Appeal No.	 EAT/1025/96

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 11 July 1997

Before
HIS HONOUR JUDGE PETER CLARK
SIR GAVIN LAIRD CBE
MRS R A VICKERS

MR J CAHILL	APPELLANT

PLUSHALL HAULAGE LTD (IN LIQUIDATION)	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR I M KAY
(Representative)
Balmoral Consultants
11 Balmoral Court
Wembley Park Drive
Wembley
HA9 8JQ	
For the Respondents	RESPONDENTS NEITHER PRESENT NOR REPRESENTED	

	JUDGE PETER CLARK:   On 27th May 1996 the appellant, Mr Cahill, presented a complaint of unfair dismissal to the Central Office of Industrial Tribunals. He named Plushall Haulage Ltd as respondent, alleging that he had been continuously employed by that company, or, implicitly any predecessor company, as a lorry driver from May 1988 until 29th February 1996.

	He gave the following details of his complaint:

“The Applicant was employed by the Respondent for nearly 8 years as a lorry driver. During all the time he was based at Hurlingham and made the starts and finishes of his day there.
He remained willing and able to continue to work in the vicinity of Hurlingham or within a reasonable distance of his home to the very end of his employment.
On 8th January 1996, he was informed that the Hurlingham depot was to close, but that he would be able to continue working from the Northfleet depot.
On 12th January, the Applicant and 12 colleagues wrote to the Respondent informing them that they would not move to Northfleet because the additional journey of well over an hour each way was too long and would cost too much.
On 30th January the Respondent offered an additional £25 per week to work form the Belvedere depot. This offer was totally insufficient as far as the Applicant and his fellow drivers were concerned.  The additional degree of travelling and the cost thereof could not be compensated by a payment of £5 per day.
Failure to reach agreement resulted in the Respondent confirming that the Applicant would leave their employment on 29th February 1996. No redundancy money has been paid, despite requests.
The Applicant contends he was unfairly dismissed.
He claims:
1.	compensation for unfair dismissal
2.	payment of final week’s salary
3.	receipt of wage slips relating, at least, to the last year of his employment.”

	The respondent did not enter a formal Notice of Appearance but sent a letter to the London (South) Industrial Tribunal, in which the case was proceeding, which is dated 24th June 1996 and was treated by the Industrial Tribunal as a Notice of Appearance. That letter reads:

“Please note that Mr J C Cahill was not employed by Plushall Haulage Limited, and therefore Plushall Haulage Limited will not be making an appearance.”

	The appellant’s representative, Mr Kay, wrote to the Industrial Tribunal on 23rd July and 6th August 1996. On 7th August 1996 the Industrial Tribunal replied to him as follows:

“The hearing on 14 August will be a full Merit Hearing and deal with all issues. The Tribunal understands that the Respondent’s grounds of resistance are confined to the allegation that the Applicant is not an employee. If the Respondent (to whom this letter is copied) intends to advance further grounds, it must send a copy to the Applicant and the Tribunal not later than 8 August 1996.”

We pause to observe that no further communication was received from the respondent.

	Mr Kay wrote on 14th August, stating that neither he nor the appellant would be attending the hearing on grounds of expense. He relied on correspondence between the appellant and the respondent already sent to the Industrial Tribunal. A calculation of compensation was appended to his letter.

	The matter came on for hearing before a full Industrial Tribunal. Chaired by Mr N A Halton on 14th August 1996. Neither side attended. Accordingly the tribunal considered the written representations before it, which included the following letters sent by Mr Kay. 

	On 8th January 1996 the respondent company wrote to the appellant in these terms:

“As you already know, Blue Circle will be closing the Hurlingham Depot at the end of February.
During our discussions with Blue Circle’s Management, they have asked us to provide a similar haulage service from their Northfleet Depot when Hurlingham closes. Therefore, no job losses are anticipated and the only change is that we will be operating from a different depot.
To help us in planning our work programme at Northfleet, would you please confirm, in writing, by Tuesday 16th January 1996, that you will continue to work for us at that depot.”

On 12th January 1996 a number of employees, including the appellant, wrote to Messrs Powell and Kenny, the directors of the respondents. They said this:

“With reference to your letter dated the 8th January, we the under mentioned have been and sought legal advice on this letter and they have told us that due to the distance involved plus petrol and the wear and tear on the vehicles that it will take us from the Hurlingham depot to Northfleet each day your offer of employment at Northfleet is unfair so all the undersigned are not prepared to go and would like to take redundancy pay.
Thanking you both for the offer but sure you appreciate the reasons for this decision.”

On 30th January 1996, the directors of the respondent wrote to the appellant saying:

“We are in receipt of your letter dated 12th January , (received on the 25th January), which you signed together with other drivers.
We would now officially like to offer you an increase of £25 per week to transfer to our Belvedere Depot.
As everyone’s circumstances are different, we must have an individual reply from you, by return of post, as to whether or not you will be taking up our offer.
We regret that Hurlingham is closing but sincerely hope you will decide to stay with us for the future.”

We should refer to the respondents’ letter to the appellant of 15th February 1996, referred to in Box 12 of the form IT1, that letter reads:

“Further to our letter dated 6th February 1996, please note that your last date of employment with Plushall Limited will be on the 29th February 1996.
Thank you for your past service with the Company.
You asked on the telephone about redundancy, none will be due because the company believes it has made a fair offer to you of other employment together with an increase, which you have failed to accept.”

	It is clear from the Industrial Tribunal’s extended reasons dated 9th September 1996 that the tribunal saw the principal issue as being whether the appellant was an employee, that is to say an individual who has entered into or works under a contract of employment, within the meaning of the definition then contained in s.153(1) of the Employment Protection (Consolidation) Act 1978 now s.230(1) of the Employment Rights Act 1996.

	Its conclusions on this question are expressed in paragraphs 19-20 of their reasons thus:

“19.  It will be seen from the above that the Applicant’s advisors take the view that the evidence submitted to the Tribunal makes it clear beyond doubt that the Applicant was an employee of the Respondent. In the absence of any other evidence, the Tribunal has not been able to share this view. The Tribunal has had to balance a straight denial by the Respondent that the Applicant was an employee, with such evidence as has been available to it in the copy correspondence. At its best, that copy correspondence, in the view of the Tribunal, could be elements of evidence which might support an employer/employee relationship but in the Tribunal’s view it is not conclusive as the Applicant maintains. In the Tribunal’s view it has been open to the Applicant to provide further evidence which might be additional or of itself might be more compelling to the Applicant’s view: but the Applicant has decided not to do so, or has been unable to do so.
20.	On the balance of probabilities, and after careful review of the evidence that has been before it and the criteria normally applicable to such an issue, it is the decision of the Tribunal that the Applicant was not an employee of the Respondent within the meaning set out in Section 153 of the Act.”

	The tribunal then went on to dismiss the complaints relating to the final week’s salary and for itemised pay statements on the grounds that no evidence had been adduced to support those claims. 

	Accordingly all complaints were dismissed.

Written representations
Rule 8(5) of the Industrial Tribunal (Constitution and Rules of Procedure) Regulations 1993 provides as follows:

	“(5) If a party wishes to submit representations in writing for consideration by a tribunal at the hearing of the originating application he shall present his representations to the Secretary not less than 7 days before the hearing and shall at the same time send a copy to each other party.”

In Tesco v Patel [1986] EAT/253/85 (reported only in The Times newspaper for 15th March 1986), both parties appeared before an Industrial Tribunal, but chose to rely upon written representations and called no evidence. It was a claim of unfair dismissal in which an issue arose as to whether or not the applicant had contributed to his own dismissal, the unfairness being admitted by the employer. The Industrial Tribunal held that in the absence of any evidence it was not justified in making a finding of contributory fault. As to that approach, Popplewell J, giving judgment of the Employment Appeal Tribunal, said this at page 4C-F of the transcript:

	“Now it is a perfectly sensible approach to decide that if somebody makes a written submission and does not support it by oral evidence, the tribunal is entitled to attach much less weight to it than the oral evidence of a witness. Likewise if oral evidence is given on one side and written submissions of the other, it is open to an industrial tribunal to attach very much more weight to oral evidence than to the written submission, or to draw the inference in the absence of oral evidence on one side that that side has something to fear or to hide and resolve the particular question in favour of the person calling the oral evidence. That is commonsense. But in the instant case the finding that in the absence of oral evidence to substantiate the allegations they were not justified in making a finding of contributory fault seems to us to be a faulted finding. ...”
[The judgment concluded at pages 6F-7A:]
	“We are very reluctant to interfere with the way in which an industrial tribunal conducts its affairs but we very much doubt whether the section which provides for written representations to be made was ever intended to be a substitute for evidence where there is a direct conflict of fact. It places the tribunal in an impossible position and, however informal industrial tribunals are to be, it is quite impossible for any tribunal to arrive at a proper decision where there is an acute conflict of fact, simply by reading the papers. It may be in some cases that is possible by seeing some admission to avoid the necessity for oral evidence,  but the instant case is not one of them.”

The appeal in that case was allowed and the case remitted for rehearing.

The Appeal
The contract of employment
In our judgment it is clear on the material which was before the Industrial Tribunal that the respondent was not, and could not on the documents, contend that the appellant was not an employee. The issue was, by whom was he employed? It seems to us that the tribunal misunderstood, fundamentally what was the question before it. In so doing it fell into error and its finding that the appellant was not an employee of the respondent within the meaning of s.153 of the 1978 Act was perverse, in the sense that it was a finding which was unsupported by any evidence. See Piggott Bros. & So Ltd v Jackson [1994] ICR 85, 92F, per Lord Donaldson MR.

	As to the remaining claims, the tribunal found that there was insufficient evidence to support them. That will often be the case where both parties submit written representations. It is a wholly unsatisfactory basis for adjudication as Popplewell J pointed out in Tesco v Patel. However, Industrial Tribunals are expected to do the best they can on such material as is before them. In this case there was nothing to contradict the appellant’s claims, other than the respondents’ letter of 24th June 1996. In these circumstances we can see no proper basis for rejecting those claims, and we are driven to conclude that following Tesco v Patel, this part of the tribunal’s decision must also be set aside. 

Disposal
Having found that the tribunal fell into error, what are we to do?
	
	There has been a material development since the Industrial Tribunal hearing. The respondent is now in liquidation. It would appear to be insolvent. Thus any claims properly made by the appellant are likely, subject to eligibility, to be met out of the state fund. It follows that the Secretary of State responsible for that fund now has an interest in the claim and should be notified of it so that any necessary representations may be made.

	For that reason, coupled with the wholly unsatisfactory situation which arises where cases come before tribunals with neither side making an appearance or calling evidence, we think that the appropriate course is to remit the case to a fresh Industrial Tribunal for rehearing.

	At the next hearing, all interested parties have the option of attending or not. A word of warning. They rely on written representations at their peril.

	Accordingly we shall allow the appeal and remit the matter for rehearing. The issues to be determined on the next occasions are:

(1)	by whom was the appellant employed?
(2)	if by the respondent (in liquidation) has he established any or all of his claims?
(3)	if so, is the Secretary of State liable to indemnify the respondents in respect of all or any of those claims?