COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
Mr Justice Underhill (President)
Case No: UKEAT/0249/09/CEA (BAILII:  UKEAT 0249_09_3107)
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE RIMER
SIR SCOTT BAKER
| New Star Asset Management Holdings Limited
|- And -
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Daphne Romney QC (instructed by Laytons) for the Respondent
Hearing date: 10 May 2010
Crown Copyright ©
Lord Justice Rimer :
Mr Evershed's original claim
I would like to make formal complaint about the way John Duffield has been bullying me and several of my colleagues.
He has been vile to most of the fund managers for several years and bullying us. He has created a most unpleasant atmosphere throughout the firm. His conduct and the atmosphere which he has created has destroyed the performance of the New Star Funds. He recruited stars and then destroyed them by the way he treated us. The board are aware of they [sic] way Duffield has been treating us and by the way his conduct has undermined the self confidence of the fund managers and the marketing department but they have been too frightened of him to deal with the situation in the way they should have.
In particular he bullied me in to reopening my fund. This destroyed the performance of the fund and my reputation. He has also destroyed the performance of several other funds and the reputation of several of my colleagues.
He also bullied Roger Dossett in to buying properties when he and I and many others kept telling him the property sector was over valued. I kept telling him for over three years that a credit crunch was coming, but he turned his back on me each time and walked away. He refused to listen to me or Roger.
When I told him to stop bullying Roger to invest in over valued properties he threatened to sack me. I intended to take him to court over this but I was persuaded by Richard Pease not to do this. This was the worst decision of my life. I could have saved a lot of people a lot of money if I had brought action through the courts against him at that time.
I would also like to make a formal complaint against Gregor Logan. He also bullied Roger and his team in to investing in over valued properties.
I am sorry to have to write this letter to you but an increasing number of my colleagues have come to the reluctant decision that it is time for Duffield to be removed. It would be better if the board did this rather than leave it to me to take the matter to court.'
Mr Evershed's amendment application
'[Mr Evershed's] claim is currently pleaded solely as one of constructive unfair dismissal on the basis that he raised a grievance and in response to that was accused of being unfit to deal with money and of being mentally ill, seeing a psychiatrist. [He] wishes to amend the claim to add allegations that the treatment he received was in response to making public interest disclosures. It is said this is a re-labelling exercise. [He] accepts that an application needs to be made to amend, which [New Star] should have the opportunity to comment on. If the amendment is not resisted then [New Star] should also have the opportunity to plead to this new claim.'
'Further or alternatively, the reason (or the principal reason) for [New Star's] conduct complained of on 18 September 2008 (which led to [Mr Evershed's] constructive dismissal) was because [he] had submitted his grievance to HR that day. The Grievance constituted a protected disclosure within the meaning of section 43B(1)(b) of the Employment Rights Act 1996 insofar as it disclosed bullying and abusive conduct on the part of Mr Duffield and Mr Logan which failed and/or was likely to fail to comply with any legal obligation to which [New Star] is subject, namely the duty of trust and confidence to [Mr Evershed] and other employees and/or section 43B(1)(d) insofar as it disclosed their bullying and abusive conduct so that the Health & Safety of any individual, including [Mr Evershed], was being or was likely to [be] endangered. Further or alternatively the grievance disclosed mismanagement by Mr Duffield in interfering with [Mr Evershed's] management of his funds (and doing the same to other Fund Managers) therefore damaging the fund's performance and the reputation of those Managers which failed and/or was likely to fail to comply with any legal obligation to which [New Star] is subject namely the duty of trust and confidence to [Mr Evershed] and other employees.
As a result of that protected disclosure [Mr Evershed] was subjected to the treatment complained of and was thereby unfairly dismissed.'
'43B Disclosures qualifying for protection
(1) In this Part a "qualifying disclosure" means any disclosure of information which, in the reasonable belief of the worker making the disclosure, tends to show one or more of the following –
(b) that a person has failed, is failing or is likely to fail to comply with any legal obligation to which he is subject,
(d) that the health or safety or any individual has been, is being or is likely to be endangered, …
43C Disclosure to employer or to other responsible person
(1) A qualifying disclosure is made in accordance with this section if the worker makes the disclosure in good faith –
(a) to his employer, or
(b) where the worker reasonably believes that the relevant failure relates solely or mainly to –
(i) the conduct of a person other than his employer, or
(ii) any other matter for which a person other than his employer has legal responsibility,
to that other person.
(2) A worker who, in accordance with a procedure whose use by him is authorised by his employer, makes a qualifying disclosure to a person other than his employer, is to be treated for the purposes of this Part as making the qualifying disclosure to his employer.'
'An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if the reason (or, if more than one, the principal reason) for the dismissal is that the employee made a protected disclosure.'
Whilst it did not say so expressly, the proposed amendment sought to make a case under section 103A. As Underhill J observed, the advantage of success on such a claim as opposed to an 'ordinary' unfair dismissal claim is that the compensation cap imposed by section 124(1) does not apply (section 124(1A)); and Mr Evershed had been a high-earning employee. The proposed amendment was potentially a very significant one.
The decision of the employment tribunal on the amendment application
'I refuse [Mr Evershed's] application as set out in a written application dated the 20 January 2009 to amend the claim that [he] was subjected to the treatment complained of and was thereby unfairly dismissed as a result of [his] making a protected disclosure namely a written grievance made to [New Star's] HR department on the 18 September 2008. The reasons for refusal were all those put forward by Mr Randall at the hearing.'
A 'Reasons' section provided a modest expansion of that, as follows:
'1. If full written reasons are required for the refusal to allow the amendment application should be made to the Tribunal. To assist the parties the brief reasons for refusal are:-
(i) The amendment added a new claim it was not a re-labelling.
(ii) [Mr Evershed] had not raised a s32 grievance in respect thereof.
(iii) The request to amend was out of time – [Mr Evershed] was represented by solicitors at the time of his termination of employment and there was no explanation why such a claim was committed [sic: presumably means 'omitted'].
(iv) There would be prejudice to [New Star] by allowing the amendment.'
'14. I refuse the amendment on the grounds that I consider [A] that the amendment is an attempt to raise a new cause of action which [B] will require wholly different evidence to that envisaged in the claim as pleaded.
15. [C] There is no causal link shown in the present ET1, to the claim now sought to be added; [D] no grievance has been raised in respect of such new claim under section 32 Employment Act 2002 that [Mr Evershed's] constructive dismissal was on the grounds of [his] making a public interest disclosure and [E] there would be prejudice to [New Star] in that further expense in respect of a longer hearing [F] no further reason has been given as to why notwithstanding [Mr Evershed] was represented by solicitors at the time of raising his and at the time of his resignation why a public interest disclosure claim was not pleaded in the original ET1 when it was drafted by the same solicitor. [G] [Mr Evershed] still has an unfair, constructive dismissal claim.'
The decision of the appeal tribunal
'John Duffield recruited investment stars to his new fund management group. In the first two years, five of the six main retail funds were in the top quartile of their respective sectors. Four years later, however, because of the bullying and undermining which the fund managers suffered from John Duffield, five of the six main retail funds were at the bottom of their respective sectors.'
I have also referred to the other generalised allegations that Mr Evershed made with regard to the alleged daily, indeed hourly, bullying by Mr Duffield of other fund managers. Underhill J's view was that Mr Evershed's case for both 'ordinary' and 'automatic' unfair dismissal would stand or fall on the evidence relating to himself. He again expressed the expectation that the tribunal would keep the exploration of collateral issues under tight control. He was, therefore, of the view that Judge Warren's unexplained view that the new claim would require wholly different evidence was wrong.
'[New Star] denies that the Chairman in any way bullied [Mr Evershed] or attempted to undermine, demean or humiliate him. The Chairman always spoke to and acted towards [him] with courtesy and respected [him]. Moreover, [New Star] denies [Mr Evershed's] allegation that the poor performance of the Fund (or indeed any other fund managed by [New Star]) is related to bullying on the part of the Chairman. [New Star] does not however plead to allegations which related to third parties, as they have no relevance to [Mr Evershed's] claim.' (Emphasis supplied)
Mr Hochhauser pointed that Underhill J recognised that the tribunal would want to control the evidential investigation of 'collateral issues about the treatment of third parties' in the context of an 'ordinary' unfair constructive dismissal claim, on the basis that such treatment will not generally entitle the claimant to resign, although evidence about it may be of relevance.
Discussion and conclusion
'Having been forced to witness this conduct, carried out against both himself and also his respected colleagues, [he] felt complicit in what was happening and demeaned in so doing.'
Sir Scott Baker :
Lord Justice Sedley :