United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR I CHOWDHARY (of Counsel) Messrs Duthie, Hart & Duthie Solicitors 517 Barking Road Plaistow London E13 8PT
For 1st and 2nd Respondent For the 3rd Respondent	NEITHER PRESENT NOR REPRESENTED MR N VICKERY (of Counsel) Messrs Eversheds Solicitors Senator House 85 Queen Victoria Street London EC4V 4JL


 


MR JUSTICE MORISON (PRESIDENT): This is an interlocutory appeal. The appeal is against a decision of an Industrial Tribunal Chairman who held at hearing on 24th September 1997 and made certain orders.

Before saying anything about the merits of the appeal, we have a number of observations to make.

The first is that the order which was made by the tribunal Chairman is contained in a letter which is signed by an official for the Regional Secretary of the Tribunals. In our judgment that is not the proper way for a judicial order to be recorded. This order should have, in our view, identified the Chairman who held the hearing and made the orders; and to reflect the fact that it was a judicial order, it should not have been contained on writing paper with the logo of the Agency which provides administrative support to the Industrial Tribunals. As the letter stands, it is apparent that the signatory is simply reciting what a Chairman has dictated to him. It would have been correct if the Chairman himself had signed the letter or somebody on his behalf, rather than on behalf of the Regional Secretary of the Tribunals, who has no jurisdiction to make an order of the sort with which we are concerned. We would like to make it plain that in future this way of dealing with interlocutory orders should not be followed in future.

We turn now to the background to the appeal.

Mr Khan was employed by a company called NRC Ltd as, I think, financial director. He enjoyed a contract of employment which, as we understand, entitled him to six months notice of termination. His employer got into financial difficulties. Administrative receivers were appointed. By an agreement made between NRC Ltd (In administrative receivership), the two administrative receivers, a company called NRC Plant Ltd, another company in administrative receivership and a fifth party, the assets used in the business of NRC Ltd were sold to NRC Plant Ltd. It was acknowledged in the written agreement that the arrangements constituted a transfer within the meaning of the Regulations. It was also an express term of the agreement that the vendor, that is NRC Ltd, would terminate the employment of Mr Khan by serving notice on him on 15th January 1997.

Accordingly, on 15th January 1997 Mr Khan was given notice of termination. And thereafter, he continued, as we understand it, working for the company and continued at least until March to receive his wages with PAYE and the other normal deductions being made. In due course a decision will be required from an Industrial Tribunal as to whether the effect of the Regulations was to transfer Mr Khan's contract of employment to NRC Plant Ltd.

On 27th March 1997 one of the two joint administrative receivers purportedly acting as agents on behalf of NRC Ltd and purportedly without personal liability, wrote to him as follows:

"Following my letter to you of 15 January 1997, which gave you notice under your Service Agreement, I am now writing to terminate your employment with immediate effect. My solicitors will be writing to yours separately with regard to any monies owed to you."

Following that letter, Mr Khan issued through his solicitors, Duthie Hart & Duthie, two Originating Applications. Both of them were applications claiming unfair dismissal and redundancy. The first named as the employer NRC Ltd and another company who can be ignored for present purposes. In the second, it named Paul Shipperlee, one of the two joint administrative receivers. The claims were in identical terms reciting his employment as a financial director. In relation to each complaint, the dates of employment showed the ending date as being 15th January 1997 which of course was the date when notice was served and not the date when the employment came to an end.

The grounds for resisting the applications were that on 23rd March the contract was terminated with immediate effect, and that all liabilities in connection with the applicant had by virtue of the Regulations passed to NRC Plant Ltd.

Having received those grounds, very sensibly the employee's representatives considered whether or not to add NRC Plant Ltd to the proceedings. They took the view that they should. By letter dated 30th May the tribunal were invited to add NRC Plant Ltd as an additional respondent to the complaint against NRC Ltd. In order to make sure that both administrative receivers were parties there was an application that that complaint should be amended so that the other administrative receiver could be included as a respondent. There were also requests for further and better particulars.

The matter came on for hearing, as we have indicated, before the Chairman of the Industrial Tribunal. He refused the application for leave to amend the complaint against NRC Ltd to add NRC Plant Ltd. He purported to exercise his discretion to refuse that application by reference to hardship to NRC Plant Ltd that had been caused to them because of the limited nature of the indemnity under the contract of sale.

What the learned Chairman appears completely to have overlooked is that a fresh complaint against NRC Plant Ltd could have been issued on 30th May because the effective date of termination could not be earlier than 23rd March. And if asked the question as to whether it would be sensible to have a third complaint, or whether it would sensible simply to add NRC Plant Ltd to an original complaint, we have no doubt that the Chairman would have concluded that it was equally convenient and more sensible to amend the complaint to add NRC Plant Ltd. NRC Plant Ltd had no justifiable reason for opposing that application for an amendment since they could have been made a respondent by virtue of a separate Originating Application. Accordingly, it seems to us, that the learned Chairman has wholly misdirected himself and has arrived at a conclusion which can only be described as perverse in that respect.

He acceded to the application to add the other administrative receiver to the complaint made against the first of the two of them. There is no cross-Notice of Appeal in this case, and Mr Vickery on behalf of the receivers, to whom we are grateful, has not sought to suggest that the tribunal Chairman was wrong in that respect.

The last matter which the tribunal had to deal with was an application which was made on the day of the hearing that Mr Khan be allowed to make a complaint under the Wages Act. As we understand it, the purpose behind that application was to seek to recover from the persons liable the balance of the notice monies which were due under the contract of employment. A complaint under the Wages Act would have been an appropriate complaint to have made if the employee's employment had continued and, for example, he was on garden leave at the time. That claim for wages due might well fall under s.13 of the Employment Rights Act 1996. But, as it seems to us, the letter which was sent by the receivers on 27th March to which I have referred, is plain on its face, which is that it is summarily dismissing the employee, Mr Khan, with immediate effect. Accordingly, the remedy, if any, which Mr Khan has is for damages for breach of his contract of employment; that is damages for wrongful dismissal. Whether that claim lies against the administrative receivers, against NRC Ltd or against NRC Plant Ltd, would be a matter for debate before the appropriate legal forum. It may be, and we were told by Mr Chowdhary on the appellant's behalf that this is the position, that at the date when the letter of 27th March was sent monies which were due prior to that letter in respect of the service period from 1st March had not been paid to Mr Khan, in which case his claim would have been for money due under the contract. But the question the Industrial Tribunal had to decide was whether at the stage at which that application was made to them it was appropriate to grant leave to Mr Khan to add those complaints to his Originating Applications.

Effectively, as we read the order and the reasons for it, the Chairman was of the view that it was much too late to be making such complaints, which were out of time. That would be so whether they were claims for damages for breach of contract within the tribunal's jurisdiction, or whether they were claims under the Wages Act.

We are unable to say that that decision of the Industrial Tribunal Chairman was outwith the ambit of his discretion. We are of the view that he was entitled to reach the conclusion that it would not be appropriate to add those complaints. If, after a hearing of the unfair dismissal complaint it transpires that by virtue of the Regulations, Mr Khan was employed by NRC Plant Ltd, then he will know that he will have a right in the County Court to bring proceedings for wrongful dismissal or monies due as he might be advised. Equally if the tribunal concludes for one reason or another that a different person was responsible for his employment during the relevant period, then that other person can be sued in the County Court as needs be.

It seems to us that this matter should be heard and determined by an Industrial Tribunal at the earliest practicable date. That is the complaints of unfair dismissal and redundancy which are currently being pursued against the old company and, now as a result of this appeal, the new company, NRC Plant Ltd and against the administrative receivers. Accordingly, we allow the appeal to extent that we have indicated and order that NRC Plant Ltd be added to complaint case No. 3201418/97, that is the complaint which named the respondent as NRC Ltd.

In reaching this conclusion, we have had regard to the letter which we received on behalf of NRC Plant Ltd. It seems to us that the letter provides no significant reason as to why NRC Plant Ltd should not have been joined as a party to the proceedings in response to the application which was timeously made. Accordingly, the appeal is allowed to the extent that we have indicated, otherwise it is dismissed.