Mitten & Os v London Borough Of Bexley [1996] UKEAT 900_95_0202

EAT
Mitten & Os v London Borough Of Bexley
[1996] UKEAT 900_95_0202 · 1996-02-02

JUDGE CLARK :

In 1993 the London Borough of Bexley ["Bexley"] catering services were put out to competitive tendering. In order to put in a competitive tender by its own DSO the employer terminated the contracts of employment of its catering and relevant Head Office staff on 31st July 1993 and offered new contracts on less favourable terms. Most employees accepted the new contracts under protest. Some left the service.By originating applications in similar form some 143 affected employees presented complaints of unfair dismissal and/or breach of contract to the Industrial Tribunal on 28th October 1993. They were represented by their trade union, UNISON.In response, Bexley entered Notices of Appearance taking a number of points.The nine appellants in this appeal were applicants to the Industrial Tribunal. All cases are being dealt with by the Industrial Tribunal sitting at Ashford.The principal grounds of appeal and cross-appeal by Bexley have been characterised as the "hours point" and the "withdrawal point". There is a subsidiary ground of cross-appeal in relation to the cases of Mrs Metson and Mrs Nast, to which we shall return.

The Hours point

On 12th April 1995 a full tribunal sitting at Ashford (Chairman Mr D.E. de Saxe) held a directions hearing. Extended reasons for the rulings made as a result of that hearing are dated 13th July 1995.One of the directions given by the tribunal was that the cases of the nine appellants be dismissed for want of jurisdiction. Against that direction they now appeal.Each of the nine had insufficient service to qualify for statutory unfair dismissal protection in that they worked less than 16 hours per week and had not completed five years continuous service.In R v Secretary of State for Employment ex-parte EOC & another ["The EOC Case"] the Equal Opportunities Commission challenged that statutory qualifying period, on that grounds that it was indirectly discriminatory against women by way of application for judicial review. The Divisional Court dismissed the application and that decision was upheld by the Court of Appeal.The matter went to the House of Lords. [1994] ICR 317 .On 3rd March 1994 the House upheld the EOC's appeal. It declared that the qualifying period for those working less than 16 hours per week, being different from that applying to those working more than 16 hours per week, was incompatible with European Law, and in particular the Council Directive of 9th February 1976 (76/207/EEC).The applicants before the tribunal sought to rely upon this decision. However the tribunal accepted a submission by Mr Bowers, Counsel for Bexley, that the EOC case had not altered the law retrospectively. What it did was to point out the need for the law to be changed by the United Kingdom Government, and this was done with the introduction of the Employment Protection (Part-time Employees) Regulations 1995 , on 6th February 1995. The tribunal held that those Regulations did not have retrospective effect. Accordingly the United Kingdom statutory provisions contained in the Employment Protection (Consolidation) Act 1978 applied to these dismissals in July 1993. The appellants did not qualify for unfair dismissal protection under that Act.In attacking that conclusion Mr Kibling relies upon the EOC case, and on the recent judgment of the Court of Appeal in Biggs v Somerset County Council [26th January 1995. Unreported] . We have been supplied with a transcript of the judgments.Mrs Biggs was dismissed from her post as a part-time science teacher at Whitstone School, Shepton Mallet, on 31st August 1976. She did not then make a complaint of unfair dismissal.Following the House of Lords decision in the EOC case she commenced Industrial Tribunal proceedings on 1st June 1994. She contended that the three month time limit on claims for unfair dismissal under Section 67(2) of the 1978 Act had no application to her claim.The Exeter Industrial Tribunal held that her claim was time-barred. That decision was upheld by this tribunal [1995] ICR 811 .In upholding the decisions below Neill LJ cited with approval the main conclusions of the Employment Appeal Tribunal at page 826-7. The fourth proposition of this Appeal Tribunal was as follows:
" An Industrial Tribunal may, within the scope of its statutory jurisdiction, administer, apply and enforce not only United Kingdom domestic law but also Community Law. ... Thus, in the exercise of its statutory jurisdiction, the Industrial Tribunal is bound to apply and endorse relevant Community law, and disapply an offending provision of United Kingdom domestic legislation to the extent that it is incompatible with Community law, in order to give effect to its obligation to safeguard enforceable Community rights."
In the course of his judgment Neill LJ said this (transcript 16-17):
"The decision in the EOC case (supra) was declaratory of what the law has always been ever since the primacy of Community law was established by section 2 of the European Communities 1972. Indeed, as Mummery J. pointed out, Mrs Biggs relies on the retrospective effect of the EOC decision. Accordingly, since 1 January 1973, and certainly since the decision of the ECJ in Defrenne v. Sabena (supra) there was no legal impediment preventing someone who claimed that he had been unfairly dismissed from presenting a claim and arguing that the restriction on claims by part-time workers was indirectly discriminatory."
Finally, Sir Iain Glidewell at page 31-32 said:
" In my judgment, therefore, whether the correct analysis of the application of Article 119 to the facts of the present case is that it disapplies the restrictive provisions contained in paragraph 9 of schedule 1 of the [ Trade Union and Labour Relations Act 1974 ] Act of 1974, or that the article grants a right which is directly enforceable, the effect is the same. On either analysis, the remedy is the statutory right to make a claim for unfair dismissal, now contained in the Act of 1978. For the reasons explained by Neill L.J., that remedy is and was available to Mrs Biggs only subject to the time limits in s.67(2)."
In short, Mr Kibling submits that the EOC case is declaratory of existing law. It did not alter the law. These appellants were entitled to bring complaints of unfair dismissal in 1993, subject only to the time-limits under the 1978 Act, with which they have complied.Mr Bowers, in seeking to uphold the tribunal's ruling, contended that an employee may only seek to have the United Kingdom statutory law, including the qualifying period for part-time employees, disapplied if she can show unlawful discrimination in her employment at the time of dismissal. We think that submission is at odds with the reasoning of the Court of Appeal in Biggs and we accept that advanced by Mr Kibling.We therefore conclude that the tribunal fell into error in acceding to the submissions made by Mr Bowers, and this part of its order must be set aside.

The withdrawal point

At an earlier directions hearing before a different Chairman, Mrs V Cooney, held on 17th February 1994, Bexley was again represented by Mr Bowers, and the applicants by their then union representative, Mr Norton. That Chairman made a number of directions which are recorded in a letter to the parties dated 21st February 1994 ["The Cooney Order"]. The first two directions in that order read as follows:
"(i) 37 applicants with insufficient continuous employment to qualify for the right not to be unfairly dismissed will withdraw their applications on or before 17 March 1994;
(ii) The applicants' representative will discuss with 5 applicants whose applications may be out of time, whether they wish to continue with their applications and will notify the respondent of their intentions on or before 17 March 1994;"The 37 applicants were those mentioned in Category 3 and 4 of a breakdown of all applicants. They worked less than 16 hours per week and had not completed five years continuous service. Among the 37 were these appellants, save for Mrs Metson and Mrs Nast.Shortly after that directions hearing the EOC decision in the House of Lords was announced. None of the seven appellants withdrew their applications. Correspondence followed. Finally, at the hearing before the de Saxe Tribunal on 12th April 1995 Mr Bowers applied to strike out any remaining applications out of the 37 referred to in paragraph (i) of the Cooney Order. He argued that it was a direction which must be complied with, or an undertaking, or an order by consent, and that the cases should not be permitted to continue.The de Saxe tribunal rejected that application. It held that the Cooney Order was not a binding order or direction. It was a mere expression of intention of the parties. It rejected the argument that the tribunal was functus officio and directed a preliminary hearing of the remaining cases not already dismissed under the order which we have held was erroneously made by the de Saxe tribunal.In support of the cross-appeal against the de Saxe tribunal's order allowing the cases to proceed ["the de Saxe Order"], Mr Bowers advances five alternative propositions which he helpfully reduced to writing:(1) An interlocutory direction or order of an Industrial Tribunal cannot be revoked or varied or reviewed once made; in the alternative(2) an interlocutory direction or order of an Industrial Tribunal providing for withdrawal cannot be revoked or varied or reviewed once made: in the further alternative(3) this interlocutory direction or order of an Industrial Tribunal cannot be revoked or varied or reviewed once made because it proceeds from a consent order; in the further alternative(4) this interlocutory direction or order of an Industrial Tribunal cannot be revoked or varied or reviewed once made because it gives rise to cause of action estoppel; in the further alternative(5) this interlocutory direction or order of an Industrial Tribunal should not have been revoked or varied or reviewed once made because Bexley was headed off from arguing the point by an undertaking which was accepted in good faith . It is clear that, if this undertaking had not been given, Bexley would have made the application there and then for the dismissal.We shall consider each proposition in turn, using the same numbering.(1) He accepted that paragraph (i) of the Cooney Order was an interlocutory order and not a decision of the tribunal within the meaning of Regulation 2(2) of the Industrial Tribunals (Constitution & Rules of Procedure) Regulations 1993 ["the 1993 Regulations"]. We agree. We also agree with the proposition that an Industrial Tribunal cannot review its orders, only its decisions. Where we disagree is with the proposition that an interlocutory order of the Industrial Tribunal cannot be revoked or varied.In support of that proposition Mr Bowers relied on the decision of this Appeal Tribunal in Casella London Ltd v Banai [1990] ICR 215 . In that case an Industrial Tribunal chairman struck out the applicant's complaint of unlawful discrimination on the ground that it was frivolous or vexatious in accordance with what was then rule 12(2)(e) of Schedule 1 to the Industrial Tribunals (Rules of Procedure) Regulations 1985 ["the 1985 Regulations"], now reproduced in Rule 13(2))d) of the 1993 Rules. Subsequently the Chairman reconsidered the matter in the light of authorities not cited to him at the hearing and of his own motion set aside his original order.On appeal, the Employment Appeal Tribunal held that the original striking out order was not a `decision' within the definition contained in Regulation 2 of the 1985 Regulations. Accordingly the Chairman had no power to review his order (that power being limited to decisions). It went on to hold further that he had no power to recall an interlocutory order striking out the complaint of his own motion, since a final decision had been made.At the end of his judgment (Page 221 E-F) Wood J identified a need to amend the Regulations. That call has been heeded. Regulation 2(2) of the 1993 Regulations now expressly provides that an order striking out an originating application under Rule 13(2)(d) of the 1993 Regulations is a decision, and Rule 11(1) grants power to a tribunal to review any decision of its own motion. Thus, today the Chairman in Casella would have had power to do what he did, subject to giving notice to the parties under Rule 11(3) and the limitations on that power imposed by Rule 11(1)(a)-(e).Does Casella nevertheless support Mr Bower's first proposition? We think not. In the course of his judgment in Casella Wood J referred to the decision of this tribunal in Nikitas v Solihull Metropolitan Borough Council [1986] ICR291 . The case was cited as authority for the proposition that an interlocutory order is not a decision under the Rules susceptible to review. (Page 220 E).Nikitas was concerned with discovery and interrogatories. Certain interlocutory orders were made. Being dissatisfied with those orders the applicant sought a review. The Chairman refused to make the directions sought by the applicant. He appealed. The Employment Appeal Tribunal initially allowed the appeal per incuriam . It had not been directed to the definition of "decision" in the Industrial Tribunal Regulations of 1980. Realising its error, the Employment Appeal Tribunal recalled the matter of its own motion under Rule 26 of the Employment Appeal Tribunal Rules 1980 . On the subsequent hearing the Appeal Tribunal (Waterhouse J presiding) held that the original interlocutory order was not a decision within the meaning of the Tribunal Regulations and could not be reviewed. However, the judgment continues at 295 C-E:
"When a party to proceedings before a tribunal is dissatisfied with an interlocutory order that has been made, or by the refusal of an interlocutory order, it is clear that his remedy is to apply again to the tribunal for directions in accordance with the provisions of rule 13(2). Accordingly, the chairman of the tribunal in this case was entitled to deal with the application made by the employee, following the hearing on 3 June 1981, as applications for further directions within the terms of rule 13(2), and to adjudicate upon them in the way that he did. The position was made clear to the employee when he requested the information immediately after the hearing and, in our judgment, the chairman's approach to the matter was perfectly correct because there was no jurisdiction to carry out a review."
Applying that approach to the 1993 Regulations, where a party is dissatisfied with an interlocutory order of the tribunal, not being a decision within the meaning of Regulation 2(2), it is open to him to apply for directions under Rule 16(1).We note that in Blockleys PLC v Miller [1992] ICR 749 , Wood J questioned the correctness of Nikitas at page 756 D. We think that observation related to the use by the Employment Appeal Tribunal in Nikitas of its powers under Rule 26 of the Employment Appeal Tribunal Rules 1980 (now Rule 33 of the Employment Appeal Tribunal Rules 1993 ) to review its own decision in the appeal. We do not understand Wood J to be questioning the ratio of the Employment Appeal Tribunal's judgment on review of the matter under appeal from the Industrial Tribunal. For out part we regard the statement of the law contained in the passage from the judgment in Nikitas cited above to be correct.It follows, in our judgment that the Cooney Order was capable of alteration or revocation at a subsequent hearing, not by way of review, but by way of further directions. In fact what happened here was that, following the applicants failure to withdraw their applications as foreshadowed in the Cooney Order, Bexley then quite properly applied for an order striking out those complaints under Rule 13(2)(d) and the applicants, implicitly if not expressly, sought a variation or revocation of the Cooney Order. The de Saxe tribunal refused the first and granted the second application at the directions having held on 12th April 1995. In our judgment it had power so to do, subject to the further propositions advanced by Mr Bowers.(2) His narrower submission is that even if the tribunal has power to vary or revoke an earlier interlocutory order (not being a decision) that power cannot extend to an order providing for withdrawal of a complaint.This raises the important principle of finality of litigation. We fully accept, as was held by the Employment Appeal Tribunal in Times Newspapers Ltd v Fitt [1981] ICR 637 that an order made by consent dismissing a complaint on withdrawal by the applicant cannot be disturbed, even where made by mistake. Had Mrs Cooney dismissed the appellants complaints on withdrawal at the hearing on 17th February 1994 under Rule 13(2)(a) that would have been an end to the matter. The fact that shortly afterwards the House of Lords revealed what the law had always been, namely that the qualifying period provisions for part-time employees contained in the 1978 Act was incompatible with European Law and ought to be disapplied, would not have assisted these appellants. That is the effect of the Court of Appeal's decision in Barber v Staffordshire County Council [Unreported] delivered at the same time as the Biggs judgment. Again, we have the advantage of having read the transcript of that judgment.In Barber the applicant instituted Industrial Tribunal proceedings on 3rd May 1993 alleging, inter alia , unfair dismissal against her former employers, Staffordshire County Council. The claims were based on the termination of three contracts of part-time employment with the Council as a teacher on 31st August 1992. Following such dismissal she presented a complaint to an Industrial Tribunal on 2nd November 1992. She claimed a redundancy payment but not compensation for unfair dismissal. Her redundancy complaint was listed for hearing before an Industrial Tribunal on 5th May 1993. On the preceding day her representative came across the House of Lords decision in Surrey County Council v Lewis [1988] AC 323 , wherein it was held to be impermissible to aggregate the hours worked each week under separate concurrent part-time contracts of employment for qualifying purposes under the 1978 Act. On this basis Mrs Barber indicated to the Council that she would withdraw her complaint. The Council accepted that course and did not attend the following day. On 5th May 1993 the tribunal duly dismissed the complaint on withdrawal under what is now Rule 13(2)(a) of the 1993 Regulations (formerly Rule 12(2)(c) of the 1985 Regulations).Her attempt to revive the claim by instituting a second complaint ultimately failed, but it is instructive to examine the process of reasoning which led to that result.First, the Industrial Tribunal. Her second originating application came before a Chairman sitting alone at an interlocutory hearing. The employer had raised a plea of res judicata in the Notice of Appearance in these terms:
"(2) The application relates to the same termination of employment as was dealt with in application 61096/92, an application that was dismissed on withdrawal by the applicant."
The Chairman ruled that no bar to the claim arose by way of res judicata or cause of action estoppel, holding that Mrs Barber had a free-standing cause of action under Article 119 of the EEC Treaty combined with the Equal Pay and Equal Treatment Directives.On the employers' appeal the applicant accepted that the free-standing European cause of action contention could not be argued in view of the Employment Appeal Tribunal's judgment in Biggs [1995] ICR 811 . This tribunal held that the principles of cause of action estoppel and issue estoppel applied to an originating application which had been dismissed on withdrawal even although the Industrial Tribunal had given no reasoned judgment on the complaint.The Court of Appeal upheld this Appeal Tribunal's approach on both points. In the course of his judgment Neill LJ held that the order made by the first Industrial Tribunal, dismissing Mrs Barber's complaint on withdrawal on 5th May 1993 was a judicial decision, not an administrative act, as was argued on her behalf. Pausing there, we entirely accept that analysis, all the more so because Rule 13(2) begins:
"A tribunal may (a) if the applicant at any time gives notice of the withdrawal of his originating application dismiss the proceedings;"
That is not what happened in this case. Mr Bowers, who represented Bexley before Mrs Cooney, has very fairly told us that in out of court discussions with the applicants' representative, Mr Norton, on 17th February 1994, Mr Norton said that he did not have authority from his members to withdraw their applications on that day. Further, it was made clear in a note prepared by Mr Bowers during this appeal hearing that Mrs Cooney had said that she would not be happy to make an order without signatures from each of the applicants whose applications were to be withdrawn. In these circumstances it is hardly surprising that Rule 13(2)(a) orders were not made on that occasion.That, in our judgment, is the crucial distinction between this case and those of Fitt and Barber . It is our firm conclusion that unless and until a Rule 13(2)(a) order is made, or until there is a final determination following a hearing on the merits, the application remain in train, again, subject to the further arguments advanced by Mr Bowers and considered below.(3) Even if this is an interlocutory order which can be varied or revoked, it is in fact a consent order, and as such cannot be altered unless the underlying consent is withdrawn on both sides. See Fitt 643B.The difficulty with that argument is that in our judgment the Cooney Order was not an order by consent. The letter of 21st February 1994 does not record its being an order by consent. Paragraph (i) of the order does not involve the agreement of Bexley to a statement of intention by Mr Norton, we shall assume with the ostensible authority of his members (compare paragraph (ii) of the order) as to their future conduct. We think that the point here made falls more appropriately to be dealt with under Mr Bower's fifth proposition.(4) Cause of action estoppel. We repeat our conclusions in relation to the second proposition. In our judgment no cause of action estoppel arose here in the absence of a Rule 13(2)(a) order.(5) If he is wrong on his earlier propositions Mr Bowers submits that here the 37 applicants, through Mr Norton acting with ostensible authority, had given an unequivocal undertaking to the tribunal that they would, within the next month, withdraw their applications, whereupon they would be dismissed by the tribunal and the claims would then not be capable of being re-opened by reason of cause of action estoppel. He says that Bexley altered their position, since had the undertaking not been given they would have applied there and then for the applications to be dismissed. It is unjust, in these circumstances, to allow these applications to proceed. This point is answered in two ways:(i) As Mr Kibling points out, the wording of paragraph (i) of the Cooney Order refers to 37 applicants with insufficient continuous employment withdrawing their applications. Since, in the light of the EOC case, the 37 applicants in categories 3 and 4 did not have insufficient continuous service to qualify for unfair dismissal protection the undertaking is of no effect. However, leaving aside that point, since it was clearly understood which 37 applicants were included,(ii) Mr Kibling secondly submits that it would not have been open to the tribunal to dismiss the complaints under Rule 13(2)(d) in the absence of notice given under Rule 13(3).It seems to us that either Mr Kibling is correct on his second point, or Mr Bowers is right in drawing our attention to the proviso to Rule 13(3), namely that notice need not be given provided the applicants (through their representative, Mr Norton) are given an opportunity to show orally why an order dismissing the complaints should not be made.If Mr Kibling is right, then it was simply not open to Bexley to apply to have the complaints dismissed by the tribunal on 17th February 1994. Alternatively, if Mr Bowers is right (and we prefer his submission on Rule 13(3)) then the position is this; Mr Norton indicated that he did not have authority to withdraw the 37 applications on that day; consequently no order could be made under Rule 13(2)(a). If Bexley wished to have the cases determined there and then it was for them to apply under Rule 13(2)(d). They chose not to. Mr Bowers told us that he thought it unlikely that the Chairman would have acceded to such an application; that is speculation. The fact is that no such application was made. Consequently no final order was made in those cases.The employer's remedy did not however end there. When the relevant applicants failed to withdraw their complaints, as Mr Norton had indicated they would, it was then open to Bexley to apply under Rule 13(2)(d) for those applications to be dismissed. That is what they did before the de Saxe tribunal on 12th April 1995. That application was considered and rejected for the reasons given in paragraph 9 of that tribunal's reasons. In our judgment that tribunal had power to do what they did. They were not bound by the Cooney Order. It was not a final decision, order or other determination of those proceedings. Further, the de Saxe order was within the proper exercise of that tribunal's discretion. It was not perverse. It should stand.

Mrs Metson and Mrs Nast

Their cases are dealt with in paragraph 10 of the de Saxe reasons. The short point is that it is not now open to those two ladies to pursue appeals before this tribunal in circumstances where their applications were dismissed by the de Saxe tribunal without argument (they not having been amongst the 37 applicants, including the remaining 7 appellants, to which the "withdrawal point" applies). The equally short answer is to be found in the tribunal's reasons at paragraph 10:
"Mr Snow [ the applicants representative on that occasion ] conceded the factual situation, and, although he did not consent to our dismissing those cases, did not oppose our doing so. Those cases are therefore ... dismissed for want of jurisdiction."
In our judgment, in the absence of consent by these appellants to the order made by the Industrial Tribunal, it is now open to them to challenge that order on appeal.

Conclusion

It follows that the appeal must be allowed. The complaints of the nine appellants are restored. The cross-appeal is dismissed. Any further directions will be a matter for the Industrial Tribunal.Finally, having announced our decision in this appeal, Mr Bowers applied for leave to appeal on the withdrawal point. That application was refused.