Shifferaw v Hudson Music Co Ltd

When unfair dismissal and wrongful dismissal claims run concurrently, an Employment Tribunal has a choice in avoiding double recovery. It may assess unfair dismissal loss from the end of the notice period, or assess the full loss and deduct the wrongful dismissal award. Where an ACAS uplift applies only to unfair dismissal compensation, the Tribunal must consider whether its chosen method gives proper effect to that uplift.

Compensation for post-dismissal loss should include employment benefits such as paid holiday and potentially pension contributions during sickness absence. A simplified approach to pension loss may be appropriate where employment would probably have ended before retirement. Future loss may be limited where the Tribunal adequately finds that lawful dismissal would have occurred after prolonged ill-health.

The Claimant appealed the London (Central) Employment Tribunal’s Remedy Judgment following findings that she had been wrongfully and constructively unfairly dismissed. The Employment Tribunal awarded damages for the notice period, an unfair dismissal compensatory award including a 20% uplift for breach of the ACAS Code of Practice on Disciplinary and Grievance Procedures 2009, and compensation for five days’ holiday pay.

The appeal concerned the calculation and application of the uplift, inclusion of paid holiday in continuing losses, pension loss during sickness absence, and the decision to end compensation when the Claimant’s statutory sick pay entitlement expired. The central questions were whether the Tribunal had adopted legally permissible methods and adequately addressed relevant evidence.

The appeal was allowed in part. The relevant issues were remitted to the Employment Tribunal for reconsideration, subject to any representations on disposal.

1. Concurrent claims and ACAS uplift. An Employment Tribunal may avoid double recovery either by beginning unfair dismissal loss when the wrongful dismissal period ends, or by calculating the unfair dismissal loss from termination and deducting the wrongful dismissal sum. It is not bound to adopt either method. Where the uplift under section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992 applies only to unfair dismissal compensation, the Tribunal must consider which method properly gives effect to its intention. The issue was remitted.
2. Holiday entitlement. Paid holiday was included in the Claimant’s schedule of loss and was a relevant employment benefit. The Employment Tribunal erred by failing to include it in its calculation of continuing loss. This issue was remitted.
3. Pension loss. Failure expressly to refer to the withdrawn pension guidance was not an error of law. The Tribunal had effectively adopted the simplified approach, which was appropriate where employment would probably have ended before retirement. Its treatment of the Claimant’s own contributions and tax relief was permissible.
4. Pension contributions during SSP. The Tribunal failed to show that it had considered evidence that contributions had continued during an earlier period of statutory sick pay. The issue was remitted.
5. Limitation of loss. An Employment Tribunal may limit future loss where it finds that lawful dismissal would have occurred after prolonged ill-health, or that the employee would otherwise have received no pay. The reasoning here adequately identified long-term absence as the lawful ground and the appeal on this issue was dismissed.
6. The separate holiday pay claim was not subject to the uplift. An error in the Respondent’s counter-schedule did not extend the Employment Tribunal’s finding concerning the unfair dismissal claim.

• Employment Appeal Tribunal: Allowed the appeal on the ACAS uplift calculation, paid holiday entitlement, and pension contributions during statutory sick pay. Those issues were to be reconsidered by the same Employment Tribunal where practicable. Dismissed the appeal concerning the separate holiday pay uplift and limitation of future loss.
• London (Central) Employment Tribunal: Following its liability decision, awarded wrongful dismissal damages, unfair dismissal compensation including a 20% ACAS uplift, and holiday pay.