Appeal No.  EAT/0129/07/CEA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 18 June 2007

Before
 HIS HONOUR JUDGE BURKE QC
(SITTING ALONE)

 MS P ASHLEY	APPELLANT

 CITY HOLDINGS	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR A ELESINNLA 
(of Counsel)
Instructed by:
Messrs J R Jones Solicitors
58 Uxbridge Road 
Ealing
W5 2ST
 	
For the Respondent	Mr W Burrows
(Non-practising Barrister)
Peninsula Business Services Ltd
Litigation Department
Riverside
New Bailey Street 
Manchester 
M3 5PB	

SUMMARY
Time limits
Practice and procedure – Costs
Unfair dismissal
The Employment Tribunal held that the employee’s race discrimination claim was out of time. On appeal it was conceded that the first of the 2 bases of that claim arose out of dismissal and that, pursuant to the EAT decision in Lawrence v HM Prison Service (UKEAT/0630/06), no separate grievance was required; and time was extended pursuant to rule 16 of the Dispute Regulations. The second basis of that claim was not pursued. There had been delay and failure to comply with EAT orders by Peninsula; order for costs made against them for an agreed figure.

HIS HONOUR JUDGE BURKE QC

1.	This is an appeal by Ms Ashley, who was the Claimant before the Employment Tribunal, against part of the judgment of the Employment Tribunal on a pre-hearing review, sitting at Watford, made by Mr Willans as Chairman sitting alone on 8 December 2006; the judgment was sent to the parties on 28 December.

2.	There were five claims before the Chairman, set out in a Claim Form dated 11 August 2006. They were (1) that Ms Ashley had been unfairly dismissed on 22 March 2006 by the Respondents City Holdings Ltd from her employment as an evening cleaning supervisor; (2) that there had been unlawful deduction from her wages; (3) breach of contract; (4) race discrimination and (5) that her dismissal was automatically unfair on the basis that she had made a protected disclosure. 

3.	The issue to be heard at the pre-hearing review, the dismissal and the matters leading up to it having occurred more than three months before the claim was presented, was whether the claims were in time. It was conceded that claim 3, breach of contract, was out of time. It seems not to have been in dispute that claims 1 and 2 were in time. Therefore the Chairman had to decide in relation to claims 4 and 5. He decided that claim 5, the protected disclosure claim, was in time, but that claim 4, the race discrimination claim, was out of time. The appeal is against that last part of the Chairman’s decision. There is now no dispute as to the decision that claim 5 was in time. 

4.	The Respondents, by Mr Burrows of Peninsula Business Services on their behalf, now concede, in the light of the decision of the EAT in March 2007 in Lawrence v. The Prison Service (UKEAT/0630/06), (the President, sitting alone), which the Chairman could not have known about because it was decided three months after he reached his decision, that the Chairman was wrong in law to decide that the race discrimination claim was out of time; and, therefore, they have conceded that the appeal should be allowed; or rather they do not oppose it. However, of course, appeals are not nodded through by consent – to do would be disrespectful to the decision makers; and I have heard the point argued, albeit briefly, by Mr Elesinnla on behalf of Ms Ashley. 

5.	It is necessary for me to set out a little of the factual background.  In late 2005-2006, Ms Ashley complained that unlawful deductions were being made from her wages. When her complaint made no progress, she registered a grievance, in February 2006. In March 2006, she was accused by the Respondents of stealing. She denied that she had done so. Disciplinary proceedings were commenced which resulted in her summary dismissal on 24 March. She appealed against that decision on 29 March. On 31 March, her grievance in relation to the unlawful deduction from her wages was rejected by Mr Jameson. She appealed against that on 18 April. The two appeals against the dismissal were both dealt with together and concluded on 5 July 2006. Both appeals failed. 

6.	In Ms Ashley’s claim form the race discrimination claim was set out at paragraph 58, under two separate sub-paragraphs. The first said “the Claimant was dismissed by the Respondent in circumstances where a white employee would not have been dismissed. The Claimant relies on a hypothetical comparator”. The second related to Mr Jameson’s handling of the grievance.  It relied on his failure to deal with the Claimant’s grievance properly or at all and claimed that, if the Claimant was white, her grievance would have been properly investigated. 

7.	It is common ground that Ms Ashley did not raise any question of discrimination until in a letter of 4 August, which preceded her claim by a week, she said, “Further to my appeal hearing against my dismissal and my grievances, I do not believe you have dealt with my grievances properly, and I believe the outcome of my grievances are discriminatory on the grounds of my race.”

8.	So far as the first of those two complaints of discrimination are concerned, when the three-month normal time limit expired, the appeal against Ms Ashley’s dismissal had not been heard or, at least, completed; and, therefore, the statutory dismissal and disciplinary procedures contained in schedule 2 of the Employment Act 2002 had not been completed. So far as the second of those complaints are concerned, which relates to Mr Jameson’s handling of the first grievance which Ms Ashley put in, that was resolved initially on 31 April; the appeal was rejected in July.  The Respondent submitted to the Tribunal that Ms Ashley ought to have presented a grievance or originating application within three months of the subject matter of her complaint and that no complaint of discrimination was made, until at the very earliest by the letter of 4 August; and therefore her claims were out of time; see para 6 of the Chairman’s judgment.

9.	Mr Elesinnla tells me today that the second limb of the discrimination claim was not pressed before the Tribunal. The Tribunal’s reasons do not state one way or the other that that was so; the judgment decides that the discrimination claim was out of time, without distinguishing between sub-paragraphs 1 and 2 of that claim. 

10.	In Lawrence, the employee claimed that his dismissal was unfair and constituted disability discrimination. There had been no presentation of a grievance in respect of disability discrimination. The employers accepted that there was no requirement to present a grievance in respect of the dismissal but agreed that a grievance had to be submitted in respect of the discrimination claim before the Tribunal could have jurisdiction to hear that claim, pursuant to Section 32 of the 2002 Act. The employee submitted that, pursuant to regulation 6(5) of the Employment Act 2002 (Dispute Resolution) Regulations 2004, no separate grievance was needed because the complaint (albeit presented under two heads – i.e. unfair dismissal and disability discrimination) was all about the dismissal; in other words, the act of discrimination that was said to have occurred was the dismissal. The employers’ argument prevailed; but on appeal the EAT came to the opposite conclusion, following in particular the earlier decision in the EAT in DCA v Jones (UKEAT/0333/06 HHJ Richardson). It was held that pursuant to regulation 6(5), 
“neither of the grievance procedures applies where the grievance is that the employer has dismissed or is contemplating dismissing the employee”

and that principle applied to a claim which arose out of the dismissal and raised an issue which, internally, would be expected to have been explored and resolved within the dismissal and disciplinary procedure and that there was no obligation on an employee, where his complaint raised such an issue, to commence a separate grievance in respect of discrimination arising from the dismissal so as to satisfy section 32(2) of the 2002 Act. 

11.	In the present case, in relation to the first limb of the race discrimination complaint, no section 32 point arises; the issue is whether the extension of time limits provided for by regulation 15 applies.  The statutory dismissal and disciplinary procedure applied; and, following Lawrence, no separate grievance process was required in respect of the complaint of race discrimination arising from the dismissal. The circumstances set out in regulation 6(2) applied; and, because the appeal was outstanding when the three month’s normal time limit for an unfair dismissal claim expired, by virtue of regulation 15, the time limit was extended automatically; and thus the presentation of the claim was in time.
12.	So far as the second limb is concerned, as I have said it is far from clear from the reasons given in the judgment that that was considered separately from the first limb.  The Notice of Appeal, at paragraph 3, sets out the judgement of the Employment Tribunal, including the judgement that the claim for race discrimination was out of time and says, at paragraph 5, that the Employment Tribunal erred in law or was perverse in its finding that it did not have jurisdiction to deal with the Appellant’s claim of race discrimination – again, without distinguishing between the first and second limbs. It seems to me, reading forward in the Notice of Appeal, and in Mr Elesinnla’s skeleton argument, that no separate attention has been paid to the second limb; and, when I first raised this point, Mr Elesinnla appeared to accept that there has been some kind of omission; Mr Elesinnla was given time to think about it; and it has emerged that the second limb was abandoned before the Tribunal (even though the Tribunal did not so record); and that is why no submissions have been addressed to me as to that limb and why that limb, which would not have been covered by the Respondent’s concession, has not been the subject of any approach in any of the papers before me.  Alas, I have to say I did not know that and have spent some time considering how the second limb might be brought within regulation 15, without reaching any very successful conclusion one way or the other.  While I certainly do not complain about it, my time has been spent unnecessarily.  However the second limb is not live; it is not the subject of this appeal. 

13.	So far as the first limb is concerned, the appeal against the Employment Tribunal’s decision will be allowed for the reasons which I have set out and that issue will go back to the Tribunal to be determined according to its merits.

14.	I now have to turn to an application for costs which has been made by Mr Elesinnla on behalf of Ms Ashley, or to put it slightly more realistically, on behalf of the public funders who support her.  That is not in any way to express a criticism of the fact that the application has been made – very much the contrary.  The history is this: at the time when the Notice of Appeal was put in, on 22 January 2007 and indeed when the Respondent’s Answer was lodged on 23 March 2007, in which Answer the Respondent simply said that they would rely on the Employment Tribunal’s judgment, Lawrence had not yet been decided; it was decided on 26 March.  It is now said that, at the time of the Answer, the Respondents should have appreciated that they could not resist to the appeal and that their Answer was unreasonable; but it was not until 30 May that Ms Ashley’s solicitors drew the attention of the Respondent’s representatives to the existence of the decision in Lawrence; and I have absolutely no doubt that the Respondents and their representatives cannot be criticised for not appreciating that there was then or might be no answer to the appeal.  I see no reason to suppose that they should have appreciated the impact of Lawrence before Ms Ashley’s solicitor’s representatives did so; and, to be fair, Mr Elesinnla has not sought to persuade me that, save in one respect, there has been any action or reaction on the Respondent’s part prior to May 30 which would or should attract costs. 

15.	On May 15 the solicitors acting for Miss Ashley wrote to the Respondents’ representatives, inviting them to contribute to or agree to an index for the EAT.  There was no response.  Thereafter there was a number of letters from Ms. Ashley’s solicitors to which those representatives did not respond effectively or at all.  Mr Burrows today, on behalf of the Respondents, has accepted that that should not have happened and has apologised.  It is of the highest importance that the parties to an appeal cooperate as to putting together all the paperwork which is required for an effective EAT hearing; and that involves responding to each other and otherwise communicating properly about putting those matters in hand. Indeed the standard direction made by the EAT, where an appeal is sent forward to a full hearing either at the sift stage or at a preliminary hearing, as in this case in the EAT order of 8 March 2007, specifically provides that parties are under an obligation to cooperate in reaching agreement as to lists of authorities and bundles. However, in this case when the Respondent’s representatives were invited to contribute on 15 May to the preparation of the appeal, they did not respond. Quite properly Ms Ashley’s solicitors prepared the bundle themselves, served it on the EAT and served it on Peninsula on 24 May. 

16.	On 30 May, Ms Ashley’s solicitors wrote to Peninsula, referring to Lawrence and asking them to confirm whether or not they proposed to continue to resist the appeal, warning them that if they continued to, do so, an application for costs would be made, on the basis that defending the appeal would be unreasonable. They gave them until 4pm on 1 June to reply. There was no response by 1 June. Before 4pm on 1 June, the solicitors sent a letter to Peninsula, saying that they were ready to exchange skeleton arguments; and they proposed that exchange would take place by 4pm that day – the deadline for the provision of skeletons under the EAT’s direction would have expired on the following Monday. 

17.	On 4 June, there having been no formal response to the letter of 30 May or that of 1 June, a phone call was made by Mr Martyn West of Peninsula to Ms Ashley’s solicitors. The attendance note which they made of that phone call sets out that Mr West said that he had received the bundle that day, Monday 4 June and had not been able to do work on it and was unlikely to have anything prepared till the end of the week; and that the suggested that the bundle be lodged, and that his skeleton argument would simply set out that the Tribunal had got the decision right. In effect, Mr West was saying, “I’m not going to be able to comply with the deadline of the skeletons”, but said nothing about his attitude to the letter of 30 May, which invited Peninsula to concede the appeal. 

18.	There was then a hiatus. Mr Burrows tells me that Mr West was in a Tribunal hearing that week and that he, himslef tried to ring Ms Ashley’s solicitors but was not successful because the person in charge of the case was out.  He rang the HR manager of the Respondents and, on 11 May, got written instructions that he could make the concession that had been sought 30 May. He then wrote to the Tribunal and Ms Ashley’s solicitors, though there was some suggestion that the solicitors did not receive his letter. 

19.	Now Mr Elesinnla, in the course of his submissions on costs, put the matter in this way, leaving aside the suggestion that there was unreasonable conduct of this appeal on Peninsula’s part. He says, that there has been a failure to comply with directions in that there was a failure to cooperate over the bundle, in breach of paragraph 6 of the order made by the EAT on 12 March, and failure to comply with the order relating skeleton arguments. He further submits that the repeated failure to respond to correspondence, and the way in which the concession was delayed until 11 June were both unreasonable. Mr Burrows says that, while he apologises for the failure to respond to letters, that has not actually cause any loss; plainly there had to be time to take instructions; and those instructions were taken quickly; and there has been no unreasonable behaviour.

20.	I have to say that some of Mr Elesinnla’s criticisms go a bit further than I feel warranted; but I have come to the conclusion that there has been unreasonable conduct in this case on Peninsula’s part to a limited extent. There was also a failure to comply with directions. So far as Paragraph 6 of the order of the 8 March is concerned, the failure to deal with the request for co-operation in agreeing the bundle was a failure to comply with a clear direction, and was therefore a breach of such direction and opens the door to a discretionary costs order under Rule 34(a)(2) of the Employment Appeal Tribunal Rules. So far as the failure to comply with the direction in relation to the skeleton argument is concerned, it seems to me that, in theory, the same applies. Technically there has also been a failure to comply in that respect. So far as unreasonableness is concerned, I do not accept Mr Elesinnla’s point that on receipt of the letter of 30 May, there should have been an immediate response by way of a telephone call or otherwise from Peninsula telling Ms Ashley’s solicitors what they were going to be doing about the matter. The letter expressly gave Peninsula until 4pm on1 June to reply; and delaying the response until that exact time was not in my judgement unreasonable; nor would I have regarded it as reasonable if they had waited a few days to take instructions before replying; – it might have been both courteous and better practice to have said “we are taking instructions”, but I do not regard the failure to do so as something amounting to unreasonableness. That is on the hypothesis that the matter had a least been dealt with  properly on Peninsula’s side when they got the letter of May 30; but it was not Mr West it is accepted did not get the file until June 4. His phone call simply said that he couldn’t do anything until the end of the week; but that was not good enough; Peninsula is not limited to Mr West. It is a large organisation which is constantly representing Respondents before Tribunals and the EAT. No real explanation has been put forward as to why Mr West did not hand over the file immediately to Mr Burrows.  It is quite clear that when Mr Burrows got the file he acted as quickly as could have been expected to act, because he got it on 8 June, and, all within one day communicated with the lawyers, read Lawrence, made up his own mind that the part of the race discrimination claim which was the only part of it still live, merited a concession and sought instructions on making that concession; he also tried (as I accept) to get hold of Ms Ashley’s solicitors to tell them what was going on; and he got instructions by the eleventh, the following Monday. He acted properly once he had got the decision from the client. But all of that process was delayed by a week; and the passing of that week, in my judgement, was unreasonable.  No real explanation has been put forward for it, except that Mr West  was very busy; and that I am afraid will not do. Accordingly, the door to an application for costs, as set out in Paragraph 34(a)(1) of the EAT Rules is open, because I find that there was, in the respects, that I have set out, unreasonable conduct in the conduct of this appeal by the party against whom costs are now sought. 
21.	Nothing that I have said so far should be taken as any indication of any determination that the unreasonableness to which I have inferred has resulted in any extra costs.  So far as that is concerned, I have before me an extremely detailed schedule of costs.  I have no idea whether Mr Burrows yet has had a chance to get to grips with it.  It seemed to me when Mr Elesinnla started to go through it with me, before I realised it was going to be so detailed that it was going to be very difficult – potentially a waste of time – to go through it before I had made a decision in principle – that it was likely to take some time. In the circumstances what I’m going to do is to say to the parties that they should now discuss the schedule, and look through it with care; and it may be that this matter can be the subject of agreement. 

22.	Looking through it briskly, it would appear to be suggested that between the letter of 30 May and now, the total of £3,600 (roughly) has been incurred by way of costs. My instinct tells me that much of that inevitably must have been for preparation, which would have to have taken place in any event. There would have to have been Mr Elesinnla’s brief fee because the appeal could not be nodded through and because, I have to say, the point about part two of the race discrimination claim was something which he was going to have argue on any view. But there may have been some costs thrown away by the delay which I have identified; and if there has then of course I will have to decide whether in the exercise of my discretion I should make an order in respect of those costs. What I do not want is to spend a lot of court time going line-by-line through the schedule. If I have to, I will, but it will not please me very much, as the parties I am sure will readily understand, but I will do what I have to do.  It may be that the best course is for Mr Elesinnla to sit down with his solicitor and Mr Burrows and go through the schedule and see what can be worked out.  If nothing sensible can be worked then I will have to decide whether to hear some kind of assessment of these costs later today, or whether it should be heard by a district judge in the county court.