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United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Amey Services Ltd & Enterprise Managed Services Ltd v Aldridge & Ors (Practice and Procedure: Amendment) [2016] UKEAT 0007_16_1208 (12 August 2016)
URL: http://www.bailii.org/uk/cases/UKEAT/2016/0007_16_1208.html
Cite as: [2016] UKEAT 0007_16_1208, [2016] UKEAT 7_16_1208
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EMPLOYMENT APPEAL TRIBUNAL
52 MELVILLE STREET, EDINBURGH EH3 7HF
At the Tribunal
Before
(SITTING ALONE)
AMEY SERVICES LIMITED & ENTERPRISE APPELLANTS
MR R ALDRIDGE AND OTHERS RESPONDENT
JUDGMENT
APPEARANCES
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(of Counsel) Instructed by: Bird & Bird LLP 15 Fetter Lane London EC4A 1JP
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(of Counsel) Instructed by: Thompsons Solicitors & Solicitor Advocates Berkeley House 285 Bath Street Glasgow G2 4HQ
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SUMMARY
PRACTICE AND PROCEDURE - Amendment
A number of claimants presented amendments seeking to introduce fresh claims on alleged under-payment of holiday pay, which was the subject matter of the originating claims. The amendments sought to cover a period or periods during the course of the proceedings, but did not specify particular dates. At least some of the amendments were on the face of it time barred.
The Employment Judge decided to allow the amendments “subject to time bar”, on the basis that the limitation issue could be revisited once the test cases of Lock v British Gas and Fulton and Others v Bear Scotland had finally concluded.
Although the decision to grant or refuse an amendment was one for the exercise of discretion, the Employment Judge had made a material error justifying interference with his conclusion. He had failed to follow the established principles for consideration of an amendment in this context. In particular he failed to assess whether the proposed amendments were out of time and if so whether they should nonetheless be allowed as part of a single stage exercise. The cases of Selkent Bus Co Ltd v Moore [1996] ICR 836, Rawson v Doncaster NHS Primary Care Trust UKEAT/0022/08 and Newsquest (Herald and Times) Limited v Keeping UKEATS/0051/09 all support the principle that any time bar issue is an essential component of the decision to grant or refuse and amendment. It made no difference that the claims sought to be inserted arose after the originating claim had been presented, a decision on whether they were time barred still required to be made as part of the determination of the amendments application. The decision to excise timebar and to allow the amendments on a seemingly tentative basis pending resolution of that issue amounted to a material error such that the decision could not stand.
While there were also issues in relation to the lack of specification in the proposed amendments, the appeal would be allowed and the case remitted back so that the tribunal could consider the amendments of new, taking all relevant considerations into account.
THE HONOURABLE LADY WISE
1. This appeal arises out of a decision, following a Case Management Hearing, to allow various applications to amend holiday pay claims brought by a number of claimants. Those cases have been initiated by claimants (who are the respondents in this appeal) who are or were employed by the respondents (appellants) in a variety of roles. They all allege that they have not been paid appropriately for holidays taken, primarily on the basis that they should have been paid for holidays at an enhanced rate taking into account overtime and/or other elements of pay additional to their basic rate. I shall refer to the parties as claimants and respondents as they were in the tribunal below. The claimants were represented at the tribunal and before me by Mr Kenneth Maguire, Advocate. The respondents were represented both at the tribunal and before me by Mr Dale Martin, of counsel.
2. The substantive subject matter of these proceedings raises issues that have been litigated in the cases of Lock v British Gas Trading Limited (“Lock”) and Fulton and Others v Bear Scotland Limited (“Bear Scotland”). Accordingly, these cases were sisted pending the outcome of those actions. This appeal arises from applications to amend tendered by the claimants thereafter. A hearing on the proposed amendments took place on 24 September 2015 and the judgment on the matter was issued on 8 December 2015. The respondents also lodged applications for further information/specification. These were granted and that part of the decision is not challenged. It is, however, of some relevance to the appeal in that the lack of specification in the proposed amendments was one of the bases of opposition to them. The judgement sets out carefully a summary of the various claims and details of the arguments presented in relation to the different amendments tendered by the claimants in paragraphs 15-125 and there is no need to rehearse that here. The terms, insofar as relevant, of the Presidential Practice Directions of 11 December 2014 and 27 March 2015 relating to amendment of claims of this type are narrated at paragraphs 11 and 12. Ultimately, some of the proposed amendments were held to be incompetent as they sought to relate to deductions not yet made at the date of the amendment applications and no point is taken in relation to that aspect of the decision. The central issue for this appeal is whether the Employment Judge erred in allowing the amendments that he did. In particular the judge sought to resolve the relationship between time bar points taken and the decision on the amendments by allowing them “subject to time bar”. It may be helpful to record the Judge’s reasoning behind the decision made to set the arguments at appeal in context.
The Judge’s Reasoning
3. The judgment of Employment Judge Gall includes the following discussion and reasons for his conclusions:
“151. The decision of the EAT in Bear Scotland is that where more than three months have passed since an alleged underpayment there is a break in the chain so as to bring the series of deductions to an end. There is, as I understand, an appeal against the decision of the Employment Tribunal, including that on time bar. The decision in Bear is also currently subject to potential challenge, as I understand it, in the appeal in Lock.
153. I have considered carefully the completing submissions in relation to whether the applications to amend constitute a new complaint …
154. I appreciate that the subject matter of the proposed amendments is at “top level” the same as that contained within the claims. The claimants, putting the matter broadly, maintain that in the period covered by the proposed amendments the respondents have failed to pay them at the appropriate rate having regard to their normal level of pay and the holiday pay actually paid to them during periods of holiday leave.
157. Even if, however, the holiday pay paid to a worker during the period of amendment is said to have been less than it ought to have been due to an unauthorised deduction and the nature of that alleged unauthorised deduction is the same as the case in an earlier period of claim, in my view an application to amend to bring in a claim for a later period is an application to advance a new claim. That claim will be based upon alleged unauthorised deductions in the period to be covered by the amendment. The fact that this is a not a completely unheralded ground of claim in the previous dealings between the parties would appropriately be factored into the consideration as to whether to allow the amendment … There might be issues of timebar arising as mentioned above.
158. Timebar issues will be more easily identified and potentially resolved in due course, once higher authorities have determined the principles applicable, if there is specification of the claims as initially brought and as they are set out in the elements sought to be added by amendment.
159. … I see it as desirable in the particular circumstances of this case for there to be specification of the elements of the claims as originally brought and as sought to be added by way of amendment …
161. I understand the claimant’s assertion that they will require to seek information from the respondents to enable them to provide information, certainly in relation to the historical aspects of holidays, sums paid and possibly sums paid at other non holiday times …
163. … the stage has been reached where, in this particular case and in the circumstances of this case, Orders should be granted as sought by the respondents. I have therefore granted their applications.
164. … I raised with parties an alternative way of proceeding by way of information being sought and supplied from both parties in relation to elements of the claim. This might have involved there being a lead claimant in each instance. The information might assist with determination of the amendment applications.
165. The claimants were prepared so to proceed. The respondents opposed that course of action. Their position was that the applications to amend should be determined as made and on the footing that allowing them subject to timebar was not possible given the terms of Rawson and Selkent …
167. The applications to amend which have not been refused on the basis of seeking to advance claims for future loss were all made after the Practice Direction of 2015. … I regard the terms of paragraph 6 of the Practice Direction as being applicable. It is in my view in the interests of justice to allow the amendments to be made (subject to consideration of the timebar point as detailed below) notwithstanding any lack of specific detail in the proposed amendments …
168. I have considered carefully the competing propositions as to whether an amendment can be allowed “subject to timebar”.
169. I have come to the view that I am able to allow the amendments, other than those seeking to add claims for future losses, reserving all issues of timebar. The amendments are therefor allowed subject to timebar.
170. After much consideration of the circumstances of these particular cases I have concluded that the facts and circumstances are distinguishable from those which pertained in the cases both of Selkent and Rawson.
171. I am conscious of the principles laid down in these cases. I recognise that they proceed on the basis of allowing or refusing an application to amend with the timebar issue being part of the basis for the decision one way or the other. Rawson says in paragraph 14 that the time bar point must be considered at the amendment stage.
172. In my view, what is involved in the circumstances of these cases are, however, different scenarios to that which pertained in both Selkent and Rawson. Each of those cases involved the presentation of a claim. There was then an application to amend the claim to include ground of claim which existed at the time of presentation of the original claim but which was not included within it.
173. What the current cases involve is presentation of claims followed by applications to amend. These applications do not seek to advance claims which were open to the claimants at the time of presentation of the original claims but which were, for whatever reason, not advanced at that stage. Rather, they seek to make claims in terms of the position unfolding with the passage of time since the presentation of the original claims. They refer to deductions and underpayments in respect of holidays taken by the claimants during the periods of amendment.
174. The applications to amend see a repetition of the basis of claims originally made. Paragraph 14 of Rawson referred to a new claim being made. Here there is a reference to the original claim, by the repetition of it relating to periods which have passed since the claims were originally presented. Whilst there is a new claim being advanced, it is not an unrelated or, I would venture to say, a claim likely to have been unanticipated. It is based on the same principle as the claim initially made. It arises due to the passage of time and alleged ongoing underpayments.
176. The respondents cannot say, in my view that they are taken by surprise by the proposed amendments. They have the information as to who has been on leave and what is being paid to them during the periods involved. That contrasts with the type of situation which pertained in Rawson in particular.
177. Further it cannot in my view be said by the respondents that they have been prejudiced by the absence of these elements in the original claims …
178. I also see it as relevant that whilst the EAT has set out its position on time bar in the Bear Scotland case, as I understand it there remain arguments about the correctness or otherwise of that approach, those arguments now being advanced in a different forum. To consider applications to amend and to take account of principles of time bar currently set out as applicable in a case of this type when it is known that these matters are before Employment Appeal Tribunal and/or upper courts, would not seem to me to be appropriate. In short the law on time bar in this area is uncertain.
179. I have therefore considered the issue of time bar and do regard it as of relevance in the ultimate determination of the applications to amend. For the reasons set out however I have concluded that it is both appropriate and open to me to allow the amendments subject to time bar in the particular circumstances of these cases. There may require in due course to be a PH in relation to timebar.
180. It is recognised in the Practice Directions, both in the Direction issued in December of 2014 and that issued in March 2015, that there are cases currently proceeding in higher courts which will have a key impact on cases of the type being pursued by the claimants in this case. Both parties in these cases recognise that the context of consideration of these applications for amendment is that of the case being sisted pending determination of cases at higher level. The cases are not therefore ones in which a Hearing is looming or in which preparation for a Hearing is required within the immediate future.
181. In considering the ability of the respondents to understand the case brought against them and to be able to respond to that, it is also relevant in my view to keep in mind that whilst the claim is set out in broad detail and the amendments follow a similar pattern, the respondents are on notice as to the type of claim being made and have relevant records within their own possession …
182. I recognise and accept that it will be for the claimants to specify their case. The Orders now made will see that specification being provided. …
183. In my view, looking at the situation as it currently is, looking to the factors mentioned, the claims as made and the amendments proposed and in particular that cases are currently being considered at higher level, it is appropriate to allow the amendments being Aldridge (iv), (v),(vi) and (vii), Taylor (ii), (iii) and (iv), McArthur (i), (ii) (iii) and (iv), Sutherland (i), (ii) (iii) and (iv) and Ross and Menzies (i) and (ii), all subject to reservation of time bar and as detailed in this Judgment.”
The Respondents’ Arguments on Appeal
4. At the hearing before me, Mr Martin advanced four arguments in support of his appeal against the decision. First he submitted that Judge Gall had wrongly failed to consider whether the claims were out of time as part of the exercise of discretion in relation to the applications to amend. Secondly, he argued that it is essential that before an amendment can be allowed it must be properly formulated and sufficiently particularised so that the respondent knows the case it is required to meet. Thirdly, the judge had taken into account an irrelevant factor in deciding to grant the amendments, namely that in future there would be more legal clarity regarding time bar. Finally he submitted that the Judge had been wrong to conclude that the amendment applications complied with the Presidential Directions of 11th December 2014 and/or 27th March 2015 and/or that, in relation to an amendment application filed before 27th March 2015, paragraph 6 of the later Presidential Direction was relevant to his determination.
5. In support of the first argument, Mr Martin submitted that, having found that the amendments sought to advance new claims (paragraph 157) the Judge had erred in failing to resolve the question of whether the claims were out of time as part of the consideration of whether or not to grant the amendment applications. It was clear on the authority of Selkent Bus Co ltd v Moore [1996] ICR 836 that in such situations the tribunal was required to consider whether the complaint was out of time and if so whether the time limit should be extended under the applicable statutory provisions (per Mummery J at 844). The question of time bar must be considered at the point at which the tribunal is determining whether to accept jurisdiction over the amendment. In the interests of justice and certainty a one stage process was required. Paragraph 5(2) of the 2014 Presidential Guidance for Employment Tribunals on General Case Management, albeit applicable to England and Wales made clear that a decision on whether an amendment was out of time had to be made when considering whether to allow the amendment. It was clear from the approach of Lady Smith in Newsquest (Herald and Times) Limited v Keeping UKEATS/0051/09 that the same rule applies also in Scotland. Further, it was clear from the case of Mouteng v Select Services Partner Ltd UKEAT/0059/08 that the issue of time bar was not a separate consideration but must be put in the balance of prejudice/ injustice test as to whether or not the amendment should be granted. It was not sufficient for Judge Gall to record, at paragraph 179 of his judgment, that he regarded the issue of timebar as “relevant in the ultimate determination of the applications to amend”. The authorities required an evaluation of the issue of whether the new claims were time barred, not simply an acknowledgement that timebar was a potential issue. There was no basis in the authorities for reservation of the time bar issue in this context. To the contrary the authorities require the point to be determined as part of the exercise of deciding whether to allow the amendment. The claimants could easily have presented amendment applications in respect of any given deductions every three months, thus avoiding the timebar issue, so there was no injustice to them in approaching the matter in accordance with recognised authority.
6. While it was indisputably the case that the judge’s decision involved the exercise of discretion, such a decision could still be interfered with where it disclosed one of (i) an error of law, (ii) a misapprehension of the facts or (iii) a failure to take into account a relevant factor or the taking into account of an irrelevant factor. The failure to evaluate timebar as part of the decision and the misapplication of the law in Selkent represented errors of law. Further, as it is clearly established that, once an amendment is granted, it has the effect of preventing a respondent from raising the timebar point thereafter. HHJ Clark stated in terms in Rawson v Doncaster NHS Primary Care Trust UKEAT/0022/08 (at paragraph 14) that the reason consideration of timebar was so essential when deciding whether or not to grant permission to amend was the inability of the respondent to revisit it later.
7. Mr Martin submitted also that the judge’s approach failed to apply the established principle that it was for the claimant to establish the jurisdiction of the tribunal and the related onus of establishing that the amendment should be granted (see Mouteng at para 31). Time bar was one of a number of points being relied on by the respondent in opposing the amendments. The effect of Judge Galls’ decision was to relieve the claimants of one of those arguments, namely time bar, in a situation where it was the claimant’s failure to particularise their claims adequately that led to the lack of clarity on the timebar position. The claimants had secured an unfair advantage through their own wrong.
8. It was also an error of law for the judge (at paragraphs 172-174) to seek to adopt a different approach simply because the claims that were the subject of the amendment applications were alleged to have arisen after the presentation of the ET1. It is of course possible to amend in claims where the cause of action arises after such presentation, as clarified in Okugade v Shaw Trust UKEAT/0172/05 and Prakash v Wolverhampton City Council UKEAT/0140/06. Those decisions did not support an approach that deviated from Selkent, however. To the contrary, in Prakash the case was remitted back to the tribunal with a specific direction (at paragraph 65) to determine whether the amendment should be allowed “… in accordance with the principles set out in Selkent”. Where claims arose after the presentation of the ET1 it might even be said that a claimant has less excuse for not complying with time limits.
9. Mr Martin’s second argument was that it is essential before allowing an amendment that it must be properly formulated and sufficiently particularised so that a respondent can make submissions and know the case it is required to meet. In Remploy Limited v Abbott and Others UKEAT/0405/14 HHJ Serota QC had allowed an appeal on the basis that the tribunal had fallen into error by granting permission to amend without first ensuring that it had before it a properly particularised proposed amendment. This point was related to the first argument in that, without knowing whether the claims were only just time barred or were weeks out of time, discretion on whether to allow them in could not be properly exercised. The only appropriate decision to an amendment that is too poorly particularised to evaluate it would be to dismiss it. It was erroneous to allow it subject to subsequent refinement as the judge appeared to have done in this case. Where granted, the precise wording of an amendment stood a part of the claim from the date of the application to amend. It followed from the judge’s order that particularisation was to be provided subsequent to the amendments being allowed that he accepted that they were not properly particularised. Mr McArthur and eleven others had presented their proposed amendments almost 18 months after the initial presentation of their claims. It was unclear whether any deductions in the intervening period had been made within three months of the amendment applications or whether there had been a series of deductions because there was no specification at all of actual hours worked or dates on which work was done or of any deductions made at all. Examples of the amendments as purportedly granted had been produced in a Supplementary Bundle and illustrated the absence of any specification on these issues. The answers to these unanswered points may be different for each claimant. The tribunal was unable to address these issues in a way that would have allowed for the proper exercise of discretion. There was no basis for contending that the Presidential Direction had somehow “watered down” the long established right to fair notice of allegations made against a party.
10. On the third argument, Mr Martin submitted that Judge Gall had erred in taking into account an irrelevant factor in deciding to grant the amendments, namely that in future there would be more clarity on the time bar issue. At best, uncertainty in the law would be a reason for delaying a decision on the amendments until there was legal clarity but it could never be a relevant factor in granting them. A decision on a proposed amendment could be reached only its merits and in light of the law as appeared applicable at the time of that determination. There was no basis in authority for the approach on this taken by the judge in this case.
11. The fourth point of contention was that the judge erred in concluding that the amendment applications complied with the Presidential Directions of 11 December 2014 and/or 27 March 2015 and in considering that, in relation to the amendment application filed before 27 March 2015, paragraph 6 of the second Presidential Direction was relevant to his determination. Those Directions did not excuse proposed amendments that simply stated that the new claims, otherwise unspecified, fall at some unstated point or points between the date of the initial claim and the date of the amendment application. The requirement in paragraph 3 of the Direction to set out the “dates or periods” of the claim required more specification than that. In any event, the Judge failed to take into account the differing Presidential Directions in force at the time when the amendment applications were made. He had stated incorrectly at paragraph 167 that all of the applications were made after the Practice Direction of 27 March 2015, when the amendment he allowed in relation to Mr Taylor was dated 21 February 2015. Quite apart from the highlighted inadequacies with the actual terms of the amendments, the Employment Judge himself acknowledged (at paragraphs 156 and 159) the possible different bases for the various claims sought to be added and the need for additional specification. Against that background it was not possible to consider relief under paragraph 6 of the Presidential Direction unless and until a proper conclusion regarding default and the scale of the default could be reached.
12. For the claimants, Mr Maguire emphasised a number of general propositions contained in his skeleton argument. First, that a decision on whether or not to allow an amendment involved the exercise of discretion. Accordingly the circumstances in which the EAT could interfere were very limited - Bastick v James Lane (Turf Accountants) Ltd [1979] ICR 778 at 782. Secondly, for an appeal to succeed in relation to the exercise of discretion, the discretion must “… exceed the generous ambit within which reasonable disagreement is possible” - Remploy Limited v Abbott and Others [2015] UKEAT /0405 at para 59, citing Asquith LJ in Bellenden (formerly Satterthwaite) v Satterthwaite [1948] 1 All ER 343 at 345. Thirdly, the injustice or hardship that might be caused to any of the parties if a proposed amendment is allowed (or refused) was something to which regard must be had - Cocking v Sandhurst (Stationers) Ltd [1974] ICR 650. Finally, the EAT should, wherever legally possible, back up the case management rulings and decisions of Employment Judges - Gayle v Sandwell and West Birmingham Hospitals NHS Trust [2011] IRLR 810.
13. In response to the first substantive argument advanced by Mr Martin, Mr Maguire pointed out that Judge Gall had referred explicitly to the cases of Selkent and Rawson in reaching his decision. In particular he had noted, in setting out the applicable law at paras 131 and 132 of his judgment, both what was laid down in Selkent about the relevance of time limits in deciding whether or not to allow an amendment and the statement in Rawson that once an amendment was granted the respondent is thereafter prevented from raising the limitation defence. He distinguished Selkent and Rawson on the basis that in both of those cases there was an application to amend to include a ground of claim that had existed at the time of the presentation of the original application. At paragraphs 173-175 he explains that in the present cases the proposed new claims had not existed when the original applications were framed and so had arisen through the passage of time since then. This was a distinction he was entitled to draw in the exercise of his discretion. Further, the effect of the amendments in the present cases was not to “backdate” the new claims to the date on which the original claims were made. In those circumstances it was not essential for the Judge to determine any issue of time bar before allowing the amendments and so no error of law had been identified.
14. Mr Maguire pointed out the difference between the Presidential Guidance for Scotland and that for England. Unlike the latter, the former does not state that in determining an application for amendment the tribunal must consider whether the new claim is in time. The relevant Presidential Guidance recognises that a claim for losses accruing after the date of the originating application can be made by amendment of the original claim. In so doing it does not require that time bar issues be determined at the time the amendment is allowed or refused.
15. So far as the argument that once an amendment is granted the respondent is prevented from thereafter raising a time bar point was concerned, Mr Maguire submitted that the observation to that effect in Rawson was obiter dictum and related to an amendment that sought to introduce a head of claim which could have been included in the originating application. It was also contended that as the decision to allow the amendment subject to time bar was a case management order, it could accordingly be varied suspended or set aside in terms of Rule 29 of the Employment Tribunal Rules of Procedure 2013. On that basis a decision could be made at a later date that the amendments are in fact time barred. There was detailed argument before the Employment Judge about whether it was possible to allow amendment “subject to time bar”. Paragraphs 168, 175 and 177 make clear that he considered the various arguments and the absence of any real prejudice to the respondents. He concluded that he had jurisdiction to allow the amendments. No issue of onus arose as detailed submissions had been made by both sides and a decision that favoured the claimants’ arguments was the end result. However the effect of the decision is claimants retain the burden of demonstrating that any amendments are not time barred.
16. In response to the second ground of appeal Mr Maguire pointed out that the Employment Tribunal Rules of Procedure 2013 do not set out any specific requirement as to the form and content of a proposed amendment. The Employment Judge found (at paragraph 181) that the respondents were able to understand the case brought against them and to respond to it, given that they have relevant records in their own possession. He contrasted the case before him with a discrimination case where a broad statement made without any detail would be difficult to answer. Absent any challenge to the Employment Judge’s findings in this respect it was difficult to see how it could be successfully argued that the amendments were not particularised sufficiently to allow the respondents to answer the case.
17. So far as the third ground was concerned, Mr Maguire stated that, while the EAT in Bear Scotland Limited v Fulton and another [2015] ICR 221 had held, inter alia, that non-payment of holiday pay cannot be claimed as the last in a series of deductions where a period of more than three months has elapsed between deductions, he understood that that arguments as to the correctness of otherwise of that approach were to be heard by the EAT in the relatively near future. In any event, both sides had accepted before the Employment Judge that there may be further developments on the issue of time bar to emerge from the case law. This was a relevant factor for the Employment Judge to take into account in allowing the amendments subject to time bar. The fact that the Judge could have decided not to make a decision on the applications did not mean that it was not a proper exercise of his discretion to take the possibility of future clarity in the law into account in reaching his decision.
18. On the fourth ground, Mr Maguire’s response was that Judge Gall’s decision was in line with the President’s Directions of 11 December 2014 and 27 March 2015 and also with the overriding objective in the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2013, Schedule 1, Rule 41. The decision, at paragraph 167, was that the applications to amend complied with the provisions of the “Practice Direction”. It was implicit that he found that the applications to amend satisfied paragraph 3 of the Presidential Direction. In any event paragraph 6 of the 2015 Presidential Direction allows an Employment Judge, in the interests of justice, to permit a claim to be amended even if it does not comply with the terms of the Direction. Taking the Aldridge and Others batch of cases as an example, each application to amend identifies the case number, claimant and respondent and sets out the amended particulars to include the additional dates and/or periods of alleged no payment of holiday pay and the basis of the complaint. The decision of the Judge to exercise discretion in favour of allowing those claims to be amended, subject to timebar, could not be said to amount to an error of law. So far as the specific argument about Mr Taylor’s case was concerned, by the date of the preliminary hearing the Presidential Direction of 27 March 2015 was in force and all applications fell to be considered by reference to that Direction, which revoked the previous Direction. Even if the Judge should have applied the earlier Direction to Mr Taylor’s application he would have been justified in allowing it in accordance with the overriding objective and any error was not a material error on law such as to justify interfering with his decision.
Discussion
19. This appeal primarily relates to an issue about which there was thought to be settled law, namely the approach of an Employment Tribunal to an application to amend which seeks to insert a claim that would be time barred but for permission to amend being given. The particular difficulty that has arisen relates to that category of cases involving claims for alleged underpayment of holiday pay where there is arguably an ongoing “loss” during the proceedings if the deductions complained about continue to be made by the employer. The Presidential Practice Directions of 11 December 2014 and 27 March 2015 were designed to deal with such a situation. The first Direction provided that a claimant or group of claimants, having raised complaints of alleged non-payment of holiday pay, can apply to amend their original applications by adding details of the additional dates or periods of non-payment, the basis of complaint and the amount claimed – paragraph 3 of the 2014 Direction. The second Direction deleted the requirement to include the amount claimed in the proposed amendment. It added additional provisions including a period of 7 days for the respondents to provide written comments on the amendment application after which “… the application to amend will then be considered by a judge in accordance with the usual principles for the amendment of a claim”(2015 Direction paragraph 5). There is then provision (at paragraph 6) for the Employment Judge permitting a claim to be amended even if it does not comply with the terms of the Direction after hearing the reason for non-compliance and being satisfied it would be in the interests of justice so to do. It was not suggested to me that paragraph 5 was an innovation on the position that existed previously in terms of the approach to be taken by the tribunal to a proposed amendment, it seems rather to serve as a reminder that a tribunal always requires to consider the arguments for and against any proposed amendment before deciding whether to grant it and that the Direction should not be taken as giving claimants “carte blanche” to submit amendments without being able to justify the basis for them. What then, are the “usual principles for the amendment of a claim” in the Employment Tribunal context and insofar as relevant to this appeal?
20. The trite but nonetheless important starting point is that a decision to grant or refuse an amendment involves the exercise of judicial discretion. In exercising that discretion, regard must be had to all the circumstances of the case, including consideration of the injustice or hardship that would be caused to any of the parties if the proposed amendment is allowed or refused - Cocking v Sandhurst Ltd [1974] ICR 650. That the applicability of time limits is a relevant consideration in considering how to exercise discretion on an opposed amendment was put beyond doubt by Mummery J in Selkent Bus Co Ltd v Moore [1996] ICR 836. He listed the nature of the proposed amendment, the applicability of time limits and the timing and manner of the application as three relevant considerations in a non-exhaustive list of circumstances to be taken into account. On time limits, he stated:
“If a new complaint or cause of action is proposed to be added by way of amendment, it is essential for the tribunal to consider whether that complaint is out of time and, if so, whether the time limit should be extended under the applicable statutory provisions …”
That passage from Selkent has been reproduced and relied on in a number of subsequent EAT decisions involving proposed amendments. In particular, the issue of limitation being an essential question in considering a proposed amendment was confirmed and elaborated by HHJ Peter Clark in Rawson v Doncaster NHS Primary Care Trust [2008] UKEAT/0022 in the following passage:
“The effect of an amendment is to backdate the new claim to the date on which the original claim form is presented. Once amendment is granted, the Respondent is thereafter prevented from raising the limitation defence. That is why consideration of the extension of time point is essential when deciding whether or not to grant permission to amend …”
From a Scottish perspective, the position was articulated clearly and unequivocally by Lady Smith in Newsquest (Herald and Times) Limited v Keeping [2010] UKEATS/0051 where she stated that:
“The fact that to allow an amendment would, in effect, enable a claimant to elide a statutory time bar does not necessarily prevent an Employment Tribunal granting the application. It does not operate as an absolute bar … It is, however, as I said in the case of Argyll and Clyde Health Board v Foulds & Others UKEATS/0009, a highly relevant factor … Underhill J referred to it as “potentially decisive” in TGWU v Safeway Stores Ltd UKEAT/0092/07 at paragraph 10. Furthermore, a Tribunal requires to consider why the application was not made at an earlier date, why it is being made at that point in time and what are the whole circumstances of the lateness … The overall task of balancing the injustice and hardship that will result from granting the amendment against that which will result from refusing it, must, in the case of an amendment to introduce a fresh claim which would be time barred if presented independently, be carried out in that context.”
21. It is clear from these authorities that the usual principles for amendment of a claim include a requirement to determine at the stage of exercising discretion to grant or refuse the application (i) whether the amendment seeks to bring in a claim that would otherwise be time barred and (ii) if so, whether there are good reasons, taking into account injustices and hardship that may be the result, to grant the amendment notwithstanding that the effect will be to allow the amending party to avoid the usual consequences of presenting a claim out of time. It is always for the party seeking to amend his claim to establish that it should in all the circumstances be accepted. In my view the required approach is of general application and is not restricted to circumstances in which the new claims sought to be inserted arose were open to the claimants at the time of the originating application. The accepted principle is that where timebar is an issue in a proposed amendment, it is considered as an integral part of the overall decision to grant or refuse the amendment. That is the position in both Scotland and England and Wales, the absence of any reference to consideration of time limits in the relevant Presidential Guidance in Scotland being of no moment standing the clear statement of principle enunciated by Lady Smith in Newsquest. The cases of Okugade v Shaw Trust UKEAT/0172/05 and Prakash v Wolverhampton City Council UKEAT/0140/06 serve to reinforce rather than retract from the established principle. In the former case an appeal was allowed because the tribunal had dismissed a proposed amendment that sought to raise matters postdating the receipt of the originating application without considering the broader picture, including the issue of time limits and in Prakash it was emphasised that, where considering an amendment seeking to introduce a claim that arose from a date after the already presented claim had been lodged, the discretion to grant or refuse it had to be exercised in accordance with the well known principles set out in Selkent.
22. In the present cases, the Employment Judge acknowledged that the amendments in question sought to introduce new claims, albeit new claims that were related to those already made and it was conceded before me that he had been correct so to categorise them. One of the grounds on which he sought to distinguish the cases of Selkent and Rawson was that those cases dealt with amendments that sought to introduce claims that were in existence (and therefore could have been included) when the original claims were made. I have reached the view that his approach was wrong in law. While the circumstances of the present cases are entirely different from those in Selkent and Rawson the principles they set down are of general application. Where a claim arises after the originating application is made it may be even more difficult to justify amending outside the time limit. Much depends on the circumstances. In any event, the error in this case was in attempting to carve out the issue of time bar from the decision on whether to allow the amendment. A determination on the grant or refusal of an amendment is a single stage exercise. Once the tribunal allows the amendment the new claim is subject to the jurisdiction of the tribunal and a substantive decision will be made on the claims made within it. The Judge’s misunderstanding of the legal position in this case is best illustrated by his reference, in paragraph 179, to the issue of timebar being “… of relevance in the ultimate determination of the applications to amend”. It seems that he regarded the decision to allow the amendment “subject to time bar” as some sort of tentative conclusion, to be revisited later. That is not, on the basis of the established principles, a permissible approach. The Presidential Practice Directions do nothing to assist the claimants on this issue. On the contrary, the 2015 Direction serves to emphasise the importance of any amendment being considered on its merits. The Judge in this case has not determined as part of the overall hardship test whether or not the amendments seek to introduce time barred claims and for that reason alone his decision cannot stand. There were other options available to the Judge in the situation presented to him. In particular, he could have deferred his decision on the amendments until a later date. There may be situations in which a decision on an amendment can be deferred pending inquiry. It may sometimes be appropriate to defer a decision pending resolution of a legal issue by a higher court or tribunal. If a Judge is concerned that he cannot determine whether an amendment application should be allowed without more information, whether by way of factual inquiry or otherwise he can raise that with parties’ representatives. What the Judge in this case was not entitled to do was allow the amendments at the same time as deferring the timebar issue. That was in my view a material error that justifies interference with his decision.
23. There were other matters raised before me that merit some discussion. On the issue of the lack of proper specification within the amendments to allow for fair notice, again it would be an error to allow amendments without first ensuring that they were properly particularised. In Remploy Limited v J Abbott and Others UKEAT/0405/14, HHJ Serota QC, in allowing an appeal on that basis said the following:
“I consider … that the Employment Tribunal placed itself in great difficulty by failing to ensure that before it granted permission to amend, it had before it a properly particularised amendment. This failure in itself in (sic) sufficient to flaw the exercise of discretion. Without that the Employment Tribunal was simply not in a position to consider the effect of the proposed amendments on existing and future case management …”
Mr Martin argued that the same error had been made in this case and I agree. However, I do not consider that the only option available to the judge was to refuse the amendments. Again, if there is known to be a problem with particularisation, as there was here, an opportunity could be given to remedy that before any decision is reached and a determination of the proposal to amend deferred. There is a clear inconsistency in allowing amendments at the same time as requiring them to be further particularised, but where outright refusal of the amendments would lead to undue hardship I see no reason in principle why adjustment of the proposed terms of the amendments cannot take place prior to the determination being made. The focus of the arguments might then be on whether and in what time frame such refinement of the proposed amendments should be allowed but those arguments would be take place before the single stage decision on the granting or refusal of amendment itself.
24. It was also contended for the respondents that the need for future clarity on the time bar issue was an irrelevant factor giving rise to a stand-alone ground of appeal. As I have already indicated, there can be merit in a first instance decision maker awaiting the outcome of another case on an important point of principle or practice that will be binding upon him. The proper course in that situation is to defer a decision until the law is clarified, not to make a tentative or partial decision that seeks to excise an integral factor in the decision making process. In any event, the EAT decision in Bear Scotland v Fulton and another [2015] ICR 221 on the issue of time limits where there has been a series of deductions was not appealed. Only a higher court could overturn the decision of the then EAT President in that case and so it stands as authority binding on Employment Tribunals dealing with issues such as those that arise in this case.
25. So far as the 2014 and 2015 Presidential Directions are concerned, the decision appealed against appears to contemplate, at paragraph 167, two separate situations; (i) that the requirements in paragraph 3 are satisfied and (ii) that they are not, in which case relief under paragraph 6 would be appropriate. The problem with that approach is that it again involves excision of the timebar bar issue which is part of the exercise of determining whether there is compliance with the Directions. A failure to specify dates as required by paragraph 3 may result in the tribunal being unable to determine whether or not the amendments are time barred which in turn results in an inability to excuse failure to comply unless or until that issue is resolved. However, the points taken in relation to the Directions have less force than the main issue on which I have decided to grant this appeal. In particular, I would not have regarded the possible confusion on the part of the tribunal in relation to the timing of the Direction in force in relation to Mr Taylor’s claim as a material error had there been no other basis on which to regard the exercise of discretion as flawed.
Disposal
26. Counsel were not agreed on the appropriate disposal in the event that of the appeal being allowed. Mr Martin submitted that, in circumstances where the amendments were too poorly particularised to be granted in their present form, there was no benefit to be derived from remitting them back to the tribunal. Dismissal was the only reasonably possible outcome of any proper consideration of the amendment applications. The amendments disclosed no basis on which the timebar issue could be determined. It was accepted that if only the separation of timebar form allowing the amendment point succeeded there could be a remit, but if it was accepted that the amendments were so lacking in specification such as not to provide fair notice the only option was their dismissal. There was a difference between the level of specification required to allow an amendment and the more detailed specification required for a full hearing, but in these cases all that had been tendered were pro forma amendments with no particularisation at all. Mr Martin accepted that remit to the “industrial jury” was normally required unless there was only one possible outcome, but the rule in Jafri v Lincoln College [2014] ICR 920 did not apply in circumstances where these amendments could not be allowed. There was no justification for a “satellite enquiry” before reaching a decision on the amendments. They had to be assessed as at the date of the application to amend.
27. Mr Maguire’s position on behalf of the claimants was that even if the appeal succeeded the matter should be remitted back to the Employment Judge to deal with the amendment de novo. It would be up to him how to deal with the amendments in light of any clarification of the correct legal approach. In any event, on the face of it not all of the amendments raised possible time bar issues. For example, some of the Aldridge applications, two of the Taylor applications, one of the Ross & Menzies applications and two of the McArthur applications did not involve any timebar point. It would make no sense to dismiss amendments that were not on the face of it time barred. So far as those that were either time barred or possibly time barred were concerned, the claimants should have the opportunity of addressing the Employment Judge on why those amendments were late and whether they should still be allowed notwithstanding that lateness.
28. I have decided that, in allowing this appeal, I should remit it back to the tribunal to decide of new whether to allow these amendments. The real issue of substance before the Employment Judge and in this appeal has been whether or not it was permissible to allow these amendments “subject to time bar”. Having decided that issue in favour of the respondents, I consider that each side is now entitled to seek to persuade the Judge that the amendments should or should not be allowed. The outcome is not inevitable and may vary as between the different amendments. However, the onus is squarely on the claimants to confirm or deny whether each amendment is late and if so to what extent, before arguing that those which are late should nonetheless be allowed. The explanation for lateness will be part of that argument. I am not in a position to reach a conclusion on time bar as part of a decision on these amendments but I see no reason why the necessary information cannot be provided to the tribunal making the decision following the remit. While I accept that an amendment has to be considered in the terms presented, I see no reason why extraneous information clarifying the time bar point cannot be made available. Most importantly, the judge requires to apply the “injustice or hardship” test on the basis of all available material, including that relating to timebar. That is not an exercise that has been carried out in this case because of the attempt to excise the time bar issue from the exercise of discretion.
29. For these reasons I will allow the appeal and remit back to the tribunal to determine of new these applications to amend.