FIRSTCITY INSURANCE BROKERS LTD v MR R JONES [2001] UKEAT 897_00_1207

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2001] UKEAT 897_00_1207Case No Appeal No. EAT/897/00Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
FIRSTCITY INSURANCE BROKERS LTDAPPELLANTMR R JONESRESPONDENT
Before
Her Honour Judge A Wakefield Mrs M T Prosser Mrs R A VickersDate 12 July 2001
[1]APPEARANCES For the Appellant MR JONATHAN SWIFT (of Counsel) Instructed By: Messrs Herbert Smith Solicitors Exchange House Primrose Street London EC2A 2HS For the Respondent MR DALE MARTIN (of Counsel) Instructed By: Messrs Lovells Solicitors 65 Holborn Viaduct London EC1A 2DY JUDGE A WAKEFIELD : This is an appeal against an interlocutory decision of an Employment Tribunal sitting at Stratford on 30 May 2000, by which permission was granted to the Applicant (the present Respondent and so referred to hereafter) to amend the Originating Application to include a complaint of unfair dismissal.[2]The background and undisputed facts are as follows: (a) On 7 September 1999 the Respondent presented an Originating Application to the Employment Tribunal. In box 1 of the form IT1 which invites an applicant to:
"Please give the type of complaint you want the tribunal to decide (for example: unfair dismissal, equal pay). A full list is given in Booklet 1. If you have more than one complaint list them all", the Respondent had written in manuscript capitals: "
BREACH OF CONTRACT BY FIRST CITY (SEE COPY LETTERS ENCLOSED)." He also entered on the form the dates of his employment with FirstCity Insurance Brokers Ltd (the present Appellant and so referred to hereafter) as being from 23.1.97 to 11.6.99. In box 10 of the form which was headed " Unfair dismissal applicants only . Please indicate what you are seeking at this stage, if you win your case", the Respondent had placed a tick against the option "compensation only: to get an award of money". In box 11 on the form which invites an Applicant to give details of the complaint the Respondent listed four heads of complaint. The first was "BREACH OF CONTRACT AS PER MY RESIGNATION LETTER OF 11 th JUNE, 1999". The other three heads of complaint listed were defamation, conspiracy and non-payment of profit commission, these being only very peripherally relevant to this appeal. (b) Enclosed with the form IT1 as sent to the Employment Tribunal were a letter dated 1 September 1999 written by the Respondent and addressed to the Employment Tribunal Service at Stratford, a copy of the Respondent's letter of resignation which had been sent to the Appellant and was dated 11 June 1999 and other copy letters and documents dealing with the background events which had led to the Respondent's employment with the Appellant coming to an end. These enclosures in total ran to 55 pages. (c) It was apparent from box 3 of the form IT1 that, notwithstanding that the Respondent had filled in the form and signed it personally, he had already instructed Solicitors, Lovell White Durrant to act on his behalf as regards the issues arising from the termination of his employment with the Appellant. This was confirmed by a paragraph in his letter to the Employment Tribunal dated 1 September 1999 in which the Respondent wrote:
"I can confirm that all my correspondence to First City Insurance Brokers Ltd was drafted and signed off by the Senior Partner at Lovell White Durrant (Andrew Williamson). Lovell White recommended that I resign from First City."
Much later and from evidence given by the Respondent to the Employment Tribunal sitting at Stratford on 30 May 2000 (referred to hereafter as the Second Tribunal) it emerged that:
"By the middle of August 1999 the Applicant formed the decision to proceed with his claim before the Employment Tribunal. He had been considering other courses of action, namely to bring a claim against the Respondents in the High Court of Justice, or alternatively to make allegations to the Serious Fraud Office. In the event he decided, on advice, that a claim to the Employment Tribunal would be the better course. From mid-August 1999 until the time that the Applicant presented his complaint to the Tribunal, however, he was unable to obtain further advice from his solicitors. He made several phone calls, leaving messages on the solicitors' voice-mail box. However, his messages were not replied to and he eventually did not have the advantage of their advice and drafting when he presented his complaint to the Tribunal" [paragraph 9(f)) of the Decision of the Second Tribunal sent to the parties on 9 June 2000]. (d) Following presentation of the Originating Application, the Appellant duly filed a Notice of Appearance dated 30 September 1999. In detailed "
Grounds of Resistance" it was denied that the Respondent had been dismissed and was asserted that the employment had been terminated by his resignation. The breach of contract claim was also denied and an indication given that further particulars of that latter claim would be sought "in order to respond in more detail". (e) The subsequent history of the matter up to 10 April 2000 is clearly set out in a decision dated 19 April 2000 (referred to hereafter as the First Decision) of a Chairman sitting alone at Stratford Employment Tribunal following a hearing on 10 April for interlocutory directions. The First Decision contains the following:
"5 On 5 October 1999 and after submission of the Notice of Appearance by the Respondent, the Chairman of Tribunals took the view that further particulars of the claim were required. Evidently the Chairman noted that with the application came a substantial assorted and unparticularised bundle of documents. 6 Mr Jones did not respond to that request for particularisation [5 October] and so, by Order dated 1 November, Mr Jones was formally required to further particularise his claim. 7 That resulted in a document, dated 8 November 1999, headed 'Particulars of Applicant's Complaint'. Paragraphs 2 and 3 of that document dealt with further particularisation of the breach of contract claim but at paragraph 1 appeared the following and for the first time: 'The Applicant's claim is for unfair dismissal and for breach of contract by the Respondent'. By a further direction, this time sent to the parties by letter dated 15 November 1999, the parties were told that there would be a preliminary hearing to see whether the breach of contract complaint was brought within the time limit contained in Article 7 of the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994. That is a time limit of three months. Also the parties were directed that at a preliminary hearing the Tribunal would consider whether it had any jurisdiction to deal with the Applicant's complaints of conspiracy and defamation. 8 In the course of correspondence and in the weeks which passed before mid-January 2000, it came to be conceded on behalf of the Applicant that the Tribunal has no jurisdiction to deal with defamation and conspiracy but that the breach of contract claim did not, of itself, justify a preliminary hearing because it was recognised that certain of the allegations brought had been presented timeously. The preliminary hearing was vacated and the directions hearing which is before me today was listed."
What then occurred appears from paragraph 5 of the Decision of the Second Tribunal (referred to hereafter as the Second Decision) which was sent to the parties on 9 June 2000. That paragraph stated as follows:
"By a letter dated 10 February 2000 the Respondents' solicitors acknowledged notice of the directions hearing and stated: 'We refer to our letter to the Tribunal of 28th January 2000, in which we asked that the Tribunal also consider, at a preliminary hearing, whether the Applicant requires leave to amend his Originating Application to include the unfair dismissal complaint referred to in the Particulars of Complaint filed on 8 th November 1999 and if so, whether he should be granted leave to amend. We should be grateful if you could confirm that this issue will also be considered at the hearing on 10th April 2000'. In reply, the Tribunal confirmed by letter dated 14 February 2000 that the issue referred to by the Respondents' solicitors could be raised at the hearing for directions, as it was an issue requiring clarification." (f) The purpose of the hearing on 10 April 2000 was therefore to give interlocutory directions and to consider the issue as to the Respondent now raising unfair dismissal. In the event, the only direction given which is relevant to this appeal was that the matter should be listed for a preliminary hearing before a full Tribunal on 30 May 2000. In reaching his conclusion that this was the only appropriate direction on the unfair dismissal issue the Chairman in the First Decision at paragraphs 10 to 21 found as follows: "10 Today the matter comes before me with Mr Andrew Payne, who is a solicitor, representing Mr Jones and Mr Andrew Hillier of Counsel for the Respondents. 11 Mr Hillier tells me that much of the future conduct of this case for the Respondent will depend on whether or not the allegation of unfair dismissal is a live claim. Mr Payne says that he is surprised that there is any doubt in that regard and he confirms again that the Applicant does bring to the Tribunal an unfair dismissal allegation. 12 To that Mr Hillier responds that it must be, in his view, a claim brought out of time. Mr Payne says that, in his view, it is a claim properly made within the Originating Application when it was first filed. He does not say that his application to me today is for amendment of the first filed application. He relies upon it as sufficient on its face. 13 Mr Payne concedes, save that at box 10 of the Originating Application, there is no reference whatsoever in the claim to unfair dismissal. Also he concedes that in the substantial bundle of documents in support of that application and likewise the Applicant's letter dated 1 September which came with it, there is no other reference to a claim of unfair dismissal. 14 Nevertheless, Mr Payne relies upon his unfair dismissal complaint as presented timeously because box 10 which is headed "
Unfair dismissal applications only" was ticked to indicate that Mr Jones sought only compensation. He recognises there is no other particularisation or detail. 15 That is not a submission which I find attractive in any way. It is well known that the Applicant's omission to include the exact nature of his claim at box 1 does not matter if indeed the details in support of that claim appear later in the application. If Mr Payne had made his application as a request for amendment it might be necessary for me to view his request in another way. There might even be a need for it to come before a full Tribunal today. 16 So if I look to Rule 1 of Schedule 1 of the Employment Tribunals Rules of Procedure 1993, I remind myself of the detail which must be present in support of a Tribunal claim. Rule 1 requires an applicant to set out in writing his claim together with 'The grounds, with particulars thereof on which relief is sought'. 17 Casting aside, in view of what comes within the concession by Mr Payne, that there is nothing otherwise in either boxes 1 or 11 of the Originating Application which lend support to a claim of unfair dismissal, if I exclude, on that basis, the entirety of boxes 1, 11 and the supporting documentation, I am left with an application before me making no reference to unfair dismissal but at box 10 beside the words 'compensation only' is to be found only a tick. There are no other grounds or particulars of the nature of the claim, let alone particulars '… on which relief is sought'. That does not appear to me to provide even an outline of the detail required by Rule 1. 18 Thus I agree with Mr Hillier and find myself in no difficulty in making the preliminary determination that the Originating Application filed on 7 September 1999 cannot be interpreted, even benevolently, as an application for relief in regard to unfair dismissal. 19 From that it follows that further particulars filed on 8 November 1999 contain an application for unfair dismissal made then for the first time. By the Applicant's own claim for breach of contract, he was dismissed constructively as from 11 June 1999. Thus a claim, to have been presented timeously, ought to have been filed on or before midnight on 10 September 1999. So the unfair dismissal claim is almost two months late and I find accordingly. 20 Section 111 of the Employment Rights Act 1996 at paragraph 111(2)(b) provides that a claim must be presented (if it is not presented before the end of the period of three months):
'(b) within such further period as the tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of that period of three months'
. It is now well established that where there are issues of fact to be decided a Chairman is likely to be assisted by the industrial experience of lay members and thus it follows that a determination which may enable validation of the late complaint to have been made ought to and will be heard before a full Tribunal. I am not prepared to deal with that today even if both parties consent. 21 Thus this matter will be listed for a preliminary hearing as indicated and before a full Tribunal to be heard on 30 May next with a time estimate of 2½ hours. It will be an allocated case that day and it is anticipated that it will begin promptly at 10:0 am." (g) There was no appeal against the First Decision. (h) Against that background there was the Second Tribunal hearing at Stratford on 30 May 2000 which resulted in the Second Decision, the subject of this appeal. (i) Having set out the factual background and having made reference to the principles to be applied when a Tribunal is considering an application for leave to amend an Originating Application, the Second Tribunal in paragraph 8 of the Second Decision set out as follows the issue which they were considering:
"8 The issue for the Tribunal is whether to allow an application to amend on the basis now put forward by the Applicant, namely: (a) That the amendment sought comes within the category of addition or substitution of other labels for facts already pleaded to and not a substantial alteration making entirely new factual allegations which changed the basis of the existing claim. (b) If the amendment is of the latter category, then whether it ought to be allowed having regard to the time limits set out in section 111(2)(b) of the Employment Rights Act 1996 which provides that a claim must be presented (if it is not presented before the end of the period of three months): '(b) within such further period as the tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of that period of three months'. "
The facts as found and the submissions of both parties were then set out in detail. The Second Decision then concluded as follows:
"12 The Tribunal's assessment: (i) The Chairman of Tribunals at the interlocutory hearing for directions on 10 April 2000 directed that there was no claim for unfair dismissal included in the Originating Application or the accompanying documents. (ii) The Chairman on that occasion was not asked for permission to amend the Originating Application on any basis, ie he was not asked on the basis that it was a claim to add or substitute a new cause of action but one which was linked to or arose out of the same facts as the original claim, or alternatively on the basis that it was adding or substituting a wholly new claim or cause of action. (iii) At the directions hearing, having dealt with the issue put before him, namely that the Originating Application did not include a claim for unfair dismissal, it followed that a claim for unfair dismissal was being made for the first time by the particulars presented on 8 November 1999. Accordingly the Chairman directed a preliminary hearing on the issue of whether the raising of a claim for unfair dismissal should be allowed out of time. (iv) The purpose of this preliminary hearing, therefore, was to consider the effects of the directions given by the Chairman on 10 April 2000 as to whether there should be an amendment permitted to the Originating Application. (v) The Applicant now claims to amend on the basis that no new facts are relied upon and therefore he argues that the fact that the three month time limit has not been complied with is not of crucial importance. (vi) The Respondents, on the other hand, claim that the Chairman decided on 10 April 2000 that an unfair dismissal complaint is not included within the Originating Application. Accordingly, they submit there can be no re-labelling. They argue that we should not even permit an argument to be put forward on this basis. On a preliminary ruling, we held that we should permit the Applicant to argue his case for amendment on the alternative bases which he puts forward. (vii) On these alternative arguments we have come to the conclusion that: (a) In order to claim unfair dismissal it is not necessary for the Applicant to make allegations of any new facts which add to the existing allegations. (b) There may be reliance upon 'last straw' matters, as referred to when the Applicant gave his evidence, which led to the decision to resign on 11 June, but the broad factual case is as already detailed and includes continuing allegations which are alleged to be causative of the decision to resign on 11 June 1999, namely the disciplinary procedures brought against the Applicant and the circulation of rumours about him in the re-insurance market. (c) The matters alleged to support the complaint of unfair dismissal can be traced back to the Originating Application and accompanying documentation presented by the Applicant. (d) Had we been concerned with an amendment which added or substituted a wholly new claim or cause of action not connected to the original claim at all, we would not have allowed such an amendment. It would have been out of time and we would have held that it was reasonably practicable to present the complaint within time. (e) The case is not similar to the case of Schultz where there was a physical impediment which prevented the Applicant presenting his complaint in the last six weeks of the three month period. (f) Here, there was culpable delay on the part of the Applicant and it is well-established that delay attributable to such factors as seeking legal advice does not ordinarily justify a finding of reasonable impracticability. (viii) However, in our assessment the proposed amendment to add a complaint of unfair dismissal is linked to or arises out of the same facts as the breach of contract claim. In these circumstances we apply the general principles of Selkent , balancing the hardship caused to the parties if the amendment was allowed or disallowed. We have taken account of all the circumstances which include in particular the fact that there will be no further evidence which the Respondents will have to meet. (ix) The amendment is therefore allowed and the matter will go forward to a full merits hearing on the Applicant's complaints of both breach of contract and unfair dismissal."
[3]The appeal against the Second Decision which allowed the amendment is mounted on two fronts, the second only becoming relevant if the first does not find favour. It is argued firstly that the Second Tribunal had no jurisdiction to consider and/or to determine whether or not a claim for unfair dismissal had been contained in the Originating Application presented on 7 September 1999 and therefore erred in law in making the preliminary ruling that the Respondent should be permitted to argue his case for amendment on the alternative bases which he had put forward and in finding that the complaint of unfair dismissal was linked to or arose out of the same facts as the breach of contract claim, these both being matters which had already been determined by the First Decision and in respect of which there was therefore an issue estoppel. Put shortly, it is said by the Appellant that the First Decision determined that the unfair dismissal claim was presented out of time and the Second Decision decided the opposite. There were also submissions made before us by the Appellant based on concessions which the Solicitor acting for the Respondent is said to have made before the First Tribunal. We are satisfied that no concessions were made over and above an acceptance of what was apparent on the face of the documents. No additional point arises out of these submissions and we say no more about them. Secondly, it is argued by the Appellant that, if it was open to the Second Tribunal to consider and determine the matters as they did, they erred in law in allowing the amendment despite having concluded that it had been reasonably practicable for the unfair dismissal claim to have been presented within the three month period specified by section 111 of the Employment Rights Act 1996 .[4]On behalf of the Respondent it was submitted to us that an amendment to add a complaint of unfair dismissal to the Originating Application was merely to apply a new "label" without the assertion of any new facts. It was not accepted by the Respondent that the conclusions of the First Tribunal in any way deprived the Second Tribunal of jurisdiction to reach the conclusions which they did. The Respondent relied on there having been a proper exercise by the Second Tribunal of its discretion to allow the amendment upon proper evaluation of the factors referred to in the Selkent decision.[5]Having thus set out the arguments put forward it is readily apparent that there is in the minds of the parties uncertainty or a difference of construction as to exactly what was decided by each of the two Decisions. As a matter of construction we conclude that the First Decision expressly determined the following:(i) that no claim of unfair dismissal was made in the Originating Application presented on 7 September 1999;(ii) that the claim of unfair dismissal was made for the first time on 8 November 1999;(iii) that this was a new cause of action presented out of time. By implication and in the light of these express findings, it is our conclusion that the First Decision determined that putting forward the claim of unfair dismissal, a wholly statutory cause of action, was not a mere relabelling exercise to be applied to the facts pleaded in support of the original claim of wrongful dismissal. This being so, the Second Tribunal in our view had no jurisdiction to reopen that issue.[6]The Second Decision purported to redetermine the issue as to whether the claim of unfair dismissal was the assertion of a wholly new and previously undisclosed cause of action not maintainable on facts already pleaded or was merely a relabelling of facts already disclosed in the Originating Application. The Second Tribunal found that it was the latter.[7]In reaching this conclusion we are satisfied that the Second Tribunal erred in law. They omitted to recognise the issue estoppel.[8]The Second Tribunal went on to consider whether it had been practicable for the Respondent to have presented the unfair dismissal claim in time. They found that it had been practicable. There is no appeal against that finding. The Second Tribunal then, in the light of their finding as to the nature of the proposed amendment, considered and applied the principles as illustrated in Selkent Bus Company Ltd v Moore [1996] ICR 836 (EAT) as to the giving of permission for amendments to add new causes of action out of time when what was being done (as the Second Tribunal had found) was merely a relabelling of facts already pleaded. In Selkent Mummery J had set out the procedure and practice governing amendments in the Industrial Tribunal as follows:
"(1) The discretion of a tribunal to regulate its procedure includes a discretion to grant leave for the amendment of the originating application and/or notice of appearance: see rule 13 of Schedule 1 to the Regulations of 1993 and Cocking v Sandhurst Stationers Ltd [1974] ICR 650, 656G-657D. That discretion is usually exercised on application to a chairman alone prior to the substantive hearing by the tribunal. (2) There is no express obligation in the Industrial Tribunals (Constitution and Rules of Procedure) Regulations 1993 requiring a tribunal (or the chairman of a tribunal) to seek or consider written or oral representations from each side before deciding whether to grant or refuse an application for leave to amend. It is, however, common ground that the discretion to grant leave is a judicial discretion to be exercised in a judicial manner, ie in a manner which satisfies the requirements of relevance, reason, justice and fairness inherent in all judicial discretions. (3) Consistently with those principles, a chairman or a tribunal may exercise the discretion on an application for leave to amend in a number of ways. (a) It may be a proper exercise of discretion to refuse an application for leave to amend without seeking or considering representations from the other side. For example, it may be obvious on the face of the application and/or in the circumstances in which it is made that it is hopeless and should be refused. If the tribunal forms that view that is the end of the matter, subject to any appeal. On an appeal from such a refusal, the appellant would have a heavy burden to discharge. He would have to convince the appeal tribunal that the industrial tribunal had erred in legal principle in the exercise of the discretion, or had failed to take into account relevant considerations or had taken irrelevant factors into account, or that no reasonable tribunal, properly directing itself, could have refused the amendment: see Adams v West Sussex County Council [1990] ICR 546. (b) If, however, the amendment sought is arguable and is one of substance which the tribunal considers could reasonably be opposed by the other side, the tribunal may then ask the other party whether they consent to the amendment or whether they oppose it and, if they oppose it, to state the grounds of opposition. In those cases the tribunal would make a decision on the question of amendment after hearing both sides. The party disappointed with the result might then appeal to this appeal tribunal on one or more of the limited grounds mentioned in (3)(a) above. (c) In other cases an industrial tribunal may reasonably take the view that the proposed amendment is not sufficiently substantial or controversial to justify seeking representations from the other side and may order the amendment ex parte without doing so. If that course is adopted and the other side then objects, the industrial tribunal should consider those objections and decide whether to affirm, rescind or vary the order which has been made. The disappointed party may then appeal to this appeal tribunal on one or more of the limited grounds mentioned in (3)(b) above. (4) Whenever the discretion to grant an amendment is invoked, the tribunal should take into account all the circumstances and should balance the injustice and hardship of allowing the amendment against the injustice and hardship of refusing it. (5) What are the relevant circumstances? It is impossible and undesirable to attempt to list them exclusively, but the following are normally relevant. (a) The nature of the amendment. Applications to amend are of many different kinds, ranging, on the one hand, from the correction of clerical and typing errors, the addition of factual details to existing allegations and the addition or substitution of other labels for facts already pleaded to, on the other hand, the making of entirely new factual allegations which change the basis of the existing claim. The tribunal have to decide whether the amendment sought is one of the minor matters or is a substantial alteration pleading a new cause of action. (b) The applicability of time limits. If a new complaint or cause of action is proposed to be added by way of amendment, it is essential for the tribunal to consider whether that complaint is out of time and, if so, whether the time limit should be extended under the applicable statutory provisions eg in the case of unfair dismissal, section 67 of the Employment Protection (Consolidation) Act 1978 (c) The timing and manner of the application. An application should not be refused solely because there has been a delay in making it. There are no time limits laid down in the Regulations of 1993 for the making of amendments. The amendments may be made at any time – before, at, even after the hearing of the case. Delay in making the application is, however, a discretionary factor. It is relevant to consider why the application was not made earlier and why it is now being made: for example, the discovery of new facts or new information appearing from documents disclosed on discovery. Whenever taking any factors into account, the paramount considerations are the relative injustice and hardship involved in refusing an amendment. Questions of delay, as a result of adjournments, and additional costs, particularly if they are unlikely to be recovered by the successful party, are relevant in reaching a decision."
[9]It is clear from these principles that the Second Tribunal's approach to the exercise of their discretion must have been different if they had recognised, as they were bound by the First Decision to do, that the proposed amendment was the adding of a wholly new and as yet undisclosed cause of action. As the Second Decision stated in paragraph 12 (vii)(d) already referred to, they would then have refused the amendment and in our view would have been right to do so.[10]In these circumstances the appeal is allowed and leave to make the amendment is refused.