Collins v Banham Patent Locks Ltd [1992] UKEAT 539_92_0110

EAT

Collins v Banham Patent Locks Ltd

[1992] UKEAT 539_92_0110 · 1992-10-01

MR JUSTICE KNOX: This is an interlocutory appeal from a refusal by an unnamed Chairman of Industrial Tribunals to postpone the hearing of Industrial Tribunal proceedings pending County Court proceedings which impinge on the same series of events.

The Appellant before us is the employee, a Mr Collins, who was a long serving employee of the Respondents, Banham Patent Locks Ltd, which I will call "Banhams". He was employed in July 1966 and was dismissed either on the 21st or 22nd, it matters not which, of February 1992. The reasons for dismissal are identified in the Notice of Appearance by Banhams as gross misconduct and the particular factual basis upon which they justify his dismissal are stated as follows in their Notice of Appearance.

"During the first weeks of 1992 the Company began to experience serious operational difficulties when it became apparent that incoming cheques from customers were going missing for periods of time, to be subsequently discovered in unusual and unexplained places on the premises"

and they go on to say how serious that problem was and then they say:

"On 27th January 1992 certain actions by Mr Collins led one of the other employees to become suspicious of his intentions and his movements were observed by that employee. Without realising that he was being watched by the other employee Mr Collins was seen to deliberately place a bundle of documents, later found to be cheques, behind stationery stored halfway up the stairs to the upper floor of the premises."

I need not read the rest of that. The dismissal ensued thereafter.

The procedural history, thereafter, was that the Originating Application for compensation for unfair dismissal was presented by Mr Collins on the 25th April 1992, it is dated the 24th, and what he was seeking was compensation for unfair dismissal and also refusal to provide Written Reasons for dismissal. That of course is a free standing claim in respect of which, if the case is proved, two weeks wages can be awarded. We can dispose of that aspect of the matter at this stage by saying that that, although not a matter which by any means is de minimis is very much less important than the other claims that are advanced by Mr Collins for unfair dismissal in the Industrial Tribunal and for wrongful dismissal in the County Court.

The particulars of claim in respect of his common law action for wrongful dismissal were issued in the Brentford County Court on the 15th May, some three weeks later. That was before Banham's Notice of Appearance from which I have read extracts, which was dated the 5th June 1992. On the 29th June 1992 Mr Collins' Solicitors applied for an adjournment of the Industrial Tribunal proceedings pending the determination of the County Court action. We do not, in fact, have that letter before us. We do, however, have the answer which came the next day, and so far as relevant, reads as follows:

"A Chairman refuses to postpone listing as the basis for unfair dismissal claims is invariably different to that for wrongful dismissal and the High Court has no jurisdiction over refusal of written reasons."

There was subsequently a transfer of the County Court proceedings from one County Court to another. Nothing turns on that. The Notice of Appeal to us was dated the 7th August and it comes on today. In roughly five weeks time on the 6th November 1992 the Industrial Tribunal hearing is fixed.

There is no doubt that a Chairman of an Industrial Tribunal has jurisdiction and a discretion to grant or refuse an adjournment that is asked for in these circumstances. It is a situation which has given rise to a considerable weight of authority, that is to say, where there is concurrently an unfair dismissal application in an industrial tribunal and proceedings in the Courts, either the County Court or the High Court, in respect of alleged wrongful dismissal. The discretion given to the Chairman is in Rule 12(2)(b) of the Industrial Tribunals Rules of Procedure, and it reads, so far as relevant, as follows:

"(2)A tribunal may, if it thinks fit - (a) . . . .

(b) postpone the day or time fixed for, or adjourn, any hearing"

There is one particular example that is given which is not directly relevant where that discretion is particularly exercisable.

This case is, as has already appeared, a case where both proceedings in the Industrial Tribunal and in the County Court, were initiated by Mr Collins, the employee. In that respect, although not unprecedented, it is unlike most of the reported authorities, particularly when one bears in mind that it is Mr Collins who has made the application for adjournment of the Industrial Tribunal proceedings. One case which does have those features, namely, the proceedings being initiated both in the industrial tribunal and in the common law Courts by the employee rather than the employer, and the employee making the application for the adjournment, is to be found in Warnock v. Scarborough Football Club

[1989] ICR 489

, where this Tribunal, with Mr Justice Wood giving the Judgment, dealt with the situation itself, exercising the discretion which is conferred upon it by paragraph 21(2) of the 11th Schedule to the Employment Protection (Consolidation) Act 1978, to deal with the matter itself having first decided that the Chairman was in error in the way in which he dealt with the matter. The nature of the error is not relevant to these proceedings. Mr Justice Wood, in that case did make a very helpful general observation, which was, unfortunately, not in fact followed in this case, namely that it is advisable where an employee is bringing both industrial tribunal proceedings for unfair dismissal and intends to sue for wrongful dismissal at common law, for him to make it clear that that is what he is doing and that the industrial tribunal proceedings, which have of course, as is notorious, a very short time limit imposed upon them are only brought to satisfy that very short time limit. The particular grounds upon which the adjournment was, in that case, directed, as indeed it was, are not the same as the grounds which are advanced in this particular action, and it would not, I think, be useful for us to go through them in any detail. Similarly Wood J stated the general situation in Bowater plc v. Charlwood

[1991] ICR 798

at p.

(E) in the following terms:

"If a litigant wishes to preserve his position under the jurisdiction of the Act of 1978 then he can issue an originating application and it can be adjourned. His position is therefore preserved."

That does seem to us to indicate that in those circumstances of an employee's application to an industrial tribunal and an action at common law, where the time limit requires the industrial tribunal application to be issued within 3 months, the employee is normally to be regarded as being in control of the proceedings that he has initiated and if he makes it clear that the industrial tribunal proceedings are only issued to save being out of time that effect should in general, but not of course necessarily in all cases, be given to that attitude on his behalf. In fact, the attitude to be discerned from the letter refusing the application to postpone in the case before us is exactly the opposite of that because, as we read it, it gives as the principal reason a general proposition that the basis for unfair dismissal claims is invariably different to that for wrongful dismissal claims. In itself that statement is perfectly accurate because it is notorious that in a wrongful dismissal claim what has to be looked at in this particular case is whether or not Mr Collins acted in such a way as to justify his employers in dismissing him summarily. Did he in fact commit a sufficiently serious misconduct? Whereas the issue that arises in a claim for unfair dismissal, in relation to serious misconduct, is not did he or did he not commit the misconduct alleged but was the employer acting reasonably in treating his conduct as a sufficient ground for dismissal. The precise formulation is, of course, to be found, in Section 57(3) of the Employment Protection (Consolidation) Act 1978 and it has very often been helpfully interpreted in many reported decisions in the way in which Mr Justice Arnold did so in British Home Stores v. Burchell

[1978] IRLR 379

The first point that we have to decide is whether or not there is any ground upon which it would be proper for us to interfere with the decision of the Industrial Tribunal Chairman. That requires that either we should be satisfied that there is an error of law or that the decision is a perverse one, which amounts to an error of law on the authorities. As to that, we are satisfied that, so far as one can discern exactly what the process of reasoning was from this very short decision, it is fatally flawed in that it treat as the principal reason for refusing the adjournment, the invariable difference between unfair dismissal and wrongful dismissal claims. That seems to us so far as it goes factually to be correct but to be an entirely inadequate summary of the considerations that have to be looked at to determine whether or not an adjournment in any given case should be directed. There are, in fact, a very substantial number of considerations one way and another in this particular case and these cases are not at all straight forward. It is principally for that reason that we do find that the imposition of a blanket view that, because there is invariably a difference between the basis for unfair dismissal claims and that for wrongful dismissal claims, an adjournment should be refused, is so narrow as to constitute an error of law. That means that we have a choice before us either of exercising the discretion under paragraph 21 of the 11th Schedule of the 1978 Act, or of remitting the matter to be considered anew by an industrial tribunal in London (South). Since we entertain no doubt how the discretion should be exercised we are persuaded that it would be in the better interests for both parties that we should, given the very short time limit that is available to us before the industrial tribunal hearing on the 6th November, exercise that discretion ourselves. This is something which has been done quite frequently in the past, notably by this Appeal Tribunal in the Bowater plc v. Charlwood case to which I have referred, and in other cases such as J M C C Holdings v. Conroy

[1990] ICR 179

What then are the considerations which govern the question whether or not there should be a stay? The first, and most important one, is that whereas the industrial tribunal proceedings are unlikely to provide a final conclusion to the disputes between the parties before us, the Court proceedings in the County Court are very likely to do so. One has to consider the possibility of either side succeeding, if the Court proceedings come first. If the Company is successful, that will necessarily establish that Mr Collins did do the act which is relied on as misconduct and although that would not of itself decide the unfair dismissal point, it would certainly remove any likelihood of his securing any significant compensatory award should he find some means of succeeding on a procedural basis in establishing that there was an unfair dismissal. So that it is, we are persuaded, singularly improbable that if Mr Collins loses in the County Court, he would continue further in the industrial tribunal. If, on the other hand, Mr Collins succeeds in the County Court, thereby establishing that he did not, in fact, commit the misconduct that is alleged against him, it is at least likely, if not certain, that the industrial proceedings would no longer proceed because, in practice, Mr Collins would have secured as much relief in the Court proceedings as he would be likely to obtain in the industrial tribunal proceedings. I exclude, of course, the two weeks pay to which he would be entitled if he succeeds on his separate claim for failure to give written reasons for dismissal, but those I treat as relatively insignificant.

Looking at the other side, if the industrial tribunal proceedings come first, the possibility is again, twofold. Mr Collins may succeed in the industrial tribunal, but if he does he will almost certainly need to continue with the County Court proceedings because of the financial limitation, currently £10,000, on compensatory awards in industrial tribunals and we were told that the amount, disregarding the pension claim, that is claimed in the County Court proceedings was of the order of £8,000. For a long serving employee in a relatively important responsible position, it is we think self evident, that the pension claim must sound in more than £2,000 in damages if it is successfully prosecuted and that introduces the necessity for expert evidence because pension claims are never entirely straightforward and it also introduces the necessity for there to be two sets of proceedings, industrial tribunal, followed by County Court, to give Mr Collins what, on that hypothesis, he would be entitled to receive. If on the other hand, Mr Collins in the industrial tribunal proceedings, which come first, is not successful because the Company had a reasonable belief on reasonable grounds and made proper investigations into the matter, it does not necessarily follow that he will not be in a position to continue with the Court proceedings because it is perfectly possible, depending on how the facts fall out, for there to be a dismissal which is fair, but which at the end of the day is not a lawful one at common law. So, although that is far from certain there is at least a possibility, even if Mr Collins fails in the industrial tribunal of there being continued Court proceedings. For those reasons, there is, in our view, an important feature in the possibility, and indeed probability, of multiplicity of proceedings if the County Court proceedings come first which is much less probable if the industrial tribunal proceedings come first.

Secondly, there are possibilities of there being findings in the industrial tribunal application, if it comes first, which would:(a) be based on evidence that was not admissible in Court but was admissible before an industrial tribunal, and

(b) perhaps more seriously, would be binding on a High Court or County Court Judge in the subsequent Court proceedings. The sort of undesirable situation that can arise is vividly illustrated by the Court of Appeal Decision in O'Laoire v. Jackel International Ltd (No.2)

[1991] ICR 718

, and although we are not persuaded that there is a significant probability of an industrial tribunal finding that Mr Collins did in fact commit the conduct alleged against him in the course of deciding whether or not he was unfairly dismissed, because that is not the question to which the industrial tribunal has to address its mind, we are satisfied that there is a very high degree of probability that they would go into that aspect of the matter in deciding what the amount of the compensatory award should be and whether there was a question of contributory fault, such as to reduce the award that he otherwise would secure. So that to that extent, there is a very significant probability of overlap in the probable findings of tribunal on the one hand, and Court on the other. Other things being equal in those circumstances, it does seem to us highly desirable that, particularly in a case of alleged, serious mis-conduct, which this is, the Court action should come chronologically before the tribunal.

In fact, these proceedings, on both sides that is to say tribunal and Court, are on the face of it continuing side by side. There is no application to stay the County Courts proceedings on either side, and as things are now, the industrial tribunal proceedings are going to go on and there must at least be a possibility of the industrial tribunal proceedings being taken in two stages because in our experience it is not uncommon for an industrial tribunal to decide whether or not there was an unfair dismissal and to leave the quantification of the compensatory award to a later hearing partly to give the parties an opportunity of coming to terms on that subject and partly, because it is convenient to break the proceedings into those two parts in many cases. That raises a possibility of there being inserted between the two stages of the industrial tribunal application the County Court proceedings and that we hardly think could be described as an orderly sequence of hearings between the two types of proceeding.

Next one looks to see how far either side would be prejudiced by the grant or refusal of a stay. In many cases where the application for a stay is made by the employer, there is a serious prejudice to the employee in having his claim to compensation from the industrial tribunal, which is intended to be a rapid remedy, postponed while litigation proceeds in the Courts. That is not a point of any significant weight when the application for the stay is made, as it is here, by the employee. Compare Warnock v. Scarborough Football Club , supra. There was identified for us, in argument by Mr Ashfield on behalf of Mr Collins, a possible prejudice to employers in having a postponement of industrial tribunal proceedings where either re-engagement or re-instatement is sought as a remedy and that we accept, but of course it does not arise in this case because Mr Collins is not claiming either of those remedies. It is of course desirable that employers should know as soon as possible whether they can re-engage a new employee to take the place of the dismissed employee who is bringing the proceedings against them. But that is not a factor in this case.

So far as prejudice to the employer is concerned it is limited we think to the question of costs. Now costs, we do not suggest, are in any way unimportant, they bulk very large in the employer's reasons as put forward by Mr Jones on their behalf. Mr Jones is their Personnel Consultant. He submitted to us, correctly, that the proceedings before the industrial tribunal would be less expensive for Banhams than proceedings in the County Court, for the simple reason that informal representation is permitted in industrial tribunals and professional assistance does not have to be engaged even on behalf of a limited company, such as Banhams, and we see that point.

On the other hand this is not a case where it can be said that Mr Collins is bringing the proceedings in the Courts with the assistance of Legal Aid so as to tip the scales in a way which would, no doubt, look unfair to the employer. Where there is a legally aided plaintiff of course the defendant is at a disadvantage because, save in exceptional circumstances, even if successful, he or it will not recover costs against the unsuccessful legally aided litigant. But Mr Collins is not legally aided at present and he is exposed to a liability in costs if he fails in his County Court proceedings. True it is that there will no doubt be a difference between the taxed costs and the costs which Banhams are put to but Banhams will not be without any remedy with regard to costs.

On the other hand the multiplicity of proceedings which we have looked at earlier in this Judgment which would be likely to occur if the industrial proceedings come first, does sound in costs, for the detriment of both sides in the obvious way, that two sets of proceedings cost a great deal more than one.

For those reasons we have come to the conclusion that the arguments in favour of a stay very substantially outweigh the arguments in favour of allowing both sets of proceedings to continue and we therefore propose to allow this appeal and to impose a stay of the industrial tribunal proceedings pending the determination of the County Court proceedings between the parties. We will give liberty to apply to the industrial tribunal should there be a change of circumstance.