In this case, the EAT held that an employment tribunal had erred in its assessment of compensation for a whistleblower who had been automatically unfairly dismissed and subjected to detriment because of his protected disclosures.
Facts
An employment tribunal upheld Dr Mullen's claims that he had been automatically unfairly dismissed and that he had been subjected to detriment by his employer, Melian Dialogue Research Ltd (Melian), for making protected disclosures.
The tribunal hearing had originally been listed for 10 days, to consider liability only, based on the number of witnesses that Melian had said it intended to call. However, with fewer witnesses actually being called it was agreed at the start of the hearing that, to use the available time efficiently, the tribunal would also determine remedy if appropriate.
The tribunal heard limited evidence on remedy before it made its decision on liability, giving its judgment orally. After this, the parties submitted further documentation and submissions were made by their respective Counsel, but witnesses were not recalled to give more evidence. In its remedy judgment, the tribunal:
- Made a 10% Polkey deduction on the basis that there was a chance Dr Mullen would have been fairly dismissed in any event
- Held that Dr Mullen had unreasonably failed to mitigate his losses by focusing all his efforts on setting up his own new business venture, and reduced his compensation accordingly
- Refused to make an award of aggravated damages.
Dr Mullen appealed on all three points, also submitting that the tribunal had failed entirely to consider his claim for compensation for the costs of establishing his new business venture. Melian cross-appealed against the tribunal's decision to make an injury to feelings award in respect of the unfair dismissal. (Thereafter, Melian failed to engage with the EAT process and the hearing went ahead in Melian's absence.)
The EAT upheld Dr Mullen's appeal on all grounds, and also upheld the cross appeal.
With regard to Polkey, the EAT reiterated the principle that a degree of uncertainty is inevitable when seeking to predict what might have happened, but the fact that an element of speculation is involved is not a reason for refusing to have regard to the evidence. Here, the tribunal had referred to concerns about Dr Mullen's performance, and complaints that had been received about him, as giving rise to the possibility that he may have been fairly dismissed had fair procedures been followed. The EAT considered it likely that the tribunal had in mind capability and conduct as potentially fair reasons for dismissal. However, it had failed properly to analyse what, if any, chance there was that Melian would have fairly dismissed Dr Mullen for either of those reasons and had not identified a proper evidential basis for the 10% deduction it had applied.
On mitigation, the EAT explained that the burden of proof is on the respondent to prove that the claimant has acted unreasonably in failing to mitigate. The tribunal had concluded that it was reasonable for Dr Mullen to focus exclusively on his new business venture for the first six months after his dismissal, but thereafter it was not reasonable for him to devote the entirety of his time to it. The EAT noted that the tribunal's findings appeared to have been based on documents disclosed during the hearing. It was substantively unfair to Dr Mullen for findings to be made that substantially reduced his compensation without him having an opportunity to deal with them. It was also clear that the tribunal had wrongly looked to Dr Mullen to prove he had acted reasonably in setting up his own business, rather than requiring Melian to prove that he had acted unreasonably.
Aggravated damages are available in a whistleblowing claim where the employer has acted in a high-handed, malicious, insulting or oppressive manner. Dr Mullen relied on several actions by Melian, including threatening to bring a £600,000 High Court claim against him, and reporting him to the police for having accessed his work email after his employment ended – both in order to intimidate him into withdrawing his tribunal claims. The EAT held that a respondent is entitled to defend their position robustly. However, going beyond mounting a legitimate defence and seeking to intimidate a claimant into withdrawing a claim may lead to an award of aggravated damages. The tribunal had failed properly to assess whether Melian's actions met the relevant threshold.
As to the injury to feelings award, no such award should have been made in respect of the unfair dismissal – though an award could have been made for the other whistleblowing detriment.
The EAT remitted the case to a different tribunal for reconsideration of remedy.
What does this mean for employers?
This case provides a reminder of the importance of presenting proper evidence on remedy. As the EAT emphasised, it would be an error for an employment tribunal to adopt a more relaxed approach to evidence on remedy than it does to evidence on liability. Equal forensic scrutiny is needed. While the assessment of remedy usually requires conjecture about what would have happened in the future, it must nonetheless be based on evidence. If parties consider they need further time to prepare for the remedy aspect of a case, even if the final hearing is listed for liability and remedy, then they should apply to the tribunal to adjourn the remedy hearing to allow for full preparation of their evidence.
