United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR R PEAT (Representative) Messrs Wilkinsons Solicitors 1A Strawberry Bank Preston New Road Blackbury Lancashire BB2 6As
For the Respondents	MISS J EADY (of Counsel) The Treasury Solicitor Queen Annes Chambers 28 The Broadway London SW1H 9JS


 


MR JUSTICE HOLLAND: By an IT1 dated 25 June 1997, Mr Fred Peat made a complaint against Fensterplas Ltd in terms "redundancy, compensatory notice, wages and holiday payment from the National Insurance Fund". The essence of the matter was an attempt by him to avail himself of the potential for compensation from the Secretary of State for Trade and Industry, pursuant to the statutory provisions contained in the Employment Rights Act 1996, starting at section 166. The essential issue that presented itself for adjudication was as to whether he was an employee of Fensterplas Ltd or whether in reality he so controlled it, as to be indistinguishable from the company itself. Upon that finding his entitlement under the legislation depended.

In the event, the matter came before an Industrial Tribunal at Manchester on 15 August 1997. Through what may have been a combination of circumstances current on that day, it seems that the hearing did not start until the afternoon and then it was in front of a Chairman sitting alone, which Chairman seems to have taken the case over from another Court.

At the hearing the Applicant, Mr Peat was assisted by his brother and essentially depended upon oral submissions backed up with a certain amount of documentation, in particular, a letter of 13 June 1997 from Mr Beir of Building and Engineering Plastics Limited, who was writing in his capacity as company accountant for Fensterplas Ltd.

The Respondents, the Secretary of State had submitted a written representation. In the result, the Tribunal ruled that the claim failed. It failed because it was able to find that Mr Peat was not an employee. Against that finding, Mr Peat appeals to this Tribunal, he has had the advantage of some assistance from solicitors who have drafted for him a skeleton argument. Once again these had the considerable advantage of assistance from his brother as advocate.

We have further had much assistance from Miss Eady, appearing for the Respondents, that assistance helping us about the facts and the law, with the sort of care that is much appreciated when only one side is professionally represented.

The essential submission of Mr Peat has to be that the decision of the Tribunal was flawed as a matter of law. The essential submission in response of Miss Eady is to the effect that it can and should be sustained. We have very carefully considered both submissions, not least because there is a lot of force undoubtedly in the submission advanced by Miss Eady. But in the result, we have decided that we cannot sustain this decision, that we must allow this appeal and that we must direct that the matter be remitted for a fresh hearing, this time in front of a fresh Tribunal constituted by a Chairman sitting with the usual two lay members.

The reason for this decision is as follows. It is trite law that the question as to whether Mr Peat was at the material time an employee, or whether in truth he was the company, must reflect a jury decision based upon all the available material facts. Our concern looking at the very brief Extended Reasons is twofold. First, were all the facts properly put before the Chairman? And second, was he in a position sitting on his own properly to provide the jury element that is necessary to give substance to the end result?.

Turning to the first point, it was necessary at the beginning of the hearing before us, to gain assistance from Mr Peat via his brother as to the facts, and certain facts emerged in the course of that discussion, which we noted were wholly absent from those that, as found by the Chairman, appearing in the Extended Reasons.

One such was that the dismissal of Mr Peat was not at his own behest, but was at the behest of a receiver appointed by the Inland Revenue, that receiver presumably acting on behalf of the company. There were other rather less significant matters which emerged from that discussion.

Turning to the second aspect of the matter, we notice the Chairman gamely seeking to make judgments as to the weight of the facts, but in so doing, dealing with factors as to which he would have been greatly assisted by input from both sides of industry, that is by input from lay members. At the end of the day, this Tribunal has a considerable sense of unease about the findings as expressed in the Extended Reasons, hence the decision arrived in disposal of this appeal.

We hasten to add that it may indeed be that the end result of the re-hearing is as it was at the conclusion of the previous hearing. But if that is the case, then it should at least be capable of substantiation by reference to the full facts and by reference to a judgment upon those facts of a full Tribunal.

Without seeking in any way to direct the fresh Tribunal, we would invite them in considering the facts to have in mind the following matters. First, who controlled the company, so as to appoint Mr Peat, managing director in 1991? Second, how and in what circumstances, did he buy the balance of his current shareholding in 1993? Three, how was the company controlled in and after 1993? Four, by whom and in what circumstances was he dismissed? In that context, when the Chairman found "he could not be dismissed without his agreement as to the dismissal", can that finding be substantiated? Five, can any inference at all, be fairly drawn from the fact that he did without wages and holidays in the particular circumstances that preceded the appointment of the receiver? Similarly, can any inference at all be fairly drawn from the assistance given to the company by his brother? It will be observed that the Chairman considered that both those matters went into the balance against Mr Peat's application. We invite re-appraisal. It may be that the Chairman was right, but it may equally be that as factors they are immaterial or that they do no more than reflect mitigation of the position so that had the brothers been successful, no claim would have been made at all against the Respondents. On this latter view, it would seem rather unusual that such should weigh against Mr Peat.

All those issues of fact then fall to be considered helpfully by reference to the very recent decision, put before us by Miss Eady, that is Secretary of State for Trade & Industry v Bottrill, Court of Appeal, 12 February 1999. Manifestly, that was not before the Tribunal under appeal. It does represent the latest assistance upon this topic. We are not saying that it necessarily impugns the guidance that the Chairman obtained from the cases that he cites in his Extended Reasons, but it certainly serves to develop and illuminate the principles that he sought to observe.

Thus for the reasons we have indicated, we make the order already identified. Before departing from the case, whilst we fully appreciate the financial position of Mr Peat , it has to be said that he would plainly benefit from legal representation before the Tribunal, if such were possible. If such is not possible, then perhaps the services of Messrs Wilkinsons could be obtained in order to provide, at the very least, a statement that would seek to cover the issues of fact that we have raised, plus the other issues of fact that are plainly material to this deliberation. With that sort of help, then the Tribunal might be in a better position to resolve this matter, rather than seeking to do so by way of an oral exchange with Mr Peat or his brother. Plainly, there is room for oral argument but in the background are issues which do require a modest amount of research and which can benefit from being set down clearly in writing.