Hill v G & R Pollard Engineering

An Employment Tribunal may assess the period of compensable loss by reference to the evidence of available work, the employee’s mitigation efforts and its local knowledge. Its evaluative findings will stand where they were open on the evidence.

Under section 123(6) of the Employment Rights Act 1996, a reduction for contributory conduct must be based on the employee’s conduct and not that of the employer. Where alternative employment later pays at least as much, increased earnings after the established end of the loss period cannot reduce loss already sustained. Whether later employment breaks the chain of causation depends on the facts.

The Employment Tribunal found that Mr Hill had been constructively unfairly dismissed. Following an earlier successful appeal and remittal, it assessed compensation at £9,069. It reduced the contributory-conduct deduction from 70% to 50%, increased the statutory-procedure uplift from 10% to 40%, and retained 31 December 2009 as the end date for loss of earnings.

Mr Hill appealed the cut-off date, the 50% contribution finding and the uplift. The employer cross-appealed the finding that contractual pay produced a continuing net weekly loss of £76. The central issues were whether the Tribunal had sufficient evidential basis for its compensation findings and whether later increased earnings could reduce earlier loss.

1. Appeal and cross-appeal dismissed. The Tribunal had adequate material to conclude that loss of earnings ended on 31 December 2009. Mr Hill had obtained fresh employment soon after leaving, evidence showed that other local employers could pay the same or more, he had not sought better-paid work, and the Tribunal could use its local knowledge. Its assessment was open to it.

2. The 50% reduction for contributory conduct under section 123(6) of the Employment Rights Act 1996 was also open on the facts. Employer conduct, including the alleged forged document, could not be taken into account in making that reduction. The Tribunal was entitled to weigh Mr Hill’s senior role and failure to clock off against its finding that the conduct at a Christmas event was an error of judgment rather than a deliberate fraud.

3. The challenge to the 40% uplift under section 31(3) of the Employment Act 2002 disclosed no perversity. The Tribunal had heard the relevant witnesses and was entitled to take account of the employer’s forged document and disregard of the applicable statutory disciplinary procedure when revising its uplift.

4. Applying Whelan and Another v Richardson [1998] IRLR 114, later earnings cannot be used to reduce loss sustained before the employee obtained alternative employment. The Tribunal made no finding that Mr Hill earned more in 2010; it found only that from 1 January 2010 he would not earn less. On these facts, it was entitled to treat the net loss as ending on 31 December 2009. Dench v Flynn and Partners [1998] IRLR 653 confirms that equal or greater permanent earnings do not invariably break the chain of causation, but did not undermine this fact-sensitive conclusion.

• Employment Appeal Tribunal: The appeal from the Employment Tribunal’s first compensation decision was allowed on 15 June 2010 and remitted to the same Tribunal.
• Employment Tribunal: On review, judgment was sent to the parties on 1 November 2010. The Tribunal awarded £9,069 compensation after revising the contribution reduction and statutory uplift, while retaining the loss cut-off date.
• Employment Appeal Tribunal: This appeal and the employer’s cross-appeal were dismissed.