J. A. Clyde-Smith, Esq., Commissioner, sitting alone.
Dominion Fiduciary Services Limited
Dominion Managed Services (Jersey) Limited
Advocate B. H. Lacey for the Appellant.
Advocate D. M. Cadin for the First and Second Respondents.
1. This is an appeal against a case management decision of the Jersey Employment Tribunal ("the Employment Tribunal") of 6th February, 2014.
2. The appellant ("Mr Piazza") had been employed by the second respondent ("Dominion Managed Services") from 22nd September, 2008, as a client services director. In his application form filed with the Employment Tribunal on 21st October, 2013, Mr Piazza claims that on his return from holiday on 27th August, 2013, he had been constructively unfairly dismissed by Dominion Managed Services. At a meeting with the chief executive officer, Mr Ben Cooke, at the Fregate Café, he had been told that whilst he had not done anything wrong, he would be unable to meet the objectives that would be set for him and that Mr Cooke wanted him to leave. Mr Piazza alleges that he was offered £900,000 (which might be higher once the audited accounts had been completed) for his 2% shareholding in the group holding company, Dominion Fiduciary Holdings Limited ("Dominion Holdings") and this by way of an amicable departure in which he would be freed from restrictive covenants.
3. Mr Piazza's shareholding in Dominion Holdings was subject to the terms of a shareholders' agreement dated 11th April, 2013, to which Mr Cooke, Mr Piazza and a number of other shareholders were party and which provided, in very broad summary:-
(i) That if Mr Piazza chose to leave the employment of Dominion Managed Services, he would transfer his shares in Dominion Holdings to Mr Cooke or as Mr Cooke would direct, in return for a consideration to be calculated by reference to a formula (subject to a minimum consideration of £750 per share). My understanding is that the price under this formula would be close to the sum of £900,000 which he alleges he was offered at the meeting with Mr Cooke.
(ii) If Dominion Managed Services terminated his employment, he would be obliged to transfer his shares immediately for a cash consideration of £10.
(iii) He would not compete with any member of the Dominion group of companies for a period of two years from his ceasing to be a shareholder.
4. Mr Piazza states that whilst he did not wish to leave, he concluded that he had no option but to accept the offer. He shook hands with Mr Cooke and left. He refers to this as the "Exit Agreement". He did not return to the Dominion offices; his office was cleared, he handed back his Blackberry and Fob and signed resignations from all of his directorships.
5. Mr Piazza goes on to say that on 19th September, 2013, he received two agreement letters:-
(i) One from Dominion Managed Services and Mr Cooke headed "Without Prejudice and subject to contract" re "confirmation of legal arrangements, including general waiver". This letter was stated to "confirm the arrangements relating to the termination of your employment with Dominion". It required Mr Piazza to take legal advice before countersigning the letter. This letter recounted, inter alia, that his employment had terminated by mutual agreement on 31st August, 2013. Mr Cooke and Dominion Managed services had already signed the letter and he was to countersign a copy, and
(ii) The other letter was signed by Mr Cooke for himself and on behalf of Dominion Holdings confirming the agreed purchase of his shares. The letter stated at the outset "the purpose of this letter agreement is to record the payment terms agreed between us as applicable to the consideration payable by me [Mr Cooke] to you for the shares".
6. Mr Piazza took advice as instructed and his lawyers pointed out that the restrictive covenants were not being entirely released as had been agreed and there was no reference to the £900,000 as the minimum that he would receive in return for his departure and his shares. His lawyer therefore wrote on 24th September, 2013, pointing these matters out and asking for the documents to be amended.
7. On 27th September, 2013, the lawyers acting for Dominion and Mr Cooke responded on the basis that the agreement letters had only been "offers" and that his lawyer had made a "counter offer". Therefore the offers contained within the agreement letters were withdrawn. It was also pointed out by Dominion's lawyers that all the restrictive covenants remained in force. Since then, he says that the lawyers acting for Dominion and Mr Cooke deny the existence of the Exit Agreement or any other agreement.
8. In his form, Mr Piazza had stated he was filing the claim before the Employment Tribunal "as a protective measure" and that "Royal Court proceedings would be brought with a view to enforcing the Exit Agreement, if necessary".
9. In its "Employer Response" dated 15th November filed with the Employment Tribunal, Dominion Managed services drew the Employment Tribunal's attention to these latter comments of Mr Piazza and the fact that his claims under the Exit Agreement would greatly exceed the jurisdiction of the Employment Tribunal. Accordingly, it said his claim before the Employment Tribunal should be stayed pending the termination of the Exit Agreement claim before the Royal Court.
10. Dominion Managed Services did not set out its defence in full, but in general terms it denied that Mr Piazza had been dismissed, averring that he had resigned, and asserting that he was entitled to payment for his shares in Dominion Holdings provided certain conditions were met. It was Dominion Managed Services' position that the claim before the Employment Tribunal and the intimated Exit Agreement claim were an attempt by Mr Piazza to renegotiate the terms applicable to him under the shareholders' agreement.
11. Dominion Managed Services' application for a stay came before the Employment Tribunal on 3rd February, 2013. Mr Piazza represented himself and Dominion Managed Services was represented by Mr Cadin. It was agreed at that hearing that Dominion Managed Services had been Mr Piazza's employer and therefore the first respondent Dominion Fiduciary Services Limited was discharged as a respondent. Miss Lacey, for Mr Piazza, agreed that the first respondent had been incorrectly named as a respondent to this appeal.
12. The Employment Tribunal issued its decision on 6th February, 2014, by which it adjourned Dominion Managed Services' application for a stay for six months and it is that decision which is the subject of this appeal ("the Decision").
13. There being no recorded decision of the Employment Tribunal in circumstances where there are concurrent or threatened proceedings in the Royal Court, Mr Cadin referred the Employment Tribunal to two English cases. In Mindimaxnox LLP v Gover and Ho [UKEAT/0225/10/DA], there were concurrent proceedings in the Employment Tribunal for two applicants, the High Court (for one applicant) and in Cyprus (for the other applicant). The Employment Tribunal judge declined to stay the proceedings. The Employment Appeals Tribunal held that the Employment Tribunal judge had erred in declining a stay and identified five factors as being relevant:-
(i) Factual matters. Where they are complex, it is a question of balance where it is more appropriate to decide them but where there is a substantial factual dispute it is more appropriate for the matter to be determined by the higher Court.
(ii) Embarrassing the Court. This might occur where findings of fact by the tribunal would embarrass the higher court in that they would impinge upon the judge in the higher court who would find it difficult not to be bound by the findings.
(iii) Complex legal matters. Whilst acknowledging that the English Employment Tribunal make decisions in complex legal matters on a regular basis, it was relevant to consider the complexity of legal issues.
(iv) Overlap of issues. Where there is a considerable overlap of issues pertaining to each claim, that is a compelling reason for the tribunal to cede the matter to the higher Court.
(v) Small Financial Value. In Mindimaxnox, the relationship between the total claimed in the higher court and the available compensation for unfair dismissal was described as a comparison between "an elephant and a mouse". It would give satisfaction to the parties to know that the central issues in terms at least of money would have been determined once in the higher court.
14. In Andrew John Halstead v Paymentshield Group Holdings Ltd  EWCA Civ 524, the Employment Appeals Tribunal had extended the principles stated in Mindimaxnox to where there were no concurrent proceedings but a threat of the same. The English Court of Appeal acknowledged the complexity of the claims and the overlap between them, but, quoting from the judgment of Lord Justice Pill at paragraph 21:-
"21. While making allowance for those considerations, it would, in my judgment, be wrong in principle to deprive the appellant of a remedy which statute has provided for him because he has chosen, without commencing proceedings in the High Court, to indicate lines of claim which may be available to him there. By ventilating the possibility of such a claim, and stating an intention to pursue it, he has not deprived himself of his statutory right to make a claim in the Employment Tribunal."
He went on to say at paragraphs 24 and 25:-
"24. In the absence of concurrent proceedings, that, in my judgment, is fundamental. The factors identified by Judge McMullen in Mindimaxnox will have force when there are concurrent proceedings but are not determinative in their absence. The judge accepted that the appellant could have proceeded with his case in the Employment Tribunal but regarded the 'uttering' of a letter before action, accompanied by draft particulars of claim, as decisive against him. I respectfully disagree. Correspondence short of proceedings did not deprive the appellant of his right to proceed in the Tribunal.
25. The appellant was confronted with a stay on Tribunal proceedings without limit of time and he was and is entitled to obtain its removal and pursue his case n the Employment Tribunal. He cannot be driven away from the Employment Tribunal by being required first to pursue a High Court claim and he has given an undertaking not to attempt to proceed with a High Court claim until the Tribunal claim has been resolved."
15. Judging from Mr Cadin's skeleton argument for the hearing before the Employment Tribunal, and the Employment Tribunal's decision, its attention does not appear to have been drawn to the provisions of Article 80(2) of the Employment Law which provides for an automatic discontinuance of proceedings before the Employment Tribunal where the employer or employee brings proceedings in the Courts for breach of a contract of employment:-
"80 Remedy for infringement of rights under this Law and under contracts of employment
(2) Nothing in this Law shall prevent an employer or an employee from bringing proceedings in the courts for breach of a contract of employment, and on commencement of such proceedings any proceedings before the Tribunal shall be discontinued."
16. As I understand it from counsel there is no statutory equivalent to this provision under English law and certainly there is no reference to such a provision in either of the Mindimaxnox or Paymentshield cases. Thus, in this jurisdiction, where either the employer or the employee brings proceedings in the courts for breach of a contract of employment, Article 80(2) is determinative. In this case, we are concerned with Mr Piazza's claim for unfair dismissal and his claims\obligations in relation to his shares. Proceedings in relation to the latter may not necessarily trigger Article 80(2) and to this extent the Mindimaxnox principles will come into play.
17. Article 80(2) would obviate any requirement for an undertaking as sought by Dominion Managed Services from Mr Piazza in the hearing before the Employment Tribunal not to bring any claim before the Royal Court and to which the Employment Tribunal made reference in its conclusions, which I set out at paragraph 28 below. I note in any event that the English Court of Appeal in Paymentshield, at paragraph 28, did not consider it appropriate for such an undertaking to be made a condition of parties seeking a remedy in the Employment Tribunal.
18. I would summarise the position in this way. Where there are no concurrent proceedings in the Royal Court, then following Paymentshield the applicant cannot be driven from the Employment Tribunal because he or she has lines of claim before the Royal Court that may be available to him or her and which may have been threatened. Where there are concurrent proceedings in the Royal Court and Article 80(2) is not triggered bringing about an automatic discontinuance, then the Mindimaxnox principles provide useful guidance on the issue of whether there should be a stay of the proceedings before the Employment Tribunal.
19. Under Article 94 of the Employment Law, appeals lie only on questions of law. Applying Voisins Department Store v Brown  JLR 141, Jones v Royal Bank of Scotland International  JLR N 44 and Luxicabs Ltd v Baal  JLR 208, a question of law only arises if:-
(i) the Employment Tribunal misdirected itself in law or misapplied or misunderstood the law;
(ii) there is no evidence to support the conclusion or finding of fact;
(iii) the Employment Tribunal's decision is perverse or obviously wrong; or
(iv) so unreasonable that no reasonable Tribunal could have made it.
20. Miss Lacey wrote to the Employment Tribunal on 14th February, 2014, seeking leave to appeal against the Decision on the basis that the Employment Tribunal had erred in law in relation to the Paymentshield case and leave was granted on 3rd March, 2014.
21. On 20th November, 2013, Mr Piazza wrote to the Employment Tribunal in response to Dominion Managed Services' application for a stay, stating that there were no Royal Court proceedings and he doubted whether he could manage proceedings as a litigant in person on such an important matter to him. Furthermore, he said he had not been paid anything by Dominion Managed Services since 15th August, 2013, and was being held to the restrictive covenants which prevented him working in Jersey's finance industry for two years. He did not have the financial resources available to Dominion Managed Services and was very worried over having the ability to finance major stressful Royal Court proceedings that he said Dominion Managed services would try to force him into. He therefore requested that the application for a stay be refused and his application be processed in the usual manner.
22. The Employment Tribunal having considered the Mindimaxnox case in its written judgement, went on to say this at paragraph 7 in relation to the Paymentshield case:-
"7. The Respondent's representative also referred the Tribunal to the English Court of Appeal decision in Halstead v Paymentshield Group Holdings Limited  EWCA Civ 524. This case involved an application to stay proceedings in the Employment Tribunal where the employee had not yet issued High Court proceedings. In Paymentshield Lord Justice Pill approved the approach in Mindimaxnox, noting that in that case there had been 'issue and service of proceedings [in the High Court]' and added that [In my judgment it is correct to extend it on the facts of this case, where there has been a solicitor's letter ... [which] .... is intended to get the parties to see what a case is and possibly avoid going to court ... it involved legal costs in its preparation and service and legal costs for the Respondent in providing a response and substantive reply'. In this present case the Applicant engaged a lawyer to write to the respondent setting out his case in respect of the breach of contract claim and the Respondent replied accordingly. In Paymentshield a draft Statement of Claim accompanied the letter to the employer. The Applicant did not take that step in the present case or threaten to do so but it is clear to see from the Applicant's letter to the Respondent, which runs for 5 pages, that the Applicant sets out his case."
23. In what Mr Cadin conceded was an error, the Employment Tribunal had quoted not from the judgment of Lord Justice Pill, but from the judgment of McMullen J in the Employment Appeals Tribunal, which had been expressly overruled by the English Court of Appeal. Their finding, as set out in paragraph 14 above, was that correspondence, short of proceedings, did not deprive the appellant of his right to proceed to the Employment Tribunal.
24. The Employment Tribunal then went on to apply the Mindimaxnox principles notwithstanding that there were no concurrent proceedings in the Royal Court, finding:-
(i) That the same evidence underlay both the claim in the Employment Tribunal and the potential claim before the Royal Court.
(ii) That the value of the claim before the Royal Court was likely to be about £900,000 which vastly exceeded any award of compensation that could be made by the Employment Tribunal (estimated at £54,519.23).
(iii) That the Employment Tribunal was a lower court and it was inappropriate for judges of the Royal Court to be bound or hampered in their decisions by the reasoning and decisions of a tribunal.
(iv) That if there is any appeal from a decision of the Employment Tribunal made to the Royal Court, the latter could find itself in a position that it was forced to make a finding concerning the appeal from the Employment Tribunal which directly conflicted with the decision it was able to reach on the potential breach of contract claim:-
"It is simply unacceptable for the Employment Tribunal to cause such potential embarrassment to the Royal Court or the court service".
25. The Employment Tribunal concluded its written judgement in this way:-
"At this time there is only the potential of litigation in the Royal court regarding the breach of contract alleged by the Applicant concerning the sale of his shares but it is apparent from the Applicant's testimony today that this is an issue he feels strongly about. The Respondent suggested that the Applicant give an undertaking that he will desist from making a claim in the Royal court in respect of the potential breach of contract claim and this would allow the Employment Tribunal claims to proceed without any hindrance. This Tribunal considers that it is too early for the Applicant to give such an undertaking as it is apparent that he has not fully appreciated the difficulties of his situation or the options that are available to him. For this reason the Tribunal's decision is that the Respondent's application to stay the Applicant's complaints to the Employment Tribunal as set out in his Form JET1 should be adjourned for 6 months so that the Applicant has the opportunity to consider the nature of his complaints further. After that period has elapsed the tribunal shall ask the parties to reconvene and inform the Tribunal of the current position in respect of the Applicant's complaints following the termination of his employment whereupon the Tribunal shall make a decision as to whether to grant the Respondent's application to stay the Employment Tribunal proceedings or not."
26. Miss Lacey submitted that the Employment Tribunal had misdirected itself on the applicable legal test to be followed where there are no concurrent proceedings. The effect of the decision was, and remains, she said, wrongfully and unlawfully to suspend the Employment Tribunal proceedings and to deprive Mr Piazza of his statutory right to pursue proceedings before the Employment Tribunal. Given the terms of the decision, Mr Piazza was seriously concerned that when the matter returns before the Employment Tribunal in six months' time, it will be further adjourned and he will continue to be denied his statutory right. Whilst a short adjournment to allow Mr Piazza to fully consider his options might have been understandable, why an adjournment of Dominion Managed Services' application for a stay for six months - a period and possibility not apparently canvassed at the hearing? Mr Piazza's application had already been delayed three months by Dominion Managed Services' application for a stay, and this equated therefore to a delay of some nine months from the time when he first filed his application during which he was coming under increasing financial hardship. Not only was he in receipt of no salary from Dominion Managed Services from August 2013 but he was prevented by the restrictive covenants from finding alternative employment and the dividends on his shares had been withheld.
27. Miss Lacey submitted that the decision of the Employment Tribunal should be set aside and directions given by the Royal Court for the filing by Dominion Managed Services of a full answer and reply and the fixing of a hearing date, together with mutual disclosure of documents and sworn witness statements.
28. Mr Cadin, whilst accepting that the Employment Tribunal had misquoted from the decision of the English Court of Appeal in Paymentshield, did not accept that there had been an error of law on the part of the Employment Tribunal or any misunderstanding of the law. It was nothing more than a misquote and no point of law, he said, arose. The Decision, in his submission, was:-
(i) A decision to adjourn an application (which could be revisited in the usual way by further application to the Employment Tribunal).
(ii) One the Employment Tribunal had power to make under Article 89 of the Employment (Jersey) Law 2003 ("the Employment Law").
(iii) Not determinative of Dominion Managed Services' application for a stay.
(iv) An exercise of the Employment Tribunal's case management discretion.
29. The Royal Court should be wary, he said, of interfering with the Employment Tribunal's exercise of discretion in what is an interlocutory matter (see Jones v Royal Bank of Scotland International  JLR N 44); a proposition which I accept. The reason for adjourning Dominion Managed Services' application for a stay was purposefully to allow Mr Piazza "to consider the nature of his complaints further". It does not deprive him of any statutory remedy. According to Mr Cadin, Mr Piazza had conceded that his Tribunal claim could only succeed were there not to be a concluded agreement reached between him and Mr Cooke (a concession which I question in that the two are not necessarily mutually exclusive). There was clearly a conflict in relation to his position which, Mr Cadin said, must be resolved before the Employment Tribunal claim could proceed.
30. Decisions of the English courts are not binding on this court, but given the similarities between the statutory regimes in both jurisdictions, they are relevant and persuasive. In my opinion, the Employment Tribunal did more than simply misquote the judgement of the English Court of Appeal. It misunderstood the effect of the Paymentshield case and that misunderstanding underpinned its decision, in that it went on to apply the Mindimaxnox principles, even though there were no concurrent proceedings in the Royal Court. There was an error of law and this Court therefore has jurisdiction to entertain Mr Piazza's appeal.
31. I acknowledge that this Court should be wary of interfering in case management decisions of the Employment Tribunal, but the decision was:-
(i) premised on a misunderstanding of the Paymentshield case; and
(ii) had the effect of depriving Mr Piazza of a remedy with which the Employment Law had provided him for six months (a period of time for which there was no discernible rationale); a very substantial period of time on its own, but more so when added to the delay of three months already incurred in the process.
32. Mr Piazza had made it plain in his letter and before the Employment Tribunal that he would not be proceeding with a claim before the Royal Court and that he wished his application to be advanced in the usual way as was his entitlement. To make it clear Mr Piazza's claims before the Employment tribunal are for unfair dismissal only (a statutory tort provided by Article 61 of the Employment Law) and not for breach of contract pursuant to Article 86 of the Employment Law, a quite separate jurisdiction of the Employment Tribunal.
33. I accept that as Mr Cadin says this was an adjournment of Dominion Managed Services' application for a stay and not a stay per se and that accordingly it was open to Mr Piazza to apply back to the Employment Tribunal for its decision to be revisited. This, he said, was the appropriate way of dealing with a case management decision with which a party disagreed rather than embarking upon an appeal with all the costs that involves. I do not accept that submission, however, in that in any such application Mr Piazza would have been handicapped firstly by the Employment Tribunal's misunderstanding of the law and secondly by the burden of persuading the Employment Tribunal to overturn its earlier decision.
34. In my view it is right that the Employment Tribunal's decision should be set aside and the matter remitted back to it so that, as there are no concurrent proceedings before the Royal Court, it can following Paymentshield now give case management directions to enable Mr Piazza's application to be heard as soon as possible. I do not feel it appropriate for this Court to give such directions, assuming it has the power to do so, upon which I have not heard full argument, but I do expect the Employment tribunal to give such directions with the minimum of delay.
35. In a letter dated 23rd May, 2014, Dechert LLP, Solicitors, acting for Mr Cooke and Dominion (alongside Bedell Cristin), sent Lacey Advocates a draft Order of Justice settled by English counsel which it gave notice would be served on Mr Piazza should he not accept an offer to participate in mediation by close of business on 27th May, 2014. That draft Order of Justice is concerned with Mr Piazza's shares in Dominion Holdings and alleged breaches of confidentiality on his part. It names Mr Cooke as the plaintiff and Mr Piazza as the defendant. Part of the relief sought would require a finding by the Court as to the validity of the Exit Agreement.
36. Mr Cadin informed me that if those proceedings were issued, there would be another application by Dominion Managed Services for a stay of the proceedings before the Employment Tribunal applying the Mindimaxnox principles on the basis that there would now be concurrent proceedings. He submitted that such proceedings would not trigger Article 80(2) of the Employment Law, as they would be brought by Mr Cooke, who is not Mr Piazza's employer.
37. Miss Lacey submitted that Mr Piazza's claim for unfair dismissal and his contractual claims/obligations in relation to his shares in Dominion Holdings are quite separate and can be dealt with by the Employment Tribunal and the Royal Court separately. This would be a matter for full argument before the Employment Tribunal should Mr Cooke's proceedings be commenced before the Royal Court and a further application for a stay be made by Dominion Managed Services.
Mindimaxnox LLP v Gover and Ho [UKEAT/0225/10/DA.
Jones v Royal Bank of Scotland International  JLR N 44.
Employment (Jersey) Law 2003.