MR D HANCOCK v DONCASTER METROPOLITAN [1998] UKEAT 1078_96_2105

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [1998] UKEAT 1078_96_2105

Case No Appeal No. EAT/1078/96

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

MR D HANCOCKAPPELLANT

DONCASTER METROPOLITANRESPONDENT

Before

His Honour Judge H J Byrt

Date 21 May 1998

JUDGE BYRT QC:

This is an appeal against a decision of the Industrial Tribunal sitting in Leeds. Their decision was promulgated on 16 August 1996, and its effect was to dismiss Mr Hancock's claim under the Wages Act 1986 , and to order him to pay £200 towards the Respondents' costs.

Mr Hancock appeals that decision on both counts.

The background facts, so far as they are relevant to this appeal, are as follows: Mr Hancock had been employed by the Respondents for a number of years as an adviser on Further and Higher Education. In 1993, the post disappeared and Mr Hancock was threatened with redundancy. The Respondents came up with alternative employment which they thought suitable for Mr Hancock. They offered it to him and his was the choice whether to accept that alternative employment or opt for redundancy. The job was as an Education Assistant at a significantly reduced salary. On 1 September 1993, a meeting took place between the Respondents, Mr Hancock and his representative, Mr Hughes. The case Mr Hancock sought to place before the Leeds Tribunal was that, at that meeting, he accepted that alternative employment on the understanding that his pay would be protected under the Respondents' personal salary protection policy. His new contract commenced on 6 September 1993, and thereafter he was paid the lesser salary until that contract came to an end in December 1995 on his retirement on the grounds of ill-health. On 13 March 1996, he brought a claim against the Respondents alleging a number of matters with which we are not presently concerned, as well as a claim under the Wages Act . He claimed that his salary should have been his protected pay and that the lesser salary he was paid was the amount it was, because the Respondents had made unlawful deductions from that to which he was entitled.

At a pre-hearing review on 16 May 1996, His Honour Judge Wolstenholme, directed that only the Wages Act should, in the first instance, proceed to a hearing, the remainder of the claim to be adjourned pending the outcome of certain proceedings in the High Court in which Mr Hancock was Defendant. These directions settled the format of the proceedings before the Leeds Tribunal on 26 May 1996.

Having regard to the nature of Mr Hancock's claim under the Wages Act , it would have been necessary for the Leeds Tribunal to make findings as to what was agreed on 1 September 1993 about salary. Was it a term that his pay would be protected?

The Tribunal never reached that stage because Counsel for the Respondent employers took a preliminary point. He referred to the fact, which was a matter of record, that Mr Hancock had, on 30 November 1993, commenced proceedings before the Sheffield Industrial Tribunal, alleging that he had been unfairly dismissed from his earlier employment. The basis of his claim before that Tribunal was that the alternative employment the Respondents had offered him and he had accepted, was not reasonably suitable because it was at a significantly lower salary.

By its decision, promulgated on 13 July 1995, the Sheffield Industrial Tribunal dismissed that claim because it held that, pursuant to Section 84(1) of the Employment Protection (Consolidation) Act 1978 , Mr Hancock had not been dismissed. But, on its way to that conclusion, the Tribunal had found as fact the following:

"9. At the meeting on 1 September Mr Hughes asked if the alternative job offer was still on the table. The respondents said that it was and a written copy of the offer dated 1 September 1993 was produced. Mr Hughes then asked if pay protection would apply and he was told that it would not. Mr Hughes and the applicant then conferred together and in their evidence to us they both accept that the choice confronting the applicant was either to take a redundancy payment or to accept the new job. The applicant decided to accept the new job."

The necessary implication of those findings was that the lesser salary was accepted by Mr Hancock, and his wage was not protected pay.

Mr Jack, for the Respondents, submitted before the Leeds Tribunal that Mr Hancock was now barred by the plea of res judicata from alleging in the second set of proceedings, as the basis of his claim under the Wages Act , that his wage was in fact protected pay. Had Mr Hancock wished to make that claim, he should have raised it before the Sheffield Tribunal as an alternative plea or by amendment, since clearly it was relevant to the issue, then to be decided, whether the job he was offered was suitable alternative employment.

In support of that submission, he referred the Leeds Tribunal to the case of Henderson v Henderson [1843] 3 Hare 100 . In his judgment, the Vice Chancellor, Sir James Wigram said:

"I believe I state the rule of the Court correctly when I say that where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward the whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in context, but which was not brought forward, only because they have, from negligence, inadvertance, or even accident, omitted part of their case. A plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation and which the parties, exercising reasonable diligence, might have brought forward at the time."

In argument before us, Mr Jack explored the meaning of that passage by drawing our attention to the case of Talbot v Berkshire County Council [1994] Q B 290 at 294, where, in his judgment, Stuart-Smith LJ explained that the rule as stated in Henderson's case is in two parts:

"The first relates to those points which were actually decided by the Court; this is res judicata in the strict sense. Secondly, those which might have been brought forward at the time but were not. The second is not a true case of res judicata but rather is founded on the principle of public policy in preventing multiplicity of actions, it being in the public interest that there should be an end to litigation."

The Sheffield Tribunal had made a finding that the alternative employment offered did not include protected pay. The Wages Act was clearly a point which might have been brought forward at the time but was not. On both points, Mr Hancock was now debarred.

In his submissions to us, Mr Jack accepted that the rule, as formulated in the case of Henderson , admitted of instances where that rule should be relaxed. Those instances were where special circumstances existed and justice demanded such relaxation. He cited the case of ARNOLD v NATIONAL WESTMINSTER BANK LTD

[1991] 2 AC 93

. In that case, Lord Keith of Kinkel said:

"..... In my opinion your Lordships should affirm it to be the law that there may be an exception to issue estoppel in the special circumstance that there has become available to a party further material relevant to the correct determination of a point involved in the earlier proceedings, whether or not that point was specifically raised and decided, being material which could not by reasonable diligence have been adduced in those proceedings. One of the purposes of estoppel being to work justice between the parties, it is open to courts to recognise that in special circumstances inflexible application of it may have the opposite result, as was observed by Lord Upjohn in the passage which I have quoted above from his speech in the Carl Zeiss case [1967] 1 A.C. 853,.947."

Mr Jack submitted that, with reasonable diligence, Mr Hancock could and should have raised his Wages Act claim before the Sheffield Tribunal because the issue relating to pay protection must have been very much in his mind when he was arguing the terms of the contract which he contended did not amount to one of suitable alternative employment.

The Leeds Industrial Tribunal accepted Mr Jack's submissions and dismissed Mr Hancock's claim under the Wages Act .

Now for Mr Hancock's arguments on appeal.

Mr Hancock has clearly expended much thought and energy in compiling his carefully considered argument in support of his appeal. We trust that we do no injustice to his case when we say that he advanced four main points:

He submitted that the rule in Henderson had no place in the context of tribunal work.

He claimed that Article 7 of the Industrial Tribunal (Extension of Jurisdiction) Order 1994 prohibited him bringing his Wages Act claim before the termination of his employment, and as at the date in November 1993 when he commenced the first proceedings, namely those before the Sheffield Industrial Tribunal, he was still employed by the Respondents.

No matter what the rule in Henderson says, he was not bound to join his two separate courses of action in one proceeding: Halsbury's Laws Vol 16 para 975 (Revised Edition).

If he was wrong in his submission that this rule in Henderson does not apply, then special circumstances exist which, in justice, argue he should be allowed to proceed with his claim. We take those points in turn.

Many would sympathise with Mr Hancock's contention that the pleas of res judicata and issue estoppel have no place in tribunal procedures where informality and access to litigants in person should arguably determine such matters. However, it is to be noted that these pleas were developed in equity in order to ensure that justice is done and there seems no good reason why they should not serve those ends of tribunals as well as the traditional courts. The position in law is that the rule in Henderson , as expanded and explained in later authority, has been applied in Industrial Tribunals for quite some time, and has been sanctioned by the EAT and the Court of Appeal: see Barber v Staffordshire County Council (supra) . Its applicability was questioned in Munir & Another v Jang Publications [ 1988] ICR 214 but when that case went to the Court of Appeal, that applicability was affirmed: see

[1989] ICR1

. This must dispose of Mr Hancock's first point.

With regard to Mr Hancock's second point: we do not accept that, because there might be a contractual issue arising in the course of his Wages Act claim, such a claim could not be commenced until the termination of his contract. In our judgment, Article 7 of the Industrial Tribunals Extension of Jurisdiction (England and Wales) Order 1994 clearly predicates a complaint arising from the circumstances in which an employment came to an end. Instances might be a claim for unfair dismissal or redundancy. This statutory instrument in no way precludes a Wages Act claim which the provisions of the Act require to be brought within three months of the date of payment of the wage from which an unlawful deduction is alleged. On reflection, would it not be absurd that such a claim had to be postponed till the conclusion of the contract of employment which, in theory, might be in five or ten years time?

Mr Hancock's third point is that Halsbury's Laws state that a claimant is not bound to join two separate cases of actions in one proceeding. The passage in Halsbury to which Mr Hancock is referring relates to a cause of action estoppel rather than an issue estoppel. Paragraph 977 of Volume 16 (Revised Edition) refers to the latter and says:

"An estoppel which has come to be known as 'issue estoppel' may arise where a plea of res judicata could not be established because the causes of action are not the same.

A party is precluded from contending the contrary of any precise point which, having once been distinctly put in issue, has been solemnly and with certainty determined against him. Even if the objects of the first and second actions are different, the finding on a matter which came directly (not collaterally or incidentally) in issue in the first action, provided it is embodied in a judicial decision that is final, is conclusive in a second action between the same parties and their privies.

. .... Where a cause of action is held not to fall within the scope of issue estoppel, it may none the less be struck out as vexatious or frivolous; to relitigate a question which in substance has already been determined is an abuse of process."

This passage echoes what Stuart-Smith LJ said in Talbot v Berkshire County Council (supra) immediately after the passage quoted above:

"..... The second is not a true case of res judicata but rather is founded upon the principle of public policy in preventing multiplicity of actions, it being in the public interest that these should be an end to litigation; the court will stay or strike out the subsequent action as an abuse of process: see per Lord Wilberforce in Brisbane City Council v A-G for Queensland [1979] AC 411 ."

In our judgment, the issue of whether Mr Hancock's second contract of employment contained a pay protection provision is central to the claims made both to the Sheffield and the Leeds Industrial Tribunals. And whether it is correct to say that that issue is subject to the plea of res judicata, issue estoppel or a possible abuse of the process of court, it is our view that the alternative version Mr Hancock now seeks to put before the Leeds Tribunal should have been raised as an issue before the Sheffield Tribunal in the alternative or by way of an amendment of his case.

Mr Hancock's last point is that this Tribunal should find his case raises special circumstances which would permit an exception to the rule in Henderson . We do not find that the circumstances are in any way analogous to those contemplated by Lord Keith of Kinkel in Arnold v National Westminster Bank (supra). His new plea that his salary was covered by the Respondents' pay protection policy is not a point which has become available since the Sheffield Tribunal hearing, nor is it one which could not by due diligence have been raised in those earlier proceedings.

In short, we are satisfied that the Leeds Tribunal directed themselves correctly as to the law and came to the right decision to dismiss Mr Hancock's claim. He should have raised his plea concerning the pay protection issue as an alternative pleading so that the Sheffield Tribunal could focus their minds on the point and come to an express finding on the evidence Mr Hancock chose to adduce before it. As it is now, the Leeds Tribunal could have been faced with the embarrassing position of possibly coming to a finding contradictory to that which was the basis of the earlier Tribunal's finding if Mr Hancock was allowed to proceed with his Wages Act claim.

Despite Mr Hancock's forceful argument, we have no hesitation in dismissing his appeal on that claim.

There remains his appeal on the costs order.

When His Honour

Judge Wolstenholme gave his directions in May 1996, he said this:

"On the documentation put before me and on the arguments addressed to me, it seems clear that the Applicant accepted his job on terms that pay protection did not apply. That also seems to have been expressly decided by the Industrial Tribunal sitting in Sheffield in the Applicant's previous case. I therefore conclude that the Applicant's Wages Act claim has no reasonable prospect of success."

Accordingly, he required Mr Hancock to pay a deposit of £50 as a condition attaching to his leave for the case to proceed before the Leeds Tribunal. At the conclusion of the hearing before that Tribunal, the panel took the view that he had been put on notice that his case stood little or no chance of success. Having dismissed his claim, as had been predicted, the Tribunal, in the exercise of their discretion, made an order for costs against him, mitigated in amount by the fact that the Respondents had not furnished him with a complete list of their authorities.

We have considered whether the Leeds Tribunal have in any way been incorrect in the principles they applied or in their approach to the exercise of their discretion. In our judgment, we think they were entitled to take the view which they did, that Mr Hancock had acted unreasonably in continuing with his claim after the Judge's warning. We therefore can find no good reason to disturb the Tribunal's decision and accordingly we must dismiss this limb of the appeal also. That is our order.