THE INDUSTRIAL TRIBUNALS

CASE REF:	6476/09

CLAIMANT:			Brendan McDonald

RESPONDENT:		Nortel Networks UK Ltd (in administration)

DECISION 

The claimant’s unfair dismissal claim is well-founded.  It is ordered that the respondent shall pay to the claimant the sum of £35,042 in respect of that dismissal. 

Constitution of Tribunal:

Employment Judge (sitting alone):	Employment Judge Buggy

Appearances:

The claimant was represented by Mr Andrew Stephens.

The respondent was not represented.

REASONS

1.	I refer to my decision in Murdock v Nortel Networks UK Ltd (in administration) (case reference no: 6614/09, decision issued on 23 October 2014).  Below, any reference to the “Murdock Decision” is a reference to that decision.  

2.	This Decision should be read in conjunction with the Murdock Decision.

3.	This Decision should be read as though the contents of paragraphs 1-9 inclusive of the Murdock Decision were set out immediately below.

The breach of contract claim

4.	This Decision is concerned only with this claimant’s claim of unfair dismissal.  In these proceedings, this claimant also has a pending claim for breach of contract.  That is a claim relating to an alleged contractual entitlement to redundancy pay, over and above the statutory redundancy pay entitlement.  (That statutory entitlement has of course already been the subject of a successful application to the Department for Employment and Learning).  The claimant is not abandoning that contractual redundancy claim.  However, the claimant and the administrators are agreed that there is no need for an industrial tribunal adjudication in respect of that claim; instead, the claimant and the administrators expect that the matter can in due course be resolved, between them, during the course of the insolvency process.  During the course of the hearing, the claimant withdrew his age discrimination claim; accordingly, that claim is now dismissed.

The history of this claim

5.	This Decision should be read as though paragraphs 13-17 of the Murdock Decision were set out immediately below.

This claim

6.	This claimant was one of the Northern Ireland employees of Nortel who were dismissed, ostensibly on the ground of redundancy, in March 2009.  The claimant says that he was unfairly dismissed.  This is my decision in respect of that unfair dismissal claim.

Liability

7.	By email dated 14 July 2014, Ms Amanda Rowe, on behalf of the administrators, confirmed that they do not contest claims made in respect of unfair dismissal, against the respondent, by any Northern Ireland claimants. 

8.		Because the respondent is not contesting the unfair dismissal claim, I have jurisdiction to hear that claim as an employment judge sitting alone.

9.	It is clear that the respondent did not comply with the statutory dismissal procedure.  Accordingly, on that ground alone, the dismissal is unfair. 

Compensation issues

10.	I refer to paragraph 22 of Murdock, which sets out compensation issues which had to be determined in that case.  No issue relating to future loss has had to be determined in the present case.  However the other five of the issues mentioned at paragraph 22 of Murdock have also had to be addressed in the present case.    

The course of the proceedings

11.	For costs reasons, the administrators have decided not to participate in these proceedings.  

12.		The evidence in this case mainly consisted of the oral testimony of the claimant.  During the course of that testimony, he referred to a written schedule of loss (“the Schedule”), which sets out the compensation claimed by him.  The Schedule has provided a useful basis for assessing compensation in this case.  The claimant’s oral testimony was supplemented by a letter dated 7 December 2014 (“the Letter”), which outlined various efforts which the claimant had made to obtain employment during the period from March 2009 until September 2010.  The Letter was accompanied by some documents which related to relevant work search efforts, which had been carried out by the claimant.  

13.	Mr Stephens has had the benefit of advice and guidance from Mr Francis Bondoumbou.  I have also received written submissions (“Submissions”) which Mr Bondoumbou drafted.  I have taken those Submissions into account in deciding this case.

14.	At paragraph 26 of Murdock, I refer to the judgment of an employment judge in England, sitting at Reading, in respect of various unfair dismissal claims, which were heard in 2012, and which were brought by ex-employees of Nortel who had been made redundant in Great Britain in 2009.  In arriving at my conclusions in this case, I have had regard to the statement of applicable legal principles which was set out in the Reading judgment.

General

15.	This Decision should be read as though the contents of paragraphs 28-31 of Murdock were set out immediately below.  

Loss

16.	The claimant was entitled to nine weeks’ notice of termination, but received no such notice.  The Department for Employment and Learning (“the Department”) has made a payment to the claimant in respect of the loss caused by that lack of notice.  Accordingly, for present purposes, the claimant is making no claim in respect of any period earlier than 3 June 2009.  The claimant is making no claim in respect of any period after 15 September 2010.  In the following paragraphs, the period from 3 June 2009 until 15 September 2010, which is the period in respect of which compensation is claimed, is referred to as “the applicable period”.  

17.	This Decision should be read as though the contents of paragraphs 35-38 of Murdock were set out immediately below.  

18.	Pursuant to Article 157(1) of the Employment Rights (Northern Ireland) Order 1996 (“ERO”), the claimant is clearly entitled to recover in respect of any loss sustained by him during the applicable period, provided that any such loss has been sustained in consequence of the dismissal, and is attributable to the dismissal.  

19.	In light of the further information provided by the claimant, in the Letter and in the enclosures which accompanied the Letter, the position now is as follows:  

	(1)	I am satisfied that, in respect of the entire applicable period, the claimant’s losses were all caused by, and attributable to, the dismissal.  

	(2)	I am not satisfied that the claimant failed to mitigate his loss at any time during the applicable period.

20.	The claimant had damaged his knee in an industrial injury.  Accordingly, he was unfit for work from the date of his dismissal until 15 September 2009.  If he had continued to be an employee of the respondent during that period, the position would have been as follows:  

	(1)	During the period from 3 June 2009 until 20 August 2009 (11 weeks) he would have received 100% of his usual net pay.  

	(2)	During the period 21 August 2009 until 15 September 2009, he would have been entitled, pursuant to Nortel’s sick pay arrangements, to be paid half of his usual net weekly pay.  

	I am satisfied that, during the applicable period, the claimant would have earned £23,416 from the respondent if he had continued to be employed by the respondent during that period.  From 16 September 2009 onwards, the claimant was in receipt of Jobseekers Allowance, which is a recoupable benefit.  Throughout the 15 weeks beginning on 3 June 2009 and ending on 15 September 2009, the claimant was in receipt of Employment Support Allowance, which must have been contribution-based.  ESA of that type is not recoupable in the context of an unfair dismissal claim.  Accordingly, the amount of that ESA (£965) must be taken into account in reducing the overall recoverable loss on the part of the claimant, in respect of the applicable period.  When that has been done, the claimant’s net loss amounts to £22,451.  To the latter sum, I add £350 in respect of loss of statutory rights.  The resulting aggregate figure is £22,801.

Polkey?

21.	This Decision should be read as though paragraphs 49-56 of Murdock were set out immediately below.  

22.	Because of the factual and other circumstances noted in those paragraphs of Murdock, and because of the legal principles set out in those paragraphs, I have concluded in this case that there should be no Polkey deduction from the claimant’s compensation.  

An Article 17 uplift?

23.	This Decision should be read as though the contents of paragraphs 57-66 of the Murdock Decision were set out immediately below.  

24.		Against the background set out at paragraphs 57-66 of the Murdock Decision, and having had regard in particular to the Wardle (2) judgment, I have decided that this claimant is entitled to an uplift of 50 per cent pursuant to Article 17 of the Employment (Northern Ireland) Order 2003.

25.	That uplift increases the amount of the compensatory award by £11,401.

26.	The aggregate of the figures specified in paragraphs 20 and 25 above (£22,801 and £11,401) is £34,202. 

Grossing up?

27.	At paragraph 16.17 of Korn and Sethi’s “Employment Tribunal Remedies”, Fourth Edition, the concept of grossing up, in the context of unfair dismissal awards, was explained, in the following terms:

		“[Grossing Up] means that ... an employment tribunal must gross up any award for any unfair dismissal that it makes over £30,000 ... to ensure that, after tax, the claimant receives the net award made by the employment tribunal (see 2.02 for current rates)”.

28.	In 2010/2011, according to paragraph 2.02, payments on the termination of an office or employment were taxed on a sliding scale, and the position then was as follows:

			“(a)	The first £30,000 was tax free.  

		(b)	The balance may be taxed at the higher rate of tax, which for the tax year 2010-11, is 20% on income up to £37,500, 40% on income above £37,500 but less than £150,000 ...”.

29.	In this case, I am indeed awarding slightly more than £30,000 in respect of unfair dismissal.  With some reservations, I have decided to agree to Mr Stephens’ argument that the compensatory award should be “grossed-up”.  In doing so, I have followed the process which is recommended at paragraphs 2.04-2.07 of Korn and Sethi.

30.	Why do I gross up with reservations?  Because I very much doubt that this claimant will ever actually receive any amount in excess of £30,000 in respect of unfair dismissal.

31.	However, at this point in time, on the basis of any information currently available to me, I simply cannot say what the percentage dividend, available to unsecured creditors, is likely to be.

32.	Against that background, and for those reasons, I have decided to “gross up” the compensatory award.  The amount of the compensatory award (prior to grossing up) which exceeds £30,000 is £4,202.  I have added £840 by way of grossing up.  After grossing up, the award amounts to £35,042.

Summary and overall conclusions

33.	In respect of the applicable period, I have assessed the claimant’s loss as amounting to £22,801 including the sum of £350 in respect of loss of statutory rights.  (See paragraph 20 above).

34.	That figure of £22,801 is not subject to any Polkey reduction.  

35.	That figure is, however, subject to a 50% increase pursuant to Article 17 of the Employment (Northern Ireland) Order 2003.  (See paragraph 25 above).  That produces a figure of £34,202.  

36.	That figure of £34,202 has been grossed-up, adding the sum of £840, which results in an overall compensatory award of £35,042.

Recoupment of benefit from awards

37.	The Recoupment Regulations apply.  Attention is drawn to the notice below, which forms part of this Decision.  The prescribed element is £34,692.  The prescribed period is the period from 3 June 2009 until 15 September 2010.  The amount by which the monetary award exceeds the prescribed element is £350.

Interest on industrial tribunal awards

38.	This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.

Employment Judge:       

Date and place of hearing:  28 October 2014, Belfast.

Date decision recorded in register and issued to parties: