England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM AN EMPLOYMENT APPEAL TRIBUNAL
(Mr Justice Howell QC)

		Royal Courts of Justice Strand London WC2 Tuesday, 29th January 2002

Tuesday, 29th January 2002

1. LORD JUSTICE MUMMERY: This is an application for permission to appeal. The application is made by a company called 2525 Resource Management Consulting Ltd, a company which was incorporated on 16th August 2000. On the hearing of the application this afternoon, the managing director of the company, Mr Nigel Gauder, has made submissions as to why permission should be granted to appeal against the order of the Employment Appeal Tribunal at a preliminary hearing on 12th June 2001 dismissing the company's appeal against the decision of the Employment Tribunal Chairman, Mr Edwards, at Southampton on 18th December 2000 when an order was made in favour of Mr Kevin Steel in respect of a claim of alleged unlawful deductions from wages totalling £1500.
2. The background to the application to the Employment Tribunal was that Mr Steel claimed that he was the contract customer services manager of the company between May 2000 and August 2000 and that he had not been paid for work done in June, July and August 2000. When the case on his form IT1, which was presented in September 2000, came before the Employment Tribunal on 18th December, the following decision was made, no appearance having been entered to the proceedings:

"DECISION

1.The title of the Respondent is amended to 2525 Resource Management Consulting Ltd.

2.The Tribunal declares that the Respondent has made an unlawful deduction from the wages of the Applicant in the sum of £1,500.00 net and orders the Respondent to pay this sum to the Applicant."

3. The extended reasons state that the Chairman had heard evidence from Mr Steel alone. The company had not attended or entered an appearance. On Mr Steel's evidence, the Chairman was satisfied that he had worked as a customer services manager for the period which he claimed, and that during that period he had received £500 for the month of May but nothing for June, July or August. The extended reasons concluded as follows:

"4.On the Applicant's evidence, I therefore declare that there has been an unlawful deduction from the wages of the Applicant in the sum of £1,500.00 net and I order the Respondent to pay this sum to the Applicant."

4. The decision was sent to the parties and entered in the register on 19th December.
5. The case put forward by Mr Gauder, as set out in a witness statement made by him to the Employment Appeal Tribunal and dated 30th April 2001, is that Mr Steel never was employed by the company 2525 Resource Management Consulting Ltd at any time. He was employed by a different company called Wealth of Work, which traded as 2525 (UK) Ltd from May 2000 until 8th August 2000. That company became insolvent on 20th June due to lack of funds being injected into it. It is alleged that Mr Steel was aware of the efforts made to salvage the situation so that the company could continue, but that was to no avail. Mr Gauder says that the claim made by Mr Steel that he was not paid for June is untrue because he was paid his full salary by Mr Gauder out of his own pocket; and he says that, as far as the claim for payment for the months of July and August is concerned, that is untrue, he having signed a document stating that he would move to a commission only basis for remuneration.
6. Mr Gauder has also informed the court this afternoon that he and Mr Gillibrand were themselves both employees of 2525 (UK) Ltd, and they have successfully brought proceedings in the Tribunal against that company. Substantial awards were made in their favour, though no payment has been received, the company being insolvent. They also informed the court that the reason that there was no notice of appearance in the Employment Tribunal in response to Mr Steel's claim is that the new company was not aware of the proceedings.
7. The statement from which I have read was sent by Mr Gauder to the Employment Appeal Tribunal in support of an appeal to that Tribunal, and there was correspondence with the Employment Appeal Tribunal between Mr Gauder and the Registrar. In a letter of 2nd May, it was pointed out on behalf of the Registrar of the Tribunal that there had not been submitted a notice of appearance to the proceedings. The letter stated:

"As I understand it you did not make an appearance ... at the Employment Tribunals in time and as such you have appealed. I need to have sight of the draft Notice of Appearance."

8. That was not supplied, and it was made clear in further letters to the Employment Appeal Tribunal what the grounds were for the appeal but that Mr Gauder would not be attending the hearing.
9. The hearing of the appeal took place on 12th June before a tribunal chaired by Mr Commissioner Howell QC. As had been indicated by Mr Gauder, he did not appear and there was no representation on his behalf. Having reviewed the history of the proceedings and the matters which had been placed before the Appeal Tribunal, the Appeal Tribunal came to the conclusion that the appeal should be dismissed. The Tribunal expressed the view that there was no ground for holding that the Employment Tribunal did other than give proper consideration to the case made out by the party who did appear before it and on the basis of the evidence given to it. The Appeal Tribunal said:

"The reason that 2525 Resource Management Consulting Ltd lost the case was that it never appeared before the Tribunal to put its side of the case at all. Parties who ignore Tribunal proceedings in our judgment do so at their peril. We are not satisfied that it can be arguable that it is erroneous in law for the Tribunal to have proceeded as it did to deal with the case on the basis of Mr Steel's evidence in default of appearance by 2525 Resource Management Consulting Ltd."

10. The position today is that Mr Gauder submits that we should grant permission to appeal because there is a real prospect of showing that there was an error of law in the decision of the Employment Tribunal. The way in which Mr Gauder puts it is that the error consists of the wrong company being named as the respondent in the Employment Tribunal proceedings and, consequently, non-service on the right company and a non-appearance by the right company. He says that the new company, the one incorporated in the middle of August 2000, knew nothing about the proceedings, and therefore could not participate in them by entering a notice of appearance and attending the hearing to produce evidence.
11. The normal way in which the kind of complaint made by Mr Gauder would be dealt with would not be by way of an appeal, but by a review by the Employment Tribunal of its own decision. Under Rule 11 of the Industrial Tribunals (Constitution and Rules of Procedures) Regulations 1993 there was the following provision:

"Subject to the provisions of this rule, a tribunal shall have power, on the application of a party or of its own motion, to review any decision on the grounds that-

...

(b) a party did not receive notice of the proceedings leading to the decision;

(c)the decision was made in the absence of a party;

(d)new evidence has become available since the conclusion of the hearing to which the decision relates, provided that its existence could not have reasonably been known of or foreseen at the time of the hearing; or

(e)the interests of justice require such a review."

12. There is a similar provision in the new Regulations made in 2002. It seems to me, in the light of the wide terms of that provision and the facts of this case, that the appropriate procedure would not have been to institute an appeal against the Employment Tribunal's decision to the Appeal Tribunal and further to this court, but to go back to the Employment Tribunal seeking a review on one or more of the grounds which I have mentioned. Unfortunately, the time for applying for a review has expired, but the Employment Tribunal has a power to extend the time for making such an application.
13. It seems to me that it would not be a service to anybody in this case for permission to appeal to be granted by this court today. The case is about a comparatively small sum of money. When I put the question of ADR to Mr Gauder, he thought that that was a possible route for resolving this matter.
14. What I would propose to do is neither to grant nor refuse permission today, but to adjourn this application for further consideration until after an application has been made on behalf of 2525 Resource Management Consulting Ltd to the Employment Tribunal in Southampton for an extension of time in which to seek a review of the decision made in Mr Steel's favour in December 2000. It will be necessary for Mr Gauder to place before that Tribunal all the materials which he has put before this court and seek an extension of time and a review. This application can then be restored to be disposed of in the light of what happened on that application for a review.
15. For the reasons I have stated, I would prefer to postpone a final decision on whether this is an appropriate case for permission until that avenue for dealing with this matter has been explored. If an extension of time is granted and the Employment Tribunal undertake a review, it may not be necessary for this matter to be dealt with by the Court of Appeal at all. If a review is refused as being out of time, then it may be necessary for this matter to be reconsidered. I would, therefore, adjourn this application to be restored on the application of the applicant after steps have been taken to have the decision reviewed by the Employment Tribunal.
16. LORD JUSTICE DYSON: I agree.
Order: As above.