Appeal No. UKEAT/0510/07/LA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 8 April 2008

Before
THE HONOURABLE MR JUSTICE UNDERHILL
(SITTING ALONE)

MR D OKINEDO	APPELLANT

(1) NORTHWEST GUARDING LIMITED (DEBARRED)
(2) MR NEIL BYNOE	RESPONDENTS

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR J MEDHURST
(of Counsel)
Instructed by:
Free Representation Unit
6th Floor
289-293 High Holborn
London WC1 7HZ	
For the First Respondent	No appearance or representation by or on behalf of the First Respondent
	
For the Second Respondent	MR S FIDLER
(Solicitor)
Messrs Stephen Fidler & Co Solicitors
Thavies Inn House
3-4 Holborn Circus
London EC1N 2HB	

SUMMARY
PRACTICE AND PROCEDURE:  Amendment
Claimant brought a claim for, inter alia, racial discrimination against his employers, who were a company - When it appeared that the company was likely to be dissolved, he applied for permission to amend to include a claim against the individual alleged to have discriminated against him – That application was refused – Four months later he repeated the application on the basis that the dissolution had now occurred – The Chairman refused the application on the basis that it had already been considered – Held that he was entitled to do so:  there was no material change of circumstances, and no other exceptional reason why the claimant should be allowed to renew his application in the interests of justice.

THE HONOURABLE MR JUSTICE UNDERHILL

1.	On or about 31 January 2007 the Appellant presented a claim in the Employment Tribunal against a company called Northwest Guarding Ltd alleging that he had been employed by the company between July 2004 and 4 November 2006 and making claims under a number of heads, namely racial harassment contrary to Section 3A of the Race Relations Act 1976; direct religious discrimination contrary to the Employment Equality (Religion or Belief) Regulations 2003; religious harassment contrary to regulations 4 and 5 of those Regulations; unfair dismissal; victimisation contrary to the provisions of both the 1976 Act and the 2003 Regulations; being subjected to a detriment under the whistleblower provisions of the Employment Rights Act 1996; unlawful deduction of wages; non-payment of holiday pay under the Working Time Regulations 1998; wrongful dismissal; failure to give itemised payslips under the 1996 Act; and a failure to give a statement of employment particulars under that Act.  Grounds of complaint pleaded by his then solicitors, Duncan Lewis & Co, identified the acts complained of by way of discrimination, all of which were said to have been done by the company’s “Operations Manager, Mr Bynoe”:  it is common ground that Mr Bynoe was in fact the owner and sole director of the company.

2.	The company in its ET3 lodged on 8 March 2007 denied that the Appellant had ever been employed by it.  It attached “preliminary grounds of response” drafted by its solicitors, Stephen Fidler & Co, asserting that the Appellant had been “instructed on a self-employed basis to carry out certain graphic work on behalf of the respondent”, and claiming that, that being so, he did not “fall within the employment legislation as pleaded”.  I would note in passing that it is doubtful whether, even if the company’s contention as to the Appellant’s status was correct, it would have afforded a defence to the totality of the claims, since some of the statutes in question contain an extended definition of employee which would cover not only employees in the strict sense but persons employed under a contract personally to execute any work or labour:  however, it is in the event unnecessary for me to pursue that question.

3.	Shortly before the company lodged its ET3 Duncan Lewis & Co wrote to the Tribunal a letter dated 1 March 2007 in the following terms:
“We write on behalf of the Claimant in the above matter.  
It has come to the Claimant’s attention that the Respondent company is likely to become defunct in the near future and the Registrar has already commenced dissolution action pursuant to Section 652A of the Companies Act 1985.  
We therefore write to request for leave to amend the Claim to include the Respondent’s Operations Manager Mr Neil Bynoe as a second Respondent to the Claim.  
The Claimant has pleaded in the grounds of complaint that Mr Neil Bynoe subjected him to continuous acts of less favourable treatment on the grounds of his race and religion during his employment with the Respondent.  As the perpetrator of the acts of harassment and discrimination, it would therefore be fitting for Mr Bynoe to be included as a second respondent.”

On 2 March 2007 the Regional Secretary for the London Northwest Region - that is, colloquially, Watford - replied in the following terms:
“Thank you for your letter dated 1/3/07, which was referred to a Chairman of the Tribunal (Mr Mahoney) who has refused your request to amend a Claim stating:- 
It is not appropriate to add a new party by way of amendment when there is a jurisdictional issue as it appears to be out of time.  The claimant should lodge a fresh claim if so advised.”

4.	It has been submitted to me that the short reasoning attributed to Mr Mahoney was in fact wrong in law, but the Appellant did not appeal against the refusal of his application;  nor did he take up the suggestion that he issue fresh proceedings.  

5.	In due course the company was indeed dissolved:  that appears to have occurred on 5 June 2007.  In the meantime the Appellant had ceased to instruct Duncan Lewis & Co but had the advantage of assistance by the Free Representation Unit.  On 9 July 2007 Ms Woods of the Unit wrote to the Tribunal making what was essentially the same application as had been made by Duncan Lewis & Co on 1 March.  I need not set the letter out in full:  after reciting the procedural history she said this:
“On the 3rd July 2007 the Complainant became aware that the Respondent Company was dissolved on 5th June 2007.  A copy of the Companies Register search conducted is attached. 
Therefore the Complainant seeks leave to add Mr Bynoe, the Director of Northwest Guarding Ltd to the claim as Second Respondent.”

She then proceeded to give certain grounds for the application. 
“Grounds
5. On the facts of the application the matter for amendment was a genuine mistake, especially on consideration of the timing of events.  The Company was the correct party against whom to bring the claim at the time the claim was presented to the Tribunal.  However, since that time Mr Bynoe has dissolved the Company rendering the claim as it stands somewhat futile.  No doubt has been caused as to the party the claim is brought against.  Mr Bynoe was the Director of the Company whose own actions in the conduct of his business are the factual substance of the claim.
6. Regard should be had to the potential injustice and hardship which would be caused by refusing the application.  On putting the two alternatives in a balance it is clear that little or no hardship is caused to the Respondent by allowing the amendment, that being to either the Company or Mr Bynoe.  The amendment simply puts all the parties back to the positions that they held when the claim was presented to the Tribunal, ie before Mr Bynoe chose to dissolve the Company, Conversely, to refuse the application is to prevent Mr Okinedo from any meaningful redress against the wrongs for which he claims.  To refuse the application is to allow the dissolution of the Company to render the Tribunal impotent.  This would result in serious injustice should the Tribunal ultimately find for Mr Okinedo on any of the heads of claim; it will have been an academic exercise if this application is refused. 
7. The nature of this amendment is not such that a new factual assertion is made or a new cause of action added.  Mr Bynoe was at all times the Director of the Respondent Company and the individual with whom Mr Okinedo interacted and for whom Mr Okinedo worked.
8. No time limits would be breached by the proposed amendment.
9. As to the timing of the application the Complainant has acted promptly upon becoming aware that the Company has been dissolved.  This took place on the 5th June 2007 and the Complainant became aware on the 3rd July 2007 and straight away took steps to present this application.
10. Adding Mr Bynoe as a second Respondent would enable the Tribunal to deal with the proceedings efficiently and fairly.  The parties would be brought into a fair position where effect can be given to the Tribunal’s ultimate decision on the claims rather than one where the Complainant effectively has no remedy even were the claim successful.	
11. This application is made in accordance with Rule 11 and has been sent to the Respondent together with a letter explaining:
i) notification that objections must be sent to the Tribunal Office within 7 days of receiving the application, or before the date of the hearing, and
ii) that any objection must be copied to both the Employment Tribunal Office and all other parties,
in compliance with Rule 11(4) Employment Tribunal Rules 2004.”
6.	The Regional Secretary replied to that application on 18 July as follows:
“Thank you for your letter dated 9/7/07, which was referred to a Chairman of the Tribunal (Mr Bedeau) who has directed as follows:- 
Application is refused.  The Chairman already ruled on the point on 2/3/07.”

7.	This is an appeal against that order.  It is common ground that the effect of allowing the appeal, and of any consequent decision joining Mr Bynoe as Second Respondent, would not be to allow the pursuit of the entirety of the Appellant’s pleaded claims.  For example, the claims of unfair dismissal and for unlawful deductions (the latter being in fact very substantial, being quantified at over £56,000) could be pursued only against the company as the Appellant’s employer (if it was held so to be).  The only claims which could be pursued against Mr Bynoe would be the claims of unlawful discrimination.

8.	The Appellant’s original Notice of Appeal was the subject of an order under rule 3(7) of the Employment Appeal Tribunal Rules 1993, but a fresh Notice of Appeal was lodged, on the basis of which the matter was permitted to proceed to a full hearing.  Mr Bynoe has been joined as a party to the appeal and the company, being dissolved, has been debarred from participation.  

9.	The Appellant has been represented before me by Mr Medhurst of counsel, instructed through the Free Representation Unit, and Mr Fidler of Stephen Fidler & Co has appeared for Mr Bynoe.

10.	The only reason given for the order under appeal is that the application in question is one which had already been considered and refused.  The first question for me therefore (and, as it transpires, the decisive question) is whether that reason was bad in law.  Mr Medhurst submits that it was.  He accepts that the general position is that a party should not be entitled to revisit a case management order which has already been decided against him.  But he submits that that rule does not apply where there has been a material change in the circumstances justifying a reconsideration.  He has referred me to the decision of this Tribunal in Goldman Sachs Services Ltd v Montali [2002] ICR 1251 where that was held to be the position (albeit that on the facts of that particular case it was held that there had been no sufficient change in the circumstances).  He has also referred me to the well‑known decision of the Court of Appeal in Woodhouse v Consgnia plc [2002] EWCA Civ 275:  that of course was not a case concerning the jurisdiction of the Employment Tribunals but Mr Medhurst wished (perfectly legitimately) to draw a parallel with the position under the Tribunal Rules and under the Civil Procedure Rules and to demonstrate that the equivalent rules applying in the High Court allowed for a substantial degree of flexibility having regard to the interests of justice and the overriding objective.  Mr Medhurst submits that there had in the present case been a material change in circumstances, namely that by the time of the second application the company was not simply known to be in trouble but had in fact been dissolved:  thus the joinder of Mr Bynoe was not simply desirable but necessary if the Appellant was going to be able to maintain any part of his claim.   

11.	I am afraid I cannot accept that that was a sufficient change of circumstance to justify a re-application and certainly not that the Chairman was obliged to treat it as such.  The application in February had been made on the express basis that dissolution proceedings had already been commenced.  The fact that those proceedings had by July been concluded does not seem to me to make any substantive change to the position.

12.	I am inclined to accept that the Chairman’s discretion was not narrowly confined to a consideration only of whether there had been a material change in circumstances.  It might have been open to him to allow a renewal of the original application if there had been some other exceptional circumstances such that it was necessary, in the interests of justice, to allow the Appellant to have a second bite of the cherry notwithstanding the considerable weight that has to be attached to the general rule.  But in my judgment there was nothing in the application as made to him which compelled him to take that view.  The only point made in the letter of 9 July - this is in no sense a criticism of the Unit, since I am not sure what else there was they could have said - was that it would be a great hardship to the Appellant not to be able to pursue his claim, or at least that part of it which could be maintained against Mr Bynoe as an individual, whereas there would be no real hardship to Mr Bynoe because he was “in the frame” in any event.  That does not in fact seem right since there is a crucial difference from Mr Bynoe’s point of view from being a witness (albeit a central one and one against whom serious allegations were made) and being a party against whom formal findings might be made and who would be potentially liable for compensation.  But in any event those considerations are present in every case where a procedural rule falls to be enforced in a way which prevents a party pursuing his or her case at all or in the manner in which he or she wishes.  If it were a sufficient reason such rules would be deprived of all force.  In the present case the Appellant had the chance to seek to preserve his position in March, either by appealing against the initial refusal of his application for permission to amend or by accepting the suggestion of the Chairman that he should issue fresh proceedings against Mr Bynoe.  He did not do so.  I can see no exceptional injustice in his being held to the consequences of the decisions which he (I daresay on advice) took at that time.

13.	Mr Medhurst sought to place some reliance on the provisions of Article 15 of Council Directive 2000/43/EC which now underpins the statutory regime against racial discrimination.  He submits that the result of the Chairman’s ruling would be to prevent the Appellant having an effective sanction for the discrimination which he says that he suffered.  I do not accept that that is the case.  The provisions of the law allowing him three months to bring proceedings against the company, and against Mr Bynoe as an individual, represent an effective sanction; and those rules are in any event not inflexible, having regard to the jurisdiction to give permission to amend, or indeed to allow fresh proceedings, outside the time limit where it is just and equitable to do so.  The reason for the Appellant’s difficulties is that he did not invoke those rights, as against Mr Bynoe, in good time and that he did not pursue the matter following the refusal of leave to amend in March.

14.	I should briefly deal with two other matters arising out of the Unit’s letter of 9 July 2007.  

15.	In the first place the letter claims at paragraph 5 that:
“… the matter for amendment was a genuine mistake ... .”

That, with respect, is not quite right.  The original decision not to join Mr Bynoe was not a mistake but a conscious decision.  It is not a decision which I would wish to criticise, for reasons which Mr Medhurst urged on me and which I accept:  it may be positively desirable that claimants who bring a discrimination claim against their employer do not join every alleged individual discriminator as a party.  Nevertheless the decision was one which the Appellant or his advisers took.  Likewise, it was their decision not to appeal against the initial refusal of permission to amend or to issue fresh proceedings as invited.

16.	Secondly, the letter says at paragraph 8:
“No time limits would be breached by the proposed amendment.”

That is true in the literal sense that there is no time limit in the rules for making an application for leave to amend.  But on any application to add a previously unpleaded issue, or to join a party, after the expiry of the primary time limits questions of whether it would be appropriate to extend time always fall to be considered:  see per Mummery J in Selkent Bus Co Ltd v Moore [1995] ICR 836, at pages 833 to 844, and the more recent decisions of myself and Elias P in Transport and General Workers Union v Safeway [2007] UKEAT/009/LA and Mouteng v Select Services Partner Limited UKEAT/0059/08.  I do not express a view about whether, if the Chairman had thought it right to entertain the application for permission to join Mr Bynoe, the fact that the claim was made out of time would have been decisive against joinder.  I only say that it is not clear that it would not have been.

17.	In the result I can see no error of law in the Chairman’s decision and I must accordingly dismiss this appeal.