AUSTIN ROBERTS LIMITED v MR C KNAGGS [2002] UKEAT 1197_00_1704

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2002] UKEAT 1197_00_1704

Case No Appeal No. EAT/1197/00 EAT/862/01

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

AUSTIN ROBERTS LIMITEDAPPELLANT

MR C KNAGGSRESPONDENT

Before

Mr Justice Lindsay

Date 17 April 2002

[1]APPEARANCES For the Appellants Mr A G Roberts Austin Roberts Limited Tarran Industrial Estate Moreton Wirral CH49 ISP For the Respondent No appearance or representation by or on behalf of the Respondent MR JUSTICE LINDSAY (PRESIDENT ) We have before us by way of a full hearing the appeal of Austin Roberts Ltd in the matter Mr C Knaggs -v- Austin Roberts Ltd . Today Mr A G Roberts himself, of Austin Roberts Ltd, has appeared for his company which is, it has to be said, a very small company. He describes it as a one-man-band. The Respondent to the appeal, Mr Knaggs has, by his representatives, indicated that they would not be attending today but would be relying on some written submissions put in in August 2001.

[2]One needs to set out the procedural background to understand the case. It is something of a procedural tangle. On 3 April 2000 Mr Knaggs lodged an IT1 claiming unfair dismissal. He asserted that he had, by December 1999, been off sick for some two or more months; that he accepted that at times his sickness had been uncertificated; that his last sick note had expired on 21 December 1999 and that on 6 January 2000 he had received a letter from his employers which, amongst other things, said this:

"Dear Mr Knaggs Despite previous letters regarding unauthorised absenteeism you continue to take time off without explanation. Your current sick note expired on 19.12.99. You were due back in work yesterday morning, as yet we have received no word from you or further sick note regarding your failure to return to work. In view of the above you leave us with no alternative but to terminate your employment with this company. We enclose your P45."

He was paid wages in lieu of notice down to 19 January 2000 and, as I mentioned, he launched proceedings for unfair dismissal.

[3]On the IT1 which Mr Knaggs completed he gave the Respondent Company's postcode as "CH46 4TW". No Notice of Appearance was received by the Employment Tribunal, according to the Employment Tribunal. There is no evidence of the IT1 being sent out by the Employment Tribunal to the Respondent Company to that, or to any other postcode, but it would, of course, be the ordinary Employment Tribunal practice that a copy of the IT1 would have been sent to the address the Applicant had given for the Respondent. Presumably (as will emerge from the correspondence) there was then some notification by the Employment Tribunal to the Respondent Company which was received by the Company. It is likely to have been a Notice of Hearing giving the hearing date of 28 June, linked with an indication on that Notice of Hearing that the case would be marked to indicate that the Respondent had filed no Notice of Appearance.

[4]On 12 June, writing from postcode "L46 4TW", the company wrote to the Employment Tribunal saying this:

"I refer to the above tribunal, and as explained to someone in your office last week, and also to Mr Sullivan at ACAS, we did file a response when we received the original details, but this does not seem to have been received by yourself. We will be contesting the claim, but as explained last week the date of 28 th June 2000 is not convenient as I have a prior business appointment on this date and am not able to change this at the moment."

It is likely that there had, indeed, been some oral communication between the company and the Employment Tribunal because the fax message that I have just read was sent to an identified individual, Mrs P J Palin, at the Tribunal, rather than simply to an office.

[5]So the position was that as at 12 June, that is sixteen days before the due date for hearing, the Employment Tribunal learned that the Respondent Company said that it could not attend on 28 June. But it has to be borne in mind that it was a Respondent that had not put in a timely Notice of Appearance and the particular difficulty: "I have a prior business appointment" was not explained in any detail.

[6]On 14 June the company added a further fax to the Employment Tribunal, again identifying Mrs Palin and saying:

"Further to my fax of 12-06-00 I would also confirm that I would not be able to attend a hearing during the week 10 -15 July."

I pause to mention that it does not seem to have been the company's case when it first sent in, as it claimed, a response to the Employment Tribunal that it had indicated dates on which it could not attend. On 15 June the Employment Tribunal answered the letter of 12 June, saying this:

"Thank you for your letter of 12 June 2000. A Chairman of the Tribunals has instructed me to say that at present you have not entered a Notice of Appearance and so cannot seek a postponement. You might, if you so wish, send us grounds of resistance urgently when the Chairman will reconsider the matter. At present the case remains listed for 28 June 2000."

[7]Just pausing there, in law that is right. A person who has not entered a Notice of Appearance is not entitled to be heard to ask for a postponement. That letter from the Employment Tribunal was sent to "L46 4TW". So the position at this stage is that on its own reckoning, no grounds of resistance having yet been received by the Employment Tribunal, the Employment Tribunal was, on that account, of the view, correctly, that no adjournment application could be entertained on the company's behalf, but it had added that if such grounds were urgently supplied, then the Chairman would reconsider the matter.

[8]The company then sent in a Notice of Appearance. We do not, in fact, have an accompanying letter; it is not precisely clear when it was sent, but it was likely to have been sent on 19 or 20 June and it purports to be dated 19 June, which is why it is likely that it was then sent. The Notice of Appearance that was sent does not purport to be a copy (or, date apart, a copy) of the one which the company had asserted it had sent earlier. No earlier version of the Notice of Appearance is ever seen. The Notice of Appearance that the company did put in gives some detail of the company's intended resistance to Mr Knagg's claims. It says, for example, that Mr Knaggs had been told time and again about his unauthorised absenteeism. and it makes the point that although he maintains (that is Mr Knaggs) that:- "……. he was always short of money to comply with his employment conditions, he could call on a Friday afternoon to collect his wages (when off sick) in a very drunken state on a number of occasions" The Notice of Appearance gives the company's postcode as "CH46 4TW".

[9]On 22 June the Employment Tribunal, writing to "CH46" (by saying "CH46" I mean simply that, rather than "L46", the rest of the postcode was as it should have been), but, reverting to 22 June, the Employment Tribunal said this:

"Thank you for the completed Notice of Appearance. A Chairman of the Tribunals has refused to validate your Notice of Appearance since it has been received out of time. He notes that you claim that you have previously sent a response. The case will remain in the list for 28 June 2000 and the first question for the Tribunal will be to consider whether to validate your Notice of Appearance. You will need to produce evidence of how your company deals with post and indicate what documents you have received from the Tribunal."

So it is clearly stated that the question of validation will be the first question at the hearing on 28 June.

[10]The Applicant's, Mr Knagg's, representative was copied in on the correspondence, and on 27 June she wrote to remind the company that it would be expected to prove how it dealt with post. On the same day the company told the Applicant's representative by letter (but not, it seems the Employment Tribunal) that it (the company) could not attend on 28 June, and the company dealt rather aggressively with the postal issue by asking the Applicant's representative how she dealt with post. In the course of discussions this morning, it has become clear that Mr Roberts is of the view that he had taken up the question of how post is handled with the Employment Tribunal, as opposed to with the Applicant's representative, but, so far as concerns the letters we have got, we only have a letter to the Applicant's representative on the point, and it is not indicated on it that it was copied also to the Employment Tribunal.

[11]On the 28 th , the hearing went ahead. Mr Knaggs gave evidence by way of witness statement and orally. No one attended on behalf of the company; no written evidence was put in on behalf of the company; no written argument was put in on behalf of the company. Mr Knaggs' written evidence included his denial of some of the allegations which had been included in the company's late Notice of Appearance which had not been validated. So argument began and ended without anything from the company at all.

[12]On 6 July Summary Reasons were sent to the parties by the Employment Tribunal. It was the Decision of the Tribunal at Liverpool, under the Chairmanship of Mr E Lloyd Parry. The unanimous Decision of the Tribunal was that Mr Knaggs had been unfairly dismissed; that his award of compensation should be subject to a 30% discount by reason of his contributory conduct and that the award in his favour was therefore £721. The Employment Tribunal set out something of the nature of Mr Knaggs' case. They said that:

"3. The applicant was dismissed for taking unauthorised absences. That was misconduct. 4. The dismissal was unfair because no kind of procedure was followed for monitoring the applicant's health or hearing what he had to say about the accusation. The real problem for the respondents, a very small firm, was that the applicant was absent at all for a long time; he kept more or less in touch as to his absences and the reason for them. 5. The applicant contributed to his dismissal by being dilatory about getting in touch with the respondents whilst absent and about making medical appointments. We estimated his contribution as 30%. 6. The respondents could not have retained the applicant in employment for much longer than they did, certainly not beyond January 2000. 7. The applicant is entitled only to basic award and compensation for loss of statutory rights. He had 4 complete years' service. He was 35 when dismissed. His gross weekly wage was £220. His basic award is thus £880. His compensation for loss of statutory rights is £150. The total of £1030 is subject to a 30% discount, giving a final award of £721."

[13]Despite the indication given on 22 June by the Employment Tribunal, there was nothing to suggest that validation of the Notice of Appearance put in by the company was considered at all, but, against that, of course, no one had turned up on the company's behalf to ask that it should be; there had been no written argument to that end, and despite the indication given to the company that it would need to prove what its postal arrangements were, no evidence of its postal arrangements was put in to the Employment Tribunal, even in writing. Nor had the company sent to the Employment Tribunal a copy of the early Notice of Appearance (the one sent before the second, as it was, in the company's eyes) and no explanation was given why the Notice of Appearance that was ultimately received by the Employment Tribunal was not a copy or a date-apart copy of the earlier one. There may have been oral communications on the subject, but they are not in evidence at all.

[14]Those Summary Reasons having been sent to the parties on 6 July 2000, on 13 July 2000, in other words, without any real delay, the company asked the Employment Tribunal for Extended Reasons and also asked for a review of the Decision, adding this, amongst other things:

"It is totally unjust for the case to go ahead when only one side of the case is heard. Why did Mr Knaggs ask for the day off? Why when he was refused the day off did he suddenly become ill and leave work without permission to see a Doctor? Had he been allowed the day off work would he not have needed to see a Doctor? Mr Knaggs had been given Three Official Warnings before his contract was terminated. Had he kept us fully informed and sent sick notes on time he would still be an employee of Austin Roberts Ltd."

[15]On 21 July the Employment Tribunal answered that request for Extended Reasons and for a review, and the Employment Tribunal begins its letter:

" Thank you for your letter of 13 July 2000, which has been referred to the Chairman who dealt with this case. He has asked me to say that both your requests have been refused. Your company is not a party to this action since it has not lodged a valid Notice of Appearance. Thus, it has no standing to ask for reasons in extended form or a review."

So there we are; the Tribunal refuses a review and refuses Extended Reasons.

[16]On 15 August 2000 the company dated its Notice of Appeal and it was received the next day, 16 August 2000, by the Employment Appeal Tribunal. In terms of identifying the date of the Decision which is appealed against, it identifies 28 June as the date of the Decision appealed against. To that extent it was not an appeal against a refusal to review or to refuse Extended Reasons, but, when one looks at it more fully, one sees that it does go beyond the mere Decision that emerged from the hearing of 8 June. Accompanying and as part of the Notice of Appeal, the company said this:

"The Tribunal claimed that we did not lodge a valid Notice of Appearance and therefore will not provide us with Extended Reasons. A Notice of Appearance was completed and returned to Tribunals as soon as we received it. We sent a further letter to them requesting a postponement because we had a previous appointment which we had been trying to change but were unable to do so. We received a reply by post stating that they had not received a Notice of Appearance from us. A further Notice of Appearance was faxed through to us, this was completed and faxed back. We then received a letter saying that the Tribunal had refused to validate our Notice of Appearance as it had been received out of time. The letter also stated that the case would remain on the list for the 28 th June (The day we couldn't attend) and the Tribunal would consider whether to validate our Notice of Appearance. We were told we would need to produce evidence of how our company deals with post. We sent a letter stating yet again that we could not attend on that date and also said we deal with our post as everyone else does, we put a stamp on it and place it in a post box, we also asked how they dealt with their post? (we have not received a reply to this). This case was heard without our side of the case being heard, correct procedures were followed by ourselves. Three written warnings (after numerous verbal warnings) before his contract was terminated. We paid four weeks sick pay in lieu of notice. Surely a Company has the right to expect that their company rules be obeyed. This gentleman blatantly ignored all warnings. We had supported this gentleman with problems (outside of work) that had had over the years and had he respected our rules would have continued to do so. It is our belief that had we been present and put our side of the case to the Tribunal the outcome would not have been Unfair Dismissal."

[17]Looking at the Notice of Appeal, it does not touch the refusal to review but fairly read does, as we understand it, indicate that it was also intended to be an appeal against the refusal to give Extended Reasons. The very beginning indicated that there was a complaint that the Tribunal would not give Extended Reasons. As for that passage "We were told we would need to produce evidence of how our company deals with post. We sent a letter stating yet again that we could not attend on that date" and so on, no such letter to the Employment Tribunal is in the bundle. The letter of 27 June was to the Applicant's representative. It does not indicate that it was copied to the Tribunal itself, and in any case, the letter does not quite say what the Notice of Appeal says that it says, in terms of putting on a stamp and placing it in a post box, and so on.

[18]The next stage in the chronology is on 4 September 2000 the Employment Appeal Tribunal, having received the Notice of Appeal, indicated to the company that for an appeal, Extended Reasons are necessary. The Employment Appeal Tribunal drew attention to the case of William Hill Organisation -v- A Gravas and indicated that if Extended Reasons were refused by the Employment Tribunal then an appeal could be made against that refusal.

[19]On 13 September 2000 the company asked the Employment Appeal Tribunal for an extension of time in order firstly, to appeal against the refusal of the Employment Tribunal to validate the Notice of Appearance. In other words, that was an appeal against the Decision of 22 June, or at least was an application for an extension of time relative to the Decision of 22 June. Secondly, it asked for an extension of time as to the refusal to give Extended Reasons; in other words, it was an appeal against the Decision of 13 July.

[20]On 27 September 2000 the Applicant wrote to the EAT resisting the appeal as to the refusal to validate. The Employment Law Unit, acting on behalf of Mr Knaggs, said inter alia :

"The appellant would have received the notice of hearing which clearly stated that he was a 'respondent who had not entered a notice of appearance'. As far as I am aware, he did not contact the Employment Tribunals to query this statement. However, it was not until an ACAS officer began exploring conciliation and a settlement figure was presented to him did the appellant state that he wished to resist the application. ACAS pointed out to the appellant that he needed to submit a Notice of Appearance in order to resist the application."

On 30 October, adding final comments to the Employment Appeal Tribunal, the company said "We can only say again that we made it quite clear that we would not be able to attend on the 28 th June, we were led to believe that the case would probably be postponed."

[21]On 30 March 2001, moving forward, the company, then represented by Ms Booth of Counsel, under the ELAAS scheme, attended at the Employment Appeal Tribunal preliminary hearing and the matter was allowed to go to a full hearing. At that stage, of course, the Respondent's, Mr Knaggs' side, were asked for their views for the first time, or at least were entitled to put in an answer for the first time, and the Respondents' answer says this - I will set it out in full because this is the argument which the Respondents have asked to be considered today in their absence. "The Respondent contends that the Tribunal was entitled to refuse leave to rely upon the evidence of the Appellant in view of the total lack of any detailed information as to 'when the original Notice of Appearance was posted if at all', and its contents and, the failure to give any detail as to the reason for non attendance at the Tribunal, over and above the bald statement:

"….the date of 28 th June 2000 is not convenient as I have a prior business appointment on this date and am not able to change this at the moment"

. The Respondent remains in the same position at present. It is still unknown as to when the original Notice of Appearance was said to have been posted and how. No details were given as to any record kept of same or, its contents. No evidence has been presented as to the nature or importance of the 'business appointment'. Prior to such matter the Respondent is unable to make submission in greater detail as to the merits of the Appellant's case and therefore submit that having been given leave to appeal, it is incumbent on the Appellant to provide detailed evidence on such matters. The Respondent will seek further to consider this position and submissions as and when evidence is submitted." That answer, that is provided by the Respondent, really goes only as to the refusal to validate, but a little later the Respondents indicated, on 16 August 2001, that they wished the answer to cover also the refusal to give Extended Reasons.

[22]The next stage was on 2 November 2001, the Registrar, Ms Selio O.B.E, considered the request for an extension of time as to the validation of the Notice of Appearance appeal and she concluded:

"IT IS CONSIDERED that there has been shown no 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 AND IT IS ORDERED that the application for an extension of time in which to present the Notice of Appeal is refused."

On 13 November 2001 the company appealed against the Registrar's Order. That, I think is as much as needs to be said of the chronological and procedural background to the matter.

[23]Coming to the foreground, and looking first at the issue of the refusal of the Employment Tribunal to validate the Notice of Appearance and the appeal on that subject, the first indication of a refusal by the Employment Tribunal to validate the Notice of Appearance was on 22 June 2000. But it would be unreasonable to expect the company to have appealed that Decision at that time for a number of reasons. First of all, it was not indicated to the company that an appeal was possible. When a substantive decision is sent out by the Employment Tribunal to parties, there is an accompanying sheet that indicates how an appeal is to be made, and the time within which it is to be made, and to whom it is to be made, and so on. But for interlocutory matters such as the letter of 22 June, no indication was given to the company of how to appeal, to whom, or by what date.

[24]Secondly, no reasons were then given for a refusal to validate the Notice of Appearance other than simply that it was out of time. No indication was given that any factors other than the expiry of the prescribed time was considered, and there was a clear indication by the Employment Tribunal that the matter would be considered on 28 June. Against that background, it would be reasonable, therefore for the company, to await 28 June, or if the case was in fact postponed, to the outcome of whatever postponed hearing was arranged. However, there was no hint that the issue was in fact considered on 28 June. The Summary Reasons of 6 July give no indication of validation being considered at all, and no reasons in the Summary Reasons cover declining to validate. There were, no doubt, good reasons for not validating as at 28 June, but none are in fact expressed in the Summary Reasons. Then, the Extended Reasons for the Decision of 28 June were requested but were refused.

[25]The Notice of Appeal was received by the Employment Appeal Tribunal on 16 August. Although premature in the sense that at that stage there were then no Extended Reasons, it indicated that complaint as to the failure to validate was one of the matters in issue. The issue was therefore raised, as if by a Notice of Appeal, within forty two days of 6 July, which is the date when, for the first time, the company could see that, finally, it had, in effect, lost the validation issue. As at 6 July the position would have seemed to have been, and probably was, that the earlier informal letter of refusal of 22 June had, despite its terms, led to no subsequent consideration on 28 June and that, accordingly, the position would have been that the initial informal refusal was presumably left standing.

[26]Validation of the Notice of Appearance has never been argued or considered on the merits. The merits of the company's prospective defence, for example, do not appear at any stage to have been considered - compare Kwik Save

[1997] ICR 49

. On the other hand, of course, it was the company's failure to attend on the appointed day, 28 June, or to put in argument or evidence on the point that led, no doubt, or at least contributed, to the failure of the Employment Tribunal to consider the matter on 28 June.

[27]These are, as it seems to us, unusual circumstances. Consideration of the issue of validation had, in effect, been promised, but no consideration was then given to the issue of validation, and as it seems to us for the reasons we have given, it was not unreasonable for the company to wait until, as it transpired, 6 July and the Summary Reasons then given, to stay its hand as to appeal on the issue of the refusal to validate. If it was, as we think, reasonable to wait until 6 July, then the Notice of Appeal that it eventually put in was, in fact, in time. That is an exceptional circumstance, and it seems to us to justify the exceptional course of extending time.

[28]So we allow the appeal against the Registrar's Order of 2 November 2001. We extend time for appeal on the issue of validation of the Notice of Appearance until 16 August, and we do so on the footing that the Notice of Appeal of that day did, in fact, purport to appeal against the refusal to validate. So there is now an appeal as to the validation issue which is not bad on time grounds alone.

[29]Of course, at this stage - today's hearing - the substantive appeal on the point is not before us, and, unhappily, in the absence of anyone on the Respondent's side to agree that we should deal with it, we can only deal with what strictly is in front of the Employment Appeal Tribunal as at today's stage. So we cannot do other than allow the appeal as to the refusal to validate to go to its next stage, which is a preliminary hearing at the Employment Appeal Tribunal. This is undoubtedly a cumbersome procedure, but we see no alternative. So much for the issue of validation of the Notice of Appearance.

[30]The second matter before us the issue of refusal of Extended Reasons. The Refusal was indicated to the company on 21 July 2000. The 16 August Notice of Appeal includes complaint as to refusal of Extended Reasons. It is not out of time in the sense that it was within forty two days of the Decision. The Summary Reasons given, as we have seen, are full enough, as it seems to us. The defect within them is not that they are summary in nature but rather that the position that they were dealing with was a position in which only one side was heard; there is nothing to indicate that the company's prospective defence, as foreshadowed in the Notice of Appearance which the Employment Tribunal had in fact received, was at all considered. There is nothing to suggest that Extended Reasons might be substantially fuller than the Summary Reasons. In the circumstances, we think it is right that the company should be allowed to pursue its appeal on the footing that the Summary Reasons stand as Extended Reasons.

[31]So there will therefore be a preliminary hearing of the company's appeals, firstly as to the Employment Tribunal's refusal to validate, and secondly, as to the merits of the Decision of 6 July, and that preliminary hearing goes forward notwithstanding that only Summary Reasons are available. It will be conducted as if the Summary Reasons stand as Extended Reasons. But the company cannot sit back and regard the position as being one of a substantial victory at this stage. How the matter proceeds is largely a matter for the company and its advisers, and how the Employment Appeal Tribunal reacts, at the full or the preliminary hearings, as the case might be, depends, of course, on the panel of the Employment Appeal Tribunal on the day. But as we see it, if the company is to have any real prospect of substantive success, it is going to need to put in a good deal of thought and, indeed, a good deal of written evidence; by written evidence we mean sworn affidavits or sworn statements.

[32]There are a number of subjects which, quite plainly, need to be considered in evidence properly-so-called. For example, what notices or communications were received from the Employment Tribunal and when? When did the alleged first Notice of Appearance get sent off, and what did it say? Was it accompanied by anything that indicated dates which the company could or could not cope with as hearing dates?

[33]It will need to be explained why, when the company sent what, on its view, was the second Notice of Appearance, it did not merely send a copy of the one which it claimed to be the first one. It has become apparent in discussion this morning with Mr Roberts that a number of oral communications were made, not only with the Employment Tribunal, but with ACAS, and it is likely to be useful for the company to set out those, so far as they have any bearing on the issues before the Employment Appeal Tribunal.

[34]It will be remembered that the company said that it could not attend because of an unshiftable "other business appointment" on 28 June. That will need to be specified in evidence, in some best detail. It will need to explain why it did not put in written argument or evidence for the hearing of 28 June, even if the company itself could not find any representative to attend on that day. It is to be remembered that we are dealing here with a company not a single individual, and even a small company is likely to have another employee, or a company secretary or another director, or some other person who could represent it on the day. That will need to be explained.

[35]Evidence will also need to be given to show that there truly was a real defence against Mr Knaggs' version of events as that version is seen in the Summary Reasons and in the Chairman's Notes of Evidence. In other words, the company needs to show that it did have a good case that could have been presented, if only proper arrangements, as it would regard them, had been made.

[36]The whole general drift of the company's case, if it wishes to fight on, will need to show that it did have a good case on the merits to present against Mr Knaggs, if only the Employment Tribunal had been willing to hear that case, and that the fact that it was not able to present its case and have it entertained was not so wholly or significantly the company's own fault that it was appropriate that the Tribunal should not hear the case. Consideration will need to be given not only to the Kwik Save case, already mentioned, but to Charlton -v- Charlton Thermosystems

[1995] ICR 56

[37]We cannot leave the case without some reflection on the small amount (or relatively small amount, even in relation to a fairly small company) which is really at stake. It will be appropriate for the company to reflect, no doubt also with advisers to Mr Knaggs, that here yet further litigation at the Employment Appeal Tribunal, possibly with a view to the matter being re-heard at the Employment Tribunal level, is close to disproportionate when so small a sum is in issue. To some extent today, Mr Roberts, on the company's behalf, has had a minor success at a procedural level, and to that extent, the principles which he has wished to have regard paid to, have succeeded. But a small company such as his does need to reflect on whether the game is worth the candle, and - we have no power, of course in this regard - but we do suggest that the parties would spend time usefully in considering whether or not at this stage a compromise could not be reached to avoid both sides having further expenditure in time and money. But, that apart, we grant the relief that we have earlier described.