APPEAL BY MARGARET GENNELLI MALCOLM AGAINST DUNDEE CITY COUNCIL
SECOND DIVISION, INNER HOUSE, COURT OF SESSION
[2017] CSIH 32
XA103/16
Lord Justice Clerk
Lord Brodie
Lord Drummond Young
OPINION OF THE COURT
delivered by LADY DORRIAN, the LORD JUSTICE CLERK
in the Appeal
by
MARGARET GENNELLI MALCOLM
Appellant
against
DUNDEE CITY COUNCIL
Respondent
Appellant: Party
Respondent: Upton; Gillespie Macandrew, WS
26 May 2017
Introduction
[1] This case has a long and unfortunate history, which includes a prior application for leave to appeal from an earlier decision of the EAT. In giving its decision in that case the court (14 February 2012, unreported, Lord Malcolm giving the opinion of the Extra Division) observed that:
“[24] This opinion is the court’s best attempt to make sense of this long and complicated saga, which, in its 2008 decision, the EAT described as “a mess”. …The amount of tribunal and court time, and associated expense, which has been spent on this matter over no less than 10 years is staggering. We note with concern that all of this has occurred in the context of a system which, at least initially, was aimed at improving efficiency and reducing costs by encouraging lay representation.“
Background
[2] In 2002 Miss Malcolm was employed by the Council as a general assistant at Baldragon Academy, Dundee. During 1995 and into 1996 she had worked as a lab technician but, in terms of performance at work procedures, she was allocated a demoted post and given a written warning. As well as her employment with the respondents, the appellant had taken evening work at Asda, where she worked about 15.5 hrs a week.
[3] On 23 April 2002 she applied to the Employment Tribunal (“ET”) for a determination that the respondents had discriminated against her unlawfully, contrary to the Sex Discrimination Act 1975. Her complaints related to the conduct of colleagues, including harassment and the handling of a complaint that she made.
[4] The ET held a hearing on the merits, (‘the Christie Tribunal’), between 9 September 2002 and 15 January 2003, during the course of which, on 27 November 2002, Miss Malcolm resigned from her employment. She was at the time facing disciplinary proceedings for continuing to work a number of hours at Asda during periods when she was absent from her principal employment on grounds of illness. It was maintained that she had been told not to continue to work at Asda during absence but had continued to do so. The appellant also lodged a further application with the ET, claiming constructive dismissal, which was conjoined with the original claim.
[5] On 29 April 2003 the ET dismissed the proceedings. An appeal to the EAT resulted in a rehearing before a fresh tribunal, on the basis that one of the original tribunal members had fallen asleep during the hearing.
[6] At the re-hearing, (“Worthington 1”) the claim for constructive dismissal was dismissed. The ET (Worthington 1) made a finding of fact that had the appellant not resigned she would have been dismissed for gross misconduct a few days later. The claims of sex discrimination and victimization were also dismissed, but only on the basis that the proceedings had been brought outwith the permitted 3-month time limit and that there were no just and equitable reasons to allow it to proceed. But for that factor, the ET would have upheld the discrimination claim. An appeal against the decision was dismissed. An application was made for review on new evidence and interests of justice grounds. Whether in response to that application or ex proprio motu, on 1 June 2007, the ET, under the same chair (“Worthington 2”) revoked its earlier decision on time bar and ordered a re-hearing on fresh evidence. On the respondent’s application for review of that hearing, the ET changed its mind again, holding that a re-hearing was not necessary and that the claim of discrimination should be upheld, subject to consideration of the question of remedy.
[7] On remittal to it for that purpose after appeal on the latter decision, a differently constituted ET determined (on 17 December 2008) that there were no just and equitable grounds for allowing the case to proceed. Following sundry further Tribunal procedure on the issue, an application for leave to appeal on the issue was granted by the Inner House. Resistance to the appeal was withdrawn, so the case was remitted on the basis that in the absence of any issue regarding time bar, on the findings of the Worthington 1 Tribunal, the appellant was entitled to compensation for the discrimination found by that Tribunal to have existed.
[8] The case therefore went to a remedies hearing before yet another tribunal (“Watt 1”), which awarded Miss Malcolm compensation under three heads: injured feelings; psychiatric injury and loss of earnings for the period 2007-2013, subject to a reduction by half following Thaine v London School of Economics [2010] ICR 1422. The Tribunal also held that Miss Malcolm was in principle entitled to compensation for loss of pension rights, to be agreed or to be the subject of a further hearing.
[9] Both parties appealed to the EAT (“EAT 1”) which issued its decision in July 2014. The appellant’s argument on apportionment was refused. In relation to wage loss, the appellant argued that the ET had erred in failing to award wage loss for any earlier period. The EAT agreed that, had the decision on wage loss been correct, the ET had not justified he limitation on the period in question. The respondent had appealed on the basis that there had been no foundation in evidence for either wage or pension loss.
[10] The EAT, on the basis of the arguments for both parties, decided to remit the case for consideration of wage loss, saying (para 26) that:
“The ET will have to determine what work the claimant would have done after her resignation in 2002 had she been fit; what wages she would have made; and what loss she sustained.”.
The EAT added, (para 27):
“As regards pension loss the ET has found at paragraph 139 that the claimant would have found work in 2007 and that her employer would have been contributing to a pension. It will be necessary for the ET to consider whether or not the claimant would have been in that position had she not gone to university. They will also have to consider what employment she was likely to have between 2002 and 2007, and whether it would have been pensionable. If the claimant has suffered pension loss, the ET will require to determine the amount as parties have not been able to agree it.”
For the avoidance of doubt, the EAT added that the decision of the ET on apportionment was upheld, as was the decision that compensation should be calculated to 2013.
[11] Accordingly, on the final remit to the ET, it was to be assumed that the period of loss was to be calculated to 2013; that the losses awarded for injury to feelings and psychiatric damage were to stand; that the apportionment of 50% was to stand; and that there was no valid claim for constructive dismissal. The finding of Worthington 1 that had the appellant not resigned she would have been dismissed for gross misconduct a few days later also stood. The finding that there was an entitlement to pension loss was to be reconsidered on the evidence available.
The decisions which are the subject matter of this appeal
ET
[12] The second remedies ET (“Watt 2”) awarded compensation for loss of earnings the sum of £17,946.96, with interest, but made no award for pension loss.
[13] In advance of the hearing, the ET had made several attempts to indicate to the appellant that the burden of proving her case lay with her. On the question of both wage and pension loss, she was ordered to produce certain schedules and documentation to vouch her claims. She did not produce such information, and the matter was revisited at a preliminary hearing, at which it was emphasised that
“The burden of proof was on the claimant to satisfy the Tribunal of the likelihood of the claimant's loss both on the question of wage loss and on the question of pension loss. The Employment Judge said that he could not advise what evidence the claimant should lead but there must be enough evidence for the Tribunal to be satisfied what work it was likely the claimant would have done after her resignation, what wages she would have earned and what loss she sustained. The Employment Judge also explained to the claimant that she might face a submission by the respondents that there was not enough evidence before the Tribunal for a Tribunal to conclude what the claimant's loss might have been.”
[14] On the merits of the case the ET concluded, standing the earlier employment background, and the disciplinary proceedings, which included an assertion of disobeying a direct instruction, that it would be extremely unlikely that the claimant would be given a good reference from her former employers. The basis of this finding is not entirely clear. However, despite the fact that the appellant made some submissions to us about this issue, it was not a matter raised at the EAT. In any event, it is a finding which seems to have been of peripheral significance only in relation to the main findings of the ET.
[15] In relation to wage loss, the appellant’s case was that she would have been able to find employment at Dundee University as a lab technician. However the ET noted (para 65) that this case rested essentially on the appellant’s own evidence that she would have liked to have worked there as a lab technician, and she thinks that she would have got a job there. She gave evidence that as a student her experience allowed her to help the professor to demonstrate to other undergraduates. However, there was no other evidence to suggest what vacancies there were or what her prospects of success for these vacancies would have been. There was no evidence as to the state of the job market for technicians in Dundee during 2002 to 2013. The ET concluded that:
“There is simply insufficient evidence for the Tribunal to come to any reasonable conclusion that the claimant would have obtained a position with Dundee University as a Lab Technician.”
[16] The ET emphasised the efforts which had been made to indicate to the appellant the kind of evidence which the tribunal expected. In relation to posts elsewhere the evidence was sketchy at best, and in the result there was
“Insufficient evidence for the Tribunal to come to a conclusion that it is reasonably likely that the claimant would have obtained a job as a lab Technician anywhere.”
[17] The appellant had also claimed loss of earning from her job at Asda, and in this respect the ET acknowledged that more evidence had been led. The ET accepted the appellant’s evidence that she had previously worked 15.5 hrs at Asda, that subsequent to the discrimination she had, from March 2003, been able to work only 3.5 hrs, and that but for the injury she would have been employed for 15.5 hrs per week from 2003 to 2013.
[18] The evidence was that the appellant had always worked since she left school; she had taken on the second job at Asda; she had a mortgage to pay and the usual household bills. By 2005 she had worked at Asda for 5 years without encountering any problems. The ET concluded that if she had not managed to obtain a job as a lab technician by mid-2005, she would have been making enquiries about a full time position at Asda, where it was likely that such positions came up on a regular basis, especially in a large store. There was evidence that the hours for a full time check-out operator were 36.5 hrs. It proceeded to state that:
“The Tribunal consider that it is more likely than not that, if Miss Malcolm had not obtained a position as a Lab Technician by 2005, she would have been looking to go full time as a Checkout Operator in Asda in order to try to meet her mortgage and other outgoings. The Tribunal consider that it is probable that a full time position would have arisen by 25 November 2005. If the claimant could have got nothing else, the Tribunal are satisfied she would have taken a full time job at Asda.”
Although there was little documentation of what she had earned, the material was such as to enable parties to agree that the average net hourly pay from November 2005 to February 2013 was £5.34 per hour. The loss for this period worked out at £68,725.80.
[19] The ET was satisfied that from 1 March 2003 until 24 November 2005, the appellant’s earnings at Asda would have been at a similar rate, which they assessed, in the absence of direct evidence at £5.07 per hour. The loss for this period (a loss of 12 hours per week) was assessed at £8,700.12. The parties agreed the total benefits which had been paid. The total figure of loss was thus £35,893.92, which after deduction for apportionment amounted to £17,946.96.
[20] The ET described the claim for pension loss as being totally based on the premise of having obtained a job with Dundee University, and thus unable to succeed.
EAT
[21] Both parties appealed to the EAT (“EAT 2”). For present purposes we need only address the appeal by the appellant, the thrust of which was that the ET had raised the bar of the burden of proof too high, to a point which it was well-nigh impossible to meet, and thereby been in error. Employability was a matter of possibilities, and the ET wrongly sought probabilities.
[22] The EAT noted that in the original reference from the EAT, the word “would” was used not to encourage an approach on the balance of probabilities but to ask a Tribunal to envisage as best it could what might have happened had the Claimant been fit:
“….it is well established that the assessment of future loss is an assessment of chances, not a question of established fact in respect of which proof on a balance of probability is the proper approach, and the same approach necessarily applies where the task is to envisage a state of affairs which never actually existed.”
The task of the ET had not been to assess what job the appellant might have obtained, or her earnings therefrom, on a balance of probabilities – had it done so, it would have been in error. There were suggestions of such an approach in the respondents submissions during the appeal, which essentially were that having failed to prove the alternative employment suggested by her, she should receive no award, an approach which the EAT said was not justified on the evidence.
[23] The EAT considered that there was “some force” in the submission that the ET had taken too stringent line on the standard of proof required (para 41). The ET’s reference to the appellant having to "satisfy the Tribunal of the likelihood" both of wage and pension loss, and that she had not shown that it was “reasonably likely that she would” have been employed as a lab technician carried overtones of the balance of probabilities. However, the EAT considered (para 41) that:
“on a fair reading they do not go that far. Though I would have been happier had the Tribunal recognised it was dealing with chances, rather than probabilities I cannot say from the words it used that it clearly was not:… The word "would" is often used colloquially to express a conclusion as to the future, worked out on the best assessment of chance, just as it may indicate a decision on balance.”
[24] Returning to this issue in summing up its conclusions (para 44), the EAT repeated the concern that the Tribunal’s judgment
“comes close to reading as if the Tribunal was applying the balance of probabilities approach appropriate for determining past issues of fact, rather than assessing on all the evidence what the chances were of remunerative employment… and, as best it could, an assessment of the resulting loss, taking account of uncertainties as well as opportunities. Given the way in which the Tribunal went on to apply its self-direction, however, I have concluded it did not in the event apply too rigorous a standard.”.
Submissions
Appellant
[25] The appellant had asserted 11 grounds of appeal in the present proceedings. We invited her to explain her position in respect of each of them, which she did. We also considered both her appendix to the grounds, seeking to elaborate upon them, and her note of argument. In our view many of the purported grounds either did not properly constitute grounds of appeal, or related to issues which had long been settled ( eg apportionment) or which had not been argued before the EAT. Once these are laid aside, three specific issues and one overarching issue can be distilled from what is left. The specific issues are: whether the passage of time made it impossible for the appellant to lead relevant evidence? (in this regard the appellant emphasised how difficult it was for her to obtain evidence from, for example, the HR department of the University as to posts which might have been available in 2002-3, details of what earnings would have been and the like); whether the ET erred in failing to make an award on a full-time Asda basis for the period 2003 to 2005?; and whether the ET erred in failing to make any award in respect of loss of pension? However, these specific issues can all be subsumed in what we see as the overarching and most significant issue in the appeal: whether the ET applied too stringent a standard of proof?
[26] The appellant referred to Thaine; Vento v Chief Constable of West Yorkshire Police, [2003] ICR 318; Ministry of Defence v Cannock, [1994] ICR 918; Dickins v O2 Plc [2008] EWCA Civ 1144; Chagger v Abbey National Plc and another [2009] EWCA Civ 1202; and Konczak v BAE Systems (Operations) Limited 2014 WL 1097008.
Respondent
[27] Counsel for the appellant advanced the following propositions.
1. An appeal lies to the Court of Session on a point of law only (Employment Tribunals Act 1996, s. 37(1))
2. In an appeal to the Court of Session from the EAT, in substance the question of law is whether the Employment Tribunal erred in law (Vento, paras. 25 & 31).
3. The amount of any compensation awarded should correspond to damages that could have been awarded by the Sheriff Court, quantified by the ordinary measures applicable in delict (Hurley v Mustoe (No. 2), [1983] ICR 422, at pp. 425-6).
4. A finding by the Tribunal about any chance that an applicant would or would not have secured or retained any given employment must be based on evidence to that effect. (Taylor v Dumfries & Galloway Citizens Advice Services, 2004 SLT 883, paras. 15, 16 & 19).
5. When the Tribunal is assessing any evidence about the hypothetical career of an applicant, his or her unsupported evidence may be held to be insufficient (Cannock, at p. 951). Concluding that the unsupported word of an applicant is not sufficient is not an error in law. Counsel also referred to Robins Business Transfer 1976 SLT (n) 18
[28] Counsel submitted that this is not a case in which the appellant was able to say “…but for the damage done I’d have remained in the same employment”. The appellant had made an independent decision to leave her employment for reasons which were not imputed to the respondents. The vicarious discrimination for which the respondents were held responsible was limited to the period between 9 May and 21 December 2001: it did not continue into 2002, when the appellant resigned. The question is what would have been the position had the harassment and the psychiatric injury not happened, but in answering that the ET had to recognise that the appellant would nevertheless have decided to leave the council for an unconnected reason. This explains why a continuance of earnings cannot simply be assumed.
[29] Counsel said that the EAT’s reading of the ET decision in respect of the standard of proof adopted might be described as “beneficent”. It is not a necessary reading of the decision that the ET adopted an incorrect standard of proof. However, even if the ET had erred in respect of standard of proof, the appellant has not been prejudiced. The ET proceeded on the basis that she would certainly have entered employment, and awarded compensation on that basis. Even if it were to be held that the ET applied the wrong standard of proof: balance of probabilities that the appellant would have secured a post with Dundee University rather than a real and substantial chance that she would have secured a post, that has made no difference. Irrespective of the standard of proof, an award must be based on evidence. The appellant led no evidence.
Analysis and decision
[30] According to EAT 2 the passage from the ET’s decision, quoted at para 23 above, was to be construed as referring to work which it was likely that the appellant “could” have done. In fact, there, as elsewhere, the ET used the word “would”. Whilst accepting that the word “would” may be used colloquially to express a conclusion based in chance, the context in which we must interpret it is not an every-day colloquial one, but one which underpins the test applied by the ET in assessing the appellant’s loss. There is nowhere even a hint that the ET recognised that it was dealing with an assessment of a realistic chance, rather than something which required to be established as a fact on the balance of probabilities. Had there been such recognition in the decision of the “beneficent” interpretation by the EAT might have been more understandable. As it is, the reasons for the EAT’s conclusion are somewhat elusive standing the concerns expressed about the repeated references to likelihood and the repetitive use of the words “would have”.
[31] We regret that this is a matter upon which we are unable to agree with the EAT. We think that the whole approach of the ET is indicative of an approach under which it was expecting the appellant to establish a factual basis for her claim on a balance of probability. Even the issues raised at the preliminary hearing were couched in terms of likelihood. The basic issue which the ET considered at the full hearing was “what job she would have obtained” (para 64). The conclusion which they were unable to reach was one that the appellant “would have obtained” a position as a lab technician (para 77). In the paragraphs which follow, in which the ET discusses the evidence which might have been led, they repeatedly emphasise issues of “likelihood”. There is no recognition that the word “would” which they repeatedly use, required to be assessed in the way explained by EAT 2.
The ET record uncritically the respondents’ submissions that what the appellant required to prove was:
“1. Who the claimant would have applied to for a job.
2. The fact that she would have applied for a position.
3. That she would have got the job.
4. The earnings she would have received.”
[32] The EAT described the respondents’ arguments as turning on the issue “does the litigant have to specify in her argument precisely what a future job will be, when the near certainty is that there will be one, but where there is insufficient to establish with any clarity what it may be?”
[33] The EAT answered that question in the negative. It does, however, underline the nature of the submissions made. The absence of any comment by the ET about the way in which these submissions were focused is consistent with it misapprehending the exercise upon which it was embarking. Accordingly we are satisfied that the ET made an error of law.
[34] The appellant submitted that the directions given at the preliminary hearing, coupled with the passage of time, placed an impossible burden on her. In these submissions there was an underlying implication that the appellant had been misled about the kind of evidence she should lead. If that is what the appellant intended to convey, we reject it. In the first place, it does not appear that the appellant even tried to lead evidence of the kind referred to at the procedural hearing. In the second place, the ET at the procedural hearing made it very clear that the ET could not advise the appellant as to what sort of evidence to lead or as to what might be sufficient for her purposes. That is clearly correct. The decision of EAT 2 contains, in a different context, reference to MacNicol v Balfour Beatty Maintenance Ltd [2002] EWCA Civ 1074, and the comment that:
“It is not ... the duty of the tribunal to obtain evidence or to ensure that adequate ...
evidence is obtained by the parties. That is a matter for the parties and their
advisors.”
Reference is also made to Craig v British Railways (Scottish Region) [1973] 8 ITR 636 at p637, that:
"It is the duty of the parties to present the relevant evidence before the tribunal. That is not, of course, to say that where persons appearing before a tribunal are not legally qualified and are manifestly unversed in legal procedure that the tribunal will not give them such assistance as they can in presenting their case. But it cannot be too emphatically stated that the duty lies upon the parties to place the relevant evidence before the court."
The question of what evidence to lead was entirely a matter for the appellant. There are numerous ways in which she might have presented her case without having to have resort to HR personnel from 2002. How she presented her case was entirely a matter for her.
[35] The ET’s error has no bearing on how the appellant presented her case. We are quite clear that any assessment of the ET’s error must proceed only on the effect it had on the assessment of the evidence which the appellant had in fact chosen to lead.
[36] In relation to the appellant’s chance of obtaining pensionable employment with Dundee University as a lab technician, we are satisfied that the error had no effect. The evidence presented by the appellant was no more than a wish-list, and she herself inhibited the case by the way in which she restricted her presentation. We agree with the EAT that “In essence the appellant had a very difficult task in showing that there was any real chance that she would have gained a job as a lab tech at Dundee University”: she hindered her claim by restricting it to the one employer, and led no evidence even of a general kind, in support of her assertions. The issue of poor performance when she had previously occupied a technical role would also have been relevant.
[37] The same may be said of the issue of pension loss. The appellant led no evidence upon which the ET would have been able to assess a loss of pension. The appellant had not even led evidence of a general kind to show that full-time Asda employment on the check-out would have been pensionable. Even approaching the matter as a question of realistic chance, there was no evidence upon which an assessment might be made, even in the vaguest terms.
[38] The matter is a little more complicated in relation to the issue of full-time employment at Asda, since the ET, even applying the higher test, found in the appellant’s favour on this, at least from 2005. As the EAT pointed out there was ample evidence, based on her employment history and the financial commitments that she had taken on, that it was highly unlikely that the appellant would have been without work. Considering that she had worked for Asda for 5 years without difficulty; that it is reasonable to assume that vacancies for full-time check-out operators would arise regularly; and that parties had been able to agree pay rates, it is not surprising that the ET concluded in the appellant’s favour, even on the higher test.
[39] However, we do think that in respect of the assessment of her prospects of employment full-time at Asda the ET’s error did have a consequence to the disadvantage of the appellant, namely in its decision to restrict the period from which that should be reflected in computation of her loss. In our view, the ET’s decision to calculate that loss only from late November 2005 was a consequence of its approach to proof of the appellant’s loss. As the EAT observed, the ET had stated that the period between the start of the appellant’s period of loss and its assessed commencement for full-time employment was a “relatively long one”. It seems clear that it fixed on such a period because it was addressing the issue as a matter of probability rather than substantial chance. Had it done the latter, recognising, as the EAT did that this was:
“… a woman who had worked all her adult life, who needed to work to pay her bills, who had even taken a part-time job over and above full-time hours, and in respect of whom it had to be assumed that she had been completely unaffected by the discrimination she had suffered.”,
we consider that it would have concluded that the appellant’s loss should be assessed from shortly after her resignation.
[40] In other circumstances we might have considered the appropriate course to adopt would be to remit to the ET to address this matter. However, given the appalling history of this case we are firmly of the view that to do so would not be in the interests of justice. We have therefore concluded that the appellant’s loss on the basis of full-time employment at Asda should be increased to reflect such employment as commencing on 1 March 2003. We will put the case out by order for the parties to present us with the calculation of this additional sum, plus interest.