Appeal No.	 EAT/708/97

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 17 December 1997

Before
THE HONOURABLE MR JUSTICE LINDSAY
MR J A SCOULLER
MR G H WRIGHT MBE

MR T REILLY	APPELLANT

COMMISSIONERS OF CUSTOMS & EXCISE	RESPONDENTS

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellant	NO APPEARANCE BY 
OR REPRESENTATION
ON BEHALF OF 
THE APPELLANT	

	MR JUSTICE LINDSAY:     In the matter T.P. Reilly against the Commissioners of Customs & Excise this is a preliminary hearing and Mr Reilly does not attend.  He has previously been “in person”, at any rate at some stages of the history.

	The position is that on 20 May 1997 the Industrial Tribunal (the Chairman alone, Mr MacMillan, sitting in Birmingham) held that “The decision of the tribunal is that the complaint is struck out under Rule 13(2)(e) of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations 1993.”  One therefore has to look at that, which is at page 1140 of Butterworths and it says:

“(2)  A tribunal may -
(e) subject to paragraph (3), at any stage of the proceedings, order to be struck out any originating application or notice of appearance on the grounds that the manner in which the proceedings have been conducted by or on behalf of the applicant or, as the case may be, respondent has been scandalous, frivolous or vexatious.”

	And paragraph (3) is procedural.  It requires notice to be given of such an application being likely to be made.

	So that was the rule which the Chairman relied upon to strike out Mr Reilly’s complaint.  The position was that Mr Reilly then lodged a Notice of Appeal on 13 June 1997.  He wrote a letter to the Employment Appeal Tribunal on 10 June 1997 and he has lodged a Skeleton Argument and, on that basis, it would not be just to deal with the matter simply by dismissing it because he has not attended today and so therefore we have to deal with it.

	One needs to look briefly at the history of the matter.  On 8 October 1995 Mr Reilly lodged a complaint of racial discrimination based on “national origin and personality”.  Quite what his “national origin” is we are not able to state and, as for his personality, or if the word “national” is intended to cover personality as well as origin as for his national personality, we have no information.

	The case came on for hearing on 14 May 1996 before Mr MacMillan on a preliminary point as to whether Mr Reilly had complained early enough so as not to be time-barred under Section 68 of the Race Discrimination Act 1976.  Was he time barred? - that was the question that was before the Tribunal on 14 May 1996 and at that stage Mr Reilly was represented by both Solicitors and Counsel and, very sensibly, the parties looked not simply at the time bar but to the merits of the case generally, it would seem.  The parties broke off for oral negotiations and the outcome of those negotiations was recorded in a letter of 15 May 1996 which said, so far as we have seen the quotation from it, as follows:

“The hearing of this case on 14 May 1996 was adjourned generally for terms of settlement contemplated by the parties to be perfected and implemented.  The complaint will be treated as having been dismissed on withdrawal by the applicant upon the granting to him by the respondents of medical retirement on ill health grounds.  Liberty to apply.”

	As the Industrial Tribunal, by the Chairman, as he records at paragraph 3 of the decision:

“It is important to note that there was not at that time a completed agreement.  That was because the respondents could not willy nilly grant ill health retirement.  That could only be done in accordance with established procedures, including the certification by an appropriate medical officer that Mr Reilly was no longer fit for his duties.”

	The decision continued a little later:

“The next communication which was received [that means received by the Industrial Tribunal] was a letter from Mr Reilly dated 20 November 1996 in which he said:-
‘I would like to inform the tribunal that failure of Customs & Excise to honour its agreement reached in the tribunal on 15 May, leaves me with no alternative but to seek leave to re-enter my application for hearing’.”

	And that letter was copied to the Respondents, the Customs & Excise, but also (and it might have been simply that they crossed in the post says the Chairman) the Customs & Excise wrote a letter to the Industrial Tribunal that said:

“Further to your letter of 15 May, I write to advise you that the applicant has been granted retirement on ill health grounds and so invite you to dismiss the claim as previously indicated.”

	In that circumstance the Industrial Tribunal, very sensibly, had the matter restored and the next stage was that there was a complaint by Mr Reilly.  He wrote a letter that said:

“The terms of the agreement were not in terms of natural justice properly adhered to.  There was no element of compensation at all for the 6 months prior to my ill health retirement.  I had no salary at all between April and October 1996 and the respondents have not offered one penny.  I was forced to wait for 6 months without any salary, yet the respondents used their endeavours to protract the whole question of the ill health retirement until 18 October 1996.  When I agreed to withdraw my application from the tribunal, it was in the certain hope that the whole question of salary would have to be dealt with for the intervening months.”

	The Chairman heard argument and some evidence and he concluded that he was satisfied that “to continue these proceedings would be vexatious and in the exercise of my discretion I accordingly strike them out under Rule 13(2)(e)”.  He had previously instructed both parties that the matter should be listed before him on 28 April for consideration, under Rule 13(2)(e), of whether Mr Reilly’s complaint should be struck out because “the manner in which the proceedings have been conducted by or on behalf of Mr Reilly has been scandalous, frivolous or vexatious”.

	One of the difficulties of this area is that it is by no means every compromise that is enforceable at law and for that one needs to look at Section 72(3) on page 175 of Butterworths.  This says:

“(3)  A term in a contract which purports to exclude or limit any provision of this Act is unenforceable by any person in whose favour the term would operate apart from this subsection.”

	And one also needs to look at (4)(A):

(4)(A)  The conditions regulating compromise contracts under this Act are that - 
(a)  the contract must be in writing.”

	And then there are other provisions that need to be satisfied.  In summary, the complainant must have received independent legal advice, the adviser must have a policy of insurance; the contract must identify the adviser and the contract must state that the conditions regulating compromise contracts under this Act are satisfied.  

	Mr Reilly complains in his Notice of Appeal of a number of features but what most concerns us is whether there was here a contract of a kind that falls within Section 72(3) of the Race Relations 1976 and whether, in effect, Rule 13(2)(e) can be used, in practical terms, to enforce a compromise even though Section 72 has not been complied with (which would seem here to be the case because here there is no indication that the contact, if there was one, was in writing; there is no indication that the contract, if there was one, identifies the adviser as is required, or that the contract, if there was one, states that the conditions regulating compromise contracts under the Act are satisfied).

	There is here, as it seems to us, a point that deserves a full hearing.  Can Rule 13(2)(e) be used where the practical consequence of its use is that one has enforced a compromise of a kind which might not otherwise have been capable of being enforced?  Of course, if there was no contract, then it is even harder to see Mr Reilly’s continued pursuit of his case as being vexatious.  So whether there was a contract or not, there are some difficulties in pursuing the use of Rule 13(2)(e) in the manner in which it was used.

	We are loth though, to let the matter go unconditionally to a full hearing because it has to be borne in mind that Mr Reilly has not bothered to attend this morning.  It could be that, on reflection, he has seen that whatever deal he has done was, after all, a fair deal.  It could be that he, on reflection, realises that it may be the case (we say no more than may be the case) that if he seeks to unscramble the deal he will have to pay back money that he has already received.  

	So, rather than unconditionally going straight to a full hearing, what we are going to do is this.  We direct that there may be a full hearing here but only if, within 14 days after Mr Reilly being sent a copy of the transcript of this decision he indicates, in writing, to the Employment Appeal Tribunal that he does indeed wish to pursue his appeal.  If he does that then the matter can go to a full hearing.  If he does not then it shall not go to a full hearing.  That is all that we can do at this stage.