That is the approach to be taken by an employment tribunal and most particularly by a court on appeal from such judgment; that much appears to be common ground between the advocates before us. And see further Evans v Barclays Bank EAT 0137/09.
Dench was considered by the Employment Tribunal in our case. Just to set the scene, the Employment Appeal Tribunal had considered on three occasions circumstances where compensation was awarded following the successful mitigation of a Claimant entitled to compensation for unfair dismissal and whether or not that broke the chain of causation. They were: Courtaulds Northern Spinning Ltd v Moosa [1984] ICR 218, Browne-Wilkinson J President and Members, Ging v Ellward Lancs Ltd [1991] ICR 222, Arnold J and Members, and Fentiman v Fluid Engineering Products Ltd [1991] ICR 570, Lord Mayfield and Members.
All three were considered by HHJ Peter Clark and Members in Whelan and Anor v Richardson [1998] ICR 318, which case indicated difficulties in the approach on the authorities to this topic. Judge Clark for the EAT said this:
That approach, at least in respect of guidelines 1 to 4, was expressly approved by the Court of Appeal in Dench but a slightly modified approach was enjoined in respect of Guideline 5, for Beldam LJ said this:
That proposition was expressly adopted by Mummery LJ and by Sir Christopher Staughton. The authorities, therefore, indicate that there is no automatic guillotine upon a person's continued losses compensable by a former employer when the employee takes on new work. The paradigm case is where the employee obtains permanent alternative employment paying more than the rate in the previous lost job. It follows that in a case where there is either a loss or the work obtained is not permanent, that guideline will not be directly applicable and thus it is understandable that a more flexible approach, as set out in paragraphs 19 to 21 of Beldam LJ's judgment, is correct.
The principle of flexibility, in the interests of deciding what is just and equitable, was also used by Mr Pilgerstorfer in argument by analogy with Morris v Richards [2004] PIQR Q3 [2003] EWCA Civ 232 dealing with an employee who suffered a road traffic accident as a result of negligence by a driver, lost her job, found another job (at Toshiba) and then left that as a result of discrimination. Schiemann LJ summarised the position and the award of damages in the following way:
In considering whether losses following the loss of the second job were to be laid at the door of the tortfeasor Shiemann LJ went on to say this:
Applying those principles it seems to us that there is no requirement on an employment tribunal faced with an employee who presents with mitigated loss to operate a guillotine at any stage. That is only likely to occur in a case which fits the EAT's Guideline 5 in Whelan . It must be borne in mind that the Tribunal is doing what is just and equitable in having regard to the loss sustained by the Claimant as a result of the Respondent's unfair act. It operates as a double test of causation, as Sir Christopher Staunton pointed out.
A tribunal may, if it is just and equitable, take an overall approach, look at all of the actual and probable losses and deduct all of the mitigation. On the other hand it may, permissibly, decide to draw a line between past and future losses and apply different tests. After all, what a tribunal is required to do is to speculate as to the future, see Scope v Thornett [2007] IRLR 155. It is an essentially different exercise from that of assessment of past losses, which can be decided as a matter of fact. As to the future, based upon an impression of what is likely to occur, the tribunal must to some extent speculate. If a tribunal decided to approach past and future losses in that different way, it would be committing no error of law in our judgment.
Thus the essential question is should the EAT intervene? We find no error of law in the Tribunal's approach and will operate on the basis of caution in dealing with an assessment of loss by an Employment Tribunal as required of us by the judgment in Bentwood Brothers .
Lest we are wrong and it be thought that there were an injustice in this account, we have also heard argument from the parties in relation to what Mr Pilgerstorfer contends is an alternative way of factoring in risk. This is an analysis of the Tribunal's finding as to the precarious nature of the work. Working backwards from the finding, the Tribunal would not have committed an act of injustice upon the Respondent had it factored in the £5,000 the Claimant earned in excess of her pre-dismissal earnings and taken a view about the risk of losing the current job.
In detailed figures Mr Pilgerstorfer takes, in simple terms, the projected loss by the Claimant on the hypothesis that she continues to work for Press TV at a rate which pays her £500 a month less than she was receiving at the Respondent. This gives her £6,149 which is the loss awarded by the Tribunal in this case. However, if she were to lose that job she would lose £32,149.
Doing the arithmetic in respect of both of those possible projections, that is losing the job or maintaining the job at its present rate, Mr Pilgerstorfer contends that £6,172 should be added to £4,968 to give a total of £11,141, which represents the way in which the Tribunal could factor in risk based upon the inherent uncertainty of the new job at roughly 20 per cent of the full loss, or 80 percent of the mitigated loss. If, as the Respondent urges, £5,000 is to be brought into that equation, then the Claimant still would end up with roughly the disputed figure.
This is an exercise in after-the-event consideration, trying to assist to support the justice and equity in the Tribunal's award. It is not strictly necessary but since we adopt this it reaches the same overall conclusion. It should reassure the Respondent that had the Tribunal assessed the risk to the Claimant in the inherently insecure environment she was working, the result would have been the same.
It is fair to say the Claimant's claim for one year's future loss at the rate of the mitigated loss was what the Claimant put to it. But it follows from the finding as to the precarious nature of the job, that without assessing a risk the Respondent might be getting an unfair advantage in the compensation. So from that alternative perspective too, the award is both just and equitable and we see no error of law in it.
The appeal is dismissed.