Appeal No. UKEAT/0048/07/CEA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 10 May 2007

Before
THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)
MRS C BAELZ
DR K MOHANTY

AROMA (NORTHAMPTON) LTD	APPELLANT 

MISS S H ANG	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR G FOXWELL
(of Counsel)
Instructed by:
Messrs Brignalls Balderston Warren
Solicitors
The Forum 
STEVENAGE
Hertfordshire
SG1 1EL	
For the Respondent	No appearance or representation by or on behalf of the Respondent

SUMMARY

Tribunal awarded travel costs as a head of compensation in an unfair dismissal claim, and also lost earnings with respect to a period when it would have been unlawful for her to be employed because in breach of her work permit.  EAT held that in so doing the Tribunal erred in law.  

  

THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

1.	Ms Ang was employed by the appellants at one of their restaurants in Northampton as a waitress. Both the individuals running the business and Ms Ang came from Malaysia and their first language was Cantonese. She was working under a work permit which expired on 1 May 2006.  In fact she had expected to end her employment on 22 April 2006 and then return to Malaysia. 

2.	She was dismissed by her employers and they conceded that the dismissal was unfair contrary to both ss98 and 98A of the Employment Rights Act 1996. Accordingly, the only question was the remedy. 

3.	The Tribunal calculated her loss in gross terms and we are told by Mr Foxwell, counsel for the appellant, that that the parties have agreed the actual figure, subject to this appeal.  The employers initially appealed against the assessment of compensation on a number of grounds. Only two were allowed through the sift and there has been no attempt to reinstate those grounds that were rejected. Those two grounds relate to the following heads of compensation.

4.	The first relates to the sum of £1,500 paid for the cost of flight and accommodation, which would have been involved had the claimant had to return to England from Malaysia for the Tribunal hearing. That hearing was in August 2006. In fact, Ms Ang did not go back to Malaysia but remained in England whilst her case was pending.  The Tribunal made this award on the basis that she in fact claimed the cost of staying in England, but they felt that it would have been reasonable for her to return to Malaysia and fly back for the hearing.

5.	The Tribunal further explained the decision to award this sum in the following way:
“Normally, a Tribunal would not award the cost of travelling to the Tribunal hearing. Such an expense would normally be regarded as part of the cost of pursuing the claim, which would only be awarded against the opposing party if the opposing party had misconducted themselves. The Chairman drew this issue to the attention of the parties at the conclusion of their submissions. Normally, the expense of travel to the Tribunal and of any overnight stay, would be reimbursed to the Claimant by the Tribunal itself. However, this would not apply in the case of a party journeying to the Tribunal from outside of the United Kingdom. This clearly was a significant additional expense in the case of Miss Ang and both parties would have been aware of that fact once the Tribunal proceedings had been commenced. We have already indicated that we accept Mr Chai’s figure of £1,500 in expense of such a trip, and include that figure in the award. Otherwise, we make no award for the cost of staying in England from 6 May 2006 onwards.”

6.	 This award is challenged on two grounds. First, it is said that since Ms Ang did not in fact return to Malaysia and did not incur any expense with respect to a return trip to this country then it was not a loss that she actually suffered and therefore was irrecoverable. Second, and in any event, it was submitted that it was not a loss flowing from the dismissal.  Mr Foxwell submitted that if it were to be awarded at all, it would have to be by way of a costs order, which was not made in this case.  In fact, as the Tribunal recognised, such costs incurred in the course of litigation are usually paid by the Tribunal itself by way of an allowance. 

7.	The second principal area of contention concerns the conclusion of the Tribunal that they should make an award in respect of lost wages until 6 May 2006. They did this on the basis that Mr Chai, one of the directors of the appellants, conceded that it was reasonable for the claimant to stay in England until the conclusion of the grievance procedure, which was 2 May.  The Tribunal then added a few days which would have been necessary to allow Ms Ang to make arrangements for her return to Malaysia and concluded that she should be paid until 6 May. The short point here is that she could not lawfully be employed after 1 May because that was when her work permit ceased and it was therefore inappropriate to compensate her for any period thereafter.  It in fact a criminal offence for a person to work beyond the time specified in the work permit, and for an employer at least knowingly to permit her to do so.

8.	In our judgment, both these grounds of appeal succeed. As to the first, it is well established under s123 of the Employment Rights Act that the compensation is to be such sums as are just and equitable having regard to the loss sustained by the complainant. Loss does not include non-economic or non-pecuniary loss but it plainly means the actual loss suffered by a person in consequence of the dismissal: see Dunnachie v Kingston Upon Hull City Council [2004] IRLR 727. 

9.	 In our judgment it was not legitimate for the Tribunal to make an award of this nature against a appellant.  First it was not a cost actually incurred.  Second, even if it had been, it was incurred not as a result of the dismissal but in consequence of the litigation.  We appreciate that here the Tribunal was seeking to fix what it considered was an appropriate sum in place of the costs actually incurred by Ms Ang in remaining in this country.  But again, the costs resulting from that decision do not flow naturally from the dismissal itself, and they would not have been a recoverable as head of damage in any event.

10.	Our conclusion is reinforced by the fact that normally travel costs can be claimed as allowances from the tribunal, pursuant to a power conferred on the Secretary of State by s. 5(3) of the Employment Tribunals Act, although we understand that it is very rare for such allowance to be paid in the case of somebody travelling from outside the United Kingdom. It is also expressly provided that where costs are awarded against a party, this may include an order for the paying party to reimburse to the Secretary of State such allowances as he has made in connection with the other party’s attendance at the tribunal: see the Employment Tribunal Rules, rule 38(1)(b).  Even then, it is not envisaged that the travelling costs will be paid direct to the other party as part of the costs order.  The clear premise is that travel and related costs will not be awarded as part of an award of costs.  In any event, in this case there was no order for costs, and given that the employer had admitted the unfair dismissal, we surmise that no such order could properly have been made.

11.	As to the second head of compensation, it is plain that without a valid work permit the applicant could not lawfully work after 1 May. The fact that there was a concession as to how long it might have been reasonable for her to remain in the United Kingdom is not material here. The question is what she has lost as a result of the dismissal; she could not be said to have lost any salary after 1 May as a consequence of her dismissal since she could not lawfully work beyond that date.

12.	In short, we uphold both grounds of appeal. We are told that the parties are agreed that this should involve a reduction in the agreed compensation in the sum of £1762.14.