MR D MCLUSKEY v DUTY AND TAX FREE WORLD INTERNATIONAL LTD T/A THE DUTY FREE BUSINESS [2001] UKEAT 1369_00_2202

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2001] UKEAT 1369_00_2202

Case No Appeal No. EAT/1369/00

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

MR D MCLUSKEYAPPELLANT

DUTY AND TAX FREE WORLD INTERNATIONAL LTD T/A THE DUTY FREE BUSINESSRESPONDENT

Before

Mr Justice Charles Mr J R Rivers Mr H Singh

Date 22 February 2001

[1]APPEARANCES For the Appellant MR M AFEEVA (of Counsel) Instructed By: Messrs Green Vine Beverley Palos Solicitors 56-58 Bloomsbury Street London WC1B 3QT For the Respondents MR C BENNISON (Representative) First Business Support Southern Area Office 12 Westminster Court Hipley Street Old Woking Surrey GU22 9LQ MR JUSTICE CHARLES : We have before us an appeal from a decision of an Employment Tribunal sitting at London (South). The Extended Reasons for that decision were sent to the parties on 1 September 2000. The hearing took place on 29 August 2000.

[2]The parties are a Mr McLuskey and a company called Duty & Tax Free World International Ltd. The decision of the Employment Tribunal which is the subject of the appeal is that:

"The Originating Application in this case be struck out under Rule 13(2)(e) of the Employment Tribunals Rules of Procedure 1993 on the grounds that the manner in which the proceedings have been conducted by and on behalf of the Applicant has been scandalous, frivolous or vexatious."

[3]The background appears in part from paragraphs 4 and 13 of the Extended Reasons. They are in the following terms:

"4 Also at the outset of the hearing the issues were established. It was established that the Applicant qualified for the right not to be unfairly dismissed and that he was dismissed. The Respondent alleged that the reason for dismissal related to the Applicant's conduct / some other substantial reason. That the Applicant accepted that that was the reason for dismissal. The Applicant alleged that the unfairness of the dismissal arose in two respects. First the Applicant alleged that the disciplinary procedure was flawed. Secondly the Applicant alleged that dismissal was not an appropriate sanction and did not fall within the responses of a reasonable employer given the misconduct found. The Respondent resisted the complaint saying that the procedure was not flawed and that dismissal was an appropriate sanction. However the Respondent contended that even if the dismissal was unfair there was a significant degree of contributory conduct on the part of the Applicant. 13 After a lengthy adjournment during which the Tribunal members considered the contents of the witness statement and the Originating Application and after agonising over the balance of prejudice as between the parties the Tribunal unanimously decided to strike out the Originating Application. In doing so the Tribunal noted that the Applicant had produced a witness statement of over 20 pages at the Tribunal hearing which witness statement had not previously been seen by the Respondent. In the view of the Tribunal the witness statement recited matters which were largely irrelevant and contained highly offensive prejudicial comment and allegations against various people including against one person, who had not previously been mentioned, of distributing pornography. The Tribunal noted that no hint of any such comments and allegations appeared in the Originating Application. The Tribunal considered that the Applicant was well able to understand the issues in the case and was legally represented. The Tribunal failed to find any evidence at the hearing of a genuine attempt by the Applicant to litigate an unfair dismissal complaint. In the view of the Tribunal the Applicant was using the public proceedings to make various prejudicial comments about the Respondent and individuals which prejudicial comments were unconnected to the issues in the unfair dismissal case. The Tribunal considered that was an abuse of the Tribunal proceedings and the Tribunal ordered that the Originating Application should be struck out."

[4]By way of further background we add that Mr McLuskey was suspended by a letter dated 14 February 2000 which did not particularise the reasons for that suspension. The next day he was sent a further letter which identified the grounds of gross misconduct alleged against him which led to the decision of the employer to dismiss him. These grounds were as follows:(a) Breached the company's confidentiality with reference to a new project.

(b) Brought the reputation of the company into disrepute by sending wholly inappropriate e-mails using company equipment.

(d) Sexually harassed another employee.

(e) Blatantly disobeyed a legitimate management instruction not to contact another employee of the company whilst on suspension. (I should add that that was an instruction given in the letter of 14 February 2000 which was read out to us during the course of today's hearing).

[5]The Extended Reasons do not identify the conduct or other substantial reason that was relied on by the employers pursuant to Section 98 Employment Rights Act 1996. I use the phraseology "conduct or other substantial reason" taking it from paragraph 4 of the Extended Reasons. However this appears from the allegations of gross misconduct I have just referred to and also from paragraphs contained in the particulars of the defence in the IT3, in particular paragraphs 3, 9, 10 and 11 thereof which are in the following terms:

"3 By letter of date 14 th February 2000, the Applicant was suspended, with immediate effect, from work, on full pay, pertaining to serious and disturbing e-mail irregularities. 9 In response to the evidential matters that the Respondents had before them; the fact that the Applicant admitted divulging sensitive, prohibited corporate information to an external source, despite being expressly forbidden to do such; whilst suspended and forbidden from contacting company employees, in particular Susan Gray, the Applicant wilfully and blatantly disregarded this imposition and contacted the said employee. 10 The evidential matters in the Respondent's possession referred to at paragraph 9 above are numerous and varied e-mails which the Respondent deemed to be either obscene and or intimidating and or frightening and or vulgar, all of which were an abuse of company property and or time and or resources. 11 These e-mails contained materials which were of a lewd nature and were part of a campaign by the Applicant to sexually harass and intimidate a member of the Respondent's workforce in to succumbing to his unwanted advances."

Paragraph 12 then goes on to contain examples of the e-mails referred to in paragraph 11.

[6]I pause to comment that we are unclear whether paragraph 9 contains a wholly separate ground but it would appear from the grounds of gross misconduct found that it does, albeit that we were told today that at the heart of the employer's case is the sexual harassment of another employee through the use of e-mails.

[7]The Applicant's case, as pleaded, was that he was not given adequate reasons for his suspension on 14 February and that a proper fair and reasonable process of investigation leading to his dismissal was not carried out. His grounds are set out in paragraphs 5 to 13 of the particulars of his claim attached to his IT1. Paragraphs 12 and 13 of that are in the following terms:

"12 The reasons given by the Respondents in their letter of the 1 st March 2000 in which they claimed they had grounds to find gross misconduct were not, in any event, either individually or in combination, adequate to support a finding of gross misconduct. Moreover, gross misconduct and dismissal without notice was not a sanction that a reasonable employer could conclude. 13 Even if, which is not admitted, the Respondents adopted a fair procedure, they failed to prove any of the allegations made against the Applicant. The Applicant did not sexually harass any member of staff, did not breach any confidentiality, nor bring the name of the Company into disrepute and did not use the e-mail system of the Respondents in an obscene manner."

[8]As those pleadings demonstrate and, as indeed flows from the gross misconduct relied on by the employer, an issue was whether the Applicant had sent e-mails, to quote from paragraph 11 of the particulars of defence: "which were of a lewd nature and were part of a campaign by the Applicant to sexually harass and intimidate a member of the Respondent's workforce in to succumbing to his unwanted advances".

[9]As I have said, the issue as to the sending of lewd e-mails is not mentioned by the Employment Tribunal in the Extended Reasons. In paragraph 4 of those Extended Reasons they refer only to the allegation in general or indirect terms by referring to the fairness of the procedure and the dismissal not being an appropriate sanction.

[10]It seems to us that on reading the pleadings that either an issue in this case was, or it is no surprise that an issue in this case became, that other members of the staff of the employers were sending lewd and pornographic e-mails, to each other. We say this because it is a natural consequence of an assertion that the dismissal is not within the band of reasonable responses. One only has to posit the position of a company in which nobody sends these types of e-mail one to another and ask whether e-mails containing the language particularised by the employers would, or would not, warrant immediate dismissal to recognise that a defence may be "Well I was sending those e-mails but so was everybody else".

[11]Neither side put in a Statement before the date of the hearing before the Employment Tribunal but we were told that documents were exchanged. So far as the Statement of the Applicant was concerned it was, we were told, not exchanged between the parties on the day before the hearing commenced and paragraph 11 of the Extended Reasons identifies what Counsel for the Applicant then said was its relevance. That paragraph is in the following terms:

"11 The question of motive for the paragraphs being in the statement in the first place was raised and Mr Afeeava submitted that the motive was to show the unpleasant atmosphere in the office."

[12]Before us Counsel has gone further and said that the relevance was to support the allegation, in particular, that the sanction of dismissal was not within the range of reasonable responses and that the process of investigation was not conducted reasonably and fairly.

[13]In his written submissions Counsel for the Appellant raised a point on the Rules that the Tribunal erred in law by exercising a discretion under Rule 13(2)(e). As I understood the submission, it was that the Employment Tribunal should have exercised their discretion under Rule 13(2)(d). Even if we had found that submission to be correct, it would not seem to us to identify an error of law which would warrant this appeal succeeding. Both sub-rules refer to conduct that is scandalous, frivolous or vexatious.

[14]However, it seems to us that the submission is in fact misconceived and is based on a misreading of Rule 13(2) (d) and (e). They are in the following terms:

"13(2) A tribunal may - (d) subject to paragraph (3), at any stage of the proceedings, order to be struck out or amended any originating application or notice of appearance, or anything in such application or notice of appearance, on the grounds that it is scandalous, frivolous or vexatious; (e) subject to paragraph (3), at any stage of the proceedings, order to be struck out any originating application or notice of appearance on the grounds that the manner in which the proceedings have been conducted by or on behalf of the applicant or, as the case may be, respondent has been scandalous, frivolous or vexatious."

It is apparent from the language of those Rules that subparagraph (d) is not dealing with a Statement in support of an Originating Application but with the Originating Application itself.

[15]The Appellant through his Counsel argued that sub-rule (e) was only dealing with matters at the hearing and, in support of that, placed reliance on paragraphs T 647 to 649 of Harvey . In our judgment that argument again is misconceived. In part, it seems to us, that it is based on the way in which the authors of Harvey have split up paragraphs 13(2) (d) and (e) for the purposes of analysis. Both (d) and (e) refer to scandalous, frivolous or vexatious matters. The heading in Harvey to the passage relied on by the Appellant is:

"Conduct at hearing, scandalous, frivolous or vexatious"

. That heading does not reflect the wording of the relevant Rule. The start of each Rule refers to what can be struck out.

[16]Any strike out of an application goes back to the Originating Application or part of it, because it is that which identifies and brings the claim that would be struck out. Sub-rule (d) refers to matters in that document. Sub-rule (e) refers to the manner in which proceedings are conducted which covers, for example, Statements put in, the way in which evidence is given and the way in which parties conduct themselves before a tribunal. The phrase "scandalous, frivolous or vexatious" includes anything that might be deemed an abuse of process of the court: see Harvey paragraph T 632 which also (if recollection serves me correctly) refers to two cases referred to us on behalf of the Respondents, Ashmore v British Coal Corporation

[1990] IRLR 283

and E T Marler Ltd v Robertson

[1974] ICR 72

. In particular we were referred to the following passages in the Marler judgment at pages 75 D to E, where it is stated:

"Costs are a matter of discretion for the tribunal and an appeal against the exercise of discretion can only succeed if it can be shown on the face of the decision that the tribunal has misdirected themselves in law as to the manner in which discretion should be exercised or, alternatively, that the facts point overwhelmingly to the exercise of the discretion in one manner that any other decision can only have been arrived at through a failure to exercise the discretion judicially." [that was dealing with an application for costs ordered on the basis of whether a party has acted frivolously or vexatiously]. We were also referred to a passage at 76 E which is in the following terms: "

If an employee brings a hopeless claim not with any expectation of recovering compensation but out of spite to harass his employers or for some other improper motive, he acts vexatiously, and likewise abuses the procedure. In such cases the tribunal may and doubtless usually will award costs against the employee."

[17]We also accept the submission made on behalf of the Respondent that there is no standard case for striking out for abuse. It is a matter for an Employment Tribunal to consider in the exercise of its discretion having regard to all the circumstances of the case.

[18]What we have to consider is whether the Employment Tribunal erred in law in the exercise of their discretion, which is a judicial discretion. An alternative ground is that we can set aside a decision on the basis of perversity.

[19]In our judgment the Employment Tribunal did not err in considering the application to strike out under Rule 13(2)(e). As appears from paragraph 13 of the Extended Reasons the Employment Tribunal considered that there was not a genuine attempt by the Applicant to litigate the unfair dismissal claim and that the Applicant was using the proceedings as a platform to make irrelevant and damaging comments and in their view that amounted to an abuse of process.

[20]However, in our judgment, the Employment Tribunal did err in law in the way in which they reached that conclusion and exercised their judicial discretion.

[21]I have already mentioned that the Extended Reasons do not go back to identify an issue that existed in the proceedings relating to the exchange of e:mails. Further, paragraph 12 of the Extended Reasons demonstrates that 24 of the remaining 60 paragraphs of the Statement were not paragraphs that the Respondent was seeking to have struck out (that application would have been under Rule 13(1)). Also in paragraph 13 of the Extended Reasons the Employment Tribunal state that the Statement recited matters which were (and I emphasise) largely irrelevant. They therefore did not conclude that the Statement was wholly irrelevant. Further, later in the Extended Reasons in dealing with an application for costs, the Employment Tribunal recognise that there was a genuine claim for unfair dismissal.

[22]These matters indicate that some of the Statement was relevant and thus that when the Employment Tribunal are considering the matter in paragraph 13 of the Extended Reasons they are referring only to the prejudicial comments which they considered to be unconnected with the case and not to all of the Statement.

[23]It was put to us today that the submission made to the Employment Tribunal and thus their thinking was that the way in which the Statement had been read meant that there could not be a fair trial and that was what caused the Employment Tribunal to reach the conclusion that they did. This is not quite what they say in paragraph 13. Further, it seems to us, that if that was their thinking they erred in law. It is difficult to see why the minds of the Employment Tribunal should be prejudiced by matters which they considered to be irrelevant.

[24]That moves one to the point, as to what other options were open to the Tribunal. That needs to be considered in the knowledge that a decision to strike out is a serious order and indeed one that can be described as draconian. The Extended Reasons do not demonstrate that the Employment Tribunal considered these options and in our judgment in that respect they erred in law. Possibilities were:(1) First, they could have considered arguments as to the relevance of the paragraphs in the Statement and made orders as to which of them should remain in and which of them should be removed.

(2) They could have required the Applicant to proceed to present his case orally in answers to questions put by his barrister on the basis that those questions would go to relevant matters and that barrister would have to have explained why a question was relevant if the Employment Tribunal had doubt about it.

(3) They could have adjourned to allow the Statement to be re-drafted in the light possibly of further particulars of the Applicant's case and/or further documents and explanations ordered to be supplied. In that context the Employment Tribunal would have had the power to consider what, if any, costs orders should have been made having regard to the reasons for the adjournment. As I have said the Extended Reasons do not show that the Employment Tribunal took any of those possibilities into account.

[25]The Extended Reasons however do show that the Employment Tribunal did not pursue with the parties the differences between them as to which paragraphs should or should not remain in the Statement and whether it was practical to proceed with the application on the 24 paragraphs thereof which, in any event, were left. I take that number from the maths appearing from paragraph 12 of the Extended Reasons.

[26]It seems to us that that was an obvious first step for an Employment Tribunal to take in the proper exercise of their discretion before moving on to make an order to strike out.

[27]Further and, in any event, it seems to us that given that(i) this was the first time upon which this hearing came before the Employment Tribunal,

(ii) particulars had not been sought by the employers,

(iii) both sides arrived armed with their Statements which had not previously been exchanged it was an error of law for the Employment Tribunal to move immediately to striking out without considering the possibility of an adjournment, perhaps accompanied by an order for costs, or to explain why they had rejected the possibility of adjourning.

[28]Accordingly, in our judgment, whilst accepting that Rule 13(2)(e) gives a discretion to the Employment Tribunal and that care has to be taken by this Tribunal in interfering with the exercise of such a discretion, we have concluded that in this case the Employment Tribunal did err in law in the exercise of that discretion. We also recognise that we were not present at the Employment Tribunal and thus do not have their knowledge in assessing the atmosphere of the hearing.

[29]Having looked at the Statement during the course of today's hearing, we would like to express our sympathy for the Employment Tribunal in that they were faced with a lengthy Statement and, it seems to us, that certain parts of it can be categorised as passages which if, Mr McLuskey had pursued them, would have warranted a finding that in so doing he was abusing the process.

[30]Equally, however, the Statement appears to us to contain material that is relevant to a genuine claim for unfair dismissal.

[31]What we therefore propose to do is to set aside the order striking out the Originating Application. Further in exercising our powers under Section 35 Employment Tribunals Act and thus through that Rule 13(1), we propose to order that:(i) the existing Statement of the Applicant be struck out,

(ii) within 14 days from today the Applicant is to serve on the Respondent particulars of his case, setting out all facts and matters relied on by him to support the contention that he was unfairly dismissed and, in particular, identifying conduct of other employees or directors of the company that he relies on in support of his case,

(iii) within 21 days of today the Applicant is to serve a further Statement by reference to those particulars so that the Employment Tribunal considering this matter will be able to link the evidence to the allegation(s) being made by the Applicant.

[32]Further we will direct that(i) within 21 days of service of the new Statement by the Applicant the Respondents are to serve particulars of their defence by reference to the particulars served on behalf of the Applicant. and may file such further Statements as they wish,

(ii) within 14 days after that the Applicant can put in a Statement in reply, and (iv) within 7 days after that the parties are to exchange any further documents they wish to rely on in this case.

[33]The above directions to the Applicant's Statement include and should be read as a reference to his Statement and the Statements of any other witnesses he proposes to rely on.

[34]We will finally direct that both parties are at liberty to apply for such further directions as they consider appropriate to the Employment Tribunal. We indicate that those could include issues as to the striking out of particular parts of the documents served pursuant to the directions we have given, or the application as a whole.

[35]We express the hope that those directions will concentrate the minds of the parties on the issues that are relevant to these proceedings for unfair dismissal and we would caution the Applicant and, indeed, the Respondents in answer against embarking upon the giving of evidence which is not relevant to issues raised in the parties' respective cases.