Appeal No. UKEAT/0532/07/LA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 4 December 2007

Before
THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)
(sitting alone)

ALSTOM TRANSPORT	APPELLANT

MR A G TILSON	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MS IJEOMA OMAMBALA
(of Counsel)
Instructed by:
Messrs Zatman & Co
Solicitors
1 The Cottages
Deva Centre
Trinity Way
MANCHESTER
M3 7BE

For the Respondent	MR MARK SAHU
(of Counsel)
Instructed by:
Messrs Darlingtons
Solicitors
48 High Street
EDGWARE
Middlesex
HA8 7EQ	

SUMMARY

Practice and Procedure – Bias, misconduct and procedural irregularity

The Employment Tribunal refused an application by the respondent employer to join two other respondents.  This was made at the beginning of a pre-hearing review at which the issue to be determined was whether the claimant was employed under a contract of employment with the respondent.  That hearing was not completed on that day and was adjourned to a later date.  In the course of giving its reasons on joinder, a decision given prior to the pre-hearing review being resumed, the Tribunal made reference to certain aspects of the evidence which had not been relied upon by either party in the course of argument, and expressed conclusions which were highly relevant to the issue to be determined in the pre-hearing review.  The respondent alleged that the Tribunal had erred in law both in its approach to the joinder issue, and because it had effectively pre-judged the issue to be determined at the pre-hearing review, or at the very least had given the impression that it had done so.  The EAT upheld both grounds of appeal.

  

THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

1.	This is an appeal against the decision of the Employment Tribunal which refused to join two further parties to the proceedings.  As a consequence of that decision, there is a further ground of appeal in which it is alleged that the Chairman cannot now continue to hear a pre-hearing review because in the course of giving his reasons for rejecting the joinder application, he has expressed very firm views on the issue before him in that review without having heard all the evidence.  I shall refer to the appellant as the respondent, as it was below.

Background.
2.	 By a Claim Form dated 5 February 2007  Mr. Tilson sought to bring claims of unfair and wrongful dismissal against the appellant. He also alleged a failure to comply with statutory grievance and disciplinary procedures.

3.	By its response to that Claim Form dated 6 March 2007 the appellant denied that Mr. Tilson was or had at any material time been employed by it. The appellant asserted that Mr. Tilson had been engaged as an independent contractor who provided services through a limited company known as Silversun Solutions Limited which in turn had entered into a formal contract with Morson Human Resources, an employment business, to provide his services.  In short, it was one of these cases where the issue was whether there was a contract with an end user or not.

4.	By a Notice of Hearing dated 14 March 2007 a chairman of the Employment Tribunal directed that there should be a pre-hearing review in this case on 22 June 2007. He identified the specific preliminary issue to be considered at the hearing as:

“To decide whether the Claimant was an employee of the Respondent and if not to decide whether to dismiss the unfair dismissal claim for want of jurisdiction.”

5.	On 22 June 2007, prior to the commencement of the Pre-Hearing Review, the appellant’s representative made an application for the joinder of Morson Human Resources Limited and Silversun Solutions Limited as Respondents to Mr. Tilson’s claim pursuant to rule 10(2)(k) of the Employment Tribunal Rules of Procedure 2004.

6.	The parties agreed that the application would be dealt with on the basis of documentation before the tribunal together with oral submissions from the parties’ representatives.   No oral evidence was adduced.

7.	The respondent’s representative referred the Chairman to the case of Astbury v Gist / Ltd (UKEAT/0446/04/LA) in the course of his submissions. No other authorities were referred to. He drew the chairman’s attention to certain passages in the judgment of HHJ Richardson, giving judgment for the EAT.

8.	At paragraph 15 HHJ Richardson observed that a recurrent problem in cases concerning triangular relationships was: 
“that cases have been heard, and decisions taken, in circumstances which did not bind one of the three parties, and often where there was no evidence or argument from one of the three parties.”

9.	At paragraph 16 the judge said this:
“When the legal consequences of these triangular relationships have to be determined, it is, in our judgment, highly desirable that all three parties should be involved. There are usually means by which this can be achieved. If the worker knows that there will be an issue as to the legal position of the different sides of the triangle, it may be appropriate for him to claim against both in the alternative. It will generally be reasonable for him to do so.    Moreover, we draw attention to the Tribunal’s power under rule 10(2)(k) of the Employment Tribunal Rules of Procedure (Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations) 2004).  The tribunal may order that any person who the chairman or tribunal considers may be liable for the remedy claimed should be made a respondent in the proceedings. The power to add a respondent has always been available as part of the tribunal’s general powers to regulate their own procedure: see Cocking v Sandhurst (Stationers) Ltd [1974] ICR 650.

10.	The Chairman refused the appellant’s application for joinder. He did not at that stage give detailed oral reasons for his decision, although he did apparently express briefly his reason and, in particular, indicated that in his view Astbury could be distinguished on its facts from this case.  There has, however, been no agreement between the parties as to precisely what was said by the judge at that stage.

11.	The Employment Tribunal then commenced the pre-hearing review and heard oral evidence from the claimant. There was insufficient time to conclude the pre-hearing review.  A number of appellant witnesses remained to be heard, and accordingly the Tribunal adjourned the hearing to be resumed on 5 November 2007.

12.	Prior to that resumed hearing, the Chairman gave his reasons for refusing the joinder application.  He noted in paragraph 1 of the decision that he had heard evidence and submissions on the question.  It is common ground that this was mistaken and that in fact he did not hear evidence, and nor was any reference made in argument to the witness statements before him.  

13.	The Chairman recounted what the parties had stated in their witness statements and concluded that there was no basis for adding either party.  In essence his conclusion was that neither of the respondents sought to be joined had any mutuality of obligations with the claimant and that Silversun Solutions only existed as the mechanism through which the wages were paid.   The Tribunal said this: 
“The reality of the situation in this case is that on the evidence before me the agency known as Morson did not have any mutuality of control or obligations with regard to the Claimant who obtained his work with the end user, the Respondent Alstom without their invervention or involvement. The other factors are the promotion of the claimant, the letter notifying other employees of the termination of his work with the Company and the delegated power to sign timesheets and authorise expenditure as well as the lack of any control over his work or appointment exercised by either Company. The company Silversun Solutions Limited only existed as the mechanism through which the claimant was paid and had no control over the work of the claimant. Morsons had a contract with Silversun Solutions  Limited however the claimant was not a party to that contract as he was unaware of its existence and had not signed it.”

14.	The Chairman then summarised his conclusion as follows: 
“I find that there was the claimant was under the direction and control of the end user, the Respondent with neither Morsons Human Resources Limited nor Silversun Solutions Limited having any discernible role in the mutuality of obligations and control over the claimant. I therefore on the facts before me do not find that there is any merit in the Respondents claims to add the two named Companies as further Respondents to these proceedings.”

The grounds of appeal.
15.	There are essentially two quite distinct grounds.  The first is that the Employment Tribunal has misapplied the law and/or misdirected itself in deciding to reject the appellant’s application to join further respondents.  It has exercised its discretion upon wrong principles in that, in reaching his decision, the Chairman has taken into account matters which it was not proper to take into account, namely evidence going to the issue whether the respondent was the employer as a matter of law, and which departed fundamentally from the basis on which the argument had been advanced before the Chairman.

16.	The second ground is this.  It is said that having regard to its extended reasons, the employment tribunal has conducted itself in such a way that a fair minded and informed observer would conclude that there is a real possibility that the Tribunal has pre-determined the outcome of the  pre-hearing review.  Certain conclusions had been reached as to the issues of mutuality of obligation, the role of Silversun and the finding that the claimant was under the direction and control of the respondent which came close to dictating, if they did not actually determine, the outcome of the pre-hearing  review against the respondent. 

17.	As to the first ground, the appellant submits that the employment tribunal erred in law in considering the content of witness statements and of oral evidence for the purposes of determining the appellant’s application for joinder of additional respondents, given that it was agreed that the application would be dealt with on the basis of a perusal of an agreed bundle of documents and oral submissions from representatives. 

18.	The Chairman further erred and acted unfairly in failing to advise the parties that he had determined to deal with the application for joinder in a different way. It is essential for the just handling of proceedings that the parties and their advisors should know the rules which are to be applied during the course of the hearing.

19.	Whilst the Employment Tribunal has wide powers to conduct hearings in such a manner as the Chairman thinks most appropriate for the clarification of the issues and for the just handling of proceedings, it is submitted that those powers do not extend to altering the basis upon which an application is to be determined without notice to the parties. 

20.	In giving its conclusion on the question of joinder, the Chairman had in fact virtually determined the very issue identified for the pre-hearing review, but without having heard all the evidence material to it.  Ms Omambala, counsel for the appellant, submitted that a fair-minded and informed observer would necessarily take the view that the Chairman had pre-determined the outcome of the adjourned pre-hearing review.

21.	Mr Sahu, counsel for the claimant (the respondent before me) accepts that the agreement between the parties was that the question of joinder would be determined by a consideration of certain documents referred to in the agreed bundle, but not including any witness statements or witness evidence.  He also realistically accepts that there are certain unsatisfactory features of the decision which he suggests were simply in the nature of unfortunate administrative and typographical errors.  He reminds me that there is a wide discretion given to chairman in the case management process: see e.g. Noorani v Merseyside TEC [1999] IRLR 184, and that the oral reasons given by the chairman at the time justified his decision.  That decision was reached on the basis of the matters which he could legitimately take into account.  

Conclusion. 
22.	In my judgment this appeal must succeed.  Even if the chairman gave oral reasons at the time which would have justified his decision on joinder, it seems to me that I must assume that his written reasons properly reflect his thinking.  I have no doubt that it was in principle open to him to reject the application for joinder.  Indeed, since no claims were made against the other respondents, careful consideration should be given before they are required to incur the cost of appearing in the proceedings.  But I cannot accept that the decision was properly made, as the oral reasons might have demonstrated, when the formal reasons tell another and quite different story.  That decision was based on considerations not advanced by either party and which they had had no opportunity to address.

23.	I also uphold the second ground of appeal.  The chairman has made very clear findings with respect to the very matter in respect of which the pre-hearing review had been called but in circumstances where the respondents had still not presented all their evidence. That cannot be consistent with a fair trial.  Even if the chairman did seek to reconsider matters afresh following the resumed hearing, and in the light of all the evidence, there is inevitably an appearance of bias where he has reached such an unequivocal view half way through the hearing.   There is nothing provisional about these findings.  In the circumstances I consider that there are close  similarities with the decision in North Glamorgan NHS Trust v Ezsias [2007] IRLR 603 where the Court of Appeal held that the decision of a chairman at a pre-hearing review was vitiated after she had expressed a view in unambiguous terms, before the hearing had taken place, that a claim was without merit without indicating that this was simply a provisional view. 

24.	It follows that the appeal succeeds and the case will have to be remitted to a fresh tribunal to consider both the joinder application – if the respondent still wishes to pursue it - and the question whether Mr Tilson was an employee of the respondent.