Appeal No. UKEAT/0018/10/CEA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 12 March 2010

Before
HIS HONOUR JUDGE RICHARDSON
MR T HAYWOOD
MS P TATLOW

MR C WOOD	APPELLANT

MITCHELL SA LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR MICHAEL REED
(Legal Adviser)
Free Representation Unit
6th Floor
289-293 High Holborn
London
WC1V 7HZ	
For the Respondent	MS SAFIA THAROO
(of Counsel)
Instructed by:
Messrs Archers Solicitors
78 new London Road
Chelmsford
Essex
CM2 0PD	

SUMMARY
UNFAIR DISMISSAL
Compensation

The Tribunal awarded compensation to the Claimant up to the date when he became unfit for work (at least for a time) due to a supervening illness.  It treated any loss after this date as not attributable to the Respondent’s action in dismissing the Claimant.  This was an error of law; the Tribunal ought to have considered for how long thereafter the Claimant might have been employed by the Respondent, whether he might again have become fit for work during that period, and what sick pay or other benefits he would have received during that period.

HIS HONOUR JUDGE RICHARDSON 

1.	This is an appeal by Mr Craig Wood (“the Claimant”) against a judgment of the Employment Tribunal sitting at Stratford (Employment Judge Leonard presiding) dated 9 October 2009.  The Tribunal had already upheld the Claimant’s complaint that he was unfairly dismissed by his employers Mitchell SA Ltd (“the Respondents”).  By this judgment it awarded him compensation in the sum of £5,842.14.  The Claimant argues that this compensation is insufficient; and that the Tribunal has not acted on correct legal principles, or has not given sufficient reasons for its decision.

The Dismissal
2.	The Claimant was employed by the Respondents as a driver/salesman with effect from 20 September 2004.  He drove a commercial vehicle.  While he was working his net pay was £443 per week.  If he was absent through sickness, he was (we understand) only entitled to statutory sick pay of £72.55 per week.

3.	In mid 2006 the Claimant was diagnosed with hepatitis C.  By October he was struggling to cope with the demands of his job and with the debilitating effects of his medication.  On 17 November he was signed off for a period of two weeks. The Respondents became concerned about his fitness to drive.  He told them that, while off sick, he drove to Colchester and back and was so affected by the experience that he had to take to his bed the following day.  He showed them a leaflet indicating that a patient on his medication should not drive if feeling tired, sleepy or confused.  The Respondents asked him to obtain his GP’s confirmation in writing that he was fit to drive.  His GP would not provide it; it was apparently his GP’s view that if the Respondents required such confirmation they should instruct a doctor privately.  The Claimant was prepared to co-operate with a doctor instructed by the Respondents.  But they insisted that he obtain confirmation, and dismissed him with effect from 15 December when he was unable to do so.

4.	After the dismissal, but prior to the hearing of an appeal, the Claimant obtained a letter from Dr Subhani, his consultant.  The letter said that his condition and the treatment for it should not prevent the Claimant from driving; and that the symptoms would diminish over the few weeks after treatment had ceased; that is by about 12 January.  Nevertheless the Claimant’s appeal was dismissed.  The Respondents considered that the consultant’s letter was insufficient because it did not confirm that the Claimant was fit to drive a commercial vehicle.

5.	By its judgment on liability the Tribunal held that the dismissal was unfair. It accepted that the principal reason for dismissal related to the Claimant’s capability to do the job for which he was employed.  But the Tribunal said:
“22. …it was incumbent upon the respondent to make such enquiries as would allow him to make a properly informed decision.  There was no good reason for the respondent’s refusal to take up the suggestion, offered by the claimant, that the request go to his GP from a doctor instructed by the respondent.
23. … no reasonable employer would have rejected the appeal without affording to Dr Subhani the opportunity to say whether his clearly expressed view should be treated as extending to a commercial vehicle or whether it was to be treated as applying simply to a private motorcar.  Indeed the probability is that, had that enquiry been made, Dr Subhani would have confirmed that his advice was unchanged.”

The Remedies Judgment
6.	The Tribunal found that, but for the dismissal, the Claimant would have continued in receipt of sick pay until resuming work on 1 February 2007.  This finding was soundly based on the report of Dr Subhani; and there is no complaint in respect of it by either party.

7.	There was, however, evidence before the Tribunal that during 2007 the Claimant suffered a decline in his mental health.  The Claimant maintained at the remedies hearing that this decline (1) was due to his dismissal, and (2) inhibited his search for work.  The Tribunal commented that there was no specific medical evidence to support these propositions.  The Claimant made a belated application for an adjournment to obtain such evidence; but the Tribunal, commenting that the importance of medical evidence had been stressed to him on previous occasions, refused an adjournment.

8.	On the specific question whether there was a linkage between his employment situation and his mental health, the Tribunal concluded, in paragraph 11 of its reasons:
“There is corroborative evidence of a decline in the Claimant’s mental health in the period from January 2007 but it is implicit, in the references to the marital difficulties, and in the complete absence of any reference to his employment situation, that the Claimant’s then health problems were due to marital problems.”
Thus far there is again no complaint about the Tribunal’s findings.

9.	The Tribunal then turned to deal with the Claimant’s attempts to obtain alternative employment.  It accepted in paragraph 12 of its reasons that he made reasonable attempts to mitigate his loss between January and March 2007.  Again, no complaint is made by either party about this finding.

10.	The Tribunal then continued:
“13. The evidence is less clear in relation to the period from the end of March 2007.  There is evidence that Mr Woods was in receipt of incapacity benefit for a short period from 31 March but there are gaps in the record thereafter.  Coupled with the evidence of the Claimant to the effect that he was unfit for work from the period 13 April until end June 2007 and that there was a gap of several months during which the Claimant was not actively seeking work because his health did not permit him to do so.  The evidence available to the Tribunal does not, however, permit the conclusion that the Claimant’s health problems from the end of March onwards were, to any measurable extent, caused by the actions of the Respondent in dismissing him.
14. The conclusion of the Tribunal is that the Claimant should be compensated by the Respondent for his period out of work from 1 February 2007 for nine weeks thereafter.  At the agreed net weekly rate of £443.96, that gives rise to a loss of £3,995.64.  When added to the other heads of claim, that gives rise to a total award in the sum of £5,842.14.  Based on the available evidence, the Tribunal is unable to conclude that, after the end of March 2007, that any continuing loss is attributable to action taken by the employer.”

Submissions
11.	On behalf of the Claimant, Mr Reed does not challenge the Tribunal’s finding that the Claimant’s decline in mental health was unrelated to the dismissal.  Rather he submits that it was in any event incumbent upon the Tribunal to ask the question: for how long would the Claimant have been employed, but for the dismissal?  The fact that an illness is unrelated to the unfair dismissal does not carry with it any necessary implication that he would have been dismissed in any event, still less when he would have been dismissed.  In order to identify what loss he suffered as a result of the unfair dismissal it was incumbent upon the Tribunal to ask whether he would have been dismissed by reason of his declining mental health, and if so when.  Mr Reed refers to and relies on O’Donoghue v Redcar and Cleveland Borough Council [2001] IRLR 615 and Software 2000 Ltd v Andrews [2007] IRLR 568.

12.	We asked Mr Reed what loss the Claimant suffered as a result of the error which, on his submission, the Tribunal made.  He submitted that the Claimant would have received at the very least statutory sick pay during his period of absence (although he accepted that there might be some invalidity benefit to set off against it).  Moreover, there was a chance, which it was for the Tribunal to assess, that the Claimant would have been fit to return to work in June and that he could not and would not have been dismissed in the meantime.  He said that it is the Claimant’s case that from June onwards there was a period when the Claimant was fit to work; and it was for the Tribunal to evaluate this.

13.	On behalf of the Respondent, Miss Tharoo submits that the Tribunal considered the matter properly.  The statute directs consideration to the question whether the loss is attributable to action taken by the employer: section 123(6).  The Tribunal had evidence from which it could conclude that the Respondent was unfit for work from the end of March.  It awarded him compensation until the first week in April.  The Tribunal was entitled, given its earlier findings of fact, to take the view that his loss thereafter was not attributable to the dismissal.

Conclusions
14.	Section 123 of the Employment Rights Act 1996, so far as relevant, provides:
“123	Compensatory award
(1)	Subject to the provisions of this section and sections 124, 124A and 126, the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer.
(2)	The loss referred to in subsection (1) shall be taken to include-
(a)	any expenses reasonably incurred by the complainant in consequence of the dismissal, and
(b)	subject to subsection (3), loss of any benefit which he might reasonably be expected to have had but for the dismissal.”

15.	A Tribunal must, therefore, have regard to the loss sustained by the complainant in consequence of the dismissal.  In order to assess this loss it will generally have to estimate in financial terms what the employee would have earned or received but for the dismissal.  This includes benefits he might reasonably have expected to have: see section 123(2)(b).

16.	In the vast majority of cases a first step towards making this estimate will be to consider for how long the complainant would have been employed if he had not been unfairly dismissed.  This question is important because, of course, generally speaking an employee is paid and receives other benefits while he is employed.

17.	It is for this reason that there are many decided cases on the approach which the Tribunal should take in deciding for how long a complainant would have been employed if he had not been unfairly dismissed.  The issue is not always straightforward; it may be particularly difficult to resolve where a complainant has been made redundant; or where there is material indicating that an employee might soon have been dismissed for misconduct or on grounds of capability.  The decided cases are fully discussed in Software 2000 Ltd v Andrews.  In part the guidance in that case has been overtaken by the subsequent repeal of section 98A of the Employment Rights Act 1996.  But the basic principles remain applicable.  The Appeal Tribunal (Elias P presiding) summed up the position at paragraph 54.  It is sufficient to quote the following:
“54. The following principles emerge from these cases.  (1) In assessing compensation the task for the tribunal is to assess the loss flowing from the dismissal, using its common sense, experience and sense of justice.  In the normal case that requires it to assess for how long the employee would have been employed but for the dismissal.  (2) If the employer seeks to contend that the employee would or night have ceased to be employed in any event had fair procedures been followed, or alternatively would not have continued in employment indefinitely, it is for him to adduce any relevant evidence on which he wishes to rely.  However, the tribunal must have regard to all the evidence when making that assessment, including any evidence from the employee himself.  (He might, for example, have given evidence that he had intended to retire in the near future.)  (3) However, there will be circumstances where the nature of the evidence which the employer wishes to adduce, or on which he seeks to rely, is so unreliable that the tribunal may take the view that the whole exercise of seeking to reconstruct what might have been is so riddled with uncertainty that no sensible prediction based on that evidence can properly be made.  (4) Whether that is the position is a matter of impression and judgment for the tribunal.  But in reaching that decision the tribunal must direct itself properly.  It must recognise that it should have regard to any material and reliable evidence which might assist it in fixing just compensation, even if there are limits to the extent to which it can confidently predict what might have been; and it must appreciate that a degree of uncertainty is an inevitable feature of the exercise.  The mere fact that an element of speculation is involved is not a reason for refusing to have regard to the evidence.  (5) An appellate court must be wary about interfering with the tribunal’s assessment that the exercise is too speculative.  However, it must interfere if the tribunal has not directed itself properly and has taken too narrow a view of its role.”

18.	In this case the Claimant’s main argument was that his ill health declined by reason of his dismissal and that his inability to work, hence his financial loss, was directly attributable to his dismissal.  The Tribunal rejected that argument; as we have seen, there is no appeal against that finding.

19.	The Tribunal then awarded the Claimant, in effect, what he would have lost until the time he became unfit for work by reason of psychiatric problems associated with the breakdown of his marriage.   As we read paragraphs 13 and 14, the Tribunal concluded that any loss after that time was not attributable to action taken by the Respondents.

20.	We think that is too narrow a view.  A contract of employment provides an employee with rights which are of benefit to him even if he becomes ill for reasons which are not connected to his employment.  He may be entitled to sick pay; generally he will be entitled to statutory sick pay; he can expect his employers to investigate when he will become fit for work and he may be able to return to work before the time comes when he could or would be fairly dismissed; if his employers are entitled to dismiss him, it will be with notice or with a payment in lieu of notice.  If an employee is unfairly dismissed, he loses these rights.  In some circumstances they may be valuable rights.

21.	Accordingly, in estimating what loss a complainant has sustained in consequence of the dismissal a Tribunal ought generally to take account of these matters and estimate their financial value in the light of the evidence before them.  The date at which ill health supervened will not generally be the cut-off point.  It is right to estimate; for how long would the employee have been employed?  What pay or other benefits would have accrued to him during that employment even granted that he would have been ill?  Would he have returned to work?

22.	We emphasise that we do not intend to say that there can never arise circumstances in which an employee has brought his ill health on himself to such an extent that it would be just and equitable to treat supervening ill health as a cut off point.  But they would be unusual circumstances, very far removed from the general run of cases.  Psychiatric ill health in itself would certainly not be such a circumstance.   An employee can generally expect to receive benefits by reason of his employment even if he becomes ill for reasons unconnected with his employment.   If he is unfairly dismissed, and loses those rights in consequence, his loss will generally be attributable to the dismissal and it will generally be just and equitable to compensate him for that loss.

23.	In this case the Tribunal ought not to have treated the supervening psychiatric illness as a cut off point.  The Tribunal ought to have considered the period after the Claimant became unfit for work.  The Tribunal ought to have considered whether the Claimant would have received any pay or benefit during this period, for how long he would have been employed, and whether he would have been able to return to work during this period.  We are not in a position to make findings on these matters ourselves.  The matter will be remitted to the Tribunal.