Appeal No.	EAT/0034/03/MAA   		EAT/0224/03/MAA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 6 June 2003

Before
HIS HONOUR JUDGE J BURKE QC
MR M CLANCY
MR P GAMMON MBE

MITIE LINDSAY LIMITED	APPELLANT

MR S LYNCH	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellant	Mr D Meredith
(Representative)
Peninsular Business Services Ltd
Riverside
New Bailey Street
Manchester M3 5PB	

HIS HONOUR JUDGE J BURKE QC

1	This is the preliminary hearing of the appeal by Mitie Lindsay Limited, the employers, against two decisions of the Employment Tribunal sitting at Exeter and consisting of Mr Richardson as Chairman, sitting alone.  By the first decision the Tribunal held that the employee, Mr Lynch, was entitled to payment of commission by the employers from the beginning of the employment with the employers in January 1998 to the end of 1999.  

2	By the second decision, the Tribunal quantified that commission at £11,000 and ordered the employers to pay £2,500 towards Mr Lynch’s costs.  We propose to allow the appeal against the liability decision which turns entirely on a time point, and the appeal against the assessment of quantum and the Order for costs to go through to a full hearing.  Unusually, we are giving a very short judgment because we regard it as necessary to explain, in particular, why we regard there as being arguable grounds to attack the decision of the Tribunal at the liability hearing on the time point.  

3	The factual background can be very shortly stated.  Mr Lynch was employed as a salesman by the employers who carry on a painting and scaffolding business.  He was eventually made redundant in February 2002; he claimed that under the terms of his contract, the employers were obliged to pay, but had not paid commission in respect of business which he generated under the terms of a document signed by Mr Thomson, the employer’s managing director.  The employers disputed that there was any contractual entitlement.  Alternatively, they said that, if there had been any contractual entitlement, it came to an end at the end of 1999, when it was bargained away in return for a substantial salary increase plus bonus; and the Tribunal eventually found for the employee up to the end of 1999, but no longer.  

4	Before the Tribunal had embarked on considering the contractual entitlement issue, Mr Meredith, on behalf of the employers, took the point that the claim was out of time by virtue of section 23(2) of the Employment Rights Act 1996 in that it had not been presented within three months of the wrongful deduction complained of, the wrongful deduction being the non-payment of commission.  

5	Had that point got any further, the employee, or his representative - and he was represented by Counsel - would no doubt have said that there was no time bar under section 23(2) of the Employment Rights Act because if that section applied at all, the deductions complained of were a series of deductions and the last of those deductions, because the monies were still outstanding at the date of termination of employment and the Originating Application was presented within three months of that termination, was continuing until less than three months before the presentation of the Originating Application.  

6	Mr Meredith tells us that he would have said, had that argument been put forward, that that might or might not be so if indeed the commission payments were due up to the end of 2001 or the beginning of 2002 when the employment ended but that that would not apply if the commission entitlement ended much earlier, as eventually the Tribunal found that it did.  

7	However matters never got that far because the Tribunal Chairman had, not surprisingly, pointed out that the claim was not brought under part 2 of the 1996 Act at all as a wrongful deduction claim, but was a claim made under the Extension of Jurisdiction Order as a breach of contract claim, and the time provision for such a claim is different; it is different in that such a claim may be brought if the claim is outstanding at the date of termination and is brought within three months of termination.  The Chairman obviously thought that that response was a total answer to the point taken by Mr Meredith, and at first blush we confess that we would have taken the same view.  

8	However, Mr Meredith referred the Chairman to an unreported decision of the Employment Appeal Tribunal Henricks -v- Lewden Metal Products Limited EAT/1181/95 in which the Employment Appeal Tribunal decided that if a claim which could be brought by either route, that is to say by the wrongful deduction route or the breach of contract route, was out of time in terms of the wrongful deduction route at the date of the termination of the employment, then it was no longer outstanding at that date and could not, thereafter, be the subject of a claim as a breach of contract under the Extension of Jurisdiction Order.  

9	Unhappily, Mr Meredith did not provide to the Chairman a copy of the decision itself; he referred only to a passage in the IDS Employment Law Handbook, the Tribunal Practice and Procedure volume, and failed to persuade the Chairman that what the handbook said about Henricks -v- Lewden was appropriate.  We have seen the full decision; and it is clear that the Employment Appeal Tribunal did decide what page 17 of that handbook says it decided.  We have to say that we have some doubt as to whether that decision was or was not correct, but there being a decision of the Employment Appeal Tribunal in favour of the point which Mr Meredith makes, he clearly has an arguable point which must go for full argument at a full hearing of the appeal at which, no doubt, Henricks -v- Lewden Metal Products will be considered and the division of the Employment Appeal Tribunal which considers it will either agree with it or not, having heard full argument, hopefully, on both sides.

10	So far as the appeal against the decision made at the remedies hearing is concerned, we leave say and propose to say very little.  Mr Meredith has persuaded us that the basis on which Mr Lynch had put his claim throughout the liability hearing, or at least it is arguable that the basis on which Mr Meredith put his claim through the liability hearing, was that his commission was to be calculated on profit margin and that therefore the liability decision must be taken to have determined that he was entitled for commission for the years 1998 and 1999 on that basis.  

11	It is equally arguably plain that, at the remedies hearing, Mr Lynch changed his tune; he asked for commission not on profit margin but on turnover, not at the rate of 3% of margin but at the rate of 1% on turnover, and the Tribunal, at paragraph 6 of its remedies hearing, accepted that argument and found that he was entitled to commission at that rate.  The argument is that Mr Lynch had not put his case that way that the decision on liability meant that he was entitled to commission on the basis that he was putting forward, not some other basis, and therefore the calculation which followed from the decision at paragraph 6 of the remedies hearing was made on an unsound basis; as we have said, that is arguable.  

12	The costs appeal really, to a degree, follows from that; and unusually, in the specific circumstances of this case, we regard that as also arguable.  Therefore this case will go forward to a full hearing.  Category C.