United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MISS J HARRISON (of Counsel) Messrs Denton Hall Solicitors Five Chancery Lane Clifford's Inn London EC4A 1BU
For the Respondent	MR T PULLEN (Representative) Hammersmith & Fulham Community Law Centre 142-144 King Street Hammersmith London W6 0QU


 


MR JUSTICE MORISON (PRESIDENT): This is an appeal against a unanimous decision of an Industrial Tribunal held at London (South) on 5th September 1996 which refused the respondents leave to file a late Notice of Appearance. At that hearing the applicant appeared in person and the respondents who are the company which trades as 'Garfunkel's' were represented by Mr Potts. It must be said, that Mr Potts had received somewhat late notification of the hearing, but he had the right to apply for the case to be adjourned if he did not feel that he was fairly in a position to deal with it. He did not make any such application.

The Rules of Procedure which were in force at the time of this decision are the Industrial Tribunal (Constitution Rules of Procedure) Regulations 1993, the Rules being contained in Schedule 1 to those Regulations and in particular Rule 3 and Rule 15:

"3.-(1) A respondent shall, within 14 days of receiving the copy of the originating application, enter an appearance to the proceedings by presenting to the Secretary a written notice of appearance-

(a) setting out his full name and address and, if different, an address within the United Kingdom to which he requires notices and documents relating to the proceedings to be sent;

(b) stating whether or not he intends to resist the application; and

(c) if he does intend to resist it, setting out sufficient particulars to show on what grounds.

Upon receipt of a notice of appearance the Secretary shall send a copy of it to each other party.

(2) A respondent who has not entered an appearance shall not be entitled to take any part in the proceedings except-

(a) to apply under rule 15 for an extension of time appointed by this rule for entering an appearance;

...

and rules which follow, the word "party" only includes such a respondent in relation to his entitlement to take such a part in the proceedings, and in relation to any such part which he takes.

(3) A notice of appearance which is presented to the Secretary after time appointed by this rule for entering appearances shall be deemed to include an application under rule 15(1) (by the respondent who presented the notice) for an extension of time so appointed.

(4) Without prejudice to rule 15(3), if a chairman grants an application deemed to be included in a notice of appearance by paragraph (3) (which he may do notwithstanding that the grounds of the application are not stated) the Secretary shall send a copy of the notice of appearance to each other party.

(5) A chairman shall not refuse such an application unless he has sent notice to the person wishing to enter an appearance giving that person an opportunity to show cause why an extension should be granted.

...

15.-(1) A chairman may on the application of a party of his own motion extend the time for doing any act appointed by or under these rules (including this rule) and may do so whether or not the time so appointed has expired.

(2) An application under paragraph (1) shall be made by presenting to the Secretary a notice of application, which shall state the title of the proceedings and shall set out the grounds of the application.

(3) The Secretary shall give notice to each of the parties of any extension of time granted under this rule."

The question before the tribunal was whether they should in the circumstances extend Garfunkel's time for putting in a Notice of Appearance. They found facts which are set out in paragraph 4 of their decision. Essentially they found that the employee had lodged his originating application claiming unfair dismissal and breach of contract on 8th June 1996. The tribunal copied the originating application to the respondents, and sent, as they found, to their correct address on 8th July 1996, accompanied by the standard form IT2, an explanatory booklet and the blank IT3 form. Included within that package, that is at paragraph 3 of the IT2, the company was reminded that if they wished to resist the claim they were required to enter an appearance within 14 days of receiving the application. At paragraph 4 they were reminded "If you do not enter an appearance you will not be entitled to defend the proceedings. However, you will be sent a copy of the Tribunal's decision." No Notice of Appearance was received by the tribunal and the matter was listed for a hearing on 5th September 1996. The Notice of Hearing was sent out and dated 9th August 1996. On 20th August 1996 a letter was faxed to the tribunal from the respondent when an explanation was put forward for the failure of the company to serve a Notice of Appearance. The explanation put forward in the fax read:

"Due to the recent postal difficulties and staff holidays IT1 form on behalf of Mr Calheiros has only come to my attention. It was only when I received the Notice of Hearing form on 12 August 1996 that I realised that the case was pending. I then retained a copy of the IT1 form which had been inadvertently filed as there was no appropriate person readily available to deal with it."

[I think the word 'retained' is a misprint for 'obtained'.]

The letter went on to say that the matter had been put in the hands of their professional adviser, Mr Potts, and an IT3 would be prepared without delay. The IT3 was faxed to the tribunal and received by them on 29th August 1996. It appears also that after 10th July 1996 the company would have received a letter from ACAS referring to the proceedings, that letter being dated 10th July 1996. The company plainly received that letter prior to 16th July 1996, because they responded to it on that date.

It appears from the evidence that was given to the Industrial Tribunal that the IT1 form and the letter from the Industrial Tribunal came to light subsequently, and it appeared that it had been filed in the Operations Director's pending file, and as he had been on holiday from 2nd to 20th August 1996, in only came to light on his return.

The essence of the tribunal's decision can be found in paragraphs 5, 6 and 7:

"5. The matter before the Tribunal today is whether or not the Tribunal should, in its discretion, extend the period in which the Notice of Appearance may be submitted so as to validate it. In the evidence which we have heard, there were various suggestions that the real fault lay with "Michelle" a temporary typist replacing someone on maternity leave in the way in which she dealt with the IT1 when it was received by the Respondents. We believe that criticism to be unfair. There is no explanation as to what happened to the IT1 between the time it was received and the day it was found. It would have been received around the 9/10 July. The Operations Manager did not go on holiday until 2 August. It is quite clear that the letter from the Tribunal which had enclosures in it, is a weighty document, it would not have just been one page, it is also clear on the face of it that it would require action. Miss Shennan has had some considerable experience dealing with employment matters, i.e. some 5 years or so, as indeed had Mr Potts, who has 26/27 years experience. Ms Shennan took no constructive action following 16 July when she was aware that a claim had been made against the Respondents to ensure that the company's position was protected. There is no evidence that the IT1 was not received in the normal course of post which would have been round about 9/10 July. It is clear that the ACAS copy was received by ACAS at about that time as they wrote to the Respondents as to why a Notice of Appearance was not entered in time. Even when the problem was discovered on receipt of the hearing notice, the Respondents did not take the step of filing a holding notice of appearance indicating that the claim would be resisted and that full details would follow.

6. Time limits are time limits.

7. The Rules clearly require that a Notice of Appearance should be lodged within 14 days. The Respondents are a substantial company used to dealing with employment matters. They should have in place procedures to deal with important matters such as this, as and when they arise. They failed in this case. We do not consider we should exercise our discretion to extend the period to allow them to file a late Notice of Appearance. In the circumstances we debar the Respondents from defending this claim."

It is apparent as Miss Harrison had suggested in an interesting and able argument on behalf of the appellant respondents, that the Industrial Tribunal did not expressly apply themselves to the question of prejudice; they did not ask the question or appear to have asked the question 'what harm would be caused to the employee if we were to extend time?' and 'what harm would be caused to the employers if we were to refuse to extend the time?' It is accepted honestly on behalf of the company that there was no submission made to the Industrial Tribunal that they should take account of prejudice, but we consider the matter as it stands, despite the fact that they did not have the advantage of the submission which has been made to us.

What is submitted by Miss Harrison is that the tribunal were wrong not to have regard to the question of prejudice and reference was made to an unreported decision of the Employment Appeal Tribunal dated 21st October 1981 a court which was presided over by the then president Browne-Wilkinson J. In that decision he referred to the Rules of Procedure which I believe to have been in the same form as the 1993 Rules to which I have referred. He dealt with the matter in this way. The employer Margaret Horsefield carried on a small business. She appeared in person on 20th January 1981 before the Industrial Tribunal without ever having sent an IT3 or applied for an extension of time. They heard evidence from her as to why the Notice of Appearance had not been entered. She gave evidence which the Industrial Tribunal accepted, that she did not know that she had to enter an appearance; that she had been very busy with her work and had been sent the notice of the hearing. I just pause there to indicate that none of those features is present in this case. (Garfunkel's is a large business, they were aware of the need to enter an appearance because they had previous experience of Industrial Tribunal procedures, and whilst they no doubt are very busy, they are a large organisation which is capable and should be capable of coping with the normal pressures of work and coping with holiday arrangements made for their staff.) The Industrial Tribunal reached its conclusion by saying that the employer, Mrs Horsefield, had not given reasonable grounds for her delay in lodging her Notice of Appearance. It would appear, they said, that she genuinely thought "That it would have been sufficient for her merely to appear on the day of the hearing having regard to the fact that she had received a notice of the date of the hearing, but we have to conclude that having regard to the Rules of Procedure governing these matters, that the Respondent has not satisfied us that she had reasonable grounds for delay in entering a Notice of Appearance, and consequently, she must be debarred from defending these proceedings." Having referred to the argument of Counsel, the court said, and this is essence of their decision, "You have to look at the whole of the circumstances of the case, and so far as possible, you do not debar somebody from taking part in the proceedings if he can be allowed so to do without injustice to the other parties." Accordingly Miss Harrison submits to us that the tribunal were wrong, whatever arguments were presented to them, not to have regard to the prejudice or lack of it to the employee and the prejudice to the company by refusing to allow them to participate in the unfair dismissal and breach of contract proceedings.

We do not know why this decision of the Employment Appeal Tribunal is unreported, if it carries the weight which Miss Harrison has sought to place upon it. We would respectfully observe that it was a decision dated 1981 at a time when it can legitimately be said, I think, that the unfair dismissal procedures were in their 'teenage years' if not in their 'infancy', whereas at this date they are of maturity. It seems to us clear that every employer, certainly of the size of Garfunkel's, is plainly aware and must be aware and must be taken to be aware of the need for prompt responses when they have received an IT1.

It seems to us that if one was to take prejudice as the guiding principle for the determination of the exercise of the tribunal's discretion to extend time, it would be most unlikely that there would be any case where time would not be extended. Thus by applying the prejudice rule as the prime rule, the time limits provided by the Rules would become meaningless.

It seems to us that the position is as follows: that where the tribunal is considering whether an extension of time should be granted or not, they should first of all satisfy themselves that a reasonable explanation has been put forward for the non-compliance with the court's rules. Only when such explanation satisfactory to the tribunal has been given, will it be necessary to consider the question of prejudice, and in those circumstances, it is likely on the facts of a case similar to this one, that if stage two is reached the discretion will be exercised in the respondent's favour.

On the facts of this case the Industrial Tribunal were entirely right to conclude that no satisfactory, reasonable explanation had been put forward by the employers for their failure to comply with a mandatory rule, expressed in mandatory terms, that they are required to put in a Notice of Appearance within the specified time. In those circumstances, the Industrial Tribunal did not need to proceed to stage two of the test, because the employers had failed to satisfy them at stage one.

On our view, we have no misgivings as to the correctness the decision in Horsefield v Roberts. On the facts, we think that it likely that as at 1981 a one person employer might have satisfied a tribunal that she genuinely did not realise that she had to enter an appearance, and accordingly it became appropriate for the court to take into account also the question of prejudice. But we recognise that the decision of the court was expressed in rather wider terms than I have just indicated, and to that extent, we consider that through the passage of time, if for no other reason, the climate of the law has changed and we are satisfied that there is now a two stage test. I should add, that our conclusion on this point is somewhat reinforced by the new Rules which have come into force as from 31st July 1996 where the time for entering an appearance has been extended, but the provisions of Rules 3(3) and 3(4) and 3(5) have ceased to be of effect. Accordingly it should be widely known that employers must put in their Notices of Appearance within time, otherwise they run the risk of being debarred from defending.

Accordingly, in the circumstances we dismiss the appeal. We consider this was a matter for the exercise of the tribunal's discretion which they have correctly done in this case and we are not prepared to interfere with the way they have approached the matter. Accordingly the appeal must be dismissed.