United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR JONATHAN SWIFT (of Counsel) Messrs Clifford Chance Solicitors 200 Aldersgate Street London EC1A 4JJ
For the Respondents	NO APPEARANCE BY NOR PRESENTATION ON BEHALF OF THE RESPONDENTS


 


MR JUSTICE MORISON (PRESIDENT): This case raises an important issue, namely the extent of the power, if any, of an Industrial Tribunal to regulate its own procedure. The parties were informed of the result of the appeal following the hearing, and this written judgment has been prepared subsequently.

In connection with two complaints of unfair dismissal and breach of contract brought against Eurobell (Holdings) Limited ["Eurobell"], both parties being legally represented, an Industrial tribunal held at Southampton, made, inter alia, the following order ["the Order"] on 20 November 1996:

"There shall be simultaneous exchange of witness statements by both parties by 27 November 1996, of all witnesses on whom each party intends to rely, and there shall be no further witnesses called at the hearing without the leave of the tribunal."

The Industrial Tribunal having noted that the two issues raised in the proceedings would be:

"a) were both applicants employed in the part of the undertaking transferred to the respondents? and

b) did they object to being transferred, either by their words or actions?"

continued, as follows:-

"1. There shall be simultaneous exchange of witness statements by both parties by 27 November 1996, of all witnesses on whom each party intends to rely, and there shall be no further witnesses called at the hearing without the leave of the Tribunal.

...

5. It is true that the 1993 Rules of Procedure do not specifically contain a power for exchange of witness statements, whereas the High Court rules do. Nevertheless Rule 9(1) provides:

"The Tribunal shall make such enquiries of persons appearing before it and witnesses as it considers appropriate, and shall otherwise conduct the hearing in such manner as it considers most appropriate for the clarification of the issues before it and generally to the just handling of the proceedings".

Also Rule 13(1) states:

"Subject to the provisions of these rules, a Tribunal may regulate its own procedure".

6. It has certainly been the practice throughout the Tribunal system, and in the Southampton Region to require parties to exchange witness statements in appropriate cases. This is usually where both parties are legally represented. It is obviously not appropriate where a party is acting in person.

7. The more complicated the issues and the larger the number of witnesses the more appropriate it is for witness statements to be produced since this cuts down considerably the time taken at a Tribunal hearing.

8. In this particular case, although the issues have been narrowed down to the two I have mentioned above, I note that the respondents intend to call nine witnesses. I note that both parties are legally represented and clearly considerable time will be saved at the hearing if there are witness statements.

9. In the exercise of my discretion therefore, and having regard to the provisions of Rule 9(1) and Rule 13(1), I consider that this is an eminently appropriate case for there to be exchange of witness statements.

By Schedule 9 of the Employment Protection (Consolidation) Act 1978, as amended, now replaced by section 7 of the Industrial Tribunals Act 1996, the Secretary of State was empowered, by Regulations to make such provision

"as appears to him to be necessary or expedient with respect to proceedings before industrial tribunals."

The Regulations which he made are the Industrial Tribunals (Constitution and Rules of Procedure) Regulations 1993, as amended. Regulation 3 provided for the appointment of a President of the Industrial Tribunals (England and Wales). The role and power of the President is expressly provided for in Regulations 4, 6 and 7. The combined effect of Regulations 8 and 11 is that the Rules in Schedule 1 are to apply to the complaints in the present case.

In the course of argument we were referred to a number of different Rules and we set them out:

"4. Power to require further particulars and attendance of witnesses and to grant discovery:

(1) A tribunal may, on the application of a party made either by notice to the Secretary or at the hearing of the originating application, or of its own motion -

(a) require a party to furnish in writing to the person specified by the tribunal further particulars of the grounds on which that party relies and of any facts and contentions relevant thereto,

(b) require one party to grant to another such discovery or inspection (including the taking of copies) of documents as might be granted by a county court, and may appoint the time at or within which and the place at which any act required in pursuance of this rule is to be done.

...

(4) The tribunal shall take account of a written answer furnished pursuant to paragraph (3) in the same way as it takes account of representations in writing presented by a party pursuant to rule 8(5).

...

(6) Every document containing a requirement imposed under paragraph (1)(b) or (2) shall contain a reference to the fact that, under paragraph 1(7) of Schedule 9 to the 1978 Act, any person who without reasonable excuse fails to comply with any such requirement shall be liable on summary conviction to a fine, and the document shall state the amount of the current maximum fine.

8. The hearing.

(5) If a party wishes to submit representations in writing for consideration by a tribunal at the hearing of the originating application he shall present his representations to the Secretary not less than 7 days before the hearing and shall at the same time send a copy to each other party.

9. Procedure at hearing [part of which was cited in the Decision]:

(1) The tribunal shall, so far as it appears to it appropriate, seek to avoid formality in its proceedings and shall not be bound by any enactment or rule of law relating to the admissibility of evidence in proceedings before the courts of law. The tribunal shall make such enquiries of persons appearing before it and witnesses as it considers appropriate and shall otherwise conduct the hearing in such manner as it considers most appropriate for the clarification of the issues before it and generally to the just handling of the proceedings.

(2) Subject to paragraph (1), at the hearing of the originating application a party shall be entitled to give evidence, to call witnesses, to question any witnesses and to address the tribunal.

(3) If a party fails to attend or to be represented at the time and place fixed for the hearing, the tribunal may, if that party is an applicant, dismiss or, in any case, dispose of the application in the absence of that party or may adjourn the hearing to a later date: provided that before dismissing or disposing of any application in the absence of a party the tribunal shall consider his originating application or notice of appearance, any representations in writing presented by him in pursuance of rule 8(5) and any written answer furnished to the tribunal pursuant to rule 4(3).

(4) A tribunal may require any witness to give evidence on oath or affirmation and for that purpose there may be administered an oath or affirmation in due form.

13. Miscellaneous powers

(1) Subject to the provisions of these rules, a tribunal may regulate its own procedure.

...

(8) Any act required or authorised by these rules to be done by a tribunal may be done by a chairman except -

(a) the hearing of an originating application under rule 8;

(b) an act required or authorised to be so done by rule 9 or 10 which the rule implies is to be done by the tribunal which is hearing or heard the originating application;

(c) the review of a decision under rule 11(1), and the confirmation, variation or revocation of a decision, and ordering of a re-hearing, under rule 11(6).

16. Directions

(1) a tribunal may at any time, on the application of a party or on its own motion, give directions on any matter arising in connection with the proceedings."

The argument ably presented to us by Mr Jonathan Swift on Eurobell's behalf may be summarised in this way:

1. Neither the Rules nor the Regulations expressly confer upon an Industrial Tribunal the power to make the Order.
2. Although the Rules expressly incorporate the County Court Rules relating to discovery and inspection of documents [see rule 4(1)(b)], there was no similar incorporation of the County Court Rules relating to the exchange of witness statements.
3. Rule 9 governs the powers of a Tribunal in relation to the conduct of the hearing, as defined in Regulation 2, and not in relation to interlocutory steps taken leading up to the hearing. The effect of Rules 9(1) and 9(2) is that, unless the Tribunal has for some good reason of admissibility ruled that a witness shall not give evidence, a party has a right ["shall be entitled"] to call witnesses. The Tribunal does not have the power to exclude that right on the basis of some time limit which it has stipulated.
4. Although Rule 13(1) has been framed in broad terms, it should be treated as giving the tribunals a residual power and not an unlimited power to supplement the existing rules. Its scope is to be determined in the context of the other express powers granted under the Rules. Therefore, this Rule gives the Tribunal no power to impose a substantial procedural step, such as ordering an exchange of witness statements, not otherwise provided for.
5. The Order appears to conflict with the express power which is contained in Rule 8(5).
6. The Order is inconsistent with the President of the Industrial Tribunals' "Guidance on Judicial Procedure for The Industrial Tribunals in England and Wales" also referred to as Practice Direction Number 1. At paragraph 6 of that document, it seems clear that the preparation of witness statements in advance of the hearing was not regarded as a matter for an Order but as a matter to be left to the parties' discretion.
7. The practice at Southampton differs from the practice in other Regions which treat the exchange of witness statements as being at the parties' discretion.

It seems to us that these arguments raise two questions:

8. What is the proper construction of the Rules, and, in particular of Rule 13(1)?
9. What is the status of the Notes for Guidance or Practice Direction issued by the President of the Industrial Tribunals?

Question 1

We cannot approach the task of construction without admitting to a clear pre-disposition in favour of the decision of the Industrial Tribunal. The power, if it be such, was eminently sensibly exercised in this case. Tribunals need to be able, in advance of the hearing, to identify with some precision what the issues before them will be, so that the hearing can proceed on a basis which is fully understood. There is evidence from appeals before the EAT that with quite straightforward cases it has not always been made plain what issues are being determined at a particular stage of the hearing. For example, Tribunals sometimes fail to make it clear that they intend to deal both with liability and quantum, or with liability and contributory fault and quantum, as the case might be. But apart from these inadvertent lapses, there is a more important need for clarification now that their jurisdiction has been extended to include claims for wrongful dismissal.

We take as a hypothetical case, a complaint by an individual who alleges that he was unfairly dismissed by reason of alleged misconduct, without notice. Thus, he is making a complaint both of unfair dismissal and wrongful dismissal.

On the question of unfair dismissal, the Tribunal will not be concerned to determine as a question of fact whether the employee did the act of misconduct alleged, rather whether the employer had reasonable grounds for believing that he had, on the basis of a reasonably sufficient investigation. There are many cases, therefore, where the employer will not wish to adduce evidence relating to the incident in question but rather to concentrate on the investigation process, on the information available to him at the time of the dismissal [for present purposes we include within this expression any internal right of appeal], and upon the way the decision maker weighed the evidence and concluded that dismissal was a fair and reasonable response to the facts as the employers had found them to be. Indeed, we understand that some Industrial Tribunals will not permit the employers to adduce factual evidence of the act of misconduct. The reason for such an approach is quite understandable. If such evidence is called, there is an obvious risk that the Industrial Tribunal will hear different evidence from that available to the employer at the time of the dismissal. Fairness is judged on the material available at the time of dismissal; the employer cannot rely on facts acquired after that time, and nor can the Industrial tribunal take any such factual matter into account. Further, there is a real risk that if the 'primary' factual evidence is adduced, the Industrial Tribunal will find it impossible not to substitute their own view of the evidence and of the credibility of the witnesses for that of the employer, and fall into error as a result.

On the other hand, with wrongful dismissal, the question is whether the employee committed the wrongdoing. Furthermore, an employer is entitled to justify the summary dismissal by relying of matters of which he was unaware when he effected the dismissal. If an Industrial tribunal decides to hear both matters together, it is important that the parties know, so that the relevant evidence can be adduced. In such circumstances, too, the Industrial Tribunal will wish to keep well in mind the relevance of the evidence to each issue it is considering. For example, an employer might not have had reasonable grounds, at the date of dismissal, for believing that the employee had been guilty of theft but, subsequently, the employee pleaded guilty to theft in a criminal court. The evidence of the conviction would be relevant to the question of wrongful dismissal but not to the question of whether the dismissal was unfair.

But it does not stop there. If the Tribunal wishes to consider whether, if the dismissal was unfair, the employee contributed to his dismissal, again it will be concerned to make findings as to its view of what happened so that it can determine the degree to which the employee could be said to have been at fault [to blame]. But on the issue of contributory fault, the question relates to the amount by which he contributed to his dismissal. That means that the Industrial tribunal will consider the facts as at the date of the dismissal. Contributory fault is irrelevant to a wrongful dismissal claim. Further, the tribunal will wish to consider whether it will, at the first hearing, take the decision in Polkey into account. This decision can operate in two ways. First, where the employers' decision was made in breach of procedure but the tribunal were satisfied that it would have been futile to have 'gone through the motions' of complying with the procedure, then the breach of procedure might not render the dismissal unfair. But, second, if they were of the view that the breach of procedure rendered the dismissal unfair, then at some stage they should ask themselves what would have happened had a fair procedure been observed. It must always be made clear to parties at what stage the tribunal intends to give consideration to this type of issue.

On the question of compensation, the tribunal would be entitled to receive relevant evidence, even if that evidence had not been available to the employer at the date of the dismissal. Thus, for example, an employee who was unfairly dismissed for theft will be likely to receive no award of money if he had pleaded guilty to theft before the Tribunal decision on compensation.

This summary will be sufficient to make the point that the case management by an Industrial tribunal is critical to a fair, orderly, just and efficient hearing. It seems to us that it would be very regrettable if the Rules were so construed that Industrial Tribunals were not entitled to regulate their own procedure in the way the Southampton Tribunal has done in this case. Further, no argument was, or could have been, presented to us to the effect that the Chairman improperly exercised his discretion in this case. The course he decided to take, and the reasons for it, show, we think, a proper judicial approach to the task in hand. Many tribunals are criticised for the length of their hearings. Good judicial case management, coupled with diligent pre-reading, will be likely to reduce the hearing time.

We turn to the first question: how the Rules should be construed? We start with the hearing itself. The right to call witnesses referred to in Rule 9(2) is subject to Rule 9(1). Sub-rule (1) permits the Tribunal to conduct the hearing in such manner as it considers most appropriate "for the clarification of the issues before it and generally to the just handling of the proceedings." It seems to us clear that a Tribunal would be quite entitled to require a party to tell it the substance of the evidence to be given by a witness before he or she was called to give it. It might need to do that both because it wished to be satisfied that the evidence was pertinent to the issues under consideration, and because it wished to focus attention on what was relevant. In an appropriate case, it seems to us clear that a Tribunal could require a party to provide it with a written statement of that witness' evidence so that it could carry out its duty under Rule 9(1), whether under the power given to it to regulate its own procedure or under the power to make directions conferred by Rule 16. If a party refused such a request, it seems to us that the Tribunal would have power to refuse to accept that witness' evidence, if, by receiving it, it was the tribunal's view that the proper and just conduct of the proceedings would be interfered with.

Does the Tribunal have power to require a written statement of evidence in advance of the hearing? It seems to us that it does. The power to make practice directions is conferred on Tribunal Chairmen by Rule 13(1). We accept that this Rule is 'subordinate' to the specific rules, as the words "subject to the provisions of these rules" make clear. But this power must, we think, enable a Tribunal to require a party to do in advance of the hearing what it could do at the hearing. By exercising this power, the Tribunal would not be making a new rule it would simply be regulating its own procedure for the better doing of justice at the hearing. The fact that the County Court Rule relating to witness statements was not incorporated into the Tribunal Rules does not, as it seems to us, provide any indication, one way or the other, as to how Rule 13(1) is to be construed. Further, we are not persuaded that the other Rules to which our attention was drawn affect the issue. Where one party is absent, the Tribunal will be required to take account of certain specified documents in reaching their decision. That provision does not bear on the question at issue.

Question 2

As to the status of the 'Practice Direction' made by the President of the Industrial Tribunals, it seems to us that it has no standing in law. The functions of the President are set out in the 1993 Regulations. He is given no power to make practice directions nor any general power to make orders regulating the Tribunals' procedure of a sort which is equivalent to Rule 13(1). Rule 13 confers power on the tribunals, and thus on Chairmen of tribunals pursuant to Rule 13(8). It seems to us, with great respect to the President, that it is undesirable in principle that a document should be produced which purports to be something which it is not and which the maker had no power to make.

That said, we can well understand the motives which prompted the President to make such practice direction. It seems to us quite undesirable that Industrial Tribunals should adopt different practices and procedures in different regions. Justice should be evenly and consistently done over the whole of England and Wales. There are many organisations, such as employers and Trade Unions, which function throughout the country. We are aware of complaints from such organisations that the manner in which their cases are brought to hearing and heard depends upon the particular region where the case is tried. For example, there have been complaints that Tribunals take different approaches to applications to vacate the date first set for a hearing; some regions permit evidence to be given by an employer to prove the misconduct alleged in an unfair dismissal case whereas others do not; some regions require written witness statements in advance of the hearing, others do not. It was, therefore, entirely sensible, we think, that the President should have attempted to introduce more uniformity into the procedures by his practice direction. In the opinion of the President of the EAT, it is desirable that the Tribunals seek to agree on what is best practice from the point of view of the judicial management of proceedings, and that, if needs be, the President of the Industrial Tribunals is given statutory power to make Practice Directions which apply country wide.

As we informed the parties at the hearing, the appeal is dismissed.