) is 'was the loss caused by the dismissal "to any material extent"?' The ET applied a more stringent test. It was open to them on the evidence, applying that test, to find in the wife's favour. If the appeal failed in her case, it must fail in the husband's case too. The double counting issue was resolved when the maths was looked into again.

____________

Appeal No. UKEAT/0196/12/DM

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX

At the Tribunal

On 15 March 2013

Judgment handed down on 5 August 2013

Before

HIS HONOUR JEFFREY BURKE QC

MR D J JENKINS OBE

MRS D M PALMER

R & M GASKARTH (APPELLANTS)

(1) MR M MOONEY

(2) MRS J MOONEY (RESPONDENTS)

Transcript of Proceedings

JUDGMENT

**APPEARANCES**

For the Appellants
MR NICHOLAS SIDDALL (of Counsel)
Instructed by:
DWF LLP Solicitors
1 Scott Place
2 Hardman Street
Manchester
M3 3AA

For the Respondents
MR TIMOTHY GRACE (of Counsel)
Instructed by:
Richard C Hall & Partners
Red Hill House
Hope Street
Saltney
Chester
CH4 8BU

**SUMMARY**

UNFAIR DISMISSAL

Compensation

Mitigation of loss

The Respondents sought to challenge the award of compensation awarded to a husband and wife who had been summarily and unfairly dismissed from their jobs running the Golden Lion. The first challenge was based on the argument that the award for loss of earnings covered a period during which the wife was unable to work not because of depression caused by the dismissal but because of organic symptoms not so caused and the husband, in not working in order to look after his wife, was away from work for reasons not attributable to the dismissals.

On that "attribution issue", the Employment Tribunal had found that the depression caused the disputed absence "in no small part". The correct test, derived from the Court of Session's decision in Dignity Funerals v Bruce ([2005] IRLR 189) (which was not cited to the ET) is –was the loss caused by the dismissal "to any material extent". The ET applied a more stringent test. It was open to them on the evidence, applying that test, to find in the wife's favour. If the appeal failed in her case, it must fail in the husband's case too.

There was a second issue as to whether the ET had, in calculating their awards, permitted to each Claimant a small sum by way of double recovery. On proper examination, it became clear that they had not done so.

**HIS HONOUR JEFFREY BURKE QC** **The nature of the appeal**

1. This is the Respondents' appeal against the amount of compensation for unfair dismissal awarded to the Claimants, Mr and Mrs Mooney, by the Employment Tribunal sitting at Liverpool, presided over by Employment Judge Wardle and sent to the parties on 31 October 2011. At the conclusion of the hearing of the appeal and after deliberation, we informed the parties that the appeal would be dismissed, for reasons which we would provide subsequently. We now provide those reasons.

1. Mr and Mrs Mooney were employed by the Respondents, who are a trading arm of what HHJ McMullen QC described at a preliminary hearing of this appeal as, "The great Yorkshire brewer, Samuel Smith's" on 3 July 2009 as joint managers of the Golden Lion pub in Frodsham, Cheshire. They and their four children, aged four to twelve, moved into the Golden Lion from their previous accommodation; they ran it until 15 July 2010 when the Respondents, without notice and without any form of process, terminated their contracts of employment forthwith and required them to leave. On that very day workmen locked off the doorways so that the only access to and egress from the premises was via the fire escape. It appears that the Respondents believed they were entitled to treat the Claimants in that way because, mistakenly, they thought that the employment had not continued for a year and therefore the Claimants had no statutory protection. Whether a reputed brewery should act as the Respondents did, albeit there was no statutory protection under the employment statutes, is open to question; but it is not a question which falls for an answer from us in this appeal.

1. The Respondents denied unfair dismissal. The Employment Tribunal, at a liability only hearing, found that the dismissal of the Claimants was both procedurally and substantively unfair. They were critical of the Respondents - as in the circumstances they, no doubt, felt they were entitled to be. They also found that the Claimants had not been guilty of contributory fault.

1. The remedies hearing followed some three months later. The Tribunal assessed the losses of the two Claimants separately, taking Mr Mooney first. At paragraph 5 the Tribunal decided that he had taken reasonable steps to mitigate his loss; he had, they found, been out of work from the dismissal to 1 August 2011 when he began work as taxi driver. Mr Mooney received one week's pay as a basic award. As to the compensatory award, the Tribunal took a weekly wage of £202.57, multiplied it by the 54 week period between dismissal and the date when Mr Mooney started work, deducted a sum in respect of notice pay to which we will refer later and reached a net figure of £10,086.51. They then added £350 for loss of statutory rights, £1,878 for expenses incurred in renting a replacement home, £1,377.50 in respect of extra utility bills and £175 for removal costs. The total thus reached was £13,876.01. They awarded no future loss of earnings on the basis that Mr Mooney's earnings as a taxi driver would match his earnings with the Respondents. They then increased that total by 25% by reason of the Respondents' failure to comply with the ACAS code. Thus the total compensatory award came to £17,345.01 (with some other small sums).

1. The second Claimant, Mrs Mooney, was in a different position. From the dismissal up to the remedies hearing she had been unable to work because of illness. It was not in dispute that, at least initially, she was suffering from depression; at some stage she began also to suffer from physical symptoms, hydronephrosis and gallstones. At the time of the hearing she was awaiting surgery for those physical conditions. Her basic award was the same as that of her husband. In deciding upon her compensatory award, the Tribunal had to decide whether the dismissal was a material cause of her illness and if so over what period. At paragraphs 13 and 14 of their Judgment the Tribunal said:

"13. Turning to the second claimant she has been certified as unfit for work from her dismissal initially by reason of stress at work. According to a letter from her GP dated 12 September 2011 she visited the surgery on 20 July 2010 very stressed, very depressed, very tearful and unable to sleep because she had been dismissed from her job and had lost her home at the same time. She was reviewed on several occasions and continued to have low mood with poor sleep and appetite and was started on anti-depressants, which she has taken ever since, during which she has been diagnosed both with gallstones and hydronephrosis, which have been causing severe abdominal pain and giving her frequent urinary problems. She is listed for surgery in relation to both conditions and has a pre-operative appointment scheduled for 1 November 2011.

14. As a result of her state of unfitness she has been in receipt of Employment and Support Allowance from her dismissal."

1. And at paragraph 16 they said:

"16. In regard to the assessment of her compensatory award we took account of the provision made by section 123(1) of the Employment Rights Act 1996, which states that such 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 in so far as that loss is attributable to action taken by the employer'. We accepted that the trauma caused by the respondent dismissing her and her partner from their jobs and evicting them and their four children from their home had caused the second claimant to undergo a psychological reaction in the form of a significant depression, from which she continues to suffer alongside her other medical problems and that her inability to work was attributable in no small part to the respondent's opportunistic and unscrupulous actions in depriving them from them their livelihood and their home."

1. At paragraph 17 they assessed Mrs Mooney's net weekly wage as being the same as Mr Mooney's and awarded loss of earnings for the whole period between dismissal and the remedies hearing, using that net weekly wage. To that sum they added the various sums which they had awarded to Mr Mooney - as her half of the additional expenses. They awarded her future loss of earnings for 26 weeks on the basis that was a reasonable time in which she could be expected to be able to return to work. After addition of the 25% uplift the total award to Mrs Mooney was £27,093.43.

1. The Respondents in their Notice of Appeal sought to attack the award to both Claimants on a number of grounds. At the preliminary hearing on 30 August 2012 they were permitted to proceed to a full hearing on two grounds only in respect of each Claimant. In each case the first ground relates to Mrs Mooney's illness. In her case it is submitted that her absence from work due to gallstones and hydronephrosis could not have been and was not caused by the dismissal and that, insofar as she was unable to work after the dismissal for reasons other than depression and stress caused by the dismissal, she could not for such period be awarded compensation. Insofar as Mr Mooney was off work because he was caring for his wife while she was rendered unfit to work by the physical conditions and not by the depression or stress caused by the dismissal, he too, it was argued, should not have received compensation. These arguments gave rise to what was described as the attribution issue. The second ground which affects each Claimant in the same way is this; that the way in which the Employment Tribunal made their awards in each case included double recovery because the Claimants were awarded loss of earnings for the whole period from the dismissal forward, in Mr Mooney's case until the date when he started working as a taxi driver and in Mrs Mooney's case until six months forward from the date of the remedies hearing but, in each case, each was also awarded a fixed sum for unpaid notice pay after having been compensated for loss of earnings during the notice period. That issue was called the double recovery issue.

**The attribution issue**

1. The Respondents' starting point is the proposition that, in assessing compensation for loss of earnings for unfair dismissal, the Tribunal had to decide, 1) whether the loss claimed was occasioned or caused by the dismissal; 2) whether it was attributable to the conduct of the employer; 3) if so, was it just and equitable to award compensation. That proposition is, in general terms, unexceptional and not in dispute. It tells us nothing, however, as to the correct approach where there are or it is asserted that there are concurrent causes of the same loss, i.e. the same absence from work, such as a medical condition which is attributable to the Claimants' dismissal and at the same time a medical condition which is not.

1. As to that, the Respondents submit that the correct approach is to be derived from the decision of the Court of Session in Scotland in Dignity Funerals v Bruce [2005] IRLR 189. In that case the respondent had unfairly dismissed Mr Bruce, who had not worked since because of depression. He had been suffering from depression for five years before the dismissal; but it had not kept him off work; and the medical evidence was that he was, by the time of the assessment of compensation, feeling brighter and could see a resolution to his problems. The Employment Tribunal awarded him compensation for loss of earnings not from the dismissal to the hearing but only for a period of six months following the hearing, holding that that would be just and equitable pursuant to section 123(1) of the Employment Rights Act 1996.

1. The EAT held that the Employment Tribunal had erred. There was nothing to determine what limited the period of compensation to six months in general or to those six months in particular. There was a causal connection between the illness and the absence from work and therefore the claimant should recover loss of earnings in a substantially larger sum than that originally awarded which the EAT took to be agreed.

1. The Court of Session concluded that both the Tribunal and the EAT were mistaken. The central part of their conclusions is to be found in paragraphs 11 to 13 of the opinion of the court, delivered by Lord Gill, in these terms:

"11. A compensatory award depends on proof of loss (Leonard v Strathclyde Buses Ltd [1998] IRLR 693). Therefore any application of the just and equitable test (supra) in a case such as this must be underpinned by findings in fact establishing that the loss was caused to a material extent by the dismissal.

12. If the dismissal was not a cause of the respondent's wage loss, no award was due. If it was the sole cause, the full award would normally be appropriate. But in this case the respondent's depressive state had manifested itself before the dismissal and it appears that there may have been other unrelated causes of his unfitness to work thereafter. It was therefore possible that after 18 January 2011 the dismissal was merely one of two or more concurrent causes of his wage loss. It was also possible that the dismissal had been a cause of the unfitness for work for only part of that period. In such circumstances, a just and equitable award, in our opinion, would in all likelihood be of less than the full amount of the wage loss.

13. The Tribunal therefore had to decide whether the depression in the period after the dismissal was caused to any material extent by the dismissal itself; whether, if so, it had continued to be so caused for all or part of the period up to the hearing; and, if it was still so caused at the date of hearing, for how long it would continue to be so caused. It was essential that the tribunal should make clear-cut findings on these questions before any question of a compensatory award could arise…"

1. The Court of Session went on to hold that the EAT had acted on a misunderstanding of what was agreed and therefore its conclusion could not stand; because there was no finding as to whether the dismissal was the cause of the claimant's continuing unfitness to work, the issue would have to be remitted to the same Tribunal to reconsider the assessment of compensation having regard to the principles which were set out in the opinion.

1. Basing himself on that authority, Mr Siddall for the Respondents submitted, put briefly, that, 1) the Tribunal had failed to apply the principle as set out in paragraph 13 of Dignity Funerals; a finding that Mrs Mooney's inability to work was, "attributable in no small part" to the dismissal was not a finding that Mrs Mooney's absence from work was caused, "to any material extent" by the dismissal; 2) the evidence did not support a conclusion that the depression had caused Mrs Mooney to be absent from work throughout the period in respect of which the Tribunal awarded her compensation and the conclusion in paragraph 16 of the Judgment of the Tribunal was unsupported by evidence and perverse; 3) the Tribunal's reasons for that conclusion were insufficient; they had not found facts which supported that conclusion and explained why, when the Claimant was on her own evidence waiting for an operation for her physical conditions and was not going to be fit before such operation, they had rejected the Respondents' case that over a substantial proportion of the period during which Mrs Mooney had been off work and would be off work until after her surgery, that absence would be attributable to her physical conditions and not her psychiatric condition.

1. Mr Siddall accepted that there was a period when Mrs Mooney was unable to work as a result of depression and that if her depression continued to render her unfit for work during the period in respect of which compensation was awarded, she was entitled to such compensation even though she suffered from another condition which would also have caused her to be off work. That, he accepted, was followed necessarily from the principle set out in Dignity Funerals; but he submitted that was not the basis of the Tribunal's award in this case or if it was, sufficient findings of fact had not been made to enable that approach to stand.

1. Mr Grace's submissions on behalf of Mrs Mooney were, again in brief terms, that the Tribunal had considered the relevant issue, had applied the correct test, had found as a fact that Mrs Mooney's absence from work had to a material extent been caused by the dismissal; the expression, "in no small part" did not convey anything less than, "to any material extent". That conclusion was open to the Tribunal on evidence; and the reasons were sufficient.

1. The only medical evidence consisted of a letter from a consultant urological surgeon who described the physical symptoms as they were in February 2011 but made no comment about Mrs Mooney's ability to work, a drug sheet which showed that Mrs Mooney was still taking Citalopram, an anti-depressant, in April 2011 and a letter from Mrs Mooney's GP dated 12 September 2011, a few days before the remedies hearing. The GP's letter was as follows:

"I am writing on behalf of this 33 year old patient of ours who I can confirm became severely depressed following her unfair dismissal. She first came to see us on 20th July last year very stressed, very depressed, very tearful, unable to sleep because she had been dismissed from her job as a tenant pub manager. She had also obviously lost her house at the same time. She was reviewed on several occasions and continued to have a very low mood with poor sleep and appetite. She was tearful and snappy at everyone and she was started on anti-depressants, which she has taken ever since. Also during this time she was diagnosed not only with gallstones but with hydronephrosis. This has been causing sever abdominal pain and also frequent urinary problems which have led to her disability. The problems continue although she is listed for surgery both on her kidney and gallbladder fairly soon, but I can confirm again that she has been significantly depressed and it has been directly attributable to the loss of her job and home."

1. Mr Siddall submitted that, by describing the physical symptoms as, "leading to her disability", the GP should have been taken to have been expressing the view that those symptoms were causing Mrs Mooney to be unable to work; but in our judgment the Tribunal were not bound to understand the letter in that way and, indeed, that reading was barely open. The use of the word "disability" does not connote an inability to work; the Disability Discrimination Act 1995 and the equivalent provisions of the Equality Act 2010 are based on a fundamental policy, the aim of which is to enable those who are disabled to work; in the context there was no reason to read the word "disability" as meaning more than, "the physical symptoms from which the patient suffers". It is of more significance that the depressive condition, described in detail, was described as continuing; "the problems continue" plainly refers to all of the problems described above. The words, "she has been significantly depressed" indicate a continuing condition, not one which has gone away or remitted.

1. In her witness statement, which no doubt formed her evidence in chief, Mrs Mooney linked her absence from work to both her depression and her physical symptoms; she described in paragraph 4 her symptoms, of both types, as continuing. She was still taking Citalopran. She had been told by her GP that she was likely to be unfit for work for a further six months.

1. At paragraphs 3 and 4 of her witness statement she said:

"3. I am currently awaiting an operation for the removal of gaul [sic] bladder and I am expected to remain unfit for work until after such time as I have recovered after this operation.

4. My symptoms are severe abdominal pain and stomach cramps, severe musculo-skeleton pain all over my body, low mood, irritable moods and lethargy. I always used to be the 'life and soul of the party' but nowadays I find myself on occasions unable to get out of bed in the mornings, look after our children and carry out normal day to day activities."

1. We do not accept Mr Siddall's argument that those paragraphs indicate that her physical condition and not her psychiatric condition was causing her to be off work; that is not, in our judgment, a logical interpretation of those paragraphs when read together with paragraphs 2 to 6 of the witness statement as a whole. She was not saying that she would be fit once her physical condition had been relieved by surgery but that, by reason of her physical condition, she would not be fit before surgery. There is nothing in her cross-examination which conflicts with her case or the Tribunal's findings.

1. It is clear that the medical evidence did not include expressed answers to plain questions as to the extent to which the psychiatric symptoms on the one hand and the physical symptoms on the other had caused Mrs Mooney's absence from work at any particular time. In a perfect world or in a case involving greater stakes, perhaps, the medical evidence might well have been prepared in such a way that it spoke more clearly on the attribution issue; but this was a relatively modest unfair dismissal claim by two Claimants who could not have had great resources; and the Respondents did not require the authors of the medical letters to be called as live witnesses for cross-examination; as is not uncommon in such circumstances the Tribunal had to reach their decision on the evidence available.

1. That evidence, medical and from Mrs Mooney herself, was, in our judgment, such as to permit the Tribunal to conclude that the depressive condition had continued up to the hearing and would continue for a relatively short period thereafter; and both Mrs Mooney's evidence and the letter from the GP sufficed to enable the Tribunal to conclude that the depressive condition was caused by the dismissal and that Mrs Mooney's absence from work was, "in no small part" attributable to that condition. The evidence was that the psychiatric condition had caused her to be off work initially; there was no evidence that the psychiatric condition had improved so that she would not have been off work at any material time but for the physical conditions. The Tribunal had to consider whether the psychiatric condition caused that absence from work throughout the relevant period, "to any material extent"; the words used by the Tribunal in paragraph 16 are not the same as those used in Dignity Funerals (to which there has been no suggestion that the Tribunal was referred); but in our judgment they do not convey that the Tribunal was applying a lower test than that set out by the Court of Session; as we have said before, if anything the words, "In no small part" indicate a more stringent test.

1. Accordingly the conclusion reached by the Tribunal as to attribution involved no error of law; it was open to the Tribunal on the evidence to reach that conclusion; and the Respondents have not overwhelmingly demonstrated (see Yeboah v Crofton or demonstrated at all that that conclusion was one which no reasonable Tribunal could reach or that there was no evidence to support it.

1. We accept the Tribunal could have been more expansive in their reasons; they could have defined the issues more precisely and made more explicit factual findings; but in our judgment the basis on which the Respondents lost on this issue and Mrs Mooney won is sufficiently clear from paragraph 13 to 16 of the Judgment to satisfy the requirements of Meek and of rule 30 (6) of the Tribunal Rules. The issue was, in reality, a simple one and needed no more than the reasons which are set out in those paragraphs.

1. We now turn to Mr Mooney's position. The reason why it was important for the parties to know, as soon as possible, the outcome of the appeal against the award to Mrs Mooney was this. The Respondents sought to argue that, because Mr Mooney spent time caring for Mrs Mooney, to the extent Mrs Mooney's need for care was derived from her physical as opposed to her psychiatric problems, her husband was not entitled to compensation for loss of earnings while not working because he was caring for his wife.

1. It appeared from the Claimants' counsel's note of the hearing that that point may well not have been taken at the remedies hearing; Mr Grace, who was there, told us that it had not been taken; Mr Siddall, who was not present, suggested that it had been taken. It seemed, if the point was live, that we might well have to adjourn the appeal in Mr Mooney's case to ask the Tribunal whether or not the point had been taken. However Mr Siddall, fairly and helpfully, accepted that, if his appeal on the attribution issue failed in Mrs Mooney's case, it could not succeed in Mr Mooney's case. Therefore we decided, at the end of the argument and after deliberation on the appeal in Mrs Mooney's, case to inform the parties of the result so that it would be clear whether steps to investigate Mr Mooney's case further needed to be taken. Having decided the appeal on the attribution issue in Mrs Mooney's case in her favour, we need only say that the appeal on that issue in Mr Mooney's case also fails, for the same reasons.

**The double recovery issue**

1. The second issue in this appeal arises from the unimpeachable principle that no claimant can be compensated twice for the same loss of earnings. At paragraph 10 of their judgment the Employment Tribunal awarded to Mr Mooney 54 weeks loss of earnings from the dismissal to 1 August 2011. From that sum they deducted £1,023.18, said to be notice pay for the first four weeks of that period. However, at paragraph 10 they awarded Mr Mooney £347.80 because he had not received a payment of notice money in full. Mr Siddall's argument was that the Tribunal had deducted notice pay to avoid double recovery in respect of the first four weeks after dismissal but then, in paragraph 10, had added back the sum of £347.80 thus effecting a partial double recovery. However, Mr Grace explained what had happened; when the Tribunal gave brief oral reasons at the end of the remedies hearing, they appeared to have failed to appreciate the double recovery point. This was pointed out to them; and the Tribunal agreed that, when they came to write the written reasons, an adjustment would be made. Thus the last line of Mr Grace's note is, "award will be adjusted to reflect notice pay received". In paragraph 6 the Tribunal had honoured that self-instruction by deducting from the 54 week loss of wages a sum equivalent to four weeks of notice pay (although the maths in fact comes out slightly in the Respondents' favour). However, although they thus deducted for a full four weeks of notice pay the evidence had been that Mr Mooney had not in fact received the full amount of his notice pay; at paragraph 10 the Tribunal added back in the sum of £347.80 because they had earlier deducted notice pay in full although Mr Mooney had not received it.

1. Accordingly there was no double recovery; and the same process happened in the case of Mrs Mooney.

1. Mr Siddall gracefully conceded that, if that was the right approach to the mathematics, his point could not be taken further. We have no doubt that Mr Grace's explanation is correct. It would, have been clearer had the Tribunal deducted in paragraph 6 only the notice pay which had actually been received; but by a slightly longer route they achieved the same result; they deducted the full notice pay as if all had been paid and then made a compensation later because not all of the notice pay had been paid, as in the case of Mrs Mooney.

1. Thus the appeal in the case of both Claimants on the double recovery issue also fails.

**Conclusion**

1. For the reasons we have set out this appeal is dismissed.