Case law states that courts should disregard events after dismissal when calculating compensation in a successful unfair dismissal case. However, the Employment Appeal Tribunal (EAT) held in Cumbria County Council v Bates that tribunals had to use their common sense and assess how long the employee might have been employed for, had they not been dismissed.
Mr Bates, a teacher in a local authority school, was dismissed for misconduct in April 2009. Following a successful claim for unfair dismissal, the tribunal set down a date in February 2011 for a remedy hearing to sort out his compensation.
The Council then applied to have the hearing date adjourned because Mr Bates was due to appear at Preston Crown Court in June 2011 to face three charges of sexual assault of a former pupil in July 2010. It argued that, although the acts happened after his dismissal, the outcome of the criminal prosecution could be relevant to the question of compensation, acting as a cut off for his claim for loss of earnings and reducing his pension claim.
Relying on the case of Soros v Davison (which said that courts should disregard events after dismissal), the tribunal refused the application and held it should not engage in speculation as to the outcome of any future criminal proceedings.
Mr Bates was subsequently found not guilty of the three charges of sexual assault, but was convicted of common assault against a 16-year-old girl and sentenced to six weeks' imprisonment.
Following an appeal by the Council, the EAT asked the tribunal to review the case in light of Mr Bates‘ conviction. However, the tribunal held again that it had to follow Soros and that the conviction for common assault was not relevant to what was just and equitable to award Mr Bates in terms of his compensatory award.
It added that Mr Bates would not, in any event, have been dismissed following his conviction as the Council had not produced any evidence to the contrary. The Council had, in fact, produced a witness statement from a senior manager, Mr McGaw, stating that Mr Bates would have been dismissed, but the tribunal refused to accept it because the witness could not attend the hearing.
The EAT allowed the appeal, holding that the tribunal had misapplied Soros. Quite apart from the issue of what was "just and equitable", it held that Mr Bates’ conviction could have substantially reduced his pension loss and the tribunal was “plainly” entitled to take that into account. The decision in Soros did not preclude it from doing so.
Nor did it understand how the tribunal could say that the Council had not come up with any evidence that it would have dismissed Mr Bates. Apart from Mr McGaw’s witness statement, Mr Bates himself told the tribunal that he had been advised by his own union that dismissal was a “distinct possibility”.
The principles in Software 2000 Ltd v Andrews applied which meant that tribunals had to assess a claimant’s loss arising from the dismissal “using its common sense, experience and sense of justice. In the normal case that requires it to assess for how long the employee would have been employed but for the dismissal”.
The tribunal failed properly in this case to take into account the evidence of Mr McGaw and Mr Bates himself in coming to its decision and as a result did not “grapple” with the Council’s case on causation.The EAT therefore allowed the appeal and remitted the case to a new tribunal to decide Mr Bates’ pension loss.