JT Edwards Ltd v Isaac Seopane

This is my decision in respect of an appeal which has been brought by the Respondent employer. I shall refer to the Appellant as the Respondent, and to the Respondent to this appeal as the Claimant, as they were when they appeared before the Employment Tribunal (“the Tribunal”).

The Tribunal concluded that the Claimant was unfairly dismissed by the Respondent. This appeal concerns issues arising out of the conclusion of the Tribunal regarding remedy.

Before the Tribunal the Claimant made a number of claims: unfair dismissal; that he had been subjected to an unlawful deduction of wages; and, a claim for race discrimination. He asserted that his dismissal was an act of race discrimination.

The Tribunal found that the claims of unfair dismissal and of unlawful deductions from wages to be well founded and awarded compensation in respect of those matters. However, the Tribunal dismissed the Claimant’s claim of race discrimination. It did, however, make an award in respect of the Respondent’s failure to provide a statement of terms and conditions of employment, noting that the Claimant had never asked for such a statement and, therefore, in the Tribunal’s judgment, the failure to provide the statement was an omission rather than a deliberate act and, awarded two weeks’ pay by way of compensation.

In my view, the Judgment and the Reasons are, in the main, carefully written and they are concise. They identify the relevant issues that were before the Tribunal, in particular, at para. 10. They also set out in a concise, but accurate manner, a statement of relevant law and the principles that the Tribunal should apply, at paras. 2 to 12.

The Claimant worked for the Respondent from 12^th April 2017 until his dismissal on 10^th May 2020. Looking back, (and, when considering the facts of this particular case I consider that it is important to do so and recall the extraordinary events then taking place) it will be recalled that the 10^th May 2020 was in the midst of the first Covid lockdown in the UK.

The Respondent is a relatively small business. Its work concerns the maintenance and refurbishment of services for schools and hospitals. The evidence before the Tribunal was that most of the work it undertook in schools tended to peak during school holiday time, particularly during the summer holidays.

As I have noted above, the business is a small one. Its managing director is Mr James Edwards and he owns the company. His wife is employed to undertake accounts work and administrative work. There are a number of other staff who have technical professional qualifications; for example, as an electrician, as a carpenter or gas fitting. The Claimant was employed to ‘price’ for tenders and interacted with those asking for tenders; he was responsible for securing work and securing contracts. It is clear from the Tribunal’s Reasons that he was successful in that work, bringing in a substantial volume of work of significant value to the business.

Although the Claimant initially worked, purportedly, as a self-employed sub-contractor, the Tribunal found that, in reality, the relationship between the parties had been one of employer and employee from the start.

Like many other businesses, the Respondent’s business was affected by the Covid pandemic. That impact was described in paras. 27 to 28 of the Tribunal’s Judgment in this way:

One member of staff asked to be put on furlough. That individual felt that he was at increased risk of contracting Covid and/or of experiencing more serious consequences if he did become infected with the Covid virus. His application to be placed on furlough was granted. Another employee (not the Claimant) also requested to be put on furlough but that was not granted. The Claimant had his own, genuine, concerns about working. The Tribunal expressed that in these terms:

As noted above, it is important to reflect back to how things were in May 2020. We now know a lot more about Covid, we now live in an environment in which many people are vaccinated. But at the time, in early spring of 2020, there was real, acute, anxiety about Covid and about contracting it. It was not understood clearly how the virus was transmitted and spread nor, indeed, what the risk factors were. Nor, sadly, were health professionals as experienced or skilled in managing the condition as they now are. Many people with Covid died from it. There was genuine fear about the risk of contracting Covid.

The Tribunal found as a fact that the Claimant asked to be placed on furlough and that he had genuine reasons for wishing to make that request arising from his concern about the risk of contracting Covid.

James Edwards asked the Claimant to provide medical evidence to support the suggestion that he was at increased risk because of his asthma. The Claimant was unable to do so: he knew that he would not be classed as being extremely vulnerable and he had not received a letter instructing him to ‘shield’.

The Tribunal found that Mr Edwards believed that what the Claimant was seeking to do was misusing the furlough scheme. During one discussion, Mr Edwards asked the Claimant what he would do if he were placed on furlough. The Claimant said he would use some of the time to finish his Master’s Degree on-line. He also expressed a hope to be able to go and visit his family in Botswana, having booked a trip to do so long before; that, however, being more of an aspiration than realistic given the limitations that there were on international travel at the time.

On 10^th May 2020, and after the Claimant and Mr Edwards had met to discuss the Claimant’s request that he be placed on furlough, Mr Edwards e-mailed the Claimant. He stated, in that e-mail, the following:

In reply, about half-an-hour later, the Claimant wrote to Mr Edwards. He stated he could provide evidence about the asthma medication that he took; he raised an issue about the overtime payment and the lack of, he said, a contract in respect of what the Respondent was proposing. He again put forward his case that he wished to be furloughed and he could not see why he was being treated differently from the former employee who had been granted furlough for health reasons without any medical evidence.

That led to the following response from Mr Edwards, some 26 minutes later:

The Tribunal noted that after the Claimant’s dismissal, Mr Edwards undertook his work. It also appeared to have accepted that, although schools were re-opening, by September 2021, when the hearing took place, budgets for work for maintenance were not still freed up. The Tribunal recorded that although the furlough scheme was winding down, as of July 2021, many employees and staff were still furloughed. The end of the furlough scheme was at the end of September 2021. The Tribunal also recorded that, at the time of the hearing, the Claimant was not able to work by reason of the eczema on the palms of his hands.

The Tribunal robustly rejected the Respondent’s case that the reason for dismissal was redundancy. The Tribunal’s view was that the Respondent had improperly used the label of redundancy as a disguise for the real reason for dismissal. At para. 48 of the Judgment, the Tribunal sets out a clear statement of what the actual reason for dismissal was:

The Tribunal then went on to state, in paras. 50 to 51, further detail as to why it did not consider the Claimant was dismissed for redundancy. It noted that Mr Edwards took great exception to what he saw as the misuse of tax-payers’ money to be paid to be at home studying, not working, by necessary implication when there was work to be done. The Tribunal stated as follows:

The Tribunal further found (1) that Respondent’s contention that there was a need to reduce overheads was simply not credible and, (2) that the Claimant had brought in £2m of business over the two years previous to his dismissal. The Tribunal stated that the reason for dismissal was not redundancy. It considered that the Respondent’s statement “We will follow statutory redundancy procedures and work within the law” was not cogent evidence of the real reason; rather, it was, in the Tribunal’s view, “to dress up a dismissal for other reasons as a redundancy”. Furthermore, the Tribunal noted that Mr Edwards’ statement that there had been complaints about the Claimant’s work at the hospital, in fact, further undermined the Respondent’s position: not only because there was no evidence of such complaint, but also because, to dismiss for such a reason, genuine or not, was a reason connected to capability or conduct, not related to redundancy.

The Tribunal concluded that:

I pause at that point because, in my judgment, it is clear that the Tribunal found, having regard to para. 57, that the reason for the dismissal was not a potentially fair reason. Reading the judgment as a whole, I consider that it believed that the reason for the dismissal was because of the request to go on furlough; Mr Edwards’ view about that; and, potentially, because of the criticisms which he said were made of the Claimant’s work by hospitals. But the reason for the dismissal was simply not a fair reason. It follows, that the submission made by the Respondent that the dismissal was one which was simply procedurally unfair dismissal is not accurate. The dismissal was found to be substantively unfair.

The Tribunal also observed within the Reasons, that if there had been genuine concerns about the Claimant’s future role within the business because of the volume or type of work which required to be done, then it was important to note that, as the Respondent acknowledged, the whole purpose of furlough was to prevent redundancies for those who may be affected by a down-turn of business as a result of the Covid pandemic. Its purpose was to protect employees from immediate redundancy where there was not sufficient work.

As noted above, the Tribunal found that the claim of race discrimination was not made out. Within the evidence, relevant to that claim, however, the Respondent advanced the case that one factor which suggested that race was not a factor within the decision to dismiss, was the fact that the Claimant had been given a very expensive company car as part of his package of renumeration. The Tribunal included the loss of a company car within its calculation of the compensatory award. In an e-mail sent to the parties on 30^th September 2021, the employment judge acknowledged that that had not been raised as a specific aspect of the compensatory award. The judge stated as follows:

At paragraph 66 the Tribunal made the following findings of fact regarding the company car which the Claimant benefitted from:

The conclusions of the Tribunal regarding remedy are set out at paragraphs 71 and following. At paragraph 74, the Tribunal recorded the following regarding the Claimant’s fitness to work:

The Tribunal therefore recorded that the Claimant, at the time of the hearing, was signed off from work by reason of eczema on the palms of his hands and noted that the Claimant attributed that flare up of eczema to stress arising from his dismissal. The Tribunal accurately noted that a claim for personal injury can only be made where there has been a successful claim of discrimination.

The Tribunal dealt with the future loss at paras. 77 to 81. Earlier in the Judgment, (para. 10) the Tribunal had identified relevant issues and some of the relevant legal principles. It referred expressly to s.123 ERA 1996 at paragraph 86.

At para. 78, the Tribunal referred to the Polkey principle. It stated as follows:

There would have been no reason to bring matters to a head before that, particularly for an employee who had brought in about £2m of work in a relatively short time. The increasing problem of schools being undermaintained has been headline news … , and there would be good reason to keep Isaac Seopane furloughed so that when such work resumed he could again play a profitable role in seeking it.

That would be a period of 1 year and 6 weeks, at 80% of pay.

The Acas Code will apply, as the dismissal was not by reason of redundancy. Given that no process at all was followed, the uplift must be the maximum of 25%.”

Two points are relevant here. First, Within the identified issues, the Tribunal recorded that it was required to determine whether an uplift should be applied (made) of “up to 25%.” Paragraph 82 must be read alongside that part of the Reasons. Secondly, the reference to the ‘preliminary assessment’ referred to in paragraph 79 requires some elaboration. It was agreed by the parties that having heard evidence and submissions in respect of liability, the Tribunal produced a ‘draft’ Judgment and Reasons which it circulated to the parties, and then, having heard further submissions, gave the final Judgment and Reasons with passages added to it in respect of remedy. I remain a little unclear as to precisely how much of the final document was different to the draft.

The Tribunal made an award for £500 for loss of statutory rights. It applied a cap of 1 year’s salary in respect of compensation. As noted above, it set out the statutory provisions in respect of the compensatory award in section 123 of the Employment Rights Act (“ERA”) 1996. It then set out, at paras. 87 and following, this passage:

There was no evidence of mitigation of loss. Neither was there evidence from the Respondent as to the availability of jobs in the sector, or more widely. The Tribunal therefore has to assess the extent of compensation in a hypothetical environment, based on its assessment, as an industrial jury, of when it was likely the Claimant could gain suitable alternative employment.

[The Claimant] said that the eczema on his palms had prevented him working. Counsel for the Respondent pointed out that he had been able to use his computer for this hearing and doubted that he was unable to work. The Claimant said that he had obtained universal credit by reason of fit notes by so stating It is not submitted that loss should be limited to the maximum of 6 months SSP because of inability to work, although the Tribunal raised the point.

The submission was that loss should be limited to perhaps 3 months, submitted as a reasonable period of time during which to find alternative work.

[The Claimant] had returned to Botswana from November 2020-January 2021, and the submission was that November 202 as a long stop date for the cessation of compensation for loss of the job.

The Tribunal accepted the Claimant’s submissions that:

The Tribunal did not accept the submission that it should select a period in the usual way and compensate for that period. While it is for a claimant to mitigate his loss, there is a responsibility on the Respondent to show that he has not…”

I am not clear which ‘usual way’ paragraph 97 refers to. The Tribunal was required to apply the statutory provisions to determine loss, as it appears, elsewhere in the Reasons to recognise. In any event, the Tribunal concluded that it was highly unlikely that the Claimant would have found an alternative role before January 2021 (paras. 99-100). The Tribunal stated that:

Four grounds of appeal have been advanced by the Respondent as follows:

I do not propose to set out at length in this judgment the relevant statutory provisions the Tribunal was required to apply, nor, indeed, the relevant furlough provisions; suffice to say that, on a claim of unfair dismissal, once the decision is made that appropriate remedy is to award compensation, the Tribunal must is to calculate having regard to the relevant statutory provisions, including those set out in s.123 of the Employment Rights Act 1996.

Tribunals must provide adequate reasons for their decisions so that parties and their representatives must know why they have won or lost. A judgment and reasons which reaches this standard is often referred to as one which is Meek compliant.

Section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) applies to s.111 of the ERA 1996 pursuant to which claims of unfair dismissal are brought before Tribunals. At s.207(2) if provides that, if appears to the Tribunal that,

Two authorities are potentially relevant in this case. First, in Rentplus UK Ltd v Ms Susan Coulson [2022] EAT 81 and the observation made by His Honour Judge Tayler that:

Secondly, in Homes v Qinetiq Ltd [2016] IRLR 664, Simler P as she then was noted that

The Tribunal’s Reasons are, mainly, clearly written and they are concise. However, at the point the Tribunal started to consider the question of compensation, the analysis became more confused. The process of issuing a draft judgment (including the Tribunal’s initial views regarding remedy) prior to the issues regarding remedy were determined has not, in my view, assisted clarity of analysis. It would, in my view, have been far preferable for the Judgment and Reasons on liability to have been prepared, and then, a separate decision on remedy prepared. A tribunal may, of course, set out its preliminary view on a particular matter. However, once having invited submissions on that issue, it must then take care to ensure that it sets out clearly why it remained of that view (despite the submissions made) or, was persuaded away from that initial view, and why.

In respect of liability, the clear and significant finding that the Tribunal made was that the Claimant was dismissed unfairly, and substantively so. The dismissal arose from the matters which had occurred immediately preceding the letter that was sent to the Claimant referred to at paragraphs 18-23 above. The Tribunal was clear that the dismissal was not for redundancy, and that that asserted reason was, in truth, no more than a guise for the true reason. The true reasons behind the decision to dismiss involved matters most properly described as being related to the employer’s views about the Claimant’s conduct and performance – to what the Respondent employer clearly considered was culpable behaviour. In my view, in the circumstances of this case, the Tribunal was legitimately entitled to conclude that the ACAS Code applied to the facts it found. The Tribunal was clearly alert to the fact that it would not have applied had the real reason for dismissal been redundancy.

Although shortly stated, the specific conclusions regarding the uplift was at para. 82 of the Reasons:

If the Respondent is aggrieved by that finding, it may wish to reflect upon the fact that it used redundancy as a label for dismissal, and then did not follow any procedure. Had the respondent been honest about why the dismissal was taking place, and followed a fair procedure, then it would not have found itself in the position that it did.

That, in my judgment, addresses a large part of Ground 2 of the Respondent’s appeal: that the (ACAS) uplift should not have been applied and how the Tribunal should have calculated the level of the uplift.

The third part of Ground 2 is that the Tribunal erred in applying the uplift to the unlawful deduction of wages claim. In respect of that issue I am unclear whether the Tribunal considered that the Claimant had raised a grievance by the response he wrote to the managing director. That is not explicitly referred to within the Judgment. As noted above, the analysis in respect of the application of the ACAS uplift is short, and, it is wholly unclear whether the Tribunal made a deliberate decision to apply the ACAS uplift to the unlawful deduction of wages claim (and if so, why it considered that was appropriate), or, whether it has done so accidentally, because it has included the sum awarded within the compensation award. I consider that that aspect of Ground 2 should be allowed: the Tribunal’s analysis is not Meek compliant and its reasoning in this respect is inadequate.

I propose to deal with Grounds 1 and 3 together. As I have stated above, the Tribunal’s analysis in respect of remedy is not as clear as the Tribunal’s factual determinations and analysis regarding the substantive liability issues. In particular, paras. 78 to 81 are a little difficult to follow, in my judgment, as, indeed, are paras. 91 and 101 to 102.

The Tribunal has not clearly set out whether the compensation awarded for that time period of time should be on the basis of full pay or on the basis of the rate of furlough pay.

Reading the Reasons and Judgement as a whole, fairly and objectively, does not remedy that issue. In my judgment, if the reader seeks to discern from the Reasons the clarity required, they do that which is impermissible: remedying a lack of clarity within the Reasons when they are, in truth, not sufficiently clear on the point in issue.

The analysis at paras. 78 to 81 of the Reasons suggests that the Tribunal concluded (perhaps) that, had the Claimant not been unfairly dismissed, then he would, in fact, have been placed on furlough for a year and then (because Mr Edwards was doing the work whilst he would have been on furlough) would have been, or could have been, fairly dismissed. The difficulty with that analysis, however, is that the Tribunal found that Mr Edwards did not believe that the Claimant should go on furlough, because he thought that that was a misuse of the statutory scheme. Arguably, therefore, the award of compensation should have been made on the basis of the Claimant’s full rate of pay.

The Tribunal, in my judgment, did not, however, conclude that the Claimant failed to mitigate his loss. That, in my judgment, is clear from the Reasons. Further, in my judgment the Tribunal came close to setting out a conclusion that the eczema from which the Claimant suffered had begun after his dismissal. There is, however, no clear finding of fact about that. The Tribunal has not set out within its Reasons how and why it calculated compensation because it has not determined (one way or the other) whether or not the eczema suffered by the Claimant began after the Claimant had been dismissed and was because of a stress-reaction to that dismissal. The Tribunal did not, thereafter, set out its conclusions about whether and how that impacted upon his ability to work and the compensation awarded.

My initial reaction on reading the Appeal, was that Ground 1 was unlikely to succeed because the Tribunal found that the time for compensation was 52 weeks; it found that there had not been a failure to mitigate; and that it had accepted the case advanced by the Claimant regarding his inability to work because of eczema on the palms of his hands, namely that that had only arisen since dismissal and because of the stress and anxiety he experienced after dismissal. On further reflection, however, I accept that those conclusions are not within the Reasons: there is simply not a finding to that effect as to when and how the eczema arose.

In those circumstances, I consider that I must allow the Appeal in respect of Grounds 1 and 3, However, as to the issue of mitigation, the Tribunal recognised that it is for the Respondent to prove a failure to mitigate. It is clear in this case that it did not do so. The contention that the Tribunal erred in its approach to the question of mitigation is not made out and I dismiss that aspect of Ground 1.

Finally, I turn to consider Ground 4 in respect of the award of compensation regarding the car. The task of the Tribunal, once it considered that the Claimant was unfairly dismissed, and that the appropriate remedy was one of compensation, was to award compensation in accordance with the principles set out in s123 of the ERA 1996.

In my judgment, it is clear that the Tribunal considered that compensation for the loss of the benefit of a car was a this was a legitimate head of loss. The Claimant represented himself. This head of loss was one which the Tribunal was fully entitled to identify and raise with him. That should have occurred, ideally, at case management stage, or, at the latest, prior to the close of submissions. In this case, the point was raised after the close of submissions. The Judge recognised that this had taken place and provided a candid apology by email to the advocates. My view, however, is that it was an error not to have raised this point prior to the close of submissions, at the latest, and to allow further submissions (or evidence) regarding that matter before the Tribunal reached conclusions upon this issue. It is a matter upon which the Respondent could and should have been heard. I do not, however, accept the submission made that the only outcome is that the head of loss should not be allowed.

The Tribunal’s conclusion on liability should stand: the Claimant was unfairly dismissed in the circumstances, and for the reasons, set out within the Judgment and Reasons. The Tribunal legitimately concluded that the appropriate remedy was one of compensation. Further, the Tribunal legitimately concluded that an ACAS uplift should be applied at the level of 25% to the compensatory award. The issues upon which I have allowed the appeal are:

As to disposal, having further submissions and been referred to Sinclair Roche, I consider that the appropriate order is that the issues on remedy set out above are remitted to a differently constituted tribunal. Despite the Claimant’s submissions to the contrary, I was not satisfied that it would be appropriate for the EAT to determine issues (iii) and (iv) above. In my judgment, there is not, on the findings found by the Tribunal, and recorded within the Reasons, only one correct outcome. I considered, briefly, whether it would be appropriate to ask a further question of the Tribunal and adjourn the appeal, but considered (again having heard further submissions and considering the decision in BMC Software Ltd v Shaikh [2019] EWCA Civ 267) that that would not be appropriate or consistent with the overriding objective. Further, although the Tribunal was clearly professional in their approach, I considered that it would be an unrealistic request to ask the original Tribunal to disentangle themselves from their stated conclusions and one which would all too easily give rise to the potential criticism that they had not, or could not, fairly and objectively re-visit the relevant issues,

During those further submissions, however it was clarified and agreed between the parties that, in respect of the claim of unlawful deduction of wages, the figures used by the Tribunal were ‘gross’ figures and that they should not be ‘grossed-up.

It will be a matter for the Tribunal to consider whether any further evidence is required to be heard. be a matter for the Tribunal, subject to the clear findings made by the Tribunal regarding the reason for the dismissal and the period of time for which compensation should be awarded. There may be a need to hear evidence regarding the Claimant’s eczema and his personal use of the car, and, possibly whether the compensation should be awarded on the basis of full salary or furlough salary. In respect of this last point the Tribunal must be careful not to go behind the findings of fact made regarding the reason for dismissal.