Taylor v XLN Telecom Ltd & Ors UKEAT/0385/09/ZT
Appeal against decision to award no compensation in relation to claims of injury to feelings, injury to health and ‘aggravated damages’. Appeal allowed and matter remitted to the Tribunal to decide the level of any award.
The claimant won his claim of unfair dismissal and victimisation and was awarded compensation in respect of both. However, the Tribunal did not award any compensation for injury to feelings, injury to health or aggravated damages. Using Coleman v Skyrail Oceanic Limited  IRLR 398 as authority, they ruled that, although the claimant had undoubtedly suffered injury to feelings and personal injury, he had failed to provide the Tribunal with any evidence that his feelings were injured in any respect because of any knowledge on his part that his dismissal amounted to an act of unlawful victimisation.
The EAT first distinguished between injury to health and injury to feelings, highlighting that Skyrail only covered injury to feelings. They then looked at the principles governing a claim for personal injury compensation and decided that compensation for injury to feelings should not be determined on different principles to those for injury to health. Finally they held that the key sentence in Skyrail had been misunderstood by the Tribunal and ruled that a claimant should be able to recover for his injury irrespective of what he knew or did not know about the motivation of the respondents in reaching the decision to dismiss him.
Appeal No. UKEAT/0385/09/ZT
EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
At the Tribunal
On 9 November 2009
THE HONOURABLE MR JUSTICE UNDERHILL (PRESIDENT)
MR I EZEKIEL
MR A HARRIS
MR G TAYLOR (APPELLANT)
**(1) XLN TELECOM LTD
(2) MR T FITZPATRICK
(3) MS T PINFOLD
(4) MRS S HUTCHINSON (RESPONDENTS)**
Transcript of Proceedings
For the Appellant MR G TAYLOR
(The Appellant in Person)
For the Respondents MR ROBERT CATER
Peninsula Business Services Ltd
New Bailey Street
RACE DISCRIMINATION: Injury to feelings
Tribunal found Claimant to have been dismissed partly because he had made a complaint of racial discrimination – it declined to make any award of injury to feelings or personal (psychiatric) injury because although there was evidence that he had suffered both the Claimant had in his evidence attributed his distress to the dismissal and its manner generally and not to the element of victimisation (of which indeed he was arguably unaware at the time) – it reached that conclusion reluctantly but believed it was bound by the observation of Lawton LJ in Skyrail Oceanic Ltd v Coleman  ICR 864 that “any injury to feelings must result from the knowledge that it was an act of sex discrimination …”
Held that the Clamant was entitled to recover for any injury to feelings and personal injury attributable to the act complained of, namely, the dismissal, without the need to attribute the injury specifically to knowledge of the element of discrimination, and that Skyrail was not authority to the contrary.
**THE HONOURABLE MR JUSTICE UNDERHILL (PRESIDENT)
**1. In January this year an Employment Tribunal sitting at London South, chaired by Employment Judge Houghton, held that the dismissal of the Claimant, who is black, by the Respondents was unfair and that it constituted unlawful victimisation contrary to the Race Relations Act 1976. It is unnecessary to give more than a very brief summary of the findings on liability. The Respondents are a business which provides broadband and other telecom services. The Claimant joined them in October 2006. He was promoted to team leader in the broadband division with effect from 1 October 2007 on a three-month probationary basis. There was some dissatisfaction expressed with his performance, and the probationary period was extended. On 10 March 2008 the Claimant lodged a formal grievance. Although initially his grievance did not allege any kind of racial discrimination, in the course of a grievance appeal meeting on 11 April he complained of racially offensive conduct on the part of one of his managers. The grievance was rejected. Following a probation review meeting on 19 May, the Claimant was suspended; and by letter dated 27 May he was dismissed with immediate effect, ostensibly for poor performance. What, however, the Tribunal held (so far as the victimisation claim is concerned) was that while the dismissal was indeed partly on perceived performance grounds the Respondents were also influenced to a significant extent by the fact that the Claimant had brought the grievance that he did and that it included an allegation of racial discrimination.
2. At a remedies hearing in June this year the Claimant was awarded compensation in the sum of £12,039.18. That consisted of £7,099 for the pecuniary loss caused by the dismissal (mostly loss of earnings), which was claimable (although of course only once) in both the unfair dismissal and the victimisation claims; a 50 per cent uplift under section 31 of the Employment Act 2002; a basic award of £1,320 in respect of the unfair dismissal claim; and some £70 by way of interest on the victimisation claim. But although the Claimant in his Schedule of Loss advanced claims for injury to feelings, injury to health and “aggravated damages”, no award was made under any of those heads.
3. This appeal is about the Tribunal’s omission to award compensation under those heads. The Claimant appears before us in person (although he was represented by a union representative before the Tribunal). The Respondents, as before the Tribunal, are represented by Mr Cater of Peninsula Business Services.
4. The Tribunal’s reasons for not making any award under the heads in question are given at paragraphs 6-10 of their written Reasons as follows:
“6. That leaves the question of an award to the Claimant of injury to feelings in respect of unlawful victimisation. In Coleman v Skyrail Oceanic Limited  IRLR 398 the Court of Appeal held that an award in respect of injury to feelings had to result from knowledge that it was an act of discrimination which brought about a dismissal. In the context of the claim of unlawful sex discrimination Lawton LJ stated (in paragraph 13):
‘compensation is to be awarded for foreseeable damage arising directly from an unlawful act of discrimination. It follows that an applicant can claim for any pecuniary loss properly attributable to an unlawful act of discrimination …
Any injury to feelings must result from the knowledge that it was an act of … discrimination which brought about a dismissal. Injury to feelings unrelated to … discrimination such as in this case, the circumstances that leakages of information had taken place in July 1978 and that others might have reasonably have suspected Mrs Coleman to have been responsible for them is not properly attributable to an unlawful act of sex discrimination.’
- The above principle was approved by the Court of Appeal in the later case of Alexander v The Home Office  IRLR 190.
- The difficulty facing the Tribunal in this case is that the Claimant has failed to provide the Tribunal with any evidence that his feelings were injured in any respect because of any knowledge on his part that his dismissal amounted to an act of unlawful victimisation. The Tribunal heard extensive evidence and arguments as to the extent of the Claimant’s anxiety and depression and the treatment to which he has received. Mr Berry on behalf of the Claimant further argued that any award of injury to feelings should include an element of aggravated damages on account of the Respondent’s treatment of the Claimant. The Tribunal’s difficulty springs from the fact, however, that the Claimant both in his witness statement and oral evidence to the Tribunal ascribes any injured feelings he has not to his knowledge of any act of victimisation but the Respondent’s failure to comply with the statutory grievance and disciplinary procedures. In paragraph 6 of his witness statement the Claimant states:
‘despite being signed off, I pursued work vigorously as I have a Mortgage and a family to support. During the dismissal appeal with Mr Karibian; what really aggravated me was that the main basis for the appeal was that they did not follow the statutory grievance and disciplinary procedures as stipulated in the Employment Rights Act 2002.’
- Nowhere in the witness statement quoted from above does the Claimant state that his feelings were injured on account of his knowledge (whenever it was acquired) that his dismissal was partly attributable to the doing of the protected act. The Claimant was given further opportunities to clarify the source of any injury to feelings and associated depression in his oral evidence in response to questions from Mr Cater on behalf of the Respondent and from the Tribunal. In response to Mr Cater the Claimant reiterated that what had “really really hurt [him]” was the Respondent’s failure to comply with the Employment Act 2002. The Tribunal received the same response when posing a question to the Claimant.
- In these exceptional circumstances the Tribunal is driven to the conclusion that it is impossible to make any award for injury to feelings for the simple reason that the Claimant has failed at any stage (including this remedy hearing for which he provided a fresh witness statement) that the act of unlawful racial victimisation found by the Tribunal played any part in contributing to any distress, anxiety, depression or hurt feelings which his dismissal caused him. For these reasons the Tribunal has reluctantly concluded that no award in respect of injury to feelings is possible, including any associated award for psychiatric injury or aggravated damages.”
5. At the risk of merely repeating what is clear from those reasons, it is apparent that the Tribunal was not saying that there was no evidence that the Claimant had suffered either injury to feelings or personal injury. There was in fact plenty of evidence to that effect. The witness statement submitted by the Claimant for the purpose of the remedies hearing starts by explaining how upset he was by the suspension on 20 May, coming on top (as it did) of stresses already caused by the relationships at work. He then explains at paragraph 4 of the statement his reaction to receiving the dismissal letter, as follows:
“All of the negative mixed emotions I had experienced since this whole witch hunt began intensified after receiving this letter. I was shocked, angry, distressed, embarrassed, humiliated and anxious all at once. My family life suffered deeply; I began shouting at my wife (who was heavily pregnant at the time) and my young children. I became very withdrawn and disengaged from family activities: meal times and church attendance were especially picked up on by the children who I almost totally ignored. It became unbearable.”
He goes on to explain how he went to see his doctor, whom he had already seen once immediately following the suspension; and there were before the Tribunal two medical reports from his general practitioner, one dated 4 November 2008 and the other dated 26 February 2009, together with a short report from the Newham Psychological Treatment Centre. It is apparent from those materials that he saw his GP on four occasions. He was diagnosed as suffering from “stress, anxiety and some depression” and was prescribed sleeping pills, medication for heart palpitations and anti-depressants. He was referred for cardiac investigations because of the palpitations, but fortunately those were confirmed to be purely stress-related. He was also referred for cognitive behavioural therapy, which appears to have been very helpful in his case.
6. The Tribunal did not reject that evidence. Rather, it believed that it was not entitled to award compensation because the Claimant could not show that the matters in question, whether they were characterised as injury to feelings or injury to health, were - to use its language in paragraph 9 of the Reasons - “on account of his knowledge ... that his dismissal was partly attributable to the doing of the protected act”. The question before us is whether that approach was right in law.
7. Apart from authority, we should have thought that the approach adopted by the Tribunal was wrong in principle. The Claimant was complaining of less favourable treatment by reason of having done a protected act - that is, of discrimination by way of victimisation within the meaning of section 2 of the 1976 Act. The treatment in question consisted of his dismissal, and was said to be unlawful by virtue of section 4 (2) (c) of the Act. (There is a slight complication, in that precisely what was being complained about was not clear from the ET1 as originally pleaded, but it was, we understand, clarified at a subsequent case management discussion, and in any event the nature of the case before the Tribunal is clear.) Thus the Claimant’s dismissal was (to use the phrase usually adopted) the “act complained of”. It is for that act, once it was held to be unlawful, that in principle he fell to be compensated. It is well-established that the effects of sections 56 (1) (b) and 57 of the 1976 Act is that compensation should be governed by the same principles as a claim in tort: see, most recently, Essa v Laing Ltd  ICR 746. In an equivalent situation at common law the victim of the wrong would be compensated for the consequences of the wrongful act, subject to the relevant rules about remoteness, irrespective of his knowledge or otherwise of the particular facts which constituted ingredients of the tort. It is not in fact easy to think of a common law tort which is precisely equivalent to the statutory tort of discrimination, but there are certainly torts which require a “mental element”, generally characterised as “malice”, on the part of the tortfeasor; and we are aware of no authority that suggests that the claimant can only recover compensation in such cases if and to the extent that his injury can be attributed to any knowledge on his part either, generally, that the act in question was tortious or, more particularly, that the requisite mental element was present. He recovers for the injury caused by the wrongful act. No more than that is needed.
8. The basis for the Tribunal’s understanding that a different rule applied is the decision of the Court of Appeal in Skyrail Oceanic Ltd v Coleman  ICR 864. In that case the applicant worked for a travel agent. She became engaged to a man who worked in a competitor company. In July 1978, during the period of her engagement, there were some leaks of confidential information to the competitor, although she was not, either at the time or subsequently, directly accused of being the person responsible. Immediately following her marriage, some two months later, she was dismissed because of concerns about a conflict of interest. She brought proceedings for unfair dismissal. In the employers’ response it was said that they and the competitor company had discussed the problem, and it was decided that her employers should dismiss her, rather than the competitor dismissing her husband, because “presumably he was the bread-winner”. It was at that stage that she amended to claim sex discrimination. That claim was duly upheld and she was awarded £1,000 for injury to feelings. The Court of Appeal allowed an appeal against that award and substituted a sum of £100. It was in that context that Lawton LJ made the observation quoted by the Tribunal at para. 6 in the extract which we have set out. The entire passage (which is at p. 871) reads:
“I turn now to the award of £1,000 for injury to feelings. Two problems arise for consideration: first, what factors should be taken into account by an industrial tribunal when making an award for injury to feelings; secondly, when and on what principles should an appellate court interfere with such an award?
The jurisdiction of the industrial tribunals to make awards of compensation derives from sections 65 and 66 of the Act of 1975. A claim for compensation should be dealt with in like manner as a claim in tort: see sections 65(1) (b) and 66(1). Section 66(4) provides:
“For the avoidance of doubt it is hereby declared that damages in respect of an unlawful act of discrimination may include compensation…… under any other head.”
Compensation is to be awarded for foreseeable damage arising directly from an unlawful act of discrimination. It follows that an applicant can claim for any pecuniary loss properly attributable to an unlawful act of discrimination. This is a head of damage for which the appellant did claim and was awarded £666. Any injury to feelings must result from the knowledge that it was an act of sex discrimination that brought about a dismissal. Injury to feelings unrelated to sex discrimination, such as, in this case, the circumstance that leakages of information had taken place in July 1978 and that others might reasonably have suspected the appellant to have been responsible for them, is not properly attributable to an unlawful act of sex discrimination. The industrial tribunal thought that the circumstances in which the appellant had been dismissed might have damaged her reputation. That would not have been a consequence of sex discrimination and should have been disregarded.”
The key sentence for the purpose of the present appeal is the observation that “any injury to feelings must result from the knowledge that it was an act of sex discrimination that brought about a dismissal”. Sir David Cairns agreed with the judgment of Lawton LJ, but without adding anything on the question of the amount of the award. Shaw LJ dissented on the question of liability. He did say a little about the award, on the basis that the majority were against him on the question of liability, but there is nothing in his discussion which addresses the present point.
9. The first thing to note about Skyrail is that it was specifically concerned only with an award for injury to feelings. It says nothing about injury to health, since no such injury was suggested on the facts in that case. By contrast, in the present case the Claimant claimed to have suffered a psychiatric illness, namely depression, for which he received medical treatment. No doubt (and we say this without attempting to belittle what he went through) his depression was at the lower end of the spectrum, but it was nevertheless properly classifiable as an injury to health. Such injury is conceptually distinct from injury to feelings: see Essa v Laing, esp. per Pill LJ at paragraph 41 (page 760) but also per Rix LJ (dissenting, but not on this point) at paragraphs 109-113 (pages 778-779) - though there may be a significant degree of overlap in the actual suffering for which a Claimant may claim: see HM Prison Service v Salmon  IRLR 425, paragraph 29 (at page 430). In principle, a psychiatric illness of this kind, suffered as a result of the wrongdoing of a respondent, is governed by the usual principles applying to personal injury compensation. If, as we believe, we have stated those principles correctly above, the Claimant should be able to recover for his injury irrespective of what he knew or did not know about the motivation of the Respondents in reaching the decision to dismiss him. Skyrail simply has no application.
10. On that basis, we must in any event allow this appeal in order to allow the question of compensation for injury to the Claimant’s health to be considered. It may be that in practice any compensation which the Claimant received under that head would subsume the entirety of the compensation which he might otherwise recover by way of injury to feelings: it is important in this area to avoid any double-counting - see the case of Salmon to which we have already referred. But it may be arguable that there is not a total overlap, and we think it would be wrong to decline to tackle head-on the effect of the decision in Skyrail as regards a pure injury to feelings case. We have not found this altogether easy. There is no doubt that the key sentence (as we have called it) in the judgment of Lawton LJ, if read in isolation, does appear to say what the Tribunal understood it to say; but on careful reflection we have come to the conclusion that this is in fact a misunderstanding. We make the following points:
(1) If in a discrimination case a claimant could only recover compensation for injury to feelings if and to the extent that he could prove that he knew of the particular factor that rendered the act complained of unlawful, that would be an exception to the general approach in tort as we have outlined it above. It would be surprising if different rules governed the recoverability of compensation for injury to feelings and injury to health, particularly where they commonly overlap.
(2) We can see no reason in principle for making an exception in the case of awards for injury to feelings in discrimination cases. Certainly there is nothing in section 57 (4) of the Act (which is the subsection making it clear “for the avoidance of doubt” that compensation for injury to feelings is awardable) to suggest that it should be governed by any special principles. Of course one of the purposes of the discrimination legislation is to provide for compensation for the distress and the affront to dignity caused by overtly discriminatory conduct. But distress and humiliation may also be caused by conduct which is not overtly discriminatory, and if such conduct is in fact on the grounds of, or by reason of, the relevant protected characteristic or protected act, it would seem artificial and arbitrary to withhold compensation for it, even though the victim may not at the time have known of, or indeed even suspected, the respondent’s discriminatory motivation: it is, after all, still an injury attributable to the discriminatory conduct. No doubt as a general rule the distress and humiliation suffered by the victim will be greater where the discrimination is overt, or where, even in the absence of overt signs, the victim understands the motivation at the time to be discriminatory; and in such cases the compensation may be correspondingly higher. But that is a different point and does not justify the conclusion that there should be no compensation in other cases.
(3) If the rule were as the Tribunal believed, it would involve employment tribunals in some very fine distinctions and some very unsatisfactory inquiries. What, for example, exactly is meant by “knowledge” of the discriminatory motivation? Or, in a case where it is clear that the claimant has been caused distress by which is motivated partly by a proscribed characteristic and partly by other considerations, does the Tribunal have to apportion or distinguish between the degree of distress attributable to the proscribed element on the one hand and, on the other, to the distress attributable to other elements for which compensation for injury to feelings cannot be awarded?
(4) We do not think that these issues in fact arose on the actual points that were argued in Skyrail or therefore that this was the question that Lawton LJ had in mind in making the single-sentence observation on which the Tribunal relied. It is important to read the entirety of the passage in which that observation falls, and to be aware also of what, so far as it can be gleaned from the report and from the report of the decision in the Employment Appeal Tribunal ( ICR 596), the real argument in the case was about. As it seems to us, the criticism being made of the tribunal’s decision in that case appears to have been, not that it had taken into account the distress caused by the dismissal at a time when the claimant had no reason to suppose that it was discriminatory, but rather that it had taken into account distress which the claimant felt at the credence that she thought her dismissal gave to the belief that she had been responsible for the earlier leaks. Read that way, Lawton LJ was in fact positively allowing compensation for damages “attributable to an unlawful act of sex discrimination” - that is, the dismissal - but was making the point that it could not be allowed for anything else. This frankly makes more sense. Granted that these were the early days of the legislation, we would nevertheless have expected a much more elaborate analysis on the part of the Court of Appeal if it had been intending to advance a rule of the kind understood by the Tribunal.
11. Mr Cater pointed out to us that in Alexander v Home Office  ICR 685 May LJ, in the course of some general observations about compensation for injury to feelings, said (at p. 695 C-D):
“That the injury to feelings for which compensation is sought must have resulted from knowledge of the discrimination is clear from the decision of this court in Coleman v Skyrail Oceanic Ltd.”
But that was an obiter observation on an issue which did not arise on the facts before the court, and May LJ was doing no more than quote verbatim what Lawton LJ had already said in Skyrail. There is no discussion of the point, and we do not believe therefore that Alexander takes matters any further.
12. The Claimant also referred us to several other authorities which he believed supported his case, in particular Marshall v Southampton and South-West Hampshire Health Authority (Teaching) (no 2)  ICR 893; Sheriff v Klyne Tugs (Lowestoft) Ltd  ICR 1170; Essa v Laing, to which we have already referred; and British Telecommunications Plc v Reid  IRLR 327. We have to say however that those appear to be neutral on the particular issue in this case. They were all cases of overt discrimination, and the question of the knowledge which the claimant had to have in order to benefit from an award of injury to feelings did not arise.
13. We would therefore allow the appeal in relation to the claim for injury to feelings also. We reach this conclusion all the more readily in view of the fact that the Tribunal was avowedly reluctant to reach the conclusion to which it thought it was compelled by the authority of Skyrail. Its reasoning on that basis seems to us to have been both careful and conscientious, but it was – understandably, if we may say so - misled by the wording used by Lawton LJ.
14. The Claimant invited us, if we allowed the appeal, to decide the question of compensation for ourselves. We do not think that would be right. The question of compensation is quintessentially one of fact for the Tribunal, which of course heard the evidence as well as simply considering the documents. It obviously makes sense for the same Tribunal to hear this matter and there is no reason why it should not do so. We remit the case accordingly. It will be a matter for the Tribunal what procedure it thinks right to follow. We would expect that it will wish, both perhaps for its own sake but also so that the parties can draw its attention to any relevant recent case law, to give them the opportunity to make some further submissions. It may be that it will be sufficient for those submissions to be made in writing: that, as we say, must be a matter for the judgment of the Tribunal. The starting point, as it seems to us, is that the decision should be made on the basis of the evidence which the Tribunal has already heard. If either party wishes to adduce further evidence it will have to make an application to that effect to the Tribunal and show good reason why the evidence in question was not called first time around.
15. We have said nothing so far about aggravated damages. That is because that question is essentially dependent on the issues which we have been considering thus far: on the Tribunal’s approach, there was no relevant injury which could have been aggravated by the Respondents’ conduct. That position is now changed. The Claimant has in principle shown that he has suffered injury under one or other, or both, heads; and the Tribunal will have to consider, the point having been raised, whether that injury has been aggravated. But in saying that we should not be regarded as expressing any opinion that there are in fact circumstances here that would justify an award of aggravated compensation.
Published: 29/03/2010 14:32