United Kingdom Employment Appeal Tribunal

BAILII case number: [1996] UKEAT 587_95_0703

Appeal No. EAT/587/95

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 7 March 1996

Before

THE HONOURABLE MR JUSTICE HOLLAND

DR D GRIEVES CBE

MR R TODD

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RAVENFIELD DESIGNS LTD          APPELLANTS

MR J D CHEETHAM          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MR J C TAYLOR

(Managing Director)

For the Respondent RESPONDENT IN PERSON


 


MR JUSTICE HOLLAND: The Appellants are Ravenfield Designs Limited, a small specialist engineering company, the Managing Director of which, is Mr Taylor, who has represented them here before us. The Respondent, Mr Cheetham, from April 1989 to a date in the Summer of 1993, was employed by the company in sales and marketing. It seems that both men were, certainly prior to the events that we are concerned with, personal friends.

In that Summer, it is plain that a decision had been arrived at by the company to dispense with the services of Mr Cheetham. Unhappily the precision that is presumably one of the skills of this company and its works, deserted it at this stage, with the result that there was on any view, a muddle. The muddle started as to when the employment terminated. There was muddle as to why it was being terminated. There was further muddle as to the terms upon which that termination was taking place. Thus it is that it is common ground that earlier in their relationship Mr Cheetham had invested £5,000 in the company. It is common ground that that £5,000 was paid back in that Summer. There is a strong issue as to the terms on which it was paid back. According to Mr Cheetham the £5,000 had been at all material times an interest free loan. It was that money that was paid back, and in the result he felt that he was entitled to further monies. According to Mr Taylor it had not been an interest free loan. It had been invested on the basis of a shareholding. Granted that that shareholding was originally worth £5,000, by the time Mr Cheetham's employment was terminated, the holding was worth only £3,000. In the circumstances, the balance of £2,000 was additionally paid in order to meet any further liability, whether in terms of redundancy or anything else.

Turning to the procedural history of this matter, it starts on 11 December 1993 with Mr Cheetham's IT1 of that date. He was basing his complaint upon redundancy and claiming redundancy payment. The IT3 is dated 20 January 1994 and from that one learns that the position adopted by the company was that the termination of Mr Cheetham's employment was on the basis of dismissal for incompetence and not on the basis of redundancy. This being one of those cases, there seems to have been some more muddle, this time in arranging a pre-hearing review and a full hearing of Mr Cheetham's complaint. Mr Cheetham wrote to the Regional Secretary of the Tribunal at Manchester on 6 June 1994, complaining that he had not been advised as to when either the pre-hearing review or the hearing would be taking place. In the course of the letter, he further wrote this:

"I also note that Ravenfield have stated that I was `dismissed for incompetence'. Until now I was under the impression that I had been made redundant.

In view of this latest submission by Ravenfield, I want this claim to include Unfair Dismissal."

On 11 July, there was a pre-hearing review before a Chairman whose identity is presently unknown to us. Neither party was represented and it is presently not clear as to what was decided on that occasion. It certainly seems that the question of amending the complaint to add a claim for unfair dismissal was not seemingly considered. Our best guide to events at that time and subsequently, comes from a letter written on behalf of the Regional Secretary of the Industrial Tribunals at Manchester to the Registrar of this Tribunal and dated 30 October 1995. In that letter the following appears:

"2. On 6 June 1994, the applicant applied to the Tribunal in writing to amend his claim to include a claim for unfair dismissal. At that stage, a Pre-Hearing Review had been listed, and a Chairman directed that the application to amend should be brought to the attention of the Chairman dealing with the Pre-Hearing Review on 11 July 1994.

3. The application to amend was not in fact raised at the Pre-Hearing Review and was not drawn to the Chairman's attention at that hearing.

4. Subsequently, the applicant renewed his application to amend his claim, which was referred to the Chairman who had dealt with the Pre-Hearing Review. That Chairman dealt with the application as a written application, by reference to the original letter sent to the Tribunal by the applicant on 6 June 1994. ...

5. The Chairman refused the application to amend for the reasons set out in our letter to the applicant dated 22 August 1994. A copy of that letter is attached hereto. The matter should then have proceeded only as a claim for a redundancy payment.

6. The Chairman who refused the application to amend was not the Chairman who dealt with the full hearing on 10 January 1995 and was not party to the decision made on that day to allow an amendment of the applicant's claim to include a claim for unfair dismissal."

Guided by that letter, one turns to the letter of 22 August 1994, addressed to Mr Cheetham. In the body of that letter the following appears:

"... Your application for a redundancy payment was dated 3 December 1993 and received by the Tribunal on 11 December 1993.

If it had been a claim for unfair dismissal it would already have been outside the primary period of three months from the date of termination within which an application for unfair dismissal must be brought. The respondents' Notice of Appearance was received by the Tribunal on 20 January 1994, and served upon you shortly thereafter.

Against this background, it was not until 6 June that you first indicated that you wished to add a claim for unfair dismissal. You gave no reason why it would not have been reasonably practicable to have brought such a claim within three months of the date of your dismissal, save to say that your request to add unfair dismissal was in response to what had been said in the Notice of Appearance.

Nevertheless, your request was not made out until about four months after you had sight of the Notice of Appearance and more than ten months after the date of your dismissal.

Even if you were to accept that it was not reasonably practicable to have brought your claim, within three months of the date of your dismissal, the Chairman would not accept that it was brought within a reasonable period thereafter. Accordingly, your application to add a claim for unfair dismissal is refused."

Mr Cheetham says that he did not receive that letter, and certainly it appears that he did not appeal against that ruling and neither did he invite a review of the ruling in accordance with Rule 11, Schedule 1 Industrial Tribunals (Constitution and Rules of Procedure) Regulations 1993. Mr Taylor candidly says that he has a recollection of seeing that letter at about that time. Turning to what happened thereafter, on 10 January 1995, there was a full hearing of this matter chaired by Mr W G Beckett, who was not the Chairman who had hitherto been involved in this matter. It seems to this Tribunal that Mr Beckett had not been apprised of that decision of 22 August. Certainly what happened during that hearing would be inexplicable if he had been apprised of it. Further, we know that he did not have his attention drawn to the letter by Mr Cheetham, who had not received it, and Mr Taylor accepts that his then representative, Mr McDonald (who may or may not have known about the letter) did not draw the Chairman's attention to it and thus it is that that Tribunal approached this problem of the scope of Mr Cheetham's complaint as though the canvas was completely clean.

As to what then happened, the Chairman's Notes of Evidence read as follows:

"Mr.McDonald for the respondent submitted that the application of the applicant was out of time as the effective date of termination of his employment was 16 July 1993 whereas the application had not been lodged at the Tribunal until 11 December 1993 and, furthermore, the applicant had already been paid his redundancy payment. The applicant, in person, stated that the first he heard of his dismissal being on the grounds of incompetence was when he received the IT3 as he had previously been under the understanding that he had been dismissed for redundancy. The respondent was a very small firm with no particular systems or procedures and the matter had thoroughly confused him. Mr McDonald submitted that the applicant's performance had been unsatisfactory and the word redundancy had only been used by the respondent in order to cover certain monies which were due from the respondent to the applicant as consideration for some shares the applicant had in the company.

After consideration, the Tribunal decided that, as the grounds for dismissal had not been clearly set out to the applicant, he had been confused in the matter and with this he had lodged his application within reasonable time after he had been finally advised of the situation. Accordingly, the Tribunal ordered that the application of the applicant be amended to include a claim for unfair dismissal and that the application should be accepted out of time in all the circumstances and accordingly, the Tribunal had jurisdiction to hear the applicant's claim."

Having made that preliminary ruling, the Tribunal after a full hearing went on to consider the merits of the matter arriving at the decision that Mr Cheetham, the Applicant, had been unfairly dismissed by Ravenfield Designs Limited as Respondent, and that the latter should pay to him compensation in the sum of £515.

It is against the preliminary ruling that this appeal is mounted: the case for Ravenfield Designs Limited, now the Appellants, being that it was wrong in law. This Tribunal in considering this appeal has been confronted by two alternative analyses of law of the procedural situation that is under review. By way of analysis one, the following can be put as a proposition: the decision of 27 August 1994 is a decision of the Industrial Tribunal which prevailed on and after that date. Thus it is a decision arrived at by the Chairman, following consideration of a written application, and once given, there has been no appeal against it, nor indeed has there been any review of it, indeed there has been no application for any such review.

On the basis of that analysis, that order was prevailing as at 11 January 1995. In the result the apparent contrary decision arrived at by the Tribunal on that day should be regarded as a legal nullity arrived at per in curiam, that is, without being properly advised as to all material matters. So much then for analysis one. By analysis two, one puts forward the following proposition: the decision of 22 August 1994 was, in truth, the nullity. Alternatively, perhaps preferably, it was a decision that could be deemed to have been reviewed and set aside by the contrary decision of the full Tribunal of 10 January 1995. That proposition arises from the fact that first, the decision was never communicated to Mr Cheetham as Applicant. Second, and just as importantly, it was never communicated to the Tribunal of the 10 January 1995, whether by the parties or indeed by the administration of the Industrial Tribunals at Manchester.

Having given our best consideration to both analyses and to their respective merits, we are quite satisfied that for the purpose of this appeal, we should adopt the second analysis. That analysis has the merit of according with the essential reality of this matter. That reality is that the decision under appeal is a decision arrived at by a full tribunal, totally unaware of the previous procedural history. It is their decision that is under appeal and interestingly, under appeal on the basis that its intrinsic merits are to open to criticism, not on the basis that it was arrived at in the face of a preceding decision of the Industrial Tribunal. For this Tribunal, a decision which is not communicated and is not put forward to be relied upon can, in the circumstances, be regarded as a nullity, alternatively, as a decision that was open to review, that was reviewed, and that was set aside upon review.

On the basis of that second analysis, what follows so far as this appeal is concerned? By Section 36 of the Employment Protection (Consolidation) Act 1978 we are only empowered to consider questions of law. We are not empowered to consider questions of fact. We have, accordingly, carefully considered the Chairman's Notes of Evidence. We have given even more care to the submissions advanced by the Appellants and in particular, to the written submissions seeking to challenge the decision of the Industrial Tribunal on the basis of law. In the event, in our judgment, there is really only one possible attack upon this decision and that is, that it is a decision that could not have been arrived at by any reasonable Tribunal on the basis of the material before it, that is, that it was a perverse decision. We are entirely satisfied that it cannot be categorised as perverse. The situation that confronted the Industrial Tribunal on 10 January was not straightforward. We have no difficulty in seeing how a reasonable Tribunal could take the view, at that time, that the only way for them fairly to sort out the muddled events of June and July 1993, so as to arrive at a decision that properly reflected their findings of fact, was to allow this amendment, that is to take the hearing out of the straightjacket of an issue, `redundancy or no', and allow them to decide `redundancy or no, unfair dismissal or no', and in that way, hopefully, to do justice between these parties. It would indeed have been robust if that Tribunal assembled to hear this matter with the parties in front of it, as it were, confined its remit by refusing this particular amendment at that stage.

Certain, it is, that Mr Cheetham had, in legal terms, been guilty of delay at various times which meant that the amendment was well out of time. That said, there was good reason for his delay at certain of the stages, and in any event, there was this overriding merit of enabling that Tribunal to do justice on the material that was then to be put before it. Thus it is that we cannot accede to the submissions politely and carefully made by Mr Taylor, both orally and in writing and we have to dismiss this appeal.

Before departing from these papers, we wish to underline the very unfortunate breakdown of communication within the Regional Office of the Industrial Tribunals in Manchester. It seems to us, as already set out in this judgment, perfectly plain that something went wrong with the promulgation of the decision of the Chairman of 22 August 1994. Thus not only did Mr Cheetham not receive it, but, for present purposes more importantly, Mr Beckett and his Members did not receive it for the hearing on 10 January. In the result, there was this very unfortunate conflict, which meant that this Tribunal was confronted by two totally contrary decisions on the same point by the Industrial Tribunal sitting at Manchester. It is regrettable from everybody's point of view that this situation arose. We are minded to direct that a transcript of this judgment be sent to the Regional Chairman, so that he may take any steps that are needed to ensure that this problem should not arise again.