Appeal No.	EAT/1395/98

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 15 June 1999

Before
THE HONOURABLE MR JUSTICE CHARLES
MR L D COWAN
MR D A C LAMBERT

COMTEC (ESSEX) LTD	APPELLANTS

MR I STUART	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellants	MR M WEST
(Representative)
Peninsula Business Services Ltd
Advocacy & Litigation Dept
2nd Floor
Stamford House
361-365 Chapel Street
Salford 
Manchester M3 5JY

	MR JUSTICE CHARLES:	This matter comes before us by way of the special procedure for a preliminary hearing.  The parties are a company called Comtex (Essex) Ltd who are the Appellants and a Mr I. Stuart who is the Respondent and was the Applicant below (the Employee).

1	The appeal is against a decision of the Employment Tribunal sent to the parties on 1 October 1998 which related to a hearing which took place on 1 September 1998.  The Employment Tribunal ordered that the Appellant company do pay the Employee £5,352.54 under section 23 of the Employment Rights Act.  The basis of that award was either that there had been an unlawful deduction from wages, or that the Employee had a valid contractual claim.

2	The Employee had become an employee of the Appellant company following its acquisition of a company called Primetime which we understand has gone into liquidation, and the claims which were the subject of the proceedings related to the Employee’s employment by Primetime.  We were told that no records of Primetime were made available to the Appellant company.  It is apparent that no such records were put before the Employment Tribunal.  The Employee was therefore put to proof of his claim and produced some bank statements.  He was cross-examined, in the absence of material that the person representing the Appellant company could put to him, to contradict his explanation of entries on his bank statements and also in the absence of other financial records of the Employee, for example, records relating to his credit or debit cards.

3	The position therefore reached before the Employment Tribunal was that the Employee, who we understand had been the manager of the shop and knew perfectly well what was going on there on a day-to-day basis, was being cross-examined by someone who had no ammunition.  This is always a difficult task.  On the information and evidence before him the Chairman of the Employment Tribunal, who was sitting alone, believed the Employee.  He said at paragraph 10 of his Extended Reasons the following:

“The Applicant gave evidence, submitted the exhibits A2-A4 and he was cross-examined.  I am satisfied that he was not paid £1,458.33 basic pay in April, May or June 1997 and that he was, further, not paid commission due of £1,152 and £1,648 in April and May.  These sums total £7,174.99 and the simplest way, on the evidence, of obtaining the net amount is to multiply this by 74.6% which produces £5,352.54.  With respect to the Respondent, its sole submission, that I should disbelieve him and find that the claim is not proven, has no rational basis and ignores the cogent evidence derived from the bank statements.  The Applicant has proved his alternative claims for the same sum, under section 23 of the Act and in contract, and the Respondent is ordered to pay £5,352.54 to him.”

4	In our judgment in making this finding on the information and evidence before him the Chairman of the Employment Tribunal did not err in law and the ground of appeal in the original Notice of Appeal, which was in the following terms, namely:

“The Tribunal reached a decision that no reasonable Tribunal, on the facts presented, could have reached.”

is not one that has any reasonable prospect of success and we do not allow that ground to proceed.

5	However, the Appellant now seeks to rely on alternative or additional grounds based on an assertion that since the hearing before the Employment Tribunal and, as we understand it, in some respects the bringing of this appeal, it has obtained further information.

6	In the skeleton put in on behalf of the Appellant it is asserted as follows:

“3	At the hearing the employee produced bank statements which purported to show non payment of salary.  When questioned about credits to his account, he described these as payments in respect of expenses, but produced nothing to substantiate the fact that these monies which he had received from Primetime were in fact re-imbursement of expenses.
Nor did he demonstrate the reason for two additional payments of £625.99 into his bank account.
4	No credit card statements were produced, which could have substantiated his expenses claims, and may have thrown some light on what follows.
5	In this case all the available evidence was, it appeared, in the hands of the employee.  As such she should have been subject to strict proof of the quantum of his claim.  He was not put to such strict proof.
6	Since the hearing, two members of staff have revealed that in the last few months, during the terminal financial difficulties, Primetime allowed employees to make refunds by use of Credit and Debit cards to their own account, not in respect of their own purchases, but as a means of getting payment from the company when the company had no direct means of paying salary and commission.
7	None of this was revealed by the employee to the Employment Tribunal.  As such the Appellants maintain that the decision on quantum is unsafe, and seek leave to adduce further evidence at a full Appeal Hearing to substantiate the unconventional means by which monies were obtained by employees, from Primetime.”

7	That alternative basis of putting the appeal is also contained in a letter dated 10 December 1998 from the representative of the Appellant company, and in the Appellant’s PHD form it seeks leave to amend the Notice of Appeal in accordance with that letter of 10 December 1998.

8	The nub of this alternative ground of appeal is therefore, whether the Appellant’s should be entitled to introduce new evidence.  The test as to that in summarised with reference to the relevant authorities in Harvey at T 1586 to 1601.  As appears therefrom the test is the same as that applied by the Court of Appeal in Ladd v Marshall [1954] 3 All ER 745 and quoting from paragraph 1587, the test is as follows:

“It is only in exceptional cases that fresh evidence will be admitted in the EAT.  In Wileman v Minilec Engineering Ltd [1988] IRLR 144, [1988] ICR 318, EAT, Popplewell J stated that the test to be applied should be the same as that laid down in Ladd v Marshall [1954] 3 All ER 745 for the admissibility of fresh evidence in the Court of Appeal.  Thus the party seeking to introduce the new evidence must show (i) that the evidence could not have been obtained with reasonable diligence for use at the tribunal; (ii) that not only must it be relevant, but that it would probably have an important influence on the result of the case, even though it need not be decisive; and (iii) that it is apparently credible, though it need not be incontrovertible.  In the earlier case of Borden (UK) Ltd v Potter [1986] ICR 647, Popplewell J had equated the ‘reasonable diligence’ test with the test which employment tribunals must apply in deciding whether to grant a review under what is now r 11(1)(d) of the 1993 Rules of Procedure, namely, whether the existence of new evidence which had become available since the conclusion of the hearing could not have been reasonably known of or foreseen at the time of the hearing.”

9	It seems to us in the circumstances of this case and, in particular, having regard to the following, namely:

(a)  that the Appellant company took over the business from earlier employers and the claims related to a time when the employee was employed by the earlier company,

(b)  the Appellant company had no books and records relating to the earlier period, and

(c)  the position of the Employee in the shop and his knowledge of relevant financial transactions 

that it is reasonably arguable that that test is satisfied in this case.

10	If one poses the question “What would have happened if the Appellant company had the information it now has when the matter came before the Employment Tribunal?”, it is certainly reasonably arguable that the cross-examination would have taken a different course and that the employee would have been required to produce other books and records, particularly relating to credit card transactions.

11	During the course of the hearing we were provided with two statements being the statements referred to in the skeleton argument put in on behalf of the Appellant company.  In giving leave for this matter to proceed we will give leave to the Appellant company to amend its Notice of Appeal in accordance with the skeleton argument and letter of 10 December 1998.  As we have indicated we do not allow the present ground, as stated in the Notice of Appeal, to proceed.  We will direct that those amendments are to be made within 14 days.  That a grant of leave is, of course, subject to any application to set it aside by the Employee who is not represented before us.  The upshot of that is that the direction is that this appeal can only proceed on the amended grounds.

12	We will also make a direction that the Appellant company is to lodge within 21 days affidavits setting out the new evidence it wishes to rely on and all matters it wishes to rely on as to why the test we have referred to and which is summarised in Harvey at paragraph 1587 is satisfied in this case.

13	We will also give leave to the Employee (the Respondent to this appeal) to put in affidavit evidence within 21 days after service of the Appellant’s evidence.  We will give this case Category C and, although it may be an over-estimate, we will estimate it at a day because there may be a need to consider evidence.

[  NOTE:	When correcting this transcript it occurred to me that there may be an additional point that was not raised at the hearing, namely that the Chairman did not explain why he sat alone.  ]