APPEARANCES
| For the Appellant |
MR T WILLS
(Representative)
Aston Seals Ltd
P O Box 269
Cortonwood Drive
Barnsley
S73 0YP |
| For the Respondent |
MR D MATE
(The Respondent in Person) |
SUMMARY
Contract of Employment - Notice and pay in lieu
Practice and Procedure - Perversity
Appeal against the judgment of an Employment Tribunal Chairman sitting alone rejected on the basis that there was adequate factual material to enable the Chairman to reach his conclusions. Neither was the judgment perverse. Cross appeal dismissed on the same grounds.
HIS HONOUR JUDGE BIRTLES
Introduction
- This is an appeal by Ashton Seals Ltd against the judgment and reasons of a Chairman sitting alone in Sheffield on 20 March 2007. The Chairman was Mr G R Little. The Employment Tribunal decided first, that the Claimant's claim in relation to bonus payments failed. Second, that the claim in relation to notice pay succeeded and the Claimant was awarded damages in the sum of £447.69. Third, that the Claimant's claim in respect of holiday pay also succeeded and the Respondent was ordered to pay the amount of £932.02. Fourth that the counterclaim failed. There is also a cross-appeal by Mr Mate.
- Today the Appellant has been represented by Mr Tim Wills, the Managing Director of the Appellant company, and Mr David Mate has represented himself.
- Mr Mate made an application at the beginning of the hearing of the appeal to admit further evidence in the form of two unsigned witness statements. For the reasons given in an earlier short judgment I refused that application.
History
- The history of this appeal is set out in the judgment and reasons of the Chairman paragraphs 5.1 – 5.24. They are incorporated into this judgment. Mr Mate brought a claim against the Respondent in the Employment Tribunal: the ET1 is at EAT bundle pages 27 - 34. The company brought a counterclaim: the ET3 is at EAT bundle pages 35 - 40.
Employment Tribunal judgment and reasons
- The reserved judgment and reasons is at the EAT bundle pages 1 - 14. The structure of the judgment is in conventional form. The reasons begin by listing first, the complaints, paragraph 1, and second, the counterclaim, paragraph 2. Paragraph 3 sets out the issues, which as the Chairman records, were discussed with the parties at the commencement of the case and were agreed. Paragraph 4 records the evidence. The Chairman heard evidence from the Claimant himself. His other witnesses were Mr P H Minchin, the former Managing Director of the Appellant company, and Mr A K McVann, formerly the Quality Assurance Manager of the Appellant company. The Appellant's evidence was given by Mr Wills and a Mr J Thornton, the Respondent's General Manager. Paragraphs 5.1 through to 5.24 record the Chairman's findings of fact based on that evidence and the documentation in front of him. Paragraph 6 records the parties' submissions. Paragraph 7 records the relevant law, and paragraph 8.1 through to 8.8 set out the Chairman's conclusions.
- The conclusions are incorporated into this judgment but for clarity I record the headings. Paragraph 8.1 asks in respect of the contractual bonus, was there a contract? The Chairman's conclusion was that the Claimant was not entitled to a contractual bonus. Paragraph 8.5 deals with what is called the "guaranteed bonus, and the Chairman finds that the Claimant was not entitled to any further bonus, be it guaranteed, warehouse or Christmas. Paragraph 8.6 deals with notice entitlement, and the Chairman concludes in paragraph 8.7 that the notice period offered by Mr Mate to the Respondent was one week whereas his contractual notice period was three weeks. Paragraph 8.8 deals with the duty to mitigate and the fact that the Claimant had obtained fresh employment within one week of the termination of his employment. The second paragraph 8.8 deals with holiday pay.
Appeals to the Employment Appeal Tribunal generally
- In view of the fact that both parties have been represented by non-lawyers I think it is necessary for me to say something about appeals to the Employment Appeal Tribunal. An appeal from an Employment Tribunal lies on only on a question of law: see the Employment Tribunals Act 1996 s21(1). Accordingly the Employment Appeal Tribunal has no power to interfere with the Employment Tribunal's decision unless it can be shown (a) that the Tribunal misdirected itself in law or misunderstood the law or misapplied the law or (b) that there was no evidence to support a particular conclusion or finding of fact or (c) that the decision was either perverse in the sense it was one which no reasonable Tribunal directing itself properly on the law could have reached or alternatively one which was obviously wrong: see Harvey on Industrial Relations and Employment Law Vol. 5 paragraph 1630. As is well known an Employment Tribunal is the sole arbitrator of fact and no question of law can arise out of its conclusion on the facts other than on grounds (b) and (c) which I set out above. It follows of course that the Tribunal decides the issues of credibility of witnesses. The Employment Appeal Tribunal is not here to hear arguments on facts reargued as they were before the Employment Tribunal.
The Notice of Appeal
- This is set out at EAT bundle pages 15-19 and has been supplemented by Mr Wills' skeleton argument and his oral submissions. In my judgment the Notice of Appeal is an attempt to reargue the same issues that were before the Employment Tribunal and the inference drawn by the Chairman from the evidence that he heard.
- There are two parts to the Notice of Appeal. The first relates to the notice period. The Employment Tribunal dealt with this first in its fact finding at paragraphs 5.19 – 5.20 and second it its conclusions at paragraphs 8.6, 8.7 and 8.8.
- In his oral submissions Mr Wills focussed on two parts of the judgment of the Chairman. The first is in paragraph 8.6 which Mr Wills criticises in saying that, either on the evidence or perversely, it was an error of law for the Chairman to have found that at the second meeting on 30 June 2006 Mr Mate offered and accepted a one week's notice.
- The situation here is this. On the morning of 30 June 2006 Mr Mate and Mr Wills met twice. The first meeting was at approximately 08.30 am; the second meeting started at approximately 09.50 am. There were before the Chairman and are before me, in a supplementary bundle, the notes taken by a Ms Jane Birley of both of those meetings. The first meeting began with Mr Mate handing Mr Wills a letter and stating that he was leaving the company and that in his view he was constructively dismissed. A claim for constructive dismissal was dismissed by an earlier Chairman because Mr Mate did not have the necessary twelve months continuous employment to enable him to bring a claim for constructive unfair dismissal. The note of the meeting at supplementary bundle page 115 records that Mr Mate made a number of complaints which were in effect justifying his leaving. He said that he wanted to leave "as friends" and would tear up the letter claiming constructive dismissal if he were paid his bonus. Mr Wills asked him to wait in his office for five minutes and he would then be called back for a calm discussion on the bonus. The meeting then ended. The Chairman found that in fact that Mr Mate had left the premises but was called back by a telephone call from Mr Wills. The second meeting began, as I have said, at approximately 09.50 am: the notes are at supplementary bundle pages 116-118. There was considerable discussion. The critical passage which the Chairman thought was relevant is at page 117 towards the bottom of the page where Miss Birley has recorded the following:
"DM said that he felt the situation was untenable and although it was bad timing as Karl Thomas was on holiday, he felt he needed to leave that day. He then said he would work a week's notice with 100% effort.
TAW said he liked and trusted DM and would like a written report of where DM was with anything business critical. He would prefer a clean break but would like to review what stage things are at before deciding.
DM said that he would write a list of issues. He said that he would come in if required to support production, as they were short staffed.
TAW praised DM for getting a lot out of the workforce and instilling a "can do" attitude.
TAW said that he would put his opinion on the bonus in writing, and DM would be invited to come in to discuss it if he disagreed.
DM said that he would go and tell the workforce that he was parting on good terms."
- In my judgment it was open to the Chairman, having heard both Mr Wills and Mr Mate and having read those minutes, to find as a fact that the second meeting was effectively a continuation of the first meeting and that Mr Mate offered to work one week's notice and that offer was accepted by Mr Wills.
- The second matter relied on by Mr Wills is further on in paragraph 8.6 of the reasons. The passage Mr Wills complains of says this:
"It is significant that whilst Mr Wills initially wrote two lengthy letters to the Claimant in that period, they contain no reference to the Claimant having left without notice or at least no reference to the consequences of that and it is only in Mr Wills' letter of 2 August 2006, when the negotiations were on the brink of breaking down, that Mr Wills raises the matter of the impact of the Claimant's departure and indicates an intention "to sue you for our financial loss unless we reach agreement on my offer".
The Chairman goes on "It is clear therefore that this aspect of the matter which now forms the counterclaim was in effect raised as a bargaining tool."
- The letters the Chairman refers to are, as he records them earlier in his judgment, without prejudice letters. The first is dated 11 July 2006: supplementary bundle pages 88-91. The second is dated 2 August 2006: supplementary bundle pages 100-103. Attached to it at page 104 is a without prejudice offer which Mr Wills relies on because it says categorically "You are not entitled to notice as you walked out". Then at page 105 is a settlement letter whereby Mr Wills was to accept the sum of £50 in full and final settlement of all claims arising against the Appellant.
- In my judgment a careful reading of those letters entitles the Chairman to make the finding of fact in the passage that I have referred to. I do not think a single bald line in the summation of the case immediately prior to the settlement letter carries the construction or indeed weight that Mr Wills wishes to put upon it. Looking at the judgment overall, which in my view is extremely well constructed and argued, I can see no error of law.
- The second matter which I can take more shortly relates to holiday pay. The Chairman deals with this in paragraph 8.8 of his reasons. Mr Wills does not challenge the argument put forward there by the Chairman but challenges his conclusion because it is based upon the fact that the Appellant would have had a defence to a claim for holiday pay if the Tribunal found that Mr Mate left without giving due notice. As the Tribunal found that Mr Mate did not leave without giving due notice, then accordingly he was entitled to be paid his holiday pay. That point stands or falls with the first point in relation to notice, and, again, I find no error of law for the same reasons.
- Finally I deal with perversity. The legal tests for perversity is set out in the well-known case of Yeboah v Crofton [2002] IRLR 634 at paragraphs 92-95 in the judgment of Lord Justice Mummery. The hurdle set by Lord Justice Mummery and the Court of Appeal is a very high one. In my judgment there is nothing in Mr Wills' arguments which begin to reach the barrier set for him by that case. There is simply no perversity in this case.
- I turn then to the cross-appeal. It is important to realise that the cross-appeal is a very limited one. The terms of it are set out in the letter from the Employment Appeal Tribunal to Mr Wills at EAT bundle pages 51-52 and more particularly in the order made by His Honour Judge Burke Q C sitting in Chambers when allowing part of the cross-appeal to go forward to a full hearing: EAT bundle pages 49-50. Paragraph 1 of the order says this:
"This cross-appeal be set down for a full hearing on one ground only, namely whether on the basis of the term of the written contract of employment or terms and conditions of employment referred to in paragraph 5.3 of the Employment Tribunal judgment there was an obligation on the Appellant to pay to the Respondent a minimum of 10% of earnings monthly by way of bonus until 3 months from December 2005."
- Paragraph 5.3 of the reasons of the Chairman says this:
"That letter [the letter of offer of employment] enclosed a contract of employment which the Claimant duly signed. A copy of that contract, described as "Terms and Conditions of Employment", appears between pages 14 and 21 in the bundle. The employer is defined as Ashton Seals Limited. Clause 8(a) of that contract provided as follows
Remuneration
The Employees BASIC RATE of pay is £32,000 per annum plus a bonus scheme with target earnings of 10% - 15% of basic, and this will be paid to the employee, monthly generally on the last Friday in the month commencing after the end of the employee's first month".
The Chairman made findings of fact about the bonus scheme in paragraphs 5.1 – 5.17 of his reasons. His conclusions, as I have indicated, are set out at paragraphs 8.1 – 8.5.
- Despite Mr Mate's arguments I have come to the clear conclusion that the Tribunal Chairman was entitled to find on the facts that he heard that the bonus scheme beyond the description in the contract of employment did not exist. It did not exist in the sense that the detail of it was simply never worked out. The Managing Director, Mr Minchin, who was in post at the time himself left the company within a matter of weeks and there is nothing in the evidence recorded by the Chairman that shows what the bonus was to be based on or how it was to be calculated. The whole thing simply fell into the sand. There is not the detail necessary to enable the Chairman to make a finding that there was anything written down or indeed orally agreed on which the bonus scheme could be based. No targets were ever set; nothing was ever worked out, not least, I suspect, because the company fell into serious financial difficulties.
- At the end of the day I have to stand back and look at the evidence presented to the Chairman and decide whether he has made an error of law in the narrow terms in which I have described it in reaching his conclusions. I can see nothing wrong with the way in which the Chairman approached this issue. He heard the evidence; he heard the witnesses: the conclusion he drew was one which he was entitled to draw. A different Tribunal might well have reached a different conclusion, but that does not amount to an error of law. Finally, I should add that I can see nothing in the Chairman's reasoning which could possibly be described as perverse in the sense described to it in Yeboah v Crofton. For those reasons both the appeal and the cross-appeal are dismissed.
