United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR ANDREW SHARLAND (of Counsel) Instructed By: Mr Geoffrey Tyler Messrs Pinsent Curtis Biddle Solicitors 1 Gresham Street London EC2V 7BU
For the First Respondent For the Second Respondent	MR STUART BRITTANDAN (of Counsel) Instructed By: Messrs Pattinson & Brewer Solicitors 71 Kingsway London WC2B 6ST MR JONATHAN AUBURN (of Counsel) Instructed By: Mr Thackrar Messrs Bircham Dyson Bell 1 Dean Farrar Street Westminster London SW1H 0DY


 


MR RECORDER BURKE QC:

1. This is an appeal by Poupart Limited ("Poupart") against the decision of Employment Tribunal sitting at London South, chaired by Ms. Taylor and sent to the parties with extended reasons on 24^th April 2001, that the Respondents' claim that certain deductions had been unlawfully made from their wages was not presented out of time.

The Facts

2. The First Respondents ("the employees") are nine porters employed in taking delivery of and transferring goods within the New Covent Garden fruit and vegetable market in South West London. They were entitled to be paid at the rate of .06p for each movement of goods within the market. To establish the amount of "porterage" payable to the parties, a ticket was written out for each delivery; and the data on the ticket was fed into a computer which calculated the porterage owed by each customer. The sum thus reached was then divided between the porters on duty in any given week.
3. Up to 2^nd May 2000 the employees were employed by Poupart, the Appellants. On that day Poupart's business at Covent Garden was transferred to Mr. Thakrar, the Second Respondent, and the employees were transferred into the employment of Mr. Thakrar pursuant to the Transfer of Undertaking (Protection of Employment) Regulations 1981. The payment system was not altered.
4. On 2^nd June 2000 Mr. Hounsell, who is the first of the Respondent employees and the foreman of Mr. Thakrar's porters, noticed on an invoice to a customer that the customer had not paid porterage on a movement of goods. He drew this to Mr. Thakrar's attention; Mr. Thakrar invited Mr. Hounsell to check the relevant paperwork and computer records.
5. Mr. Hounsell's investigations revealed firstly that the computer had been failing to attribute any porterage to certain deliveries, possibly for some years and, therefore, that in each week the employers - Poupart up to and Mr. Thakrar after the transfer - had been failing to pay to the porters what was properly due to them. These short payments were referred to by the Tribunal as "weekly deductions".
6. Mr. Hounsell secondly discovered that the computer had been making deductions from the total porterage payable to the porters before the total was divided and distributed to the porters. The short payments arising in this way were called "computer deductions" by the Tribunal.
7. Mr. Hounsell informed Mr. Thakrar of his findings on 29^th June 2000. While neither employer accepts that any unlawful deduction from wages had been made, it is common ground that when Mr. Thakrar learnt of the computer deductions he repaid the shortfall of which the porters complained back to 2^nd May 2000. The repayment was made on 30^th June; and no further computer deductions occurred. We do not need to say anything about the history of the weekly deductions with which this appeal is not concerned.
8. After negotiations between Poupart and the employees' trade union had broken down, the employees presented to the Tribunal on 15^th August 2000 originating applications complaining of unlawful deduction of wages. The Tribunal held a preliminary hearing to decide whether the complaints were out of time. They decided that the complaints in respect of the weekly deductions were but that the complaints in respect of the computer deductions were not out of time; there is no appeal against the first limb of the Tribunal's decision; the present appeal is against the second limb of that decision. The basis of the Tribunal's decision was its finding of fact, at paragraphs 13 and 27, that the computer deductions continued until 23^rd June 2000, less than 3 months before the presentation of the complaints on 15^th August 2000.

The Preliminary Point

9. Mr. Galbraith-Marten, on behalf of the employees, took a preliminary point - although both in his skeleton argument and orally he called it a preliminary observation. He reminded us that, by virtue of Regulation 5(2) of the 1981 Regulations, all Poupart's liabilities under the employees' contracts of employment had been transferred to Mr. Thakrar. Therefore, he submitted, Poupart had no interest in the outcome of the present appeal. Mr. Thakrar had not appealed against the Tribunal's decision; he was represented before us by counsel but as a Second Respondent. Accordingly the appeal ought not to be entertained because there was no issue to be determined as between Poupart and the employees.
10. Mr. Galbraith-Marten, in support of his submissions or observations, referred us to Harvey on Industrial Relations and Employment Law Vol. 5 paragraph T1404 where the learned authors say :

"Moreover the EAT may decline to hear an appeal if, at the date of the hearing, there is or remains no issue of any practical consequence to be determined between the parties".

11. In our judgment it was appropriate that this appeal should be heard on its merits, for the following reasons :

(i) the factual situation had not changed since 30^th June 2000 when Mr. Thakrar made the repayments to which we have referred and 15^th August 2000 when the complaints were presented; Poupart's interest has not reduced or changed since those events.

(ii) despite the facts upon which Mr. Galbraith-Marten relied, the employees made their complaints against both Poupart and Mr. Thakrar without, save in terms of the history, distinguishing between them.

(iii) the employees did not at any stage before the Tribunal suggest that Poupart had no interest, that no remedy was sought against them or that they should no longer be the subject of proceedings; they allowed Poupart to play a full part in the hearing, at which all three parties (treating the employees for these purposes as one) were represented by counsel.

(iv) accordingly it would be unjust to deprive Poupart of the opportunity to appeal against a decision contrary to the case which they had been permitted to put forward at the preliminary hearing of the Tribunal and in favour of the case which was put forward against them by the employees at that hearing.

(v) the point was not taken in the employees' Answer to the Notice of Appeal; and there was no application to amend their Answer.

(vi) in any event, while Poupart may not have had a direct interest as between themselves and the employees in the outcome of the appeal, they had at least potentially a very substantial interest in that outcome; as between Poupart and Mr. Thakrar any liability to the employees in respect of deductions made prior to the transfer might well be the subject of an indemnity or breach of contract claim by Mr. Thakrar against Poupart. We were not told what were the terms of the transfer; but no suggestion was made to us that no such claim could or would be brought.

12. We had no doubt that Poupart had a sufficient interest to entitle them to proceed with their appeal, that it was important in the interests of all parties that the substantive issue arising in the appeal be resolved and that in the exercise of our discretion we should allow the appeal to proceed.

The Relevant Statutory Provisions

13. Section 13(1) of the Employment Rights Act 1996 provides :-

"(1) An employer shall not make a deduction from wages of a worker employed by him unless -

(a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker's contract, or

(b) the worker has previously signified in writing his agreement or consent to the making of the deduction".

Section 23(1) of the 1996 Act provides :-

"(1) A worker may present a complaint to an employment tribunal

(a) that his employer had made a deduction from his wages in contravention of Section 13 ...

(2) Subject to subsection (4) an employment tribunal shall not consider a complaint under this section unless it is presented before the end of the period of three months beginning with -

(a) in the case of a complaint relating to a deduction by the employer, the date of the payment of the wages from which the deduction was made ...

(3) Where a complaint is brought under this section in respect of -

(a) a series of deductions ... the references in subsection (2) to the deduction ... are to the last deduction ... in the series ..."

Section 24 provides :-

"Where a tribunal finds a complaint under section 23 well-founded it shall make a declaration to that effect and shall order the employer :

(a) in the case of a complaint under section 23(1)(a) to pay to the worker the amount of any contravention of section 13 ..."

Finally Section 25(3) provides :-

"An employer shall not under section 24 be ordered by a tribunal to pay ... to a worker any amount in respect of a deduction ... insofar as it appears to the tribunal that he has already paid ... such amount to the worker."

The Submissions

14. Mr. Sharland, on behalf of Poupart, submitted that the Tribunal fell into error in regarding the date of the last deduction, on 23^rd June 2000, as the crucial date from which the time limit set out in Section 23(2) began to run; the true date, he argued, from which the Tribunal ought to have regarded the time limit as running was 27^th April 2000, the date of the last deduction in respect of which Mr. Thakrar had not made repayment; and that was the correct date because the employees had made it clear, if their originating applications and subsequent correspondence were taken together, that they made no complaint in respect of any deductions after that date.
15. The employees, Mr. Sharland, submitted, had conceded that they were not complaining as to deductions after 2^nd May 2000, had not taken the point that they were entitled, despite repayment, to complain of deductions up to 23^rd June 2000 and should not be entitled now to resile from their concession or take a new point which was not taken before the Tribunal. He relied on the well known principle set out in Jones v. The Governors of Burdett-Coutts School (1997 ICR 390) which for present purposes can be summarised as permitting a new point of law to be raised in the Employment Appeal Tribunal to be raised only in exceptional circumstances.
16. Mr. Sharland's submissions were founded on what he referred to as the "pleadings", together with letters which, it was argued, clarified the employee's case and contained the vital concession. He drew attention to the failure on the part of their employees' solicitors to complete on their behalf Box 9 of the IT1 form which asks the question :

"If your complaint is not about dismissal, please give the date when the matter you are complaining about took place".

He submitted that, if that box had been completed, it would have given dates up to but not beyond 2^nd May 2000 and that the absence of any dates in box 9 was not erased or erased with precision on the Grounds of Complaint which accompanied the IT1 or the subsequent Amended Grounds of Complaint, which were, for present purposes, not materially different.

17. Poupart's Notice of Appearance did not assert that there was no computer deduction after 2^nd May 2000 or that the employees' claim was out of time; it did however make the point that no dates were provided as to when the deductions were alleged to have commenced. On 4^th January 2001, Poupart's solicitors wrote to the employees' solicitors as follows :-

"We write in relation to the following matters of case management.

1. Particulars

To assist us in calculating any potential loss from the alleged unlawful deduction and so we are clear on what the period is, please could you confirm by way of further particulars that the period of alleged unlawful deduction for which the claim is a period ending on 29^th August 1999" (by common ground a mistake for 2000) "and going back to the beginning of 1992. We presume this to be the case because we note from the Originating Application that (Mr. Thakrar has) compensated the Applicants for any alleged unlawful deduction occurring after the sale of the business to (Mr. Thakrar), that is to say after 2 May 2000. If our assumption is incorrect please advise us of the period in which the Applicants' claim an unlawful deduction was made. We will then be able to make a calculation of the alleged loss. We are entitled under rule 4(1)(a) in our view to such particulars ..."

18. On 11^th January 2001 the employees' solicitors replied, saying :

"We confirm that the period of loss for which the Applicants are claiming terminates on 2^nd May 2000".

This, it was submitted on behalf of Poupart, amounted to a concession by way of further particulars that the employees' claim was not brought in respect of deductions after 2^nd May 2000. While Mr. Sharland accepted that the jurisdiction provided by Section 23 of the 1996 Act to the Tribunal is based on a complaint of unlawful deduction rather than of loss caused by such a deduction, as it clear from the terms of Sections 13(1) and 23(1), and that repayment does not remove the right to complain of and obtain a declaration in respect of the deductions which have been the subject of such repayment, as is clear from the terms of Section 24 and Section 25(3), such jurisdiction, it was argued as a matter of construction, only arises in respect of deductions which are the subject of complaint.

19. It is important to note, however, that the relevant correspondence did not end with the employees' solicitors' letter of 11^th January 2001 on which Mr. Sharland principally relied. On 23^rd January 2001 Poupart's solicitors wrote to the Tribunal raising the issue as to time limits and asking the Tribunal to treat the first 2 days of the forthcoming 4 day hearing as a hearing of the preliminary issue as to jurisdiction which thus arose, setting out to the Tribunal the background to their application. They wrote :-

"4. In answer to (Poupart's) request for voluntary further and better particulars the (employees) have confirmed that in the case of each class of alleged unlawful deduction under 3.1 and 3.2 above their claims relate to deductions from wages occurring on a date before 2 May 2000. That is to say, the last deduction in respect of which a claim is made by the (employees) occurred prior to 2 May 2000 ..."

This letter was not copied to the employees' solicitors; but it was sent to them by the Tribunal. The employees' solicitors replied to the Tribunal (who sent a copy to Poupart's solicitors) on 30^th January 2001 in these terms :-

"... The (employees) contend that the last deduction in that ongoing series of deductions occurred on 23^rd June 2000. However when they approached ... Mr. Thakrar on the 29^th June about the series of deductions the (employees) contend that he admitted liability and partially repaid the sums owed to them - back to the date when he took over the business on 2^nd May. He made this payment on the 30^th June 2000.

Therefore the (employees') claim is for monies due to them before the 2^nd May. However the date of the last deduction in the series was 23^rd June 2000. Consequently the claim which was lodged on 10^th August is in time."

20. Mr. Sharland submitted that the employees' solicitors' letter of 30^th January did not change the position and, indeed, underlined their position that the claim was brought only in respect of deductions before 2^nd May.
21. Mr. Galbraith-Marten submitted firstly that no concession had been made at all and, in contrast to the position in Jones, no concession had been made before the Tribunal. The only concession relied upon was made, if at all, in correspondence; but as was revealed by paragraph 24 of the Tribunal's decision, where in summarising the employees' submissions to them, they said :

"The computer deductions continued beyond 2^nd May 2000 and the sum in respect of these deductions was paid to the (employees) on 30 June 2000. Therefore the last deduction was made on or about 23 June 2000 and time ran until 22 September 2000. Therefore this complaint had been presented within the time limit.",

the employees at the Tribunal hearing were permitted to put and did put their case on the basis of continuing deductions up to 23^rd June 2000. Whereas in Jones the fatal concession from which recovery was not permitted had been made at the Tribunal, in this case no concession was made at the Tribunal hearing. Nor was any new point now being taken on appeal; the employees' central point was precisely that run before the Tribunal.

22. Further, Mr. Galbraith-Marten argued, the Grounds of Complaint provided with the IT1 at paragraph 20 made it clear that the deductions had continued beyond 2^nd May and into June but that Mr. Thakrar had repaid in respect of deductions back to 2^nd May; it was not possible, he submitted, to spell out of the "pleadings" and the correspondence the concession on which Poupart relied. It was clear from the IT1 and the Grounds of Complaint that the complaint was about unlawful deductions (e.g. see box 1) of wages, not loss caused by such deduction; the initial correspondence did not change the position; and even if it might be thought to have done so, the letter of 30^th January corrected any impression that a concession had been made in plain terms.
23. Mr. Auburn, on behalf of Mr. Thakrar, adopted Mr. Sharland's submissions.

Conclusions

24. In our judgment Mr. Galbraith-Marten's submissions are persuasive. We regard it as plain that (1) no unambiguous concession was ever made by or on behalf of the employees that they were not complaining of deductions after 2^nd May 2000 and (2) if such a concession was made it was resiled from by the date of the hearing which proceeded on the basis that the employee's case relied on deductions continuing to 23^rd June 2000.
25. While it is correct that box 9 of the IT1 was not completed, it is clear from the accompanying Grounds of Complaint that the period in respect of which the employees complained that there had been unlawful deductions of wages did not end on 2^nd May 2000. Indeed, it could not have done; for the first discussion between Mr. Thakrar and Mr. Hounsell which led to the latter's investigations did not occur until 2^nd June; until then the employees were unaware that any deductions were taking place and nothing had occurred to bring them to a halt. Paragraph 20 of the Grounds of Complaint asserts that the system was not changed until after 20^th June, after which date Mr. Thakrar made the repayments to which we have referred.
26. A complaint under section 23 of the 1996 Act is brought in respect of deductions, not in respect of loss; such a complaint may be made even though the loss suffered as a result of all or some of the deductions has been made good before the complaint is presented; see Section 25(3). The Tribunal, pursuant to section 24 "shall make a declaration" if the complaint is well founded. We read paragraph 20 of the Grounds of Complaint as asserting, when taken in the context of the document as a whole, deductions continuing to at least 20^th June in respect of some of which repayment had been made.
27. We accept Mr. Sharland's point that neither the IT1 nor the Grounds of Complaint identified precisely the date of the last deduction or the date of the first deduction. In those circumstances it was understandable that Poupart's solicitors should seek clarification so that they could calculate their clients' potential loss; and that was, expressly, the purpose of their request for particulars in their letter of 4^th January 2001. The relevant paragraph of that letter was, in our judgment, a request to the employees' solicitors to provide details which would enable such a calculation to be made; the writer plainly understood that there had allegedly been deductions after the transfer in respect of which repayment had been made. It is equally plain that the employees' solicitors so understood the letter of 4^th January; that is why they responded not by way of identifying the period of deductions but the period of loss which of course by the date of their response did not, unlike the deductions, continue beyond 2^nd May 2000.
28. For these reasons we do not regard the "pleadings" and correspondence as containing an unambiguous or any concession such as that contended for by Mr. Sharland.
29. In any event, it is in our judgment necessary to consider the picture not only on the basis of the pleadings and the two letters on which Mr. Sharland relies, but on the basis of the relevant material as a whole, including the subsequent letters of 23^rd January and 30^th January 2001 which we have set out, so far as is necessary, in paragraph 19 of this judgment. The last of those letters made the employees' position wholly clear; that position was entirely inconsistent with the supposed concession; and that was the position which they adopted and the case which they ran at the hearing. The relevant material viewed as a whole does not reveal any concession; or if the earlier letters, contrary to our view, do contain such a concession, the employees resiled from it before the hearing began. No suggestion was made to us that they could not, in law, do so.
30. While it did not deal in terms with the concession argument which Mr. Sharland tells us was put to them, the Tribunal, as in our judgment it was entitled to do, based its decision as to the date from which the 3 month time-limit began to run on the date of what it found to have been the last deduction, 23^rd June 2000 and not on the last date of deduction in respect of which repayment had not been made. We see no error of law on the Tribunal's part in their decision.
31. Accordingly the appeal is dismissed.