MAMDOUH BARAKAT RISK MANAGEMENT v MS V MOGHADAM [1999] UKEAT 1469_98_2005

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [1999] UKEAT 1469_98_2005Case No Appeal No. EAT/1469/98Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MAMDOUH BARAKAT RISK MANAGEMENTAPPELLANTMS V MOGHADAMRESPONDENT
Before
His Honour Judge Peter Clark Mr D J JenkinsDate 20 May 1999

JUDGE PETER CLARK:

By an Originating Application dated 13 June 1998 the Applicant, Ms Moghadam alleged that she was employed by the Respondent as a Secretary/P.A. from 11 December 1997 until her summary dismissal on 20 March 1998. Following termination of her employment she claimed to be owed £1,364.84 in respect of outstanding salary and holiday pay and pay in lieu of notice, after giving credit for payments received from the Respondent totalling £1,064.70. The breakdown of her claim was first intimated to the Respondent in a letter before action from her solicitor dated 27 April 1998.The Respondent entered a Notice of Appearance dated 30 June 1998. Attached to it were 15 pages of documents.On 24 July 1998 a Chairman of Employment Tribunals wrote to the Respondent, in response to their letter dated 16 July, stating that he did not regard the Notice of Appearance as raising an employers claim. On the same date an order was made against the Applicant requiring her to provide Further and Better Particulars pursuant to a request made by the Respondent and referred to in paragraph 7.2 of the Notice of Appearance contained in an earlier letter dated 26 June 1998, such order to be complied with by the Applicant by 17 August.The Applicant did not comply with that Order in time and a letter was written to her by the Tribunal indicating that her claim would be struck out. On 27 August the Applicant's solicitor applied for the Order for Further and Better Particulars made on 24 July to be set aside. The Order as sought was made by a Chairman and contained in a letter dated 4 September 1998 without, so far as we can see, reference to the Respondent.On 11 September 1998 the Respondent applied to the Tribunal for the Order of 4 September to be reconsidered and for the Originating Application to be struck out for failure to comply with the original Order made on 24 July. In that letter the Respondent through its Managing Director, Dr. Barakat, indicated that if the Order of 4 September was to be reaffirmed then the Respondent would have no choice but to appeal to the Industrial Tribunal Appeals Board which we take to be the Employment Appeal Tribunal .The response of the Tribunal was to set the matter down for a directions hearing which came before a Chairman, Mrs J. R. Hill on 28 October. On that occasion Dr Barakat appeared on behalf of the Respondent and the Applicant submitted written representations. The outcome of the directions hearing was set out in a letter from the Employment Tribunal dated 4 November 1998. In that letter the Chairman set out the procedural history of the matter and in particular referred to the Order made on 24 July and that it had been set aside by the Order of 4 September. At paragraph 5 of the letter she observes "The Order is consequently set aside in its entirety." We take that to be a reference back to the Order of 4 September, rather than any further or independent Order made by Mrs Hill following the 28 October hearing.The Chairman then refers to the Respondent's letter of 11 September and observes that in response the matter was set down for the directions hearing before Mrs Hill. The letter goes on:
"The Chairman at the directions hearing, Mrs Hill, advised the employer that he could not now seek to amend his counter-claim to incorporate matters that had emerged since the termination of employment, namely that the Applicant's P45 from her previous employment showed the termination date as 11 January, post-dating her commencement of employment with the Respondent as this was not an issue that was raised within 6 weeks of the receipt of the Originating Application."
The matter relating to the ex-gratia payment, a payment of £444.44 had already been dealt with by the letter of 24 July. Directions were then given for the case to be set down but no further orders for Further and Better Particulars, discovery or for questions to be answered under Rule 4(3) of the Employment Tribunal Rules of Procedure were made in the directions letter.

On 4 December 1998 the Respondent lodged a Notice of Appeal against

(1) dismissal of the Respondent's claim for breach of contract by the order of 4 November and the failure to make discovery orders on that occasion, and(2) the set aside Order of 4 September.As to the second part of the appeal, the Employment Appeal Tribunal Registrar, by Order dated 14 January 1999, refused to order an extension of time for appealing against the Order of 4 September. Dr. Barakat accepts that in the light of that Order by the Registrar we are not today concerned with any appeal against the Order of 4 September as such.As to the appeal against the Order of 4 November the effect of Dr. Barakat's submission is that although the directions hearing held on 28 October was designed to reconsider the Order of 4 September, no proper consideration was given to that matter. In particular he seeks an Order for further information arising out of the fact that the Applicant's Form P45 from her previous employer referred to that employment ending on 11 January 1999, one month after she started with the Respondent.That particular point appears to have been disposed of by Mrs Hill on the basis that it went to a proposed counter-claim which it was too late for the Respondent to raise. We agree that the Chairman was entitled to so rule so far as any counter-claim was concerned. In particular we have in mind a letter dated 20 March 1998 from Dr. Barakat to the Applicant in which he states that in addition to any gross pay outstanding at the termination of her employment, a discretionary additional amount of £444.44 for full and final settlement of all amounts due was there paid. It seems to us that that payment was not pursuant to an agreement to settle any outstanding claims by the Applicant against the Respondent but was an ex gratia payment. Accordingly it is not a free standing counterclaim in these proceedings but can only go as a matter of account against the Applicant's claim. Indeed, credit for that amount is given in the formulation of her claim.However, it seems to us that the issue arising out of the date on the Form P45 goes not only to a possible counterclaim but also to the Respondent's defence to the Applicant's claim. In the Notice of Appearance at paragraph 7(6) it is said:
"Ms Moghadam's summary dismissal is totally justified on the grounds that Ms Moghadam misrepresented her skills and work experiences, and/or her unsatisfactory, insulting and defamatory behaviour to other colleagues. Also Ms Moghadam breached her contract by divulging information about her employer to 3 rd parties, and by apparently taking on outside activities without approval, which is in direct breach of her contract terms."
We have been shown a copy of the Applicant's contract of employment, signed and dated by her on 12 December 1997 which contains this clause:

"Outside Activities

Before engaging in any outside activity (business venture, directorship, trustee, etc.), you must submit an outside activity form to a Managing Director and this must be approved. This policy is in regard to any activities, whether conducted during normal business hours or not, and whether or not remuneration is involved."As we understand the way to the defence to the claim is put, it is the Respondent's case that the Applicant was in repudiatory breach of the terms of her contract of employment and as such, the employer was entitled to terminate the contract summarily. If made out, that is an answer to the claim for pay in lieu of notice. We also observe that it is open to an employer to raise a defence of repudiatory breach of contract in answer to a claim to wrongful, as opposed to unfair dismissal, at common law, even although the matters relied on did not come to the attention of the employer until after termination of the contract.In these circumstances it seems to us that the question of whether or not the Applicant was engaging in outside activity as defined in the contract during the period up to 11 January 1999, (the termination date on the Applicants Form P45 from her previous employment) is relevant to that defence to the Applicant's claim. It therefore follows in our view that the Respondent is correct in submitting that the Chairman fell into error by failing to reconsider the application for further information in connection with the Respondent's defence to the Applicant's claim, rather than any proposed counterclaim.Having identified that error in the approach to the Chairman in the Directions Order of 4 November 1998, we have proceeded to consider the matter under our powers contained in Section 35 of the Employment Tribunals Act 1996. We have considered the various requests for information contained in the Respondent's letter dated 26 June 1998 and the response to those requests contained in the Applicant's solicitor's letter dated 27 August 1998. For the most part, we do not consider that the Respondent is entitled to the information requested but the exceptions lie in paragraphs (1) and (10) in the letter of 26 June 1998. We think the proper course (whether on application by the Respondent or of our motion) is to direct that the following questions be answered by the Applicant under the powers contained in Rule 4(3) of the Employment Tribunal Rules:Whether she carried on any outside activity as defined in the contract of employment between 11 December 1998 and 11 January 1999.Whether she received any earnings from alternative employment for the period 20 March to 20 April 1999, together with any supporting documentation relating to such alternative employment.The appeal is therefore allowed to that limited extent. We direct that the Applicant provide answers to those two questions identified above within 21 days of the promulgation of this judgment.In reaching our decision in this appeal, we have taken into account the written submissions made on behalf of the Applicant by her solicitors dated 14 May 1999. In particular we have considered the application made for costs in this appeal. In view of the fact that the appeal has succeeded, albeit to a limited extent, we do not think it right to make any order for costs in this case.