United Kingdom Employment Appeal Tribunal

Appeal No. UKEAT/0098/16/BA

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8AE

At the Tribunal

On 22 June 2016

Before

THE HONOURABLE LADY WISE

(SITTING ALONE)

MR N HASAN APPELLANT

TESCO STORES LTD RESPONDENT

Transcript of Proceedings

JUDGMENT

APPEARANCES

SUMMARY

PRACTICE AND PROCEDURE - Striking-out/dismissal

PRACTICE AND PROCEDURE - Bias, misconduct and procedural irregularity

The Claimant made a number of claims against his former employer.  An Employment Judge decided to hold a Preliminary Hearing to consider a number of matters, including (at the Tribunal’s own initiative) consideration of striking out some of the claims.

At the Preliminary Hearing the Employment Judge decided to consider whether to strike out all of the claims, not just those that parties had been given notice would be considered for striking out.  His decision was that none of the claims had any reasonable prospect of success and he struck them all out.

On appeal it was decided that, insofar as the Claimant, who was unrepresented and whose first language was not English, had no prior notice at all that two of the claims would be considered for striking out at hearing, the striking out of those was so tainted by procedural unfairness that the Judge’s ruling on those could not stand.  Even had there not been such unfairness, the Judge’s decision so far as the discrimination claim was concerned was premature given that discrimination claims should not normally be struck out without enquiry.

Further, all of the striking out decisions had been made following consideration only of whether the test in Rule 37(1)(a) of the 2013 Regulations had been met.  There had been a complete failure to address the necessary second stage of the exercise of discretion, identified as necessary in the case of HM Prison Service v Dolby [2003] IRLR 694 EAT.  That failure amounted to a clear error of law.  Appeal allowed.

THE HONOURABLE LADY WISE

Introduction

1.                  In a Judgment registered on 19 October 2015 Employment Judge Southam, sitting at Watford, made an Order following a Preliminary Hearing striking out all of the Claimant’s claims on the ground that they had no reasonable prospect of success.  I shall refer to the parties as the Claimant and the Respondent as they were in the court below.  From the outset of his claim, and at the hearing before the Employment Judge, the Claimant represented himself.  At the appeal before me he was represented by Mr Watson of counsel.  The Respondent has been represented throughout by Mr Adkin of counsel, and he appeared at the hearing before me.

The Applicable Rules

2.                  Rule 37 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 is in the following terms:

“(1) At any stage of the proceedings, either on its own initiative or on the application of a party, a Tribunal may strike out all or part of a claim or response on any of the following grounds -

(a) that it is scandalous or vexatious or has no reasonable prospects of success ;

(b) that the manner in which the proceedings have been conducted by or on behalf of the claimant or the respondent (as the case may be) has been scandalous, unreasonable or vexatious;

(c) for non-compliance with any of these Rules …

(d) that it has not been actively pursued;

(e) that the Tribunal considers that it is no longer possible to have a fair hearing in respect of the claim or response (or the part to be struck out).

(2) A claim or response may not be struck out unless the party in question has been given a reasonable opportunity to make representations, either in writing or, if requested by the party, at a hearing.

(3) Where a response is struck out, the effect shall be as if no response had been presented, as set out in rule 21 above.”

The Procedural Background So Far As Material

3.                  The Claimant lodged his claim on 2 August 2015 bringing claims of unfair dismissal, whistle blowing, race and age discrimination and violation of his intellectual property rights.  On 17 August 2015 the Tribunal listed the case for a Preliminary Hearing to deal with case management issues on 16 October.  The Respondent responded in an ET3 dated 14 September in terms of which it challenged the Tribunal’s jurisdiction to hear the unfair dismissal and intellectual property claims and asked for Further and Better Particulars of the whistle blowing and discrimination claims.  On 5 October the Respondent’s solicitor emailed the Tribunal asking for these matters to be dealt with at the Preliminary Hearing on 16 October.  On the same day, by a letter sent by email, Employment Judge Heal ordered that the Preliminary Hearing would consider those matters but (at the Tribunal’s initiative) would also consider whether to dismiss the claims for intellectual property, public interest disclosure and unfair dismissal on the ground that they had no reasonable prospects of success.  The Order was silent as to the discrimination claims and the request for further information.  However, consideration of the need to require a party to provide further information was point 2 in the list of case management issues in the Preliminary Hearing Notice dated 17 August; so, arguably, that part of the Respondent’s request had been dealt with.

4.                  Prior to the hearing the Claimant asked for an interpreter.  On 16 October the parties attended, but the interpreter did not.  The Claimant elected to proceed.  The Judge decided to consider whether the entire claim, including the race and age discrimination claims, should be struck out, and his Judgment makes clear that that is what he did.  There was a subsequent application for reconsideration by the Claimant, which was dismissed.

The Appeal

5.                  At the hearing before me, Mr Watson, in support of his submissions under grounds 1-3, pointed out that Rule 37(1) creates the jurisdiction to strike out but Rule 37(2) limits or fetters that power.  He submitted that there must be a real and adequate opportunity to make representations and it must always include advance notice.  He relied on the case of Catton v Hudson Shribman and Anor [2002] All ER (D) 143 in support of the proposition that a reasonable opportunity must be an adequate opportunity not just a chance to make representations at the hearing itself.

6.                  So far as ground 3 was concerned, in relation to the 11 days’ notice given of the possibility of striking out the whistle blowing and unfair discrimination (and intellectual property) claims, Mr Watson acknowledged that the court might be reluctant to fix a minimum period of notice in terms of Rule 37 but submitted that 14 days would be a reasonable period.  By analogy, Rule 53, relating to preliminary issues, is indicative of what might be required.  Mr Watson submitted that no consideration whatsoever was given by the Judge to the issue of a reasonable opportunity to make representations in relation to both the discrimination claim and the other payments claim.  A discussion with the Claimant at the oral hearing was not enough.  It was not important whether the procedural failure made any difference.  Further, the warning given by the Employment Judge at the hearing could not constitute a waiver of the right conferred by Rule 37(2).  There was no application before the court to strike out the discrimination or other payments claims, and the Claimant was therefore not at the hearing in order to respond to those even orally.  It was not in dispute that the reference by the Judge to the Claimant that the claims could be struck out in their entirety was something raised by the Employment Judge alone.  In all of the circumstances, there had been a complete failure to conduct the proceedings in a procedurally fair way.  The same arguments applied to both the discrimination and the other payments claim.  So far as the whistle blowing claim was concerned, a view had to be taken as to whether 11 days’ notice was sufficient.

7.                  Turning to ground 4, this involved the test for striking out and whether the threshold had been met.  Reference was made to the cases of Anyanwu v South Bank Students’ Union [2001] ICR 391 HL and Ezsias v North Glamorgan NHS Trust [2007] ICR 1126 CA.  It was submitted that discrimination claims are fact sensitive and should invariably not be struck out without enquiry.  The Ezsias case confirmed that the same rule applied to whistle blowing and other claims.  The Employment Judge should have taken into account that the claim form was drafted by a litigant in person.  Further, case authority was referred to by the Judge that the litigant would not have read, nor would he understand the requirements of written pleadings.  Further, it was pedantic to say in relation to the discrimination claim that the Claimant had to state a comparator at this early stage.  The Judge should have considered the overriding objective to put parties on an equal footing where possible.  Reference was made to the case of Mensah v East Hertfordshire NHS Trust [1998] IRLR 531 CA.  If more help had been given to the litigant in person, a different outcome might have been reached.  It had been precipitous to strike out the other payments claim before identifying what it was about.

8.                  So far as ground 5 was concerned, Mr Watson argued that Rule 37 imported a two stage test.  The first stage was to consider whether any of the grounds (a)-(e) have been established.  Thereafter, a Judge had to consider whether or not to exercise the discretion in favour of striking out.  Support for that could be found in the case of HM Prison Service v Dolby [2003] IRLR 694 EAT.  So, it was not sufficient to decide that one of the strike out grounds was made out.  The Judge had addressed only stage one of the two stage approach and had accordingly erred in law.

9.                  In reply, Mr Adkin addressed each of these points.  He submitted that Mr Watson was inviting the court to rewrite the Rules to say that there should be written notice.  Rule 54 clearly related only to preliminary issues in requiring 14 days’ notice.  Those were normally issues that needed evidence.  The wording of Rule 54 is in clear contrast to that of Rule 37.  By the time of the hearing the Claimant had produced a nine-page letter elaborating his claims; so, he was aware that he had to give further details.  He had two months’ notice that there was to be a hearing, and the hearing was listed for two hours.  He knew that some of the claims were subject to a strike out argument.  Accordingly, he had a reasonable opportunity.  In any event, there was an exploration of his claims at the hearing (see paragraphs 15 and 16 of the Judgment).  It was incorrect to assert, as the Claimant’s written argument did, that the Judge considered only the claim form.  It was clear that there was a detailed discussion.

10.              Mr Adkin submitted that the Catton case could be distinguished because it pre-dated not just the 2013 Rules but also the 2004 Rules.  More importantly, the strike out that was being considered in Catton was in relation to both the issue of no reasonable prospects of success and that of conduct and there had been no prior notice that the conduct allegations would be dealt with at the hearing.  In contrast, at this case the Claimant knew that he would be asked about the claim itself.  It was not for this Tribunal to rewrite the Rules, and the Claimant was aware of the substance of his own claim.

11.              So far as ground 4 is concerned, reliance was placed by Mr Adkin on the case of Jaffrey v Department of Environment Transport & Regions [2002] IRLR 688 EAT in support of the power to strike out discrimination cases, albeit that the power tends to be used sparingly.  The threshold test as enunciated in Ezsias was emphasised as one indicating that the claim must have some prospect of success.  It could not be said that the Judge had inappropriately dismissed this case against a background of disputed fact.  The approach he had taken was to assume that all of the Claimant’s facts were either true or could be proved.  In relation to discrimination, there had to be something more than a bold assertion to put the burden on the Respondent.  There was nothing in the ET1 to say why age or race was a factor.  The Claimant had not set out any basis for that claim.  So far as protected disclosure was concerned, it was incontrovertible that ideas for increasing profits by themselves could not amount to a protected disclosure, and in any event the chronology did not work because the treatment started before the disclosure.  On these bases, the Judge was right to strike out the protected disclosure claim.  So far as other payments were concerned, there was no specification whatsoever of what that claim was about.

12.              On ground 5 Mr Adkin submitted that while a two stage approach was normally required by Rule 37 the situation may be slightly different where the ground for striking out was no reasonable prospect of success.  While the use of the word “may” in the Rule implies a discretion, one had to distinguish minor breaches of rules or procedure from a claim that was wholly lacking in specification or legal support.  It was pointed out that the Dolby case involved a dispute of fact situation.  An analogy might be drawn with the Civil Procedure Rules, which provide for striking out where there is no reasonable prospect of success unless there is some other compelling reason not to do so.  By analogy, there was no compelling reason here to do anything other than strike out once it was established that there were no reasonable prospects of success.

Discussion and Conclusions

13.              Dealing first with procedural unfairness, there is, in my view, a clear distinction between the discrimination and other payments claims on the one hand and the whistle blowing and unfair dismissal claims on the other.  There was no notice whatsoever that the striking out of the former was to be considered at the Preliminary Hearing, while there was 11 days’ notice in relation to the latter.  In my view, the decision to strike out the discrimination and other payments claims was made in clear breach of the provisions of Rule 37.  Rule 37(2) requires a party to be given a reasonable opportunity to make representations when consideration is being given to striking out.  The opportunity must be adequate, and that necessarily includes notice so that oral or written representations can be prepared.  I do not consider that Catton is distinguishable, on the basis that the ground for striking out was conduct where the facts were not intimated prior to the hearing.  In any event, it was known in this case that the Claimant was a litigant in person.  It was procedurally unfair in the extreme to expect him to address the issue of striking out of the discrimination and other payments claims when he had been given no prior notice that they could be dismissed at the hearing.  The warning issued at the outset of the hearing was insufficient to overcome that unfairness.  It was accepted that the idea of considering striking out the discrimination and other payments claims was raised at the hearing by the Judge himself and not by counsel for the Respondent.  Had it been raised for the first time by counsel for the Respondent at the hearing, the only fair course would have been to refuse to deal with it in the absence of notice.  The unfairness in the circumstances that arose in this case was aggravated by it being the decision maker himself who decided it should be discussed without notice.  I am entirely satisfied that the decision to strike out the discrimination and other payments claims cannot stand as a result of the failure to give the Claimant a reasonable opportunity to make representations.

14.              So far as the procedural unfairness argument relates to the other claims, the position is rather different.  There is no specified period of notice required for a striking out claim.  The Claimant was given 11 days’ notice of the decision to canvass striking out the whistle blowing and unfair dismissal claims.  While I am satisfied that fair notice of a hearing at which striking out will be considered is essential, it would be inappropriate and perhaps incompetent for me to try to “read into” Rule 37 any particular notice period.  What is reasonable in any given case depends on the circumstances.  While the Claimant’s circumstances, including lack of legal representation and a first language other than English, are relevant, they are not sufficient for me to conclude that there was no reasonable opportunity for him to make representations about the possibility of these other claims being struck out.  The Tribunal can expect even litigants in person to read and digest information sent to them or to seek assistance if they do not understand what the documentation conveys.  The importance of advance notice of a striking out claim is that it allows a party to consider what may occur.  The letter of 5 October 2015 from the Tribunal is in clear and simple terms.  I conclude that the Claimant did have a reasonable opportunity to consider his position and prepare representations in relation to the intellectual property, public interest disclosure and unfair dismissal grounds against a background of notice that it might be decided at the hearing that they had no reasonable prospect of success.

15.              Turning to ground 4, the issue of the threshold test for no reasonable prospect of success, the law is fairly well settled.  In Anyanwu the House of Lords emphasised (paragraph 24) that discrimination cases are generally fact sensitive and should almost invariably be examined on the merits.  The Rule that only exceptionally can an application to an Employment Tribunal be struck out as having no reasonable prospect of success when the central facts are in dispute applies with equal force to whistle blowing and other claims (see Ezsias).  In this case, however, it appears that the Employment Judge approached matters as one would a legal debate on the relevance of written pleadings.  He assumed that the Claimant would prove all of the facts stated and then asked himself whether that would be sufficient in law to establish each of the specified claims.  In other words, he assumed that any factual enquiry would go in favour of the Claimant.  While that may well be an acceptable approach at a stage where both parties have finalised their positions in writing, it was, in my view, an unhelpful way to proceed when the Judge was faced with a litigant in person who had asked for but was without an interpreter.  The initial purpose of the Preliminary Hearing was, after all, amongst other things to consider the need to require a party to provide further information.  The Employment Judge conducted an analysis of the Claimant’s case that ignored the possibility that it could have a reasonable prospect of success if properly pled.  So far as the discrimination and other payments claims are concerned, I have of course already decided that they should not, as a matter of procedural fairness, have been struck out at the hearing.  Even had I decided that it was proper to consider striking them out, I would in any event have concluded that the Employment Judge applied too stringent a test in deciding that the discrimination claim had no prospect of success for want of a comparator or further details of why the Claimant claimed he had been discriminated against on the basis of race or age.

16.              There is no doubt that the case on protected disclosure is very poorly pled.  All that can really be said is that the Claimant ticked the appropriate box in the claim form.  There is, of course, a potential relationship between this claim and the unfair dismissal claim in that constructive unfair dismissal due to making protected public interest disclosures would bring the Claimant within the length of service requirement for unfair dismissal.  That is acknowledged by the Employment Judge at paragraph 13.  However, the Judge then proceeded to examine the chronology of events listed in the claim form and concluded that it precludes an argument that the Claimant was subjected to the treatment that led him to leaving because of the disclosures.  Again, this tends to treat the claim form as if it is the final position of the Claimant and that it provides an exhaustive catalogue of events.  It ignores the Claimant’s disadvantages in completing the claim form himself in a language that is not his first.  Further, other than recording that an incident relevant to this claim was reported before the allegedly unfair treatment started, the Judge relies on information that the matter was investigated at the time and nothing came of it (paragraph 16).  This is a good example of the Judge drawing conclusions from statements without a fact finding exercise that might at last put them in context.  A factual enquiry might shed light on the way that events evolved such that the earlier complaint has more significance.  In any event, even if it can be said that the whistle blowing claim is completely unspecified, that should not lead immediately to a conclusion that it is without reasonable prospects of success.  In my view, the Employment Judge went too far too fast in concluding that there was no reasonable prospect of success of the protected disclosure claim on the basis of the material before him.

17.              This leads me to ground 5.  There is absolutely nothing in the Judgment to indicate that the Employment Judge paused, having reached the conclusion that these claims had no reasonable prospect of success, to consider how to exercise his discretion.  The way in which Rule 37 is framed is permissive.  It allows an Employment Judge to strike out a claim where one of the five grounds are established, but it does not require him or her to do so.  That is why in the case of Dolby the test for striking out under the Employment Appeal Tribunal Rules 1993 was interpreted as requiring a two stage approach.

18.              In my view, the Employment Judge’s failure to consider whether to exercise his discretion in favour of not striking out following his finding that the claims had no reasonable prospect of success amounts to a clear error of law.  While it is not for me to speculate as to how that discretion might have been exercised, the factors that might have weighed heavily include the early stage of the proceedings, the ability to direct that Further and Better Particulars of each claim be specified and the absence of any application on the part of the Respondent for striking out.

19.              The second stage exercise of discretion in Rule 37(1) is important, not just where the striking out ground established is minor or excusable; it is a fundamental cross check to avoid the bringing to an end prematurely of a claim that may yet have merit.

20.              For all these reasons, I am satisfied that this appeal should be allowed and the Claimant’s claim (with the exception of the intellectual property claim) reinstated.  I shall further direct that the matter should be remitted to the Employment Tribunal for a further Preliminary Hearing.