United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MS AKUA REINDORF (of Counsel) Instructed by: Messrs Russell Jones & Walker Solicitors Swinton House 324 Gray's Inn Road London WC1X 8DH
For the Respondent	No appearance or representation by or on behalf of the Respondent

SUMMARY

Practice and Procedure

Response lodged at the Employment Tribunal 44 minutes late and the Employment Tribunal ordered that the Respondent could take no part in the proceedings and refused to review that order on the basis it had no jurisdiction to do so. The Employment Tribunal has no power under Rule 4 to entertain an application for an extension of time for service of the response once the 28-day period has expired (Rule 4(4)) and, although it has power to entertain an application to set aside judgment in default to grant an extension of time for a response once judgment set aside (Rule 33), no default judgment was entered. However, concluded on appeal that there is power under Rule 34 where the interests of justice require to review the order made under Rule 6 not to accept a response served out of time and to direct it be accepted. The test for making such an order, as with Rule 4 and Rule 33, is what is just and equitable. Review ordered under Rule 34 and decision to accept response substituted.


 


THE HONOURABLE MR JUSTICE BURTON (PRESIDENT)

1. This has been the hearing of an appeal by the Appellant Company, Moroak, trading as Blake Envelopes, against a Decision or Order of the Employment Tribunal Chairman,
   Mr Toomer, at the Exeter Employment Tribunal. It is a matter of some considerable importance, by reference to the construction and application of the new rules, the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004. It has an application relevant not only to this case, but to at least one other pending appeal in the Employment Appeal Tribunal, and plainly to many other parties who are respondents in the employment tribunal.
2. The circumstances can be shortly stated in relation to this case. An Originating Application was lodged with the Exeter Employment Tribunal on 12 October 2004, claiming, primarily, unfair dismissal. The circumstances of the alleged dismissal need not be set out in this judgment, but they would involve significantly sensitive oral evidence, challenged and counter-challenged between the parties. A letter was sent prior to the proceedings in August 2004 by the Industrial Relations Workshop Ltd, instructed by the Appellant, setting out what would be the nature of the Appellant's defence, if proceedings were brought, and justifying the termination of the Claimant's employment. But once the Originating Application was issued, of course, the procedure required not reliance on some earlier letter, but the service of a notice of appearance or, as it is now called, a response.
3. In circumstances which are described in a letter to the Employment Tribunal, dated
   13 November 2004, the Response, which was due to be served by midnight on 11 November 2004, was lodged with the Employment Tribunal 44 minutes late. The explanation is given in that letter as follows:

"The reason why the response was late was because of a computer failure.

(a) The response was drafted prior to midnight – ie: in time.

(b) When I tried [to] print it off it would not print.

(c) I saved the document and re-booted my computed.

(d) When I opened the response up again the document was blank. It was then shortly before midnight. I rushed out a brief response [and that is a reference to a letter from Industrial Relations Workshop Ltd which was sent eight minutes after midnight, promising a further response], but it took until 8 minutes after midnight for me to finish writing and printing that document until I was able to fax it to the tribunal. At this point a response, albeit an imperfect one, was presented to the tribunal – 8 minutes late.

(e) I then redrafted the response to the Originating Application and this, as stated above, was faxed to the tribunal at 44 minutes after midnight."

This letter of 13 November 2004 was sent by a Mr Suter of Industrial Relations Workshop Ltd, who at that stage still continued to represent the Respondent. His letter requested an extension of time for service of the response, in order to validate the 44 minutes late document: alternatively, that in the interests of justice, as he put it, the submission of the Response 8 and/or 44 minutes late should be treated as de minimis, and the Response should be treated as having been presented in time.

4. This letter was sent both to explain the delay, and also in response to a letter which was sent out by the Employment Tribunals, dated 12 November 2004, and which contains the Decision or Order which has led to this appeal. The letter, under the rubric of the Exeter Employment Tribunal, and signed for the Regional Secretary of the Tribunals, said as follows:

"Your response to the above claim has been received in this office. A chairman Mr C G Toomer has decided that under Rule 4(1) of the Rules of Procedure your response has not been presented within a statutory time limit, and therefore cannot be accepted. You can take no part in these proceedings.

You have the right to apply for a review of this decision. If you wish to do so you must apply in writing within 14 days of the date of this letter quoting the above case number. You must explain why you believe the decision not to accept your response is wrong. The only grounds on which the decision can be changed are if a Chairman is satisfied that:

- it was wrongly made as a result of an administrative error, or

- the interests of justice require it."

Clearly at that stage, the Tribunal anticipated that there could be, and no doubt would be, an application for a review; and that application for a review could only be under Rule 34, to which I shall make reference later.

5. The letter of explanation and application, to which I have referred, dated
   13 November 2004, was, as I have indicated, on the alternative bases of either being an extension of time application or of being an application for review; and the reference to the interests of justice is a reference to subparagraph 34(3)(e) of the Rules, to which, again, I shall refer.
6. The response of the Tribunal, signed by a Jane Webber for the Regional Secretary of the Tribunals, was as follows, dated 19 November 2004:

"Your application has been considered by a Chairman, Mr C G Toomer, who has rejected it for the following reasons:

Neither Regulation 3(2) nor any other of the Regulations or Rules of Procedure entitled a tribunal to assume a power where none exists. Rule 4(4) is clear: an application for an extension of time may only been entertained if it is made within the 28 day time limit. The Chairman is not persuaded that it is appropriate to disregard the rule by saying that the delay is "de minimis".

Your response cannot be accepted for the reasons previously given in our letter dated 12 November 2004."

The Respondent now appeals that letter, or a combination of that letter and the earlier letter of 12 November 2004, so far as they contain the refusal by the Employment Tribunal to accept the Response served 44 minutes out of time.

7. I turn to deal with the Rules. Rule 4 governs 'Responding to the claim', and 4(1) provides:

"If the respondent wishes to respond to the claim made against him, he must present his response to the Employment Tribunal Office within 28 days of the date on which he was sent a copy of the claim…."

There is no doubt that the response document which was sent 44 minutes late, and which I have seen, is a valid response and, clearly so far as any kind of objective test is concerned, contains a sufficient answer to the claims made in justifying the dismissal.

8. Rule 4(4) provides as follows:

"The respondent may apply under rule 11 for an extension of the time limit within which he is to present his response. The application must be presented to the Employment Tribunal Office within 28 days of the date on which the respondent was sent a copy of the claim (unless the application is made under rule 33(1)) [that is an application to which I shall refer later] and must explain why the respondent cannot comply with the time limit. Subject to rule 33, the chairman shall only extend the time within which a response may be presented if he is satisfied that it is just and equitable to do so."

That is a new rule, in the sense that it introduces for the first time what was not in the old rules or the old jurisprudence, namely a requirement that an application to extend the time must be made before the time has expired; and the word "must" is used. Not only is the word "must" used in that context, but in Rule 10(2), which deals with the general power of the Employment Tribunal to manage proceedings, there is provision at subparagraph (e) for orders to be made extending any time limit, whether or not expired, and an express exception is made with regard to Rule 4(4).

9. That is all well and good and perfectly understandable in relation to a party who believes that he or she is not going to be able to comply with a time limit, laying down a requirement to get on with making an application for an extension and not waiting until after it has expired. What it does not deal with is a party who does not appreciate that he or she is not going to get the application in within time, because he or she believes, when sending or transmitting the response to an employment tribunal, that it will be in time and, through some unexpected cause, is preventing from lodging or posting it in time, so that, as here, it arrives late.
10. There was a provision in the Employment Appeal Tribunal Practice Direction 2002 which required (by paragraph 3(2) of the Practice Direction of 9 December 2002) that every notice of appeal lodged after the prescribed period of 42 days must be accompanied by a written application for an extension of time; and the view taken by the Appeal Tribunal, which has now been enshrined by omitting that paragraph from the new Practice Direction, is that that could not apply where it was not known at the time of making the attempt to lodge the notice of appeal that it would be out of time.
11. What is the position, then, of a party who has not lodged the response in time, and not made an application for an extension prior to the expiry of the period? Is that party left, as the Tribunal concluded here, without any device, and unable to take any part in proceedings?
12. There is an express sanction, which is available to the employment tribunal for the first time, in respect of parties who are in breach of orders or rules; and that is set out under Rule 8:

"Default judgments

8(1) In any proceedings if the relevant time limit for presenting a response has passed, a chairman may, in the circumstances listed in paragraph (2), issue a default judgment to determine the claim without a hearing if he considers it appropriate to do so.

(2) Those circumstances are when either -

(a) no response in those proceedings has been presented to the Employment Tribunal Office within the relevant time limit; or

(b) a response has been so presented, but a decision has been made not to accept the response…;

and the claimant has not informed the Employment Tribunal Office in writing either that he does not wish a default judgment to be issued or that the claim has been settled."

13. There is an express provision under Rule 8(5) that a claimant or respondent may apply to have such default judgment reviewed, in accordance with Rule 33, to which I made reference earlier. Rule 33 is headed up "Review of default judgments" and provides:

"33(1) A party may apply to have a default judgment against or in favour of him reviewed. An application must be made in writing and presented to the Employment Tribunal Office within 14 days of the date on which the default judgment was sent to the parties. The 14 day time limit may be extended by a chairman if he considers that it is just and equitable to do so.

(2) The application must state the reasons why the default judgment should be varied or revoked. When it is the respondent applying to have the default judgment reviewed, the application must include with it the respondent's proposed response to the claim, an application for an extension of the time limit for presenting the response and an explanation of why rules 4(1) and (4) were not complied with.

…

(4) The chairman may -

(a) refuse the application for a review;

(b) vary the default judgment;

(c) revoke all or part of the default judgment;

(d) confirm the default judgment…"

14. There is, as I have indicated, a cross-reference to Rule 33 in Rule 4(4); and that specifically allows for the situation of an application for a default judgment being made, naturally enough, after the expiry of the time limit; and, of course, allows for what is expressly provided in Rule 33(2), namely that any application to set aside a default judgment must include an application for an extension of the time limit for presenting the response. There is also a further express reference to Rule 33 in the last sentence of 4(4), to which I have referred, which suggests to me that what is there referred to is the need, in a Rule 33 application, for the additional requirement of explanations which are specifically provided for under Rule 33.
15. I have no doubt that, in the making of an application to set aside a default judgment, it will always be an important part of the application for the tribunal to be satisfied that there is at least an arguable defence contained in the proposed response, which must be included with the application to set aside the default judgment. What thus happens is that, whereas someone who makes their application for an extension under 4(4) within the time does not have any kind of supervision of the content of the response by the employment tribunal at that stage, if a party misses that deadline, and a judgment in default is issued, before the judgment in default can be set aside there will be the additional test of a merits requirement for the response.
16. That is, of course, all well and good where, upon a respondent failing to comply with the time limit under 4(4), a judgment in default is issued. It is apparent, however, that this new animal, the default judgment, will not necessarily be issued in every case; indeed it is specifically provided, as I have set out above, that if the claimant does not wish it entered it will not be; and in any event it would appear to be an entirely discretionary matter on the part of the tribunal as to whether, in a particular case, it does or does not issue a default judgment. It is plain, of course, that the issuing of a default judgment is more drastic than the order that was made here (which simply prevents the Respondent from taking any continuing part in the proceedings) because a judgment is then entered without a hearing; whereas in a case where an order is made such as was made in this case, all that occurs is that the hearing proceeds, but with no contribution from the respondent. Nevertheless, particularly in a case such as this, where it would appear that the whole case will depend upon oral evidence, if the only oral evidence that will be adducible at the hearing is that of the claimant, the order made debarring a respondent from taking further action is as good as a default judgment in everything except formalities.
17. In a case, then, such as this, where judgment in default is not entered, is the respondent left in limbo? That is, that whereas such respondent could make an application if the time limit has not expired, or if it has expired but a judgment in default has been entered, he or she could not do so where no judgment in default has been entered. That is plainly a lacuna which cannot be intended by these Rules, if it be a lacuna.
18. It is apparent that the initial reaction of this Employment Tribunal was not to regard there as being a lacuna, but to encourage the making of an application for a review. It was only by the second reaction of the Employment Tribunal, by letter dated 19 November (which I have read), that it was concluded by the Tribunal that there was no room for a review, because of the fact that no application could be made for an extension of time once the time limit had expired and that there had been no default judgment entered. This is a wholly unsatisfactory position, and one which I am satisfied is not correct.
19. Rule 34, headed up "Review of other judgments and decisions", following on immediately after Rule 33 ("Review of default judgments"), reads as follows:

"34.(1) Parties may apply to have certain judgments and decisions made by a tribunal or a chairman reviewed under rules 34 to 36. Those judgments and decisions are -

(a) a decision not to accept a claim, response or counterclaim;

(b) a judgment (other than a default judgment but including an order for costs, expenses, preparation time or wasted costs);

(c) …

and references to "decision" in rules 34 to 37 are references to the above judgments and decisions only. Other decisions or orders may not be reviewed under these rules."

It is apparent that the reference in (b) to excluding a default judgment is because that is separately provided for under Rule 33.

20. In my judgment, what the Chairman did on 12 November was to refuse to accept a response. The provisions in respect of accepting responses are set out in Rule 6, which reads as follows:

"6(1) Where a response is required to be presented using a prescribed form by rule 4(2), but the prescribed form has not been used, the Secretary shall not accept the response and shall return it to the respondent with an explanation of why the response has been rejected and provide a prescribed response form.

(2) The Secretary shall not accept the response if it is clear to him that any of the following circumstances apply -

(a) the response does not include all the required information …

(b) the response has not been presented within the relevant time limit.

(3) If the Secretary decides not to accept a response for either of the reasons in paragraph (2), he shall refer the response together with a statement of his reasons for not accepting the response to a chairman. The chairman shall decide in accordance with the criteria in paragraph (2) whether the response should be accepted."

The provisions relating to communication of the decision by the chairman either to accept or not accept such a response are then set out in subparagraph (4) and (5), and subparagraph (6) then reads as follows:

(6) Any decision by a chairman not to accept a response may be reviewed in accordance with rules 34 to 36. If the result of such a review is that the response should have been accepted, then the Secretary shall accept the response and proceed to deal with the response as described in rule 5(2).

21. This Response was not accepted by the Secretary and/or Chairman, as is clear, because it was out of time; and thus, in my judgment, its rejection was a Decision falling within the ambit of Rule 34 by reference to Rule34(1)(a), being a decision "to accept a… response". There is no doubt, therefore, that there is a power to review the Decision, and one of the grounds for review is set out 34(3):

"(3) Subject to paragraph (4), decisions may be reviewed on the following grounds only …

(e) the interests of justice require such a review."

I see no reason why such power of review should be restricted to the content (Rule 6(2)(a)), as opposed to the timing (Rule 6(2)(b)).

22. If the decision that the Respondent can take no part in the proceedings is reviewed, and successfully reviewed, so far as the Respondent is concerned, then the Order that the Respondent can take no part in the proceedings falls away. But the question still remains as to what is to be done in respect of the Response. There cannot be, by virtue of Rule 4(4) and the cross-reference to Rule 33 (to which I have referred), an application for an extension of time in that circumstances. But plainly the response cannot be left in limbo if the Respondent is to be permitted to take part in the hearing. The Claimant must of course know what the nature of the defence is that he has to meet.
23. I am satisfied that, in a circumstance such as this, when a decision not to accept a response is made, and an order is made that the respondent cannot take a continuing part in the action and that decision is then reviewed, it is a necessary concomitant of a decision to review that the decision not to accept the response is also reviewed under Rule 6(6). Consequently that is the Order that I would make if I were minded to make it, and that I am satisfied the Tribunal had power to make, once the explanation was given, 19 November 2005.
24. Should it have done so? Clearly on 12 November it had no ammunition to do anything other than to refuse to accept a response which was out of time. When the application to review was made on 13 November it now had information upon which, if so minded, it could act so as to review its decision and its refusal to accept the Response. In my judgment it had a discretion to do so. Should it have exercised that discretion?
25. I now turn to the basis upon which, as I understand it, the exercise of a discretion in such circumstances should be operated by a Tribunal. If I am then satisfied that that discretion, on the facts of this case, could only be exercised one way, then I would substitute my own decision one way or the other; if I were in doubt as to which way the Tribunal ought to exercise that discretion, I would remit it to the Tribunal to exercise the discretion.
26. What is the basis for an exercise of the discretion in the circumstance, which I have now decided can and does, on the facts of this case, arise, namely on an application for review of a decision not to accept a response by a respondent which was out of time, and if so advised, the reviewing of an order that that respondent should not be entitled to take part, and an order that the response will be accepted? It is clear to me that the test must be the same as under an application under Rule 4(4) for an extension of time, or an application under Rule 33 for a review of a default judgment, save of course that in practice it will be likely to be easier for an applicant to obtain an extension in advance of the expiry for two reasons:

(i) because if the reason is good, at least credit will be given for the application being timeously made by the respondent; and

(ii) because the respondent will not, in those circumstances, have to exhibit any merit in relation to the response, whereas if the time limit has expired, in my judgment, not only expressly by virtue of Rule 33(2), but inevitably by analogy, on any application for review under Rule 34(1)(a), there must be consideration of the merit of a response for which a discretion is being exercised.

27. The discretion is expressly described as being one to do that which is just and equitable. It is not, therefore, the same discretion or power as is being exercised in respect of the time for lodgement of an originating application for unfair dismissal, where the test is one of reasonable practicability. Nor is it the same test as that which is operated for an appellant to put in a notice of appeal to the Employment Appeal Tribunal, where very restrictive rules apply, as has been so often canvassed, particularly in United Arab Emirates v Abdelghafar [1995] ICR 65.
28. In my judgment, given that the test is as to that which is just and equitable, the same principles will apply to an application under Rule 33 or Rule 34 (under Rule 33 for an extension of time, and under Rule 34 for an order that the response already served be permitted to stand and be accepted, albeit that it was out of time), as were fully analysed by the Employment Appeal Tribunal, per Mummery P, in Kwik Save Stores Ltd v Swain [1997] ICR 49. The passages in that judgment, under the heading "The discretionary factors" at pages 54-56, are clear and persuasive; and indeed they fall to be contrasted, as I have indicated, with the very restrictive circumstances laid down by that same learned Judge in Abdelghafar. The headnote helpfully summarises the position as follows, by reference of course to a respondent applying to an extension of time, whereas in the circumstances of this case it will be what applies to a respondent applying to review the non-acceptance of a response which was out of time:

"…it was incumbent on a respondent applying for an extension of time for serving a notice of appearance… to put before the industrial tribunal all relevant documents and other factual material in order to explain… both the non-compliance and… the basis on which it was sought to defend the case on its merits; that an industrial tribunal chairman in exercising the discretion to grant an extension of time to enter a notice of appearance had to take account of all relevant factors, including the explanation or lack of explanation for the delay and the merits of the defence, weighing and balancing them one against the other, and to reach a conclusion which was objectively justified on the grounds of reason and justice; that it was it was important when doing so to balance the possible prejudice to each party…"

29. It is clear in this case that there is no prejudice to the Claimant by virtue of the
    44 minute delay in service of the response. The fact that the letter was sent in similar terms in August has of course, and understandably so, been relied upon by the Claimant in written submissions which have been put before me, as indicating that there was no apparent reason why the Respondent needed to have delayed as long as it did to serve the response, when the nature of its defence was apparently known to it. I agree with that criticism although, as I have indicated, if the test is not one of reasonable practicability, but simply just and equitable to extend or to forgive a failure to get response in in time, the issue, which might well have resonated in a different context, does not carry the same force where there is an explanation which does not redound to the discredit of the Respondent for its failure to comply with the time limit by virtue of last minute emergencies. On the other hand, the point, of course, only goes to emphasise that the Claimant has known the nature of the proposed defence, and will not be surprised by it.
30. I am satisfied that there is an explanation for the failure to get the response in in time on the day, by reference to the fact that, but for the unexpected computer failure, this response would have been in in time; and that the period of 44 minutes can be forgiven in those circumstances, a full explanation of the delay on that last day having been given, and their being no requirement to give what would be required in other contexts, namely an explanation in respect of the full period. I am satisfied, therefore, that, persuaded as I therefore am that
    Kwik Save Stores Ltd v Swain remains the test for extensions of time for a response, no reasonable tribunal, given the explanation set out in the letter of 13 November, would do other than grant that extension of time, were this an application for an extension or, in the particular facts of this case, allow a review against the refusal to accept the response.
31. In those circumstances I propose to make an order to that effect. The appeal will be allowed; the Decision of 19 November will be reviewed; and there will be substituted an order that the response, albeit 44 minutes out of time, shall be accepted by the Employment Tribunal.