Appeal No.	EAT/1001/99

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 25 November 1999
Judgment delivered on 18 January 2000

Before
THE HONOURABLE MR JUSTICE CHARLES
MISS C HOLROYD
MR D J JENKINS MBE

(1)	LONDON BOROUGH OF SOUTHWARK 
(2)	THE GOVERNORS OF HEBER SCHOOL 
(3)	MR G MOTT	APPELLANTS

MISS V E SAWYERR	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR J SWIFT
(of Counsel)
Instructed By:
Ms L Meadows
Head of Legal (Contract) Services
London Borough of Southwark
30-32 Peckham Road
London
SE5 8UB
	
For the Respondents	MR T SISLEY
(of Counsel)
Instructed By:
Ms J Turner
Messrs Mackesys
Solicitors
7 Lewisham Way
London SE14 6PP	

MR JUSTICE CHARLES:	The Appellants in this appeal are (1) the London Borough of Southwark, (2) The Governors of Heber School and (3) Gordon Mott.  The Respondent is Victoria Sawyerr (Miss Sawyerr)

1	The appeal is against a decision of an Employment Tribunal sitting at London (South) (“the second Employment Tribunal”), the Extended Reasons for which were sent to the parties on 5 August 1999.  That decision was that:

1	The Applicant be reinstated to her position of Humanities co-ordinator History and Geography year 6 at Heber School as of 19 July 1999.
2	By agreement between both counsel it was agreed that having heard the views of counsel for the parties in respect of those matters referred to in Sections 114(2)(3) and (4) Employment Rights Act 1996 the parties will attempt to reach agreement as to financial compensation in the event that no agreement is reached by 27 July the Applicant should apply to the Tribunal for a further hearing of the Tribunal to deal with such matters.

2	Additionally, the second Employment Tribunal made an order for costs against the Respondents before them and thus the Appellants before us.  The order was that they pay £500 as a contribution towards Miss Sawyerr’s costs.  The Appellants also appeal against that order.

3	The Appellants sought a review of the order of the second Employment Tribunal against the decision that Miss Sawyerr be reinstated with effect from July 1999 on the basis that the second  Employment Tribunal did not have jurisdiction to consider the issues of reinstatement or re-engagement.  

4	The Chairman of the second Employment Tribunal refused that application on the basis that he concluded that it had no reasonable prospect of success and that the interests of justice did not require the review.  

5	In the reasons for refusing the review which were sent to the parties on 5 August 1999, the Chairman makes the following point in paragraph 7:

7.  It is noted that the Respondent did not raise any questions as to whether or not the Tribunal had jurisdiction to consider reinstatement or re-engagement at the hearing on the 13 July and indeed Respondent counsel’s written skeleton submissions were prepared on the basis of such an application for reinstatement being made and the whole proceedings which was held from 10.00 am to approximately 5.30 pm dealt with nothing but.  The Respondent’s counsel did not object.

6	Before us the Appellants (the Respondents before the second Employment Tribunal) are represented by different Counsel.  On instructions he accepted that at the hearing that took place on 13 July 1999 the point was not raised or argued that the second Employment Tribunal did not have jurisdiction to consider the issue of reinstatement or re-engagement.

7	In our judgment correctly no point was taken by reference to the fact that the issue of jurisdiction was not argued before the second Employment Tribunal.  
The Background

8	The Background can be summarised as follows:

(i)	Miss Sawyerr was dismissed with effect from 31 August 1996.  On 11 October 1996 she presented claims of unfair dismissal, race discrimination and for damages for breach of contract;

(ii)	Those claims were considered by the Employment Tribunal at a hearing on 17 October 1997 (“the first Employment Tribunal” and “the first hearing”).  The outcome of that hearing was that the first Employment Tribunal dismissed the claim under the Race Relations Act, but allowed the claim of unfair dismissal;

(iii)	the Employment Tribunal provided extended reasons for its decision which were sent to the parties on 31 October 1997 (“the First Tribunal Decision”).  In that decision the first Employment Tribunal specifically considered the issue of remedies in relation to the unfair dismissal claim.  The first Employment Tribunal concluded:

(a)	that no order should be made either for reinstatement or re-engagement.  In this respect paragraph 52 of the Extended Reasons for their decision is in the following terms:

“52.  The Applicant has asked for reinstatement or compensation.  We do not consider reinstatement to be a feasible option.  The Applicant has not taught at the school for two years.  We heard that it is now a calmer place.  We have also seen the quite disgraceful letters that she has written to and about Mrs Padmore and the education authority since this litigation started and that persuades us that even if as we have find (sic) efforts should have been made in January 1996 to reintegrate her into the school and improve matters, they would be fruitless now.  Furthermore, because many of those letters have been written about officers of the education authority we find that re-engagement if such a thing is possible under the Education Act within Southwark is not something with (sic) which we would order.  We therefore determine upon compensation of being the right method of dealing with this case.”

(b)	as appears from the above quotation that the appropriate remedy for Miss Sawyerr was an award of compensation, 

(c)	that the award of compensation to Miss Sawyerr should be reduced by 50% to reflect the extent to which she contributed to the cause of her own dismissal and by a further 25% to reflect the fact that she had failed to mitigate her loss (see paragraphs 54 and 55 of the Extended Reasons); and 

(d)	dismissed Miss Sawyerr’s claim under the Race Relations Act, and

(e)	concluded their Extended Reasons by the following paragraph:
“Remedy
59.  Following our decision the parties agreed the Applicant’s remedy and no order is therefore necessary from us.”

(iv)	Miss Sawyerr appealed against the First Tribunal Decision.  The grounds of the appeal were set out in an amended Notice of Appeal dated 1 July 1998 and were as follows:

“The grounds upon which this appeal is brought are that the Industrial Tribunal erred in law in that it acted perversely, 
(a)	in concluding that the Appellant (Miss Sawyerr) had contributed to her own dismissal by 50% by writing letters and acting in a confrontational manner.  The Appellant did not write any letters prior to her dismissal.
(b)	In concluding that the Appellant (Miss Sawyerr) failed to mitigate her losses by turning down an offer of redeployment and reducing her award by a further 25%, there being no offer of redeployment made and if, such an offer was made, it was ultra vires and could not be acted upon by the First Respondent.”

The amendment that was made to the original Notice of Appeal was to exclude a further ground (c) which related to the dismissal in the First Tribunal Decision of Miss Sawyerr’s claim under the Race Relations Act.

(v)	As appears from the amended Notice of Appeal Miss Sawyerr challenged the  First Tribunal Decision on compensation in relation to the decisions as to contribution and a failure to mitigate.  There was no appeal against the decision that neither reinstatement or re-engagement should be ordered and that as stated in paragraph 52 of the Extended Reasons for the First Tribunal Decision that compensation was the right method of dealing with this case.

(vi)	The Appeal was heard on 3 February 1999 by this Tribunal and judgment was delivered on 23 February 1999 (“the Appeal Decision”).  Unsurprisingly, that judgment deals only with the issues of compensation which were the subject matter of the Notice of Appeal.  This Tribunal allowed the appeal on both grounds and the final paragraph of the Appeal Decision is in the following terms:

“Overall Conclusion
In our judgment all issues related to compensation should be remitted to a new Tribunal.”  

Comment

9	In paragraph 1 of the Extended Reasons sent to the parties on 5 August 1999 the Employment Tribunal states as follows:

“This matter, following a decision of the Employment Appeal Tribunal, returned to the Employment Tribunal, but before a differently constituted Tribunal, to consider remedy.”

10	As appears from the background set out above this is not correct.

11	Further, in paragraph 6 of the reasons given by the Chairman for refusing the review sought by the Appellants he says this:

“6.  Having said that and in so far that he is able to do so the Chairman refuses the application for review for the following reasons:-  The previous Tribunal under the Chairmanship of Mr Booth had not dealt with remedy at all.  They heard no evidence regarding remedy and made no findings of fact in that respect.  Further the matter was remitted by the Employment Appeal Tribunal to a freshly constituted Tribunal to consider remedy.  … .”

12	As appears from the background history we have set out each one of those reasons is not correct.  Indeed, we fail to understand how anyone who has read the First Tribunal Decision and the Appeal Decision could make such a statement.  In this context we note that the Extended Reasons relating to the hearing held before the second Employment Tribunal on 13 July 1999 and the reasons for refusing the review sought by letter dated 21 July 1999 are both dated 5 August 1999 and were sent to the parties on that date.

13	Before us Miss Sawyerr was represented by different Solicitors and Counsel to the solicitors and counsel who had represented her before the second Employment Tribunal.  The new solicitors and counsel were  instructed shortly before the appeal was due to be heard.

The Hearing Before Us

14	In his skeleton argument Counsel for the Appellants referred to the decision of the Court of Appeal in Aparau v Iceland Frozen Foods.  This is a decision of the Court of Appeal in an appeal heard on  29 October 1999.  The skeleton asserted that a copy of the transcript would be provided and this was duly done on the morning of the hearing.  The leading judgment in that case was given by Moore-Bick J and in it he says (amongst other things):

“The effect of an order remitting a case to a tribunal which had otherwise exhausted its jurisdiction was considered by this court in the context of arbitral proceedings in Interbulk Ltd v Aiden Shipping Co Ltd (The ‘Vimeira’ (No.1)) [1985] 2 Lloyd’s Rep. 410.  Ackner L.J. pointed out that the extent to which the tribunal’s jurisdiction is revived in consequence of an order remitting the matter to it depends entirely on the scope of the remission.  If, as occurred in the present case, the matter is remitted for the tribunal to consider certain specific issues, it will have no jurisdiction to hear or determine matters outside the scope of those issues and it must follow that it has no power to allow one party to amend its case to raise issues which were not previously before it.  In the present case it is clear from the passages in the judgment of the Employment Appeal Tribunal to which I have already referred that remission was ordered in very limited terms simply to enable the industrial tribunal to reconsider whether Iceland’s new terms of employment had been accepted by Mrs Aparau.  That being so, the tribunal did not by virtue of the remission have jurisdiction to reopen the case generally, nor did it have jurisdiction to hear or determine any argument on the part of Iceland relating to the fairness of any dismissal.  Although Mr Glennie sought to persuade us to the contrary, I for my part am quite satisfied that that was not an issue which had previously been raised in the proceedings and it was certainly not within the scope of the remission.”

15	In the light of that decision Counsel for Miss Sawyerr, in our judgment correctly, accepted that the appeal should be allowed.

16	It follows that we did not hear him on the arguments he had set out in a skeleton argument provided to us shortly before the hearing.  In that skeleton argument Counsel raised points relating to estoppel, sections 112 and 113 of the Employment Rights Act 1996 and section 35 of the Employment Tribunals Act 1996.  

17	We indicated to Counsel during the hearing that our preliminary view in respect of the arguments he raised was that he had a very steep hill to climb to persuade us that they were correct.  We set out briefly below our reasons for this view.  We do so because we reached such a view without knowledge of the decisions in Aparau v Iceland Frozen Foods or The Vimeira (No. 1) [1985] 2 Lloyd’s Rep. 410, and it seems to us that the reasons should have caused the representatives of both sides before the second Employment Tribunal, and the Tribunal themselves to realise that the second Employment Tribunal should not have considered reinstatement or re-engagement, or at least that the question whether they could do so merited argument and consideration.

18	Sections 112 and 113 of the Employment Rights Act 1996 provide as follows:

“112.  The remedies:  orders and compensation
(1)  This section applies where, on a complaint under section 111, an employment tribunal finds that the grounds of the complaint are well-founded.
(2)  The tribunal shall –
(a)	explain to the complainant what orders may be made under section 113 and in what circumstances they may be made, and 
(b)	Ask him whether he wishes the tribunal to make such an order.
(3)  If the complainant expresses such a wish, the tribunal may make an order under section 113.
(4)  If no order is made under section 113, the tribunal shall make an award of compensation for unfair dismissal (calculated in accordance with sections 118 to [127A] [or in accordance with regulations under section 127B]) to be paid by the employer to the employee.”

113 The orders
An order under this section may be –
(a)	an order for reinstatement (in accordance with section 114), or
(b)	an order for re-engagement (in accordance with section 115),
as the tribunal may decide.”

19	It follows from section 112 that the structure of the Employment Rights Act is that if a complainant expresses a wish that the Employment Tribunal should make an Order under section 113 the Employment Tribunal has to consider that first. The Act therefore requires a two-stage process.

20	Here the first Employment Tribunal in the First Tribunal Decision carry out that two-stage process and at the first stage decided not to make an order under section 113.  That decision is reflected in the decision of the Employment Tribunal to make no order relating to compensation, having regard to the agreement referred to in their decision.  (In passing we mention that opposition to Miss Sawyerr’s appeal on the basis of that agreement was abandoned before this Tribunal – see page 2 of the Appeal Decision).

21	It follows, in our judgment, that the First Tribunal Decision includes a decision at the first stage of the consideration of remedy that an order pursuant to section 113 of the Employment Rights Act 1996 should not be made.  That decision which is reflected in the order made by the first Employment Tribunal following the first hearing was never the subject matter of an appeal.  

22	It seemed to us that that decision remains binding on the parties.  

23	Section 35 of the Employment Tribunals Act 1996 provides as follows:

“35  Powers of Appeal Tribunal
(1)  For the purpose of disposing of an appeal, the Appeal Tribunal may –
(a)	 exercise any of the powers of the body or officer from whom the appeal was brought, or 
(b)  remit the case to that body or officer
(2)  Any decision or award of the Appeal Tribunal on an appeal has the same effect, and may be enforced in the same manner, as a decision or award of the body or officer from whom the appeal was brought.”

24	It seemed to us that on the proper construction of section 35 the Employment Appeal Tribunal may remit part of a case and thus specific issues within a case to an Employment Tribunal.  Indeed, if this was not the case the arguments contained in the skeleton argument put in on behalf of Miss Sawyerr would lead to the conclusion that if the earlier appeal in this case had included an appeal against the decision not to make a section 113 order this Tribunal could have concluded that in reaching that decision the Employment Tribunal did not err in law but would nonetheless have been unable to confine reconsideration of the case to the issues of compensation in respect of which this Tribunal found that the Employment Tribunal had erred in law.

Our Conclusion and Decision

25	We allow the appeal. 

26	In our judgment correctly it was common ground before us that if we decided that the appeal against the order made by the second Employment Tribunal of reinstatement should be allowed that we should also allow the appeal against the order as to costs.

27	We would add that even if no point as to jurisdiction had arisen on this appeal we have had some difficulty in understanding why the reasoning in paragraph 14 of the Extended Reasons sent to the parties on 5 August 1999 warranted an order for costs being made against the Appellants before us (the Respondents before the second Employment Tribunal).  This is particularly the case when one has regard to the background history and the conclusion of the first Employment Tribunal in the First Tribunal Decision.  We confess that we do not understand how the conduct of the Respondents before the second Employment Tribunal (the Appellants before us) can be categorised in any of the ways set out in Regulation 12 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 1993.

28	Having regard to the fact that at the hearing before the second Employment Tribunal the Appellants before us did not raise the point concerning jurisdiction that was raised by their application for review and on this appeal the Appellants (in our judgment properly) did not seek an order for the costs of this appeal or the proceedings before second the Employment Tribunal against Miss Sawyerr.

29	Our decision and its overall effect is therefore:

(a)	We set aside the orders made by the second Employment Tribunal in its decision sent to the parties on 5 August 1999 (which we have set out earlier in this judgment) and their order as to costs against the Appellants before us (the Respondents before them).  

(b)	The Order of this Tribunal dated 23 February 1999 remains unperformed and it follows that in the absence of a settlement between the parties the issues relating to compensation (and compensation only) will have to be decided by an Employment Tribunal.

30	In our judgment the issues as to compensation should be dealt with by a new Tribunal.  That Tribunal should not contain any of the persons who sat on the first hearing or on the hearing on 13 July 1999.  In our judgment if any of those individuals were to sit on the Tribunal that determines the outstanding issues relating to compensation justice would not be seen to be being done.