United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR P COTTON (Representative)
For the Respondent	MR C BAMFORD (of Counsel) Instructed By: Ms J Bradbury Messrs Leo Abse & Cohen Solicitors 40 Churchill Way Cardiff CF10 2SS


 


MR JUSTICE LINDSAY (PRESIDENT): We have before us as a full hearing the appeal of Gloystarne & Co Ltd in the matter Martin against Gloystarne & Co Ltd. Gloystarne is represented by Mr Cotton, their Personnel Manager, and Mr Martin is represented by Counsel, Mr Bamford.

1. From, it seems, something like 13 July 1978 until 20 August 1999 Mr Martin was employed by Gloystarne. On 13 August 1999 there were some events as to which the parties make very different allegations. Mr Martin says, of 13 August 1999, that:

"I returned to the depot after completing my driving duties. I went into the Manager's Office to lodge my time sheet, then I noticed that previous time sheets had been altered without my knowledge and would have resulted in hours being deducted. I had the intention of sending copies of the altered sheets to my employer in Rotherham, at that time my Manager, Mike Stanton, entered the office and asked me what I was doing so I advised him. I got up from the table to leave, Mr Stanton blocked my way. I asked him to move and with that he proceeded to assault me physically."

Gloystarne's very different version is as follows:

"The applicant committed an act of Gross Misconduct by removing documents from the Company. He opened a filing cabinet, removed the documents, copied them and retained these for his own purposes. These acts are admitted by the applicant.

The applicant's manager arrived and requested the return of the paperwork. The applicant refused and attempted to leave the room. The manager then attempted to restrain the applicant as he tried to push his way past.

A thorough investigation into the allegations made by the applicant has taken place and the Company was satisfied that the action taken by the management was reasonable in the circumstances."

So one can see very different versions of what happened on 13 August 1999.

2. On 20 October 1999 Mr Martin signed his IT1 claiming unfair dismissal. Importantly, because it will feature in the later argument in the case, box 3, which is headed "If a representative is acting for you please give details", (and there is then a space for Name, Address, Postcode and a Reference to be given) is completely blank. So Mr Martin described no one as a representative acting for him. On the face of things the complaint in the IT1 was made against a Mr Mike Stanton but the IT3 of the 1 November 1999 came from Gloystarne and it seems that thereafter Gloystarne was taken to be the Respondent.
3. Gloystarne claimed that Mr Martin had been dismissed for gross misconduct after a formal disciplinary hearing at which he had been represented, as we have just indicated in the citation we have already given. It does not appear who then represented him and, in any event, there is nothing held as a fact on the subject of whether the representative then acting for him was duly continuing to act thereafter or had authority thereafter to act for Mr Martin. There are no findings on any such subject.
4. Then came the events in February 2000 which are relevant to the case on appeal before us. Chronologically, and looking at the matter as the Employment Tribunal, prior to the hearing before it, had understood the case to be, the position was as follows.
5. First of all there was an Employment Tribunal hearing listed to deal with the IT1 and the IT3 on 3 February 2000. On 1 February 2000 Mr Keith Jones, Regional Industrial Organiser of the T & GW Union (which is presumably Mr Martin's union) phoned the Employment Tribunal to say that the parties had reached agreement and that he was requesting ACAS to draw up a COT3 form, the form very commonly used, with the assistance of ACAS, to compromise proceedings of this kind. Thirdly, next, but still on 1 February 2000, Mr Jones sent to the Employment Tribunal a fax stating, so far as found by the Tribunal, as follows:

"The above case listed for hearing on Thursday 3 February 2000 has now been settled via ACAS and we are awaiting the COT3."

6. On the same day ACAS telephoned the Employment Tribunal to say that a COT3 form was being prepared. There are no findings as to further communications but then on 11 February the Employment Tribunal made an Order as follows:

"The Conciliation Officer having taken action under the provision of the Employment Rights Act 1996 and terms of settlement having been reached between the parties the originating application is hereby stayed."

That is the Order of 11 February; it is signed on behalf of the Employment Tribunal.

7. No completed COT3, it seems, had been shown to the Employment Tribunal, certainly there is no finding that one had been. However, on 18 February Mr Jones wrote to the Tribunal and said this:

"Further to my letter of the 1^st February and your subsequent letter of the 11^th February 2000 I would advise you that Mr Martin has now decided not to complete the COT 3 and wishes his case to be re-listed.

I await your reply

Yours sincerely

Keith Jones

Regional Industrial Organiser."

8. Having received that, the Employment Tribunal made arrangements for a hearing to deal with this new situation and a hearing was arranged for 11 May. At the hearing there was, as it seems, no legally qualified representation of either side, Mr Martin having been represented by another T & GWU representative and Gloystarne being represented by its Personnel Manager, Mr Cotton. In the course of that hearing further facts emerged as follows.
9. First of all, on the morning of 1 February 2000, Mr Martin had attended a meeting with Mr Keith Jones. As to that the Tribunal held as follows:

"We find that Mr Jones invited the applicant to consider the prospect of a settlement of the case, but we accept that Mr Jones made it clear that it would be entirely up to the applicant himself as to whether he accepted any proposals that might be put forward by the respondent company. We find that at no stage were any monetary figures discussed with the applicant, either by Mr Jones or anyone else. At no stage did the applicant meet with or discuss the case with ACAS. At the conclusion of the applicant's meeting with Mr Jones, at about 12.15 on 1 February, we find it was agreed that Mr Jones would report back to the applicant on any proposals the respondent made. That the applicant might then consider whether he was prepared to settle the case. We accept, having listened to the applicant, that he had very specific views about the kinds of matters that should be covered by any agreement with the respondent and that those matters did not go merely to financial issues. We further find that Mr Jones was aware of the applicant's position and, more especially, was aware of the need to have his approval to any terms and conditions that were offered by the respondent."

10. There is no finding that Gloystarne knew of this meeting or that Gloystarne knew that Mr Martin had met with Mr Jones in relation to the conduct of the case. Then the Tribunal continues with other relevant findings. In paragraph 7 they say:

"7. We find that there was no further communication between the applicant and Mr Jones prior to the receipt by the applicant on the morning of 2 February 2000, of a COT3 drafted by ACAS. We find that Mr Jones had sought to conclude a settlement of the case on the applicant's behalf, when he knew, or reasonably should have known, that he had no authority, expressly or impliedly, to do so. In these circumstances, we find that Mr Jones did not act in the applicant's best interests or with his consent. We accept that the applicant was party to no oral or written agreement to settle his claim. Any terms of settlement that had been discussed and purportedly agreed between Mr Jones, the respondent and ACAS were done so without the applicant's knowledge or consent. …"

A little later:

".. the applicant had no knowledge of the agreement until he received the COT3 directly from ACAS through the post. In these circumstances we accept what the applicant has said in evidence; that he went 'absolutely ballistic' when he discovered that ACAS had been advised the case was settled and that, in turn, the tribunal had stayed the proceedings."

11. It was common ground at the hearing on 11 May that the COT3 form had not been signed by Mr Martin and there is certainly no finding that it had been signed by him, or, indeed, in fact signed by anyone. The Tribunal heard evidence on 11 May from Mr Martin and from a colleague of his who had attended the meeting with Mr Keith Jones on 1 February 2000. The Tribunal also had in front of it ET correspondence and documents relating to notes of telephone calls. Gloystarne's argument, as it was put below, is recorded as follows:

"The respondent's submission by Mr Peter Cotton, its personnel manager, is that terms and figures were agreed by Mr Jones, with the assistance of Mrs Pritchard from ACAS, and that constitutes an enforceable oral agreement regardless of the signature of the COT3."

12. Reference was made, perhaps by Mr Cotton on Gloystarne's behalf, to the case Gilbert v Kembridge Fibres Ltd [1984] ICR 188, which the Employment Tribunal then distinguished as follows. They held in their paragraph 9:

"We distinguish that case from the applicant's case as unlike the tribunal in the Gilbert case we cannot find as a matter of fact that the parties minds had met. The issue before us now is essentially whether an oral agreement was lawfully concluded at all. Mr Gilbert pondered on his COT3 for a few days before signing the agreement, then subsequently changing his mind and crossing out his signature. In the present case we accept that the applicant was genuinely outraged that a settlement had been concluded without his knowledge and without his authority. Those facts properly lead us to a different conclusion than was come to in the Gilbert case."

13. There is no record in the Extended Reasons of the Tribunal suggesting that Gloystarne's case below was put other than in the manner which we have just cited it as being recorded. In particular, there is no hint that Mr Jones having had ostensible authority was mentioned, nor that the case which we will need to return to shortly, Freeman v Sovereign Chicken Ltd [1991] ICR 853, was referred to. The Tribunal, continuing their findings of fact, said this:

"We find that there was no 'meeting of minds' aside from Mr Jones' unauthorised acceptance of proposals for settlement made by the respondent. There was no oral agreement between the parties that was expressly or impliedly authorised by the applicant. Mr Jones' authority was no more than to make an invitation to treat with the respondent and we find Mr Jones should reasonably have appreciated the limits of his authority at the relevant time. There was no offer of compromise on the applicant's part that was capable of lawful acceptance. We are not satisfied that an agreement to settle the applicant's complaint of unfair dismissal was reached between the parties on 1 February, within the terms of Section 203(2)(e)of the Employment Rights Act 1996. Mr Jones did not have any unconditional authority to conclude a settlement on the applicant's behalf."

And then, a little later, in the last paragraph, the Tribunal said:

"In our conclusion, neither has a COT3 been completed nor has there been an oral agreement. There has been no settlement of this case. The issues in this case are still live for consideration on the merits by the tribunal. We order that the case be re-listed for hearing forthwith."

And, it was for those reasons that they made the actual decision which was as follows:

"The unanimous decision of the tribunal is that the stay of proceedings imposed on 11 February 2000 be lifted. The applicant's claim of unfair dismissal be re-listed for full hearing."

14. Then, just to bring the chronology to an end, the decision having been sent to the parties on 2 August 2000, on 14 August Gloystarne lodged its Notice of Appeal. The only point taken in the Notice of Appeal is as to Mr Jones' ostensible authority. Thus, in the short Notice of Appeal it says:

"However, it is central to the conduct of proceedings such as these and to the conduct of negotiations as to settlement, that the parties should be able to rely on certain things. In particular, they should be able to rely on statements made on behalf of a party by someone who has ostensible authority to speak for that party."

A little later:

"In this case therefore it matters not a jot that Mr Jones did not have authority and that he should have known that he did not. What matters is whether the ACAS officer and the Respondents were entitled to rely on his ostensible authority."

15. That is the Notice of Appeal but in Gloystarne's skeleton argument there is, in effect, added an argument that Gilbert v Kembridge Fibres Ltd case is indistinguishable and should be followed. Mr Martin, by Mr Bamford, argues that the Gilbert case is distinguishable in the manner in which the Employment Tribunal did distinguish it and that, in any event, the question of ostensible authority was not raised below and therefore cannot now be raised. To deal first with Gilbert v Kembridge Fibres Ltd [1984] ICR 188 EAT, the headnote in the ICR version has in its "held" passages, a passage follows:

"Held, dismissing the appeal, that an oral agreement between the parties to settle a dispute with the assistance of a conciliation officer acting under section 134 of the Act of 1978, was enforceable without being put into writing; and that, accordingly, the industrial tribunal's decision that a conciliation settlement had been reached notwithstanding that the official document, form COT3, had not been signed by the parties was correct."

That is a fair summary of the reasoning in the case and of the conclusion of the case. In the course of it Browne-Wilkinson J (as he then was) records at page 190, between F and G:

"The industrial tribunal found as a fact that the parties' minds had met, and that an offer was made and accepted on 17 December through the intervention of Mr Marsden in the way that we have recounted. The tribunal held that there was therefore an enforceable agreement to settle the claim notwithstanding that the document COT3 had never been signed by both parties."

16. In our case, as we have seen, there was an express finding that there had been no written or oral agreement. The Employment Tribunal was therefore right to distinguish the Gilbert case. The Gilbert case does not truly assist the Appellant.
17. Turning, then, to the other remaining issue, namely ostensible authority, it has to be said that, save in very exceptional circumstances, the fact that a point was not raised below is usually a bar to the point being raised on appeal if it is the case that were the point permitted to be raised a whole number of previously unexamined questions of fact would arise as a necessary part of a just decision.
18. That consideration requires a brief look at how ostensible authority arises. Putting the point alphabetically, B does not become A's agent in dealings with C, nor does B acquire authority from A to act on A's behalf in relation to C by way only of what B says to C. If that was the case, principals could have agents completely unknown to them and over which they had no control. Rather the case is that B becomes A's agent in dealings with C by reason, in general, of what A says to C on the point or whether A conducts himself to C in some way that reflects on the possibility of B's agency. In other words, on the facts of the case at hand, however much Mr Jones described himself to Gloystarne as representing Mr Martin, that, of itself, would not make Mr Jones Mr Martin's agent in dealing with Gloystarne, nor authorise him to bind Mr Jones in those dealings.
19. It follows that if ostensible authority were now permitted to be raised, possible facts that do not seem to have been canvassed below at all would need to be investigated. For example, did Mr Martin himself say anything to Gloystarne about Jones' position and, if so, what did he say? Did Martin in Gloystarne's or Jones' joint presence agree to or fail to negative some assertion by Mr Jones as to his, Mr Jones, having Martin's authority and, if so, what was said and done?
20. Fresh points of law can sometimes be raised on appeal at the EAT but, where the new point, if allowed, could not, in any event, be ruled upon adequately for want of adequate facts having been already found below, there is generally no sufficient reason to permit the new point to be raised and this is such a case. To the limited extent we have a discretion to permit ostensible authority to be raised, we feel unable to exercise the discretion for want of adequate facts having been held below to enable a decision fairly to be arrived at on the point – see Kumchyk v Derby County Council [1978] ICR 1116 EAT and Jones v Governing Body of Burdett Coutts School [1998] IRLR 521 CA - both cited in the Martin skeleton argument. In other words, the central point that Mr Cotton would like to raise is, unhappily for him, not available to him. But, even if he were permitted to raise it and if he were therefore permitted to develop an argument based on Freeman v Sovereign Chicken Ltd [1991] ICR 853 and in [1991] IRLR 408 EAT, it would not, as it would seem, assist him. There, the Citizens Advice Bureau adviser was held to have been able to act on the Applicant's behalf. He was held to have had ostensible authority so to act but (and this is crucial) the Employment Tribunal had found as a fact in that case that the Applicant had been named by Mr Freeman, the Applicant, as his, Mr Freeman's, representative. Thus, in paragraph 2, looking at the report in IRLR, that paragraph begins: "We [the EAT] therefore agree completely with the reasoning of the Industrial Tribunal as succinctly expressed in paragraphs 41 to 45" which are then cited by the EAT and they include, at paragraph 43, with our emphasis:

"But it seems to us that where the CAB advisers, named as representatives by a party to the proceedings, hold themselves out as having authority to negotiate, and to reach a settlement, on behalf of a client, the other party to the proceedings is entitled, in the absence of any notice to the contrary, to assume that the CAB adviser does in fact have such authority, and to enter into an agreement with the CAB adviser on that basis. That is what is meant by ostensible authority."

And, at paragraph 27, it is made clear that in that case Dr Byford, the CAB representative, had been named in the Applicant's (Mr Freeman's) Originating Application as her representative.

21. To revert to our alphabetical formulation, in that case B had authority to act as A's agent in dealings with C because A had herself described B as being A's representative and had done that directly to C because, of course, the Applicant's Originating Application is sent to and responded to by the Respondent. There is no equivalent finding in our case and, unhappily, the summary which Mr Cotton includes in his skeleton argument from Freeman v Sovereign Chicken Ltd case, leaves out the crucial words: "named as representatives by a party to the proceedings", which totally change the effect of the case. It is not a holding out by Counsel, a Solicitor, a CAB adviser or other representative himself that is material to the question of ostensible authority but a holding out by the party himself as to which, as we have said, there is no finding at all of fact in this case. Accordingly we have to dismiss the appeal.
22. But we cannot leave the case without some considerable expression of sympathy for Gloystarne. Through, it would seem, no fault of its own at all, it has incurred costs and delays that should not have been part of the case. It has been poorly served. Whether it has any claim against Mr Jones for breach of warranty of authority or whether in the circumstances the T & GWU or ACAS feel able to lighten its burden, are not matters for us. Nor have we the material to determine such points even were it proper for us to do so, nor whether the Employment Tribunal had been precipitate in regarding the case as settled and in staying proceedings as it did.
23. Employment Tribunals have been held – see the Freeman case at page 857 C to D - to have both a right and a duty to investigate whether compromised agreements of this kind have been made and yet, here, there was no agreement in writing laid before the Employment Tribunal as none was made and none was signed by the parties. There is no finding either that the Employment Tribunal had been told that there had been some concluded oral agreement made and nor any finding as to what the terms of that oral agreement were. So it is hard to see how the duty upon the Employment Tribunal to examine whether an agreement has been made could fairly here have been discharged. These are not matters for us but they do lead to sympathy for Gloystarne in its predicament.
24. However, so far as concerns errors of law in the Tribunal's reasoning on lifting the stay, we find none. We have not been referred to any express power upon the Employment Tribunal to make a stay in the first place but whatever power of a general nature there would have been (for example, Employment Tribunal Rule 13(1)) would undoubtedly include also a power to lift the stay. The proceedings had not been dismissed but only stayed and we see no error of law in the Employment Tribunal's reasons for lifting the stay. Thus the appeal, as we have said, has to be dismissed.