United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR MARTIN GRIFFITHS (One of Her Majesty's Counsel) & MS JUDY STONE (of Counsel) Instructed by: Messrs Bird & Bird LLP 15 Fetter Lane London EC4A 1JP
For the Respondents	MR THOMAS KIBLING (of Counsel) Instructed by: Messrs Fox Solicitors 78 Cornhill London EC3V 3QQ


 


SUMMARY

PRACTICE AND PROCEDURE

Case management

Postponement or stay

The Employment Judge erred in deciding not to stay Employment Tribunal proceedings, and to allow them to run concurrently over similar territory with High Court proceedings. By consent, the decision would be made by the EAT and not remitted.


 


HIS HONOUR JUDGE McMULLEN QC

1. This case is about concurrent proceedings in the Employment Tribunal, the High Court and in an overseas court and the relationship between them. I will refer to the parties as the Claimants and the Respondents.

Introduction

2. It is an appeal by the Respondents in those proceedings against the judgement of Employment Judge Weiniger, sitting at London (Central) on 23 February 2010 registered with reserved reasons on 17 March 2010. The Claimants have been represented throughout by Mr Thomas Kibling the Respondents, by different counsel, today by Mr Martin Griffiths QC and Ms Judy Stone.
3. The hearing before the Judge was to determine the application made by the Respondents for a stay of the Employment Tribunal proceedings pending the outcome of proceedings in the High Court. Those relate to Mr Ho. The proceedings in the Employment Tribunal relate to Mr Ho and Mr Gover. The proceedings in the overseas court, the District Court in Limassol, Cyprus relate to Mr Gover.
4. The Claimants in the Employment Tribunal claim unfair dismissal and unlawful deduction from wages. Essentially it is a bonus claim, in each case worth £6 million.
5. The Respondents in the High Court proceedings go over the same territory and it would have been determined as an issue to do with a counterclaim if this had been available in the Employment Tribunal. A counterclaim is available for a breach of contract claim under The Industrial Tribunals Extension of Jurisdiction (England and Wales) Order 1994 but the cap on such awards is £25,000 and it is not in play in either of the tribunal claims.
6. The essential issue for the Judge to determine was the priority of the Employment Tribunal or the High Court proceedings. His decision, effectively, was to allow both sets of proceedings to run concurrently. The Respondents appeal from that decision. I gave directions sending the matter to a full hearing. The Registrar declined an application for expedition. In the meantime the parties agreed a stay themselves, between 2 August 2010 and 1 December 2010 and so during that time the Respondents had achieved the relief they sought before the Employment Judge.
7. The Appeal Tribunal was not informed of this development; had it been, I might have formed a different view of the utility of this appeal. Today the position, as it left Employment Judge Weiniger, remains; that is, that the stay was refused in the Employment Tribunal proceedings.

The legislation

8. The only relevant legislation in these proceedings is the case management power of an Employment Judge sitting alone under the Employment Tribunal Rules 2004, rule 10, to order a postponement or an adjournment. The overriding objective in regulation 3 applies to discharge cases as efficiently, expeditiously and cost-beneficially as possible and of course that applies across the other jurisdictions, notably in the High Court.

The procedural history

9. The Claimants were each dismissed on 23 December 2008, Mr Ho by reason of redundancy, Mr Gover by reason of gross misconduct. On that date the two Cypriot companies issued proceedings against Mr Gover in Cyprus. Almost at the end of the three month period for presenting unfair dismissal claims the two Claimants issued proceedings. Mr Ho issued against Mindimaxnox (which I will call Mindi) and Mr Gover against Mindi and another company, Phaestos Ltd. At the same time Mindi and Phaestos issued proceedings in the High Court against Mr Ho. The service of that was delayed until 24 November 2009 in order to allow inter-party discussions.
10. On 8 May 2009 new claims were issued in respect of unlawful deductions by both of the Claimants, this time against Mindi. On 13 May 2009 an application was made for all of the four cases - that is, the two unfair dismissal and the two unauthorised deduction cases - to be heard together. That was granted on 11 August 2009 and that remains the position. There is no live issue as to whether those cases should not be heard together.
11. The proceedings in the Employment Tribunal appear, at least from the agreed chronology before me, to have fallen into quietude. However, on 23 February 2010 the hearing came on before Employment Judge Weiniger in respect of the stay. The parties took matters into their own hands.
12. On 28 July 2010 at a Case Management Discussion conducted by Employment Judge Wade, at which the parties were represented, orders were made and on 2 August 2010, also before that Judge, the Judge noted that the stay would be imposed until 1 December 2010 [the agreement of the parties] by which time the parties must apply to continue the stay or state reasons. There would then be reinstatement of the PHR which had originally been listed for five days starting on 2 August 2010 so that that could be started again and then a case management discussion to see if the issues had changed. The parties agreed to keep the tribunal updated.
13. Meanwhile, on 13 October 2010, the parties agreed to vacate a trial date which had been fixed for their convenience on 15 November 2010 of the issues before the High Court in Mr Ho's case. There is an issue to do with confidentiality and steps were taken in relation to that. There were still discussions going on at the time a statement was made and this relates a conversation said to be without prejudice. Armed with that joint statement the parties appeared before Eady J on 14 October 2010 where the trial was vacated. Rigorous case management directions were given for two matters; (1) the trial of a preliminary issue - the without prejudice matter and that contained the timetable for complying with various steps - and; (2) preparing for full trial.
14. On 14 March 2011 there is a fixture for a trial of the preliminary issues with three days allowed as ordered by Eady J; on 27 June 2011 to 1 July 2011 there is a fixture in that trial window for a fifteen-day trial to begin of the claims relating to Mr Ho. Thus the timetable has been set in clear directions by the High Court, for the disposal first of the preliminary issue and then the trial of the main issue, whereas in the Employment Tribunal no steps have been taken to get the case back on the rails again following the consent order on 2 August 2010.
15. The simple issue which the Claimants in the proceedings today raise is that they want their case heard at the Employment Tribunal and they want their issues disposed of as quickly as possible. Indeed they want, as Mr Kibling put it, "to resolve all issues as soon as possible".
16. The Claimants wish the security of a declaration in their favour of unfair dismissal, a finding which I do not underestimate in any way, notwithstanding that in many cases it may be accompanied by modest compensation or even no compensation. A declaration a tribunal is empowered to give for unfair dismissal is valuable in its own right.
17. The Claimants also want their bonus issue to be resolved and they, as a matter of practicality, wish that to be done in the Employment Tribunal because there is a tactical advantage to them. The Respondent may not weigh against them a counterclaim of the kind which forms the substance of the High Court claim against Mr Ho.
18. The parties are all agreed that at the moment justice requires the four claims by the two Claimants to be heard together against the relevant Respondents.

The judgment

19. The Judge heard submissions and considered the documentary material. The Judge decided that justice required the application for stay be refused and that the proceedings before the Employment Tribunal continue, implicitly in the High Court too.
20. The essential findings by the Judge can be summarised in the following way; the Judge was given a list of authorities and lengthy written submissions but he did not regard these as exhaustive or a mandatory checklist. He rejected the contention that the proceedings in the High Court and the Cyprus Court were some sort of manoeuvre by the Respondents unfairly to disadvantage the Claimants.
21. He decided that the costs in the High Court were estimated to be £700,000. The evidence required in the High Court and in the Employment Tribunal would include expert evidence. I know from the case management directions in the High Court evidence is to be provided by experts, one from each side in Mr Ho's case, in the field of hedge fund models. That is to be served in accordance with Civil Procedure Rules, part 35 and the necessary protocols.
22. The Judge accepted the relationship between the available compensation for unfair dismissal and the total claimed. It has been quantified without objection by Mr Kibling as being 99 per cent to do with the monetary claims and 1 per cent to do with what is available on a maximum award of unfair dismissal (£63,000) for it is capped. As Mr Griffith QC engagingly put it, "this is a comparison between an elephant and a mouse".
23. The Judge noted that issues that are familiar in unfair dismissal will arise in the tribunal claims and that the sums involved were huge. The Judge noted cost rules were different as were rules relating to evidence and noted the relationship between Mr Gover and Mr Ho. He was strongly influenced by the fact that Mr Gover's case, uniquely in the Employment Tribunal, would be held back for the time that it took for the High Court proceedings, in which he is no more than a witness, to be resolved and he has no control over them. The Judge expressly observed that his order will allow the Employment Tribunal and the High Court actions to run concurrently.
24. He agreed the issues were complicated and of high value and that there is a considerable overlap between the material available in the Employment Tribunal, the High Court and Cyprus. He made a decision that the findings of fact in one forum would bind another and his starting point was always that proceedings in the Employment Tribunal should be moved as swiftly as possible.

Discussion and conclusion

25. The judgment is attacked on three principal bases and I will deal with the arguments advanced by Mr Griffiths and the response of Mr Kibling in the same sequence as they have been put to me.
26. There is a major criticism of the Judge for failing to follow binding authorities. Mr Kibling asserts that the Judge had the authorities beforehand and took from them the decision which he ultimately made. It is contended that the express language used by the Judge mirrors language which was criticised by the Court of Appeal in Carter v Credit Change Limited [1979] ICR 908. To use as the starting point the swiftness of proceedings was held to be wrong. That was how the Employment Appeal Tribunal Slynn J (President) and members put it in Carter. In the Court of Appeal, Stephenson LJ considered that the judgment of the Employment Appeal Tribunal in that case involved stepping out of line in seeking to lay down a general principle that an Employment Tribunal must hear a claim before High Court proceedings unless there are special or unusual circumstances. In other words, the language of Slynn J was disapproved. I accept the submission that it is almost identical language to that used by the Judge in the present case.
27. From that general background, five submissions are made:

(1) The more appropriate forum is the High Court, since there are complex factual matters.

28. This is an invidious position to inflict on an Employment Judge. It is clear that Employment Tribunals today deal with highly complex issues relating characteristically to equal pay, discrimination in its nine strands and to major bonus issues, for example amongst traders in the City. I do not accept the simple proposition that because there are complex factual matters the Employment Tribunal's jurisdiction is usurped. That is not the central question.
29. Given there are complex factual matters in the tribunal proceedings is it more appropriate for those matters to be determined by the High Court? It is a question of balance (see First Castle Electronics Limited v West [1989] ICR 72 at 78 and the reference I have given above to Carter). It is also the case that where the issues of fact are supported by voluminous documents that too will point to the matter being better determined in the High Court (see JMCC Holdings Limited v Conroy [1990] ICR 179).
30. I accept in principle Mr Kibling's support for the expertise of Employment Tribunals, I indeed endorse it. The fact is that the authorities which have been shown to me indicate where there is a very substantial factual dispute the proceedings are more appropriately to be brought in the High Court. The Judge does not seem to have been alert to that distinction. He seems to have taken the view that there was some criticism of the Employment Tribunals as not having the expertise. If he did that was misplaced. There is no such criticism; it is simply a question of where it is more appropriate to decide complex factual matters.
31. There are rules of evidence which are important to resolve in disputes such as this. It has been submitted to me that a Judge of the High Court, sitting alone, with preparation time being provided by the court and reading time and making a decision on his or her own, is an expeditious way to deal with these matters. There may be some force in that.

(2) Embarrassing the High Court.

32. This is the language used in First Castle at page 78. It is that findings by the Employment Tribunal could be embarrassing for a Judge in the High Court. A similar view is taken by Sir Ralph Kilner Brown in the Employment Appeal Tribunal in Automatic Switching Limited v Brunet [1986] ICR 542 at 545; he talked about putting the High Court Judge in a straightjacket. A similar approach was taken by HHJ Ansell in GFI Holdings Limited v Mr D Camm UKEAT 0321/08, who said this:

"It is generally desirable to dispose of High Court actions first where there are issues in both sets of proceedings which are substantially the same"

The point is that the Employment Judge, again, seems to have been of the view that there would emerge either res judicata or issue of fact estoppels. All of the authorities where this arises indicate preference for the High Court rather than the Employment Tribunal: see, for example, Jacobs v Norsalta Limited [1977] ICR 189 at 192, where it was thought to be preferable for the tribunal to have the High Court judgment than for the High Court to have the tribunal's judgment.

33. It appears that the Judge in our case specifically rejected the contention that findings of fact by the Employment Tribunal would embarrass the High Court. In my judgment he erred in that because they plainly would. They would impinge upon the Judge who would find it difficult not to be bound by the findings.

(3) Complex legal matters.

34. It is contended that complex legal matters are better decided by the High Court than the Employment Tribunal. Again this is a difficult submission to make and I accept from Mr Kibling that Employment Tribunals are making decisions on complex legal matters all the time. Employment Tribunals are now bound by judicial oaths and have responsibilities to determine the law as well as to be an employment jury.
35. One issue which arises in this case is said to be based upon BNP Paribas v Mezzotero [2004] IRLR 58, a judgement of Cox J. Whether or not that is to be applied in this case seems to me to be irrelevant. A judgment of the Employment Appeal Tribunal is binding on the Employment Tribunal and if the Respondents wish to rely on it they will be better off in the Employment Tribunal. On the other hand it is to mistake the simple principle. If a judgment is made by a Judge, at whatever level, which is correct, it will be followed whether regarded as binding or not by a subsequent Judge. It is relevant to consider the complexity of legal issues and it is plain that in this case there will be some complex legal issues in relation to the discussion of the bonus and so on.
36. I accept that the Judge did consider the complexity of the legal issues but again he ought to have recognised that these hugely expensive claims in the Employment Tribunal will be susceptible to a detailed analysis in the High Court, at least in respect of Mr Ho, which will influence the decision making in the Employment Tribunal if that is the sequence in which the cases are heard.

(4) Considerable overlap.

37. In my judgment Mr Griffiths is correct when he relies heavily upon the finding by the Judge that there is considerable overlap. That is the premise upon which the Judge ought to have decided that this matter should be left to the High Court. In terms of value it is 99 per cent. The only real issue is the statutory tort of unfair dismissal and I say 'only' bearing in mind the comments I have made above about the importance of that matter. The factual material is the same in both jurisdictions. It seems to me that where there is considerable overlap it is appropriate to cede to the High Court and the Judge was wrong not to regard this as a compelling reason for rejecting the application for a stay.

(5) The small financial value

38. It is of small financial value and I accept the imagery of Mr Griffiths. The central issue in the case will be the amount of the bonus and whether there is entitlement to it. More issues can be determined in the High Court than in the Employment Tribunal. Mr Ho will have to face an issue relating to what essentially will be a counterclaim. It will give satisfaction, if that is the right word, to the parties to know that the central issues, in terms at least of money, and some of the issues relating to share ownership, will have been determined once in the High Court.
39. The second principal ground relates to deciding that the cases would be heard together. In my judgment the Judge was correct to pay attention to the joinder of Mr Gover and Mr Ho in their proceedings in the Employment Tribunal. That was plainly right, it was a relevant consideration. The point is, however, that Mr Gover is ineluctably shackled to Mr Ho in his High Court claim and until he is disjoined then he is to sink or swim with Mr Ho's progress. All parties now accept that these four claims in the Employment Tribunal are to be heard together and so although it is right to pay attention to the separate considerations applying to Mr Gover, who has no High Court proceedings but only Cyprus proceedings, they are all together in the Employment Tribunal.
40. The third principal contention which I allowed to go forward to this hearing relates to the expedition which the Judge said he was going to take account of. In my judgment this is a misconceived approach by the Claimants. They do not sacrifice any of their common law rights to a fair trial and, more particularly, to their rights under Article 6 of the European Convention on Human Rights to a fair trial within a reasonable period of time. They are going to get a fair trial. There is no suggestion that the Cyprus action will not be fair. Cyprus is a member of the Commonwealth and of The Council of Europe bound by the Strasbourg Convention and so I do not accept that the reasoning of the Judge based upon the problems facing the Claimants on expedition is relevant.
41. It follows that I consider the Judge has made an error in his approach to the question of a stay. The implication of the refusal to grant a stay is that proceedings will be concurrent. There are three cases which have been shown to me in which that is the obvious conclusion. In Bastick v James Lane (Turf Accountants Limited) [1979] ICR 778 Arnold J and members in the Employment Appeal Tribunal rejected the employee's appeal against a refusal to stay Employment Tribunal proceedings he had brought pending his trial in the Crown Court. That may seem a strong example. Generally Crown Court proceedings would take precedence over other proceedings but the implication is that there would be some sort of concurrent proceedings would go on together. Neither of those two cases reports what actually happened.
42. The best example however of the problem encountered by concurrent proceedings is found in a judgment of the late Laddie J in Chorion Plc & Others v Lane [1999] Times Law Report, 24 February 1999. Doing the best I can from the short report the Judge made clear that it was wrong for essentially the same issue to be run in two separate tribunals. Where there was a significant overlap between an application to an Employment Tribunal and an action in the High Court, with common issues permeating each dispute and an effectively agreed timetable, it was appropriate to stay the former.
43. The relief given in that case was unusual because an injunction was granted in mandatory terms requiring the employee to apply for a stay of his unfair dismissal complaint or requiring him to consent to an application by the employers and on that basis the Judge was able to resolve the jurisdictional problem. The problem is this; an Employment Judge has no control over the High Court proceedings, HHJ Weiniger acknowledged that. All he can do is stay or not stay. However, in the High Court, as is seen by Chorion, a Judge may take a holistic approach so that he can order, and did order, steps to be taken by the employee to stay his own Employment Tribunal proceedings forcing him, as the report says, to hold back on his Employment Tribunal case.
44. That does not appear to be the first time because in Cahm v Ward & Goldstone Ltd [1979] ICR 474 at 576 Bristow J said:

"We think it clearly right in the interests of justice that High Court proceedings should be heard first."

45. In my judgment it is not in accordance with the overriding objective to have concurrent proceedings over exactly the same factual territory except for the unique tort of unfair dismissal in the Employment Tribunal. The factual territory and the legal principles relating to the dismissal, but not the unfairness of it, are the same or at least substantially similar. It cannot be right that there are two sets of proceedings on foot, each requiring teams of lawyers to be respectively in the London (Central) Employment Tribunal and the Queen's Bench Division on different days. Take this very case. In the Employment Tribunal there is to be a Case Management Discussion then a PHR on one of the issues, if not more, and then in the High Court there is a PHR on the confidentiality issue and then a trial. It cannot be in accordance with the overriding objective that duplicate proceedings are on foot.
46. In my judgment, the Judge erred in acknowledging that the effect of his judgment is concurrency of proceedings; that is, with respect, to sit on the fence. The Judge was asked to make a choice as to which goes first and in all of the authorities to which I have been referred there is some reference to preference; that is, priority, going first, heard first and so on.
47. In none of the cases, it seems to me, is it envisaged that it is just to order in-tandem proceedings over the same territory and I will follow Laddie J in his pragmatic approach to this. It is based upon his view that it is wrong for two sets of proceedings to be ongoing. Fortunately by use of the injunction in the High Court he was able to control proceedings in the Employment Tribunal indirectly.
48. It follows that the Employment Judge erred in his approach to this matter of case management and discretion. I am very slow to intervene in the exercise of discretion by a Judge but it does occasionally happen (see Beck v Canadian Imperial Bank of Commerce [2010] UKEAT/0141/10 where the Court of Appeal approved my reversing an Employment Judge on an issue of disclosure. No one doubts the power of a Judge to make the order sought in this case but in my judgment, for the reasons I have given in respect primarily over the five issues first put by Mr Griffiths, the Judge erred.

Disposal

49. The question now is what should happen to this case. Both sides invite me to make the decision myself. In doing so I am conscious of what appears to be a difference of opinion in the Court of Appeal. It makes no difference in my case because counsel have kindly invited me to make the decision. The division is this; in Buckland v Bournemouth University Education Corporation [2010] ICR 908 the Court of Appeal had to decide what to do in relation to a decision it had made on hearing an appeal about constructive unfair dismissal. Carnwath LJ said this:

"50. I agree that the appeal should be allowed and the cross-appeal be dismissed for the reasons given by Sedley LJ. I also agree with Jacob LJ's concluding comments on the desirability of avoiding unnecessary remitter to the tribunal when the EAT is in as good a position to decide the matter itself."

That refrain was picked up by Jacob LJ more fully when he said this:

"57. Finally a word about the EAT's "academic" decision that if it had upheld the finding of constructive dismissal it would have remitted the question of fairness to the ET. With respect I cannot see why. Even though the ET had not made a finding about this, no more evidence was required. So the EAT could have decided the point itself.

58. Quite generally sending a case back to a tribunal or court below should be used as a last resort. "Ping pong", as some call it, generally services litigants badly - prolonging things and increasing costs."

In that memorable athletic example is encapsulated the problem facing an appellate court in dealing with whether to make a decision itself or remit. Buckland was decided on 24 February 2010 but it apparently was not put before a differently constituted Court of Appeal in Tilson v Alstom Transport [2010] EWCA 1308 where the Court of Appeal upheld my judgment, reversing an Employment Judge on the question of the existence of an employment contract. Elias LJ said this:

"25. Had the EAT upheld the appeal simply on the first two grounds, that would have necessitated a remission to a fresh tribunal to hear the matter again. But His Honour Judge McMullen QC decided to determine the issue himself and to substitute his decision for that of the employment judge. He justified this approach on the grounds that once the sham argument had been disposed of he was in a good position to assess the case, on the basis of the facts found by the employment judge, as the employment judge himself. Hence he substituted his conclusion that there was no contract in place.

26. In approaching the matter in this way, the EAT erred in law. It is not entitled to substitute its own decision for that of the employment tribunal simply on the basis that it is in as good a position as the employment judge to make the necessary determination. This was precisely what the EAT did in Wilson v Post Office [2000] IRLR 834 and the Court of Appeal held that it was wrong to do so. Buxton LJ said this (para 36):

'The [employment] tribunal is not merely a fact-finding body, it is an industrial jury. That is not merely a phrase, but a concept that has to be taken seriously. It is only going to be in an extreme case, on that is very clear, that it is going to be possible for an appellate body properly to say that a jury would have inevitably reached the conclusion that the EAT reached, when in the original case, albeit proceeding upon an incorrect basis, the [employment] tribunal had come to a contrary conclusion. I do not think it is possible to say confidentiality in this case that if the matter is remitted on the basis that this court has indicated, it is inevitable that an industrial jury will consider that Mr Wilson was fairly dismissed.'

27. As this judgment of Buston LJ makes clear, it is only where the employment tribunal, properly directing itself in law, could reach only one legitimate decision that the EAT can substitute that decision for the one improperly reached by the employment tribunal. This is a well established principle reflecting the approach of earlier courts: see e g the observations of Sir John Donaldson in O'Kelly v Trust House Forte [1983] ICR 728, 764 and Hellyer Bros v MacLeod [1987] ICR 526, 547.

29. I would observe in passing that I think there is much to be said for a relaxation of the established principles in the manner adopted by Judge McMullen, particularly where, as in this case, the proceedings have continued for a long time. (There had already been one appeal to the EAT on an earlier interlocutory point.) The overriding objective set out in the EAT rules seeks to save costs, amongst other matters, and it is not necessarily in the parties' interests to disable the appellate court from reaching a decision on the same evidence as would be available to the judge. However, we were not addressed on any of this jurisprudence and this is not an appropriate case to formulate a modification of the traditional rule."

As Mr Griffiths submits, there was no need for this if Buckland had been cited. Indeed after full argument, it had there decided that remission on what was in fact a case on evidence was not appropriate and the court should not shrink from making its own decision. It will be noted that the language that I used in Tilson ("the EAT is in as good a position to decide ... ") criticised by Elias LJ, came from what Carnwath LJ said in Buckland. In Buckland the Court emphatically asserted the correctness of a decision being made by a three-person EAT, replacing that of an industrial jury on unfair dismissal. [It did the same in the later Devon v Tilke [2010] EWCA Civ 1402 at paras 42ff per Rimer LJ.]

50. I would be much taxed with having to make a decision about this if it were not made easy by the joint approach of counsel in this case. It does seem to me that where there has been an error in the exercise of discretion on case management in a case which is proceeding and requires further case management decisions that I am in as good a position to exercise the discretion as the single Judge. This is not the verdict of an industrial jury but a reasoned judgment of a professional Judge in a specialist jurisdiction. So is my judgment here in the EAT. None of the authorities cited by Elias LJ deals with the modern Judge-alone jurisdiction, which is not so easy to depict as an industrial jury. There is only one answer which is the auxiliary reason given in Tilson and is the primary reason in this case. There is only one decision that could be made in the exercise of discretion in the light of proper application of the authorities.
51. I will stay the four cases in the Employment Tribunal until further order and I envisage that it will be until the trial of the whole action in the High Court.