DEPARTMENT FOR WORK AND PENSIONS v MR E PHILLIPS [2003] UKEAT 0251_03_0409

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2003] UKEAT 0251_03_0409

Case No Appeal No. EAT/0251/03

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

DEPARTMENT FOR WORK AND PENSIONSAPPELLANT

MR E PHILLIPSRESPONDENT

Before

His Honour Judge D Serota

Date 4 September 2003

[1]APPEARANCES For the Appellant MISS RUTH DOWNING (of Counsel) Instructed by: Department of Work and Pensions Office of the Solicitor Sutherland House 5th Floor 29-37 Brighton Road Sutton Surrey For the Respondent MR BARRY HAVENHAND (of Counsel) Instructed by: Porter Dodson Solicitors Central House Church Street Yeovil Somerset BA20 1HH HIS HONOUR JUDGE D SEROTA QC This is an appeal from the Department of Work and Pensions from a decision of the Employment Tribunal at Exeter, given on 11 February of this year, the Chairman was Mr B E Walton. The issue before the Tribunal was a preliminary issue as to whether it was appropriate to extend time to the Applicant for making his application for unfair dismissal.

[2]We set out the relevant background facts. Mr Phillips worked for the Benefits Agency, a department of the Department of Work and Pensions. In 1995 the Benefits Agency took upon itself a decision to streamline its operations, which involved a reduction in the number of SEOs (we assume that to be Senior Executive Officers) of whom he was one. What happened was that persons in his position were required to give details of their preferences for retention and redeployment and these were considered by a Board. The Board was responsible for selecting those SEOs who would remain with the Department.

[3]Mr Phillips wished to remain in Somerset and applied for a post in Somerset or Dorset, but he learned in March 1996 that his application had been unsuccessful. The Department had an internal complaints procedure. He made a complaint on 3 April, which he asked to be investigated by an independent officer. Interviews were held but he was told that his complaint had been rejected. He then appealed to the Chief Executive, who again rejected the appeal in December 1996, and in March 1997 Mr Phillips took early retirement. He still had a further avenue of appeal which was to the Permanent Secretary, and on 24 March 1997 he exercised that right but the appeal was rejected in August 1997.

[4]It is right to say that Mr Phillips throughout was dissatisfied with the manner in which he had been selected for redundancy. He did not consider that the panel that conducted the selection exercise had conducted it in accordance with what might be described as the published guidelines. He also believed, incorrectly, as appears to be the case, that one of the managers, a Mr Barker, wanted particular people to be retained and in particular people who would be working in Bristol, and that he had chosen a particular named individual for the post in Somerset.

[5]These complaints were all investigated by the Department, and albeit Mr Phillips may not have agreed with the conclusion, there was nothing to suggest to him that his complaint had not been properly considered. Indeed, it was considered by the Permanent Secretary, on the ultimate appeal, Dame Ann Bowtell, and we have her letter of 5 August 1997, in which she says, and we of course accept, that she had considered Mr Phillips' case in detail, but was not prepared to agree to a further investigation. She said that there had been two independent investigations into the findings of the Selection Panel, and although there were some misgivings about handling, she said:

"… nothing of any substance has been found in either of these independent examinations which would bring either the conduct or the findings of the Panel into disrepute."

She informed Mr Phillips that she had no cause to doubt that the Panel chose the most suitable candidates for those senior management posts. She concluded:

"I can understand your disappointment at not getting the post you wanted and felt that you deserved, but I am satisfied that Peter Mathison reached the correct conclusion in rejecting your appeal. I can find no reason to pursue this matter further as I have not found any evidence of the conspiracy you claim has been used to conceal the manner in which the selections were made. Although some doubts have been expressed about the actions and statements of certain individuals, I do not consider that any of these was serious enough to cast doubt upon the integrity of the entire exercise. Consequently I cannot uphold your appeal."

[6]Mr Phillips took legal advice and was advised that he simply had no evidence to support his suspicions, and that any claim he brought was doomed to failure on the evidence he currently had available. Mr Phillips may have been unhappy, but he accepted that advice and got on with his life.

[7]In 2002, however, on 12 September, a colleague happened to mention to him that a Mr Spence, who had been Secretary, I believe, to the Board that had considered the candidates for the retained posts, was going to a Tribunal, we do not know the details, but had mentioned Mr Phillips' name, and he claimed that he had learned that members of the Board who carried out the examination had not acted in good faith. The Employment Tribunal put the matter in this way:

"On 12 September 2002 he [that is Mr Phillips] learned that members of the board who had assessed him had apparently not acted in good faith (that was his understanding, and we make no findings of fact). The secretary of the board, the Human Resources Manager, was bringing his own claim, and he himself (that is the secretary) maintained that the board had not acted in good faith because when the marks were totalled it was discovered that the applicant was in line for remaining in the restructuring. The board did not like that result and so they abandoned that set of marks and started again with a view to marking so as to exclude the applicant. The HR manager's claim was settled on 25 th October."

[8]Mr Phillips contacted Mr Spence on 13 September and Mr Spence apparently asked him to delay taking action for a limited period of time while his own complaint was sorted out. It is said that Mr Spence's application was resolved, whatever that means, on 7 October of last year. Mr Phillips learned of this on 25 October, and presented his IT1 on 29 October.

[9]The Employment Tribunal, obviously, were faced with a situation in which the Originating Application was presented long outside the primary limitation period of three months. We draw attention to section 111(2) of the Employment Rights Act , the relevant parts of which read:

"2) Subject to subsection (3), an industrial tribunal shall not consider a complaint under this section unless it is presented to the tribunal- (a) before the end of the period of three months beginning with the effective date of termination, or (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."

[10]The Employment Tribunal came to the conclusion, which was expressed succinctly, that firstly it was not reasonably practicable for Mr Phillips to embark on a case in the certain and reasonable knowledge that he was not going to succeed (see paragraphs 10 and 12). They considered that he was entirely justified in his view that there was no point in issuing proceedings which would simply fail.

[11]Further, they considered, and we now refer to paragraph 15, that the six week period that elapsed between his speaking to Mr Spence and the initiation of the proceedings, was not too long. The Employment Tribunal had this to say:

"In our judgment 6 weeks is not in the particular circumstances too long a period. The applicant was proposing to embark on proceedings alleging fraud and was entitled to be cautious and confident that he had the evidence. He delayed at the request of his sole witness, without whom he would have no success at all. In those circumstances it is reasonable to extend the time for that period of 6 weeks in order to bring this case in time."

We would pause for one moment to note that if, and we stress that the word " if " should be put in bold, italics and underlined, that allegations made by Mr Spence are correct, eight members of the Department at a senior level were engaged in a conspiracy, documents were falsified or destroyed and false information given to those appointed by the Department to investigate Mr Spence's complaint. Indeed, Mr Spence himself admits to having misled investigators.

[12]It is not for us, any more than it was for the Employment Tribunal, to weigh the weight of Mr Spence's evidence. The evidence is apparently credible, and is contained in the statement to which Mr Spence has appended his signature. We note with interest that the Employment Tribunal was able to condense its reasoning in two pages. The Notice of Appeal is seven pages, and the parties' Skeleton Arguments, certainly exceed this. That of the Department (which is prudently not paginated) but certainly runs into some fifteen pages.

[13]We also bear in mind the guidance recently given by Lord Hope of Craighead in the case of Shamoon -v- Chief Constable of the Royal Ulster Constabulary , in a case that concerns the manner in which an Employment Tribunal had dealt with an allegation of discrimination on the grounds of sex:

"An Appellate Court should hesitate before it decides to reverse the question of the Tribunal on a matter of this kind. The question that was at issue was a question of fact, and the Tribunal had the advantage of seeing and hearing the witnesses, in a case such as this, where the direct evidence of discrimination is absent, and so much depends on inference as a crucial advantage which the Appellate Court does not share. It is also recognised that a generous interpretation ought to be given to a Tribunal's reasoning. It is to be expected, of course, that the Decision will set out the facts; that is the raw material on which any review of its Decision must be based, but the quality which is to be expected of its reasoning is not that to be expected of a High Court Judge, its reasoning ought to be explained, but the circumstances in which a Tribunal work should be respected, the reasoning ought not to be subjected to an unduly critical analysis."

[14]We find the latter part of what Lord Hope has said particularly apposite in a case like this, and in our opinion, the Employment Tribunal is to be commended rather than criticised for the economy with which it expressed its decision. The Employment Tribunal directed itself by reference to the leading case on the meaning of phrase "reasonably practicable", that is Palmer & Saunders -v- Southend on Sea Borough Council .

[15]The Employment Tribunal, in the first ground of appeal, is criticised by the Department for only referring to part of what Lord Justice May said, and, implicitly, for not fully quoting what he said and suggesting that accordingly, the Employment Tribunal has not carried out the appropriate obligation to address the factual basis of why Mr Phillips did not issue proceedings.

[16]There are, obviously, numerous cases that are available in which the Employment Appeal Tribunal and the Court of Appeal have considered section 111 of the Employment Rights Act and its predecessors. It is quite clear, and we have already drawn attention to the relevant provisions of the section, that the three month period provides a much shorter period within which to bring proceedings than equivalent claims for discrimination on the grounds of race, sex or disability. Further, the provisions of subsection 111(2)(b) which entitles the Tribunal to extend the time when satisfied it was not reasonably practicable for the complaint to be presented before the end of the period of three months, is more limited than the equivalent section that applies in cases of the three kinds of discrimination that we have mentioned. It is clear that the period of three months is regarded as a relatively short period of time and that the Courts should be cautious before extending time and should have regard to the fact that Parliament intended proceedings to be brought within such a short period.

[17]It is submitted that the Employment Tribunal should have considered the three stage test set out in the decision of Machine Tool Industry Research Association -v- Simpson to which we will now make a brief mention. This was a decision of the Employment Tribunal, which cited Mr Justice Browne-Wilkinson's decision in Churchill -v- Yeates & Sons with approval and expanded upon it. He proposed a three stage test that an Employment Tribunal needed to consider. Firstly, that it was reasonable for an employee not to be aware of the factual basis upon which he or she might bring an application, secondly, the knowledge he or she gains must be crucial, fundamental or important to change the belief from one where he does not have a claim to one where he has grounds for making an application, and thirdly the acquisition of the knowledge was crucial to the decision to bring a claim.

[18]Ms Downing submitted that the Employment Tribunal made no finding in the present case as to why it was reasonable for Mr Phillips not to be aware of the relevant facts. Indeed, she went so far as to submit that the Employment Tribunal should have called Mr Spence, who was present at the Tribunal and who had given a witness statement, to explain why it was that he had not previously contacted Mr Phillips. It seems to us quite clear that the Employment Tribunal considered that Mr Phillips reasonably was unaware of Mr Spence's allegation. Mr Phillips was available to give evidence; we understand that he was cross-examined on behalf of the Department. No doubt the Department questioned him, as it was entitled to, as why it had taken him so long to learn of what Mr Spence had to say, but the answer seems fairly obvious. What had happened, if Mr Spence is correct, was that there was a conspiracy and a cover-up, and until Mr Spence or someone else chose to reveal the wrong-doing, there was no way in which Mr Phillips, or anyone else, could have known about it. If Mr Spence is right, the cover up extended to giving false information to two investigations carried out by the Department, and also to the Permanent Secretary.

[19]It is equally clear from the reasoning of the Tribunal, and we consider that we need to consider the Tribunal's reasoning, with what Lord Hope had to say in Shamoon in mind, that it was clear that the information gained was of significant importance and led Mr Phillips to change his mind from believing that he had no claim to believing that he had a viable claim, and that that was crucial to his decision to bring the claim.

[20]It is quite clear, firstly from the decision in Churchill -v- Yeates & Sons that the Employment Appeal Tribunal was satisfied that there were cases where ignorance of a fact fundamental to the existence of a good cause of action, was relevant to a decision as to whether it was reasonably practicable for the claim to be brought within the three month periods. Mr Justice Browne-Wilkinson said: "As it seems to us there are two related questions here. The first and possibly the most fundamental is this: Can ignorance of a fact, the existence of which is fundamental to the right to complain of unfair dismissal, amount to circumstances which render it not reasonably practicable to bring a complaint? The second is whether, in a case where an applicant relies in part on grounds which depend on the existence of a fact of which he was ignorant, and in part on grounds which are not dependent upon such fact, it can be said that it was reasonably practicable to present the complaint within the three months' period. As to the first point, we find it impossible to say that there cannot be cases where ignorance of a fact fundamental to the existence of a good cause of action is not a matter merely of leading an industrial tribunal to the conclusion that it was not reasonably practicable to bring the complaint within three months. So far as the researches of the parties' legal advisers have extended (and so far as our knowledge extends) there has never previously been a reported case under section 67(2) in which it has been urged that it was not reasonably practicable to bring a complaint within three months on the grounds of ignorance of fact which is necessary to found the cause of action. Hitherto, all the cases have been concerned with a different point: namely, whether ignorance of the right to complain of unfair dismissal or of the procedure to adopt in order to make such complaint, or as to the time limit provides a ground for saying that it was not reasonably practicable to present the claim within the time limit. As it seems to us it is impossible to say that it is practicable for somebody to bring a case of unfair dismissal until he is aware of a fundamental fact which renders his dismissal unfair. We are not saying that it is necessary for him to know all the facts. There must be very few cases indeed where the discovery of a new fact for the first time shows a cause of action to exist which, on the previously supposed state of facts, did not exist. But we cannot rule that there are no occasions in which ignorance of facts prevents an industrial tribunal from holding that it was not reasonably practicable to present the complaint within time. In this case, if for the moment we assume a complaint presented by the employee relying on ground(1) alone (there being no reference to grounds

(2) to (6) ), the question is whether he can demonstrate to the industrial tribunal that until he was aware of the possibility of challenging the reason for dismissal given by the employers he reasonably took the view that he had no reasonable grounds to complain of unfair dismissal. If that could be established on the facts, then it would be open to an industrial tribunal to hold that it was not reasonably practicable for him to have brought that complaint until he discovered the crucial fact. That leads to the second point, which is the point on which the industrial tribunal decided the matter; viz, that because other grounds were relied upon in the complaint (and as he could have presented a complaint based on those other grounds within the three months) it was unnecessary for them to consider whether or not it was practicable for him to bring a case based on ground (1). In our judgment that view is not right in law. In the present case, grounds (2) to (6) of the complaint proceed on the basis that the reason for dismissal was redundancy; the new factual allegation contained in ground (1) challenges the reason given for dismissal by the employer (i.e. redundancy). The employee is in fact raising a new and separate ground for alleging unfairness, i.e relate to the questions to be considered by the industrial tribunal under section 57(3). Ground (1) in the complaint goes to the honesty and genuineness of the reason given for dismissal, i.e. it goes to the point which has to be decided by the tribunal under section 57(1) and (2). In our judgment it is not enough to say that it was reasonably practicable to bring a complaint on certain grounds if it is demonstrated that it was not reasonably practicable to bring a complaint on another separate ground. For those reasons, we think that the right order is to allow this appeal and to remit the matter to the industrial tribunal for them to consider what were the facts of this case. If the industrial tribunal find that it was the discovery of the facts relating to some other person doing, as the employee alleges, his job which for the first time reasonably enabled him to put forward a claim on the grounds that he was not, in fact, redundant (he having previously taken the view or been advised that he had no good right to complain of unfair dismissal) then, in our judgment, it would be open to the industrial tribunal to make the finding that it was not reasonably practicable for him to bring his complaint within the three months' period. We must emphasise that our decision in this case is limited very much to the very unusual facts of this case. We are dealing here with an allegation that there is a discovery of a fact of fundamental importance the existence or non-existence of which makes a crucial difference as to whether or not there is a claim for unfair dismissal. Nothing in this decision should be taken as indicating that ignorance of facts of a less fundamental kind can or should be considered as providing a ground for saying that it is not reasonably practicable to present the complaint." [382G to end of page 384].

[21]In Machine Tool Industry Research Association -v Simpson , one finds the three propositions which I have mentioned set out in the judgment of Lord Justice Purchas at page 564. He then approved the passages which I have referred to in the judgment of Churchill -v- Yeates and had this to say at page 565:

"With respect and gratitude, for my part I would accept those two passages from that judgment as fully and succinctly setting out the true position in law, which should direct the approach of the court considering under section 67(2) whether it should or should not be satisfied on the facts that it was not reasonably practicable for the complaint to be presented in circumstances such as those prevailing in this case. By that I mean that during the period of the three-month limitation there were crucial or important facts unknown, and reasonably unknown, to the employee which then became known as facts to her such as to give her a belief, and a genuine belief, that she had a claim to be brought before the industrial tribunal."

It is clear therefore that knowledge of the reasonable practicability is not limited to the physical ability to commence proceedings, but includes knowledge of matters that are so significant that they underlie the ability to form a belief that there is a viable claim.

[22]It seems to us to suggest that simply because, as was the case here, someone had a suspicion, for which there was no evidence, that he had been unfairly treated, it was reasonably practicable for him to bring a claim that was almost by definition vexatious as being brought without any evidence to support it. We cannot accept the submission that in those circumstances it is appropriate to commence proceedings in the hope or expectation that your suspicions will be "firmed up", as is sometimes said in the United States, by subsequent disclosure.

[23]That view is supported by the decision in London Underground -v- Noel

[1999] IRLR 621

, a decision of the Court of Appeal, and we draw attention to, in particular, paragraphs 17, 18 and 19, as well as paragraphs 24 and 25. In paragraph 25

Lord Justice Judge had this to say:

"In my judgment the crucial fact is that Mrs Noel was not offered her original job back, nor a job which effectively provided her with similar or better terms of employment. In reality the new job represented a demotion. Although her complaint that she was unfairly dismissed from her original job would have been mitigated by the offer of alternative employment, she was not offered reinstatement or its equivalent, nor a complete or virtually complete remedy, sufficient to make it pointless for her to pursue a complaint of unfair dismissal. If the job offered to her had for practical purposes been identical to the job from which she had been dismissed, I doubt whether I should have been prepared to conclude it was reasonably practicable for her to proceed. Pointless litigation should be discouraged, whether in industrial tribunals or elsewhere, and it is not reasonably practicable to litigate about nothing."

Those words seem to us to be apposite insofar as the Employment Tribunal considered the strength of Mr Phillips' claim to be one that he believed reasonably could not succeed before he learned of what Mr Spence had to say.

[24]Our attention was also drawn to the decision in Post Office -v- Sanhotra where the Employment Appeal Tribunal made clear that it is not necessary to apply the three stage test rigidly, as set out by Lord Justice Purchas in the Machine Tool case, and in this regard we refer to paragraphs 16 and 16A of the decision, as well as paragraphs 18 - 20.

[25]In our opinion, having regard to the guidance given to those cases, the Decision of the Employment Tribunal, whilst succinct is quite clear. The Employment Tribunal considered that until Mr Phillips learned of what Mr Spence had to say, he reasonably believed that he did not have a viable claim, and that in those circumstances it was not reasonably practicable for him to have commenced proceedings until he had knowledge of Mr Spence's allegations.

[26]Ms Downing goes on to submit that even allowing for the fact that Mr Phillips did not know of the basis upon which he could bring proceedings for five years, until September 2002, he waited a further six weeks before commencing proceedings, and that it was not reasonable for the Tribunal to extend time by a further six weeks. The Employment Tribunal gave its reasons as to why it was reasonable, in its opinion. A number of the cases which we have recited make it clear that issues of fact and the weighing up of facts are for the Employment Tribunal. The decision as to what period is reasonable is essentially a matter of the application of the facts to the law by the Employment Tribunal and it is not for the Employment Appeal Tribunal to interfere unless the Employment Tribunal's decision is perverse or it has misdirected itself as a matter of law. It was submitted that it was wrong for the Employment Tribunal to have taken account of the fact, as it did, in the passage we have already read, that Mr Phillips was entitled to be cautious and confident that he had the evidence, and that he delayed at the request of his sole witness, without whom he would have had no success at all. It was submitted that these were irrelevant considerations and there was in fact nothing to prevent Mr Phillips commencing proceedings within a matter of days of speaking to Mr Spence.

[27]We take the view that the Employment Tribunal was entitled to have regard to these matters and the question as to what was a reasonable time was a matter for the Employment Tribunal, as it had correctly directed itself and was entitled to have regard to the matters we have referred to. In the circumstances, even were we to come to the conclusion that we ourselves would have found six weeks to be excessive, and we stress that that is not our decision, it seems to us that the Employment Tribunal was perfectly entitled to come to the conclusion it did, and indeed it is a conclusion that we ourselves would have concurred with. We are extremely grateful to both Counsel for the economy of their submissions. We dismiss the appeal. [Discussion]

[28]Can I just say one thing which I think ought to be added to our judgment, and that is this. We have been at pains to make clear that we have formed no view whatever as to the accuracy of the evidence Mr Spence says he will give. We also think it right to point out that Mr Phillips needs to understand that it is perhaps a high risk exercise on his part, because were the Tribunal to find Mr Spence's evidences less than accurate, he may find himself exposed to a risk of it being suggested he has conducted the proceedings in a vexatious manner.