United Kingdom Employment Appeal Tribunal

~APPEARANCES

 

 

For the Appellant	MR PAUL MCGRATH OF COUNSEL MESSRS JONES DAY SOLICITORS 21 TUDOR STREET LONDON EC4Y ODJ
For the Respondent	MR W WITOLD PAWLAK OF COUNSEL MESSRS BRAY WALKER SOLICITORS 36 FURNIVAL STREET LONDON E4A 1JQ


 


HIS HONOUR JUDGE J MCMULLEN QC

1. This case is about Employment Tribunal Procedure when a Chairman refuses to allow a postponement and deals with material in an Originating Application which is said to be privileged. I refer to the parties as Applicant and Respondent.

Introduction

2. It is an appeal by the Respondent in those proceedings against orders of an Employment Tribunal Chairman sitting at London South. First, Mr R Peters Regional Chairman of Southampton, refused to strike out and on 29 October 2003 Mr Zuke refused to order a postponement. In respect of each application the claim was made on two further occasions and was refused on each occasion. Each occasion generating more substance. Both parties have been represented before me by Counsel and solicitors highly experienced in employment litigation.
3. The Applicant claimed, constructive unfair dismissal and breach of contract, the Respondent denied the claims. Before this case was set up, two preliminary issues arose. The essential two issues for the Tribunal Chairman on each occasion was to consider the exercise of his discretion in acceding or not to an application to postpone a hearing which is due to be heard on 18 and 19 December at London South. Secondly, he was to decide whether or not there should be a preliminary hearing into the claim that matters within the Originating Application were privileged.
4. He refused both applications and so the Respondent appeals against those two decisions. It is contended not only that the Tribunal exercised its discretion incorrectly but also perversely. I am thus deep into the territory of discretion. Directions sending this appeal to a fast track full hearing were given by his Honour Judge Ansell in Chambers. In accordance with the parties' wishes I am hearing it pursuant to Section 28(4) of the Employment Tribunals Act 1996, as a Judge alone. I have granted this morning, for reasons which I gave, an application for permission to introduce a Respondent's answer.

The facts

5. The facts I tentatively state as there has been no determination. The Respondent is principally engaged in architecture both in this country and abroad, providing a number of services. At the moment we are concerned with services being offered in Michigan, USA. The Applicant describes Jonathan Bailey, the leading light in the Respondent, as a prima donna. He acknowledges Mr Bailey's expertise as outstanding. Mr Bailey resists being described as a prima donna but asserts that he is a leading visionary in respect of creative matters. An application to strike out that part of the Originating Application was refused and is no longer pursued, but it does shed light on the application to postpone.
6. The Applicant was employed by the Respondent from 23 February 1998 at a current salary of at least £122,100 a year. An additional £12,200 is disputed. He was the Finance Director and Managing Director. The relationship came to an end on 9 May 2003. Mr Dwyer, another important figure in the Respondent, came to England and it is said conducted negotiations with the Applicant and reached an agreement. This is contested by the Respondent. On the Applicant's case, the agreement contained provision for him to be paid three months' salary which would enable him immediately to start a new job he has taken up in Portugal. The Respondent withdrew from that material, I use that phrase neutrally, so as not to indicate whether or not there was an agreement and whether there was a breach. It is put by the Respondent at its highest that there was an offer which was withdrawn.
7. The Applicant brought proceedings claiming unfair dismissal and unpaid pension contributions. Although there has been considerable fuss over pleadings in this case it is said by Mr Witold Pawlak appearing for the Applicant today that his claim is solely in respect of unfair dismissal. There is also an employer's (counter-) claim for one year's lack of notice said to be owed by the Applicant. That of course would be capped at £25,000.00 being subject of the extension of Extension of Jurisdiction Order 1994.

Conclusions

8. The two issues on appeal can be dealt within sequence:

1. The application for a postponement

9. Unusually, I am told by Mr McGrath, the Tribunal did not canvass dates with the parties before fixing this date by Notice of Hearing dated 8 October 2003. By 17 October 2003, the Respondent had sought to postpone that date because of the business commitments certainly of Mr Bailey and possibly also of Mr Dwyer at a conference involving a good deal of participants in Michigan over the days listed.
10. The material which was put before the Tribunal at that stage was scant. Mr McGrath does not assert that it is impossible for Mr Bailey to attend and thus his reliance on the Judgment of the Court Appeal in Teinaz v The London Borough of Wandsworth [2002] ICR 1471 has to be seen in perspective. This case was about a person who by a reason of her sickness was unable to attend a hearing. It was held that in those circumstances a postponement should have been granted.
11. The Chairman decided that the hearing was not to be postponed giving as the reason the following. "The inconvenience to the Respondents is not a sufficient reason to postpone the hearing". On behalf of the Respondent it is contended that this contains an inadequate statement of reasons. It is accepted that a Tribunal in respect of an order involving a simple matter such as listing is neither required to give extended nor summary reasons, but to give a reason. That is because an order is not a decision within the Tribunal rules. The Tribunal has given a reason. It seems to me to be aptly summarised as rejecting the inconvenience to the Respondent as a sufficient ground. A business meeting, important to it and foreshadowed before the date of the hearing, is the reason the Respondent seeks a postponement but it is I suggest aptly described as inconvenience rather than impossibility.
12. I have paid attention to the passage in Independent Research Services v Catterall [1995] ICR 1, 5C-D as follows:

"… just as the principle upon which this Appeal Tribunal should operate in relation to appeals from interlocutory decisions is the same as the principle which ought to have apply in hearing an appeals final decisions, so it seems to us, the parties are entitled to be told why they have won or lost in an interlocutory decision as much as in a final one. True it is that in an interlocutory decision one would not seek for any great detail ...."].

13. That judgment needs to be seen in the context of the Judgment of the Court Appeal in English v Emery Reimbold [2003] IRLR 000 indicating that certain decisions do not require detailed reasoning.
14. A reason has been given and one can easily understand the reasons behind it. Thus, I reject the contention that no or inadequate reasons were given. In a case where both parties are represented and put in written submissions on an interim application one could infer by the rejection of one party's view that the successful party's submission view has been upheld. It would be simple for the Chairman to have said he refused "for the reasons given in the letter of the relevant date submitted on behalf of the Applicant". The Chairman did not, but I do not consider that he can be criticised as a matter of law for not doing so. I can easily infer that his reason for rejecting the application was the reason which he gave - inconvenience of the Respondent is not good enough - which draws directly on the letter of application. It can be inferred that he was paying attention to the argument in opposition addressed on behalf of the Applicant.
15. I turn to the second argument which is that the Chairman did not consider the overriding objective in Regulation 10. In my judgment it is not necessary for every order and for every decision in the Employment Tribunal to cite Regulation 10. Mr McGrath does not go that far, for he simply criticises there being no express or implied reference to the overriding objective. The balancing of the factors set out in paragraph 2 of the Chairman's order indicates that he has fully in mind the overriding objective for it is said, "A Chairman of Tribunal has considered carefully what you say and has balanced that against the desirability of bringing this case to a hearing without delay." That is a straightforward recognition of the duty of an Employment Tribunal to pay attention to the overriding objective and in my judgment this criticism of him fails.
16. I then turn to the criticism based upon perversity. This is that a fair trial would not be possible. Given Mr McGrath's accession to the proposition that this case is not about impossibility of a witness's attendance, his submission cannot succeed. A choice would have to be made by Mr Bailey and Mr Dwyer as to whether they attend the hearing, whether they apply to have their evidence put in writing or whether they go to the United States. I can find no error of law and certainly not one which meets the high standards set by Yeboah v Crofton [2002] IRLR 634 CA at paras 12, 93, and Carter v Credit Change [1979] ICR 361 CA for determining that a decision of a Tribunal Chairman exercising discretion is perverse. The Chairman had all the matters in front of him as he did and I do not consider that I have a jurisdiction to intervene in his decision.

2. The preliminary point on privilege~

17. It is contended that since I am against the Respondent on the postponement, I should at least allow for the hearing next week to be on of a preliminary point relating to whether or not materials contained in the Originating Application raise matters of privilege. In Unilever v Proctor and Gamble Co [2000] 1 WLR 2436 CA at 2444 D-E, Robert Walker set out the principles relating assertions of privilege which seem to me to be relevant in this case, as follow.

"There are numerous occasions on which despite the existence of without prejudice negotiations, the without prejudice rule does not prevent the admission into evidence of what one or both of the parties said or wrote the following are among the most important instances.

(1) ~As Lord Justice Hoffman noted in Muller's case when the issue is whether without ~prejudice communications have resulted in a concluded compromise agreement those ~communications are admissible [citing authority].

…

(3)~Even if there is no concluded compromise a clear statement which is made by one party to negotiations on which the other party was intended to act and does in fact act may be admissible as giving rise to an estoppel [citing authority].

18. In Independent Research Services v Catterall (above) the EAT considered whether or not without prejudice material should be adduced. Mr Justice Knox held at page 5C as follows:

" …very properly, there was a direction that that particular Chairman should not sit on the hearing of the main issues because obviously he had seen that which he would not have seen had been deprived of the without prejudice correspondence.

That, it seems to me, is a rule which indicates that where an issue arises as to without prejudice material it ought to be dealt with by a body which is not going to deal with the ultimate adjudication.
19. The Respondent has contended that a fair hearing is possible of a preliminary issue relating to the without prejudice issue on 18 and 19 December because Mr Dwyer can come back from the United States and attend on 19^th. The Chairman failed to recognise the importance of Catterall and failed to give reasons for refusing the application which had been made in proper form as a matter of substance. The Chairman simply said no new grounds had been put forward and refused to categorise the hearing as one of a preliminary point.
20. In my judgment, an issue such as privilege should properly be taken if it can as a preliminary point, for the reasons given by Mr Justice Knox. That ensures that there will be no contamination of a subsequent Tribunal by its having heard the material. Sometimes the issue arises in a hearing and the judge or tribunal must deal with it. When the issue arises in advance of a hearing, it is practicable and desirable to have it considered by a Chairman alone or an Employment Tribunal who, if they rule the material out, will not be called on to decide the substantive issue.
21. It is important to put this case in context: it is a claim for unfair dismissal; part of the grounds relied on by the Applicant rehearse the position he would in if the leadership offered a clean break with payment and then withdrew it. Those facts undermine the relationship of the parties and the existence of terms relating to mutual trust and confidence. The question is whether or not the material which passed between the parties in early May can form the basis of that claim. That is a matter which has to be tried by an Employment Tribunal and not by me and therefore, the proper question is what is the best method?
22. In my judgment the Chairman made an error in deciding not to allocate this case to a preliminary hearing. I am satisfied no injustice will be caused by the absence on the first day of Mr Dwyer. He will therefore, be able to attend and I accept Mr Bailey is such an important figure in this business that he may well want to attend as well. I also have in mind the Applicant's interest in seeing this case disposed of quickly but justly. The hearing will go ahead on the preliminary point of whether or not reliance may be placed on the May events. If they may not be relied upon, the parties will be able to consider whether or not an unfair dismissal case should follow. If they can be relied upon then of course the unfair dismissal case will go ahead.
23. So, the decision of the Employment Tribunal will stand that there be a hearing but it will concern itself with the application to strike out the matters in the Originating Application relying on what is said to be privilege. I will direct that skeleton arguments be produced by the parties and exchanged. The as yet unanswered agreement for the exchange of witness statement will be put in place.

Guidance

24. I was asked in Mr Pawlak's written and oral submissions to give some guidance to parties engaged in making applications of an interim nature to an Employment Tribunal. He complains on behalf of his client that for many of the applications made by the Respondent which I referred to above his instructing solicitors were not copied in. That means that they had either no notice or very late notice of what was going through the mind of the Respondent; more importantly of what was being put before the judicial body. Although this criticism is made on behalf of the Applicant, I understand that the Applicant has on at least one occasion not copied in the Respondent.
25. When both parties are anxious to have interim decisions made quickly, it seems to me that both as a matter of practicality and as a matter of transparent justice any application should be lodged with the Employment Tribunal and served on the other side. This will no doubt cut down time, it will ensure that cards are face up on the table and will comply with the duty of the parties to enable the Tribunal to carry out the overriding objective. A simple way of achieving this, as occurs in the Tribunal's own documents, would be to indicate on the face of the document that it is being copied to others and for copies to be sent. It seems to me to be good practice that that procedure be adopted for the advancement of the overriding objective in the future. I note that in the draft Employment Tribunal Procedure Regulations currently under consultation a form of this suggestion is made, but only when parties are legally represented.

Costs

26. An application has been made by Mr Palwalk for costs. No schedule has been put in. It is based upon Rule 34: unreasonable conduct by the Respondent. The intention to appeal was not communicated to the Applicant for about three weeks and as I have indicated above EAT has scrambled effectively to get this case on ahead of the Employment Tribunal hearing. I have already given my view about the way in which parties should make known to each other the applications they make. Maybe in future it might be considered unreasonable conduct not to do so. Although the conduct has been unsatisfactory by solicitors for the Respondent, I do not consider that this conduct falls within the pejorative epithets within Rule 34. It must also be borne in mind that the Respondent has partly succeeded on one of the two applications and that the Applicant does not say that if he had had proper notice at the relevant time he would have caved in. He would have still come here to resist them so I refuse the application for costs.
27. This case it seems to me needs a sense of proportion. I note the amount of monies that are involved here. The Applicant claims compensation for unfair dismissal but has mitigated. No doubt the Respondent reacted defensively by issuing a counter claim, which is capped at £25,000. By the time this case gets on in a week's time, and certainly by the end of two days' hearing, the costs will be very close to the amount which each side is seeking to recover. Since mediation is on foot in the United States and obviously parties would like to see everything tied up, I would earnestly urge both parties to consider a solution to this case which does not involve further litigation. There is obviously strength in both of the cases and I take the lead from the suggestion arising from the legal advisers that there might mediation to try and resolve this matter. The issue is hotly contested and from my remote vantage point I can understand that there are strong personalities and strong feelings about this. But the costs are mounting up for what may well be soluble.