Appeal No. EAT/630/92

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 18th January 1994

	Before

	THE HONOURABLE MR JUSTICE MUMMERY (P)

	MR D O GLADWIN CBE JP

	MR J C RAMSAY

CHARTER SECURITIES LTD T/A	APPELLANTS
 CHARTER PROJECT MANAGEMENT INTERNATIONAL

MRS L BLAKELEY	RESPONDENT

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR RODNEY M WOODS
(Representative)
37 Firs Chase
West Mersea
Colchester
Essex
CO5 8NN

For the Respondent	MRS L BLAKELEY
(In Person)

	MR JUSTICE MUMMERY (PRESIDENT):  This is an appeal against a decision of the Industrial Tribunal sitting at London (South) on the 5th June 1992. 

	The Tribunal unanimously decided, on the application of Mrs Lyudmilla Blakeley, that at all material times she was an employed person and that her claim for wages under the Wages Act 1986 in the sum of £11,323 was justified and was payable by the Respondents who are named as Charter Project Management International.

	It is common ground that Charter Project Management International is the name used for trading purposes by a Gibraltar Company called "Charter Securities Limited".  That Company is registered in Gibraltar with an office in St George's Lane.  I shall refer to the Respondent in this judgment as Charter Securities.

	Charter Securities was dissatisfied with the decision of the Industrial Tribunal and therefore presented an appeal to this Tribunal dated the 10th August 1992.  The Notice of Appeal has been supplemented in the days leading up to this hearing by a further bundle of documents, submitted by Charter Securities, containing skeleton arguments;  newspaper cuttings and two witness statements.  That additional material is relied upon not only to support the grounds of appeal but also to support an application made on behalf of Charter Securities for leave to adduce fresh evidence on the hearing of this appeal.

	Neither side on the appeal has been legally represented.  Mr Woods appeared on behalf of Charter Securities.  Mrs Blakeley, the Respondent to the appeal, also appeared in person. She was assisted by Mr Brian Edwards who was concerned in some of the events to which I shall refer.

	In order to understand the decision of the Industrial Tribunal and the grounds of this appeal it is necessary to go into the history of the dispute between Mrs Blakeley and Charter Securities.

	The dispute was initiated in the Industrial Tribunal by an Originating Application presented on the 5th March 1991.  In her application, Mrs Blakeley claimed under the Wages Act 1986 payment of salary and expenses due to her.  In her application she identified the employer by reference to the name "Charter Project Management International", naming Mr Woods as Managing Director.  She described her job for Charter Securities Ltd as Office Manager/Personal Assistant.  She stated that she was employed by that Company from the 16th January 1989 to the 22nd February 1990 at a basic salary of £12,000 a year working a 40 hour week.  In the details of her claim she stated that she had been engaged to work from the dates mentioned and at the salary mentioned.  She received her salary for the first two and a half months, but there had been default in payment in respect of later sums that were due.  There was no doubt then that her claim was that money was due to her, but was being withheld.

	A Notice of Appearance was put in by Charter Securities.  The representative of Charter Securities was named as Mrs Lesley Woods.  She is the wife of Mr Woods who has represented Charter Securities at this hearing.  The address of Charter Securities was given as George's Lane, Gibraltar.  In the box provided for giving the dates of employment of the Applicant Mrs Blakeley's dates are disputed.  Charter Securities states that her employment began on the 16th January 1989 and finished on the 3rd February 1989.  The grounds on which the claim was disputed are set out in an attached document.  It stated there:
"Mr Brian Edwards, the Marketing Director of Charter Project Management offered Mrs Blakeley employment as his Personal Assistant.  She started on 16th January 1989."

Mr Edwards soon found out that Mrs Blakeley could not type and therefore could not fulfil her duties.  Mrs Blakeley agreed that she had misled Mr Edwards in to believing that she could type and therefore resigned from her position on 3rd February 1989.  However, Mr Edwards believed that Mrs Blakeley could be useful in translating Russian. He suggested that she became self-employed and assisted with translations when required.  She did this and traded under the style Secretarial & Translation Services as a sole trader.  There is reference to the allegation that in February 1989 Mrs Blakeley stole some files and documents from the Weybridge offices, in which she had been working for Charter Securities, and, with Mr Edwards set up another Company called "East European Project & Marketing Limited". That company is alleged to have been used by Mrs Blakeley and Mr Edwards in an attempt to hi-jack a major project by their using information which they had stolen from Charter Securities.  It is said that, after stealing the documents and attempting to hi-jack the project, Mrs Blakeley forwarded a number of invoices for payment.  They had not been paid.

	On the 25th March 1991 a letter was sent to the Industrial Tribunal by a Director of Charter Securities, Mr D E Allen, from the Office in Gibraltar stating that:
"Charter Project Management International is the Project Management Division of Charter Securities Limited, a company registered in Gibraltar.

The Directors of Charter Securities Limited are myself [Mr Allen] and Mr M E Cruse

Our United Kingdom representative, is Mrs L I Woods, of Weevers Lodge, Firs Chase, West Mersea, Colchester CO5 8NN."

It repeated the claim in the Notice of Appearance that Mrs Blakeley was a self-employed sole trader offering secretarial and translation services and was not directly employed by Charter Securities Ltd or the UK company, (which we now know is called "Charter Plan") with whom Charter Securities had an agency agreement after the 3rd February 1989.

	The matter first came before the Industrial Tribunal as long ago as the 26th June 1991.  The point taken on a preliminary issue was whether the Tribunal had jurisdiction to entertain the complaints under the Wages Act 1986.  At that hearing Mrs Blakeley appeared in person and Mr Woods, who is a quantity surveyor, appeared for Charter Securities.  The Tribunal, in giving its decision, noted that the correct name of the Respondent was Charter Securities. It noted in its Full Reasons, notified to the parties on the 11th July 1991, that the preliminary issue related to the time limit for bringing a claim of the kind brought by Mrs Blakeley.  The time limit is contained in Section 5(2) of the Wages Act 1986.  For the reasons stated in the Tribunal's decision it concluded that it was not reasonably practicable for Mrs Blakeley to present her complaint within the relevant period of three months and she had presented it within a reasonable further period.  She could therefore proceed with her complaint.  The Tribunal found in her favour on the time limit point.

	Charter Securities then appealed to the Employment Appeal Tribunal against the ruling of the Industrial Tribunal.  This Tribunal, presided over by Mr Justice Wood, conducted a hearing on the 14th October 1991 at which Mr Woods again appeared for Charter Securities Ltd.

	In giving the judgment of the Appeal Tribunal Mr Justice Wood said, at page 3D of the judgment:
"The only point that we have before us is this, did the Industrial Tribunal err in law in deciding that it had jurisdiction to start to hear the claim being made by Mrs Blakeley under the Wages Act.  We can find no error of law in this Decision and the Appeal must be dismissed at this stage"

He commented:
"The case will then proceed and Mr Woods will be able to make all the points that he wants to make in due course."

It is clear from the context of the words used by Mr Justice Wood that the Employment Appeal Tribunal was, as the Industrial Tribunal was, solely concerned with the objection taken under Section 5(2) of the Wages Act on time limits.

	The matter came before the Tribunal again, on the 5th June 1992.  This appeal is against the decision that £11,323 was payable by Charter Securities to Mrs Blakeley.

	Mr Woods, on behalf of Charter Securities, submitted that there are three grounds on which Charter Securities appeals against that decision.  We shall deal, quite briefly, with each of those grounds.  The first ground is that the Tribunal erred in law in holding that the question of jurisdiction had already been dealt with by the Employment Appeal Tribunal.  He says that this involved an error of law in two ways:  first, the Employment Appeal Tribunal had only dealt with a jurisdictional point on time limits. It had not dealt with a jurisdictional point arising in any other way.  The second aspect is, he submits, there is a different jurisdictional point.  It arises from the foreign element in the case, namely, the fact that Charter Securities is a Company registered in Gibraltar, with a registered office in Gibraltar, trading in Moscow, Spain and Teneriffe, not trading in the United Kingdom.  For this ground of appeal it is only necessary to refer initially to paragraph 1 of the Tribunal's reasons.  The Tribunal stated in paragraph 1:
"The preliminary hearing of this case as to whether the Tribunal had jurisdiction was dealt with by the Employment Appeal Tribunal who stated that this Tribunal had jurisdiction to start to hear the claim made by the applicant under the Wages Act and the appeal by the respondents was dismissed at that hearing."

Mr Woods is correct in his submission that it was erroneous on the part of the Tribunal to state that the Employment Appeal Tribunal had resolved the question of jurisdiction in respect of anything other than time limits.  The Employment Appeal Tribunal had not dealt with any question relating to the fact that Charter Securities is a Gibraltar Company and that the Industrial Tribunal might not have jurisdiction to entertain a claim under the Wages Act 1986 against a Company is registered and trading out of the jurisdiction.  

	It does not follow, however, that, because the Tribunal was in error on that point, there is an error of law going to the question of jurisdiction which requires us to allow this appeal and remit the matter for decision of the Industrial Tribunal.

	Mr Woods explained to us the grounds on which, he submitted, there was no jurisdiction to entertain a claim under the Wages Act against a Company in Gibraltar.  It is clear to us from his arguments that they are misconceived.  In fact, there is no jurisdictional objection in this case arising from a foreign element.

	The Wages Act 1986 contains restrictions in Part I on the making of deductions by an employer from any wages of any worker employed by him unless the deduction satisfies certain conditions.  An employer is defined in Section 8, in relation to a worker, as meaning the person by whom the worker is, (or where, the employment has ceased, was)  employed.  "Employment" in relation to a worker is defined as meaning employment under his contract and "employed" in relation to a worker accordingly means employed under his contract.  There is nothing in the definition of "employer", "employment" or "employed" to suggest that these provisions do not apply to an employer out of the jurisdiction, such as a Company registered in another country.  This view is reinforced by the provisions in Part IV of the 1986 Act which deal with excluded employments.  It is provided in subsection (1) Section 30 that:
"Part I of the Act does not apply to employment where under his contract the person employed ordinarily works outside Great Britain."

That makes it clear that the test of jurisdiction is not in what country the employer resides or under what system of law a company employer is incorporated and registered.  What matters is where the person employed ordinarily works under his contract of employment.

	The decision of the Industrial Tribunal makes clear findings of fact which demonstrated that this point on jurisdiction raised by Mr Woods cannot succeed.  The Tribunal found as a fact that Mrs Blakeley was an employee of Charter Securities from 16th January 1989 until 22nd February 1990.  It says in paragraph 2 of the decision:
"Dealing with this preliminary point, there is a letter of engagement dated 21 December 1988.  This confirms the offer of the position of Office Manager/Personal Assistant to Mr Woods, the Managing Director of the respondent company, at a salary of £12,000 per annum with four weeks leave per annum.  The working hours based on a five day week were to be 40.  Clearly this was a Contract of Employment."

The Tribunal goes on to state, after reviewing various other items of evidence, at paragraph 12 of its decision:
"We have considered the detailed submissions put forward by Mr Woods in writing and we have had the opportunity of hearing both Mr Woods and the applicant in evidence on the particular point as to whether or not she [Mrs Blakeley] was employed or self-employed.  We are quite satisfied on the basis of the original letter of employment that there was a Contract of Employment to begin with and we have no doubt in accepting the applicant's evidence that at no time did she receive the letter of 18 March 1989 [that is the letter set out in paragraph 6 of the decision] as suggested by the respondent and indeed we have no positive evidence before us which would suggest that the applicant received payment for any other work carried out by her during the period of employment."

Therefore it states in conclusion at paragraph 14:
"we have without hesitation come to the conclusion that at all material times the applicant was an employee of the respondent company."

	We have been shown the letter which the Tribunal held to be a contract of employment dated the 21st December 1988.  It is clear from the letter, signed by Mr Woods on behalf of Charter Securities, that it was a contract made after a meeting had taken place between Mrs Blakeley, Mr Edwards and Mr Woods on the previous day; and that it was for the offer of a position which Mrs Blakeley accepted to be Office Manager/Personal Assistant to Mr Woods and Mr Brian Edwards the Marketing Director.  The salary was stated to be £12,000 per annum to be reviewed annually with four weeks' leave.  Working hours were stated to be 40 hours 9 to 5.30 pm, 9.30 to 6.00 pm or 10.00 to 6.30 pm (obviously a flexi-time arrangement) for a five day week.  There was provision for expenses, accommodation and travel and so on to be paid provided by the Company.  Apart from references to "Russian Commercial aims" and a requirement that Mrs Blakeley should accompany Mr Woods or Mr Edwards to Russia or Spain when necessary, there is nothing in the contract to indicate that Mrs Blakeley would ordinarily work outside Great Britain.  There is nothing in the findings of fact by the Tribunal about Mrs Blakeley's work for the Company which establishes that she was ordinarily working under this contract outside Great Britain.

	For those reasons it is our view that the point on jurisdiction, arising from the fact that Charter Securities is a Gibraltar company, has no chances of success.  There is no ground for allowing the appeal.  There is no ground for remitting this matter to the Industrial Tribunal for further argument or evidence.

	The other two points can be dealt with more briefly.  The second point made by Mr Woods related to the timing of invoices submitted by Mrs Blakeley.   Charter Securities' case is that, after the beginning of February 1989, Mrs Blakeley was self-employed, providing services, not to Charter Securities and not employed by Charter Securities, to the Company, Charter Plan, which was incorporated in the United Kingdom and traded in the United Kingdom.  Mr Woods' point, as we understood it, was that, if Mrs Blakeley was self-employed, as he contended, and she did not submit invoices until after she had resigned from the position with Charter Securities on 22nd February 1990, there were no ascertained sums due to Mrs Blakeley from which deductions could be made contrary to the restriction in the Wages Act 1986.

	This point is misconceived. It does not give rise to any point of law.  The Industrial Tribunal found as a fact, which cannot be disturbed on appeal to this Tribunal, that Mrs Blakeley was employed throughout the period from the 16th January 1989 to 22nd February 1990 at a salary of £12,000 a year.  She was entitled to be paid that sum.  The way in which the system operated between Mrs Blakeley and Charter Securities was that she would be paid on submitting invoices each month for the sum due under her contract of employment.  This is described in paragraph 4 of the Industrial Tribunal's decision.  It says:
"The applicant submitted invoices in respect of the early months worked by her under her Contract of Employment.  These were in the sum of £1,000 a month.  The first two invoices were paid but by 3 February 1990 a letter was received by the respondent company from one of their main customers, Special Gas Controls Ltd, which purported to terminate the agreement by 18 February for the supply of professional services.  This placed the respondent company in acute financial difficulties."

That, gave rise to the claim by Charter Securities that the employment contract was terminated and that Mrs Blakeley began to work as a self-employed person providing translating services to Charter Plan.

	The findings of fact that Mrs Blakeley was employed throughout this period at the annual salary of £12,000, payable on submission of invoices by her each month, shows that the timing of the invoices is irrelevant.  If the invoices were in respect of contractual salary the sum was due to Mrs Blakeley at the end of each month.  It was not a case of the sum becoming due only when an invoice was submitted by her as a self-employed person.  She was not, on the findings of the Tribunal, a self-employed person.

	The third and final point made by Mr Woods is that there has come into his hands, since the hearing before the Industrial Tribunal, evidence which should admitted on this appeal.  This evidence should either be used by this Tribunal to reverse the decision of the Industrial Tribunal on the facts, or more probably, as a ground for allowing the appeal and remitting the matter for further hearing by the Industrial Tribunal.

	The basis on which he wishes to submit the evidence is this:  it was an issue before the Industrial Tribunal whether Mrs Blakeley was employed by Charter Securities or was self-employed providing independent services to Charter Plan.  Evidence was heard on that.  The Tribunal made comments in paragraph 18 and 19 of its decision relevant to credibility.  The Tribunal said in paragraph 19 that it had heard evidence from Mr Woods relating to the issue of wages.  It had heard evidence from Mr Edwards and Mrs Blakeley.  It stated in paragraph 18, last sentence:
"We have hesitation in accepting the applicant's evidence on this point supported as it is by Mr Edwards and we would state here we found him to be a most credible witness and we prefer his testimony to that of the respondents."

The Tribunal noted in paragraph 19 that it had heard Mr Woods at some length on matters which had no relation to the issue of wages.  It did not deal with those in the judgment.  The Tribunal said it was satisfied on the evidence before it that Mrs Blakeley had worked her proper contractual hours during her period of employment, albeit there were peaks and troughs in the amount of work that she was required to do and therefore it had no hesitation in giving judgment for the sum which I have mentioned.

	Mr Woods says that new evidence has come into his possession, principally in the form of two witness statements, one statement was made by Mr Edwards and another by Mrs Blakeley.  They were both made for the purpose of other proceedings which Mr Woods had brought in the Colchester and Clacton County Court against his former employers Arlington Securities plc.  That case was settled when it came to Court at the end of last year. It was only then that Mr Woods saw these two witness statements.  

	He has taken us through the witness statements and pointed to passages which he says cast serious doubt on the credibility of Mr Edwards and Mrs Blakeley in the evidence they gave to the Industrial Tribunal.  He seeks leave to adduce this evidence.  The rules laid down by this Tribunal for adducing further evidence, which was not before the Industrial Tribunal, are strict.  The position was summarised by Sir John Donaldson in Bagga v. Heavy Electricals (India) Ltd [1972] ICR 118, he said at p.120G:
"Parties must not think that they can prosecute a case in front of the tribunal, appeal and come to this court, producing additional evidence which they could have placed in front of the tribunal, and then expect this court to allow them to re-open the case and add to the evidence.  The rules applied by the courts are clear.  Such evidence will be admitted only if some reasonable explanation can be produced for its not having been put before the tribunal of first instance and if the new evidence is credible, and if it would or might have had a decisive effect upon the decision."

Mr Wood says, rightly, that he has a reasonable explanation for not having produced these two statements before the Industrial Tribunal.  He did not have them to produce.  They only came into his hands after the decision.  The crucial question is whether the third requirement in Lord Donaldson's formulation can be satisfied.  Would this evidence, or might this evidence, have a decisive effect on the decision.  We have been taken through these statements, in some detail, by Mr Woods, and considered them in the light of the findings of fact by the Tribunal, in particular, in the light of the contractual document dated the 21st December 1988.  We have come to the conclusion that this evidence should not be admitted because it would not, nor might it have, a decisive effect on the crucial issues of fact decided by the Tribunal.

	The crucial issue of fact decided by the Tribunal was that there was a contract of employment between Charter Securities and Mrs Blakeley.  The terms of that contract were as set out in the letter of 21st December 1988.  That contract continued from the 16th January 1989 until 22nd February 1990.  The particular passages in the witness statements that Mr Woods wishes to rely on relate principally to Mrs Blakeley's knowledge of the set up between the two companies, Charter Securities Limited and Charter Plan Limited, and, more specifically, to a proposal which Mr Woods, according to Mrs Blakeley's statement, made to her shortly after the commencement of her employment that she should declare herself self-employed for tax purposes and her admission, in paragraph 2 of the statement, that she agreed to that proposal.  In our view, that statement and a number of other statements to similar effect would not have a decisive effect on the finding of fact which is made by the Tribunal or on the credibility of Mrs Blakeley as a witness.

	The crucial fact in this case, in our view, as it was in the view of the Industrial Tribunal, is that Mr Woods himself wrote a letter on the notepaper of Charter Securities setting out clearly the terms of employment of Mrs Blakeley.  There is ample evidence to justify the finding of the Industrial Tribunal, even in the light of this further material in the witness statements, that this contract remained in force until Mrs Blakeley resigned in February 1990.  For all those reasons we shall dismiss the appeal.