Appeal No.	 EAT/317/01

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

	At the Tribunal
	On 5 September 2001

Before
MR RECORDER UNDERHILL QC
MRS M T PROSSER
MR B M WARMAN

MR A HALL	APPELLANT

MR J HAMZE LOUEI	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellant	MR J LADDIE
(of Counsel)
Appearing under the
Employment Law Appeal
Advice Scheme	

MR RECORDER UNDERHILL QC:

1	This is the preliminary hearing of an appeal against the decision of an Employment Tribunal sitting at Plymouth.  Because the matter is not straightforward, and because we are not prepared to allow the appeal to proceed on all points raised, we give our reasons fairly fully.

2	The Appellant is a business man.  A company owned or controlled by him called Polygon Corporation Ltd owns the Astor Hotel in Plymouth.  Between February and June 2000 the Respondent, Mr Louei, worked as manager (whether or not he had that precise title) of the Astor Hotel.  The parties entered into no proper formal definition of the relationship, but when it came to an end Mr Louei claimed that he was owed several thousand pounds for the period he had worked and brought proceedings in the Employment Tribunal under Part II of the Employment Rights Act 1996.  

3	The claim was heard by a Chairman sitting alone.  By Extended Reasons sent to the parties on 16 January 2001 he held that the Appellant had made unlawful deductions from monies owed to Mr Louei in the sum of £3,200.38p.  The hearing was plainly not an easy one.  In paragraph 1 of the Extended Reasons the Chairman alluded to some of the difficulties which had been encountered.

4	The Chairman was required to determine a number of issues, as follows:

(1)	Whether the employee was in the period in question a worker within the meaning of the 1996 Act.  The Chairman held that he was.

(2)	Whether his employer was the Appellant personally or Polygon Corporation Ltd.  The Chairman held that it was the Appellant personally.

(3)	At what date in February the employment began.  The Chairman preferred the date of February 7 asserted by Mr Louei to that of 21 February advanced by the Appellant.

(4)	The agreed rate of pay.  The Chairman preferred the rate of £200 per week net asserted by the Appellant rather than the rate of £500 per week claimed by Mr Louei.

(5)	Whether a payment of £2,000, which was made in April or May 2000, was in part discharge of the amount payable or was referable to some consultancy work done by Mr Louei in the period prior to February 7.  On this the Chairman preferred Mr Louei’s evidence that it was the latter and accordingly the sum of £2,000 did not fall to be set off from the amount otherwise due.

5	In his grounds of appeal the Appellant seeks to challenge the Chairman’s conclusion on each of those points, save (4) (where the finding was in his favour) and possibly, though this is unclear, point (1).  However, at this hearing he has been represented by Mr Laddie, under the ELAAS Scheme.  He has taken only the two points set out in his skeleton argument.  Having taken express instructions from the Appellant, he confirmed that all other points are abandoned.  

6	We turn to consider the two grounds of appeal now advanced.

7	First, Mr Laddie challenges the Chairman’s finding on what we have called “issue 2”, that is to say that it was the Appellant personally who employed Mr Louei and not the company.  This issue is dealt with by the Tribunal at paragraphs 6 – 10 of the Extended Reasons.  Mr Laddie has made a number of points in relation to the Tribunal’s reasoning on this issue.  Not all of those points we believe have any substance, but the fact remains that it would be at least somewhat unusual for Mr Louei, as manager of the hotel, to have been employed by the Appellant personally, rather than by the company which on the Tribunal’s findings he would have known was the legal entity which owned and managed the hotel business.  Against that general background two of Mr Laddie’s specific points have given us cause for concern.  

8	The first point concerns the cheque for £2,000 to which we have already referred.  It is common ground that such a payment was made in April or May 2000.  There is an issue however as to whether the cheque was a company cheque or a personal cheque.  The Chairman at paragraph 6 of the Extended Reasons said:

“No documentation was produced to show whether that was a personal or a company cheque and I am not able to make any finding about that.”

It is indeed correct that the Appellant did not produce the original cheque or any bank statement relating to it, and that may be a matter of some surprise.  Nevertheless, he has gone on oath, in an affidavit filed in support of this appeal, to the effect that he gave oral evidence to the Tribunal, which was not challenged, that the cheque was a company cheque.  We do not feel able on this hearing to reject evidence of that character.  If it is correct, then the Chairman’s statement which we have quoted is arguably at least inadequate and perhaps, by implication, wrong.  How that error, if it was one, affects the validity of his overall reasoning may be debatable, but it cannot be said to have been plainly immaterial.

9	The second point which has concerned us is that in paragraph 10 of the Extended Reasons, where the Chairman gives his conclusion on this issue and summarises his reasoning, the first point that he makes in support of his conclusion is expressed as follows:

“If there was one overriding characteristic of the relationship between the parties it is that it was a personal relationship.”

Mr Laddie submits that it is unclear what that means, and we are bound to say that we have some difficulty in understanding it:  it seems that the entirety of the work which Mr Louei was doing was for the benefit of the business which belonged to the company.

10	Although neither of these points is by itself conclusive and there may be a number of possible answers to them, we do not believe that we are in a position in the light of them to dispose of this issue on a summary basis.  We will accordingly allow the appeal to proceed as regards this issue.  Three ancillary points arise.  

(1)	It will be necessary to see the Chairman’s Notes of Evidence on the point in relation to the cheque in order to establish whether it is indeed the case that the Appellant, as he claims, gave evidence that the cheque was a company cheque.  This will presumably require the transcript of only a very short part of the notes, but it will be necessary to look at the evidence of the Appellant and it would be prudent to see also what was put to Mr Louei in cross-examination.

(2)	The Notice of Appeal as at present drafted, although it challenges the Chairman’s finding on this issue, does not do so in terms which are particularly helpful in identifying the issues of law, and we direct that a clearer and more specific amended Notice of Appeal be lodged within 14 days.  We hope that Mr Laddie may be able to assist in the drafting of this point.  We have considered whether to seek to restrict the Appellant to the two precise points which we have identified above and thus to exclude some of the other arguments raised by Mr Laddie which impressed us less.  However, there is a degree of overlap between the different points made and we have formed the view we may cause more confusion by seeking rigidly to restrict the particular arguments that may be raised.  We would hope however that Mr Laddie, if he is involved in the drafting, will give consideration to the points which emerged in the course of oral argument and he may find it possible to narrow the grounds raised in relation to this point.

(3)	We have been shown by Mr Laddie at the end of his argument a document which he tells us, on the Appellant’s explicit instructions, formed a part of the bundle before the Employment Tribunal.  This is a computer print-out.  It appears to be the computer print-out referred to by the Chairman at paragraph 8 of the Extended Reasons, though that remains to be confirmed.  Mr Laddie points out that not only does the first part of the print-out refer to the two payments made from the company to Mr Louei at the very end of the contract, to which the Chairman did indeed refer, but it also shows a cheque drawn in May 2000 in the sum of £2,000, in favour of Sutton Restaurant:  this was an entity associated with Mr Louei and which appears on the invoices which Mr Louei submitted to the Appellant.  He therefore suggests that this strengthens the evidence that the cheque was indeed a company cheque.  This aspect of the document is nowhere referred to in the Extended Reasons and it is unclear to us whether the particular point now made by Mr Laddie was expressly made to the Chairman.  Subject to that, this will be a point which the Appellant will no doubt wish to rely on as part of the appeal on this issue and, for the avoidance of doubt, we hold that he is entitled to do so, subject to any point that may be taken on whether it was raised before the Employment Tribunal.  We direct that the Chairman’s comments be sought on whether the second part of this print-out referring to Sutton Restaurant was relied on in evidence and for the transcription of any notes relating to it.  

11	That is the first of two grounds raised by the Appellant.  The second is headed “Bias”.  It is very short.  It amounts to a submission that the Chairman’s conduct, firstly in mis-stating or overlooking, if he did, the effect of the oral evidence as to the cheque, and secondly in believing the evidence of Mr Louei in circumstances where, on another part of the case, he had found that he was advancing an exaggerated claim, was so bizarre as to give rise to an inference that he was biased.  We need only say that neither of those considerations come within any measurable distance of establishing even a prima facie case of bias and we do not permit the appeal to proceed on that ground.