MR M KELSALL v LEWISHAM SOCIAL CARE & HEALTH [2003] UKEAT 911_02_0704

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2003] UKEAT 911_02_0704Case No Appeal No. EAT/911/02Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR M KELSALLAPPELLANTLEWISHAM SOCIAL CARE & HEALTHRESPONDENT
Before
Mr Recorder LangstaffDate 7 April 2003
[1]APPEARANCES For the Appellant MR JOHN CROSFILL (of Counsel) Instructed By: Messrs Kennard Santer Wells 44-44a Longbridge Road Barking Essex 1G11 8RT For the Respondent MR GRAHAM SMITH (of Counsel) Instructed By: Lewisham Social Care & Health 1st Floor Laurence House 1 Catford Road London SE6 4RY MR RECORDER LANGSTAFF QC : On 26 th June 2002 Mr. Booth, Chair of an Employment Tribunal at London South refused an application by the Appellant to amend his Originating Application, and "therefore" struck out the application as showing no reasonable cause of action which the Tribunal had jurisdiction to try. Although the appeal at first sight appeared to raise questions of the application of the decision of the House of Lords in Johnson –v- Unisys [2001] ICR 480 requiring consideration of suggested inconsistencies between the three Court of Appeal decisions of Eastwood –v- Magnox Electric Plc [2002] IRLR 447 , Gogay –v- Hertfordshire County Council [2000] IRLR 703 , and the currently unreported case of Robert McCabe –v- Cornwall County Council and Another [2002] EWCA Civ 1887 (18 th December 2002) , the need to wrestle with the difficulties caused by those decisions was obviated during the course of the argument, for reasons which will appear below. The Procedural History[2]The Appellant made his Originating Application on 12 th May 2002. In box 1 ("Please give the type of complaint you want the tribunal to decide…If you have more than one complaint list them all.") he wrote:- " Breach of contract & negligence, slander, defamation of character (sic)". In box 4 he indicated that he had been employed from August 1999 until February 2002: accordingly, he was no longer employed at the date of filing his Originating Application. Box 9 is of importance. It reads:
"If your complaint is not about dismissal, please give the date when the matter you are complaining about took place"
. In the box provided, the Appellant wrote:- "23/04/01 & 03/07/01".[3]On any literal reading of the IT1 it would accordingly be apparent, thus far, that the Applicant to the Employment Tribunal was not raising any complaint in respect of his dismissal, or the circumstances of it. There is no reference to dismissal in Box 1. A box which was only to be filled in if the Applicant was not complaining about dismissal (Box 9) had been filled in. The dates of the matters complained of were in April and July 2001, whereas the Appellant had ceased to be employed, he says, in February 2002.[4]Box 11 seeks details of the complaint being made. In it, the Appellant wrote:- "My complaint concerns disciplinary action taken against myself by my ex-employer during my employment with Lewisham Social Care and Health. I feel strongly that the above action was disproportionate and draconian, given the offence committed. I was also accused, without any evidence, of abusing clients in my care. This had a devastating effect on my reputation as a practitioner in this field (learning disabilities), and my physical and mental well-being (currently on medication and undergoing counselling) and, I have been informed (by my ex-employer) that all allegations made against myself will be communicated to any potential employer, thus guaranteeing that I have very little chance of successfully applying for a new position in this field. I feel I have a legal right to protection from false allegations of abuse and that simply being accused of abuse should not deny my right to apply for & work further in positions in the learning disabilities field. Thank you for your help in this matter."[5]Before the Respondent's Notice had been received by the Appellant, he was referred by his local Citizens Advice Bureau to the Evelyn 190 Centre in Deptford. The Centre wrote a letter on behalf of the Appellant to the Tribunal, dated 11 th June. It said, so far as material:- "We further like to make an application to amend and/or to particularise the applicant's application to the tribunal as he had no assistance when making his application. If the above is acceptable the applicant claims the following:(a) respondents suspended the applicant on 3 rd January 2001 without informing him of the reasons for his suspension…By letter dated 14 th April 2001 the respondents instructed the applicant to attend a disciplinary hearing on 23 rd April… At the hearing the applicant was informed that there were three allegations against him…The applicant contends that the respondents failed to follow a fair procedure. This was pointed out to the respondents but they took no notice of the applicant. At the end of the hearing the respondents informed the applicant that two of the allegations were not proven. One allegation was proven for which the applicant received a final written warning.(b) The applicant appealed against the final written warning. The appeal hearing took place on 3 rd July. The applicant contends that he pointed out that their procedure was flawed and that he had no representation. Again the respondents took no notice of the applicant's claim and upheld their decision to give him a final written warning.(c) The applicant contends that although 2 allegations were not proven the respondents informed him that if he left their employment it would be stated in any future reference. This the applicant found to be unfair. And as a result the applicant became ill with stress, anxiety and depression.(d) Between August and November the applicant had a number of days off sick suffering with stress, anxiety and depression. In November the applicant received a letter threatening dismissal if he was sick for one more day. During this time he was sent to OH who referred the applicant back to his GP for counselling in December 2001. On 11 th February 2002 the applicant had a supervision in which his supervisor made threats and criticisms about the applicant's personality and not his work. This lefty (sic) the applicant feeling stressed and he felt that he could no longer carry on. He resigned by letter dated 18 th February 2002."[6]Also on 11 th June the Respondents filed a Respondents Notice. In this, the Respondent contended that the Tribunal did not have jurisdiction to hear the Appellant's complaints of slander, negligence or defamation of character, and denied that it had breached the Appellant's contract of employment in any manner whatsoever (although it did not allege any lack of jurisdiction to consider the latter). 7. The next day, 12 th June 2002, a Chairman of the Tribunal converted the hearing of the Originating Application, which was set for 26 th June, to a preliminary hearing to decide whether the Originating Application should be struck out on the grounds that it was scandalous, misconceived or vexatious. On the following day, the same Chairman ordered that the application to amend would be considered at that hearing. 8. When the matter came before the Tribunal, the Chairman clarified from the Appellant's representative that he was asking for his application to be amended to substitute a claim of unfair constructive dismissal for the previous allegations of slander and breach of contract. The Chairman (rightly in our view) addressed the matters before him in two stages. The first was whether he should permit the amendment to be made. The second was whether, if he did not, he should strike out the unamended Originating Application. 9. The Chairman posed himself the question whether the application to amend was one which changed the basis of the claim, as opposed to seeking to add a claim to an already existing one, or perhaps to amplify a claim over which it was obvious that the Tribunal had jurisdiction. He said that it seemed to him that:
"…The Applicant is changing the basis of his claim completely. From his Originating Application it is clear that he brought a claim which was an attempt to re-establish his reputation as a confident and trustworthy teacher and somehow to remove from the record the criticisms made of him which led to his original warning. That in my view could not conceivably be read as a complaint of constructive unfair dismissal in February 2002 for there was no mention at all in that of the final incident. It is quite clear to me that that final incident is one which has been made necessary in order to comply certainly with time limits and possibly with the well known rule of common law which is that a constructive dismissal is one which must follow rapidly the event which causes it. 11. I therefore have to look at this case as not one which adds the sort of claim but one which changes or indeed expands an existing narrative to include a claim over which the Tribunal has jurisdiction. Instead, this changes the basis of the claim from a defamation action over which the Tribunal has no jurisdiction to a constructive dismissal action over which the Tribunal does have jurisdiction and therefore is a new claim." 10. Having determined that, in his view, the claim sought to be raised by amendment was an entirely new claim the Chairman "therefore" turned to a consideration of Section 111 of the Employment Rights Act, which prescribes the time limit within which an Originating Application complaining of unfair dismissal must first be presented. He noted that "
What I now treat as the Originating Application was faxed on 11 June 2002 " (there referring to the letter from Evelyn 190 Centre). That was beyond the period of three months from the date of dismissal by almost four weeks. The Chairman therefore proceeded to ask himself whether it was reasonably practicable for the Appellant to know firstly that an action for slander could not be brought in a tribunal (though quite what the relevance of this was if the Chairman was considering the claim as one of unfair dismissal first brought on 11 th June 2002 is not immediately apparent to us) and secondly that it was his interview in February which caused his resignation. The Chairman summarised his decision in paragraph 15, in these terms:- " I must therefore conclude that it was reasonably practicable for him to tell the Tribunal in February of the facts which would have caused that application to be registered immediately as unfair dismissal and therefore the first application which complies with the rules by giving the Tribunal jurisdiction did not arrive until 10 June outside the time limit and I do not consider that reasonable. It follows from that that his only application before the Tribunal which I have allowed is the one presented in May. That discloses no cause of action over which the Tribunal has any jurisdiction and I must therefore strike it out." The Appeal 11. The Appellant did not focus upon any close textual analysis of that which the Chairman had said. The argument before us proceeded upon the assumption that the Chairman addressed the question of whether the Appellant had complied with the time limits in a manner which was appropriate if the Chairman had been considering an Originating Application as such. Rather, the argument made to us in the admirably succinct words of Mr. Crosfill who appeared for the Appellant before us was that "All of the essential facts necessary to establish that the Appellant was constructively dismissed were set out in the original IT1. In the circumstances the amendment did not amount to putting a fresh case." 12. Secondly, Mr. Crosfill argued that the allegations made in the original Originating Application, in particular those focusing upon allegedly disproportionate and draconian disciplinary proceedings, were clearly capable of breaching the implied term of mutual trust and confidence as recognised by the House of Lords in Malik –v- BCCI [1997] ICR 606 . 13. Both Mr. Crosfill, and Mr. Smith who appeared for the Respondent Council, agreed before us that there were two issues before the Chairman. The first was whether or not to permit the amendment. The second was whether or not the unamended Originating Application was one which the Tribunal had jurisdiction to consider. 14. As to the first issue, Mr. Crosfill argued that the Chairman was wrong to see the claim for which amendment was sought as being one which was wholly new. The bare bones of it had been set out in the Originating Application. The letter of 11 th June put flesh on those bones, and did not substitute a new structure. The Appellant was plainly complaining of a breach of the implied term of trust and confidence: he was not required to set out the term itself in any of the boxes on the application. He had, however, pleaded that he was no longer in employment, and had set out the breaches of contract which he alleged (in relation to the disciplinary action) which formed the foundation of his claim for unfair dismissal. They were part and parcel of the allegations leading, together with the materials supplied by the 11 th June letter, to the conclusion that there had been sufficiently serious a breach as to justify the Appellant in resigning from his employment, and treating himself as dismissed. The term "unfair dismissal" was merely a new label added to old facts: and the facts themselves are that which the application has to recite. A cause of action is a set of facts which is capable of giving rise to remedy at law: it is those facts which need to be asserted, not the precise legal formulation of the duty to which those facts give rise. 15. Mr. Crosfill went so far as to suggest that the only missing element in terms of fact was a statement to the effect that the Appellant had resigned in consequence of the breach. 16. He pointed to paragraph 23 of the decision in Morrow –v- Safeway Stores Plc [2002] IRLR 9 in which this Tribunal, presided over by Mrs. Recorder Cox QC (as she then was) referred with approval to another tribunal's formulation of the question as being in every case whether "…objectively speaking, the employer has conducted itself in a manner likely to destroy or seriously damage the relationship of confidence and trust between the employer and employee ," adding that if the employer were found to have been guilty of such conduct, that went to the root of the contract and amounted to a repudiatory breach, entitling the employee to resign and claim constructive dismissal. Mr Crosfill submitted that such a breach might be constituted by just one incident. It might, however, be a series of incidents none of which taken on its own would be sufficient to amount to a breach of the implied term, but which taken cumulatively with some or all of the other breaches might do so. Thus, in such a case, the existence of a number of such breaches was necessarily part and parcel of the history leading to the employee's decision that he could take no more, and his consequent choice to resign from employment. Law relating to amendment 17. The principles governing the exercise of a tribunal's discretion whether to grant or refuse an amendment were not in dispute before us. These are those set out by Mr. Justice Mummery, President of this Tribunal, in Selkent Bus Co Ltd –v- Moore [1996] ICR 836 . The salient features, for present purposes, are that such a discretion must be exercised in a judicial manner (i.e. in a manner which satisfies the requirements of relevance, reason, justice and fairness inherent in all judicial discretions) (per Mummery J at 842H); and that the relevant circumstances to consider are the nature of the amendment, the applicability of time limits, and the timing and manner of the application. 18. As to the nature of the amendment, the Appeal Tribunal said this (at 843G – H):- " 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 a minor matter or is a substantial alteration pleading a new cause of action." 19. As to time limits, the Tribunal said (843H – 844A):- " If a new complaint or cause of action is proposed to be added by way of amendment, it is essential" (we note the force of that word) "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 …." 20. As to the timing and manner of the application, the Appeal Tribunal recognised (844A – C) that no time limits were laid down in the Regulations for the making of amendments, but that it was relevant to consider why the application was not made earlier. Paramount considerations were the relative injustice and hardship involved in refusing or granting an amendment. Questions of delay were relevant in reaching a decision. 21. In the present case, the first question is whether the Chairman was entitled to regard the amendment as raising entirely new facts and a new cause of action. The question for us is whether we can say that he was wrong to do so. We cannot say that he was. Indeed, though it is unnecessary perhaps to go further, we consider that he was right in the conclusion which he reached. 22. The reasons why we think this are apparent from the facts we have recited above. In particular, the letter seeking to amend and/or to particularise the Originating Application (a) put in issue the circumstances surrounding the alleged receipt of a letter threatening dismissal for continued sickness, in November 2001, and whether that was reasonable or unreasonable in the circumstances on the part of his employer; (b) put in issue the content of a supervision meeting on 11 th February 2002, and in particular whether threats and criticisms of the Appellant's personality had been made by his supervisor during that meeting; (c) suggested that the Appellant's resignation was in consequence of the supervision meeting of 11 th February 2002; and, perhaps most important (d) that central to the claim was the termination of the Appellant's employment by the Respondent, and the reasons for it. None of these matters had been raised by the unamended originating application, which was limited to complaints about disciplinary action taken in April and July 2001, whether or not the Appellant had been accused without good reason of abusing clients in his care, and whether the employer was in breach of contractual duty by threatening to tell potential employers of the fact that allegations had been made against the Appellant. Against this background it could not be said that the Chairman lacked a proper basis for the conclusion, which was his to make, that the amendment introduced additional facts to those originally relied upon, giving rise to a claim of a different nature. 23. The fact that the Chairman did not explicitly recognise that there was no statutory time limit applicable to the amendment itself, and appeared to treat the question as concluded by the answer that would have been given had the claim been one by way of Originating Application rather than amendment was not the subject of any detailed criticism before us. It was not suggested that the paramount considerations of relative injustice and hardship involved in refusing or granting an amendment, identified in Selkent Bus Co Ltd v. Moore would, if they had explicitly been considered by the Chairman, have occasioned any difference in the result. Mr Crosfill's argument concentrated upon his submission that the Chairman was not entitled to regard the proposed amendment as raising entirely new facts and a new cause of action, and did not suggest any factor which might have counter-balanced that of the time limit which, in the words of the Appeal Tribunal in Selkent Bus Co Ltd, it is "essential" for the Tribunal to consider. 24. Accordingly, we are bound to reject the appeal insofar as it seeks to attack the Chairman's decision to disallow the proposed amendment. The Strike-Out 25. The Employment Tribunal Rules of Procedure, scheduled to the Employment Tribunals (Constitution etc) Regulations 2001, provide by Rule 15(2)(c) that a Tribunal may order to be struck out or amended any Originating Application, or anything in such application, on the grounds that it is scandalous, misconceived or vexatious. "Misconceived" is defined in Regulation 2(2) as including "having no reasonable prospect of success". The Chairman did not specifically rely upon the "misconceived" ground: he did not analyse the application of Rule 15(2) to the case presented by the Originating Application, but the Respondent argues that a strike out was justified on the basis that the claim as formulated could not succeed. 26. Accordingly, the question is whether the Chairman was right to conclude that the Originating Application disclosed no cause of action over which the Tribunal had any jurisdiction. 27. Here, there was a surprising amount of common ground between the parties. The Appellant asserted that the Originating Application disclosed a "breach of contract" as a ground of claim in Box 1. He did not seek to argue that the tribunal had any jurisdiction in respect of slander, or defamation of character. The contractual term said to have been breached was that of the implied term of mutual trust and confidence. The Respondent did not dispute that (at least where there has been a termination of employment) a former employee is entitled to claim against his employer in respect of a breach of contract committed during the currency of the employment. The principal difference between the parties was whether breach of such a term gave rise to a claim in respect of breach of contract where the allegations of breach related to a disciplinary process or manner of dismissal. Mr. Smith for the Respondent maintained that the effect of the House of Lords decision of Johnson v. Unisys Ltd [2001] ICR 480 was that such a claim could not co-exist with the statutory right not to be unfairly dismissed. He noted that the effect of Eastwood v. Magnox Electric Plc [2002] IRLR 447 C.A. was to extend this approach. His Skeleton Argument maintained that if a breach which was repudiatory in nature was committed, then the employee had a stark choice: he could accept the repudiation, and claim compensation for unfair (constructive) dismissal, though not for breach of the term itself ( Johnson; Eastwood ), but otherwise had no remedy. 28. It proved unnecessary for us, in the event, to determine whether the anomalies created by this argument might demonstrate that it could not be tenable - not least, the fact that it would imply that a breach of contract might be committed with impunity by an employer, so long as it was repudiatory; the anomaly that a less serious breach would be justiciable by an Employment Tribunal, where there was a subsequent termination of employment, but not one which was repudiatory; and the curiosity that it would envisage a breach being actionable at common law (though not before an employment tribunal) at any stage up until it formed part of the history relevant to a claim that the employee was constructively dismissed, when it would cease to be so actionable. It became unnecessary to consider these arguments, and what answers there might be to them, or the extent to which the Court of Appeal in Gogay v. Hertfordshire County Council [2000] IRLR 703 , and McCabe v. Cornwall [2002] EWCA Civ 1887 appeared to endorse a common law claim for a repudiatory breach where the circumstances giving rise to it were not part of the manner of dismissal, because it became common ground during the argument that the principle in Johnson v. Unisys was one which applied where dismissal was an essential part of the factual background. Thus a breach of the implied term of trust and confidence which occurred in the adoption or operation of the procedures and proceedings which led to dismissal could found no separate claim: Parliament's enactment of the statutory provisions relating to unfair dismissal precludes it. 29. By contrast, where a dismissal is based upon facts separate and distinct from those giving rise to the alleged breach of contract, the existence of the unfair dismissal provisions in the Employment Rights Act 1996 could constitute no bar to the potential success of the contractual claim, whether the breach alleged was, or was not, repudiatory in nature. The difficulty for Mr Smith's argument, in the present case, is that it assumed a claim which related to dismissal. Yet any claim related specifically to dismissal was excluded once the Chairman had determined that the supervision meeting, the alleged criticism of the employee at it, and the termination by him of his employment allegedly in consequence of that criticism were not matters which the Tribunal was entitled to consider. Indeed, it left the case as one in which there was no allegation of dismissal at all (the fact of termination was consistent, on the face of the originating application, with consensual termination, or resignation). Once those allegations were removed from the picture that left only complaints of matters which occurred in April and July 2001, which were capable (on Mr Smith's argument) of amounting to a breach or breaches of contract. The relevance of the termination of employment itself was then merely to confer jurisdiction, since an Employment Tribunal does not have general jurisdiction over breaches of contract in employment but only if the employment has come to an end. There was no warrant in the unamended originating application for regarding the alleged breaches in April and July as having given rise (or having contributed) to the decision by the employee to resign. Though they may have had that consequence, as a matter of fact, this was not something which emerged from the Originating Application, nor from the information before the Chairman. 30. In short, once the claim for unfair dismissal had been ruled out, because the amendment was disallowed, the claim for breach of contract was one which fell to be determined on the facts surrounding the incidents in April and July, taking into account as further particulars of that allegation the matters volunteered at paragraphs (a), (b) and (c) of the letter of 11 th June from the Evelyn 190 Centre in Deptford to the Tribunal. 31. It may be that the Chairman regarded the Originating Application as principally concerned with the employee's reputation, and consequently as being a claim in respect of defamation. To that extent, certainly, the Employment Tribunal had no jurisdiction to consider it. But in our view it was more than that, on the face of it. A disproportionate and draconian exercise of disciplinary procedures within employment, and a failure to meet the requirements of natural justice by failing to inform an employee of that which is to be said against him is capable of being conduct likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. If, in addition, it is shown that that was conduct for which there was no good reason (a part of the formulation of the implied term of trust and confidence which is sometimes overlooked), and if in fact the evidence establishes that the conduct was of such a nature, then the claim would be entitled to succeed. Whether it would do so or not would depend entirely upon the evidence. We do not think that this could be pre-determined without hearing that evidence. 32. Accordingly, this appeal succeeds to the extent that the decision of the Chairman to strike out the unamended Originating Application must be set aside, save insofar as the decision to strike out relates to any claim other than breach of contract. It must be remitted, for an Employment Tribunal to hear and determine the claim in respect of breach of contract, on the basis of the unamended Originating Application, as further particularised in paragraphs (a), (b) and (c) of the letter of 11 th June 2002. Insofar, however, as the appeal is one raised against the Chairman's exercise of his discretion to refuse amendment, it is dismissed.