United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 962_94_1311

Appeal No. EAT/962/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 13 November 1995

HIS HONOUR JUDGE H J BYRT QC

MS S R CORBY

MISS A MACKIE OBE

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MR A J SANDERS          APPELLANT

(1) MR D SLADE

(2) MR G WOODFORD

(3) THREE COUNTIES EXPRESS LTD          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MR J CLEMENTS

(of Counsel)

The Keeler West Partnership

Solicitors

191A London Road

North End

Portsmouth

PO2 9AH

For the 1st and 2nd Respondents NO APPEARANCE BY OR REPRESENTATION ON BEHALF OF THE 1ST AND 2ND RESPONDENTS

For the 3rd Respondent MR E BLAND

Director (Three Counties Express Ltd)

ATC Management Services (Southern) Ltd

Delta House

Delta Business Park

Salterns Lane

Fareham

Hants

PO16 OSF


 


JUDGE BYRT QC: This is an appeal against the refusal of an Industrial Tribunal sitting at Southampton to review the decision it made on 26 May 1994. On that occasion (that is 26 May) the Tribunal found in favour of the Applicant, a Mr Slade, that he was entitled to redundancy and holiday payments and that he was entitled to those sums as against a Mr Sanders, personally. To understand the problem that arises in this case, it is necessary for me to review the background facts.

Mr Slade had been first employed in about 1988 by a Mr Sanders, who at that time was trading as Three Counties Packaging. In February 1993, Mr Sanders incorporated all his business interests in a limited company, which was named Three Counties Express Ltd and Mr Sanders was a director of that company.

On 4 January 1994 Mr Sanders resigned as director and a company named as D.H. Directors Ltd took over as sole director of the company. They were in the nature of being company's doctors. Their prescription was that the company should cease trading and it did so on 14 January 1994. By then, two employees of the company, Mr Slade and Mr Woodford, had been dismissed from their employment by reason of redundancy, that having happened mid-December 1993.

On 6 January, Mr Slade commenced proceedings before the Industrial Tribunal by taking out an Originating Application. Mr Woodford followed suit on 13 January and it is important to see who it was that each of those parties named in their Originating Applications as the Respondents.

Mr Slade named Three Counties Express; that was neither Three Counties Packaging, Mr Sanders' old firm, nor was it Three Counties Express Ltd, the Company, nor did it (and this is most especially important) name Mr Sanders as the Respondent. So there was an ambiguity here, right from the beginning which needed clarification at some stage.

Mr Woodford, on the other hand, did name Mr Sanders as the Respondent and gave his address as Three Counties Express. In due course, IT2s were sent out accordingly. On 28 February, D.H. Directors Ltd wrote in a letter, on behalf of the company, Three Counties Express Ltd, in relation to the Woodford application and that letter dated 28 February was accepted by the Industrial Tribunal as being the Notice of Appearance in that case.

The matter proceeded smoothly in front of the Industrial Tribunal on 20 May, so far as Mr Woodford is concerned, and notwithstanding whom he had originally named the Respondent in that case, he secured an award against Three Counties Express Ltd and there has been no appeal against that decision.

So far as Mr Slade's case is concerned; on 16 May, D.H. Directors Ltd wrote in respect of his case for the first time and stated that they themselves had become the sole directors of the Company, Three Counties Express Ltd, which had ceased trading. They indicated they had no wish to obstruct Mr Slade's claim and then went on to state that they did not intend to appear at the hearing with a view to saving costs.

The next crucial dated is 25 May. This was the hearing date and one wonders what happened there. One has an idea, as a result of reading the summary of reasons which was given by the Tribunal at that hearing. The summary says (rather surprisingly) in paragraph 3:

"3. On enquiry from the applicants, it transpires that Mr Slade was employed by Mr Sanders who was trading as Three Counties Packaging, whilst Mr Woodford was employed by Three Counties Express Limited."

In the next paragraph the Tribunal sets out what they deemed Mr Slade's entitlement to be and then went on to make an award against Mr Sanders, on the basis that he was the employer of Mr Slade. Having regard to the facts I have set out earlier, that plainly was a mistaken view of who the parties were to the proceedings.

On 26 May, D.H. Directors Ltd write again to the Regional Office of the Industrial Tribunals saying, "Please amend the order that you made against Mr Sanders personally. The party against whom Mr Slade is entitled to payment, is the Three Counties Express Ltd." The letter was treated as an application for review and this was heard on 4 July. The views of the Tribunal, in considering this application for a review, are set out in the extended reasons which are included in the bundle of documents we have at page 6.

Paragraph 1 of the extended reasons has a statement which makes plain that the Tribunal was still under the misconception that Mr Sanders was a party to the proceedings. It states, quite plainly, and I quote here:

"1 ... Since the Originating Application specifically named Mr Sanders the decision could not be amended under Rule 10(9) of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations 1993. ..."

The essential point to be made there is that in considering this application for a review, the Tribunal is once more emphasising that they had firmly in mind that Mr Sanders was the Respondent to Mr Slade's Originating Application.

The Reasons then proceeds to state that the proceedings were specifically served upon Mr Sanders, that he had entered no appearance, that on 8 April 1994 the Regional Office had written to him personally again, emphasising the statutory time for entering an appearance had elapsed, but that there was scope for considering a late application. Then they continue by saying that on 20 May they were satisfied, on the evidence they heard, that Mr Slade was employed by Three Counties Packaging; that he was dismissed by a letter dated 16 December 1993 on Three Counties Packaging paper signed by Mr Sanders. But they then go on to say that they did not regard Mr Sanders's failure to enter an appearance in this case as a mere procedural mishap. Accordingly, against the background of the facts as they had them firmly in mind, they decided that, finality being one of the essential goals of litigation, this was not one of those exceptional cases where they were prepared to grant a review.

It is clear, in our assessment of the facts, that the Tribunal thought that Mr Sanders was a party; that he had been personally served and, of his own volition, had chosen to disregard these proceedings. They came to this conclusion and proceeded with the hearing without affording Mr Sanders any opportunity of being heard and that, of course, is a serious procedural defect.

The question, at this particular stage, is what should the Employment Appeal Tribunal do now? Mr Clements, who has appeared on behalf of Mr Sanders, invites us to remit the case to the Industrial Tribunal with a direction that they review this case with a view to deciding whether to allow an amendment of the proceedings so as to include the name of Mr Sanders personally.

He says that if the Industrial Tribunal at that stage agreed to the amendment, it is a necessary implication of such an amendment that Mr Sanders be afforded an opportunity to be heard on the case. A necessary implication of that is that the original decision the Tribunal had come to, would have to be revoked; in effect the proceedings would have to start again.

We do not think that the interests of justice would be served by such a process.

Mr Bland has appeared on behalf of D.H. Directors Ltd, the sole directors of Three Counties Express Ltd, and he has made plain he would wish Mr Slade should, in due course, be paid out his just entitlement and wants to do nothing which would hinder that process. In fact, he says he has no grounds he would wish to argue why an award should not be made against the company he represents. There was a real possibility that at the end of the day, all creditors will be able to be paid out. But of course, if that were not to be the case, Mr Slade's entitlement would be met out of public funds.

As the Employment Appeal Tribunal, we are quite clear what has gone wrong in this case, and are in possession of all the facts which would enable us to put matters right without remitting the case to the Tribunal below. In our judgment, the Appellant named the right Respondent in his IT1, and, accordingly, we direct that the award be entered against Three Counties Express Ltd in substitution for Mr Sanders. To that extent, we allow the appeal.