Scottish Court of Session Decisions

Applicant: Party

Respondents: Upton, Advocate; Gillespie MacAndrew, W.S.

14 February 2012
[1] In this application for leave to appeal against a decision of the Employment Appeal Tribunal the court was favoured with full grounds of appeal and answers, written submissions and oral argument. In effect parties treated this as an appeal on the merits of the matter, and the court has done likewise. It is necessary to set out the background in some detail.

[2] On 23 April 2002 Miss Margaret Malcolm (the claimant and applicant) presented various claims against her employers, Dundee City Council (the respondents), to the Employment Tribunal, alleging, amongst other things, harassment on the grounds of her sex perpetrated by fellow employees. A preliminary hearing considered a plea that the application was time barred because it was presented more than three months after several of the acts which formed the basis of the application. That plea having been rejected, a full hearing commenced on 9 September 2002. In November the applicant resigned from her employment. In April 2003 the tribunal dismissed all her claims.

[3] So far as the sexual harassment claim is concerned, the tribunal held that the harassment had occurred, but declined to find the City Council vicariously liable. In March 2004 that decision was reversed because during the hearing one of the members, who was unwell, had fallen asleep. The claims were then considered afresh by a different tribunal in the course of a 21 day hearing spread over five diets between March 2005 and September 2006. In addition there was a members only meeting in November 2006. (It is to be hoped that the duration of this hearing, which seems wholly disproportionate, is not typical). It is necessary to consider the outcome of this hearing in some detail.

[4] The tribunal stated that "by and large, we found the claimant to be a credible witness..." (para 100). As with the earlier tribunal the complaint of sexual harassment by fellow employees was proved. However, on this occasion the Council failed in the defence that it was not vicariously responsible for the sexual harassment. The tribunal indicated that the only further matter to be considered was whether the application, which had been presented on 23 April 2002, could be said to be out of time having regard to section 76 of the Sex Discrimination Act 1975, which requires complaints to be made within the period of three months from the last act of harassment. The tribunal's view was that the relevant conduct ceased on or about 21 December 2001, thus, on the face of it, the claim was out of time.

"The issue was not addressed in the course of the evidence and indeed, we understood [the respondents' agent's] position to be, in relation to time bar generally, that he did not intend to take any particular point" (para 140).

The tribunal continued

"Regretfully we simply cannot leave matters upon that footing since the time bar provisions set out in section 76 of the 1975 Act go to the root of our jurisdiction...If...a claim is not made within the relevant three month time limit, we simply have no jurisdiction to consider it. The only potential saving grace is set out in the just and equitable provisions set out in section 76(5)" (para 141).

[5] Reference was made to Robertson v Bexley Community Centre t/a Leisure Link [2003] IRLR 434 for the view that it was for the claimant to convince the tribunal that an extension was just and equitable, and that an exercise of discretion should be the exception rather than the rule. The tribunal observed that the issue of time bar did not feature in the hearing, and no point had been taken regarding the just and equitable extension. Reference was made to an authority to the effect that a tribunal was not obliged to raise the just and equitable provisions if the claimant had not requested an extension of the time limit.

"In all these circumstances, and we reach this conclusion with great regret, there is no basis upon which we can elide the three month time limit provided for in section 76(1) of the Act with the result that we require to refuse the complaint of harassment which, had it been presented timeously, we would have been prepared to uphold" (para 144).

[6] Thus, after a 21 day hearing spread over 18 months, resulting in a judgment running to 157 paragraphs, during which no issue of time bar had been taken, and notwithstanding that the tribunal had considered the claim and decided that it was well founded, the decision was to refuse the claim on the basis that it had been lodged about a month after the expiry of the three month period laid down in section 76. The tribunal recognised that it could set aside the time limit "if, in all the circumstances of the case, it considers that it is just and equitable to do so". It declined to do this on the basis that such should be the exception rather than the rule, and that the claimant had not requested such an extension.

[7] So far as relevant for present purposes, section 76(1) provides:

"An employment tribunal shall not consider a complaint under section 63 unless it is presented to the tribunal before the end of:

(a) The period of three months beginning when the act complained of was done..."

Sub‑section 5 provides:

"A court or tribunal may nevertheless consider any such complaint, claim or application which is out of time if, in all the circumstances of the case, it considers that it is just and equitable to do so".

Assuming for the moment that an extension of time was necessary, on the face of it the case for such was exceptionally strong. Section 76(1) prevents the consideration of an out of time complaint. However the tribunal had already considered the complaint at great length and found that it was merited. The whole tenor and terms of section 76 pre-suppose that the issue of time bar has been raised and is being dealt with in advance of the complaint being considered. The just and equitable extension allows the tribunal to proceed to consider an out of time complaint. In this case the tribunal had already done that. Either an extension was unnecessary, or the grant of it was hardly more than a formality in order to regularise that which had already happened. All of this can be seen against the background of the earlier rejection of a time bar plea by the original tribunal and no time bar concern having been raised by either the tribunal or the respondents during the hearing.

[8] One of the most significant factors to be taken into account when deciding whether to set aside the time limit is whether a fair trial of the issue is still possible (Director of Public Prosecutions v Marshall [1998] ICR 518). Obviously this was not a concern in the present case. In Baynton v South West Trains Ltd [2005] ICR 1730 EAT, it was observed that a tribunal will err if, when refusing to exercise its discretion to extend time, it fails to recognise the absence of any real prejudice to an employer. In Chief Constable of Lincolnshire Police v Caston [2010] IRLR 327 CA (which was decided after the tribunal's ruling) it was stressed that the discretionary power to extend time does not require to be used sparingly. Lord Justice Wall said

"It is common ground that the discretion under the statute is at large. It falls to be exercised 'in all the circumstances of the case' and the only qualification is that the employment judge has to consider that it is 'just and equitable' to exercise it in the claimant's favour" (para 17).

Lord Justice Sedley observed that

"...there is no principle of law which dictates how generously or sparingly the power to enlarge time is to be exercised. In certain fields (the lodging of notices of appeal at the EAT is a well-known example), policy has led to a consistently sparing use of the power. That has not happened, and ought not to happen, in relation to the power to enlarge the time for bringing ET proceedings, and Auld L J was not to be read as having said in Robertson that it either had or should. He was drawing attention to the fact that limitation is not at large: there are statutory time limits which will shut out an otherwise valid claim unless the claimant can displace them.

Whether a claimant has succeeded in doing so in any one case is not a question of either policy or law: it is a question of fact and judgment, to be answered case by case by the tribunal of first instance which is empowered to answer it." (paras 31-32).

[9] In Caston the judges emphasised the wide and unfettered discretion available to the decision-maker when an extension is being considered. A tribunal will err if it proceeds on the basis that an extension will be refused in all but exceptional circumstances. In one case a nine year delay was excused (Southwark London Borough Council v Afolabi [2003] ICR 800). In any event, as suggested above, there is at least a question as to whether an exercise of discretion was required at all, given that the tribunal had already considered the complaint. However no doubt it would have been prudent to make an order under sub-section 5.

[10] Furthermore, in procedural terms the course taken by the tribunal was inept and unfair. The claimant was given no opportunity to make submissions on the matter of time bar, nor on whether to present an application for an extension of time. The tribunal decided to raise the issue of time bar and then refused the claim on that basis. At the very least Miss Malcolm should have been given an opportunity to address the matter and seek an extension. The complaint was lodged only one month late. There can be no question of prejudice to the employers nor of a stale claim. Section 76(5) is expressly founded on notions of equity and is aimed at allowing justice to be done. The outcome here, as the tribunal itself came to recognise, was unfair and productive of injustice.

[11] In January 2007 Miss Malcolm lodged an appeal. There was a further hearing before the same tribunal. Miss Malcolm complained that she had not realised that time bar was an issue and thus had not addressed it nor asked for an extension of time. She sought to rely upon harassment in 2002 which, if established, would mean that her claim was not late. The tribunal acknowledged that there had been a "procedural mishap" in that the claimant should have been given an opportunity to address the time bar question and any just and equitable extension. On 25 June 2007 the tribunal revoked its ruling and permitted the claimant to lead further evidence about "an act extending over a period" or the just and equitable extension. Thus the tribunal allowed the possibility of further evidence as to acts of harassment in 2002. This was to have serious ramifications for the future progress of the case.

[12] In July 2007 the respondents applied for a review of this judgment. As a result there was a further hearing before the same tribunal when the respondents argued against the decision to allow evidence of harassment in 2002. The tribunal foreclosed that issue by announcing that the chairman had reviewed his notes of the original hearing, the outcome being that it was decided that, contrary to the views expressed in the original judgment, no issue of time bar arose because there had been continuing harassment of the claimant in 2002, thus the claim was both timeous and successful. In any event "something had gone radically wrong with the procedure involving a denial of natural justice or something of that order". On 24 September 2007 the tribunal issued its third judgment which was in the following terms:

"The unanimous judgment of the Employment Tribunal is to refuse the respondents' application for review set out in their letter of 9 July 2007, to confirm our judgment of 25 June 2007 to the effect and extent that the respondents unlawfully discriminated against the claimant on the grounds of her sex by reason of harassment by former colleagues in terms of section 1(1) of the Sex Discrimination Act 1975; and, of consent, to continue the claim meantime to enable the parties to seek to agree the level of compensation due by the respondents to the claimant".

The reference to the tribunal's second judgment of 25 June 2007 is puzzling, however the overall intention is clear. The tribunal decided to revisit its first decision and revoke the refusal based on time bar, thus leaving only one outstanding issue, namely quantum. It is hard to avoid the conclusion that the tribunal realised that in its first judgment it had taken a wrong turning and was now doing all that it could to put matters right.

[13] That judgment was the subject of an appeal by the City Council to the Employment Appeal Tribunal, which issued its decision on 25 July 2008. The EAT observed that the evidence relied on by the tribunal did not justify the view that harassment had continued into 2002. No application had been made for fresh evidence to be led. The EAT stated that it appeared that the tribunal had reviewed its first judgment in favour of the claimant and against the interests of the respondents in the context of the respondents' application for review of the second judgment without any application for review at the instance of the claimant. The EAT understood that the tribunal had power to review a judgment of its own motion, but it would normally state that it was doing so, and give parties the opportunity to make appropriate submissions. Founding on the absence of any basis for fresh evidence of harassment in 2002, it was held that the tribunal's second decision announced on 25 June 2007 was in error in assuming that the claimant was "entitled" to lead evidence of acts of harassment in 2002 (para 65). The claimant had "ample opportunity" to present her whole case at the original hearing and had not led any evidence as to unacceptable conduct in 2002. It can be noted that the focus was on whether Miss Malcolm should be allowed to attempt to prove harassment continuing into 2002. In the result the EAT decided that Miss Malcolm had been given "a second bite at the cherry" and that the tribunal had gone "too far too fast" in deciding that all that remained to be determined was quantum. However she was given permission to raise the issue of a just and equitable extension, albeit before a differently constituted tribunal because the original tribunal's sympathy for the claim had caused them to circumvent the rules in a manner which was "unfair to the respondents".

The overall disposal was as follows:

"We will accordingly uphold the appeal and pronounce an order remitting the claimant's claim of sexual harassment to a freshly constituted tribunal to hear evidence and submissions and to determine the following issues;

(a) Whether it is just and equitable to consider the claimant's complaint that she was sexually harassed by her former colleagues in the period May to 21 December 2001?

and

(b) In the event that the tribunal finds that it is just and equitable to consider that complaint, to determine whether the respondents are liable for the sexual harassment to which, on the findings in fact of the Employment Tribunal sitting at Dundee which issued judgment dated 5 December 2006, the claimant was subjected in the period May to 21 December 2001?" (para 71)

[14] A hearing before a differently constituted tribunal took place on 27 and 28 November 2008. The unanimous judgment of that tribunal was that it had no jurisdiction to consider the claimant's complaint that she was sexually harassed by her former colleagues in the periods May to 21 December 2001. This was on the basis that her claim was time barred, it not being just and equitable to extend the time limit in terms of section 76(5). As a result the claim was dismissed.

[15] The claimant put forward two main reasons for extending the time limit. Firstly evidence was led to the effect that at the relevant time it was her belief that Dundee City Council had a policy that if an employee went to a tribunal with a grievance before all internal procedures had been exhausted then that employee would be dismissed. The tribunal considered the evidence and concluded that it "simply did not accept the claimant's evidence that this was her truly held view at the time" (para 63). The second case put forward by the claimant related to her state of health in early 2002. For the reasons discussed at paragraphs 72-80 of its judgment, the tribunal was not persuaded that any stress and social dysfunction which the claimant was suffering from over this period was such as to justify an extension of time.

[16] Once again reference was made to the case of Robertson in support of the view that an exercise of the just and equitable discretion is "the exception rather than the rule" (para 61). The tribunal approached the matter "on the basis that it was up to the claimant to convince them that it was just and equitable to extend time." Furthermore "time limits in employment law should be interpreted strictly" (para 85). As discussed earlier, this approach is not supported by the terms of the legislation, nor by case law, including the decision in Caston. Plainly the strict approach adopted by the tribunal was influential in its ultimate decision, which was taken notwithstanding the acknowledgement that the tribunal was "in the unusual position of having to decide whether or not to extend the time limit in a situation where the evidence relating to the harassment has already been heard" and that, in the absence of an extension, the claimant "would remain uncompensated for sexual harassment of a serious nature which the [earlier] tribunal had found had taken place" (paras 85/6). No attention was paid to the terms of section 76(1), which are designed to prevent consideration of an out of time complaint, something which had already happened, nor to the absence of any prejudice to the respondents. In fairness to the tribunal, no doubt it was influenced by the claimant's failure to persuade it of the two main grounds upon which evidence was led in support of the submission that time should be extended.

[17] It is worth noting that the tribunal appeared to be of the view that the earlier tribunal had not decided that the respondents were vicariously liable for the harassment carried on by their employees. This is curious since the opposite is clearly stated in the earlier tribunal's decision. The tribunal interpreted the judgment of the EAT as being to similar effect, namely that the earlier tribunal had not determined this matter, and therefore, in the event that the claim had not been dismissed for time bar reasons, evidence and submissions would have been required on the issue of vicarious responsibility. In our view the EAT simply acknowledged that no specific order had been made upholding the claim, no doubt because time bar issues had intervened. In short, in the event that an extension of time had been granted, the only outstanding issue would have been quantum.

[18] Faced with this new set back, on 26 January 2009 Miss Malcolm presented a notice of appeal to the Employment Appeal Tribunal. It is a lengthy document which raises a large number of matters. By letter dated 16 February 2009 the Chairman of the Employment Appeal Tribunal ruled that the appeal had no reasonable prospects of success and that, in accordance with Rule 3(7) of the Employment Appeal Tribunal Rules 2004, no further action would be taken upon it. The reasons for this decision were as follows:

"An appeal lies to this tribunal only in respect of a question of law and only where reasonable grounds that raise a question of law are set out in the notice of appeal. The issue that the Employment Tribunal required to address was that set out in part (a) of the order of this tribunal dated 25 July 2008. It was not open to them to make any fresh findings in fact as to the nature and extent of any harassment to which the claimant was subjected, particularly as to whether or not she was subjected to such harassment beyond 21 December 2001. It was only open to them to make findings in fact relevant to the issue of whether or not it was just and equitable to consider the claimant's complaint that she was sexually harassed by her former colleagues in the period May to 21 December 2001. The notice of appeal discloses that the claimant fails to appreciate that limitation on the exercise that was to be carried out by the Employment Tribunal. Further, the notice of appeal shows that the claimant thinks that an appeal will be an opportunity for her to have the evidence reheard and reconsidered and a fresh decision reached as to whether or not it is just and equitable to consider that complaint. It is, however, not open to this tribunal to do so. Firstly, determining the facts of the case is the task of the Employment Tribunal. It is for the Employment Tribunal to make findings in fact which, in this case, they have done. This tribunal will then proceed, if a relevant case of error of law is raised, to consider whether, on those facts and in the light of the relevant law, the Employment Tribunal erred. Here, however, the claimant does not point to any respect in which she seeks to present a case that the Employment Tribunal erred in law in the findings made. Rather she seeks a rehearing. Then, in so far as the claimant alleges bias, it is wholly inspecific and far too general in terms to constitute a reasonable ground of appeal. Finally, the notice of appeal does not indicate any appreciation that in reaching a decision on the issue before it the Employment Tribunal was exercising judgment and that being so, it would only be if it could be demonstrated that no reasonable tribunal taking account of all the relevant circumstances put before it by both parties, could have reached the same result, that this tribunal could interfere with its decision. In all the circumstances, no reasonable grounds of appeal are advanced and Rule 3(7) applies."

[19] Miss Malcolm now seeks leave to appeal against that decision. This turns on whether reasonable grounds of appeal are advanced in her notice of appeal against the tribunal judgment dated 17 December 2008. There is no question but that there are reasonable grounds for challenging that decision. Unfortunately it is not easy to find any of them in Miss Malcolm's notice of appeal. The essence of the tribunal's error was that an overly strict approach to the application of section 76(5) blinded it to the underlying strength of the case for a just and equitable extension. No doubt the failure of the two main arguments put forward by the claimant influenced the outcome. However the tribunal's emphasis upon a need for exceptional circumstances is contradicted by the terms of the relevant statutory provisions, as confirmed in the recent decision in Caston; though, even on the strict approach, one would have expected an extension to be granted in the present case.

[20] The notice of appeal concentrates almost entirely on extraneous or unfruitful matters, hence the terms of the decision on 16 February 2009, which held that no reasonable grounds of appeal had been advanced. The notice of appeal lacks the legal knowledge, focus and discipline of a professionally prepared document. Much of it is aimed at a continuing attempt to lead fresh evidence and to prove that the claim was not out of time; issues which had been foreclosed by the EAT's decision in 2008. Passages are devoted to the rejected lines of evidence concerning Miss Malcolm's ill health and her beliefs in 2002. There are claims of bias and impartiality which were rightly rejected. However, at paragraph 2(d) the notice of appeal correctly states that the earlier tribunal had considered Miss Malcolm's harassment claim and found in her favour both on the substance of the matter and on vicarious responsibility, with only quantum left to be resolved. As discussed above, that is one of the main foundations of the case for a just and equitable extension, and is something which, in its decision of 17 December 2008, the tribunal either overlooked or laid to one side because of the erroneous and overly strict approach which it adopted. At least in this respect the notice of appeal advances a reasonable basis for a successful challenge to the tribunal's decision.

[21] In saying this we neither intend nor infer any criticism of the author of the letter of 16 February 2009. This one nugget was buried under a mass of hopeless material, and was uncovered by virtue of the time and effort which the current appeal process has required to be expended. In these circumstances Miss Malcolm's application for leave to appeal will be granted.

[22] In the course of the hearing parties explained that they had engaged in settlement discussions, however they had not borne fruit. The amount of time and expense incurred on this matter is already beyond belief. With the benefit of the terms of this opinion, the court hopes that those discussions will be resumed with the prospect of a more positive outcome, thus avoiding any need for further court or tribunal procedure. Miss Malcolm can be pointed towards possible sources of free legal advice. In the absence of an agreement between the parties, the case will be put out by order for a discussion on further procedure.

[23] For completeness it can be recorded that at one stage counsel for the respondents sought to raise various procedural objections, including the alleged lateness of the lodging of certain documents or appeals, all in respect of the course of events after the decision of 16 February 2009. During the hearing he departed from these concerns and rested upon the submission that the decision of 16 February 2009 correctly held that the notice of appeal disclosed no reasonable grounds for a successful challenge to the tribunal's decision.

[24] This opinion is the court's best attempt to make sense of this long and complicated saga, which, in its 2008 decision, the EAT described as "a mess". It is difficult to be confident that the above summary does justice to all that has happened. In large measure this is because of the complexity of the substantive law and the intricacies of the procedural rules, which often seem to militate against finality of decision making. The amount of tribunal and court time, and associated expense, which has been spent on this matter over no less than 10 years is staggering. We note with concern that all of this has occurred in the context of a system which, at least initially, was aimed at improving efficiency and reducing costs by encouraging lay representation.