Secretary of State for Employment v Cooper
| Jurisdiction | UK Non-devolved |
| Year | 1987 |
| Date | 1987 |
| Court | Employment Appeal Tribunal |
Employment - Employer's insolvency - Debt due to employee - Dismissal without notice or payment in lieu - Payment out of redundancy fund - Income tax deducted from payment - Whether Secretary of State entitled to deduct income tax from awards - Industrial tribunal's power to make declaration as to Secretary of StateS liability -
The employees, C. and V., were summarily dismissed by the employer on its insolvency without payment in lieu of notice and they applied to the Secretary of State for Employment in accordance with section 122(1) of the Employment Protection (Consolidation) Act 1978,F1 for payment out of the redundancy fund. The Secretary of State calculated the money due to V. on the basis of 17 years' employment giving an entitlement of 12 weeks' notice and he deducted V.'s earnings from new employment in the notice period from the total. He assessed the amount due to C. on the basis of seven years' employment and seven weeks unemployment following his dismissal and he deducted unemployment benefit paid to C. from the total due. He also made a deduction in respect of notional income tax at the basic rate from both employees' awards. The employees complained to an industrial tribunal pursuant to section 124(1) of the Act of 1978 that the payment was too low. The industrial tribunal held that the Secretary of State ought not to have deducted tax from the sums awarded in lieu of notice pay and, in the case of C., whose length of employment and subsequent unemployment were disputed, they calculated a sum based on seven years employment but made declarations, first that the Secretary of State should pay any additional state benefits lost because payment of those benefits was for a limited period after dismissal and ought not to have started until after the notice period, and, secondly, that the amount should be increased if C. was in fact entitled to more than seven weeks notice. The tribunal made no deduction for supplementary benefit paid to C. during his employment.
On appeal by the Secretary of State and cross-appeals by the employees: —
Held, allowing the appeal and dismissing the cross-appeals, (1) that, applying the principle that payment of a sum awarded in lieu of notice by the Secretary of State was a payment of damages calculated by reference to the pay that should have been received from the employer, and subject to mitigation, it was appropriate to reduce the amount of the payments from the redundancy fund by an amount of tax equivalent to the basic rate of income tax and the industrial tribunal's awards would be reduced accordingly (post, p. 772D–H).
(2) That an industrial tribunal's duty under section 124(3) of the Act of 1978 to make a declaration that the Secretary of State should make a payment was confined to specific facts proved to the tribunal rather than to possible situations which might arise; and that since C. had failed to prove the facts needed to show that the Secretary of State was wrong in his calculation the industrial tribunal did not have jurisdiction to declare that the amount might be varied if the necessary facts were established (post, p. 773B).
(3) That the industrial tribunal ought to have taken into account supplementary benefit payments received by C. during his unemployment and the declaration made by the industrial tribunal could not be upheld; and that the Secretary of State had rightly deducted sums equivalent to the unemployment benefit recieved by C. and the earnings paid to V. in his new employment (post, pp. 773H–774A).
The following cases are referred to in the judgment:
British Transport Commission v. Gourley [
Parsons v. B.N.M. Laboratories Ltd. [
Secretary of State for Employment v. Jobling [
Secretary of State for Employment v. John Woodrow & Sons (Builders) Ltd. [
Westwood v. Secretary of State for Employment [
No additional cases were cited in argument.
Appeal and Cross-Appeals from an industrial tribunal sitting at London.
The Secretary of State for Employment appealed from a decision of the industrial tribunal on 2 March 1983 that he should make payments out of the redundancy fund to the employees, F. M. Cooper and G. H. Vinning, in respect of payment in lieu of notice. He appealed on the grounds that the industrial tribunal had erred in law in refusing to allow any deduction for income tax in the calculation of payments due under section 122(3)(b) of the Act of 1978 and in making the declarations that further payments should be made in Mr. Cooper's case for any state benefits which had been lost and if it were found that he was entitled to more than seven weeks' notice.
Mr. Cooper cross-appealed on the ground that a deduction should not have been made for the unemployment benefit he had received and Mr. Vinning cross-appealed on the ground that the earnings he received from his new employment should not have been deducted.
The facts are stated in the judgment.
Peter Goldsmith for the Secretary of State.
The employees did not appear and were not represented.
Peter Gibson J. delivered the following judgment of the appeal tribunal. This is an appeal by the Secretary of State for Employment from certain parts of the decision of an industrial tribunal relating to the amounts to be paid by the Secretary of State out of the redundancy fund to two former employees of an insolvent employer, Mr. Vinning and Mr. Cooper. Each had been summarily dismissed and no payment in lieu of notice was made to them by the employer. Each cross-appeals on the method of calculation of the sums to be paid by the Secretary of State.
Mr. Vinning, by reason of his long service with the...
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Mr C Archibold and others v Norwegian Air Resources UK Ltd (in liquidation) and Secretary of State for Business, Energy and Industrial Strategy: 3206176/2021 and Others
...principles set out in Westwood v The Secretary of State for Employment [1984] IRLR 209 and The Secretary of State for Employment v Cooper [1987] ICR 766 and Secretary of State for Employment v Stewart [1996] IRLR 334 in which the Employment Appeal Tribunal confirmed that the Secretary of St......