Appeal No. UKEAT/0452/04/SM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 20 July 2004

Before
THE HONOURABLE MR JUSTICE BURTON (PRESIDENT)
MR R N STRAKER
MRS L TINSLEY

IRON AND STEEL TRADES CONFEDERATION	APPELLANT

ASW LTD (IN LIQUIDATION)	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR ANDREW HOCHHAUSER
(One of Her Majesty's Counsel)
and
MR PAUL TROOP
(of Counsel)
Instructed by:
Messrs Russell Jones & Walker Solicitors
Swinton House
324 Gray's Inn Road
London WC1X 8DH
	
For the Respondent	MR JONATHAN SWIFT
(of Counsel)
Instructed by:
Clifford Chance Limited Liability Partnership
200 Aldersgate Street
London EC1A 4JJ	

SUMMARY

Time Limits

Applicant Union out of time in claiming protective award.  ET did not find that it was not reasonably practicable to present claim in time.  No error of law or perversity.  In particular Machine Tools v Simpson [1988] ICR 558 correctly applied: there was no new and crucial fact discovered after the limitation period, but the Applicant had sufficient information before the expiry of the period to present the claim.

THE HONOURABLE MR JUSTICE BURTON (PRESIDENT)

1.	This has been the hearing of an appeal by the Iron and Steel Trades Confederation (“the Applicant”) against the unanimous decision of the Employment Tribunal at Ashford in Kent, after a hearing on 23 and 24 March 2004, in Reasons handed down on 19 April 2004, that it was reasonably practicable for the Applicant to have presented a claim in respect of a protective award on behalf of 170 of its members, within the time limit laid down by section 189 of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRA”), and consequently that the Tribunal had no jurisdiction to hear the claim and it was dismissed.

2.	Section 189 of TULRA provides for the claim, and for that claim to be heard, by a union where an employer has failed to comply with a requirement of section 188 or section 188A of TULRA in a redundancy situation.  By section 189 (5) the limitation period is provided as follows:

“An employment tribunal shall not consider a complaint under this section unless it is presented to the tribunal -
(a)	before the date on which the last of the dismissals to which the complaint relates takes effect, or
(b)	during the period of three months beginning with that date, or
(c)	where the tribunal is satisfied that it was not reasonably practicable for the complaint to be presented during the period of three months, within such further period as it considers reasonable.”

3.	The latter sub-clause, the reasonable practicability extension, is a common clause in industrial relations legislation and in particular is the same provision as allows for an extension to be granted by an Employment Tribunal in respect of a claim by an individual employee for unfair dismissal.  It is thus a provision which has, over the years, been very often looked at by the Tribunals and the higher courts.

4.	There are three areas of law which form the backbone to the claim here by the Applicant union for such an extension.  Before we address them we should set out the central dates, which are these.  The last of the dismissals, as referred to in section 189 (5) (a), took place on 8 April 2003, such that the three month period, within which, under section 189 (5) (b), a complaint had to be made in order to comply with the primary limitation period, ended on 7 July 2003.

5.	By the time that the complaint came to be made against the Respondent company, in this case ASW Ltd, that company was in liquidation.  The date of its liquidation, as it happens at the hands of the Applicant union, was 24 April 2003.  As a result of that liquidation, proceedings could not be issued against the Respondent without the consent of the Companies Court.  That consent was ultimately obtained by the Applicant on 3 October 2003, pursuant to section 130 (2) of the Insolvency Act.  The proceedings were eventually issued on 5 November 2003.

6.	It can be seen therefore that it was no surprise, and not in issue, that the proceedings were found to be issued out of time by the Applicant, namely just under four months out of time.  The issue which the Tribunal had to decide therefore, and resolved against the Applicant, was whether it had been reasonably practicable for proceedings to be issued within time.

7.	The three areas of law to which we referred were as follows.  First, the general proposition that, whereas the Employment Tribunal is always the arbiter of fact, the industrial jury, that is particularly so in relation to questions of reasonable practicability.  Attention has been drawn by both parties to authorities which support that proposition.  We have been referred to Palmer and Saunders v Southend-on-Sea Borough Council [1984] ICR 372 at 385; to Croydon Health Authority v Jaufurally [1986] ICR 4 at 10; and to a case to which we shall return, Machine Tool Industry Research Association v Simpson (“Simpson”[1988] ICR 558 at 563.  But the most relied upon authority for this proposition is Walls Meat Co Ltd v Khan [1979] ICR 52 at 57, where Shaw LJ said as follows.

“It seems to me axiomatic that what is or is not reasonably practicable is in essence a question of fact.  The question falls to be resolved by finding what the facts are and forming an opinion as to their effect having regard to the ordinary experience of human affairs.
The test is empirical and involves no legal concept.  Practical common sense is the keynote and legalistic footnotes may have no better result than to introduce a lawyer’s complications into what should be a layman’s pristine province.  These considerations prompt me to express the emphatic view that the proper forum to decide such questions is the [employment] tribunal, and that their decision should prevail unless it is plainly perverse or oppressive.”

8.	The second basic proposition is that the test of reasonable practicability is one effectively of negligence, the test being as set out in the words of Lord Denning MR in Dedman v British Building & Engineering Appliances Ltd [1974] ICR 53 at 61:

“The court then has a discretion to allow it to be presented out of time, if it thinks it right to do so.  But, if he [that is, the Applicant in that case] was at fault, or if his advisers were at fault, in allowing the four weeks to slip by, he must take the consequences.  By exercising reasonable diligence, the complaint could and should have been presented in time.”

That proposition has been repeatedly followed and approved and augmented and we have been referred to two examples of such cases, Riley v Tesco Stores Ltd [1980] ICR 323 at 333 and the Croydon case, again at paragraph 10.

9.	It is apparent that for the purposes of bringing or presenting a claim the issue is identified by section 189 (5) (c) itself, namely that the Tribunal must be satisfied, the onus being upon the Applicant, that it was not reasonably practicable for the complaint to be presented during the period of 3 months.  In particular in relation to a situation such as this where what was known at any given time falls to be considered, it is apparent that the test laid down by Lord Denning MR applies as much to the state of mind, i.e. the knowledge of those who were to present the claim as it does to the conduct of those persons.  Was it reasonably practicable for the complaint to be presented involved whether by the exercise of reasonable diligence the complaint could have been presented in time.

10.	The third area of authority on which in particular Mr Hochhauser QC relies, who has ably appeared on behalf of the Appellant leading Mr Troop, who appeared below, while Mr Swift appears, as he did below, for the Respondent, is authority which reflects upon that question of knowledge.  The Simpson case, to which we have referred, was a case in which the Applicant for unfair dismissal had been dismissed while she was in fact off work recuperating from an illness.  She was made redundant, and at the time she was made redundant had no reason to believe that it was otherwise than a genuine redundancy, particularly as she was absent from work at the time.  She was told that she had been made redundant, that plans existed for moving the office and she accepted a redundancy payment.  She later learned certain facts which caused her for the first time to believe that she was not redundant but had been unfairly dismissed.  It was held that the fact that she did not acquire such facts until after the expiry of the three month period entitled her to say that it was not reasonably practicable to bring the complaint within the time limit.

11.	The relevant passage upon which Mr Hochhauser has placed reliance is at page 564 in the judgment of Purchas LJ.  He refers to the fact that Counsel for the Court, the amicus curiae, the employee being in person, had submitted that the expression “reasonably practicable” imported three stages, the proof of which rested on the employee:

“The first proposition relevant to this case is that it was reasonable for the employee not to be aware of the factual basis on which she could bring an application to the Tribunal during the currency of the three-month limitation period.  [Counsel] argues with some force that if that if that is established it cannot be reasonably practicable to expect an applicant to bring a case based on facts which she is ignorant.  Secondly, the applicant must establish that the knowledge which she gains had, in the circumstances, been reasonably gained by her and that that knowledge is either crucial, fundamental or important – it matters not which particular epithet, if any, is applied – to her change of belief from one in which she does not believe that she has grounds for an application, to a belief which she reasonably and genuinely holds, that she has a ground for making such an application.  I am grateful to adopt the summary of that concept in the words that [Counsel] used, that is an objective qualification of reasonableness, in the circumstances, to a subjective test of the applicant’s state of mind.  The third ground, which [Counsel] accepted, is really a restatement of the first two [in] that the acquisition of this knowledge had to be crucial to the decision to bring the claim in any event.”

12.	Mr Hochhauser has referred us to the passage in Harvey on Industrial Relations and Employment Law at paragraphs 238 following, which incorporates reference to Simpson.  At 238 the editors say as follows:

“It may not be reasonably practicable to present a claim in time if the applicant at a late stage discovers some important fact which transforms his existing belief that he has no court of action into a belief that he does or may have a valid claim.  The most frequent example of this is where an employee who is dismissed for redundancy subsequently receives information leading him to believe that redundancy may not have been the real reason for his dismissal and that consequently he may have good grounds for making an unfair dismissal claim.”

In paragraph 239, as is to be anticipated, the editors refer consequently to Simpson, and set out the contents of that part of Purchas LJ’s judgment which we have already cited.

13.	In paragraph 240.01 another example is given of where the relevant factor causing an Applicant to believe that he has grounds for making a claim is an alleged fraudulent misrepresentation made to him by his employer.

14.	In paragraph 242 there is reference to yet another line of authority in which, as summarised by Harvey, the Court of Appeal in the case of James W Cook & Co (Wivenhoe) Ltd v Tipper [1990] IRLR 386 saw considerable force in the company’s argument that the employees had, from the date of their dismissals, sufficient knowledge of the facts upon which they could bring claims of unfair dismissal, none of which depended upon the discovery of the company’s intentions.

15.	It is quite apparent from those authorities and indeed Mr Hochhauser did not contend otherwise that it is not necessary for the employee to know that his claim will succeed before he is expected to bring a claim.  Thus, equally, looking at the flipside of that proposition, the date that one is to look at to see whether there was something which transformed his belief from one that he had no claim to one that he may have a claim was not a date upon which the nail in the coffin, or the last piece of evidence required to have a good chance of winning, was in place, but simply when it was that it was reasonably practicable for him to present a claim in the light of the knowledge available to him.  Mr Hochhauser in the end found it appropriate and necessary to formulate the test, which he recognised he had to meet, as being ‘when the Applicant reasonably should have known that the Respondent was a potential party’.

16.	The Decision by the Employment Tribunal is of course based upon its findings of fact, as one would expect, and it sets them out at some length.  Its conclusion was in paragraph 39, as follows:

“We therefore concluded that within the time limit the Applicant should have known that ASW [that is, the Respondent now sued] was likely to be the correct Respondent.”

It further addressed Mr Troop’s point, as it put it, in paragraph 44 of its Decision that:

“…there had been a legal impediment in the form of a compulsory winding up order made in the High Court on 24 April 2003 and that this in itself made it not reasonably practicable to present the claim within the time limit.  We accepted that to some extent this could be described as a legal impediment to the proceedings, but we concluded that it was not insurmountable; it could have been overcome by an application to the High Court at a much earlier stage and certainly within the relevant time limit.  We noted that on 12 June 2003 the Applicant’s solicitors, presumably on the instructions of the Applicant, accepted the possibility that Sheerness Steel was not the correct Respondent.  This was still within the time limit and there was nothing to prevent an application to the High Court at that stage in order to join ASW Limited as a Respondent ready for the preliminary hearing which was to determine the very point of the identity of the correct Respondent.”

17.	We turn then to the essential facts which underlie those conclusions.  There were a good many other facts which were banded on both sides as to the history of the case.  So far as the employees are concerned, members of the union, they had payslips, it seems, issued by what turns out to be the wrong company.  The Tribunal certainly found, as Mr Hochhauser more than once pointed out to us, in paragraph 37 of the Tribunal Decision, that:

“Given the findings of fact above, we accepted that the Applicant thought that the employer was Sheerness Steel, because of the pay slips and other PAYE documentation.  However, we concluded that through its members the Applicant had knowledge that the letters of redundancy had been headed differently.  The heading on those letters was ASW Ltd and ASW Holdings plc.  In addition, we concluded that through its members the Applicant had access to the Joint Administrative Receiver’s report to creditors, which named ASW Limited as the employer, and that this was available in September 2002.  In addition, members of the Applicant union had attended the meeting of creditors at the end of September 2002.”

18.	Consequently, as can be seen from that paragraph, there was a good deal of evidence one way or the other as to what might, could, should have been deduced by employees faced with employment which sadly ended with the intention to close Sheerness Steelworks in November 2002 and consequent redundancies.

19.	But the central factors appear to us to be as follows.  An Originating Application was issued before the last of the dismissals had taken place, as was perfectly appropriate, by the Applicant under section 189 of TULRA, on 12 February 2003.  That Originating Application was, it seems, in accordance with the findings of the Employment Tribunal, in the same terms as the subsequent Originating Application, now before us on appeal.

20.	By that time Sheerness Steel, as we shall call it, the Respondent to the first Originating Application, was, together with 8 other companies, part of the ASW group, one of which was the Respondent, in administrative receivership.  Receivers, consequently, were acting on behalf of Sheerness Steel and the Respondent.

21.	Notice of Appearance was entered in response to the first Originating Application on 10 March 2003 by Messrs Clifford Chance Solicitors acting on behalf of the Respondent to that application, Sheerness Steel (in administrative receivership), instructed by the Receivers who were, as we have indicated, receivers for all 9 companies.  The Notice of Appeal, IT3, commenced as follows:

“1.	The Applicant is an independent trade union recognised by ASW Limited (in administrative receivership) [that is a reference to the Respondent] in respect of employees at its steelworks in Sheerness.
2.	The Respondent named in the Originating Application [that is of course Sheerness] is a dormant company which is also in administrative receivership and does not employ any ISTC members (nor any employees at all) and it is submitted that it is not a proper Respondent in this action.  The employer of ISTC members at Sheerness was ASW Ltd (in administrative receivership) (“ASW”).  There were about 170 such employees.  ASW also employs some 660 ISTC members at its steelworks in Cardiff.”

22.	On receipt of that IT3 there was available to the Applicant and those advising the Applicant, including of course its solicitors who have acted throughout, to take the course of making an immediate application to join AWS Ltd (the Respondent) as second Respondent in that Originating Application.  It was an open invitation by the Administrative Receivers’ solicitors to join the correct Respondent as was asserted by those Administrative Receivers.

23.	Of course, there was no need, nor call, for an abandonment of the case against Sheerness Steel against whom the Applicant union and its solicitors continued to believe, right through until the end of August 2003 it seems, that it had a good arguable case; but it plainly also had a good arguable case against the alternative Respondent on the basis of the admission by the alternative Respondent’s own Receivers in the IT3 served on their behalf.

24.	As we have indicated, that step was not taken.  There was a letter from the Employment Tribunal to the Applicant’s solicitors dated 12 March 2003 which read as follows:

“Dear Sir,
I refer to the Respondent’s letter of 10 March 2003 enclosing Notice of Appearance, a copy of which is attached.  Do you agree that the correct Respondent should be ASW Limited (in administrative receivership), as asserted in paragraph 2 of the response to question 7?”

25.	The response from the Applicant’s solicitors dated 17 March 2003 was not to take the opportunity to join the second Respondent but simply to say:

“The correct Respondent would be the members’ employer.  Our understand[ing] was that the employer was ASW (Sheerness Steel) Limited but there would have come a time when the employment transferred to the receiver.  We would need to have confirmation from the Respondents as to what stage the receiver was appointed in respect of ASW (Sheerness Steel) Limited as opposed to the Cardiff operation.  With respect to the Respondents, that is not clear from their Response and we are taking this issue up with them directly.”

26.	They did so by letter dated 17 March 2003, in the fourth paragraph of which they stated:

“As to the question of the identity of the Respondents, what your response does not appear to us to make clear is the point [at] which the Receiver was appointed in respect of ASW (Sheerness Steel) Limited, whom we understood to be the employer at the Sheerness site.  Our claim is obviously directed against the employer and if you could clarify these issues for us (we would be happy to discuss it over the telephone), we can obviously determine upon who is in fact the correct Respondent in this matter if, as you say, it is not the party we have named in the proceedings.”

27.	The response from the solicitors for the receivers was dated 26 March 2003 and that concluded as follows:

“As to the identity of the respondents, Roger Oldfield and Richard Hill were appointed Joint Administrative Receivers of nine companies in the ASW group at 10.50 am on 10 July 2002.  These nine companies included ASW (Sheerness Steel) Ltd who you have listed as the Respondent in the present application.  Their appointment also related to ASW Limited, who we contend is the proper respondent in this case.”

As we have described, it appears that this group employed employees and it appears, as we know now, that it was ASW Ltd, at any rate by some stage, which did so, both in Sheerness and in Cardiff.

28.	The Applicant union, instructing a different firm of solicitors, making claims in respect of the employees in Cardiff, brought a winding up petition, as we have already described, against ASW Ltd, which resulted successfully in a winding up order against the Respondent on 24 April 2003.  It seems that was followed by a telephone call on 29 April 2003 which is recorded in the Applicant’s solicitor’s attendance note as follows:

“Firstly, we had a discussion about the correct Defendant and I explained to him the basis of my instructions and that we had sued the correct Defendant.  He accepted that might be right but his own evidence was not entirely clearly on the point although his instructions very firmly were that we had sued the wrong Defendant and the member was employed by the company which was now in receivership from the dormant company.  He could not indicate when the transfer might have taken place.  However he went on to say that I did [know] that what he believed was the correct Defendant ie the company in receivership was now in liquidation.”

29.	On 12 June 2003 the Applicant’s solicitors wrote their next letter to the Respondent’s solicitors relating to this matter.  This resulted, it seems, from communications relating to the time estimate for the hearing, which was still intended to take place, at the Employment Tribunal of the outstanding Originating Application, in which the Notice of Appearance, still extant, contended that ASW Ltd was the relevant employer, such that the solicitors for Sheerness were suggesting that there should be a preliminary hearing to identify the identity of the correct Respondent, and dealing with directions in that regard.

30.	The letter from the Applicant’s solicitors dated 12 June 2003 stated as follows:

“Whether you assert that ASW (Sheerness Steel) Limited is not the employer there is very clear evidence in our possession that it was the employer at least at a date pretty close to the date when the employees employment was terminated.  What we need you to disclose at this stage is the documentation in your possession that says that ASW (Sheerness Steel) Limited was not the employer.  It may well be that at some point ASW (Sheerness Steel) Limited ceased to be the employer and passed the employment relationship over to others.  However, if that did happen there was no notification to the employees to that effect.”

31.	The response from the solicitors for the Respondent was dated 17 June 2003.  It said:

“You will see that in the Respondent’s Notice of Appearance it was asserted that ASW (Sheerness Steel) Limited (in administrative receivership) was a dormant company.  If this issue goes to a hearing we plan to call evidence from the Joint Administrative Receivers of the Company to support that contention.  The Company’s accounts will be material.  These are, of course, in the public domain and if we may point you in the right direction you may find it appropriate to conduct a Companies House search.”

There is no evidence as to whether the Applicant had prior to that date sought to carry out such a search.

32.	The response by the Applicant’s solicitors dated 20 June 2003 stated as follows in the response to that letter:

“We did note that in the Respondents Notice of Appearance it was asserted that ASW Sheerness Steel Limited was a) in administrative receivership b) was a dormant company.  We also noted the assertion that it did not employ any CC members or indeed any employees and was not a proper Respondent.  However, the evidence in our possession points to the contrary…
The fact that it is in administrative receivership and a dormant company does not mean that it is the wrong Respondent.  On the evidence before us we are certainly not withdrawing the complaint.”

33.	By a letter dated 23 June, the solicitors for Sheerness sent a copy of documents which, as it had indicated, had been and still were publicly available at Companies House; and in particular attached a copy of the director’s report and audited financial statement for Sheerness for the year ending 31 December 2000.

34.	Those documents revealed the following, first under a “Report of the Directors” of Sheerness:

“Review of Activities
The principal activities of the company are the manufacturing, processing and sale of steel products.
On 3rd April 2000, ASW Sheerness Steel Limited transferred all its business activities to ASW Limited and on the same date ASW Limited signed an agency agreement with ASW Sheerness Limited.  These agreements are effective from 1 January 2000 and, as a result, ASW Sheerness Steel Limited became a dormant company on that date.”

35.	As part of the accounts, under “Notes to the Financial Statements”, there is the usual paragraph relating to Employee information, from which it is apparent that for the year 2000 there were no employees and there is the rubric underneath:

“With effect from 1 January 2000, the activities of ASW Sheerness were transferred to ASW Limited, a fellow subsidiary undertaking.”

36.	Procedures for the preliminary hearing of the issue in the Originating Application as to whether Sheerness, the still only joined Respondent in that case, was a proper Respondent, were afoot.  But by 7 July 2003, as we have indicated earlier, the limitation period ended for the bringing of proceedings in the alternative against the present Respondent ASW Ltd.

37.	For the purpose of that preliminary hearing there was to be disclosure of documents, and the solicitors for Sheerness, who it appears for a short time went off the record, were restored to the record for the purposes of the hearing.  But in the meanwhile there was not only some communication, it seems, with those solicitors, but also direct communication between the Applicant solicitors and Grant Thornton, the liquidators of Sheerness.  By a letter dated 7 August 2003 the Applicant’s solicitors wrote as follows:

“We refer to our telephone conversation this morning, your email and our subsequent telephone conversation having spoken to Messrs Clifford Chance who are not yet able to confirm instructions.  We understand that you are faxing to us various documents which we will need in relation to the hearing.  You have asked to write to us to obtain your consent to a proposal that we will be making to the Tribunal on 22nd [August] which we set out below.
…
The matter in respect of which I require consent are as follows “We consent to ASW Limited (in receivership and liquidation) to be joined as second Respondent and/or be named as Respondent in place of ASW (Sheerness Steel) Limited in the proceedings before the Employment Tribunal … subject to the appropriate leave of the Court being obtained”.
…
It may well be that if we can deal with this matter on a consent basis before the Tribunal so that the attendance of the parties on 22nd is not necessary and that the application can be made by consent.”

This is the first time that there was any such suggestion, and it was being made at the 11th hour prior to the preliminary hearing, which of course had been sought and indeed, it seems, arranged, since May.

38.	The Tribunal made the following finding in relation to that telephone conversation referred to in that letter at paragraph 19.  On 6 August 2003 the Applicant’s solicitor wrote directly to the Respondent’s liquidator, requesting any documentation that would clarify the identity of the employer of the Applicant’s members.  There was a telephone conversation on 7 August 2003 during which the liquidator confirmed that he had a Sale of Business Agreement between Sheerness Steel and ASW Limited dated 1 April 2000, and a copy of the notice that was posted on the company’s noticeboard.  He provided these with a covering letter dated 8 August.  

39.	We have that covering letter and we have the Sale of Business Agreement.  The Sale of Business Agreement, which is in the bundle, does indeed confirm that there was a transfer of business, and it also confirms that such amounted to a transfer for the purposes of the Transfer of Undertaking (Protection of Employment) Regulations 1981, by paragraph 9 of that document.

40.	The solicitors for Sheerness and ASW wrote by letter dated 15 August 2003 in response to a letter sent to them of 11 August 2003 which said this:

“In your letter, you appear to concede that ASW Sheerness Steel Limited (in liquidation) is not the correct Respondent.  We would be grateful if, for the avoidance of doubt and wasted costs you would confirm your position on this point unequivocally.
With regard to your proposed joinder of ASW Limited (in liquidation) to these proceedings, this is a matter governed by Section 130 of the Insolvency Act 1996 …, (the High Court having issued a winding up Order on the petition of your client)…
This makes it clear that whether and on what terms an action may be commenced against ASW Limited (in liquidation) is a matter for the High Court.  It is not a matter in which the Act confers any discretion on the liquidators, nor indeed on an Employment Tribunal…
Unless you are to continue to contend that ASW Sheerness Limited (in liquidation) is the correct Respondent (and we believe there is no sensible basis for doing so), the hearing on Friday, 22 August 2003 will be unnecessary.  We shall not make any application for costs if the application is withdrawn against our client by noon on 21 August 2003, but we reserve our clients’ position if costs are wasted by an unnecessary attendance at the Ashford Employment Tribunal.”

41.	The Applicant, notwithstanding its receipt of the business sale agreement, did not, at that stage, but only on the day of the hearing of 22 August 2003, withdraw its case against Sheerness.  There was an application made for costs by Sheerness at that hearing which was before a Tribunal which was not the same as that which subsequently heard the application against which this is an appeal.  Such application for costs, upon the dismissal on withdrawal by the Applicant of the claim against Sheerness, failed.  The Tribunal stated at paragraph 3:

“The Tribunal concluded that up until 28 July 2003, the position as to who was the correct Respondent was confused.  The Respondent asserted in the Notice of Appearance that it was not the correct Respondent.  However, the Applicant had documents to the contrary.  It was certainly not unreasonable for the Applicant to pursue the case against the Respondent in the circumstances, given that it made a number of efforts to clarify the position.”

42.	Consequently, that Tribunal found that it was not unreasonable for the Applicant to have brought and continued its claim against Sheerness.  Of course, at that stage, the question of joining ASW did not – and indeed pending the consent application to the Companies Court could not – arise.

43.	That application to the Companies Court did not take place for another month and a half.  The Tribunal, in circumstances to which we will briefly refer, did not make any finding in regard to whether, if the application could not reasonably practicably have been brought within the limitation period, the Applicant acted diligently thereafter, because of its conclusion that it could have reasonably practicably have brought the claim within the period.  It made only this finding in relation to the period of time between 8 August 2003, when the Sale of Business Agreement was received, and 3 October 2003, nearly 2 months later, when the application was made to the Companies Court, in paragraph 23 of its Decision:

“Mr Whitehead told the Tribunal that he had some difficulty in obtaining instructions from the Applicant as preparations were being made for the TUC conference.  However, he was able to make an application to the High Court on 3 October 2003.”

As we have indicated, once consent was obtained, the application was issued on 5 November 2003 and it was as a result of that that the preliminary hearing as to jurisdiction was heard by this Tribunal.

44.	Mr Hochhauser QC has put forward his challenge, difficult as it must be because of the important role ascribed to the Employment Tribunal in the authorities to which we have referred, in three ways.  First of all, he submits that the Tribunal did not follow the principals in Simpson and thus applied an incorrect approach.  Secondly, he asserted that the Tribunal reached a perverse conclusion, in essence because it should have ascribed responsibility for the passage of time, at least in part, to delay on the part of the Respondent, and that it was willing to accept that the Respondent’s solicitors did not have easy access to the business transfer agreement, not supplied until August by the liquidator itself, whereas the Tribunal did not exercise a similar approach to its conclusions as to whether the Applicant union had easy access to knowledge on the part of its members.  The third ground of challenge was a specific point related to the conclusion by the Tribunal in paragraph 44 (which we have read) relating to the finding by the Tribunal that, though the necessity of obtaining consent from the High Court was a legal impediment, it was not one that was insurmountable, and could certainly have been overcome within the relevant time limit.  That is a discrete point to which we shall return.

45.	The first two points are in fact intertwined, as in essence Mr Hochhauser was driven to accept in the course of argument.  On the one hand it is necessary to look at 8 August, which is the date upon which the Respondents received the Sale of Business Agreement, and see whether the obtaining of that document was the obtaining of a fact, crucial, important or otherwise, which transformed the state of belief of the Respondent, such that, within Simpson, then for the first time, it was reasonable to say that the Applicant could bring an application to the Tribunal.  On the other hand, in order even to consider that aspect, it was necessary for the Tribunal, and is necessary on review for us, to consider the situation earlier both in order to apply the tests laid down in the authorities, and in particular enshrined by Lord Denning MR in Dedman; and of course if the conclusion is reached that it was reasonably practicable to have presented the complaint before 8 August, and even without the information in the business sale agreement, then that question becomes superfluous.  But the answer is, in any event, provided to the question.

46.	In the context of considering the period before 6 August it will be necessary to bear in mind two matters.  First of all, the submission by Mr Hochhauser QC that this is not a case in which one should apply some kind of hypothetical test, nor should one ask what is or is not reasonable.  The issue which he himself has formulated is whether the Applicant reasonably should have known that the Respondent was a potential party.

47.	The second matter that the Tribunal must bear in mind is that the impossible should not be expected – if not the impossible, certainly the desirable.  It is only another way of putting what he has submitted by way of not looking at the hypothetical, when he submits that, if in fact some other solicitor or some other party would have taken a different step, that does not mean that it was unreasonable for this Applicant not to take that step.

48.	In this context (and it is appropriate to deal with the point now) he submits that the finding by the first Tribunal that it was not unreasonable for the Applicant to pursue the case against Sheerness is relevant, and indeed he would submit determinative, of the question in this case, namely: was it unreasonable for the Applicant not to have joined ASW Limited?

49.	The Employment Tribunal against whom this appeal is brought, the second Employment Tribunal, addressed this very submission made by Mr Troop in paragraph 46 as follows:

“Finally, we were anxious to ensure that we had not contradicted the decision of the Tribunal in August 2003.  We are satisfied that we have not.  They thought the Applicant had not acted unreasonably in pursuing Sheerness Steel; we, on the facts, have concluded that the claim against ASW could have been submitted within the time limit.  We have concluded that these points are discrete and not contradictory; the one does not rule out the other.”

We entirely agree, and of course the clue is that they are not alternative courses.  Indeed, what is suggested by Mr Swift is not that the claim should have been pursued by the Applicant against ASW Limited and not against Sheerness, but that joinder of ASW Limited could and should have been made in addition, and as an alternative Respondent, to the joinder which had taken place in February of Sheerness, before service of the IT3 in response to it.

50.	Against that background we turn to consideration of whether there was an erroneous approach by the Tribunal or whether it was perverse.  We are entirely satisfied that the case cannot be put forward on either basis.  We have indicated the timescale and the central events.  We accept, as did both Tribunals, that there were plainly facts upon the basis of which the Applicant union was entitled to reach the belief it did that the employer was Sheerness, and thus that the bringing, and indeed the continuing, of proceedings against Sheerness was not unreasonable.  It is plain also that the Tribunal below came to the conclusion, with which exception is not sought to be taken by Mr Swift, that the Applicant thought that the employer was Sheerness.
51.	But it appears to us quite unarguable that there ought to have been a joinder of ASW Limited well within the time limit of 3 months, as the Tribunal found.  The most obvious time for doing that was after receipt of the IT3.  This is not a situation in which joinder of the alternative Respondent was optional, was a course that might have been taken; this was a situation in which, particularly as the time limit began to near expiration, it became a matter of fundamental importance, for the protection of the Applicant, for the alternative Respondent to be joined.

52.	The next opportunity was when there was the letter of query from the Employment Tribunal.  Mr Hochhauser has pointed to the equivocal conversation, which we have recited, which took place just after the Applicant union put ASW Limited into liquidation on 29 April.  But even on the basis of that conversation, and indeed the earlier letter which we have already recited of 20 March 2003, even though Clifford Chance were unable to produce any convincing or telling evidence, they remained, on instructions, asserting that the correct Respondent was ASW.  That is, in our judgment, sufficient for any reasonable Applicant, in the position of this Applicant, to have taken steps to join the alternative Respondent.  There was, to use the vernacular, no conceivable downside in doing so.  No extra costs would have been incurred, and indeed if there had ever been any question of costs the fact that the Applicant had been invited by the Administrative Receiver for both Respondents to take that course would have been a complete answer.

53.	In any event, in applying the question which Simpson and Harvey require to be applied, namely whether there were grounds for the bringing of such claim, there plainly were grounds, even at that stage; and again quoting Harvey, and indeed Simpson, on the basis of whether the Applicant may have had a valid claim at that stage, even if he believed that his claim was rather against the other company, not only is it clear objectively that he may have had such a claim, but those very words (indeed stronger than those very words) were used by the Applicant’s solicitors in the letter of 12 June 2003 “It may well be”.

54.	If there were any doubt about the position, it was, in our judgment, completely resolved by the receipt of the Director’s report and accounts on 23 June.  Of course, once again it can be said that this would not necessarily be sufficient to get the Applicant home against ASW Limited.  But they were not needing to be so certain, as we have already indicated, and as Mr Hochhauser QC has conceded.  It was not necessary for them to know that they would win, any more than it was necessary for the Applicant in Simpson.  But it was, certainly, yet further very strong evidence and indication that the wrong Respondent had been joined, and/or that the members of the Applicant union had, at any rate from a date, been employed not by Sheerness who showed no employees in their accounts, but by another company; and that other company being a company with which there had been, according to the Director’s report, contractual arrangements of a kind entered into; and of course in relation to which company there had been a concession and assertion in the IT3 by the administrative receivers.  If there was not sufficient, by 23 June, and if the Applicant union had not at that stage searched the Companies registry itself, there was plainly sufficient by that time.

55.	Consequently, looking to the relevant date of 5 July, it appears to us that at that date by exercising reasonable diligence:

“…the complaint against ASW Limited could and should have been presented.”

That is the finding by the Tribunal, which we have quoted in paragraph 37, and that is a finding which we conclude not to be perverse and to be in accordance with the correct approach, and indeed to be the kind of decision which this Tribunal was well able to make, on the basis of Shaw LJ’s practical good sense.
56.	Mr Hochhauser points out that on the one hand the Applicant’s solicitors were writing a good many letters, all the relevant ones of which we have cited; and on the other hand the solicitors for the Respondents were not being as forthcoming as they might have been.  There is a finding by the Tribunal that there was no obstruction by the Respondent.  But it follows from what we have already indicated, that, quite apart from the question as to whether there was any duty upon the Respondent’s solicitors to do any more than they did, and the fact that on any basis the IT3 concealed nothing, there was, as we have indicated, quite sufficient in the possession of the Applicant’s solicitors to have taken the steps that they, we are satisfied, ought to have taken, on their client’s behalf.

57.	As for the fact that there was a good deal of effort in writing letters, effort in writing letters is to be commended; but it does not mean that there was reasonable diligence in relation to the central question, which is whether the claim should have been presented on the basis of the state of knowledge which the Applicant had, in our judgment, as from March, but certainly as from a later date, had the matter been followed up with reasonable diligence.

58.	What appears to us to have happened is that the Applicant’s solicitors may have taken their eye off the ball of the limitation period, because what they were gathering or seeking to gather was evidence which would lead to certainty of the right company not being sued, when all they needed, and all any reasonable Applicant or its advisers would need, would be, as is set out in Simpson – sufficient grounds to bring a claim.

59.	In those circumstances, we are satisfied that Simpson was correctly applied, because there was no crucial, fundamental or important new fact which arose when, on 7 August 2003, the Applicant’s solicitors were told that the liquidators had and were about to send a document which would further support the case that ASW Limited was the correct Respondent and not Sheerness, and would indicate that ASW Limited was the employer.  The Applicant already had that information.  They did not have it in black and white.  They got it in black and white on 8 August and even then did not, at that stage, immediately abandon the claim against Sheerness.  They were entitled not to do so, as was found by the Tribunal.  That is not the question.  The question is not when should they have accepted one was correct and one was incorrect; the question is when should they reasonably have concluded when was it not reasonably diligent not to have concluded that there should be a joinder of the alternative Respondent, so that the limitation period should not expire.

60.	We are satisfied that both of Mr Hochhauser’s grounds must fail, and that the Tribunal was entirely justified in reaching the conclusion it did at paragraph 37, and that asking Mr Hochhauser’s own question, which is should the Applicants reasonably have known within the period prior to 5 July that the Respondent was a potential party, the Tribunal answered yes, and we conclude the Tribunal was entitled, and indeed right, to answer yes.

61.	As for the issue as to setting this in a hypothetical question and not an actual question, we are not sure that that is a distinction.  The Tribunal asked itself the practical good sense question as to whether, by exercising reasonable diligence, the complaint could have been presented in time, and was satisfied that it could have been.  But in any event we do not consider that this was a hypothetical question at all.  The Tribunal looked at the facts, and we have looked at the facts.  We are satisfied that this Applicant reasonably ought to have presented the claim before 5 July on the basis of the information then known to it and, that although information subsequently crisped up the case and strengthened it, the Applicant was not entitled, and indeed it was not the exercise of reasonable diligence, to have awaited yet more information when it had sufficient information to have brought its claim within the limitation period.  As a matter of public policy a time limit has been set and it is not, in our judgment, sensible to encourage a situation in which a Claimant or an Applicant waits to see what more he can get if he already has enough.  Indeed, the very bringing of the proceedings would have made it the more likely that he could have obtained orders for that which he needed to prove his case.

62.	We turn to the discrete point and that relates to the conclusion in paragraph 44, to which we have referred.  Mr Hochhauser QC has referred us to Palmer, in particular at page 384 in the judgment of May LJ, when he referred to the judgment of Browne-Wilkinson J (as he then was) in Bodha [1982] 200 at 204, when he said:

“ “The statutory test remains one of practicability.  The statutory words still require the industrial tribunal to have regard to what could be done albeit what is practicable in a common sense way.  The statutory test is not satisfied just because it was reasonable not to do what could be done.  Reasonably practicable means ‘reasonably capable’ of being done not ‘reasonable’.”

May LJ then continued:

If, in this dictum, Browne-Wilkinson J was intending to limit the meaning of the phrase “reasonably practicable” to that which is reasonably capable physically of being done, then on the authorities to which we have referred this we think would be too constrictive a construction.
In the end, most of the decided cases have been decisions on their own particular facts and must be regarded as such.  However we think that one can say that to construe the words “reasonably practicable” as the equivalent of “reasonable” is to take a view too favourable to the employee.  On the other hand reasonably practicable means more than merely what is reasonably capable physically of being done – different, for instance, from its construction in the context of the legislation relating to factories…
What, however, is abundantly clear on all the authorities is that the answer to the relevant question is pre-eminently an issue of fact for the industrial tribunal and that it is seldom that an appeal from its decision will lie.”

63.	It is quite clear to us that the Tribunal made such a conclusion of fact.  There is, indeed, nothing insurmountable about a requirement to obtain consent from the Companies Court.  Mr Hochhauser QC in his Skeleton Argument submitted that the Employment Tribunal stated the test too highly (that is, too highly against the Applicant) in paragraph 44, which we have referred to.  He submitted, in paragraph 41 of his Skeleton Argument, that the finding that “the compulsory winding up order … did not prevent it from being reasonably practicable to present the claim within the time limit was perverse”.  He submitted that:

“42.	The Employment Tribunal failed to take into account relevant facts namely that neither the Appellant nor the Appellant’s representative believed that the Respondent was the correct employer…  There was little point in making an application to the High Court for permission unless there was sufficient supporting evidence.
43.	It failed to take account of the fact that absent sufficient supporting evidence, the application risked being unsuccessful.”

64.	We have already concluded that there was abundantly sufficient evidence on which a case could be brought against the Respondent, if only by reference to the case made by the Administrative Receivers in their IT3; but certainly if and when supplemented by the further correspondence and documents to which we have referred, before the end of the limitation period.  It appears to us inconceivable that Mrs Registrar Derrett, had she been asked for consent earlier than she was, and before the receipt of the Sale of Business Agreement, would have declined consent.

65.	But at any rate, in our judgment, this was a decision of fact for the Tribunal to take; and the Tribunal concluded that:

“…it could have been overcome by an application to the High Court at a much earlier stage and certainly within the relevant time limit.”

That is not a decision which puts the matter too high; that is the application of the robustly practical attitude of the Employment Tribunal, that once the liquidation had ensued, and of course that did not occur until more than a month after receipt of the IT3, the need to apply for consent was simply a legislative requirement which could be (and this Tribunal was satisfied would have been) surmounted; and, in effect, that it was part of the overall finding the Tribunal reached that, given the fact that the Applicant should have known that ASW was likely to be the correct Respondent, as set out in paragraph 39, it indeed did know sufficient facts to lead it to conclude that the employer may be ASW Limited, and that in those circumstances it was not taking all reasonably practicable steps, it was not acting reasonably, not to bring such an application for consent.

66.	In those circumstances, all these grounds fail and the appeal is dismissed.