Appeal No. EATS/0078/06/MT

EMPLOYMENT APPEAL TRIBUNAL
52 MELVILLE STREET, EDINBURGH, EH3 7HF

	At the Tribunal
On 19 September 2007

Before
THE HONOURABLE LADY SMITH
MR M SIBBALD
MR M SMITH OBE JP

MR M MacDONALD	APPELLANT

FRANK’S INTERNATIONAL	RESPONDENTS

Transcript of Proceedings

JUDGMENT

APPEARANCES

For the Appellant	Mr C MacKenzie 
(Advocate)
Instructed by:
Messrs Taggart Meil Mathers
Solicitors
20 Bon-Accord Square
Aberdeen
AB11 6DJ	
For the Respondents	Mr D Burnside 
(Solicitor)
Messrs Simpson & Marwick Solicitors
4 Carden Terrace
Aberdeen
AB10 1US	

SUMMARY

Unfair dismissal – Compensation/Polkey deduction

Claimant dismissed on grounds of redundancy. Offered alternative employment by Respondents but declined to accept it.  Dismissal held to have been automatically unfair on account of Respondents’ failure to follow steps 1 and 2 of the statutory dismissal procedure (Employment Act 2002 Sch 2 part 1). No compensation awarded, however, since virtually certain that Claimant would have lost his job in any event i.e. 100% Polkey deduction. Tribunal’s decision upheld on appeal. 

THE HONOURABLE LADY SMITH

Introduction 
1.	This is an appeal from the judgment of an Employment Tribunal sitting at Aberdeen, Chairman Mr R G Christie, registered on 8 September 2006, in which it was held that the Claimant was unfairly dismissed but that no monetary award should be made. It was agreed that the Claimant was redundant. The unfairness in question was that the dismissal was held to be automatically unfair (see:  Employment Rights Act 1996 section 98A(1)) and the reason why no monetary award was made was that he had already received his statutory redundancy pay and the Tribunal concluded that:
“such was the virtual certainty”
that the dismissal of the Claimant would have ensued even if the statutory procedure had been complied with (see:  Tribunal judgment paragraph 34), that a Polkey reduction of 100% should be applied. 

2.	Parties’ representation at the appeal hearing was the same as their representation before the Tribunal. 

Background Facts 
3.	The Claimant had been employed by the Respondents as a sales manager. His job title became business development manager in January 2002. At that time he became responsible for the Respondents’ contract to supply services to the oil company AGIP in connection with their operations in Kazakhstan. He spent about six months of each year there in connection with that contract. The Respondents lost the AGIP contract in December 2004. 

4.	Following informal discussions, the Respondents wrote to the Claimant offering him redeployment in a job which was to be created for him, by letter dated 18 May 2005. The salary was lower than in his previous post and it was to be subject to a probationary period. The Claimant met with the Respondents on 19 May 2005 and the whole circumstances were discussed. In particular, the Respondents referred to the fact that the Claimant’s previous job no longer existed and that his position was effectively redundant. The Respondents’ offer of a new job, as explained in the letter of 18 May, was discussed but he declined to accept their offer. 

5.	The Claimant then fell ill. The Respondents wrote on 24 May 2005, indicating that they presumed he was still considering their offer but if they did not hear back from him by close of business on 26 May 2005, they would assume that he did not wish to accept their offer and they would then commence the redundancy procedure. They did in fact extend their own deadline. They wrote again in similar terms on 8 June 2005 but requested, in that letter, a response by return, which failing they would proceed to process a redundancy payment. By the end of June, the Claimant had not accepted the Respondents’ offer and parties had not agreed settlement terms, although attempts had been made to do so. The Respondents then issued a notice of termination of employment dated 1 July 2005. It gave 3 months notice. 

6.	What the Respondents did not do was provide the Claimant with a written statement setting out the circumstances which led them to contemplate dismissing him and inviting him to a meeting to discuss those circumstances and thereafter hold a meeting with him.

7.	The Claimant appealed against the notice of termination, alleging that the redeployment offer was a sham, complaining that there had been no proper consultation and disputing that there was a genuine redundancy. The appeal was heard on 29 August 2005, by the Respondents’ Mr Sibille and was unsuccessful. In the course of the appeal hearing, the Respondents’ offer of alternative employment was again discussed and the Claimant again said that he would not accept the offer. It remained the Respondents’ clear position that his previous position was redundant. By letter dated 31 August 2005, the Respondents’ wrote a letter to the Claimant which was clearly written on the basis that their decision to dismiss him was not being departed from. 

The Relevant Law 
8.	The Respondents required to follow one of what are now known as the statutory dismissal procedures provided for in terms of the Employment Act 2002 (“the 2002 Act”) and the Employment Act 2002 (Dispute Resolution) Regulations 2004. In particular, they required to follow the three steps in the standard procedure set out in Chapter 1 of Part 1 of Schedule 2 to the 2002 Act. In summary, the first of those steps requires an employer contemplating dismissal on grounds of redundancy to set out in writing the circumstances which lead him to contemplate the dismissal in question, send it to the employee and invite him to a meeting to discuss the matter. The second step requires him to hold that meeting after having given the employee a reasonable time to consider his response and to inform the employee after the meeting of his decision and of his right of appeal against it.  

9.	The third and last step provided for in Chapter 1 is in the following terms:
“Step 3:  appeal 
3.- (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.” 

10.	If the statutory procedure is not followed then any dismissal which ensues will be regarded as “automatically unfair” because of the provisions of section 98A(1) of the Employment Rights Act 1996 (“the 1996 Act”):

“(1) 	An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if –
(a)	one of the procedures set out in Part 1 of Schedule 2 to the Employment Act 	2002 ( dismissal and disciplinary procedures) applies in relation to the dismissal,
(b)	the procedure has not been completed, and 
(c)	the non-completion of the procedure is wholly or mainly attributable to failure 	by the employer to comply with its requirements.” 

11.	Where there is an automatically unfair dismissal (just as where a dismissal is found to be procedurally unfair on an application of section 98(4) of the 1996 Act), when it comes to the assessment of compensation, it is open to a Tribunal to reduce the sum payable to allow for any chance that the  employee would have lost his job in any event, even if the correct procedures had been followed, all in accordance with the principles discussed in the case of Polkey v AE Dayton Services Ltd [1988] AC 344 that is that, as was there adopted from the words of Browne–Wilkinson Judgment in Sillifant v Powell Duffryn Timber Ltd [1983] IRLR 91 and expanded on, at p.365:
“There is no need for an “all or nothing” decision.  If the industrial Tribunal thinks there is a doubt whether or not the employee would have been dismissed, this element can be reflected by reducing the normal amount of compensation by a percentage representing the chance that the employee would still have lost his employment.’
  The second conclusion is perhaps of particular importance in redundancy cases.  An industrial Tribunal may conclude, as in the instant case that the appropriate procedural steps would not have avoided the employee’s dismissal as redundant.”

12.	The reference to the importance of the availability of the Polkey deduction in redundancy cases is of particular relevance in the present case. It is not difficult to see that there is liable to be a higher incidence of such deductions and at higher percentages, where the dismissal is by reason of redundancy. The extent of any Polkey reduction is, though, a matter for the judgment of the Tribunal; it could be as much as 100% if justified on the evidence:  Devis Ltd v Atkins [1977] IRLR 314.

The Tribunal’s judgment 
13.	The Tribunal found that the Respondents had failed to comply with steps 1 and 2 of the standard dismissal procedure. The Claimant’s dismissal was, accordingly, “automatically unfair” under and in terms of section 98A(1) of the 1996 Act.  No basic award arose since the Claimant had received the statutory redundancy payment due to him. 

14.	The Tribunal then considered the question of compensation. Since his dismissal, the Claimant had not secured other employment, despite making some job applications but had started his own business providing services to other oil related businesses. The Tribunal considered that in doing so, he had taken such steps as were reasonable; he had not failed to mitigate his loss.

15.	Parties provided a statement of loss to the date of the hearing in respect of which only one matter was at issue between them. That was the question of whether or not there should be added back the sum of £400 which the Claimant had been deducting as a monthly expense. It was a payment to his wife who carried out some clerical work for the business. It was, however, paid into a joint account to which he had access. The Tribunal found:
“In assessing the amount of the earnings of the business to be set against the Claimant’s loss of income following dismissal, the parties were at odds as to whether the monthly payment of £400 should be included as an expense.  Mr Burnside’s point was that whilst the practice in itself was unobjectionable the monthly payment in reality was income ‘into the household’ from which the Claimant must have derived benefit.  We tended to agree, particularly as the money was passing simply from one bank account under the Claimant’s control into another from which he could draw freely.  It therefore seemed to us to be consistent with justice and equity, the criterion by which we are to determine the amount of a Claimant’s losses, for that part of his post - dismissal earnings to be left in the reckoning.” 

16.	Once that was done, it brought out a total loss to the date of the hearing of £14,617.31.
17.	As regards future loss, they decided that it would not be just and equitable to make any award. At paragraph 30, they state:
“It is now over ten months since the Claimant’s employment came to an end and, given the known state of the labour market, and although we felt he has acted reasonably until now, we considered that sufficient time for him to be expected to have gained other employment has now passed.  There is, inevitably a high degree of speculation involved in any assessment of future loss, and even if he were to remain unemployed we cannot exclude the possibility of income from his own business becoming sufficient at any time for him to restore the level of his previous earnings.  We have therefore declined to include future loss, thus leaving the figure at £14,617.31.” 

18.	The Tribunal then considered the question of whether or not to make a deduction to allow for the chance of the Claimant being dismissed even if the correct procedures been followed. That was, of course, by reference to the well known principle discussed in Polkey, to which we have already referred. They noted that the only procedural unfairness that arose was as a result of the operation of section 98A(1) and it was against that background that the question of the Polkey deduction required to be considered. At paragraph 33, they observe that the hypothetical outcome that required to be created, for that purpose, was reasonably clear. It was that:
“... the requirement for the Claimant’s services in Kazahstan had diminished to the point of disappearance.  Other than the position which the Respondents offered to him and which he refused, there was no other position for him.  Accordingly, if the Respondents had set out the circumstances in writing (Step 1) they would, and could only, have said precisely that.  At a subsequent meeting, that position would have been repeated.  What then, if anything could have gone differently?” 

19.	At paragraph 34, they go further: 
“Mr MacKenzie complained in his submissions that there was no evidence led at the hearing before us that could allow us to come to any view about the matter so that any suggested reduction could not possibly be made.  We disagree.  Firstly, the question was put directly to the Claimant as to whether he felt, if such a meeting had been held, that the outcome might have been different.  He was quite clear that it would not.  Certainly the same direct question was not put to the Respondent’s witnesses, but we do not consider that evidence bearing on this hypothetical question needs to be so direct.  We can, and probably must look at the whole surrounding circumstances and take these into account.  There was nothing in these which, as an example, led us to suspect, far less regard as probably, that the Respondents would have altered their view as to the appropriate level of salary for the alternative position being offered.  There was nothing else in the circumstances with which the Respondents were confronted at the time which, on any sensible view, would have altered the eventual outcome, namely the dismissal of the Claimant after his refusal of the other post, and that for the potentially fair reason of redundancy.  Such is the virtual certainty of that outcome that in our view it can only be just and equitable for the ‘Polkey’ reduction from what would otherwise be a compensatory award to be total, namely 100%.” 
The Appeal 
20.	Mr MacKenzie advanced five separate grounds of appeal. The first was that the Tribunal had erred in failing to consider evidence and accept a submission that the dismissal was substantively unfair. The evidence in question was said to be evidence that the Respondents did not require for financial reasons to pay the Claimant a reduced salary and that a particular employee would not accept that the Claimant should be paid a higher salary than him. The argument was that the job offer made to the Claimant was on unreasonable terms and that the dismissal should, accordingly, have been regarded as unfair. He seemed to seek to infer that because the Respondents could have offered the new job at a higher salary they should have done so and by not doing so they caused the dismissal for redundancy to be unfair. He submitted that it was for the Respondents to justify the conditions on which the job offer was made and they had not done so although he also accepted that there was no onus on the Respondents in this matter. The Tribunal had not made findings in respect of the evidence referred to and had not dealt with the argument. They should have done so.

21.	The second ground of appeal constituted an attack on the Polkey deduction and was in three parts. It was submitted that the Tribunal erred in failing to consider certain evidence led about the appeal, that it should have found that there was a failure to comply with step 3 of the statutory procedure as well as steps 1 and 2 and it should have found that had the appeal been decided fairly, it could not have decided that compliance with step 3 would have made no difference. The argument in the notice of appeal seemed to be that had step 3 been complied with then the Claimant might have been able to persuade the Respondents to offer him the redeployment job at the same salary as his old job and without a probationary period. The second branch of this ground was to the effect that the Tribunal should not have found that the Claimant would have been dismissed in any event because they did so by relying on an answer that he gave in evidence where the Respondent’s witnesses had not given any evidence on that matter. Mr MacKenzie accepted that it was open to the Tribunal to look at the whole circumstances and to draw inferences but he submitted that the evidence ought to have come from the Respondents on the issue of what would have happened if the statutory procedure had been complied with. Then he added that he was not saying that it was necessary to lead such evidence but that it inevitably weakened the Respondent’s position when it had not been led. As to the third branch of this ground, he said that had the Claimant been written to in accordance with the statutory procedure it was difficult to speculate as to what might have happened but his whole approach might have been different; he might have taken stronger steps to try and persuade the Respondents to change their conditions. And had step 3 been complied with which, on his submission, it had not, matters might have been different.  

22.	The third, fourth and fifth grounds were predicated on the basis that we were persuaded that the Tribunal erred in making a 100% Polkey deduction. Mr MacKenzie submitted that the Tribunal erred in deciding that had it been awarding compensation, it would not have allowed the deduction from the Claimant’s post dismissal earnings of the £400 per month paid as spouse’s salary. He submitted that the Tribunal had erred in deciding that there would have been no award for future loss; there was contradiction as between their finding that he had mitigated his loss to the date of the hearing but immediately thereafter, would be able to earn the same as prior to his dismissal. Finally, he submitted that the Tribunal should have specified that it would have increased the award of compensation in accordance with the uplift provisions in section 31 of the 2002 Act. 

23.	For the Respondents, Mr Burnside submitted that it was plain that the Claimant was seeking to advance a perversity appeal but he failed to pass the high test that that ground required. He referred, for discussions of the relevant test in perversity appeals to the well trodden pathway through Carter v Credit Change Ltd [1979] ICR 908, McAfee v Associated Newspapers Ltd EAT/0568/03, Neal v Hereford & Worcester County Council [1986] ICR 471, Piggott Brothers & Co Ltd v Jackson [1992] ICR 471, Forbes v Salamis (Marine and Industrial) Ltd [2006] SC 621, Stewart v Cleveland Guest ( Engineering) Ltd [1994] IRLR 440 and Yeboah v Crofton [2002] IRLR 634. 

24.	In this case, it was not disputed that there was a potentially fair reason for the dismissal, namely redundancy. The Claimant had accepted that his job had gone.  He had taken his redundancy payment.  There was no basis on which it could be said that the nature of the Respondents’ offer of a new job made the dismissal substantively unfair. In any event, there was no obvious unfairness in the job offer that was made. He was being offered a salary which was in line with the other members of the same team and the inclusion of a probationary period was normal. 

25.	Regarding the attack on the Polkey deduction, Mr Burnside submitted that it was evident from the findings that there was an appeal and that it had been unsuccessful. The argument advanced seemed to be to the effect that Mr Sibille had failed to decide the appeal but the Tribunal had found that the appeal was unsuccessful which was contrary to that proposition. Further it did not make sense to say that the criticism was that he had not decided the appeal at the same time as saying that the point was that had he decided it, he would have decided in favour of the Claimant. As regards the evidence as to whether matters would have turned out any differently, it did not, Mr Burnside submitted, matter who the evidence came from. The Tribunal’s task was to assess the evidence before them and they had done that. Further, the Claimant’s evidence was strong on the matter and there was evidence overall that nothing was going to change. It was rare to see a Tribunal go so far as to refer to the “virtual certainty” of the outcome, as had this Tribunal. That was a strong finding and indicative of the extent to which they were satisfied on the evidence that the Claimant would have been dismissed in any event. On the evidence, the Claimant knew of the risk of redundancy from April/May and it could not be said that being formally told of it in a letter or in a meeting following such a letter, would have made any difference. That the Claimant’s job was redundant was referred to at the meeting which took place on 19 May and it was plain from the letter he was sent after that meeting that the Respondents considered there was a redundancy situation. 

26.	Regarding the matter of compensation, Mr Burnside submitted that no point of law arose in respect of the £400 per month spouse’s salary. The Tribunal had simply found what they considered to be just and equitable. As regards the future, Mr Burnside, in a creative submission, referred to the knowledge that Tribunal members in Aberdeen have about oil prices, which would have lain behind their comment in paragraph 30 about the “known state of the labour market” since, if it was high, that would have indicated full employment in the oil industry in the area. They were entitled to apply their local knowledge and that was what they had done. He rounded off the submission by saying that what the Tribunal was really saying was that just and equitable compensation was limited to ten months post dismissal. As regards the section 31 uplift, he commented, correctly, that it would only arise if an award of compensation was due. 

Discussion and Decision 
The Polkey Deduction
27.	As regards the main thrust of this appeal, we agree with Mr Burnside that it is, in reality a perversity appeal. Mr MacKenzie seemed, in the course of oral submissions, to accept that it was.  

28.	Dealing with the main argument, which was the attack on the Polkey deduction, we do not accept that the Tribunal erred in any respect. It cannot, in our view, be said that they reached a conclusion which was obviously wrong, was an impermissible option, was irrational or indeed, could be described in any of the other ways in which perverse decisions have been characterised in the authorities to which Mr Burnside referred. On the contrary, the conclusion which they reached was open to them on the evidence. Having found that the appeal was unsuccessful, not only did they not require to find that the appeal was never determined (as seemed to be suggested) but it would have been contradictory for them to do so. Insofar as Mr MacKenzie’s submission developed (beyond the ground in his written notice) to be that step 3 of the statutory procedure had not been complied with in respect that the Claimant had not been informed of the outcome of the appeal after the meeting, we are not satisfied that the Tribunal required to make such a finding. The minute of the appeal meeting (p.53 of the bundle) makes it clear that the Claimant knew the Respondents’ position was that he was redundant (a potentially fair reason for dismissal) and that the best offer they were prepared to make in respect of the new job that was available was as previously and was an offer that he was not prepared to accept. In the face of that, given that notice of redundancy had already been issued, very little further communication could be said to be required to inform the Claimant of the Respondent’s final decision and it was implicit from the terms of the letter that followed 2 days later (p.54 of the bundle) that they were adhering to the decision that the Claimant was redundant, not making any altered job offer and thus proceeding on the basis that he was being dismissed. In these circumstances, it was open to the Tribunal to take the view that step 3 had been complied with although, for the reasons they explain, they rightly considered that steps 1 and 2 were not. 

29.	We observe further that Mr MacKenzie’s argument regarding step 3 seemed to depend, at least in part, on factoring in a certain view of evidence given by Mr Sibille in respect of which there are no findings in fact. But the Claimant did not seek a review nor did he seek a note of evidence from the Chairman under paragraph 4 of the order of this Tribunal dated 17 October 2006, as he could have done. In these circumstances, it would not be appropriate for us to proceed on the basis of any facts or inferences arising from that part of Mr Sibille’s evidence. 

30.	Regarding Mr MacKenzie’s suggestion that the Tribunal should not have concluded as, in paragraphs 33 and 34 they did, to the effect that it was virtually certain that the Claimant would have been dismissed even if the statutory procedures had been complied with, because the evidence came from the Claimant, we disagree. Contrary to what he, at one point, suggested, there was plainly sufficient evidence on the matter; although there was no need for corroboration, there was evidence from the Claimant as to what he thought would have happened and from other witnesses not only as to the factual background of the loss of the Kazakhstan contract and downturn in business but also as to the reasoning behind the salary level offered which, if they accepted it, entitled the Tribunal to conclude that nothing would have changed. They plainly did accept that evidence and went on to infer that there would have still have been a dismissal; the job offer would not have changed and the Claimant would not have accepted the offer that was on the table. These were matters of judgment for the Tribunal when assessing and deciding on the evidence and their decision is not vulnerable because none of the Respondent’s witnesses were asked whether they thought matters would have worked out differently if the statutory procedure had been adhered to, which is what, in the end of the day, the Claimant’s submission amounted to. Even less could it be said that the drawing of the conclusion that they did on the evidence that they had before them points to their decision being perverse. 

31.	We would add that we found it hard to follow the reasoning behind the argument that was part of the attack on the Polkey deduction to the effect that since the Claimant was not told in a step 1 letter that he was at risk of being made redundant, it could not be concluded that matters would not have ended differently. That is because it is evident from the minutes relied on that he knew possibly as early as April 2006 and certainly by the time of the meeting of 19 May, that the Respondents regarded his job as redundant (see: minute of appeal meeting at p.53 of the bundle).  We are at a loss to see how a step 1 letter would have made any difference at all.

32.	We are, in all the circumstances, satisfied that the Tribunal were entitled, on the findings in fact made by them, to conclude that the Claimant would have been dismissed in any event and, indeed, to conclude that there was a virtual certainty of that happening. Their conclusion is clear, if not robust. That is, perhaps, not surprising given that although the precise statutory format was not complied with, the message that the Respondents regarded his job as redundant was clearly communicated to the Claimant, there was discussion between employer and employee to see if there was a way that he could be retained in their employment and although dismissal would have been avoided if he had accepted the new job that was offered, there was plainly never any prospect of the Respondents changing the terms of their offer and equally plainly never any prospect of the Claimant acceding to those terms.  

33.	Overall, we are satisfied that what the Claimant was in fact trying to do before us was achieve a rehearing of the case presented to the Tribunal all under the guise of a perversity appeal. But that will not do. Perversity means that the decision made is contrary to the evidence not that the Tribunal could have reached a different view. The comments made recently by Lord Justice Mummery in Joseph v Equant Holdings UK Ltd [2007] EWCA Civ 755, at paragraph 3:
“There must be a question of law arising from the decision of Employment Tribunal or a point of law which has arisen in the proceedings before it.  There is no appeal against the Tribunal’s findings of fact.  There is no re-trial of the case on appeal; it is simply a question of reading the decision which has been given to see that it was made in accordance with the law.  Employment Tribunals often have to hear cases in which there is conflicting evidence and the Tribunal has to decide whose evidence to accept.  There is no appeal against the Tribunal accepting the evidence of one party or rejecting the evidence of the other party unless it can be shown that there was a perverse decision – that, one which no reasonable Tribunal could have come to.  Such instances occur where the Tribunal finds facts which are contrary to the uncontradicted evidence, or finds facts for which there is no evidence at all.”  

and at paragraph 14:
“There are isolated cases in which perverse decisions are made and they will be entertained on an appeal  as raising questions of law, but perversity means that the decision is contrary to the evidence, not that the Tribunal has preferred the evidence of one party to another.  It really has to be shown that there is an overwhelming case for setting aside the decision of the Employment Tribunal as unsupported by any evidence or as completely contrary to the uncontradicted evidence.”  

are in point.

The “Substantively unfair dismissal” argument
34.	Turning to the first ground, we recognise that it could, conceivably, be separated out from the perversity argument, although Mr MacKenzie did concede that it could be viewed as being advanced under that head. However, even if it could, we are not persuaded that it is well founded. Firstly, it is predicated on a factual basis regarding the Respondents’ approach to the salary level in the job offer about which there are no findings in fact. Yet the Claimant has not sought a review or a note of that evidence so to put it before us in a form which we could use as a basis for our considerations. Secondly, in any event, even if the facts proposed on behalf of the Claimant could be taken from that evidence, we do not see that they lead to the conclusion that the Tribunal erred in failing to decide that the dismissal was substantively unfair. It was agreed that there was a genuine redundancy situation. The Respondents offered the Claimant a new job on terms that were not substantially different from his previous job in salary terms and the differential was explained by the need to achieve parity with others doing similar work. He had the prospect of earning a bonus. As regards the probationary period, the job was a new one which seem to be generally indicative of a probationary period being reasonable and given that the Respondents stated in terms that he was a valued employee that they did not want to lose (see: note of meeting of 19 May 2005 at p.46 of the bundle), such a condition does not appear as onerous. We cannot see consideration of such evidence and the argument advanced on the basis of it would have required the Tribunal to conclude that there was a substantively unfair dismissal. Therefore, whilst Mr MacKenzie may be justified in saying that it is unfortunate that the Tribunal have not recorded his argument on the matter and their decision in respect of it, we cannot conclude that they have fallen into error.

Spouse’s Salary
35.	We can deal with this shortly, particularly since the point is an academic one, given our decision that the Tribunal did not err in respect of the 100% Polkey deduction.

36.	The Tribunal required to bear in mind the task they would have been carrying out, namely assessment of “just and equitable” compensation under and in terms of section 123(1) of the 1996 Act. What, on the particular facts and circumstances of the case, amounted to just and equitable compensation was a matter for their judgment. Another Tribunal might have taken the view that the £400 per month ought not to be added back but given that the money was transferred by the Claimant into a joint account meaning that he had as much control over and access to it as before, albeit that his wife had similar access, we cannot say that the Tribunal erred in reaching the view that they did.  

Future Loss
37.	This is the one area where we are satisfied that the Tribunal have fallen into error. That is because their approach is contradictory in terms. They say that they are satisfied that the Claimant had been acting reasonably regarding alternative employment “until now” i.e. until the date of the hearing yet they also indicate that they would have expected him to find other employment as “sufficient time” to do so had passed. With respect, that does not seem to us to make sense. It cannot be that the Claimant was acting reasonably in not seeking alternative employment prior to the date of the hearing and at the same time it being reasonable to expect him to have done so. The sense we get from the Tribunal’s discussion is that it would not be reasonable to allow for much by way of a further period for the Claimant to obtain alternative employment (we rather suspect that is what they meant) but to stop the loss calculation at the date of the hearing does not seem logical. We would have expected, on the findings made by the Tribunal, for them to allow a little longer, such as a period of one month. 

38.	We would add that we also have some concerns about the Tribunal’s inspecific reference to the known state of the labour market. If there was something known to the Tribunal members about the local labour market that had not been referred to in evidence (and we take it that there had been no such reference given the absence of any findings in fact in that regard) then it was incumbent on them to bring it to the attention of parties so as to enable them at least to make submissions on it, if not to seek to lead their own evidence. We appreciate that Employment Tribunals, particularly their lay membership, are particularly valued for the specialist and local knowledge and understanding that they may be able to bring to bear on the issues before them. They must, however, appreciate that the interests of justice require that cases are decided by them on the basis of the evidence (which can, of course, include agreed facts) and that parties need to know if there are any facts in addition to those adduced in evidence which the Tribunal, drawing on their own knowledge and understanding consider to be relevant so as to enable them to take any action which, in their interests, they consider appropriate whether by way of leading evidence, making submissions or otherwise.

39.	As regards the section 31 uplift, it does not arise. All that we would say in that respect is that we do not accept that there was a serious breach. Mr MacKenzie’s approach was to the effect that the severity with which a breach could be regarded was in direct proportion to the number of steps of the procedure that were missed. That cannot be right. It seems to us that it would have been a matter of looking at quality and substance not quantity. In this case, whilst breaches could be identified, they were a matter of form, not substance. The relevant information had in fact been communicated and there had been a discussion meeting. Indeed, the circumstances were such that it would have been open, in our view, for the Tribunal to award no increase at all on the basis that it would have been unjust to do so (section 31(4) of the 2002 Act). 

Disposal 
40.	We shall, accordingly, pronounce an order upholding the judgment of the Tribunal and refusing the appeal.