Appeal No.	 EAT/281/00

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 10 May 2001
Judgment delivered on 9 July 2001

Before
SIR CHRISTOPHER BELLAMY QC
MR H SINGH
MISS D WHITTINGHAM

MR D DURU	APPELLANT

GRANADA RETAIL CATERING LIMITED	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR A ADENIJI
(Representative)
Instructed By:
Messrs Osibanjo Ete & Co
Solicitors
74 Camberwell Church Street
London SE5 8QZ	
For the Respondent	MR M CREAMORE
Solicitor
Instructed By:
Messrs Gregsons
Solicitors
St Christopher’s House
Tabor Grove
London SW19 4EX	

SIR CHRISTOPHER BELLAMY QC:

1.	The appellant, Mr David Duru, appeals against the decision of the employment tribunal sitting at Ashford dated 17 January 2000.  In that decision the tribunal held that Mr Duru was precluded from further pursuing his complaint for unfair dismissal against the respondents, Granada Retail Catering Limited, by virtue of an agreement to settle the proceedings binding on Mr Duru by virtue of the combined effect of sections 18(2) of the Employment Tribunals Act 1996 and section 203(2)(e) of the Employment Rights Act 1996.
2.	The essential issue on this appeal is whether the tribunal erred in law in finding that there was a concluded agreement to that effect between the appellant and the respondents.
3.	Section 203 of the Employment Rights Act 1996 provides–
“(1)		Any provision in an agreement (whether a contract of employment or not) is void in so far as it purports –
(a)	to exclude or limit the operation of any provision of this Act, or
(b)	to preclude a person from bringing any proceedings under this Act before an Employment Tribunal.
(2)	Subsection (1) ...
(e)	does not apply to any agreement to refrain from instituting or continuing proceedings where a conciliation officer has taken action under section 18 of the Employment Tribunals Act 1996 ...”
4.	Section 18(2) of the Employment Tribunals Act 1996 provides –
“(2)		Where an application has been presented to an employment tribunal, and a copy of it has been sent to a conciliation officer, it is the duty of the conciliation officer –
(a)	if he is requested to do so by the person by whom and the person against whom the proceedings are brought, or
(b)	if, in the absence of any such request, the conciliation officer considers that he could act under this subsection with a reasonable prospect of success,
to endeavour to promote a settlement of the proceedings without their being determined by an employment tribunal.”
5.	It is common ground that a binding agreement to settle a case, reached after a conciliation officer has taken action under section 18(2), may preclude the continuation of the proceedings even if the agreement is not reduced to writing, for example in the ACAS form COT3 commonly used for that purpose: Gilbert v Kenbridge Fibres Ltd [1984] ICR 188.  The issue in the present case, however, is not whether a binding oral agreement suffices for the purposes of the statutory provisions in question, but whether a binding oral agreement was ever in fact concluded between the parties.
6.	In paragraph 4 of its decision the employment tribunal found the following facts:
“(1)		On 25 October 1999, Mrs Jannette Crisp, Conciliation Officer with ACAS, was allocated this case.  She is an experienced Conciliation Officer, having worked full-time from 1986 to 1989, and part-time from 1990 to 1992 and from 1995 to date.
(2)		On 17 November 1999, she telephoned the Respondent and was informed that Mr Pye was the relevant person to contact.  She left a message for him to call her, which he did at 1320 hours that day.  They had a discussion about the case in which he indicated that there was a nuisance value which the Respondent was likely to be prepared to pay, despite the Respondent’s contention that the dismissal had been fair.
(3)		At 1410 hours on 17 November, Mrs Crisp telephoned the Applicant and explained her role to him.  He had already received a letter from ACAS with the standard guidance documentation which the Applicant had not read.  The Applicant informed Mrs Crisp that he had taken legal advice but that he currently had no representative.  They discussed the case and the difference in proof between civil and criminal matters.  There was also a discussion between them relating to the compromise procedures.  The telephone conversation ended with the Applicant informing Mrs Crisp that he would seek legal advice and come back to her.
(4)		On 19 November 1999 at 1241 hours, Mrs Crisp rang the Applicant, who told her that he had seen a Solicitor who was supposed to be coming back to him and that he would contact her.  The Applicant had Mrs Crisp’s home telephone number.
(5)		On 1 December 1999, Mrs Crisp spoke to Mr Pye, who confirmed to her that he would like her to put an offer to the Applicant of £250 to settle the case.  At 1300 hours that day, Mrs Crisp telephoned the Applicant on his mobile and conveyed the offer of £250 to him.  He told her that he was seeing a Solicitor that afternoon and he would contact her with a counter offer.
(6)		On 10 December 1999, at 1218 hours, the Applicant left a message on the answerphone of Mrs Crisp at home.  Mrs Crisp was not working on this day.
(7)		On Monday 13 December 1999 at 1005 hours, Mrs Crisp rang the Applicant’s mobile.  He asked her for the offer to be put in writing.  She told him that she conveys offers on the telephone, not in writing.  The Applicant then told her that he was prepared to accept £250 to settle the claim.  She asked him twice to confirm that she was to convey to the Respondent acceptance of the £250 offer, and on both occasions the Applicant informed her that she was to go ahead.  She also discussed with the Applicant how the concluded agreement would work out in practice.  He told Mrs Crisp that he would contact her on receipt of the draft COT3 and Mrs Crisp agreed to contact the Respondent immediately.
(8)		Mrs Crisp telephoned Mr Pye at 1007 hours but could not make contact.  She telephoned again at 1130 hours, but he was engaged at that time.  She eventually got in touch at 1510 and conveyed acceptance of the £250 offer.  Mr Pye indicated that he had some standard wording he would like to use on the COT3, but would be prepared to see Mrs Crisp’s document first.  She faxed through a document and at 1533 Mr Pye rang leaving a message that the COT3 was satisfactory.
(9)		At 1643 hours that day, the Applicant rang and left a message stating that he wanted the Respondent to put the offer in writing before he accepted it.
(10)		At 1735, Mrs Crisp rang the Applicant:  she went over the conversation she had had with the Applicant earlier that day and he informed her that he had just woken up and did not know what was happening.  She explained to him that she had put the acceptance to the Respondent and informed him that it may be a binding compromise agreement.  She told the Applicant that she would attempt to get the Respondent to put the offer in writing to his home address.
(11)	On 14 December 1999 Mrs Crisp was annual leave.
(12)		On 15 December, Mrs Crisp contacted Mr Pye and conveyed the request of the Applicant for the offer to be made in writing.  Mr Pye refused to do that, but informed Mrs Crisp that he had sent back to her the signed COT3.”
7.	On those facts the tribunal found at paragraph 8 of its decision:
“The unanimous conclusion of the Tribunal is that the Respondent requested the Conciliation Officer to put forward an offer of £250 to the Applicant to settle the case; that the Conciliation Officer put that offer to the Applicant; that the Applicant accepted that offer in a telephone conversation on Monday 13 December 1999 at 1005 hours; that that acceptance of the offer by the Applicant was unconditional, and the Tribunal concludes that at the end of that telephone conversation, there was an enforceable agreement to settle the claim, notwithstanding that the usual form COT3 document had not been signed at that stage.”
8.	The appellant argues, in essence, that the tribunal erred in law in finding that there was a concluded, binding agreement:  it was always in the contemplation of the parties, notably the appellant, that the agreement would not become binding until it was reduced into writing, and that was never done.  At the least, the tribunal never asked itself whether the appellant’s purported ‘acceptance’ of the offer could be said to be unambiguous or unequivocal, which it plainly was not.  The appellant also suggests that the conciliation officer, Mrs Crisp, may have exerted undue influence, or acted unreasonably, in declining to pass on to the respondents the appellant’s request on 13 December 1999 that the offer be put into writing:  see paragraph 4(7) of the decision.
9.	The respondents contend that on the material before them the employment tribunal was justified in coming to the conclusion that there was a concluded agreement between the parties which prevents the appellant from pursuing his complaint.  The respondents say that the respondent’s offer, which Mrs Crisp communicated to the appellant on 1 December 1999, was unconditional and not expressed to be subject to the wording of any COT3 (paragraph 4(5) of the decision).  That offer was unconditionally accepted by the appellant in the telephone conversation at 1005 hours on 13 December 1999 (paragraph 4(7) of the decision).  The reference (at paragraph 4(9) of the decision) to the draft COT3 did not alter the binding nature of the oral agreement or make its terms ambiguous.  The respondents further submit that the agreement was concluded at the latest when the appellant’s acceptance was conveyed to Mr Pye at 1510 hours on that day (paragraphs 4(7) and (8) of the decision) and thus before the appellant’s request that the offer be put in writing which was made at 1643 on that day.  Finally the respondents deny that Mrs Crisp acted in any way improperly, or that the appellant is entitled to raise an issue in that respect which was not argued below or referred to in the notice of appeal.
10.	In our view, when deciding whether the parties have reached an “agreement” to refrain from instituting or continuing proceedings within the meaning of section 203(2)(e) of the Employment Rights Act 1996, the contractual principles of offer and acceptance are to be applied:  see Gilbert v Kenbridge Fibres Ltd, cited above, at p. 191.
11.	In this case the tribunal’s finding, at paragraph 8 of the decision, was that an agreement had been made by the end of the telephone conversation between the appellant and Mrs Crisp which took place at 1005 hours on Monday 13 December 1999, the appellant having, in the course of that telephone conversation, accepted unconditionally the respondents’ offer to settle the case for £250 made on 1 December 1999.  The issue for us is whether, on the facts found, the tribunal’s conclusion discloses any error of law, applying the normal rules of offer and acceptance.
12.	In our view the first question that arises is whether, when Mr Pye intimated to Mrs Crisp on 1 December 1999 that he would “like her to put an offer to the Applicant of £250 to settle the case”, Mr Pye was already making an offer in the contractual sense.  As is well known, an offer in the contractual sense is an expression of willingness to contract made with the intention that it is to become binding on the person making it as soon as it is accepted by the person to whom it is addressed.  Such an offer in the contractual sense is to be distinguished from the various preliminary communications that may pass between parties in the course of negotiating a contract before a definite offer is made, such as an expression of willingness to enter into an agreement on terms to be agreed or recorded in writing.  A communication not made with the intention that it shall be immediately binding as soon as the person to whom it is addressed signifies his unconditional assent may be better analysed as an “invitation to treat” rather than as an offer in the contractual sense.
13.	In our view it was therefore incumbent on the employment tribunal to ask itself whether, when Mr Pye asked Mrs Crisp on 1 December 1999 to put an “offer” of £250 to settle the case to the applicant, he (Mr Pye) did so with the intention that the respondents would be immediately bound by an oral agreement if the appellant said ‘Yes’, or whether, for example, it was in fact Mr Pye’s intention that if the appellant signified his assent the next step would be for the matter to be recorded in writing in terms acceptable to Mr Pye.  In our view, unless Mr Pye’s “offer” of 1 December 1999 was made with the intention that it should be contractually binding immediately upon the appellant’s oral acceptance, the appellant’s “acceptance” of that offer in the telephone conversation at 1005 hours on 13 December 1999 could not have given rise, at that stage, to a binding agreement made in the course of that conversation.
14.	The tribunal’s decision does not address the issue of Mr Pye’s intention when making the initial “offer”.  We note, moreover, that at paragraph 4(8) of the decision the tribunal finds that when the appellant’s “acceptance” of the “offer” was conveyed to Mr Pye by Mrs Crisp at 1510 on 13 December 1999 he (Mr Pye) indicated “that he had some standard wording that he would like to use on the COT3 but would be prepared to see Mrs Crisp’s document first”.  Mrs Crisp then faxed through a document and “at 1533 Mr Pye rang leaving a message that the COT3 was satisfactory”.  At paragraph 4(12) the tribunal further finds that Mr Pye had sent back to Mrs Crisp the signed COT3.
15.	Those seem to us to be findings of fact from which it can reasonably be inferred that Mr Pye did not intend his “offer” made on 1 December 1999 to be contractually binding immediately upon the appellant signifying his oral acceptance, but that his (Mr Pye’s) intention was rather that the agreement would come into binding effect when recorded in writing on terms satisfactory to Mr Pye.  That would explain why Mr Pye referred to “some standard wording that he would like to use”, why he asked to see Mrs Crisp’s document, why he rang to signify his assent to her wording on the COT3, and why, finally, he sent back to her the signed COT3.
16.	We have not seen the actual document that Mrs Crisp faxed to Mr Pye, which he apparently signed, but we are given to understand that it was in the form of the ACAS standard form document headed “Draft COT3” which has been shown to us.  That form contains, notably, the wording:
“The Respondent, without any admission of liability, agrees to pay and the Applicant agrees to accept, the sum of £                                        to be paid within             days of receipt of signed form COT3 by the Respondent’s representative, in full and final settlement of all and any claims the Applicant may have arising out of the Applicant’s contract of employment or its termination.”
17.	It is of some significance that the above wording refers to such matters as the settlement being “without any admission of liability” and “in full and final settlement of all and any claims”.  Looking at the matter from an objective point of view, we very much doubt whether, in his conversation with Mrs Crisp on 1 December 1999, Mr Pye was really intending to be bound, unconditionally and without more, on the basis of his oral “offer” without the need for any subsequent document to be signed by the parties recording, for example, that the offer was made without admission of liability, and/or in settlement of all claims that the appellant might have.
18.	In our view it follows that the tribunal erred in law in failing in its decision to address (i) the question whether the ‘offer’ made by Mr Pye on 1 December 1999 was an offer in the contractual sense capable of giving rise to a binding agreement immediately upon its oral ‘acceptance’ by the appellant in the telephone conversation at 1005 on 13 December 1999, or (ii) the question whether it was in fact Mr Pye’s intention that a binding agreement should not come into force in the absence of a document acceptable to him.
19.	Pursuing the same analysis a little further, the next question which arises is:  what was the agreement that Mr Pye finally accepted?  On that point it is clear, from paragraph 4(8) of the decision, that what Mr Pye finally accepted, as his side of the agreement, was the offer to settle for £250 on the basis of the wording set out in the COT3 faxed to him by Mrs Crisp.  That was what Mr Pye accepted when he telephoned Mrs Crisp back at 1533 hours on 13 December 1999.  More particularly, it is clear from the tribunal’s findings that when the appellant’s ‘acceptance’ of the “offer” of £250 was communicated to him at 1510 hours on that day, Mr Pye did not accept that “offer” as it stood, unconditionally, but said that he wanted to see some appropriate wording.  He (Mr Pye) only signified his unconditional acceptance at 1533 hours when he had seen the wording of the COT3.  
20.	The difficulty which flows from that is that what Mr Pye had accepted at 1533 hours on 13 December 1999 – the payment of £250 on the basis of the wording of the COT3 – was not what the appellant had accepted in his telephone conversation with Mrs Crisp at 1005 hours on that day.  At 1005 hours on 13 December the appellant had not yet even seen the draft COT3, still less agreed the wording to which Mr Pye signified his assent at 1533.  Since the appellant never did signify his assent to that wording, the inescapable conclusion is that there never was a meeting of minds as to the wording to be used in the settlement agreement.
21.	We therefore further conclude that the tribunal also erred in law in failing to consider, on the basis of the facts found, (i) whether the relevant bargain to which the respondents in fact signified their acceptance, at 1533 hours on 13 December, was to pay £250 on the basis of the wording of the COT3, and (ii) whether the appellant ever signified his assent to that bargain.
22.	Since the general rule is that the acceptance of an offer does not create a binding agreement until the acceptance is communicated, we add, thirdly, that tribunal’s conclusion in paragraph 8 of its decision that there was already an enforceable agreement at the end of the telephone conversation at 1005 hours on 13 December is erroneous in law.  The appellant’s acceptance of that offer was not communicated to Mr Pye until the afternoon of that day, and it is not suggested by the tribunal that Mrs Crisp was Mr Pye’s agent for the purpose of receiving the “acceptance” on his behalf, as distinct from being merely the channel through which the “acceptance” could be communicated to Mr Pye.  It would therefore appear that the tribunal also erred in law in holding that the purported agreement was already enforceable when the telephone conversation came to an end at 1005 hours on 13 December.
23.	Turning, fourthly, to the analysis of the issue from the point of view of the appellant’s intention, the tribunal found that the appellant had ‘unconditionally’ accepted the respondent’s offer in the telephone conversation at 1005 hours on 13 December 1999.  However, we are troubled by four matters which emerge from the tribunal’s own findings at paragraphs 4(7) and 4(9):
(i)	In that conversation, the appellant asked for the offer to be put in writing, but Mrs Crisp declined to convey that request to the respondents.
(ii)	According to the tribunal, Mrs Crisp discussed with the appellant “how the concluded agreement would work out in practice”, but the Chairman’s notes of evidence state, on this point “We discussed how agreement concluded”.  It seems to us that there is at least some ambiguity about the tribunal’s finding as regards this discussion.  The Chairman’s notes could point to a discussion on the telephone about how the agreement was to be concluded or executed, which could support the appellant’s contention that in his mind his acceptance of the offer was subject to the agreement being recorded in a document.
(iii)	The appellant told Mrs Crisp that “he would contact her on receipt of the draft COT3”.  That signifies to our mind that it was in the contemplation of both Mrs Crisp and the appellant that there was still a further step to be taken, namely the sending to the parties of a “draft COT3”, presumably for their signature.  Moreover the reference to a “draft” COT3 (the word “draft” appears in the standard heading on the form we have seen) indicates that the document to be sent to the parties was not a final document but a draft that was still open to amendment.
(iv)	At 1643 hours the appellant was still maintaining to Mrs Crisp that he wanted the offer put in writing before he accepted it.
24.	The foregoing matters all seem to us to point in the same direction, namely that the appellant’s intention, when accepting the offer in the telephone conversation at 1005 hours on 13 December 1999, was and remained either that he wished the respondents to put the offer in writing or, at the least, that the agreement reached was subject to it being recorded in writing, a draft COT3 being sent to the appellant for that purpose for him to look at.
25.	In those circumstances it does not seem to us that the tribunal has given sufficient reasons, for its conclusion, in paragraph 8 of the decision, that the appellant had ‘unconditionally’ accepted the ‘offer’ in the course of the telephone conversation at 1005 hours on 13 December 1999.  The tribunal does not deal, in its decision, with the elements we have indicated above which, on the facts found by the tribunal, support the opposite conclusion, namely that the appellant’s ‘acceptance’ was not unconditional but was subject to there being a document, the execution of which would constitute the binding agreement between the parties.  The omission of sufficient reasoning on this point in our view constitutes an error of law in accordance with the well-known principles of Meek v City of Birmingham District Council [1987] IRCR 250 at 8 to 10.
26.	It follows from the foregoing that the tribunal’s decision is erroneous in law and the appeal must be allowed.
27.	Pursuant to section 35(1) of the Employment Tribunals Act 1996, this Appeal Tribunal may, for the purpose of disposing of an appeal, either exercise any of the powers of the employment tribunal from whom the appeal was brought, or remit the case to that tribunal.  In the present case we consider it appropriate to determine ourselves, on the basis of the facts found by the employment tribunal, whether a concluded agreement precluding the continuation of the proceedings has been established for the purposes of section 203(2)(e) of the Employment Rights Act 1996.
28.	For the reasons already given we conclude that, applying the relevant principles of law to the facts as found by the tribunal, no such agreement has been established.  There is thus no bar to the appellant proceeding with his claim against the respondents by virtue of section 203(2)(e) of the Employment Rights Act 1996.