Castle Cement Ltd v Jones & Ors [1992] UKEAT 343_92_0411

EAT
Castle Cement Ltd v Jones & Ors
[1992] UKEAT 343_92_0411 · 1992-11-04
MR JUSTICE WOOD (PRESIDENT): At first sight this appeal is a comparatively simple matter in that in a letter of the 18th March 1992 the learned Chairman at Shrewsbury refused an application by the respondent employers Castle Cement Limited to amend their Notice of Appearance, their pleading, and the Company appeal. It is far from as simple as that. In order to understand the situation we must look at the history.There are a substantial number of Applicants, over 50 originally, who claimed that they had been unfairly dismissed by Castle Cement Limited. The claim was that their dismissal was automatically unfair under the provisions of Section 59(b) of the Employment Protection (Consolidation) Act 1978. As we all know that comes in Part V of the Act which deals with unfair dismissal. There are certain reasons for dismissal which are considered to be automatically unfair, for example under Section 58 there are those grounds which relate to trade union membership, and indeed, under Section 59 if the reason for selection was one of those under Section 58 that also rendered it automatically unfair.Section 59(b) however, is dealing with the question of selection. The criteria for selection are essentially part of the procedures which are relevant when considering unfairness of dismissal where the basis for the dismissal is redundancy. The wording of Section 59 reads, where relevant, as follows:
"Where the reason or principal reason for dismissal of an employee was that he was redundant, but it is shown that the circumstances constituting the redundancy applied equally to one or more other employees in the same undertaking who held positions similar to that held by him and who have not been dismissed by the employer, and . . . (b)that he was selected for dismissal in contravention of a customary arrangement or agreed procedure relating to redundancy and there were no special reasons justifying a departure from that arrangement or procedure in his case."
So this is a question of selection and the selection by way of criteria and the agreed procedure. The reason why that has been included is that often in industrial relations there is an agreed basis of a criteria for selection made between a recognised trade union and an employer. That was the position in the present case.At a preliminary hearing, which was a summons for directions, held in October 1991, a number of issues were raised and amongst others it was mentioned that if liability was held against the respondent employer there would be an issue that if the procedure had been properly carried out nevertheless the dismissal would have taken place, in other words, the argument on liability was going to be, "if there was an agreed procedure we have special reasons for departing from it".The hearing of the liability issue took place before an Industrial Tribunal sitting at Shrewsbury under the Chairmanship of Mr Leo Blair on three days in January 1992, January 22nd, 23rd and 24th. It is quite clear that the sole issue before the Tribunal on that occasion was the Section 59(b) issue and that is apparent from paragraph 1 of the Full Reasons which were given by the Tribunal.The Tribunal examined the evidence and decided that the Company had not provided sound reasons for departing from the agreed procedure and therefore that the Applicants were entitled to a finding that they had been unfairly dismissed. That is what is called, in many ways, the liability issue. The question of compensation was to be adjourned to another date. We do not know whether three days were allotted or more days allotted, but it does seem that no question of compensation was to be considered at that hearing in the light of what is said in paragraph 1 of the decision. Towards the end of the decision and before the Full Reasons were sent to the parties, the decision being promulgated on the 20th February 1992, there was mentioned to the Tribunal the question of possible issues when compensation came to be considered.There is an affidavit before us from a Miss Joan Elisabeth Hawkins, who is an articled clerk with a Solicitors representing the Company. She was taking hand written notes during the hearing and it is quite clear from her hand written notes that a full set of reasons were asked for and she notes the question of appeal from the judgment but then continues:
"But there may be hints in judgments re future conduct of cases. Some applicants may fall within the LIFO procedure so I would ask for leave to amend IT3s if decision is to do that."
and then one of the other representatives said:
"I expect that the Company anticipate that they will lose and if that's the case they're seeking to say 33 applicants would have no compensation because they would have been dismissed as redundant anyway."
and then Mr Fordham says:

"That's right."

then they discuss other matters.So that articled clerk that evening dictated a typewritten note as follows:
"Some of the applicants in this action may fall within the LIFO procedure and so I would ask for leave to amend the IT3's within the say 28 days of the Tribunal's decision."
We now know that in the notes of the learned Chairman there appears the following:

"Application to amend IT3's 28 days from the decision."

In the light of a letter written to us since this appeal has been launched, it is quite clear that the learned Chairman noted that and understood his note - and it seems to be confirmed by that of the articled clerk - that this was leave to amend within 28 days.Unfortunately, the Solicitors acting for the Company wrote a letter to the Office of Industrial Tribunals at Shrewsbury indicating that they wished to amend and they applied to amend. That clearly, caused a misunderstanding because that letter was looked upon as an application to amend, whereas in truth and in fact there had already been leave granted to amend. The procedure, presumably, which the staff at the Tribunal went through was to ask for comments from the parties and ultimately the letter, which is the subject of this appeal was written on behalf of the learned Chairman on the 18th March of this year, hence the appeal arrives here. We have recently received from the learned Chairman, a letter, indicating that he had looked at his notes and the passage to which I have already referred was in his notes and he regrets having failed to look at his notes and he realised that the leave to amend had been granted and if he had realised it was not an application it would have been granted in any event.Mr Bowers appears today for all the Applicants, although the Applicants are in fact members of different trade unions, and he has taken a number of cogent points. He submits, first of all, that the issue on compensation namely, whether any loss had arisen on the basis of the principles and guidance set out in the well known case in the House of Lords of Polkey v. A E Dayton & Sons Ltd [1988] ICR 142 , should have been pleaded in the first case and that to allow the matter to be raised on the compensation issue would cause an injustice to the Applicants.It would be a very strong decision of this Appeal Tribunal to say that every issue on compensation must be pleaded in a Notice of Appearance. Whilst we have always encouraged the issues to be clarified, it has never been suggested that they need necessarily be clarified in the Notice of Application or the Notice of Appearance, and quite often parties indicated by letter or otherwise. The real importance is to clarify and to concentrate one's attention on the real issues, but secondly, not to allow people to be taken by surprise, so that they know what is to be decided. In this case we feel that there is no injustice here. This issue was a live issue, is an essential issue, is recognised as an issue not only in October 1991 but during the hearing itself and the second point is that it may very well be argued that it is not necessary in any event to raise this as an issue because it would follow from Polkey that that issue is there. Mr Bowers wants to argue, in due course, and will no doubt argue in front of an industrial tribunal, that where one has a failure in procedure which renders the dismissal automatically unfair that the principles of Polkey do not apply. We do not intend to decide that today, that will be a matter for the industrial tribunal looking at the wording of the Act in due course.The second point taken by Mr Bowers is that the evidence before the Tribunal would be quite different had they realised that this issue was to be raised on compensation. A number of points should be made about that; first that they should have so realised it; secondly that the comment made at the end of the hearing from one of the representatives indicates that it was in fact in mind but, thirdly, when a compensation hearing takes place there is nothing to prevent some evidence being called on the issue of whether or not if the agreed procedure had been carried out and the selection carried out in accordance with it, it would have caused any difference to the decision or the eventual dismissal. So that in our judgment there is no question here of a second bite of the cherry, this is simply the ordinary procedure that is carried out in all these cases.The third point made by Mr Bowers is that no reason had been advanced why the matters now sought to be pleaded were not pleaded the first time round. We have dealt with that, there was no need for it to be pleaded and in fact the issue was raised.Mr Bowers has referred us to two authorities, the first is the Blue Star Ship Management v. Williams [1978] ICR 770. That, he submits, was a case in which there was a refusal to allow an amendment at a late stage. The amendment there was as to the reason for the dismissal, in other words, there was a change in the case being put forward on the liability, that is distinguishable from the present case. The second case to which he referred us is Devonshire v. Trico Folberth Ltd CA [1989] ICR 747. Here again, the Court of Appeal, the leading judgment being given by Lord Justice May, who had formerly sat in this Tribunal, the question was, a selection by the employer of the reason for the dismissal. It is not a question of the procedure it is a question of the basic reason why the dismissal took place and it was held there that they could not change their ground at a late stage. Those two cases are, in our judgment, distinct.The last point as we understand Mr Bowers' submission was that this was a discretion exercised by the learned Chairman in his letter of the 18th March 1992, thereafter he was functus officio; we must therefore ignore his letter indicating that he himself felt to be in error and that he had misunderstood the situation, and we must look at this as a decision which was made in the exercise of discretion and therefore we should not interfere. The principles upon which this Tribunal will interfere with such a discretion was examined in the case of Adam v. West Sussex County Council [1990] ICR 546 and broadly speaking the test we apply are the Wednesbury Rules test, namely, that where there is a wide discretion exercised judicially this Tribunal and, indeed an appellate court, will not interfere unless the decider, here the learned Chairman, has taken into account something he should not have taken into account or has failed to take into account something he should have taken into account, or that the decision in the appellate court is plainly wrong. Here we are quite clear that the learned Chairman through an error, an overlooking of a situation, failed to take into account the fact that he had granted leave to amend at the end of the hearing, as he reads his own notes and as we understand it from the notes of the articled clerk, that leave in fact was granted and he would have granted leave on that occasion. That indicates to us that he failed to take that into account; he also, one can say secondly, did not have it drawn to his attention that the issue had been raised in October 1991. Whether or not the various other matters that Mr Bowers wished to raise with us are raised before the industrial tribunal are a matter for him and those who instruct him. But so far as this appeal is concerned we are quite satisfied that the justice of the matter, the merits of the matter, require us to allow the appeal and to allow the amendment to be made but we do not in so doing indicate in any way that we think that the amendment was a necessary amendment in the situation which existed in this case.For those reasons this appeal will be allowed and the amendment allowed.