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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Blackpool Fylde & Wyre Society for The Blind v Begg [2005] UKEAT 0035_05_3103 (31 March 2005) URL: http://www.bailii.org/uk/cases/UKEAT/2006/0035_05_3103.html

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APPEARANCES

 

For the Appellant	MR MATTHEW SMITH (Of Counsel) Instructed By: Croner Consulting Croner House Wheatfield Way Hinckley Leicestershire LE10 1YG
For the Respondent	MR NEIL DAWNEY (Of Counsel) Instructed By: Messrs Panone & Partners Solicitors 123 Deansgate Manchester M3 2BU


 


SUMMARY

Practice and Procedure –and- Disability Discrimination

Appellant's application to raise a new point on appeal (that the Law Reform (Contributory Negligence) Act 1945 applies to Disability Discrimination Act 1995 section 8(3) damages) was refused as the Employment Tribunal had already decided, at its liability hearing, to deduct 40% from unfair dismissal compensation and had not said the same in respect of disability discrimination and this was not appealed. Alternatively, no exceptional circumstance existed: Kumchyk applied. Appeal allowed by consent on deducting incapacity benefit: Morgans applied. If the principle of contributory conduct approved in Fife Council v McPhee EAT/750/00 were to be applied, it would be useful first to have the intervention of the statutory commissions.

HIS HONOUR JUDGE McMULLEN QC

1. This case is about the interesting question of whether there may be a deduction from compensation awarded by a Tribunal for disability discrimination on the ground of fault by the Claimant. However that interesting issue dissolves into what will be revealed as a judgment on practice and procedure in the Employment Appeal Tribunal, thought by some to be a far less interesting subject. The judgment represents the views of all three members who pre-read the relevant papers. We will refer to the parties as Claimant and Respondent.

Introduction

2. It is an appeal by the Respondent in those proceedings against a reserved judgment of an Employment Tribunal on remedy. The Chairman was Mr A M Buchanan and it sat over three days, including two days in Chambers, in 2004 and was registered with written reasons on 26 October 2004.
3. The Claimant was represented there as him by Mr Neil Downey, Counsel. The Respondent was represented by Mr Robert Budgen who is a Consultant and non-practising solicitor. Today the Respondent is represented by Mr Matthew Smith. The Claimant claimed unfair dismissal and unlawful disability discrimination. The Respondent denied both of the claims but did not assert that if it were wrong on discrimination its action was justified.

The issues relevant to the appeal

4. So far as is relevant to the Appeal, the issues are whether or not it is correct for a Tribunal to make a deduction from compensation awarded in respect of disability discrimination, on the ground that the Claimant, by his fault, contributed to the damage. The background to that decision is a practice of the Employment Appeal Tribunal which generally precludes the raising of new points on appeal unless there are exceptional circumstances. A second substantive issue relates to whether or not, in the calculation of compensation for disability discrimination, the Claimant must give credit for incapacity benefit received at a rate of 50% or 100%.
5. The Tribunal decided that the Claimant should be awarded £85,962.39 as compensation for disability discrimination and £3,845.09 for unfair dismissal. Against all of the liability decision, and against much of the remedy decision there is no appeal for the parties have being able, during the lead-up to this hearing, to either agree, concede or abandon various issues which were between them. We are grateful for their realistic approach to those issues. What remain are the two outstanding substantive points, both of which are preceded by the practical point as to whether or not the Employment Appeal Tribunal should allow them to be heard.
6. Directions sending this appeal to a full hearing were given by Rimer J but, as with any case where a complaint is raised that a new point is to be argued on appeal (Kumchyk v Derby City Council [1978] ICR 1116), the Judge conducting the sift would not be alert to that possibility.

The legislation

7. The relevant provisions of the legislation are Sections 122(2) and Section 123(6) of the Employment Rights Act 1996:

"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."

"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."

8. In addition, the Law Reform (Contributory Negligence) Act 1945 Section 1(1) provides as follows:

"Where any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons, a claim in respect of that damage shall not be defeated by reason of the fault of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the Claimant's share in the responsibility for the damage:

(a) this subsection shall not operate to defeat any defence arising under a contract;

(b) where any contract or enactment providing for the limitation of liability is applicable to the claim, the amount of damages recoverable by the Claimant by virtue of this subsection shall not exceed the maximum limit so applicable

9. The Tribunal directed itself by reference to the relevant authorities governing the calculation of compensation for unfair dismissal and disability discrimination and the relevant provisions of the Employment Rights Act 1996 but not the 1945 Act.

The facts

10. The relevant facts are as follow:

"The Respondent is a registered charity and operates on a site in Blackpool a residential home for visually impaired elderly people known as the Princess Alexandra Home. On the same site the Respondent operates a talking newspaper studio, a resource centre and a meeting hall known as the Sharples Hall. The Respondent employs some 68 people."

"The Applicant began work for the Respondent in 1984. At all relevant times for these proceedings the Applicant held the post of manager of talking newspaper and library services. Prior to his appointment to that position the Applicant had managed and developed the Respondent's resource centre. The Applicant is registered blind and is a disabled person for the purposes of Section 1 of the 1995 Act."

11. The Claimant had been employed by the Respondent for 19 years. In 2002 it became apparent, and further investigations revealed. that the Claimant was conducting a company which was in competition with the Respondent. Following investigation, a hearing and an appeal the Claimant was dismissed upon notice.
12. During the course of the investigation and hearing, steps were taken by the Respondent, which put the Claimant at a substantial disadvantage because of his blindness. The Tribunal concluded that the Respondent unfairly dismissed the Claimant, not only as a matter of substance, but also as a matter of procedure, and that it discriminated against him in the arrangements which it made for the disposal of the disciplinary matter.
13. The Tribunal then went on to consider whether or not, for the purposes of unfair dismissal, the Claimant was culpable or blameworthy and it said this:

"The Tribunal has moved on to consider whether the applicant by his culpable or blameworthy conduct contributed to his dismissal in any way. The Tribunal notes that the applicant did set up the Company which on the face of it was to act in competition with the Respondent. The Applicant's reasons for setting up the Company were unconvincing. The Tribunal notes that the Applicant accepted through his representative at the disciplinary hearing that he had acted wrongly and an offer was made immediately to transfer or dissolve the Company. An employer can expect all employees not to act against its interests and in doing as he did the Applicant acted in a culpable and blameworthy fashion which clearly led to his dismissal. The Tribunal assesses the Applicant's contributory conduct at 40% and there will be that reduction from any remedy provided to the Applicant in this case. In reaching this decision, the Tribunal takes account of and accepts that the Applicant had not sought to hide the fact that the Company had been formed and also that the Company had not traded."

14. The structure of the liability decision is a tribute to the modern decision writing of the Tribunal Chairman and to the input of the lay members. It is quite apparent that an essential issue was to determine whether or not the Claimant contributed to his dismissal by way of his conduct. The Tribunal was at pains to separate its consideration of the claims under the two distinct statutes. It is to be noted that, whereas amongst the issues to be determined in relation to unfair dismissal, there is a consideration of culpability, none appears in relation to disability discrimination (see Paragraphs 5.2 and 5.4 of the liability decision).
15. Consequently, when the Tribunal gave its conclusions, it separated them according to the claim which it was at that time considering. Thus it is that the passage we have cited at Paragraph 11.11 fell under the unfair dismissal considerations and there is no corresponding reflection of the Tribunal's consideration of any issue of culpability in relation to discrimination on the grounds of disability.
16. The Tribunal published its decision and set a date for a remedy hearing which was 27 May 2004. At that hearing an adjournment was granted at the Claimant's request because Dunnachie v Kingston Upon Hull CC [2004] IRLR 287, in the Court of Appeal, was pending a judgment in the House of Lords. However, responsibly, the Tribunal decided to set out reasons and directions for the conduct of the remedies hearing which was then to take place on 23 August 2004.
17. Counsel agree that the Chairman had indicated that consideration of compensation should be under the DDA for pecuniary losses. This was because it would not attract the cap on compensation under the Employment Rights Act nor the 40% deduction which was a reflection of the decision it had made in respect of unfair dismissal. At that stage no further submissions were made, nor was a single word said at the hearing on 23 August 2004 about contribution in respect of disability discrimination.
18. The Tribunal went on to award the sums we have cited. In respect of disability discrimination, there were no deductions. In respect of unfair dismissal, there was a 40% contribution, consistent with its earlier decision and, we hold, its second decision, recorded in an agreed note.

The Respondent's case

19. On appeal, now two points are taken by the Respondent. First it is contended that the Tribunal ought to have considered whether contribution should have played a part in the award for disability discrimination to reduce the award by 40%. Secondly in the light of the judgment of the Employment Appeal Tribunal in Morgans v Alpha Plus Security Limited EAT0438/04, the Tribunal ought to have required the Claimant to give credit as to 100% of his incapacity benefits, rather than the submission of 50%.
20. To both of these points a Kumchyk argument has to be addressed and since both sides anticipated the point, each has prepared a skeleton argument which focuses upon the Kumchyk principles. Mr Smith accepts that at least in respect of the first point it is new and seeks therefore only to persuade us to exercise our discretion.
21. The grounds on which the discretion is to be exercised, it is contended, place the case within the truly exceptional category which the jurisprudence to which we shall refer in a moment, relates. The following submissions are made: 1) it was mandatory for the Employment Tribunal to apply a 40% deduction, 2) although there was some discussion of contributory fault the Tribunal ought in any event to have made the award and reduced it under the DDA, 3) there is no requirement for further evidence or any prejudice to either party, 4) the Claimant would not have changed his position had he known the point was coming, 5) all findings and conclusions have been reached, 6) this is not a case where a U-turn had been made by the Respondent, 7) there is no detriment to the Claimant.
22. As to the Incapacity Benefit issue, if this point is to be made, it is conceded on behalf of the Claimant that the appeal should be allowed. It is contended that this is not a new point but if it is, the same considerations above apply.

The Claimant's case

23. On behalf of the Claimant, it is contended that this case does raise a new and novel point for which there is no direct binding authority. The Tribunal was not obliged to consider the 1945 Act since this was neither raised nor proved by the Respondent. No indication was given by the Respondent until the skeleton argument that this issue was to be raised. It is conceded that there is no need for further evidence but the Employment Appeal Tribunal is not in a position to determine this matter. There is a different set of criteria in respect of Sections 122 and 123 of the Employment Rights Act and Section 1 of the 1945 Act and the three provisions do not necessarily lead to the same conclusion or the same calculation.
24. The Respondent could have raised its dissatisfaction at the way in which contribution was to be dealt with, ie only under unfair dismissal provisions, at either of the two successive hearings following the liability hearing. Although no concession was made, it is not sufficient for a Claimant to be cross-examined on culpability and a broad brush approach to be taken when it appears that this point has been never been taken in the 30 years of anti discrimination legislation.
25. Although the evidence may have been in place, conclusions might have been very different. Applying the authorities to which we will turn, it is not sufficient to argue on behalf of a party seeking exercise of discretion that it has the law on its side, and even if it were mandatory on the Tribunal to consider Section 1 of the 1945 Act this cannot be an exceptional circumstance.
26. Turning to Incapacity Benefit, it was accepted in debate that, at least in the depiction of the issues at the remedy hearing, the Tribunal was set to determine whether there should be a 100%, 50% or 0% deduction. This raised a new point in the way in which it was expressed. But if the point were to be allowed in, it would be conceded. The only authority relating to the first point is a judgment of the Employment Appeal Tribunal Fife Council v McPhee EAT/750/00 which is not binding since what is said about this subject was not necessary for its decision.
27. Both parties were offered the opportunity to consider Majrowski v Guy's & St Thomas's NHS Trust [2005] EWCA Civ 251 and the judgment of the Employment Appeal Tribunal and the Court of Appeal in Orthet Limited v Sarah Vince-Cain to which we will return.

The legal principles

28. The legal principles to be applied in a case such as this have been approved by the Court of Appeal, most recently in Orthet. There were two judgments which I handed down on behalf of the Employment Appeal Tribunal and two judgments of the Court of Appeal which Lord Justice Sedley, with Lord Justice Peter Gibson agreeing, handed down refusing permission to appeal.
29. In our first judgment UKEAT0801_03, we set out the law as we understand it in relation to the hearing of new points at the Employment Appeal Tribunal:

"As can be seen from our first preliminary ruling, this is a point which is free of authority. We do not shrink from our duty to determine a point fairly put to us by an Appellant aggrieved at a decision on a matter of law made by an Employment Tribunal. The principle, however, which requires us to operate when a new point arises is clearly set out in the following authorities, in addition to Kumchyk: Jones v The Governing Body of Burdett Coutts School [1999] ICR 38 CA; Hellyer Brothers Ltd v McCleod [1987] ICR 526 CA; Glennie v Independent Magazines (UK) Limited [1999] IRLR 719 CA; Mensah v East Hertfordshire NHS Trust [1998] IRLR 531 CA; Divine-Borty CA; Craig EAT; Dimtsu EAT; Derby EAT. Of those, 5 Court of Appeal and 4 EAT authorities dealing with the issue of new points, it is fair to say that they point in one direction, which is that new points may only in exceptional circumstances be raised at the EAT. The high water mark we suppose is Mensah where a point of law wrongly conceded by counsel could not be unpicked on appeal to the EAT however unfair that result might appear. Those then are the principles which inform our approach to the submissions."

30. The Court of Appeal of appeal approved of that approach: see 24 June 2004, para 12
31. It again approved that approach when the matter came back before it: see 25 September 2004, para 20.
32. In the judgment of the Court of Appeal, Robert Walker LJ in Jones v Governing Body of Burdett Coutts School [1998] IRLR 521 paragraphs 19, 20 and 29, it is clear that a new point of law may not be taken simply because it is arguably or even demonstrably correct by the time it reaches appeal.

Conclusions

33. With those principles in mind, we draw the following conclusions. Despite the very careful argument suggested to us we do not approach this case as one of procedure. Mr Downey, in a soft but effective approach to this issue, submitted that the liability hearing determined what course the remedy hearing would take. We have already drawn attention to the fact that, in its categorisation of the issues, the Tribunal noted only in respect of unfair dismissal that contribution would be in play. It structured not only its hearing but also its decision writing in accordance with that. There was no appeal.
34. It was open to the Tribunal to leave all issues of contribution to a remedy hearing since in the statute on unfair dismissal, the issue of contribution comes under remedy. But it is often helpful to the parties to decide issues such as contribution at the outset so they can deal with it in cross examination and so they can negotiate, should there be an award in favour of the Claimant.
35. Thus, a short-cut to this case is to say that the decision as to whether or not there would be contribution in respect of disability discrimination, was determined at the liability hearing. If there was doubt it was certainly determined by the second hearing, for which summary reasons were sent to the parties on 17 June 2004, when as the agreed note makes clear the tramlines for the remedy hearing were laid down. It is explicable that there was no discussion again of contribution under the Disability Discrimination Act 1995 and that is the primary way in which we will dispose of this case.
36. In deference, however, to the arguments which have been advanced before us, we will deal with it in another way. Section 8 of the Disability Discrimination Act 1995 sets out the way in which the calculation of damage should be made and it has now been replaced by Section 17 in the same terms:


(2) Where an employment tribunal finds that a complaint presented to it under this section is well-founded, it shall take such of the following steps as it considers just and equitable—

…

 (b) ordering the respondent to pay compensation to the complainant;

(3) Where a tribunal orders compensation under subsection (2)(b), the amount of the compensation shall be calculated by applying the principles applicable to the calculation of damages in claims in tort...



37. On the submission of Mr Smith, the reference there to damages in tort would obviously bring in consideration of the 1945 Act. Only one case has been drawn to our attention and we are told that the researches of Counsel, which reflect our own experience, indicate that there is no published authority for the proposition which Mr Smith advances. It is necessary to look at that authority.
38. The EAT in Fife Council v McPhee EAT/750/00 determined in an appeal where a Tribunal had made a finding of unfair dismissal and of disability discrimination that the Tribunal had erred for it had applied the DDA at a time when it was not in effect. It had then applied its findings, in relation to that Act across to its findings in respect of unfair dismissal. Both parts of its finding were set aside in what Lord Johnston described as a first and obvious observation and without further ado, as he put it, the appeal was allowed. However, the Tribunal went on to say this:

16 Before determining what should therefore be done against this background, we would also however assert that the Tribunal's approach to contribution in this case in relation to the discrimination aspects is flawed, given a finding of 50% against the respondent in relation to the unfair dismissal.

17 We would not suggest that in some cases, a finding of contributory fault in relation to a successful claim for unfair dismissal necessarily would bear on a quite separate claim for discrimination whether on race or disability grounds at the instance of the same employee in respect of the same employment. However, where the two are inextricably bound up as in here, inasmuch that it is the employee's conduct that led to dismissal but the employer's failure, it is said, to look after his interests in relation to the Act that rendered the dismissal unfair, it is to be observed at once that these two elements are totally intertwined. Logic therefore dictates that if there is to be a 50% contribution in relation to unfair dismissal, the same must apply in respect of discrimination having regard to the fact that in terms of section 8(3) of the Act, as Counsel pointed out, compensation in disability discrimination cases is to be assessed as a claim for reparation at common law where contributory negligence or contributory fault is a highly relevant element, if applicable.

18 In these circumstances even if we were therefore proposing to do nothing in relation to the substance of the decision, we would have quashed the award made under the Act and made a new order reducing it by 50%.

That is the only occasion, as far as we can tell, of there being a reference in any discrimination case to the 1945 Act.

39. Notwithstanding that it was made beside the point and not necessary for its decision we have no doubt that it represents a firm view of the Employment Appeal Tribunal on this subject. We can understand however, that the point may not have been argued thoroughly, given the strong wind blowing in favour of the Appellant on the jurisdiction point. Whilst technically hearing a preliminary Kumchyk application, because of that authority we decided that we would hear full argument on both sides on whether or not it is correct to bring in Section 1 of the 1945 Act when considering Section 8(3) of the DDA.
40. As we have said, we prefer to decide this point on the basis that it had already been decided in the liability decision and should not arise here. We also decide the point on the basis of Kumchyk. We accept the submissions of the Claimant but this is not such a truly exceptional case. The language of the ERA and indeed the language of the two sections of the ERA is mutually different from that of the 1945 Act. It by no means follows where there is fault by way of contributory negligence that there will be culpable conduct by way of Section 123 of the Employment Rights Act 1996. Even less does it follow that the figures attached to any such contribution should be the same. The experience in the Employment Appeal Tribunal is that a Tribunal is entitled to treat differently its approach to Section 122 and Section 123 since they are governed by different language and although they often go hand in hand, they need not.
41. The parties were represented professionally at the Tribunal and the Claimant could not have expected from the decisions made earlier in his case that he would have to meet a case made, for the first time in 30 years of anti discrimination legislation, that he would have to yield to the 1945 Act. Although the finding of fact may not require revisitation, the conclusions of the Tribunal would.
42. We regard it as particularly important that when a wholly novel point (pace Fife Council) is sought to be raised for the first time, it should be done at the Employment Tribunal; the Claimant has had to forego, on this argument, his right to a first instance hearing by a specialist Employment Tribunal who would be able to understand such issues.
43. Thus, we conclude that the issue should not be raised for the first time before us. It may be of some comfort to the Respondent to note that as Lord Johnston put it, there is some logic in a read-across from one statute to the other but if we were to decide this matter, we would regard it as of assistance to have intervention from the three statutory commissions, who may not have considered this matter, to help us to a conclusion. Thus, on Kumchyk principles we will refuse the application.
44. We then turn to the Incapacity Benefit point which is in a different category. We accept the argument of Mr Smith that this is not a new point: why else would the Tribunal take the trouble to set out the issue as between the various percentages if it were not there to be decided? As it happened, it decided in favour of the submission made by the Claimant which represented the orthodoxy, both in personal injury litigation and in employment protection and discrimination litigation, prior to the judgment of Employment Appeal Tribunal in Morgans. It cannot be faulted for making that judgment. However, on appeal, since we hold that the issue was before the Employment Tribunal, it is properly open to the Respondent to challenge it and helpfully, in the light of authority, the Claimant does not resist it. Therefore this ground of appeal will be allowed. It is agreed that the effect of our judgment is that for the sum of £85,982.39 there is substituted £76,303.33. Paragraph (ii) of the judgment on remedy is unaltered.
45. We would very much like to thank both Counsel for clear and succinct submissions today. The appeal is allowed in part.