United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MS B O'DRISCOLL (The Appellant in Person)
For the Respondent	MR MARK SAHU (of Counsel) Instructed by: Messrs Aletta Shaw Solicitors Suites A& B 130/132 Broadway Bexleyheath DA6 7DP


 


SUMMARY

JURSIDICTIONAL POINTS – Fraud and illegality

PRACTICE AND PROCEDURE

New evidence on appeal

Costs

On the Respondent's concession that the Employment Tribunal had erred in deciding, without it being submitted to it, that the Claimant's contract of employment was tainted by illegality and that it had no jurisdiction to hear her claims, the alternative Judgment on unappealed findings on the merits of her unfair dismissal and discrimination claims was unarguably correct. The subsequent order for £10,000 costs was not appealed.

The EAT ordered EAT costs in part of £1,000 as the Claimant while legally represented had unreasonably pressed on after the EAT's costs warning at the preliminary hearing.

Respondent's application to rely on the Claimant's post-hearing convictions refused.

HIS HONOUR JUDGE McMULLEN QC

1. This case is about sex and race discrimination, constructive unfair dismissal and unlawful deduction of wages and Tribunal procedure. It is the Judgment of the three members of this court appointed by statute for their specialist experience. We will refer to the parties as the Claimant and the Respondent.

Introduction

2. It is an appeal by the Claimant in those proceedings against a Judgment of an Employment Tribunal sitting at Watford under the chairmanship of Employment Judge Postle over nine days and running to 20 pages, registered with Reasons on 4 July 2007. The Claimant represented herself, assisted by her PA/carer, for she is disabled. The Respondent was represented by Mr Mark Sahu of counsel.
3. The Claimant contended that she had been discriminated against on the grounds of her gender and her racial origins - she is Irish by background - and that the Respondent had constructively unfairly dismissed her, having made substantial unlawful deductions from her wages. The Employment Tribunal dismissed the claims. It did so in four substantive paragraphs of its Judgment and then said this:

"5. Further and in any event the contract of employment was tainted with illegality and the Tribunal declared they had no jurisdiction to hear the Claimant's claim of constructive dismissal, unlawful deduction of wages and claims for sex and racial discrimination."

4. The essential issues were set out by the Employment Tribunal along the tramlines set for it by previous CMDs. These included orders for disclosure and refusal of the Claimant's applications for disclosure. The basis of the claim was set out under separate headings in the judgment distinguishing between the discrimination, dismissal and the unlawful deduction claims.
5. The Claimant was dissatisfied and, as well as appealing to the EAT, sought a review. On 4 March 2008, in Reasons given over ten pages on 1 May 2008, what we hold to be a review was conducted. On its face, the record shows that a hearing took place before the same three-person Tribunal, the Claimant was represented by a law student, for the purposes of what was described as the review hearing, and Mr Sahu is also on the record as representing the Respondent.
6. I have pointed out in Secretary of State v Rance [2007] IRLR 665 that unless an Employment Judge rejects an application for a review on the basis that it has no reasonable prospect of success there must be a review. Plainly the Claimant passed the first stage for the Judge did not dismiss it, but caused a hearing of the full Tribunal. The stated outcome was that the application for a review was refused. This must be an irregularity and we hold that what occurred was a review at which the Judgment was affirmed. This is in the Claimant's interest, however, for instead of having her case rejected summarily on the papers by a Judge, it was decided upon by the same three-person Tribunal after a hearing where she was represented.
7. The Reasons in this Judgment on review are substantial. The order in the original hearing was unchanged. There is no separate appeal against the review and we regard it as instructive when looking at review Reasons for them to be bolted on to the original Judgment in order to illuminate any matter in the former.
8. At the same time, the Respondent's application for costs was considered and at this part of the day the Claimant represented herself. The Tribunal concluded that the Claimant had been unreasonable in her conduct and that her claim was misconceived and there was no credibility in any of the Claimant's allegations.
9. It is suggested that the claim was brought out of malice, although the Tribunal appears to have made no positive finding about that. In response to the schedule of costs produced by the Respondent of over £60,000, the Tribunal considered it was just to award the Respondent £10,000 - the maximum without a detailed assessment. It took into account the failure by the Claimant to accede to a substantial pre-hearing offer to compromise the proceedings.

EAT procedure

10. There is no separate appeal against the costs Judgment. The Claimant says in her skeleton argument of 25 pages, lodged today, that she does contest the costs order. She acknowledges that if the original Judgment is undisturbed there is no separate appeal. We pointed out that if we were in her favour and the Judgment were set aside we would be sympathetic to applications for an out of time appeal. As will become obvious, that is unnecessary.
11. At the sift of the Claimant's appeal an order was first made by HHJ Ansell staying the appeal pending the outcome of the review. The matter was then dealt with by HHJ Peter Clark who held that there was no possible ground for overturning the original Judgment and he paid attention to the costs Judgment wherein, as he put it, the Claimant's conduct in the proceedings was fully chronicled.
12. It appears that the matter was dealt with twice by HHJ Peter Clark under rules 3(7) and 3(8), and his opinion was that the appeal was wholly devoid of merit. The Claimant being dissatisfied applied to Silber J under rule 3(10) who directed questions to be asked of the Employment Judge relating to procedural irregularities alleged by the Claimant. The Judge responded by a letter on 12 December 2008 in which he said that allegations by the Claimant of a refusal by the Tribunal to accede to applications to adjourn either on the grounds of her disability or in order to cope with new documents and allegations had not been made at the Employment Tribunal.
13. It was also said by the Judge that the Claimant's disability was not apparent in respect of two matters said here to be relevant, at least in respect of the Claimant's hearing disability. The Judge referred to the review Judgment for a further answer to Silber J's question. Silber J did not reserve the matter to himself when he adjourned part-heard the rule 3 hearing and so it came before HHJ Pugsley on 24 September 2009.
14. According to the transcript of that hearing the Judge mainly focussed upon procedural irregularities and the contention that the Tribunal had found that the Claimant's contract was tainted by illegality and that this point had not been raised by the Respondent in advance nor canvassed at CMDs. He made a number of orders relating to further documentation and set up a preliminary hearing at which unusually the Respondent, in addition to presenting written submissions, was invited to appear, which it did. That came on before Slade J and members on 3 February 2010. The Claimant was represented by counsel. The Tribunal ordered that there be a full hearing.
15. We have been told that Slade J raised the issue of whether or not there had been criminal proceedings relating to the Claimant's conduct and the court was told that there had not. As a result, inquiries were made by the Respondent and an account appearing in the local newspaper The Watford Observer has been produced before us of the outcome of a trial at St Alban's Crown Court. The Claimant was found guilty of benefit fraud after a two-week trial. The sentence was imprisonment for 18 months suspended for two years which is still in its operative period. We have seen the record of confiscation proceedings which indicates the benefit of the Claimant's criminal activity to be £52,881.53 over six years from which confiscation was ordered of £42,962.63.
16. The reason why we have been shown these documents is that the Respondent wishes to shore up the Judgment of the Tribunal in its passages dealing with credibility. Mr Sahu contends that if there were doubts about the Tribunal's reasoning they are allayed by the conviction and he seeks to argue from that position that the Tribunal was undoubtedly correct.
17. At the opening of this hearing objection was taken by the Claimant to this matter being put on the grounds that it is not relevant. She contends that the Crown Court was concerned with Housing Benefit and not with the benefit which she was receiving at the time by way of an Access to Work scheme for disabled people, nor was it as a result of proceedings brought in respect of failure to pay tax or National Insurance which might have been a matter in relation to the employment issue.
18. We are not able to resolve a dispute which arose as to whether or not Mr Parry, the Chair of the Respondent, gave evidence at the trial but it is common ground that a statement was taken from him and it was part of the Crown's case at one stage. Mr Sahu says it is indicative of the Claimant's propensity to engage in activity such as alteration of documents and not telling the truth, and is connected to the Claimant's work relationship where she also obtained benefits.
19. Having heard from Ms O'Driscoll, who is herself a law graduate and has partly completed a Masters degree in law, together with some input from Ms Rendes, the Claimant's PA, we decided to leave the matter until the end of the case before making a decision. Mr Sahu did not rely in his argument upon this point, but in a reply he did return to it. We consider it unfair to hold against the Claimant her conviction two years after the hearing before the Employment Tribunal, and of which the Tribunal knew nothing, for the purposes of an appeal. If the Reasons of the Tribunal are wrong in law they will be struck down and if they are correct they do not get any better by later rationalisation as may be derived from the Crown Court's verdict. We will make our decision in the absence of any consideration of the Claimant's criminal record.

The legislation

20. It is important to note that the re-amended Notice of Appeal, which was drafted by counsel, makes no challenge to the application of the Sex Discrimination Act, the Race Relations Act, the law on unfair dismissal or unlawful deduction from wages.
21. It is also important to note that there is no attack upon the facts found by the Tribunal except to the extent that if material irregularities in the case occurred, the Tribunal will have been tainted by unfair and incorrect application of the law.
22. The Claimant in her skeleton argument today alleges actual bias against the Employment Judge or possibly the Tribunal itself. Fairness in procedures is a hallmark of the system of justice irrespective of the application of the ECHR. To this end a system operates in the EAT practice direction for disposing of allegations of bias and apparent bias. Our approach to this hearing is based upon the Judgments thinning down this appeal both at the rule 3 hearing and at the preliminary hearing. No allegation of actual or apparent bias survives. There may be allegations that the Tribunal was wrong not to allow extra time or adjournment but that is not the same as an allegation of bias as to which no directions were given and so the scope of this appeal is narrowed.

The facts

23. The Claimant is in her 50s, is articulate and educated and has an Irish background. She is disabled. She was employed by the Respondent from 4 January 2004 until 31 July 2005. She was the beneficiary of the Access to Work scheme available to people who are disabled. When the Claimant was employed she was allowed under the scheme to receive pay up to £20 a week from her employers for one and a half days. The Respondent is a charity in Hertfordshire, a company limited by guarantee which exists in order to provide personal assistance and support nationwide to disabled people. It has a board of trustees. A good deal of voluntary input is required. The leading lights are Mr Owen Parry and Mr Stephens. Mr Stephens was the Claimant's line manager. All three are disabled.
24. The Claimant alleged that she was not paid in accordance with her contract of employment and in particular, that she had not been paid overtime. The Tribunal found that she had fabricated the contractual documents which she put before it. From the witnesses she called there was no support for the overtime issue, for Mr Borerwer and Mr Muradzikwa (see paragraph 9.6) asserted that overtime was not paid by the Respondent. The Respondent had a standard contract and it did not include overtime and yet the Claimant's claim for unauthorised deductions was based in part upon a failure to pay her overtime.
25. The Claimant also claimed her rate of pay for some of the work she did was £60 an hour, found by the Tribunal to be frankly ludicrous in the light of the fact that this is a charity. A number of invoices had been submitted. This was the subject of a dispute because the Claimant said she had not had proper disclosure but the Tribunal noted that the documents which she herself produced were so questionable that they could not be accepted as a basis upon which an unlawful deduction claim should be weighed.
26. The Claimant was being paid expenses of £250, but when that was discovered, the invoices started to emerge and it was clear to the Tribunal that the Claimant knew what she was doing and this was not to incur tax and National Insurance. The Claimant was involved in a scam with the aid of Mr Stephens, who gave evidence for the Claimant with whom he was in a relationship. The Tribunal found that on the arithmetic, both by weeks' pay and actual money, the claim for unauthorised deduction simply did not add up. The only conclusion was there was some sort of fiddle and the Claimant was making claims for monies to which she was not entitled.
27. The Tribunal said it stopped short of suggesting the Claimant was committing a fraud on the Respondent but those payments had never been satisfactorily explained and might need separate investigation. The Tribunal did not find the Claimant credible. In detail (see chapter 10) the Claimant is found to be contradictory, evasive and economic with the truth, with a tremendous capacity for self-deception. Cogent reasons are given for that overall conclusion.
28. The Tribunal considered the claims of sex and race discrimination, of which there were about ten. All of these were dismissed as a matter of primary fact. The Tribunal did not address itself expressly to the burden of proof. But it follows, as Mr Sahu says, that the Tribunal plainly decided in the light of its finding that none of the events alleged by the Claimant happened, that the Claimant did not put up sufficient material from which the Tribunal could form the view that discrimination occurred.
29. The one exception is use of racist language on one occasion by Ms Jones, Mr Parry's PA/carer. The Tribunal explained that she was not an employee of the Respondent nor acting on its behalf. Mr Parry is not an individual Respondent in the proceedings and so what Ms Jones did, without his knowledge and disowned by him when it occurred, could not fix liability upon the Respondent.
30. The Tribunal considered all the allegations of sex and race discrimination were ill-founded but it did say that they were linked to its finding that there was illegality in the performance of the contract.
31. The Tribunal then went on to consider constructive unfair dismissal and dismissed that claim on the facts and on causation. It examined the contemporaneous emanations of the Claimant and Mr Stephens at the time of her leaving, none of which reveals any of the material the Claimant subsequently prayed in aid to show that the Respondent had, by its conduct, committed a fundamental breach of contract.
32. Again in its conclusions the Tribunal drew upon the illegality in the performance of the contract. It held that the contract was unenforceable and no statutory rights, including unfair dismissal, could be enforced under it.
33. It went on to the alternative conclusion, if it were wrong, that the Claimant was not constructively dismissed, and that must be an indication of its previous findings as to causation.

The Tribunal directed itself correctly by reference to the standard test in Western Excavating (E.C.C.) Ltd v Sharp [1978] ICR 221 CA and found there was no breach of the express or implied term. The Claimant's reason for leaving was that she wanted to move on. Those findings are entirely independent of the illegality finding (see para 3 above).

The Claimant's case

34. The Claimant's case is that she was denied the opportunity to seek extra time through material irregularities at the hearing. The time was needed to look at some of the documents. In our judgment this fails because the Claimant told us that six weeks earlier applications for disclosure had been refused by the Judge, no appeal had been entered and the reason for refusal was that it was too onerous on the Respondent to produce all of the material sought. No tailored application was made in the light of that and at the hearing the same application was made and refused.
35. There was no application for an adjournment. The Claimant said she asked for more time. This hearing lasted nine days. In our judgment there is no substance in the contention that the Claimant was treated unfairly in the approach to her request for more time, based either upon her disability or the documents.
36. Her second point has some substance. It is based upon what is said to be a new allegation made by the Respondent. The allegation in issue is that the contract was tainted with illegality. Mr Sahu raised a number of arguments showing that the Tribunal was fully alert to the way in which this point was being put, but accepts that there is no express indication in the list of issues at the hearing or at the CMD of the illegality of the contract. The Claimant complains she was ambushed.
37. The way to resolve this matter at our hearing was as follows. There is force in the contention by Mr Sahu that the Judgment of the Tribunal is unarguably right, notwithstanding any procedural irregularity or misdirection on illegality of contract. He relies on Dobie v Burns International Security Services (UK) Ltd [1984] ICR 812 CA. So we invited the Claimant to consider that if we were provisionally in her favour on the illegality point she would still need to show that the Tribunal's Judgment was not unarguably right.
38. This approach has been assisted by Mr Sahu's concession that the Tribunal erred in law when it found that it had no jurisdiction to deal with the issues because the contract of employment was tainted with illegality. He has some embarrassment in accepting that for it looks as though that was the case put to the Tribunal, but he has shown us the written argument, and this was no part of his case. As he accepts, it is clear that illegality of contract does not go to jurisdiction but to discretion in the enforcement of a right. In any event, while there may be fairly clear rules in respect of contracts being enforced which are tainted with illegality, a more liberal regime attends upon claims of statutory tort. Put simply, just because someone pays no tax does not mean that they cannot complain of sexual harassment.

The alternative finding

39. With that approach, we turn then to whether the Tribunal was unarguably correct. It formed a clear view of the Claimant's credibility which affected its approach to the allegations she made. Neither her evidence nor that of her witnesses was found to support her case. In particular, her collaboration with Mr Stephens was found not to assist her in any way. The fact that on the merits the Tribunal dismissed all of the allegations of discrimination bar one indicates that the Claimant had a full hearing on the substance, not restricted to the jurisdiction issue.
40. If this were really an issue of jurisdiction, the Tribunal would not have needed to go into any of the evidence here, for it would have been a complete bar. Providentially the Tribunal did do just that and made alternative findings on the basis that there was jurisdiction. In the executive part of its Judgment, the first four orders dismissed claims based upon separate jurisdictions and the illegality point comes only as "further" to the others. In other words looking only at the Judgment it is clear the Tribunal made findings against the Claimant's case without resort to the illegality point.
41. The constructive unfair dismissal point was bound to fail in the light of the Tribunal's conclusions on causation having seen the contemporary statements. The Claimant did not leave as a result of intolerable conduct by the Respondent, but with Mr Stephens for her own reasons. The Claimant did not suffer unlawful deductions because she was not able to prove to the Tribunal what the proper rate of pay was and that it was in accordance with her claim. The overtime issue was important to her; it is the one she has stressed throughout this case, but on the evidence called by her this claim was doomed.
42. In any event, that and other parts of the claim were found by the Tribunal to be frankly ludicrous for this little charity to be paying the kind of money the Claimant was claiming. Given the burden of proof is on the Claimant to show what the proper rate of pay is for the purposes of Part II of the Employment Rights Act 1996, she failed in her fabricated evidence to do that and the claim was properly dismissed.
43. The fallback position of the Claimant is that the rest of the findings were tainted because of the finding on the jurisdiction point. That would be a forceful point if there were any weakness or interweaving in the actual findings by the Tribunal but there is none. The Tribunal was asked to try as a matter of fact about ten allegations of harassment and it found that none of them occurred. The only one in respect of Ms Jones is to do with her alleged connection to the Respondent and there is no separate ground of appeal attacking the legal reasoning as to that. So, irrespective of the Tribunal's misdirection on illegality, the discrimination claims are intact and are unarguably correct.
44. The same goes for the unfair dismissal point. This is based on causation and is not affected by way of illegality of contract. The Tribunal makes the alternative finding based on why the Claimant left and that is an end of the matter.
45. We made clear, as she urged us, that we have recognised the Claimant's disability; we have excused her from arguing orally before us a good deal of the case because we have read the substantial material she put in front of us. We have offered her and her PA/carer reasonable adjustments throughout the hearing, and we note that she is a litigant in person. The fact that she has a law degree does not diminish the fact that she appears before us on her own. She has told us everything she could in support of her case. None of the grounds on which the Claimant moved the previous Judges of this court survive proper examination with the Respondent here. The appeal is dismissed.

Costs

46. An application has been made for costs based on rule 34A, which is that the Claimant has unreasonably conducted part of the proceedings. The application was well advertised for at the end of the preliminary hearing, Slade J and members gave the Claimant a costs warning. That is the correct expression since it is reflected in a letter acknowledging that from the Claimant's solicitors. It was a joint understanding that this application would follow if the Claimant lost.
47. It is open to an EAT to award costs notwithstanding that the implication of a full hearing is that the claim has reasonable prospects of success. We have looked with care at the terms in which Slade J recorded the warning to the Claimant, at the time legally represented, and they are plainly the outcome of the case today. The Claimant may succeed on the illegality point (it is not necessary to decide it) but, nevertheless, she failed because of what the Slade J described as the fallback findings. The Claimant has pressed on, making no separate argument about the fallback findings, and we consider that she behaved unreasonably in doing so.
48. The schedule indicates something in the region of £4,600 from the date when the costs warning was given. Mr Sahu acknowledges that perhaps not all should be awarded, presumably in the light of his concession that there was an error of law. We have considered carefully the financial circumstances as to the Claimant's capital and income. We note that there is no appeal against the Tribunal's order of £10,000 of costs and we note that the sale of her house will go to discharge the mortgage which she has, the £10,000 already payable by way of a charge by the Respondent on her house and the confiscation order made following her conviction. . Justice will be done by making an award.
49. The Claimant tells us she is working and as she has modest income we consider that an award of £1,000 is correct, to be paid by 1 September 2010. It represents something less than 25% of what is claimed expresses the fairness of the situation before us. The Claimant is anxious to clear her name. That was not the point of these proceedings and we stress that clearing her name in respect of the distinction between benefit fraud and tax evasion has not been part of our hearing either.