Countrywide Estate Agents & Ors v Turner

Under section 123 of the Employment Rights Act 1996, compensatory loss must be sustained in consequence of the dismissal. In a constructive-dismissal case, the assessment must therefore proceed from the claimant’s contractual remuneration at the effective date of termination. A tribunal cannot compensate by reference to a more highly paid post previously held merely because earlier employer conduct formed part of the cumulative breach leading to resignation.

A separately pleaded contractual claim may remain within the Employment Tribunal’s jurisdiction under the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994. An award for loss of statutory rights is discretionary and an award of two weeks’ capped gross pay was not perverse on the facts.

The claimant was found to have been constructively unfairly dismissed after a cumulative breach of trust and confidence. Before his effective date of termination, he had moved from an Area Manager role to a lower-paid Senior Branch Manager role.

In its remedies judgment, the Employment Tribunal awarded contractual damages and calculated unfair-dismissal compensation by reference to remuneration from the earlier Area Manager role. It also awarded compensation for loss of statutory rights.

The employer appealed on four grounds. It challenged the Tribunal’s jurisdiction to determine a contractual claim, the basis of the compensatory award, the contractual-damages award, and the statutory-rights award. The central issue was whether loss calculated using the earlier Area Manager remuneration was loss sustained in consequence of the dismissal.

1. The appeal was allowed on ground 2. The Employment Judge erred in calculating the compensatory award under section 123 of the Employment Rights Act 1996 by reference to the claimant’s former Area Manager remuneration. The relevant loss had to be loss sustained in consequence of dismissal. The dismissal was effected by the claimant’s decision to resign on 29 September 2011, with termination deferred by agreement until 30 November 2011. At that point he had freely accepted the lower-paid Senior Branch Manager position.

2. The cumulative conduct which entitled the claimant to resign did not permit compensation for the loss of remuneration from an earlier post after he had entered a new contractual position. The approach in GAB Robins (UK) Ltd v Triggs [2008] ICR 829 was applied. The authority relied upon concerning diverted work and additional earnings was materially different and did not assist.

3. Ground 1 was dismissed. The contractual claim was properly pleaded in the ET1 and was before the Employment Judge at both the liability and remedies hearings. The decision in Symonds (t/a Symonds Solicitors) v Redmond-Ord [2014] 1 ICR D6 was distinguishable because no contractual claim had been pleaded there.

4. Grounds 3 and 4 were dismissed. The contractual-damages assessment disclosed neither an error of law nor perversity on the evidence before the Tribunal. The award of £860 for loss of statutory rights was within the Tribunal’s discretion. If the parties could not agree the recalculated compensation, the matter was to be remitted to the same Employment Judge.

• Employment Appeal Tribunal: allowed the employer’s appeal on the basis of the compensatory award, while dismissing the challenges to jurisdiction, contractual damages and loss of statutory rights.
• Employment Tribunal, Southampton: found the claimant constructively unfairly dismissed following hearings in October 2012. Its remedies judgment, sent on 3 January 2013, awarded contractual damages, unfair-dismissal compensation and compensation for loss of statutory rights.