COMPENSATION

Voith Turbo Ltd v Stowe

EAT: Judge McMullen QC, Mr I Ezekiel and Mr A Harris: 20 January 2005

The claimant was dismissed for redundancy with three months' pay in lieu of notice. A week after his dismissal he started new employment. An employment tribunal upheld his complaints of unfair dismissal and race discrimination, and, in calculating the compensatory award for unfair dismissal in accordance with the provisions of section 123 of the Employment Rights Act 1996, assessed his loss of earnings after dismissal without deducting the sum earned during his notice period. In respect of pension loss, which the claimant had put at five years and the employer at two and a half years, the tribunal awarded 10 years.

The employer appealed.

The Employment Appeal Tribunal held:
(1) While on a claim of race discrimination, in accordance with the tortious approach to the assessment of damages, a claimant had to give credit for money earned during a period in which payment in lieu of notice had been made, the common law rules relating to the duty to mitigate did not apply in the same way to the assessment of the compensatory award for loss of earnings on an unfair dismissal claim under section 123 of the Employment Rights Act 1996, where the statutory concept of good industrial practice required an employer to meet its obligations by providing notice or money in lieu. Accordingly, it was open to an employment tribunal to decide that an employee who obtained new employment during a notice period for which he had received payment in lieu was not required to give credit for it.
(2) In the assessment of pension loss and its relationship to the assessment of future income loss, it was possible for an employment tribunal to take different periods. It could do that by using, and referring to, the tribunal's knowledge of local conditions and special features, but the tribunal in the present case did neither, and it was difficult to see how it could resolve a dispute between two and a half years and five years at a figure of ten. Although ten years might well be the correct figure, possibly by the application of the Ogden Tables, the tribunal was bound to so explain, and that matter would be remitted for further consideration.

The appeal was allowed in part.

Appearances: Alison Russell (ASB Law, Croydon) for the employer; James Wynne (Rowley Ashworth) for the claimant.