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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Skipaway Ltd v. Sidhu [2006] UKEAT 0629_05_0803 (8 March 2006)
Cite as: [2006] UKEAT 0629_05_0803

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BAILII case number: [2006] UKEAT 0629_05_0803
Appeal No. UKEAT/0629/05

             At the Tribunal
             On 8 March 2006







Transcript of Proceedings



© Copyright 2006



    For the Appellant MS ALISON RUSSELL
    (Of Counsel)
    Instructed by:
    Messrs ASB Law Solicitors
    12 Mill Street
    ME15 6XU
    For the Respondent MS HARINI IYENGAR


    Unfair Dismissal. Whether deductions to be made from loss of earnings in respect of notional childcare costs for returning mother and chance of fair dismissal (Polkey). No error of law. Appeal dismissed.



  1. By a judgment with Reasons promulgated on 22 March 2005 an Employment Tribunal sitting at Ashford found that the Claimant, Mrs Sidhu had been constructively unfairly dismissed and discriminated against on grounds of her sex by the Respondent, her former employer, Skipaway Ltd. There is no appeal against that liability judgment. The present appeal, brought by the Respondent below, is against the Employment Tribunal's later Remedy Judgment, promulgated with reasons on 12 May awarding the Claimant total compensation of £22,249.39 (including interest).
  2. Background

  3. The Claimant commenced employment with the Respondent on 1 March 2001. Their principal place of business is at Pelican Reach, Rochester, Kent. Prior to starting this period of employment (she had worked for the Respondent the in mid-1990s) it was agreed that the Claimant could work from her home in Slough, Berkshire; attending at Pelican Reach when necessary. Her job was selling the Respondent's service relating to the disposal of asbestos. She was the sole salesperson for that particular service within the Respondent's waste management business.
  4. By the end of January 2003 it became known to Mr Orsbourn, the Respondent's Managing Director and staff generally that the Claimant was pregnant. In March 2003 she indicated in her maternity leave plan that she wished to start her maternity leave on 15 June 2003 and to return to work, after additional maternity leave, on 14 June 2004.
  5. Prior to taking maternity leave, during May 2003, the Claimant was told by Mr†Orsbourn that due to falling asbestos disposal sales the Respondent may not be able to retain a salesperson dealing solely with those sales so that her position was at risk of redundancy; on 19 May he recorded in a letter, following a meeting that day, that she had agreed to work at Pelican Reach in an expanded role, subject to review after 3 months, following her return from maternity leave. The Claimant responded on 4 June, disputing that she was contracted to work from Pelican Reach and stating that she accepted the change in arrangements on the basis that her current role was redundant.
  6. Her baby was born in July 2003 and she returned to work on 19 July 2004. She arranged to stay with her parents, from whose house she was able to travel to work easily at Pelican Reach during the week, returning home to Slough at weekends. She found the arrangement difficult, that is working away from home and enquired about redundancy. She then, by letter of 26 August raised a grievance alleging unfair treatment due to her taking maternity leave; she was now employed on less favourable terms than before taking her leave. Attempts were made to resolve the position involving ACAS and the possibility of the Claimant taking voluntary redundancy. However, no agreement was reached. In the end she tendered her resignation which took effect on 30 September 2004.
  7. The Liability decision

  8. The Employment Tribunal reached the following conclusions:
  9. (1) Constructive Unfair Dismissal

    The requirement by the Respondent that the Claimant cease to work principally from home in Slough to attending for work at Pelican Reach amounted to a fundamental breach of her contract of employment entitling her to treat herself as constructively dismissed.

  10. The Respondent had a legitimate business reason for unilaterally imposing the new work location. That amounted to some other substantial reason for dismissal, a potentially fair reason under Section 98 of the Employment Rights Act 1996 (ERA). We note that the Tribunal did not find that the reason or principal reason for dismissal was redundancy. However, dismissal for that other substantial reason was not fair. It was unreasonable to impose the change in location without looking for possible compromises, such as working part of the week in the office and part at home. Dismissal in those circumstances fell outside the range of reasonable responses.
  11. (2) Sex Discrimination

  12. Strictly, the Remedy appeal is not concerned with the Employment Tribunal's finding of direct sex discrimination. We merely note the Employment Tribunal's finding that the timing of the Respondent's requirement that the Claimant work from Pelican Reach was prompted by her imminent maternity leave.
  13. The Remedy decision

  14. Material to the present appeal is the Employment Tribunal's reasoning leading to a finding that the Claimant's immediate loss of earnings attributable to her unfair dismissal totalled £11,294.96. That reasoning is initially contained in paragraph 4.2.1 of the Remedy reasons.
  15. The Remedy hearing took place on 6 May 2005. The effective date of termination was 30 September 2004. She received 2 weeks notice pay. The Employment Tribunal found that following dismissal she could reasonably be expected to spend 6 months looking for similarly paid employment and if that search failed she could then be expected to find a job at half-pay, rising to full pay after a further 2 months.
  16. The Respondent advanced 2 arguments to reduce the gross award representing that period of lost earnings; first that credit should be given for the cost of childcare had she remained in employment with the Respondent during the material period; secondly that this element of the compensatory award should be reduced by a proportion to reflect the risk of her being fairly dismissed by reason of redundancy in any event. Both arguments were rejected by the Employment Tribunal.
  17. The Remedy Appeal

  18. The Respondent contended by its Notice of Appeal that the Employment Tribunal was wrong in law in rejecting both arguments raised below. It was further argued that the Employment Tribunal had given inadequate reasons for their findings on those two issues, which we shall describe as the childcare and redundancy issues.
  19. As to the Employment Tribunal's reasons I directed on paper, following the Burns/Barke procedure, that the Employment Tribunal be invited to provide further reasons as to (a) why no credit was given to the Respondent for the Claimant's childcare costs and (b) why no reduction was made to reflect the possibility of a fair redundancy in any event. The Chairman Miss Lester, through her colleague Ms Hyde, answered those 2 questions in a document dated 4 August 2005. I then directed that the matter proceed to a Preliminary Hearing.
  20. At the Preliminary Hearing held on 20 December 2005 before a division presided over by His Honour Judge Altman that Tribunal directed that the appeal proceed to this full hearing and further invited the Chairman to produce her Notes of Evidence limited to any reference to childcare provision either in fact or intention. Those Notes were provided in a document dated 29 January 2006. In considering this appeal we take into account the Employment Tribunal's original reasons both as to Liability and Remedy; the answers to questions and the Chairman's Notes of Evidence.
  21. For completeness, we see that application was made by the Claimant in advance of this hearing to adduce fresh evidence on appeal from her father as to free childcare available from him and his wife, her mother. That application was refused by the Deputy Registrar and is not renewed on behalf of the Claimant by Ms Iyengar before us today. We are not surprised; that evidence could have been called before the Employment Tribunal and we do not believe that it would have made a material difference to the outcome. In these circumstances we have disregarded that proposed new evidence in this appeal.
  22. Discussion


  23. Ms Iyengar submits that where, as a matter of fact, an Employment Tribunal finds that in continued employment the Claimant would incur childcare costs the Employment Tribunal is not required to give credit to the Respondent for those expenses. Ms Russell, on the other hand, submits that the legal principles are clear. As Morison P put the matter in Cannock v Ministry of Defence [1994] IRLR 509, paragraph 103, a case concerned with the assessment of loss for the tort of unlawful sex discrimination:
  24. "childcare costs which would notionally have had to be incurred to enable the [Claimant] to return to work should be set off in full against her damages for loss of earnings.'

    I applied that approach, sitting with members, in Visa International Service Association v Paul [2004] IRLR 42, paragraph 42 to the particular facts of that case. Ms Russell further submits that such an approach is consistent with the House of Lords decision in Dunnachie v Kingston upon Hull City Council [2004] IRLR 727 as further explained by Burton P in Morgans v Alpha Plus Security Ltd [2005] IRLR 234, particularly at paragraph 22. The statutory basis for the recovery of compensation for unfair dismissal under Section 123 ERA is the reimbursement of the loss suffered. If the Claimant would, after returning to work with the Respondent following maternity leave, have been met with the costs of caring for her new child the whole of that notional cost must in our judgment, be set against the net lost earnings during the relevant period of unemployment in order to reflect her actual loss. On this aspect of the case we prefer the submissions of Ms Russell to those of Ms Iyengar.

  25. The question on appeal is whether the Employment Tribunal failed to apply that principle to the facts of the case in concluding that no deduction should be made for childcare costs. We begin with the facts, as now revealed through the Employment Appeal Tribunal process earlier described.
  26. The evidence before the Employment Tribunal shows that (a) when working at Rochester the Claimant received free childcare from her parents with whom she lodged and (b) that when at home in Slough she received temporary assistance from her parents, who stayed with her whilst she prepared for the Employment Tribunal hearing and from friends locally whilst she searched for new employment. True it is that she made enquiries of nurseries for her child particularly when considering a job with Sita in the Slough area and that the cost would be £800.00 per month, that is 50 percent of her net salary with the Respondent.
  27. Looking at the evidence as a whole it was open to the Employment Tribunal, in our judgment to reach the position that they were not convinced by the Respondent's submissions on that evidence that the Claimant would necessarily incur childcare costs. In those circumstances they were entitled to conclude that no deduction should be made in that respect.
  28. Redundancy

  29. Here the legal principles are not in dispute. It is open to an Employment Tribunal to find that a fair dismissal might have taken place so as to reduce the compensatory award for unfair dismissal on a percentage basis. The Employment Tribunal rejected the Respondent's submission that a fair dismissal on grounds of redundancy might have taken place and to apply the so-called Polkey deduction.
  30. We emphasise the relevant question; what are the chances that the Claimant would have been fairly dismissed? That necessarily involves stripping out the unfairness found by the Employment Tribunal at the liability stage. Here, the unfairness consisted of the Respondent unilaterally requiring the Claimant to work full-time from Rochester; if she was permitted to retain her original contractual right to work from Slough Ms Russell submits that there was at least a chance, to be assessed in percentage terms, that the Claimant would have been fairly made redundant because of the Respondent's requirement to have its sales staff based at Rochester, after proper consultation.
  31. We do not consider that such a stark proposition is necessarily sustainable on the findings of the Employment Tribunal. Their reasoning (liability reasons paragraph 25) for finding that the dismissal was unfair included their assessment, not challenged in this appeal, that a reasonable employer would have explored the possibility of a compromise solution involving the Claimant working partly in Rochester and partly from home. If such a compromise had been reached, involving give and take on both sides, then her employment would have continued on that basis. No redundancy would arise so far as location was concerned and, as the Employment Tribunal found in their further reasons, there would be no diminution in the requirement for employees to do work of the particular kind envisaged in the Claimant's expanded role post maternity leave or even if there was, a wider pool for selection for redundancy existed at the time of constructive dismissal. For these reasons it was open to the Employment Tribunal to conclude that no Polkey deduction was appropriate.
  32. Conclusion

  33. It follows that we are not persuaded that the 2 points raised in this appeal, either individually or cumulatively, give rise to a substantive error of law on the part of the Employment Tribunal. The Meek grounds of appeal have been abandoned in the light of the Employment Tribunal's further reasons. Consequently this appeal fails and is dismissed.

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