Appeal No.	 EAT/1185/98

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 26 October 1999

Before
HIS HONOUR JUDGE H WILSON
MR J A SCOULLER
MR G H WRIGHT MBE

MR J F KERRIGAN	APPELLANT

ROVER GROUP LTD	RESPONDENTS

Transcript of Proceedings

JUDGMENT

FINAL JUDGEMENT

Revised

	APPEARANCES

For the Appellant	Mr D Parry (Solicitor)
Messrs Darbys Mallam Lewis
Solicitors
52 New Inn Hall Street
Oxford OX1 2QA	
For the Respondents	Ms Ijeoma Omambala (of Counsel)
Legal Services Department
Rover Group Ltd
International Headquarters
Warwick Technology Park
Warwick CV34 6RG	

JUDGE WILSON:	This appeal is the final hearing of the Notice of Appeal, insofaras that notice was permitted to go forward to a full hearing when it was before the Employment Appeal Tribunal on the 14 April 1999.  On that occasion on behalf of the Employment Appeal Tribunal His Honour Judge Byrt allowed the appeal to go forward on two points only.

1	The first point was that the Tribunal had failed to make any findings as to what job the applicant would have been doing by the 30 August, what pay he would have been receiving and what effect that continuing employment would have had on his pension and that therefore there was no basis for cutting off loss completely at that date.  

2	The second point on the amended notice has not yet been argued but it is accepted by Mr Parry on behalf of the Appellant that that point - namely the preliminary issue of whether or not he should be allowed to call fresh evidence - will depend upon our view on the first point of appeal.  

3	Mr Parry relies on the decision in the case of Gardner-Hill V Roland Berger Technics Ltd [1982] IRLR 498 and in particular he relies on what it set out in Paragraph 12 of that decision.  It is there stated that:

“In order to show a failure to mitigate, what has to be shown is that if a particular step had been taken, the dismissed employee, after a particular time, on a balance of probabilities, would have gained employment.  From then onwards, the loss flowing from the unfair dismissal would have been extinguished or reduced by his income from that other source”.

4	In fixing the amount to be deducted from failure to mitigate, it is necessary for the Tribunal to identify what steps should have been taken; the date on which that step would have produced an alternative income; and thereafter to reduce the amount of compensation by the amount of the alternative income which would have been earned.  The facts in that case, the decision in which was followed in Savage V Saxena [1998] ICR 557, were quite different from the facts before us.  

5	The Employment Appeal Tribunal in Gardner-Hill V Roland Berger Technics Ltd  case was concerned with a situation where the appellant failed to seek employment by somebody else, he having formally run his own business.  In Paragraph 11 of the decision in Gardner-Hill V Roland Berger Technics Ltd, the Employment Appeal Tribunal said that the Industrial Tribunal had approached the matter without adverting to the relevant question, which was whether in all circumstances it was reasonable for Mr Gardner-Hill to do what he did.  Instead of doing that, the Industrial Tribunal had:-

“Simply assumed that because he failed to seek employment by another person he had failed to mitigate his loss”.

6	The principle in question is set out in paragraph 10 of the decision:-

“The duty on a claimant is to take such steps as in all the circumstances are reasonable to reduce the loss he suffers from the respondent’s wrongful act”.

7	Mr Parry asserts, and Ms Omambala, on behalf of the respondents accepts, that it is for the respondent to show that that duty has not been discharged by the claimant.  What Mr Parry says is that the Tribunal erred in this case by failing to take the third step, which is set out in Gardner-Hill V Roland Berger Technics Ltd  case at Paragraph 12 of the decision, namely to establish what the continuing loss would have been from the employment that he would have had.  

8	We consider that the case of Gardner-Hill V Roland Berger Technics Ltd  is to be distinguised from the case with which we are concerned.  For the reasons already stated, the matter seems to us to have been comprehensively dealt with by the Tribunal in its decision, and the extended reasons for that decision, which are set out from page 5 in the bundle.  In particular the matter turns on a letter which was written on behalf of the company on the 26 June 1998 (after the appellant had left the employment of the company) in which they go to some length to offer alternative employment.  In paragraph 4 they say as follows:

“It would be helpful to write fully about this and present the different options should the appellant be interested in this offer we will be in a position to offer him any one of the following.

1	“His old job back in “B” Press Shop which would be night shift work;
2	A position working in the tool room at Swindon.  This would involve carrying out light tool work and it would be on a day shift basis;
3	A completely new position at our plant at Cowley.  I understand that Mr Kerrigan lives near the Cowley plant and this opportunity has the advantage of being a “fresh start” for both him and us”.

9	The Tribunal found (as was admitted in fact) that that offer was rejected. In paragraph 12 of their decision they say:-

“We find that in rejecting the respondent’s offer without any attempt to investigate it the applicant did not discharge his duty to mitigate his loss.  We find that he refused to give any consideration to the respondent’s offer of alternative employment or to investigate the genuineness of what was on offer.  We accept that he may have had his doubt about the genuineness of the offer but without some attempt to pursue what on the face of it appears to us to be a genuine one we cannot find that the applicant has mitigated his loss.  The letter amounts to an entirely open letter offer to discuss any job available within the respondent company which the applicant might like to consider and which he was capable of doing.  Bearing in mind the enormous size of the respondent’s undertaking that amounts to a lot of potential opportunity.  We consider it almost inconceivable that for an employee who genuinely wished to return to work and who had no reasonable prospect of getting alternative work a suitable accommodation could not have been reached between the applicant and the respondent.  We have no evidence that the applicant had fallen out with any work colleagues or with any members of management within the respondent company.

10	The Tribunal continues in paragraph 13.

“We find that if the respondent’s offer to discuss alternative employment had been taken up this would have resulted in the applicant either concluding by 30 August 1998 that the offer was not a genuine one or that by that date he would have found himself re-employed.  We find the latter of those two to be the most likely option and we therefore find that a cut off date for the applicant’s financial loss is 30 August 1998”.

11	The foregoing is part of the decision which is based entirely on findings of fact.  We cannot and are not invited to go behind those findings.  But says Mr Parry, even though that was the position the Tribunal was in error by failing to carry out what would have been a purely academic exercise of identifying the job that the applicant would have been doing if he had accepted the offer.  In other words, if he had mitigated his loss.  It seems to us that that is an argument contrary to common sense and certainly is not something that is required of a Tribunal which has reached a conclusion that this tribunal reached.   Accordingly we dismiss the appeal on ground c.  That leads on to the other matter and disposes of the question of the preliminary application which is also necessarily dismissed.  

12	We turn next to the additional matter of the deduction that was made and the contention that the Tribunal wrongfully deducted from the loss of earnings the payments from the contributory scheme that is to be found in the judgment of Judge Byrt’s tribunal at letter g.  This is the second matter upon which the Employment Appeal Tribunal at the preliminary hearing granted leave for full argument to be heard.  The question is whether the Tribunal in the first instance had wrongfully deducted from the loss of earnings award payments made from a contributory Pension scheme.  

13	We have been much assisted by the skeleton arguments from Mr Parry and from Ms Omambala and by the authorities to which they have referred us.  The position over this issue was that for the remedies hearing which took place on the 13 July 1998, the solicitor for the appellant mistakenly took into account pension payments when calculating income loss.  Counsel for the respondent failed to identify that error and submitted in her note of argument for the remedies hearing a document, the relevant part of which is on page 63 in our bundle, and we quote paragraph 10 of her note for the hearing:-

“There is no dispute between the parties but that, from any sum awarded, the applicant’s pension should be deducted.  The issue between the parties is as to the amount that should be taken into account.  The respondent contends that this should be based upon the Option 1 pension allowance, which allows for a proper calculation of pension for annual income purposes, see letter from Pensions Benefits”.

14	There is then a reference to the letter from the Pensions Benefits Manager in the compensation bundle.

15	Counsel for the respondent’s note was an acceptance of the error originally made.  The submission of a different figure was in respect of the deduction which it was wrongly being agreed ought to be deducted.  It is the undisputed fact that pension payments are not to be taken into account when calculating damages for personal injury or wrongful dismissal.  

16	In law that is a well-established principle and if it needed authority we would look to the decision in the case of Hopkins V Norcros  [1994] IRLR 18.  The leading judgment was delivered by Lord Justice Straughton.  He reviews the position from paragraph 20 onwards and, having conducted his review, sums the matter up in paragraph 28 by saying:-

“Accordingly, I would regard this court as bound by the principle in Parry V Cleaver a (House of Lords decision) to hold that receipts from a pension plan are not to be deducted from the claim for damages”.

17	It follows therefore that the Employment Tribunal in the case with which we are concerned misdirected itself in law in permitting argument to continue on the basis that the pension payments were deductible and that the matter for their decision was which figure should be taken into account in making that deduction.  It is open to this Tribunal to remedy this direction and to substitute its own finding if we are possessed of all the facts necessary so to do.  

18	We are in that position and we therefore set aside that part of the remedies decision which awarded £7519.39 for financial loss and substitute the award of £19872.33.  The appellant is to give credit for any sum received under this head of remedy.  If we are wrong about our conclusion, that the Employment Tribunal must inevitably be found to have misdirected itself in law, because it did not correct the mistakes upon which the remedies hearing proceeded, we would find in the alternative that this is one of the rare exceptions contemplated by the court of appeal in the case of Jones V Governing Body of Burdett Coutts School  [1999] ICR Page 38 at page 44.  In the course of his judgement Lord Justice Widgery referred to the judgement of the Court of Appeal in another case, Hellyer Brothers Ltd V McLeod  which fully reviewed the authorities and which inclined to the view that the test in the appeal tribunal should not be more stringent than it is when a comparable point arises on an ordinary appeal to the Court of Appeal.  In particular it was inclined to the view of Lord Justice Widgery in Wilson V Liverpool Corporation 1971 IRLR302 at page 307 which is to follow the well known:-

“rule of practice that if a point is not taken in a court of trial it can’t be taken in the appeal court unless that court is in possession of all the material necessary to enable it to dispose of the fact matter finally without injustice to the other party and with out recourse to a further hearing below”.  

19	So far as our case is concerned on this alternative basis of judgement, we do know all the facts; there is no injustice to the other side; and there will be no further hearing below. And on that alternative basis also we find as we have already indicated.  The additional authorities to which have been referred and to which we have had regard are the decisions in Langston V Cranfield University [1998] IRLR 172; Kumchyk V Derby City Council [1978] ICR 1116 and the case of Jones to which I have already referred.