United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR R MOORE (of Counsel) Instructed by: Mr D Tibble Messrs White & Bowker Solicitors 20 Brunswick Place Southampton SO15 2AQ
For the Respondents	MR L MENZIES (of Counsel) Instructed by: Mr T Rehal Messrs Bond Pearce Solicitors 7 Town Quay Southampton SO14 2PT


 


JUDGE PETER CLARK:

1. Mr Moore commenced employment with the respondent, Warings Contractors Limited as Company Secretary on 29th January 1979. Shortly prior to joining the company he signed a written contract of employment on 8th January 1979, which expressly provided for three months notice of termination of the contract.
2. The following year he was appointed to the Board of Directors of the respondent. Thereafter he became Company Secretary of some nine companies within the group of Warings' companies and a director of the board of three of those companies.
3. In January 1998 a management buy out ["MBO"] took place by employees and a new holding company Warings Construction Group Limited, set up as the MBO vehicle, acquired three of the nine companies formerly within the Warings Group.
4. The three subsidiary companies acquired though the MBO were the respondent, Heaton Warings Limited and Sanipor Southern Limited. At the time of the MBO the appellant was Company Secretary of all three companies.
5. The appellant was invited to join in the MBO and become a shareholder in the new holding company. He declined to do so.
6. The other six companies were not included in the MBO and remained effectively with the Warings family.
7. There followed negotiations between the holding company main board and Mr Moore over a new contract of employment. That would have involved a reduction in his overall remuneration because, say the respondents, his responsibilities had reduced as a result of the reduction in the number of companies of which he was Company Secretary.
8. Ultimately, by a letter dated 9th November 1998 the appellant was given three months notice of dismissal by his employer, the respondent. That notice duly expired on 9th February 1999.
9. The appellant presented a complaint to the Southampton Employment Tribunal of unfair dismissal, wrongful dismissal, and unlawful deduction from his wages and breach of contract.
10. That claim is resisted by the respondent and the substantive hearing of the case is due to take place before the Southampton Employment Tribunal on 23rd to 24th September.
11. On 13th September an interlocutory hearing took place before a Chairman, Mr N Jenkinson, sitting alone at Southampton, on the appellant's application for discovery of certain documents. By an order with reasons, promulgated on 15th September, the Chairman dismissed that application. Against that order the appellant now appeals.
12. The classes of documents in respect of which discovery is sought, are set out in a letter from the appellant's solicitors to the respondent's solicitors dated 4th August 1999. That letter makes clear, as does an earlier letter of 23rd July, that in all respects the application is for discovery, which is dealt with in Rule 4(1) of the Employment Tribunal Rules of Procedure.
13. The request for discovery was resisted by the respondent for the reasons set out in their solicitors' letter of 30th July and 5th August.
14. The application falls into two parts. First, there is an application for the service contracts of all directors in the new group, including the director shareholders of the post-MBO holding company. The issue to which it is said those contracts go is the appellant's claim that he was wrongfully dismissed in that he was entitled to more than three months notice.
15. Initially, and it appears from the letter of dismissal dated 9th November 1998, the respondent was unaware of the written contract made between the respondent and the appellant and dated 8th January 1979. Thus in the Notice of Appearance settled by solicitors, it was pleaded that in answer to the claim of wrongful dismissal three months notice was reasonable notice to terminate the appellant's employment or three months was the appellant's contractual notice entitlement. Now that the appellant has produce the contract of 8th January 1979, the respondent, unsurprisingly, has seized upon that to advance as its primary case that there was an express term of the contract providing for three months notice. That is what he received. Therefore the wrongful dismissal action fails.
16. I am prepared for the purposes of this appeal, to entertain the possibility that the appellant may be able to argue that in some way the express term as to notice has been varied and that it is arguable that the appellant is entitled to reasonable notice and in turn it is arguable that more than three months is reasonable notice in the circumstances of this case.
17. The question then arises as to whether or not the other directors' service contracts entered into post-MBO are relevant to the question as to what is reasonable notice.
18. The Chairman, for reasons set out in paragraph 5 of his reasons, came down firmly in favour of the respondent's submission that those contracts are not relevant to an issue in this case because there is no true comparison between the shareholder directors and the appellant who chose not to invest in the new company.
19. It seems to me that that was a perfectly permissible finding for the Chairman to make. I bear in mind that my powers on appeal are limited to correcting errors of law. It is not enough that I, sitting as an Employment Tribunal Chairman, might have reached a different view. In these circumstances Mr Moore has to satisfy me that the Chairman's finding in relation to this first part of the application., the directors' service contracts, was a perverse finding. He fails to do so and I dismiss the appeal in relation to that first part of the application.
20. The second part of the application, although described throughout by the appellant's solicitors as being a matter of discovery, in fact is nothing of the sort. The application is to be found in a letter from the appellant's solicitors to the respondent's solicitors dated 23rd July 1999. It is in this form:

"Finally, please let us know, in relation to all accounting and administrative staff employed by your client, the following information as at 31 January 1998, 9 November 1998, 9 February 1999 and now:-

1. The number of persons employed within the group undertaking such work;

2. The number of hours per week worked by each individual;

3. The position or job title in respect of each individual.

[and by an addition raised for the first time by Mr Moore at the hearing before the Chairman on 13th September]

4. How much they are paid."

It will be readily seen that that is a request for information. It is not a request for discovery of documents already in existence. To that extent, whatever the reasoning of the Chairman, which I find opaque, in paragraph 6 of his reasons, there is no basis upon which an order for discovery, in those terms, could be made.

21. However, and this point is not dealt with by the Chairman in his reasons, Mr Moore tells me that before the Chairman, although not mentioning Rule 4(3) of the Employment Tribunal Rules of Procedure in terms, he was effectively inviting the Chairman to make an order under Rule 4(3) which provides as follows:

"A tribunal may, on the application of a party made by notice to the Secretary or of its own motion, require a party in writing to furnish to the tribunal a written answer to any question if it considers-

(a) that the answer of the party to that question may help to clarify any issue likely to arise for determination in the proceedings, and

(b) that it would be likely to assist the progress of the proceedings for that answer to be available to the tribunal before the hearing,

and may appoint the time within which the written answer is to be furnished …"

22. Insofar as such an application was before the Chairman, and I shall assume in favour of the appellant that it was it was not dealt with as such in the Chairman's reasons. If, and insofar as the Chairman erred in law in not adjudicating on the Rule 4(3) application as it is now put to me, then the appeal would, prima facie, be allowed. However, I have to consider what course I would take in the event that the appeal was allowed. I would exercise the powers of a tribunal Chairman granted by s.35 of the Employment Tribunals Act 1996. Having considered the way in which the case is now formulated on this point by Mr Moore, I reject the application. It seems to me that the request for information does not properly relate to the pleaded issues raised by the respondent in the Notice of Appearance, particularly in relation to its case as to some other substantial reason for dismissal rendering the dismissal fair. Reminding myself of Rule 4(3) I am quite satisfied that answers to the questions or requests for information contained in the letter of 23rd July, as amended, will not help to clarify any issue likely to arise for determination in the proceedings. Nor do I think that it will be likely to assist the progress of the proceedings for those answers to be available to the tribunal before the hearing.
23. In these circumstances I shall dismiss this appeal.
24. There will be no order for costs in the appeal.