Tan v Solihull Community Housing Ltd

An Employment Tribunal must give adequate reasons for a substantial discount to pension loss. It must explain how its findings and the relevant contingencies justify the percentage adopted; reciting the parties’ competing cases and announcing a conclusion is insufficient.

Where past loss is awarded to the remedy hearing, the separate question under section 123 of the Employment Rights Act 1996 is whether a future award is just and equitable. A refusal of all future loss must address any continuing or partial earnings loss, including the likely level of re-employment, rather than relying only on the employee’s general employability.

The claimant was unfairly dismissed from his employment as an Anti-Social Behaviour Officer. The Employment Tribunal made a 25% deduction for contributory fault. At the remedy hearing it awarded a 20% uplift under section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992.

The claimant had obtained lower-paid work after dismissal and then suffered injuries in a road traffic accident. The Tribunal awarded earnings loss only to the remedy hearing, made no award for future earnings loss, and reduced the calculated pension loss by 85%, finding only a 15% prospect that employment would have continued to age 65.

He appealed against the pension discount and the refusal of future loss. The central issues were whether the Tribunal had given sufficient reasons for the pension contingency and whether it had addressed the possibility of continuing, including partial, future earnings loss.

1. Appeal allowed. The Tribunal’s reasons for imposing an 85% reduction on pension loss were inadequate. Its bare finding that there was a 15% prospect of employment continuing to age 65 did not explain its treatment of the disputed factors relied upon by the employer, including the claimant’s prior back condition and the possibility of redundancy. Proper reasons must reveal how the Tribunal moved from its findings of fact to its conclusion; a recital of background and submissions followed by a conclusion does not do so.

2. The Tribunal had not, despite imprecise language, ended loss at the date of the road traffic accident. It awarded loss to the remedy hearing. The issue was therefore the statutory assessment under section 123 of the Employment Rights Act 1996: whether it was just and equitable to award future loss. Tort authorities on the effect of an intervening event in personal-injury damages, and the cited employment authorities concerning that analysis, were not engaged.

3. The finding that the claimant was employable and was not prevented from working by his back condition or accident injuries could support a conclusion that there was no total inability to work. It did not, however, answer whether he could return to his lower-paid postal work, the earnings level at which he could re-enter the labour market, or whether a continuing partial loss should be awarded. There was also no finding of failure to mitigate. The complete cut-off of future loss therefore required reconsideration.

4. The case was remitted to the same Employment Judge for submissions only and further reasons on pension loss and future loss. No further evidence was to be admitted. The Judge had heard the liability and remedy proceedings and had otherwise produced balanced decisions; the appellate guidance favoured remittal to the fact-finding tribunal rather than determination by the Appeal Tribunal.

• Employment Appeal Tribunal: Allowed the claimant’s appeal and remitted the outstanding pension-loss and future-loss issues to the same Employment Judge.
• Employment Tribunal: By a judgment with reasons dated 25 July 2013, upheld the unfair-dismissal complaint subject to a 25% deduction for contributory fault. At the remedy hearing on 2 October 2013, it awarded a 20% uplift under section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992, but made no future earnings-loss award and reduced pension loss by 85%.