United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR HEFIN REES (of Counsel) Instructed by: Messrs Streeter Marshall Solicitors 74 High Street Croydon Surrey CR9 2UU
For the Respondent	MR ANTONY SENDALL (of Counsel) Instructed by: Messrs Freshfields Bruckhaus Deringer Solicitors 65 Fleet Street London EC4Y 1HS


 


HIS HONOUR JUDGE J McMULLEN QC

1. This case is about costs and the interpretation of an agreement to resolve a grievance at the workplace. We will continue to refer to the parties as Applicant and Respondents.

Introduction

2. It is an appeal by the Applicant in those proceedings against the decision of an Employment Tribunal sitting at London (South), Chairman Mrs F J Silverman, promulgated with Extended Reasons on 19 May 2002. The Applicant represented himself, the Respondents were represented there and here by Mr Anthony Sendall of Counsel. Today the Applicant has had the considerable assistance of Mr Hefin Rees in addressing a Skeleton Argument and oral submissions.
3. The Applicant had made a number of claims of race discrimination and unfair dismissal, and of other related matters. The Respondents denied discrimination and contended that the Applicant had not been dismissed, unfairly or at all.
4. The Tribunal found that the Applicant was not unfairly dismissed and that he was not discriminated against on the grounds of race nor victimised contrary to section 2 of the Race Relations Act 1976. The Tribunal found that the Respondent had not breached the contract of employment and thus dismissed all of the claims which he had made over a period of 10 days in the hearing. The Tribunal ordered the Applicant to pay costs to be assessed following a detailed assessment under Rule 14 (6) of the Tribunal Rules.
5. The Applicant appealed against those findings, as advanced in a Notice of Appeal which went before an EAT, Miss Recorder E Slade QC and members, on 26 September 2002. The judgment which she gave should form part of our judgment since it records the dismissal of seven grounds of appeal against the Tribunal's decision, allowing just two points to be argued at a full hearing. It is fair to say that Miss Slade's Tribunal was not sanguine about the prospects of success on either point, holding that they were just about arguable points of law.
6. The Applicant had been employed by the First Respondent on 9 May 1999 as a Sales Consultant. He was engaged at a salary of £25,000 per year and received commission amounting to approximately £8,000 per year. The Respondent, Morse Computers, is part of the Morse Computer Group and is engaged in the supply of hardware and technology. The individual Respondents, Mr Lewis and Mr Carroll, were at the relevant time Managers.
7. The Applicant had made complaints against them and against the company, all of which the Employment Tribunal dismissed. Only two matters remain outstanding for us.

Facts

8. The first matter is the entitlement to a commission. The Applicant had complained that an opportunity arose to provide computer equipment to a client Boo.com in September 1999. The company had already handled an order relating to Boo.com in June 1999 and that order had been allocated to the Applicant. It was at that time not on his own client list and the work associated with that contract had been conducted by a co-employee, Ms Baker Odlin.
9. The Applicant was on holiday in September 1999 when the second order came in. That order was given to Ms Baker Odlin. The Applicant complained when he returned from holiday that he had not been allocated the commission. It was worth £21,000. The matter was the subject of a grievance which was heard by Mr Carroll. The Applicant had made a number of complaints. The Respondent did not have a grievance procedure but created one in order to deal with the issues raised by the Applicant.
10. The practice for the allocation of commission was as follows. Where an unexpected contract arrived while a sales manager for that account was on holiday, company practice was to pay the commission to the person who dealt with the contract. This is precisely what happened in the case under discussion.
11. The Applicant was in fact treated better than other employees in a comparable situation might have been since he did manage to negotiate an agreement; that he would be entitled to a sum by way of compensatory commission from the next 'bluebird' which came in. A 'bluebird' is a contract which arrives unexpectedly. The fact that no such bluebird had arrived before the Applicant left the Respondent's employment is unfortunate.
12. The findings that we have recorded above show that the Tribunal had in mind the Applicant's claim that he should be paid full commission on the Boo.com September order and that the parties had reached a solution to that complaint during the grievance meeting. The Tribunal noted that Mr Carroll reported the results of the grievance to the Applicant. The result was, as the Tribunal found, that there was a compromise of the issue so that the Applicant would receive a sum equivalent to 50% of the commission paid to Ms Odlin on the Boo.com contract, which would be taken from the next 'bluebird' contract to be received by the company.
13. The Tribunal descended into the details of the agreement. It is clear the Tribunal found an agreement had been reached and since the issue was of fundamental importance to the Applicant clearly found against him on an important element of his case. It similarly found that he had been treated better than others and so dismissed his claims to have been treated unfairly or discriminated against on the grounds of race.

The appeal

14. The first issue to decide in this case is whether or not the Tribunal made sufficient findings of fact in order to justify the conclusion which we have set out above. In our judgment its approach cannot be faulted. There are sufficient findings for its decision and reasoning to be exigible. We are supported in that view by our acceptance of Mr Sendall's submission that the the nature of the agreement was not really in dispute at the Employment Tribunal.
15. The findings are clear. There was an agreement. It was by way of the resolution of the grievance to make a payment to the Applicant on the occurrence of a future event. There never was such an event before the Applicant left, thus there is no crystallisation of the payment.
16. The Skeleton Argument and the Notice of Appeal describe that agreement as a compromise agreement. It plainly is not a compromise agreement within the terms of section 203 Employment Rights Act 1996. The Tribunal was not deciding that it was. It had never been argued that it was within the statute. The Tribunal has simply used the word compromise in its ordinary non-statutory sense to describe the outcome of a grievance hearing.
17. Once that is clear, it seems to us that the ground of appeal that the Tribunal failed to consider properly the nature of this agreement fails and is dismissed.

Costs

18. The Tribunal awarded a detailed assessment of costs for part of the hearing which had lasted 10 days, spread over one year. The original estimate of the case was for five days. In a second tranche in February 2002 the Tribunal disposed of all of the other issues. The hearing at that stage lasted for a week. The parties were directed to submit written submissions and the Tribunal would meet on the following Monday (18 and 19 February 2002) to consider its decision.
19. The parties did make submissions in writing. Mr Sendall submitted his to his solicitors who ensured transmission to the Tribunal and, he assumed, to the Applicant. The Applicant sent his to the Tribunal. Through Mr Rees today he tells us that he has never seen Mr Sendall's written submissions.
20. Whether there was a slip-up in the post does not really seem to us to matter since an opportunity was not given to the Applicant to make submissions in relation to a final point raised in Mr Sendall's argument. That is that the Applicant should pay the whole of the costs of the proceedings or alternatively part of the costs of the proceedings which had been occasioned by his conduct during the hearing. Thus, the Applicant has had an award, which is likely to lead to a detailed assessment of costs of some £40,000 made against him, without having had an opportunity to address the Tribunal on its fairness.
21. The law is clear, for as Judge Byrt QC giving the judgment of the EAT in London Borough Of Barking & Dagenham v Mr O Oguoko [EAT/817/99] said, natural justice requires such an opportunity. At paragraph 33 he said this

33 "There will be occasions when it will be greatly to the convenience of the parties and of the Tribunal that the parties closing submissions should be made in writing after the hearing and lodged with the Tribunal. If this procedure is to be adopted, it should be implemented only with the consent of the parties. Once such consent has been secured, then in our judgment the Tribunal Chairman must take responsibility of ensuring that the procedure is implemented in accordance with the rules of natural justice. This will require that, upon receipt of both sets of submissions, the Tribunal will serve each party with the written submission of the other. Each party should be informed that if they have any appropriate comment to make on the submission of their opponent, they should send those comments to the Tribunal within, say, a further 14 days. They should be warned that if, within that time, no comment is received back by the Tribunal, it will be assumed they have no comment to make and the Tribunal will proceed to make their decision on the basis of the submissions already tendered. Appropriate comments in reply should be limited, as would be the case had oral submissions been made, namely to correction of factual errors and legal submission on a new point of law not previously raised. The Tribunal should not proceed to the decision making stage till the Chairman is satisfied that each of the above steps has been taken."

22. At the close of submissions today, we drew this authority to the attention of Counsel. Mr Sendall very fairly accepts that statement of the law and of the requirements of natural justice and that the steps were not taken.
23. Those steps should have been taken in this case. It is not fair that so serious a decision should have been made without hearing the Applicant upon it. Although the Applicant is found by the Employment Tribunal to have had experience of two previous cases, one which went to a hearing and one which was settled, he, like any other party before a Tribunal, is entitled to make a submission.
24. Mr Sendall's written submissions very properly raised the issue of costs and the Tribunal has accepted that. It made ample findings to justify a decision based solely upon Mr Sendall's submission. The Tribunal found that the Applicant's conduct of the hearing was vexatious, disruptive and unreasonable and he was untruthful.
25. The Tribunal set out at length its criticisms of the Applicant's conduct. They are severe. The hearing had been extended by five days because of his conduct and ordered the costs of that period to be assessed. Sadly the Tribunal did not hear from the Applicant and Judge Byrt's comments are even more appropriate when issues of costs arise.

Guidance

26. By definition, neither party knows whether they have won or lost when written submissions are called for. If an issue of costs is to arise, there is no reason why the advocates should not include in their submissions on the substance submissions on costs, conditional of course upon a finding in their favour. But, as Judge Byrt made clear, there is to be some sort of equivalence to what would happen if this were a full oral hearing, which is that submissions would be made in the presence of the parties. A decision would be made by the Tribunal. It would be announced with its reasons, in a perfect world, and then an opportunity would be made available to both parties to make any applications.
27. We entirely agree that it is convenient in many cases, particularly a case which has extended over almost a year and involving much documentation, for submissions to be reduced into writing; but it is an equally important part of that convenient procedure that the steps provided for in the Dagenham case should be followed.

Disposal

28. In those circumstances, we will send this matter back to the Employment Tribunal allowing the appeal in part against the First Respondent only. The individual Respondents can be dismissed from the proceedings. We echo the judgment of Miss Slade in her Preliminary Hearing of this case that there may not be a very great deal of hope for the Applicant given the findings of the Tribunal, but it is elementary to our system of justice that he be given the opportunity to comment on whether or not costs should be awarded and if so the division of those costs.
29. We thank both Counsel for their help today. This appeal is allowed in part.