England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
UKEAT/0225/07/CEA

		Royal Courts of Justice Strand, London, WC2A 2LL
		17/12/2008

Lord Justice Sedley :

1. On 6 February 2006 Mr Clark was dismissed by Mr and Mrs Grew from his post as managing director of a property company which he himself had founded. The Grews, who had injected a considerable amount of capital into the company, had secured the majority shareholding which enabled them to dismiss him. Mr Clark brought employment tribunal proceedings alleging unfair dismissal both for procedural reasons and on public interest disclosure grounds, and also claiming for unpaid salary, failure to provide written terms of employment and payment in lieu of notice. The Lincoln employment tribunal (Mr Goodchild, Mr Kingswood and Mr Smith) dismissed both unfair dismissal claims. They made modest awards for unpaid salary and short notice. They also ordered the claimant to pay a substantial sum in costs to reflect the failure of his public interest disclosure claim.
2. The reason why the public interest disclosure claim failed was that the tribunal found that the allegation concerning forgery of the claimant's signature was not made in good faith and in any event had not been an effective cause of his dismissal. Nothing now turns on this part of the determination. The reason why the generic unfair dismissal claim failed was that the tribunal held itself to be without jurisdiction. This was because such a claim cannot be made unless the employment has been of at least one year's duration. The tribunal, having investigated the facts, concluded that the claimant had been employed by the company only since the summer of 2005; before that time he was self-employed. The unfair dismissal claim was therefore taken to have failed at the threshold.
3. This had, however, not been an issue between the parties. The respondents had accepted that there was at least a full year's continuous employment. It was the tribunal which took the point, believing it to go to jurisdiction and so to be incapable of concession or waiver. I will return to this at the end of my judgment. But on the claimant's appeal to the Employment Appeal Tribunal this point was not taken. Rather it was contended that the employment tribunal had misapplied the law and so reached an erroneous conclusion on the duration of the claimant's employment. This broad argument was not repeated before us – unsurprisingly, if I may say so, in view of the comprehensive overview of the law to be found at §61-98 of the judgment given by Elias P in the EAT [2008] IRLR 364, which practitioners will find of considerable assistance in this difficult terrain. Instead James Laddie for Mr Clark focuses on the submission, which had formed part only of his argument below, that the tribunal's reasoning on the issue is vitiated by the citation of untraceable authorities which, like the thirteenth chime of the clock, cast doubt not only on themselves but on all that has gone before them.
4. For the rest, Mr Laddie's appeal to the EAT was successful. The EAT remitted the case to a fresh tribunal to determine (a) a number of unaddressed allegations of protected disclosure, (b) the appropriateness of the costs order, (c) the unaddressed question of failure to provide written particulars of employment and (d) the proper period of notice. He nevertheless obtained permission to appeal from Mummery LJ, who wrote:

"The skeleton argument dated 17 April 2008 raises some general points about decisions of employment tribunals and their procedure that ought to be considered by the full court. I express no view on the prospects of the appeal succeeding"

5. The skeleton argument to which Mummery LJ was referring is devoted to a single issue: whether the Lincoln employment tribunal has departed from the universal obligation of judicial tribunals to give reasons which are candid, intelligible, transparent and coherent. Mr Laddie was willing to accept these adjectives as a fair summary of his impressively researched account of the modern sources of the judicial obligation, and James Behrens, for the respondent, was content to adopt them. For my part I accept that these are qualities which litigants and the public are entitled to expect in all reasoned judgments.
6. Candour, a subjective quality, is what Crewe CJ was describing when he spoke in the Oxford Peerage case in 1625 of the covenant he had made with himself "not to let affection press upon judgment". It is echoed in the judicial oath to do justice without affection or ill-will. Intelligibility and coherence, which are objective and therefore justiciable qualities, may be achieved in a variety of ways. Transparency, a devalued word but one which is central to this appeal, means here that properly drawn reasons should make it possible for the reader to find sources, especially but not only sources of law, which are referred to but not recited.
7. The question is whether there has been such a shortfall in these qualities as to vitiate the determination of the employment tribunal to a point where it has to be retaken. The passage on which the question hinges is the concluding paragraph of the tribunal's decision on what they took to be a jurisdictional issue:

"We have regard in our consideration [to] those case regularly referred to us by the Secretary of State in cases involving this point. We considered the case of Eaton vs. Robert Eaton Ltd. Wilson vs. Trenton Service Station Ltd and McLean vs. Secretary of State. We note the age of those cases and we recognised that employment law may well have progressed. But the later cases for instance Fairly vs. Secretary of State, Gladwell vs. Secretary of State and the guideline case of Secretary of State vs. Bottrill would seem to establish the principle that what we have to do is to look at the whole picture – which we have done. We should balance out all the factors and make a reasoned conclusion. We do that balancing exercise. It seemed to us that during the first and middle phases the claimant was in business on his own account and not employed."

8. Following a preliminary without-notice hearing, the EAT asked the tribunal to explain these references. It had been submitted to them that the cases of Wilson and McLean could be found in no known law report and had been refrred to by neither party during the hearing; that there was no known case called Fairly v Secretary of State; and that Gladwell had been handed down by the EAT a week after the tribunal had met to consider its findings. Judge Peter Clark therefore had a set of questions sent to the chairman and lay members, asking in relation to each of these four cases whether it had been considered in the course of the tribunal's deliberations; if so, how they had obtained it (and in the case of Fairly, what the reference was); in each case, to supply a copy; and to provide any further comments on §5.9 of their determination.
9. Much of the chairman's written response was taken up with an explanation of how the tribunal had gone about putting in writing a determination which had initially been delivered orally. On the questions about §5.9 he wrote:

"When we reconvened it was quite clear that both members were entirely satisfied that the written reasons issued reflected the decision and the actual reasons discussed during our retirement. They reminded me that in fact we had spent some considerable time looking at the law and in particular the law relating to whether a majority shareholder can be an employee. It was apparent that the issue was not a new issue for my members. It is a 'bread and butter' issue which tribunals have to deal with without the assistance usually of skilled counsel. The cases we referred to are those cited by the Secretary of State when arguing the issue. Mr Smith pointed out that this was an issue during his professional life as a tax inspector [of 30 years] that he was entirely familiar with. I am able to report to the EAT with confidence that the issues of law as they existed at the time we made our decision were properly considered by the tribunal.

The sources we used at retirement was Harvey and [I am reminded] a Secretary of State's written submission in a case that had been heard during the week of our retirement at Nottingham. To answer the specific point raised by Mr Laddie both members were entirely familiar with the issues although neither had before them the actual reports cited. I had read the cases when they came out and, sadly, many times since. All three of us during our sittings in tribunal have used those authorities [and their predecessors] as almost a tool of our trade in the same way as one would refer to Polkey without actually reading the case again".

10. This response, as the EAT noted, was less than helpful. Mr Laddie at one point suggested that it appeared to refer to some communication from government. But Mr Behrens has shown us that the cases of Wilson and McLean are both cited, with dates, in Secretary of State v Bottrill [1998] ICR 564, as well as in other specialist publications, as authority for the proposition that even PAYE and class 1 National Insurance contributions are not necessarily determinative of the existence of a contract of employment. Neither is reported. But what I am quite satisfied that this ill-expressed passage amounts to is the simple proposition that there is no universal test for a contract of employment and that, in deciding whether a particular relationship amounts to one, the entire picture has to be considered. The invocation of decided cases to support the proposition is a makeweight. There is nothing to suggest that they have prompted a decision which would otherwise not have been reached. On the contrary, they have evidently been fetched in to illustrate or support a proposition which, as the chairman says, has for years been bread and butter for employment tribunals.
11. I put it this way in the light of this court's decision in Stanley Cole (Wainfleet) Ltd v Sheridan [2003] EWCA Civ 1046, [2003] IRLR 885. The nub of the decision is that, while there is no universal test of procedural irregularity, a tribunal's determination is not vitiated by reference to uncanvassed authorities if these have not been central to and influential in the eventual decision. Much the same was decided by the EAT in Albion Hotel (Freshwater) Ltd v Maia e Silva [2002] IRLR 200.
12. The citation by the Lincoln tribunal of authorities which had not only not been canvassed but two of which were unobtainable was, I accept, uncalled for and distracting; and the chairman's failure to give direct answers to the EAT's questions about them did nothing to help. But none of this, in my judgment, warrants the heavy strictures placed upon the entire determination by Mr Laddie, who argues that it is vitiated by a want of fairness and candour in the formulation of §5.9 and, by extension, in the entire decision. If this degree of casualness is revealed at one point, he argues, how can one be confident that it has not contaminated the other findings, especially in a determination which has required remission on four other counts?
13. In my judgment this is an overreaction to a relatively venial fault in the composition of the decision. It is quite unreal to aggregate it with other, distinct, errors in an attempt to bring down the edifice of reasoning. In my view the determination sufficiently meets the criteria of intelligibility, coherence, candour and – albeit less well than is desirable – transparency. Standing back, no reader can be in any real doubt as to what has been decided and why, and none the less so because on appeal errors and omissions have been found in it. The relative opacity of part of §5.9, while unfortunate, is legally inconsequential.
14. I would therefore dismiss this appeal. In doing so, however, I record my own doubt whether the duration of the claimant's employment was in truth a jurisdictional issue. The point has not been argued. But while it is trite law that the statutory remit of a tribunal cannot be enlarged by consent or by silence (see British Midland Airways v Lewis [1978] ICR 782), whether any one case lies within or outside the tribunal's jurisdiction is typically a mixed question of fact and law. If the parties disagree about whether there was a full year's employment before dismissal, the tribunal's decision on the point will determine whether it has jurisdiction. If they agree that there was, their agreement will ordinarily determine jurisdiction, not by enlarging the statutory remit but by bringing themselves within it. In the latter situation there may be no jurisdictional issue permitting intervention of the tribunal's own motion. The House of Lords in Carter v Ahsan [2007] UKHL 51 (cf [2005] EWCA Civ 990) has considered this restricted concept of jurisdiction; and while, as I stress, it has not been an issue before us, attention may need in other cases to be paid to it.

Lady Justice Arden:

15. I agree. As the point was not argued and does not arise in this case, I too note for future determination the issue identified by Lord Justice Sedley in paragraph 14 above.

Lord Justice Moore-Bick

16. I agree with both judgments