United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	No appearance or representation by or on behalf of the Appellant
For the First Respondents	MR P LEWIS (of Counsel) Instructed by: Plymouth CAB Cobourg House 32 Mayflower Street Plymouth Devon, PL1 1QX
For the Second Respondent	No appearance or representation by or on behalf of the Second Respondent
For the Third Respondent	MS N SETHI (of Counsel) Instructed by: Messrs S Ali & Co Solicitors 133 A City Road London EC1V 1JB
For the Fourth Respondent	No appearance or representation by or on behalf of the Fourth Respondent


 


SUMMARY

PRACTICE AND PROCEDURE: Appearance/response

A company director who signed a form ET3 on behalf of his company could not complain that he personally had been unaware of the proceedings.

THE HONOURABLE MR JUSTICE BEAN

1. In the light of the fact that Mr Koyunco has still not attended we are going to deal with both the appeal by Mr Aldogan, in theory classified as a cross-appeal, and the appeal by Mr Koyunco.
2. Ms Sarah Primmer was employed in the Rendezvous Café in Plymouth from November 2004 until 18 October 2006. By a form ET1 presented to the Employment Tribunal on 15 January 2007 she alleged unfair dismissal, various financial claims, such as failure to pay wages and holiday money, and sex discrimination in the form of sexual harassment. She named three Respondents: Mayflower Kebabs Ltd, and two individuals; Mr Kemal Koyunco and Mr Malik Aldogan. Companies House documentation available to us appears to indicate that Mr Aldogan was the Director and Mr Koyunco the Company Secretary of Mayflower.
3. Mayflower was the only one of the three Respondents to enter a form ET3 with a response to claim. It did not do so immediately. The form ET1 sent to them at 89 Mayflower Street, Plymouth in January 2007 was returned to the sender, namely the regional office of the Employment Tribunal. However, on 24 January 2007 a form ET3 in the name of Mayflower Kebabs Ltd was lodged with the Employment Tribunal. In paragraph 1.1 the name of the respondent company or organisation was given as Mayflower Kebabs Ltd and the contact name given was Mr Malik. The address given was 109 Bevan Court, Cruikshank Street, London WC1 X9HE. That was, and still is, according to his witness statement in this Appeal Tribunal, Mr Malik Aldogan's home address.
4. Under the heading, "Employment Details" it was asserted that Ms Primmer's employment with Mayflower Kebabs Ltd ended on 18 June 2006 and the following is added:

"We are writing to inform you that we ceased trading on 18 June 2006. After this date new company would continue (name of company Laxtone Ltd)."

5. Under, "Other Information" we found the following:

"We are pleased to inform you that Sarah Ayres not working for us at that period e.g. after18 June 2006 .

We do not know why she gave our company name that she was working.

Our company been strike off after18 June 2006 and stopped trading on the same day."

This form was signed by Mr Malik Aldogan.

6. By letter of 27 February 2007, on the headed notepaper of Mayflower Kebabs Ltd, 89 Mayflower Street, Plymouth, a letter was written by the company to the regional office of the Employment Tribunals as follows:

"Further to your letter dated 20 February 2007, we are pleased to inform you that our company on the process of strike off [sic this clearly means is in the process of strike-off] and we already closed the business on 18 June 2006. Our company did not have any employee named Ms S Primmer just we had Ms Sarah Ayres.

Also we would like to inform you that Ms Sarah Ayres left our company on 18 June 2006 (enclosed copy of her P45) for your kind attention.

If you require further information please do not hesitate to contact us."

7. The letter, like Mayflower's ET3 was signed by Mr Malik Aldogan. The P45 enclosed was indeed in the name of Sarah Ayres and gave the date of leaving as 18 June 2006 and the employer's name was Mayflower Kebabs Ltd, 89 Mayflower Street, Plymouth. That was the response of Mayflower Kebabs Ltd. They did not, however, take any further part in the Employment Tribunal proceedings.
8. Mr Koyunco, the second Respondent before the Tribunal, took no part at all, so he was debarred from appearing at the Tribunal hearing as a party and did not do so in any capacity. He has, however, appealed to this Appeal Tribunal against the Tribunal's decision of which more later.
9. The third named Respondent was Mr Malik Aldogan who, as we have said, signed the ET3 on behalf of Mayflower as well as the letter of 27 February. He did not enter a form ET3 in his own right. Following receipt of the ET3 in the name of Mayflower Ms Primmer's solicitors sought, and were granted, permission to add a fourth Respondent before the Tribunal, namely Laxtone Ltd, the company which had allegedly taken over the business of the café on 18 June 2006, exactly four months before Ms Primmer's employment was terminated.
10. The case came before an Employment Tribunal consisting of Mrs Christensen, Chairman, and two lay members, at Exeter on 25 June 2007. The Claimant represented herself. Mayflower did not appear. The remaining Respondents, Mr Koyunco, Mr Aldogan and Laxtone, did not enter a response and did not appear. The Tribunal had a witness statement from the Claimant and accepted her evidence. In her witness statement she said that she was not clear as to who her employer was at the time of her dismissal. The Tribunal therefore gave judgment jointly and severally against all four respondents. They awarded compensation for unfair dismissal and made certain other relatively minor awards for failure to pay wages and holiday pay and for breach of contract. The total of all these awards including unfair dismissal was £4,118.57. They also made an award for sex discrimination. The last sentence of the judgment reads:

"The claimant has suffered sexual harassment and is entitled to be compensated in relation to her injury to feelings in the sum of £13,500."

11. As to that last point, the witness statement of the Claimant, which was before the Tribunal, stated that during her employment up to the time of her dismissal she had been regularly sexually harassed by her employers and she gives details of that. She does not name the perpetrators. The six month period of harassment runs from mid-April to 18 October 2006.
12. The two companies against whom this judgment was given have not sought to appeal. It is apparent from the correspondence to which we have already referred that Mayflower is no longer trading and it is possible that the company has been dissolved. As to Laxtone Ltd we have no information.
13. Mr Koyunco entered notice of appeal. Mr Malik Aldogan seeks to cross-appeal. Since neither gentleman entered a form ET3 before the Employment Tribunal and indeed took no active part before the Tribunal, paragraph 16 of the Employment Appeal Tribunal Practice Direction 2008 applies. It reads as follows, omitting the sections dealing with extensions of time:

"16.1 If the appellant in a case did not present a response (ET3) to the Employment Tribunal ... the Notice of Appeal must include particulars directed to the following issues, namely whether:

16.1.1 there is a good excuse for failing to present a response (ET3) ... and

16.1.2 there is a reasonably arguable defence to the claim (ET1).

16.2 In order to satisfy the EAT on these issues, the appellant must lodge at the EAT, together with the Notice of Appeal, a witness statement explaining in detail the circumstances in which there has been a failure to serve a response (ET3) in time … the reason for that failure and the facts and matters relied upon for contesting the claim (ET1) on the merits. There should be exhibited to the witness statement all relevant documents and a completed draft response (ET3)."

14. Mr Aldogan made a witness statement dated 6 March 2008 and also was present on this appeal today. Mr Koyunco made a witness statement received by the Employment Appeal Tribunal on 2 October 2007 but dated 30 July 2007. In the case of each of these witness statements the statement is typed in English, signed by the witness, and contains at the end a signed statement from an employee of the relevant solicitors (different ones in each case) saying that the writer has truly and faithfully interpreted the above statement from English to Turkish.
15. It may be that both Mr Aldogan and Mr Koyunco would have had reasonably arguable defences at least to the claims for unfair dismissal and the minor financial claims on the basis that they were not the employer. A Company Director and Company Secretary are not personally liable, even in the case of a small company, to pay compensation for unfair dismissal to someone employed by the company. We say "it may be" because the identity of Ms Primmer's employer remains in doubt.
16. It is apparent from the Employment Tribunal's reasons that Ms Primmer had no written contract of employment, no statement of terms and conditions, and payment was in cash. There might have been an issue as to whether the true employer in the concluding four months of the employment, and thus the time of dismissal, was indeed Laxtone Ltd or whether she was being employed personally by one or more individuals.
17. The two individual Appellants would, however, particularly Mr Aldogan, have had more difficulty in persuading us that they had a reasonably arguable defence to the claim of sexual harassment. Mr Aldogan does not mention the subject in his witness statement. Mr Koyunco does, but in somewhat perfunctory terms. We should make it clear, lest either of these gentlemen feel a sense of unfairness about this, that it is possible for a director of a company or owner of a business to be liable to pay compensation for sexual harassment without the individual concerned having said or done anything indecent or otherwise harassing himself. A claimant can succeed against such a person on the basis that there was a culture of sexism and harassment prevalent in a small business which the owner did nothing to stamp out. But all this is, as we see, academic because in our judgment both Mr Aldogan and Mr Koyunco fall at the first fence of the Practice Direction. They have not satisfied us in either case that there was a good excuse for failing to present a response to the claim before the Tribunal.
18. In the unusual circumstances of this case we invited Mr Aldogan to give evidence on a particular point before us on oath. His witness statement of 6 March 2008 states at paragraph 17:

"I was not even aware that Ms Primmer had issued proceedings at the tribunal until 7^th August 2007."

19. This is, on the face of it, extremely difficult to reconcile with the fact that he signed Mayflower's form ET3, his name was given as the contact name, and his home address in London was given as the home address. The form is handwritten. There is nothing to indicate that it is somebody else's handwriting and the letter of 27 February 2007 on behalf of Mayflower Kebabs Ltd and on their headed notepaper, is signed by him. On the face of it, therefore, the statement in paragraph 17 that he was unaware of any Tribunal proceedings until 7 August 2007, a critical point as regards paragraph 16 of the EAT Practice Direction, is plainly untrue.
20. Mr Aldogan's explanation of it before us is that he simply signed what Mr Kemal Koyunco told him to sign. In the case of the letter of 27 February 2007 it was written by Mayflower's bookkeeper/accountant, a gentleman called Sinan who is, we think, referred to in paragraph 10 of his witness statement. Mr Koyunco told him, Mr Aldogan, to go to the bookkeeper's offices just to sign it. His understanding of what he was signing was that it was simply a letter for what purpose it is not clear, to say that the person concerned was no longer working at the café and he was unaware that proceedings had been issued against him personally.
21. We very much doubt whether this is true, but even if it is true it does not, in our judgment, satisfy paragraph 16.1.1 of the EAT Practice Direction. Mr Aldogan was not a helpless foreigner with no access to any advice, faced with legal proceedings which he did not understand. He was a 50 per cent shareholder in Mayflower Kebabs Ltd and its sole Director though with Mr Koyunco as Company Secretary. He had access to expert advice which, as is often the case with small businesses, took the form of accountants rather than lawyers. If he chose to rely on them to explain documents to him he must be bound by the consequences. It would be utterly destructive of the Employment Tribunal system if company directors in this position were to be able to lie low, take technical points such as those taken in the letter of 27 February, and then argue afterwards that they were simply signing what their bookkeepers, accountants, or anybody else told them to sign and actually had no knowledge that the Tribunal proceedings were underway.
22. Likewise with form ET3. If Mr Aldogan, when he completed and signed the form ET3 on behalf of Mayflower, did not understand what he was doing he should have asked somebody who did. Accordingly, we find that there was no good excuse, in his own case, for failing to present a response form ET3 to the Tribunal and his cross-appeal must be dismissed.
23. As to Mr Koyunco the position is even clearer. His appeal and his witness statement give no grounds for saying that there was any good excuse for failing to present form ET3. In paragraph 10 of his witness statement he wrote:

"I have not thus far been involved in these proceedings although I knew about them. So I have not completed the Response to Ms Primmer's action, which she began on 16 January of this year. Nor did I attend the hearing in June of this year [that is 2007]. The reason I have not been involved is that when I received the documents sent from the Employment Tribunal at Plymouth I handed them to the company's accountants Gebryil Accounting. I gave them to a partner at Gebryil. The reason I did this is that I have a poor understanding of English, my first language is Turkish and I am heavily reliant on persons who are fluent in English when it comes to formal documents. He took the documents and assured me that everything would be all right. I trusted Gebryil Accounting completely."

24. We repeat, in relation to Mr Koyunco, the same observations as those in relation to Mr Aldogan. Mr Koyunco was the company secretary and a 50 per cent shareholder. He too had access to advice. He too cannot be heard to say now that he wishes he had defended the Employment Tribunal claim.
25. It is right to say that in the last few days there has been correspondence between a firm of solicitors formally acting for Mr Koyunco and him. They wrote to him on 16 June 2008, a letter which on the face of it would plainly be covered by solicitor/client privilege. However, Mr Koyunco has written to the Employment Appeal Tribunal confirming that he has no problem with Mr Aldogan's legal representatives using that letter as evidence. His handwritten letter and the solicitor's letter indicate that Mr Koyunco is now willing to say that Mr Aldogan was never the boss of Ms Primmer and:

"He had no control over her hours of work, duties, wages or generally. He had no say with regard to her terms and conditions of employment. Mr Aldogan had no authority to dismiss Ms Primmer or any other staff."

26. Similarly, the solicitor's letter of 16 June 2008 includes this paragraph:

"Your instructions have now changed whereby, in accordance with your instructions, the only other person that could have been responsible for the Rendezvous Café would have been yourself and your Company Director, Mr Huseyin, from Laxtone Ltd. You confirmed to me that Mr Huseyin is nowhere to be found and he is not a party to these proceedings, and as such the only other person will either be yourself or Mr Malik Aldogan. Given the fact that you are now fully exonerating Mr Aldogan from these proceedings you have now accepted that you were the owner and the employer for Ms Primmer."

27. The writer goes on to say that he and his firm are now professionally embarrassed and will be unable to represent Mr Koyunco further.
28. We were told this morning that Mr Aldogan spoke to Mr Koyunco at about 10.15 am and said to him that he still needed to come to the Employment Appeal Tribunal and Mr Koyunco said he would get a taxi and be here in 20 minutes. Shortly afterwards he confirmed that he had left his shop in Tottenham. At 11.15 am we were told that Mr Koyunco spoke again to Mr Aldogan on the telephone and said that he had not yet left the shop but was locking up and was on his way. He had not appeared by 11.30 am so we started the case. He has still not appeared now and it is 1.15 pm.
29. We are not disposed to treat the recent letters from Mr Koyunco, and to him from his solicitors, as demonstrating that there was good reason for Mr Aldogan not to present a response ET3 to the Employment Tribunal. They certainly do not assist Mr Koyunco in his appeal. For the reasons we have given both the appeal and the cross-appeal are dismissed.