United Kingdom Employment Appeal Tribunal

BAILII case number: [1996] UKEAT 898_93_0606

Appeal No. EAT/898/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 6th June 1996

Before

THE HONOURABLE MR JUSTICE BUTTERFIELD

MR P DAWSON OBE

MISS D WHITTINGHAM

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MR D THOMPSON          APPELLANT

LEHRER MCGOVERN INTERNATIONAL LTD          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MR R ZARA

(Solicitor)

Robert Zara & Co

Solicitors

214 Broadgate House

Broadgate

Coventry

CV1 1NG

For the Respondents MR HUTCHINSON

(Personnel Manager)


 


MR JUSTICE BUTTERFIELD: This is an appeal against the decision of the Industrial Tribunal sitting at London (South) promulgated to the parties on 16th September 1993.

The facts giving rise to the hearing before the Industrial Tribunal are shortly as follows. The appellant, Mr Thompson was employed by the respondents as a mechanical and electrical project construction manager. He took up that employment in February 1989. On 28th June 1991 he was dismissed. By an originating application dated 3rd July 1991 the appellant alleged that the had been unfairly dismissed and also sought relief under the Wages Act in respect of an alleged unlawful deduction of £24,109.67. It is to be noted that the appellant sought by way of relief not only compensation but also reinstatement or re-engagement. He was at the time of his dismissal in receipt of a salary in excess of £30,000 per annum.

The respondents resisted the claim on the sole basis that the appellant did not have the necessary period of continuous employment to entitle him to bring proceedings. That issue was determined at a preliminary hearing held on 14th January 1992 in favour of the appellant, at which both parties attended.

The merits hearing then took place on 1st June 1992. The respondents did not attend. The tribunal consisted of the Chairman, Mrs Hollis and two members. The tribunal held that the appellant had been unfairly dismissed. They ordered that he should receive £576 by way of a basic award, £10,000 by way of compensation, and £384 for the respondent's failure to give written reasons for dismissal. The tribunal further directed that the respondents should reinstate the appellant to his former employment. The appellant's claim under the Wages Act was adjourned.

On 23rd June 1992, the respondents requested a review of the decision, on the grounds that the decision was either wrongly made as a result of an error on the part of the tribunal staff, or made in the absence of the respondents. The Chairman granted that request. The parties were notified that the date of review was to be 23rd November 1992.

At this time, that is to say the early autumn of 1992, the appellant was represented by Mr Adamson-Leigh who carried on business as Glymfarm Legal Services Ltd. In the weeks before the review hearing, there were negotiations between Mr Adamson-Leigh and the respondents in an attempt to compromise the dispute. By letter dated 19th October 1992, the respondents set out the terms on which they were prepared to settle all claims arising out of the appellant's employment with the respondents. These terms had been orally agreed in discussions. The respondents invited Mr Adamson-Leigh to confirm the terms on behalf of the appellant. In particular in addition to a monetary settlement calculations, the terms included the following:

"The settlement is in full and final satisfaction of all claims, causes of action, costs, proceedings and damages which each party may have against the other arising from the former Contract of Employment between the parties and includes the extinguishment or satisfaction of any and all orders or judgements already made in this matter in the Hereford County Court or the Industrial Tribunal."

The respondents invited Mr Adamson-Leigh to confirm these terms on behalf of the appellant. Mr Adamson-Leigh did indeed confirm those terms. Accordingly on 23rd October 1992 the respondent's solicitors wrote to the Industrial Tribunal informing them that the parties had agreed to settle the dispute by consent and enclosing a letter from Mr Adamson-Leigh in which he confirmed the agreement on behalf of the appellant and requested the Industrial Tribunal to issue a decision recording the terms agreed by the parties. The settlement was not approved by ACAS who declined to be involved.

Shortly after Mr Adamson-Leigh had written to the Industrial Tribunal, the appellant learned of what had been done on his behalf. On 30th October 1992, he himself wrote to the Industrial Tribunal informing them that Mr Adamson-Leigh was not acting on his instructions or with his knowledge when he wrote to say that the matter had been settled. No decision was issued by the Industrial Tribunal despite the request that had been made by the respondents and Mr Adamson-Leigh and the parties accordingly attended the review hearing on 23rd November 1992.

That hearing was adjourned sine die at the request of Counsel for the respondents.

In the spring of 1993, Mrs Hollis the Chairman became ill and was not able to continue her duties. The Regional Chairman directed that the matter should come before a fresh tribunal to consider remedies and to hear the appellant's outstanding complaint under the Wages Act. That direction, not surprisingly, caused some confusion to the parties. Mrs Hollis had granted the respondent's request for a review, but the review had yet to be determined. The appellant pointed this out to the tribunal but was informed by the tribunal that the restored hearing was not a review hearing, but was concerned to decide on remedy in view of the failure the respondents to reinstate the appellant, and to deal with his claim under Wages Act.

When the matter came before the Industrial Tribunal on 12th August 1993, the appellant appeared in person. The respondent was represented by Counsel. Counsel for the respondent persuaded the tribunal that notwithstanding the directions given, the tribunal should first decide whether there was a concluded settlement between the parties. If so, submitted Counsel, no question of a review or remedy for failure to reinstate or claim under the Wages Act arose.

The Industrial Tribunal decided to adopt this route. It held that the correspondence in October 1993 established that there was at that time a concluded settlement between the respondents and the appellant's duly authorised agent ostensibly having authority to act on his behalf. That being so, the tribunal held that the settlement was binding on the appellant, notwithstanding that there was no decision of the tribunal determining his complaint, and notwithstanding that he did not wish to compromise his claim on the terms agreed by his then representative. The tribunal accordingly declined to hear the adjourned review hearing or to consider the remedy for reinstatement, or the appellant's adjourned Wages Act claim, holding that the appellant's claims had been satisfied by the agreement.

The appellant appeals against that decision.

The central thrust of his case, at least as identified by Morison J. at the preliminary hearing and adopted by us today; is that the settlement agreement reached did not deprive him of his right to a determination of his complaint.

In our unanimous judgment, that submission is correct. Section 140(1) of the Employment Protection (Consolidation) Act 1978 expressly provides:

"... any provision in an agreement ... shall be void in so far as it purports-

(b) to preclude any person from presenting a complaint to, or bring any proceedings under this Act before, an industrial tribunal."

Section 140(2) sets out the statutory exceptions to the general rule. None of those exceptions apply to the circumstances of the settlement agreement in this case. ACAS was not involved in any way in the negotiations. The Industrial Tribunal held that the concluded settlement was not made void by the provisions of Section 140 because it was entered into freely and voluntarily by both parties and included an authority to withdraw the action. We do not understand the basis for that conclusion. An agreement as to compensation made by the parties is void under Section 140(1)(b) if, as here, it has been concluded without the intervention of a conciliation officer and it purports to preclude the applicant from continuing with his claims before the tribunal.

Of course, when a tribunal makes a decision by consent, allowing a complaint to be withdrawn following a voluntary agrement between the parties, an applicant will be unable thereafter in the absence of fraud or misrepresentation to claim that the decision is vitiated by the fact that no action had been taken by a conciliation officer. The consent order will be binding on the parties and no further proceedings can be instituted. That, in our judgment, is the ratio of the decision in Times Newspapers Ltd v Fitt [1981] ICR 637 to which we have been referred. The reason for this is that the contracting out provisions only apply to protect an employee before a claim is determined by the Industrial Tribunal. Once a case is disposed of by order of the tribunal, whether by consent or after hearing, the purpose of Section 140 is exhausted.

We are reinforced in our conclusions on this matter by the case of Courage Take Home Trade Limited v Keys [1986] IRLR 427. That was a decision in respect of facts which were similar to the present situation. The tribunal held that Section 140(1) of the 1978 Act rendered void an agreement under which the employee agreed to accept a sum in full and final settlement of his unfair dismissal claim which was reached after the tribunal had found that the dismissal was unfair, but before the question of remedy had been settled. Such an agreement came within Section 140(1)(b) since it purported to preclude the employee from "bringing any proceedings" under the Act before an Industrial Tribunal. The provision did not cease to have effect either after proceedings had been commenced or after liability as opposed to remedy had been determined. The claim alleging unfair dismissal is "bringing any proceedings" under the Act, a claim for compensation or reinstatement is also "bringing any proceedings". "Bringing" is not the same as beginning any proceedings.

In that case as this, the applicant agreed to settle without the involvement of a conciliation officer. Subsequently he took the money and then continued to pursue his claim for unfair dismissal.

Notwithstanding those circumstances, the applicant is entitled to have his claim determined and that has not taken place in this case.

Of course a tribunal might properly decide that because an applicant has taken money offered to him under a settlement, it would not be just and equitable to make a compensatory award given the receipt of the agreed sum already. But that is a matter for the exercise of the judgment and discretion of the Industrial Tribunal, not for this tribunal.

In the circumstances of this case, we simply observe that the possible compensation for failure to reinstate this appellant might be very substantial indeed.

In all those circumstances the settlement, in our judgment was clearly void. The appellant was entitled to a determination of his complaints. The appeal will be allowed. The matter will be remitted to a differently constituted Industrial Tribunal for a determination of the review of the original hearing and thereafter the resolution of any outstanding matters following that review. To that extent and for those reasons this appeal is allowed.