United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Mr I Steel (a non-practising Solicitor) Citation PLC Caledonian House Tatton Street Knutsford Cheshire WA16 6AG
For the Respondent	No appearance or representation by or on behalf of the Respondent


 


SUMMARY

Practice and Procedure – Case management; Bias, misconduct and procedural irregularity

Appeal against a decision of the Employment Tribunal to refuse to make a disclosure order against a third party. The central issue was whether the decision ought to have been taken by the Chairman alone or by the full tribunal and, if the latter, whether in fact the Chairman had consulted the lay members. The EAT found that the facts were unclear and they were not satisfied that the decision had been wrongly made. Even if it had, the EAT considered that the overriding objective entitled them to make the decision rather than to remit. They would not have required the document to be disclosed. The appeal was dismissed.


 


THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

1. This is an appeal against the case management decision in which the Tribunal refused to require the curriculum vitae of the Claimant in the Tribunal proceedings to be produced by a third party, namely Ms Sheila Talbot, who is the managing director of a company in which the Claimant obtained employment following the termination of his contract with the Respondent.

Background

2. The background is this, putting it relatively briefly. The Claimant before the Employment Tribunal, who is the Respondent to this appeal (although he did not appear or make any representations to us) was employed by Magenta Security Services as a business development manager. His employment commenced on 4 October 2005 and was terminated on 23 December 2005. On 7 February 2006 he presented a claim to a Tribunal alleging damages for breach of contract and unlawful deduction of wages. The value of the claim is a little under £1500. He alleges that he was snot paid his salary for the month of December.
3. The Company, the Appellants before us, resisted the claim fully. The basis of the defence is that the Respondents believe that during the month of December, the Claimant was working for a third party or for himself, but in any event was not performing the services which he was contractually bound to perform to the benefit of the Company. So he was not entitled to pay.
4. The case was listed for a hearing on 10 May 2006. It was to be heard before a full Tribunal. Prior to that date, the Appellant company had sought to obtain further information about precisely what the Claimant had been doing in December. They discovered, and indeed the Claimant accepted, that he had been abroad to Poland at some point, although he said it was a private week-end visit with his wife. The Appellant also contended that they had had a telephone conversation with a Mr Lee Morris, an employee of Nortec Training Limited, which was the company to which Mr Wilkinson went after he left the Appellant company. Mr Morris indicated that Mr Wilkinson had been employed by Nortec prior to his terminating the contract with the Appellant. Mr Morris is alleged to have said that he joined Nortec on 19 December, and by then Mr Wilkinson was already working for Nortec, but not at the UK office.
5. Mr Steel, who represented the Appellants, both below and before us, wrote a letter to Ms Sheila Talbot, the managing director of Nortec, on 13 April 2006. He made a number of requests for information and there appears to have been a telephone conversation on 26 April and a formal reply from Ms Talbot on that date. She said that Mr Wilkinson had stated in his CV that he was a self-employed consultant before joining Nortec. She confirmed that Mr Wilkinson did not commence work with Nortec or work on any project with, we take it, certain related organisations until 9 January 2006.
6. The Appellants then applied to the Employment Tribunal for a witness order, requiring Mr Morris to attend the hearing and to produce a copy of the CV sent by Mr Wilkinson to Nortec. It is not clear to us why it was thought that Mr Morris, as a fellow employee, would have that CV. We would have thought that he is not entitled to it, in fact, under the data protection legislation. But the order was made by a Tribunal Chairman on 8 May. (That was a different Chairman to the Chairman who heard the case on 10 May).
7. When the hearing commenced on 10 May, Mr Morris did not appear. Mr Steel appeared for the Company and the Claimant, Mr Wilkinson, appeared in person. It appears that what then happened was that there was first of all a discussion between Mr Steel and the Chairman concerning a letter in which Mr Steel had threatened that costs would be sought against the Claimant unless certain information was disclosed. The gist of that discussion apparently was whether Mr Steel, as a non-practising solicitor acting for the company, would be entitled to pursue a claim for costs. Nothing turns on that, save that Mr Steel has said before us that relations between him and the Chairman became somewhat tense and it may be that it started with this discussion. Subsequently an application was made by Mr Steel for an adjournment, after he had consulted his clients, because of the absence of Mr Morris.
8. To anticipate a little, we have, in the course of this appeal, had the benefit of an affidavit sworn by Mr Steel as to precisely what occurred at the Tribunal, and also the observations of the Chairman and the two lay members on that affidavit. Although the Chairman cannot remember the Tribunal retiring to consider the application for an adjournment, one of the lay members and the Appellant both say that that is what happened. It appears that the Tribunal did adjourn and, according to the Appellant today, they came back and said that they were adjourning the proceedings because of the failure of Mr Morris to appear. They also indicated that they were, of their own motion, requiring Ms Talbot to attend and to produce the contract of employment that had been made between the Claimant and Nortec.
9. Mr Steel says that he then made two further applications. First, he asked that Nortec disclose the address of Mr Morris. We assume that the reason why Mr Morris was not present is that they had not been able to serve him with the witness order because they could not discover where he was. (We should add that by then he had left the employment of Nortec). He also asked for an order that Ms Talbot produce the CV; this is the CV which Mr Morris had been required to produce but (which I think is now common ground) he almost certainly would not have now, even if he had ever had it. It seems to us that he ought not to have had it, and he presumably would not have retained it once he had left the company.
10. Although there is some dispute about precisely how these applications were dealt with, both the Appellant and the Chairman accept in their statements before us that these two applications were dealt with by the Chairman. It is right to say, however, that one of the lay members, in her observations, recalled that the issue of the CV had arisen when the members had retired and it was considered that it was not relevant, not least because Ms Talbot had already answered questions about it in her reply to the letter from Mr Steel. The Tribunal rejected both applications. I say the Tribunal, though in fact there is a dispute as to whether it was the Chairman acting alone, or whether it was the full panel that had made that decision, and that is the principal issue arising in this case.
11. At that hearing, Mr Steel asked that the Chairman should recount in the formal order of proceedings that these two applications had been made and had been refused, and indeed, that is what the order states.
12. There was then an appeal to this Tribunal against these two decisions. The appeal was received on 27 June 2006. It was sifted by HHJ Serota QC. The appeal had been lodged on three principal grounds. In respect of each of the orders it was said that the order had been unlawfully reached, because the Chairman had made the decision without consultation with the lay members; and in respect of each it was said that the decision was perverse; and one which the Tribunal could not properly reach in the circumstances. There was also a complaint that the Chairman had not, at that stage, given reasons for the orders although Mr Steel frankly accepts that no request for reasons was made. HHJ Serota QC allowed the case to go ahead, but only in respect of the grounds which alleged that there had been a failure of the Chairman to consult the lay members. He did that having obtained, by fax it appears, some observations from the Chairman. We have not seen those, but as we have indicated, fuller observations came from him at a later stage in any event.
13. By letter dated 18 July 2006, the Appellant made two further applications to the EAT. First, they sought a review, which they state was under rule 33 of the Employment Appeal Tribunal Rules, of HHJ Serota QC's decision that there was no arguable point of law in relation to the other grounds of appeal. That was an error. Rule 33 is not used to deal with cases where, on a sift, grounds of appeal have not been allowed to go forward. There is either a fresh notice of appeal put in, which is then the subject of a fresh sift under rule 3(8), or there is an application for an oral hearing, under rule 3(10).
14. There was also an application to amend the notice of appeal. It appears that no amended notice was actually supplied at that time, but it was indicated that the basis of the amendment would be that the full hearing of the case should not return to the same Chairman because he had been influenced by bias, and it was suggested that this may have been the reason why he refused the two applications in the first place. This letter was considered by HHJ McMullen QC. He ordered that the complaints relating to bias or improper conduct should be put in the form of a sworn affidavit and that the Chairman and members should be asked for their comments thereafter. That is what occurred. That order was dated 25 August 2006.
15. The amended notice of appeal was dated 10 September 2006 (It is not entirely clear when it was received in this Tribunal). The basis of it was that it was improper for the Employment Tribunal to consider the possibility of the same Chairman hearing the full appeal as had heard the case on 10 May. The matter was then considered again by HHJ McMullen QC after the responses from the Tribunal dealing with the affidavit of Mr Steel had been sent back to the EAT. He requested that, in the light of these observations, the Appellant should make it clear whether they were continuing to assert the grounds which they had originally advanced.
16. As to the second appeal – and we take that to mean the allegation of bias in relation to the possibility that the case may go back to the same Chairman – he pointed out that the matter was academic. The Chairman had not been listed to hear the case, and there had to be a finding of bias against him in the first appeal in any event.
17. So the case came before us today following a letter from the Appellant in which they indicated which grounds they now wish to pursue, having received an Order from HHJ McMullen QC that they should specify what these were. They have indicated that they do not wish to pursue the appeal relating to the order on Nortec to produce Mr Lee Morris's address, because they now have that and have been able to serve the Witness Order. Nor do they wish to pursue any bias claim. In any event, that, it seems to us, has been clearly denied them by the order of HHJ McMullen QC.
18. What they do wish to pursue is the short point of whether Ms Talbot should be required to produce a copy of Mr Wilkinson's CV. As we have said, the only ground on which HHJ Serota QC gave leave to argue that point was that the decision had been taken by the Chairman without consultation with the members. Mr Steel, before us, has sought to maintain that, independently of that ground, his understanding was that he could also argue that the decision in any event was a perverse one. His understanding was that the letter of 18 July (which had asked for a review of HHJ Serota QC's decision) had been considered by HHJ McMullen QC, who had not in terms indicated that this was a ground that could not be pursued. As we have indicated, he sought a review under a rule which was quite inappropriate. Rule 33 does not deal with these issues. Strictly we do not think that the issue of perversity arises before us, but we will in due course deal very briefly with that point.

The rules

19. We turn to consider the relevant rules. The power to case manage proceedings is a broad one. Rule 10 of the Employment Tribunal Rules provides as follows, insofar as material:

"10. Subject to the following rules, the chairman may at any time either on the application of a party or on his own initiative make an order in relation to any matter which appears to him to be appropriate…."

Then there is an extensive list in para 2 of relevant orders that can be made and they include, as one might expect, the disclosure of documents or information. We also note that that obligation to disclose can of course extend to persons who are not parties to the Tribunal case.

20. There are then a number of Tribunal rules dealing with different kinds of hearings. Rule 14 identifies the four different types of hearing: a case management discussion (under rule 17), a pre-hearing review (under rule 18), a hearing (under rule 26), or a review hearing (under rules 33 or 36).
21. Rule 17, dealing with case management hearings, provides in terms that they will be heard by a Chairman only. The kinds of orders that may be considered are those set out in rule 10. Rule 18 concerns pre-hearing reviews, at which certain decisions may be taken including, for example, striking out all or parts of a claim or a response. They too are, typically, to be heard by a Chairman only, but there are circumstances set out in para (3) where the review can be conducted by a full Tribunal. It is not necessary to set out what those circumstances are. Where that is the case, then rule 18(4) provides in terms that:

"18 (4) If an order is made under paragraph (3), any reference to a chairman in relation to a pre-hearing review shall be read as a reference to a tribunal."

Rule 18(2)(b) provides that:

"18 (2) At a pre-hearing review the chairman may carry out a preliminary consideration of the proceedings and he may—

…

(b) issue any order in accordance with rule 10, or do anything else which may be done at a case management discussion;"

22. It follows, therefore, from rule 18(2)(b) read with 18(4), that where a full Tribunal is convened then it is for that body, rather than the Chairman alone, to decide any case management issue which may arise in the course of the pre-hearing review itself.
23. Rules 26 and 27 deal with full hearings. Rule 27(7) says this:

"27 (7) At a Hearing a tribunal may exercise any powers which may be exercised by a chairman under these rules."

24. Accordingly, although a Chairman has very wide powers to make case management decisions, where a full Tribunal has been convened (and that is whether it is pre-hearing review or a full hearing) then the full Tribunal must make the relevant decision in relation to any case management issues that arise. The power conferred by rule 10, allowing a Chairman to make an order "at any time" does not mean that the Chairman can, in the course of proceedings where the full panel has been convened simply take decisions independently of the lay members. Of course, as is arguably the position here, there may be circumstances where a case is adjourned or postponed and where case management decisions are taken by the Chairman thereafter on the basis that the full panel is no longer sitting. This may often be a desirable way of dealing with matters particularly, for example, where the decision to adjourn is taken before any evidence is heard.
25. In other circumstances, it may be that the formal decision to adjourn is not taken until after case management applications have been made and considered. The Chairman may think that it is desirable that the lay members should be party to case management decisions which may affect the future conduct of the trial, particularly in circumstances where the lay members have already been involved in hearing part of the case.
26. In our judgment, it is a matter for the Chairman's discretion as to how these matters may be dealt with. But whichever decision is taken, the position must be made clear to the parties and they must be in a position to know whom they are addressing. If the intention is that the proceedings being heard by the panel should be determined, and that the Chairman should act alone in exercising case management powers, then the lay members are redundant at that point. If they remain with the Chairman, they do so simply as observers and not as part of the Tribunal itself. We would suggest that in general it is desirable in those circumstances that they physically leave the Tribunal room so that the position is clear beyond doubt as far as the parties are concerned.
27. We have to try and determine from the affidavit we have received from Mr Steel and from the, to some extent conflicting, statements of the Chairman and the lay members precisely what occurred in this case. There is considerable uncertainty about that. We are not at all critical of the fact that the Chairman and lay members do not speak with one voice; on the contrary, they have clearly done their best to recall matters as carefully as they can and it is not surprising that, some six months or more after the event, with very many cases going through the hands of the Chairman in particular, and possibly the lay members also, that they do not have a very clear recollection of precisely what occurred.
28. We put weight on what Mr Steel says in his affidavit and indeed what he confirmed before us this morning, which in fact appears to us to be broadly consistent with the Chairman's observations. What Mr Steel said was that the application for an adjournment was made, the Tribunal did then retire and make its decision and they came back and announced that there was going to be an adjournment. It was after that that the two applications were made for this further disclosure. Mr Steel understood that he was addressing the Tribunal as a whole, although it does appear from what he said that there had been by then a statement from the Chairman that the proceedings were adjourned. If that is right then, although we would accept that the Chairman perhaps ought to have made matters clearer, strictly the panel thereafter was no longer sitting as a full panel, and the Chairman was then dealing with the issue as a case management matter, which he alone could determine.
29. Even if the position were that the full Tribunal was still charged with this matter on the basis that there had not, at that stage, been a formal decision adjourning the proceedings, then it certainly appears from the evidence of one of the lay members that there had in fact been a discussion as to whether the CV should be required and the decision had been taken that it should not. On that basis too, assuming that those were the facts, it seems to us that there is nothing inconsistent with that. It is true that the Chairman does not recall the Tribunal retiring but it seems that he was wrong about that because both the lay member and the Appellant are clear that the Tribunal did. (It may be that the observations of the Chairman were intended merely to indicate that there was no retiring in relation to the two particular applications which are the subject of this appeal, rather than in respect of the application to adjourn. It is not entirely clear.)
30. We think that where an allegation of this kind is made then we ought not to find that there has been an error of law in circumstances where the facts are so ambiguous and where in fact, on the Appellant's own case, they appear to us to be more consistent with the proceedings having been adjourned and then the case management discussion taking place, than with the Tribunal still hearing the case as a full panel. We would however emphasise that the position should be made transparently clear to the parties in these circumstances.
31. Assuming we are wrong and the decision was unlawfully taken by the Chairman alone, we think that this is in any event a case where it would be quite disproportionate and inconsistent with the overriding objective to send this matter back for the Tribunal to hear the issue again. We have to say that if the matter had come before us we would not have made this particular order. We agree with the observations of the Chairman on this point. In truth, we think that the CV adds very little if anything to the Respondent's case. They have not asked for the Claimant himself to produce it. It is alleged that it indicates that he said he was self-employed when he made his application to Nortec. Whether the CV was drawn up before or after his employment ceased we do not know. Moreover, Ms Talbot can be cross-examined on her comments about what the CV said.
32. The crucial question it seems to us is that when the job with Nortec began (and there is the contract of employment which has to be produced to show that, and we think that the CV adds very little to this case) even if Mr Wilkinson had said that he was self-employed at the time, that would not take matters very much further.
33. We should add that we are not entirely clear how the point is being put by the Respondents in any event. In general, the mere fact that the employee is in breach of contract does not entitle the employer to withhold pay, although there may be a counter-claim from damages resulting from the breach. It may be, however, that the employers wish to assert that there was no service at all provided during December but quite what assistance the CV will provide on that issue we are not very clear.
34. It follows, of course, that even if it were open to Mr Steel to contend that the decision of the Tribunal (or the Chairman, whichever it was) if properly reached was perverse – and we do not think it is – it is doomed to fail. We think, as HHJ Serota QC did when initially dealing with this sift, that the decision taken by the Chairman was manifestly one which was within his discretion and Judge Serota did not, as we have indicated, allow the case to go forward on that basis. We think he was right to do so and, assuming the issue is still alive before us, we reach the same decision.
35. So, for these rather lengthy reasons, in a case where the facts are not as clear as one might like, we dismiss this appeal.
36. We should add that it is a surprise to us that this case is generating so much litigation. The sums involved really are rather small, and we would have thought it highly desirable that the parties get together and seek to resolve the issue because ultimately it appears that the costs are likely to end up being well in excess of the sums which are in issue between the parties. However, that is for the parties themselves to consider.