Appeal No.	 EAT/1054/00

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 6 February 2002

Before
HIS HONOUR JUDGE WILKIE QC
MS N AMIN
MISS S M WILSON

ROTHERHAM REBORING SERVICE LTD	APPELLANT

MR R MAYCOCK	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR D BARNETT
(of Counsel)
Messrs Irwin Mitchell
St Peter's House
Hartshead
Sheffield
S1 2EL	
For the Respondent	MS S RITCHIE
Mitchells Solicitors
2 Peckitt Street
Clifford Street
York
YO1 9SF	

HIS HONOUR JUDGE WILKIE QC

1	This is an appeal by Rotherham Reboring Service Ltd against 2 elements in a remedy awarded to Mr Maycock by the Employment Tribunal sitting at Sheffield, Chaired by Mr Little which, in a decision dated 11 July 2000, awarded him £6,600 by way of basic award and a further sum of £4,780 in respect of a compensatory award, making a total award in respect of his unfair dismissal claim of £11,387.  Mr Maycock had applied for a finding of unfair dismissal arising out of the termination of his employment which ran from September 1977 to 12 August 1999.  Mr Maycock’s date of birth was 12 August 1934 so that the date of his termination of employment was his 65th birthday.

2	The issue of substance which was determined by the Sheffield Employment Tribunal with Mr Little in the Chair on 30 May 2000 was whether Mr Maycock’s employment had come to an end by reason of dismissal, or, as the Respondent to the application have contended, by agreement.  The conclusion of the Tribunal had been that there was no agreement that Mr Maycock had been dismissed and that it was an unfair dismissal because the Respondent had failed to establish what was the reason for the dismissal.

3	However, prior to that decision on the substance, a differently constituted Tribunal sitting at Sheffield with Mr Rostant in the Chair had dealt with a preliminary issue raised by the Respondent.  The Respondent sought to rely on Section 109 of the Employment Rights Act 1996 which provides by Subsection (1), that Section 94 of the Act - that it to say the Section which gives an employee a right not to be unfairly dismissed by his employer - does not apply to the dismissal of an employee if on or before the effective date of termination he has attained:-
	(a)	the normal retiring age, or
	(b)	the age of 65.

In this case there was no normal retiring age and therefore the relevant provision of Section 109(1) was the age of 65.  On the face of it that precluded Mr Maycock pursuing a claim for unfair dismissal.

4	The first Employment Tribunal however, concluded that Mr Maycock was entitled to claim unfair dismissal because it came to the conclusion that Section 109(1)(b) constituted a provision which indirectly discriminated against men and, as the right to claim a remedy by way of compensation for unfair dismissal was a right in respect of pay, according to the decision of the European Court of Justice in the Seymour-Smith case, Article 119 of the Treaty of Rome, now Article 141 of the Treaty of Amsterdam, operated directly in English law to override the otherwise express prohibition of the Employment Rights Act 1996.  

5	The question, whether Section 109 did operate in an indirectly discriminatory way, had been determined by the Tribunal Chaired by Mr Rostant by reference to a statistical exercise which had been undertaken by Employment Tribunals, first of all in the case of Nash v Mash/Roe Group Ltd [1998] IRLR 169 the reasoning in which was subsequently applied in an Employment Tribunal decision in the case of Rutherford v Harvest Town Circle which was unreported.  Based on the statistical analysis which found favour in those 2 Employment Tribunal decisions, the Tribunal on 22 February 2000 followed them; concluded that Section 109 did operate in an indirectly discriminatory fashion and accordingly it disapplied Section 109 of the 1996 Act thereby permitting Mr Maycock to pursue his claim for unfair dismissal.  That decision of the Employment Tribunal on the preliminary issue was not the subject of any appeal to the Employment Appeal Tribunal hence the substantive hearing on 30 May to which we have already referred.

6	The decision, which is the subject of this appeal, awarded Mr Maycock a basic award of £6,600.  That award was made pursuant to the compensation provisions in the 1996 Act which start at Section 118, which provides that where a tribunal makes an award of compensation for unfair dismissal the award shall consist of a basic award calculated in accordance with Sections 119 – 122 and 126 and a compensatory award calculated in accordance with Sections 123 and certain other Sections.  Section 119(1) sets out the way in which the amount of the basic award shall be calculated by reference to the number of years’ continuous service.  Subsection (2) provides further material for that calculation by defining what is the appropriate amount which shall be multiplied by the number of years’ continuous service in order to calculate the basic award.  Subsection (4) however imposes an inhibition on the amount, if any, of the basic award.  It provides that:

“Where the effective date of termination is that of the 64th anniversary of the day of the employee’s birth, the amount arrived at under subsections (1) to (3) shall be reduced by the appropriate fraction.”

Subsection (5) defines the appropriate fraction as being the fraction of which the numerator is the number of whole months reckoned from the 64th anniversary of the day of the employee’s birth and ending with the effective date of termination, and the denominator is 12.  Thus, in effect, once a person is 64 the amount of the basic award, otherwise calculated in accordance with Section 119, falls to be reduced by 1/12th for every month after the age of 64 and by the time someone has turned 65 the basic award is reduced to nil.

7	The Employment Tribunal was confronted in considering the basic award by an argument presented on behalf of Mr Maycock that the provision in Section 119(4) is just as discriminatory on grounds of sex as Section 109, upon which the Tribunal had already ruled and that it would be illogical and wrong for the Tribunal to deny Mr Maycock a basic award by applying Section 119(4).  It appears from the decision of the Tribunal that Mr Meldrum, the solicitor on behalf of the Respondent, amongst other arguments, questioned whether the Tribunal could proceed to disapply Section 119(4) in the absence of statistical evidence.  The Tribunal decided that it should follow, from its decision on the preliminary point, that Section 119(4) must be disapplied.  Accordingly, it did so, hence the basic award unaffected by the inhibition imposed by Section 119(4) and (5).  

8	In its argument on this appeal, both in the Notice of Appeal and in the skeleton submissions, the Appellant has sought to undermine the correctness of that decision of the Tribunal by seeking to undermine the correctness of the Employment Tribunal decisions which the Tribunal in this case was following and had followed in the preliminary decision.  In so doing the Appellant is substantially fortified by a decision of the Employment Appeal Tribunal in Harvest Town Circle Ltd v Rutherford which overturned the determination of the Employment Tribunal in that case and remitted that case to the Tribunal to consider again whether Section 109, and in that case 156, of the Employment Rights Act 1996, which deals with redundancy payments, was indirectly discriminatory by applying (if it were available) the statistical evidence which went to what the Employment Appeal Tribunal considered the issues or reflecting the correct approach, it having concluded that the approach to the statistical evidence adopted by implication in Nash v Mash/Roe and in the Rutherford case was incorrect.  Thus, insofar as this Employment Tribunal in respect of the basic award purported to apply the Nash approach, the Appellant, on the face of it, has a compelling argument that the Tribunal erred in law in adopting a manifestly erroneous approach as a matter of logic.  

9	Mr Ritchie, on behalf of the Respondent to this appeal, has attempted to sidestep the logic of that process.  He does not seek to defend the adoption by the Tribunal of any particular approach to statistical analysis.  Rather, he asserts that it is not open to the Appellant to seek to overturn the Tribunal on this issue because there arises an issue estoppel in the sense that the same question had already been decided in the proceedings at the initial preliminary stage.  That decision had not been appealed and so in that sense it was final.  Therefore it is not now open to the Appellant to raise it.  In so doing he is really implying that the words of the Employment Tribunal that ‘it must naturally follow from the Tribunal’s decision on the preliminary point’ does reflect the Tribunal concluding that having already decided this issue it would quite wrong for that issue to be reopened on this question of the basic award.

10	Mr Barnett, in seeking to contradict this argument on issue estoppel, has sought to argue that the question posed of the Tribunal in respect of the basic award was not the same question as was posed to the Tribunal on the occasion of the first Preliminary Hearing.  He says that the question in each case was, whether a different statutory provision was to be disapplied as being indirectly discriminatory, applying directly the terms of Article 141.  He points out, correctly, that Section 109 bites in a number of circumstances, namely where there is a normal retiring age and, as a default position, where the Applicant has reached the age of 65.  Section 119(4) however, starts to bite when an Applicant has reached the age of 64 and operates on a sliding scale so that it wholly precludes a basic award only when the Applicant is 65.  Furthermore he says that the mere fact that the European Court of Justice in Seymour-Smith characterised the compensation award to an employee for unfair dismissal as comprising a basic award and a compensatory award, does not necessarily mean that it follows that the statutory provisions impacting on the compensatory award and the basic award respectively are necessarily to be adjudicated upon together by consideration only of Section 109.  He rather contends that whether Section 119 operates in an indirectly discriminatory manner so as to be disapplied pursuant to Article 141 is a matter which necessarily is separate to, and therefore entails a different consideration than, Section 109.  From that he argues therefore that the decision reached by the Employment Tribunal on the basic award was not the same question as was decided at the Preliminary Hearing.

11	Whilst in theory that may be right, in the sense that there is no necessary congruence between questions arising under the 2 sections, what we have to consider is whether in this case, between these 2 parties, the same question was decided in both proceedings.  In this case, at the commencement of the proceedings, and indeed at the effective date of termination, Mr Maycock was 65.  Therefore the question which arose under Section 109 was whether he was disqualified from applying for a finding of unfair dismissal and the remedies which flowed from that, and, under Section 119(4), whether being 65 he should receive no basic award whatsoever.  

12	It seems to us that it is quite unrealistic to describe those questions as in any way different because in each case the question was – he having reached the age of 65, is he wholly disqualified from access to what has been defined as pay, namely compensation by way of a compensatory award and/or a basic award following from a finding of unfair dismissal?  Therefore it seems to us, notwithstanding the extremely able submissions of Mr Barnett, that Mr Ritchie’s argument that an issue estoppel did arise and that this was effectively what the Tribunal was saying in its decision of 11 July 2000, was correct as a matter of law.  Therefore it follows that not withstanding the fact that, as a matter of substance, the decision of the Employment Appeal Tribunal in the Rutherford case has rather cast doubt upon the correctness of the approach of the Tribunal at the Preliminary Hearing, nonetheless there is now nothing that the Appellant can do to remedy that, their having missed the opportunity of appealing the initial decision at the Preliminary Hearing.  Therefore we dismiss the Appellant’s appeal on that issue.

13	The second, and secondary, issue concerns the calculation of the compensatory award.  Mr Maycock had always contended that he would not have wished to have worked beyond 
31 March 2000 and he limited his claim to future loss to that date.  He was entitled to receive pay in lieu of notice for the period from the termination of his employment up to 8 November 1999.  So the Tribunal was concerned to calculate as one of the elements in the compensatory award his loss of earnings by virtue of the unfairness of his dismissal during the 21 weeks between 8 November 1999 and 31 March 2000.  In its decision it did so by taking his net weekly contractual pay of £247 per week and multiplying that by 21 and then deducting from that a figure of £400 to reflect sums that he had earned by reason of consultancy fees during that period.

14	The Tribunal had heard evidence in respect of that period and indeed Mr Maycock had been subjected to cross-examination on behalf of the Appellant.  The notes of that cross-examination which have been produced for this Tribunal are somewhat ambiguous, but what is clear is that between August and October he did nothing as we was not well, that he now worked a few hours per week for parts of the day and that he just went in when he felt capable.  The Tribunal also questioned him and he is recorded as saying that he did not keep records of the hours worked for the company for whom he was performing the consultancy service, he agreed that £500 was appropriate, it would appear, as a figure for those earnings. 

15	What is said on behalf of the Appellant is that the Tribunal simply taking as read his contractual net weekly earnings as the basis for calculating that element of loss had failed to have regard to the fact that it appeared that he was not in the best of health during that period and it should therefore have embarked upon an investigation as to whether he was contractually entitled to his full weekly wage or salary for that period, or whether he was only entitled to statutory sick pay.  

16	Mr Ritchie contends that the Appellant is seeking to raise at this Tribunal an issue which they did not raise below.  We are in the unfortunate position of having before us contradictory statements as to whether that is or is not the case.  The solicitor for Mr Maycock has produced a witness statement of 5 February 2002 which suggests that the issue was not raised and in support of that, producing his hand written notes of the submissions made on behalf of the Appellant by Mr Meldrum, their solicitor, as well as his notes of the evidence.  It is right to say that there is nothing in the notes of submissions which suggests that this point was taken, on the contrary, the note reads:

“It was agreed that the net amount of the applicant’s earnings would be £247 a week.  I agree that the £5000 should be taken into account.  The net amount of the £957 less holiday pay should be deducted.”

Mr Meldrum, on the other hand, has provided a witness statement dated 31 October 2000, some 5 months after the hearing on 30 May, in which he says that he did submit that:

“Mr Maycock’s compensatory award should be limited to take into account the fact that by his own admission he was only well enough to have worked for a few hours a week during the relevant period.”

but he has not produced any notes of a contemporaneous nature showing the pattern of his submissions or the contents of his submissions.

17	As against those 2 accounts we have the Notes of Evidence of the Chairman.  It is noteworthy that there is nowhere in those Notes of Evidence any hint that Mr Meldrum was cross-examining Mr Maycock about his contractual entitlement to pay if sick was to lay an evidential foundation for such submissions.  Furthermore, the Tribunal decision is, if we may say so, one which carefully sets out the respective submissions of each side and the findings made by it on a number of issues, and if, as is argued, Mr Meldrum had put forward this submission we would have expected it to be reflected it that decision as indeed other arguments of Mr Meldrum were on the issue of the compensatory award.  

18	Therefore we are forced, in our judgment, to conclude that we should act essentially on the basis of the contemporaneous documentation, none of which reveals that this issue was taken.  It therefore appears to us to be one which is raised after the event at the appeal stage which Mr Barnett well recognises is not permissible.  Therefore we dismiss his appeal on this issue on that basis.  Therefore on both of the limbs of appeal, we dismiss the appeal.