Stuart Peters Ltd v Bell EAT/0272/08
constructive dismissal | compensation | alternative employment during notice period
The Employment Appeal Tribunal (EAT) has held that an employee who is constructively dismissed without notice or pay in lieu is entitled to compensation for the whole of the notice period even if he or she has received wages from another employer during that period.
An employment tribunal held that Ms Bell had been constructively dismissed by Stuart Peters Ltd. It found that she was entitled to an award amounting to the pay that she would have received during her six-month notice period. She had worked for another employer for three months during that period, but the employment tribunal declined to reduce the award to take account of the money she had earned, relying on the principle set out in Norton Tool Co Ltd v NJ Tewson [1972] IRLR 86 NIRC and confirmed in Burlo v Langley and another [2007] IRLR 145 CA. Norton Tool established the principle that, where no payment in lieu of notice is made at the time of dismissal, an employment tribunal assessing compensation for unfair dismissal under what is now s.123 of the Employment Rights Act 1996 may award full pay for the notice period without deducting income that the employee may in fact have earned from another employer during that period.
The EAT agreed. There is nothing in the Norton Tool or Burlo decisions to suggest that the principle should be restricted to cases of direct dismissal. The principle applies to the just and equitable award of compensation for unfair dismissal under s.123 of the Employment Rights Act 1996, however the dismissal occurs. The EAT also declined to draw an inference from the absence of any reported decisions applying the Norton Tool principle to a constructive dismissal. The EAT did note that its decision meant that Ms Bell had achieved an element of double recovery of earnings and expressed the hope that the House of Lords would have the opportunity to review the Norton Tool principle in the near future.
Case transcript of Stuart Peters Ltd v Bell (Microsoft Word format, 68K) (on the EAT website)
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