J O SIMS LTD v MR J MCKEE [2006] UKEAT 0518_05_1603

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2006] UKEAT 0518_05_1603Case No Appeal No. UKEAT/0518/05Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
J O SIMS LTDAPPELLANTMR J MCKEERESPONDENT
Before
Mr Justice Bean Mr T Haywood Mr D J JenkinsDate 16 March 2006
[1]APPEARANCES For the Appellant MR JOEL DONOVAN (of Counsel) Instructed by: Messrs Roythorne & Co Solicitors 10 Pinchbeck Road Spalding Lincs PE11 1PZ For the Respondent MR MARTIN BLOOM (of Counsel) Instructed by: Messrs Hegarty & Co Solicitors 48 Broadway Peterborough PE1 1YW SUMMARY Time Limits: Reasonable Practicality & Practice & Procedure: Costs Unfair dismissal – first claim had been held to be premature – second claim out of time, but ET found not reasonably practicable to have presented it in time. Employer's appeal dismissed. Costs of "misconceived" appeal awarded – relevance of threat to claim costs made in ET 3. THE HONOURABLE MR JUSTICE BEAN Anyone who doubts that the law of unfair dismissal is a minefield of technicalities need look no further than this case to be enlightened. Mr McKee joined the employment of J O Sims Ltd on 20 September 1998. On 19 November 2004 a meeting occurred, the circumstances of which remain in dispute, in the course of which he was given a draft Compromise Agreement by his employer. On 10 December 2004 he presented an Originating Application to an Employment Tribunal alleging that he had been dismissed on 19 November 2004 and making claims for unfair dismissal, wrongful dismissal under the contractual jurisdiction of the Tribunal and failure to give written statement of reasons for dismissal.[2]The employers did go on paying him until Christmas Eve when, pursuant to a letter from their solicitors to his the previous day, they ceased pay and benefits. On 30 December their solicitors lodged form ET3 on their behalf. In answer to the question:
"do you agree that the Claimant was dismissed?" they answered "no"
. In answer to the question:
"are the dates of employment given by the Claimant correct?", they answered "yes"
. Mr Joel Donovan, who has appeared on appeal on their behalf and did not appear below, accepts that the latter answer was a mistake.[3]By notice dated 18 January 2005 the Employment Tribunal gave notice of a Pre-Hearing Review as follows:
"A Chairman has directed that on the application of the [Respondent] a Pre-Hearing Review is to be held. The specific preliminary issue to be considered at the hearing is as follows: To determine whether the Claimant is entitled to bring these proceedings as he may not have been dismissed"
. The Pre-Hearing Review came before Mr Christopher Jeans QC, sitting alone, on 5 April 2005. It will be observed that if the Claimant had been dismissed on Christmas Eve 2004, the time that had elapsed since that date was some 3½ months. Mr Jeans' decision was that the complaints of unfair dismissal, breach of contract and failure to provide written reasons failed and were dismissed.[4]As the Tribunal observed in its second judgment (the one under appeal):- "There was no indication prior to the [Pre-Hearing Review] conducted on 5 April 2005 that any point as to prematurity of proceedings was to be taken. On that day, however, Mr O'Dempsey (who then appeared for the Respondent) did take that point. It was a point which had also occurred as a possibility to the Chairman. There was no objection on that occasion from Mr Bloom to that point being raised. It became the main point of the hearing (it being accepted that if there was no termination either summarily on 19 November or by notice on that date, then any complaint would, indeed, be premature). The hearing on 5 April was, however, the first occasion on which the Respondent had formally changed its position about the correctness of the 19 November date it had previously admitted".[5]Returning to Mr Jeans' judgment on the Pre-Hearing Review, he addressed first the primary case put forward on behalf of Mr McKee which was that there was a summary dismissal on 19 November and concluded that there was not. He found that the terms of the Compromise Agreement handed over on that date envisaged termination by mutual agreement at some future date to be agreed. He found that nothing was said or done on behalf of the company after Mr McKee had left the meeting on 19 November to indicate that his employment was being terminated on that date. He also rejected the alternative case that there was a dismissal by notice given on 19 November.[6]At paragraphs 66 to 68 of the judgment of the Pre-Hearing Review, he said this:"66. It follows that I reject both of Mr Bloom's alternative cases. It follows that on the date of presentation of proceedings there was no dismissal and no notice of dismissal had been given. If there was a dismissal or notice of dismissal thereafter, it is common ground that the proceedings are premature.67. Whether there was a dismissal or notice of dismissal after 10th December 2004 is therefore essentially academic. The parties have not however discouraged me from expressing a view about the matter and Mr O'Dempsey for his part has deployed some brief argument on the point.68. I will express on my view on this briefly. It seems to me that Mr McKee was dismissed ("directly") by Messrs Roythorne's letter dated 23rd December 2004 and/or ("constructively") by the withdrawal of salary and benefits following that letter. Mr McKee had not resigned. The institution of proceedings by him alleging dismissal did not amount to a statement by him that he thereby terminated his employment and nothing in Messrs Hegartys' letter of 13th December 2004 amounted to a resignation. Accordingly the employment was still on foot on 23rd December 2004 when Messrs Hegarty & Co wrote making it clear the employment would not continue beyond 24 th December and that all benefits would cease then. Even if it were the case that Mr McKee's non-attendance at work or his bringing the proceedings or anything said or done by him was repudiatory of the contract of employment (as to which I express no view), such repudiation would not by itself bring the employment to an end: see, for example, London Transport v Clarke [1980] ICR 532. 69. No proceedings having been brought in respect of any notice of dismissal or summary dismissal on or after 24 th December 2004, it is common ground that no complaint in relation to such a dismissal can be entertained by me and that, on my determinations, the claim falls to be dismissed in its entirety".[7]That judgment was promulgated and sent to the parties on 3 May. On 16 May Mr McKee's solicitors, on his behalf, presented a second claim to the Employment Tribunal. This time the particulars under paragraph 5 of the Originating Application included the following paragraph 7. "On 8th December 2004 I submitted a claim to the Employment Tribunal alleging that I was unfairly dismissed by the Respondent on 19th December 2004. At the time I presented that claim I believed that that was the effected date of termination of my employment. The Respondents denied that I had been dismissed by them on that date. A Pre-Hearing Review took place on 5th April 2005 to determine the effective date of termination. Judgment was reserved and was not sent out until 3rd May 2005. The Judgment stated that I was not dismissed on 19th November 2004 but on 24 December 2004. That claim was therefore dismissed. I now wish to pursue a second claim as a result of the finding that I was dismissed on 24th December 2004. In all the circumstances I submit that it was not reasonably practicable to present this second claim until now".[8]In their response, the employers, as they had before, answered the question:
"do you agree that the Claimant was dismissed?" in the negative; but this time, in answer to the question: "are the dates of employment given by the claim correct?" answered "no"
. In their grounds of resistance, they asked that the Tribunal strike out the Claimant's claim on the grounds that all of the claims were made outside the relevant primary limitation periods and that it was reasonably practicable for the claims to have been brought within the primary limitation periods. They asked that the claim be brought before the same Chairman, Mr Jeans, as heard the earlier claim "as he is fully familiar with the way in which the claim was conducted on behalf of the Claimant on that occasion". That is a tribute to the way in which the Chairman had conducted the Pre-Hearing Review and it was, indeed, sensible that he should preside at the second hearing, this time with the assistance of lay members. Finally, for good measure, the grounds of resistance in this case claimed costs on the basis that "the claim is abusive, vexatious and has been unreasonably conducted".[9]The second Pre-Hearing Review took place on 20 July and the unanimous decision of the Tribunal was promulgated and sent to the parties on 9 August. Mr Jeans and his colleagues first had to consider whether there was a dismissal and if so, on what date it took effect. They concluded that there was, indeed, a dismissal and that the effective date of termination was 24 December 2004. There is no appeal against either of those conclusions. It follows then that the complaints for unfair dismissal and wrongful dismissal were out of time. (So was a fresh claim for unlawful deduction of wages. The Tribunal rejected it on the basis that there was no ground for saying that it was not reasonably practicable to have brought that complaint within the three month period. It had not been made before. There is no appeal from the rejection of that claim.)[10]Section 111(2) of the Employment Rights Act 1996 provides that:
"…an Employment Tribunal shall not consider a complaint under this section [that is to say a complaint of unfair dismissal] 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"
. The Extension of Jurisdiction Order of 1994 conferring contractual jurisdiction on the Tribunal has an effectively identical provision in Article 7.[11]The question for the Tribunal therefore was whether it would have been reasonably practicable for the complaint to be presented by 23 March 2005 and, if so, whether the further period ending with the presentation of the complaints on 16 May was a reasonable one. The Tribunal set out in paragraphs 18 to 22 of their judgment some of the extensive authority on this subject and Mr Donovan accepts, subject to one point (to which we shall return shortly) that that summary is both accurate and adequate.[12]The Tribunal referred to Wall's Meat Co Ltd v Khan [1978] IRLR 499 in which the Court of Appeal said that the question of reasonable practicability involved no legal concept and was essentially a question of fact.[13]Similarly, in Palmer and Saunders v Southend-on-Sea Borough Council [1984] IRLR 117, May LJ giving the leading judgment in the Court of Appeal, said that "reasonably practicable" can be interpreted as meaning reasonably feasible and that, as Sir John Brightman had said in a previous case, the question should be asked colloquially and untrammelled by too much legal logic. The hope expressed in that dictum has not been borne out in the subsequent 22 years. The judgment of May LJ in Palmer went on to a passage which Mr Donovan emphasised: "It will probably be relevant in most cases for the Tribunal to ask itself whether there has been any substantial fault on the part of the employee or his adviser which has led to the failure to comply with the statutory time limit".[14]In Schultz v Esso Petroleum Company Ltd , [1999] IRLR 488 Potter LJ (as he then was) said that the injection of the qualification of reasonableness requires the answer to be given against the background of the surrounding circumstances and the aim to be achieved.[15]In the recent case of Marks & Spencer plc v Williams-Ryan [2005] IRLR 562 , the Court of Appeal reviewed the authorities and said this at paragraph 24:
"…if an employee takes advice about his or her rights and is given incorrect or inadequate advice, the employee cannot rely upon that fact to excuse a failure to make a complaint to the Employment Tribunal in due time. The fault on the part of the adviser is attributed to the employee"
. The Court endorsed as being still good law the observation of Lord Denning MR in Dedman v British Building and Engineering Appliances [1973] IRLR 379 that "if a man engages skilled advisers to act for him - and they mistake the time limit and present it too late – he is out. His remedy is against them".[16]The Tribunal summarised the position as follows in paragraph 22:
"Thus, whilst the judgment as to what is 'reasonably practicable' is one of fact, we have to bear in mind the principles set out in the authorities that 'reasonably practicable means 'reasonably feasible'; that the expression must be understood in the context in which is arises and that, in particular, the injection of a qualification of reasonableness requires an answer to be given against the background of the surrounding circumstances; and that is relevant to consider whether and to what extent the employee have been misled by the Respondent or its advisors. However, if there is any 'substantial fault', (as it was put in the Palmer case) on the part of the Claimant's advisors in not putting in the relevant proceedings within the time limit, that fault adheres to the employee and he cannot complain that it was not reasonably practicable to bring the claim within that period"
. Mr Donovan, while accepting that as accurate, says that it gives insufficient emphasis to the duty of legal advisers to make sure that time limits are not passed.[17]Mr Donovan cited the unreported case of Agrico UK Ltd v Ireland EATS/0024/05. The employee's solicitor had left the presentation of an Originating Application until the end of the three-month period and having gone on holiday, left it to a secretary to complete and fax to the Central Office the form ET1 on the last day of the three-month period. The secretary failed to do so. She did not attend work through sickness, although she was able to telephone. There was no evidence as to why she failed to alert the office of the need to issue the Originating Application. Notwithstanding that position, the Chairman found that it was not reasonably practicable for the Claimant to have presented her complaint within three months of the effective date of termination of her employment, Unsurprisingly, we think, this Tribunal (sitting in Edinburgh) allowed the employer's appeal. It is a sadly familiar type of case: a last minute flurry which does not achieve the objective, and where there is no explanation of why things were left until the very last moment. Such cases do not usually satisfy the requirements of section 111(2)(b).[18]The EAT in Agrico referred to its previous decision in Camden & Islington Community Services NHS Trust v Kennedy in which the judgment delivered by HHJ Colin Smith QC said:
"A competent solicitor practising in this field must be taken to appreciate the vital importance of complying with time limits strictly and having in place a system designed to ensure that such time limits are complied with at a time when they are supposed to be being complied with"
. The EAT in Agrico agreed with that. They held, in paragraph 17, that the Chairman had failed to have regard to the fact that the burden remained on the Claimant to satisfy him that it was not reasonably practicable for the application to have been lodged within time. This was a matter, they said, of great importance because there was simply no evidence or explanation at all as to why the secretary had failed to contact the office. They also said that if the solicitor was to show that he had acted reasonably and without fault, he was bound to have in place a rather better system for ensuring that applications were issued within time when he was away from the office rather than simply relying on his secretary. That decision, with respect, is obviously correct, but it is some way from the present case.[19]In the judgment under appeal, the Tribunal at paragraph 33 turned to the critical question in the case. They said:
"Was it reasonably practicable to have presented the claim in time? The principal issue on which submissions were focused was whether there was in the language of Palmer 'substantial fault', on the part of Messrs Hegarty & Co in not bringing 'protective' proceedings by or before 23 March 2005"
. They continued at paragraph 34:
"We have concluded that there was no substantial fault on the part of Messrs Hegarty & Co (or Mr McKee). They were entitled to proceed in accordance with the position formally stated in the Response [that is to the first claim] which recorded an acceptance that 19 November 2004 was the termination date. True it was that there was a dispute as to how the employment terminated. True it was also that a number of inconsistent assertions were made thereafter as to precisely how and when the employment might have come to an end. However, we consider that multiplicity of proceedings is in principle undesirable and that unless and until the formal acceptance of 19 November 2004 as being the date of any dismissal was withdrawn (or the Respondent advanced a contention that the existing proceedings were premature) the Claimant's solicitors were not at substantial fault in not instituting or advising Mr McKee to institute a second set of proceedings"
. Thus far, we entirely agree with the Tribunal, in particular with their view that multiplicity of proceedings is, in principle, undesirable. They continued: "Had the Response in the first proceedings asserted a clear case that there was a termination at 24 December 2004 (or had it even made no admissions about the matter), the case would have stood on a very different footing. As it is, we infer that Mr McKee and his solicitors have effectively been misled by the Response (and the absence of subsequent applications to amend) into thinking that if there was a dismissal, it would not be contended that the proceedings were premature".[20]We, for our part, think that Mr Donovan has a point in saying that the Tribunal laid very great weight on the check-box answer to the question in form ET3 in the first claim as to whether the dates of employment given by the Claimant were correct and the mistaken answer that they were. But, on the other hand, we consider that this paragraph of the Tribunal's judgment lays less emphasis than we would have done on the terms of the Notice of Hearing of the Pre-Hearing Review which were, we note again, "to determine whether the Claimant is entitled to bring these proceedings as he may not have been dismissed".[21]There was no second ground of potential disentitlement listed in the Notice of Hearing; that is to say whether the Claimant is entitled to bring these proceedings as he may not have been dismissed or, even if he has been dismissed, he has been dismissed prior to the issue of these proceedings on 10 December 2004". From the passage in paragraph 32 of the decision under appeal, which we have cited earlier in this judgment, it is plain that notwithstanding the terms of the Notice of Pre-Hearing Review, which did not mention the prematurity point, it became the main issue at the hearing on 5 April.[22]Returning to paragraph 34 of the Tribunal Decision, they went on: "Although there was no objection to the point being taken and ventilated at the Pre-Hearing Review we nonetheless consider that Messrs Hegarty & Co cannot be the subject of real blame for not taking the precaution of instituting further proceedings by 23 March. The position had been confusing on all sides. The Respondent had contributed to that confusion before 30 December 2004, but what is really material to our consideration is that in their Response submitted on that date, they had set out a formal case accepting that 19 November 2004 was the effective date of termination (at least if contrary to its case there was a dismissal) and had never withdrawn that formal statement. In those circumstances we think that it was 'not reasonably practicable' in the sense indicated by the authorities for Mr McKee to have brought his proceedings within the three month period".[23]We consider that that conclusion is unimpeachable. We bear in mind that the second Tribunal had the advantage of having, at the employers' request, the same Chairman as had heard the Pre-Hearing Review. The Tribunal correctly applied the authorities which they set out at some length.[24]We do not consider that the unreported decision in Agrico adds anything to the law. It is, of course, in the typical uncomplicated case, very much at the forefront of the duties of any competent solicitor to present an unfair dismissal claim to the Tribunal within the three-month period. But the complications of this case, as set out by the Tribunal in their judgment, gave them ample scope for holding, in accordance with the authorities, that it was not reasonably practicable for Mr McKee to have brought his second claim by 23 March 2005.[25]The final question is whether the Tribunal, having found that Mr McKee got over the reasonable practicability hurdle, were entitled to find that he brought the proceedings within a reasonable period after the three-month period had expired. The Tribunal answered that question in the affirmative and said they had no difficulty about it. If they had no difficulty about it, we have still less difficulty about it because, as Mr Donovan very realistically conceded, the wording of s111(2)(b) is such that if the Applicant gets over the reasonable practicability hurdle, the period of extension open to the Tribunal is "such further period as the Tribunal considers reasonable". It is not the minimum possible or minimum practicable period. The Tribunal found in paragraph 35 that it was reasonable to await the Tribunal's judgment on the prematurity point when that judgment was reserved. When it was sent out on 3 May, proceedings were started within two weeks thereafter. The Tribunal were, therefore, well entitled to find that both limbs of s111(2)(b) and similarly of Article 7 of the Extension of Jurisdiction Order, had been satisfied.[26]Accordingly, while we are grateful to Mr Donovan for his attractive submissions, we dismiss the appeal. Costs[27]Notwithstanding the decision made on the preliminary hearing in this Tribunal in this case, we have come to the conclusion that this appeal was misconceived within the meaning of Rule 34A. The Tribunal, in the decision under appeal, set out the law in exemplary fashion and having done so, applied it to reach their conclusion on the issue of reasonable practicability which the Court of Appeal has said time and again is a question of fact. We have, in essence, agreed with them on all points, save that we considered their emphasis on the check box to be greater than we would have placed ourselves and their emphasis on the terms of the Notice of Pre-Hearing Review less than we would have applied ourselves.[28]Were it not for the decision on the preliminary hearing in this Appeal Tribunal, we would have had no hesitation in saying that this was an appeal bound to fail. Despite that decision, we take the view that a favourable outcome of a preliminary hearing or, for that matter, a sift cannot be a talisman affording protection against an award for costs.[29]We also bear in mind that in the ET3 in the second case settled by Counsel (not Mr Donovan) it was stated on behalf of the employers that the proceedings were an abuse of process and misconceived and that an application for costs would be made. In the event, the Tribunal decision under appeal proved them wrong. We think that in those circumstances, the employers can have little complaint at being ordered to pay the costs of this appeal. We so order.