Westwood v Secretary of State for Employment
| Jurisdiction | England & Wales |
| Judge | Lord Diplock,Lord Keith of Kinkel,Lord Bridge of Harwich,Lord Brandon of Oakbrook,Lord Brightman |
| Judgment Date | 15 March 1984 |
| Judgment citation (vLex) | [1984] UKHL J0315-1 |
| Date | 15 March 1984 |
| Court | House of Lords |
[1984] UKHL J0315-1
House of Lords
Lord Diplock
Lord Keith of Kinkel
Lord Bridge of Harwich
Lord Brandon of Oakbrook
Lord Brightman
My Lords,
I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Bridge of Harwich. I agree with it, and for the reasons which he gives I would allow this appeal.
My Lords,
I have had the benefit of reading in advance the speech to be delivered by my noble and learned friend, Lord Bridge of Harwich. I agree that, for the reasons given by him, this appeal should be allowed.
My Lords,
On 9th May 1980 the respondent's employers became insolvent and in consequence the respondent was dismissed without notice. Having been continuously employed for twelve years or more the respondent was entitled by virtue of section 49(1)( c) of the Employment Protection (Consolidation) Act 1978 (the Act of 1978) to not less than twelve weeks' notice. The wrongful dismissal being attributable to the employers' insolvency the employers' liability to the employee in respect thereof is imposed upon the Secretary of State by section 122(1) and (3)( b) of the Act of 1978, to be met out of the Redundancy Fund, with a right over, for what it is worth, against the insolvent employers under section 125(1). The liability of the Secretary of State cannot exceed that of the insolvent employers.
The respondent remained unemployed for more than fifteen months, he received unemployment benefit and earnings related supplement for the maximum periods of entitlement (approximately twelve months and six months respectively). After the expiry of his entitlement to unemployment benefit he received supplementary benefit.
On 3rd February 1981 the Secretary of State paid the respondent £525.21. This represented the amount he would have earned during the twelve weeks period of notice (£1,052.76) less the aggregate of unemployment benefit and earnings related supplement which he in fact received in the same period. In due course the respondent complained to an industrial tribunal, pursuant to section 124, that he was entitled to recover the balance on the ground that the benefits received had been wrongly deducted. The tribunal rejected this complaint.
The respondent appealed to the Employment Appeal Tribunal (Browne-Wilkinson J., Mr. R.V. Cooper and Mr. E.A. Webb). Put shortly the effect of their judgment was that the benefits received were, in principle, deductible in mitigation of damages for loss of earnings flowing from a wrongful dismissal, following Secretary of State for Employment v. Wilson [1978] 1 W.L.R. 568 and Parsons v. B.N.M. Laboratories Ltd. [1964] 1 Q.B. 95. However, in consequence of the premature termination of his employment, the respondent, in mitigating his damages suffered during the twelve weeks' notice period, had been obliged to claim prematurely the unemployment benefit and earnings related supplement to which he had only a limited entitlement. Having remained unemployed beyond the period of his entitlement to both these types of benefit, his ultimate position was that he had in the period of approximately fifteen months following the wrongful dismissal received less than he would have done if he had been given due notice, paid by his employers during the first twelve weeks and then received his unemployment benefit and earnings related supplement for the full periods of entitlement. In effect this loss was the difference between the aggregate of unemployment benefit and earnings related supplement paid during the first twelve weeks of unemployment and the supplementary benefit paid during the first twelve weeks after the unemployment benefit period expired. The parties agreed this figure in the sum of £212.67 and the Employment Appeal Tribunal ultimately ordered that this sum be paid by the Secretary of State to the respondent.
The Secretary of State appealed to the Court of Appeal and the respondent renewed, by way of a Respondent's Notice, his contention that he was entitled to recover from the Secretary of State the full amount he would have been able to earn during the notice period without deducting any benefits received by him.
The judgments of the Court of Appeal (Eveleigh, O'Connor and Purchas L.JJ.), as I understand them, proceed on the basis that an employee entitled under the Act of 1978 to a minimum statutory period of notice to terminate his contract of employment, whether or not he is given that notice, has a statutory right to be paid the full amount due during the period of notice calculated in accordance with the provisions of section 50 and Schedule 3 and that this statutory right is not subject to any deduction by reference to a common law duty on the part of the employee to mitigate his damage.
The formal order of the Court of Appeal dismisses the appeal by the Secretary of State but makes no adjustment to the sum ordered by the Employment Appeal Tribunal to be paid to the respondent (which the logic of the judgments would seem to require to be increased to cover the full difference between the sum already paid and the amount the respondent would have earned during the twelve weeks' notice period calculated in accordance with section 50 and Schedule 3) unless, as I presume, this was intended to be covered by a clause in the order reserving liberty to apply. The Court of Appeal gave to the Secretary of State leave to appeal to your Lordships' House on his undertaking not to disturb the Court of Appeal's order as to costs in favour of the respondent and to pay the respondent's costs in this House in any event.
The issues arising for decision in the appeal are:
(1) Is an employee dismissed without notice or with less than the minimum notice required by section 49 of the Act of 1978 under any duty to mitigate the damage he suffers from loss of earnings?
(2) If yes, is unemployment benefit (including earnings related supplement) to be taken into account in mitigation?
(3) If questions (1) and (2) are answered affirmatively, what, if any is the effect on the damages recoverable if the employee claims unemployment benefit and earnings related supplement during the statutory period of notice, so that his limited rights thereto are exhausted before he is again employed?
The provisions of sections 49 to 51 and Schedule 3 of the Act of 1978 reproduce with detailed amendments provisions first enacted by sections 1 to 3 and Schedule 2 of the Contracts of Employment Act 1963. The detailed amendments were effected successively by the Contracts of Employment Act 1972 and the Employment Protection Act 1975. The principal provision of section 49 is to require minimum periods of notice to be given by an employer to determine a contract of employment according to the length of the employee's period of continuous employment. These minima have been raised by the amendments referred to, but the basic principle by which this provision operates has remained unchanged since 1963.
Section 50 and Schedule 3 of the Act of 1978 reproduce, again with minor amendments, the provisions first enacted by section 2 and Schedule 2 of the Contracts of Employment Act 1963 for calculating an employer's liability to pay the employee during the minimum period of notice required by the statute. Different formulae, modified by the Employment Protection Act 1975 in minor detail, apply to employments for which there are normal working hours and to employments for which there are no normal working hours. Special provisions apply if the employee during the notice period is granted leave at his own request or goes on strike. Schedule 3 contains provisions relating to sickness and industrial benefit first introduced by the Act of 1972. The Schedule makes no provision, because none is needed, for the case where the employee continues to perform his contractual work and receive his contractual pay during the period of notice. The evident primary purpose of the Schedule is to prevent the...
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