(1) MR R SHUTTLEWORTH (2) MR G ADAMS v MR L JOHNSON [2001] UKEAT 1247_00_3001

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2001] UKEAT 1247_00_3001

Case No Appeal No. PA/1247/00

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

(1) MR R SHUTTLEWORTH (2) MR G ADAMSAPPELLANT

MR L JOHNSONRESPONDENT

Before

Mr Justice Lindsay

Date 30 January 2001

[1]APPEARANCES For the Appellants MR I PEACOCK (of Counsel) Wallace Robinson & Morgan Solicitors 4 Drury Lane Solihull West Midlands B91 3BD For the Respondent MR D MASSARELLA (of Counsel) Commission for Racial Equality 3rd Floor Lancaster House 67 Newhall Street Birmingham B3 1NA MR JUSTICE LINDSAY (PRESIDENT) : I have before me the appeal of Mr R Shuttleworth and Mr G Adams in the matter Mr L Johnson v Hurlston Design Ltd, Mr Shuttleworth and Mr Adams . Before me to day Mr Shuttleworth and Mr Adams have appeared by Mr Peacock, Mr Johnson by Mr Massarella and the company, which is in liquidation, has not appeared nor been represented. I am grateful to Mr Peacock and Mr Massarella for a well-prepared argument in both cases, not only oral but in written skeleton form. The appeal of Shuttleworth and Adams is against the Registrar's Order refusing to extend time for lodging a Notice of Appeal. The question arises in what are, happily, unusual circumstances. It is necessary first to have a look at the chronology of the matter. On 25th January 1999 Mr Johnson presented an IT1 for racial discrimination. It would seem that the discrimination claimed was in relation to his dismissal, that being, he said, upon racial grounds. He had been employed only briefly from 14th September 1998 and, according to him and his IT1, to 22nd October 1998. The IT1 that he lodged, having given 22nd October 1998 in Box 4 under the description "Please give the dates of your employment", went on, in Box 9, where the heading is "If your complaint is NOT about dismissal, please give the date when the matter you are complaining about took place" to be completed as referring to 27th October 1998. If the dismissal was 22nd October 1998 and if the discriminatory event complained of was dismissal on racial grounds, well then, one can see at a glance that the event complained of was more than three months before the presentation of the IT1. Accordingly, it is little surprise to find that there was arranged to be a hearing as to jurisdiction. There was an oral hearing on that point on 7th May 1999, but it is important to keep in mind that the IT1 was addressed only to Hurlston Design, the company; Mr Shuttleworth and Mr Adams were not parties at the time.

[2]The result of that hearing of 7th May 1999 was that summary reasons sent out to the parties on 7th June 1999. It was held in the course of those summary reasons that the termination of employment was 31st October 1998 and accordingly, of course, that put the IT1 on 25th January 1999 within time.

[3]On 16th August 1999 extended reasons were given that ruled that the claim had been lodged within three months of the dismissal. That was a decision of Mr G Price-Rowlands sitting with Ms Phelan and Mr Woodward. The decision was:

"The unanimous decision of the tribunal is that it does have jurisdiction to hear the application."

It was put on the lines that that it was in time but that even it was not in time, well then there were just and equitable grounds for hearing the complaint pursuant to section 68(6) of the Race Relations Act 1976 . Still the position was that the only respondent was Hurlston Design.

[4]On 30th November 1999 there was an amended IT3 on the part of Hurlston still taking a point as to time. They said:

"The applicant's complaint of racial discrimination was presented to the tribunal on 25th January 1999. This was outside the statutory time limit of three months for the presentation of a complaint of this nature. In the circumstances the Respondent contends that the tribunal has no jurisdiction to hear the applicant's complaint."

The amended IT3 on the part of Hurlston took other points that purported to go to the merits of the case. They said in paragraph 10:

"In the short period that the applicant was employed by the Respondent, the applicant only managed to realise 13:4% of his salary from commissioned work. Further on review of the work carried out by the applicant even this 13.4% proved not to be chargeable to the customer, and in the light of the need for the Respondent to maintain a tight control over its financial situation, the Respondent had no alternative but to consider reducing the number of employees employed to carry out work of the same or similar nature as the applicant."

A little later in their paragraph 11:

"… the Respondent decided that the most appropriate criteria for selection for redundancy would be length of service."

Of course, if that was so, Mr Johnson was going to be in a poor position. In paragraph 12 they say:

"The Respondent considered whether there was a suitable alternative position within the Respondent company for an employee with skills and experience of the applicant, but no vacancy was available. On 22nd October 1998 given the shortage of commissioned work and the fact that the applicant had failed to bring sufficient income into the Respondent company to cover any of his salary for that month, together with the need for the Respondent to maintain tight control of its financial situation, the Respondent had no alternative but to dismiss the applicant by reason of redundancy."

That was the way the case was limbering-up to be fought, the company still being the only respondent.

[5]On 24th February 2000 the company went into liquidation and, to judge from what has been said to me, an insolvent liquidation.

[6]On 22nd May 2000 there was an oral hearing, ex parte, and the reasons for the decision were sent out to some individuals the same day, adding Mr Shuttleworth and Mr Adams and Miss Cowell, who was a woman involved in the case, as respondents. No one had appeared for the company and, of course, no one had appeared (because they were not then interested, so far as they could tell, in the case) for Mr Shuttleworth and Mr Adams. The order was:

"Under the provisions of Rule 17(1) of Schedule 1 of the Employment Tribunals Rules of Procedures 1993 on the application of Ms Sian Hughes on behalf of the Applicant there be joined as parties to these proceedings the following persons:- Mr Robert Shuttleworth as second respondent, Mr Graham Adams as third respondent and Miss Sarah Cowell as fourth respondent."

Then there was an invitation that the tribunal should be given their addresses, so presumably it had not got them at the time, and in paragraph 3:

"The second, third and fourth respondents do then have 21 days from the date of service of the proceedings and a copy of this Order upon them either to make application to show cause why one or all of them should not be joined as respondents to these proceedings or as respondents do lodge an enter a Notice of Appearance to the proceedings."

That, as I say, appears to be in resepct of an application made on 22nd May 2000 and it was sent out to the parties on 22nd May 2000.

[7]On 19th June 2000 Mr Shuttleworth and Mr Adams applied to be unjoined to the proceedings.

[8]On 23rd August 2000 there was an oral hearing for directions, now against all four respondents, including Mr Shuttleworth, Mr Adams and Miss Cowell, as well as the company. The decision growing out of that oral hearing on 23rd August was sent to the parties on 25th August 2000. Sarah Cowell was dismissed as a respondent and the second and third respondents, Mr Shuttleworth and Mr Adams, were asked to indicate to the Employment Tribunal if they were going to appeal against the decision of 16th August 1999 about the IT1 claim being within time. There was to be a further hearing to determine whether or not they should be dismissed from the proceedings. So, although they had applied to be unjoined, if that is the right term, it was not substantively dealt with but it was contemplated that it could still be. What was said in the decision, sent to the parties on 25th August 2000, was, inter alia:

"(iii) The question of whether the second respondent and the third respondent should be dismissed from these proceedings under Rule 17(2) be taken as a preliminary issue at a further hearing and further directions be given as are then appropriate at the end of that hearing. Therefore, the present hearing for further directions be postponed. … (iv) Skeleton arguments relating to the preliminary issue to be determined as to whether the second respondent and third respondent be dismissed from these proceedings be mutually and contemporaneously exchanged … (v) The preliminary issue as to whether the second respondent and the third respondent be dismissed from these proceedings under Rule 17(2) and the hearing on further directions in this case take place on Tuesday, 7m November 2000 at 9.45 a.m. The date for such preliminary hearing and further directions now having been determined will be regarded as a "fixture" and will only be postponed in the most extenuating and exceptional circumstances. The hearing take place before Mr A B Rees as Chairman and two lay members, one of whom should be a member of the Race Panel."

Mr Rees was the Chairman who heard that particular application on 23rd August 2000 on his own. So he was, in effect, reserving it to himself, but saying that there should be a full panel of three when it came back.

[9]On 26th September 2000 (dated 25th September 2000) Mr Shuttleworth and Mr Adams lodged a Notice of Appeal at the EAT seeking to appeal against the decision that had been promulgated as long before as 16th August 1999, namely the decision which by its extended reasons had explained that the IT1 was in time or was to be regarded as in time. There was, they said, inter alia, new evidence that Mr Johnson had indeed been dismissed on 22nd October 1998, exactly as he had himself first asserted.

[10]The Employment Appeal Tribunal, knowing nothing of the detailed chronology that I have set out but seeing a Notice of Appeal of September 2000 against a decision of August 1999, replied to say that they were 365 days out of time, calculating the time from the 16th August 1999. As the EAT commonly does, it sought the reasons, if any, the other side might have to oppose an extension. On 11th October 2000 Mr Johnson submitted reasons opposing any extension of time.

[11]On 11th October 2000, the same day, Mr Johnson's advisers wrote to the Employment Tribunal saying that there may be no alternative but to adjourn the hearing fixed for 7th November 2000 of the issue of whether Mr Shuttleworth and Mr Adams should be dismissed from the proceedings.

[12]On 27th October 2000 the Registrar made an order as follows:

"AND UPON DUE CONSIDERATION of paragraph 3(1) of the Practice Direction (Employment Appeal Tribunal – Procedure) where it is clearly the responsibility of the Appellant to ensure that a properly constituted notice of appeal is submitted to the Employment Appeal Tribunal within 42 days of the date stamped on the Extended Reasons as the date sent AND UPON CONSIDERATION of the fact that despite late receipt of the Employment Tribunal's Extended Reasons the Appellants were notified of their joinder on or about 2 June 2000 by their own admission and this allowed them sufficient time in which to admit the notice of appeal AND UPON DUE CONSIDERATION of the Judgment given in UNITED ARAB EMIRATES AND (1) MR ABDELGHAFAR (2) DR A K ABBAS there has been shown no good or exceptional reason why an appeal could not have been presented within the time limit laid down in paragraph 3(2) of the Employment Appeal Tribunal Rules 1993 IT IS ORDERED that the application for an extension of time in which to present the Notice of Appeal is refused"

[13]Well, that is the chronological background to the case.

[14]I shall not pay much attention to Mr Massarella's first argument that Mr Shuttleworth and Mr Adams cannot appeal against the decision of 16th August 1999 upon the simple ground that they were not party to it because if they were not party to it then, surely, it should not be that they are irretrievably bound by it without having any chance of challenging it. It seems to me that there cannot be a position in which one is inescapably bound by that which one has had no opportunity to oppose by evidence or question or challenge.

[15]Mr Peacock has cited to me two cases – Linbourne v Constable

[1993] ICR 698

and Watts v Seven Kings Motor Co Ltd and another

[1983] ICR 135

– in both of which, although different in many respects, the Court was careful to make it plain that an opportunity should be given to those who are joined late to proceedings in order to challenge decisions which would affect them but to which they were not party. Mr Massarella argues that it cannot be right to allow what he calls an "unpicking" of earlier decisions and I quite see that in many cases it would need careful judicial control. But the only "unpicking" here could be as between the person who had the benefit of the order and the incoming lately added parties. Obviously, the "unpicking" would not affect parties who had already been joined and had been party to the decisions which, it was said, were being sought to unpick. So such "unpicking" as there would be would be relatively limited and, it seems to me, it is axiomatic that a person who has not been a party to a decision can have some opportunity to challenge that decision before finding himself or herself irretrievably bound by it.

[16]This leads me on to EAT Rule 3(2) which is the basic rule about the period in which an appeal might be lodged. It says:

"The period within which an appeal to the Appeal Tribunal may be instituted is 42 days from the date on which extended written reasons for the decision or order to the employment tribunal were sent to the appellant, … 42 days from the date on which the extended written reasons for the decision are sent to the appellant."

[17]Well, the appellants here are Mr Shuttleworth and Mr Adams. On what date were the extended reasons sent to the Mr Shuttleworth or Mr Adams? One notices that the rule does not say when the extended reasons were received by the appellants, it does not say when the appellants knew of the contents of the extended reasons or when they could have guessed what the contents of the extended reasons would be, nor is there any provision that the date runs, in a case involving a corporation, from the date when any officer of that body was addressed with the extended reasons.

[18]Mr Massarella accepts, as I understand it that the extended reasons have not yet been sent to Mr Shuttleworth and Mr Adams in the sense of the extended reasons having been addressed by the Employment Tribunal to those individuals. He argues, though, that they were directors or the directors of the company at the time and that it is not denied and can be inferred that they would actually have received them. I do not read the rule as looking to who actually received documents in such a way. It seems to me that the person to whom the extended reasons are sent is the person to whom they were addressed and in a company case they would be addressed, presumably, to the company and not to specified individuals such as Mr Shuttleworth and Mr Adams. It matters not that Mr Shuttleworth or Mr Adams qua directors, came to know, as presumably they did, of the contents of the decision. Mr Massarella's skeleton argument says that so to construe Rule 3(2) is wholly artificial. But it would seem to me, to be the only the possible construction of the words used and any alternative construction, for example, that officers of a company, even though not parties directly as individuals at the time, could find themselves bound upon a later joinder by a decision against the company which they individually had no good reason to oppose, could lead, as it seems to me, to manifest unfairness in that, individuals could find themselves bound by decisions which they had no reason to think would affect them at the time the decision was made. Indeed, it seems to me, that it is not even clear whether the decision of the Employment Tribunal arising out of the oral hearing of 7th May 1999 could even yet have been sent to the appellants in conformity with or to trigger Rule 3(2). Decisions are to be sent to parties – Employment Tribunal Rule 10(5). There was accordingly no ability in June 1999 or August 1999 to send the decision and extended reasons to strangers such as Mr Shuttleworth and Mr Adams. Indeed, even now, it is not clear whether Mr Shuttleworth and Mr Adams are truly and irretrievably and necessarily parties to these proceedings. On 22nd May 2000 it was provisionally ordered that they should be parties; that was done, as I have mentioned, at an ex parte hearing at which they were not represented and at a time when, of course, they were not already parties. I have already read paragraph 1 of the decision sent to the parties on 22nd May 2000. But, as I have already cited, they were permitted to move later inter partes to set that aside and such application was made and the question of their joinder was adjourned in order to be ruled upon on 7th November 2000. It would seem from the correspondence - perhaps it does not matter - that it was Mr Johnson's side that asked for that date to be abandoned, but, at any rate, there was no hearing on 7th November 2000 and both Mr Peacock and Mr Massarella tell me that there is not, as far as they know, a replacement date as yet. So it is still not decided inter partes whether Mr Shuttleworth and Mr Adams are to be parties or remain parties. Till that is held, they are or may be merely strangers to the action. So one does doubt the propriety of sending out the extended reasons to them as if they were incontrovertibly parties.

[19]In the circumstances I have described, it seems to me that I cannot hold the Notice of Appeal to be out of time.

[20]So far as the merits of the appeal are concerned, I have the familiar case of Abdelghafar , the very case mentioned in the Registrar's Order, cited to me to some extent as to how far the merits should or should not be taken into account. I do not think that the merits here are sufficiently clear to be capable of really being a significant force one way or another. I cannot hold that they are so weak as to militate against Mr Shuttleworth and Mr Adams being allowed to take a challenge to the decision of the 16th August 1999 further. It seems to me, that Rule 3(2) not having been complied with, I must set aside the Registrar's Order as time has not even started to run against Mr Shuttleworth and Mr Adams, let alone has expired.

[21]What then is the procedural way forward? There may be alternatives by way of Mr Shuttleworth and Mr Adams seeking reviews but I find that not a convenient route because the jurisdiction as to review is relatively limited and if Mr Shuttleworth and Mr Adams are to be afforded a fair opportunity of challenge, it seems to me that they do not necessarily get that by way of invoking the jurisdiction as to review. It seems to me that there four stages here.

[22]Stage 1 is this: the Employment Tribunal should determine inter partes whether Mr Shuttleworth and Mr Adams should be parties to these proceedings. A material factor will no doubt be whether there is any possibly timely claim against them or other possible claim that could be allowable under section 68(6) of the 1976 Act, bearing in mind that Mr Johnson's own IT1 appears to say that his employment terminated on 22nd October 1998 and yet equally indicates a degree of confusion about the reference to the other date, 27th October 1998; bearing in mind the particulars which Mr Johnson has given when the claim was as against the company, and given also that no claim was raised against Mr Shuttleworth and Mr Adams until after February 2000. Whether or not the Employment Tribunal would wish to hear evidence as part of that ruling upon whether Mr Shuttleworth and Mr Adams should be or remain parties, is entirely a matter for the Employment Tribunal. But there would be no point in joining Mr Shuttleworth and Mr Adams if it had become clear that there was no possibility of a claim that was either within time or capable of being saved by section 68(6) being available to Mr Johnson. It will be matter for the Employment Tribunal but it may be thought appropriate that that first stage, which I have described, should be determined by a panel not involved in the decision of 16th August 1999, as otherwise Mr Shuttleworth and Mr Adams might well, with some justice, feel that they were not getting an independent hearing of the issue which, so far as they were concerned, will have been ruled upon for the first time, namely, whether there was a possible timely claim or a claim meriting extension under section 68(6). So much for the Stage 1.

[23]Stage 2 . If the Employment Tribunal holds that it is possible that a timely or allowable claim may lie against Mr Shuttleworth and Mr Adams, then, subject to other more general considerations relative to late joinder, including why they were not joined sooner, the Employment Tribunal may , it is entirely a matter for them, then rule that they should indeed be joined.

[24]Stage 3 . If they are thus formally joined by order ruling against their application that they should not be joined, then at that point and for the first time Mr Shuttleworth and Mr Adams will be plainly be parties to the proceedings begun by Mr Johnson in which an order indicating that the proceedings were timely subsisted. At that point they will be entitled to be sent a copy of the extended reasons of 16th August 1999 and at that point, if they were not sent such copies, Mr Johnson would be entitled to ask the Employment Tribunal to send them copies of the extended reasons of that date. Thereafter, Mr Shuttleworth and Mr Adams could expect to be bound by the decision of 16th August 1999 unless it came to be varied on appeal to the Employment Appeal Tribunal.

[25]Stage 4 . It would be open to an Appeal Tribunal on such an appeal - and it would be entirely a matter for the Employment Appeal Tribunal - to say that whilst, quoad the company, the ruling that the IT1 was in time was unexceptionable, it needed to be remitted for a fresh hearing before it was finally to bind Mr Shuttleworth and Mr Adams, who had had no reason as individuals to contest the point. Indeed, in the sense that complaint against the company could draw fire away from them, they might have had some reason - it might have conflicted with their director's obligations, but they might have some individual reason - not to contest it as individuals. Amongst the factors affecting the Employment Appeal Tribunal would be, not improbably, a consideration of what had been said and done at the Stage 1 decision and whether the Stage 1 decision had been appealed and, if so, to what effect. It is not impossible to foresee an appeal against the Stage 1 decision and an appeal by Mr Shuttleworth and Mr Adams against the 16th August 1999 decision coming on together. The matter is not at all free from complication.

[26]That series of stages is a possible way ahead. In my judgment, it is preferable to using Rule 39(3) which has been mentioned in the course of argument, because there is a possibility that the persons involved here, Mr Shuttleworth and Mr Adams, might prove not to be parties. I do not suggest that the stages I have mentioned are the only possible stages. They seem to me appropriate but, no doubt, one or other of the parties may seek to argue otherwise. But, strictly speaking, that is not immediately before me.

[27]If I revert simply to the business before me, I allow the appeal against the Registrar's Order and, in case it may be useful to keep alive the application, I adjourn generally the application by Mr Shuttleworth and Mr Adams to extend time, merely lest it at some stage becomes a convenient procedural device, with liberty to restore it on adequate notice to each side. I do not validate the present Notice of Appeal because, it seems to me, amongst other issues as I have mentioned, that it will be necessary to determine whether Mr Shuttleworth and Mr Adams are truly to be parties to these proceedings. As to which, as I have mentioned, there are stages at which the matter can be resolved.