Appeal No. EAT/819/93

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 22nd April 1994
	Judgment delivered 13th May 1994

	Before

	HIS HONOUR JUDGE J HULL QC

	MR G R CARTER

	MISS A W MADDOCKS OBE

MR H DAVIES	APPELLANT

MR S BATHA	RESPONDENT

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR C JONES
Solicitor
Messrs Gwilym Hughes & Partners
30 Grosvenor Road
Wrexham
Clwyd LL1 1BU

For the Respondent	MR D BATTISBY
Solicitor
Messrs Lanyon Bowdler
23 Swan Hill
Shrewsbury SY1 1NN

HIS HONOUR JUDGE HULL QC         Mr Hefin Lloyd Davies and two companies controlled by him, Amberfinch Ltd and Transkool Ltd appeal to us from a decision of a Chairman of Industrial Tribunals, Mr A H Browne, promulgated at Nottingham on 16th September 1993.  In this decision Mr Browne refused an application by Mr Davies to substitute Amberfinch Ltd for Mr Davies as respondent to the complaint (of unfair dismissal) made by Mr Batha.

	We cannot do better than set out Mr Browne's reasons for his decision.  He said:
		"Upon hearing the respondent's solicitor at an interlocutory hearing on 6th August 1993, and after consideration of subsequent correspondence, the application of the respondent to substitute Amberfinch Ltd as respondent in these proceedings is refused.

		1.  By an originating application presented to the Tribunal on 31st July 1992, the applicant complained of unfair dismissal.  He named Mr H L Davies as the respondent whose address he gave as Transkool, A1 Great North Road, Colsterworth, Grantham.

		2.  A notice of appearance was received by the Tribunal more than 2 months later which appears to have been signed by, or more likely on behalf of, the respondent whose name was stated to be H L L Davies.

		3.  On 22nd January 1993 a notice of hearing was sent to the parties and the case was listed to be heard in Nottingham on 8th February.  On 3rd February, a fax message was received from solicitors in Wrexham who stated that they were instructed on behalf of the respondent "Mr H L Davies of Transkool".  The letter requested a postponement which was refused and the complaint was heard by a Tribunal on 8th February 1993.  The respondent on that occasion was represented by Mr Todd, a partner in the firm of Hopkin & Sons Solicitors of Mansfield who had been instructed as agent by the respondent's solicitors.

		4.  The decision of the Tribunal, of which Mr P K Thompson was the Chairman, on 8th February was that the applicant had been unfairly dismissed and he was awarded compensation of £10,700 which was subject to a provision for Recoupment of Benefit.  A copy of the decision of the Tribunal was sent to the parties on 4th May.

		5.  No more was heard of  the matter until 19th July when an urgent fax message was received from the respondent's solicitors in Wrexham in which they claimed for the first time that the employer of the applicant had been Transkool Limited.  It was apparent that the fax message of 19th July had been prompted by a demand from the Grantham County Court addressed to Mr Davies at the address of Transkool for payment of the sum of £9378.27 and costs was demanded within fourteen days.  The respondent's solicitors in their message of 19th July asked for the situation to be remedied, but they did not then make any specific application to the Tribunal.  Another Chairman, Mr D R Sneath, refused to take any action because the identity of the respondent was a matter of substance.  it was pointed out "that the respondent was the individual and not the company was never challenged in the course of the proceedings or at the hearing when the respondent was represented by a solicitor".

		6.  A letter from the respondent's solicitors dated 21st July followed in which they made a formal application under Rule 14 in the Industrial Tribunals (Rules of Procedure) Regulations 1985.  The effect of Rule 14 is that: "a Tribunal may, at any time upon the application of any person direct or person against whom relief is sought to be joined as a party to the proceedings", and may order "that any respondent named in the originating application who appears not to have been directly interested in the subject of the originating application to be dismissed".  The application under Rule 14 was listed for an interlocutory hearing and came before me on 6th August.

		7.  The applicant instructed solicitors who contacted the Tribunal by letter dated 28th July.  They wrote to  the Tribunal at length making written representations in a letter dated 4th August, but neither they nor the applicant attended the interlocutory hearing on 6th August.  Included in their representations was a copy of a letter dated 15th June 1987 on the letter paper of H LL Davies Refrigerator Trailer Rentals offering employment to the applicant which he accepted by signing and returning the second copy of the document on the following day.

		8.  Mr Todd appeared before me at the interlocutory hearing.  He told me that he was instructed to represent not only Mr Davies, but also Amberfinch Ltd and Transkool Ltd.  He told me, and I noted, that his application was on behalf of Mr Davies to substitute Amberfinch Ltd, with the consent of that Company as respondent to the proceedings in place of Mr Davies.  Mr Todd told me, and I noted, that he made no application to substitute Transkool Ltd as respondent.

		9.  The applicant had worked previously for Mr Davies in North Wales in 1986 for a period prior to the incorporation of Amberfinch Ltd in April 1987.  Fresh employment in Warrington was offered to the applicant by the letter dated 15th June 1987 and the Tribunal found as a fact at the hearing on 8th February that the applicant's period of continuous employment ran from the date of that letter.

		10.  Mr Todd contended that the original letter of the 15th June 1987 included mention of Amberfinch Ltd which did not show on the photocopy which was available to me.  It appeared to me to be crucial to decide whether Mr Batha on 16th June 1987 was accepting employment with Amberfinch Ltd or with Mr Davies by whom he had been employed previously.  I therefore deferred any decision in order to give the respondent an opportunity to produce to me the original letter.  The original has not been forthcoming.

		11.  The respondent's solicitors, however, have written to me at length to say that it was the practice in June 1987 to place a printed red sticker on correspondence to the effect that H LL Davies is a trading name of Amberfinch Ltd.  I am not persuaded that the original letter bore such a sticker.  I observe that a more recent letter addressed to the applicant on the same letter paper and dated 21st October 1988 carried no such sticker or reference to Amberfinch Ltd.

		12.  With their letter to me dated 2nd September, the respondent's solicitors enclosed for my consideration a folder of other documents which were not produced at the hearing on 6th August and which I had not requested.  I have, however, studied the additional documents.

		13.  I observe that in their letter of 2nd September the solicitors claim that the employment of the applicant was changed from Amberfinch Ltd to Transkool Ltd.  They claim that from that time the employer was Transkool Ltd.  This is entirely contrary to the application made to me by Mr Todd on 5th August.

		14.  The letter of 16th June 1987 indicates an agreement for the employment of the applicant by Mr Davies who had, at an earlier stage, been the employer of the applicant.  By using letter paper bearing his own name which contained no mention or reference to Amberfinch Ltd, the respondent was holding himself out as the employer.

		15.  The onus of proving that there was a change of employer rests upon the respondent.  It is a fundamental principle of common law that a change of employer cannot be imposed upon an employee without his knowledge and consent.  Proof of such a change is not achieved by documents which purport to show that the applicant was paid his wages at different times by Amberfinch Ltd and Transkool Ltd nor is it proved by documents which show that he was authorised to order and acknowledge receipt of goods on behalf of Transkool Ltd.

		16.  Included in the documents is a form of a contract of employment dated 12 September 1988 giving the name of the employer as Amberfinch Ltd.  This document refers to employment commencing on that date and says that employment with the previous employer does not count as part of the continuous period of employment which on any showing is incorrect.  This form of contract does not bear the signature of the applicant and there is no reason to infer that he had agreed to any change in the identity of the employer.

		17.  In their application, the respondent's solicitors have referred to the decided cases of Watts v. Seven Kings Motor Co Ltd [1983] ICR 135 and to Cocking v. Sandhurst (Stationers) Ltd [1974] ICR 650.  I have read those cases and also the more recent decision of the Employment Appeal Tribunal in Linbourne v. Constable (1993) ICR 698.  Those decisions make it clear that I have a discretion to make an order.  In all three cases, however, the application to amend and substitute a fresh respondent was made on behalf of the employee and not by a respondent as in the present case.

		18.  I have had regard to the guidance given by Sir John Donaldson in Cockings case where he said:-

			"In deciding whether or not to exercise their discretion to allow an amendment which would substitute a new party, the Tribunal had to be satisfied that the mistake sought to be corrected was genuine and not misleading or such as to cause reasonable doubt as to the identity of the person intending to claim or to be claimed against and should have regard to all the circumstances of the case, in particular any injustice or hardship which might be caused to any of the parties including those proposed to be added if the proposed amendment were allowed or refused".

		19.  I do not consider that I would be assisted by listening to any further argument, and I have therefore made my decision.  In so far as there was any mistake, it was made or compounded by the respondent.  If there was any doubt about the true identity of the employer, the point could, and should, have been raised in the notice of appearance.  The point was never in issue at the hearing before the Tribunal or subsequently until steps were taken through the Grantham County Court to enforce the award against Mr Davies.  The purpose of the present application is to relieve Mr Davies personally of the liability and to pass it to a company controlled by him which does not have the means of satisfying the order of the Tribunal.  To allow the application would impose substantial hardship on the applicant.

		20.  Mr Davies appears to have several companies under his control.  Amberfinch Ltd and Transkool Ltd are but two of them.  If, as his solicitors claim in their letter of 2nd September, the applicant was employed latterly by Transkool Ltd, Mr Davies will no doubt have a right of indemnity against that Company.  I do not consider that the degree of hardship which might be suffered by Mr Davies if I refuse the application to amend would be anything like as great as the hardship suffered by the applicant if I were to permit the amendment.

		21.  I do not regard this as a case of a genuine mistake.  The confusion has been created by the manner in which the respondent has allowed companies under his control to be conducted and from his allowing his own name to be used in circumstances which hold him out as being the proprietor of the business.  I consider that it would not be just to permit the amendment and I therefore refuse it."

	On the face of it this decision was an exercise of discretion which was not only justified but inevitable.  If further grounds were needed to support it Mr Davies himself informed us through his solicitor (Mr Jones) that Transkool Ltd was from a date before the original hearing in February in financial difficulties, and that his motive in making these applications was the desire to avoid payment of the Industrial Tribunal's award.  We understand that Amberfinch Ltd was also unlikely to be able to pay.  Mr Jones further informed us that H LL Davies was the name in which each of these companies traded, and it was not until recently that this fact was stated (in small letters at the bottom of the page) on company stationery.

	Mr Jones however supported the appeal on grounds which are set out in a 22-page Skeleton Argument.  The account there given of "How did the mistake arise?" and "When was the mistake discovered?" is wholly unconvincing.  It contains a serious misstatement in averring that in his application to the Industrial Tribunal dated 29th July 1992, Mr Batha gave the name of his employer as H L Davies "and then Transkool".  It is perfectly clear that Mr Batha said throughout that his employer was Mr Davies and that this was not challenged until more than five months after the hearing.

	Mr Jones went on, however, to raise important points of law.  He averred that for the purpose of Rule 14 of the Industrial Tribunal Rules the Tribunal which heard the application to substitute Amberfinch Ltd for Mr Davies should have been the Tribunal which heard Mr Batha's originating application in February, consisting of the Chairman, Mr Thompson and the two industrial members who sat with him.  The application under Rule 14 required "a partial rehearing" of the originating application.  A different Chairman had no locus standi; alternatively, as a matter of discretion Mr Browne should have refused jurisdiction.

	Mr Jones also complained that Mr Browne should have heard the oral evidence of Mr Davies and his manager, Mr Singleton, and should have allowed the advocate for Mr Davies (a solicitor agent, Mr Todd) to recall Mr Batha for further cross-examination about the true identity of his employer, which would be based on documents produced for the first time.  These "cogent documents" were said to be very abundant and weighed more than 11 kilograms (see letter of 18th August 1993).

	These submissions were based on the provisions of the Industrial Tribunals (Rules of Procedure) Regulations 1985.  Mr Jones pointed to Rule 14, under which "a tribunal" may at any time direct any party to be joined, or to be dismissed from the proceedings.  He also pointed to Rule 7 under which any hearing "of or in connection with" an originating application shall take place in public (subject to exceptions immaterial for present purposes) and to Rule 8(2) under which any person entitled to appear at the hearing is entitled to call witnesses and to question any witnesses.

	Mr Jones conceded that Mr Todd had not challenged Mr Browne's jurisdiction to hear the application at any stage, but he said that Mr Todd had made it perfectly plain that he wished to call the oral evidence of Mr Davies and Mr Singleton, and this assertion was not challenged by Mr Battisby, who appeared before us for Mr Batha.

	Mr Battisby contended that these submissions were misconceived, and showed a misunderstanding of the nature of an application under Rule 14.  This was an interlocutory application, as was maintained by Mr Browne.  The same relief could have been sought by an application to review the decision under Rule 10, although time would have had to be very greatly extended under Rule 13(1).  In that case, if a hearing were considered necessary, it would have been heard by the Tribunal which decided the case (Rule 10(4)) unless that were impracticable.  In the case of interlocutory applications, however, the practice was for these to be dealt with by any Chairman to whom they were allotted, sitting in Chambers and without industrial members, in accordance with Rule 12(4).  Such a Chairman might or might not receive oral submissions.

	It was true that "tribunal" was defined by Regulation 2 of the 1985 Regulations as being "in relation to any proceedings ... the tribunal to which the proceedings have been referred by the President or a Regional Chairman", but this was subject to the proviso "unless the context otherwise requires" at the beginning of the Regulations.  The "tribunal" referred to under Rule 14 was any Chairman, under Rule 12(4).  That construction was supported by the express provisions to the contrary to be found in Rule 10, relating to a review.  The provisions of Rules 7 and 8 relating to a "hearing" "in connection with" an originating application did not apply to the proceedings before Mr Browne.  "Hearing" was defined by Regulation 2 as including "a sitting of a tribunal duly constituted for the purpose of ... doing anything lawfully requisite to enable the tribunal to reach a decision on any question": but "decision" was defined by Regulation 2 as not including "an interlocutory order".  Accordingly, Mr Browne was not conducting a "hearing", was not obliged to sit in public, and was not obliged to receive oral evidence.  This conclusion was supported by Jones v. Enham Industries [1983] ICR 580.

	Mr Battisby also referred to Watts v. Seven Kings Motor Co Ltd [1983] ICR 135 at p.137D where it was said that the Industrial Tribunal should exercise its powers under Rule 14(1) in exactly the same way as the High Court under RSC Order 20, Rule 5: that being treated as an interlocutory matter by the express provisions of Order 59, Rule 1(A)6(h).

	Mr Battisby submitted that it was moreover open to Mr Browne, under Rule 12(1), to regulate his procedure as he thought just.  If Mr Todd had thought it right to apply to re-open the original hearing, seek leave to call further evidence and further cross examine a witness then he should have made the necessary applications and not simply have applied under Rule 14 to substitute a different party as respondent.

	In our judgment, Mr Battisby's submissions are correct and Mr Browne was entitled to act as he did.  It is true that he himself referred to the consideration of the application as an "interlocutory hearing", but we do not think that any person familiar with the Rules and the decisions to which we have referred or, indeed, the ordinary practice of courts and tribunals, could have supposed that it was in fact an occasion on which oral evidence would be received or that the decision of the Industrial Tribunal sitting with Mr Thompson as Chairman in February 1993 would be reviewed.

	Mr Jones made a large number of detailed criticisms of the inferences drawn and facts found by Mr Browne in the course of his decision.  These criticisms continue for nine pages in his Skeleton Argument.  Having heard Mr Jones go through them all we are satisfied that they are ill-founded or immaterial.  Some of them are seriously misleading: for example, at p.16, the assertion is made that Mr Batha's application suggests that he believed that Transkool Ltd was his employer, and that he had originally made the mistake of naming his employer as H L Davies Transkool.  This is simply incorrect.  It is followed by a criticism of Mr Browne for stating "If there was any doubt about the true identity of the employer the point could and should have been raised in the notice of appearance" (which we should have thought was self-evident) on two absurd grounds, including the observation "(a) there was no evidence whether there was any doubt in Mr Batha's mind who his employer was".  We will not lengthen this decision by going through all these ill-founded criticisms.

	The application to substitute Amberfinch Ltd as respondent was belated (more than five months after the determination of Mr Batha's application) and was motivated purely by a desire to avoid paying compensation lawfully due.  It was for Mr Davies and the Company to satisfy Mr Browne that the original mistake (in accepting that Mr Davies was the employer) was genuine and that it could be corrected without injustice to Mr Batha.  That was a matter for the discretion of Mr Browne.  He decided against Mr Davies and the Company.  It is not for us to interfere with Mr Browne's exercise of his discretion unless it is shown that he went wrong in law.  In our judgment, it is not so shown and we would add that we would have been surprised if he had come to any other conclusion.  The appeal must be dismissed.