Stuart Peters Ltd v Bell

Stuart Peters Ltd v Bell

The Norton Tool principle does not apply to constructive dismissals because there is no established good industrial relations practice for employers to pay in lieu of notice in such cases. Therefore, sums earned by the employee in alternative employment during the notice period must be credited against the compensatory award. The limited exception to the actual loss rule in Norton Tool is not to be extended to constructive dismissals.

Parties
Appellant: Stuart Peters Ltd; Respondent: Bell
Jurisdiction
England and Wales
Judgment Date
30 July 2009
Procedural Posture
Appeal / Court of Appeal Judgment
Outcome
Appeal allowed
Legal Topics
Unfair Dismissal, Constructive Dismissal, Compensation Calculation, Mitigation of Loss
Employment Law Unfair Dismissal Constructive Dismissal Compensation Calculation Mitigation of Loss

Case Brief

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Parties

Stuart Peters Ltd

Appellant

Bell

Respondent

Procedural Posture

Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Does the Norton Tool principle apply to constructive dismissals for the purpose of calculating compensatory awards under section 123 of the Employment Rights Act 1996?
  2. 2 Should sums earned in alternative employment during the notice period be deducted from compensation in cases of constructive dismissal?

Ratio Decidendi

The Norton Tool principle does not apply to constructive dismissals because there is no established good industrial relations practice for employers to pay in lieu of notice in such cases. Therefore, sums earned by the employee in alternative employment during the notice period must be credited against the compensatory award. The limited exception to the actual loss rule in Norton Tool is not to be extended to constructive dismissals.

Court Disposition

Appeal allowed

Orders

  • Credit must be given for sums earned in temporary employment during the notice period in cases of constructive dismissal.