Appeal No.	 EAT/1376/96

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 17 April 1997

Before
HIS HONOUR JUDGE D M LEVY QC
MRS T A MARSLAND
MR T C THOMAS CBE

MR ROBERT CARTER	APPELLANT

REINER MORITZ ASSOCIATES LTD	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR A BURNS
(of Counsel)
Messrs Langley & Co
Solicitors
199 Bishopsgate
London
EC2M 3TY	
For the Respondents	MR D READE
(of Counsel)
The Simkins Partnership
Solicitors
45-51 Whitfield Street
London
W1P 6AA	

	JUDGE D M LEVY QC:    By an application dated 13 July 1995, Mr Carter brought proceedings for, claiming according to his IT1:  “Unfair Dismissal/Breach of Contract” against Reiner Moritz Associates Ltd (“the Company”).

	A Notice of Appearance was entered on 20 September 1995.  There was an hearing before an Industrial Tribunal on 17 and 19 June 1996.  On 15 July 1996 the result of the hearing was communicated to the parties.

	The unanimous decision of the Tribunal was that Mr Carter was unfairly dismissed.  The Tribunal held that Mr Carter contributed to his dismissal and it was just and equitable that an 80% reduction be applied for contributory conduct to the sum which would otherwise be due to him.

	The first paragraph of the Decision says:

“The issue of remedy was adjourned to 26 September 1996 at 10.00 am.”

	There was no appeal from the holding that Mr Carter had contributed to his dismissal and that the just and equitable 80% reduction be applied for contributory conduct.

	After the Tribunal decision was known there was correspondence between the parties, some of which is before us.  We anticipate that the Tribunal had indicated its decision before the formal reasons were sent.  The Solicitors for the Applicant offered to accept £5,269 in settlement of their client’s claim and on 20 June 1996 the Simkins Partnership wrote to Langley & Co as follows:

“We refer to the two telephone conversations between your Ms Andrew and our Mr Lakeland earlier today.
A binding agreement has been reached as between our respective [and there is a word left out] that your client’s financial claim has been compromised in the sum of £5,269.  In our first telephone conversation it was agreed that our clients would pay your client the sum of £5269 within 14 days of today’s date.
We communicated the terms of this agreement to our clients and informed them that they should expect to receive a request from us for a cheque in the above sum.
We consider that your client is bound by the agreement and that any subsequent thoughts you have had concerning the calculation of the sums due to your client have no bearing on the agreement reached between our firms.”

	On 20 June 1996, the same day, a fax was sent by Langley & Co to the Simkins Partnership:

“We write further to your fax earlier today and our preceding telephone conversation.  When we spoke earlier today you will recall that any agreement was expressly subject to a Consent Order.
Under s140(1)(b) of the Employment Protection (Consolidation) Act 1978 [“the 1978 Act”] there can be no binding agreement unless there has either been a Consent Order, intervention by ACAS or a Compromise Agreement.  Therefore there is no binding agreement in this case.
We will write to you separately concerning our clients loss.”

	At the request of the parties, in this judgment, we will refer to sections of the 1978 Act rather than the replacement sections.

	When the matter came back for the compensation hearing on 26 September, the rights and wrongs of the contractual agreement which was said to have been made, were considered by the Industrial Tribunal and this appears in the elegant sentence at the end of paragraph 6 of their Extended Reasons sent to the parties on 25 October 1996:

“The Tribunal found that the agreement to settle the matter for £5,269 was a binding agreement between the parties subject to a consent order being entered into.”

	The Tribunal found that the legislation, particularly section 140(1) and 140(2) of the 1978 Act, was such that it was not open to the parties to compromise the claim, but they then went on to find that the amount of compensation which Mr Carter was to receive was a sum of £5,269, the very same sum as had been offered in the agreement which they found was not binding.

	From that decision Mr Carter appeals on the basis, and we turn to his Notice of Appeal, paragraph 6 (c) and (d):

“(c)  The Tribunal erred in law in that they either:
(i)  adjusted the damages for wrongful dismissal as far as they considered was just and equitable so that it was contained within the £5,269, in circumstances where there is no power to do so under the Tribunal’s contractual jurisdiction as extended by section 131 of the EPCA [1978 Act] and S.I. 1994/1623; or
(ii)  failed to assess damages or make any award in respect of the Appellant’s wrongful dismissal claim;
(d)  further the Tribunal erred in law and/or their decision was perverse in that they found it was just and equitable to award the Appellant £5,269 for unfair dismissal compensation ...”

	And it goes into the matter of the overall figures.

	There was an answer / cross-appeal by the Respondent, relying on section 140 and saying in paragraph 5:

“5.4.  The Appellant’s Originating Application included both a claim for unfair dismissal and wrongful dismissal arising out of the same facts.  The Tribunal had jurisdiction to deal with the entirety of the Originating Application by reason of S. 131.  The proceedings therefore fell within the scope of subparagraph (fa) and section 140(1) does not apply.  
5.5.  The Tribunal erred in law in finding that the proceedings did not fall within Section 140(2)(fa) because the Appellant’s claim included both a claim for unfair dismissal and a claim in contract.
5.6.  The Tribunal erred in law in not finding:
5.6.1.  that the proceedings fell within Section 140(2)(fa) and therefore that S.140(1) did not apply to the binding agreement reached between the parties ;
5.6.2.  that it had no jurisdiction to deal with the application other than to make the agreed order for payment of £5,269.”

	In reply to the cross-appeal, Mr Carter relied on the decision of the Industrial Tribunal.

	It will be convenient first to deal with the issues raised in the cross-appeal.  

	Mr Reade reminded us of how there was introduced into the jurisdiction of the Industrial Tribunal the provision to award damages for breach of contract under section 140 of the 1978 Act; how under section 131 of the 1978 Act, a power to confer jurisdiction on Industrial Tribunals in respect of damages for breach of contract of employment was introduced and how thereafter (in section 140) restrictions on contracting out were introduced.

	Section 140(1) of the 1978 Act reads:

(1)  Except as provided by the following provisions of this section, any provision in an agreement (whether a contract of employment or not) shall be void in so far as it purports -
(a)  to exclude or limit the operation of any provision of this Act or;
(b)  to preclude any person from presenting a complaint to, or bringing any proceedings under this Act before, an industrial tribunal.”

	Subsection (2) provides:

(2)  Subsection (1) shall not apply - .”

	And then there is inserted, by an amendment, in 1993:

“[(fa)  to any agreement to refrain from instituting or continuing any proceedings before an industrial tribunal where the tribunal has jurisdiction in respect of the proceedings by virtue of an order under section 131;]
[(fb)  to any agreement to refrain from instituting or continuing any proceedings specified in section 133(1) (except (c) or 134(1) before an industrial tribunal if the conditions regulating compromise agreements under this Act are satisfied in relation to the agreement.]”

	At the second hearing before the Industrial Tribunal, a debate as to what was the status of the agreement which the parties had reached in correspondence and we have already identified the decision reached by the Tribunal.

	Mr Burns has submitted that that decision was entirely right and he has drawn our attention to a passage in a text book on Statutory Construction which reads, “the maxim expressio unius est exclusio alterius” (translated this means the express mention of one person or thing is the exclusion of another).  Mr Burns submits that when one looks at subsections (fa) and (fb) there is excluded from there only compromise agreements relating to the contractual aspects introduced into section 133.  He submits where statutory provision is there which might have covered a number of matters but, in fact, mentions only some of them, only those expressly mentioned are included.

	In reply to that, Mr Reade says, the “only” is not there and therefore there is no restriction on contracting out in the way the parties did in the agreement which they made, subject to the approval (so to speak) of a formal Order by the Court.  There was no law to prevent the parties making a binding agreement, subject to it being embodied in a Court Order and that the Court had a discretion to make an order per the agreement reached by the parties.

	In our judgment the argument of Mr Reade is right.  We can see no reason at all why adult parties should not reach an agreement subject to the order being made by the Court.  The Court retains a discretion as to whether it will make the order sought.  In our judgment, section 140 of the Act does not restrict the parties from reaching an agreement, albeit that it has to be considered by the Court and will not become enforceable unless and until an Order of the Court has been made.  In our judgment therefore the cross-appeal of Mr Reade succeeds.  We accept Mr Burns’ submission that within the decision itself it is not possible to find out how the quantum compensation has been calculated.  Mr Burns says, and we think he is right in this, that what the Tribunal appears to have done is to have accepted submissions made by him by reference to Courage Take Home Trade Ltd v Keys [1986] ICR 874.

	In these circumstances, the issues raised in the appeal are only of academic interest but as the appeal has been argued, we will give judgment on it.

	Paragraph 10 of the Extended Reasons reads:

“10  The Tribunal considered the provisions of section 74(1) of the Act and took note of the submission of the Applicant’s Counsel that the provisions of S.74 only applied to the compensatory award and not to the basic award.  The Respondents contention is that having entered into a binding agreement, it would be unjust and inequitable for Mr Carter to be awarded a higher sum as compensation for his unfair dismissal.  The Tribunal was satisfied that the expression ‘just and equitable’ permitted them to look at the figures overall in all the circumstances and that in the exercise of their jurisdiction to make an award of compensation they would treat the figure of £5,269 as comprising a basic award reduced by 80% for contributory conduct, together with the balance representing the compensatory award.”

 	What the Tribunal appears to have done is to say, “Well there may have been an agreement which is not binding, but Mr Carter is not entitled to go behind it.  We therefore will reach the figure which was in the agreement made by the parties although we have not specified how we have done our sums”.  Mr Burns has bravely tried to submit that there is a way of calculating how the sums could have been done, but we are satisfied that if a Tribunal wishes to make a basic award and a compensation award in a case where there is a claim both for damages for unfair dismissal and for breach of contract, they must set out how they have made their award so the parties know exactly why the decision has been reached in case they wish to appeal against it.  The Industrial Tribunal may have felt that the award to be made for unfair dismissal was of a sum which would subsume the sum due for wrongful dismissal but this was not something they expressed.  However as in our judgment they clearly wished to give effect to the agreement made by the parties (subject to the Court Order), this is what they should have said.

	Though we are not satisfied that the Industrial Tribunal took an appropriate route to reach their decision, as the order made was one which could properly be made, in our judgment the course we should take is to dismiss the appeal and allow the cross-appeal.