United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 1113_95_3011

Appeal No. EAT/1113/95

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 30th November 1995

HIS HONOUR JUDGE P CLARK

MRS T A MARSLAND

MR K M YOUNG CBE

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MRS SHELAGH BENNETT          APPELLANT

DE VERE HOTELS LTD          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MR SIMON GORTON

(of Counsel)

Messrs Lees Lloyd Whitely

Castle Chambers

43 Castle Street

L2 9TJ

For the Respondents MR D EDWARDS

(of Counsel)

Legal Department

The Greenalls Group

Wilderspoll House

Greenalls Avenue

Warrington

WA4 6RH


 


JUDGE CLARK: This appeal raises a narrow point of statutory construction.

By way of background Mrs Bennett was employed by the Respondent as a financial controller from 29th October 1981 until her dismissal on 6th January 1995. Following that dismissal, but before presenting a complaint of unfair dismissal, which she did on 29th March 1995, she entered into what the Liverpool Industrial Tribunal Chairman sitting alone, Mr D Reed, was asked to assume was a compromise agreement complying with Section 140(3) of the Employment Protection (Consolidation) Act 1978 ["the 1978 Act"], as inserted by Section 39(1) of the Trade Union Reform and Employment Rights Act 1993 ["TURERA"].

The Respondent contended that the effect of that compromise agreement was to preclude the Appellant from bringing a complaint of unfair dismissal.

Accordingly the sole question to come before the Chairman was whether an agreement to refrain from commencing unfair dismissal proceedings is effective in law, given the provisions of Section 140 of the 1978 Act, as amended. He held that it was. Against that ruling Mrs Bennett now appeals.

Section 140 of the 1978, as originally enacted, provided by subsection (1):

" Except as provided by the following provisions of this section, any provision in an agreement (whether a contract of employment or not) shall be void in so far as it purports -

(a) to exclude or limit the operation of any provision of this Act or;

(b) to preclude any person from presenting a complaint to, or bring any proceedings under this Act before, an industrial tribunal."

Subsection (2) then set out a number of exception to the general restrictions on contracting out of the protection afforded by the Act. We should draw attention particularly to the following exceptions:

"(d) to any agreement to refrain from presenting a complaint under section 67, where in compliance with a request under section 134(3) a conciliation officer has taken action in accordance with that subsection;

(e) to any agreement to refrain from proceeding with a complaint presented under section 67 where a conciliation officer has taken action in accordance with section 134(1) and (2);

(g) to any agreement to refrain from instituting or containing any proceedings before an industrial tribunal where a conciliation officer has taken action in accordance with section 133(2) or (3);"

It will be seen that those three provisions relate to agreements, either to refrain from presenting a complaint under Section 67 (that is a complaint of unfair dismissal) or proceeding with such a complaint once made, where a conciliation officer has taken action in accordance with Sections 133 or 134 of the Act.

For many years a practice developed whereby if parties were able to reach agreement to compromise a claim for unfair dismissal, whether before or after proceedings were commenced by presentation of a complaint to the Industrial Tribunal, but prior to a hearing before the Industrial Tribunal, if that agreement was "rubber-stamped" by ACAS, evidenced by the issuing of a Form COT 3, such agreement fell within the exceptions set out in Section 140(2). However, a time came when ACAS, as a matter of policy, declined to issue a COT 3 save in relation to cases where a conciliation officer was actively involved in the negotiations leading to agreement. The "rubber-stamping" of agreements reached between the parties without the assistance of ACAS ceased.

This change of policy by ACAS undoubtedly caused difficulties. It was a disincentive to employers to reach a settlement of actual or potential employment protection claims where there was no certainty that the former employee would not pursue his or her claim to a hearing before the Industrial Tribunal.

Parliament has sought to resolve that difficulty by providing for compromise agreements, as defined by Section 140(3) of the 1978 Act, as an alternative route to that which involves the ACAS service. The relevant provision for our purposes is now to be found in Section 140(2)(fb), also inserted by Section 39(1) of TURERA.

Section 140(2)(fb) adds to the list of exceptions to the restrictions on contracting out of the Act's provisions, by providing that Section 140(1) shall not apply -

"to any agreement to refrain from instituting or continuing any proceedings specified in section 133(1) (except (c)) or 134(1) before an industrial tribunal if the conditions regulating compromise agreements under this Act are satisfied in relation to the agreement."

Mr Gorton's submission, on behalf of the Appellant, put shortly, is that the exception contained in sub-sub-section (fb) applies only to complaints which have already been made to the Tribunal, and it does not apply to agreements concluded before a complaint has been presented.

He focuses attention on the words "specified in section 134(1)" and submits that Section 134(1) is concerned only with the intervention of a conciliation officer after a complaint of unfair dismissal has been presented. Section 134(3) deals with such intervention before such a complaint has been presented.

Accordingly, he says, by referring only to Section 134(1) Parliament must have intended that the new power relating to compromise agreements in relation to unfair dismissal claims only applied to agreements reached after a complaint has been presented and not before.

He acknowledges that the plain words of the sub-sub-section refer to "any agreement to refrain from presenting any proceedings", but says that this expression is inconsistent with the reference to Section 134(1). He goes on to submit that these two elements are irreconcilable.

Pausing here, we are quite unable to see any difficulty in the construction of this sub-sub-section.

The words "any agreement to refrain from instituting or continuing any proceedings" echo similar words to be found in the original sections 140(2)(d) and (e). The two concepts of pre and post complaint agreements are run together in sub-sub-section (fb). The first of those expressions cannot as a matter of statutory construction simply be ignored, as Mr Gorton would have us do.

As to the point that there is a reference only to Section 134(1) (post-complaint) and not Section 134(3) (pre-complaint) we think that the simple answer is that the proceedings specified in Section 134(1) simply refers to a complaint under Section 67 (that is, a complaint of unfair dismissal). Those are the proceedings specified in Section 134(1). Accordingly what the sub-sub-section is referring to is:

(1) an agreement to refrain from instituting a complaint of unfair dismissal presented under Section 67; and

(2) an agreement to refrain from continuing any proceedings already commenced by way of a complaint of unfair dismissal presented under Section 67.

This agreement, on the assumption made for the purposes of argument, falls squarely under the first limb articulated above.

Accordingly, in our judgment, the Chairman's ruling on this point was correct.

We have tested our conclusion in this way. Mr Gorton accepts that Section 133(1) of the Act sets out a number of claims under the Act. He agrees that in relation to those matters (with the exception of wrongful dismissal claims under Section 131) Section 140(2)(fb) allows of Section 140(3) compromise agreements to be reached both before and after a complaint is presented to the Tribunal.

Let us take by way of example one those claims referred to in Section 133(1)(a), namely a claim under Section 53 of the Act that an employer has not given written reasons for dismissal. Mr Gorton accepts that such a claim may be lawfully compromised whether or not a complaint under Section 53 has been presented to the Industrial Tribunal. That would lead to the absurd result, if his primary submission in relation to Section 134(1) is correct, that a compromise agreement reached before a complaint is made relating to both a Section 53 claim and a complaint of unfair dismissal under Section 67 would be valid as to the Section 53 complaint but not the Section 67 complaint. That cannot, in our judgment be what Parliament intended.

Had we thought that there was any ambiguity, obscurity or absurdity about the construction of Section 140(2)(fb) we should have felt obliged, following the House of Lords ruling in Pepper v Hart [1993] ICR 291, to refer to the relevant parliamentary debates. We emphasise that such a course, in our view, is not necessary. However, were we to have thought it was, and having been directed to the relevant reports in Hansard, we would have been bound to conclude that the construction which we favour reflects the intention of the legislature.

Finally, we are asked by Mr Gorton to consider the public policy behind the 1978 Act. We accept that Section 54 gives every employee to whom Part V of the Act applies the right not to be unfairly dismissed, and further that any attempts to contract out of that right is prima facie barred by Section 140(1) of the Act. However, there is a further principle enshrined in the Act, that of encouraging conciliation between parties to a dispute arising out the employment protection rights contained in the Act. We are quite satisfied that our construction of the provision here in question is entirely consistent with that principle, and thus accords with the public policy behind the legislation.

In all the circumstances this appeal must be dismissed.