United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MS P WALSH (Solicitor) Messrs L Bingham & Co. Solicitors 4 Carmelite Street London EC4Y 0BN
For the Respondents	MR P MILLER (Director) Pinnacle Business Group Ltd 363 London Road Croydon Surrey CR9 3BW


 


MR JUSTICE MORISON (PRESIDENT): This is an appeal from a decision of an Industrial Tribunal Chairman sitting alone, in which he refused to grant the employee's/applicant's claim for outstanding commission allegedly due to him, on the ground that the arrangements between the parties represented illegal performance of the contract of employment, and that therefore, there was no contract of employment for the purposes of Section 1 and Section 8 of the Wages Act 1986.

The matter arises in this way. The appellant was employed by the respondent company for a short period of time from January 1995 until his resignation on 10th April 1995 as a salesman entitled to commission. The circumstances of the commission arrangements appear to be that commission was only due and payable to the employee when the employers themselves had been paid in respect of the transaction giving rise to the right to commission.

When the employee left, it was his contention that he was due some £674.28 commission which the respondents had failed to pay him. The respondents put in a notice of appearance denying that for various reasons, including as I understand it, that some of the customers who had signed up did not in fact make any payment, therefore the company did not receive any payment themselves, that there was any money owing to the employee. They referred to a letter which was sent to the employee setting out details of his final payment and a full breakdown of the deductions.

Both parties, therefore, anticipated, no doubt, that the issue which had to be determined at the Industrial Tribunal was whether the company were correct in the contention which they made that the employee had been fully paid his commission entitlement. Mr Miller, a director of the company, was, I think, available to give evidence at that hearing, and no doubt had prepared himself with the necessary documentation to substantiate what was said in the letter to which I have referred.

However, during the course of the hearing, it appeared to the Industrial Tribunal Chairman, as I have indicated, that the contract, or at any rate the claim, was tainted by illegality and therefore would fail on that ground. The Chairman of his own initiative asked a number of questions of the parties and having received their responses made findings of fact in paragraph 4 of the decision. He was of the view that the activities between the employee and the employer in relation to what the revenue were to be told had happened during March, was a false arrangement which tainted the claim.

We have looked with care at this appeal. We are satisfied that the matter cannot stand as it is at the present time; that justice can only be done between the parties if there is to be a hearing before a full tribunal; and that hearing is to be a re-hearing, with the parties at liberty to put whatever evidence they wish before the tribunal so that the matter can be heard afresh. We think this is a case where the Chairman of the original tribunal should not preside over the new tribunal, so as to ensure that both parties know that their case is being looked at anew.

We have arrived at this conclusion because it seems to us that there is not enough factual material in the present decision to enable us to determine whether the contentions made by Ms Walsh on behalf of the appellant here are well-founded or not. We are very unclear as to precisely what the arrangements were in March 1995, and therefore we are not in a position to form any view as to whether the defence, if you will, of illegality is a good one or not. That will be a matter for a new tribunal to take account of, having heard the evidence and applied the law.

We regret taking this course, because we recognise that the employers, through no fault of their own, have won a case on a point which they were not themselves proposing to argue before the Industrial Tribunal and had not prepared themselves for. It turns out, as I have indicated, not to have been a good point on which to have succeeded, and they therefore are going to be put to the expense of a further hearing. It is also a matter of regret so far as the employee is concerned, that he is going to have to have yet another bite the cherry. We hope very much that the new hearing will lead to a satisfactory resolution of the dispute between the parties if they have been unable to resolve their dispute before that time. I think that we are all of the view that bearing in mind the limited amount of the claim and the costs likely to be involved, it would be a case which should sensibly be dealt with by the parties by some kind of satisfactory settlement. The employee will recover nothing if the employers case is correct, and he is obviously at risk for losing yet again on the illegality point; he may therefore think that it would be sensible to accept some kind of offer from his employers, but that is entirely a matter for the parties to deal with as between themselves. We hope that they will succeed at arriving at a sensible conclusion.