Appeal No. EAT/26/91

	EMPLOYMENT APPEAL TRIBUNAL
	4 ST. JAMES'S SQUARE, LONDON, SW1 4JU

		At the Tribunal
		On 12th February 1992

	Before

	THE HONOURABLE MR JUSTICE PILL 

	MR J A POWELL

	MR G H WRIGHT MBE

COLD DRAWN TUBES LTD	APPELLANTS

C H MIDDLETON	RESPONDENT

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR C JEANS
(Of Counsel)
Engineering Employers' Federation
Tothill Street
London
SW1H 9NQ

For the Respondent	MR G MILLAR
(Of Counsel)
Russell Jones & Walker
Swinton House
324 Gray's Inn Road
London
WC1H 8DU

	MR JUSTICE PILL:  This is an Appeal by employers against the Decision of an Industrial Tribunal sitting at Leicester, that the Applicant, Mr C H Middleton was entitled to total compensation of £11,062 including the additional award in respect of his unfair dismissal and the Respondents' failure to comply with an Order for reinstatement.

	It is necessary to state briefly the history of the present dispute.  Mr Middleton commenced his employment with Cold Drawn Tubes Ltd (CDT) in 1986.  He was dismissed on the 11th December 1989.  He claimed at a hearing of an Industrial Tribunal on the 15th June 1990 that he had been dismissed unfairly and the Tribunal so found.  He also claimed reinstatement and the Tribunal ordered that he should be reinstated.

	At a further hearing on the 10th September 1990 it was argued that it was impracticable to reinstate in accordance with the terms of the Act.  That argument was rejected by the Tribunal, who then proceeded to assess compensation.  

	The employers appealed against the Order for reinstatement.  They also appealed against the component in the compensation which followed from that Order.  Those appeals were heard by this Tribunal, Mr Justice Tucker presiding, and by a Judgment delivered on the 17th December 1991 the Tribunal allowed the appeal against the reinstatement Order by holding that it was not practicable for the employers to reinstate Mr Middleton.  It followed from that finding that the component of the award which flowed from the failure to comply with the Order for reinstatement fell.  There remained the question of other elements in the award which were challenged and, through want of time, the Employment Appeal Tribunal, as then constituted, did not deal with those remaining issues.

	The remaining issues are two in number.  The first is whether in assessing the loss of earnings suffered by Mr Middleton the Tribunal wrongfully took into account the overtime which he had earned in 1989.  It is submitted that the evidence before the Industrial Tribunal was that after February of 1980 Mr Middleton would not have been able to earn wages for overtime because no overtime was available.  It is submitted on his behalf that on the evidence, the Tribunal were entitled to reach the conclusion they did.

	The second point is in relation to the multiplicand for future loss of earnings following the date of the hearing in October 1990.  It is accepted that the Tribunal were entitled to assess the continuing loss over a six month period in the future but it is submitted that they erred in the weekly figure they used to calculate that future loss.  There is no doubt that Mr Middleton made reasonable efforts to mitigate his loss following his dismissal by CDT.  He obtained other employment first with Programme Network Ltd (PNL) and after April 1990 with PUPA Plastics Ltd (PPL).  He was still employed by PPL at the date the Tribunal assessed his loss.

	The Parties have helpfully and sensibly agreed arithmetically calculations of what would follow if the Appellant succeeds on both grounds of appeal or on the second ground only.  

	The Tribunal conducted two hearings into the present issues.  That is clear from the Decision document on the front page of which is a reference to hearings held on the 10th September 1990 and the 19th October 1990.  The Tribunal Chairman has supplied a note of the evidence given on those two occasions.  On the first occasion, evidence was given by Mr Richard Carpenter, the employers' Materials Purchase and Planning Manager, and Mr John McCann, their Personnel Manager.  At the second hearing Mr Middleton gave evidence.  It is possible that he also gave evidence at the first hearing, but nothing turns upon that, and evidence was also given by Mr Andrew Frith, the employers' Site Accountant.

	In their Decision the Tribunal set out the basis upon which they reached the figure which they did and their reasoning is set out at page 2:
"We have decided on the evidence (and we must only act on the evidence that we have heard) to take the figures which are shown on page 12 [which is page 56 of our Bundle] as being the figures that the applicant was earning before he was dismissed in December 1989 and the basis for what he would have been earning had he still been employed from the beginning of January 1990.  Those figures would have been subject to a 7.2% increase overall.  Mr Kay [he was the Advocate for the employers at the Tribunal] has asked us to take into account that earnings are down this year on what they were last year but we have heard no evidence in support of that.  It is agreed by Mr Kay that the bonus position was much the same as is shown in the earlier figures and Mr Firth, who is the respondents' site accountant, has said that he did not known anything about the question of overtime.  There is, therefore, nothing which changes our mind about relying on the end of December 1989, plus a 7.2% increase on the gross pay.  We have, therefore, taken the net pay at £581 per month, to which we have 7% and this for the ten months from 1 January to 31 October produces the figure of £6,230."

It is common ground that the Tribunal were correct to have regard to a 7.2% increase in 1990 as compared with the 1989 figures which Mr Middleton in fact earned.  It is also common ground that the bonus position was the same for the two years.  The dispute is as to whether the Tribunal were correct in taking into account the same overtime figures in 1990 as had been operative in 1989.  We bear in mind of course that the Industrial Tribunal are the Tribunal of fact.

	The central point made by Mr Jeans, Counsel on behalf of the employers, is that the Tribunal either forgot, or wrongly ignored, the evidence upon overtime given by Mr Carpenter at the September hearing.

	Mr Millar submits, first, that the Tribunal did and were entitled to disbelieve the evidence of Mr Carpenter.  Second, he submits, that even if his evidence was accepted it was ambiguous or related to a different issue, or was in such general terms that the Tribunal were not perverse in not having regard to it.  

	The relevant evidence of Mr Carpenter is as follows:
"The order book has worsened since the beginning of the year [1990].  4,800 tons of order in January reduced to 2,700 at the end of August 1990.  No overtime was necessary after two months of the year.  Since April there has been hardly any overtime.  We are in mid-recession.  Three planners are adequate cover.  No overtime is necessary.  We don't want anyone else."

Later there is reference to the fact that the Applicant was never replaced and
"If we took the applicant back we would have too many `bodies' in the department."

	We deal first with Mr Millar's second point. He submits that on a fair reading of that evidence the Tribunal were entitled to hold that overtime should be a component in the award for loss of earnings in 1990.  We reject the arguments which he has made on that point.  They are semantic arguments and may be none the worse for that, but in our unanimous view the effect of the evidence of Mr Carpenter is plain.  The evidence was that after February 1990 no overtime was worked, and it must follow from that that no overtime would have been available to Mr Middleton had he remained in the employment of CDT.

	In support of his first point, Mr Millar invites us to say that it follows from the above passage in the reasoned decision that the Tribunal rejected the evidence of Mr Carpenter.  We find it impossible to accept that submission.  Mr Carpenter was in a position of responsibility.  Had the Tribunal disbelieved his evidence they would have said so.  We find it inconceivable that they would have disbelieved evidence of such an official of the employers without saying so in terms.  Such indication as they did give on credibility was if anything to the contrary effect, because they stated that they must
"only act on the evidence (they) have heard".

There is no ground for believing that they rejected and disbelieved the evidence of Mr Carpenter.  The point made is that disbelief may be inferred from the fact that the Site Accountant, Mr Frith, said in his evidence at the October hearing:
"I do not know about overtime."

and that in the absence of evidence from him that there was no overtime, it could properly be inferred that overtime was available.  We cannot accept that submission.  We consider the case upon the Tribunal's Decision itself, and upon the Notes of Evidence as they throw light upon the reasoning and findings of the Tribunal.  The rest of Mr Frith's evidence, as noted, was to produce a document which showed the Applicant's earnings for 1989.  He then said that one bonus was paid in April 1990.  2% gross salary for a quarter.  There was no issue as to that.  Mr Millar's submission is that Mr Frith would have known about any overtime and his statement that he did not know about it left it open to the Tribunal to conclude that overtime was available on the balance of probability.  We accept that Mr Frith, as Site Accountant, would be expected to know the actual earnings of Mr Middleton in 1989, and he gave evidence about that.  We find it in no way surprising that he did not know the operational position in relation to the availability of overtime during the year 1990.  We would expect Mr Carpenter, the Materials Purchase and Planning Manager to be in a position to give the relevant evidence on that subject.

	The further point made by Mr Millar, and that is one reason why we have referred to the earlier hearings, was that the evidence of Mr Carpenter was directed not to the present issue but to issues of reinstatement.  It was no doubt relevant to those issues.  However, it is also relevant to the issue now before us, and we do not think it was open to the Tribunal to ignore evidence on the basis that it related also to another issue.

	Accepting, as they did, that the hearing of September was a part of the hearing on the present issues the Tribunal were obliged, in our judgment, to have regard to the evidence of Mr Carpenter.  We have refused to accept the suggestion that it is a proper inference from the Tribunal's findings that they disbelieved Mr Carpenter.  What must have happened in that case is that for some reason, and it is not for us to speculate why, they forgot or otherwise ignored the evidence of Mr Carpenter.  The question of the employment position in 1990  must have been in their minds because that question was considered by them expressly when considering the question of reinstatement.  They were obliged to have regard to the employment position in 1990 and in particular to the availability or otherwise of overtime when assessing the loss which Mr Middleton, in fact, suffered.

	It is clear that Mr Kay took a point at the hearing upon the relevant issue.  He accepted the increase in rate;  he accepted the 1989 earnings;  he accepted the question of bonus.  The point he raised when urging the Tribunal to adopt a lower figure than the 1989 figure, must it seems to us, have been in relation to overtime.  Even if it was not, the Tribunal were not entitled to ignore the evidence on that subject.

	If the Tribunal had taken account of the evidence, it all pointed one way.  There was clear evidence that Mr Middleton would not have been in a position to work overtime after February 1990.  That being so the Tribunal erred.  The only decision they could properly have reached was a decision that overtime was not available after that date.  That being so there is no dispute on the arithmetic which follows to lower the award made.

	On the second point Mr Millar rightly draws our attention to authorities which indicate that in assessing compensation the Tribunal are entitled to adopt what Mr Justice Phillips in Fourgier v. Phoenix Motor Co. [1976] ICR 495 described as a "broad brush" approach.  What happened was that following his first employment with PNL Mr Middleton obtained better paid employment with PPL.  He had held that employment for a period of six months before the Tribunal assessed his loss.  What the Tribunal did was first to consider what future loss should be awarded and they decided upon a period of six months.  There is no appeal or cross appeal in relation to that figure.  However, in deciding what weekly rate to apply to that six month loss, they took not the current earnings with PPL but an average of the earnings with PPL and the lower earnings with PNL.  In their Decision they set out at paragraph 1 the calculation based on the average which came to a figure of £1,390.  They then considered at paragraph 2 the period to be taken and had regard to the uncertainties involved when deciding upon the period of six months.  They then stated that the prescribed element figure of £1,390 is based on a period of 10 months so the six months continuing loss at the same rate is arrived at by dividing £1,390 by 10 and multiplying it by 6, which is a figure of £834.  That, Mr Jeans submits, was done simply as a matter of arithmetic.  It was not done, and there is no reasoning to suggest it was done, as a means of arriving at a figure which was likely to be lost over a future period.

	Mr Millar submits and rightly so, that this Tribunal should not readily interfere with a finding of fact and that there are no hard and fast rules for the calculation of future loss.  There is however a well established principle that future loss is to be calculated on the basis of the existing continuing loss.  That is not a principle which must invariably be applied.  There could be grounds for reducing, or indeed increasing that figure, if on the evidence that would produce a just result.  However there is no suggestion in the Tribunal's findings that that is what they have done.  In considering the uncertainties of the situation, and invariably in assessing future loss there are uncertainties, they did so in relation to the period during which it was appropriate to compensate.  That was a perfectly proper approach.  However, having considered the uncertainties under that heading, it was not right in our unanimous view to take the average earnings for the period with the two employers as distinct from the actual earnings which Mr Middleton was making at the time.  This, in our judgment, is an error which must be rectified by this Tribunal.  We have considered whether remission of that point might be appropriate but for reasons we have given, and in the absence of any suggestion in the Decision that the average figure was in some way intended to represent a true calculation of future loss, we consider it appropriate that we should reverse the Decision.  To apply the current figure would have been the only correct approach having regard to the fact that uncertainties were taken into account when assessing the period for which the loss was to be applied.

	Accordingly, we also reverse the Decision of the Tribunal upon that point and the amount of compensation ordered must be reduced in accordance with the arithmetic which is agreed, by the sum of £1,378.  The appeal to that extent is allowed.

	We substitute an award of £5,212.  That includes a prescribed element of £720.  On the issue before us we reduce the Tribunal's award by £1,378 as per calculation A which the parties have submitted and it follows from the Order of the Employment Appeal Tribunal of the 17th December 1991 that the award is also reduced by the figure included for failure to reinstate.