United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR D CURREN (of Counsel) DAS Legal Expenses Insurance Co Ltd DAS House Quay Side Temple Back Bristol BS1 6NH
For the Respondents	MR D MORDUE (Representative) Messrs Pinsent Curtis Solicitors 1 Park Row Leeds LS1 5AB


 


MR JUSTICE KEENE: This is an appeal by Mrs C Maurice from a decision of an Employment Tribunal sitting in Cardiff and entered on the Register on 5th August 1999. The appellant had presented a complaint of unfair dismissal against the respondent by whom she claimed to have been employed from June 1992 to 7th July 1998. By its notice of appearance the respondent contended first, that the appellant was not employed by it but was a del credere agent and, alternatively, that if she was employed then she was not dismissed unfairly.

1. A pre-hearing review was held before a Chairman sitting at Cardiff on 4th December 1998. The Chairman heard oral submissions from Counsel for Mrs Maurice and read written submissions from the respondent, noting that the submissions of the appellant's Counsel were essentially that the written agreements signed by her did not reflect the reality of the relationship between the parties.
2. By letter dated 10th December 1998, the Chairman stated that:

"No evidence was taken at the pre-hearing review and consequently I am unable to say that those submissions would have no reasonable prospect of success. Everything of course will depend upon the evidence. …."

Consequently, the Chairman declined to make any order under Rule 7(4) of the Employment Tribunals (Constitution and Procedure) Regulations 1993, Schedule 1. We shall refer to those as 'the 1993 Regulations'. That is the provision which empowers a tribunal to order a party to pay a deposit of an amount not exceeding £150 as a condition of being permitted to continue to take part in the proceedings.

3. However, by letter dated 14th May 1999 the respondent's solicitors wrote to the Employment Tribunal pointing out that the Court of Appeal had recently made a decision in a case entitled Express and Echo Publications v Ernest Tanton [1999] IRLR 367, which indicated that the legal approach adopted by the Chairman in the letter of 10th December 1998 was wrong. They therefore requested that a fresh pre-hearing review should be held to consider the matter.
4. The tribunal agreed to do so and a further pre-hearing review took place before a different Chairman on 4th August 1999. This time both parties were represented. The Chairman concluded, as set out in an order dated 4th August 1999, that Mrs Maurice's case had no reasonable prospect of success. The reason for that conclusion was that:

"The contract is clearly a contract for service. This is reflected in almost every clause of the contract. Any tribunal hearing the case would take the contract as the starting point of the relationship between the parties. An argument that it did not reflect the parties' intention and that the reality was different would have no reasonable prospect of success in the face of the clear and unambiguous wording of the contract."

As a result it was ordered that Mrs Maurice pay a deposit of £150 as a condition of proceeding.

5. The written reasons, to which we have just referred, also dealt with certain jurisdictional and procedural issues. Given the matters being raised on this appeal before us, it is convenient to set out the relevant paragraphs from that document:

"4. A previous pre-hearing review was held in this case. Prior to the present review Mr Curwen for the applicant, sought to have it removed from the list on the ground that the tribunal had no jurisdiction to hold a second pre-hearing review in the one case and also on the ground that the interests of justice demand finality.

5. The application was rejected on the ground that the wording of rule 11 [sic] of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations 1993 is discretionary in that the tribunal "may at any time" hold a pre-hearing review. [We interpolate there that we think that that must be a reference to Rule 7(1)] There is nothing in the Regulations to suggest that "any time" must be confined to only one time. If a chairman, in the exercise of his discretion, considers that a second review is appropriate there is nothing in the Regulations to prevent him from listing a second review "at any time".

6. I therefore find that the tribunal does have jurisdiction to hear the review.

7. With regard to the interests of justice I reject the argument as to finality on the ground that a pre-hearing review finalises nothing. It either permits the applicant to proceed without having to pay a deposit, or its permits her to proceed on condition that she pays a deposit, while giving her a 21 day opportunity to re-consider her position.

8. I see no injustice to the applicant in this process. On the contrary, clarification of her prospects could well be of assistance to her."

6. Rule 7(7) provides that unless the deposit is paid within 21 days of the date on which the order is sent out to the party ordered to pay, the tribunal shall strike out the application. In fact what happened in this case is that Mrs Maurice's advisers indicated that she intended to appeal against the order and as a result the tribunal stayed the payment of the deposit. At one time the respondent sought to contend that there was no power to suspend an order under Rule 7(4), but that point is no longer being pursued.
7. On 13th September 1999 the appellant lodged a Notice of Appeal with the Employment Appeal Tribunal.
8. The first issue which arises before us is whether this appeal is out of time or not. The respondent contends that insofar as the appeal relates to the decision to hold a second pre-hearing review the appeal is made out of time. It is submitted by Mr Mordue, on behalf of the respondent, that the appeal should have been lodged within 42 days and since the decision to have the second pre-hearing review was communicated by letter dated 18th May 1999, that period had expired before the Notice of Appeal was lodged in this case.
9. On behalf of the appellant, Mrs Maurice, Mr Curwen contends that the listing, as he describes it, was purely an administrative act and did not amount to a decision within the meaning of Regulation 2(2) of the 1993 Regulations. He contends that there is no right of appeal under section 21(1) of the Employment Tribunals Act 1996 and he contends therefore that the time limit regulations do not apply to the decision actually to hold a second pre-hearing review but only to the substantive decision or order which resulted from it. On that basis, he submits, the lodging of the Notice of Appeal was within time.
10. It seems to us that there is a short answer to the contention put forward on behalf of the respondent. The 42 day time limit upon which reliance is being placed, is to be found in the Employment Appeal Tribunal Rules 1993 at Rule 3(2), which reads as follows:

"(2) The period within which an appeal to the Appeal Tribunal may be instituted is 42 days from the date on which extended reasons for the decision or order of the employment tribunal were sent to the appellant, or, in the case of an appeal from a decision of the Certification Officer, 42 days from the date on which the written record of that decision was so sent."

It is clear from that provision that the 42 day time limit simply does not apply to a decision to list a matter for a pre-hearing review, whether the first or any subsequent pre-hearing review. We also have doubts as to whether there is any right of appeal at all in respect of that decision as opposed to the decision which emerges from the pre-hearing review, there clearly being a right of appeal in relation to the latter. In the event, Mr Mordue did not press his argument on this point and in our judgment rightly. The Notice of Appeal here was lodged within 42 days of the order and reasons for order being given by the Employment Tribunal Chairman on 4th August 1999. The appeal is within time. Furthermore, it seems to us that there is force in the point made by Mr Curwen that it would be inappropriate to appeal a decision before there was any reasoned statement available for having a pre-hearing review or for that matter a second pre-hearing review. That is the justification in substance for the way in which the Rules provide for this matter. Consequently, we reject the first contention which has been put forward on behalf of the respondent.

11. With that preliminary matter dealt with, we turn to the principal issue on this appeal. That issue is whether there is a power in an Employment Tribunal to reconsider a "decision" made under Rule 7 of Schedule 1 of the 1993 Regulations.
12. That Rule finds its origin in the Employment Tribunals Act 1996 at sections 9(1) and 9(2). That provision reads as follows, under the heading "Pre-hearing reviews and preliminary matters":

"(1) Employment tribunal procedure regulations may include provision-

(a) for authorising the carrying-out by an employment tribunal of a preliminary consideration of any proceedings before it (a "pre-hearing review"), and

(b) for enabling such powers to be exercised in connection with a pre-hearing review as may be prescribed by the regulations.

(2) Such regulations may in particular include provision-

(a) for authorising any tribunal carrying out a pre-hearing review under the regulations to make, in circumstances specified in the regulations, an order requiring a party to the proceedings in question, if he wishes to continue to participate in the proceedings, to pay a deposit of an amount not exceeding £150, and

(b) for prescribing-

(i) the manner in which the amount of any such deposit is to be determined in any particular case,

(ii) the consequences of non-payment of any such deposit, and

(iii) the circumstances in which any such deposit, or any part of it, may be refunded to the party who paid it or be paid over to another party to the proceedings."

Rule 7(1) itself of the 1993 Regulations Schedule 1 provides:

"7.-(1) A tribunal may at any time before the hearing of an originating application, on the application of a party made by notice to the Secretary or of its own motion, conduct a pre-hearing review, consisting of a consideration of-

(a) the contents of the originating application and notice of appearance;

(b) any representations in writing; and

(c) any oral argument advanced by or on behalf of a party."

13. Nothing in either the statutory or the regulatory provisions to which we have referred expressly limits the number of times a pre-hearing review may be held. It is true that the phrase is used in Rule 7(1) "conduct a pre-hearing review", but to our mind that is not seeking to impose a numerical limit. If it were so intended, then it seems to us that the section 9of the Act and the 1993 Regulations would have expressly spelt out such a limit. There are good practical reasons why a second pre-hearing review can be very useful, given the purposes to which section 9 of the 1996 Act refers. That may particularly be so in a large complicated case or where there is a considerable time lapse between the lodging of the application initially and the full hearing of that application. But even in cases like the present, a second pre-hearing review may have some value. For example, if at a first review a deposit has been ordered under Rule 7 and there is then, subsequently, a change in circumstances before the deposit has been paid, then it may be appropriate that the matter should be reconsidered. For example, it does occur from time to time, as the reported cases indicate, that the financial position of a party ordered to make such a deposit may change between the making of an order under Rule 7(4) and the time at which the deposit is required to be paid. It is to be observed that Rule 7(5) requires the tribunal contemplating such an order to take reasonable steps to ascertain the ability of the party against whom it is proposed to make the order to comply with such an order, and to take account of any information as ascertained in determining the amount of the deposit, so this is clearly an important factor.
14. Mr Curwen for the appellant makes the point that interlocutory orders of this kind are excluded from the definition of "decisions" under Regulation 2(2) of the 1993 Regulations. That seems to us to be right and, indeed, there is authority to that effect. It follows from that, he contends, that the review power, which a tribunal possesses under Rule 11 of Schedule 1 of those 1993 Regulations, does not apply to cases where one is dealing with an order under Rule 7 or decision not to make an order. Consequently, he submits, because there is no power to review under those Regulations, there can be no power on the part of the tribunal to revisit the issue. He contends that if there is a change in circumstances or, for that matter, a change in the law, a party is restricted to his rights of appeal to this appeal tribunal.
15. We do not agree with that contention. We accept that the review power under Rule 11 does not apply, because that power only exists according to Rule 11(1) where there has been a "decision", and it is clear from the definition of "decision" in the Regulations to which we have already referred that a decision under Rule 7 does not fall within that definition and does not give rise to the review power under Rule 11. The review power exists, as is made clear by Rule 11 read in combination with the definition in Regulation 2(2), in situations where there have been decisions of a substantive nature, including actual awards made on an application. The review power does not apply to interlocutory decisions, those being decisions which are generally speaking excluded from the Rule 11 review process. But it does not follow from that that an Employment Tribunal cannot revisit such interlocutory matters in appropriate cases. Indeed, it would be strange if that were the end result. Mr Curwen on behalf of the appellant agreed in the course of the argument that the logic of his contentions was that an Employment Tribunal can review a substantive decision but can at no time reconsider an interlocutory order of the kind with which we are dealing. That seems to us to be an absurdity. The true position is that the express power of review under the Rules is required and is provided in respect of substantive decisions of the kind to which we have referred. But with interlocutory decisions, which are generally speaking of lesser significance, one would expect an Employment Tribunal to be able to revisit and reconsider in appropriate cases. Of course, it would cut both ways if there were no such power, because it would mean that an Employment Tribunal could not reconsider a deposit order even if the financial means of an applicant had altered in the meantime.
16. This is a matter which has been given some consideration by the Employment Appeal Tribunal on previous occasions. In P Glossop v Shropshire's Community Health Service NHS Trust (Unreported – EAT/561/98 – 27th July 1999) a pre-hearing review had been held and a deposit of £150 ordered. Then there had become available evidence about the applicant's financial means because of the loss of his job and other factors which changed his financial situation. As a result, there was a further consideration by the tribunal of the order for the deposit which had been made. As it happened, the tribunal confirmed the order for the deposit. On appeal the Employment Appeal Tribunal said this at paragraphs 19 and 20 of its decision:

"19 There has been reference in submissions before us as to whether the provisions of Regulation 11 of the 1993 Regulations are applicable to a review of the decision to alter the Costs Order made by the Chairman. Both Counsel suggest that Rule 11 does not apply. However, we are satisfied that the Chairman did have power to reconsider the Cost Deposit Order by reference to Rule 16(1) of the Regulations. This reads:

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

(2) An application under paragraph 1 shall be made by presenting to the Secretary a Notice of Application which will state the title of the proceedings and set out the grounds of the application."

20. It was submitted by Mr Goulding that the terms of the Regulation include the power to vary a Cost Deposit Order in circumstances where an application is no longer able to comply with its terms because of a change in his financial reputation. Reference was made to the decision in Nicotas –v- Solihull Metropolitan Borough Council [1986] ICR 291 and Cuttapan –v- London Borough of Croydon & Ors EAT/268/98 and 392/98."

The EAT accepted that proposition and allowed the appeal, relying as we have indicated, on that general power which an Employment Tribunal has under Rule 16 of Schedule 1 of the 1993 Regulations to give "directions on any matter arising in connection with the proceedings" at any time.

17. We have been referred to the two cases which were cited there in Glossop. In the case of Nicotas v Solihull Metropolitan Borough Council [1986] ICR 291, Waterhouse J, giving the decision of the Employment Appeal Tribunal said this at page 295B-D:

"It is abundantly clear, therefore, that interlocutory orders do not constitute a decision within the meaning of the Industrial Tribunal (Rules of Procedure) Regulations 1980. Moreover, the power of review provided by rule 10(1) applies only to a decision within the meaning of the Rules. It follows that neither the full tribunal not the chairman sitting alone has power to review interlocutory orders previously made or the refusal of such orders within the provisions of rule 10. When a party to proceedings before a tribunal is dissatisfied with an interlocutory order that has been made, or by the refusal of an interlocutory order, it is clear that his remedy is to apply again to the tribunal for directions in accordance with the provisions of rule 13(2). Accordingly, the chairman of the tribunal in this case was entitled to deal with the applications made by the employee following the hearing on 3 June 1981, as applications for further directions within the terms of rule 13(2), and to adjudicate upon them in the way that he did."

We only add that the equivalent, these days, of Rule 13(2) to which reference is there made, is Rule 16 under the Rules in Schedule 1 of 1993 Regulations.

18. Finally, in the more recent decision of Kuttapan v London Borough of Croydon & Ors [1999] IRLR 349, the tribunal said this at paragraphs 36 and 37:

"Consequently, it appears to us that the chairman had no power to entertain an application for review of the strike-out order in this case.

It would, in these circumstances, be absurd if the tribunal had no power to revoke a strike-out order wrongly made under rule 7(7). However, that is not the position. By rule 16(1), the tribunal has power at any time, on the application of a party or of its own motion, to give directions on any matter arising in connection with the proceedings. We are satisfied that such power includes the power to set aside or revoke a strike-out order wrongly made under rule 7(7). See, by analogy, Nikatas v Solihull Council [1986] ICR 291, 295C-D."

19. We agree with those passages to which we have made reference.
20. In the end, indeed, Mr Curwen conceded that there is a power in an Employment Tribunal to look again at interlocutory decisions of the kind involved under Rule 7 of these Rules. He then advanced his contentions more in relation to the scope of the power which exists and submitted that that power was restricted in a way to which we shall come in a moment. He made reference then to a number of decisions on issue estoppel. But before we come to that aspect, we simply spell out our conclusion that we are satisfied that there is a power in an Employment Tribunal to revisit this matter, whether there has been an order made under Rule 7 or whether it has been decided to make no such order.
21. The appellant relies upon various well known decision in relation to issue estoppel in support of the contention that the ability to revisit a previous decision is a restricted one. One of the leading cases on this topic is that of Hunter v Chief Constable of the West Midlands [1982] AC 529 and the principal characteristics required for an issue estoppel to arise are there set out as follows. First, the earlier judgment has to be by a court of competent jurisdiction and must be final and conclusive. That requirement for a decision to be final will nonetheless allow certain interlocutory decisions to be included. Secondly, the parties between whom the earlier decision was made must be same on the second occasion for there to be an issue estoppel; thirdly, the issue arising must be the same on both occasions and fourthly, there will be no estoppel if there is fresh factual material or even a subsequent change in the interpretation of the law. The authority for that last principle is the decision, to which were referred by Mr Curwen, of Arnold v National Westminster Bank [1991] 2 AC 93. Consequently, it is said on behalf of the appellant that in the present case there was an issue estoppel because the decision, which had been made by the first Chairman dealing with these matters, was the same, the parties were the same, and there had been no material change in fact or law.
22. It seems to us that issue estoppel is not strictly speaking applicable to the situation with which the tribunal had to deal. When an Employment Tribunal exercises its powers under Rule 7(4) it is not truly deciding an issue between the parties. It is using its powers to control its own proceedings and to impose conditions on what seem to be unmeritorious applications. It may therefore, as Rule 7(1) states, conduct such a pre-hearing review of its own motion. No initiating step is required of the other party, nor need the other party appear or make representations in order that the tribunal decides to make a Rule 7(4) order. Nonetheless, the principles underlying issue estoppel are not irrelevant. In particular, it seems to us that those set out in Arnold v National Westminster Bank are of considerable assistance when deciding on the appropriate approach to be adopted by a tribunal Chairman faced with an application of this kind. We are satisfied that the power to revisit a Rule 7 issue is not a power to be used in order to have a second or third or further bite at the same cherry, when there has been no material change in facts or in the law, nor is it a procedure to be used to enable a party to go, as it were, chairman shopping, moving from one Chairman to another until it can find a Chairman who will come up with a decision in its favour.
23. On behalf of the respondent, Mr Mordue submits that there is no need to consider at a second pre-hearing review, or any subsequent one, what went on at the first or earlier hearing, or whether there had been any change in the circumstances or the law. He is, perhaps, forced into that position because it is agreed on both sides that in the present case the Chairman conducting the second pre-hearing review took the position that she should look at the matter entirely afresh and have no regard whatsoever to the first review or to the proceedings at the first review. Mr Mordue submits that the nature of the exercise at such a pre-hearing review when Rule 7 is under consideration is such that there is a mere expression of opinion by the tribunal or its Chairman when arriving at a conclusion on this topic. He relies upon the decision of the Employment Appeal Tribunal in the case of Mackie v John Holt Vintners Limited [1982] IRLR 236. In that decision the appeal tribunal, whose judgment was given by Browne-Wilkinson J as he then was, did indeed describe the conclusion formed by an Industrial Tribunal under the then powers as being, in effect, no more than an expression of opinion.
24. However, the Regulations at the time of the decision in Mackie were wholly different. At that time, an Industrial Tribunal, as they were then called, could provide such an expression of opinion and that opinion would be of relevance if and when any issue of costs subsequently arose; but there was no power to require a party to pay a deposit as a result of that expression of opinion under the regulatory powers as they then stood, and no reasons had to be given for the opinion which was expressed by the tribunal. There was no equivalent of Rule 7(7) enabling the tribunal and, indeed, requiring the tribunal to strike out for non-payment the originating application or notice of appearance of the relevant party. It seems to us that the situation which arises under the current Rules is wholly different from that with which the Employment Appeal Tribunal had to deal at the time when Mackie was decided. The current Rules provide teeth for the tribunal or its Chairman when dealing with its assessment of the prospects of success of a party at a pre-hearing review. It can, as we have already indicated, require a deposit and if that deposit is not paid within the requisite time there is an automatic strike out. Consequently, it does not seem to us that the decision in Mackie is any longer of relevance to the assessment of the situation which arises in such cases. It is no longer merely an expression of opinion. Therefore, in our view, it would be quite wrong for either party to be able simply to make a second or third attempt at getting the outcome which it wants if there is no material change in the facts or the law. It follows, that if a matter is considered on a second or further occasion, it is incumbent upon the Chairman to consider whether or not there has been such a change and that in turn requires some consideration to be given as to the basis of the earlier decision which it is being asked to revisit; otherwise there may be a particular danger of an employer, for example, seeking a revisiting of this topic again and again until it obtains the result which it wants.
25. On that basis we conclude that, while there is a power in an Employment Tribunal to revisit the matters arising under Rule 7, it is a power only to exercised if there is a material change in the factual circumstances or a relevant change in the law.
26. What then is the position in the present case? It follows from what we have said that if a Chairman is faced with an application by a party to revisit the issue arising under Rule 7 the approach should be one of asking whether there has been a material change in the facts or law and whether, as a consequence of that, a different outcome should now obtain. That means that at such a further hearing a Chairman must consider the basis of the previous decision. Without that it is impossible for the Chairman to be able to say whether there is has been a material change of the kind to which we have referred. Here, the Chairman, as is agreed, declined to be informed about the previous pre-hearing review. In our judgment, that approach was mistaken. Furthermore, it is conceded by Mr Mordue that the respondent on the second occasion was not saying that there had been a material change in the facts or the law. He accepts that the respondent was simply putting forward the proposition that the decision in the case of Express and Echo Publications made in a particularly forceful fashion the legal point which the respondent wished to advance. If follows from that that this was indeed a second bite being attempted by the respondent at the very same cherry. If that were the right approach, we can see no reason why logically there should not be a third or fourth approach to that issue, with all the dangers to which we have already referred. It is enough for present purposes that in our judgment the Chairman at the second pre-hearing review adopted the wrong approach to this issue as a matter of law and failed to considered whether there had been any material change in the facts of the case or in the law applicable to it.
27. In those circumstances, it is unnecessary to go on to deal with the appellant's alternative argument that the decision of 4th August 1999 was in itself wrong in law even if it had stood alone. We would merely say, as a matter of principle, that this appeal tribunal will be very cautious about interfering with the judgment of an Employment Tribunal on the question of whether there is no reasonable prospect of success. It will be unusual for an issue of law to arise in such circumstances and appeals from such pre-hearing reviews in relation to Rule 7 are unlikely to be justified accept on rare occasions. They will normally turn principally upon an assessment of the facts and it is quite inappropriate of course for such a matter to be sought to be brought on appeal to this tribunal. Having said that, this is one of those rare occasions and for the reasons which we have set out, this appeal will be allowed.
28. Since the respondent concedes that there had been no material change in the facts or law since the first pre-hearing review, it seems to us, prima facie, that there is no need for this matter to be remitted. Unless either party wishes to make further representations on this, we propose simply to substitute our own decision for that of the tribunal dated 4th August 1999, our decision being that there should be no order under Rule 7 of Schedule 1 of the 1993 Regulations. That will be our decision and our order.
29. We are very grateful to the representatives of both parties, who have obviously done a great deal of work on these matters and who have made our task therefore very much easier than it would otherwise have been.