England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
MR RECORDER LUBA QC
UKEAT0097/11/DA
BAILII: [2012] UKEAT 0097_11_1603

		Royal Courts of Justice Strand, London, WC2A 2LL
		07 /12/2012

Lord Justice Mummery:

Introductory

1. This appeal is from the order of the Employment Appeal Tribunal (EAT) dated 16 March 2012 dismissing an appeal about the case management of proceedings for "ordinary" unfair dismissal. The respondent employer gave "capability" as a potentially fair reason for dismissing the claimant employee, who disputes the reason, as well as the reasonableness of the decision to dismiss him.
2. The outcome of the appeal turns on the legal effect of what occurred at a Pre-Hearing Review (PHR) conducted by an employment judge on 15 December 2010. At that time Mr Shailesh Parekh was acting in person against his former employer, the London Borough of Brent (the Council). In the EAT, which dismissed his appeal, and in this court, which gave him permission to appeal, he was represented by solicitors and counsel.
3. At the PHR the employment judge sought clarification of the way Mr Parekh was advancing his case. When he appreciated that Mr Parekh was suggesting that he was dismissed because of his "whistleblowing" activities (see paragraph 8 below), he invited him to apply to amend his ET1 claim form in order to claim "automatic" unfair dismissal on the ground of protected disclosure. Mr Parekh accepted that invitation and made the application, but the employment judge refused it. The EAT dismissed his appeal from that ruling. In this court Mr Parekh no longer pursues directly his wish to bring a protected disclosure claim. I emphasise directly. Although Mr Parekh's claim is now only for "ordinary" unfair dismissal, various allegations that would have featured in a protected disclosure claim now seem to form part of his challenge to the Council's capability reason.
4. Mr Parekh's ground of appeal is that at the PHR the employment judge erred in law in the way in which he drew up the list of issues for determination at the substantive hearing of his ordinary unfair dismissal claim. The criticism made by his counsel, Ms Joffe, in the EAT and in this court is that the employment judge, without hearing any evidence, has prevented Mr Parekh from disputing the capability reason.
5. Permission to appeal was granted by Sir Stephen Sedley on 15 June 2012 on the basis that, in the circumstances of this case, an appeal on the ground that the employment judge had no power to foreclose the reason for dismissal at the PHR had a reasonable prospect of success. Mr Parekh had never conceded the reason for dismissal. Under the Employment Rights Act 1996 (the 1996 Act) it was for the Council to establish at the substantive hearing the reason given by it. Only then would the question of the reasonableness of the dismissal, which was included as an issue in the list, be considered.
6. As became all too clear during the full hearing of the appeal almost everything that has happened in this case since the PHR nearly 2 years ago has been a regrettable waste of money, time and effort. The proceedings are no further forward than they were in 2010. The costs have spiralled out of all proportion to the nature of the case and to the point of appealing the PHR. This court has received schedules of estimated legal costs. In this court alone they total £27,009.80 (inclusive of VAT) in the case of Mr Parekh, who has entered into a conditional fee agreement with his solicitors, and £9347.50 in the case of the Council- all about a list from which no question of law arises, since it never had the drastic exclusionary effect asserted in the EAT and in this court on his ability to advance his case fully.

The facts

7. Between 25 August 2008 and 2 September 2009 when he was dismissed Mr Parekh was employed by the Council as a school bursar at Park Lane Primary School. According to the letter of dismissal dated 27 August 2009 he was dismissed on capability grounds. His internal appeal was unsuccessful.
8. In his ET1 form presented on 30 November 2009 Mr Parekh claimed unfair dismissal, sex discrimination and disability discrimination, breach of contract, unlawful deduction from wages and holiday pay. The unparticularised discrimination claims were later withdrawn, though only just before the PHR at which the Council's application to strike them out was due to be heard. The ET1 did not specifically dispute the Council's stated reason for dismissal. He mentioned that he had taken out a grievance in May 2009 and that that "and whistle blowing statements" had yet to be investigated. He also stated that he had never been informed that he was "on probation." However, in considering the contents of the ET1, I take into account that, at that stage in the proceedings, Mr Parekh did not have the benefit of the legal team that he now has.
9. At the PHR the employment judge dismissed the discrimination claims on withdrawal and refused Mr Parekh's late application to amend his ET1 by including a new claim for automatic unfair dismissal based on the grounds of public interest disclosure under s103A of the 1996 Act, as amended. Mr Parekh contended that he had concerns, which were not mentioned in his ET1, about financial and other irregularities at the school which he raised with the head teacher, school governors and other employees of the Council.

The PHR

10. In deciding whether any question of law arises from the proceedings at the PHR it is important to understand what was discussed on 15 December 2010 and what orders and decisions the employment judge actually made.
11. The formal order of that date fell into two parts: first, dismissal of the disability discrimination and sex discrimination claims upon their withdrawal; secondly, refusal of the application to amend to include a claim of unfair dismissal on the grounds of public interest disclosure. Reasons for the orders were given in the next 15 paragraphs of the PHR document.
12. Paragraphs 16, 17 and 18 then moved on to the ordinary unfair dismissal claim:-

"16. As to the ordinary unfair dismissal claim, Mr Ross made the further (in my view entirely justifiable) point that that part of the claim is also unarticulated.

17. The claimant explained the basis of the unfair dismissal claim by reference to a letter dated 27 August 2009 by the chair of the ad hoc committee of the Park Lane primary school governing body. His claims were limited to paragraphs b, c and d under the heading of "Findings" in that letter, namely:

b. "You found it difficult to take instructions."

c. You are unable to work as part of a team.

d. That you provided poor quality work as evinced by the budget monitoring reports that you provided at meeting held by the Finance and Buildings Committee and the Full Governing Body."

18. He further referred to his letter of 7 September 2009 to the chair of governors complaining about lack of appropriate procedure and that dismissal was an appropriate sanction."

13. My reading of those paragraphs is that the employment judge was making a formal record of his understanding of what was said in the tripartite discussions in which the judge, Mr Parekh and Mr Ross for the Council participated, about the ordinary unfair dismissal claim. Two things are clear from those paragraphs: first, that Mr Parekh was not conceding that capability was the reason for his dismissal, or that his dismissal was procedurally fair, as he was taking issue with the criticisms of his work performance; secondly, the employment judge agreed with Mr Ross that the ordinary unfair dismissal claim was lacking in particulars.
14. Paragraph 19, on which this appeal is grounded, states:-

"19. Accordingly, it is now definitively recorded that the issues between the parties which will be determined by the tribunal are as follows:

a. Did the respondent act reasonably in treating capability as a sufficient reason for dismissal and in particular did the respondent act reasonably in concluding that the clamant lacked the competencies referred to in sub paragraphs b, c and d of the letter of 27 August 2009 referred to above?

b. Did the respondent otherwise act unreasonably in its decision to dismiss the claimant from his employment?

c. Was dismissal within the range of reasonable responses?"

15. Ms Joffe's point is simply this: as the list does not include the prior question "Has the [Council] proven on the balance of probabilities that the reason for the dismissal of [Mr Parekh] was capability?" Mr Parekh was thereby prevented from disputing the Council's given reason for dismissing him. As I put it to Ms Joffe, the essence of Mr Parekh's complaint against the employment judge was that that issue was excluded from the case, as a result of not being included by the judge in his list.
16. On paragraph 19 two things are reasonably clear. First, it is only a list in the setting of reasons given by the employment judge for the orders that he made and as a record of his understanding of the position of the parties reached in the tripartite discussions. Secondly, in order to decide the issues of reasonableness that were listed, the employment tribunal would have to hear and consider evidence from both sides and make findings of fact on aspects of Mr Parekh's capability to do the job from which he was dismissed.
17. The PHR document concluded with a "Case Management Discussion Summary" and a series of orders relating to the disclosure of documents and so on and a statement of consequences of non-compliance. Those matters are not relevant to this appeal.
18. By letter of 24 January 2011 Mr Parekh applied, through the North Kensington Law Centre, for a variation to be made to the order of 15 December 2010 to include inter alia the claim for unfair dismissal under s.103A of the 1996 Act and to amend the list of issues to include the question whether the Council had proven that the reason for dismissal was not contrary to s. 103A and the question in paragraph 15 above. It was made clear that the objection was to a list which had been unlawfully limited to consideration of the Council's reasonableness and that Mr Parekh wished to challenge the reason for dismissal and procedural unfairness, as well as substantial unfairness.
19. The employment judge who considered the paper application was not the same judge as conducted the PHR. The claims for breach of contract, unauthorised deductions from wages and holiday pay had not been withdrawn or dismissed and were allowed to proceed, but the contents of the list of issues were not dealt with expressly one way or the other: see letter dated 8 February 2011. The application regarding the s. 103A claim, which was treated as an application to review the order of 15 December, was refused. Nothing was said about the ordinary unfair dismissal claim, or the issues raised by it, or the issues in the list.

EAT judgment

20. Mr Recorder Luba QC dismissed the appeal to the EAT on all grounds and also refused an application for permission to adduce fresh evidence. Ground 4, which is the only one relevant to this appeal, gave the Recorder "really significant concern on the hearing." That ground was that the list of issues was drawn up in such as way as to prevent the employment tribunal at the substantive hearing from requiring the Council to make out the reason for dismissal.
21. The Recorder concluded that delimitation of the issues so as to exclude consideration of the reason for the dismissal fell within the powers of the employment tribunal by Rule 10 of the Employment Tribunals Rules of Procedure 2004. He held that it was a proper exercise of discretion on the facts of this case to restrict the issues in the way that was done in the list.

Appellant's submissions

22. In her skeleton argument (paragraph 1) Ms Joffe describes the appeal as on against the "employment tribunal's order" [my emphasis] at the PHR that the list of issues be limited so as to prevent a challenge to the capability reason. In the same vein the section of the skeleton argument headed "The Employment Tribunal's Order" sets out the list of issues "definitively recorded" by the ET. In the concluding paragraph of the skeleton argument it is submitted that this court should "set aside the order of the employment tribunal, substituting a decision that the list of issues to be determined by the employment tribunal hearing the Appellant's case should include the issues: 'What was the reason for the Claimant's dismissal? Was it a potentially fair reason?' "
23. The basis of the appeal is that Mr Parekh disputed that he had been dismissed for a capability reason as alleged by the Council. The EAT erred in law in concluding that the employment judge had power to restrict the issues to be considered at the substantive hearing so as to exclude the reason for dismissal.
24. Mr Parekh was entitled to contend at the substantive hearing that he was not dismissed for a capability reason. Under s. 98(1) of the 1996 Act the burden was on the Council to show the reason for the dismissal and that it was a potentially fair reason: see Maund v. Penwith District Council [1984] ICR 143 at 148E – 149C. That issue could not be lawfully determined by the employment judge in the Council's favour without having heard any evidence from either side.
25. It is contended that to exclude an issue in purported exercise of case management powers was outwith the powers conferred by the 2004 Rules. Alternatively, the employment judge was perverse in limiting the issues as he did. He must have mistakenly believed that Mr Parekh raised no challenge to the reason for dismissal put forward by the Council. No reasonable judge would have restricted the issues in that way.

Discussion and conclusions

26. In my judgment, the appeal to the EAT and to this court is based on a misunderstanding about the legal status of the list of issues recorded by the employment judge following the tripartite discussions at the PHR.
27. First, it is wrong to say, as Ms Joffe asserts, that the employment judge made an "order" restricting the issues to those in the list. The order on 15 December 2010 set out only the two matters referred to in paragraph 11 above. The list of issues was not part of it, or the subject of any other order; it was something set out in the reasons for the orders.
28. Secondly, it is wrong to say, as the Recorder held, that, in drawing up the list of issues, the employment judge was exercising a discretion conferred by Rule 10. That rule is concerned with the making of "an order in relation to any matter which appears to him to be appropriate…" It is true that Rule 10 has been construed so as to cover all "decisions" made by a tribunal in the proper exercise of its case management powers. It has been held that the employment tribunal has the power to reconsider such decisions, whether they would naturally be described as orders or not, though whether it will be appropriate to do so depends on the particular circumstances: Hart v. English Heritage [2006] ICR 655 at [30].
29. In my judgment, the employment judge was not, in drawing up the list of issues, making an order under Rule 10. The same comment applies to the Rule 18(7) of the 2004 Rules to which reference has been made in relation to orders striking out claims. The employment judge did not purport to exercise any power at the PHR to strike out any part of Mr Parekh's case.
30. Thirdly, the list was described by the employment judge as the issues "definitively recorded" by him. He recorded them following the discussions at the PHR by Mr Parekh and Mr Ross, appearing for the Council, with him. The list was not the product of any adjudication, let alone any binding adjudication, of a dispute of substantive fact or law between the parties, such as whether capability was the reason for the dismissal, or of a procedural application or dispute.
31. A list of issues is a useful case management tool developed by the tribunal to bring some semblance of order, structure and clarity to proceedings in which the requirements of formal pleadings are minimal. The list is usually the agreed outcome of discussions between the parties or their representatives and the employment judge. If the list of issues is agreed, then that will, as a general rule, limit the issues at the substantive hearing to those in the list: see Land Rover v. Short Appeal No. UKEAT/0496/10/RN (6 October 2011) at [30] to [33]. As the ET that conducts the hearing is bound to ensure that the case is clearly and efficiently presented, it is not required to stick slavishly to the list of issues agreed where to do so would impair the discharge of its core duty to hear and determine the case in accordance with the law and the evidence: see Price v. Surrey CC Appeal No UKEAT/0450/10/SM (27 October 2011) at [23]. As was recognised in Hart v. English Heritage [2006] ICR 555 at [31]-[35] case management decisions are not final decisions. They can therefore be revisited and reconsidered, for example if there is a material change of circumstances. The power to do that may not be often exercised, but it is a necessary power in the interests of effectiveness. It also avoids endless appeals, with potential additional costs and delays.
32. While on the matter of appeals I would add that, if a list of issues is agreed, it is difficult to see how it could ever be the proper subject of an appeal on a question of law. If the list is not agreed and it is contended that it is an incorrect record of the discussions, or that there has been a material change of circumstances, the proper procedure is not to appeal to the EAT, but to apply to the employment tribunal to reconsider the matter in the interests of justice.
33. Fourthly, some confusion has arisen in the employment tribunal and in the EAT from protected disclosure matters not previously mentioned in the ET1. Mr Parekh's allegation that he was dismissed for a "whistleblowing" reason still seems to linger, even though he has not been allowed to amend. It now assumes the form, in his ordinary unfair dismissal case, of a challenge to the capability reason. I gather this from the paragraph in Ms Joffe's skeleton argument (and also in the grounds of appeal) which states:-

"26. It was entirely apparent to the employment tribunal from the Appellant's application to amend (to allege that he had been dismissed because he had made a protected disclosure) that he continued to dispute that he had been dismissed for capability."

34. Perhaps I am reading too much into that submission, but my understanding of Ms Joffe's position on this point at the hearing was that, although Mr Parekh could not advance a positive whistleblowing case, having been refused permission to amend, it was open to him to challenge the capability reason by evidence and argument that he was dismissed for making complaints and grievances. I note that it was accepted by Mr Ross at the PHR (paragraph 8) that the ordinary unfair dismissal case "could not reasonably be a matter of surprise to the respondent (in general terms)." His specific objection was to an unpleaded and unparticularised case based on complaints that the head teacher had not followed "legal procedures for recruitment and not following legal procedures in relation to safeguarding of children, particularly in relation to CRB checks of new and existing employees". He also raised a very large number of complaints in a letter to the auditing and investigation team.
35. It is for the tribunal that hears the claim for ordinary unfair dismissal to make rulings on the relevance of evidence sought to be adduced by Mr Parekh at the hearing. It is not for this court to make binding rulings on the relevance of evidence in advance of the tribunal hearing. All that this court can state with confidence at this stage is that Mr Parekh has been refused permission to advance a positive case of dismissal for making protected disclosures. He has not been refused, because he had no need to apply for or obtain the permission to do so, the opportunity to dispute the capability reason.
36. As already explained, it will be for the Council to show that the reason for dismissal was a potentially fair one. If it does that, the evidential burden will shift to Mr Parekh to show that there is a real issue as to whether that was the true reason. That reason may be challenged by Mr Parekh at the hearing by adducing relevant evidence. It is not enough for him simply to assert in argument that it was not the true reason. He must produce some evidence that casts doubt on the employer's stated reason and so raises an issue: see Kuzel v. Roche Products [2008] ICR 799 at [52] –[60]. In this case it would not be permissible for Mr Parekh to produce evidence to advance a positive case of protected disclosure, because he has been refused permission to amend in order to do that on the grounds that the amendment was late and unarticulated. However, as I understood Mr Ross to accept during the course of argument, Mr Parekh would not be precluded from adducing evidence of, for example, the nature and timing of his complaints in order to raise the issue of whether "capability" was the true reason for his dismissal. As is evident from the record of the PHR the employment judge had some difficulty in gathering from Mr Parekh what evidence he would be relying on in relation to the capability potentially fair reason issue other than the inadequate allegation relating to the inadmissible protected disclosure amendment. In those circumstances it is hardly surprising and certainly not an error of law, for the employment judge to make a list that did not include a "reason" issue. That omission did not, however, amount to an order or to a final and binding decision against Mr Parekh, nor did it discharge the Council from having to show that there was a potentially fair reason for his dismissal.

Result

37. I would dismiss the appeal. Although I do not agree with the EAT that Rule 10 applied to this case, it correctly dismissed the appeal, because no question of law arose from the record of issues compiled by the employment judge or in the proceedings before it that would give the EAT jurisdiction under s.21 of the Employment Tribunals Act 1996.

Lord Justice Patten:

38. I agree.

Mr Justice Foskett:

39. I also agree.