Appeal No. EAT/379/90

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 26 October 1992

	Before

	THE HONOURABLE MR JUSTICE WOOD MC (P)

	MS S CORBY

	MR J C RAMSAY

MR A SAHIL	APPELLANT

KORES NORDIC [GB] LTD	RESPONDENTS

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR RICHARD CLAYTON
(Of Counsel)
Attwater & Liell
Rothwell House
West Square
The High
Harlow
Essex
CM20 1LQ

For the Respondents	MR A S HOWARD
Managing Director
Kores Nordic (GB) Ltd
West Road
Templefields
Harlow
Essex

	MR JUSTICE WOOD (PRESIDENT):  This is an appeal by Mr Sahil from a decision of an Industrial Tribunal sitting at London (North) under the Chairmanship of Mr Brayden, who on the 3rd May 1990 found in favour of him, that he was unfairly dismissed, but also found that no compensation was payable.  It is in respect of that second finding that Mr Sahil appeals.

	It seems to us quite clear from a reading of this decision, that the Tribunal took the view that Mr Sahil's employers, Kores Nordic (GB) Ltd were reasonable and responsible employers, they were a small Company, but they had acted appropriately in the way that they had dealt with his dismissal which was as a result of his ill-health, but they found, and if technical was ever the right word it is perhaps is relevant in this case, that they had not given a warning to Mr Sahil that his job would be terminated and had not invited him in for a consultation before deciding to dismiss him.  The problems were created, no doubt to a substantial extent, by the failure of Mr Sahil to communicate with the Company, but the fact remains that the finding of unfair dismissal was there, it was a finding of fact, we can find no error in the principles applied and we would allow that part of the judgment to stand.

	It is on the issue of compensation therefore to which we must address our minds.  Pausing there, we have indicated that we are not prepared to disturb the finding of unfair dismissal because the Company indicated, by way of a late cross-appeal, that they were challenging that finding.

	Before looking at the details of assessment of compensation, which were said to be nil, it is important to set out the history of the matter.  The Respondents manufacture typewriter and printer ribbons, stencil and carbon papers and so on, it is Danish owned and employs about 200 people.  Mr Sahil had been employed from September 1983, he was a Slitting Machine Operator, it was heavy work.  He was a satisfactory employee.  He became ill in April 1989.  On the 23rd May management wrote to him explaining that they were sympathetic with his problems and asking permission to obtain a medical report.  Mr Sahil completed the form and it was returned on the 25th May.  On the 30th May management wrote to Mr Sahil's doctor asking about his health.  The doctor replied on the 7th June indicating that he had severe back ache and he would not be fit to return until he had seen a consultant.

	The Company operated a sick pay scheme under which sick pay was paid at a full rate for 30 days and half rate for a further 30 days in any one year and Mr Sahil was paid during this period.  

	November came round and there was a further request for an approach to the doctor.  The doctor, on the 16th November, wrote indicating that the situation was very much the same, I am paraphrasing, and that Mr Sahil continues to present with no improvement in his condition.  Until his treatment was complete the prognosis was totally uncertain.  So on the 13th December Mr Trimmer, who was responsible in the management for the conduct of this matter, wrote to the Applicant.  He referred to the previous correspondence, he referred to the receipt of information from the doctor.  The last paragraph ends:
"We regret to inform you that in view of the nature of the work and the likelihood that you will not be able to return in the foreseeable future, we can no longer hold your job open.  However, I would like to add that should you wish to return to Kores when you are fully recovered, your application will be treated favourably."

and on that same day, the personnel clerk sent to Mr Sahil his P45 and a cheque for £826.51 representing 20 days holiday entitlement plus two statutory days for Christmas, the employment, therefore, came to an end.  In fact the sum sent to him, as is indicated at a document at bundle C3, was £1,651, made up of £900 payment in lieu of notice, £751 for the 20 days holiday and £75 for two additional days over and above contractual liability.

	Having found that the dismissal was unfair the function of the Industrial Tribunal was thereafter to consider compensation.  It may be, because we do not wish to say more than is necessary in the light of our decision to remit the compensation for a re-hearing, it may be that there will be some issue as to whether or not parts of that total figure of £1651 were really ex-gratia or not and that is a matter that requires some investigation and no doubt that can take place.  However, when approaching the question of compensation, in paragraph 17 the Tribunal say this:
"In cases of this sort, the Tribunal sometimes awards a sum representing, say a week's pay, to make up for the time which should have been spent on consultation.  In the present case, however, the Applicant had already run out of sick pay and, as we have noted, he did receive additional holiday pay.  In all the circumstances, therefore, we conclude that no compensation is due."

That paragraph has been criticised by Mr Clayton, for the Appellant before us.  He submits there is no power in an Industrial Tribunal simply to say we do not think that it is just and equitable that a basic award should be made.

	Mr Clayton, first of all, takes the distinction between, compensatory awards and basic awards.  In many of the cases that have been before this Court the basic element has been obliterated by a redundancy payment and therefore did not need to be considered, but that is not so in this case, because this is not a redundancy case.  The problems arise because of the wording in Section 73 and Section 74 of the Employment Protection (Consolidation) Act 1978.  Section 74 has been in its present form, if one works back, from the Employment Protection Act 1975, and its wording is well established and has been understood and decisions have been given upon it.  Under Section 74(1) in dealing with a compensatory award the statutory provision reads thus:
"Subject to sections 75 and 76, 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."

Under that broad wording it is possible for the Tribunal to find that it is not just and equitable, it is not just fair and reasonable, that any award should be made.  There is also a distinct power under Section 74(6) which reads:
"Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding."

That subsection and that wording in an earlier provision was considered by the Court of Appeal in Nelson v. British Broadcasting Corporation [1980] ICR 110.  There was a long judgment from Lord Justice Brandon dealing with the wording and there was an indication there that the "action" in Section 74(6) imported some measure of blameworthiness.  Without referring to the judgment in detail it will be seen from p.120 at "C" to p.121 "G", that he    examines the reasoning behind that and he says this, at p.121:
"I agree with the conclusion there reached that, on a proper interpretation of paragraph 19(3), an award of compensation to a successful complainant can only be reduced on the ground that he contributed to his dismissal by his own conduct if the conduct on his part relied on for this purpose was culpable or blameworthy."

Then, further down, he goes on to indicate that the concept is not, perhaps, precisely what one might read at first blush but it includes conduct, which might be termed was "bloody-mindedness" or without being pejorative, was unreasonable in all the circumstances and he indicates finally that not all unreasonable conduct is necessarily culpable or blameworthy, it must depend upon the degree of unreasonableness involved.  There one has a fairly general approach but nevertheless it is to action which causes or attributes to the dismissal.

	That being the situation, there was at the time, a similar subsection in Section 73,  because it is in Section 73 that the approach to the award of a basic award is set out.  Section 73(1) indicates as follows:
"The amount of the basic award shall be the amount calculated in accordance with subsections (3) to (6) subject to -"

So that, as Mr Clayton has so ably pointed out, a basic award must be calculated, and in this case it would come to £1,032.00, and then can only be reduced if it falls within one of the statutory provisions.  The heads under which it can be reduced is under the new Section 73(7A), where there is an unreasonable refusal of an offer which would amount to re-instatement.  Secondly, under (7C), the redundancy payment to which we have already referred which can reduce or eliminate the basic award, and then lastly, there is the situation where the discrimination cases are involved.  None of those apply in this case, but the fourth one, which is in fact the second in his list, is where the tribunal is entitled to consider the provisions of Section 73(7B), that reads as follows:
"Where the tribunal considers that any conduct of the complainant before the dismissal (or, where the dismissal was with notice, before the notice was given) . . . . was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the tribunal shall reduce or further reduce that amount accordingly."

That amendment was made by the Employment Act 1980.  That was after the decision in Nelson v. BBC.  The wording which it replaced, the old subsection (7) was very nearly the same as Section 74(6).  So that with the knowledge of the decision in Nelson the legislature intended the wording substituted to be different.  

	This subsection has caused problems in that it mentions "conduct" and also mentions "just and equitable".  Those distinctions between general "just and equitable" in the overall circumstances, and conduct or action which caused or contributed to the dismissal, are contrasted in Section 74.  The issue therefore remains whether, where there is a basic award calculated, and where, perhaps, a case may occur where a very substantial payment, ex-gratia, has already been made, whether in that situation an industrial tribunal can say "no, no basic award should be made".  Mr Clayton submits, on the present wording it seems a very plausible submission, that although it might not be just and equitable, nevertheless, there was no conduct of the complainant which would entitle the Tribunal to have refused to make a basic award.

	It is, in many ways, a simple matter and it would be of the greatest assistance to those in this jurisdiction if an early opportunity could be taken to clarify the position and perhaps to indicate whether it was really intended that where a tribunal felt that it was not just and equitable to make a basic award they were entitled so to do.  The instance we have given is only one illustration but there may, or may not be others.  However, for the moment, the reduction can only be made if there is some conduct, behaviour, where there is an act or an omission which indicates that the tribunal is entitled, or decides, to reduce or eliminate the basic award.

	The problems to which we have already referred are thrown up from such cases as Polkey v. A E Dayton Services Ltd [1988] ICR 142, where Lord Bridge refers to the possibility of reducing compensation to nil.  Does that merely refer to a compensatory award?  Or does it also indicate and include basic award?

	Secondly, the case of Mining Supplies v. Baker [1988] ICR 676, but in that case that really was a case of a compensatory award and the basic award issue did not arise.  Nor did it arise strictly in the case of Slaughter v. C Brewer & Sons Ltd [1990] ICR 730, nor indeed in the other case to which we referred Chaplin v. Rawlinson [1991] ICR 553 where the conduct of the applicant in urinating on the wheat was clearly conduct which the tribunal was entitled to take into account in deciding that there should be no basic award.

	The final case to which we were referred in detail and to which I have already made reference, was Parker Foundry v. Slack [1992] ICR 302, in that case the Court of Appeal did consider the wording of Section 73(7B) and Section 74(6) and 74(1) and it decided that it was the conduct of the applicant which was under examination when considering whether a basic award should be reduced or eliminated.

	If that is the present state of the law and we do not need to decide it strictly today, but we do merely draw attention to the problems that are being raised. 

	Then, one turns to the decision in this case in paragraph 17 to see how this tribunal approached the matter.  In looking at the basic award and in looking at the compensatory award there were a substantial number of matters which may indeed have gone through their minds but which Mr Clayton is entitled to say are not to be seen on the face of the decision itself.  We sympathise with the Tribunal, who may have thought that this Applicant, although unfairly dismissed did not merit any form award or compensation.  But he is entitled to say that his client should know why.  There are issues, so far as a compensatory award was made, for instance loss of statutory rights.  We do not know whether there were any pension losses or provisions to be considered, or whether he was likely to be back at work within any foreseeable future.  I am inclined to think on that the last point, he was not, but that would be a matter for them to find.  
	Then when they came to the basic award they would then need to make the calculation of what the basic award would be and to decide whether the conduct of the complainant, that means his behaviour, what he did or failed to do is part in the whole history of the matter, made is just and equitable to reduce that basic award, or to reduce it further as the case may be.  One can read possible views through the wording of the judgment, but it seems to us that Mr Clayton is entitled to say that it is not sufficiently explicit on the face of the judgment for the matter to be allowed to stand.

	In fact, Mr Clayton submits, that a basic award should be made and that there could be no possible defence to that.  We are not prepared to go that far it seems to us that this matter does require a re-hearing on those issues and so we allow the appeal and remit the issue of compensation to be heard by the same Tribunal.  We wish to make it clear that the Tribunal can hear such further evidence and submissions as it sees fit, it may wish to review a good deal of the evidence it has heard so as to refresh its memory and decide on the various matters, some of which we have touched on in this judgment.  So, the evidence in the way that re-hearing is conducted is a matter at large for the learned Chairman of the Tribunal.

	In the circumstances, therefore, the appeal is allowed and the matter remitted, the Order will be in form which I have already indicated.