Appeal No. UKEAT/0229/09/DM

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 9 December 2009

Judgment handed down on 26 January 2010

Before

HIS HONOUR JUDGE BIRTLES

MR D BLEIMAN

DR B V FITZGERALD MBE LLD FRSA

MS A WACHA (APPELLANT)

(1) MRS M LEWIS (DEBARRED); (2) NOVAS SCARMAN GROUP LIMITED (RESPONDENTS)

Transcript of Proceedings

JUDGMENT

For the Appellant
MS S STANZEL (of Counsel)

Instructed by:
Messrs Rightways Law Consultants
9 Gunnery Terrace
Royal Arsenal
Woolwich
SE18 6SW

For the First Respondent
Debarred from proceedings

For the Second Respondent
MR D NORTHALL (of Counsel)

Instructed by:
Messrs Hill Dickinson Solicitors
No 1 St Paul's Square
Liverpool
L3 9SL

STATUTORY DISCIPLINE AND GRIEVANCE PROCEDURES

Whether Infringed

Inpact on Compensation

Employment Tribunal erred in law in finding Claimant had complied with the statutory appeal procedure under the Employment Act 2002 but the Respondent employer was not required to make an increase in compensation under s.31(3). The Tribunal made no reference to s31(4) and it was completely unclear whether it had that provision in mind. Case remitted to the same Tribunal.

1. This is an appeal by Ms Anna Wacha from the unanimous judgment of an Employment Tribunal sitting at London Central on 26-27 November 2008 and 28 January 2009.

1. The unanimous judgment of the Tribunal was that Ms Wacha was unfairly dismissed and the Second Respondent was ordered to pay her the sum of £5,538 (of which the sum of £5,292 was the prescribed element). There was no basic award, as the basic award was extinguished, since the Second Respondent had paid a sum in excess of the basic award by way of a redundancy payment.

1. At the hearing before the Employment Tribunal, Mrs M Lewis was the Second Claimant. She was found to have been unfairly dismissed, and she subsequently settled her compensation claim with the Second Respondent. By an order of the Deputy Registrar, sealed on 21 September 2009, the First Respondent was debarred from taking further part in this appeal.

1. At the hearing of the appeal, the Appellant was represented by Ms Sarah Stanzel (of Counsel), and the Second Respondent was represented by Mr Daniel Northall (of Counsel). We are grateful to both Counsel for their written and oral submissions.

1. At the liability hearing on 26-27 November 2008, the Employment Tribunal decided that the Appellant was unfairly dismissed, as the reason for her dismissal was not one of the potentially fair reasons within section 98 of the Employment Rights Act 1996: judgment paragraph 55; EAT bundle page 13.

1. The remedy hearing took place on 28 January 2009 and the reserved judgment was sent to the parties on 11 March 2009. The judgment is challenged only insofar as it concerns the compensation awarded to the Appellant.

1. The Employment Tribunal's conclusions on compensation are set out at paragraphs 74-83 of its judgment. The relevant paragraphs say this:

"76. We then considered the compensatory award and the amounts claimed by Ms Wacha. Our starting point was to consider the immediate loss of earnings claim which she had calculated, starting with the date of dismissal and continuing through to the date of hearing. The Tribunal had heard submissions from the Respondent that this should be reduced to reflect a failure to mitigate a contributory fault. The Tribunal's conclusion was that in fact on the evidence it was clear that there had been a job offer made to Ms Wacha. That was made by Camden and Islington Health Trust in a letter dated 14 August. That letter said that the offer was conditional only on the CRB clearance and on references. We understand that Ms Wacha had a criminal records bureau screening and that she would have been able to satisfy that requirement. There was only therefore the question of outstanding references. We have seen a reference that was provided on 11 August which referred to a fax dated 6 August. It appears that this letter was returned by post and would probably have arrived about the same time as the offer letter dated 14 August was sent to Ms Wacha conditionally offering her the post. It is not clear whether or not the two crossed but in any event, it was quite clear that there was a reference provided.

77. Ms Wacha tells us that she had some form of telephone conversation and that she was put on the locum list by Camden and Islington Health Trust rather than given a contract. She argued this was due to the Respondent's behaviour, but she admitted that she had no idea why that had happened and she had no explanation for it. The Tribunal are not prepared to infer that there was some fault on the part of the Respondent. We note that the dates of employment given by the Respondent in the reference were incorrect but we assume that if there had been an error of that kind there would have been a check back again with the Respondent to see if there was some explanation for it or indeed a check with Ms Wacha. It is possible that the lengthy number of sickness days noted in the reference did in some way impact on her position, but again we are surprised that there was no discussion with Ms Wacha about that. In the circumstances, our view is that Ms Wacha received an offer of employment and that it should have been fulfilled and sorted out we think within a week or so. We note that there was a requirement in the letter that Ms Wacha complete and return an occupational health questionnaire and we have no information as to whether she actually followed that through. If she failed to do so, that may have been a problem. We consider that on its face this was an offer which should have resulted in Ms Wacha starting work for the Camden and Islington Health Trust authority and we therefore calculate that the actual loss that Ms Wacha would have suffered was a matter of 14 weeks.

78. We looked at the question of future loss, but of course that does not arise where we have already said that the compensatory award is sufficient. We considered the claim for loss of statutory rights. A normal award is somewhere between £200-£300 and we awarded £300.

79. We considered the question of an adjustment of the award. We looked very carefully at the provisions of the legislation in the Employment Act 2002 which require an adjustment. It was argued by the Claimant that there should be an uplift to reflect the Respondent's failure to address an appeal which Ms Wacha submitted. The Respondent argued that in fact any award should be reduced to reflect the fact that Ms Wacha failed to appeal. The facts of the matter are that Ms Wacha has presented to the Tribunal a copy of the letter of appeal. She was actually dismissed by the Respondent by a letter dated 25 April and which requested that she submit her appeal in writing to Mary Connolly, Human Resources Director, within five working days or by 2 May 2008. In fact the appeal letter, when it was submitted, was sent to Michael Wake who was the Founder and Executive Director of the Novas Scarman Group and not until 30 May 2008. That was some five weeks after the original notice of termination and some four weeks after the date by which she was asked to appeal.

80. The Tribunal are not inclined to penalise employees who fail to stick rigidly to very short appeal periods such as five working days, but in circumstances where there is a lengthy delay, there is real issue as to what point the appeal ceases to be effective for the purposes of the Employment Act 2002. Our conclusion on this, since we are reluctant to make a deduction from Ms Wacha's award, is that she did submit an appeal which was sufficient to meet Section 31(2). We are prepared to treat her letter as sufficient to amount to an appeal so as not to justify a reduction of her award but we accept that so far as the Respondent is concerned, the appeal was so late and sent to the wrong person and we understand why they did not regard it as an effective appeal. We are not prepared to increase the award since from their perspective the letter arrived very late and being addressed to another person would have taken some time to reach the right party. We accept that the letter would not therefore have been seen by the Respondent as being an effective appeal. We do not regard the Respondent as being at fault in failing to follow through the appeals procedure. That being the case, there is neither an uplift nor any reduction in the award and the figures are therefore as follows."

1. The Notice of Appeal appears at EAT bundle pages 20-32. It is supplemented by Ms Stanzel's Skeleton Argument and oral submissions. The Respondent's answer is at EAT bundle pages 33-37, which is supplemented by Mr Northall's skeleton argument and his oral submissions.

1. There were two grounds of appeal, we take each ground in turn.

1. The relevant part of section 31 of the Employment Act 2002 provides as follows:

"31 Non-completion of statutory procedure: adjustment of awards

(1) This section applies to proceedings before an employment tribunal relating to a claim under any of the jurisdictions listed in Schedule 3 by an employee.

(2) If, in the case of proceedings to which this section applies, it appears to the employment tribunal that—

(a) the claim to which the proceedings relate concerns a matter to which one of the statutory procedures applies,

(b) the statutory procedure was not completed before the proceedings were begun, and

(c) the non-completion of the statutory procedure was wholly or mainly attributable to failure by the employee—

(i) to comply with a requirement of the procedure, or

(ii) to exercise a right of appeal under it,

it must, subject to subsection (4), reduce any award which it makes to the employee by 10 per cent, and may, if it considers it just and equitable in all the circumstances to do so, reduce it by a further amount, but not so as to make a total reduction of more than 50 per cent.

(3) If, in the case of proceedings to which this section applies, it appears to the employment tribunal that—

(a) the claim to which the proceedings relate concerns a matter to which one of the statutory procedures applies,

(b) the statutory procedure was not completed before the proceedings were begun, and

(c) the non-completion of the statutory procedure was wholly or mainly attributable to failure by the employer to comply with a requirement of the procedure,

it must, subject to subsection (4), increase any award which it makes to the employee by 10 per cent and may, if it considers it just and equitable in all the circumstances to do so, increase it by a further amount, but not so as to make a total increase of more than 50 per cent.

(4) The duty under subsection (2) or (3) to make a reduction or increase of 10 per cent does not apply if there are exceptional circumstances which would make a reduction or increase of that percentage unjust or inequitable, in which case the tribunal may make no reduction or increase or a reduction or increase of such lesser percentage as it considers just and equitable in all the circumstances."

1. The relevant statutory dispute resolution procedures are set out in schedule 2 of the Employment Act 2002. In this case, the procedure was the standard procedure set out in Part 1, Chapter 1, and is only relevant in relation to an appeal. It says this:

"Step 3: appeal

(1) If the employee does wish to appeal, he must inform the employer.

(2) If the employee informs the employer of his wish to appeal, the employer must invite him to attend a further meeting.

(3) The employee must take all reasonable steps to attend the meeting.

(4) The appeal meeting need not take place before the dismissal or disciplinary action takes effect.

(5) After the appeal meeting, the employer must inform the employee of his final decision."

1. Ms Stanzel submits that, in its judgment, the Employment Tribunal did not state in terms, whether the procedure had been completed or not, or whether any non-completion was attributable to the employer or not. She further submits that the effect of the judgment was to hold that there was no non-completion of the procedure attributable to the employer. The appellant had alleged that the non-completion was the refusal to hear her appeal under step 3.

1. In support of her submission, Ms Stanzel relies on Masterfoods (a division of Mars UK Limited) v Wilson (UKEAT/0202/06/ZT) at paragraph 63, per HHJ McMullen QC. She also relied on the judgment of Underhill J in YMCA Training v Stewart [2007] IRLR 185 at paragraph 9. She relies on these authorities, and submits that there is a distinction between any contractual right of appeal and the statutory provision under step 3. Furthermore, Ms Stanzel submits that there was no unreasonable delay here by the Appellant in submitting her appeal. She relies on Selvarajan v Wilmot [2008] IRLR 824 at paragraphs 26-28 per Mummery LJ.

1. Finally, Ms Stanzel submits that if the Tribunal intended to rely on the exceptional reasons exemption in section 31(4) of the 2002 Act, it should have spelt that out. She relies on Redcar and Cleveland Borough Council v Bainbridge and others [2008] IRLR 776 at paragraphs 309-311 per Mummery LJ. In any event, she submits there were no exceptional circumstances in this case. Neither was there unreasonable delay: regulation 12 of schedule 2 of the 2002 Act.

1. Mr Northall refers us to the Tribunal's findings of fact at paragraphs 6-11 of its judgment: EAT bundle pages 3-4, and refers us to the relevant statutory provisions in the 2002 Act. He relies on the Employment Tribunal's reasoning, at paragraphs 79-80 of its judgment. He accepts that there is no reference to paragraph 2 of schedule 2 of the 2002 Act relating to unreasonable delay, but submits that, in any event, failure to refer to a relevant statutory provision is not an error of law. He refers us to Union of Construction, Allied Trades and Technicians v Brain [1980] IRLR 357 and The Chief Constable of the Thames Valley Police v Kellaway [2000] IRLR 17 at paragraph 48. Mr Northall refers us to the various findings by the Tribunal in paragraphs 79-80 of its judgment in relation to the delay in the letter of appeal and the fact it was sent to the wrong person.

1. Finally, Mr Northall responds to the various authorities put before us by Ms Stanzel.

1. Underhill J said, in YMCA Training v Stewart [2007] IRLR 185 at paragraph 9:

"But it is crucial in cases of this kind for tribunals not to be distracted by the fact that the parties may have been following an internal procedure with more elaborate requirements and different terminology from those required by the statute: it is necessary to look beneath the parties' own labels and focus on whether the substantive requirements of the statute, which are in simple and non-technical terms, were or were not in fact met. In this case, there was a letter containing the necessary statement of the alleged conduct and there was an invitation to a meeting to discuss the matter. That is all that was required, and it is beside the point how the letter and the meeting may have fitted into the Appellant's own procedure."

1. In the present appeal, the Tribunal have quite properly referred to the Second Respondent's own appeal provision, but they have reached this conclusion:

"Our conclusion on this, since we are reluctant to make a deduction from Ms Wacha's award, is that she did submit an appeal which was sufficient to meet section 31(2). We are prepared to treat her letter as sufficient to amount to an appeal so as not to justify a reduction of her award."

In our judgment, the Employment Tribunal have properly applied the stricture of Underhill J in the Stewart case.

1. However, they then go on to make an error of law by treating what they have decided was a valid appeal under step 3 paragraph 3(1) of schedule 2 of the 2002 Act, as not being a valid appeal so as to trigger the meeting organised by the employer under paragraph 3(2) of schedule 2. That is the only way we can read the remainder of paragraph 80 of the Employment Tribunal's judgment, where it says this:

"… but we accept that so far as the Respondent is concerned, the appeal was so late and sent to the wrong person and we understand why they did not regard this as an effective appeal. We are not prepared to increase the award since from their perspective the letter arrived very late and being addressed to another person would have taken some time to reach the right party. We accept that the letter would not therefore have been seen by the Respondent as being an effective appeal. We do not regard the Respondent as being at fault in failing to follow through the appeals procedure. That being the case, there is neither an uplift nor any reduction in the award, and the figures are therefore as follows."

1. If the Employment Tribunal intended to invoke section 31(4) of the 2002 Act, then it did not refer to that provision. While we accept the failure to refer to a statutory provision is not itself an error of law, we are simply unable to conclude, from the Tribunal's reasoning, whether it had section 31(4) in mind at all. It seems to us that the words of Mummery LJ in Redcar v Cleveland Borough Council [2008] IRLR 776 at paragraphs 309-311 are highly material here.

1. If the Employment Tribunal had regulation 12 of schedule 2 in mind (that the procedure must be taken without "unreasonable delay") they did not refer to it. Again, we accept the failure to refer to an express statutory provision is not in itself an error of law, providing it is clear from the Tribunal's judgment that it had it in mind. That is not what the Tribunal said. It approached this issue from the perspective of the Respondent, who would not have seen the letter, "as being an effective appeal". We are quite unable to accept Mr Northall's submission that the Tribunal had regulation 12 in mind.

1. It seems to us that the only logical conclusion from the Tribunal's conclusion in paragraph 80 is that there was a valid appeal by Ms Wacha which satisfied section 31(2) so as to cause the Second Respondent to hold an appeal meeting under paragraph 3(2) of schedule 2 of the 2002 Act. No such meeting was held. It follows that the Second Respondent was in breach of section 31(3) and it was incumbent upon the Tribunal to award an uplift subject to section 31(4) which it does not appear to have considered.

1. Ms Stanzel submits that the Employment Tribunal's reasoning in paragraphs 66-78 amounts to an error of law for two reasons. First, the Claimant failed to get the job she applied for as a Health Care Assistant with the Camden and Islington Health Trust. The job offer is at EAT bundle pages 87-88. It will be seen that there are conditions to the job offer. It was subject to the receipt of two satisfactory written references, health clearance, Criminal Records Bureau screening and work permit where necessary. No work permit was required in this case. The Tribunal's discussion of these matters is at paragraph 77 of its judgment. The Tribunal's conclusion is:

"In the circumstances, our view is that Ms Wacha received an offer of employment and that it should have been fulfilled and sorted out we think within a week or so. … We consider that on its face this was an offer which should have resulted in Ms Wacha starting work for the Camden and Islington Health Trust authority and we therefore calculate that the actual loss that Ms Wacha would have suffered was a matter of 14 weeks."

1. There is no dispute that Ms Wacha did not receive that offer of employment but was offered a job as a locum Health Care Assistant that is dependent on work being offered, and Ms Stanzel told us that Ms Wacha had not in fact received any such offer of work. Ms Stanzel therefore submits that there was a continuing loss of earnings and she refers us to Ms Wacha's witness statement which was before the Tribunal: EAT bundle pages 93-96.

1. In support of her submission, Ms Stanzel refers us to two decisions. They are Wishart v National Association of Citizens Advice Bureaux Limited [1990] IRLR 393 at paragraphs 14 and 31 in respect of the references point made by the Tribunal, and Dench v Flynn and Partners [1998] IRLR 653.

1. Mr Northall submits on the facts that the Employment Tribunal found that there was no reason why the job offer of Health Care Assistant with the Camden and Islington Health Trust should not have been offered to the Claimant, and the Employment Tribunal properly looked to the Claimant for an explanation, which she was unable to give. He submits that this was a failure to mitigate loss. He refers us to the well-known perversity case of Yeboah v Crofton [2002] IRLR 634 at paragraphs 92-95 per Mummery LJ. He says it is implicit in the judgment that the Employment Tribunal found there was no continuing loss, and that it was entitled to do so. Finally, Mr Northall sought to distinguish the two authorities relied upon by Ms Stanzel.

1. We agree with Ms Stanzel. The short point here is that in paragraph 77 of its judgment, the Employment Tribunal found that the job offer of Health Care Assistant by the Camden and Islington Health Trust dated 14 August 2008 was in fact withdrawn because what Ms Wacha was then offered was the job of a locum Health Care Assistant. The Tribunal speculate as to the reason why the job offer of Health Care Assistant was withdrawn, but in the absence of any explanation from the Camden and Islington Health Trust, it is only speculation. In those circumstances we are unable to see how the Employment Tribunal could have concluded that the offer should have been completed and Ms Wacha start work as a Health Care Assistant with the Camden and Islington health authority within a week or so after the job offer of 14 August 2008.

1. The factual position is that she did not obtain that position and the Tribunal do not find that she failed to mitigate her loss by reason of any action on her part. If they had made such findings of fact then that would have been a different situation, but it is not this situation. In those circumstances, the Tribunal should have ignored the withdrawal of the offer of a position as Health Care Assistant with the Camden and Islington Health Trust and gone on to consider future loss of earnings. In our judgment this amounts to an error of law.

1. For these reasons the appeal is allowed on both grounds of appeal. We have carefully considered the question of disposal and in the circumstances of this case we think that the appropriate disposal of the case is to remit the case to the same Employment Tribunal to reconsider its judgment on compensation in the light of this judgment. It will be a matter for the Employment Tribunal as to how it wishes to proceed.