United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR S T TURNER (The Appellant in Person)
For the Respondent	MR M PALMER (OF COUNSEL) Instructed by: Birmingham City Council Legal Services Department Ingleby House 11-14 Cannon Street Birmingham B2 5EN


 


SUMMARY

PRACTICE & PROCEDURE – Bias, misconduct and procedural irregularity

Chairman decided an issue which was not properly before him.


 


THE HONOURABLE MR JUSTICE UNDERHILL

1. The Claimant in this case, a Senior Technical Officer employed by Birmingham City Council, claims that he has been for many years underpaid sums due to him by way of car user allowance, that is the allowance paid by the Council for the use by him of his own car in the course of his work. His claim was dismissed by an Employment Tribunal Chairman sitting in Birmingham on 4 December 2006.
2. The issues on which the appeal turns are in fact quite narrow, but in order to get to them it is necessary to set out some wider background. The Council's car user allowance policy has been a source of serious contention for over a decade. Two attempted unilateral changes imposed in 1993 and in 1998 are at the heart of the problem. For present purposes I need only state the issues in very broad outline. Since I do not have very full information about the scheme and the relevant disputes, that may involve some inaccuracies on my part; but that will not matter for present purposes. The two features of the scheme which are material are, first, that different rates of allowance are paid depending on the engine size of the car, and, secondly, that different rates of allowance are paid to "casual car users" and to "essential car users". As to the former feature, there were until 1993 three bands, but in October that year the Council unilaterally abolished the top band: that led to considerable protest and some litigation. As to the latter feature, employees are classified as either casual or essential car users depending on the extent of their car use. Importantly, there was until 1997 a subdivision of essential car users into those who only became entitled to the "ECU [i.e. essential car user] rate" if they had an annual mileage of over 3,000 miles, and those who were entitled to that rate irrespective of mileage. In 1997 the Council decided to abolish the latter subcategory. It set out to write to all employees who enjoyed ECU-regardless-of-mileage status, offering them a variation of their terms of employment; and those who did not accept that variation were dismissed and offered reinstatement with effect from 1 March 1998. (As will appear, however, some of the relevant employees fell through the net and this procedure was not applied to them). I am not entirely clear whether the effect of the 1998 change was that all essential car users were only paid the ECU rate for miles over the first 3,000 miles, being paid the casual rate up to that point; or whether they were paid it on all miles driven but only if they did a minimum of 3,000 miles. I could possibly have got to the bottom of that issue by careful questioning of the Claimant, who appears before me in person, and Mr Palmer of Counsel, who appears for the Council; but the full documents are not before me and Mr Palmer has only very limited instructions, and the point does not fortunately need to be resolved for present purposes. Either way it was a detrimental change. The 1998 change led to even more protest than the 1993 change and to major litigation in the Employment Tribunal, resulting ultimately in all or most of the employees in question being restored to their former status by agreement or by Tribunal order. In the aftermath of that victory, employees were emboldened to revive the objection to the abolition of the top band in 1993. Some 19 employees, said however to represent de jure or de facto a much larger group, have brought proceedings in the Birmingham County Court under the name of Wetherill & others. Their case involved a number of tricky issues, including whether those who had accepted settlements or been reinstated as a result of the earlier Tribunal proceedings following the 1998 change had thereby to be taken to have accepted the 1993 changes. In 2006 Judge McKenna found in the employees' favour. An appeal to the Court of Appeal has been heard and the result is expected shortly.
3. The Claimant is an essential car user who until 1998 enjoyed essential car user status irrespective of mileage. He was accordingly in principle affected by the 1998 changes but, as - to anticipate - the Chairman found, he was one of those who fell through the net of the Council's attempts to agree or impose the necessary contractual changes. Nevertheless, the new policy was applied to him. There may be an issue as to whether it had any practical impact on him for the first few years. The Chairman understood that it did not: he understood the position to be that essential car users who drove more than 3,000 miles continued to be paid the ECU rate on all miles driven, but, as I say above, it is not entirely clear that that understanding is correct. In any event the Claimant did on any view suffer from the change in 2003 because in that year his mileage dropped below 3,000 miles. The Chairman understood that any loss which the Claimant suffered in respect of that year (or, if there was any, in respect of previous years) was subsequently made good to him by the Council. I shall return to this point below. The Claimant was of course affected throughout the period from 1993 by the abolition of the top band.
4. The Claimant commenced the present proceedings in the Employment Tribunal in July 2004. His ET1 is exceedingly unspecific. It is ambiguous as to whether it included an unfair dismissal claim, but the substantive claim pleaded is in the following terms:

"I am an essential car user as part of my contract, terms and conditions. This has only altered when the Council made a financial deduction, then claimed my terms had been altered unilaterally some time ago. Although they admit I was never notified of this change to my contract of employment, they still have not provided the 'new contract' and refuse to deal with the matter under the grievance procedure quoting an unfair contract term as the reason."

In principle that could have been a reference to the 1993 changes or the 1998 changes or both; apparently formal particularisation was never sought. However, the Council plainly understood it to be a reference only to the 1993 changes, that is to the abolition of the top band. That is the issue which it addresses in its grounds of resistance. It understood it to be a contractual claim, in the sense that it depended on the terms of the contract; but of course in the absence of a dismissal such a claim could not be brought as a contractual claim as such in the Employment Tribunal, and the Claimant's claim would have to be understood, which it can be without difficulty, as a claim for unlawful deductions contrary to Part 2 of the Employment Rights Act 1996.

5. The Council in its grounds of resistance raised essentially three defences: (1) that there was no contractual entitlement to the top band - that was a matter of construction of the relative collective agreement contained in the so-called 'Purple Book'; (2) that the Claimant had accepted any variation by conduct; and (3) that the change had in any event been rendered effective by the dismissal and re-engagement process in March 1998, the Council's understanding at that point being that the Claimant had been one of those to whom that process applied.
6. There followed a series of case management conferences. It is clear that the parties continued to understand the claim to relate wholly or mainly to the abolition of the top band. That is clear not least from the fact that there was considerable discussion of whether the case should be stayed pending the outcome of the Wetherill proceedings, in which it was hoped that that issue would be resolved in a way which could be applied also to the Claimant's case: see in particular a case management order of 22 June 2005 made by Mrs Street. There was indeed a stay for some time for that reason, but on 29 September 2006 a Chairman, Mr Beard, ordered the hearing of a preliminary issue to be heard by a full Tribunal on 4 December 2006. The issues were defined as follows: (a) did the Respondent dismiss the Claimant within the meaning of Section 95(1) (a) of the Employment Rights Act 1996, and if so what was the effective date of termination, and (b), if the Respondent did so dismiss the Claimant, did the Claimant present his complaint of unfair dismissal within a reasonable period after the expiration of three months and can the Claimant show that it was not reasonably practicable for his complaint to be presented before the end of three months after the effective date of termination? Those issues would, of course, have been material if the claim did indeed include a claim for unfair dismissal, but they would also have been material to the defence raised by the Council to any claim under Part 2 of the 1996 Act: see point 3 of the defences which I have identified above.
7. A hearing accordingly proceeded on 4 December 2006, although for reasons which are unexplained it was not before a full Tribunal but before a Chairman alone, Mr Rostant. He decided that the Claimant had never been dismissed. Though that of course meant that the Claimant could not bring a claim for unfair dismissal, and thus claim reinstatement on pre-1998 terms, it also meant that no claim could be made under the Tribunal's contractual jurisdiction. In substance, however, it was nevertheless a finding in the Claimant's favour because it disposed of the defence that he was bound by the result of the dismissal and re-engagement exercise carried out in 1998. Indeed the principal factual enquiry carried out by the Chairman, which occupies the bulk of his Reasons, was an inquiry into whether or not the Claimant had fallen through the net of the 1998 process, he submitting that he had never received any of the relevant correspondence and the Council contending that he had. However, despite having made that finding in his favour, the Chairman went on to dismiss the Claimant's claim in its entirety on the basis (a) that he had suffered no loss (more accurately perhaps, this should have been expressed as being that he had suffered no underpayment) and (b), in the alternative, that even if he had suffered any loss his claim was out of time.
8. With regard to the second ground, this seems, with respect to the Chairman, to be plainly wrong in law, as Mr Palmer concedes. If the Claimant had been suffering an underpayment of the type alleged, such underpayment would have been continuing at the date of the claim, and he would accordingly have been entitled to rely on section 23(3) (b) of the 1996 Act relating to "a series of deductions".
9. However, that error would not be material if the Chairman's primary ground was correct. The decision that the Claimant had suffered no loss was based on a factual finding: see paragraph 3.16 of the Chairman's Reasons, which is in the following terms:

"Because of other reasons connected with the scheme the claimant's entitlement to essential car user allowance was restored and backdated from tax year 1997/1998 to the date of the claim, the claimant has suffered no financial loss of any sort as a result of the actions of the Council."

Mr Turner tells me that that is a misunderstanding of the evidence. He accepts that there was evidence from the Council's witness, Mr Phillips, that his ECU status had been restored by the Council following the blip in 2003; and it may be, though this remains unclear for the reasons I have identified above, that it follows that he had suffered no loss attributable to the 1998 change. But the underpayment as a result of the abolition of the top band in 1993 was continuing, and the evidence of Mr Phillips did not suggest that that had ever been put right.

10. Mr Palmer submits that, right or wrong, the finding by the Chairman was a finding of fact which is unchallengeable in this Tribunal. I am not so sure. If the finding was based in a confusion in the Chairman's mind - which would hardly have been surprising given the complex factual background - between the effects of the 1993 and the 1998 changes and did not reflect the evidence, then it could have been reviewed on ordinary principles. There are real grounds for believing that this is what happened. It is striking that the Chairman does not deal with the events of 1993 at all, and that may reflect the focus of the Council's evidence before him. However, I accept that, although I strongly suspect on the material and submissions before me that that is indeed what happened, I am not in a position to make a definite finding to that effect. I do not have a good record of what evidence was before the Chairman. Mr Turner was acting in person before the Chairman, as he is before me. He is, with all respect to him, not able to give me a particularly full and coherent account of what passed before the Chairman. He has, again understandably as a litigant in person, not taken any steps to agree a note of evidence with the Council or to obtain the Chairman's notes. He did this morning produce helpfully the short witness statements of Mr Phillips, and of himself and his witness, but these shed little light on how the matter was put orally before the Chairman. Mr Palmer is likewise unable to help. He did not appear below, where the Council was represented by Ms Khan of its Legal Department. Although Mr Palmer has spoken to her and attempted to find out as much as he can about what happened, both her note and her recollection are limited. He did not even have, until Mr Turner produced them, copies of the witness statements; nor does he, or indeed I, have the bundle of documents that was before the Chairman. Accordingly, it would not be possible for me to make any finding based on perversity or confusion on the part of the Chairman.
11. On a strict view, that might be thought to be the Claimant's problem and not the Council's: it is for him to show proper grounds for overturning the decision below and if the full material is not before this Tribunal he is unable to do so. However, it is necessary to feed in a further factor. On the face of it the issue which the Chairman decided, and on which Mr Turner now appeals, was not an issue which was before him at all. It was not one of the issues specified for the preliminary hearing in Mr Beard's case management order. That by itself would not be fatal, if the parties had explicitly, and with a clear understanding of the implications, agreed to extend the issues which he was being asked to decide. But Mr Turner says that he did not do so. He says that he was very puzzled, when he eventually received the decision, as to the points which it covered. And Mr Palmer, for the reasons I have already given, has been unable to discover anything useful from Ms Khan. At this stage the lack of information about what happened in the hearing counts against the Council. On the face of it, there was a serious procedural irregularity in that the Chairman decided a point which was not before him and of which the parties had had no notice; and it is for the Council, if it seeks to show that that is not the whole story, to give me the material that does so.
12. One course that would be open to me in these unsatisfactory circumstances would be to adjourn the appeal in order to obtain both full information about what happened procedurally and the best possible summary of the evidence on the basis of which the Chairman proceeded. But neither party favoured this course, which would only add to costs and complexity. In the circumstances, I believe that the right course is for me therefore now to allow the appeal as regards the dismissal of the Claimant's claim for unlawful deductions under Part 2 of the 1996 Act. I do so on the basis of procedural irregularity, that is that the Chairman decided the point in circumstances where it was not properly before him. That may be, if the full facts were ever known, unfair to the Chairman, but no doubt his back is broad. In the wider sense, I am satisfied that it is not unfair to the parties. All the signs are, albeit that I am not in a position to make a definitive finding to this effect, that something went wrong in the way in which the case was presented to the Chairman, with the result that, whatever the procedural position, he reached findings which do not do justice to the real issues raised by these proceedings.
13. The result is that the claim under Part 2 of the 1996 Act remains to be decided by the Employment Tribunal. For the avoidance of doubt, however, I do not set aside that part of the Chairman's Order which dismissed any contractual claim, in the strict sense of a claim under the Extension of Jurisdiction Order: the Tribunal had no jurisdiction to entertain such a claim since there had been no dismissal. Nor are the findings which the Tribunal made on the questions in fact specified by Mr Beard impugned: that is to say, there has been a binding determination that the Claimant was not dismissed by the Council in March 1998. I am of course hopeful that it will not be necessary for there to be a further hearing in the Employment Tribunal. It may be that the decision of the Court of Appeal in the Wetherill proceedings will establish that the Claimant has a good claim which the Council is prepared to meet without further litigation; but there may well be reasons why that is not the case, in which case the Tribunal will have to fix a hearing and determine it in the usual way. Given the history of the matter, I think it would be imprudent for the Tribunal to do so without a case management conference and careful directions, so that the parties are clear what the issues are and what evidence is necessary; but that must be a matter ultimately for the Tribunal and not for me.
14. I should perhaps end by saying that Mr Palmer was in an awkward position, both because of the limited information available to him about the previous history and because of the overall difficulties of the case, and he has discharged his duties to his client and to this Tribunal with conspicuous care and fairness.