Griffin v Plymouth Hospital NHS Trust [2014] EWCA CIv 1240

Subjects: Remedy – Future Loss – Pension losses – Substantial approach to pension loss – Simplified approach to pension loss

C brought proceedings for constructive dismissal and disability discrimination. She was successful and the ET awarded her £105,643.01 compensation. She appealed and on 18 November 2011 the Supperstone J in the EAT allowed her appeal and remitted her case to the ET to make further findings. At the remitted hearing the ET increased the award to £166,595. C appealed again. The EAT dismissed this second appeal and C appealed to the Court of Appeal.

Facts

C was disabled by reason of Lupus. She was 24 at the time she started working for R and 34 at the date of her resignation. She succeed in a claim of disability discrimination and unfair dismissal. There was no appeal against the liability judgment. The first issue was whether C could adduce new evidence as to the work she had carried out as a volunteer at Shelter between the first and second remedy hearings. The ET had made a finding that C would gradually return to her previous level of earnings by rising through an administrative role into management, but that that would take twelve years, and it awarded compensation in increments to reflect this [the figures are not provided in the CofA's judgment].

C had tried during the course of the remitted hearing to rely on fresh evidence to show that in fact the ET's assessment of when she would be able to return to work and her consequent level of earnings was wrong. The ET refused to allow her to rely on the fresh evidence and C was confined to the evidence that she had produced at the original remedies hearing.

Held

There were two principles thrusts to the appeal. Firstly that the ET had erred assessing C's future losses and secondly that the ET had erred calculating her pension losses.

The assessment of future loss was said to be wrong because (1) the ET failed to take into account C's fresh evidence to the remitted hearing and (2) that it's approach to the facts was wrong or perverse.

In respect of ground 1, the CofA referred firstly to the principle that an ET conducting its assessment of compensation must have regard to all the facts known to it at the date of assessment (referring to Bwlfa and Merthyr Dare Steam Collieries (1891) v Pontypridd Waterworks Co [1903] AC 426 and Curwen v James [1963] 1 WLR 748). However, once a final award has been made the important interest in finality of litigation means that a court will be much more reluctant to admit fresh evidence and will only do so where the interests of justice require it or where the assumptions that both parties have been made are shown to be false.

The present case concerned a remitted hearing on remedy. It was not however a fresh hearing. The remission ordered the ET to "review [its] decision on ... continuing loss of earnings." The ET was effectively being directed to reconsider the rate of remuneration that C was likely to receive after a year of employment. There was no challenge before Supperstone J to the date on which C would have been able to return to work. C was entitled to produce fresh evidence in respect of the rate of loss as of right since this was the remitted question but the ET had a discretion whether to admit fresh evidence and effectively reconsider its original decision. That discretion was to be exercised by the ET in accordance with Mitchell v Mulholland [1971] AC 666 at pp.679-680. The CofA held that in any event the fresh evidence was not relevant to the date on which C would have found employment and that C had not relied on the evidence in any other way. Had C sought to rely on the evidence to show that the rate the ET had originally used was wrong the CofA indicated that its view was that the ET could not properly have exercised its discretion in her favour.

The CofA gave short shrift to the other grounds of appeal concerning the calculation of future losses.

The pensions appeal was allowed. C claimed that the ET had erred in law by preferring the simplified approach over the substantial loss approach when calculating her losses related to her final salary pension scheme. The CofA described the losses suffered by a dismissed employee who was in receipt of a final salary pensions as: (1) the loss of accrued rights, being the loss of the enhancement to the final benefit that would have occurred due to the increase in salary had the employee remained in the scheme; and (2) the loss of future rights, being the increase in the years of service and the multiplicand that would have been used to calculate the final benefit.

The CofA set out the main features of the substantial and the simplified approaches to calculating pensions loss and also the narrative Guidance given in the handbook Guidance for Loss of Pension Rights - Employment Tribunals. The CofA held that the only correct choice of calculation in this case was the substantial approach. The case fell squarely within paragraph 4.13 of the Guidance which states that the substantial loss approach is applicable where the person dismissed has been in R's employment for a considerable period of time, where the employment was unlikely to be affected by the economic cycle and where the person has reached an age where he is less likely to be looking for new pastures. There was also a quantifiable continuing loss which could be assed by using the tables set out in the Guidance (para.4.14).

Comment

This is a relatively lengthy judgment. The most interesting elements concern the question of what evidence can be relied upon at remitted remedies hearings and the quantification of pension losses.

Although the CofA cautioned against treating its judgment as a short hand for the correct approach to calculating pension losses the judgment does provide a helpful summary of the correct approach to calculating losses under final salary pension schemes. The CofA added one cautionary point to its conclusion that the ET had erred in its choice of calculation: the Guidance was not gospel and its application should be considered critically. Due to recent changes in pensions law, the extent to which the Guidance's recommendations on particular points remains valid will need to be considered carefully.

The full transcript is here: http://www.bailii.org/ew/cases/EWCA/Civ/2014/1240.html