Rutherford v Henderson [1998] UKEAT 844_97_0412

EAT

Rutherford v Henderson

[1998] UKEAT 844_97_0412 · 1998-12-04

JUDGE J. ALTMAN: This is an appeal from the decision of the Industrial Tribunal sitting at Newcastle-upon-Tyne on 19 February 1997, nearly two years ago.

The summary reasons were promulgated on 26 March 1997. Extended Reasons were promulgated on 21 May 1997. The matter came in ordinary course before this Tribunal by way of preliminary hearing on 8 May 1998 and in an unusually long judgment for a preliminary hearing Mr Justice Lindsay took the trouble to analyse the issues in some detail, we have no doubt partly in the hope that further inconvenience and costs could be avoided in what is by any stretch of the imagination quite a modest claim in money terms.

The history of the claims and their content is as follows. In the Originating Application of 13 March 1996, the Applicant claimed one week's holiday pay of £140, and an unlawful deduction from her final wage of £100 and we note that in dealing with her remuneration, she asserted, by saying nothing, that she did not receive any bonuses or benefits. There was then substantial correspondence from the Respondents who contested that the sums were owing, apart from a final sum of £56.87 owing for holiday pay, and we have had an opportunity of seeing the correspondence from the Respondents which was before the Industrial Tribunal, in particular, the letters of 17 February and 2 April 1997, and the earlier letter in correspondence to the Applicant's representative, letters about the various sums alleged to be owing.

The matter came before the Industrial Tribunal in circumstances which were helpfully analysed by Mr Justice Lindsay in his judgment on the preliminary hearing. It is unnecessary for us to repeat it, but it is quite clear that in not attending that hearing, the Respondents to that hearing were entitled to assume that the maximum claim that was being pursued was £240, and the failure to restrict any final judgment to that amount without giving the Respondents an opportunity to be heard, it seems to us was an error of law. Any party is entitled to be heard as to any claim made against them before a final decision is made and it seems to us that it can only be due to the Tribunal's drawing an adverse inference from their failure to attend the Tribunal in relation to this we would simply echo what Mr Justice Lindsay said in his judgment.

The first matter about which the Tribunal had to concern itself, was the claim for £140 accrued holiday pay. The Tribunal accepted at all times that £140 had been paid to the Applicant and that it followed upon matters relating to holiday pay. In their summary reasons, in paragraph 4, they said this:

"Having explained that she worked during her holiday period, her evidence [that was the Applicant's] was that she received her normal wages for that period which was paid as usual direct to her bank and in addition the Respondents gave her a cheque for £140 because she had forgone holidays. That was therefore in effect, a bonus."

By using the phrase "in effect" it must follow, it seems to us, that there was no affirmative evidence before him from the Applicant that it was simply a bonus and it is contrary to the evidence that was before him in writing from the Respondents. The Applicant as we have already pointed out, had no entitlement to bonus and therefore it seems to us that there was no evidence upon which the Tribunal could conclude that that was anything other than holiday pay.

The production of the cheque it seems to us, was an answer to the original claim, but it is acknowledged that that leaves a balance outstanding of £56.87. In support of our conclusion in relation to a bonus we referred to in the summary reasons. We have looked at the way that was described in the Extended Reasons and all that is said was that the Applicant was entitled to £196.87 which was not paid and although it was not raised in the application, the Chairman had seen no reason not to deal with it when it had been raised and admitted in the letter of 17 February. But curiously, leaving that sum as it were intact, the Tribunal then goes on to deal as if it were a separate matter with an additional sum of £140, alleged to be revealed in effect by the final accounts of the Respondents. The Tribunal then went on to award yet a further £140, this time nothing to do with holiday pay, because in paragraph 10 of the Extended Reasons he said it was, unlike the unpaid holiday pay, a deduction from the final wage. That had never been claimed. There was never a claim that that sum had been deducted from the final wage. Was this yet an additional bonus that the Chairman was finding on top of the £140? We have searched the evidence that he had before him and we looked at the Originating Application and we have come to the conclusion, that if there was some oral evidence in support of it at the hearing, the Chairman erred in law in failing to give the Respondents an opportunity to explain again that which they had already on the face of it explained in their earlier letter, when they dealt with the technical accounting explanation for that sum of money.

This was explained from that point of view in the letter of 2nd April 1997, but the record of the payment in and the payment out of that sum was relied on, it seems, by the Chairman to add a further sum of £140 to the sum that he had already refused to deduct for holiday pay, so that on the face of it, it appears there was double accounting, but on any view it was a conclusion reached without hearing the Respondents.

Finally, there was a question of £100 being the balance of the loan. In their letter of 2nd April 1997, the Respondents were prepared to admit that that was an unlawful deduction, in effect conceding that the proper place to recover that sum was in the County Court, and that therefore there was a balance of £100 strictly speaking, owing on these proceedings, although the Respondents had a set-off.

That was information clearly before the Tribunal at the time. What must have been known to the learned Chairman and which may not have been known to the Respondents, is that Respondents are entitled to make a claim for breach of contract, such as a non-payment of a loan, if it arises out of matters claimed in proceedings before an Industrial Tribunal and that Tribunal would have had jurisdiction to deal with that matter as effectively a counterclaim or a set-off, if it had been approached in that way. Again, in their absence, it appears that the learned Chairman did not advert to that and, true it is, the formalities of that application which would have acquired an Originating Application had not been gone through, so that on the face of the record there was no formal application by the Respondents for that amount.

However, the issue between the parties was a factual one as to whether or not that loan had ever been advanced to the Applicant. She said it had not, the Respondent said it had. The Respondents elected for understandable commercial reasons not to attend the hearing, the Chairman considered the evidence and he accepted the evidence of the Applicant. We can see no error of law in that whatsoever and the appeal in relation to that sum must fail.

Accordingly, we have come to the conclusion that in awarding the additional amount of £140 not contained in the original claim, the learned Chairman erred in doing that without first giving the Respondents an opportunity to be heard upon it. Secondly, in failing to deduct the £140 from the amount alleged to be paid by holiday pay, the learned Chairman treated it as if it was in effect a bonus, without there being evidence before him, so it appears, to entitle him to do so, or alternatively without in his Extended Reasons going on to support his earlier finding of a bonus in that respect. He simply omitted in his Extended Reasons to take into account the fact that £140 have been paid. In his calculations, if we may say so, where the learned Chairman appears to have fallen into error, is first not to have taken into account at any stage the £140 actually paid, by regarding it as some sort of bonus that had no relation to the contract between the parties, whilst secondly at the same time attributing two sums of £140 as entitlement in addition. As a result the Applicant would end up receiving £140 three times over. For those reasons we have decided to allow this appeal, save as concerns the £100 loan. What are we to do?

We are asked by the Respondents to remit this matter to a fresh Tribunal for rehearing. We are concerned about the vast amount of inconvenience and costs occasioned to the parties, not to speak of the public, in resolving this matter so far. We are satisfied that there is sufficient evidence before us to make a final adjudication upon the matter which, in all the circumstances, it seems to us imperative that we should do, so as to bring this very long running matter to a conclusion and so as to resolve it once and for all. We are satisfied that there is sufficient evidence before us to avoid the need to remit for a fresh hearing.

As I have already said, the £100 must stand and in the light of the fact that the Applicant conceded that she received £140 we can find no other inference that can possibly be drawn, but that that is to be set against holiday pay so that there is a balance owing of £56.87. We can see no evidential support for the proposition that there is yet another £140 owing simply because of some accounting procedure drawn to the attention of the Tribunal by the Respondents. Accordingly, we quash the decision of the Industrial Tribunal and we substitute an order that the Respondents must pay to the Applicant the sum of £156.87.

We understand that a sum of money was paid into the County Court as a result of enforcement proceedings in relation to the earlier Industrial Tribunal decision. Our having quashed that decision it follows that that sum now falls to be returned "in toto" to the Respondents together with any interest which may have accrued therein.