United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR P GOULDING (One of her Majesty's Counsel) Instructed by: Messrs MacFarlane Solicitors 10 Norwich Street London EC4A 1BD
For the Respondents	MR C SAMEK (of Counsel) Instructed by: Messrs Campbell Hooper Solicitors 35 Old Queen Street London SW1H 9JD


 


HIS HONOUR JUDGE PETER CLARK

1. This case is presently proceeding before the London (Central) Employment Tribunal. The parties are (1) Mr Bamber and (2) Mr Forsyth, Applicants; and (1) Cordiant Communications Group Plc (2) Fitch Design Consultants Ltd and (3) Bamber Forsyth Ltd, Respondents. I shall use the same description of the parties as below.
2. This is an interlocutory appeal by the Respondents against orders made by a Chairman, Mr C A Carstairs, contained in a faxed letter to the parties dated 13 October 2003.
3. The background is helpfully set out at paragraphs 5 - 55 of a Skeleton Argument prepared for the purposes of this appeal by Mr Paul Goulding QC, appearing on behalf of the Respondents. That account, I see, is largely accepted by Mr Samek for the Applicants for the purposes of this appeal only.
4. I have taken that history fully into account. In summary, the Applicants were the founders and prime movers behind the second and third Respondent companies. Both were employed by the third Respondent (BFL).
5. By a share purchase agreement in writing dated 8 November 2000 the first Respondent (Cordiant) acquired the entire issued share capital in BFL from the Applicants. The price, just over £7m, was paid in the form of Cordiant shares. Those shares are now said by Mr Samek to be worth "tuppence ha'penny". That is not a matter with which I am concerned in this appeal.
6. Thereafter, the Applicants continued to work in the business of BFL which underwent a reorganisation. On 28 May 2003 both resigned from their employment and two days later resigned as Directors of BFL.
7. By Originating Applications dated 4 June 2003 the Applicants complained to the Tribunal of both unfair and wrongful constructive dismissal. Those complaints were presented on 5 June. The claims were resisted.
8. On 21 July directions were given by the Tribunal in 2 separate letters. In one letter a direction was given that the parties exchange witness statements at least 14 days before the date fixed for the hearing, that is, the substantive hearing of the complaints. In a separate letter that hearing was given a time estimate of 2 days by a Chairman who considered the case papers. On 24 July the Respondents' solicitors gave a time estimate of approximately 4 days.
9. On 8 August the Applicants' solicitors made application for permission to amend their particulars of complaint, both in similar terms, to add a contention that the alleged dismissals were automatically unfair by virtue of the operation of Regulation 8 (1) of the Transfer of Undertakings (Protection of Employment) Regulations 1981. Copies of the proposed amendments were sent to the Respondents' solicitors on the same day. The Tribunal has, as yet, made no formal order on the amendment application, despite an enquiry by the Respondents' solicitors by a letter dated 28 August in which they say this:

"We refer to Campbell Hooper's [the Applicants' solicitors] letter to the Tribunal dated 8 August 2003 in which the Applicants requested leave to amend their particulars. We have not received any further correspondence in relation to this matter and have not been invited to give our views. We would appreciate it if you could let us know whether or not such application has been granted and whether our views will be sought."

10. On 23 September Cordiant and BFL commenced High Court proceedings against these Applicants alleging breaches of certain restraint clauses included both in the share purchase agreement of 8 September 2000 and in service agreements made between the Applicants and BFL dated 14 June 2000, and fiduciary duties owed as directors of that company. On 25 September the Applicants gave certain undertakings to the court in the form of express covenants pending trial. Those undertakings appear from a consent order made by Master Eyre. Detailed particulars of claim, settled by Mr Goulding and junior Counsel, Mr Paul Epstein, were served on 7 October. That pleading with annexes is at pages 82 - 215 of the bundle placed before me in this appeal.
11. By a Notice of Hearing dated 1 October and received by the Respondents' solicitors on Monday 6 October, the parties were informed by the Tribunal that the substantive hearing of these Tribunal complaints would take place over 4 consecutive days commencing on Monday 20 October.
12. On 6 October the Applicants' solicitors proposed the following timetable for agreement by those acting for the Respondents; a trial bundle to be agreed by 9 October; witness statements to be exchanged by 14 October; and a chronology to be agreed by 16 October. In that letter the Applicants' solicitors referred to the earlier order on 21 July, that witness statements should be exchanged at least 14 days before the date fixed for the hearing, pointing out that that timescale was no longer possible. The Respondents did not agree with that proposal. They did not want the hearing to go ahead on 20 October, as they said in a fax to the Applicants' solicitors of 7 October.
13. On 7 October in addition to serving the weighty particulars of claim in the High Court action the Respondents'solicitors also made application by fax to the Employment Tribunal, first for a stay of the Employment Tribunal proceedings pending determination of the High Court proceedings between the parties which, if granted, would necessarily lead to the hearing fixed for 20 October and following days being vacated. Secondly, and independently of the stay application, the Respondent sought a postponement of the 20 October hearing on the following grounds:

(1) The Employment Tribunal still had not ruled on the amendment application, despite the enquiry of 28 August; the Respondent therefore did not know what case they had to defend

(2) Witness statements had not been exchanged and the Employment Tribunal directions order of 21 July 2003 did not deal with the exchange of witness statements. Pausing there, that is incorrect. One of the letters of 21 July dealt with the exchange of witness statements; the other did not.

(3) The Employment Tribunal had not requested dates to be avoided. It was said in that application by the Respondents' solicitors that one of the Respondents' key witnesses, not there named, lived in the United States of America and would be unable to attend the hearing during the week commencing 20 October. What evidence that witness would give or why he was unable to come to this country to give that evidence, was not explained at the time, but for completeness Mr Goulding tells me today that the witness in America was the chief executive of Cordiant, Mr Herne and that in the event, happily he is available to attend the Employment Tribunal next week if required.

(4) Leading Counsel, Mr Goulding who had been advising the Respondents, would not be available to conduct their case during the week of 20 October.

14. The Applicant's solicitors were asked for their response. It came the following day on 8 October. They opposed both applications. Their position was, first that a stay of the Employment Tribunal proceedings was not appropriate; they wanted to get on with the Employment Tribunal case. Secondly, they contested the reasons advanced by the Respondents' solicitors for a postponement of the upcoming Employment Tribunal hearing. In summary they pointed out first that the Respondents had had the proposed amended particulars of complaint since early August; they doubted whether an early exchange of witness statements was beyond the capacity of a large corporation in the communication field, assisted by highly experienced solicitors in the Employment Tribunal field; they queried the difficulty of adducing the evidence of the US based witness, particularly in the age of video-links and finally they did not believe that listing of the case should depend on the availability of Counsel.
15. The Chairman, who I have taken to be Mr Carstairs, considered the rival contentions on paper, it now seems on the afternoon of 9 October. His order, dated 13 October, reads as follows:

"1. I refer to your recent request for a postponement of the hearing in this case.

2. A Chairman of the Tribunals has considered carefully all you say and has balanced that against the desirability of bringing this case to a hearing without delay

Pausing there the letter was addressed to Macfarlanes, the Respondents' solicitors.

3. The Chairman refuses your request for the following reason(s)

(1). Mere inconvenience to witnesses is not a sufficient reason to grant a postponement; please state the reason for the inconvenience.

(2). You have not stated:

(a). the name of the witness

(b). what the witness can give evidence about

(c). how that evidence is relevant to the issue(s)

Have you considered whether some other witness can give the necessary evidence?

(3). It is no longer practicable to consult parties about convenient dates of hearing. Please see the President's practice direction No. 1 of 11 November 1994 about this.

(4). It is not normally the practice of these Tribunals to postpone hearings because a particular representative is unable to attend. The Chairman expects the representative to ensure that alternative representation is arranged.

(5) The Chairman agrees with the Applicant's representative that there has been sufficient time to prepare for this case to be heard for the reasons given by the Applicant's representative in their letter of 8 October 2003.

(6) Moreover your opponent has objected to the postponement requested.

The application for a stay should be agreed before the Tribunal hearing the matter."

16. By a fax sent to the parties on 14 October, a typographical error in that last line was corrected. The word 'argued' was substituted for 'agreed'. It is the Respondents' appeal against that order which I now turn to consider.
17. First, the well-established principles to be applied in determining interlocutory appeals to the Employment Appeal Tribunal. It is common ground between Counsel that I do not have a general power of review of Employment Tribunal interlocutory orders. The principle stated by Arnold J in Bastick v James Lane [1979] ICR 778, 782, expressly approved by Stephenson LJ in Carter v Credit Change ltd [1979] ICR 908, 918 still holds good. The Wednesbury principles apply. Has the Employment Tribunal Chairman taken into account irrelevant factors or failed to take into account relevant factors in exercising his discretion, or is his conclusion a perverse exercise of that discretion in the true legal sense. Is it a conclusion which no reasonable chairman, properly directing himself, could reach?
18. Against that background I turn to the submissions made by Mr Goulding in support of the appeal, dealing separately with the stay issue and the free-standing question of whether the application for a postponement of the substantive hearing could properly have been refused.

The stay application

19. When this appeal was first lodged on 14 October the point was taken on behalf of the Respondents in the Notice of Appeal and skeleton arguments then lodged, that the final line of the Chairman's Order of 13 October which spoke of the application for a stay being agreed before the Employment Tribunal hearing the matter, was meaningless. It was. But the typographical error was promptly corrected in the way anticipated by Mr Goulding in his original skeleton argument.
20. It follows that the Chairman made no ruling on the stay application. He adjourned it to the Employment Tribunal to be convened for the full hearing. Pausing there, that ruling cannot be characterised as perverse and no such argument is advanced by Mr Goulding. On the contrary, having seen the substantial dispute between the parties, reflected in their respective skeleton arguments in this appeal as to whether or not a stay should be granted pending the outcome of the High Court proceedings it would in my judgment have been inappropriate for Mr Carstairs to order a stay on a paper application without at least giving the Applicants an opportunity to make oral submissions. That argument may properly be heard and determined at the outset of the substantive hearing.
21. Mr Goulding submits that in adjourning the stay application to the full hearing the Chairman erred in law in 2 respects. First, he submits that the Chairman failed to take into account a relevant factor, that is the waste of resources to the parties and to the Employment Tribunal system, if the stay application is granted on the first day and witnesses who have attended for the substantive hearing are not then sent away. I find myself quite unable to accept

that submission. As Mr Samek put it, it is "blindingly obvious" that where a Chairman refuses an application for a postponement of a substantive hearing and at the same time orders that a stay application be heard at the beginning of that hearing that he must realise if the stay application is granted that would be end of the hearing fixed for this case for 4 days.

I do not accept the Chairman failed to take it into account but for the reason given earlier it seems to me entirely proper that he should make the stay application the first order of business before the full Tribunal.

22. Secondly, Mr Goulding submits that the Order of 13 October is defective in that no reasons are given for the Chairman's Order standing over the stay application until the first day of the substantive hearing. Mr Samek reminds me that under the Employment Tribunal Rules of Procedure there is no requirement for any reasons to be given for an interlocutory order not being a decision as defined in Regulation 2(2) of the 2001 Regulations. It is good practice and in these days of Human Rights compliant hearings highly desirable that some reasons are given even though there is no requirement under the rules. However, again it seems to me absolutely plain that the reason why the Chairman stood over the stay application is so that it could be properly and fully argued with both parties present before the Employment Tribunal. That did not require spelling out in this interlocutory order and I therefore reject this alternative ground for setting aside the stay order. In these circumstances I reject the first part of this appeal.
23. The second part of the appeal concerns the postponement application. Again Mr Goulding submits that the Chairman failed to take into account relevant factors in refusing the postponement application. They are:

(1) that he failed to take into account the fact that the Applicants' application to amend the particulars of complaint made on 8 August remains outstanding. He submits that that places the Respondents at a significant disadvantage in knowing the case they have to meet.

True it is that the point is not specifically mentioned in the list of reasons given by the Chairman for refusing the postponement request at paragraph 3 of his letter dated 13 October. However that letter recites at paragraph 2:

"2. A Chairman of the Tribunals has considered carefully all you say and has balanced that against the desirability of bringing this case to a hearing without delay."

All that the Respondents said includes, in the fax of 7 October the clearly stated submission that a postponement should be allowed for among other reasons the fact that the adjournment application had not been formally adjudicated on. I am quite satisfied that the Chairman did take that into account.

I therefore conclude that this was one of the factors which he took into account in the overall balancing exercise but that it did not sway him towards allowing the postponement does not altogether surprise me. The application to amend to add a new cause of action was made within the 3 months time limit for complaining of unfair dismissal. When raising the question as to permission in their letter of 28 August the Respondents' solicitors did not volunteer any objection to the proposed amendment and today Mr Goulding has very fairly accepted that, but for the shortness of time, no opposition would have been raised to the proposed amendment.

(2) It is said that the Chairman failed to take into account that witness statements had not been exchanged and that the Employment Tribunal's Order of 21 July provided for exchange at least 14 days before the hearing date. The Notice of Hearing arriving with just 14 days to go. I repeat, the Respondents' application stated incorrectly that there had been no order for exchange of witness statements. Indeed that error was repeated in their solicitors' fax of 10 October which may or may not have arrived after the Chairman finally reached his decision. It seems to me that he can hardly be criticised for failing to take into account any tension between the order for witness statements exchange on 21 July and the receipt by the Respondents' solicitors of the Notice of Hearing 14 days before the hearing at fixed date, if he was told in terms by those solicitors that no Order had been made for exchange. More generally I have been impressed by the speed and efficiency with which this interlocutory appeal has been prepared by the parties' solicitors. The Notice of Appeal was lodged on 14 October. I saw the file on the afternoon of 15 October and gave directions for a hearing today at 2 pm which required skeleton arguments and bundles to be prepared within a 24 hour time frame. The Respondents' solicitors lodged immaculately prepared bundles precisely at 4.30 pm yesterday and I am therefore not persuaded that this case could not prepared on both sides for a substantive Employment Tribunal hearing this coming Monday. That was the view of the Chairman, accepting the Applicants' submission on the point. See paragraph 3(5) of the letter of 13 October.

(3) The question of the availability of Counsel. Mr Goulding submits that at paragraph 3(4) of the letter of 13 October the Chairman was saying in effect that it was an irrelevant factor for his consideration that a representative was unable to attend the hearing. I cannot accept that interpretation of the words used. It seems to me that the Chairman took into account that in perhaps exceptional cases the unavailability of the representative will be a factor which leads to a postponement request being granted. It is not that the point was immaterial to the Chairman's consideration rather that it did not sway him in this particular case in favour of granting the postponement. Again I am pleased to learn that Mr Epstein, who is retained in the High Court Proceedings, is available to conduct the Respondents' case before the Employment Tribunal next week.

(4) Finally it is said that the decision to refuse the postponement application is perverse. I bear in mind the high hurdle faced by Mr Goulding in making good that submission. It has been repeated many times by the Court of Appeal and recently in the case of Andreou v The Lord Chancellors Department [2002] IRLR 728. In the course of this judgment I have made some observations of my own on the strength of the submissions made in support of these applications. The purpose was not to carry out an impermissible review de novo of the Chairman's Order, but to explain, if further explanation were necessary, why I have concluded that, all other grounds of appeal having failed, the perversity ground fails also.

24. For these reasons I shall dismiss this appeal.