United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 771_94_3003

Appeal No. PA/771/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 30th March 1995

Judgment delivered 28 April 1995

THE HONOURABLE MR JUSTICE MUMMERY (PRESIDENT)

(AS IN CHAMBERS)

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DR M S SETIYA          APPELLANT

EAST YORKSHIRE HEALTH AUTHORITY          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MR A SNELSON

(of Counsel)

Messrs Le Brasseur

J Tickle

Solicitors

6-7 Park Place

LEEDS LS1 2RU

For the Respondents MISS J McNEILL

(of Counsel)

Yorkshire Health Legal Services

Clarendon House

9 Victoria Avenue

Harrogate HE1 1DY


 


MR JUSTICE MUMMERY (PRESIDENT) For 20 years Dr Setiya, a full time GP, worked as a Clinical Assistant for the East Yorkshire Health Authority ("the Authority") under a contract involving employment for less than eight hours per week. After the termination of his employment on 10th October 1991, Dr Setiya made a claim for unfair dismissal. The Authority disputed the jurisdiction of the Industrial Tribunal to hear his Originating Application presented on 6th November 1991, on the ground that Dr Setiya was not continuously employed by the Authority for eight hours or more per week during any period of his employment. The Authority also contended that he was fairly selected for redundancy.

The Industrial Tribunal heard argument on the question of jurisdiction as a preliminary issue on 26th February 1992 and, in Full Reasons notified to the parties on 4th March 1992, decided that Dr Setiya did not have the necessary continuity of service to enable the Tribunal to consider his complaint of unfair dismissal.

Dr Setiya's time for appealing from that decision expired at the end of 42 days from 4th March 1992 (Employment Appeal Tribunal Rules 1980, Rule 3(1A), which was then in force).

His Notice of Appeal was not served on the Employment Appeal Tribunal until over two years later on 3rd August 1994. The Notice of Appeal was served under cover of a letter from his solicitors (Le Brasseur J Tickle) explaining the reasons for the lateness of the appeal and applying for an extension of time.

The appeal was prompted by the impact of the decision of the House of Lords in R. v. Secretary of State for Employment ex parte Equal Opportunities Commission ("the EOC case"), promulgated on 3rd March 1994 and reported at the beginning of April 1994 in [1994] IRLR 176 (now reported in [1995] 1 AC 1), and subsequent decisions affecting the jurisdiction of an Industrial Tribunal to hear a claim for unfair dismissal by a part-time worker employed for less than eight hours per week (Warren v. Wylie reported at the beginning of July 1994 in [1994] IRLR 313), followed by Mediguard Services Ltd v. Thame [1994] IRLR 504 and Clifford v. Devon County Council [1994] IRLR 628 confirming the entitlement of employees of public and private employers to make complaints of unfair dismissal regardless of the number of their weekly hours of work. That followed from the declarations made by the House of Lords in the EOC case that the provisions of the Employment Protection (Consolidation) Act 1978, whereby employees who work for fewer than 16 hours per week are subject to different conditions in respect of qualification for employment rights (such as redundancy pay and compensation for unfair dismissal) from those which apply to employees who work for 16 hours per week or more, are incompatible with Article 119 of the EEC Treaty and the Council Directives on Equal Pay and Equal Treatment.

The application for an extension of time for appealing is opposed by the Authority which accepts that, if an extension is granted, Dr Setiya is, in the present state of the law, bound to succeed in his appeal and the matter would have to be remitted to the Industrial Tribunal for a hearing on the merits of his claim for unfair dismissal.

As it is likely that this decision will affect many other cases, this judgment, which would normally be given in Chambers, is, with the agreement of the parties, given in open Court.

Extensions of Time - General

The practice and principles relating to applications for leave to appeal out of time are not in dispute. They were recently restated, both as a reminder to, and as a convenient summary for, parties and their advisers: United Arab Emirates v. Abdelghafar [1995] ICR 65 at 71 and 72. Time limits are strictly enforced and only relaxed in rare and exceptional cases where the Tribunal is satisfied that the reason for non-compliance is a good excuse which justifies departure from the time limits prescribed by the Rules. In the exercise of the discretion to extend time the Tribunal will examine the explanation for the default, ask whether that explanation provides a good excuse for the default and decide whether the circumstances justify the exceptional step of granting an extension of time.

The excellent arguments of Mr Snelson, on behalf of Dr Setiya, and Miss McNeill, on behalf of the Authority, have concentrated on two main points on this appeal, namely

(1) The Directive point, and

(2) The EOC decision point.

The Directive Point

Mr Snelson submitted, on the authority of Emmott v. Minister of Social Welfare and Attorney General 208/90 [1991] IRLR 387, that the Authority is not entitled to rely on Dr Setiya's delay in instituting the appeal against the Industrial Tribunal decision.

(1) The Authority is an emanation of the State: Marshall v. Southampton & South West Hampshire Area Health Authority (Teaching) [1986] ICR 335.

(2) On the authority of the EOC case Dr Setiya is entitled to rely on the Equal Pay Directive and the Equal Treatment Directive against the Authority, as an emanation of the State, to disapply the threshold qualifying provisions in the 1978 Act as being incompatible with the superior provisions of Community Law contained in the Directives.

(3) The Directives had not been properly transposed into UK domestic law in 1992 and he was, therefore, unable to ascertain in 1992 the full extent of his rights relevant to the time for appealing against the Industrial Tribunal decision.

(4) Until a Directive has been properly transposed into domestic law, a defaulting Member State is not entitled to rely on an individual's delay in initiating proceedings against it in order to protect rights conferred upon him by the provisions of the Directive. The period laid down by national law in which proceedings must be initiated cannot begin to run before that time. See Emmott (supra) at paragraphs 21 and 23.

(5) The Directives were not properly transposed into the domestic law of the United Kingdom so as to effect the enforcement of employment rights of part-time employees until the coming into force of the Employment Protection (Part-Time Employees) Regulations 1995 (1995 No.31) on 6th February 1995. Time had not therefore begun to run against Dr Setiya at the time when he served his notice of appeal in August 1994.

The Application of the Principle in Emmott

The principle in Emmott has been applied by the Employment Appeal Tribunal in relation to claims brought in the Industrial Tribunal, after the expiration of the time limits set by UK domestic law, in reliance on the Equal Pay and Equal Treatment Directives and on Article 119 of the EEC Treaty. For example, in Cannon v. Barnsley Metropolitan Borough Council [1992] IRLR 474 Mrs Cannon, who had been made redundant in August 1985 at a time when there was a difference in treatment of men and women for redundancy payments, did not present her originating application alleging that she had been unlawfully discriminated against until 28th February 1990, nearly six weeks after the difference in treatment had been removed by the Employment Act 1989. The Industrial Tribunal applied the time limits under UK domestic law in the Sex Discrimination Act 1975 and dismissed her complaint on the ground that it was out of time. They applied the time limit of three months and did not consider that it was just and equitable to extend the time. The Employment Appeal Tribunal held that that was an erroneous approach because, in advancing her claim, Mrs Cannon was relying on the Directives and

"...the Emmott decision makes it clear that the State and its emanations are disabled from relying on any such running of time right down to the day when the failure of the State to comply with its obligations under the relevant Directive has been made good." (paragraph 12, p.477)

That did not occur until the coming into force of the relevant provisions of the Employment Act 1989 on 16th January 1990. On application, by analogy, of the statutory time limit for bringing redundancy claims, Mrs Cannon was not out of time in presenting her originating application on 28th February 1990.

A similar approach was taken by the Employment Appeal Tribunal in Rankin v. British Coal Corporation [1993] IRLR 69. That was also a case of reliance on European Community Law to claim redundancy payments in respect of a dismissal by reason of redundancy some years before the application was presented to the Industrial Tribunal. The Industrial Tribunal dismissed the application on the ground that it was out of time. The Employment Appeal Tribunal allowed the appeal. The decision contains a comprehensive review of the authorities, including the Cannon case. That case was argued on the basis of a claim under Article 119. The Tribunal came to the conclusion that

"...The protection of the rights conferred under Article 119 of the Treaty should prevail, at least to the extent that a claim brought within a reasonable period after the coming into force of the amending legislation should be regarded as timeous." (Paragraph 28, p.76).

In that case the Tribunal expressed no view on the application of Emmott to the case of a failure to carry out the obligations imposed by Article 119, since the point had not been raised before the Industrial Tribunal. The Tribunal stated in paragraph 29 -

"We were not referred to any authority to support the view that the considerations which apply in the case of failure to carry out Directives, as in the case of Emmott, supra, should also apply in the case of a failure to carry out the obligations imposed by Article 119. It is not, therefore, necessary for us to express any view on this point."

For the purposes of this appeal I shall assume that the approach in those two cases to the application of time limits to the initiation of claims based on Community Law is correct, though arguments have been advanced in other cases that that approach is wrong. It will be more appropriate for those arguments to be considered in the cases where the point is necessary for decision. That is not necessary in this case because, in my view, it is possible to distinguish those cases and the case of Emmott along the lines suggested by Miss McNeill in her arguments for the Authority.

In my judgment, the principle in Emmott does not apply in this case. I reject the argument that the time for appealing against the Industrial Tribunal decision did not begin to run against Dr Setiya before the amendments made to the qualifying conditions in the 1978 Act on 6th February 1995.

The principle laid down in Emmott, as applied in later cases, relates to time limits for initiating proceedings. The principle stated in paragraph 23 of the decision is -

"It follows that, until such time as a Directive has been properly transposed, a defaulting Member State may not rely on an individual's delay in initiating proceedings against it in order to protect rights conferred upon him by the provisions of the Directive and that a period laid down by national law within which proceedings must be initiated cannot begin to run before that time."

The limited nature of that principle has been recently recognised by the European Court of Justice in Johnson v. Chief Adjudication Officer (No.2) [1995] IRLR 157. The European Court observed in paragraph 26 of the judgment that -

"... the solution adopted in Emmott was justified by the particular circumstances of that case, in which a time bar had the result of depriving the applicant of any opportunity whatever to rely on her right to equal treatment under the Directive."

That was contrasted with rules of national law which did not affect the rights of individuals to rely on the Directive in proceedings before the national courts against a Member State, but merely placed a time limit on the retroactive effect of claims. Such limits do not constitute a bar to proceedings; they merely limit the period prior to the bringing of a claim in respect of which arrears are payable. The European Court concluded (in paragraph 38) -

"Community Law does not preclude the application, to a claim based on the direct effect of Council Directive 79/7/EEC of 18th December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security, of a rule of national law which merely limits the period prior to the bringing of the claim in respect of which the arrears of benefit are payable, even where the Directive has not been properly transposed within the prescribed period in the Member State concerned."

In my view, Miss McNeill correctly argues, by analogy with the reasoning in that decision, that the principle in Emmott has no application to national time limits for appealing against a decision, even in a case where a claim is sought to be based on a Directive against an emanation of the State, such as the Authority.

It was not argued by Mr Snelson that the time limit for appealing contained in Rule 3(1A) of the Employment Appeal Tribunal Rules 1980 or in Rule 3(2) of the current Rules 1993 was itself incompatible with Community Law. That time limit is not less favourable than the time limit relating to similar actions of a domestic nature nor is it "framed so as to render virtually impossible the exercise of rights conferred by Community Law", see Emmott (supra) paragraph 16 on p.390.

For those reason Mr Snelson's argument on the Directive point is rejected.

The EOC Decision Point

Mr Snelson's argument on this point was that there were exceptional features of this case which justified the exercise of the discretion to extend time.

(1) Radical developments in the law had occurred since the Industrial Tribunal decision in 1992.

(a) The EOC case According to the decision of the House of Lords, which was not promulgated until 3rd March 1994, the threshold qualifying provisions of the 1978 Act whereby any employees who worked for fewer than 16 hours per week were subject to different conditions in respect of employment rights from those who worked for more than 16 hours a week were incompatible with the Directives and with Article 119 of the EEC Treaty. That case decided for the first time points of fundamental importance affecting the jurisdiction of the Industrial Tribunal to entertain claims by part-time workers, such as Dr Setiya.

(b) The decision left open certain points, namely whether compensation for unfair dismissal was "pay" within Article 119 and whether the lower eight hour qualifying provision was incompatible with Community Law.

(c) Both of those points were considered by the Industrial Tribunal sitting at Southampton in the case of Warren v. Wylie (supra) which, though decided in May 1994, was not reported until the July 1994 issue of the Industrial Relations Law Reports. The Industrial Tribunal held that the eight hour qualifying provision in the 1978 Act was contrary to Community Law and that compensation for unfair dismissal was "pay" under Article 119 and was binding on all employers, whether or not they were emanations of the State. The later decisions of the Employment Appeal Tribunal in Mediguard (supra) and the Clifford (supra) confirmed that decision.

(2) Within a month of the reporting of the case of Warren v. Wylie in the Industrial Relations Law Reports Dr Setiya presented his originating application. An Affidavit has been sworn by Dr Setiya' solicitor, Mr Jonathan Bonser, setting out details of steps taken in relation to Dr Setiya's case after the promulgation of the EOC decision. On 22nd March 1994 Mr Bonser's firm was asked by its client, the Medical Protection Society, to look into the possibility of resurrecting Dr Setiya's case in view of the EOC decision. The EOC decision had been reported in the Daily Telegraph on 5th March 1994. It was noticed by Dr Setiya who wrote to the Medical Protection Society for advice on the matter. Mr Bonser advised the Medical Protection Society on the effect of the EOC case by a memorandum dated 27th April 1994. He suggested obtaining counsel's opinion. As he received no specific instructions on the matter he contacted the Medical Protection Society on 16th June 1994 and was then authorised to instruct counsel on the complex legal issues involved. Counsel, who was instructed on 22nd June 1994, advised on the merits, suggested an appeal and settled the notice of appeal received by Mr Bonser's firm on 15th July 1994. A copy of the advice and the notice of appeal were forwarded to the Medical Protection Society under cover of a memorandum dated 20th July. The urgency of the matter was stressed. On 2nd August 1994 the Medical Protection Society authorised the solicitors to proceed with the appeal on Dr Setiya's behalf. A letter was written on the same day enclosing the notice of appeal and applying for an extension of time. In those circumstances Mr Snelson submitted that the length of the period from 3rd March 1994 until 2nd August 1994 was not an unreasonable one, having regard to the difficulty of the legal issues, the continuing development of the law through the cases and the necessity for a number of persons to be consulted and involved in the process of resuscitating Dr Setiya's case.

(3) There was no evidence from the Authority to show that there was a risk of any specific prejudice to them in the grant of an extension of time. It was not suggested that there were any specific reasons why it would not be possible to have a fair hearing on the merits of Dr Setiya's case before the Industrial Tribunal.

(4) To refuse Dr Setiya a hearing of his claim on the merits on procedural grounds (ie as out of time) would deprive him of the benefit of the EOC decision. That would be unjust to him.

(5) On the other hand, to grant an extension of time to Dr Setiya would not inflict any injustice on the Authority. On their own case they had always claimed to be able to justify his dismissal.

(6) It was an irrelevant consideration, in the exercise of a discretion to grant an extension, that Dr Setiya might have a claim against his advisers or against the State on the basis of Francovich v. Italian Republic [1991] ECR 1-5357. The Authority was alleged to be the primary wrongdoer. There was no reason, in principle or policy, why the Authority should be protected, by virtue of a time limit, from the consequences of the EOC decision.

Conclusion

After hearing the submissions from Mr Snelson and Miss McNeill I concluded that, whichever way this case is decided, a sense of injustice is inevitable. If I were to refuse to extend the time, Dr Setiya would feel that he has been unjustly denied the benefit of the EOC decision to correct the decision of the Industrial Tribunal on jurisdiction which the Authority accepts would now be held to exist on the basis of the EOC decision; Dr Setiya would be deprived of the chance to fight his claim on the merits.

If, on the other hand, I were to grant the extension the Authority might view that as an unjust deprivation of the benefit of the time limit for appealing the decision which was regarded as correct at the time. As the EOC case itself demonstrated, it was open to Dr Setiya's advisers in those proceedings to take the points which ultimately succeeded in the House of Lords, even though it was not then widely appreciated by legislators, tribunals or professional advisers that the legal position was as ultimately stated by the House of Lords on 3rd March 1994.

The principled exercise of discretion is a matter of weighing and balancing, in all the circumstances, the justice of the case, and the injustice which each side may suffer.

I have reached the conclusion that an extension of time should be refused in this case for the following reasons.

(1) As Mr Snelson recognised in his submissions, it is not sufficient, on an application for an extension of time, for the appellant simply to point to a subsequent decision of a Superior Court to the effect that the decision sought to be appealed was wrongly decided. The proper approach is for the court to look at all the circumstances to see if it is just to extend time ie the nature of the dispute, the position of the parties and the effect of the judgment. This was the approach taken by the Court of Appeal in Re Berkeley [1945] Ch.1 and in Property and Reversionary Investment Corporation Ltd v. Templar [1978] 2 All.ER 433. The second case is instructive. The Court of Appeal did grant an extension of time for appealing where a decision by a judge of first instance in a rent review case was not sought to be appealed until nearly two and a half hears after it was decided. An attempt was then made to appeal on the basis that the House of Lords had recently declared erroneous a decision which formed the foundation of the judgment at first instance. The Court of Appeal decided that there was a special reason for granting leave to appeal out of time. The special reason was the continuing contractual relationship between the parties which included provisions affecting future periodic rent reviews until 1986. On the basis of the subsequent House of Lords decision it was argued that those provisions had been erroneously construed. An extension of time was granted, though it is relevant to note that the Court of Appeal said that it had been properly conceded by the appellant that there would be no retrospective consequences as far as rent was concerned. It is also important to note that an extension was not granted simply on the basis that it was now appreciated by the courts (and everyone else) that the law was different from what it was thought to be at the time of the decision under appeal. The special feature of the case was that the judgment, which may have been erroneous in the light of the later higher decision, had continuing consequences for the parties. That is not a feature of the present case. I conclude that, if this were purely a domestic law case, an extension of time for appealing the Industrial Tribunal decision heard over two years previously would not be granted. For example, if a decision was made in 1992 that the Applicant was not an employee and therefore not entitled to bring a case for unfair dismissal, I do not think that the discretion to extend time would be exercised in his favour over two years later if a subsequent decision of a higher court reformulated the test for determining who was an employee and who was self-employed in such a way as to cast serious doubt on the correctness of the earlier decision.

(2) Does it make any difference that Dr Setiya now seeks to rely on Community Law? On this point Mr Snelson referred me to the decision of the Employment Appeal Tribunal in Foster v. South Glamorgan Health Authority [1988] ICR 526. In that case the applicant made a complaint to an Industrial Tribunal that she had been unlawfully discriminated against on the ground of sex on 20th December 1985 when she was required to retire at 60. The time limit applicable to her claim was three months beginning when the act complained of was done. On the law, as it appeared to be at 20th December 1985, she had no claim. However, on 26th February 1986 the European Court of Justice ruled in the decision of Marshall (supra) that those in her position were entitled to bring a claim. That decision was declaratory of the law as it affected the applicant's case on 20th December 1985. The period for bringing her claim expired three weeks after the Marshall decision was promulgated. The originating application was not presented until 8th September 1986, over eight months after the act complained of. The Industrial Tribunal decided that the claim was presented outside the time limit and refused to extend the time on the basis that it was not just and equitable to do so. The reasoning of their decision appeared to the EAT to be that other people had proceeded on the basis of an earlier decision, Roberts v. Cleveland Area Health Authority [1979] ICR 558, that they had no claim. The applicant also proceeded on that basis. The fact that Marshall's case changed the law should not put her in a better position than those other people. There had to be finality in litigation. Those other people were prevented from reopening their cases. The applicant should not be in any better position than them. The EAT disagreed with that reasoning and remitted the case to the Industrial Tribunal for further consideration. The basis of their disagreement was that the Industrial Tribunal had approached the matter as one of principle, rather than as an exercise of discretion on the facts of the particular case. They concluded that there had not been a proper exercise of the statutory discretion to extend time, because the Industrial Tribunal had not approached it as a question of fact for each particular case, comparing only like with like. In their approach they in fact treated "three months and a day as being on all fours with seven years". They treated necessity for finality in litigation as a general principle to be applied across the board, rather than drawing a line according to the facts of the case. In my view, that decision does not support Dr Setiya's application for leave to appeal out of time. It was not concerned with appealing out of time. It was concerned with bringing a case in the Industrial Tribunal out of time. Further, all that it decided, as a proposition of law, was that the proper approach to extensions of time is to consider each case according to its circumstances, and not decide it simply by reference to a general principle, such as the necessity for finality in litigation and the fact that there were some people for whom it would be too late to bring a claim. The EAT did not decide that there should or should not be an extension of time. They remitted the matter to the Industrial Tribunal as the Tribunal had used erroneous legal reasoning in refusing an extension. It is to be noted that the EAT did not regard the fact that the applicant was relying on Community Law, as importing any special considerations into the exercise of the discretion.

(3) Mr Snelson did not contend, as already noted in relation to the arguments on the Directive point, that the 42 day time limit for appealing was incompatible with Community Law, either as being less favourable than time limits for similar claims of a domestic nature or as making it exceedingly difficult or virtually impossible in practice to enforce Community rights.

(4) In my judgment, considerations of finality and certainty are a relevant consideration in this case, though not in the way argued by the Industrial Tribunal in the case of Foster. It is not a ground for refusing an extension to Dr Setiya that there may be other applicants in cases decided years before his who would now have no hope of obtaining an extension of time. That does not mean, however, that finality and certainty are not relevant considerations in the dispute between Dr Setiya and the Authority. As I see it, the position is that the decision of the Industrial Tribunal in March 1992 was a final and binding decision. The case was argued on the basis of the legal position as it was perceived to be by those representing the parties and by the Tribunal itself. Their decision was accepted. There was no appeal within the time limits. Even at that time, however, it was possible that a higher Court would later take a different view of the law. The arguments which ultimately succeeded in the House of Lords in 1994 could have been used in Dr Setiya's case in 1992. The European Communities Act had been in force since the beginning of 1973. Article 119 of the EEC Treaty had been held to have direct effect in 1976. The Directives had been in force for many years. It cannot be right, in my view, to extend the time for appealing on the basis that two years after the decision the law appeared to the House of Lords to be different than it appeared to the Tribunal to be in 1992. Life, including the law, is subject to the chance of change. Dr Setiya's claim against the Authority was subject to the "hazards of time" inherent in change. It is true that, if Dr Setiya had been dismissed in October 1994, instead of October 1991, he would have had a right to have his claim for unfair dismissal heard by the Industrial Tribunal. That does not, however, justify an extension of time for appealing, so as to question the validity of an unappealed decision, which was final and binding between these parties when it was decided. I am as reluctant to disturb that decision as I would be to question a compromise reached between the two parties at that time, which it was sought to set aside subsequently on the basis that the legal position was now different from it was thought to be when the parties settled their differences.

For all those reasons an extension of time is refused. I leave this case with a thought for future cases. The arguments advanced on behalf of Dr Setiya are based on an unstated, but undisputed, legal theory of judicial decision: that judicial decisions proceed by way of declaration, not creation, of law and therefore, even if a decision at the highest authority enunciates a legal principle not previously known or recognised, it has retrospective effect. The assumption in Dr Setiya's application is that the declarations made by the House of Lords on 3rd March 1994 had force over two years earlier when his case was argued. There may no longer be a sound theoretical or practical basis for treating the effect of all judicial decisions as retrospective, particularly in an area such as Community Law, which emerges and changes direction and shape, sometimes unpredictably. Thus the European Court of Justice, in recognition of the legal principle of certainty, gives only prospective effect to some of its rulings. The time may have arrived for the highest court in the United Kingdom (or for Parliament) to consider whether, in appropriate cases, rulings should be made prospectively so that there is a "cut off point" limiting the retrospective repercussions of a decision (see Lord Simon's "After Thoughts" in Jones v. Secretary of State for Social Services [1972] A.C.944 at 1026, 1027).