Appeal No. UKEAT/0023/07/RN

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 27 February 2007

Before
THE HONOURABLE MR JUSTICE WILKIE
(SITTING ALONE)

MR N d gibbs T/A jarlands financial services	APPELLANT

MR C R HARRIS	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MS REBECCA DENNIS
(of Counsel)
Instructed by:
Messrs Berry Smith Solicitors
16 Hanover Square
London
W1S 1HT	
For the Respondent	No appearance or representation by or on behalf of the Respondent	

SUMMARY

Practice and Procedure – Preliminary issues
The Employment Tribunal was wrong to conclude that an ET1 could constitute a written grievance for the purpose of satisfying s32 of the Employment Act 2002.

THE HONOURABLE MR JUSTICE WILKIE

1.	This is an appeal brought by Mr Nigel David Gibbs t/a Jarlands Financial Services against a decision of the Employment Tribunal held at Cardiff on 25 July and 17 October 2006 which held that the Tribunal had jurisdiction to hear claim number 016101/73/06, brought by Mr Harris for constructive unfair dismissal, as well as a claim for breach of contract brought under a different number (016011/61/06).  The Employment Tribunal concluded that the first ET1 claim form stood as a grievance for the purposes of s32 of the Employment Act 2002, so as to give it jurisdiction to hear the second claim (the one numbered 73/06).  The Claimant before the Employment Tribunal (the Respondent before the Employment Appeal Tribunal) has not attended the appeal hearing, but has submitted a skeleton argument to which I have had regard.

2.	The heart of this case is the important question whether, within the statutory framework of Part 3 of the Employment Act 2002, an ET1 can constitute part of the statutory grievance procedure so as to enable an employee to commence proceedings by means of a second ET1, relying on the first as satisfying the prior procedure which has to be gone through before the Tribunal can accept a claim as properly made.

3.	The chronology of the matter is unfortunate, and it is the accident of timing which forced the Tribunal to consider whether an ET1 could constitute a written grievance.  The Claimant had been engaged by the Respondent to work in the insurance business towards the end of 1998.  A dispute arose concerning non-payment, as alleged by the Claimant, of commission, which came to a head in February 2006.  The Employment Tribunal concluded, though it was a matter of dispute, and acted on the basis that there was no written statement of grievance sent by the Claimant to the Respondent prior to a meeting in which orally the Claimant gave notice of termination of his employment, which took effect on 28 February 2006.  

4.	The next step was that on 5 May 2006 an ET1 form in case number 61/06 was lodged.  That document is of course a written document and it sets out in full the complaints of Mr Harris concerning his treatment and the circumstances of his resignation.  As required by statute, the Respondent below submitted their response by means of an ET3 dated 2 June 2006.  An issue arose whether the Tribunal could entertain the claim brought under the ET1 of 5 May, because the Claimant, it was said, had not complied with s32 of the Employment Act 2002, to which I will return.  

5.	At a case management hearing which took place on 27 June before a Regional Chairman, the note of the hearing reads as follows:

“In relation to the dispute under s32 of the Employment Act 2002 the parties should note the provisions of Regulation 15 of the Dispute Resolution Regulations 2004.  If the Claimant lodges a further claim then the above arrangements will need to be amended.”  

The last phrase was a reference to certain case management decisions.  

6.	Having been alerted to the potential problem under s32, the Claimant, Mr Harris, then wrote a letter setting out his grievance.  That was dated 28 June and there was a dispute as to whether it was received on 28 or 29 June, but that makes no difference because on any view a grievance presented on 28 June would have been out of time under the statutory scheme provided for by s32 of the 2002 Act, being more than one month after the end of the original time limit for making the complaint (that having expired on 27 May).  

7.	It was in that unfortunate set of circumstances that the question then arose whether the second ET1, namely number 73/01, could be entertained.  There was no doubt that that ET1 had been submitted in time (namely by 26 July 2006) provided the grievance letter had been in time, or provided that the original ET1 could be treated as a written grievance.  There was a preliminary hearing on 25 July which Mr Harris did not attend.  In the course of that hearing the Tribunal Chairman grappled with the s32 issue and at that stage formed a preliminary view that the Tribunal could not accept any further complaint.  He formed a view that the ET1 originally sent on 5 May did not constitute a written grievance; the reason for that was that he concluded that it could not be said that the statement of grievance had been “sent” to the employer as required by the detailed provisions for grievance procedures in Schedule 2 to the 2002 Act.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       In his final judgment, which was issued after a further hearing on 17 October, the Chairman said that he no longer felt that that was a good point.  He expressed the view that as long as the ET1 had been received by the employer through the office of the Tribunal then it had been sent by the employee and delivered through the agency of the Tribunal office.  

8.	Ms Dennis, who appears for the Appellant (the Respondent below) has not taken that point, which she describes as a highly technical one and unrealistic.  She says that what she relies on is a single major proposition, which is that within the statutory scheme an ET1 cannot constitute a written grievance.  I have therefore to look at the statutory scheme in order to see whether this is a good argument.  

9.	    Section 32 of the 2002 Act applies to various jurisdictions which are identified in Schedule 4 which include unauthorised deductions and unfair dismissal.  Sub-section (2) provides that:

“32 (2)	An employee shall not present a complaint to an employment tribunal under a jurisdiction to which this section applies if—
(a)	it concerns a matter in relation to which the requirement in paragraph 6 or 9 of Schedule 2 applies, and 
(b)	the requirement has not been complied with.” 

Schedule 2 Part 1 sets out a standard and a modified procedure in relation to disciplinary matters, and Part 2 in particular sets out a standard procedure and a modified procedure in relation to grievances.  It describes, in the standard procedure, a step-by-step approach.  Step 1 is the employee must set out the grievance in writing and send the statement to the employer.  Step 2 requires the employer to invite the employee to attend a meeting to discuss the grievance and imposes an obligation on the employee to take all reasonable steps to attend the meeting.  After the meeting the employer must inform the employee of his decision as to his response to the grievance and notify him of the right of appeal against the decision if he is not satisfied with it.  Step 3 provides for the appeal.  The modified procedure only requires two steps.  Step 1 is the employee setting out his grievance in writing and sending it to the employer and Step 2 requires the employer to set out his response in writing and send the statement, or a copy of it, to the employee.  

10.	There is no doubt that, as to the first ET1, Mr Harris did not comply with paragraph 6 or 9 of Schedule 2.  Section 32 (3) provides that:
“An employee shall not present a complaint to an employment tribunal under a jurisdiction to which this section applies if—
(a)	it concerns a matter in relation to which the requirement in paragraph 6 or 9 of Schedule 2 has been complied with, and
 (b)	less than 28 days have passed since the day on which the requirement was complied with.” 

What this does is to prohibit the employee from presenting a complaint to the Tribunal, having first sent a statement of grievance in writing to the employer and without giving the employer 28 days to respond so as to give the employer the opportunity to comply with step 2 of either the standard or the modified procedure.

11.	Sub-section (4) sets out an extended time limit, which extends the time limit from three months effectively to four months, thereby ensuring that the prohibition on commencing proceedings before the first step of the grievance procedure has been complied with, and 28 days thereafter has expired, does not disadvantage the employee.  

12.	Sub-section (6) prevents a tribunal from considering a complaint presented in breach of sub-sections (2), (3), or (4) and it was that prohibition which the Tribunal was considering.  The question of what constitutes compliance with Schedule 2 and, in particular, the requirement to send a written statement of grievance to the employer, has been the subject of consideration by the Employment Appeal Tribunal on a number of occasions although it is right to say that the question of whether an ET1 can constitute compliance with the statutory grievance procedure has not directly been before the Tribunal.  

13.	In the case of Galaxy Showers Ltd v Wilson (UKEAT/0525/05/CK) the EAT, in the judgment delivered by Langstaff J, indicated that the requirements for a statement of grievance in writing were not onerous.  In para 16, he said as follows:

“16.	We consider that the Tribunal was entirely right to take the view it did.  We consider that the only issue which arises for determination in a case such as this is whether or not there has been something in writing which complies with the definition contained in the 2004 Regulations.  As we have already noted that requires a complaint.  It does not in its terms require anything more than that, however desirable it might be for any letter or statement to indicate that that the complaint may go further.  What is looked at is a matter of substance.”

The emphasis on matters of substance was echoed in the decision in Shergold v Fieldway Medical Centre [2006] IRLR 76 in which the EAT judgment, delivered by the then President, Burton J, included the following paragraphs:

 “26.	…It is quite plain that the purpose of this legislation was to encourage conciliation, agreement, compromise and settlement rather than the precipitate issue of proceedings. It is not unlike the system of pre-action protocols in relation to High Court and County Court litigation, although hopefully it is even more likely to succeed because of the relationship, or the immediately preceding relationship, between the parties in an employment dispute.

27.	To that extent, therefore, the need for parties to understand each other’s position before proceedings are launched (and the opportunity for resolution short of litigation) is to be welcomed, but what must be guarded against, once such legislation has been enacted, is that it can create its own hostage to fortune and, in fact, introduce an entirely and, we are satisfied, unintended result of creating undue technicality and over-sophistication, which can result in problems for both sides.”

The third decision dealing with this area of the legislation is Canary Wharf Management Ltd v Edebi [2006] IRLR 416, in which the judgment of the EAT, delivered by the President, Elias J, began with the following words in para 1:

“1.	Section 32 of the Employment Act 2002 has sought to encourage the use of grievance procedures prior to an employee lodging certain claims before an Employment Tribunal.  In such cases the employee must send to the employer a written statement of the grievance and wait until at least 28 days for the employer to respond.  The Tribunal will not hear a complaint which has not first been raised in that way with the employer.  If the grievance has been raised with the employer then in certain circumstances the time limit for lodging a complaint is extended by a further three months.  So although the employee cannot register a claim with the Tribunal until at least 28 days has elapsed from the time he raised the grievance, he may thereafter have a more extended period within which to present his claim than would otherwise be the case.” 

He continues at para 19:

“19.	First, the timing of the grievance.  There is no maximum time limit prior to the lodging of the claim to the Tribunal in which the grievance must have been raised.  There is the minimum period of 28 days which must be allowed for the employer to deal with it and go through the relevant procedures, but no maximum period.”  

14.	In paragraph 20 Elias J repeated the fact that there was considerable flexibility about the form of the grievance.  He says:

“20.	 …It may be raised in a resignation letter (as here).  It may even be raised after a dismissal has taken effect (indeed that is one of the conditions for the application of the modified procedures). It may be raised by a solicitor in a communication to the employer’s solicitor (as in the Mark Warner case.)  It matters not that other issues are raised at the same time as the complaint, whether additional complaints or otherwise.”  

15.	In my judgment, the Employment Tribunal was wrong in this case to conclude that an ET1 could constitute a written statement of grievance for the purposes of satisfying the pre-conditions set out by s32 before an employee can present a complaint which the Tribunal is obliged to accept.  I accept the submissions made by Ms Dennis that the statutory structure is such that it envisages that a grievance procedure is invoked before litigation is commenced.  Furthermore, once the grievance procedure has been invoked by the sending of a written grievance, the employee cannot immediately thereafter fire off the opening shot in formal litigation before the employer has had the 28 days within which to consider the matter and comply with the requirements of the standard and modified procedure by responding either by holding a meeting or responding in writing.  It would run wholly counter to the statutory scheme if, in effect, the employee could litigate on the one hand and on the other hand oblige the employer to engage in the grievance procedure and then, the employer not having satisfied the employee in respect of the grievance thus raised, allow the employee to re-start litigation afresh.  The two processes – the litigation process and the pursuit of a grievance – are separate and distinct and call for a separate and distinct approach.  

16.	It appears that in the present case the employee knew well enough what was required, because when the s32 point was raised the response of the employee was to write a letter of grievance which would have complied with the requirements of the statutory scheme had it not been sent one day out of time.  In those circumstances, it seems to me that the Employment Tribunal was misreading the statutory scheme by concluding that a failure on the part of the employee to send a written grievance statement could be made up by the commencement of litigation formally by the sending of an ET1.  

17.	Furthermore, although Ms Dennis did not actively pursue the, no doubt technical, argument, I, for my part, do find it difficult to see how an employee can be said to have sent a statement of grievance to the employer when what the employee has done is commence litigation by presenting to the Tribunal an ET1.  There can be no question of a contractual relationship between Claimant and Tribunal Service whereby it acts as the employee’s agent by sending the ET1 to the employer on behalf of the employee.  Whether or not that is a good point, it rather points up the inappropriateness of regarding the commencement of proceedings at the same time constituting the invocation of the statutory grievance procedure.    

18.	Therefore, in my judgment, this appeal must succeed.