United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR M HARDY (of Counsel) Pool Purchas & Stokes Solicitors 37 Morrab Road Penzance Cornwall TR18 4ER
For the Respondents	NO APPEARANCE BY OR ON BEHALF OF THE RESPONDENTS


 


JUDGE PETER CLARK: This case raises a number of problems which we have canvassed with Mr Hardy, who appears today on behalf of the appellant, Mr Merceica. We now have before us an application by Mr Hardy for this appeal to be adjourned.

We begin with the history. Mrs Tanner, formerly Butson, the applicant and first respondent to this appeal, commenced employment in "The Captain's" fish and chip shop at 62 Daniel Place, Penzance, in March 1977. The business was then owned by Mr Bota.

Subsequently Mr Bota transferred the business Mr Leone, the second respondent to this appeal; the applicant remained in the employment. She was the manageress.

Mr Leone ran into financial difficulties and on 6th April 1996 he left the business, having first served notice of dismissal on the applicant dated 14th March to take affect on 6th April.

It was and is the applicant's case, supported by Mr Leone, that the business was transferred to Mr Merceica on that date. Further, the applicant contends that although her employment transferred to Mr Merceica on 6th April, he refused to employ her on the same terms as before, but suggested that she sign on for Unemployment Benefit and work for him as and when required. She rejected that suggestion and went to work for another fish and chip business.

Mr Merceica contends that he was not the transferee of the business; that the applicant was dismissed by Mr Leone, who is responsible for the redundancy payment and pay in lieu of notice claimed by the applicant, and further denies that he was not prepared, as manager of the business after 6th April 1996, to continue the applicant's employment as before.

On 1st July 1996 the applicant presented an Originating Application to the Industrial Tribunal, claiming a redundancy payment and pay in lieu of notice, and naming Mr Leone as respondent. By an order of the tribunal dated 3rd December 1996, Mr Merceica was added as second respondent.

The matter came on for hearing before an Industrial Tribunal sitting at Truro under the chairmanship of Mr Brian Walton on 13th January 1997. Mr Merceica did not attend. Having heard evidence from the applicant and Mr Leone, the tribunal found that there was a relevant transfer from Mr Leone to Mr Merceica, and that Mr Merceica was liable to pay the applicant a redundancy payment of £4,017.16 and the balance of her notice entitlement, that is nine weeks pay totalling a further £770.08 after deductions of monies earned in alternative employment.

That decision with extended reasons was sent to the parties on 17th January 1997. On 28th January Mr Merceica, then acting for himself, lodged a Notice of Appeal to this tribunal. He did not then apply for a review of the tribunal's decision.

At a preliminary hearing held on 21st April 1997 this Appeal Tribunal allowed the matter to proceed to a full hearing, listed for today.

Meanwhile, on 5th March 1997, Mr Leone was declared bankrupt by order of the Plymouth County Court.

Mr Merceica instructed solicitors. They made enquiries and it transpires that the reason why Mr Merceica failed to attend the hearing before the Industrial Tribunal on 13th January was that he had to be with his 10 year old son, Tony, who was seriously ill in the Bristol Children's' Hospital that day. The clinical need for his attendance is set out in a letter from the Consultant Paediatrician dealing with Tony's case to his solicitors dated 27th August 1997. Further, in an affidavit sworn on 4th December 1997, Mr Merceica deposes to the fact that he telephoned on the morning of 13th January in order to explain why he could not attend the Industrial Tribunal, to be told that it was then too late to stop the proceedings.

A copy of that affidavit was sent to the Chairman, Mr Walton, for his comments. He promptly replied by letter of 12th December. He states that had he received the information contained in Mr Mercieca's affidavit before starting the case on 13th January he would almost certainly have postponed it. However, he might have proceeded with the case after warning the parties that there could be an application for a review which would almost certainly succeed.

However, it seems that no message was relayed to the Industrial Tribunal that day. There is no record of a call having been received.

That is the background. Now the problems. The first difficulty is that this is an appeal in part against an Industrial Tribunal award of damages for breach of contract. The pay in lieu of notice claim.

As the Employment Appeal Tribunal pointed out in Pendragon PLC v Jackson [Times. 19th November 1997], due to a lacuna in the formulation of the Industrial Tribunals Act 1996, the Employment Appeal Tribunal's jurisdiction to entertain appeals against Industrial Tribunal breach of contract decisions, formerly contained in the Employment Protection (Consolidation) Act 1978, had been omitted. It is likely that the position will be cured retrospectively by the bill currently progressing through Parliament. Until then, our practice as set out in the President's Practice Statement [Times. 3rd December 1997], is to adjourn an appeal which is related to more than one head of complaint, here redundancy and a claim for damages for wrongful dismissal.

The second point relates to review. As the Chairman points out in his recent letter, if the facts deposed to by Mr Merceica are correct, this is an appropriate case for a review application under Rule 11(1)(c) of the Industrial Tribunal Rules of Procedure; the decision having been made in the absence of a party.

Of course, the time for making that application, 14 days from the promulgation of the Industrial Tribunal's decision on 17th January 1997 (see Rule 11(4)) has long since expired. Nevertheless, the tribunal has power to extend time in an appropriate case under Rule 15(1).

If we accede to the application to adjourn this appeal pending our jurisdiction to hear breach of contract claims being restored by Parliament, there is nothing to prevent Mr Merceica making an application for a review of the Industrial Tribunal's decision, coupled with an application to extend time for making that application. It will then be a matter for the Industrial Tribunal to determine those applications. Should the applications fail, it will then be open for Mr Merceica to appeal those decisions to this tribunal. Should the applications succeed, this appeal will be rendered superfluous.

In mentioning that possible course we have not overlooked the position of the applicant and Mr Leone. There is before us a letter from the applicant which arrived at the Appeal Tribunal on 10th December. She has not appeared today. She rightly points out that she has won her case and thought that the issue now rested between Mr Merceica and Mr Leone as to who paid her tribunal award.

However, she may not have considered or been aware of the financial position of these two gentlemen. We are told that Mr Merceica is now not working; he is looking after his son following the break-up of his marriage; and dependent on Disability Benefit which, in the light of possible changes, may leave little to meet her award. Mr Leone is a bankrupt. In these circumstances, if following a rehearing it was found that he is responsible for the redundancy payment and pay in lieu of notice awarded to the applicant; liability to make those payments would then appear to rest with the Secretary of State under s. 182 of the Employment Rights Act 1996. It may therefore be necessary for the Secretary of State to be notified if a rehearing of the tribunal proceedings is in due course ordered. On any view Mr Leone himself, who does not appear today, would not be personally liable whilst he remains a bankrupt.

We hope that these observations may be some assistance to the parties. Meanwhile, we shall adjourn this appeal on Mr Hardy's application, consistent with the recent Practice Statement, sine die.