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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Sovereign Publications Ltd v Alvarez [2004] UKEAT 0849_03_1608 (16 August 2004) URL: http://www.bailii.org/uk/cases/UKEAT/2004/0849_03_1608.html Cite as: [2004] UKEAT 0849_03_1608, [2004] UKEAT 849_3_1608

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APPEARANCES

 

For the Appellant	MR A CLARKE QC (of Counsel) Instructed by: Messrs Needleman Treon Solicitors Meridien House 42 Upper Berkeley Square London W1H 5QJ
For the Respondent	MR R HARRAP (of Counsel) Instructed by: Messrs Vincent French & Browne Solicitors Kingsway House 103 Kingsway London WC2B 6QX

SUMMARY

Practice and Procedure / Time Limits

Application to extend time for lodging appeal to the EAT against Employment Tribunal's decision: jurisdiction of Employment Tribunal to make an award for unfair dismissal/constructive dismissal where applicant's claim may have been out of time. Whether such want of jurisdiction amounted to an exceptional reason for EAT extending time. Was full and honest explanation for delay put forward by Appellant to enable EAT to exercise its discretion in permitting appeal out of time.


 


THE HONOURABLE MR JUSTICE NELSON

1. This is an appeal, brought out of time, against the decision of the Employment Tribunal sitting at Central London which, on the 5 November 2002 held that the Respondent had been unfairly dismissed and was entitled to compensation in the sum of £52,850.
2. There are two matters which come before the EAT: firstly the application for an extension of time for lodging the appeal against the Employment Tribunal's decision, and secondly the substantive ground of appeal, which is also the ground put forward in support of the application for an extension of time, namely that the award made by the Tribunal was one which it did not have jurisdiction to make as the Respondent's application to the Employment Tribunal for unfair dismissal and constructive dismissal was one day out of time. As the application for an extension of time and the substantive grounds of appeal are so closely interlinked both matters were heard together at the request of the parties.

The facts

3. Mr Alvarez was engaged as a sales manager with Sovereign Publications Limited on 1 January 2001. He records on his Originating Application that when he returned after the Christmas and New Year holidays on 2 January 2002, he was called into the office and told that his employers had replaced him, and that he would need to leave the office immediately as his replacement was due in within the next twenty minutes. He stated that there had been no warning or prior indication that this was to happen. The ET1 which is dated 2 April 2002 concludes as follows:

"I was unable to apply earlier as my ex-employers have been paying me weekly and I could not afford any reasons for them to delay any payments."

4. His employers had written to Mr Alvarez on 2 January 2002 stating as follows:-

"Dear Joseph,

I am writing to confirm our discussion today when I informed you of the Company's decision to terminate your employment with immediate effect and of the reasons for that decision.

As discussed the Company has taken the decision to terminate your employment due to your poor performance in meeting sales targets. As you know your employment and remuneration was agreed on the basis that you would achieve an annual sales turnover of £1.75m - £2.0m in the year to 31^st December 2001. Your failure to meet sales targets has been discussed at numerous meetings over the past year and you have on each occasion been asked to improve your performance. You have assured us time and time again that the sales performance would be improved. Regrettably you have consistently failed to meet the sales targets. The Company has therefore reluctantly taken the decision to terminate your employment.

In accordance with the terms of your employment you are entitled to three months notice of termination of employment to expire on 1^st April 2002. During your notice period you will continue to receive your remuneration on a weekly basis in accordance with your entitlements.

Yours sincerely,

D M Coughlan

Joint Managing Director."

5. The employers did not enter an appearance and the claim was heard on 4.10.02 before the Employment Tribunal at London Central with Mr R A Hemmings as Chairman. The unanimous finding of the Tribunal was that Mr Alvarez's complaint of unfair dismissal succeeded and compensation of £52,850 was awarded. The decision was given by Summary Reasons and at no stage were extended reasons called for, though the Appellants say they were unable to do so as they had not entered an Appearance.
6. In those Summary Reasons the Employment Tribunal found that:-

"The effective date of termination of his employment was 2 January 2002" (Paragraph 1).

7. It is recorded in the description of the issues under paragraph 4 of the decision that :-

"The applicant's positive case is that he was summarily dismissed without any plausible legitimate explanation."

8. The description of the issues notes that the Tribunal considered whether the applicant had been continuously employed for at least one year prior to the termination, but does not state that one of the issues considered was whether the application was in time.
9. In paragraph 6 of the decision it is stated that the applicant was an employee with one year's continuous service prior to 'his summary dismissal on 2 January 2002'.
10. Paragraph 7 of the decision states:-

"7. Further, it is evident from the Respondent's letter of 2 January 2002 to the Applicant that his employment terminated by reason of dismissal, a summary dismissal, on that date."

11. Under the heading of Basic Award in paragraph 10 the effective date of termination is stated as 2 January 2002. Under the heading Compensatory Award under the heading Loss of Earnings it is stated:

"1. Loss of earnings

(i) We find that the applicant's net earnings were £6,000 per month. With the payment in lieu of notice ultimately received by the applicant from the Respondent his losses commenced in April 2002 and have continued beyond."

12. This latter finding refers to the fact that Mr Alvarez was paid by his employers on a weekly basis until 1 April 2002. Such a payment was in accordance with the terms of his employment which entitled him to three months notice of termination to expire on 1 April 2002. It is to be noted that the originating application was dated 2 April 2002 with Mr Alvarez's explanation that he was not able to apply earlier as he could not afford any reasons for his employers to delay their weekly payments.
13. The Appellants sought a review of the Tribunal's decision by letter of the 29 November 2002. They said that they had had no notice of the proceedings and had not received "the originating application nor indeed any other documentation from the Tribunal".
14. The application for a review was heard on 12 March 2003 and refused by the decision of 24 April 2003. The Tribunal considered the correspondence and witness statement from Mr Coughlan a director of the Appellants. The Tribunal made detailed findings as to the chronology as follows:

"2 April 2002 The Originating Application was presented to the Employment Tribunal. It was presented correctly, recording the Respondent's postal address as Meridien House, 42 Upper Berkely (sic) Street, London W1H 5QJ. The Respondent's correct address is Meridien House, 42 Upper Berkeley Street, London W1H 5QJ.

4 April 2002 The Employment Tribunal sent to the Respondent an IT2 Notice of the Proceedings against the Respondent and a copy of the Originating Application. The Tribunal's letter was incorrectly addressed to Merieden (sic) House, 45 Upper Berkley (sic) Street, London W1H 5QJ, the material error being 45 as opposed to 42.

9 May 2002 ACAS sent a customary standard letter to both parties offering their conciliation services – a letter received by both parties.

14 June 2002 No appearance having been entered by the Respondent, the Tribunal wrote to the Respondent advising that the proceedings had been noted as "Appearance not entered". That letter replicated the incorrect address on the Tribunal's earlier letter of 4 April 2002. Nevertheless, it was received by the Respondent, as evidenced by their response of 17 June 2002.

17 June 2002 Mr D Coughlan, one of the Respondent's Directors, faxed a letter to the Tribunal acknowledging receipt of the Tribunal's letter of 14 June 2002, pointing out the erroneous address, requesting that the Respondent be permitted to enter an appearance and indicating that Mr Coughlan would await a response.

26 June 2002 A Notice of Listing of a full merits hearing on 15 July 2002 was sent to the Tribunal to both parties, incorrectly addressed to 45 Berkley Street – albeit that "Meridien" was now correctly spelt. It is apparent that by 26 June 2002 the fax of 17 June 2002 had not by then been attached to the file and the Notice of Listing was issued in ignorance of the communication from Mr Coughlan.

9 July 2002 The terms of the Respondent's letter of 17 June 2002 were brought to the attention of a Duty Chairman who ordered that the process should start again with fresh service of an IT2 Notice of Proceedings and the Originating Application on the Respondent at the correct address.

15 July 2002 The full merits hearing, not having been vacated, came before a Tribunal but was adjourned to allow the action ordered by the Chairman on 9 July to be implemented.

7 August 2002 The decision of 15 July 2002 was promulgated and posted, with the correct addresses, to both parties. Further the IT2 Notice of Proceedings and the Originating Application were also sent, now properly addressed, to the Respondent.

4 Sept 2002 No appearance having been entered by the Respondent, the Tribunal wrote to the Respondent advising that the proceedings had been noted as "Appearance not entered". The letter was correctly addressed.

18 Sept 2002 A Notice of Listing of a full merits hearing on 4 October 2002 was sent by the Tribunal to both parties, correctly addressed.

4 October 2002 The full merits hearing took place. The Respondent was absent from the hearing. Miss Elizabeth Hood, a witness called by the Applicant and a former member of the Respondent's sales team, testified that she had been told in a wine bar on 15 July 2002 by a Mr Bell, (a senior employee of the Respondent who she believed was a Director), that the Respondent was being sued by the Applicant or words to that effect.

15 Nov 2002 The Applicant's complaint succeeded and, having proved losses in excess of the statutory maximum, he was awarded £52,850. The Tribunal's decision was promulgated and posted to the Applicant and the Respondent at their correct addresses.

22 Nov 2002 Solicitors on behalf of the Applicant wrote to the Respondent regarding payment of the outstanding Tribunal award. That letter was properly addressed and was received by the Respondent.

25 Nov 2002 Mr Coughlan on behalf of the Respondent telephoned the Tribunal, informing a member of the Tribunal staff that the Respondent had been unaware of the proceedings.

29 Nov 2002 Solicitors retained by the Respondent submitted an application to review the decision of the Tribunal of 4 October 2002, namely the application which falls for determination today.

11 March 2003 Yesterday, the Respondent's solicitors requested copies of documentation from the Employment Tribunal's file. A clerk faxed to them four requested documents including the Originating Application."

15. On the basis of the documents, evidence and submissions before them the Tribunal then reached the following conclusions:

"(1) The central question is whether we are satisfied on the balance of probabilities that the Respondent did not receive notice of the proceedings leading to the decision.

(2) We readily come to the conclusion that the Respondent did receive notice of those proceedings. The Respondent's position is simply not credible, namely that it received correspondence properly addressed to it from ACAS and the Applicant's solicitors; that it received the Tribunal's letter of 14 June 2002 which was incorrectly addressed to it, i.e. at 45 (not 42) but failed to receive correctly addressed correspondence from the Tribunal to the Respondent of 9 July, 7 August, 4 September, 18 September and 5 November 2002.

(3) We conclude that for reasons only known to the Respondent, it chose not to participate in this litigation and, in doing so, took a calculated risk.

(4) Accordingly, the Respondent has failed to make out the ground upon which it relies for the purpose of a review by the Tribunal of its decision of 4 October 2002. We unanimously refuse the Respondent's application."

16. At the review hearing the Appellants had been represented by counsel and solicitors. On their account they were, by the time of the hearing, in receipt of the Originating Application as this had been faxed to them by the Employment Tribunal on 10 March 2003. They did not however contend that the Originating Application showed on its face that the application was out of time and hence that the Tribunal did not have jurisdiction. Nor was that point raised by anyone else. Nor was it raised on 18 March 2003 when the Appellant's solicitors wrote to the Employment Tribunal complaining that the Applicant had overstated his earnings.
17. By 7 July 2003 however the Appellant's had instructed Mr Andrew Clarke QC who raised the point that the application was on its face out of time and hence the Tribunal had no jurisdiction. This was set out in a letter of 7 July 2003, and in a further letter of 25 July 2003 the Appellant sought an extension of time to appeal out of time, and for the EAT to exercise its discretion to hear the appeal on the basis of the Summary Reasons only. In this letter the factual background and the Appellant's state of knowledge about the documents was asserted. The account was intended to provide a full and honest reason for the Appellant's failure to comply with the time limit for appealing. It was said that the key point was that at no time prior to the expiry of the 42-day time limit did the Appellant see the Originating Application and so did not know and could not have known that there was a jurisdictional issue relating to the Tribunal's decision. Even when they did receive a copy on 11 March 2003 the point was not noticed until the matter went to leading counsel.
18. A copy of the letter of 25.7.03 was sent by the EAT to the Employment Tribunal. On 16 September 2003 the Employment Tribunal replied at the request of the Chairman Mr Hemmings. Paragraph 3 of the letter states as follows:

"The Chairman's notes of evidence record from the outset that an issue for determination was whether or not the Originating Application was within time. The Tribunal determined that the Applicant was continuously employed from 1 January 2001 until 1 April 2002 inclusive and that accordingly the Originating Application had been presented to the Employment Tribunal in time. The reference in the Summary Reasons to summary termination of 2 January 2002 is erroneous; the Applicant from the outset having satisfied the Tribunal that although his dismissal was summarily announced on 2 January 2002, the practical effect of paragraph 1 of the letter, in fact the employment relationship continued for three months, the Respondent honouring the obligation to give three months notice as recorded in the Respondent's closing paragraph of the letter of 7 January. Neither party sought extended reasons."

19. When notice of an Originating Application is sent to a Respondent by the Employment Tribunals the system requires that a copy of the Originating Application, an explanatory booklet and a Notice of Appearance form is sent. In the chronology of the review decision it is noted that on 9 July 2002 the deputy chairman ordered that the process should start again with fresh service of an IT2 Notice of Proceedings and the Originating Application on the Respondent at the correct address. The Tribunal at the Review hearing found that "...the IT2 Notice of Proceedings and the Originating Application were also sent, now properly addressed, to the Respondent." The finding that the Respondent's position was "simply not credible" and that it had chosen not to participate in the litigation and in doing so took a calculated risk, has not been appealed. Those findings are not and cannot therefore be challenged.

The Appellant's submissions

20. The Originating Application on its face shows that the claim was made out of time. As the Tribunal found that Mr Alvarez's effective date of termination was 2 January 2002, his Originating Application should have been presented on or before midnight on 1 April 2002 to be in time for the purposes of section 111(2)(a) of the Employment Rights Act 1996. The finding of the Tribunal as set out in paragraphs 1, 4, 6, 7 and 10 make it absolutely clear that the contract was terminated on 2 January 2002 rather than 2 April 02 and nothing which the Chairman says in his letter of 16.9.03 can affect that conclusion. Indeed it was correct – Dedman v British Building 7 Engineering Appliances Ltd [1974] ILR 53, 59.
21. There is no power to alter a decision of an Employment Tribunal after registration, save firstly, where clerical mistakes and errors have arisen from an accidental slip or omission in the documents containing the decision or the reasons (Rule 12(8) of the Employment Tribunals (Constitution etc.) Regulations 2001 Schedule 1), secondly where a decision has been reviewed by the Employment Tribunal, or thirdly where the decision has been altered by order of a superior court on appeal. None of these applies here, as no clerical mistake or error from an accidental slip or omission has been made, and furthermore the letter of 16 September 2003 cannot amount to a certificate by the Chairman under Rule 12(8). No review of the decision as to the date of termination has been made and there is no appeal or cross appeal in relation to this before the EAT who cannot therefore alter the Employment Tribunal's decision in this respect.
22. It follows, Mr Clarke submits, that the conclusion that the Tribunal had no jurisdiction to make an award because the Originating Application was out of time, is inescapable. In his written submissions, though not elaborated in his oral submissions, Mr Clarke submitted that the decision was indeed a nullity.
23. It is upon this basis alone that the Appellants seek permission to appeal out of time. They do not rely upon any allegation that the Respondent misled the Employment Tribunal. Their explanation for the delay in appealing is, it is submitted, full and honest and even though it may not be completely adequate, the rationale for extending time is compelling. If the appeal does not proceed the Respondent will have been handed a valuable and unwarranted windfall at Sovereign's expense. To permit that to occur by not extending time to appeal would be dealing with the case unjustly.
24. Whilst there is no doubt that delay has taken place and that the Employment Tribunal's findings on review have not been appealed, Mr Clarke made it clear that his clients still contend that they had not in fact received the relevant correspondence. But even if they had, he submits it should be noted that the jurisdiction point was not raised by anyone including the Tribunal and that even though the reasons for the delay may not be entirely adequate they are nevertheless full and honest. The authorities show that even where there is no proper excuse for the delay there may nevertheless be circumstances which are so exceptional that leave to extend time should be permitted. United Arab Emirates v Abdelghafar [1995] IRLR 243 and NGA v Howard [1983] IRLR 440 demonstrate that this is so.
25. Mummery J, as he then was, held in Abdelghafar that the EAT's discretion to extend time will not be exercised unless the Appellant provides a full and honest explanation of the reason for non-compliance which satisfies the EAT that there was a good excuse for the default. Other factors which come into play in the exercise of the discretion include procedural abuse, questionable tactics, intentional delay, the length of the delay, the merits of the appeal and any prejudice or injustice to the successful party. The delay was not properly excused on the facts of that case but there was an exceptional feature which persuaded Mummery J that time should be extended. This was the question of state immunity which the Court itself had a duty by statute to consider and give effect to, and which it appeared it had failed to do.
26. In the NGA case it was held that even where a party had deliberately failed to co-operate with the Court, time could be extended where it appeared a judgment had been obtained on the basis of misleading facts.
27. Both cases emphasise the need for the circumstances for extending time to be exceptional. Each case must of course turn upon its own particular facts but, Mr Clarke submitted, a lack of jurisdiction was exceptional.

The Respondent's submissions

28. The Respondent submitted that Mr Alvarez's contract was terminated by notice expiring on 1 April 2002. This was clear from Mr Coughlan's letter of 2 January 2002. Where the Tribunal referred to summary dismissal in their judgment they were merely reflecting the fact that Mr Alvarez had been told to leave the building immediately. This echoed the first paragraph of the employer's letter of 2 January 2002 whereas the actual termination was by notice expiring on 1 April 2002 pursuant to contract as set out in the last paragraph of the employer's letter of 2 January 2002. Although the Tribunal did not expressly state this conclusion their decision as to remedy is entirely consistent with this rather than with a summary dismissal on 2 January 2002 and the Chairman's letter of 16 September 2003 puts the matter beyond doubt.
29. That letter can either be regarded as a certificate under Rule 12(8) or as providing sufficient explanation of the errors in the decision which did not require a formal certificate. The fact that the employee was paid weekly between 1 January 2002 and 1 April 2002 demonstrates that he was still regarded as being employed until his notice had expired. Both the Chairman and Mr Alvarez thought that the question of the time limit had been expressly considered even though it was not mentioned in the decision.
30. As to discretion the Tribunal's findings on review could not be challenged; they indicated that the explanation for the delay provided by the Appellant was neither full nor honest. It was simply incorrect to say that the Appellant did not see the Originating Application. There were no exceptional circumstances here but substantial delay. The jurisdiction point was not raised at the review when the Appellant was represented by competent counsel and solicitor, and even after they had received the Originating Application on 11 March 2003 the jurisdiction point was not raised until July 2003. It had to be recalled that on the Appellant's case the Respondent was only one day out of time whereas on the Employment Tribunal's findings the claim was within time. An extension of time under section 1.1.1. was therefore not necessary. The Employment Tribunal found that it did have jurisdiction to hear the case, that the Originating Application was lodged in time and that the dismissal was unfair, which had not itself been challenged. There was simply no appeal of any merit for the EAT and the appeal should be dismissed.

Conclusions

31. It is essential that time limits are observed. Only in rare and exceptional cases will time be extended, but the interests of justice may require time to be extended in an exceptional case even if the delay which has occurred is not fully excused. The exercise of discretion involves consideration of all the circumstances.

Delay

32. There must be a full and honest explanation which satisfies the Employment Tribunal that there was a good excuse for the default. Mr Clarke submitted that the explanation may not have been adequate but it was full and honest. We are not so satisfied. The Employment Tribunal found in its review decision that the Appellant's explanation of not receiving several correctly addressed letters was not credible. That is, they disbelieved the Appellant's account. It is correct that this decision was based on written evidence and that Mr Coughlan was not called to give evidence, but the decision has not been appealed. The further review or clarification sought by the Appellants did not challenge these findings. (Letter 7 July 2003).
33. There is no reason to suppose that the Originating Application was not sent out in accordance with normal practice on 7 August 2002 and the Employment Tribunal found that that was the case.
34. The Employment Tribunal's finding that the Appellants chose not to participate in the litigation, has not been appealed and still stands.
35. On the material before us we are not satisfied that we have received a full, honest or adequate explanation which provides a good excuse for the default. We see no reason to view the matter any differently to the Employment Tribunal in so far as receipt of documents, including the originating Application, is concerned.

Jurisdiction

36. The decision on its face finds that the effective date of termination was 2 January 2002. The remedy finding however is also consistent with the determination being by notice expiring on 1 April 2002.
37. The Appellant's letter of 2 January 2002 was itself ambiguous as to when termination took place and it is to be noted that it does not suggest that the termination was summary, even though it was stated to be of immediate effect in the first paragraph, but subject to three months notice expiring on 1 April 2002 in the last paragraph. The ambiguity, which we are satisfied is inherent in that letter, appears to have been decided by the Employment Tribunal concluding that the termination was on 2 January 2002. Nevertheless as stated earlier, the remedy is consistent with a notice termination on 1 April 2002.
38. It is not clear from the decision that the jurisdiction point in relation to want of time had been raised or considered at the hearing. Indeed other jurisdiction points such as continuous employment were specifically mentioned but want of time was not.
39. What then is the status of the Chairman's letter of 16 September 03? We do not consider that it is a certificate under Rule 12(8) as the matters raised in the letter cannot properly be described as clerical mistakes or errors arising from an accidental slip or omission. The alterations which would be necessary to paragraphs 1, 4, 6, 7 and 10 are more major than accidental slips or omissions and, if altered would change one basis of the decision. Nor has the decision been altered by a review, nor are we requested by cross appeal to alter any error.
40. The decision therefore stands, but with it, the Chairman's letter which in effect says that the decision is per incuriam insofar as the date of termination is concerned.
41. We do not consider it appropriate to ignore the Chairman's letter in the exercise of our discretion. We take it into account as indicating what the Employment Tribunal says that it did in so far as determining that the application was not out of time, and what it intended to find in relation to the date of termination. The letter is relevant as to what might have happened had the jurisdiction point been raised by the Appellants at an earlier date, had they chosen to participate in the proceedings.

Overall discretion

42. We take into account the fact that there has not been in our judgment a full and honest explanation of the delay in this case. The Appellant could have entered an appearance but chose not to do so. We are satisfied on the findings of the Employment Tribunal in the review decision that the Appellant did receive the Originating Application with the letter of 7 August 2002 but gave an account which was not credible in saying that they had not received it.
43. The jurisdiction point could have been raised at the review even on the Appellant's own case of receiving the Originating Application for the first time on 10 or 11 March 2003 but the matter was not raised until July 2003. Had the matter been raised when it should have been, when the Originating Application was first received, a specific finding would have been made in relation to it or alternatively the Respondent could have applied for an extension of time of one day. Such an application might have been successful given that the Respondent was then an unrepresented litigant and had not put in an application earlier so as to ensure that he continued to receive weekly payments until 1 April 2002 from his employers. We take that possibility into account when considering all relevant circumstances in the exercise of our discretion.
44. We are quite satisfied that this is not a case in which we ought to extend time. There has not been a full and honest explanation for the delay put forward by the Appellant and the jurisdiction point does not in our judgment fall within that rare and exceptional category which requires the time to be extended even when the delay has not been properly excused. It is a case of a different order to one where the Court itself had an obligation to consider state immunity such as in Abdelghafar or where the Court had been misled and the interests of justice required that that misleading basis for their decision be reconsidered as in NGA v Howard.
45. We have therefore reached the conclusion that time should not be extended even though a jurisdiction point may have been open to the Appellant at the appropriate time. We have taken into account in exercising our discretion that had such a point been raised, the Tribunal would then have had to deal with it, in which case it could have found, on the basis of the employer's letter of 2 January 2002, that this was a notice termination expiring on 1 April 2002, or a case in which an extension of time of one day should be granted. The Chairman's letter of 16 September 2003, gives some added support to our conclusion.
46. We are therefore satisfied that this is not an appropriate case for time to be extended for the lodging of the appeal. It follows that upon this ground alone the appeal must be dismissed.
47. The question of jurisdiction does not arise as a separate issue as the question is not whether it can now be seen from the face of a particular document that the Employment Tribunal did not have jurisdiction, but whether they could have had jurisdiction had the matter been raised at the appropriate time. For the reasons given earlier in this judgment we are satisfied that had the matter been raised at an appropriate time there was material upon which the Tribunal could have concluded that they did have jurisdiction or alternatively they may have felt able to grant an extension of one day which would have enabled the matter to proceed.
48. On either of the bases put forward by the Appellant the appeal fails.
49. No formal application was made for costs by the Respondent at the conclusion of the hearing but a costs schedule was put before the Court. If an application is to be made for costs then it should be submitted in writing by the Respondent within seven days, any response from the Appellant to be served in seven days and the matter can then be dealt with on paper.