The employee had been unfairly dismissed with 12 weeks pay in lieu of notice.
Held: The court re-affirmed the narrow principle of Norton Tool v Tewson. Browne Wilkinson J P said: ‘It seems to us that the decision in the Tradewinds  IRLR 272 case is quite inconsistent with the earlier cases. We have to decide which authority to follow. In the realm of industrial relations (where settlement by negotiation must be the prime objective) it is even more undesirable than usual that there should be conflicting decisions. If we were satisfied that the decision in Norton  IRLR 86 line of cases was wrong in principle or, due to changes in industrial relations practice, had ceased to be appropriate, we would say so but suggest that the parties should correct the matter in the Court of Appeal rather than produce conflicting authority in this Tribunal. But in our judgment the line of authorities stemming from the Norton  IRLR 86 case is not unsound in principle and there has been no change in law or practice which merits departure from it.
There is no doubt that in assessing compensation under section 74 of the 1978 Act the Industrial Tribunal in deciding what compensation is just and equitable has to have regard to the loss sustained by the employee in consequence of the dismissal. In order to ascertain the loss, one has to discover what the employee would have received if had not been unfairly dismissed. The Appeal Tribunal in the Tradewinds  IRLR 272 case had regard to what, as a matter of contract and the common law remedy for breach of contract, the employee would have got. At common law there is no doubt that the employee is bound to mitigate his loss seeking alternative employment during the notice period and, if successful, his damages for breach of contract are reduced by the amount of his earnings during the notice period from his new employment. The Tradewinds  IRLR 272 case therefore identifies this as his loss.
In making exactly the same assessment (ie the loss suffered by the employee) the Norton  IRLR 86 line of cases starts from a different premise, i.e. that the employer would act not only in accordance with his contractual duties but also in accordance with good industrial practice which would require (in the absence of gross misconduct) that an employee who is summarily dismissed should at the time of his dismissal be paid a payment in lieu of notice covering the notice period. If such good industrial practice is adopted, there is no right for the employer to recover any part of it from the ex-employee if, during the notice period given, he obtains alternative employment. Therefore on this basis the loss suffered by the employee is the full amount of his wages during the notice period without any deductions for wages from the alternative employment.
We can see no flaw in the reasoning of the authorities stemming from the Norton  IRLR 86 case, unless it can be said that the loss referred to in s.74(1) must be limited to the loss which can be recoverable in an action for wrongful dismissal. We can see no reason why such limit should be placed on the wide words of s.74.
We note that the important decisions in the Everwear case and the Blackwell  IRLR 144 case were not cited to this Appeal Tribunal in the Tradewinds  IRLR 272 case. Moreover, in our judgment the suggestion that the introduction of the basic award by the 1975 Act has altered the position is not well founded. The basic award was introduced to compensate an employee for the loss of his accrued rights to a redundancy payment; it has no connection with loss of wages during the notice period.’
Browne Wilkinson J P
 ICR 228,  IRLR 48
England and Wales
Cited – Norton Tool Co Ltd v Tewson NIRC 30-Oct-1972
(National Industrial Relations Court) The court was asked to calculate damages on a dismissal, and particularly as to whether the manner of the dismissal should affect the damages.
Held: The common law rules and authorities on wrongful . .
Cited – Tradewinds Airways v Fletcher EAT 1981
The employee, an airline pilot, was entitled to three months contractual notice. The Tribunal had awarded compensation for the full three months even although he had earned a salary from other employment during part of that period.
Bristow J . .
Cited – Langley and Another v Burso EAT 3-Mar-2006
The claimant had been dismissed shortly after becoming unable to work. She sought payment of her normal salary during the period of notice saying this was established good practice.
Held: ‘We are put in the invidious position of being bound by . .
Cited – Burlo v Langley and Carter CA 21-Dec-2006
The claimant had been employed by the defendants as a nanny. She threatened to leave, but then was injured in a car acident and given a sick note. The employer immediately engaged someone else. She was found to have been unfairly dismissed. The . .
Cited – Stuart Peters Limited v Bell EAT 22-Oct-2008
EAT UNFAIR DISMISSAL: Compensation/Mitigation of loss
The employee was unfairly constructively dismissed. She was entitled to a 6 month notice period that was not paid by the employees in that period, . .
Cited – Stuart Peters Ltd v Bell CA 30-Jul-2009
The claimant had a contract entitling her to six month’s notice. She left claiming constructive dismissed, but found work shortly after. She still sought the full six months’ pay. The EAT found in her favour. The employer appealed.
Held: The . .
Lists of cited by and citing cases may be incomplete.
Updated: 01 May 2022; Ref: scu.240326