United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Mr J McMahon Solicitor The Old Blue Bell 17 West Street Moulton Northampton NN3 7SB
For the Respondent	Mr M Halsey Solicitor Messrs DMH 40 High Street Crawley West Sussex RH10 1BW

SUMMARY Practice and Procedure

A tribunal or chairman is required to give reasons, which need not conform to Rule 12, for an interlocutory or interim order. Where the application is likely to be contested, it is good practice to invite the other party's submissions before making an order. Reasons will be sufficient if they refer to and adopt or reject one or other party's submission.


 


HIS HONOUR JUDGE McMULLEN QC

1. This appeal concerns the procedure of an Employment Tribunal in the granting of an Order for disclosure of information. It is likely to have limited utility, since the substantive issue between the parties has largely been agreed at the hearing before us, and our reflections relate to the ancien regime of Tribunal procedure under the 2001 Regulations, revoked with effect from 1 October 2004.
2. We will refer to the parties as Applicant and Respondent. We have reserved our decision in this case not because of complexity of the issues, but because of pressure on Court time on the day of the hearing. The Applicant in these proceedings is represented by Mr

McMahon, solicitor, who has brought his considerable experience to bear in this appeal, and the Respondent is represented by Mr Halsey. Since the parties themselves are engaged in the administration of justice, it is understandable that they wish to resolve the disputes between themselves.

3. The judgment represents the views of all three members.

Introduction

4. It is an appeal by the Applicant in those proceedings against an Order for disclosure of information made by a Chairman of Employment Tribunals, Ms S Gilbert, sitting at Stratford East on 5 December 2003, amended on 22 January 2004. The Applicant's claim alleged breach of Regulations 13 and 16 of the Working Time Regulations 1998 in that while working for the Respondent, he had not been given paid annual leave. The Applicant asserted that he was engaged on a self-employed basis, had no written contract of employment and during the time of his engagement carried out no work for any other person. The Respondent contended that it was no more than a client or customer of the Applicant who had rendered invoices for his costs and professional services. It denied the Working Time Regulations applied, since the Applicant was self-employed and worked for different clients and customers as he saw fit.

The Issue

5. The issue before the Chairman was to decide whether to grant disclosure of certain materials, pursuant to a written application made on behalf of the Respondent. The Chairman decided to grant two of the five requests and ordered the Applicant to provide copies of all tax returns from 2000 onwards and copies of invoices rendered to the Respondent by the Applicant from 1 December 2000 to 3 March 2001. That Order was narrowed by a letter sent on behalf of the Chairman on 22 January 2004 saying that:

"the Applicant must disclose those points of his tax returns related to his earned income from all sources in the years requested."

6. The first Order was in standard form and contained a penal notice and the following:

"The Tribunal has power to vary or set aside this Order on the application of the person to whom it is directed but can only do so for good cause. Any such application should be made to this Office before the date for compliance mentioned above, giving reasons for the application."

The letter of 22 January 2004 did not follow that standard format. The Applicant appeals against those Orders. Directions setting up this full hearing were given respectively by myself, His Honour Judge Birtles and Burton P.

7. By Regulation 10 of the 2001 Regulations a Tribunal must seek to give effect to the overriding objective which is to enable Tribunals to deal with cases justly, and this is defined as follows:

"Dealing with a case justly includes, so far as practicable -

ensuring that the parties are on an equal footing;

saving expense;

dealing with the case in ways which are proportionate to the complexity of the issues; and

ensuring that it is dealt with expeditiously and fairly."

8. The power to manage cases is set out as follows:

"4(1) A tribunal may at any time, on the application of a party or of its own motion, give such directions on any matter arising in connection with the proceedings as appear to the tribunal to be appropriate.

(2) An application under paragraph (1) -

may be made by presenting to the Secretary a notice of application, which shall state the title of the proceedings and set out the grounds of the application, or may be made at the hearing of the originating application.

…..

(5) A tribunal may, on the application of a party or of its own motion -

…

require one party to grant to another such disclosure or inspection (including the taking of copies) of documents as might be granted by a court under rule 31 of the Civil Procedure Rules 1998"

9. The penalties for non-compliance are contained in Rule 4(8):

"(8)If a requirement under paragraph (1) or (5) is not complied with, the tribunal -

may make an order in respect of costs under rule 14(1)(a), or

before or at the hearing, may strike out the whole or part of the originating application, or, as the case may be, the notice of appearance, and, where appropriate, direct that a respondent be debarred from defending altogether;

but a tribunal shall not exercise its powers under this paragraph unless it has sent notice to the party who had not complied with the requirement giving him an opportunity to show cause why the tribunal should not do so, or the party has been given an opportunity to show cause orally why the powers conferred by this paragraph should not be exercised."

Failure to comply may also be visited by a fine, pursuant to section 7(4) of the Employment Tribunals Act 1996.

10. A decision of an Employment Tribunal must contain either a summary or extended reasons, but a "decision" does not include "any other decision on an interlocutory matter": Regulation 2(2). The requirement to give reasons is provided by Rule 12(3). Where reasons are given they must be in writing.

The facts

11. The Applicant is a solicitor. He provided work to the Respondent over a period of time. If he provided work on a solicitor/client basis, he would be excluded from the Working Time Regulations. If the Respondent were his customer, the same would apply. Otherwise, he has a prima facie case to entitlement under the Regulations to paid annual leave.

The Applicant's case

12. On appeal, four points are taken:

(1) the Interlocutory Order is invalid;

(2) the Applicant has been denied natural justice by the procedure adopted by

the Chairman;

(3) the Chairman erred in failing to give adequate reasons for her decision.

(4) as a matter of substance, the Respondent's application for disclosure should have been refused and the Chairman erred in the exercise of her discretion.

We will deal with these submissions and our conclusions in that order.

(1) The Order was invalid.

13. This is a technical objection to the form of the Order on 22 January 2004, since it does not contain the same notices as the standard Interlocutory Order issued on 5 December 2003. Since the effect of non-compliance with the original Order is penal, such requirements are mandatory. It seems to us that the answer to this point is contained in the Applicant's first point in his Skeleton Argument which is this:

"The appellant submits that he is faced with, in effect, a single Interlocutory Order. The Order that was made on 5^th December 2003 as amended on or about 22^nd January 2004"

So, according to the Applicant's construction, the January letter simply amended the original Order and no complaint is made as to the form of the original Order. In the light of that assertion, this ground is of no substance and is dismissed.

(2) Breach of natural justice.

14. The Chairman erred in issuing her 5 December Order, following an application by the Respondent, without seeking the submissions of the Applicant or ordering a hearing on the issue. This submission requires attention to be given both to the substance of the Respondent's application, and to the procedure. The Applicant relies upon the judgment, relating to disclosure, of the EAT (Hutchison J and members) in Clwyd County Council -v- Leverton [1985] IRLR 197at paragraph 11.

"For reasons which, if we may say so, we understand, those words caused a certain amount of disquiet in the appellants' camp because, on one construction, it might appear that he was saying that anybody could launch an application of this sort without having a prima facie case and seek by discovery, by ferreting around in the documents and contracts in their employers' possession, to make a case which until discovery took place did not even prima facie exist. We do not believe that the chairman meant that. He was speaking in the context of this case. If he did mean it then, as we made clear to Mr Webster in the course of the argument, it could not possibly be right to suggest that any employee could launch an application of this sort against his employer without any sort of prima facie case and rely upon discovery, and the assistance of the Tribunal in granting discovery, to make out some sort of case."

15. Two things must be said about this authority. First, it applies directly only in respect of applications by Applicants for disclosure by Respondents. It deals with the proposition that a person may not establish grounds for bringing a complaint by launching an application for disclosure. In our judgment, circumstances are different when the application is made by a Respondent. Secondly, an appropriate adaptation can be made to deal with that situation. Once the Applicant has established a prima facie case, the Respondent is entitled to seek (for it is not automatic) disclosure of all materials which might be relevant to the proceedings in asserting its own defence or in weakening the grounds of the Applicant's complaint.
16. In the present case, given the positive assertions made in the Originating Application, the Respondent was entitled to seek disclosure of the materials cited. Indeed, the Applicant accepts that he did do work for other persons whilst engaged with the Respondent. The Respondent made a reasoned case for an Order for disclosure and as a matter of substance, therefore, the Chairman cannot be faulted in the exercise of her discretion when deciding to accede to the application.
17. Dealing with the matter of procedure, it is not a requirement under the Rules that there be a hearing, or even an opportunity to resist an application for disclosure prior to an Order being made. It might be good practice to canvass the submissions of the party against whom an Order is sought, particularly when it relates to what might be regarded as sensitive material such as tax returns. But the Rules make clear the circumstances in which notice must be given to a party, or a person who is not a party, before an Order of this kind is made. They are exceptions to rule 4(5)(b) which is unqualified.
18. When the Applicant fought back against the Order, with a reasoned argument, the Chairman considered the matter again and attenuated the Order by limiting it in the way described above. Even if in the instant circumstances the Chairman were required to consult the Applicant prior to making the Order on 5 December 2003, since the Applicant regards the letter of 22 January 2004 as an amendment, it follows that the Chairman did consider bilateral representations before adjusting her Order on 22 January 2004.
19. There is nothing unfair about this. Liberty to apply is given to parties provided they apply within the relevant timescale. It might seem unbalanced that the Applicant who has had no opportunity to make submissions, should first appear seeking to discharge an Order placed upon him or her. But as long as their views are considered by the Chairman and balanced against those of the person seeking the Order, it is possible to say a fair consideration has occurred. The rules of natural justice have been complied with. No argument was addressed to us in relation to any of the Applicant's Convention rights.
20. In our judgment there is no obligation upon Tribunal Chairmen, dealing with a contested interim application for disclosure of documents to conduct an oral hearing. This ground of appeal is dismissed.

(3) Reasons

21. An Employment Tribunal is required to give reasons for a decision: Meek -v- City of Birmingham District Council [1987] IRLR 250. Reasons should also be given for Interlocutory or Interim Decisions: Independent Research Services Ltd -v- Catterall [1993] ICR 1 EAT. The Applicant accepts that the form in which such reasons are to be delivered need not correspond to rule 12 in respect of summary, alternatively extended reasons in writing signed by a Chairman. Nevertheless, it follows from the judgment in Catterall, and in order to avoid criticism under Article 6(1) of the European Convention, that a legally qualified judicial officer should give some reasons for accepting or rejecting an application made by a party in the proceedings. In this case, the challenge is to the adequacy of the reasons given. In our judgment, reasons for such an order need not reach the standard required of a decision in order to be Meek-compliant. They need not be in the form of summary reasons. In the present case, reasons in fact were given; they are as follows, referring to correspondence subsequently received from the Applicant:

"A Chairman, Ms Gilbert, has carefully considered everything the parties have said in relation to the orders made on 5 December and can see no reason to revoke them. In particular the Chairman does not consider the orders made to be disproportionate to the issues for determination by the Tribunal or over intrusive in the Applicant's private life.

The Applicant must disclose those points of his tax returns related to his earned income from all sources in the years requested."

22. The Chairman directed the Secretary of the Tribunals to write on her behalf as follows:

"Regulation 2(2) of the Employment Tribunals (Constitution and Rules of Procedure) Regulation 2001 defines "decision" for the purposes of schedules 1, 2 and 3 and excludes an interlocutory order or decision on an interlocutory matter such as that made in this case.

Your request for extended reasons of the decision made on an interlocutory matter is therefore refused."

That approach is incorrect. It follows from the approach we have identified above that although not a decision, an Interlocutory Order does require reasons of some sort. The question then is whether the reasons given above are adequate.

23. As the Applicant accepts, these are reasons. They deal with points expressly made by the Applicant in his letter, concerning interference with his private life and proportionality. The Applicant in his letter, dealing with criticism made by the Respondent about his own disclosure, submitted that his assertion in the Originating Application was "a minor lapse rather than a signal of dishonesty". No doubt the Chairman had that dispute in mind when determining what was or was not intrusive and disproportionate. It follows therefore as a matter of substance that the parties were able to understand the reason why the Order was given and amended and this ground of appeal is dismissed.
24. Without wishing to add to the burden of Chairman in dealing with interim applications, if it is thought appropriate to consider, in what is likely to be a controversial application, canvassing submissions from the affected party, and if submissions are forthcoming, a Chairman could easily adopt as reasons for his or her decision those put forward in the application or response of one or the other party.

(4) The substance of the Order

25. One ground on which the Applicant resisted disclosure was that the invoices had already been submitted by him during the relationship and were therefore in the possession of the Respondent. We gather that for the first time at the hearing before us, the Respondent indicated that it no longer had those invoices because of re-organisation within the service. These documents are plainly relevant since they may affect the way in which the Tribunal looks at the relationship between the parties. The fact that one party has had them but has since lost them is not a reason for refusing to allow the other party, which has them, to disclose them. Since disclosure is not automatic in an Employment Tribunal, once an Order is made it follows that parties must comply with it in order to make the task of the Tribunal easier. In any event, it was conceded before us that these invoices would be forthcoming.
26. We then turn to the second issue which was the disclosure of the tax returns. As we understand it, from the close of our proceedings, the amended Order of the Chairman is not now resisted. If that is the case there is nothing more we need to say. On the other hand, if we have misunderstood that position, we have decided that the Chairman did not err in the exercise of her discretion in ordering the disclosure of the attenuated information in the tax returns. The degree of relevance of that material is a matter for the Tribunal to determine, but we cannot say that the material is irrelevant or that the Respondent is not entitled to it, given the way in which the Originating Application is drafted. This ground of appeal is dismissed.

Disposal

27. We would like to thank the parties for their help in this case. The case can now be restored to the Employment Tribunal for a full hearing. The appeal is dismissed.