Appeal No. UKEAT/0386/06/DM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 14 February 2007

Before
THE HONOURABLE MR JUSTICE LANGSTAFF
DR S CORBY
MR T HAYWOOD

MR D FAIRCLOUGH AND OTHERS	APPELLANT

JOHN REILLY CIVIL ENGINERRING LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	Mr R Thacker
(of Counsel)
Instructed by:
John Halson Solicitors 
26 Hope Street
Liverpool
L1 9BX	
For the Respondent	Mr J McDonald
(Representative)
Tara Management Services 
Tara Hill 7 Woodstock Drive
Worsley
Manchester
M28 2NP	

SUMMARY
Practice and procedure – Striking-out/dismissal
Employment Tribunal dismissed claims of Claimants who though not personally present appeared by their solicitor; the decision could not be brought within s.27(5) Employment Tribunal Rules of Procedure, and moreover was not clearly made after having considered the matters mentioned in s.27(6). Case remitted for hearing.

THE HONOURABLE MR JUSTICE LANGSTAFF

1.	The circumstances which give rise to this appeal display a measure of muddle and confusion, both before the claim was begun at all and in particular when the hearing occurred on 27 March 2006 at the Employment Tribunal in Liverpool before a Chairman, Mr Robinson, and members at which the claims of the Appellants before us were dismissed.  This appeal is against that decision, reasons for which were promulgated on 9 May 2006.  The case of each of the Appellants before us was brought at the same time as, and in respect of the same basic underlying facts, as those of a number of others.  

2.	Briefly, what had happened was this.  A number of employees were engaged by Space Development UK Ltd (“Space”) to provide ground work services on a contract which was being managed by or for which the main contractor was Fairclough.  This was only part of the operation of Space.  Space decided that it was no longer sensible for them to be involved in performing grounds works under the contract.  They therefore proposed to make their employees redundant.  Matters proceeded on the basis that that was what would happen.  Consultation under section 188 of the Trade Union Labour Relations Consolidation Act 1992 proceeded.  The Tribunal found that it was satisfactory.  

3.	Also providing ground work services under the same contract were the Respondents, John Reilly Civil Engineering Limited.  They wished to ensure that the contract proceeded on time for that was to Reilly’s benefit as to Faircloughs.  Accordingly they decided that they would take into employment those redundant employees who wished to offer their services in the employment of John Reilly.  As it happened John Reilly paid a better wage under PAYE than the redundant employees had previously been receiving.  It was only when issues of calculation of the redundancy payment due fell for consideration, that it occurred to anyone, so we have been told, that the arrangement which had taken place whereby John Reilly Civil Engineering Limited took over a significant number of employees who had worked on this particular contract for Space was one to which the provisions of The Transfer of Undertakings (Protection of Employment) Regulations 1981 applied.  Those Regulations of course required that there should be consultation in advance of a transfer.  

4.	During the meetings which had occurred and during the consultation under section 188 of the 1992 Act, no-one had thought that TUPE was engaged.  Accordingly there was no consultation sufficient to comply with the requirements of Regulation 10 of the Transfer of Undertakings (Protection of Employment) Regulations 1981.  For some employees this might have had a greater significance than others.  For Mr Wilson and Mr Cox it meant that they did not accept or wish to accept employment with Reilly’s.  For a Mr McClymont it appears that he too was not engaged by Reilly’s.  All the other redundant employees were so engaged.  They received redundancy payments calculated upon the basis that they had been redundant since at the time no-one thought any better.  It was accepted on the papers, prior to the Tribunal hearing to which we have referred, that there had been no sufficient consultation to comply with Regulation 10.  It is however the fact that, also before the Tribunal met to consider its decision, a number of the former employees withdrew their claims.  There were 11 of those.  Notification that that was the case was given in a letter of 17 March 2006 by the solicitor who was, according to the form ET1, acting for every employee concerned.  It appears that a reason for the withdrawal may well have been the fact that all of those employees were by now happily employed in the service of Reilly and all had received the adventitious bonus of a redundancy payment which no-one had required them to pay back.  Whatever the reasons may be, it is not difficult to see that speculation that that might have been the case could well have been entered into and may have been in the mind of the Tribunal when it met to reach its decision.  

5.	What happened before the Tribunal has been a matter of agreement between the parties.  

The Tribunal Hearing
6.	The names of all the applicants were listed on the Tribunal hearing sheet.  In each case, as we have noted, their representative was identified as John Halson Solicitors and indeed Mr Warren-Jones of that firm.  The first matter before the Tribunal was the withdrawal of the claims.  After that the Tribunal proceeded to hear the applications of those three who arguably fell into a different category from the others, that is, those three who had been employed by Space but had not secured re-employment with Reilly’s.  Those three were Mr Cox, Mr Wilson and Mr Geoffrey McClymont.  Before their claims were heard Mr Warren-Jones, on behalf of all the remaining applicants, made an application to strike out the Respondent’s response to the claim on the basis that alleged pressure had been brought to bear on all the Claimants now working with the Respondents to withdraw their claims.  It must thus have been apparent to the Tribunal that Mr Warren-Jones was present and purporting to act on behalf of all the Claimants.  The Tribunal rejected the application and noted that a number of Claimants had withdrawn their claims.  It noted who were the three Claimants who were pursuing claims for alleged underpayment of redundancy payments and notice pay.  Of course, that was only the three who had not been re-employed by Reilly’s.  It heard and determined those claims with the exception of that of Mr Geoffrey McClymont in respect of whom there is no appeal before us.  He did not attend.  Mr Wilson did and so did Mr Cox.  The Tribunal determined that they were entitled to damages for breach of contract in respect of notice pay and in respect of their regulation 10 claim, but they failed in respect of their claim for additional redundancy pay and a protective award.  In the case of Mr McClymont the Tribunal dismissed his claims “because of non-attendance at the Tribunal and the Tribunal are not able to deal with his claims without hearing evidence from him”.  

7.	The Tribunal proceeded to determine what compensation it was appropriate to award in respect of the failure by the employer to consult under regulation 10.  It set out its decision as follows:-
“In our view it is just and equitable that the Claimants should receive 30 working days compensation but not 13 weeks compensation.”

This says little.  However at paragraph 43 the Tribunal observed as follows:-
“43.	These respondents seem to have taken on all those working in the part transferred save for a small number but it is true that both Mr Wilson and Mr Cox found employment elsewhere and that at least Mr Wilson, although not Mr Cox, actually refused a job with these respondents.  The level of consultation that took place under Section 188 did lead to an outcome which, in the main, satisfied most other employees and did lead indirectly, not to the business being wound-down completely, and wholesale redundancies taking place, but actually allowed a transfer to take place thus saving jobs.
44.	In those circumstances under Regulation 11(11) the appropriate compensation should be “such sum not exceeding 13 weeks’ pay for the employee in question that a Tribunal considers just and equitable having regard to the seriousness of the failure of the employer to comply with his duty”.”

The claims which the Tribunal had considered were those of the three employees who were arguably in a different category from those who had raised claims who had been represented in the strike-out application by Mr Warren-Jones at the Bury Tribunal, but who had not withdrawn their claims.  

8.	Once the Tribunal reconvened, following the representatives calculating the amount due to Mr Cox and to Mr Wilson in accordance with the determination we have just recited, the Chairman asked if that was everything.  At that point Mr Warren-Jones asked about the other Claimants.  Prior to this point, it is agreed between the parties, the Chairman had not raised the question of the other Claimants who did not give evidence and neither had either representative.  When Mr Warren-Jones asked about the other Claimants the Chairman said that as they had not attended to give evidence their claims would all be dismissed.  

9.	In the written reasons at paragraph 48 this was said:-

“In relation to the other Claimants we are of the view that the majority have withdrawn their claims in any event but any other claimants who perceived that they had a continuing claim could have attended and given evidence.  As there was no attendance not only do they not receive any compensation, their claims are dismissed.”

A curiosity, given that reasoning, is that Mr Fairclough was actually present at the Tribunal.  None of the other Claimants however were.  

10.	After that decision was reached it appears that Mr Warren-Jones wrote a letter to the Tribunal pointing out that the Claimants whose claims had been dismissed and whom he had attended to represent at the Tribunal had previously been granted permission to make claims under regulation 10 of TUPE following earlier hearings before a different Chairman at the same Tribunal.  His letter asked for a review of the decision which had been made to dismiss the claims.  The Chairman, because by the time he came to draw up his reasons he had received the letter, dealt with it by way of post-script to the decision within the same body of text.  He said, simply, that the request for a review was rejected on the basis that none of the grounds for review in rule 34 of the 2004 regulations applied.  

11.	He went on to say this at paragraph 56:-

“56.	Mr McClymont…did not attend and for the reasons stated above, he is not entitled to any payment and his claim is dismissed.  For similar reasons all the other claimants who did not attend and/or who did not give evidence cannot be compensated.  It would not be right to do so.  Their non attendance indicates they do not wish to continue to press their claims if, indeed, they had any claims to so prosecute.
57.	Mr Warren-Jones goes on to say that Mr Fairclough was in the Tribunal room and that consequently his claim could have been dealt with.  However, Mr Warren-Jones did not call him and we heard nothing of his position or claim.
58.	No issue was made of that prior to the judgment with reasons being communicated at dictation speed to the parties in the Tribunal room.”

12.	What appears plain to us is that as a matter of fact the Tribunal and the parties were at cross purposes.  The Claimants had expected that their claims would be heard and that by exercise of case management powers the hearing of the three had taken place first.  This assumption may very well have been contributed to by the fact that there had, at the outset, been a speculative application to dismiss the response upon the basis we have mentioned.  So far as the Chairman was concerned it is plain that he thought by the time the issue of others was raised that the Tribunal had dealt with the issues which had been put before them and which there was evidence to support.  However, we have to deal with the legal consequences.

The law
13.	The power to dismiss which the Chairman purported to exercise must have been that contained in rule 27 of the 2004 Employment Tribunal’s Rules.  He does not specifically make reference to it.  It may be a pity that he did not do so.  27(5) provides:-

“If a party fails to attend or to be represented (for the purpose of conducting the party’s case at the hearing) at the time and place fixed for the hearing the Tribunal may dismiss or dispose of the proceedings in the absence of that party or may adjourn the hearing to a later date.”

The power is only exercisable if a party fails to attend or to be represented.  As we have already noted, a necessary pre-condition of fact, that the party was not represented, was not made out in the present case.  We do not have to deal with a submission here that the Tribunal was entitled to think that the party was not represented because of what happened, because it seems to us clear that where a case is listed before an Employment Tribunal, where on the face of the originating application a solicitor is identified, where that solicitor appears and where that solicitor, in fact on behalf of the very Claimants whose claims were struck out, makes an application before the Tribunal, there could be no basis for so thinking.  Accordingly the necessary precondition for exercise of the power was not present.  
14.	In any event rule 27(6) provides as follows:-

“If the Tribunal wishes to dismiss or dispose of proceedings in the circumstances described in paragraph 5 it shall first consider any information in his possession which had been made available to it by the parties.”

It may very well be in many cases that a Chairman has such regard without making any great mention of it in his reasons.  But in this case, it is a fact that he makes no reference to having had any such consideration, nor can it be assumed the Tribunal did so.  This is because in our view consideration is a deliberate process.  

15.	The Tribunal need to turn their mind, having first of all raised the possibility that they might dismiss a claim, to information which might be relevant to whether they exercise that power or instead a power to adjourn or deal with the matter in some other way, such as, for instance, calling the case and hearing evidence.  It is within their discretion to do as this, is pointed out in one of the cases which Mr McDonald helpfully referred us, that of the decision of Roberts v Skelmersdale College [2003] EWCA Civ 954 in particular in the judgment of Mummery LJ: see paragraph 34.  

16.	The process of consideration need not be a lengthy process but there must be some indication that it actually occurred.  The Chairman may very well have had reasons which could have satisfied a dismissal, were the precondition otherwise met, if he had only but said, in his reasons, something of what they were, or demonstrated by appropriate words that the Tribunal had indeed considered information available to them.  If specific mention had been made of rule 27 it is inconceivable, we think, that a Tribunal would not have invited Mr Warren-Jones who was there and on the record to say what he had to say about the proposed dismissal.  Had that course been taken, it is difficult to think that the same result would then have occurred.  
17.	Further, as paragraphs 48 and 56 indicate, the Chairman had a central focus upon whether or not the party could give evidence.  In the case of Mr Fairclough, for instance, he appears to have thought that the matter of significance was whether Mr Fairclough gave evidence or not.  That is not a requirement identified in rule 27.  Indeed there may be cases in which a Claimant does not, or cannot for reasons of disability, attend to pursue his claim in person, but has a representative or for that matter witnesses who do so on his behalf.  The failure to give evidence is not a sufficient reason for exercising the power, but it appears to be the basis upon which this Tribunal exercised theirs.  

18.	We have considerable sympathy with the Tribunal faced with what was a muddling case where no doubt there were good reasons for thinking that the employees, whose claims were not heard but were dismissed, might well have been reluctant to pursue them because they were still in gainful employment with Reilly’s.  But it is not, in our view, open to a Chairman to dismiss a claim upon the basis of that speculation.  We have sympathy too with the Tribunal because it might very well have been that Mr Warren-Jones had protested rather more vigorously than it appears he may have done once the decision had been reached.  He could have made it clear that the Chairman might wish to look at the terms and provisions of rule 27.  The decision which the Tribunal came to in respect of the other three is not one subject to any appeal before us by either party.  It is plain that the Tribunal performed its task conscientiously in that respect and that the suggestion that there might be other claims, otherwise unresolved, came to it as very much an after thought.  It follows however from what we have said that, there being no proper basis for the decision, and the decision in any event being exercised on a faulty basis, this appeal must be allowed.  

Consequence
19.	Mr Thacker, who appears for the Claimants, invites us to exercise our powers to determine what award should be made.  He points out that the employees were all subject to the same lack of consultation.  If 30 days was appropriate for Mr Wilson and Mr Cox then there is no good reason why it should not be appropriate also to those other employees who had raised claims.  

20.	Mr McDonald, who appears for Reilly’s, argues that we should not determine the case ourselves.  We for our part would be most reluctant to do so and will not do so. It seems to us that the assessment of compensation is very much a matter for the Tribunal upon whose assessment of the blameworthiness of the employer the amount will depend.  We do not accept that the hearing should necessarily be conducted before the same Tribunal.  We do not however order that it should go to a different Tribunal.  We think that the matter is better left to the administrative convenience of the Tribunals service at Liverpool.  The case is likely to be a short one.  

21.	The facts have passed through the hands of a number of Chairmen in any event prior to it coming before the Tribunal chaired by Mr Robinson.  We see no reason to think why Mr Robinson would do any less a professional job in respect of this remission than he did in respect of the other claims before him which he determined without, as we note, any appeal.  But we do not think that it should be ordered to be remitted either to the same or to a different Tribunal. We do however indicate this, that the Tribunal to whom it is remitted will no doubt wish to consider that the employees whose claims are extant in consequence of our decision, may well fall within a different category of employee than did those considered by the Tribunal of May 2006.  They may wish to consider the reasons that the earlier Tribunal had for concluding that it should be as much as 30 days compensation in respect of cases in which they may think that there is very little, if any, culpability which should be penalised by way of any award.  But that is entirely a matter for them, and of course we do not seek to in any way fetter their decision.  It is a pity that the reasons for the Tribunal determining that it should be 30 days in respect of Mr Wilson and Mr Cox are as brief as they are.  

22.	With those observations we therefore allow this appeal.  The consequence will be that the claims of the Appellants are not to be treated as dismissed.  They will therefore proceed before a Tribunal at Liverpool.  We anticipate that that Tribunal will be faced with determining what compensation is appropriate under the law as it is then seen to stand.