United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR J SYKES (Representative) Employment Cases Direct Ltd 8 Bloomsbury Square London WC1A 2LP


 


JUDGE PETER CLARK:

1. The appellant, Mr Patel, is of Indian ethnic origin. He commenced employment with the respondent in November 1968. Following promotion he was appointed Area Sales Manager on 8th October 1990.
2. On 1st February 1999 the appellant was dismissed with effect from 28th February on stated grounds of redundancy. He received 12 weeks pay in lieu of notice and the appropriate statutory redundancy payment.
3. He had taken out legal expenses insurance with DAS. He contacted those insurers who appointed Andrew Lear to act as his representative. Mr Lear lodged an Originating Application on behalf of the appellant with the Employment Tribunal on 21st April 1999, complaining of both unfair dismissal and unlawful race discrimination. The claim was resisted. It was listed for hearing on 21st to 22nd October 1999.
4. An ACAS officer, Michael Davies, was assigned to the case. He explored the possibility of a settlement with the parties and as a result an offer of £2,500 in settlement was made by the respondent's representative and the appellant's representative responded with a figure of £5,000. Agreement was reached on 11th October between the two representatives whereby the appellant accepted £5,000 in settlement of his claims. The terms for payment and the wording of the settlement agreement was then expressly agreed by the ACAS officer with the representatives. That agreement was notified to the London (South) Employment Tribunal in which the case was proceeding by Mr Davies by telephone on 11th October. He informed the tribunal that a hearing would not be necessary. Thereafter Mr Davies reduced the agreement into writing on an ACAS form COT3 and circulated that draft to the parties' representatives for signature.
5. On the same day a Chairman made a decision ('the original decision') in these terms:

"the conciliation officer, having taken action under the provisions of the Employment Rights Act 1996 and terms of settlement having reached between the parties, the Tribunal orders that all further proceeding in this application be stayed."

6. During the evening of 11th October the appellant faxed his representative in these terms:

"Further to our telephone conversation this morning reference to Motorway Tyres Solicitors having offered a final figure of £5,000 to the settlement of the case. After further thoughts regard to the matter I am not willing to accept £5,000 and I would like you to proceed further with the case with the Industrial Tribunal. I look forward to hearing from you. I will be available to appear at the Tribunal court on 21st and 22nd October as scheduled at Croydon. Should you require any further information kindly fax me on …"

That was a fax prepared by the appellant's daughter at his dictation.

7. Having received that fax Mr Lear contacted Mr Davies the following day to see whether anything could be done to set aside the settlement agreement. He was told not.
8. Thereafter the appellant and Mr Lear parted company and Mr Sykes of Employment Cases Direct took on his case. An application for review of the original decision was made to the Employment Tribunal. That application was heard by a tribunal on 12th April 2000. Mr Sykes appeared on behalf of the appellant on that occasion.
9. By a decision with extended reasons dated 18th April 2000 ('the review decision') the application for review was refused. Against that review decision this appeal is now brought.
10. The Employment Tribunal concluded, on the facts as found:

(1) that a conciliated settlement need not be reduced into writing. See Gilbert v Kembridge Fibres Ltd [1984] ICR 188.

(2) that a binding agreement had been reached between the parties through their representatives.

(3) that the appellant's representative, Mr Lear had ostensible if not express authority to enter into the settlement on his behalf.

(4) That was sufficient to produce a concluded and binding agreement, there being no evidence of misrepresentation, duress or mistake which could give grounds for setting aside the agreement (reasons paragraph 18). See Times Newspapers v Fitt [1981] ICR 637, 643B-D, per Browne-Wilkinson J.

11. In this appeal Mr Sykes attacks the tribunal's review decision on the basis that there was here evidence of deceit, negligent misrepresentation and/or mistake resulting from the actions of the appellant's then representative, Mr Lear.
12. That submission faces two overwhelming difficulties in our judgment:

(1) the tribunal found expressly that there was no evidence of misrepresentation, duress or mistake. It is simply not open to a party before the Appeal Tribunal to assert that such serious allegations are made out when there is no factual finding below to support it. But

(2) in order to set aside a concluded agreement on the basis of fraud or misrepresentation, it must as a matter of well-established law be shown that the other party to the agreement so acted. Here, the allegation is that it was the appellant's own representative who was guilty of deceit and/or negligent representation.

Mr Sykes has advanced the bold proposition that where there is fraud or misrepresentation on the part of a party's representative the resulting bargain is unconscionable and the other party, although not a party itself to the fraud or misrepresentation, cannot therefore rely on the bargain. As a matter of law that proposition is wholly misconceived. Further, there is no suggestion on the part of the respondent that they acted under a mistake in entering into the agreement, nor that they were aware that Mr Lear may, if it be the case, have been acting without authority of the appellant in entering into the agreement on his behalf or misrepresenting the position or deceiving the appellant in doing so.

13. It is submitted to us that disposing of this claim for £5,000 was so plainly an undervalue of the claim that the respondent must have been aware that Mr Lear had been acting improperly.
14. We wholly reject that submission. It is not insignificant that Counsel instructed by Mr Lear on behalf of the appellant had apparently advised before the settlement was reached that the appellant was unlikely to recover any compensation in this claim. The respondent no doubt had formed its own view as to the risks which it faced if the matter proceeded to a full hearing and determination by the tribunal. We are quite unable to accept that this was a plain and obvious undervalue of the claim. But even if it was, that would not be sufficient ground for setting it aside.
15. In these circumstances we can find no arguable point of law in the case and accordingly the appeal must be dismissed at this preliminary hearing stage.