United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR BEN DANIEL Solicitor Instructed by: Messrs Ford & Warren Solicitors Westgate Point Westgate Leeds West Yorkshire LS1 2AX
For the Respondent	No appearance or representation by or on behalf of the Respondent


 


SUMMARY

First application alleging constructive dismissal. Struck out as applicant had not yet resigned. Having done so, she was not barred from presenting a second application by reason of cause of action estoppel.


 


HIS HONOUR JUDGE ANSELL

1. This is an appeal from a decision of a Leeds Employment Tribunal given to the parties on 27 January 2005 who determined at a preliminary hearing that the Respondent was not estopped from pursuing her claims for constructive unfair dismissal and disability discrimination by the reason of the doctrine of res judicata. The Appellants contend that that decision was incorrect and that the Respondent is prevented from pursuing her claim for unfair dismissal by reason of cause of action estoppel and for pursuing her disability claims by reason of the principal as set out in the case of Henderson v Henderson [1843] 3 Hare 100 PC. Mr Daniel has appeared before us on behalf of the Appellants and presented a very skilful and well argued case. Unfortunately, the Respondent has neither appeared nor been represented.
2. The background facts are not in dispute. The Respondent worked as a bus driver for the Appellants from 4 June 1999, based at their garage in Leeds. She presented her first claim to the Tribunal on 30 May 2003. In box 1 of her Originating Application, which sets out the type of complaint that she wanted to make, she lists the following:

"Harassment, bullying, victimisation, constructive dismissal".

There was supporting text in box 11 of the Application and on a further sheet of paper which set out the background grievance relating to pay and holidays. At the end of the box on the second page of the Application, she said:

"I am presently under the care of my doctor suffering stress and depression and the very thought of working with the above makes my physically ill and I see no other course but to submit my resignation and fight this away from the constant pressure the company feels it must put me through. I will be submitting my resignation within the next two weeks at the end of my present sick note".

3. Within a few days, she did in fact resign and wrote a letter on 4 June 2003 delivered by hand, indicating that her employment would come to an end on 9 June 2003. It was not disputed that the reason she had presented her claim on 30 May was her concern that she was approaching a period of three months from the date of a grievance meetings which had taken place on 14 and 15 March.
4. A Notice of Appearance was entered on 24 June 2003 which denied any breach of the Respondent's contract of employment and in the alternative, contended that if there was a dismissal, it was fair and for a reason which related to her capability and/or conduct.
5. A preliminary hearing was convened on 5 August 2003 when the Employment Tribunal determined that the Originating Application was premature since it had been made before the effective date of termination and the Tribunal therefore decided that it had no jurisdiction in relation to the application. The Tribunal did not appear to have given any consideration as to whether they did have jurisdiction to deal with any of the pre-dismissal complaints that the Respondent had been making in relation to pay and/or holidays nor the claims for the victimisation or harassment.
6. The Respondent presented a fresh Application to the Tribunal on 11 August 2003. In box 1 of that Application, she referred to constructive unfair dismissal, harassment, bullying, breaking employee/employer trust, unfair wage alteration and victimisation. In box 11, she referred to a "strong claim for constructive unfair dismissal" and referred to "acts contravening the Disability Discrimination Act 1995 with regards to prolonged sickness".
7. In its Notice of Appearance filed on 27 August 2003, the Appellants raised the issue of res judicata and issue estoppel arising out of the dismissal of the first application and, in the alternative, denied breach of contract and contended that any dismissal, if it occurred, was fair.
8. The matter was listed for a pre-hearing review/strike out hearing on 10 December 2003. The Tribunal decided to strike out the application on the basis of res judicata both as regards the claim for unfair dismissal and in relation to the new claim under the Disability Discrimination Act 1995. In the alternative, the Tribunal found that it was not appropriate in the interests of justice to proceed any further when the Respondent had not attended the hearing and there was no explanation for her non-attendance. The Respondent applied for a review of that decision on the grounds that she had no notice of the hearing. She was successful and the original decision dismissing her application was set aside. A fresh hearing of the preliminary issue was fixed for a date in April 2004, but because of the Respondent's illness, she applied successfully for a postponement. A further hearing, fixed for 28 June 2004, was again adjourned because the Respondent was pregnant and the matter was finally determined at a hearing held in Leeds on 20 January 2005.
9. The Tribunal determined that the dismissal of the first premature application did not operate as a cause of action estoppel to bar a second claim for the unfair dismissal since the factual position at the time of the first claim was different in one important respect from the factual position at the time the second claim was presented, namely that at the time of the first claim, the Respondent had not resigned and her employment continued. With regard to the second issue of issue estoppel in relation to the disability discrimination claim, the Tribunal in paragraph 21 said this:

"21. No issue has been determined between the Claimant and the Respondent save for the issue of the Claimant's entitlement to bring an unfair dismissal claim before her employment came to an end. The principle of Henderson v Henderson does not therefore apply to the Claimant since she cannot be criticised for failing to bring a disability discrimination claim at a time that she failed to bring an unfair dismissal claim. It follows that there is no bar to the Claimant bringing a claim under the Disability Discrimination Act 1995".

10. We therefore turn to consider these issues again. For ease of reference, we shall refer to the original dismissal on 1 August 2003 at the Hepworth tribunal and the decision of the hearing held on 20 January 2005, the subject of this appeal, as the Hildebrand decision.
11. With regard to the unfair dismissal claim, Mr Daniel submits that the doctrine of cause of action estoppel prevents the Respondent from pursuing this course of action and those supplementary allegations it was based on, because those matters have been dealt with and adjudicated upon by the Hepworth tribunal when they dismissed the application on 5 August. He argues that the principle of cause of action estoppel is not restricted to cases where the tribunal has given a reasoned decision on the issues of fact and law, but will apply where a tribunal has made any judicial decision in the exercise of its powers. He argues that the factual matrix as between the first and second applications did not change, the circumstances giving rise to the Respondent's decision to resign had all occurred by the time of the first application and, indeed, her intention to resign was fully set out and articulated within that first application and therefore the Hepworth tribunal's decision to dismiss was based upon a series of facts which had not altered by the time of the second application and he therefore contends the Respondent should be barred from raising those complaints again by virtue of the dismissal of the earlier complaint.
12. The principle of cause of action estoppel is well set out in the speech of Lord Keith in Arnold v National Westminster Bank plc [1991] AC 93 at page 104D.

"Cause of action estoppel arises where the cause of action in the later proceedings is identical to that in the earlier proceedings; the latter having been between the same parties or their privies and having involved the same subject matter. In such a case the bar is absolute in relation to all points decided unless fraud or collusion is alleged, such as to justify setting aside the earlier judgment. The discovery of new factual matter which could not have been found out by reasonable diligence for use in the earlier proceedings does not, according to the law of England, permit the latter to be re-opened".

13. Mr Daniel further argues that the application of this principle to employment law has been recognised by both this Court and the Court of Appeal: see Barber v Staffordshire County Council [1996] IRLR 209. In that case, the Court of Appeal held that the principles of cause of action or issue estoppel applied to an Industrial Tribunal application which was dismissed by a tribunal following its withdrawal by the Applicant, holding that the order dismissing the complaint upon withdrawal was a judicial decision, rather than an administrative act. At paragraph 33, Neill LJ adopted the passage from the speech of Lord Keith, to which we have made reference.
14. Mr Daniel contends that the Hepworth tribunal made a judicial decision for the purposes of the doctrine of cause of action estoppel. He referred us to the Employment Tribunal's (Constitution and Rules of Procedure) Regulation 2001 which were the current rules which governed the first application and the Hepworth tribunal's decision. Regulation 2, the interpretation regulation, provides that "decision" in relation to a tribunal includes a determination under Rule 6. Schedule 1, Rule 6 provides that:

"(i) A tribunal may at any time before the hearing of an Originating Application, on the application of a party made by Notice to the Secretary or of its own motion, herein determine any issue relating to the entitlement of any party to bring or contest the proceedings to which the Originating Application relates".

15. Has there therefore been a judicial decision, order or judgment made by the Hepworth tribunal which acts as an absolute bar to the second application being instituted? Although the Respondent has not appeared or been represented, we have identified two problems with the Appellant's argument in this area. Firstly, and although the point does not seem to have been taken up by the Tribunal, we are not satisfied that there has been a judicial decision in this case for the purposes of the operation of the doctrine. Regulation 1(3) of the 2001 Regulation provides that:

"(3) Where the Secretary is of the opinion that the originating application does not seek or on the facts stated therein cannot entitle the applicant to a relief which a tribunal has power to give, he may give notice to that effect to the applicant stating the reasons for his opinion and informing him that the application will not be registered unless he states in writing that he wishes to proceed with it.

(4) An application in respect of which such a notice has been given shall not be treated as having been received for the purpose of rule 2 unless the applicant intimates in writing to the Secretary that he wishes to proceed with it; and upon receipt of such an intimation the Secretary shall proceed in accordance with that rule".

16. It seems to us, in this case, that the Hepworth tribunal were in reality doing no more than carrying out the administrative function in refusing to accept the application that should have been more properly performed by the Tribunal Secretary carrying out duties as set out in Regulation 1.
17. Secondly, and more importantly, we agree with the Tribunal that the cause of action estoppel can only truly operate where the same factual background or matrix is in existence, both at a time when the original proceedings were determined and when it is sought to issue the fresh application. We note from paragraph 17 of the Tribunal Decision that Mr Daniel agreed with the suggestion made by the Tribunal that a lapse of one year would certainly allow a fresh claim to be presented without objection because of the new facts that would have emerged within the supervening 12 months. He argues that, in this case, no new facts emerged since the circumstances giving rise to the Respondent's decision to dismiss and the decision itself were well set out in the first application. However, the fact remains, as pointed out by the Tribunal, that at the time that the first claim was presented, she had not resigned and her employment continued. The fact therefore of her resignation was an important new factor which could not be adjudicated upon by the first tribunal. In the Arnold case, Lord Keith spoke of both causes of action involving "the same subject matter". In our view, the Respondent's resignation rendered the subject matter different in the second application to the first. To put it another way, there was no cause of action in the first claim. There was a cause of action in the second.
18. We turn to the second aspect of the appeal, namely the submission that since the Disability Discrimination Act claim could have been raised in the first proceedings, a plea of res judicata applies to that issue, preventing it from being raised in the second proceedings. The well known principle set out in Henderson appears at page 115 in the judgment of Sir James Wigram VC.

"…when I say, that where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter, which might have been brought forward as part of the subject in contest, but which, was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time".

The rule in Henderson has been held to apply as much as to Employment Tribunals as to claims in the Civil Court: see Barber and also Divine-Bortey v London Borough of Brent [1998] IRLR 525. In the latter case, Simon Brown LJ at paragraph 32 said thus:

"In the first place, it must be recognised that the Henderson v Henderson rule applies in full measure in ordinary courts irrespective of whether the person being estopped was or was not legally represented in the earlier proceedings. Secondly, the EAT's own jurisprudence clearly establishes that a point not taken by a party in the Industrial Tribunal cannot be taken on appeal to the EAT even though the fear to take it originally was due to the lack of skill of experience of the party's advocate and even though the omission could have been rectified by the Industrial Tribunal taking the point itself."

Later, at paragraph 36, he said thus:

"It must be recognised, however, that in the Henderson v Henderson context, abuse of process involves no particular condemnation of the person estopped. The rule applies even if the point was omitted by inadvertence or even accident".

Later, in the judgment of Potter LJ, he speaks of the "need for special circumstances if the full rigour of the rule is to be alleviated", although Mr Daniel contends that, in this case, both the inexperience or lack of legal knowledge of the Respondent and/or the Tribunal's failure to spot that there might be a Disability Discrimination Act claim within the first application cannot amount to special circumstances.

19. The rule in Henderson was considered by the House of Lords in Johnson v Gore Wood [2001] 1 AER 481 where at page 498J, Lord Bingham dealt with the rule thus:

"But Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in early proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a parry is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the parry against whom it is sought to claim. While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a parry's conduct is an abuse than to ask whether the conduct is an abuse and then, if it is to ask whether the abuse is excused or justified by special circumstances. Properly applied, and whatever the legitimacy of its descent, the rule has in my view a valuable part to play in protecting the interests of justice."

20. It seems to us that the Tribunal were dealing with this issue in paragraph 19 of their Decision.

"19. The first Tribunal, chaired by Mr Hepworth in this case, which dismissed the Claimant's application, gave no consideration to the claim brought by the Claimant, other than to decide that it could not be pursued because she had not resigned her employment. It is possible that at that time further investigation might have revealed that the claim was not one of unfair dismissal but a discrimination claim based on the trigger event which the Claimant said promoted her concern to present a claim within three months of the grievance hearings which had taken place in March of that year".

21. In our view, the Tribunal were correct in emphasising that the focus of the Hepworth decision was very much concerned with the premature application for unfair dismissal and it is clear that no consideration was given to the other allegations that the Respondent had set out in her application. Moreover, the underlying public interest resulting from the rule in Henderson which Mr Daniel set out as being 1) that there should be finality in litigation; 2) that a party should not be twice vexed in the same matter and 3) to avoid the impression of subjecting a defendant unnecessarily to successive actions clearly could not apply in this case since if the second application in respect of unfair dismissal was going to proceed, the Appellants would be facing continuing litigation in respect of the facts of the Respondent's employment.
22. Accordingly, for the reasons that we have set out, we would dismiss this appeal, and thus allow the second application filed on 11 August 2003 to be pursued by the Respondent.