United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant

MR P GREEN (Of Counsel) Instructed by: Messrs Rollingsons Solicitors Lonsdale Chambers 27 Chancery Lane London WC2A 1NG

For the First Respondent	MR C PIGRAM (Of Counsel) Instructed by: Messrs Capstick-Dale & Partners Solicitors 224 Main Road Gidea Park Romford Essex RM2 5HA
For the Second Respondent	MR I HALE (Of Counsel) Instructed by: Kier Group plc Tempsford Hall Sandy Beds SG19 2BD

SUMMARY

Practice and Procedure

Rule 13(2) unless order – ET rule that claim is struck out for non-compliance and that they have no power to consider relief from sanction. Appeal upheld, strike out order on (conditional) judgment which is reviewable – underlying order capable of extension of time under Rule 10(2)(a).


 


HIS HONOUR JUDGE PETER CLARK

1. This appeal, brought by the Claimants against a judgment of an Employment Tribunal sitting at London (Central) (under the Chairmanship of Mr TP Ryan) promulgated with Reasons on 23 March 2005, raises a question as to the construction, meaning and effect of an order made under Rule 13(2) of the Employment Tribunal Rules of Procedure 2004 ("the Rules").

Background

2. At the relevant time both Claimants were employed by the Second Respondent, Caxton Islington Ltd ("Caxton"), on a cleaning contract made between Caxton and St Joseph's School. Ms Uyanwu-Odu was also employed by Caxton to work ten hours per week on a different cleaning contract which they held in relation to Lambo Community Centre.
3. On about 31 March 2004 the St Joseph's cleaning contract ended and a new contract was awarded to the First Respondent, Schools Offices Services Ltd ("SOS"). There then followed a familiar tale. Caxton asserted that the employment of these Claimants in relation to St Joseph's was transferred to SOS under the provisions of the Transfer of Undertakings (Protection of Employment) Regulations 1981 ("TUPE"), SOS asserted that the Regulations did not apply and that the Claimants were not and never had been employed by them.
4. Accordingly in May 2004 each Claimant presented an Originating Application (Form ET1) to the Employment Tribunal, complaining of unfair dismissal. The Particulars of complaint in each ET1 briefly recounted the position outlined above. Thus, on the face of it, this was a battle between the Two Respondents as to who was liable to the Claimants and for what.
5. The Forms ET1 gave as the Claimants' representative Mr Schouwenberg, a Regional Organiser of the GMB union. Each Respondent having entered Notices of Appearance (Forms ET3) resisting the complaints on the basis set out above, a Case Management hearing took place before a Chairman, Mr D A Pearl, sitting alone, on 17 December 2004. The Claimants did not appear and were not represented. Counsel appeared on behalf of the Respondents, Mr Pigram for SOS, Mr Hare for Caxton.
6. On 22 December 2004 the Chairman issued a document setting out the orders which he made following that hearing. The orders relevant to this appeal appear under the headings Documents and Witness Statements. I should set them out in full.

"Documents

9 It is further ordered that on or before 25 January 2005 the parties shall prepare and supply to the other parties a list of all documents which are or have been in their respective possession, custody or power relating to the matters in issue in these proceedings.

10 I remind the parties that all relevant documents must be disclosed, whether they are helpful to or adverse to a party's case."

Witness Statements

12 It is ordered that on or before 22 February 2005 there shall be simultaneous exchange of witness statements by each party providing to the others one copy of a witness statement for each of the witnesses, including the Claimants, that party intends to call to give evidence at the Tribunal hearing. It is ordered that the witnesses shall give their evidence-in-chief by means of such statements and six copies of each statement must be brought to the Tribunal. The Claimants are expected to deal with remedy in their statements.

13 I draw the parties' attention to the purpose of all witness statements. They are to reduce or eliminate the need for oral examination-in-chief of witnesses and should, therefore, be as full as possible."

A copy of that order was sent to and received by Mr Schouwenberg.

7. By the end of February 2005 both Caxton and SOS had written to the Tribunal complaining that the Claimants had not complied with either the disclosure or witness orders made by Mr Pearl.
8. The case returned to that Chairman who, on 4 March, made the following material orders on his own initiative, pursuant to Rules 10(2) and 13(2) of the Rules.

"2 The Claimants shall each by 4.00pm on 10 March 2005 serve upon the representatives of the Respondents a list of all documents upon which they seek to rely at the Hearing in their possession, custody or power which are relevant to the claim, together with a copy of the said documents.

3 The Claimants shall each by 4.00 pm on 10 March 2005 serve upon the representatives of the Respondents the Claimants' witness statements (whether or not the previously ordered exchange of witness statements happens simultaneously or not).

4 That unless the above two orders numbered 2 and 3 are complied with, the claims shall be struck out on the date of non-compliance without further consideration of the proceedings or the need to give notice under rule 19 or hold a pre-hearing review or Hearing."

9. The case was listed for substantive hearing over three days beginning on 14 March. On the morning of 10 March Mr Schouwenberg faxed the Employment Tribunal a letter dated 9 March 2005, stating that on 9 March he had been informed by Caxton's representative that the Tribunal had written to him, "threatening to strike out the Claimants' case." He said that he had received no letter from the Tribunal and later went on to say this:

"I have made the Second Respondent's representative aware that we shall not be supplying any documentation and that the Claimant's will not be making statements over and above what they stated in the IT1."

10. On this basis the case came before the Ryan Tribunal on 14 March.

The Ryan Tribunal Judgment

11. It was submitted to the Tribunal by Mr Pigram on behalf of SOS that the Claimants' claims stood struck out following Mr Pearl's orders of 4 March and the Ryan Tribunal had no power to do anything about it. Implicit, from the Tribunal's Reasons, was the proposition that the Claims were struck out without more under Rule 13(2), the Claimants having failed to comply with the unless orders made as to disclosure and witness statements on 4 March.
12. Mr Schouwenberg, appearing on behalf of the Claimant's on 14 March, contended that he never received a copy of the order of 4 March. The Tribunal accepted that assertion as a matter of fact, but noted that he was aware of its effect via the Second Respondent, Caxton's representative on 9 March.
13. Having considered various provisions in the Rules the Tribunal accepted Mr Pigram's submission. They held (Reasons paragraph 21) that on their construction of the Rules they had no further function in the proceedings. Thus their Judgment simply reads, so far as is material:

"The claims of these Claimants were struck out at 4.00 pm on 10 March 2005."

No order was made as to costs.

14. The question is whether the 4 March order operated so as to preclude the Ryan Tribunal from further considering these claims.

The Rules

15. The 2004 Rules have radically altered the landscape of Employment Tribunal litigation. Parties and their advisers would be well advised to study the new regime with care. Failure to comply with orders and directions of the Tribunal are now more likely to be met with the draconian sanction of a strike out than hitherto. I considered the Rules relating to strike-out for non-payment of a deposit under Rule 20(4) in some detail in Sodexho v Gibbons (UKEAT 318-320/05/TM. 29 July 2005); my attention has also been drawn to the judgment of Rimer J in Onwuka v Spherian et al (UKEAT 0843.0853/05/RN. 26 November 2004). The debate revolves around Tribunal orders and judgments and the power of tribunals to vary those orders or review those judgments.
16. For present purposes, it seems to us, the material framework within the Rules is as follows:
17. Rule 10 gives to a Chairman the general power to manage proceedings. By Rule 10(1) he may at any time, either on the application of a party or on his own initiative, make orders including those listed in Rule 10(2). Material to the present case are the following examples of orders under Rule 10(2); an order for disclosure (Rule 10(2)(d)) and for witness statements to be prepared and exchanged (Rule 10(2)(s)). Such orders were made in this case by Mr Pearl in writing on 22 December 2004 and again on 4 March 2005.
18. If a party does not comply with such orders in the time specified sanctions are available to the Tribunal under Rule 13. In the event of non-compliance a Chairman or Tribunal may, at a hearing, strike out the whole or part of a claim (Rule 13(1)). Rule 13(2) goes further; it provides:

"An order may also provide that unless the order is complied with, the claim…shall be struck out on the date of non-compliance without further consideration of the proceedings or the need to give notice under Rule 19 or hold a pre-hearing review or Hearing".

Mr Pearl made such an unless order on 4 March.

19. Pausing there, the provisions of Rule 13(2) may be compared with the requirement under Rule 19 for notice to a party before he is struck out under Rule 18(7); or the need for a strike out order under Rule 20(4) following non-payment of a deposit. On its face, Rule 13(2) provides for an automatic strike-out, without more, in the event of a party's non-compliance with an order of the type listed under Rule 10(2). We see no reason to take Rule 13(2) at anything other than face value. However, the question remains as to whether the Tribunal is functus officio following expiry of the time for compliance with the order to which the conditional Rule 13(2) sanction is appended.
20. Mr Green, now instructed on behalf of the Claimants, seeks to raise a number of arguments in this appeal, some of which it is submitted on behalf of the Respondents, were not put below and ought not to be permitted for the first time on appeal. We felt able, as a preliminary point, to cut through that debate and focus on the real point in this appeal, which was before the Tribunal below.
21. First, we are satisfied that paragraphs 2 and 3 of Mr Pearl's order of 4 March fall within the definition of an order contained in Rule 28(1)(b) which provides:

"An order which may be issued in relation to interim matters and it will require a person to do or not to do something."

That is the definition of an order as opposed to a judgment.

22. The issue of construction raised in this appeal concerns the status of a Rule 13(2) unless order. Mr Green submits that it is, albeit conditional, a judgment within the meaning of Rule 28(1)(a) which provides:

"A judgment which is a final determination of the proceedings, or of a particular issue in those proceedings. It may include an award of compensation, a declaration or recommendation and it may also include orders for costs, preparation time, or waste of costs."

23. If the party against whom the order to do something fails to comply within the time permitted then the conditional Rule 13(2) order takes effect. The proceedings are finally determined. That is, he submits, a judgment. We note that amongst the non-exhaustive list of judgments in Rule 28(1)(a) is included costs orders. Thus an order may be a judgment.
24. The Respondents challenged that construction. It is submitted that the Rule 13(2) element is part of an order made by the Chairman, not being a judgment.
25. Having considered the submissions developed in oral argument we prefer Mr Green's construction. In our view a Rule 13(2) unless order amounts to a conditional judgment. It becomes a final determination of the proceedings if the party fails to comply with the underlying order.
26. Consequently, it is reviewable under Rule 34. The Employment Tribunal is not functus. It has power to review a strike out order taking effect under Rule 13(2) in the same way as strike out orders made under Rule 18(7) or Rule 20(4).
27. However, if we are wrong in that construction and the Respondents are right that an unless order made under Rule 13(2) is an order and not a judgment within the meaning of Rule 28(1), then we accept Mr Green's alternative submission that such order is susceptible of variation under Rule 10(2)(n), notwithstanding that the time for compliance has expired, see Rule 10(2)(e). We reject the Respondent's contention that Rule 10(2)(e) does not apply to an order under Rule 13(2) in circumstances where Rule 13(2) is not mentioned as an exception, along with the exhaustive list of rules there mentioned.
28. Putting the two together, our final analysis is this: following expiry of the time for compliance the strike out sanction takes effect. Thereafter it is open to the party in default to apply for a review of the strike out judgment, coupled with an application to extend time for compliance with the underlying order requiring him to do or not to do something; here, serve a list of documents and witness statements.
29. A further point explored in argument is what happens where there is an issue between the parties as to whether or not the party against whom the order has been made has in fact complied with it.
30. It is submitted on behalf of the Claimants that the Ryan Tribunal did not find non-compliance with the 4 March order, or if it did implicitly, it was wrong to do so. Whilst it may be arguable that paragraph 2 of the order of 4 March was complied with by Mr Schouwenberg stating that no documents were relied upon by the Claimants; reliance on the short Particulars of complaint in the form IT1, arguably did not meet the requirement for witness statements, particularly where it was made clear at paragraph 12 of the 22 December order that such witness statement should deal with remedy. That is not dealt with in the forms ET1. However, we do not find it necessary to resolve the question of compliance at this stage and have not heard full argument on that question.
31. But it raises an interesting point in relation to the Ryan Tribunal's holding that it was functus officio. How then is an issue as to whether or not a party has complied with an unless order made under Rule 13(2) to be resolved? It can only be, we think, at a subsequent Tribunal hearing, as Mr Hare, although not Mr Pigram, accepts.
32. It follows, in our judgment, that the Ryan Tribunal was wrong to conclude that it was functus officio once the strike out provision contained in Rule 13(2) bit as a result of the Claimants' non-compliance, assumed for this purpose, with Mr Pearl's order of 4 March. It was open to the Tribunal, either on application by the Claimants or on its own initiative at the hearing on 14 March to consider reviewing the strike out order and extending the time for compliance with paragraphs 2 and 3 of the order of 4 March. We note that Rule 34(3)(b) gives, as one ground for review, the instance of a party who does not receive notice of the proceedings leading to the decision, here the order of 4 March. The potential basis for varying paragraphs 2 and 3 is a material change in circumstances (see Goldman Sachs v Montali [2002] ICR 1251; considered in Sodexho, paragraph 74 and see also per Rimer J in Onwuka, paragraph 35), namely that the Claimant's representative had not received the order of 4 March , as the Ryan Tribunal found as fact.
33. Having identified an error of law in the Ryan Tribunal's approach, the question now is what should be done with this appeal? Ought it to be remitted to an Employment Tribunal Chairman for further consideration in the light of this judgment or ought we ourselves to exercise our powers under section 35(1) of the Employment Tribunal Act 1996 and decide whether or not Mr Pearl's order of 4 March be reviewed and/or varied so as to permit compliance by the Claimants? And indeed to determine whether or not there was non–compliance with the original order.
34. On those questions we shall now hear Counsel.
35. Case remitted to the same Tribunal, if practicable, for consideration of any application by the Claimants for review of the strike out order of 4 March made within fourteen days of the seal date of this order and for variation of orders made on 4 March, under Rules 34-36 and 10-12 of the Employment Tribunal Rules of Procedure 2004.