The issue before the appeal tribunal concerns the correct approach to the assessment of consequential loss in a remedy hearing where a claimant succeeded in a claim for both constructive unfair dismissal and discriminatory dismissal contrary to the Equality Act 2010 (EqA 2010). The first issue was whether the tribunal had approached the assessment of a head of claim for loss of earnings as a loss of chance. If on the other hand, the tribunal had considered whether, and if so, for how long the employment relationship would have continued absent the impugned conduct on the balance of probabilities, the question was whether it was entitled to approach the matter in that way.

Permission to proceed to a full hearing was given by Cavanagh J on 10 December 2020. A second ground of appeal challenging the tribunal’s calculation of the award for injury to feelings was dismissed upon withdrawal.

The appellant was the claimant before the tribunal. I shall continue to refer to the parties as they were below.

A tribunal hearing before Employment Judge Freer and two members, Ms B Leverton and Mr N Shanks, took place at a hearing over 11 days between January and May 2018, followed by a further 6 days deliberations in chambers in June and September 2018. A reserved judgment was sent to the parties on 15 December 2018.

The claimant raised a number of wide-ranging allegations of detriment and dismissal on grounds of discrimination, victimisation and harassment in breach of the EqA 2010 by reference to the protected characteristic of disability. He also alleged constructive unfair dismissal under section 98 of the Employment Rights Act 1996 (ERA 1996) – so-called ordinary unfair dismissal - citing a total of either 47 or 54 breaches of contract (depending whether the subparagraphs are included in the overall number) from 4 March 2015 to 26 July 2016. He also alleged automatically unfair dismissal by reason of protected interest disclosure contrary to section 103A ERA 1996 and, in the alternative, a health and safety reason for dismissal under section 100 ERA 1996. In addition he made allegations of detriment on the grounds both of protected interest disclosure, contrary to section 47B of the ERA 1996 and also health and safety, together with complaints of unauthorised deductions from wages, and wrongful dismissal.

The claim was defended on grounds that there had been no breaches of contract at all, or none sufficient to entitle the claimant to resign in circumstances amounting to constructive dismissal, and in the alternative that he had not resigned in response to any breaches as might be found. The respondent did not advance a positive case on dismissal as an alternative in the sense that they did not put forward a potentially fair reason for dismissal or rely on a s.98(4) compliant procedure. In other words they defended all the unfair dismissal complaints on the ground that there had been no dismissal. The claims brought under EqA 2010 were also defended on the basis that he had not been subjected to any detriments or dismissed.

The claimant’s claim was materially successful in respect of one factual allegation only: that the respondent had failed to investigate and deal with his complaint about being subjected to an unlawful deduction of one day’s pay on 10 April 2015 when he had been absent from work at a hospital appointment for a post cancer check-up and colonoscopy. The tribunal concluded that it constituted a breach of the implied term of trust and confidence that went to the heart of the contract of employment, that the claimant had resigned partly in response to the breach and that he had been unfairly constructively dismissed contrary to section 98 of the ERA 1996. The treatment – namely the deduction of pay for a cancer related check up and failure to investigate and deal with the complaint - was also found to amount to both discrimination arising from disability contrary to section 15 and a failure to make a reasonable adjustment under section 21 of the EqA 2010.

There was one other allegation of breach of contract that was found by the tribunal to be well founded, but since it was not causative of the claimant’s dismissal or connected to the discrimination complaints no remedy flowed from it.

All of the other complaints were either dismissed by the tribunal or withdrawn at the outset of the hearing. There is no challenge to the tribunal’s findings on liability.

It is not necessary to recite all the details of the very many allegations made in support of the claimant’s various claims, beyond noting that the multiplicity of allegations presented a Herculean task for the tribunal. For example, the indirect disability discrimination complaint alleged 20 separate provisions, criteria or practices that had been applied to the claimant. In relation to the victimisation complaint, there were 9 protected acts relied on and 16 separate detriments.

What follows therefore is a brief summary of the case in so far as it is necessary for the purposes of this appeal. The claimant was employed by the respondent NHS Trust from September 2004, initially as a complaints administrator, then from 2013 with the job title of complaints and serious incidents case manager. His employment terminated on 10 August 2016.

The claimant was disabled as he had been diagnosed with bowel cancer in 2009. By paragraph 6 of schedule 1 EqA 2010 cancer is a disability. As explained in the Statutory Guidance on matters to be taken into account in determining questions relating to the definition of disability (Footnote: ¹) paragraph A9:

Thankfully in the claimant’s case the cancer had been successfully treated by 11 April 2011. Thereafter he attended hospital check-ups from time to time to ensure that that remained the case. The tribunal therefore found that the claimant was disabled as a person who had previously been diagnosed with cancer. It also found that his, quite separate, conditions of stress, anxiety and depression also caused him to come within the definition of disability under section 6 of the EqA 2010 from April 2016.

There was a departmental reorganisation in 2013, which appears not to have been entirely successful from both the team members’ and management’s perspective. In March 2015 Ms Edith Adejobe was appointed as an interim assistant director of serious incidents and complaints. She sought to manage the department more closely and address some longstanding attendance issues and what was perceived by management as non-compliance with sickness and leave absence reporting procedures in the department. The tribunal recorded Ms Adejobe’s evidence to the tribunal which gives a flavour of the problems as she perceived them:

Against that background, on Friday 10 April 2015 the claimant attended a hospital appointment for a cancer related check-up and colonoscopy, and did not attend work that day. He did not record the appointment in the respondent’s e-roster system. Ms Adejobe and the head of employee relations, Ms Sally Dibben, considered the claimant had not complied with the sickness and hospital appointment reporting procedure and decided to make a deduction of pay for unauthorised absence for that day, in accordance with what they understood to be the contractual terms.

The tribunal examined the contractual provisions and found that:

The claimant was not informed that his pay would be deducted for that date, although Ms Adejobe had been advised by Ms Dibben that it would be best to inform him that his pay had been stopped, the reason why and that it was in line with the sickness policy.

The claimant was due to attend a routine supervision meeting with Ms Adejobe on 14 April 2015 but he was signed off sick with stress by his GP from that date, initially for a period of two weeks but in fact remained off sick for some six months and did not return to work until October 2015.

The claimant noted that he was missing one day’s pay on 26 May 2015 when he presumably received his pay slip. On 23 June 2015 he raised in writing the missing one day’s pay, together with a number of other matters relating to keeping in touch obligations during his sickness absence. Ms Adejobe should have contacted the claimant weekly during his sickness absence but did not do so for the first 8 weeks of his sickness absence. Ms Adejobe replied on 2 July 2015 in relation to the other matters raised and put in place a mechanism for keeping in touch with the claimant during his sickness absence thereafter, but was silent on the 10 April 2015 deduction. The claimant continued to raise a complaint about having lost one day’s pay on 10 April 2015 in subsequent correspondence, which the tribunal found was never dealt with and nor was it reinstated in his pay packet.

Problems continued during the claimant’s sickness absence with an unwillingness from him to engage with Ms Adejobe’s weekly contact arrangements so he could update her as to his medical condition. The tribunal found that by mid-July 2015 the claimant was refusing to accept letters sent to him by his employer by recorded delivery.

In July 2015, the claimant and three other colleagues submitted a joint complaint concerning alleged bullying and harassment by Ms Adejobe. The respondent conducted an investigation which reported in March 2016 which did not uphold the allegations. In the meantime, the claimant had returned to work on October 2015, by which time Ms Adejobe was no longer his line manager.

The claimant sought to appeal the decision rejecting his and his colleagues’ complaints of bullying and harassment, but under the respondent’s procedure the investigation report was final and there was therefore no route of appeal. The claimant was also concerned that the wrong procedure had been used and there was much to-ing and fro-ing of correspondence on those procedural issues.

On 24 March 2016, the claimant sent a lengthy email, repeating his earlier complaints about the issues raised in the original joint complaint as well as other matters widening the scope of his concerns. The tribunal set out an extract in paragraph 194 of its decision which illustrates the scope and style of the claimant’s correspondence:

The Trust, however, maintained its position that the investigation had been concluded and that there was no appeal against the harassment and bullying complaint which had been dismissed.

In April 2016, the claimant commenced a further period of sickness absence for stress and he remained off sick until his resignation on 10 August 2016.

Meanwhile, the matter came to the attention of the chief executive of the Trust, Dr Matthew Patrick, when the claimant sent a lengthy email directly to him, followed by a further document on 7 July 2016 entitled “Formal Grievance”. Dr Patrick sent what the tribunal considered to be a conciliatory response, which again the tribunal set out verbatim at paragraph 119, suggesting a meeting to consider a way forward and expressing concern that from the claimant’s letter it appeared that his health continued to be a problem. Dr Patrick reassured the claimant that he did not wish to take any steps that might exacerbate his current condition, but would like to meet with him along with Louise Hall, the director of human resources, when he was fit to return. In the meantime, Dr Patrick would await the claimant’s forthcoming occupational health appointment on 21 July 2016.

The offered meeting never took place because the claimant resigned with immediate effect by letter dated 10 August 2016. The resignation letter which covered five pages raised many issues, one of which was the deduction of one day’s pay on 10 April 2015 and the failure to address the claimant’s complaint about it.

The tribunal analysed the legal issues arising from the 10 April 2015 deduction from pay. It found that the matter could not be raised as a freestanding complaint under Part II ERA 1996 as it had not been brought within three months of the deduction in question. However, they concluded (paragraph 134) that the respondent had failed to address the claimant’s complaint about the deduction from pay and that even though the deduction was a relatively modest amount, the fact that it was connected with his cancer related hospital attendance was, in all the circumstances, conduct without reasonable and proper cause which was likely to have the effect of damaging or seriously destroying the implied term of trust and confidence, and was thus a fundamental breach of contract.

The only other complaint in the constructive dismissal allegation that the tribunal found amounted to a breach of contract was allegation (f), that Ms Adejobe had failed to contact the claimant during the first eight weeks of his sickness absence or agree any keeping in touch arrangements. The tribunal found that Ms Adejobe had acted without reasonable and proper cause (paragraph 148). Although the tribunal concluded that Ms Adejobe’s inaction was not calculated to seriously damage trust and confidence, the tribunal found that it was likely to do so.

Having made conclusions on each allegation as a standalone complaint of a breach of the implied term of mutual trust and confidence, the tribunal then stood back to consider the allegations as a whole (see paragraphs 277 to 285 of the liability decision). In paragraph 283 they concluded that the issue in relation to the deduction of pay on 10 April 2015 was extant at the time of the claimant’s resignation and formed part of the reason for his leaving employment, as set out in his resignation letter. The tribunal concluded that the claimant had not affirmed the breach as it had found as a fact that he had raised it expressly and repeatedly throughout his bullying and harassment complaint.

On the second breach of contract found by the tribunal (allegation (f)), it concluded that although the eight-week delay before Ms Adejobe contacted the claimant amounted to a fundamental breach of the implied term, it did not however form part of the reason for the claimant leaving his employment. In any event, by the time of his resignation, the claimant had affirmed that particular breach by continuing in his employment for a period of over a year after she had put in place weekly contact arrangements.

It was the tribunal’s conclusion that the claimant resigned partly in response to the fundamental breach of the implied term of trust and confidence to deal with complaints, which was underpinned by an express contractual and statutory right not to be subjected to unlawful deductions of wages. However the tribunal considered that the series of events and allegations of fundamental breach of contract both individually and as a whole did not amount to a fundamental breach of contract.

As already noted, the respondent had not advanced a potentially fair reason for the dismissal and the tribunal therefore found the claimant’s constructive dismissal was unfair.

The tribunal also found that the failure to address the claimant’s concern in relation to the deduction of one day’s pay constituted two forms of disability discrimination: a failure to make reasonable adjustments, contrary to section 21 of the EqA 2010 (paragraphs 295 to 296 of the liability reasons), and discrimination arising from disability, contrary to section 15 in relation to the same matter (paragraph 365).

There is no appeal from the liability decision.

The matter then came before the same tribunal for a further five days on the remedy hearing: 25 to 27 November 2019 for the hearing and in chambers on 17 and 21 February 2020. A reserved judgment was sent to the parties on 26 May 2020.

The claimant was awarded a basic award in respect of his unfair dismissal claim of £5,748, loss of statutory rights of £500, injury to feelings of £5,000 and interest of £997.26, making a total of £12,245.26. He was not awarded any compensatory award under the unfair dismissal claim nor any loss of earnings damages under the discrimination claims. Although not expressly stated in the judgment, it is apparent from the tribunal’s reasons that only the basic award was made in respect of the unfair dismissal claim and the other heads of damage were awarded under the EqA 2010 claim.

The appeal concerns the refusal of the tribunal to make any compensatory award for loss of earnings in respect of the unfair dismissal claim, or any loss of earnings compensation in respect of the EqA 2010 claims. I was informed today that the loss – which cannot be awarded twice in respect of the same loss by virtue of s. 126 ERA 1996 - was claimed in the first place under the discrimination cause of action and in the alternative as part of the unfair dismissal compensatory award, in order to avoid the statutory cap limiting the amount of compensation that may be awarded in an unfair dismissal complaint which does not apply to a discrimination complaint. However it is a distinction which makes no difference on the facts of this case. The schedule of loss was not in the bundle before me.

It was common ground that the tribunal gave itself the following direction as to the issues on remedy at paragraphs 4 to 20 of the judgment:

Mr MacDonald acknowledges that if the tribunal followed its own direction, his appeal must fail. His argument, however, is that they did not.

As a supplementary point, he argues that there were inadequate reasons for the tribunal judgment which is therefore not Meek-compliant as an additional ground of appeal.

The tribunal then made the following observations:

The tribunal then considered carefully “the extent to which the 10 April 2015 deduction and the complaint made on 23 June 2015 had a part in the circumstances” by reference to the evidence.

The tribunal rejected the claimant’s assertion that the respondent’s failure to address the deduction of one day’s pay on 10 April 2015 had been constantly on his mind and was a seam that ran through his complaints, the “golden thread” running throughout the claimant’s issues, as he had put it in his oral evidence (paragraph 55). It was not consistent with the contemporaneous documentation, the history of his complaints and grievances both prior to his discovery of the deduction of 1 day’s pay in June 2015 and thereafter up to his resignation in August the following year, nor the medical records, and a number of expert medical and psychiatric reports that had been commissioned by the parties.

The tribunal found as a fact that the claimant’s concerns about the pay deduction on 10 April 2015 had formed a very small part of a large series of allegations of both discrimination and breach of contract and various other breaches of employment rights that were not well-founded as there were significantly more unrelated matters occurring which caused his lengthy absences for stress and the source of his unhappiness at work.

The tribunal concluded at paragraph 85:

Ms Chudleigh submits that it is implicit in the tribunal’s findings that they found the claimant to be a liar. I would not go so far, it is also possible that he had misremembered and the tribunal has not identified the reason for the claimant’s inaccuracy. I draw no conclusions that he was thought to be dishonest and put that suggestion immediately out of my mind. The important point is that his evidence was not accepted. In relation to the discrimination complaint the tribunal concluded in paragraph 86:

In paragraph 87:

It reaches a similar conclusion in paragraph 121, addressing a compensatory award and an assessment of a Polkey deduction:

Under the separate headings of “Psychiatric Injury” and also “Injury to feelings” in the discrimination complaints, the tribunal made separate findings.

The claimant argues that the tribunal had irrationally and erroneously moved from a finding that the claimant would have resigned in any event, which had been made on the balance of probabilities, to a 100% Polkey reduction. Mr MacDonald advanced a number of propositions.

Polkey calls for a predictive exercise, asking what the chances were that the employer would have dismissed fairly in the circumstances, and requiring a focus on the employer’s likely thought processes: Grantchester Construction (Eastern) Ltd v Attrill [UKEAT/0327/12] at [10]. It is therefore not right to move from an assessment of 50 per cent chance to a conclusion that the employer inevitably would have dismissed: Grantchester at [25]. The tribunal may apply a percentage reduction, or limit losses to a fixed period: Zebrowski v Concentric Birmingham Limited UKEAT/0245/16 at [50], [53], [54].

For a tribunal to decide that an employee would have been dismissed after a specific period the tribunal must be certain (i.e. find a 100% chance) that the employee would have been dismissed (or resigned) at that point: Zebrowski at [34]. It therefore follows that to conclude that the employment would have ended on the same date as the unfair dismissal is to make a strong finding that there was no chance that the employment would have continued: Hamer v Kaltz Ltd UKEAT/0502/13.

The tribunal must consider all the relevant facts and circumstances: Frew v Springboig St John’s SchoolUKEAT/0052/10 at [26].

The burden is on the employer, not to prove any fact on the balance of probabilities, but to satisfy the tribunal that a future chance would have happened: Grayson v Paycare UKEAT/0248/15 per Kerr J at [17], [32], [46 – 48], [51].

Similarly in the Equality Act claims, in assessing loss flowing from discrimination, the correct approach is not to speculate as to what would have happened as if it involved questions of fact, to be decided on the balance of probabilities – but rather to assess matters of chance in a broad and sensible manner: Ministry of Defence v Cannock [1994] ICR 918, 930E-F, 937F-H, 938A-B per Morison J. the tribunal therefore erred by deciding the matter on the balance of probabilities, thus leaving the claimant with nothing.

In the alternative, he argues that the decision was not adequately reasoned and is not Meek-complaint.

The appeal is resisted by Ms Chudleigh for the respondent NHS Trust on the basis that either the tribunal made a finding in paragraphs 86 and 121 that there was a 100% loss of chance. But even if the tribunal had in fact approached the matter on the balance of probabilities, it was permissible for it to do so. There was no contradiction between the finding in the liability judgment that the claimant had been unfairly constructively dismissed following his pay deduction and failure to deal with his complaint and the finding that he would have resigned anyway and was therefore not entitled to any loss of earnings compensation (see Wright v North Ayrshire Council [2014] ICR 77).

She referred to the case of BMI Healthcare Ltd v Shoukrey UKEAT/0336/19 which had referred a case back to the tribunal to consider “whether there were matters, other than the unlawful protected disclosure detriments, that led the Claimant to resign that either broke the chain of causation, or should result in compensation [being reduced].”

Ms Chudleigh submitted that in this case, the tribunal had avoided the error in Shoukrey and had considered the matter correctly.

But in the alternative she argued that Chagger v Abbey National and Hopkins [2010] IRLR 47 is good authority for the proposition that it is not always necessary to adopt a loss of a chance approach for Polkey purposes following a discriminatory dismissal, especially where the case is that the claimant would have resigned, citing paragraph 67 of Elias LJ’s judgment:

There are two further strands to her argument. The first is that since the case concerned the question of whether the claimant would have resigned anyway, the tribunal’s decision on consequential loss concerned what the claimant himself would have done, not what the respondent employer, a third party, would have done. Whilst it is well established that instead of the all or nothing balance of probabilities approach, the loss of a chance approach is appropriate where the question of what would have happened in hypothetical circumstances depends upon the actions of a third party, (see for example the solicitor negligence case of Allied Maples Group Ltd v Simmons and Simmons (a Firm) [1995] 1WLR 1602), Ms Chudleigh submitted that a distinction can be drawn where it is not the actions of a third party under consideration but an analysis of what the claimant would have done, relying on another professional negligence claim case, Perry v Raleys Solicitors [2019] UKSC 5 per Lord Briggs JSC at paragraph 20:

Her second argument was that the tribunal was deciding on a past event in this case, rather than a future one, which was inherently less speculative, relying on the speech of Lord Diplock Mallett v McMonagle [1970] AC 166.

Finally she relied on the observation in O’Donoghue v Redcar and Cleveland Borough Council [2001] IRLR 615 that “it cannot be said that to refuse to assess on a percentage risk is necessarily wrong in principle” [51] and whether it was appropriate to assess the chance in percentage terms will depend on all the circumstances. She also noted that in that case the Court of Appeal had inferred from the tribunal’s judgment that it had concluded that there was a 100% chance that there would have been a fair dismissal in any event.

The relevant statutory provisions are contained in sections 123 of the ERA 1996 and section 119 of the EqA2010.

It is agreed that on the facts of this case, the approach to the assessment of compensation in the discrimination and unfair dismissal complaints will be materially identical notwithstanding the different wording of s.123 ERA 1996 and s.119 EqA 2010.

Since the early days of the introduction of the statutory right unfair dismissal compensation has routinely been calculated on the percentage chance of an unfairly dismissed employee not having been dismissed had a fair dismissal procedure been followed,– see for example Winterhalter Gastronom Ltd v Webb [1973] ICR 245 and Vokes v Bear [1974] ICR 1.

In the landmark case of Polkey v AE Dayton Services Ltd [1987] IRLR 503 Lord Bridge of Harwich endorsed the percentage chance approach. He noted that if it is held that taking the appropriate steps which the employer failed to take before dismissing the employee would not have affected the outcome, this will often lead to the result that the employee, though unfairly dismissed, will recover no compensation. He cited with approval the judgment of Browne-Wilkinson J in Sillifant v. Powell Duffryn Timber Ltd [1983] IRLR. 91 at p. 96:

Since then, a number of authorities have considered when a tribunal has been correct to assess compensation on the basis of loss of a chance, how they have assessed that percentage and whether there are circumstances in which a balance of probabilities approach is more appropriate.

In O’Donoghue v Redcar & Cleveland Borough Council [2001] EWCA CIV 701, [2001] IRLR 615, an unfair dismissal and discrimination claim, the tribunal decided not to reduce compensation by a percentage, but instead concluded that the claimant would have been fairly dismissed within 6 months of her actual, unfair dismissal and thus awarded her 6 months loss of earnings and no more. The Court of Appeal rejected the appellant’s challenge that where an ET finds a dismissal substantively unfair it is bound to assess the percentage chance that the employment would have continued and it is not open to it to reduce compensation on the grounds that at a later date the employee would have been dismissed fairly.

Mrs Justice Laing (as she then was) conducted a helpful review of the authorities in the unreported case of Zebrowksi including O’Donoghue about which she said as follows:

She went on to conclude that the same considerations apply in cases of both constructive and actual dismissal. Where a claimant has been unfairly constructively dismissed it is open to the tribunal to apply a Polkey reduction, just as it may in a case of actual dismissal and that “the courts should not create a complex structure of subsidiary rules from the open language of the statutory provisions” [49].

It is a theme of the authorities that the appeal tribunal should be reluctant “it would introduce some very technical and verbally sophisticated rules into a decision-making process that should be a matter for the common sense, practical experience and sense of justice of the ET sitting as an industrial jury” (Gover v Propertycare Ltd [2006] EWCA Civ 286, [2006] ICR 1073, para 14). Or as Morison J described it in Ministry of Defence v Cannock [1994] ICR 918 in assessing loss flowing from discrimination, the correct approach is not to speculate as to what would have happened as if it involved questions of fact, to be decided on the balance of probabilities, but rather to assess matters of chance in a broad and sensible manner.

In Software 2000 Ltd v Andrews and others [2007] ICR 825, [2007] IRLR 568 Elias P summarised the following principles from a thorough review of the case law as follows:

The claim in Perry concerned an allegation of solicitor’s negligence in failing to advice their client of the possibility of applying for a claim for a services award (similar to a special damages claim in a personal injury claim) in addition to a general award in a statutory scheme that had been introduced to compensate miners who had contracted vibration white finger (VWF) to enable large numbers of similar claims to be presented, examined and resolved both effectively and at proportionate cost. An applicant would need to show that they were unable to do various routine household tasks because of VWF rather than some other medical condition. The judge at first instance found that the solicitors had not provided competent advice to Mr Perry by failing to mention the services award element of the VWF scheme. The judge then went on to conduct a trial of the question of whether Mr Perry would or could have brought an honest claim for a services award and found that he could not and awarded him no damages. He found that if Mr Perry and his family member witnesses had given honest evidence as to Mr Perry’s condition and manual dexterity, he would not have been entitled to or received a services award since to the extent that he was unable to do the routine domestic tasks against which the service award was assessed, it was due to other medical issues, unconnected with VWF. Mr Perry successfully appealed the County Court judgment to the Court of Appeal on the basis that the first instance judge should have considered the matter on the basis of the loss of a chance and not conducted a trial within a trial on the balance of probabilities thus creating an all or nothing result. On the defendant’s further appeal the Supreme Court overturned the Court of Appeal judgment and restored the judgment at first instance. The Supreme Court reviewed the law of causation and loss in professional negligence cases and found that there was no error in the approach of the judge at first instance. To the extent that the question whether negligent advice had caused a claimant’s loss depended on what the claimant would have done upon receipt of competent advice, this had to be proved by the claimant upon the balance of probabilities, but to the extent that the question depended on what others would have done it would be determined on a loss of chance evaluation. In Mr Perry’s case, the supposed beneficial outcome depended entirely on what Mr Perry would, and could honestly have done, if Raleys solicitors had advised him that the VWF scheme included a services award as well as the general award akin to a pain and suffering and loss of amenity award in a personal injury claim. The judge therefore approached the matter correctly in deciding the issue on the balance of probabilities.

Did the tribunal assess compensation on the balance of probabilities or loss of a chance?

The first issue to decide is whether, as submitted by Mr MacDonald, there is an inconsistency or contradiction between the tribunal’s liability and remedy findings such as to undermine the remedy findings. The tribunal well understood that for the purposes of its liability decision a fundamental breach of contract need not be the principal reason for the resignation for there to be a constructive dismissal: it only need play a part in line with settled authority, such as Nottinghamshire County Council v Meikle [2005] ICR 1 where Keene LJ held:

The issue was also addressed in Wright by Langstaff P who indicated that once a repudiatory breach by the employer of the employment contract has been established in a constructive dismissal complaint, where there is more than one reason why an employee resigned, the correct approach is to examine whether any of them was a response to the breach, not to see which amongst them was the effective cause:

In this case the tribunal found the respondent’s failure to address the complaint concerning the pay deduction was sufficient to form part of the claimant’s decision to resign (paragraph 283 liability judgment). For the purposes of liability nothing further was required. But when it came to assessing compensation, the tribunal’s task was different. The tribunal was required to disaggregate the reason(s) for resignation that were in response to a repudiatory breach by the respondent from reasons for resignation that were for other reasons.

The tribunal was therefore correct to seek to identify what losses were attributable to unlawful conduct – whether discrimination or unfair dismissal – and what were not.

The loss of a chance approach is traditionally adopted in the assessment of loss of earnings in an unfair dismissal case as per the classic, oft-repeated words in Mallett v McMonagle [1970] AC 166, 176 of Lord Diplock:

If the tribunal had conducted such an exercise Mr MacDonald accepts that the appeal must fail.

Mr MacDonald understandably places much reliance on the case of Grayson v Paycare UKEAT/0248/15, Kerr J, where the tribunal, as here, made no order under a compensatory award and concluded that the claimant would have been dismissed in any event by the same date had a fair procedure been followed. In that case the (actual) dismissal was unfair was because of the absence of a fair procedure. Kerr J concluded:

However this case can be distinguished from that of Grayson, as although in that case, as here, the tribunal had given itself an accurate self-direction as to the correct approach to loss of earnings compensation, it did not follow its direction and appeared to place the burden on the claimant to prove that he would not have been dismissed. As Kerr J noted:

Nor had the tribunal in Grayson analysed the evidence sufficiently to make a strong finding that there was no chance that the employment would have continued, and as Mr MacDonald correctly observes, a strong finding is required (see Hamer v Kaltz Ltd UKEAT/0502/13). In the case before me, the evidence and tribunal’s detailed findings of fact were very compelling and the tribunal has analysed all the relevant circumstances and facts with conspicuous care (Frew v Springboig St John’s School UKEATS/0052/10) to reach its overall conclusion.

The difficulty for Mr MacDonald is that it is implicit that the tribunal’s conclusions in paragraphs 86 and 121 concerning discrimination and unfair dismissal respectively, that the claimant would have resigned anyway when he did, even if he had not been subjected to the deduction of 1 day’s pay a year earlier and even if the respondent had dealt with his grievance about it, were not made on the balance of probabilities, but on the basis that there was a 100% chance that the claimant would have resigned anyway on 8 August 2016.

I reach that conclusion for a number of reasons. Firstly because that is the direction they have given themselves and said that they will follow. Secondly because the words used “when all matters are considered…the tribunal is led to the conclusion” [86] implies a test other than the balance of probabilities, which is in marked contrast to the wording used in paragraphs 86 and 121 which state that the conclusions have been reached “on balance.” Thirdly, the evidence and factual findings support a conclusion that there was a 100% chance that the claimant would have resigned then anyway. He was extremely disgruntled and had very many other dissatisfactions and sources of unhappiness at work independent of the issues concerning the docking of 1 day’s pay in April the previous year. It is also relevant that the tribunal noted that that his resignation coincided with the exhaustion of his contractual sick pay entitlement.

The tribunal has engaged in detail with all the many complaints that the claimant was raising in order to understand the full context and circumstances and reach its conclusions which it has amply set out. It is apparent from the tribunal’s judgment that the reason why the tribunal concluded that there was a 100% chance that the claimant would have resigned then anyway was because of all his very many other dissatisfactions and unhappiness at work and the ending of his sick pay entitlement, all of which were matters going on independently to the issues concerning the docking of 1 day’s pay in April the previous year. It follows that this is a Meek-compliant adequately reasoned decision and that ground of appeal too must fail.

The impact of Perry v Raley Solicitors on compensation in constructive unfair and discriminatory dismissal claims: could or should the tribunal have assessed compensation on the balance of probabilities?

It follows from my conclusion that since the tribunal approached the calculation of loss of earnings compensation on the basis of the loss of a chance, the appeal must fail. However I shall consider the matter in the alternative in any event in light of Ms Chudleigh’s submission that it is open to a tribunal to decide the matter on the balance of probabilities to reach an “all or nothing” conclusion in all cases, but specifically in a claim for constructive unfair dismissal. The logic of her argument perhaps goes further: in light of Perry is a tribunal now required to approach future and counterfactual losses in a constructive dismissal claims on the balance of probabilities? Both parties had taken the trouble to take me through all the relevant authorities and I have taken the chance to consider the potential impact of Perry which is a task which the parties understand has not yet been undertaken by the appeal tribunal and is likely to arise in other constructive dismissal cases.

In Zebrowksi, an important case which pre-dates Perry, Laing J (as she then was) conducted a helpful review of the authorities and considered the Polkey question specifically in the context of constructive dismissal unhesitatingly to conclude that it is open to a tribunal to apply a Polkey deduction in a constructive dismissal case:

I agree that it is essential to bear in mind the statutory wording and the guidance from the court of appeal to avoid introducing “some very technical and verbally sophisticated rules into a decision-making process that should be a matter for the common sense, practical experience and sense of justice of the employment tribunal sitting as an industrial jury” (Gover v Propertycare Ltd [2006] EWCA Civ 286, [2006] ICR 1073).

As Cox J noted in Brown v Baxter (t/a Careham Hall) UKEAT/0354/09 s.123 ERA 1996 poses three simple questions:

Was the loss occasioned as a consequence of the dismissal?

Was the loss attributable to the conduct of the employer?

If so was it just and equitable to award compensation?

Similar questions arise in applying common law tortious principles to discrimination complaints.

As noted above, since the introduction of the statutory right not to be unfairly dismissed, tribunals have discharged the task of assessing the counterfactual situation of what might have happened had an employee not been unfairly dismissed by applying a percentage loss approach. Therefore, if the tribunal is satisfied that there was a 100% chance that the employee would have been dismissed anyway on the same date or is able to reach any other conclusions with equal certainty (for example that the employee had a 100% chance of not being dismissed for a particular period of time, such as the length of time it would take for a fair procedure to be followed by the employer) compensation will be reduced accordingly. Similarly it may conclude that there is no chance that the employment would have ended absent the unfair dismissal and make no percentage deduction. In either scenario it will result in an “all or nothing” award under that head of damages, but have done so by applying a loss of a chance analysis.

As explained in Zebrowski

There can therefore be an “all or nothing” result, but it will be because the tribunal is 100% satisfied that a future chance would or would not have happened. In practice there are a number of possibilities, three of which were identified in Software 2000 at [54(7)]: (1) there was a less than 100% chance of indefinite continued employment in which case the tribunal must assess the percentage chance and apply that percentage reduction; (2) the tribunal is satisfied on the evidence there was a 100% chance that the employment would have ended anyway by a certain time or at the same time as the dismissal, in which case compensation is limited to that period and the claimant is awarded 100% of whatever that period is (or receives nothing for loss of earnings if it was the same date as the dismissal occurred); (3) employment would have continued indefinitely in which case there is no percentage reduction applied. There is a fourth possibility identified in Zebrowski and O’Donoghue where there was a 100% chance that the employment would have continued for a certain period followed by a lesser percentage chance thereafter. There may be other possible categories. But in each category the exercise is the same – the assessment from 0 to 100 of the percentage chance of what might have been or what will be.

Ms Chudleigh’s argument that the tribunal was considering past events that were less speculative was not persuasive. Mallett v McMonagle does not distinguish between the counterfactual and the future – the what might have been and the what will be, both are inherently speculative as they did not or have not yet happened and it would be confusing to draw a distinction between the two. Ms Chudleigh is right to observe that many of the relevant circumstances could be described as past events – the many other sources of the claimant’s dissatisfaction at work on which the tribunal has been able to make findings of fact. But the consequence of the tribunal being able to draw such a clear picture meant that they could be 100% satisfied of what would have happened.

How does Perry affect the orthodoxy? Perry restates a number of principles concerning the assessment of causation in professional negligence claims:

It is noteworthy that Lord Briggs is careful to restrict the scope of his observations to professional negligence claims in the judgment: more than a clue is in the subtitle. None of the cases analysed and discussed in Perry are outside the arena of professional negligence. Whilst it is fair to say that many of the principles apply equally to other torts and have more general applicability. However and I cannot accept Ms Chudleigh’s argument that the distinction between what the client of a solicitor can prove s/he would have done and what is dependent on actions of a third party is a distinction has direct application in a constructive dismissal employment claim. It does not follow that in the context of discrimination or unfair dismissal claims a claimant who is constructively dismissed must prove post dismissal loss of earnings on the balance of probabilities, but the losses of those who are unfairly dismissed by termination by their employer are to be assessed on the basis of the percentage loss of a chance.

Whilst in professional negligence claims the distinction between matters which a claimant must prove, and those matters that are not down to what a claimant would have done in the counterfactual or future world, but depend on actions of third parties, is a fair and sensible dividing line between what a claimant must prove on the balance of probabilities and what falls to be assessed as a loss of a chance, it does not readily translate to the possibility of the termination of an employment relationship absent the discriminatory or unfair dismissal.

In a professional negligence case it may be possible to identify with certainty which counterfactual matters the client/claimant must prove from those which would be dependent on the actions of third parties. But it is much less easy in employment cases. The nature of a professional negligence claim is entirely different to a dispute about the ending of an employment relationship. The ending of an employment relationship does not usually involve third parties and is brought about by either the employer or the employee who are the parties to the claim. Imagining the counterfactual world in an employment case absent the unfair or discriminatory dismissal usually depends on the behaviour and actions of both the employee and the employer and how they respond and react to each other’s behaviour, as well as other possible extraneous events or actions of third parties.

The task of the tribunal is to assess as accurately as it reasonably can, the losses flowing from a dismissal and to answer the answers to the three questions identified by Cox J in Brown which is the same task whether the dismissal was actual or constructive. There is no need to introduce an additional stage in the decision making process by the tribunal to require it to identify matters which depend on the claimant and those dependent on third parties and then apply a different set of rules for each category. It would hideously overcomplicate the exercise, introduce an additional unnecessary layer in the decision making process and be unlikely to improve the accuracy of what is a speculative exercise which is a “decision making process that should be a matter for the common sense, practical experience and sense of justice of the employment tribunal” (O’Donoghue at [14]). Here all the relevant evidence and circumstances enabled the tribunal to make a strong finding to conclude it was 100% certain that the claimant would have resigned on the same date anyway and therefore awarded no compensation for loss of earnings. Where, as here, the heart of the dispute between the parties concerns what the claimant (as opposed to the respondent) would have done it may well be that a tribunal will be able to be 100% satisfied that something would or would not have happened. But they have not reached their all or nothing conclusion from assessing the matter on the balance of probabilities, even if the same outcome would have been achieved if they had.

It does not follow from Perry that an employee who has been constructively dismissed must prove their counterfactual loss on the balance of probabilities, whereas a loss of a chance evaluation applies in cases of actual unfair or discriminatory dismissal. As was said in Zebrowski and Gover the statutory language is open textured and it would be wrong to introduce a complex structure of subsidiary rules which is not supported by the statutory language and which would not assist in the difficult task of accurately and fairly calculating losses. Perry does not overturn the development of 50 years of case law on the assessment of counterfactual and future losses in employment claims before the tribunal that is to be approached on the evaluation of the loss of a chance.

For the above reasons, the appeal is dismissed.