Appeal No.	EAT/1467/01

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 21 March 2002

Before
HIS HONOUR JUDGE J McMULLEN QC
MRS M T PROSSER
MISS D WHITTINGHAM

UNISON	APPELLANT

(1) SODEXHO HEALTHCARE 
(2) INITIAL HOSPITAL SERVICES	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR PAUL T ROSE
(of Counsel)
Instructed By:
Mr S Cross
Messrs Thompsons
Solicitors
St Nicholas Building
St Nicholas Street
Newcastle Upon Tyne NE1 1TH	
For the First Respondent

For the Second Respondent

	MR ALEX LOCK
(Barrister)
Messrs Beachcroft Wansbroughs
Solicitors
10-22 Victoria Street
Bristol BS99 7UD

MISS Y C McCABE
Rentokil Initial UK Ltd
Garland Road
East Grinstead
West Sussex RH19 1DY

JUDGE J McMULLEN QC:

1	This is an appeal from a decision of a Chairman of an Employment Tribunal who on 18 October 2001 decided on the papers to grant an extension of time for the entering of a Notice of Appearance.  The appeal therefore raises an issue of Employment Tribunal procedure.  In the absence of any relevant ground of a appeal or application here, the appeal is heard pursuant to section 29(4) of the Employment Tribunals Act 1996 by a judge alone.

2	The Applicant in the proceedings was UNISON.  The Respondents were Sodexho and Initial.  This case concerns the treatment by the Chairman of Sodexho.  

3	The procedural history of this case is simple.  UNISON complains of a failure to comply with regulation 10 of TUPE.  It represents employees of Sodexho employed on a domestic services contract with Gateshead NHS Trust.  It is contended that there was a transfer of an undertaking from Sodexho to Initial in 2001 and that it was a recognised union entitled to be consulted and informed, pursuant to regulation 10.  Proceedings were commenced by UNISON for a declaration of a failure by Sodexho and Initial to consult and for an award of compensation, which may be of up to 13 weeks, in respect of those employees who were the subject of a consultation requirement and in respect of whom there has been a breach.  The number of employees is something over 160 affected by what would ultimately be an award if a Tribunal were so minded.

4	The Originating Application made by UNISON was presented on 28 August 2001.  On 27 September solicitors for Sodexho wrote to the Tribunal indicating that it had been received by their client on 30 August; that the time for presenting a Notice of Appearance had expired 21 days later, on 20 September; and that in the light of the explanation it put forward it applied for an extension of time to enter a Notice of Appearance presented on 27 September.  Thus, the Notice of Appearance, it is agreed, was seven days late and contrary to the requirement of rule 3(1) of the ET Rules.  The explanation offered was that Sodexho employed only one Human Resources Manager for the relevant division; that she had been on annual leave when the notice of the application came in and that she was unable to attend to it immediately upon her return.  The letter concluded by saying:
“We look forward to hearing from you in due course with a decision on validation.”

5	Independently of this, Initial presented a Notice of Appearance on 19 September 2001 in which full particulars are given of the defence which it seeks to make.  It accepts that there was a relevant transfer on 1 June 2001 from Sodexho to Initial.  It indicates steps it took to consult at least by way of offering an opportunity for incoming staff to meet with its management and reflected what it considered to be the true position under regulation 10, which is that the obligation to consult with UNISON was laid upon Sodexho and that it, Initial, had complied with any obligation it had.  

6	The application on behalf of Sodexho was dealt with by the Chairman and communicated by a letter of 18 October 2001 which says this:

“The Notice of Appearance from the First Respondent has been referred to a Chairman, Mr Rennie, who has validated it and has directed that the case proceed to list for a one day hearing.”

7	Accompanying that were rigorous and detailed, albeit standard directions, for the conduct of the next stage, including preparation of a single bundle, a direction as to witness statements and as to how they would be handled at an oral hearing, the timing of closing submissions, requirement to provide skeleton arguments and a warning that if there were failure to comply with any of these directions there were sanctions available to the Tribunal pursuant to rule 4(8) of the 2001 Rules, including costs and striking out of the relevant pleadings and a fine of up to £1,000.  

8	On receipt of those two documents solicitors acting on behalf of UNISON wrote on 24 October 2001, making four applications.  
a) The first was to set aside the Order of Mr Rennie and/or to review it on the basis that it had not been made in accordance with the overriding objective. That is a reference to regulation 10 of the 2001 rules which reflect CPR 1, almost word for word.  It is contended that the Tribunal Chairman failed to take proper account of the fact that the only excuse offered by Sodexho was a problem relating to annual leave.
b) Secondly, it was contended that the Notice of Appearance did not meet the requirements of Rule 3(1) (c) as it did not properly set out the grounds for resisting the application.  Such failure did not comport with the overriding objective which is to assist the Tribunal in resolving matters and, it should be said, gave no indication of what defence the Respondent was about to make and what issues were in dispute.  
c) Thirdly, no opportunity had been given to UNISON to make representations before the Chairman made his decision to extend time.
d) Fourthly, the Notice of Appearance should be struck out as showing no reasonable defence to the claim; that is a reference to Rule 15(2)(c) since the right is given to a Tribunal, where it considers that a Notice of Appearance is misconceived to strike it out.  Misconceived is defined by regulation 2(2) as including having no reasonable prospect of success. 

9	Solicitors for UNISON asked for an oral hearing to determine those four applications. An oral hearing was conducted on the telephone by the Regional Chairman, Mr D. Reed on 27 November 2001 in accordance with modern tribunal practice.  No point is taken about the conduct or scope of that hearing.  At that hearing directions were given having heard a solicitor for UNISON and a representative of Sodexho.  The Second Respondent, Initial did not participate.  The Chairman made directions requiring UNISON to provide within a specified period “full particulars of each application it makes with all facts, matters and contentions on which it relies” and within a short period thereafter that Sodexho should similarly set out the basis on which it resists the applications.  After that hearing the solicitor representing UNISON by fax entered a Notice of Appeal to the EAT which is how the matter comes before me today.  

10	None of the directions set out was followed. However, on 9 January 2002, on behalf of UNISON it was stated that UNISON did not wish to proceed with a merits hearing and on 6 February 2002 the Tribunal ordered that this matter be stayed.

11	The issues on appeal relate, therefore, to the four matters foreshadowed in UNISON’s letter following the Chairman’s Order.  In a careful written skeleton supplemented by oral argument today, Mr Rose for UNISON pointed out that the issues were as follows:
a) Does a determination by a Chairman under rules 3(3)(a) and 17(1) have to be supported by reasons?
b)  Does an Applicant have the right to be heard before the Chairman makes a decision to extend time under those rules?
c)  Did the Chairman, Mr Rennie, fail to have regard to the factors identified in Kwik Save-v- Swain [1996] ICR 49 EAT before making his decision?
d)  Is a Notice of Appearance which merely makes no admissions a Notice of Appearance under rule 3(1)?
12	At all stages of Mr Rose’s submissions reference was made to the overriding objective under regulation 10 which I have referred to and to the linkage between the Employment Tribunal and the Civil Court by reason of the modern approach to litigation there enjoined.  A number of authorities were referred to for the propositions advanced by Mr Rose and I will deal with them.  

13	First, the judgment of the EAT in Kwik Save above contains a detailed analysis which must be considered before an extension of time is given or refused.  These are described under the heading “Discretionary Factors” by Mummery J at 54H to 56C.  In the exercise of the discretion by a Chairman, broadly speaking, what must be considered are: the reasons for the delay; the explanation for it; the balance between prejudice to either party as a result of exercising the discretion either way and the merits of the Notice of Appearance which is the subject of the application.  That case of course was adjudicated prior to CPR.  So was Independent Research Services Ltd -v Catterall 1993 ICR 1in which at page 5C Knox J on behalf of the EAT said this:
“…just as the principle upon which this appeal tribunal should operate in relation to appeals from interlocutory decisions is the same as the principle which we ought to apply in hearing appeals from final decisions so it seems to us, parties are entitled to be told why they have won or lost in an interlocutory decision as much as in a final one. True it is that in an interlocutory decision one would not seek for any great detail…We therefore think it right to look at the substance of the matter and see whether we agree with the result that the Chairman  arrived at.”

14	In Towle -v- Liberty Taverns (unreported) 23 July 1987, Popplewell J  in the EAT, in a case where  it was claimed that there should be a right of representation upon a decision made by a Tribunal in an interlocutory matter (See page 6B)
“The suggestion that every time an extension of time is sought for the other party should be invited to make a written representation or an oral representation seems to us to offend against the urgency of the procedure.  The rules of natural justice do not require that the applicant should be invited to make representation.”

15	In Reddington -v- S Straker & Sons Ltd [1994] ICR 172, Mummery J. considered the impact of an ex parte Order (now an Order without notice to the other side).  He said at 176D:

“We have reached the conclusion, both on the provisions of the Rules, in those days 1985 and as a matter of general principle and practice, that the industrial tribunal had power to set aside such an order, [that is the Order it had made ex parte]  It is unnecessary for a party, adversely affected by such an order, to appeal to the appeal tribunal without first seeking an order of the industrial tribunal to set it aside.  Briefly our reasons for this conclusion are these.  First, any ex parte order made by any court or by any tribunal is, in its essence, provisional.  It is made on the application of one side without notice to the other side.  The order on an ex parte application is made on hearing the submissions of law and fact of one side only.  It is not the practice of any court or tribunal to make enduring orders of that kind which the tribunal or court cannot undo.  Sometimes the right to discharge such an order is spelt out in the order itself.  It was conceded by [Counsel] that industrial tribunals making ex parte orders frequently include in them an express provision that the order is subject to objection from the party affected by the ex parte order.  Some ex parte orders contain express provisions that they are subject to an application by the party adversely affected to set aside the order.  The Rules of the Supreme Court provide in Ord. 32. r. 6 that the court may set aside an order made ex parte. That makes it clear that it is not an appropriate route to go to the Court of Appeal.  You go back to the tribunal which made the ex parte order.  That provision in the Rules of the Supreme Court is of relevance in this tribunal and in industrial tribunals….”

16	Recently, the Appeal Tribunal has had an opportunity to consider the rule in Kwik Save in a judgment given by Mr Recorder Underhill QC on 14 November 2001.  The EAT there held that it was an error of law to make a decision as to the extension of time without considering and adjudicating upon all of the reasons reflected in the judgment in Kwik Save.

17	The final authority to which it is necessary to refer is Seldun Transport Services Ltd -v- Baker [1978] ICR 1035 in which the judgment of the EAT was given by Slynn J.  The EAT was called upon to consider, under the then Rule 3 of the Tribunal Regulations, the formal requirements for a Notice of Appearance.  It was held that the rule required certain matters to be included, but others were merely directory and not mandatory, so that a Notice of Appearance containing certain basic matters but not giving the fullest particulars, was not a nullity and therefore was admissible.  The Chairman who held that the document was a nullity, that there was no appearance at all, had been in error.  

18	From that review of the authorities it is possible to draw the principles, by reference to the discretion exercised by the Chairman here.  Rule 17 of the 2001 Rules provides as follows:
“A Chairman may on the application of a party or of his own motion extend the time for doing any act appointed by or under these rules (including this rule) and may do so whether or not the time so appointed has expired.”
That rule is the relevant rule here.  It is to be noted that unlike rules 4, 6 and 15, no express provision is made for notification to be given to the other party.  

19	Rule 3 deals with the contents of the Notice of Appearance.  That has changed over the last seventeen years as the archaeological research of Mr Rose has demonstrated, so that a Notice of Appearance should contain particulars of the grounds relied on and it should not be disallowed, unless certain conditions are met.  Earlier conditions have been repealed, that is a requirement to demonstrate reasonable practicability and an automatic costs sanction where it could not be demonstrated.  

20	It seems to me that the submission by Mr Rose is correct insofar as the Order made by the Chairman, conveyed in the letter of 18 October contains no reasons and it contains no indication of the exercise of discretion and the factors considered.  The Chairman had in front of him the Notice of Appearance, which is expressly referred to in the letter. Mr Rose, taking a commonsense approach today, has accepted that he must have had the Originating Application and the Notice of Appearance by Initial, together with the letter sent by Sodexho’s solicitors on 27 September.  Even patching together those documents, he submits, there is no clue as to the exercise of his discretion as to the balance of the prejudices respectively of UNISON and Sodexho, or his view of the merits. In those circumstances, he contends that the Chairman erred.  

21	If the matter stopped there, I would accept that the submission of Mr Rose was correct; but it did not.  The way forward in this case was to do precisely as UNISON’s solicitors did ie to make the four applications to be heard by a Chairman. That hearing duly took place.  

22	That, of course, was express vindication of the requirement that an ex parte decision is always a provisional view capable of being undone, and of the right to be heard.  Natural justice, and the specific guarantees in ECHR Art 6.1, require an examination of the judicial process as a whole. The continued reliance in CPR on without-notice hearings, rather than the abolition of them, makes that point. It is made with even greater force when it is realised that the Chairman was giving case management directions for which reasons are not required under CPR or the Human Rights Act 1998: see English v Emery Reimbold and Stick Ltd The Times 10 May 2002 CA per Lord Phillips MR. The further bilateral proceedings, triggered by UNISON’s applications, were aborted, since the proper directions given by the Regional Chairman on 27 November were not followed by UNISON and its applications were all withdrawn.

23	It seems to me therefore, that since UNISON originally took the correct approach which was to go back to the Tribunal itself, rather than to come to the EAT, the matter would have been resolved by the Regional Chairman that day, or upon an adjournment.  Full consideration would have been given to the Kwik Save matters, an examination would have taken place of the nature of the defence which Sodexho was putting forward, and a balance would have been struck between the relative prejudices.  Sadly, the opportunity was lost for the correct solution of this problem when UNISON failed to carry out the directions of the Regional Chairman given at that telephone hearing.  

24	For that reason, I am left with an inadequate basis upon which to judge the Chairman’s decision to issue the Order on 18 October 2001.  An appeal to the EAT must be accompanied by the Tribunal’s written Extended Reasons.  It is, however, the practice of the EAT to allow appeals to go ahead against an Order from which there are no Extended Reasons and, indeed, Interlocutory Orders have been the subject of appeal to the highest Courts for over 30 years.  An Interlocutory Order is not a decision: see Regulation 2(2), since an Order is a decision only if it is a Striking Out Order; it is not an Order if, as in this case, it is a decision to extend time.  

25	The way around that would have been for an application to be made formally by UNISON for Extended Reasons or, informally, for reasoning to be given by the Chairman for the decision he took.  Both sides in this case accept that one cannot answer all of the Kwik Save questions by reference to the material which we have. But in my judgment, that would have occurred had the directions made and the hearing indicated by Mr Reed, taken place some time in January or February 2002.  

26	Since UNISON has now withdrawn its applications, there appears to me to be nothing left.  The way in which this matter should have been dealt with was as I have indicated and UNISON in this appeal has jumped the gun.  The proper route was to divert this case back into the decision-making of the Newcastle Tribunal. I therefore dismiss the appeal.  In doing so, I pay due respect to the very skilful propositions which have been advanced before me by Mr Rose and I am grateful to Mr Lock for his argument.