Appeal No.UKEAT/0843/04/RN & UKEAT/0853/04/RN

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 26 November 2004

Before
THE HONOURABLE MR JUSTICE RIMER
(SITTING ALONE)

MR IHEUKWUMERE ONWUKA	APPELLANT

(1) SPHERION TECHNOLOGY UK LTD 
(2) RELQ EUROPE LTD 
(3) SYSTEMS TESTING ASSOCIATES LTD 
(4) MR J THOMPSON	RESPONDENTS

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR FRANCIS DAVEY
(of Counsel)	
For the First Respondent and Fourth Respondent	MR DAVID BROOK
(of Counsel)
Instructed by:
Messrs Howell Jones Partnership Solicitors
75 Surbiton Road
Kingston Upon Thames
Surrey
KT1 2AF	

SUMMARY

The two appeals raised questions as to (i) whether the Chairman of an employment tribunal had misdirected herself in relation to an application to amend an originating application, and (ii) as to the jurisdiction of an employment tribunal under The Employment Tribunals (Constitutions and Rules of Procedure) Regulations 2004 to review its own previous orders.

THE HONOURABLE MR JUSTICE RIMER

1.	These are two appeals by Mr I Onwuka, who is a claimant in tribunal proceedings against four respondents.  The respondents are (1) Spherion Technology UK Ltd (STUK) (2) RelQ Europe Ltd (RelQ) (3) Systems Testing Associates Ltd (STA) (4) Mr John Thompson.  

2.	Mr Onwuka commenced employment with STUK as a software quality consultant on 23 April 2001.  His employment ended on 12 February 2003.  He has presented three Originating Applications, which are to be heard together, alleging constructive unfair dismissal, automatically unfair dismissal, race discrimination and victimisation.  Mr Francis Davey appeared before me for Mr Onwuka and Mr David Brook appeared for STUK and Mr Thompson.  The other respondents are not directly affected by the matters which are the subject of the appeals and were not represented, although they did submit a written skeleton argument.

3.	The first appeal is against an interlocutory Decision of a tribunal Chairman, Ms C Hyde, refusing permission to Mr Onwuka to amend his application so as to add a fifth respondent, Spherion Corporation (SC).  SC is a company incorporated in one of the States of the United States of America, and is the parent of STUK.  Ms Hyde’s Decision was made at a case management hearing held on 5 and 6 July 2004, with her extended reasons being sent to the parties on 11 August 2004.  

4.	Mr Onwuka’s Notice of Appeal to this appeal tribunal against that Decision was served on 14 September.  On 13 October, however, the Registrar informed him that she considered that the Notice of Appeal identified no error of law on the part of Ms Hyde, and that this appeal tribunal had no jurisdiction to entertain his appeal (see rule 3(7) of the Employment Appeal Tribunal Rules 1993).  The Registrar’s letter provoked Mr Onwuka into submitting a revised form of Notice of Appeal on 9 November (see rule 3(8)) but that met with no better luck and on 10 November the Registrar informed him that His Honour Judge McMullen QC had concluded that the Notice still identified no error of law and that the appeal had no prospect of success.

5.	Mr Onwuka would still not take no for an answer, and by letter of 9 November, apparently written the day before the Registrar’s letter, he asked for an oral hearing on the matter before a judge (see rule 3(10)).  He asked for his hearing to be expedited as the substantive hearing of his Originating Applications was and is due to commence this Monday, 29 November, today being Friday 26 November.  

6.	Mr Onwuka was given an expedited hearing.  It came on before Mr Justice Burton, the President, on Wednesday 24 November.  By his Order of that day, the President ordered that Mr Onwuka’s application under rule 3(10) be allowed, directed the appeal to be set down for a full hearing and gave directions for it to be heard this morning, not before 11.30.  That meant that the respondents were given less than two clear days notice in which to serve an answer, lodge a skeleton argument and prepare for the appeal.  The rush is of course explained by the fact that today is the last working day before the commencement of the substantive hearings on Monday and the President rightly took the view that the appeal needed to be disposed of today.  

7.	The second appeal is against a Decision of another Chairman, Mr M Zuke, made at a hearing on 5 November 2004, his extended reasons being sent to the parties on 12 November.  Several matters were before him, but the two which are relevant for present purposes were:

(i)	an application to review Ms Hyde’s Order refusing to permit Mr Onwuka to join SC as a respondent; and

(ii)	an application for permission to amend the Originating Applications, or one of them, to include a complaint of detriment in consequence of a public interest disclosure, a similar application having been refused by an employment tribunal chaired by Ms Hyde on 19 April 2004.

Mr Zuke declined to entertain either application, holding that he had no jurisdiction to entertain them and concluding that they amounted to applications to him to review the two prior Orders.

8.	The appeal against Mr Zuke’s Decision also came before the President on 24 November, and his Order also directed that this appeal should proceed to a full hearing before me today.

The first appeal

9.	Mr Onwuka’s case levels allegations of race discrimination against Mr Thompson.  His case is, Mr Davey has explained, that in so acting Mr Thompson was acting on behalf of SC, which is STUK’s US parent.  The application to Ms Hyde to join SC as a respondent was therefore on the basis that it is said that SC could be liable to Mr Onwuka as Mr Thompson’s principal, under section 32 of the Race Relations Act 1976 (the RRA), that section relating to the liability of employers and principals.  It is said to me that, alternatively, SC could also be liable to Mr Onwuka under section 33 of the RRA (aiding unlawful acts) but it is right to notice that that was not part of the argument put before Ms Hyde by Mr Onwuka, who appeared in person on the application before her last July.  Mr Brook, who appears today, also appeared on that occasion for STUK and Mr Thompson, and Mr Dilworth of Counsel appeared for RelQ and STA.

10.	Ms Hyde dealt with and disposed of the application to join SC in paragraphs 20-24 of her extended reasons.  They read as follows:

“20.	[Mr Onwuka] applied to join Spherion Corporation and relied on the principles set out in the case of Cocking v Sandhurst (Stationers) Ltd [1974] ICR 650.  He relied on an e-mail sent to him by Mrs Thompson on 20 December 2002 in which he contended that Mr Thompson indicated that he (Mr Thompson) and Mr Merrick of GlidePath had had their contracts extended by Spherion Corporation who also offered to pay to them a special bonus to undertake the closure of the UK technological division ie [STUK].  The effect of this was to make Spherion Corporation the principal of Mr Thompson….  Also it appeared that Spherion Corporation in the United States were the instructing parties in these proceedings.  [Mr Onwuka] was concerned that he could end up succeeding in his claim against the [STUK] who would then be a mere shell.  He relied on a letter dated 11 December 2003 from Messrs Howell Jones acting for [STUK and Mr Thompson] in which they said that they had to get instructions from the client who was the parent company.  Further the parent company was funding the litigation.
21.	On behalf of [STUK and Mr Thompson] the application was resisted.  It was submitted that relief was not sought against Spherion Corporation which was the necessary requirement under the Rules (Rule 19 of the Employment Tribunals Rules of Procedure) before it was appropriate to join a Respondent.   There was no contractual nexus between the [Mr Onwuka] and Spherion Corporation.  [Mr Onwuka] was in effect trying to be proofed against the insolvency of the appropriate Respondent.  There was no contract of employment between the [Mr Onwuka] and Spherion Corporation and it was not alleged that Mr Thompson was acting pursuant to employment with the Spherion Corporation of the USA.  [Mr Onwuka] claimed that Mr Thompson was the "eminence grise" for [STUK]. 
22.	Mr Dilworth made no further submissions. 
23.	[Mr Onwuka] was given the opportunity to reply to the submissions of Mr Brook and Mr Dilworth.  He relied on vicarious liability.   He was intending to allege that the Spherion Corporation wanted Mr Thompson to close down [STUK].  They transferred everyone else and stopped trading and needed to remove [Mr Onwuka].  Mr Thompson was on a bonus to effect the shut down and his actions were predicated on what Spherion Corporation wanted done.  Given that Mr Thompson’s contract was with Spherion Corporation, Mr Onwuka submitted that if in the course of performing his contract, [Mr Thompson] discriminated against [Mr Onwuka], then Spherion Corporation were liable.
24.	The Tribunal accepted the submissions made on behalf of the Respondents and declined to add Spherion Corporation as a Respondent.”

11.	The grounds of appeal against that Decision are that Ms Hyde’s reasons for refusing to join SC were inadequate to explain why Mr Onwuka’s application failed.  They did not identify which of the Respondents’ submissions were accepted or why, or why those submissions or any of them were regarded as ones which ought to carry the day.  It is also said by Mr Davey that each of the submissions advanced by the respondents was manifestly unsound and that it followed that in accepting them and in relying upon them in directing herself as she did, Ms Hyde had misdirected herself.  

12.	In elaboration of the grounds of appeal, Mr Davey’s submission was that none of the submissions advanced by the respondents justified the rejection of Mr Onwuka’s application.  As for the respondents’ submission that no relief was being sought against SC, that was simply wrong.  It is clear from what Ms Hyde said in paragraph 23 that Mr Onwuka was seeking to fix SC with liability, and that was recognised by the respondents by their own submission, recorded in paragraph 21, that Mr Onwuka was “in effect trying to be proofed against the insolvency of the appropriate Respondent”.  As for the respondents’ submissions that there was no contractual nexus between Mr Onwuka and SC, no contract of employment between them and that it was not alleged that Mr Thompson was acting pursuant to employment with SC, those submissions were correct but irrelevant.  None of those points was relevant to Mr Onwuka’s claim against SC under section 32, so that proof of none of them would, by itself, provide an answer to his claim.  

13.	As for the point that the thought behind the proposed joinder of SC was the wish to be “proofed against the insolvency of the appropriate Respondent”, Mr Davey submitted that this too was irrelevant to the exercise of the discretion that Ms Hyde was asked to exercise.  The background was that STUK had ceased to trade and Mr Davey squarely accepts that Mr Onwuka had become concerned that it could not satisfy any liability he might establish against it.  Why, however, if he has an arguable claim against a related company which might also be made severally liable to him, should he not be entitled to join that company as a respondent?  It is usual for claimants to want to join respondents who will be good for any liability that may be established, and there is nothing wrong with that.  None of the submissions advanced by the respondents had any merit or substance in them as a matter of law, and there was no proper basis on which Ms Hyde could properly accept any of them.

14.	In these circumstances Mr Davey submitted that Ms Hyde’s Decision was simply wrong.  Without explaining her reasoning for doing so, she accepted submissions which were each either wrong or irrelevant.  Had she considered the submissions properly she could only have come to that conclusion and she would not have accepted them.

15.	I heard Mr Brook in opposition to this appeal, but I did not understand him to advance any very positive arguments in defence of the Decision made by Ms Hyde beyond saying, in effect, that she had correctly considered the matter in the round and that it was a proper exercise of her discretion.  

16.	I agree with Mr Davey’s criticisms of Ms Hyde’s reasoning essentially for the reasons he has given and which I have explained.  In my view, Ms Hyde exercised her discretion with regard to the requested amendment by reference to considerations which were either wrong or irrelevant, and apparently by ignoring those which were correct and relevant.  It follows that she materially misdirected herself and her Decision must be set aside.  

17.	Mr Davey does not ask me to exercise the discretion myself, and permit an amendment, because I indicated in the course of discussion that as the form of the amendment has not yet been reduced to writing and is not before me, I do not know precisely what is being sought and I am not prepared to give a general permission.  Mr Davey did not press me on that, recognising that the ordinary convention is that a written form of any amendment which is sought to be made ought to be produced to the tribunal to which the application is made so that the tribunal can see its precise terms.  He invited me simply to allow the appeal and remit the amendment application to the employment tribunal hearing the substantive application.  I will do so.

18.	I will therefore allow the appeal, set aside paragraph 8 of Ms Hyde’s Order of 6 July 2004 and remit to the employment tribunal hearing the substantive applications the rehearing of Mr Onwuka’s application to add SC as a respondent.

The second appeal

19.	The starting point for a consideration of this appeal is the Decision of the employment tribunal made on 19 April 2004, the extended reasons for which were sent to the parties on 28 May.  Those reasons dealt with a number of matters, but the relevant one is the application to amend the Originating Application to add a claim for the suffering of an alleged detriment in consequence of the making of a public interest disclosure.  Mr Onwuka’s assertion was that there had been a protected disclosure on 28 January 2003 and that the detriment he complained of was, as Ms Hyde put it in paragraph 42, “the injunction and action for breach of contract against him on 5 February 2003”.  

20.	On or about 25 August 2004 Mr Onwuka applied to the employment tribunal for a review under rule 13 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001 of Ms Hyde’s Decision refusing to permit the public interest disclosure amendment or to permit the joinder of SC, the latter of course having been the subject of the first appeal which I have now disposed of.  He also sought leave to amend his Originating Application to add an amendment of the like nature as that refused in April, but not apparently identical to it.  

21.	As regards the latter application Mr Onwuka had, or claimed to have, further evidence which, so he said, added weight to the justification for the claimed amendment.  Mr Davey characterised that as involving a change of circumstances since the matter was before the tribunal in April.  Mr Brook did not concede that there was any such change of circumstances, or at any rate any material change of circumstances, but accepted, as I understood it, that the matter was arguable although it was not an argument which took place before me.  Once again, the precise form of the amendment which was sought to be made has not been reduced to any writing that I have seen, and I have not been asked, assuming that I were to allow this appeal as well, to authorise any particular amendment myself.  

22.	The hearing of Mr Onwuka’s application took place before Mr Zuke, a Chairman, on 5 November.  By then the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 (the Rules) were in force and it was common ground between the parties that those Rules applied to the exercise that Mr Zuke had to perform.  Mr Zuke plainly regarded the applications before him as requiring a review of the two prior Orders.

23.	Mr Zuke refused to review either of the previous Orders and so refused either to permit the public interest disclosure amendment or the joinder of SC.  He referred to the hearing of 19 April and its outcome and to the fact that Mr Onwuka had launched, but did not pursue, an appeal to this appeal tribunal against the refusal of his then amendment application.  He also referred to the later hearing before Ms Hyde in July, when she refused to permit the joinder of SC.  He recorded that, as I have said, Counsel agreed that the matters before him were governed by the Rules.  He then referred to rules 10, 28, 34 and 36.  He concluded he had no jurisdiction to entertain the applications and gave his reasons for that conclusion as follows:

“9.	Mr Davey submitted that rule 10 gave me the power to reconsider both matters which were the subject of the orders made by Ms Hyde.  He submitted that under rule 10(n) I had the power to revoke Ms Hyde’s orders refusing leave to add a complaint under section 103A ERA, and refusing leave to join Spherion Corporation as a Respondent, and that if I decided to revoke those orders, I could consider the applications afresh under rule 10(q).
10.	I am unable to accept that submission.  The powers in rule 10 are said to be “subject to the following rules” that is to say they are governed by among other rules, the rules concerning the power to review judgments and decisions.  Rule 34 sets out the judgments and decisions which are capable of being reviewed.  The orders made by Ms Hyde do not fit into any of the categories set out in rule 34(1).  It is clear that her orders could not possibly fall within rule 34(1)(a) or (c).  the orders do not fall within rule 34(1)(b) because they are not judgments as defined in rule 28.  Rule 34(1) expressly limits the type of decision or order that can be reviewed: “other decisions or orders may not be reviewed under these rules.”  In my view Mr Davey’s construction of regulation 10 is an impermissible attempt to circumvent the limits on the power of review set out in rule 34.
11.	I conclude that I do not have power to review the orders made by Ms Hyde, and for that reason I refuse the applications for review.”

24.	With respect, I regard Mr Zuke’s conclusion as to the limits of his jurisdiction in these respects as involving a misinterpretation of the Rules.  Rule 10(1), headed “General power to manage proceedings”, and in a section of the Rules headed “Case management”, provides as follows:

“10.(1)  Subject to the following rules, the chairman may at any time either on the application of a party or on his own initiative make an order in relation to any matter which appears to him to be appropriate. Such orders may be any of those listed in paragraph (2) or such other orders as he thinks fit. Subject to the following rules, orders may be issued as a result of a chairman considering the papers before him in the absence of the parties, or at a hearing (see regulation 2 for the definition of "hearing").”

Rule 10(2) then opens with the words:

“(2)	  Examples of orders which may be made under paragraph (1) are orders – “

and there then follow, in subparagraphs (a)-(t), a wide-ranging list of examples of typical case management orders, subparagraphs (n) and (q) of which read:

“(n)  varying or revoking other orders;
  …
  (q)  giving leave to amend a claim or response;”

25.	Rule 11, headed “Applications in proceedings” provides in paragraph (1) as follows:

“(1) At any stage of the proceedings a party may apply for an order to be issued, varied or revoked or for a case management discussion or pre-hearing review to be held.”

26.	Rule 12, headed “Chairman acting on his own initiative”, is one that provides that a chairman may make orders on his own initiative.  Rule 12(2) provides, so far as material:

“(2) Where a chairman makes an order without giving the parties the opportunity to make representations  - 
…
(b) a party affected by the order may apply to have it varied or revoked.”

27.	Rules 28-32 are in a section headed “ORDERS, JUDGMENTS AND REASONS”.  Rule 28 provides, so far as material, as follows:

“Orders and judgments
    28.(1) Chairmen or tribunals may issue the following  - 
(a)	a "judgment", which is a final determination of the proceedings or of a particular issue in those proceedings; it may include an award of compensation, a declaration or recommendation and it may also include orders for costs, preparation time or wasted costs;
(b)	an "order", which may be issued in relation to interim matters and it will require a person to do or not to do something.”

28.	It will be noted that a direction made by a tribunal or a chairman will only be an “order” within the meaning of Rule 28 if it is of a mandatory or a prohibitory nature.  It appears to follow that neither of the Orders which Mr Onwuka was inviting Mr Zuke to review was an “order” within that meaning.  They merely refused permission to do something but did not order Mr Onwuka either to do or not to do anything.  Quite how Ms Hyde’s disputed rulings should be characterised under the Rules appears to me to be a bit of a mystery, although I have difficulty in believing that they were not in fact “orders” within the meaning of that word as used in rule 10(1), even if they are not “orders” within the meaning of rule 28(1).  For example, rule 10(2)(q) in terms confers a power on a chairman to give leave to amend the statement of case and such leave is plainly an “order” within the meaning of rule 10(1), if not within the meaning of rule 28.  

29.	Rule 29 is headed “Form and content of judgments”.  Rules 33-37 are in a section headed “POWER TO REVIEW JUDGMENTS AND DECISIONS”.  Rule 33(1) provides, so far as relevant for the present purposes, as follows:

“Review of default judgments
“   33.(1)  A party may apply to have a default judgment against or in favour of him reviewed. An application must be made in writing and presented to the Employment Tribunal Office within 14 days of the date on which the default judgment was sent to the parties. The 14 day time limit may be extended by a chairman if he considers that it is just and equitable to do so.
(2)  The application must state the reasons why the default judgment should be varied or revoked….
(4)  The chairman may  - 
(a)	refuse the application for a review;
(b)	vary the default judgment;
(c)	revoke all or part of the default judgment;
(d)	confirm the default judgment;
and all parties to the proceedings shall be informed by the Secretary in writing of the chairman's judgment on the application.”

I cite the opening words of rule 33(2) and rule 33(4) simply to illustrate the obvious, namely that a power to “review” an order includes a power to “vary or revoke” it.  Those latter words are the words to be found in rules 10(2)(n), rule 11(1) and rule 12(2)(b).  

30.	Rule 34 then provides, so far as material:

“Review of other judgments and decisions
   34.(1) Parties may apply to have certain judgments and decisions made by a tribunal or a chairman reviewed under rules 34 to 36.  Those judgments and decisions are  - 
(a)	a decision not to accept a claim, response or counterclaim;
(b)	a judgment (other than a default judgment but including an order for costs, expenses, preparation time or wasted costs); and
(c)	a decision made under rule 6(3) of Schedule 4;
and references to "decision" in rules 34 to 37 are references to the above judgments and decisions only.  Other decisions or orders may not be reviewed under these rules.”

31.	Rules 35 and 36 are respectively headed “Preliminary consideration of application for review” and “The review”.  I need not quote them.

32.	Mr Zuke’s view, as appears from his reasoning which I have earlier cited, was that the only reviewing power conferred by the Rules is that conferred by rule 34.  He held that Ms Hyde’s Orders were not of a type falling within rule 34(1) and pointed to the words at the end of that subsection reading “Other decisions or orders may not be reviewed under these rules.”  If those last words are read in isolation and without reference to the rest of the rules to which I have referred, it is easy to see why Mr Zuke came to the conclusion that he did.  He appears to have interpreted “these rules” as meaning the Rules as a whole, and as thus imposing an absolute bar on the review of any orders other than those falling within rule 34(1).  

33.	A consideration of the Rules as a whole shows, however, in my view, that that interpretation is incorrect.  The various references I have given show that rules 10, 11, 12 and 33 all provide for the variation or revocation of prior orders or, therefore, for a review of them.  If the words in rule 34(1) reading “Other decisions or orders may not be reviewed under these rules” mean what Mr Zuke held them to mean, how are the review powers in those other rules to be explained?  They plainly confer powers to vary or revoke, or in other words to review, orders of a type which will not fall within rule 34(1).  The answer to this point is in my view clear, and it is to be found in the opening sentence of rule 34(1): it is that the reference to “these rules” in the sentence on which Mr Zuke relied is a reference simply to rules 34-36.

34.	In my judgment, therefore, Mr Zuke was in error in holding that the sole power to review is that conferred by rule 34.  Were Mr Zuke’s interpretation correct, the result would be surprising.  It would mean, for example, that an employment tribunal could never vary or revoke an interlocutory direction of a nature falling outside the type of orders referred to in rule 34(1), for example, as to the date it had fixed for the substantive hearing.  Wherever it turned out that such an order needed varying or revoking, the parties would need to appeal to this appeal tribunal, usually, no doubt, requiring an extension of time for doing so, but of course unless the making of the earlier order had involved some error of law, this tribunal would have no jurisdiction to entertain the appeal.

35.	I consider, therefore, and with respect, that Mr Zuke adopted too narrow a view of the jurisdiction conferred by the Rules.  Having said that, I find it unnecessary to express any final view on whether he had a jurisdiction to review Ms Hyde’s refusal to permit the joinder of SC as a respondent.  My provisional view, however, is that he would at least have had jurisdiction to entertain such an application and to consider a renewed application for an amendment.  I would regard that jurisdiction as conferred by rule 10(2)(n) and (q), although in the absence of any material change in circumstances I would not ordinarily expect a chairman to exercise it.  I would expect him to take the view that any challenge to the earlier Decision should be by way of an appeal to this appeal tribunal.  Since, however, I have allowed Mr Onwuka’s appeal against Ms Hyde’s July Order, Mr Zuke’s treatment of that matter when it was before him is no longer a live issue.  I have, as explained, made an Order on the first appeal remitting that matter to the employment tribunal for reconsideration.

36.	As regards the application to amend so as allege the detriment in consequence of the public interest disclosure, similar considerations apply.  Again, I consider that Mr Zuke had jurisdiction to entertain the matter on its merits, but again, absent any material change in circumstances, I would not ordinarily expect a chairman to exercise the jurisdiction.  In the present case, however, Mr Onwuka’s application with regard to this particular amendment is said to have been supported by the emergence of further material evidence, being evidence which is said to involve a material change of circumstances since the matter was before the Hyde tribunal in April.  If that is right, then I would consider that the employment tribunal would not only have a jurisdiction to revisit the matter, but might well consider that it should proceed to consider it on its merits.  

37.	Since I have come to the conclusion that Mr Zuke misdirected himself as to his jurisdiction with regard to the latter amendment, I propose to allow Mr Onwuka’s appeal against paragraph 1(i) of Mr Zuke’s Decision of 5 November 2004 and remit the amendment application there referred to for rehearing by the employment tribunal hearing the substantive applications.