United Kingdom Employment Appeal Tribunal

Appeal No. UKEAT/0011/11/JOJ

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 2 June 2011

Before

HIS HONOUR JUDGE SEROTA QC

(SITTING ALONE)

VMI (BLACKBURN) LTD APPELLANT

MR G M CAMM RESPONDENT

Transcript of Proceedings

JUDGMENT

APPEARANCES

SUMMARY

PRACTICE AND PROCEDURE – Right to be heard

Where an Employment Tribunal has applied rule 9 of its rules of procedure, the Respondent not having lodged a response in time, is not permitted to participate in any hearing either as to merits or remedy.  NSM Music v Leefe [2006] ICR 450 followed.

HIS HONOUR JUDGE SEROTA QC

Introduction

1.            This is an extremely unfortunate case, particularly so far as concerns the Respondent.  The Claimant, Mr Graham Camm, had been employed by the Respondent company, which was involved in the machine vending industry.  There was no issue in the event between the parties that his dismissal was unfair, but there was clearly, were the Respondents able to argue the points, some considerable dispute as to the level of the Claimant’s loss.

2.            The Claimant was selected for redundancy, the procedure was inappropriate, and he eventually was dismissed for what was described as gross misconduct.  He issued his ET1 on 20 January 2010.  It is said by the Respondent, and I have no reason to doubt, that the Claimant worked from the Respondent’s office in Warrington.  His line manager was said to be in Newport, but the company’s head office, where the Claimant did not work from, was in Blackburn.  When the Claimant completed his ET1 he did not identify the address where he worked.  The ET1 was sent to the office in Blackburn; the Respondent says it did not reach the right person, nobody knew anything about it, and the failure to lodge the ET3 in time has been described by the Respondent as being a “clerical error”.  The ET3 should have been lodged by 19 February; for the reasons that I have mentioned, it was not.

3.            As a result of the failure by the Respondent to lodge an ET3, directions, which were not sent to the Respondent, were given by the Employment Tribunal.  They were not sent to the Respondent because it had not lodged an ET3.  This occurred on 3 March.  ACAS were involved at this stage, and coincidentally, I think, on 5 March the Respondent was contacted by ACAS, and those, say the Respondent, who should have been aware of the proceedings were first aware of them.  I believe that 5 March was a Friday, and a search was conducted after or maybe over the weekend and the ET1 was discovered.  The Respondent immediately sought advice from solicitors and lodged its ET3 on 9 March.  On 9 March the ET3 was sent to the Tribunal, together with a letter informing the Employment Tribunal that it intended to appeal against any order that might be made, considering that was the appropriate course and citing the case, which has been referred to me, of Atos Origin IT Services UK Ltd v Haddock [2005] IRLR 20.

4.            As at 9 March the Employment Tribunal had not decided whether or not to accept the response out of time.  This decision was made on 18 March.  As a result of the Employment Tribunal deciding not to extend time, rule 9 of the Employment Tribunal Rules came into effect.  Rule 9 of the Employment Tribunal Rules provides that where a Respondent has not presented a response to a claim, or whose response has not been accepted, he is not entitled to take any part in the proceedings, and there are certain exceptions, which include making a request under rule 30 for Written Reasons, to make an application under rule 33 for review of default Judgments, and to make an application under rule 35 to be called as a witness by another person or to be sent a copy of any document.  Rule 33 permits a party to apply to have a default Judgment in favour of him reviewed; there was in fact no default Judgment in this case, because the Employment Tribunal, under rule 3(3), has the power to determine whether or not the claim should be accepted, and there is then power, if the Employment Tribunal considers it appropriate, to enter a default Judgment, but the Employment Tribunal is under no obligation to do so.  There is power, under rule 34, to seek a review of the decision to refuse to accept the ET3 out of time.

5.            On 21 June 2010 the Respondent did in fact apply for a review of the decision of 18 March not to extend time.  On 29 June Employment Judge O’Hara refused the application as not being in the interests of justice.  It seems to me that it was at least fairly arguable that Judge O’Hara was wrong to refuse to review the decision not to extend time.  A number of matters needed to be taken into consideration, including the explanation for the delay, the degree of prejudice that might have been caused and the length of time in relation to the delay, and there would be a strong case for saying, having regard to the overriding objective, that the prejudice caused to the Respondent of not being able to defend the claim, which in the event turned out to be in excess of £20,000, outweighed other considerations for refusing to extend time.

6.            On 16 September a hearing took place, sent to the parties on 29 September, before Employment Judge Brain in the Manchester Employment Tribunal.  The Claimant was in person, and Ms Simister, who has appeared today on behalf of the Respondent, was in attendance, but she was not permitted to participate because, by reason of the decision of the Employment Tribunal not to extend time, the Employment Tribunal held on the authority of the decision in NSM Music Ltd v Leefe [2006] ICR 450, a decision of the Employment Tribunal, that the Respondent was not entitled to participate in the remedy hearing any more than in a merits hearing. Accordingly the Employment Tribunal on 16 September heard the Claimant, looked at the documents the Claimant put forward, and concluded that the Claimant was entitled to some £22,264.19.  The Employment Tribunal, as is apparent, came to conclusions as to the level of his earnings, and they also came to conclusions as to whether or not he had mitigated his damages.  The Employment Tribunal, as I have said not having any evidence to the contrary, did not have great difficulty in accepting the Claimant’s evidence both in relation to the level of his earnings, the period of time when he was out of work, in relation to his future loss of earnings, and whether or not he had mitigated his damages.  There was no issue that the Employment Judge could determine that the Claimant had been unfairly dismissed, and this does not appear to be the subject of challenge today by Ms Simister, who in her Notice of Appeal wishes to challenge issues relating to quantum in relation to the level of the Claimant’s pre‑dismissal earnings and whether or not he had mitigated his damages, among other things.  The Employment Tribunal, as I have said, at paragraph 18 made a specific finding that the Claimant acted reasonably in mitigating his loss.

7.            Thereafter the Respondent applied for a review of the decision of Judge Brain, which was refused on 16 October.  The Notice of Appeal was lodged on 5 November of last year, and HHJ McMullen QC referred it to a full hearing.

8.            The fact that stands out is that the decision in this case that was seriously open to challenge was that of Employment Judge O’Hara, and that is a decision that could have been the subject of appeal, but was not.  It seems to me that the Respondent is in enormous difficulties.  While it is true, as the case of ATOS Origin makes clear, that a Respondent who has been barred from participating in proceedings is nonetheless entitled to appeal against the decision, the difficulties in appealing against a decision essentially on issues of fact are manifest.  The rules in relation to adducing of evidence that was not before the Employment Tribunal are very strict, and indeed the Employment Tribunal strongly discourages appeals on the grounds that fresh evidence is available, suggesting that the proper course in those circumstances is for the party wishing to adduce the evidence to seek that evidence to be introduced in the Employment Tribunal on an application for review (see the decision of Underhill J in Adegbuji v Meteor Parking Ltd UKEATPA/1570/09/LA).

9.            As I have said, Ms Simister would wish to make submissions as to the measure of damages, mitigation and whether or not there should have been a Polkey v A E Dayton Services Ltd [1987] IRLR 503 reduction, but she is unable to do this without introducing evidence which was not before the Employment Tribunal.  That evidence, of course, was evidence that was available at the time but could not be adduced for the reasons I have given, and it also would be in effect an appeal on questions of fact.  She said the main issue was whether there should have been a default Judgment, and whether the Respondent should have been allowed to make representations on quantum, but it is clear from the decision, which was cited by the Employment Judge, in NSM Music that the effect of the rules was that in the absence of an ET3 having been lodged, or permission given to extend the time for it, the Respondent had no right to make submissions either in relation to liability or in relation to quantum if there were a separate hearing.  In those circumstances, while one feels a degree of sympathy with the Respondent that finds itself having to pay out a sum in excess of that which it thinks it should have done, I am powerless at this stage to do anything that would enable me to reopen the decision of the Employment Tribunal as to the level of compensation, and in those circumstances the appeal must be dismissed.