United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 464_93_1612

Appeal No. EAT/464/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 16 December 1994

Before

HIS HONOUR JUDGE BYRT QC

MISS A MADDOCKS OBE

MR R H PHIPPS

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ON SITE MACHINING (SOUTHERN) LTD          APPELLANTS

MR R J MIDDLEWICK          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants Mrs YVONNE SAUNDERS

(DIRECTOR)

For the Respondent Mr BRUCE CARR

(OF COUNSEL)

Rowley Ashworth

247 The Broadway

Wimbledon

London SW19 1SE


 


JUDGE BYRT QC: This is an appeal from a decision of an Industrial Tribunal sitting at Southampton on 5 April 1993. They came to the unanimous decision that the employee, a Mr Middlewick, was entitled to £2,063 of arrears of payments under the Wages Act 1986. That is a finding that is not appealed in this case and, secondly, they concluded that Mr Middlewick had been unfairly dismissed and that is the subject matter of this appeal.

Briefly, the facts as found by the Tribunal are as follows: that Mr Middlewick had begun working for a firm called On Site Machining on 15 July 1990. The sole proprietor of that firm was a Mr Saunders, who unhappily and along with a lot of other people at the same time I have no doubt, was made bankrupt on 15 July 1992 and perforce his firm had to cease trading.

That, however, did not appear to affect Mr Middlewick's position. A new company was formed, called On Site Machine (Southern) Ltd, who are the Respondents in this case. The director of that company being Mr Saunders' wife. Effectively, they took over the firm's business and Mr Middlewick continued working in the same place doing the same job and, in fact, continued progressing the same work that he had been previously engaged on and he continued in that job until 4 September 1992. By that date he had worked for some seven weeks without payment of wages and he, on 4 September, treated that as a repudiatory breach and, accordingly, left his employment. He then brought a claim before the Industrial Tribunal in which he alleged constructive dismissal, which he said had been unfair.

The Respondent company entered a notice of appearance and alleged in Box 4 that Mr Middlewick had begun his employment as recently as 15 July 1992, the date of Mr Saunders' bankruptcy and only seven weeks before the date when his employment finished. They alleged in Box 3 that he had been dismissed because of insufficiency of work but in Box 2 they wrote in answer to the question:

"Do you intend to resist the application"

they answered:

"No".

and accordingly the matter proceeded to a hearing on 5 April.

I should say this: that the originating application entered by Mr Middlewick made very plain that he was progressing his claim against the Respondents on two distinct grounds. One was the arrears of salary and the other was for unfair dismissal and, again, the terms in which he was alleging that was spelt out explicitly.

The matter came before the Tribunal on 5 April 1993. On that date the Tribunal received a Fax from the Respondents in which they said that they were not going to be attending, saying that they could not be present that day and ended up with an apology once again for not turning up at the Tribunal. That was received on the morning of the Tribunal hearing. There being no application for an adjournment in that letter, the Tribunal went forward to a hearing and considered Mr Middlewick's application.

In so far as the continuity of employment is concerned, the Tribunal was satisfied that there had been a transfer of the business of the firm to the new company and, in consequence, found under the Employment Protection (Consolidation) Act 1978, Schedule 13, paragraph 17, that there had been continuity of employment and out of an abundance of caution also they came to the conclusion that there had also been a transfer of business within the meaning of Transfer of Undertakings Regulations 1981, regulations 3 and 5. They then went on to consider the evidence of Mr Middlewick to the effect that he had not been paid his wages. That was a matter which, indeed, had been admitted on the Respondent's notice of appearance, and that was all the evidence they had because the Respondents had not attended to give evidence themselves. When coming to the question of determining whether there had been unfair dismissal, they had to consider the matter against a background of s.57 of the 1978 Act and the first matter they had to decide was what was the reason for the dismissal? On that they had the evidence of Mr Middlewick himself that he had left because of non-payment of wages but quite clearly, they had also taken into account, the entry in the Respondent's notice of appearance that his dismissal had been due to insufficiency of work and as a result of that, they stated in their reasons that they were not satisfied as to the reason for Mr Middlewick's dismissal. They proceeded, therefore, in accordance with the usual procedure of a tribunal, to determine the a matter under s.57, namely that where no reason had been established for dismissal, they could not say that any dismissal that had taken place was reasonable. They therefore found unfair dismissal.

That decision was then sent to the Respondents on 8 April. The Respondents were dissatisfied and by an undated letter received by the Tribunal on 5 May the Respondents asked for a review. In that undated letter, they set out at considerable length the grounds of their complaint, (document No. 3 in the green bundle), in relation to the decision that had been given, but once again did not anywhere set out the reason for their non-attendance at the Tribunal on 5 April, although at the very end of the letter they did show an awareness of the fact that they had to comply with various time requirements for Tribunal procedures and apologised for the delay for making the application for review. They advanced the explanation that they had been taking professional advice. The burden of what they were saying in that letter was to the effect that Mr Middlewick's statement had been incorrect in several important points.

The matter was considered by the Tribunal and they refused a review. They first of all said that the application was out of time; indeed, it was beyond the 14-day period stipulated by the regulations but they then went on to say that it was refused on the grounds that it had no prospect of success and, in particular, in view of the Respondent's statement in their notice of appearance to the effect that they did not intend to defend the claim.

On 18 May the Respondents entered their notice of appeal and in their letter of that date they stressed what, in fact, has become the main point of argument in this appeal before us today, namely, that they felt it was absurd that a decision granting one of the company's ex-employees an award of £10,000 without Mrs Saunders, the director of the company or her representative, being present. In that letter she went on to explain that she and her husband had had to attend upon her father-in-law, who had been taken ill during the course of the very night before the hearing on 5 April and went on to raise two points by way of argument. First, that there had been a break in employment when Mr Saunders went bankrupt and his wife set up the new company and, secondly, they stressed that Mr Middlewick had been dismissed for reasons of redundancy.

On 18 March 1994 there was a hearing before an Industrial Tribunal of a claim brought by two other employees of the Respondents and I will come back to mention that in a minute but the Respondents were successful in that hearing and, as a result, on that same day the Respondents entered an amendment to their notice of appeal and added three other grounds, saying, first of all that an adjournment should have been made on 5 April. The second was that Mr Middlewick's evidence was completely untrue and, three, that two other employees claiming unfair dismissal under similar circumstances had just lost their case.

The Employment Appeal Tribunal today has heard argument put forward by Mrs Saunders on behalf of the Respondents and it is clear that the main burden of her appeal is that there should be a rehearing of this matter because the Tribunal on 5 April had failed to adjourn the case once they had notice that the Respondents were not going to be attending the Tribunal hearing. Mrs Saunders was reminded of the fact, as is the case, that this Employment Appeal Tribunal can only disturb decisions of the Industrial Tribunal where it finds that the Industrial Tribunal has erred on a point of law. It is not possible to review the facts found by the Industrial Tribunal, criticise those findings and come to a conclusion which amounts to a substitution of the way that they themselves would have found it. Mrs Saunders quite readily and clearly appreciated the limitation that this imposed on what this Appeal Tribunal could do.

With that reminder, we first of all consider the point made by Mrs Saunders to the effect that the Tribunal should have adjourned the hearing on 5 April. There was material before the Tribunal on that occasion which enabled them and, indeed, entitled them to come to the conclusion that they did, namely that this was a case which, notwithstanding the non-attendance of the Respondent, should proceed. They had before them the notice of appearance which included an omission of the claim, both in respect of wages and in respect of the claim for unfair dismissal.

The Fax which was received on the morning of the hearing on 5 April contained no reason for their non-attendance, none whatsoever, nor did it contain any application for an adjournment and those are the sort of circumstances where a Tribunal would feel that it was totally right and proper to continue with the hearing notwithstanding the absence of one of the parties.

At this appeal stage, we must review that decision of theirs as, indeed, it is the main plank of the Respondent's case and, first of all, we observe that there was material before the Tribunal below, which justified and entitled them to take the course that they did. The discretion as to whether to proceed in the absence of one of the parties was their discretion and if we are to disturb it at this particular stage we have to ask ourselves as to whether the decision they came to with the material before them was one which no reasonable Tribunal could have come to and in stating the test that way, I am applying the test outlined by Mr Justice Arnold in the case of Carter v Credit Exchange. In the circumstances, we cannot find that the Industrial Tribunal on 5 April erred in law in deciding to proceed with the case.

We then considered with considerable care and caused Mr Carr, who appeared here on behalf of Mr Middlewick, to look at the relevant regulations which determine whether in the circumstances of a case such as this, there has been continuity of employment by the Applicant and we have looked at both the appropriate provisions under Schedule 13 of the Employment Protection (Consolidation) Act and the appropriate regulations 3 and 5 under the Transfer of Undertakings Regulations. We can see no argument which it is possible to advance to suggest that, in the circumstances of this case, there was no continuity of employment by Mr Middlewick. Although it is in no way binding as a conclusion upon this Tribunal, one is comforted as indeed I think probably Mr and Mrs Saunders are, too, that the Tribunal sitting on 18 March 1994 came to precisely the same conclusion on this issue in respect of the other two employees.

There is the third criticism advanced by the Respondents in this matter by way of appeal. They criticize the evidence given by Mr Middlewick and, in particular, his evidence which stated that, subsequent to his retirement from the company, two other employees were taken on and the business has flourished. That was not germane to the matters the Tribunal had to decide at the hearing. The Tribunal had plain evidence, admitted as it was by the notice of appearance, that the Appellants had not paid Mr Middlewick's salary for something like seven weeks and they came to the conclusion, doubtless because it is inescapable without there being any rebutting evidence, that that constituted a constructive dismissal. Although Mrs Saunders criticizes the evidence of Mr Middlewick, any criticism she does make of his evidence saying that it is untrue, is not untrue in respect of any of the matters the Tribunal had to make findings about in this case. Apart from that, it has to be understood by Mr and Mrs Saunders, that it was for the Tribunals to make up their minds as to whether they could accept Mr Middlewick's evidence, having seen him in the witness box, and come to a conclusion about the purport of his evidence.

All that the Employment Appeal Tribunal can do, at this particular stage, is to ask whether the Tribunal has applied the appropriate law to the facts found on the basis of Mr Middlewick's evidence. It cannot review or substitute its own assessment of Mr Middlewick's evidence. It stands to reason because the Industrial Tribunal had see him in the witness box, had heard him give evidence and for all those reasons, that thay have had a very much better opportunity of assessing his veracity or otherwise than an Appeal Tribunal such as this. So, again, that in our view is not a sustainable ground for appeal.

Lastly, we have also considered the basis upon which the Industrial Tribunal assessed compensations. We have looked at that with considerable care. We appreciate that for a small company of the size the Respondents are, the award must seem substantial and for that reason we again caused Mr Carr to go through the stages which would have been taken by the Industrial Tribunal in making the assessment and, once more, we can see no error committed by the Industrial Tribunal in carrying out that process.

In all those circumstances we have scrutinized this case with considerable care, with the assistance and help of Mrs Saunders and of Mr Carr. Some might say it is appropriate for us to express the sympathy we feel for the Respondents in this matter but we would like to say that we understand the human problem that they had to face at the time when they were going through bankruptcy and experiencing all the other problems of a financial nature which this involves. We have heard the explanation as to why they made no application for adjournment on 5 April and they put it down to ignorance and so on. We have approached this case with a degree of sympathy but cannot find that there is any point of law where the Industrial Tribunal has erred and that being so there is no course open to us other than to dismiss this appeal.