Appeal No. UKEAT/0356/06/DM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 15 December 2006
Judgment handed down on 30 January 2007

Before
HIS HONOUR JUDGE PETER CLARK
(SITTING ALONE)

MR P BROCK	APPELLANT

MINERVA DENTAL LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	Mr Paul Michell
(of Counsel)
Instructed by:
Messrs TLT Solicitors
One Redcliffe Street
Bristol
BS99 7JZ	
For the Respondent	Mr Wayne Beard
(of Counsel)
instructed by:
Messrs McTaggart Solicitors
24 St Andrews Crescent
Cardiff
CF10 3DD	

SUMMARY
Practice and Procedure -  Amendment; 2002 Act and Pre-action Requirements
Whether actual dismissal effectively withdrawn by employer during internal appeal process; whether Claimant should have permission to amend ET1 to add alternative claim of constructive (unfair) dismissal.  Consideration of regs 6, 15 DR Regs.  Application of Selkent principles.

HIS HONOUR JUDGE PETER CLARK

1.	This case has been proceeding in the Bristol Employment Tribunal (ET).  The parties are Mr Brock, Claimant, and Minerva Dental Ltd, Respondents.  I shall so describe them.

2.	This appeal is brought by the Claimant against the order of the Regional Chairman, Mr A C Tickle, sitting alone at a pre-hearing review (PHR) held by telephone on 27 March 2006, refusing permission to amend the form ET1 to add, in the alternative, an allegation of constructive dismissal and dismissing his complaint of unfair dismissal on the ground that there was no actual dismissal of the Claimant by the Respondent.  Reasons for those orders were provided on 13 April 2006.

Background
3.	The Chairman heard no oral evidence but had before him the pleadings, including a proposed amended form ET1, together with a bundle of documents consisting principally of correspondence between the parties.  Those documents are before me.  

4.	From that material the following facts emerge for the purposes of considering the Chairman’s decision.  The Claimant commenced employment with the Respondent on 15 February 1994.  On 28 September 2005 he was called to a disciplinary meeting conducted by Mr Callaghan, Equipment Director, without prior notice, and dismissed with notice expiring on 16 December 2005.  Dismissal was confirmed by letter dated 29 September.  That letter informed him of his right of internal appeal.

5.	The Claimant appealed by letter sent on 5 October.  He alleged that the dismissal offended the statutory dismissal and disciplinary procedure (DDP) rendering the dismissal automatically unfair.

6.	By letter dated 26 October Mr Mather, Managing Director, acknowledged that the Company did not adhere to the statutory disciplinary procedures.  He stated:

“For that reason alone I have decided that a formal appeal hearing is not necessary.  The letter of dismissal sent to you recently is therefore rescinded.”

Mr Mather added that he had not yet considered the substantive issues leading to the decision to dismiss.  Mr Callaghan was to undertake a full and thorough investigation and write to the Claimant separately.

7.	In fact Mr Callaghan wrote two letters to the Claimant on the same day, 26 October.  In the first he called the Claimant to a disciplinary meeting on 7 November to discuss certain conduct issues there set out; in the second he separately required the Claimant to attend an investigatory meeting on 7 November to consider his failure to adhere to the Company’s sick absence procedure.

8.	Pausing there, it is apparent that, whilst acknowledging procedural failures, it was the Company’s intention to correct those failings by revoking the first dismissal and to proceed to a proper disciplinary hearing.

9.	The Claimant wrote to Vicky Adshead, Personnel Administrator, on 28 October.  He said that he would not be fit to attend the hearing on 7 November.  He further queried the sick absence charge, since he understood that he had been placed on garden leave following his dismissal on 28 September.  He concluded:

“In relation to how the Company has dealt with me, I feel the Company has broken the relationship of trust and confidence between us.  In the circumstances, the Company may like to consider making an appropriate offer to settle this matter now.”

That letter was copied to Mr Mather.  He responded by letter dated 1 November, offering three months’ salary as compensation for loss of employment.

10.	Solicitors acting for the Claimant (TLT) wrote to Mr Mather on 3 November 2005.  They contended, inter alia:

“You cannot unilaterally withdraw a termination and our client’s contract terminates on 16 December 2005.”

They asserted that further disciplinary proceedings were a pointless exercise because the Claimant had already been dismissed.  Failing any further offer he would not hesitate to bring a claim in the tribunal following the effective date of his dismissal on [sic] December 2005.  They concluded:

“This letter constitutes a complaint under the statutory disciplinary process.”

11.	Solicitors for the Respondent (McTaggarts) replied substantively to TLT’s letter on 22 November.  They contended that Mr Mather’s rescinding of contractual notice was not unilateral; by appealing the Claimant implicitly requested the Respondent to withdraw the dismissal notice.  Later they said this:

“You say nevertheless that your client’s contract will terminate on the 16th of December 2005.  In other words no matter what our client does now will make no difference.  Such an intransigent and uncompromising attitude is both unhelpful and disappointing.  It is also unreasonable but nevertheless our client accepts your client’s position.”

Finally, those solicitors acknowledge the Respondent’s obligation to meet with the Claimant in connection with his “grievance” and see little point in carrying out investigations and conducting disciplinary matters “as your client’s employment is ending.”

12.	On 16 December the Claimant’s employment ended.  On 23 December he presented a claim of unfair dismissal to the ET.  In answer to the question at paragraph 3.3 of the standard form, “Is your claim, or part of it, about a dismissal by the respondent?” he answered “Yes”.  He asserted that his employment ended on 16 December 2005 and gave particulars of his claim.  Having set out the history and relied on the original dismissal of 28 September as being automatically unfair, he added, at paragraph 25.5 of his particulars:

“I did not accept that the termination should be unilaterally withdrawn.  I had been treated terribly by the Company and I felt that I would just be dismissed again.  I was ill and felt that the relationship had completely broken down because of the Company’s treatment of me.”

13.	Before serving their Response on 3 February 2006, the Respondent’s solicitors wrote to the ET on 4 January 2006 referring to the Court of Appeal decision in Roberts v West Coast Trains Limited [2004] IRLR 788 and submitting that there was no dismissal in this case.  On that basis they applied for the claim to be struck out.

14.	By their Response, they denied that the substance of the claim had been raised in writing under a grievance procedure (para 2.5), agreed the dates of employment stated by the Claimant, and in their detailed Particulars of Response asserted that the notice of 28 September had been effectively withdrawn.  At paragraph 16 they said this:

“16.	The Respondent was then subsequently contacted by the Claimant’s legal representatives [I infer, TLT’s letter of 3 November] who indicated that they were not prepared to accept the withdrawal of the notice to dismiss and effectively gave notice themselves on behalf of the Claimant that his employment would end on the 16th of December 2005.”

Dismissal was denied, relying on Roberts.

15.	A case management discussion was held in this case on 2 March 2006 before a Chairman, Mr C G Toomer, sitting alone.  By directions contained in an order dated 7 March, that Chairman directed that a PHR by telephone take place on 27 March (the substantive hearing fixed for that date being postponed) to determine whether the claim should be struck out as having no reasonable prospect of success in view of the authority of Roberts.

16.	Prior to the PHR, on 24 March, the Claimant made application to amend his claim by adding an alternative plea that if he was not actually dismissed (Employment Rights Act (ERA) s95(1)(a)), he was constructively dismissed (s95(1)(c)).  Reliance was there placed on the letters of 28 October (breakdown in trust and confidence) and 3 November 2005, relied on as a step 1 written grievance (in accordance with para 6, Part 2, Schedule 2, Employment Act (EA) 2002), coupled with McTaggart’s acknowledgement of his grievance in their letter of 22 November.

17.	At para 35 of the proposed amended pleading the Claimant relies on the implied term of trust and confidence, asserting that it had been breached (fundamentally) by the Respondent giving rise to a constructive dismissal effective on 16 December 2005.  The references to s95(1)(c) and 95(1)(b) in that para are incorrect; they should, as I understand the Claimant’s case, refer to s95(1)(a) and 95(1)(c) respectively. 

18.	It is against this background that the telephone PHR took place before Mr Tickle on 27 March.  Originally listed for 10.30 am it was, in the event, put back to 4.30 pm.
The Chairman’s Reasoning
19.	(1)	Actual dismissal (s95(1)(a)):
Having considered Roberts, applying the approach of the Court of Appeal to the circumstances of the present case, the Chairman concluded that the dismissal of 28 September had been effectively rescinded following the Claimant’s internal appeal.  There was no actual dismissal by the Respondent.

(2)	Constructive dismissal (s95(1)(c)):
The Chairman noted that the application to amend had been made late, in breach of Rule 11(2) of the Employment Tribunal Rules 2004 (which requires, normally, 10 days’ notice of such application) and after the case management discussion.

The nub of his reasoning, leading to his refusal to permit the amendment, is contained in para 11 which I shall set out in full:

“11.	That said, the respondent fully responded to the application at this hearing.  I have been addressed on and apply the Selkent principles.  I consider that this is effectively a new cause of action.  It is not foreshadowed in the pleadings in my view.  It is, therefore, a late claim – a factor to be taken into account.  On balance of hardship, I find that the respondent is seriously prejudiced by such a change of course.  I have dismissed the direct dismissal claim.  They would have to face another unexpected claim.  Further, their defence has to change – from fairness of procedures to a more substantive approach.  But my main concern is the tardiness of the claim.  It wasn’t mentioned in the hearing 3 weeks ago – which, itself, was outside the time limit starting when the claimant says he may have been dismissed.  Is there any other compelling reason?  Answer: no.  The claim itself looks weak.  A claimant must surely show, at the very least, that the basis for the claim exists for an application to amend to have any prospect of success.  There is no such basis.  Neither of the letters relied upon refers to ‘termination.’  It is not possible to point, with any assurance, to the document in which the claimant resigned.  He was paid up to the 16 December.  The two letters are, in my judgment, negotiating letters.  They refer to offers and coming to terms about various things.  There are threats of tribunals.  But no reference to resignation or termination.”

	From that reasoning, the following strands emerge:
Applying the principles in Selkent Bus Co Ltd v Moore [1996] ICR 836 (Mummery P):

(i)	this was a new cause of action not foreshadowed in the original form ET1;

(ii)	it was a late claim.  Further, at para 12 the Chairman held that the amended claim was out of time and it was reasonably practicable to bring it within time;

(iii)	in considering the balance of hardship the Respondent was seriously prejudiced.  The actual dismissal claim had been struck out.  The Respondent would have to face a wholly different claim; the focus would move from procedural to substantive issues;

(iv)	the constructive dismissal claim looks weak.  There is no reference to resignation or termination in either the Claimant’s letter of 28 October or his solicitor’s letter of 3 November.

The Appeal
20.	Mr Michell attacks both the strike-out order and the Chairman’s refusal to permit the amendment.

Strike-out
21.	It is well-established that notice once given cannot be unilaterally withdrawn.  Harris and Russell v Slingsby [1973] IRLR 221.  See also Riordan v War Office [1959] 3 AER 552; [1959] 1 WLR 1046 (CA).

22.	In Roberts the facts were that Mr Roberts was dismissed by his employer, effective on 6 November 2001, for gross misconduct.  He appealed internally against his dismissal and, before his appeal was heard, commenced Tribunal proceedings for unfair dismissal based on the original dismissal.  The internal appeal was heard the day after he lodged his originating application to the Tribunal. It was successful to the extent that the penalty of dismissal was reduced to a demotion, coupled with a final written warning.  The time since dismissal was treated as a period of suspension without pay.

23.	It was the employee’s case that the appeal decision resulted in an offer by the employer of a new contract which he had declined.  Consequently the original dismissal stood, founding the Tribunal’s jurisdiction to hear his complaint of unfair dismissal.

24.	The Employment Tribunal and EAT rejected that argument, as did the Court of Appeal.  The Court held that the terms of the contract of employment permitted the employer to substitute a lesser penalty for that of dismissal, thereby retrospectively achieving a position that the employee had never been dismissed.

25.	In this appeal I am concerned with the question as to whether the claim based on a s95(1)(a) dismissal had no reasonable prospect of success, as the Chairman found in striking it out (Reasons para 7).

26.	I note that the principle in Slingsby/Riordan is not referred to expressly in the leading judgment of Mummery LJ in Roberts; however, I infer that his Lordship had the principle in mind when he said, para 27:

“27.	 …if he had never instituted an appeal and/or if he had instituted an appeal he had withdrawn his appeal before a decision was made.  In such circumstances, the initial dismissal would have stood.”

27.	What of the circumstances in the present case?  S111(3) ERA provides that an Employment Tribunal has jurisdiction to consider a complaint of unfair dismissal, where dismissal is with notice, after notice is given but before the effective date of termination (EDT) of the contract.  In the present case the Claimant was dismissed on 28 September with notice expiring on 16 December 2005.  That dismissal was, it seems to me, automatically unfair by virtue of s98A(1) ERA because the DDP set out in Part 1 of Schedule 2 to the EA 2002 had not been complied with by the Respondent.  It was therefore open to the Claimant to commence unfair dismissal proceedings on and after 28 September on that basis.  He would not, in those circumstances, be required under the DDP to appeal internally against that dismissal.

28.	He did not take that course.  Instead he appealed internally by letter of 5 October.  In so doing, in my judgment, he sought withdrawal of the dismissal by the Respondent.  In the context of the principle in Slingsby he consented, expressly or impliedly, to the employer’s withdrawal of the dismissal notice.

29.	The Respondent recognised its procedural failings in the original disciplinary process.  By his letter of 26 October Mr Mather, for that reason alone, rescinded the earlier notice of dismissal before termination of employment.

30.	Applying Roberts, the dismissal notice was effectively withdrawn whilst the appeal was live.  The Chairman was correct in so finding.  Thus, when the Claimant finally presented his form ET1 to the Tribunal on 23 December 2005, he was not able to rely on the actual dismissal of 28 September to found his complaint of unfair dismissal.  It had “vanished”.

31.	Accordingly, in my judgment, the Chairman was entitled to strike out the claim based on actual dismissal (s95(1)(a) ERA).  
Amendment
32.	It was common ground that the EDT was 16 December 2005.  Thus the primary three month time limit expired on 15 February 2006.

33.	On 4 January 2006 the Respondent’s solicitors wrote to the Tribunal applying to strike out the claim of unfair dismissal on the basis that the original dismissal had been withdrawn and could not found the claim.  Roberts was referred to expressly.   It was further contended that no complaint of constructive dismissal could stand because the Claimant had not raised a grievance prior to commencing ET proceedings (a reference to the statutory grievance procedure (SGP)).

34.	The Claimant’s solicitor’s response dated 12 January 2006 was to take issue with the Respondent’s contention that the original dismissal no longer stood.  Despite the Respondent’s solicitors reference to a possible claim of constructive dismissal (raised, in the case of Roberts, by Arden LJ, para 35) no steps were then taken by the Claimant or his advisors to seek permission to amend to add an alternative claim based on constructive dismissal.  Had that step then been taken the application to amend would have been made within the primary three month limitation period and would, in all likelihood, have been granted.

35.	Instead, the application to amend was delayed until 24 March 2006, the last working day before the PHR at which the amendment application was considered by the regional Chairman.  Mr Michell, who did not appear below, was unable to furnish any explanation for that delay.

36.	In challenging the Chairman’s refusal to permit the amendment, Mr Michell takes the following points.

Claim in time

37.	The Chairman found (Reasons para 12) that the amended claim was out of time and that it could not be said that it was not reasonably practicable to bring it within time (ERA s111(2)(b)).  Mr Michell does not suggest that the “reasonable practicability” escape clause could apply on the facts of this case.  Instead he seeks to demonstrate that the primary limitation period was extended by a further three months to 15 June 2006 by virtue of the application of the provisions of regulation 15 of the EA 2002 (Dispute Resolution) Regulations 2004 (DR Regs).

38.	I pause to observe that there is no indication that this point was considered by the Chairman in his Reasons, although it was raised in the Notice of Appeal and recited in the Respondent’s written submissions prepared for the preliminary hearing of this appeal on the basis that no grievance was raised by the Claimant.  Mr Beard does not invoke the Kumchyk principle, that a new point will only be entertained for the first time on appeal in exceptional circumstances and accordingly I have considered the argument.  I should add, for completeness, that having considered Mr Michell’s skeleton argument, Mr Beard lodged an addendum to the Respondent’s initial submissions immediately prior to the hearing before me, raising a further new point on the construction of the DR Regs.  Mr Michell dealt with that fresh argument on short notice in oral submissions.  After I reserved judgment he submitted further written submissions on that point, which I have taken into account.

39.	Underhill J has recently described the provisions of Part 3 EA 2002 and the DR Regs as rebarbative; see H M Prison Service v Dr Barua UKEAT 0387/06/MAA. 15 November 2006. Para 1.  I too find them unappealing.    Nevertheless, unless and until they are repealed it is the duty of Employment Tribunals and this EAT to apply them to the facts of each case in which they arise.
40.	One of the many striking features of the DR Regs is the distinction made between the different types of dismissal which found a claim of unfair dismissal.  Whereas s95(1)(a) – (c) ERA identifies three types of dismissal: (a) actual dismissal, (b) expiry of a limited-term (formerly fixed-term) contract and (c) constructive dismissal (each of which gives rise to a claim of unfair dismissal),  reg 2(1) DR Regs provides that “dismissed” has the meaning given to it by s95(1)(a) and (b) ERA only.  It follows that a constructive dismissal under s95(1)(c) is not a dismissal for the purposes of the DR Regs.  

41.	The significance of that distinction lies in the difference between the application of the DDP as opposed to SGP.  It is now well-settled that in broad terms the DDP applies to dismissals under s95(1)(a) and (b) whereas the SGP applies to claims of unfair dismissal based on constructive dismissal under s95(1)(c).  See, e.g. the judgment which I gave in BUPA Care Homes v Cann [2006] IRLR 248, para 28. 

42.	The present case, it seems to me, raises a novel point where the worlds of actual and constructive dismissal collide.  How are the two statutory procedures, DDP and SGP, then to be disentangled?

43.	I begin with the relevance of the SGP to the Claimant’s proposed constructive dismissal amendment.  Given that the SGP, not the DDP, applies to a claim of constructive unfair dismissal, two points arise.  First, a Claimant cannot present a complaint to an Employment Tribunal in respect of constructive unfair dismissal unless he has raised a step 1 grievance with his employer not less than 28 days before presenting his claim to the Tribunal (EA 2002. s32(2) and (3)).  Secondly, by a combination of regulation 15(1)(b) and (3)(b), where the Claimant has complied with step 1 of the SGP, time for presenting his complaint is extended by three months from the expiry of the primary three month limitation period.  In the present case I take the view that such extension applies where the original claim is presented within the primary period, but an application to amend, here to add a claim of constructive dismissal, is made after the expiry of that period but before expiry of the extended period.

44.	Those two statutory provision raise three questions on the facts of this case:

(i)	did the Claimant raise a step 1 grievance?

(ii)	if so, was it raised at least 28 days before the claim was originally presented on 23 December 2005?

(iii)	if so, can the Claimant rely upon the extension of time provided in reg 15?

45.	Did the Claimant raise a grievance?  From and since their solicitor’s letter of 4 January 2006, the Respondent has argued that he did not.  I have looked at the correspondence which was before the Chairman against the background of decisions in this EAT, culminating with the judgment of Elias P in Canary Wharf Management Ltd v Edebi [2006] IRLR 416, following the earlier cases approved and followed by Burton P in Shergold v Fieldway Medical Centre [2006] IRLR 76.  In short, the bar is set low for employees wishing to show that they have raised a step 1 grievance.  In the present case I am satisfied that the Claimant’s solicitor’s letter dated 3 November 2005, read with his letter to Vicky Adshead of 28 October, sets out, in writing, those complaints which form the basis of his proposed amended complaint of constructive dismissal.  If there was any doubt that he was there raising a grievance it is dispelled by the Respondent’s solicitor’s letter of 22 November which refers twice to “his grievance” as confirmed by para 16 of their Response.  

46.	It follows that the Claimant raised a step 1 grievance not less than 28 days before presenting his complaint to the Tribunal on 23 December 2005.

47.	Can he rely on the extension of time under reg 15, so that the application to amend was in time?  On the face of it, he has complied with reg 15; however, Mr Beard raises two points in relation to reg 6 of the DR Regs, submitting that in fact neither the DDP, nor the SGP, apply to the matters on which he relies as forming his grievance.

48.	By reg 6(5):

“Neither of the grievance procedures applies where the grievance is that the employer has dismissed or is contemplating dismissing the employee.”

And by reg 6(6):

“Neither of the grievance procedures applies where the grievance is that the employer has taken or is contemplating taking relevant disciplinary action against the employee unless one of the reasons  for the grievance is a reason mentioned in regulation 7(1).” 
[not applicable]

49.	As to reg 6(5), Mr Beard submits that the Claimant’s grievance was that the Respondent had dismissed him or was contemplating dismissing him.  On the facts, both limbs must be considered.  Was it the Claimant’s grievance that the Respondent had dismissed him?  Initially that was his complaint; hence his notice of internal appeal of 5 October.  However, as the Chairman found and I agree, that dismissal was effectively withdrawn by Mr Mather’s letter of 26 October.  Thus, by 28 October and necessarily 3 November, the Claimant had not been dismissed. On the Respondent’s successful argument, the dismissal had “vanished”.  The Respondent cannot, in one breath contend that he was no longer dismissed for the purposes of his actual dismissal claim and in the next that his subsequent grievance was about his having been dismissed. I would therefore reject the first way in which Mr Beard relies on reg 6(5).

50.	Was the grievance that the Respondent was contemplating dismissing the Claimant?  On determining what “contemplating dismissal” means in the context of reg 6(5), some assistance can be derived from the European Court of Justice’s analysis of the expression “contemplating collective redundancies” in Article 2.1 of the Collective Redundancies Directive (EC 98/59) in Junk v Kühnel [2005] IRLR 310, to which both Counsel referred me.  At para 36 the Court said:
“The case in which the employer ‘is contemplating’ collective redundancies and has drawn up a ‘project’ to that end corresponds to a situation in which no decision has yet been taken.  By contrast, the notification to a worker that his or her contract of employment has been terminated is the expression of a decision to sever the employment relationship, and the actual cessation of that relationship on the expiry of the period of notice is no more than the effect of that decision.”

51.	Applying that approach to the expression in reg 6(5) I take the view that where an employer commences disciplinary proceedings against an employee with a warning that dismissal may follow in the event that the disciplinary charge is found proven, he is then contemplating dismissal.  However, that is not spelt out in either of Mr Callaghan’s letters of 26 October 2005.  There is warning of “a disciplinary sanction” but not more.  In these circumstances I am not satisfied that, having withdrawn the original dismissal, the Respondent was contemplating dismissal at the time of the Claimant’s written grievances of 28 October and 3 November.

52.	As to reg 6(6) was the grievance that the Respondent had taken or was contemplating taking relevant disciplinary action?  “Relevant disciplinary action” means (reg 2(1)):

“action, short of dismissal, which the employer asserts to be based wholly or mainly on the employee’s conduct or capability, other than suspension on full pay or the issuing of warnings (whether oral or written);”

53.	The letters of 28 October and 3 November raise the following specific complaints:

(a)	he was instructed not to communicate with members of staff, other than Mr Callaghan;

(b)	the correspondence from the Respondent had resulted in his suffering from stress, causing him to be unable to attend the next disciplinary hearing on 12 November;

(c)	the way in which the Respondent had dealt with him had broken the relationship of trust and  confidence;

(d)	he was put on “garden leave” from 29 September (a fact put in issue by the Respondent) but was to be subjected to disciplinary proceedings on the basis that he had not complied with the Company’s sickness policy since that date.

In my judgment none of those grievances fell within the definition of relevant disciplinary action.  

54.	It follows that I reject Mr Beard’s submissions on the effect of reg 6(5) and 6(6).  It necessarily also follows that in my judgment:

(a)	the Claimant raised a step 1 grievance which is reflected in his proposed claim of constructive dismissal;

(b)	the grievance complies with the time provisions of s32 EA;

(c)	the grievance had the effect of extending time to make the complaint to 15 June 2006, so that the application to amend made on 24 March was in time.

55.	In these circumstances I accept Mr Michell’s submission that in proceeding on the basis that the application to amend was out of time, the Claimant’s analysis of the Selkent factors was materially flawed.  In Selkent v Moore [1996] ICR 836, 843 F – 844 C, Mummery P set out the relevant circumstances to be taken into account when considering an application to amend a claim.  A relevant factor is the applicability of time limits.  That the new claim is out of time may be a relevant, though not determinative factor.

56.	The authorities draw a distinction between three types of amendment: (i) amendments designed to alter the basis of an existing claim, but without raising a new distinct head of claim; (ii) “relabelling” amendments, which add or substitute a new cause of action, but one linked to or arising out of the same facts as the original claim, and (iii) amendments which amend or substitute a wholly new claim or cause of action unconnected with the original claim. 

57.	The Chairman (Reasons para 11) concluded that the proposed amendment alleging constructive dismissal raised effectively a new cause of action.  It thus fell into the third category mentioned above.

58.	Mr Michell challenges that analysis.  He points to para 25.5 of the original pleaded claim to which I have referred.  The contentions there set out, he submits, form the basis of a constructive dismissal claim which has now been fully particularised by way of amendment.

59.	I do not accept that submission.  In my view the original claim was firmly based on an actual (s95(1)(a)) dismissal.  Constructive dismissal was not foreshadowed in the pleading.  In past times a claim of unfair dismissal might be treated as covering both actual and constructive dismissal, see, by analogy, the treatment of claims of discrimination under the Sex Discrimination Act or Race Relations Act in Quarcoopome v Sock Shop Holdings Ltd [1995] IRLR  353 (EAT).  However, that approach was not followed by the EAT in Smith v Zeneca (Agrochemicals) Ltd [2000] ICR 800 (EAT.  Charles J) and has been expressly disapproved by the Court of Appeal in Ali v Office of National Statistics [2005] IRLR 201.  Indeed, in Selkent itself the EAT reversed an ET decision to permit an amendment adding a claim of automatically unfair dismissal (for trade union reasons) to a claim of “ordinary” unfair dismissal.  I agree with the Chairman that this proposed amendment raises a new ordinary unfair dismissal claim based on constructive dismissal (see the comments of EAT in Street v Derbyshire Unemployed Workers Centre [2004] ICR 213).  However, even if the amendment falls within the third category, so that time limits become relevant, what is the position where the amendment application is in time?  I know of no appellate employment case in which a third category amendment brought within time has been refused.  That  may go back to the old civil case of Evans v Bartlam [1937] AC 473, in which the House of Lords declined to strike out a case on the grounds of delay where it was open to the Claimant to bring a fresh action in time.  However, I am not prepared to assume, as Mr Michell invites me to do, that an amendment which is in time must always be allowed.  It is, nevertheless, a powerful factor in favour of granting the amendment.  

The balance of hardship

60.	Mummery P made clear in Selkent (844 B) that whenever considering factors relevant to the grant or refusal of an amendment, the paramount considerations are the relevant injustice and hardship to the parties of allowing or refusing an amendment.  A relevant factor in that balancing exercise is the timing of the amendment application.  In Selkent itself the application was made, initially on paper, two weeks before the date fixed for the substantive hearing of the claim.  The lateness of the application was a factor which the EAT took into account in favour of the Respondent in reversing the Tribunal’s grant of permission to amend.  However, in setting out his guidance, Mummery P said (844 A) that an application to amend should not be refused solely because there has been a delay in making it.  That proposition accords with high authority to which I was referred by Mr Michell.   See Ketteman v Hansel Properties Ltd [1987] AC 189, 212.  An amendment should not be refused solely to punish a party for his honest mistake in failing to plead his case correctly in the first place.

61.	In the present case, the Chairman properly took into account the lateness of the application to amend (Reasons para 10), for which no explanation has been given.  He also took into account the prejudice to the Respondent in having to face a claim of unfair dismissal based on constructive dismissal when the original claim based on actual dismissal had, I find correctly, been struck out.  That is a permissible consideration.  However, it seems to me, the Chairman then failed to take into account a relevant balancing factor: that if the amendment was refused the Claimant would not be able to pursue his claim of unfair dismissal at all.  This case may be contrasted with the facts of Selkent, where the EAT held (845 A) that the refusal of permission to amend would not cause hardship to the Claimant because his originating application complaining about ordinary unfair dismissal was presented within time and thus remained justiciable.  

62.	Finally, the Chairman considered the merits of the proposed constructive dismissal claim.  It seems to me that he was entitled to do so.  The position since the alteration to the ET Rules of Procedure in 2001 (see now Rule 18(7)(b) 2004 Rules) is that a claim having no reasonable prospect of success may be struck out at a PHR.  That is what happened to the actual dismissal claim in this case.  If the constructive claim has no reasonable prospect of success it necessarily follows, in my view, that the amendment ought not to be allowed.

63.	However, the basis on which the Chairman concluded (Reasons para 11) that the constructive dismissal claim looks “weak” is itself flawed in law.  The Chairman took the view that the letters of 28 October and 3 November made no reference to resignation or termination and thus, presumably, the Claimant could not show that he had terminated the contract for the purposes of s95(1)(c) ERA.  The Chairman did not go on to consider the further question as to whether the Claimant was entitled to treat himself as discharged because the Respondent was in repudiatory breach of contract.

64.	In order to analyse that proposition, it is necessary to return to the facts of the case.  Initially the Respondent, through Mr Callaghan, terminated the Claimant’s employment by letter dated 29 September 2005, following the meeting the previous day, on notice, that notice to take effect on 16 December 2005.  That notice was effectively withdrawn by Mr Mather’s letter dated 26 October.  By his letter dated 28 October the Claimant expressed his feeling that “the Company is forcing me into a position such that it will be very difficult for me to return.”  In his solicitor’s letter of 3 November it is said, among other things: 

“You cannot unilaterally withdraw a termination and our client’s contract terminates on 16 December 2005.”  

Later, that letter refers to “the effective date of his dismissal on [sic] December 2005.”

65.	In response, the Respondent’s solicitors wrote, on 22 November, the passage to which I have earlier referred, accepting the Claimant’s position.

66.	It is and always has been common ground between the parties, reflected in their respective pleadings, that the EDT of the contract of employment was 16 December 2005.  In these circumstances, during the argument before me, I was reminded of the question posed by Sir John Donalson MR in Martin v MBS Fastenings (Glynwed) Distribution Ltd [1983] ICR 511, “who really terminated the contract?”  In my judgment it is at any rate reasonably arguable in the present case that it was the Claimant who terminated the contract by insisting on leaving and in fact leaving the employment on 16 December 2005 notwithstanding that the employer’s notice, expiring on that day, had, in law, been effectively withdrawn.  How else did the employment come to an end?  It certainly was not, on any view, by mutual agreement.

Summary
67.	I find that, in exercising his discretion to refuse the proposed amendment the Chairman fell into error, as a matter of law, in three respects:

(1)	He proceeded on the basis that the application to amend was made out of time when it was not by virtue of reg 15 of DR Regs.

(2)	In balancing the respective hardship to the parties he failed to take into account a relevant factor, namely the hardship to the Claimant of being unable to pursue his claim of unfair dismissal at all if the amendment was refused.

(3)	He regarded the constructive dismissal claim as weak on an impermissible basis, namely that the Claimant had no reasonable prospect (using the rubric of rule 18(7)(b)) of establishing that he had terminated the contract for the purposes of s95(1)(c) ERA. 

Disposal
68.	I shall allow the amendment part of the appeal only and set aside the Chairman’s refusal to permit the amendment adding a claim of constructive unfair dismissal.  
69.	Since no further material is required, I shall exercise my powers under s35(1) ETA 1996 and permit the amendment.  My reasons are that the proposed amendment was made in time; it has a reasonable prospect of success (the question as to whether the Claimant was constructively dismissed being one of fact to be determined by an Employment Tribunal at a substantive hearing, having considered all the evidence); as to the balance of hardship, I weigh the unexplained delay on the part of the Claimant in making the amendment application and the prejudice to the Respondent in now having to face a constructive dismissal claim when the original actual dismissal claim has been struck out, with the prejudice to the Claimant of being unable to pursue a claim of unfair dismissal at all in circumstances where this claim based on constructive dismissal is (a) in time and (b) not without a reasonable prospect of success and conclude that the balance lies in favour of granting the amendment.  The remainder of the appeal is dismissed.

70.	The constructive dismissal claim will now return to the ET for further directions for substantive hearing.  The form of amendment before me requires correction to the statutory provisions referred to in para 35, as I mentioned to Mr Michell in argument.  Para 32 is deleted.  A fair copy of the amended pleading, incorporating those alterations, must be lodged with the Employment Tribunal and served on the Respondent within 14 days of promulgation of this judgment.

71.	Finally, the Regional Chairman will I am sure, appreciate that in the circumstances the substantive hearing should take place before a panel on which he does not sit.