United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR M SHENKS (Of Counsel) Instructed by: Messrs Brachers Somerfield House 59 London Road Maidstone Kent ME16 8JH
For the Respondent	MR W HOSKINS (Of Counsel) Instructed by: Mr A Ferguson Inland Revenue Solicitors Office East Wing Somerset House Strand, London WC2R 1LB


 


MR JUSTICE MAURICE KAY

1. Thomas Richards was employed at the Appellant's kennels which trade as Aunty Carole's Boarding Kennels. He worked there from 12^th April 1999 until 22^nd July 1999 on which day he resigned. A day or so later his mother rang the National Minimum Wage Helpline. To cut a long story short, in due course the Inland Revenue, as the statutory enforcement body under the National Minimum Age Act 1998, took up Mr Richard's case.
2. Information which had been provided to the Inland Revenue either by Mr Richards, his mother or by the Helpline suggested that he had left the job not on 22^nd July but on 29^th July. Inland Revenue officials, especially Mr Smyth and Mr Kelly, looked into the position and came to the view that Mr Richards had been paid at a rate less than the national minimum wage. This resulted in some correspondence dated 19^th October 1999, which is under the hand of Mr Kelly. It takes the form of a letter to Mrs Jones of Aunty Carole's Boarding Kennels, indicating that it was the view of the Inland Revenue that arrears of pay were due to Mr Richards. The letter went on

" We are therefore obliged to issue an Enforcement Notice under the National Minimum Wage Act, a copy of which is enclosed"

The letter referred to a right of appeal which is enjoyed by recipients of Enforcement Notices and concluded

"If I do not hear from you before 27.10.99, I shall lodge the case for hearing at Ashford Industrial Tribunal to ensure that we meet the set time limits".

That was the letter. The second document of the same date was headed "Enforcement Notice", said to be Issued under Section 19 of the National Minimum Wage Act. It went on to assert that the amount due to

"the worker specified in column 1 of the schedule to this notice"

as £1153.95. It stated that the Appellants were

"required to pay this sum by 26^th October".

Again it referred to the right of appeal.

3. The case for the Inland Revenue is that the letter and the Enforcement Notice were also accompanied by that schedule which refers to Mr Richards and sets out in an itemised form how the figure of £1153.95 had been arrived at. As we shall see later, there was an issue as to whether that schedule had ever accompanied the letter and the Enforcement Notice. Needless to say the Inland Revenue officials were aware of the three month time limit for commencing proceedings in the Employment Tribunal. They continued under the misapprehension that Mr Richards employment had ended on 29^th July rather than the 22^nd. Pursuant to this misapprehension they caused an Originating Application to be lodged on 26^th October. That would have been in time if 29^th July had been the effective date of termination but it was out of time having regard to what became the agreed fact, namely that employment had ended on 22^nd July.
4. When the matter came before the Employment Tribunal, it was concerned both with the application made by the Inland Revenue and with the present Appellants' appeal against the Enforcement Notice. Both matters were heard together. The decision of the Employment Tribunal was to the effect that the Originating Application had been presented outside the three month period contained in Section 23 of The Employment Rights Act 1996, but that it had not been reasonably practicable for the complaint to be presented within the three month period. Accordingly the decision was to allow the Inland Revenue's application to proceed. Following upon that the Tribunal found an unlawful deduction of wages, ordered the present Appellants to pay £1088.01 and amended the Enforcement Notice so as to reflect that reduced figure. The Employment Tribunal dismissed the present Appellants' appeal against the Enforcement Notice.
5. When this present appeal to the Employment Appeal Tribunal was formulated, one of the grounds of appeal, and it seems to us at the time probably the principal ground, was related to the decision on the time limit. Mr Shanks described it to us as the starting of proceedings both too late and too early. Too late in the sense that they were outside the three month period and that in all the circumstances of this case it could not be said that it was not reasonably practicable to start within the three month period. Too early in the sense that the proceedings were actually commenced a day before the time given by the Enforcement Notice had expired.
6. Those very persuasive grounds of appeal clearly commend themselves to the Inland Revenue's advisors because when the case came before us today, they were immediately conceded on behalf of the Inland Revenue by Mr Hoskins, a concession having in fact been put in writing a long time ago. We shall accordingly allow the appeal in relation to that aspect of the case. That leaves us with the remainder of the case. So far as that is concerned, Mr Shanks seeks to attack the decision of the Employment Tribunal in relation to the Enforcement Notice. He seeks to do so on two grounds.
7. The first ground is that as Mr Richards was no longer an employee at the time when the Enforcement Notice was served, indeed at the time when the matter was first the subject of complaint to the Helpline and eventually the Inland Revenue, he submits that that fact takes it outside the wording of Section 19 of The National Minimum Wage Act 1998. That is an interesting argument and one with implications going well beyond the confines of the present case. Unfortunately its interest is matched only by its lateness. It was not foreshadowed in the Notice of Appeal, nor was it raised when this matter came before the Employment Appeal Tribunal on preliminary hearing. Indeed the first that the Inland Revenue knew that this point was to be raised was shortly before this Tribunal sat today. Understandably, Mr Hoskins, on behalf of the Inland Revenue objected to any amendments that would enable that aspect of this case to be considered in the course of this appeal. He concedes that it is an important point of general clarification, and also informed this Tribunal that there has been a recent decision of an Employment Tribunal in Cardiff in which the point was taken and decided adversely to the Inland Revenue. So far as that case is concerned it is understood that it is on the way to the Employment Appeal Tribunal. We have come to the conclusion, as we indicated at an earlier stage in the proceedings, that it would be wholly wrong for us to attempt to deal with that point today, the Inland Revenue not having been put on proper notice that the point was to be taken today. Of course the Inland Revenue are aware of the existence of that point being taken in other proceedings, but that it seems to us is not a sufficient basis for us to impose on them the need to deal with that point without notice in the course of today's hearing. For that reason we indicated that we would refuse leave to amend to allow that point to be argued today.
8. That therefore leaves us with Mr Shanks' final point in relation to the Enforcement Notice. It goes to an issue of fact. In the decision of the Employment Tribunal, the following was set out as a finding

"The Enforcement Notice . . . is dated 19^th October 1999. This was served on the Respondents together with the schedule referred to".

Essentially Mr Shanks' submission is that that was a perverse finding. He seeks to persuade us that there was no material before the Employment Tribunal which would enable it to conclude that the schedule was served with the Enforcement Notice. To that end he referred us to the procedural history of the case. There were directions in the Employment Tribunal for the sequential exchange of witness statements, the first in time was that of Carole Jones, the aforesaid Aunty Carole, and she addressed this point in the final paragraph of her witness statement in this way

"On 20^th October 1999, nothing further having been heard from Mr Kelly, we received another letter, saying that arrears of pay were due and that the Inland Revenue were obliged to issue an enforcement notice, which was enclosed. However, the enforcement notice did not, as stated, enclose a schedule showing the hours claimed and rate paid. Without this schedule, it was impossible to understand how the figure claimed had been arrived at. To our concern, the sum now supposedly due to Mr Richards had increased to £1153.95. This, together with the discrepancy in leaving dates alleged by the Inland Revenue made it very difficult for us to understand what case was being out to us and how we were supposed to respond".

The evidence filed on behalf of the Inland Revenue included a statement from Mr Smyth. It said simply this

"An Enforcement Notice was issued to the employers under Section 19(1) National Minimum Wage Act 1998"

It did not address specifically the allegation that the schedule had not been served with the notice. On the day of the hearing, the Appellants did not attend, it was said that they were detained by the needs of their business. They were represented by a solicitor but it was not possible for them to add to the evidence that they had supplied in writing. Mr Smyth did attend and gave evidence. Although at the preliminary hearing there was an order for production of the Chairman's Notes of Evidence in relation to the time point, and these have been supplied, there was no order for production of the Chairman's Notes in relation to the issue of whether the schedule accompanied the Enforcement Notice.

9. Plainly the matter of the schedule was under express consideration at the hearing - the summary of the submissions contained in the Extended Reasons refers to both sides adverting to the question of whether or not there had been a schedule. However, as to whether Mr Smyth gave further evidence about this and if so what that evidence was, we simply cannot tell. Long after the event and pursuant to complaints made by the present Appellants, Mr Pilgrim who is a senior official of the Inland Revenue looked into the matter. There is, in our bundle, a witness statement from Mr Pilgrim expressing his personal view that

"On balance I do not consider that there was sufficient proof that the schedule was sent with the Enforcement Notice"

He adds

"Although I was not present at the Employment Tribunal hearing I understand that Mr Anthony Smyth gave evidence to the effect that he sent the Enforcement Notice dated 19 October 1999 with a schedule attached to Miss Jones and Mr Penny"

In his correspondence with the present Appellants, Mr Pilgrim has revisited those matters in terms consistent with the witness statement to which we have referred. It should be noted however that Mr Pilgrim was not at the hearing and our concern is simply with whether the decision that was made regarding the schedule was or was not a perverse finding.

10. We are content to assume that if the schedule had not been served with the Enforcement Notice, that may have effected the validity of the latter. This assumption we base on the provisions of Sections 19(1), 19(2) and 19(6)(a). However, Mr Hoskins, on behalf of the Inland Revenue, invited us to consider the finding of fact that the schedule was served with the Enforcement Notice in the light of the decision and the Extended Reasons read as a whole. He drew our attention to the rival submissions that are recorded in the Extended Reasons, and to which we have already referred, where the existence or not of the schedule was a very obvious issue. He also pointed to a passage in the Extended Reasons in which the Tribunal expressed views about the credibility of the two sides. The Tribunal said

"We find that the Applicant and his witnesses have given honest and credible evidence to us. We believe them. We do not believe the case advanced on behalf of the Respondents, and it is unfortunate that they have not seen fit to be present to give their evidence to us. Many of the documents in the bundle . . . have been concocted for the purpose of these proceedings, and indeed we cannot place much reliance on the "wages book" which has been produced at this hearing since we note that it was not produced to the Compliance Officers when they asked for the records".

Mr Hoskins also drew our attention to paragraph 32 of the Extended Reasons which again repeats the finding that the Enforcement Notice

"was a valid notice and was properly served in accordance with the Act and Regulations"

11. In our judgment, these submissions of Mr Hoskins are well founded and indeed irresistible. The Employment Tribunal did find as a fact that the schedule had accompanied the Enforcement Notice. We simply do not know what the evidence was on that issue, apart from the two witness statements to which we have referred, but there is no basis in the absence of the Chairman's Notes from which we could properly infer that the finding was made perversely and without supporting evidence. In reaching that conclusion we do not rely on what Mr Smyth may subsequently have said to Mr Pilgrim. That seems to us to be of little or no consequence. We approach this as we would approach any appeal based effectively on perversity. It is not for us to find facts when facts have been found by the Employment Tribunal unless it can be shown that those Tribunal findings were in fact perverse. That is not a decision that we feel able to make in this case. Mr Shanks suggests that since it is the Inland Revenue who is seeking to uphold the finding, that it is the Inland Revenue who should have taken steps to bespeak the Chairman's Notes. We do no agree that that is a proper approach in this case. If this point was to be pursued it was incumbent upon those who sought to pursue it to obtain the Chairman's Notes on that point. Accordingly we conclude that the finding that the schedule did accompany the Enforcement Notice has not be shown to be perverse and it is not one with which we should interfere. It follows that on this point the appeal will be dismissed.