1. We prefer the argument simply put of the Claimant. It is this: the starting point has to be section 123(1) of the Employment Rights Act 1996 which is as follows:

"Subject to the provisions of this section … the amount of the compensatory 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."

1. The assessment of what is just and equitable is a matter, of course, for judgment and discretion by an Employment Tribunal (see Bruce v Dignity Funerals Ltd [2005] AII ER (D) 427). The Tribunal must find the facts and then decide what is just to award by a way of compensation given the loss. It is a staged approach; the loss must be assessed and then the Tribunal stands back and says what is just and equitable in the light of that loss.

1. There are matters of judgment which involve some element of speculation. It is, we suppose, a form of informed prediction (see Scope v Thornett. The way in which tribunals approach pension loss is regulated by that statutory approach. In this case a several options were available. It could apply the guidelines given by the Employment Judges. Alternatively it could apply the Ogden tables which are similar but not the same as the guidelines. Alternatively it could have worked out its own conclusions.

1. The advocates directed the Tribunal to the guidelines, the Tribunal regarded it as appropriate to use the guidelines and there is no issue about that; the two approaches were the substantial and the simplified. The question on appeal is whether the decision as between those two permissible options was one which can be interfered with on the principles we have set out above.

1. Our approach to the guidelines should yield the same result as that of the Tribunal. No other factors were put than the simple findings of fact by the Tribunal as to the Claimant's employment status, her likely prospects and the arithmetic which has now been clarified above.

1. The Tribunal looked to the guidelines to provide assistance for its decision as between the two competing options. Although these are guidelines, since it is plain that the Tribunal's decision was based upon the guidelines it is appropriate to look at what these guidelines say about a case such as the present. In our judgment they point only to a conclusion that the substantial approach should be adopted. The relevant passages provide:

"4.7. The key choice to be made by the Tribunal is whether to look at the whole career loss to retirement which can then be discounted to allow for the eventuality that the applicant would not have remained in the employment throughout, or to look only to the next few years and assume that by that time he will have obtained comparable employment either with a similar pension scheme or a higher salary to compensate. Tribunals have tended to find in many cases that the applicant would obtain comparable employment within a fairly short period, ranging from 3 months to 2 years. Where the likely period of unemployment was longer the Tribunal would quickly find that compensation had reached the previous statutory limit of £12,000, so that assessing future loss over a period of years was largely an academic exercise. However, the increase in the limit in respect of compensatory award for unfair dismissal to £50,000 (now £53,500) and the removal of any limit in discrimination cases and some unfair dismissal cases require, where appropriate, an approach akin to that adopted in personal injury cases.

4.10. We consider that, in assessing future pension loss, the Tribunal has to select one of two approaches, which we will call the simplified approach and the substantial loss approach. As we have indicated, the decision by the Tribunal as to which approach to use will be a crucial one. It has led to considerable debate in the consultation process and the final conclusion will be a matter for the Tribunal. It can, however, make a substantial difference to the amount of compensation under this heading.

4.13 Experience suggests that the simplified approach will be appropriate in most cases. Tribunals have been reluctant to embark on assessment of whole career loss because of the uncertainties of employment in modern economic conditions. In general terms the substantial loss approach may be chosen in cases where the person dismissed has been in the Respondent's employment for a considerable time, where the employment was of a stable nature and unlikely to be affected by the economic cycle and where the person dismissed had reached an age where he is less likely to be looking for new pastures. The decision will, however, always depend on the particular facts of the case.

4.14 More particularly, we suggest that the substantial loss approach is appropriate in the following circumstances:

(a) when the applicant has found permanent new employment by the time of the hearing and assuming no specific uncertainties about the continuation of the lost job such as a supervening redundancy a few months after dismissal; further, the Tribunal has found that the applicant is not likely to move on to better paid employment in due course;

(b) when the applicant has not found permanent new employment and the Tribunal is satisfied on the balance of probabilities that he or she will not find new employment before State Pension age (usually confined to cases of significant disability where the applicant will find considerable difficulty in the job market):

(c) when the applicant has not found new employment but the Tribunal is satisfied that the applicant will find alternative employment (which it values, for example, with the help of employment consultants) and is required then to value all losses to retirement and beyond before reducing the total loss by the percentage chance that the applicant would not have continued to retirement in the lost career. See Ministry of Defence v Cannock and Others [1994] ICR 918 et al subject to our comment below.

The simplified approach becomes inappropriate in these cases because there is a quantifiable continuing loss which can be assessed using the pension data and Tables 1 to 4 of Appendices 5 and 6. These tables use factors similar to those in the Ogden Tables for personal inquiry and fatal accident cases. Although tables for pension loss are included in those tables, the tables in this booklet use some different assumptions to those underlying the Ogden Tables (see Appendix 2)."

1. It is at once clear that the Claimant did not fall within the simplified case envisaged by paragraph 4.13. It is understandable that tribunals have been reluctant to embark on assessment of whole career loss. In this case the two matters which would discourage assessment of whole career loss are absent. There was no uncertainty as to the Claimant's employment - she was to work for a further year and then retire - nor was there any uncertainty about the economic conditions; they are simply not relevant in the circumstances of this public sector teacher.

1. Thus, the other part of paragraph 4.13 would come into play indicating a substantial loss. The employment was of a stable nature; the Claimant had been employed for a considerable time, 23 years; she was unlikely to be affected by the economic cycle and she was less likely to be looking for new pastures. That would point to the choice firmly coming down in favour of the substantial approach. Further, examination of paragraph 4.14 comes to the same result. In 4.14(b) the Claimant has not achieved employment and she will not find new employment before age 60. So, again, those factors which point specifically towards the selection of the substantial method are there.

1. In the rubric at the end of paragraph 4.14 it is said that the simplified approach is not appropriate where there is a quantifiable continuing loss. In our judgment there was. As we have described it above, the Claimant instead of receiving 24 eightieths of her final salary will forever receive 23 eightieths. That is quantifiable. That was the loss. The Tribunal would have to say why, having identified that loss and recognising that the way in which it could be compensated was by using the substantial approach, it yet adopted the simplified approach.

1. In our judgment the Employment Tribunal erred in principle. To that extent, therefore, the judgment of Langstaff J at the preliminary hearing has been vindicated. With all his experience in this field, he indicated that if a clear loss were identified it would be wrong for an Employment Tribunal not to take that approach in order to satisfy the search for just and equitable compensation under section 123. Langstaff J said this:

"Where it is not clear which method may more accurately estimate future loss of pension, the guidance is of particular help to a Tribunal and a Tribunal may very well have a free choice as between one or the other approach. But where it is plain on any objective view what the loss is going to be, then the Tribunal should adopt that method and the guidelines, after all, are just guidelines."

1. We agree. This is a case where it is plain on the objective material what the loss was and the Tribunal chose a method which would not remedy that loss. So, we set aside the judgment in so far as it relates to the simplified approach. It is our decision now that the figure should be substituted of £9,797.75 for the pension loss.