Appeal No.	EAT/1194/00

EMPLOYMENT APPEAL TRIBUNAL
SITTING AT THE ROYAL COURTS OF JUSTICE
STRAND, LONDON, WC2A 2LL

	At the Tribunal
	On 17 September 2001
Judgment delivered on 14 November 2001

Before
MR RECORDER UNDERHILL QC
MRS A GALLICO
MRS T A MARSLAND

THE POLYGON CORPORATION	APPELLANT

MR P R TREGUNNA	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	NO APPEARANCE OR
REPRESENTATION
BY OR ON BEHALF OF
THE APPELLANT	
For the Respondent	MS NAOMI CUNNINGHAM
Free Representation Unit
Peer House
4th Floor
8-14 Verulam Street
London WC1X 8LZ	

MR RECORDER UNDERHILL QC:
1.  The Appellant company employed the Respondent, to whom we will refer as “the employee” at the Astor Hotel in Plymouth.  On 22 January 2000 the employee was dismissed with immediate effect for leaving the hotel, when he was supposed to be at work, without any notice to the management.  The employee brought proceedings for unfair dismissal in the Plymouth Employment Tribunal.  His originating application was presented on 10 April 2000.  The same day the Tribunal office sent a copy of the application by first class post to the Appellant. Under Rule 3(1) of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 1993 (being the Rules then in force), the Appellant was required within 21 days of receipt of the copy application to present a written notice of appearance:  assuming delivery within two days, that meant that the notice of appearance should have been presented by 3 May 2000. 
2.  No notice of appearance was presented by the Appellant to the Tribunal within that period, with the result that the Appellant was prima facie disentitled to take any further part in the proceedings unless an extension of time was granted under Rule 15: see Rule 3(2).  It was in fact only on 6 June 2000, being the day before the date fixed for the hearing of the employee’s substantive claim, that the Appellant presented its notice of appearance.  It had in the meantime received both a notice of the hearing on 7 June (sent on 9 May) and a communication from ACAS relating to the claim. 
3.  The hearing on 7 June had to be adjourned because the Chairman of the Tribunal allocated to hear the case had previously acted for Mr Hall, the Managing Director of the Appellant.  The question whether the Appellant’s time for entering a notice of appearance should be extended had likewise to be adjourned, although directions were given for exchange of witness statements and documents, with which the Appellant complied.  At the start of the restored hearing on 20 July 2000, which took place before a Tribunal in Exeter, the Tribunal considered the Appellant’s application for an extension of time.  Its decision and reasons appear from paragraphs 1 and 2 of the Extended Reasons (sent to the parties on 1 August 2000): 

“At the outset of the hearing the Tribunal considered whether to allow the respondent to enter its Notice of Appearance which had apparently been presented outside the time limit prescribed by Rule 3 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 1993.  For this purpose it heard an application from Mr Hall.  In considering that application the Tribunal took into account the following facts.  The applicant presented his Originating Application on 10 April 2000 and the Tribunal Office sent a copy of it to the respondent on the same day.  In accordance with the Rules of Procedure the respondent was required to enter its Notice of Appearance within 21 days of its receipt of that copy which assuming delivery by first class post within two days, means it was required to do so by 3 May 2000.  Within a short time after the Originating Application is presented ACAS to whom a copy is sent at the same time as it is sent to a respondent communicates with the respondent and, in this case, Mr Hall acknowledges having received a communication from ACAS but was unable to state when.  On 9 May a Notice of Hearing for 7 June 2000 was sent by the Tribunal office to both parties and the respondent received this on 12 May.  Mr Hall claims that this was the first time that he was made aware of the application.  He presented his Notice of Appearance on 6 June.  In the event the hearing listed for 7 June was adjourned to this hearing as the Chairman of the first hearing had previously acted for Mr Hall. 
Mr Hall explained that all mail delivered to the hotel and requiring his attention would be placed in the tray at reception for his personal collection but he could give no satisfactory explanation as to why he had not received a copy of the Originating Application when it was first sent out by the Tribunal office although all other communications had been received by him including the communication from ACAS.  The Tribunal concluded that it probably had been received when first sent out.  Nor could he satisfactorily explain why a further period of 24 days elapsed from when he claimed to have first become aware of the matter before presenting his Notice of Appearance.  Given his evidence, it was the Tribunal’s clear impression that he had simply not bothered to give the matter his attention at all until he was made aware of the hearing listed for 7 June and, in all the circumstances, the Tribunal did not consider that it should exercise its discretion and extend the time limit so as to allow a late Notice of Appearance to be entered.  Mr Hall was therefore excluded from all further participation in the proceedings and left the hearing.”

4.  The Tribunal proceeded to hear the employee’s claim in the Appellant’s absence.  It found that he had been unfairly dismissed:  that was in truth inevitable since the Appellant was not entitled to advance a reason for his dismissal.  The Tribunal awarded the employee £1,473 in respect of his dismissal, incorporating a 75% reduction for “contributory conduct” under ss122(2) and 123(6) of the Employment Rights Act 1996.  It also awarded him arrears of holiday pay and wages totalling £405.06. 
5.  The Appellant appeals against the decision of the Tribunal to refuse an extension of time and, therefore, against the substantive decisions made in its absence. It was not represented before us on the hearing of the Appeal.  Mr Hall wrote explaining that it would be difficult for him to attend because of the distance between Plymouth and London but he asked us to have regard to the Appellant’s Skeleton Argument and Amended Grounds of Appeal, which we have of course done.  The Skeleton Argument is short and principally cross-refers to a number of other documents generated by him:  not all of these are relevant to the limited issues now raised by the Amended Grounds of Appeal.  The employee was represented by Ms Cunningham of the Free Representation Unit, to whom we are indebted for a helpful Skeleton Argument and oral submissions. 
6.  Amended Grounds of Appeal were lodged by the Appellant on 21 February 2001, immediately following the preliminary hearing.  They are in the following terms: 

“The grounds upon which this appeal is brought are that the employment tribunal erred in law in refusing the Appellant's application to extend time to enter a Notice of Appearance solely on the basis of delay and thereby failing to consider the other relevant factors identified by the EAT in Kwik Save Stores v. Swain [1997] ICR 49, and in particular 
•	the merits of the Appellant's defence to the claim of unfair dismissal 
•	the merits of the Appellant's defence to the claim of unlawful deduction from wages which the Tribunal dealt with at the hearing (these matters were not pleaded in the IT1 and the Tribunal appears by implication to have amended the IT1 to deal with them, although this is not addressed in its decision) 
•	the prejudice to the Appellant in not being able to defend those claims on the merits 
•	the prejudice (or lack of it) to the Respondent if the Appellant's application were granted, particularly in the light of the Appellant's disclosure of its witness statement and all relevant documents 21 days before the hearing date so that no adjournment would have been necessary; 
•	whether any prejudice to the Respondent caused by the granting of the Appellant's application could be adequately remedied by an award of costs. 
alternatively, reached a decision that no reasonable tribunal could have reached in the light of those factors.”

7.  It will be seen that, although the point is elaborated in various ways, the essential ground of appeal is that the Tribunal failed to follow the guidance given by this Tribunal in Kwik Save Stores v. Swain [1997] ICR 49.  In that decision Mummery J sets out the factors to which an employment tribunal ought to have regard in considering an application for an extension of time for entering a notice of appearance.  He points out that the length of, and explanation for, the delay will always be an important factor and may be decisive (see pp54H-55C).  But he also points out that it is not the only factor to be considered. He continues (at p55C): 

“The process of exercising a discretion involves taking into account all relevant factors, weighing and balancing them one against the other and reaching a conclusion which is objectively justified on the grounds of reason and justice.  An important part of exercising this discretion is to ask these questions:  what prejudice will the applicant for an extension of time suffer if the extension is refused?  What prejudice will the other party suffer if the extension is granted?  If the likely prejudice to the applicant for an extension outweighs the likely prejudice to the other party, then that is a factor in favour in granting the extension of time, but it is not always decisive. There may be countervailing factors.  It is this process of judgment that often renders the exercise of a discretion more difficult than the process of finding facts in dispute and applying to them a rule of law not tempered by discretion.
It is well established that another factor to be taken into account in deciding whether to grant an extension of time is what may be called the merits factor identified by Sir Thomas Bingham M.R. in Costellow v. Somerset County Council [1993] 1 W.L.R. 256, 263: 
‘a plaintiff should not in the ordinary way be denied an adjudication of his claim on its merits because of procedural default, unless the default causes prejudice to his opponent for which an award of costs cannot compensate.’
Thus, if a defence is shown to have some merit in it, justice will often favour the granting of an extension of time, since otherwise there will never be a full hearing of the claim on the merits. If no extension of time is granted for entering a notice of appearance, the industrial tribunal will only hear one side of the case.  It will decide it without hearing the other side.  The result may be that an applicant wins a case and obtains remedies to which he would not be entitled if the other side had been heard.  The respondent may be held liable for a wrong which he has not committed.  This does not mean that a party has a right to an extension of time on the basis that, if he is not granted one, he will be unjustly denied a hearing.  The applicant for an extension has only a reasonable expectation that the discretion relating to extensions of time will be exercised in a fair, reasonable and principled manner.  That will involve some consideration of the merits of his case.” 

8.  Ms Cunningham was constrained to concede that the Employment Tribunal in this case did not approach the exercise of its discretion in accordance with the Kwik Save guidelines.  As contended in the Amended Grounds of Appeal, it considered only the first of the factors identified by Mummery J, namely the length of the delay and the Appellant's explanation of it.  It did not address at all the question of prejudice or, therefore, the question of the apparent merits of the employee’s claim and the Appellant's defence.  It must follow that the exercise by the Tribunal of its discretion was indeed legally flawed.  Ms Cunningham submitted that the guidance given in Kwik Save was no longer authoritative because since it was decided in June 1996 the time for service of a notice of appearance had been extended from 14 to 21 days -see reg 6 of the Employment Tribunals (Constitution and Rules of Procedure) (Amendment) Regulations 1996, made on 8 July 1996.  But we cannot see how the (modest) increase in the period allowed can affect the questions of principle reviewed in the Kwik Save decision, which are indeed common to a variety of jurisdictions with differing procedural timetables. 
9.  We have therefore to consider whether the Appellant's application for an extension of time should be remitted to the Employment Tribunal for determination or whether we are entitled, in accordance with such authorities as Dobie v. Burns International Security Services (UK) Ltd [1984] ICR 812, nevertheless to dismiss the appeal on the basis that the Tribunal’s decision was plainly right notwithstanding its misdirection. 

10.  We have, with considerable reluctance, come to the conclusion that this is a case in which we are obliged to remit.  We do not feel able to say, in the circumstances of this case, that there is only one way in which the Tribunal could legitimately have exercised its discretion.  We emphasise, as Mummery J did in Kwik Save (see p57D), that it may well be that the Tribunal comes to the same conclusion after carrying out a proper review of all the relevant factors:  as Mummery J pointed out, a respondent’s explanation, or lack of it, for the delay in question may be the decisive factor in the exercise of the discretion.  But that conclusion can only be reached after taking into account all the relevant considerations, which is a matter for the Tribunal.  In considering the issue of prejudice, and the closely associated “broad brush” assessment of the merits required by the Kwik Save guidelines, the Tribunal can in our view take into account the fact that any award against the Appellant would be subject to a very substantial reduction for contributory conduct.

11	We see no reason why the application should not be remitted to the same Tribunal if it is still available.  The error into which it fell is not of a kind which casts doubt on its ability to make a fair and proper judgment in accordance with the correct principles.