Appeal Nos. UKEAT/0121/04/SM & UKEAT/0184/04/SM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 22 & 23 March 2004
Judgment delivered on 4 August 2004

Before
THE HONOURABLE MRS JUSTICE COX
MR CLANCY
MRS J M MATTHIAS

PHILIP HYDE	APPELLANT

LEHMAN BROTHERS LIMITED	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR SIMON BROWN
(Of Counsel)
Instructed by:
Messrs Huggins & Lewis Foskett
Solicitors
5/6 The Shrubberies
George Woodford
London
E18 1BG	
For the Respondents	MR PETER WALLINGTON
(Of Counsel)
Instructed by:
Messrs Clifford Change LLP
10 Upper Bank Street
London
E14 5JJ	

THE HONOURABLE MRS JUSTICE COX

1.	Introduction
This is the full hearing of appeals by the Applicant (Appellant) against two separate Decisions of the Central London Employment Tribunal, promulgated firstly on 18th November 2002 and, subsequently, on 23rd December 2003.  The two appeals have been consolidated and heard together because they both concern the jurisdiction of the Employment Tribunal to hear a complaint of unlawful deduction from wages under Part II of the Employment Rights Act 1996.  
2.	Essentially the Tribunal, in their first Decision on a preliminary issue, dismissed the Appellant’s complaint of unlawful deduction on the grounds that his first Originating Application, presented on 4th January 2002, had been presented prematurely and that they had no jurisdiction to determine the complaint.  The Appellant lodged his appeal against that Decision on 24th December 2002.  He had, meanwhile, instructed fresh solicitors, who had presented a second Originating Application to the Tribunal on 6th August 2002, again complaining of unlawful deduction and relying on the particulars already pleaded in his first Application.  In February 2003 this Appeal Tribunal stayed the Appellant’s appeal, pending an application for a Review by the Tribunal of their first Decision.  The Employment Tribunal, at the hearing on 26th September 2003, then heard and determined both the application for a Review of their first Decision and the question whether they had jurisdiction to determine the second Originating Application.  In their second Decision they held (i) that the application for a Review failed; and (ii) that they had no jurisdiction to determine the Appellant’s second Originating Application because it had been presented to the Tribunal out of time.  The Appellant then lodged an appeal against the second Decision dated 13th January 2004.
3.	At the start of the hearing before us Mr. Brown, on behalf of the Appellant, applied to amend the Notice of Appeal relating to the second Decision, to include an appeal not only against the finding on jurisdiction, but also against the refusal to Review their earlier Decision, which he alleged amounted to an error of law, in particular in the light of fresh evidence disclosed by the Respondents.  Mr. Wallington, for the Respondents, did not object to this application and paragraph 3 of the Notice of Appeal was amended accordingly.  The parties agree that, if the first appeal succeeds, the second becomes irrelevant.  If it fails, however, then it will become necessary for us to determine his second appeal.  We therefore turn now to consider the first appeal.  
4.	The Relevant Facts and Background
The Appellant had commenced employment with the Respondents on 7th March 1996 as a sales trader, being promoted six months later to the post of Executive Director.  In his first Originating Application the Appellant complained that his employment was not lawfully terminated, that he had been unfairly and wrongfully dismissed on 2nd November 2001 and, further, that in refusing to pay him a bonus the Respondents had made unlawful deductions from his wages.  The claim was quantified in his amended Schedule of Loss at £397,327.00.  The Respondents contended that the Appellant had been dismissed and denied that the dismissal was either wrongful or unfair, alleging that he was dismissed fairly for gross misconduct.  They also denied that there had been any unlawful deduction and disputed his entitlement to payment of any bonus.  It is clear from the pleadings that there is extensive factual dispute between the parties concerning the events leading up to and the reasons for the Appellant’s dismissal.  
5.	The case was set down for a Directions hearing on 13th June 2002, when it was ordered that three issues should be determined at a preliminary hearing as follows:
“1.3.1         Whether the Tribunal has jurisdiction to consider this complaint arising out of whether there has been an occasion for payment?

1.4.1        Whether the Employment Tribunal has jurisdiction to make a declaration of entitlement as claimed in section 26 of the Originating Application?

1.4.2        Whether the Tribunal has jurisdiction in relation to a claim about the forfeiture of stock granted to the Applicant under a contingent Stock Award Agreement governed by the Law of Delaware subject to the exclusive jurisdiction of the Delaware Courts.”

Subsequently, the Appellant withdrew his claim in respect of issue 1.4.1 and, at the preliminary hearing held on 9th August 2002, the Tribunal adjourned issue 1.4.2 to be considered at the full merits hearing since there had been insufficient time to hear it.  Thus the only issue determined at the preliminary issue hearing was the Tribunal’s jurisdiction to determine the unlawful deduction claim. 
6.	After hearing oral evidence from the Appellant and Ms. Bothwick from the Respondents’ Human Resources Department and considering an agreed bundle of documents comprising some 266 pages, the Tribunal found the following facts, stating at paragraph 7 that they were “mindful not to make findings which would trespass upon the claims and the issues to be determined by the full Tribunal.”
“(i)        The Applicant commenced employment on 7 March 1996 as a sales trader on a salary of £85,900 per annum.  Within six months of the date of commencement of employment, he was promot4ed to Executive Director.

(ii)         In his offer letter, dated 7 March 1996, to which he had signed and agreed the following terms:

‘You will be eligible to participate in the Company’s discretionary bonus award programme.  Under this programme, minimum guaranteed bonus awards will be made to you of £195,000 for the bonus year 1996 and £215,000 for the bonus year 1997.  Thereafter, awards are based on the Company’s performance and your individual merit.

In order to be eligible for any awards under this scheme, including the awards referred to above, you must have worked full-time and be employed by the Company and not under any period of notice at the time bonus awards are made.  Your guaranteed bonus awards are expected to be made in the first quarter of 1997 and 1998 respectively.

At the firm’s discussion, a portion of your total compensation for 1996 and subsequent years may be paid in the form of Contingent Stock Awards (“CSA”) under the Lehmann Brothers Stock Award Program.  The maximum of CSAs which you will receive in bonus years 1996 to 1997 will be 10% of the total compensation.  For your information, we have enclosed a copy of the 1995 Stock Award Program booklet which outlines the significant features of the Program implemented in 1995.  While the terms may change from time to time at the firm’s discussion, it is expected that any Stock Award Program in future years will be similar to those described in the 1995 brochure.

In addition, upon joining the Company you will receive a $150,000 award in the form of Contingent Stock Awards (“CSA”).  The number of CSAs you will receive will be based on the closing price of Lehmann Brothers Holdings Inc. common stock (“Lehmann Stock”) on the first day of your employment.  Each CSA will represent the contingent right to receive one share of Lehman Stock four years after the date your employment with the Company commences, provided you have been continuously employed by the Company and are not under any period of notice.’

(iii)        In addition to the offer letter that the Applicant received he also received the Respondent’s employee handbook.  It contained his terms and conditions of employment, employment regulations, policies and procedures, and benefits.  At page 45 in the bundle, in the Introduction to the handbook, it is stated that the Applicant’s offer letter and written statement of terms and conditions of employment together with the terms and conditions outlined in section 1 of the handbook, referring to notice periods, constituted his contract of employment with the Respondent.

(iv)         In section 4 of the handbook under the title ‘Bonus Award Eligibility’, page 51 of the bundle, the Respondent sets out the Applicant’s entitlement to their Bonus Award Scheme.  It provides:

‘The Company operates a discretionary Bonus Award Scheme, under which the value and form of award is at the Company’s discretion.  The determination of bonus awards depends upon the Company’s assessment of numerous factors including individual contribution, global product, market related comparison and Company performance.  You may be eligible to receive a bonus award if you are employed by and working for the Company, and not under any period of notice on the date when bonus awards are made.  Entitlement is not automatic and no single award, or series of awards, creates an entitlement to further bonus awards.

Differing in arrangements may apply for particular groups of employees who will be given details of their bonus award program in their Offer Letter.

At the Company’s discretion, a portion of your total compensation for the current bonus award year and subsequent years may be made in the form of Contingent Stock Awards (CSAs) under the appropriate Lehmann Brothers Stock Award Program.”

(v)          The Applicant was, therefore, entitled to as part of his benefit package, to a discretionary award that provided a guaranteed bonus award in the first two years of his employment.  In addition, he was entitled and did receive shares under the Stock Award Program; the employee stock purchase plan, membership of the group medical scheme; pension payments and other benefits.

(vi)         The determination of the bonus depended upon an assessment of a number of factors, including individual merit, retention of employee, global product, market related comparison and Company performance.  The specific percentage allocated to any of these factors was not formula driven but the more successful any team’s product, the larger the bonus pool that would be allocated to any particular team.  The management would then divide up the bonus between the members of their team.  Eligibility to receive a bonus award for any particular year depended upon whether the employee was employed by and working for the Respondent and not under any period of notice on the date when the bonus awards are made.  The custom was and is for the Respondent to notify employees of the amount of bonus that they will be awarded, if any, in December of each year.  This is because the Respondent’s financial year ends on 30 November.  Accounts are prepared after that date.  It is only when the accounts have been audited are the employees informed whether or nor they will be entitled to any bonus award.

(vii)        During the period of the Applicant’s employment payments of his bonus were made on the following dates:

for the year 1996 the sum of £198,251 by 31 January 1997, page 59 of the bundle;

for the year 1997 the sum of £215,000 by 28 January 1998, page 60 of the bundle;

for the year 1998 the Applicant’s bonus award was $361,197 which was paid on or about 27 January 1999, page 61 of the bundle;

for the year 1999 the Applicant was paid the sum of £357,005 on or about 31 January 2000, pages 63 and 64 of the bundle;

for the year 2000 his bonus award was £424,292 to be paid in January 2001, page 65 of the bundle.

(viii)       The Applicant acknowledged that he was paid up to 2 November 2001 and that bonuses were paid on or by 31 January.  He was not paid any bonus for that year.  Whether he was entitled to a bonus payment is subject to dispute between the parties.  However, he presented his Originating Application on 4 January 2002.  One of the claims he made was in respect of unauthorised deductions from wages, namely the non-payment of his bonus for the year 2001.  Had the Applicant remained in employment he would have been part of the pool used in assessing the distribution of any bonus.  The evidence was that no one had been dismissed between the award of bonus in December and the payment of bonus by the end of January in the following year.  Those are the Tribunal’s findings of fact.”

7.	The Tribunal’s conclusions
The parties’ representatives both produced detailed written submissions, which the Tribunal summarised at paragraphs 8 to 14 of their Reasons.  At paragraphs 15 to 22 the Tribunal directed themselves as to the relevant statutory provisions and case law.  Their conclusions, at paragraphs 23 to 25, were expressed as follows:

“Conclusion 

23     It was central to the determination of the issue of jurisdiction in this case whether there was a payment date.  We are satisfied, upon the evidence and having regard to our findings of fact, that the Applicant in common with his work colleagues, received bonus awards that were paid on or around 31 January of the following year.  There had not been any payment of bonus either in November or December.  The Applicant even acknowledged that traders were paid on a given date at the end of January.  By 1 February he would have been aware that the award of bonus was not paid.  At that point in time, his right under section 13 Employment Rights Act 1996, had crystallised.  There could not have been any unauthorised deduction from wages prior to 31 January as there had not been any instance when the Respondent had paid bonus on a date earlier than towards the end of January.  It follows from this that by 4 January 2002, no one had received any bonus award.  Therefore as the payment date had not yet passed the Applicant was premature in presenting his claim under section 13 Employment Rights Act 1996 on 4 January 2002.

24     Alternatively if, having regard to the Group 4 Night Speed v Gilbert case, there was a contractual period, namely, from 1 December to 28 February, then the operative date from which the Applicant could pursue section 13 claim was after that period had expired, namely, from 1 March 2002.  It also follows from this that the presentation of the claim on 4 January 2002 was premature.

25     Having considered the issue as to whether or not there was a payment date or a contractual period within which payment was to be made, there was no need for the Tribunal to consider as urged upon us by Mr Brown, the issue of any implied term in respect of payment or there whether there was a legitimate expectation that the Applicant would be paid his bonus at any time after the accounts were prepared and a decision was taken to award bonus in December 2001.  The Tribunal, therefore, do not have jurisdiction to hear and determine the unauthorised deduction from wages claim as presented on 4 January 2002.”

8.	The Legal Framework
The material provisions of the Employment Rights Act are as follows:
“13.  Right not to suffer unauthorised deductions
(1) An employer shall not make a deduction from wages of a worker employed by him unless – 
(a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker’s contract, or – 
(b) the worker has previously signified in writing his agreement or consent to the making of the deduction
…
(3) Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker’s wages on that occasion.
…
27.  Meaning of ‘wages’ etc 
(1) In this Part ‘wages’, in relation to a worker, means any sums payable to the worker in connection with his employment, including – 
(a) any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise.’
[(b)-(j) describe sums payable pursuant to various statutory rights]
…
(3) Where any payment in the nature of a non-contractual bonus is (for any reason) made to a worker by his employer, the amount of the payment shall for the purposes of this Part – 
(a) be treated as wages of the worker, and
(b) be treated as payable to him as such on the day on which the payment is made.
(4) In this Part ‘gross amount’, in relation to any wages payable to a worker, means the total among of those wages before deductions of whatever nature. 
…
23  (1) A worker may present a complaint to an [employment] tribunal- 

(a) that his employer has made a deduction from his wages in contravention of section 13 (including a deduction made in contravention of that section as it applies by virtue of section 18(2)),

…

(2) Subject to subsection (4), an [employment] tribunal shall not consider a complaint under this section unless it is presented before the end of the period of three months beginning with-

(a) in the case of a complaint relating to a deduction by the employer, the date of payment of the wages from which the deduction was made, or 
(b) in the case of a complaint relating to a payment received by the employer, the date when the payment was received.

(3) Where a complaint is brought under this section in respect of-

(a) a series of deductions or payments, or
(b) a number of payments falling within subsection (1)(d) and made in pursuance of demands for payment subject to the same limit under section 21(1) but received by the employer on different dates, 
the reference in subsection (2) to the deduction or payment are to the last deduction or payment in the series or to the last of the payments so received.

(4) Where the [employment] tribunal is satisfied that it was not reasonably practicable for a complaint under this section to be presented before the end of the relevant period of three months, the tribunal may consider the complaint if it is presented within such further period as the tribunal considers reasonable.” 

9.	It is common ground therefore between the parties that the word “wages” includes a bonus payment of the kind in issue in the present case. Further, in New Century Cleaning Co. Ltd v. Church [2000] IRLR 27, the Court of Appeal held, by a majority, that the word “payable” in section 13(3):
“… clearly connotes some legal entitlement.  The adverb ‘properly’ is also consistent with a legal requirement, but is not necessarily limited to a contractual entitlement.  This is confirmed by the provisions of s.27(1)(a), which show that the wages ‘properly payable’ may not be due under the contract of employment.  But the words ‘or otherwise’ do not, in my view, extend the ambit of ‘the sums payable to the worker in connection with his employment’ beyond those to which he has some legal entitlement.  With the exception of the ‘bonus’ referred to in s.27(1)(a), all the subparagraphs of that subsection refer to sums to which the employee has some legal entitlement.  The case of a bonus is specifically dealt with in s.27(3), which provides that the amount of the bonus paid is to be treated ‘as payable’.  The bonus is thereby deemed to have been a legal entitlement.  In my view, the provisions of s.27(1) and (3) confirm that ‘the wages properly payable by him[sc. the employer] to the worker’ are sums to which the employee has some legal, but not necessarily contractual, entitlement.”

Section 27(3) is not directly applicable here because nothing was in fact paid to the Appellant, but it is clear that the Appellant’s need to establish a legal entitlement to the bonus necessitates identification of the date when payment is due as well as the fact that he is entitled to the payment.  
10.	The Appellant’s complaint in this case was made pursuant to the provisions of section 23(1)(a).  In our judgment it is clear from the wording of that subsection that such a complaint can only be brought after the event.  We accept Mr. Wallington’s submission that this is not only because of the use of the past tense “has made”, but also because of the necessity for a worker to establish a legal indebtedness and, thus, a cause of action.  The cause of action here is not that the employer owes wages to the worker, but that he has unlawfully deducted a sum from the wages owed (which can include a deduction of the entire sum owed by virtue of non-payment).  Section 23(2) then sets a limit to the time  (three months) within which a complaint must be presented to the Tribunal.  It does not in its terms define the start of the period within which a complaint must be presented because the start of the period is defined by the nature of the complaint.  
11.	In Delaney v. Staples [1991] IRLR 112, the Court of Appeal were considering section 8(3) Wages Act 1986, the precursor to section 13(3) Employment Rights Act.  Nicholls LJ said as follows at paragraph 9:
“The subsection makes repeated references to an ‘occasion’.  The subsection is concerned with a comparison between the amount paid on an occasion with the amount which ought to have been paid on that occasion.  I do not think this presents any problem.  If on his ‘pay day’, when an employee is due to be paid, a worker receives less wages than he should have done, the deficiency is to be regarded as a deduction for the purposes of the Act.  Likewise if he receives nothing.  If, come his ‘pay day’, a worker is in law entitled to a particular amount as wages and he receives nothing then, whatever be the reason for non-payment (excepting only errors of computation), that amount is to be treated as a deduction made from his wages on that occasion.  Section 8(3) applies, because the total amount paid on that occasion when he ought to have been paid was nil.  The s.5(2) time limit for making a complaint will run from the date on which the wages payment ought to have been made.”

In the case of Group 4 Night Speed Limited v. Gilbert [1997] IRLR 398, the EAT held that where the contract of employment stipulates that commission could be paid at any time up until the last day of the month following the end of the quarter and, as a matter of fact, this was paid at the same time as the salary for that month, namely on the Friday after the third Monday, then:
“It is only when an employer fails to pay a sum due by way of remuneration at the appropriate time, i.e. at the contractual time for payment that a claim for unlawful deduction can arise.”

12.	The Parties’ Submissions and our Conclusions
Mr. Brown’s first and main ground of challenge to the Tribunal’s Decision, in his grounds of appeal, was that they had erred in law in failing to have regard to the fact that the Appellant’s employment had been terminated prior to the presentation of the claim; and that accordingly his right to the receipt of a bonus (whether pro rata or otherwise) had crystallised, by reason of implied terms that the contract was to be extended until December, when the bonus award was made in this case, and/or by reason of his legitimate expectation of receiving a bonus.  In his oral submissions he developed this argument somewhat differently contending, if we have understood him correctly, that there was as a matter of law a completed cause of action as at the date when the complaint was presented, namely 4th January 2002, because the effect of the dismissal was to crystallise the date for payment of the bonus; and the Appellant was therefore entitled to be paid the bonus due at that date and to complain of an unlawful deduction if it was not paid.  He accepted during the course of argument that this meant that if the Appellant had been dismissed midway through 2001, rather than in November, there would be, as at the date of dismissal, a pro rata entitlement to bonus, which had crystallised and in relation to which the Appellant could have pursued a complaint of unlawful deduction from wages.  Mr. Brown relied, by way of analogy, on the decision of Sedley J. in the case of Aspden v. Webbs Poultry and Meat Group (Holdings) Ltd. [1996] IRLR 521.  In this case it was held that in circumstances in which the Claimant’s entitlement to benefit under the employers’ permanent health insurance scheme was dependent upon the continuance of the employment relationship, it was an implied term of the contract of employment that, save for summary dismissal, the employers would not terminate the contract while the employee was incapacitated for work.  So too, in the present case, he submits there was an implied term that this contract subsisted until the end of December, when the bonus award would have been made.  The Appellant would be entitled to receive it through the means of an unlawful deduction claim because termination of the contract triggers the earlier payment of the bonus.
13.	We have considered Mr. Brown’s submissions carefully, but we are unpersuaded by them.  They seem to us to give rise to a number of insuperable difficulties in relation to the operation of the unlawful deduction provisions in part II of the 1996 Act.  Even if it is correct, for the purposes of the submission, that the right to receive a sum of money crystallises upon dismissal, (and Mr. Wallington did not accept that that was correct), that leaves open and unanswered the question as to the date when that right becomes enforceable under section 23, on which Mr. Brown was unable to assist us.  Further, the contention that the Appellant, if dismissed midway through the year, would have been entitled to receive a pro rata bonus begs, in response, the obvious question, “pro rata of what?”  The bonus eventually awarded in December would depend amongst other things on the Respondent’s performance throughout the whole of 2001, which in that year would have included the terrible events of September 11th and their consequences for the financial sector.   On Mr. Brown’s analysis it is difficult to see how he can submit that anything other than an entitlement “in principle” could have crystallised as at the date of dismissal.  Such an entitlement would not incorporate any date when payment would be made (the “payment day”) or even when the payment could be calculated.  In addition, there is in any event in this case a dispute between the parties as to whether and, if so, when the Appellant was dismissed.  Following the Respondent’s letter of termination the Appellant, in his response, through solicitors, to the Respondents of 19th October 2001 stated:
“Please note that our client does not agree that his employment with Lehman Brothers has been terminated.  We shall be grateful if you will advise, when and by whom, his employment was terminated: also, please let us have any written confirmation of any notice of termination.  Our client remains willing and able to discharge his contractual duties.”

The Appellant was in this letter clearly affirming the contract.  Potentially, therefore, on his case, his employment continued until he brought it to an end by presenting the Origination Application on 4th January 2002; and there was therefore no earlier dismissal date, on his analysis, at which his entitlement to bonus could be said to have crystallised.  
14.	Further, we do not consider that the decision in the case of Aspden, which turned on its own particular facts, is of any assistance in the present case.  If Mr. Brown were right then, if the Appellant had been dismissed in January 2001, an implied term would operate so as to postpone termination of the contract until the bonus was eventually awarded in the following December.  He was unable to assist us as to what the status of the contractual relationship would be between the parties in such a situation, for example whether the implied term would include any obligation on the Respondents to pay the Appellant during the period of postponement or, indeed, an obligation on the Appellant to be ready, willing and able to work as required.  The existence of such an implied term does not in any event address the crucial question of the date when payment has to be made; and Mr. Brown did not, in argument on this hypothetical situation, advance any date as the operative payment date for the purposes of a claim. As is clear, the Tribunal found in this case as a matter of fact that all the bonus payments were made on or around 31st January each year.  
15.	The Tribunal approached the matter by applying the dicta referred to above in the case of Delaney v. Staples. In our judgment they concluded, correctly, that they would have jurisdiction to determine the Appellant’s complaint only if the Respondents had a contractual obligation to pay any bonus, in respect of 2001, before the date of presentation of his Origination Application, namely 4th January 2002.  They found as a fact that bonuses were paid at or about the end of January each year (paragraph 7(vii)) and that the Appellant acknowledged that bonuses were paid on or by 31st January (paragraph 7(viii)).  They went on to find at paragraph 23 that there had been no instance of a bonus being paid earlier than towards the end of January and that the right under section 13 of the Act crystallised by 1st February, when the Appellant would know that he had not been paid.  We note in particular from pages 8 and 9 of the Chairman’s notes of evidence (second tranche) before us that the Appellant’s own evidence was that:
“No-one got paid a bonus prior to last day in January in the year …

I could complain if I did not get bonus at end of January …

In light of history bonus payable on 31/1/02 …

Historically bonus paid end of January the following year.  I believe they wished to employ a younger person.  Bonus depended upon the performance of the company and trader.  If company did poorly bonus either reduced or no bonus.  Bonus cannot be paid before end of the accounts.”

None of these findings of fact is challenged on this appeal.  These findings it seems to us entitled the Tribunal to conclude that the payment date for the bonus was 31st January, that there was no cause of action on 4th January 2002 and that the Appellant had presented his claim prematurely.  The Tribunal also considered, in the alternative, having regard to the Group 4 case what the Appellant’s position would be if there had been, on the evidence, a contractual period during which the bonus could be paid, namely from 1st December 2001 to 28th February 2002.  In that case they held in our judgment correctly, that the operative date from which the Appellant could complain of an unlawful deduction would be 1st March 2002, namely after the expiry of that period during which the Respondents could lawfully defer payment until the end of the period.  On that basis in addition his claim on 4th January 2002 would be premature.  
16.	They were also entitled to conclude, having so found, that they were not assisted by Mr Brown’s submissions as to an implied term in respect of payment or whether there was a legitimate expectation that the Appellant would be paid his bonus after the accounts were prepared; and that there was no need in the circumstances to consider these submissions further.  It seems to us that they went only to the question of the Respondent’s liability to pay the bonus and not to the question of the date on which payment would be required.
17.	It was not entirely clear to us whether Mr. Brown was still pursuing all the other grounds of appeal referred to in his Notice, but he did not expressly withdraw them, save in respect of ground 5, and we shall therefore deal with them at this point.  Firstly, he challenged the Tribunal’s finding of 31st January as the operative payment date, criticising them for focussing on a date which he submitted was simply the date when the bonus was paid.  The Tribunal erred in failing to have regard to the evidence that the bonus was awarded in December of each year and that the contract provided that the bonus was properly payable at any time from the beginning of December or January to the end of the quarter, that is February or March.  At the time when the claim was presented he submits therefore that a bonus should have been awarded and was properly payable to the Appellant.  In our judgment, however, this submission confuses the award of a bonus with its payment.  It was common ground below that bonuses were awarded in December, shortly before Christmas.  The Respondents accepted that if, as a matter of contract, the Appellant was entitled to be awarded a bonus for the year 2001, then their failure to pay him one would be a breach of contract.  The Appellant, however, did not complain of breach of contract but pursued a claim for unlawful deduction of wages.  That claim only arose when payment was withheld and that would only be when payment became due.  We agree with Mr. Wallington’s submission that the doctrine of anticipatory breach of contract has no place in the statutory scheme under part II of the 1996 Act.  
18.	Secondly, it is contended that the Tribunal erred in deciding that the “operative date” was the last date on which the bonus could be paid because, if that was correct, any legitimate claim under section 23 of the Act could be defeated by an employer reserving the right to pay a bonus on a date later than the date when such payments were ordinarily made.  We take the view that this challenge would require us to depart from the reasoning of this Appeal Tribunal in the Group 4 Night Speed case, with which we are wholly in agreement.  In any event the Tribunal in the present case did not find that there was in fact a three-month contractual period for payment, addressing the alternative “Group 4” position at paragraph 24 of their Reasons only in terms of the consequences of such a finding.  Primarily the Tribunal identified the date of payment of any bonus as taking place on or around 31st January each year so that the Appellant became entitled to complain of unlawful deduction of wages as from 1st February.  
19.	Thirdly, Mr. Brown submitted that, by analogy with the decision in South Durham Health Authority v. UNISON [1995] ICR 498, the Appellant had a valid claim at the time he presented it.  In that case it was held that UNISON’s complaint of a failure to inform and consult with them concerning a TUPE transfer was validly presented before the transfer itself took place.  At page 501C the Court stated:
“It cannot be said that this was a premature complaint in the true sense, that is, a complaint made before there was anything to complain about.  We agree with the industrial tribunal that it is clear from regulation 10(2) that the duty to inform and consult trade union representatives is one that should be performed before a relevant transfer and long enough before to enable consultations to take place.”

The case therefore does not in our view provide a true analogy with the present case.  The cause of action there was not the transfer itself, but the failure to consult in anticipation of it, which was not dependent on the transfer having occurred and which was alleged to have already occurred when the union presented their complaint to the Tribunal.
20.	In these circumstances therefore the appeal against the first Decision is dismissed.  We turn therefore to consider the second appeal.
21.	The Second Appeal
At the hearing on 26th September 2003 the Employment Tribunal considered (i) the Appellant’s application for a Review of their earlier Decision; and (ii) whether they had jurisdiction to determine the complaint raised in the second Originating Application presented on 6th August 1992.  Both matters were determined against the Appellant and he now appeals against both Decisions.  
22.	The Review
The Tribunal set out the history and decided, for the reasons set out at paragraphs 4 to 6, (which do not raise any issues relevant to this appeal) to hear the application for a Review.  Mr. Brown based the application on two grounds, firstly in the interests of justice, in that the Tribunal failed to consider and determine a central plank of the Appellant’s case before it, namely, that at the time of the presentation of his Originating Application he had acquired the right to payment of bonus or a legitimate expectation to payment, so that the prematurity argument did not apply.  Secondly, he submitted that the decision had been made in the absence of full disclosure by the Respondents of the employee handbook covering the period of the Appellant’s employment. 
23.	The Tribunal dealt shortly with both grounds.  On the first ground, at paragraphs 12 to 14, they held that they preferred the submissions of Mr. Wallington, namely that at the first hearing full argument had been presented on both sides and the Tribunal had taken time to deliberate before arriving at a decision.  The mere fact that a submission or a particular argument was not specifically referred to in the decision did not mean that the Tribunal had ignored it.  They stated that they were applying the decision in the case of Delaney v. Staples, in relation to whether there was a right to be paid bonus and the occasion for payment.  At paragraphs 12 and 13 they held as follows:
12     … A complaint of unauthorised deduction from wages could only be made after a deduction had occurred.  The Applicant’s submission regarding implied term and legitimate expectation and unfair contract terms, must show a right to be paid before 4 January 2002 or at the date of dismissal.  The Applicant was dismissed on or around 2 November 2001.  There was no entitlement to a specific sum in respect of bonus on that date or at any time in November 2001.  The Applicant chose to argue breach of contract but it was not pleaded as such in the Originating Application as a specific claim under the Employment Tribunals Extension of Jurisdiction Order 1994.  The claim was one of unauthorised deduction from wages.  He is still able to pursue a breach of contract claim before the High Court.  Having regard to the claim before the Tribunal, namely, unauthorised deduction from wages, the Tribunal had to identify the occasion for payment.  At the time of the Applicant’s dismissal there was no assessment of bonus.  He had acknowledged, and this we found as fact, that he was paid bonus on 31 January in the following year, paragraph 23 of our decision.  We also countenanced an alternative view in paragraph 24.  Whichever way it is considered, we have found that at the earliest the Respondent had a duty to pay bonus but only at the end of January 2002.  Whether the Applicant was entitled to it is an entirely separate matter beyond the remit of this Tribunal.

13     We were concerned about “the occasion for payment”, the submissions made by Mr Brown in respect of legitimate expectation, implied terms, unfair contract terms were considered but in the light of our findings and conclusions in paragraphs 23 to 25 of our decision, those submissions did not assist in concluding the occasion for payment.  There were in the nature of breach of contract arguments which was not the claim to be determined by the Tribunal as a preliminary issue.  The claim was unauthorised deduction from wages.  Insofar as the decision did not specifically refer to Mr Brown’s submissions, we hereby clarify the Tribunal’s view and state that having regard to our findings of fact and our conclusions, they were not accepted by the Tribunal as assisting us in determining an entitlement to payment and the occasion for payment.”

24.	In relation to the second ground the Tribunal held at paragraph 11 that, having considered the provisions in the newly disclosed employee handbook and the handbook adduced in evidence on the previous occasion, the wording in respect of the payment of bonus was the same and accordingly they did not consider that this amounted to fresh evidence or that the late disclosure of the handbook had caused any serious prejudice.  
25.	Before us Mr. Brown submitted that the Tribunal erred in dismissing the application for a Review, relying on both grounds.  We consider, however, that neither ground is sustainable.  His submissions on the first ground, namely Review “in the interests of justice”, amounted in effect to no more than an attempt to reargue the case, as is clear from the Tribunal’s reference to Mr. Brown’s arguments at paragraph 9 of their Reasons.  The only evidence called at this hearing was the Appellant’s evidence in relation to the second Originating Application and the jurisdictional issue relating to the time limit.  The Tribunal were entitled to regard their findings of fact in the previous case, as between the same parties, as conclusive and we regard them as binding upon us.  The submission that we should find the Tribunal to have erred in law in failing, in the interests of justice, to reverse on a Review their earlier conclusions based on their previous findings of fact we consider to be unsustainable and we reject it. 
26.	Nor are we persuaded by the second ground for the Review application, relating to the employee handbook.  At the first hearing the Respondents’ employee handbook produced in evidence was an edition issued in 1998.  The further handbook referred to by Mr. Brown is the previous edition issued in 1993, which was in force at the commencement of the Appellant’s employment.  
27.	Mr. Brown submits that the earlier edition referred to payment in February, not January, and that that was material evidence to be considered by the Tribunal.  The relevant wording in the 1998 edition was:
“You will only be eligible to receive a bonus if you are employed by and working for the company and not in any period of notice when the bonus is paid (normally in February).”

The equivalent sentence in the 1993 edition was:
“You may be eligible to receive a bonus award if you are employed by and working for the company and not under any period of notice, on the date when bonus awards are made.”

The evidence before the Tribunal at the first hearing led them to find as a fact that for some years before 2002 payment had been made at or about 31st January, which had by then become the “payment date”.  As will become apparent when we address the jurisdictional issue below the Tribunal found that it was not reasonably practicable to present the second application before 13th June 2002, that is more than three months after the end of February, but that the further delay in presenting it exceeded what was a reasonable period of time.  This reasoning would have applied equally to the later payment date sought to be relied on by Mr. Brown.  The Tribunal were therefore entitled to reject the handbook as a basis for a Review of their first Decision.  The appeal against the Tribunal’s dismissal of the Review application therefore fails.  
28.	The Second Originating Application – The Jurisdictional Issue
After hearing evidence from the Appellant the Tribunal made the following findings of fact, which they set out at paragraph 14:
“(i)     He had been represented by a firm of solicitors called Gardner Weller.  At the Directions Hearing, held on 13 June 2002, the Respondent amended it’s Grounds of Resistance by adding that the Originating Application presented on 4 January 2002 was premature and that the Tribunal had no jurisdiction to entertain it.  The Respondent contended that the payment of bonus for 2001 was at 31 January 2002.  The Applicant was not present at the Directions Hearing.  He was of the view that his legal advisers would take the necessary course of action in response to the Respondent’s amended Grounds of Resistance.  On or around the 19 July 2002 he had instructed his current solicitors to represent him.  The papers were sent to Counsel, Mr Brown, at the end of July 2002 to advise.  He advised on, 2 August 2002, to present a second Originating Application and this was done on 6 August 2002.

(ii)    The Applicant admitted that Gardner Weller would have been aware that the Respondent was raising the prematurity point a few days prior to the Directions Hearing as they either had a copy of the Grounds of Resistance or had been informed by the Respondent.  The Applicant described Gardner Weller as inept in not putting in an amended Originating Application or a further Originating Application between 13 June 2002 and 19 July 2002.  He stated that he did not recall receiving a copy of the Tribunal’s decision for the 13 June 2002 hearing.”

The parties’ submissions and the Tribunal’s conclusions, at paragraphs 15 to 17 were as follows:
“15     Mr Brown submitted that once the prematurity point was raised by the Respondent, the Applicant’s solicitors ought to have put in another Originating Application.  Prior to 19 July 2002 Gardner Weller did not enjoy his confidence.  That the delay between 13 June to 19 July was not unreasonable.  The Applicant had a live Originating Application and it was relevant until the Tribunal determined that it had no jurisdiction.  The Applicant had put in the further Originating Application after a reasonable time, bearing in mind his difficulty with his former legal advisers.

16    Mr Wallington submitted that at the very latest the expiry date was 27 May 2002.  “Reasonably practicable” means what is legally feasible.  The Applicant had stated that he had sought legal advice from Counsel after his dismissal.  The prematurity point was not dealt with immediately after the Directions Hearing.  If the Applicant chose the Tribunal to hear and determine his claims, he must be aware of potential jurisdictional issues.  His lawyers had failed him and he has a possible cause of action against them.  Mr Wallington submitted that it was possible to present the application within time.  If, however, the Tribunal was against him, what was a reasonable time?  The prematurity point was raised by the Respondent a few days prior to 13 June 2003 hearing.  One form of damage limitation was to put in a further claim.  The Applicant admitted that there was nothing stopping Gardner Weller from putting in a claim between 13 June to 19 July.  He acknowledged that from 19 July his current solicitors had acted quite properly.  However, by then the delay had already occurred.  Accordingly, he invited the Tribunal to dismiss the Originating Application as we have no jurisdiction to hear it.

17    We have concluded, unanimously, that it was not reasonably practicable for the Applicant to have presented his further claim in time as the prematurity point was not taken by the Respondent until a few days prior to 13 June 2002.  Furthermore, he already had an existing claim before the Tribunal which he assumed was presented in time.  However, once that issue was raised by the Respondent, clearly at the hearing on 13 June 2002, it was incumbent upon the Applicant and his legal advisers to take the necessary precautionary step.  No action was taken between 13 June to 19 July.  He was legally advised following his dismissal.  Had the further Originating Application been presented between 13 June 2002 to 19 July 2002, it was more likely that we would have applied our discretion favourably.  By presenting the Originating Application on 6 August 2002, it was outside the period of time that this Tribunal considered reasonable.  Accordingly, we do not have any jurisdiction to hear the second Originating Application.  The Applicant is not without recourse as he may have a possible claim against his former legal advisers.”

29.	Mr. Brown submits firstly that the Tribunal erred in failing to consider, when arriving at their conclusions in paragraph 17, the latest date upon which the Respondents could, complying with their contractual obligations, pay the bonus and, therefore, the date from which time would run.  He acknowledged that this inevitably led to a submission that the Tribunal were not bound by their earlier findings; and he contended in this respect that there were different issues before them at the two hearings.  The issue at the first hearing was the first date, that is the payment date, which would trigger an unlawful deduction claim.  The issue at the second hearing was the last date for payment, which would determine when time began to run for the purposes of  limitation.  Mr. Brown submitted that, by the terms of the employment contract, the Respondents had reserved a right to pay the bonus within a reasonable period after 1st March, alternatively 1st April, each year.
30.	This submission created a number of insurmountable hurdles for Mr. Brown.  In the first place, the contractual documents referred to by the Tribunal in their first Decision did not contain the reservation referred to; and this was not a finding made by the Tribunal in either their primary or their alternative conclusions (see paragraphs 23 and 24 in their first Decision).  Secondly, as we have already observed, the Tribunal at this second hearing were entitled to treat their earlier findings of fact as conclusive.  Having found, in their first Decision that the Appellant’s claim crystallised on 1st February 2002 they were bound to give effect to that and to find that time began to run as from that date.  Thirdly, in making this submission, Mr. Brown found himself in the unattractive position of advancing an argument which was directly in conflict with a submission he made in the first appeal, referred to above at paragraph 16, namely that the Tribunal erred in deciding in the alternative that the “operative date” was the last date on which the bonus could be paid.
31.	Mr. Brown next submitted that the Tribunal erred in their interpretation of the provisions of section 23(4) of the Act.  The Tribunal, he submits, should have considered whether the delay was reasonable, having regard to the purpose of the statutory time limits, whereas they concluded at paragraph 17 that they had a discretion whether to allow the second Originating Application.   In our judgment, however, the Tribunal addressed themselves correctly to the statutory provisions and found expressly that “By presenting the Originating Application on 6th August 2002, it was outside the period of time that this Tribunal considered reasonable”, which indicates a clear and correct application of the statutory test in section 23(4).  The passing reference at paragraph 17 to the way in which they might have exercised their discretion if the delay had been for a shorter period does not invalidate the correct application of the statutory provisions.  In any event, deciding whether any further period of delay in a particular case is reasonable will inevitably involve the exercise of discretion by a Tribunal and we see no error in their reasoning in this respect.  
32.	Thirdly, Mr. Brown submits that the Tribunal, as a matter of law, ought to have concluded that the whole of the period of delay in the presentation of the claim was reasonable.  They stated expressly that it was more likely that they would have exercised their discretion in favour of the Appellant if he had presented the application between 13th June and 19th July, thereby implicitly accepting that the delay until 19th July was reasonable; and they concluded in addition that his current solicitors had conducted the claim properly after being formally instructed on 19th July.  
33.	In our view however it is not correct to suggest, on the basis of the reasons given, that the Tribunal implicitly accepted the delay until 19th July to have been reasonable.  Further we accept Mr. Wallington’s submission that it cannot be said that because delay over part of the period was regarded as not unreasonable the Tribunal was bound to conclude that the delay for the whole of that period was reasonable.  The essential question which they had to determine was whether, for the purpose of extending time, the period from the date when it did become reasonably practicable to present the application to the date when it was in fact presented was a reasonable period.  They clearly answered that question in the negative, as they were entitled to.  
34.	Mr. Brown’s next submission was that, in finding that the Appellant could have presented the application between 13th June and 19th July the Tribunal gave no or insufficient consideration to a number of relevant factors, which were established on the evidence.  The first of these factors was that there was already before the Tribunal a claim of unlawful deduction of wages from the same Appellant, which made this a highly unusual case; and yet there is no evidence that the Tribunal ever considered this important point.  Their failure to consider it rendered their Decision one which no reasonable Tribunal could have reached, given these unusual circumstances.  It seems clear to us, however, that the Tribunal were well aware of the existence of the previous claim and of the dispute as to their jurisdiction to determine it. They found that it was up to the Appellant and his legal advisers to progress the matter and to take the “necessary precautionary step” once the prematurity point had been taken by the Respondents on 13th June.  We see no error of law in such an approach.  Applicants to Employment Tribunals should be expected to make their applications as soon as possible, once any obstacle which has prevented them from making their claims timeously has been removed.  Further, this submission did not begin to approach the overwhelming case required to show that a Tribunal’s decision was perverse.
35.	Other relevant factors said by Mr. Brown not to have been sufficiently taken into account by the Tribunal were as follows: the Appellant’s belief that the Tribunal had jurisdiction to deal with the first claim; the fact that there was no conceivable prejudice to the Respondents; the Respondents’ delay in raising the jurisdictional issue, taking the point only on 10th June 2002, some five months after the claim was presented; the complexity and novelty of the point raised by counsel for the Respondents and the time taken to consider it; and the difficulties and delays caused by the breakdown in the relationship between the Appellant and his solicitors and the need to instruct fresh solicitors.  Mr. Brown also submitted that the Tribunal had erroneously had regard to an irrelevant factor, namely whether or not the Appellant might have a claim against his former solicitors.  In any event it was not at all clear, Mr. Brown submitted, that he did have a claim against them rather than that he had simply “fallen out” with them and had, in consequence, withdrawn his instructions.  
36.	The Appellant’s belief as to jurisdiction seems to us to be irrelevant.  Once the Respondents had taken the prematurity point the Tribunal were entitled to conclude that the period taken to carry out the “necessary precautionary step” of issuing a second application was unreasonable.  Nor do we regard the lack of any potential prejudice to the Respondents as relevant to the Tribunal’s determination of whether a period of delay was reasonable, delay being, in any event, inherently prejudicial.  The fact that the Respondents had delayed in raising the prematurity point was taken fully into account by the Tribunal when deciding that it was not reasonably practicable for the Appellant to present the second application until the point had been taken.  It was not relevant in determining thereafter whether the subsequent period of delay was reasonable.  Further, the jurisdictional point seemed to us neither novel nor unduly complex, as we hope is clear from our decision on the first appeal.  Such complexity as there was could not in any event be said to hinder or prevent the timely presentation of a precautionary second application.  
37.	In relation to the difficulties and delays caused by the breakdown between the Appellant and his former solicitors and the need to instruct fresh solicitors Mr. Brown relied on the Appellant’s evidence in chief, in the notes of evidence (first tranche) at page 13, where he said:
“I was not at Directions Hearing on 13 June 2002.  I lost confidence in them.  I felt in my naivety that they knew what they were doing.  I telephoned them on a few occasions and eventually called in and ended the relationship.  Sometime in July 2002 I instructed my current solicitor.  Once papers received by them there were outstanding matters.
… Second week in July 2002 was time I discussed my case with the partner of my current solicitors.”

Mr. Brown submitted that this evidence showed that there were problems between the Appellant and his former solicitors between 13th June and 19th July; and that the Tribunal placed excessive reliance on the possibility that these solicitors could and should have lodged a second Originating Application at an earlier date.  Mr. Wallington, however, pointed to the notes of evidence on page 14 and to the Appellant’s cross-examination in which, referring to a letter being written on his behalf by Gardner Weller (the former solicitors) dated 3rd July 2002 he stated:
“At Gardner Weller a month after Directions Hearing, that is between 13th June 2002 to 19th July 2002.  They were inept in not putting in between 13 June to 19 July 2002 an amended Originating Application or a further Originating Application. 
… Nothing to prevent Gardner Weller from amending Originating Application and putting in a new one.”

There was, therefore, evidence before the Tribunal that Gardner Weller were still instructed by the Appellant as at 3rd July.  The Tribunal were also clearly aware of the Appellant’s relationship with Gardner Weller and the situation relating to new solicitors, since they dealt in their findings of fact with the practicability of issuing a new application before 13th June and the change of solicitors.  Finally, it seems to us that it was legitimate for the Tribunal to refer, by way of comment at the very end of their Decision, to the possibility of a claim against his former solicitors.  It did not in our judgment form part of their reasoning in concluding that the period of delay after 13th June was unreasonable.  
38.	For these reasons we are not persuaded that the Tribunal failed sufficiently to take into account all the various individual factors referred to.  In any event, in our judgment, it would not have been incumbent upon the Tribunal, in giving their reasons for the Decision on this issue, to set out each individual factor and explain in each case to what extent, if at all, they considered it relevant and, if so, the relative weight to be attached to it.  The reasons for the Decision must be clear and capable of being understood. Having considered them, we are all of the view that no error has been identified in their reasoning or in the conclusion which they reached.
39.	Mr. Brown’s final submission was that the Tribunal failed to construe section 23(4) in accordance with Article 6 of the European Convention of Human Rights and to ensure that the section did not constitute an unnecessary bar to the Appellant’s right to a determination of his civil claim proceedings.  This we considered to be unarguable.  The statutory time limits are, in our judgment, compatible with the legitimate purpose of ensuring the speedy presentation of claims and the avoidance of delay.  By virtue of section 23(4) a Tribunal has the capacity to extend time by a reasonable period for the presentation of an application which it was not reasonably practicable to present in time, thereby ensuring, in an appropriate case, an applicant’s access to an independent, judicial forum for determination of his claim.  In any event, as the Tribunal observed at paragraph 12, the Appellant had and still has access to a legally sufficient, judicial determination of his claim in the High Court.  Given the jurisdictional issues which have beset this Appellant’s unlawful deduction complaints before the statutory Tribunal and, further, the complex contractual issues and the size of the sums claimed in this case, we too would regard the High Court as the appropriate forum for this dispute.  The Appellant having elected to proceed in the Employment Tribunal, however, the Respondents were entitled to raise issues which went to jurisdiction and the Tribunal were then bound to decide them.  For the reasons we have given we are not persuaded that, in doing so, the Tribunal at any stage erred in law or wrongly exercised their discretion.
For these reasons this second appeal must also be dismissed.
40.	The Respondents, in the event that the appeals were lost, made clear their intention to apply for costs in respect of both appeals on the grounds that the bringing of both appeals was unnecessary, improper and/or vexatious.  It is said that no points of law were raised and that the points advanced are no more than an extended attempt to re-litigate the issues following an adverse finding.  We have considered this application carefully but we refuse it.  Whilst we consider that the appeal against the Tribunal’s refusal to review their earlier Decision was effectively no more than an attempt to reargue the case, this aspect of the case occupied only a very small proportion of the time spent on the issues raised in these appeals; and we do not consider that the other grounds of appeal raised against both these Decisions can properly be said to amount to unnecessary, improper and/or vexatious litigation.  In these circumstances the application for costs in respect of both appeals is refused.