APPEARANCES
| For the Appellant |
Mr John Horan
(of Counsel)
(ELAAS) until discharged by the Appellant
Mr E M John
(The Appellant in Person) |
| For the Respondent |
Written submissions relating to the Employment Tribunal review. |
SUMMARY
Practice and Procedure – Appellate jurisdiction/Reasons/Burns-Barke
Statutory Discipline and Grievance Procedures: Impact on compensation
Jurisdictional Points: 2002 Act and pre-action requirements
Rule 3 Adjourned part heard restored on the papers after Burns/Barke referral to Employment Tribunal. Other aspects of the appeal stand no reasonable prospect of success. On the adjourned consideration two matters referred to the Employment Tribunal will be sent to a full hearing: uplift of compensation under Employment Act 2002 s31 and automatic compensation under s38. Observations on the nature of a review under Employment Tribunals Rule 35
HIS HONOUR JUDGE McMULLEN QC
- This case is about a number of employment rights short of unfair dismissal as to which there is a finding in the Claimant's favour on which there is no appeal. I will refer to the parties as the Claimant and the Respondent. This consolidated Judgment includes reasons given at the hearing and on adjourned part-heard consideration on the papers, so as to assist the parties and the EAT at the full hearing which I order. The delay in the adjourned Judgment has been explained to the parties, and is largely due to the additional procedural steps taken
Introduction
- It is an appeal by the Claimant in those proceedings against a Judgment of an Employment Tribunal sitting over four days plus a day in chambers at Watford, Employment Judge Mr S Bedeau, registered with reasons on 13 June 2006. The Claimant represented himself and the Respondent was represented by Counsel. The Claimant made a substantial number of claims. The Respondent denied the claims. The essential issues, as live on appeal, others having being dismissed during the course of earlier case management, were these.
"(1) Whether there was a fundamental breach of the Claimant's contract that entitled him to resign and claim destructive dismissal?
(2) Whether there was a failure on the part of the Respondents to provide the Claimant with a written statement of his employment particulars contrary to Section 1, Employment Rights Act 1996?
(3) Whether there was a failure to provide itemised pay statements contrary to Section 8, Employment Rights Act 1996?
(4) Whether there had been an unauthorised deduction from the Claimant's wages in that he believed he should have received £330 after tax instead of £280.00?
(5) Whether there had been a failure by the Respondents to pay the Claimant 4 week's annual leave each year in accordance with the Working Time Regulations 1998?
(6) Whether the Claimant was treated less favourably on the grounds of his Christian religion compared with his colleagues who were of the Hindu religion? The Claimant relied on incidents in October or November 2004 alleging that he was accused of hiding a file containing petrol delivery forms; the Respondents denying to credit companies, on two occasions, that he worked for them; and, finally, on 20 February 2005, accusing the Claimant of dishonesty.
(7) If the Claimant succeeds in any of the above issues, what is the appropriate remedy?"
- The Tribunal came to the conclusion in relation to jurisdiction issues in the following terms:-
"5. i. the Claimant's claim in respect of night time working, the Tribunal had no jurisdiction to hear and determine it having regard to Regulation 30, Working Time Regulations 1998, as amended;
ii. in respect of Regulation 4, WTR, namely, maximum weekly hours, there was also no jurisdiction again having regard to Regulation 30;
iii. in relation to his religious discrimination claim, we set out the law later in this judgment, having concluded that he had not complied with the grievance provisions in Section 32, Employment Act 2002 and The Employment Act 2002 (Dispute Resolution) Regulations 2004, therefore, the Tribunal did not have jurisdiction; and
- The Tribunal summarised its task as follows:-
"6. The Tribunal, therefore, as part of the Full Merits Hearing, had to consider the Claimant's constructive dismissal claim; the alleged failure on the part of the Respondents to provide him with a written statement of employment particulars; the failure to provide him with itemised pay statements; and unauthorised deduction from wages."
It found in favour of the Claimant on his constructive unfair dismissal claim and awarded him the sum of £5,620 in compensation which includes a basic award. The sum has been paid to him and there is no appeal.
- The Claimant appeals against parts of the Judgment. The Tribunal decided to reject claims relating to the Working Time Regulations, religious discrimination, unauthorised deductions and a failure to give any compensation for breach of section 1 of the Employment Rights Act 1996. The Tribunal upheld the Claimant's case that there was a breach of section 8 in respect of itemised pay statements. On the sift of this Notice of Appeal in accordance with Practice Direction paragraph 9, I exercised my power under rule 3(7) and concluded that the case disclosed no reasonable grounds. Where no point of law is found, section 21 of the Employment Tribunals Act 1996 deprives the EAT of jurisdiction to hear the case.
- The Claimant was given the opportunity to amend the Notice of Appeal or to have the case heard before a Judge under rules 3(8) or (10). He has done both. Further case management directions were also given by Burton J. I am thus hearing the case on more material than was available to me before and I form my own view as to whether or not there are any reasonable grounds in the appeal. The Notice of Appeal was originally drafted by Counsel. It was then revised by the Claimant himself and an application has been made for admission of what is said to be a revised amended Notice of Appeal. The grounds are set out. I would propose to allow the amended grounds of appeal to be adduced subject to liberty to apply being given to the Respondent and therefore I will operate on the basis that this document is the one to be decided. Within this document itself is also an application to adduce new material, to which I will come.
- The Tribunal directed itself by reference to the relevant provisions of the statutes except for section 31, Employment Act 2002.
The facts
- The Tribunal found that the Claimant had been employed continuously from 2000 to 20 February 2005 at the Respondent's business, as to which it said this:-
"8.1 The parties are agreed that the Claimant commenced employment with the Respondents in February 1990 as a cashier. The Respondents' business is in two parts: the Grand Prix Service Station; and adjacent to it, Edmonton Exhaust. The premises are on Church Street, Edmonton, North London. The Claimant was first taken on as a cashier by the previous manager, Mr Vinod Patel.
8.3 The Claimant worked nights on 10 hour shifts from 10pm to 8am on Monday, Wednesday, Thursday, Friday, Saturday and Sunday. His immediate line manager was Mr Mohan Patel. Mr Patel was a partner in the business with Dilip Patel. Mohan Patel ceased to be a partner in March 2005. Dilip Patel managed the exhaust side of the business.
8.4 The Claimant was not provided with a written contract of employment or statement of main terms and conditions of his employment. In addition, save for the occasion when he requested it, he was not provided with itemised pay statements.
8.5 It was agreed between Mr Mohan Patel, on or around 6 April 2001, that he, the Claimant, would be paid the sum of £280 net for working 60 hours per week.
8.6 On or around the 12 June 2003, the Claimant was paid by cheque the sum of £1,320. We accept the Respondent's account that that sum was in respect of the Claimant's holiday pay for the year 2003 to 2004. The Claimant acknowledged, in evidence, that this was holiday pay. (Respondents' bundle pages 150 to 151).
8.7 Upon payment of the sum the Claimant went to India for 6 weeks. His entitlement was 4 weeks but he had carried over 2 weeks from the previous year.
8.8 From the 1 to 28 December 2004, he again went on holiday to India. He stated that he had not been paid any holiday pay covering that period. The holiday year being 1 October to end of September.
8.9 The Respondents stated that he had been paid £880 but could not provide any documentary evidence in support. Mr Mohan Patel stated that he believed that the payment was in cash. The Claimant is an intelligent man. He was provided with itemised pay statements covering the period from 25 September 2004 to 6 November 2004 to assist him in his application for a visa to India. If he had not been paid his holiday covering that period he was most likely to have raised it with Mr Patel. There was no evidence that he did. We, therefore, find as fact that he was paid his holiday for that period. It came within the holiday year on 1 October 2004 to September 2005.
8.10 As regards unauthorised deduction from wages, he asserted in evidence that having considered the pay slips supplied to him in November 2004 that he was being paid on paper for 40 hours a week, the sum of £228.94 net. This he worked out as at the rate of £5.724 per hour. He was in fact paid for 60 hours the sum of 280 net by Mr Mohan Patel. This equates to £4667 per hour: The difference between the net hourly figure of £5.724 and £4.667 is £1.057. He therefore claimed for each week he worked 60 hours, the sum of £63.42.
8.11 The Respondents candidly admitted that they were paying the Claimant £280 net in cash without the Claimant receiving the benefit of an itemised pay statement. They were, however, disclosing to the Inland Revenue payment to the Claimant of the sum of £290 gross with £61.06 deductions giving the net figure of £228.94 net. The purpose in doing so was to reduce their's and the Claimant's national insurance contributions. They acknowledged that it was a fraud on the Inland Revenue.
8.12 We find as fact that the Claimant agreed with Mr Mohan Patel that he, the Claimant, would be paid the sum of £280 net per week for working 60 hours. There was no agreement that he would be paid the sum of £290 gross per week for 40 hours. Further, he had not received the sum of £228.95 net per week for 40 hours. The itemised pay statements given to him in November 2004 was done with the purpose of defrauding the Inland Revenue. They were of little value to him and, in our view, did not reflect what he was entitled to receive from the Respondents as itemised pay statements."
- The conclusions reached by the Tribunal were these:-
"34. As regards the alleged unauthorised deduction from wages claim, we found as fact that the Claimant expressly agreed that he should be paid £280.00 for 60 hours work. Reliance on the pay slips submitted to him in November 2004 was not of much assistance as that was done with a view to defrauding not him but the Inland Revenue. He had been paid £280.00 net for several years and had not sought to challenge the alleged underpayment by way of a claim before the Employment Tribunal. We, therefore, come to the conclusion that there had not been any unauthorised deductions from his wages.
35. As regards annual leave, the Claimant had taken 6 weeks annual leave in 2003. It covered the holiday year 2003 to September 2004. In December 2004 he had taken 4 weeks annual leave covering the holiday year October 2004 to September 2005. We found as fact that the Claimant was paid for the 4 weeks he had taken. If he was not, based on his character and, personality, he would have raised it with the Respondents at the time. There was no evidence that he did do so. There was, therefore, no breach on the part of the Respondents.
36. As regards the failure to provide him with itemised pay statements, there clearly had been a breach of Sections 8 and 11 Employment Rights Act 1996. The Claimant is not entitled to compensation but the Tribunal is empowered under Section 11(1) to determine what particulars ought to have been included in the statements. Doing the best we can from the evidence and our findings of fact, his weekly wage was £280 net. His national insurance contribution would have been £29. His tax £54. His gross weekly wage would have been £363.
37. As regards failure to provide a written statement of initial employment particulars, the Respondent had been in breach. No contract of employment or any document giving the Claimant the terms and conditions of his employment was handed to him. Compensation, however, is dependent upon whether or not one of the claims in the Employment Act 2002, Schedule 5, applies. This would cover either a breach of the Working Time Regulations or section 30 in respect of unauthorized deduction from wages. A breach of Section 1 does not stand alone in relation to a claim for compensation. As we have concluded that there were no unauthorised deductions from wages nor were there any breaches of the Working Time Regulations, the Claimant is not entitled to compensation."
- Not relevant to my hearing is the fact that the Tribunal found in favour of the Claimant on his constructive unfair dismissal and found in awarding compensation that he had not mitigated his loss. It awarded the sums stated.
The Claimant's case and conclusions
- The Claimant was offered the services of Counsel under the ELAA Scheme. He had Mr John Horan of Counsel for the opening of the case. Mr Horan sought an adjournment of 14 days which I refused but did give him additional time during the course of the day to take further instructions.
- Mr Horan presented three arguments to me which have force. The first, related to failure by the Tribunal it is said to make a finding under section 31 that the grievance procedure was breached, or not followed, by the Respondent and thus compensation should be uplifted. Secondly, new evidence should be permitted to be brought forward, and, thirdly that the Tribunal erred in law in relation to its finding that no compensation was awarded for a breach of section 1 of the Employment Rights Act. I indicated that I was minded to refer the last to a full hearing and I would consider further the two other matters. During the time that I allowed Mr Horan to take further instructions the Claimant and Mr Horan parted company and I have been assured by the Claimant that he no longer wishes to be represented by Mr Horan. I expressed my disappointment that that should be the case, for Mr Horan had succeeded this morning in making the forceful points which I have described above.
- The Claimant is 51 and is studying to be a lawyer, working on an LL.B where he specialises in employment law. I have reminded him that one of the key skills of a lawyer is judgment in deciding what points are good ones and what are not and he has assured me that he fully understands that. Sadly he has demonstrated by taking over the conduct of this case that he does not fully appreciate that approach to the law.
- He has presented a skeleton argument and documents of 36 pages and has argued some of the points in it. I will take each of them as they have been presented and I will indicate my conclusion. As to the new evidence point this relates to a record of incidents reported to the police, during the time when the Claimant was found by the Tribunal to have had a gap in his employment between 1997 and 2000. The practical point is that it affects the basic award since he would otherwise have continuity of employment for 14 rather than for 5 years. The Tribunal was seised of this problem.
- The Respondent has seen the application for the adduction of this new evidence and resists it on the grounds that the new evidence would not have altered the Tribunal's findings, also that this evidence could have been obtained prior to this. The Respondent has not actually seen this additional document but knows the gist of it. In my judgment, this is a proper application to make and I would be minded to accede to the application but I have seen a better approach. I am satisfied that the Claimant could not have obtained this actual document prior to the hearing for it is in fact created on 31 July 2006. It gives fuller details of the matters recorded in manuscript which was before the Employment Tribunal but crucially it includes the name of the Claimant. I accept that he is sometimes described as Mr Matthew but there is no doubt, that this person is Matthew John, the Claimant in these proceedings, and the police have recorded thefts of petrol reported by Mr Matthew a member of staff.
- What I propose, is that the Claimant should make an application to the Employment Tribunal, albeit out of time, to review paragraph 8.2 of its Judgment and, if it does, to consider whether the basic award should be increased if it finds that there was continuous employment during this time. I would be minded if I had sent this case to a full hearing to allow that material to be adduced, but as I say that will be a matter for the Claimant to do and he can do it by attaching the application that was made to the EAT together with the letter of 31 July 2006. I cannot of course order the Tribunal to review its Judgment and I will look again at the matter if the Tribunal refuses.
- The second point argued by Mr Horan, before he was asked to leave by the Claimant, is in relation to section 31. The Tribunal has made findings that there was a breach of the grievance procedure. The Respondent resists this part of the appeal on the ground that this point was never argued: see the Respondent's solicitor's letter of 1 November 2006. If the point was argued then the Tribunal was bound to make a decision upon it or to say why it had not. What I propose therefore, is to make an order that the Tribunal consider under the Burns-Barke procedure the question whether or not section 31 was argued and, if it was, what decision was made upon it, and if it was not, then to say why not. And if the Tribunal finds that there was a breach then it will be open to it to review its Judgment in relation to the uplift in compensation which would occur.
- The third point argued by Mr Horan related to what has been described as the section 1 point. This is the failure by the Respondent to provide a written statement. Since the Tribunal has found a breach of section 1, it cannot of course award compensation for that alone: see my Judgment in Scott-Davies v Redgate Medical Services [2007] ICR 348. But when the Judgment is attached to other valid proceedings, there is an obligation to make an award of between 2 and 4 weeks' pay. It may be that this point was considered by the Tribunal and it seemed to me that this was a question of law but taking a practical approach to this issue, given that other matters are going back to the Tribunal, I will invite it again to consider whether or not it intended to make no award for compensation having considered the Judgment in Scott-Davies.
- I then turn to the issues argued by the Claimant. The first relates to holiday pay and he points to what is said to be an arithmetic discrepancy between the calculation of £1320 and £1600 which would be the correct figure once the multiplier is applied. I cannot say whether he is right or wrong but it does seem to me to be a question of fact for the Tribunal to decide as to whether or not he was paid holiday pay. It has made a decision and given reasons for it. I see no error.
- In respect of the unauthorised deductions, the Tribunal has been at pains to point out that this employer was engaged in fraud on the Revenue and has accounted to it for sums of money less than it was paying the Claimant, the beneficiary of this being the Respondent. The calculations which are done by the Employment Tribunal seem to me to be unimpeachable and the finding that there was no unlawful deduction was one that was open to the Tribunal for it to make in the light of the figures produced to it and of course of its deprecation of the fraudulent activity of this employer.
- The Claimant also contended that the Tribunal ought to have considered his claim for religious discrimination. In my judgment that is not open to him. The Tribunal has made clear what the scope of its hearing was as tailored by previous case management directions. The claim was not live before the Tribunal and may not be made now. The issue was dealt with by way of jurisdiction. Applying Commotion Ltd v Rutty [2006] IRLR and the Judgment of Burton J (President) in Shergold [2006] ICR 304 the grievance which was put to the employer did not include, even inferentially, religious discrimination. The Claimant contends that Commotion has not been the subject of any criticism by the EAT. He is wrong: see my Judgment in NCH Scotland v McHugh UKEATS/0010/06. However, that did not criticise the essential finding in Commotion since this case is not about the transitional provisions. What is clear is that the grievance must relate to the dispute put to the Tribunal and the dispute put to the Tribunal must relate to the grievance. It did not. I see no error in the Tribunal's finding on that point.
- Thus I am of the opinion that none of these points, save for the ones I have identified above, stands a reasonable prospect of success. No further action will be taken upon them and those points in the grounds of appeal are therefore effectively dismissed. What I propose is that this hearing can be reactivated by the Claimant once he has had a result from the Employment Tribunal and it will be done on paper. There is no need for Mr John to come back. Whatever response there is from the Tribunal, Mr John can make his submissions on it. If it agrees to hear his case, fine. If it does not then he will make his submissions. I will adjourn this case part heard until after the conclusion of the Tribunal's further decision-making.
Judgment following adjournment
- A number of important steps have been taken pursuant to the Rule 3(10) hearing on 18 January 2007. The Employment Judge responded in a document lodged on 13 March 2007 pursuant to my Order, and he says the following:
"1. With regard to paragraphs 4 and 5 of EAT Order, the Tribunal considered the notes taken at the Hearing and reply as follows:
(i) Re: Paragraph 4(a), breach of Section 1, Employment Rights Act 1996, was argued and the Tribunal decided in Paragraph 37 of the Judgment that a mere breach does not give right to compensation.
(ii) Re: Paragraph 4(b), the case of Scott-Davies v Redgate UKEAT 0273/06/LA was decided after our Judgment and in any event is consistent with it, namely there is no free-standing right to compensation for breach of Section 1 ERA 1996.
We hope that the above clarify the matters raised.
2. As regards the Claimant's application for a Review, having regard to the letter from the police we have listed the application for a Hearing on 30 April 2007 to decide whether it should be granted."
Further to that, the Tribunal decided not to review its original Judgment. The reasons for this are contained in a document sent to the parties on 10 September 2007. This is described as 'Reserved Judgment on an Application for a Review', as to which "the unanimous judgment of the Tribunal was that the application for a review is refused".
- With respect this cannot be correct. As I explained in Secretary of State v Rance [2007] IRLR 665, paras 25-26, if an Employment Judge decides that there is no reasonable prospect of success there is no review. Under rule 36(1), unless a Chairman decides that there is no reasonable prospect of success, "the decision shall be reviewed". In this case this is made clear by the Tribunal's own judgment in setting out the background to the review for by paragraph 3 it is said that the whole Tribunal met in chambers to consider the Claimant's application for a review and the Respondent's response to it. If this were simply a consideration conducted by the Employment Judge alone under rule 35(3) there would be no Respondent's submissions, nor a consideration by the three members, nor a hearing before all three. Correctly analysed, there was a proper application under Rule 34(3). The Employment Judge considered the application under Rule 35(3). He did not refuse it and so there was a successful application for a review. Any review must normally be conducted by the three-person Tribunal under rule 36(1). The hearing was a review; but on review the Tribunal confirmed under Rule 36(3) its earlier Judgment. When a case goes through such a process, it is appropriate to regard the additional reasons at the review, confirming the original decision, as supplemental reasons to be read with the original. Thus I will take both sets of reasons together.
- I am satisfied there has been a full examination now by the three person Tribunal of two of the additional points which caused me concern at the Rule 3 hearing. I now have full submissions by the Claimant in support of the issues which he wishes to raise. These amount to 14 pages. The short answer to the points raised as to the issue of the police document has been given by the Employment Tribunal. I accept the correctness of the Tribunal's conclusions at paragraph 18-22. These indicate the Tribunal plainly considering the substance of the claim and in part accepting the approach of the Claimant. Nevertheless, the Judgment which it made was one which was open to it in respect of the police document, and I can see no error of law. This is simply an attempt to relitigate the essential issue found by the Employment Tribunal and in which the Tribunal expressed reservations about the Claimant's credibility yet at the same time, as it reminded us, upheld his claim for constructive unfair dismissal and awarded him compensation.
- I am grateful to the Employment Judge for providing an answer to two of the questions which I raised. In short I see no basis for the contention that the Employment Tribunal's original finding relating to the police document, as now supplemented both by the reasons on review, and the reasons following my Order, were incorrect in law.
- Two points remain, as argued by Mr Horan before he was disinstructed. Sadly, the Employment Judge did not respond to the request in para 4(a) of my order of 2 March 2007 which asked about Employment Act 2002 s31, the uplift point. The response relates to s 38, the written particulars point the subject of para 4(b) of the Order. The Claimant acknowledges that section 31 was not specifically referred to at the hearing but argues that the Employment Tribunal found there was a breach of the 2002 regime and so an uplift should have been considered. As such, this is not a new point, the Employment Tribunal should have considered it in the circumstances of its findings, and I will allow this to go to a full hearing. The Employment Tribunal seems to have regarded s31 as in some way connected to the s38 issue, and this may be a misdirection.
- Secondly, the Employment Tribunal may have misunderstood Scott-Davies. Given the Employment Tribunal's finding of unfair dismissal, it was required to consider Employment Act 2002 s38(3) which would give the Claimant between 2 and 4 weeks' pay. I had no submissions as to the applicability of these two measures to the date of these events and assume they were in force.
- I agree with the Employment Tribunal's exhortation that there must be finality of litigation. This litigation has taken a good deal of time and resources, and has involved a good deal of the Claimant's undoubted energy and enthusiasm for legal argument.
- Both the Tribunal and I have reminded him, during his academic studies of the law, that a proportionate approach to litigation must be followed. I hope the parties may now see the limited remit of the full hearing which I now order, in which the Claimant has a reasonable prospect of success and that they may be able to negotiate a settlement, or seek conciliation through ACAS at the EAT. This Rule 3 application is allowed in part on two points. No further action will be taken on all the others and the appeal on them is effectively dismissed.
