Appeal No. UKEAT/0121/06/MAA

 EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal in London
	On 17 July 2006
Judgment delivered on 28 July 2006

Before
THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)
MS B SWITZER
MRS R A VICKERS

EXEL MANAGEMENT LTD	         APPELLANT 

MRS B LUMB	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellants	
Mr Jonathan Cohen
(of Counsel)
Instructed by:
Exel PLC Legal Department
Ocean House
The Ring
BRACKNELL
Berks
RG12 1AN

	

For the Respondent	
Mr David Massarella
(of Counsel)
Instructed by:
Messrs Morrish & Co
Solicitors
Oxford House
Oxford Row
LEEDS
LS1 3BE

SUMMARY

The Employee lodged three sex discrimination complaints. With respect to the last two complaints, a grievance had been lodged with the Employer and it had been determined but 28 days had not elapsed between lodging the grievance and presenting the claim to the tribunal.  The Employment Tribunal by agreement with the parties heard all the claims before ruling that they had no jurisdiction to hear the last two because of the effect of Section 32 of the Employment Act 2002 it was recognised however that the Employee was still in a position to lodge fresh claims in time.  Accordingly, again with agreement of the parties, the Tribunal made what were stated to be “provisional conclusions” on these matters, finding in favour of the Employee.  The Employee then lodged fresh claims for the last two complaints which were in substantially identical terms to the original claims. The Employers filed a substantially identical response.  The Tribunal refused to allow the Employers to adduce fresh evidence at the new hearing, or to make further submissions.  They took the view that the overriding objective should not permit the Employers to have a second bite of the cherry.  The Employers submitted that the Tribunal was denying them their rights to a proper hearing by a Tribunal properly seized of the claim.  The EAT upheld the appeal and concluded that the Employers were entitled to receive a fresh hearing, although it was open to the parties to agree that evidence received in the previous hearing could be admitted as evidence in the fresh hearing.

THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

1.	This case raises a novel and unusual point. The Claimant before the Employment Tribunal, Miss Lumb, who is the Respondent to this appeal, brought three claims against Exel Management Services Limited, the Appellant, alleging that they had infringed the Sex Discrimination Act.

2.	The first claim was for direct discrimination, it being alleged that she had been sexually harassed by one of the Appellant’s employees. The second claim, also direct discrimination, alleged that there had been discrimination in the way in which her grievance in respect of the harassment had been dealt with, and the third claim was one of victimisation, it being alleged that the Employers had victimised her for submitting her complaint of sexual harassment.  It is not necessary to engage with the detail of these complaints in order to understand the legal issues in this appeal.

3.	At the beginning of the hearing, which was heard on 27th April 2005, the Employers raised the question whether the Tribunal had jurisdiction to hear the last two complaints because the provisions of Section 32 of the Employment Act 2002 had not been complied with.  (It was accepted that the Tribunal had jurisdiction to hear the first complaint.)   Section 32, in so far as is material, is as follows: 

“32(3) 	An employee shall not present a complaint to an employment tribunal under a jurisdiction to which this section applies if-
(a)	it concerns a matter in relation to which the requirement in paragraph 6 or 9 of schedule 2 has been complied with, and
(b)	less than 28 days has passed since the day on which the requirement has been complied with.

32(6) 	An employment tribunal shall be prevented from considering a complaint presented in breach of subsections (2) to (4), but only if –
	(a) the breach is apparent to the tribunal form information supplied to it by the employee in connection with the bringing of the proceedings, or

(b) The Tribunal is satisfied of the breach as a result of his employer raising the issue of compliance with those provisions in accordance with Regulations under Section 7 of the Employment Tribunals Act 1996 (Employment Tribunal Procedure Regulations).”

The requirement in paras 6 and 9 of the schedule is that that the employee must set out his grievance in writing and send it to the employer.

4.	The Employers contended that although grievances had been raised with respect to claims two and three, the twenty eight day period had not been exhausted.

5.	The Employers have accepted that this was and is, a wholly technical matter because although the Employee had not waited 28 days after submitting a grievance before presenting her complaint, this was because the grievance had been lodged and dealt with by the Employers. The purpose of allowing 28 days is plainly to enable the grievance properly to be dealt with: here it was.  There was no dispute that the policy of the Act had been achieved and there was no purpose in waiting further, but nonetheless the Employers were contending that this is what the law requires and that accordingly the Tribunal had no jurisdiction with respect to these two claims.

6.	The Tribunal decided not to consider this jurisdictional point as a preliminary matter, but to hear evidence on all three claims and then rule on the Section 32 point at the end of the hearing. The parties agreed to this. Evidence was heard in connection with all three matters and submissions were made in relation to them. The Employee contended that Section 32 was not a bar to the Tribunal exercising jurisdiction with respect to the latter two claims.

7.	It is not necessary now to rehearse those arguments: they were rejected by the Tribunal and they have not been pursued any further before us. Accordingly, it is accepted that the Tribunal were correct to find that they had no jurisdiction to deal with the latter two claims.

8.	However, in the course of closing submissions the Tribunal raised with the parties the possibility that claims two and three could still be pursued by the Employee because the matter had come speedily before the Tribunal and there was still time for her to lodge a fresh claim: (see Rule 15 of the Employment Act 2002 (Dispute Resolution) Regulations 2004 which extend time limits in certain circumstances, including those applicable here).

9.	The Tribunal in its judgment said this at paragraph 17:
“We explored with the party’s representatives during the course of their submissions to us what the consequences would be for the parties if the Respondent’s point on Section 32 was upheld by us. We raised the possibility that the Claimant may still be in time to submit a fresh, further complaint. If so, the parties would be faced with considerable expenditure of time and money of effectively re-litigating these issues before the Tribunal again. We reminded ourselves of our overriding objective, which is to deal with cases justly and includes, so far as practicable, ensuring that cases are dealt with expeditiously and fairly and saving expense. Given we have heard full evidence and argument on the second and third claims before us, it will lead to a great waste of time and expense if they have to be re-litigated. We therefore invited the parties to consider whether they wished us to express our provisional view on the merits of these two claims, even if we upheld the Respondent’s Section 32 point. After a brief adjournment to consider this issue, both parties confirmed that they would like the Tribunal to express such a view. Following this course also has the potential benefit that should our view of the application of Section 32 subsequently be held to be wrong (and this is novel territory for everyone) then the parties may be saved the trouble and expense of having to return to a Tribunal for the merits of the issues to be decided. We have therefore set our views out on the merits of the claims in the following paragraphs, recognising as we do so that they are in no sense binding on the parties and do not constitute a formal judgment or reasons of the Tribunal.”

10.	Having got the agreement of the parties to this course, the Tribunal found that both the second and the third complaints were sustained. As to the third complaint, they noted that there had been an absence of evidence from the three Managers who might have been in a position to counter various allegations made against them relevant to that complaint.

11.	Following this hearing the Employee did indeed lodge a fresh claim, which in relation to grounds two and three was in substantially the same terms as the original Application. Similarly, the Employers’ Response was in substantially similar terms.

12.	The issue then arose as to how matters should be dealt with by the Tribunal- the same Tribunal which had conducted the first hearing. 

13.	The Employers were content to accept the Tribunal’s finding in relation to complaint two: they were prepared to accept that the evidence that had been heard at the first hearing should be taken as the evidence in relation to the second hearing and they had no different submissions to advance. They were in effect accepting liability with respect to that complaint.

14.	 However, in respect of the third complaint, although they did not suggest that the evidence which had been heard should be heard afresh – in other words, they accepted that the Tribunal ought to treat that evidence as having been given in the course of the second hearing – they wished to adduce further evidence and to make further submissions in order to deal with the complaint. It was submitted that the previous conclusion of the Tribunal was not binding on anybody- indeed that is what the Tribunal had stated- and since the previous decision was taken by the Tribunal without jurisdiction, it could not treat its previous decision as res judicata.

15.	The Claimant, Ms Lumb, objected to this. She contended that it would be contrary to the overriding objective to allow the matter effectively to be re-litigated; the Employers had had full opportunity to adduce all relevant evidence at the earlier hearing. They had accepted, albeit on a provisional basis, that the Tribunal should reach a conclusion on the evidence and arguments advanced, and it would be an unnecessary expenditure of time and cost to permit them to adduce further evidence now. In addition, it would be unjust because the Employers had the benefit now of a decision from the Tribunal which had highlighted certain weaknesses in the original presentation of their case.

16.	The Tribunal concluded that they should have regard to the overriding objective which, among other matters, requires them to deal with cases in ways which are proportionate to the complexity or importance of the issues and to ensure that they are dealt with expeditiously and fairly and saving expense. They accepted that the doctrine of res judicata was inapplicable and that there had been no earlier binding decision. However, they considered that the reality was that the issues had been litigated over three days, there had been no complaint about any injustice in those proceedings, and the provisional views had been expressed with the consent of the parties. They noted that, at its highest, all the Employers could say was that they might have not have put forward their best and fullest case on the merits because they expected to succeed on the jurisdictional point.

17.	The Tribunal referred to Rule 27(2) and 14(2) of the Tribunal Rules, they are as follows:
“Rule 27(2):
Subject to rule 14(3), at the hearing a party shall be entitled to give evidence, to call witnesses, to question witnesses and to address the tribunal.

Rule 14(3):

The chairman or tribunal (as the case may be) shall make such enquiries of persons appearing before him or it and of witnesses as he or it considers appropriate and shall otherwise conduct the hearing in such a manner as he considers most appropriate for the clarification of the issues and generally for the just handling of the proceedings.”

18.	In what the Tribunal recognised were the unusual and particular circumstances of this case, it considered it could fairly and justly dispose of the matter without allowing any further evidence to be given by either party, or indeed allowing any further submissions on the merits of the case. They simply adopted their previous conclusions and it followed, of course, that the two complaints were upheld.

The Grounds of Appeal

19.	Mr Cohen, Counsel for the Appellant Employers (but who did not appear for them at the first hearing) submits that the Tribunal erred in refusing to permit the Employer to adduce further evidence. 

20.	He accepts, as we have indicated, that the jurisdictional point was a wholly technical one and that it might have been preferable for the legislation to have been drafted so as to permit the Tribunal to exercise jurisdiction if the grievance procedure had been concluded within the 28 days, as in this case.  However, he disputes that the justice of the case requires that the Employers should now be precluded from calling further evidence. The Tribunal had made it plain at the first hearing that any conclusion would not be binding and was merely provisional. He submits that what in substance the Tribunal have done is to treat what they called a “provisional” decision as a conditional final determination, that is, a final determination of the case but conditional on the Employee lodging a claim within the relevant time (which it was inevitable in practice that she would do.)

21.	He contends that the Employers have the right, both under common law and Article 6 of the European Convention, to have their case determined by a Tribunal which is acting within its jurisdiction. That right has been denied to them; their agreement to a provisional determination has been converted against their will into an obligation to accept that provisional determination as determinative. 

22.	Although, in theory, the Tribunal accepted that the principle of res judicata could not apply because the original decision with respect to the two matters was outside their jurisdiction, nonetheless they have, in effect, exercised the powers conferred by the Tribunal Rules to ensure that the earlier decisions have precisely the same effect as if they were res judicata. This, he submits, is an improper exercise of the power to regulate the giving of evidence and the making of submissions. He contends that it could never been in accordance with the overriding objective to defeat the right of a party to have a proper hearing by a tribunal acting within jurisdiction, and to be permitted to call all the evidence (at least, if it is relevant evidence) which it wishes to marshal in support of its case.

23.	The Employers were prepared to accept that there was no need to recall witnesses who had already given evidence; they would by agreement admit that evidence.  But that was on the basis that they would be able to adduce such further evidence as they wished and to make submissions once all the evidence had been heard.

24.	The Respondent contends that the Tribunal were right to say that it would be unjust and unrealistic to permit what is essentially a second bite at the cherry to the Employers. They had had the opportunity to put their case in full at the earlier hearing. The flaws in the presentation of their case which were identified by the Tribunal ought not now to be capable of correction in the way envisaged.

25.	Rule 14(3) requires the Chairman to conduct the hearing in a manner which is most appropriate for the “just handling of the proceedings”. It was open to the Tribunal to conclude that the just handling here required that no further evidence should be permitted. That was well within the case management powers of the Chairman, particularly bearing in mind the overriding objective.   It would only be if it were plainly perverse or involved an error of law that this Tribunal should interfere, as emphasised by the Court of Appeal in the case of Noorani v Merseyside TEC Ltd. [1999] IRLR 184.   This was not such a case.

Conclusion
26.	We have every sympathy for the difficulties facing this Tribunal. It plainly wished to adopt a practical procedure; it had witnesses available and it considered that it was desirable that it should explore all the complaints that were before it. Indeed, as it pointed out, had its ruling on Section 32 been successfully the subject of an appeal (although in fact no appeal had been lodged in connection with it) then it would have meant that the decisions on complaints on two and three could stand. 

27.	However, we are satisfied that there was an error by the Tribunal when it refused to permit further evidence to be adduced by the Employers. They have the right to have the case heard by a Tribunal acting within its jurisdiction. 

28.	We agree with the Appellant that in effect the judgment at the first hearing is being treated as res judicata. The parties cannot confer jurisdiction upon a Tribunal by agreement; indeed, they could have done so even had it been made plain that the decision of the Tribunal would be final but subject to the lodging of fresh complaints in time.

29.	 We recognise, of course, the technical nature of the defence. It is most unsatisfactory that Section 32 is drafted in the way it is, which simply excludes jurisdiction even in circumstances where the grievance procedure has run its course.  But however technical the argument, the Employers were entitled to rely on it.

30.	In the end, it seems to us that the Employer is entitled to have the case heard by a Tribunal which has jurisdiction at the time when the case is presented. We can see no objection to the parties putting before the Tribunal agreed evidence and that could include the evidence which has already been given at the previous hearing, but neither party can be obliged to do that.  

31.	Moreover, although we recognise the potential injustice to the Employee if the Employer can now re-run the case with the indication from the Tribunal that it had not adduced sufficient evidence first time round in relation to complaint three, at the same time the Employer never did agree to the Tribunal reaching a decision which to all intents and purposes was a final determination once the fresh application had been lodged.  There could, in truth, be little doubt that it was going to be lodged in time so as to give the Tribunal jurisdiction.

32.	As we have said, Mr Cohen relies upon Article 6. We do not think that really adds very much to the case. Independently of Article 6, the Employers have the right to have the case heard by a properly constituted Tribunal with jurisdiction to hear it.  There is plainly a power, and a wide power, conferred upon tribunals to regulate the witnesses who may give evidence, as the Noorani case shows.  But here the power was exercised not because the evidence was immaterial or irrelevant; it is not disputed that it was potentially of significance.  It was exercised in a way which precluded the Employers from presenting their case before the tribunal which had jurisdiction to hear it.

33.	It may be that matters could have been regularised at the hearing. For example, the matter may have been adjourned for a very short period to allow fresh  claims to be lodged immediately. If the Respondents were prepared to let their original Answer stand then we see no reason why the discrimination case could not have proceeded. (There may be some difficulties with other cases where a statutory conciliation procedure must take effect). Alternatively, the whole hearing could have been adjourned for a period to allow the 28 days to run and for the matter to be re-listed shortly thereafter once the Employee had lodged the appropriate claims.

34.	We think that, with hindsight, it was an error for the Tribunal not to deal with this issue of jurisdiction as a preliminary issue. The evidence relating to it was wholly distinct from the evidence relating to the substantive case.  Having said that, we recognise the very real dilemma facing this Tribunal and they did their best to find a practical solution.

35.	The question is what should now happen. Both parties are content for the matter to go back to the same Tribunal. There is much sense in this since the appropriate remedy can be more satisfactorily determined if the impact of all the complaints, to the extent that they are upheld, are considered by the Tribunal in one go.

36.	It was suggested to us that the second claim, which as we have indicated will not be disputed by the Employers, might not be remitted and that we might uphold the Tribunal’s decision with respect to it. Logically, however, that is not possible. There is no proper decision on the analysis we have made here, so that it has to go back to the Tribunal also. Had the Employers chosen to withdraw the appeal in relation to that complaint then, of course, we would not have had jurisdiction to deal with it.  But the appeal is before us and the matter must be remitted. The parties may then agree that the evidence and submissions which were before the Tribunal at the first hearing can again stand as the agreed evidence to be considered by the Tribunal afresh. Alternatively, the Employers can concede liability in relation to that second complaint, but that is a matter for them.

37.	Similarly, it is for the parties to consider whether they are willing to agree that evidence given at the earlier hearing can stand as agreed evidence in relation to the third complaint but, of course, that cannot bar them from adducing further relevant evidence and making submissions then on all the evidence which is before the Tribunal.

38.	For these reasons therefore, this appeal succeeds and complaints two and three are remitted to the Tribunal to make a fresh determination in the light of the guidance given in this judgment.