NCP Services Ltd v Topliss

An Employment Tribunal must give sufficient reasons for a costs award and for a substantial assessment of future loss. Where serious issues arise about the period of unemployment, prospective earnings and continuing partial loss, the reasons must disclose the essential calculation and assumptions. An unexplained figure, apparently arbitrary, is an error of law.

On remission for future loss where no proper determination has yet been made, the tribunal may consider facts known by the rehearing date. This permits compensation that is just and equitable by replacing an earlier estimate with known loss where possible.

The employee was dismissed from a senior post after making accepted protected disclosures. The Employment Tribunal at London Central found the dismissal automatically unfair under Employment Rights Act 1996, awarded compensation, including £35,700 for future loss, and ordered the employer to contribute £3,000 towards legal costs.

The employer appealed the costs order. The employee cross-appealed the future-loss award, contending that the Tribunal had not explained how it had calculated it or why it had rejected a claim for continuing partial loss. The central issues were whether the reasons were legally adequate, the appropriate disposal, and whether a remitted tribunal could take account of events after the original hearing.

1. Appeal and cross-appeal allowed. The costs order was set aside and the issue of future loss was remitted to the same Employment Tribunal.

2. The Tribunal had not given an adequate basis for the £3,000 costs award. Under paragraph 40(3) of Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004, costs required qualifying unreasonable or misconceived conduct. The stated grounds did not show additional costs caused by the employer’s resistance to the ordinary unfair-dismissal claim. The employer had also already received a 20 per cent uplift for its procedural default. Its position concerning the client’s request was not shown to be abusive or unreasonable. The figure itself had no explained basis.

3. The £35,700 future-loss award was also inadequately reasoned. Although a tribunal may reject unchallenged expert opinion and use its own experience, it must explain the essential assumptions and calculation where the dispute raises substantial issues about future unemployment and lower-paid replacement work. The Tribunal’s reference to a difficult predictive exercise did not show whether it had allowed for total loss, continuing partial loss, or some other assessment. The award could not be reviewed for legal error.

4. The future-loss issue was remitted to the same Tribunal. There was no proper basis to infer bias or incapacity. It must retain the agreed past-loss figures, the 20 per cent uplift and grossing-up exercise, and determine future loss with adequate reasons.

5. Since no proper decision on future loss had yet been made, the remitted Tribunal could consider facts arising after the original decision. Compensation under section 123 of the Employment Rights Act 1996 should be just and equitable, and known facts should ordinarily replace an earlier estimate of loss.

• Employment Appeal Tribunal: appeal and cross-appeal allowed in [2010] UKEAT 0147_09_1501. The costs order was overturned and future loss was remitted to the same Tribunal.
• Employment Tribunal, London Central: on 11 December 2008, with reasons sent on 27 January 2009, it found the dismissal automatically unfair and awarded compensation, including costs and future loss.