Court name
Court of Appeal of Turks and Caicos Islands
Case number
CL-AP 4 of 2010

Santral Management Ltd. v. Parker (CL-AP 4 of 2010) [2011] TCACA 4 (25 January 2011);

Law report citations
Media neutral citation
[2011] TCACA 4
Ground, JA
Zacca, P
Mottley, JA

IN THE COURT OF APPEAL                                                                                          APPEAL No. CL AP 4/10





- and -



Dates of Hearing: 23, 29 July 2010; and 25 January 2011

Conrad Griffith QC and Akierra Misick for the Appellant; and

Clayton Greene for the Respondent



1.             This matter came before us on appeal from a decision of the Labour Tribunal, holding that the respondent to the appeal (‘the complainant’) had been unfairly dismissed and awarding her compensation and costs. The Decision in question was given on 24 February 2010, and under it the appellant was ordered to pay $38,737.80 to the complainant, and a further $942.77 to the National Insurance Board.

2.             We heard the matter on 23rd July 2010, when we reserved judgment. On 29th July we gave a short judgment, quashing the decision and remitting the matter to the Labour Tribunal. We promised written reasons to follow. We now give those reasons.


3.             The complainant was first employed by the appellant on 1st March 2007 as Human Resources Manager, and that employment was enlarged on 1st March 2008 to include responsibility for the Human Resources function of a large resort development, Seven Stars Resort, and certain associated entities. On 20th November 2008 the complainant started a period of vacation, and she says she left the Turks & Caicos Islands on 22nd November. She says that she was due to return on 27th January 2009, but while away became ill and did not return to the Islands until 11th February 2009.

4.             During her absence the appellant sent her a letter dated 12th January 2008. It purported to have been sent by e-mail and delivery, and read as follows:

“As you are aware, for various economic reasons including a drastic change in the market, the management of the Severn Stars Resort has decided to terminate the rental program with the result that Santral Management Ltd. will discontinue to carry out a sizeable amount of its business. Notices have now been served on the condo owners with the result that the rental program ends on 8th April 2009. Consequently, there is to be a considerable reduction in the workforce. The Human Resources Department is one of those areas affected and your position of H. R. Manager has been identified as no longer being required.

It has been our wish to discuss this redundancy situation with you fact to face, however, despite repeated attempts to reach you before you left the Islands (the latest being on December 17th 2008), none of our telephone messages or emails have been returned. Matters have now progressed to the point where, unfortunately, and with great regret, we write to provide you with three months notice of termination of your employment in accordance with the terms of your contract. You will continue to be paid in the normal manner until 12th April 2009. You are not required to attend work during the period of your notice.”

5.             It is not permissible to give notice of termination while an employee is on leave: see section 63(5) of the Employment Ordinance 2004 (‘the Ordinance’). The complainant says that she only received the notice on her return, and as a result the appellant eventually agreed to extend the effective date of termination by a month to 12th May 2009, and that later date was the date the Tribunal worked from in assessing the award.

6.             On 6th May 2009 the complainant issued an originating application before the Labour Tribunal, in the form prescribed by the Employment Ordinance (Labour Tribunal Procedure) Rules 2004 (‘the Rules’). In section 10 of the form (“grounds for your application”) the complainant stated-

“Dismissed while on vacation, dismissal on ground of redundancy not genuine, trespassing - illegal entry into my unit unlawfully locked out of my unit1.”

In section 11, where the form invites the applicant to “state what in your opinion was the reason for your dismissal”, the complainant wrote:

“Unfair dismissal: At the direction of Padma Kakarla, the company was always inclined to enrun (sic) the Labour Ordinance. My presence and strict adherence to the Labour Ordinance were their only deterrence. With me out of the way, Padma now has free reign to advance her agenda of retaining cheap foreign labour, and marginalizing all local employees.”

Against that background she sought “Re-engagement: To start another job.”

7.             The appellant’s Defence was lodged on 18th June 2009. The primary defence was redundancy, which was pleaded as follows:

“2. It is denied that the Applicant’s dismissal was unfair. The Applicant was made redundant as a result in the ceasing of the hotel operation at the Seven Stars Resort. This was communicated to the Applicant via a letter dated January 12th 2009, which was emailed and delivered to the Applicant’s apartment on the property.

3. The Applicant was made redundant because the Respondent’s then owners decided to cease the hotel operation of the resort as there was a pending sale of their interest in the Respondent. As a result the Respondents started to make a substantial portion of their staff redundant and the position the Applicant held was one of the positions that was no longer needed at the resort or by the Respondent.”

There was a secondary defence of misconduct, it being alleged that the complainant applied for work permits for the appellant’s employees in the name of a company which she owned; that she also operated an employment agency contrary to her terms of employment; and that her poor performance had led to one of the appellant’s Haitian employees being repatriated because she did not renew his work permit in time.

8.             There was unchallenged evidence that the Resort had in fact been sold, and that the sale had been accomplished by the transfer of the shares in the appellant company, which was the management company for the Resort. It seems that there were two components to the Resort - (i) the condominium owners, and (ii) a rental operation. There was evidence that, in advance of the sale, the previous owner of the appellant shut down the rental part of the Resort completely and slashed about 100 out of 175 jobs at the resort due to the downturn in tourist market. This extended to management, and in addition to the complainant included the Vice President and the Financial Controller.

1 The references to trespassing etc. relate to a subsequent eviction from tied accommodation, but we are not concerned directly with that on this appeal.

9.             On the other hand there was some evidence that the then management of the appellant had also been considering dismissing the complainant for cause, and this included a letter of 2nd January 2009, which preceded the redundancy letter. The letter of 2nd January stated that the complainant’s contract was to be terminated for “serious misdemeanors”, which were listed. These were rather different from the misconduct pleaded in the Defence. In the circumstances there was plainly a need for the Tribunal to evaluate the evidence with some care, and there was no short-cut that they could take to avoid doing so.


10.          The Decision of the Tribunal is dated 24th February 2010, and is signed by the President2. Paragraphs 1-18 summarises the respective cases of the parties. Paragraph 19 states the issues as being (i) whether the appellant unfairly dismissed the complainant; and (ii) what compensation should be awarded. While that is no doubt a correct statement of the issue at the highest level, it may have been more helpful for the Tribunal to define the real issues before it, one of which was whether the complainant had been dismissed by reason of genuine redundancy, or whether, as the complainant alleges, that was a sham3 and a device to get rid of an obstructive employee.

2The Decision is entitled “Summary Judgment”. This is a misconception. The decision of a Labour Tribunal is neither ‘summary’ nor properly a ‘judgment’. The expression 'summary judgment’ should be used for decisions under RSC Ord. 14 and similar provisions, allowing for judgment on affidavit evidence without cross-examination. The Labour Tribunal proceeds after a full hearing, with live evidence and cross-examination (unless either is dispensed with by agreement). Nor, if the expression is intended to indicate that the judgment is a summary of the Tribunal’s reasons, would that be proper: The Tribunal should give reasonably full reasons for its findings of fact and decisions of law. To avoid these difficulties, it may be best if in future the Tribunal simply entitled its written findings ‘Decision’.

3The word used by counsel at the hearing was ‘scam’.

11.          Paragraphs 20 - 32 of the Decision set out the facts. Paragraphs 33 - 40 are headed “the Dismissal” and appear to embody the Tribunal’s findings on the question of redundancy. Paragraph 33 sets out the applicable redundancy provisions, being subsections 71(1)(c) and (f) of the Ordinance. Paragraph 34 then references section 71(2), which deals with the procedure to be followed in a redundancy situation, and makes a finding that that was not followed. Paragraphs 35 and 36 deal with that in more detail, and reiterate the finding that the procedure was not followed. Paragraph 37 recites that the burden of proof is on the employer to prove the reason for the dismissal and that in the event of a failure to do so there is a statutory presumption that the dismissal was unfair: see section 82(1) of the Ordinance. The Tribunal then proceeded to the following conclusions:

“38. The Tribunal find that the Respondent has failed to prove that a redundancy situation existed at the Respondent, when the Applicant was terminated for reason of redundancy. The Tribunal concluded that the Respondent failed to follow the Procedure for redundancy situations as mentioned in section 71(2) of the Employment Ordinance 2004.

39. The Tribunal took into consideration the Respondent’s defence in the alternative with reference to the Applicant’s conduct and concluded that there was not documentary evidence submitted to the Tribunal in accordance with section 62(6) Employment Ordinance 2004.

40. Upon hearing evidence submitted by and on behalf of the Applicant and the Respondent the Tribunal took into consideration all the surrounding circumstances and concluded that the Applicant’s dismissal was unfair.”

12.          The Tribunal then turned to consider compensation, as follows:

(i)            The Basic Award

The Tribunal found that the applicant was over 40 years of age and had been employed for 2 years, and they therefore awarded 3 weeks wages in accordance with section 90(2)(a) of the Ordinance. No complaint is made of the way that is calculated.

(ii)           The Compensatory Award

The Tribunal broke this down under the following heads:

(a) Immediate Loss of Wages

The Tribunal calculated these from the effective date of termination to the first hearing before the Tribunal. That was two months and one week, for which they awarded $13,384.62. They then extended that for a further two months to the date of the substantive hearing, on the basis that the employer was to blame for the delay. They awarded a further $12,000 for that. They then added on $2,000 for loss of the fringe benefit of her accommodation for 2 months.

(b) Manner of Dismissal

The Tribunal awarded $5,000 for the way in which “the employee’s sacking was handled by the employer”.

(c) Loss of Statutory Protection

The Tribunal awarded $1,000 for this. No separate complaint is made about that.

(iii)         Other Matters

(a) Costs

The Tribunal considered that the employer had wasted four days by failing to appear and awarded $400 per day for a total of $1,600. Although they referred to the appellant’s failure to appear, it seems that this related to the former owner of the appellant company, a Mr. Civre.

(b) National Insurance (NIS)

The Tribunal calculated the NIS contribution due both from the employer and the complainant on the 4 months and 1 week for which they had awarded loss of wages. They then deducted the employee’s contribution ($400.68) from the total award, and directed payment of the balance to the complainant. They directed payment of that $400.68 plus the employer’s contribution of $542.09 (for a total of $942.77) to the office of the Tribunal but made payable to the National Insurance Board.


13.          The grounds of appeal were, in brief summary, that-

1.             The Tribunal erred in law in finding tht the Appellant had failed to prove that a redundancy situation existed.

2.             The Tribunal misdirected itself in law in that it confused the requirement to establish the reason for dismissal under section 69(1) with the question of whether the dismissal was fair or unfair under section 69(3), and that there were inconsistencies in their approach.

3.             The Tribunal gave no, or no adequate, reasons for its findings, or alternatively that those findings did not relate to the evidence.

4.             There is no automatic rule that any procedural failure renders a dismissal unfair, particularly where dismissal on the basis of redundancy was inevitable in any event.

5.             In the circumstances the Tribunal’s ruling was not a reasoned ruling as required by rule 11 (2)4 of the Employment Ordinance (Labour Tribunal Procedure) Rules 2004.

6.             The finding that there was no redundancy was either unsupported by any evidence or was perverse, in the sense that it was one which no reasonable tribunal properly directed could have reached, or was obviously wrong on the clear facts.

7.             It was an error of law to hold without reasons that a failure to follow consultation requirements made the dismissal unfair.

8.             If there was a redundancy situation any procedural unfairness could give rise to no loss.

9.             The monetary award was wrong in law, in that the compensatory award, and particularly the $5,000 for the manner of dismissal, did not relate to any identifiable head of damage or loss, and was arbitrary.

10.          The award of costs was unlawful, there being no power to award costs.

11.          The order in respect of National Insurance was wrong in law and unlawful, as neither party was under any obligation to pay National Insurance after the termination of the employment.

4 (2) The Labour Tribunal shall give reasons for its decision in a documents signed by the Chairman and where the labour tribunal makes an award of compensation, the document shall also contain a statement of the amount of compensation awarded, followed either by a table showing how the amount or sum has been calculated or by a description of the manner in which it has been calculated.


The Rejection of the Employer’s Case on Redundancy

14.          We start from the statutory position that no appeal lies from a decision of the Labour Tribunal on a question of fact alone5. The proper approach was explained by Donaldson MR in O’Kelly & Ors. v Trusthouse Forte PLC [1984] 1 QB 90 (CA) at 123:

“In the last analysis all courts have to direct themselves as to the law and then apply those directions in finding the facts (in relation to admissibility and relevance) and to the facts as so found. When reviewing such a decision, the only problem is to divine the direction on law which the lower court gave to itself. Sometimes it will have been expressed in its reasons, but more often it has to be inferred. This is the point of temptation for the appellate court. It may well have a shrewd suspicion, or gut reaction, that it would have reached a different decision, but it must never forget that this may be because it thinks that it would have found or weighed the facts differently. Unpalatable though it may be on occasion, it must loyally accept the conclusions of fact with which it is presented and, accepting those conclusions, it must be satisfied that there must have been a misdirection on a question of law before it can intervene. Unless the direction on law has been expressed it can only be so satisfied if, in its opinion, no reasonable tribunal, properly directing itself on the relevant questions of law, could have reached the conclusion under appeal. This is a heavy burden on an appellant. I would have thought that all this was trite law, but if it is not, it is set out with the greatest possible clarity in Edwards v Bairstow [1956] A.C. 14.”

15.          In this case there was every indication that the Tribunal had gone wrong in law, because the only reason it gave for rejecting the otherwise strong evidence of redundancy was the failure to follow the consultation procedure in section 71(2) of the Ordinance. We base that upon paragraph 38 of the Decision, which says:

“38. The Tribunal find that the Respondent has failed to prove that a redundancy situation existed at the Respondent, when the Applicant was terminated for reason of redundancy. The Tribunal concluded that the Respondent failed to follow the Procedure for redundancy situations as mentioned in section 71(2) of the Employment Ordinance 2004.

5 The provision governing appeals from the Tribunal are contained in section 98 of the Ordinance and provide:

“(2) an appeal shall lie to the Court of Appeal on a question of law arising from any decision of, or in proceedings before, the Labour Tribunal, full tribunal or a tribunal under this Ordinance.”

The section also provides:

“(4) Decisions of the Labour Tribunal under this Ordinance shall be final and except on a question of law shall not be enquired into by any court.”

16.          There is no other explanation in that paragraph of why the Tribunal rejected the employer’s case on redundancy, nor is one given anywhere else in the decision. We can only conclude, therefore, in the absence of any other proper reasons on this central point, that it did so because of the failure to comply with section 71(2). Indeed, if the Tribunal had rejected the appellant’s case on redundancy for some other reason, there was (as we explain below) no need to refer to section 71(2) at all. As it is, the Tribunal appears to have treated that as decisive on the issue of whether or not there was a redundancy, and failed to apply their minds to the real question of whether there was a redundancy in fact. This was an error of law, and is fatal to their decision that the respondent was unfairly dismissed.

17.          In order to explain why that was an error of law, it is first necessary to set out the statutory approach to the question of dismissal and whether it was unfair or not. It is a two stage process. The first stage is to establish the reason for the dismissal. In doing this the burden of proving the reason is on the employer: section 69(1)(a). If he fails to prove a reason, then the dismissal is conclusively presumed to be unfair: section 82(1). Certain reasons arc potentially fair, and these are set out in section 69(2)6. They include redundancy: section 69(2)(c). The burden of proving that the reason for the dismissal falls within section 69(2) again lies upon the employer: section 69(1)(b). Although it is not expressly stated, it is implicit in all of this that if the employer fails to bring himself within one of the potentially fair reasons, then the dismissal will be unfair and the Tribunal can proceed straight to an assessment of the award. If, however, the employer succeeds in establishing one of the potentially fair reasons, such as redundancy, then the Tribunal has to go to the second stage: see section 69(3). On the second stage the Tribunal has to consider whether, in all the circumstances, the dismissal was fair or unfair, and the answer to that question depends on whether the employer acted reasonably in treating it as a sufficient reason for dismissal. That is all set out in section 69(3), which provides:

“(3) Where the employer has fulfilled the requirement of subsection (1), then, subject to sections 13 and 70 to 77 the determination of the question, whether the dismissal was fair or unfair, having regard to the reasons shown by the employer, shall depend on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and that question shall be determined in accordance with equity and the substantial merits of the case.”

There is no statutory burden of proof on anyone at this second stage, and the Tribunal should be looking at the matter in the round, “in accordance with equity and the substantial merits of the case”.

6 There is also a catch-all in section 69(1)(b), which provides that it if for the employer to show that the reason for dismissal “was a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which that employee held."

18.          On this second stage, the section does provide that this approach to the question of fairness is “subject to sections 13 and 70 to 77”. Section 13 is concerned with maternity issues, and section 13(9) provides that a person shall be treated as unfairly dismissed if dismissed because of absence on maternity leave. Section 70 is concerned with discrimination against trade unions, and provides that dismissal shall be regarded as unfair if the reason was membership of a trade union or certain other related matters. Sections 71 to 77, however, deal with redundancy. Section 71(1) defines redundancy. I will return to section 71(2) as it is at the heart of this case. Section 72 enacts a presumption that where, in a genuine redundancy situation, a person is singled out for redundancy by reason of trade union membership or in contravention of a shop agreement, the dismissal shall be regarded as unfair. Section 73 deals with rehiring preferences. Section 74 deals with insolvency. Section 75 has various miscellaneous provisions relating to redundancy benefits. Section 76 deals with dismissal of a temporary replacement for someone on maternity leave, and provides that that is not unfair. Section 77 deals with lock-outs and strikes, and prohibits a Tribunal from embarking upon a consideration of whether any dismissal was fair or unfair in certain circumstances. As will be apparent from that brief summary, these sections contain disparate provisions, and in respect of some of them it is not particularly clear what the reservation in subsection 69(3) really means. What is clear is that where the Ordinance intends to say that in certain circumstances a dismissal will be presumed to be unfair so that the Tribunal does not have to perform an assessment of its fairness, it does so: see for instance section 13(9); section 70(1); and section 72.

19.          Returning now to section 71(2), it contains provisions requiring consultation in a redundancy situation. It provides:

“(2) Prior to terminating the employment of any employee pursuant to this section, the employer shall-

(a)           Inform the recognized trade union, or if none exists, the employees’ representative, with relevant information as early as possible on, inter alia,

(i) the existence of the situation described under subsection (1) [i.e. the redundancy situation]:

(ii) the reasons for the terminations contemplated;

(iii) the number and categories of the persons likely to be affected; and

(iv) the period over which such terminations are likely to be carried out.

(b)           Consult as early as possible with the recognized trade union, or if none exists, the employees’ representative, on

(i) the possible measures that would be taken to avert or minimize the adverse effects of such situations on employment; and

(ii) the possible measures that could be taken to mitigate the adverse effects of any terminations on the employees concerned.”

It should be noted that that does not contain any reference to the consequences of non- compliance, and in particular contains no unfairness deeming provision in the event of non- compliance.

20.          The effect of breach of the consultation provisions has been considered in the UK in respect of the similar (but not identical) provisions of section 57(3) of the Employment Protection (Consolidation) Act 1978. In Polkey v A. E. Dayton Services Ltd. [1988] 1 AC 344 (HL) at 355, Lord Mackay said:

“Failure to observe the requirement of the code relating to consultation or warning will not necessarily render a dismissal unfair. Whether in any particular case it did so is a matter for the industrial tribunal to consider in the light of the circumstances known to the employer at the time he dismissed the employee.”

The result of the application of that principle in that case was that it was also held that:

“If the employer could reasonably have concluded in the light of the circumstances known to him at the time of dismissal that consultation or warning would be utterly useless he might well act reasonably even if he did not observe the provisions of the code.”

21.          There is one difficulty in the application of that approach in the Turks & Caicos Islands, and that is a slight difference in the statutory provisions between the two countries. The difference is in the phrase “subject to sections 13 and 70 to 77” in section 69(3) of the Ordinance. The equivalent English provision is subject to different sections, being sections 58 to 62 of the English Act, for which the Turks & Caicos local equivalents are sections 70, 72, 13, 76 and 77 of the Ordinance respectively. It follows that the English provision is not made “subject to” the consultation provisions in section 71(2), while the local one is. Indeed, in England, at least at the time of Polkey, the consultation code was hived off in a schedule. Does that make a difference? I do not think that it does, largely because, as noted above, section 71(2) does not enact any consequence for its breach, unlike sections 70, 72 and 13(9). Nor does it expressly modify section 69 in some other way, as do sections 76 and 77. I think in fact that its inclusion in section 69(3) was probably a drafting error, as was the inclusion of sections 73 - 75, where the intended impact upon the scheme of section 69(3) is even harder to discern.

22.          Returning to the statutory scheme, and applying it to the present case, at the first stage, when the Tribunal was considering the reason for the dismissal, the failure to follow the consultation requirements will normally have no bearing or application at all. In considering the reason for dismissal the Tribunal should have considered all the evidence. Before us, Mr. Greene for the complainant argues that a failure to consult might be considered as evidence from which the Tribunal could infer that this was not a real or genuine redundancy. The strength of such an inference will depend upon all the circumstances, and where, as here, the employee was absent for a long period at the critical time, then it may carry little or no weight at all. But in any event, it would only be part of the evidence, and should be considered in the context of the whole of the evidence.

23.          If, on that first stage, the Tribunal comes to the conclusion that the employer has not proved a genuine redundancy situation, then it goes straight to the compensation stage and the failure to follow the consultation procedure becomes irrelevant. It is only where the Tribunal is satisfied that there was a genuine redundancy that there is then a need to go on and consider whether the consultation process was followed, and at that point the question goes to whether or not it was fair to dismiss this complainant by reason of that redundancy situation. On that question, a failure to follow the statutory consultation process is still not decisive, for the reasons explained by Lord McKay in Polkey (supra).


24.          Our decision on the redundancy point was sufficient to dispose of this appeal, but as we heard argument on the question of the award, and as that raises several important issues of general application, we have gone on to deal with it.

25.          As to the compensatory award, the function and approach of the Tribunal in this respect is set out in a well-known passage from the judgment of Sir John Donaldson, sitting as President of the Industrial Relations Court, in Norton Tool Co Ltd, v Tewson [1973] 1 WLR 45 at 48 - 497. It reads:

“But we do not consider that Parliament intended the court or tribunal to dispense compensation arbitrarily. On the other hand, the amount has a discretionary element and is not to be assessed by adopting the approach of a conscientious and skilled cost accountant or actuary. Nevertheless, that discretion is to be exercised judicially and upon the basis of principle.

The court or tribunal is enjoined to assess compensation in an amount which is just and equitable in all the circumstances, and there is neither justice nor equity in a failure to act in accordance with principle. The principles to be adopted emerge from section 116 of the 1971 Act. First, the object is to compensate, and compensate fully, but not to award a bonus, save possibly in the special case of a refusal by an employer to make an offer of employment in accordance with the recommendation of the court or a tribunal. Secondly, the amount to be awarded is that which is just and equitable in all the circumstances, having regard to the loss sustained by the complainant. ‘Loss’ in the context of section 116 does not include injury to pride or feelings. In its natural meaning the world is not be so construed, and that this meaning is intended seems to us to be clear from the elaboration contained in section 116(2). The discretionary element is introduced by the words ‘having regard to the loss”. This does not mean that the court or tribunal can have regard to other matters, but rather that the amount of the compensation is not precisely and arithmetically related to the proved loss. Such a provision will be seen to be natural and possibly essential, when it is remembered that the claims with which the court and tribunals are concerned are more often than not presented by claimants in person and in conditions of informality. It is not, therefore, to be expected that precise and detailed proof of every item of loss will be presented, although, after making due allowance for skills of the persons presenting the claims, the statutory requirement for informality of procedure and the undesirability of burdening the parties with the expense of adducing evidence of an elaboration which is disproportionate to the sums in issue, the burden of proof lies squarely upon the complainant.”

7 The passage was quoted more recently with approval by Lord Steyn in Dunnachie v Kingston upon Hull City Council [2004] 3 WLR 310 at 312.

26.          In this case the Tribunal appears simply to have given the complainant her pay down to the actual Tribunal hearing, without explaining why it chose that date. We accept that, in assessing loss of earnings (and associated benefits), it is the practice to divide these up into two elements - (i) actual loss to the date of hearing; and (ii) future loss. However, that does not mean that the complainant automatically gets a figure equivalent to their salary down to the date of hearing. The date of hearing is simply the time at which past or accrued loss is assessed. It is, I hope, obvious that the loss stops once the complainant finds new employment at the same or better terms. It may continue at a decreased rate where the complainant has found new employment on less advantageous terms. The complainant is also under a duty to mitigate their loss, by seeking and accepting appropriate alternative employment. In assessing loss, therefore, the Tribunal has to make at least two crucial findings of fact - (i) whether the complainant was still out of work at the time of the hearing; and (ii) whether the complainant had taken reasonable steps to mitigate their loss. There is nothing in the Tribunal’s decision to show that they did that8.

27.          It may also be, where the sole or primary reason for holding that a dismissal by reason of redundancy is unfair is a failure to follow a statutory consultation process, that a Tribunal might make no compensatory award on the basis that the employee has suffered no loss if they were otherwise genuinely redundant. This too derives from Polkey (supra). It seems to have been a popular approach in the United Kingdom, where for a period there was a statutory requirement that a failure to follow the prescribed consultation process automatically rendered a dismissal unfair, no matter how compelling the redundancy. That approach is invoked here by ground 8 of the Grounds of Appeal. However, in this case at this point, it is entirely hypothetical in the absence of a sustainable finding from the Tribunal on the redundancy issue, and we have not considered it further.

8 Nor is there any evidence on these issues in the documents before us, although the transcript suggests that the Tribunal did order “the witness statement the Applicant is required to make separate or inclusive that there are any detailed for the claim that the Applicant is actually claiming from the Tribunal" (sic).

28.          As to the award of $5,000 for the manner of dismissal, the practice of making such an award had grown up following the comments of Lord Hoffmann in Johnson v Unisys Ltd. [2003] 1 AC 518 at 544, para [55]9. However, that was disapproved by the House of Lords in Dunnachie v Kingston upon Hull City Council [2004] 2 WRL 310, which held that the injury contemplated by the legislation did not include non-economic loss, such as injury to feelings, embarrassment or humiliation from the manner of the dismissal. It may be that compensation for actual financial loss may still be awarded if the manner of dismissal means that the claimant may be at a disadvantage in the job market or has suffered psychological injury which may prevent the claimant from looking for a new job. However, such things require proof by the complainant, and cannot be assumed. In practice, given the ease of alleging such things, it may be that a Tribunal would be justified in adopting a skeptical approach to such matters in the absence of compelling evidence. But no such thing was alleged in this case, and there was no evidence to support it, and nothing to justify or permit the Tribunal making the award it did.

29.          As to costs, there is no specific provision in the Employment Ordinance 2004 permitting the award of costs. That was also the position when similar legislation was first introduced in the United Kingdom, and it was commonly understood that without such a provision tribunals had no power to award costs, and it was also generally understood that that represented a policy designed to encourage informality of procedure and keep down the expense of such proceedings. That was changed in the United Kingdom by subsidiary legislation10, which made provision for the payment of costs in certain rather limited circumstances, and particularly in the case of adjournments and postponed hearings. The fact that the circumstances are limited in this way implies that there is no general or inherent power to award costs. There are no equivalent provisions in the Turks & Caicos. It should also be noted that in the United Kingdom there was an express enabling provision in the primary legislation to authorize the making of regulations governing the award and assessment of costs11. In our view, without statutory provision there is no power to make costs orders, and one cannot be implied into the statute in the absence of express provision.

9Lord Hoffmann had said “The emphasis is upon the tribunal awarding such compensation as it thinks just and equitable. So I see no reason why in an appropriate case it should not include compensation for distress, humiliation, damage to reputation in the community or to family life."

10Originally The Employment Tribunals Regulations 1993. Now see para. 38 et seq of Sch.1 to The Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004.

11See e.g. the Employment Protection (Consolidation) Act 1978, Sch. 9, paragraph 1 (2)(h) and (i), and now see the Employment [formerly ‘Industrial’] Tribunals Act 1996, s. 13(1), which provides:

“13 Costs and expenses

30.          As to the National Insurance contributions, we understand the policy behind it, and very much understand why the Tribunal may wish to do this, both to protect the National Insurance fund and to preserve the employee’s position in respect of payments to it. But to the extent that this imposes a financial burden on the employer, it cannot be done without some statutory authority. However, there is nothing in the Employment Ordinance governing or requiring this. The appellant contends that there is nothing in the National Insurance Ordinance cither, as that imposes the obligation to pay contributions on employed persons and their employers12. An employed person for these purposes is defined in section 2(1) of the National Insurance Ordinance as follows - ““employed person” means a person employed in an insurable employment specified in Part I of Schedule 1;” This is reinforced by section 3(b), which provides:

“3. Subject to the provisions of this Ordinance, every person who is—

(a)           between the ages of sixteen and sixty-five years; and

(b)           gainfully occupied in an insurable employment, shall be insured under this Ordinance and remain so insured throughout his life.”

And it is further reinforced by section 4(1)(a), which provides:

“4. (1) For the purposes of this Ordinance, insured persons shall be divided into the following three classes, namely—

(a)           employed persons, that is to say persons gainfully occupied in an insurable employment specified in Part I of Schedule 1 but excluding persons specified in Part II of that Schedule;”

31.          Someone who has been dismissed, unfairly or otherwise, is not in the nature of things an employed person and their former employer is under no obligation to pay National Insurance contributions in respect of them or in respect of any award made in their favour.

(1) Industrial tribunal procedure regulations may include provision-

(a) for the award of costs or expenses, including any allowances payable under section 5(2)(c) or (3), and

(b) for taxing or otherwise settling any such costs or expenses (and, in particular in England and Wales, for enabling such costs to be taxed in a county court).”

12 See reg. 3(1) of the National Insurance (Contributions) Regulations:

“3. (1) For each contribution week, during the whole of which or part thereof a person has been employed as an employed person, there shall be liability for the payment of contribution by the employed person and by his employer."


32.          In our judgment the Labour Tribunal treated the failure to follow the consultation procedure in section 71(2) of the Employment Ordinance 2004 as decisive on the issue of whether or not there was a redundancy, and failed to apply their minds to the real question of whether there was a redundancy in fact. This was an error of law, and is fatal to their decision that the respondent was unfairly dismissed.

33.          In addition, the Tribunal approached the assessment of the compensatory award in a way which was wrong in principle in that:

(i)            they failed to have regard to actual loss, or whether the respondent had attempted to mitigate her loss;

(ii)           they assessed the award by reference to the date of the Tribunal Hearing, without any reason for doing so; and

(iii)          they awarded $5,000 for the manner of dismissal, contrary to the House of Lords decision in Dunnachie v Kingston upon Hull City Council [2004] 2 WRL 310;

34.          We also considered that -

(i)            the Labour Tribunal had no jurisdiction to award costs of $ 1,600; and

(ii)           their approach to National Insurance deductions was unsupported by law.

35.          We therefore allowed the appeal, quashed the decision of the Labour Tribunal, and remitted the matter to the Labour Tribunal to determine the question whether this was a redundancy or not on the evidence.

36.          We heard the parties on costs, and in the event awarded the appellant its costs of the appeal to be taxed if not agreed.

Dated this 25th day of January 2011


Richard Ground JA

I agree


Edward Zacca P

I agree


Elliott Mottley JA