England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
HER HONOUR JUDGE EADY QC
UKEAT/0089/15

		Royal Courts of Justice Strand, London, WC2A 2LL
		31/01/2017

Lord Justice Elias:

1. The appellant was employed within the respondent bank's global banking and marketing division as global financial services provider. He commenced employment on 25 October 2010 and was dismissed on 31 December 2011. The reason given for the dismissal was redundancy. By a claim lodged on 29 March 2012 he brought various employment-related claims against his employer. The claims included unfair dismissal, and notice and holiday pay. In the section asking the appellant to set out the background and detail of the claim, he complained only about failure to consult. Moreover, as formulated that complaint appears to be that there was no proper statutory consultation for certain collective redundancies as the law requires rather than a complaint of a failure to consult him personally. In a section headed "additional information" he alleged that he had been promised orally that he would receive a bonus of £100,000 for the financial year 2010-11. He alleges that the promise had been made in part because by leaving his previous job to join RBS, he was forfeiting a bonus he would otherwise have earned.
2. The response to all these claims was that none of them had realistic prospects of success. In view of the somewhat confusing way in which the case was pleaded, EJ Pearl decided on 12 June 2012 at a telephone case management and directions hearing (CMD) that there should be a Pre Hearing Review to decide whether the claims had a reasonable prospect of success.
3. This led to a Pre Hearing Review before EJ Auerbach on 14 August 2012. Prior to that hearing the appellant had served a document on the employer entitled "grounds supporting the claim" in which he said that "[he] would not rule out that the decision [to dismiss] was related to my unwillingness to relocate to Russia". He said that the relocation, if accepted, would have involved a massive reduction in his compensation and benefits. He made no mention of any bonus issue.
4. At the hearing before EJ Auerbach the appellant confirmed that the claims he was then advancing (which included a claim raised for the first time at that hearing, which the judge refused to allow to go forward) constituted all the claims he wished to pursue, although he reserved the right to bring a bonus claim elsewhere. It follows that no issue relating to either his relocation or the bonus entitlement was before the tribunal. The ET did not at that time resolve the question whether the claims advanced had a reasonable prospect of success because there was not enough time to deal with that question. So the matter had to be adjourned.
5. Those issues came before EJ Deol on the 7 and 29 November 2012. He allowed the unfair dismissal and protective award claims to go forward on the basis that it could not be said at this stage that they lacked merit. Other claims for notice and holiday pay were struck out as having no reasonable prospects of success.
6. At a preliminary hearing on the 12 November 2014, EJ Pearl made certain directions including directions which were designed to enable the parties to agree a list of issues. The appellant produced his list of issues on 24 November having foreshadowed them in a letter to the respondent some two weeks earlier. For the first time he identified as an issue, albeit not clearly, potential claims based on alleged public interest disclosures, colloquially known as "whistleblowing claims". There were two distinct claims: that he might have been dismissed for raising as a grievance the failure to pay his bonus; alternatively because he had raised a grievance about the offer to relocate him on less favourable terms. This was almost three years after the original claim had been lodged. At that stage no particulars of either claim were produced; there was only the assertion that these were being advanced as reasons for dismissal.
7. The gist of claims of this nature is that an employee has a claim for compensation where the employer has dismissed him for making what is termed a "protected disclosure" and that disclosure is the reason, or if there is more than one, the principal reason, for the dismissal: Employment Rights Act 1996, section 103A. The advantage of succeeding under this head rather than the standard unfair dismissal claim is that in the latter case there is a cap on any compensatory award made by the tribunal, but that does not apply where the reason for dismissal is the fact that the employee has made a protected disclosure.
8. The concept of protected disclosure is quite technical: see sections 43A to 43H of the Employment Rights Act 1996. At the material time when the dismissal occurred it included the bona fide disclosure of information (which requires more than a mere allegation) which alleged only that the employer was in breach of a legal obligation owed to the worker making the allegation: Parkins v Sodhexo Limted [2002] IRLR 109. This decision was reversed with effect from June 2013 by section 17 of the Enterprise and Regulatory Reform Act 2013 but that was of course well after the appellant's dismissal.

The hearing before EJ Glennie

9. The decision as to the list of issues to be considered came before EJ Glennie on 12 January 2015.
10. The judge noted that no whistleblowing claim had been made in the original Form ET1 and that it would be necessary to amend the claim in order to allow the claims to be pursued. He refused to allow the amendments. He also observed that a rather different issue could be identified, namely whether the appellant had been dismissed by the employer in order to avoid paying the bonus ("the bonus avoidance" ground). Having raised the matter, however, he did not allow that argument to be advanced either, on the basis that the nature of his unfair dismissal case had been fully explored before EJ Deol and should not be altered now.
11. The judge's reasons for refusing to allow the amendments introducing the whistle-blowing claims are central to this appeal. They were as follows (paras.14-17):

"The next group of issues, which are 2(g), 3, 4, 5 and 6, relate to the argument to which I have already referred about the bonus. However, in particular in paragraphs 3, 4, 5 and 6 the Claimant seeks to make what amounts to a whistle blowing complaint, saying that his grievance about the bonus was a protected disclosure. It is described as a "protected act" but I read it as a protected disclosure. He goes on to say that the reason for his dismissal and/or his redundancy was the raising of that protected disclosure.

I am satisfied that a claim of that nature has not previously been raised. As I have indicated, the question of the bonus was raised in general terms before Judge Auerbach. The complaint that protected disclosures were made is not to be found anywhere before its appearance in this draft list of issues. It is not in the 10 November 2014 letter and it is not in any of the earlier case management or pre-hearing review records. Therefore this would be a new claim in the case, as I am satisfied that to raise a complaint about protected disclosure goes beyond what is fairly in issue in an unfair dismissal complaint. I say this because the Claimant argues that it is all part and parcel of unfair dismissal. In a sense it is, because it relates to the dismissal, but I find that a complaint that an employee has made a protected disclosure and then that that has been the reason or principal reason for his dismissal is not something that a Respondent or the Tribunal could reasonably understand to be an issue in an unfair dismissal case where that is not specifically raised.

Therefore I am satisfied that raising such a complaint would require an amendment to the claim. I would not allow that amendment. It is nearly 2 years and 10 months since the claim form was presented. There would be a substantial increase to the issues in the case. The relevant evidence would have to be obtained, and that evidence would date back not only to some point necessarily before March 2012, but also as Ms Belgrove has submitted, back to considerations of what was said and what occurred in 2010 and 2011.

Applying the principles in Selkent v Moore [1996] ICR 836, I am satisfied that it would not be just to allow the claim to be amended in that way at this stage. Applying the time limit in section 111(2) of the Employment Rights Act 1996, the new complaint, if brought in fresh proceedings, would be out of time by over 2 years 6 months. There are no grounds advanced for saying that it was not reasonably practicable for the complaint to be brought within time, as all the relevant facts must have been known to the Claimant by the time that he presented his claim. Furthermore, a further period of over 2 years 6 months is not a reasonable time within which to bring the complaint. I also find that the burden of prejudice to the Respondent in having to answer a claim that is so far out of time would outweigh that to the Claimant in not being able to bring it, given the evidential considerations to which I have already referred."

12. It is not disputed that the judge was right to say that the whistleblowing claim required an amendment. The ground of appeal is that in the circumstances he misdirected himself as to whether the amendment should have been permitted.

The appeal to the EAT

13. The applicant appealed both aspects of the ET's decision to the EAT. Langstaff J, the then President, at the paper sift stage, held that it was arguable that the bonus avoidance ground was already within the terms of his pleaded case but he held that the other grounds of appeal, including the whistleblowing amendments, were not sustainable.
14. The whistleblowing aspect of the case was then considered at a rule 3(10) hearing, with only the appellant represented, and it was allowed to go to a full appeal by HH Judge Serota QC. This was on the basis that it was arguable that the ground covered the same factual matrix as the bonus avoidance ground which Langstaff J had permitted to go to a full appeal.

The decision of HH Judge Eady QC

15. The full appeal was heard by HH Judge Eady QC. She set out the history in some detail. She agreed that the bonus avoidance ground should be included in the list of issues. In essence she held that it was always clear that the appellant was disputing whether the reason for dismissal really was redundancy and that particularising his positive case as to the reason for dismissal did not amount to a fresh amendment. It was also clear from his original complaint that he was alleging that he had been denied a promised bonus payment.
16. However, HH Judge Eady took a different view of the whistleblowing claims. These did require amendment. She did not think that any criticism could be made of the EJ Glennie's decision to refuse the amendment to allow those claims. She gave her reasons in paras. 56-58 of her judgment:

"56. I then turn to the whistle blowing claim.  I accept Mr Delehanty's submission that the issues being considered under this head by Employment Judge Glennie raised both the Claimant's alleged disclosures regarding the non-payment of bonus and those regarding the proposed relocation.  As the Claimant acknowledges, however, these were being raised as new claims, new causes of action requiring amendment of the ET1.  That being so, the ET was bound to consider the timing of the raising of these claims.  The time limit in issue ran from the date of the Claimant's dismissal.  The amended claims were, on their face, out of time.  The Claimant suggests the ET ought to have found it was not really reasonably practicable for him to have brought these claims in time.  His case on this being based on documentation provided to him by the Respondent pursuant to a subject access request in August 2014.  There is, however, nothing in the documentation I have been taken to (and I have read all the material in question provided in the supplementary bundle), that provided the Claimant with anything new.  There was no new information which would have made him realise he might have a whistle blowing claim of which he was not aware before.  To the extent that he had a genuine concern that his dismissal (or selection for redundancy) related to his earlier raising of complaints or grievances (whether regarding bonus or relocation) he had all the information he needed to express that concern in his ET1 and, thus, make a protected disclosure claim.  He did not.

57.        Going further, and considering prejudice more generally, the ET was, I find, entitled to take into account the broader procedural history: the Claimant's clarification before Employment Judge Dr Auerbach that he was not making any other claims; his failure to mention the potential whistle blowing complaints at any earlier stage.  The Claimant says that overall there is no real prejudice to the Respondent; it will be open to him to raise these factual matters in his unfair dismissal claim in any event (all the more so if the bonus avoidance case is permitted to be run on the unfair dismissal claim).  That, however, is only part of the picture.  First, raising matters as background evidential points is a different thing to pursuing a separate head of claim.  In any event, I am not persuaded that the same points would be run.  That is certainly not obvious regarding the relocation complaint.  Even as regards the bonus payment, additional issues arise relating to whether there were any actual disclosures on the Claimant's part.  Those questions - which raise both new legal and evidential issues - would need to be explored, which might well add to the time and cost of the proceedings and which would be all the more unfair for the Respondent to have to deal with after such a delay.

58.              On these points I consider, therefore, that the ET reached an entirely permissible conclusion in refusing the amendment and I dismiss this part of the appeal."

17. The appellant now appeals that decision by leave of Christopher Clarke LJ. An issue has arisen whether, given the terms in which he granted permission, it included both aspects of the whistleblowing claims, i.e. the relocation and bonus complaints, or only the latter. In my judgment, the proper objective interpretation of the terms on which leave was granted limited the appeal to the bonus complaint only. However, for reasons I give below, nothing turns on this because even if the relocation whistle-blowing claim is properly before us, I would have no hesitation in dismissing the appeal in so far as it relates to that issue.

Legal principles

18. Before turning to the grounds of appeal, I will summarise the relevant and undisputed legal principles in issue in this case.
19. First, employment tribunals have a broad discretion in the exercise of case management powers and the appellate courts will not interfere unless there is an error of law or the decision is perverse: Carter v Credit Change Ltd [1980] 1 All ER 252 (CA). Errors of law include failing to take into account relevant considerations and having regard to irrelevant ones.
20. Second, in the case of the exercise of discretion for applications to amend, a tribunal should take into account all the circumstances and balance the injustice and hardship of allowing the amendment against the injustice and hardship of refusing it: see the observations of Mummery J, as he then was, in Selkent Bus Co. v Moore [1996] ICR 836 (EAT). Factors to be taken into consideration include the nature of the amendment, so that for example an amendment which changed the basis of an existing claim will be more difficult to justify than an amendment which essentially places a new label on already pleaded facts; the question whether the claim is out of time and if so, whether time should be extended under the applicable statutory provision; and the extent of any delay and the reasons for it. As Underhill LJ pointed out in Abercrombie v Aga Rangemaster Ltd [2013] EWCA Civ 1148; [2014] ICR 209 at para.47, these are neither intended to be exhaustive nor should they be approached in a tick-box fashion.
21. Third, the focus in this court should be on the decision of the employment tribunal rather than that of the EAT: see Hennessy v Craigmyle and Co Ltd [1986] ICR 461 (CA).
22. Fourth, if the ET has erred in law, it is not for the EAT to substitute its decision for that of the ET save in exceptional cases. The position was recently summarised as follows by Laws LJ in a judgment with which Underhill LJ and Sir Timothy Lloyd agreed, in Jafri v Lincoln College [2015] QB 781, 791 at para.21:

"It is not the task of the [EAT] to decide what result is "right" on the merits. That decision is for the [ET], the industrial jury. The EAT's function is (and is only) to see that the ET's decisions are lawfully made. If therefore the EAT detects a legal error by the ET, it must send the case back unless (a) it concludes that the error cannot have affected the result, for in that case the error will have been immaterial and the result as lawful as if it had not been made; or (b) without the error the result would have been different, but the EAT is able to conclude what it must have been. In neither case is the EAT to make any factual assessment for itself, nor make any judgment of its own as to the merits of the case; the result must flow from findings made by the ET, supplemented (if at all) only by undisputed or indisputable facts. Otherwise, there must be a remittal."

The grounds of appeal

23. There are two grounds of appeal. The first is that EJ Glennie's decision cannot stand because his decision on the whistleblowing amendments was necessarily affected by his conclusion that the appellant could not pursue the bonus avoidance argument. It was on that premise that the judge had concluded that it would be unfair to the respondent to have to introduce evidential matters occurring in 2010 to 2011. That, it is said, involved a misdirection in law. Mr Delehanty, counsel for the appellant, contends that once it is accepted that the ET will have to address whether the reason for dismissal may have been the desire to avoid paying the bonus, the additional evidence necessary to pursue the whistleblowing claim is relatively limited. The two proposed amendments were closely interrelated and there is a considerable overlap between the whistleblowing claim and the bonus avoidance issue. Applying the principles summarised in the Jafri case, HH Judge Eady could not properly find that the ET judge was entitled to reject the whistleblowing amendments. Once it had become clear that the ET had effectively misdirected itself, because it had exaggerated the evidential problems which would arise if the amendment were permitted, the only proper course was to remit the whistleblowing amendment application to the ET for a reconsideration. Mr Delahanty was not asserting that the only proper and lawful decision was to allow the amendments. Equally, however, he contended that this was not one of those cases where the EAT could be confident that the error did not affect the result. It is simply not possible to say either way, and therefore the matter needs to be remitted in accordance with the principles enunciated by Laws LJ in Jafri.
24. The second ground is that the ET judge failed to have regard to the reason why the amendment application was made late. As Mummery J's (as he then was) judgment in the Selkent case makes clear, that is something which needs to be considered when evaluating the strength of the appellant's application. It is contended that the delays in bringing the matter to a hearing were not the fault of the appellant and that was a relevant factor. The EAT erred therefore in finding that there was no error of law by the ET in its analysis of the application.

Discussion

25. I can deal with the second ground briefly. In my judgment, it is wholly without merit. The delay of almost three years was very extensive. It is in my view irrelevant to contend that the appellant was not responsible, and certainly not solely responsible, for the delay in the progress of the litigation as a whole. His obligation was to put his claims before the ET when he lodged his application. As Langstaff J noted in Chandhok v Tirkey [2015] IRLR 195 (EAT) at para.16, "[t]he claim, as set out in the ET1, is not something just to set the ball rolling, as an initial document necessary to comply with time limits but which is free to be augmented by whatever the parties choose to add or subtract merely on their say so`". It was not sufficient for the appellant simply to add these claims at a later date when he was asked to produce a list of issues. They ought to have been made from the beginning. HH Judge Eady observed that there was absolutely no reason why this claim could not have been advanced as part of the original claims. It did not emerge as a result of the receipt of late documents or anything like that. If the appellant had an explanation for not advancing this claim earlier it was for him to produce it. No explanation was given. There is no conceivable error of law in this respect.
26. The first ground has more traction and requires fuller consideration. I would start by observing that I reject a submission by the appellant that the whistleblowing claim is in substance no more than additional particulars of an existing claim. I accept that there will be cases where it can properly be said as a result of the particular way in which the unfair dismissal case is framed, that the addition of a whistleblowing claim will not materially add to the evidence and may amount to little more than a labelling exercise. The case of New Asset Star Management Holdings Ltd v Evershed [2010] EWCA Civ 870 provides an illustration. That was a case where the employee brought a case of unfair constructive dismissal and later added a whistleblowing claim. The ET judge had found that this would involve much additional evidence but the Court of Appeal held, in the particular circumstances of that case, that he was wrong about that. There had been a material misdirection.
27. In my judgment, in this case the ET judge was entitled to find, as HH Judge Eady thought, that the new claim would add to the potentially relevant evidence. This will be so even allowing for the fact that the ET will have to consider whether a bonus was promised as alleged in the course of determining the bonus avoidance issue. The tribunal will need to consider other matters which necessarily arise in the context of the whistleblowing claims. These will include whether, when and to whom the alleged protected disclosures were made; whether they were made in good faith; whether and to what extent they were known to those making the decision to dismiss; and whether they constituted the principal reason for dismissal. So far as the submission relates to the complaint about relocating, there is no overlap with the bonus avoidance issue at all.
28. Mr Delehanty submitted that the evidence relating to these matters would be adduced in any event. He submits that the respondent would need to disclose evidence relating to the complaints with respect to the failure to pay his bonus in the context of the bonus avoidance issue. I am not convinced that this is so since that evidence neither establishes whether the promise to pay a bonus was made, nor does it show whether an attempt to avoid paying the bonus was the reason relied upon by the dismissing party. In any event, without the amendments it would not be necessary to take statements from potential company witnesses on these matters.
29. It follows that the EAT was, in my judgment, justified in saying that if these claims were to be pursued it might well add to the time and cost of the proceedings. Indeed, to some extent at least that would be inevitable in my view. When one adds the other factors identified by the ET, the decision to refuse the amendment was plainly open to it.
30. As I say, Mr Delehanty does not dispute this. But he says that whatever the extent of the prejudice to the employer, it will not be as significant as ET Judge Glennie thought. On any view the fact that the bonus avoidance ground is in issue will mean that some of the evidence relevant to the whistleblowing claim will be before the tribunal. Whether this might have caused ET Judge Glennie to reach a different conclusion is a matter of speculation; it cannot with confidence be said that he would not have done so, and HH Judge Eady made no such finding. Accordingly, she was obliged to remit the matter.
31. This submission clearly has no relevance at all to the relocation complaint. There is in my view no basis for saying that the decision with respect to that claim was tainted by any legal error. Accordingly, even if, contrary to my view, permission was given to appeal that issue, I would dismiss that element of the appeal.
32. I accept that with respect to the bonus complaint amendment application EJ Glennie did make his assessment without properly appreciating that the potential prejudice to the respondent was not as serious as he had assumed. Nevertheless, I have concluded that Judge Glennie would have made the same decision even had he not been under that misapprehension. It behoves an appellate court to take a robust and realistic approach to the issue of whether an error of law was material in this context, not least because of the additional delay and cost involved in a remittal (and the possibility of further appeals). It seems to me that on a fair reading of EJ Glennie's judgment, his reasons for refusing the amendment were not based on a narrow assessment of the extent to which it would involve fresh evidence. That was one factor but other important factors included the fact that the claims were out of time and there was no justification for extending time, that there had been substantial delays, that it was a fresh claim which had at no point even been floated. Set against that background, I do not accept that the inclusion of the bonus avoidance ground would have altered his conclusion.
33. For these reasons, therefore, I would dismiss this appeal.
34. I would add this. This court has said on a number of occasions that it is difficult to see any rational justification for the principle summarised by Laws LJ in Jafri applying in all cases. The effect is that the EAT has to remit a question to an employment tribunal even where the EAT is in as good a position as the ET to make the relevant ruling: see the discussion by Underhill LJ in the Jafri case, paras.43-47. Remitting the case simply creates more delay and adds to the time and costs of the litigation. It is not conducive to achieving the overriding objective. Where findings of fact are in issue, remittal will almost inevitably be appropriate since the ET is the fact-finding tribunal. But where the issue is, as here, the correctness of a case management order, there is no advantage in the matter being remitted to the ET judge who is no better equipped than the EAT judge to determine the issue. As Underhill LJ pointed out, there is no reason why the EAT cannot decide the issue rather than remitting if the parties agree since there is no jurisdictional bar. I would strongly encourage the EAT to seek that consent in advance of any hearing of this nature where the possibility of remission is likely to arise. But I agree with Underhill LJ that in the light of the authorities, and until the Supreme Court or legislation stipulates otherwise, remission is currently required absent the consent of both parties.

The costs limiting application

35. The appellant made an application for a costs limiting order pursuant to CPR 52.9A which was in force at the material time. That rule provides that the application has to be made as soon as is practicable.
36. In this case permission to appeal was granted on the 18 April 2016. The application was made by letter dated 17 November but no copy was sent to the Respondent at that time. By that time the skeleton arguments had been lodged with the court. The court's date stamp for receipt was 16 December 2016, probably after the bundles had been lodged, which we were told was mid-December 2016.
37. The application was rejected by Lewison LJ on paper in an order dated 11 January 2017. He noted that the obligation to lodge the application as soon as practicable (and not even as soon as reasonably practicable) was a mandatory requirement; see the observations of this court in JJ Food Service Limited v Zeki Mehmet Zulhayir [2013] EWCA Civ 1304 at para. 4. As Jackson LJ pointed out in JE (Jamaica) v The Secretary of State for the Home Department [2014] EWCA Civ 192 at para.11, the reason for the rule is that the parties should know as soon as possible under which costs regime they will be operating. That might affect their strategy in the case. That objective was not achieved here.
38. Plainly the mandatory requirement was not met. The reasons for delay given were ignorance of the rule (although we were not told precisely when the appellant became aware of the right to make the application) and the fact that he was tied up in other litigation. The former was held in the JJ case not to be a good excuse, the court holding that there are no special rules for litigants in person. In our view the latter has no merit. In the circumstances we see no basis on which a costs limiting order could properly be made now.
39. Mr Delehanty advanced an alternative submission to the effect that even if he was not entitled to the full costs limiting order, he should be entitled to a limit on the recoverability of costs incurred from the date of the letter applying for a limit on recoverable costs was sent. It is by no means clear that the court has power to grant such an order under the rule. Moreover, if some such principle is to apply at all, we doubt whether it should run from that date as opposed to the date when the order is made, since until then the opposing party should not have to act on the assumption that an order will be made. That would mean that no benefit would accrue to the appellant from any order made now.
40. Be that as it may, I do not think, given the extensive and unjustified delay in this case, that it would be appropriate to make even that more limited costs order, assuming that we have power to do so. I would therefore refuse the application.

Lord Justice Lewison:

41. I agree.