United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MRS HEATHER BARHAM (Representative)
For the Respondent	MR RICHARD HIGNETT (of Counsel) Instructed by: Messrs epo lawyers 52 High Street Sutton Coldfield West Midlands, B72 1UQ


 


SUMMARY

STATUTORY DISCIPLINE AND GRIEVANCE PROCEDURES

Whether applicable

Whether claims for redundancy payment, holiday pay and unpaid wages are justiciable in the Employment Tribunal without complying with the statutory grievance procedure. They are; the first two claims are excluded from the statutory grievance procedure by reg. 6(5) 2004 D.R. Regs; the unpaid wages (and pay in lieu of notice) claims are covered by Schedule 3 jurisdiction under the 1994 Extension Order (breach of contract claims after termination of employment). S.32 Employment Act 2002 applies only to Schedule 4 claims.


 


HIS HONOUR JUDGE PETER CLARK

1. The statutory dispute resolution procedures introduced by the Employment Act 2002 (the 2002 Act) read with the Employment Act 2002 (Dispute Resolution) Regulations 2004 (the 2004 Regulations) with effect from 1 October 2004 were not universally well received. So much so that Parliament repealed the relevant provisions of the 2002 Act, that is ss. 29-33 and Schedules 2-4 to that Act, by s.1 of the Employment Act 2008 with effect from 6 April 2009. And so that unhappy legislative experiment has now been consigned to the dustbin of history. Or has it?
2. As Mr Hignett, appearing for the Respondent to this appeal, Mr Andy Murdoch, helpfully points out, para. 3 of the Employment Act 2008 (Commencement No 1) Order 2008 sets out certain relevant transitional provisions. Thus, where the relevant action about which a claimant complains occurred wholly before 6 April 2009, the old procedures continue to apply.
3. That may catch the three Claimants before the Birmingham Employment Tribunal Mesdames Allen, Barham and Palmer, now Appellants before me with the leave of HHJ McMullen QC on the paper sift, who wish to challenge the pre-acceptance ruling of Employment Judge McCarry rejecting their claims for redundancy payments, holiday pay and unpaid wages, by letters from the Employment Tribunal Secretariat dated 4 and 11 June 2009.
4. By their Forms ET1, lodged with that Tribunal on 28 May 2009 the Claimants contend that their employment with Mr Murdoch, alternatively a lady described as Rebecca?, ended abruptly on 3 March 2009. All three Claimants were employed as bar staff at the Heathway public house in Birmingham. I have been shown the Forms P60 issued by their employer, whoever that may be, of which more later, which give their leaving date as 2 March 2009. Nothing turns on that one day's difference.
5. In addition to the three heads of claim which I have mentioned, the Claimants also complain of unfair dismissal. That claim appears to have been accepted.
6. Mrs Barham has acted as spokesperson for the Claimants, who seek the assistance of the Employment Tribunal to compensate them for the sudden loss of their jobs when the public house ceased trading. It has apparently since arisen, phoenix-like from the ashes, with a new licensee, Rebecca? They have done their very best, through Mrs Barham, to seek advice and present their claims effectively. On 12 May 2009 Mrs Barham wrote to Mr Murdoch in these terms:

"Dear Andy

I'm sorry its come to this but you have left me no choice, I've tried phoning you and getting nowhere. I have been advised by my solicitor to put this in writing and send it recorded delivery, which is proof of me writing to you.

I have been informed that you are responsible for our 1 week's wage that we worked also our week in hand and any holiday pay that by law we are entitled to.

We no (sic) the Heathway went into liquidation so you said, but you have other property you haven't gone bankrupt. Becky is responsible for our redundancy and unfair dismissal.

I can't understand why we have been treated like this. We don't deserve it. We have done nothing wrong. It feels like we have been thrown into a gutter. We have put a lot of hours and years into working there sometimes to keep the pub going, so I hope you could explain why we have been treated this way. In writing please. In writing this letter we hope we get some response, we don't want to take it any further but you are leaving us no choice.

I await your reply with anticipation.

Heather Barham"

7. She referred to that letter in the Claimants' Form ET1. At section 3.5, in answer to the question "Have you put your complaints in writing to the respondent?", she answered "yes" and referred to her letter of 12 May.
8. That proved to be the Claimants' undoing. Because although the Employment Tribunal letters of 4 and 11 June gave no reasons for rejecting the claims for redundancy pay, holiday pay and unpaid wages, I infer, as Mr Hignett invites me to do, that the Employment Judge had in mind s. 32(3) of the 2002 Act, which provides:

"An employee shall not present a complaint to an employment tribunal under a jurisdiction to which this section applies (jurisdictions listed in Schedule 4) if -

(a) it concerns a matter in relation to which the requirement in paragraph 6 or 9 of Schedule 2 has been complied with, and

(b) less than 28 days have passed since the day on which the requirement was complied with."

9. Game, set and match to the Respondent. The grievance letter of 12 May, which could stand as a Step 1 letter, was sent to the Respondent less than 28 days before the Form ET1 was lodged on 28 May. Or is it?
10. It is my understanding that the view has been taken generally by Employment Judges, by reference to s.32(1), that jurisdiction listed in Schedule 4, other than unfair dismissal claims relying on a dismissal within the meaning of s.95(1) (a) and (b), but not (c) of the Employment Rights Act 1996 (ERA) (see reg. 2 of the 2004 Regulations) require that the statutory grievance procedure is followed and thus s.32(3) is engaged.
11. True it is that the three relevant jurisdictions appear in Schedule 4 to the 2002 Act and by sub-section 1 s.32 applies to all the jurisdictions in Schedule 4, which also contains unfair dismissal complaints under s.111 ERA. I have earlier referred to the 28 day rule in s.32(3), which I have presumed was applied by the Employment Judge in this case. However, reading on in the section, s.32(7)(a) provides that the Secretary of State may, for the purposes of the section, by regulations make provision about the application of the procedures set out in Part 2 of Schedule 2. Part 2 of that Schedule deals with grievance procedures; in particular paras. 6 and 9 of Part 2, Schedule 2 require the employee to set out her grievance in writing and to send it to the employer (the Step 1 letter) under, respectively, the standard and modified procedures. Pausing there, the standard procedure applies pre-dismissal, the modified procedure post-dismissal.
12. The Regulations made under s.32(7) are the 2004 Regulations. Reg. 6 is headed 'Application of the grievance procedures'. The general rule under reg. 6(1) is that the grievance procedures apply, in accordance with paras. (2) – (7) of reg. 6, to complaints listed under a jurisdiction in Schedule 3 or 4 to the 2002 Act. I shall return later to one particular jurisdiction listed in Schedule 3 (but not Schedule 4), that is a claim for breach of employment contract and termination under the Employment Tribunal Extension of Jurisdiction Order 1994 (the 1994 Order). My focus is on reg. 6(5), which provides:

"Neither of the grievance procedures applies where the grievance is that the employer has dismissed … the employee."

13. Because, as I have earlier observed, under reg. 2, the interpretation provision, 'dismissed' has the meaning given to it by s.95(1)(a) but not s.95(1)(c) ERA, the position is that the statutory grievance procedure requirements are engaged in the case of constructive dismissal, but not actual dismissal. Hence, in the present case, the Claimants' claims of unfair dismissal have been accepted, it not being suggested by Mr Hignett that the circumstances of the termination of these Claimants' employment was other than an actual dismissal under s.95(1)(a) ERA.
14. With that legislative background in mind, and after pre-reading the papers in this appeal, I formulated two questions for the parties to consider and make submissions on at this hearing. Mr Hignett has helpfully provided written submissions on those questions in advance of the hearing. The Claimants having been told by telephone by the case-handler of those questions (the postal system being currently less than reliable) appear to have been bemused. That is no criticism of the Claimants, rather, Parliament's original notion that these arcane procedural hurdles might be readily understood by ordinary working people to whom legal assistance is not provided in the Employment Tribunal system by the state.
15. The questions I posed were as follows:

(1) Whether the statutory grievance procedure requirement in s.32(3) of the 2002 Act is disapplied in relation to the claims for redundancy payments and holiday pay (under the Working Time Regulations 1998) by virtue of reg. 6(5) of the 2004 Regulations; and

(2) whether the claims for unpaid wages, week in hand and notice pay come within the breach of contract jurisdiction under the 1994 Order and thus fall within Schedule 3 but not Schedule 4 to the 2002 Act and are therefore not subject to s.32 of that Act by virtue of s32(1).

16. Those questions have formed the framework for this hearing. With a little prompting from the bench, Mrs Barham submitted that the answer to both questions was yes. Mr Hignett was unable to argue against that answer to the second question. However, he strongly argues that the answer to the first question, relating to the claims for redundancy payment and unpaid holiday pay, was no. He submitted, in his helpful supplementary skeleton argument, that the following points supported the submission that the rejected heads of claim in this case fell outside the exclusion effected by reg. 6(5) of the 2004 Regulations, submitting that jurisdictions in Schedule 4 require a grievance prior to a claim, that claims for redundancy payments and holiday pay under the Working Time Regulations are jurisdictions contained within Schedule 4, that the wording of reg. 6(5) as interpreted by the case law in this area is plain: it applies to dismissal related complaints only; and finally, that the case law does not support the notion that ancillary claims which may flow from a dismissal fall within the ambit of reg. 6(5).
17. The cases to which he has referred me, all in the Employment Appeal Tribunal, are two decisions of Elias P, Lawrence v HM Prison Service (UKEAT/0630/06. 26 March 2007) and Otaiku v Rotherham Primary Care NHS Trust (UKEAT/0253/07. 3 July 2007) and the later judgment of Bean J in Maley v Royal Mail Group Ltd (UKEAT/0232/08. 2 July 2008).
18. Thus the question, it seems to me, is whether any or all of the three rejected claims fall within the rubric of reg. 6(5); is the Claimants' grievance that the employer has dismissed them, such that the statutory grievance procedure requirements are disapplied?

Redundancy Payment

19. The law relating to the right to a redundancy payment, dating back to the Redundancy Payments Act 1965, is presently contained in Part XI ERA.
20. The right to a redundancy payment arises, under s.135(1)(a), where an employee is dismissed by the employer by reason of redundancy and dismissal for this purpose is defined in s.136(1) in the same terms as it is for unfair dismissal in s.95(1) ERA. In the present case the Claimants contend that they were dismissed when the public house at which they worked suddenly closed. There was no longer a requirement for employees to work behind the bar. They were redundant within the meaning of s.139(1).
21. In these circumstances, it seems to me, no distinction can properly be drawn between an actual unfair dismissal and an actual redundancy dismissal for the purposes of reg. 6(5). In both situations the Claimant's grievance is about her dismissal.

Holiday Pay

22. Here, the claim is for outstanding holiday pay; put another way, pay for holiday not taken (pro-rating the annual holiday entitlement) as at dismissal. Insofar as the claim is brought by way of unlawful deductions relying on the Working Time Regulations 1998 (WTR) (as it may be now that the House of Lords has overruled the Court of Appeal decision in Ainsworth v IRC [2005] ICR 1149, see HMRC v Stringer [2009] IRLR 677), or under WTR reg. 30(1), the claim for outstanding holiday pay can only arise following termination of the employment by virtue of reg. 14. Thus the claim relying on the Working Time Regulations necessarily raises a grievance about dismissal in the same way as the unfair dismissal and redundancy payment jurisdictions.
23. In arriving at this analysis I have taken full account of the three earlier cases to which I have been referred and I am satisfied that my analysis is consistent with the approach taken by Elias P and Bean J in those cases.
24. In Lawrence the President allowed the claimant's appeal against an Employment Judge's ruling that although his claim of unfair dismissal did not engage the statutory grievance procedure by virtue of reg. 6(5), his claim of disability discrimination dismissal did; see paras 26-29, approving the approach of HHJ Richardson in James v DCA (UKEAT/0333/06), a case alleging unfair/disability discrimination dismissal. The President reached a similar conclusion in the case of allegedly racially discriminatory dismissal in Otaiku and Bean J followed that approach in the disability dismissal case of Maley. As the President pointed out in Lawrence (see para. 26), the legislation distinguishes between grievances about matters arising before dismissal, where the statutory grievance procedure applies and a dismissal which then engages the dismissal and disciplinary procedure. He also speaks, as Mr Hignett submits, of the boundaries between the statutory grievance procedure and the dismissal and disciplinary procedure. An example of this, it seems to me, is where a claimant, following dismissal, complains both of a failure to make reasonable adjustments contrary to the Disability Discrimination Act and also disability related dismissal. It seems to me that where a complaint is about reasonable adjustments which ought to have been made during the course of the employment, the statutory grievance procedure applies although the dismissal and disciplinary procedure applies to the disability dismissal.
25. In the present case, these Claimants had no complaint at all until their employment was summarily terminated by their employer. All their complaints in the Form ET1 necessarily flow from their dismissal.
26. There is an alternative view in relation to holiday pay. That, if the claim for outstanding holiday pay is framed as a claim for breach of contract, then the relevant jurisdiction is under the 1994 Order which, again, as Mr Hignett properly concedes, appears only in Schedule 3 to the 2002 Act and not Schedule 4, so that the provisions of s.32 of that Act do not apply.

Arrears of Wages

27. I agree with the position adopted by the parties in this case that contractual wages outstanding on termination of the employment are recoverable under the breach of contract jurisdiction (see above) as are claims for pay in lieu of notice. All are claimed in Section 8 of the Form ET1. Thus no grievance need be raised under the statutory grievance procedure.
28. It follows in these circumstances that I shall allow this appeal and declare that all of the claims raised by the Claimants in their Form ET1 shall be accepted and in due course adjudicated upon.
29. Before leaving this case, I notice that the defence put forward by the Respondent, Mr Murdoch, is that he was not the employer of the Claimants but a lady called Nicole Williams was, and reliance is placed on the written agreement between Mr Murdoch and Ms Williams. I understand from Mrs Barham that it is the Claimants' case that Mrs Williams was simply managing the public house at which they worked and that their employer was Mr Murdoch. That is an issue which will have to be decided as a matter of fact by the Employment Tribunal at a full merits hearing. For the purposes of this appeal I need say no more.