Appeal No. UKEAT/0618/05/MAA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 20 February 2006

Before
HIS HONOUR JUDGE J BURKE QC
(SITTING ALONE)

MR J M CLIFFE	APPELLANT

KSS LIMITED	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MS D CLIFFE
(Representative - Wife)	
For the Respondent	MR N SIDDALL
(Of Counsel)
Instructed by:
Messrs Halliwells
Solicitors
1 Threadneedle Street
London
EC2R 8AW	

SUMMARY

Topic numbers:  11A, 8C, 8W

The Tribunal decided that there was no jurisdiction to hear the employee’s unfair dismissal claim because he did not have employment in Britain, per the Court of Appeal in Lawson v Serco.  In the light of the House of Lords decision, appeal allowed and issue remitted to same Tribunal which is to decide whether further evidence should be admitted.  The employers argued that the employee was estopped or barred from relying upon the law as set out by the House of Lords because he had (as they had) chosen not to accept the offer of an adjournment until the House of Lords made their decision (15 months!).  That argument was rejected.

HIS HONOUR JUDGE BURKE QC

The nature of this Appeal
1.	This is an appeal against the rejection by the Employment Tribunal sitting at Manchester, Mr Robertson as Chairman sitting alone, of Mr Cliffe’s claim that his employers, Knowledge Support Systems Limited, had unfairly dismissed him.  That decision was sent to the parties on 9 December 2004.  Mr Cliffe’s employment by his employers, whom I shall call “KSS”, terminated on 8 December 2003.  The reason for the termination was redundancy.  He was paid a redundancy payment calculated on the basis of UK law and a termination package identical to that which he would have received had he been a redundant employee working in the United Kingdom.  He was at a time and had, from about the spring of 2001, been working in the United States of America.  

2.	His unfair dismissal claim was based on alleged unfair selection for redundancy.  He also brought an equal pay claim and various other claims.  The unfair dismissal claim was dismissed as part of the Chairman’s decision upon a Pre-Hearing Review at which two issues were to be determined.  The first was whether Mr Cliffe was, at the effective date of termination of his contract of employment, employed by KSS or by a separate USA company, a subsidiary of KSS called Knowledge Support Systems Inc, which was incorporated in New Jersey.  The second was whether the Employment Tribunal had territorial jurisdiction to consider Mr Cliffe’s various claims.

3.	At the outset the decks were cleared by a decision on the part of the Chairman that only the unfair dismissal and equal pay claims were to be pursued and all other claims were dismissed.  They were dismissed because, in discussion with the parties, it emerged that those other claims, whatever they were, were not being pursued; they were dismissed on withdrawal.  The Pre-Hearing Review then took place over three days during which a considerable volume of oral and documentary evidence was considered.  The Chairman’s first conclusion was that Mr Cliffe had remained employed at all material times by KSS i.e. the UK Company.  KSS has not, so far as I am aware, appealed against that conclusion.  Having reached that conclusion, the Chairman then decided, basing himself on the test propounded in Lawson v Serco [2204] IRLR 206 CA, that there was no jurisdiction in the Tribunal to hear the unfair dismissal claim.  However, basing himself on authorities appropriate to the claim under the Equal Pay Act 1970, he concluded that there was jurisdiction in the Tribunal to hear Mr Cliffe’s equal pay claim.  

4.	I am told that that equal pay claim was heard towards the end of 2005 and has been dismissed although there are, apparently, current review proceedings in relation to that dismissal, oddly enough sought by KSS who won.  Mr Siddall, who has appeared for KSS today, has explained to me why that is so; and I need make no comment about it, having recited these last events only as a matter of history.

5.	Mr Cliffe’s appeal against the Tribunal’s decision that his unfair dismissal claim was one which had to be dismissed for want of jurisdiction has had a chequered history.  There were difficulties because the Notice of Appeal was presented out of time; and when presented the Notice of Appeal raised issues of bias and/or misconduct on the part of the Chairman.  But all of those difficulties were addressed by and have been the subject of decisions by HHJ McMullen QC who, on 8 November 2005, by an Order pursuant to Rule 3 of the Employment Appeal Tribunal Rules brought to a halt all of the grounds of appeal except those which go to the territorial jurisdiction of the Employment Tribunal to hear the unfair dismissal claim.  All questions of bias and misconduct are no longer live.  

The Preliminary Point
6.	At the outset of the appeal, limited as it is in its scope by HHJ McMullen QC’s Order, there arises a preliminary point.  Mr Siddall on behalf of KSS submitted in his skeleton argument that Mr Cliffe, in his Notice of Appeal or amended Notice of Appeal, had not set out as a ground of appeal that the Court of Appeal’s decision in Lawson v Serco was wrong.  He submitted that, if and in so far as Mr Cliffe needs now to and seeks to amend his Notice of Appeal, he should not be permitted to do so.  

7.	Today Mr Siddall has not advanced that submission but has advanced a different submission which is also canvassed in his skeleton.  The point which Mr Siddall has taken is that, at the hearing before the Chairman, the parties were given the option of delaying their submissions on the unfair dismissal jurisdiction issue, because it was known in November 2004 that Lawson v Serco was going to be heard by the House of Lords, until the House of Lords had heard and decided Lawson v Serco on appeal from the Court of Appeal; but the parties chose not to do so.  Mr Siddall submits that, having chosen not to do so, in effect Mr Cliffe, or Mrs Cliffe, who was representing him, (it matters not which for present purposes), conceded that the law was as it was stated to be in the Court of Appeal in Lawson v Serco and that it would be inequitable now or it would be a wrong exercise of my discretion now to allow Mr Cliffe to contend that the law has changed as  a result of the decision of the House of Lords; and the issue of jurisdiction should now be approached on that basis.  Mr Siddall relies on the well-known decision in Jones v Governing Body of Burdett Coutts School [1998] IRLR 521 as indicating that a new point can only be taken in an appellate court in very narrow circumstances; and, similarly, a litigant should not be allowed in the Employment Appeal Tribunal to go back on a concession earlier made.

8.	I do not accept these submissions.  Had Mr Cliffe been professionally represented before the Tribunal I would have expected his representative formally to have reserved the right to challenge the law as set out in the decision of the Court of Appeal in Lawson v Serco and then to proceed with his argument, as indeed he would have been obliged to, on the basis that that decision set out what the law was, at least for the time being.  I accept Mr Siddall’s account to me that Mr and Mrs Cliffe did not formally reserve the position as a professional advocate would have done.  That is not in the slightest bit surprising; one would not expect a litigant in person to do that; but the fact that there was no reservation does not, in my judgment, lead to the conclusion that there was a concession that the law was as stated by the Court of Appeal in Lawson v Serco and would continue to be as stated by the Court of Appeal in Lawson v Serco.

9.	The decision of the Chairman records that it was not only Mr and Mrs Cliffe who chose, when offered a choice, not to have a decision on the jurisdictional issue adjourned to await the decision of the House of Lords; KSS took the same view and made the same choice.  It was a sensible choice for them to make.  It was a pragmatic choice and one which, I suspect, most people would have made in the circumstances, whether professionals or not.   Of course, it may be that KSS made their choice because they thought it was unlikely that the law would become more favourable as a result of the decision of the House of Lords; but that does not matter.  It was known at the time, as is expressed in the judgment, that a long period was bound to pass before any resolution would appear from the House of Lords.  It seems to have been expected that the decision would be made in the autumn of 2005.  In fact it is now known that there was no decision until late January 2006; so that the parties, if they had agreed to adjourn this issue, would have had to wait for well over a year from the time when the matter was to be heard; and I do not take the view that Mrs Cliffe on her husband’s behalf should now, because of the choice which was not unnaturally taken when the possibility of an adjournment was canvassed, be barred from arguing, now that the law has changed, that she is entitled on her husband’s behalf to take advantage of that change.

10.	I do not take the view that there was any concession; and even if there was, the law having changed, it seems to me that it is just that Mrs Cliffe on her husband’s behalf should be entitled to take the benefit of that change.  

11.	Mr Siddall’s skeleton also takes the point that, if the Notice of Appeal had not been delayed, this appeal would have come on before the House of Lords decision in Lawson v Serco; however that is a point which he has not renewed today; I take it that it is not being pursued; were it to have been pursued I would have rejected it.  The point may, historically, on analysis of the way in which time has passed, be correct; but once leave to appeal out of time had been given, any changes in the law occurred between May and the hearing of the appeal cannot be ignored.  This appeal has to be considered on the basis of the law as stated in the House of Lords and not on any artificial basis, as if the House of Lords had never decided the matter. 

The Substantive Issues
12.	I therefore move on to the substantive arguments before me, having rejected Mr Siddall’s preliminary point for the reasons I have given.   The principle embodied in the Court of Appeal’s decision in Lawson v Serco was set out in the judgment of Pill LJ, in the passages quoted by the Tribunal Chairman at paragraphs 34 and 35 of his judgment.  In short the test, as propounded by the Court of Appeal, was whether the relevant employment was employment in Great Britain.  It was on the basis of that test that the Chairman concluded in paragraph 37 of his judgment that there was no jurisdiction.  He said:

 “I have reached the conclusion that for the purpose of the unfair dismissal jurisdiction under section 91 the Claimant was not employed in Great Britain and therefore the Tribunal has no jurisdiction to consider the unfair dismissal claim.”

13.	That test or principle has been swept away by the decision of the House of Lords.  It is no longer necessary, if jurisdiction is to be established, for it to be shown that the employee was employed in Great Britain.  The jurisdiction issue is a question of which has to be answered on the facts of each individual case.  (See paragraphs 23 and 24 of the speech of Lord Hoffman in the House of Lords, with which Lord Woolf, Lord Roger, Lord Walker and Baroness Hale agreed.)   However Lord Hoffman, having indicated that there were no all embracing rules or tests as to the jurisdictional question which arises under section 94(1) of the 1996 Act, went on to set out some guidelines.  

14.	He said, firstly, that the standard normal or paradigm case of the application of section 94(1) was that of an employee who was actually, at the effective date of termination of his employment, working in Great Britain; see paragraphs 25 to 27 of his speech.  

15.	Secondly, he said that in the case of a peripatetic employee it is valid and helpful to consider where that employee is based; see paragraphs 28 to 30.  

16.	At paragraphs 35 to 40 of his speech Lord Hoffman addressed the case of expatriate employees.  He said that the concept of a base, which is useful to locate the workplace of the peripatetic employee, provides no help in the case of an expatriate employee; see paragraph 35; he went on to say, in paragraph 36, that, although the circumstances would have to be unusual for an employee who works and is based abroad to come within the scope of British labour legislation, he believed that there were some employees who did come within that scope.  He suggested that no precise definition could be imposed upon the many possible combinations of factors which might lead to a decision in an expatriate employee’s favour or against him; but he said, at paragraph 37, that it would be unlikely that someone working abroad would be within the scope of section 94(1) unless he was working for an employer based in Great Britain.  That alone would not be enough; something more, he said in paragraph 38, might be provided by the fact that the employee is posted abroad by a British employer for the purposes of a business carried on in Great Britain.  Lord Hoffman drew a distinction between a case such as that of Financial Times v Bishop [2003] EAT 147, in which Mr Bishop’s claim was that he was working in San Francisco but working for the Financial Times whose business was in England, and the case of Jackson v Ghost [2003] IRLR 824 in which Miss Jackson was working in the USA for an American subsidiary of an English company, which subsidiary carried on business in the USA.  

17.	Mr Siddall accepts that, once his preliminary point has gone, Mr Cliffe’s appeal against the Chairman’s decision on the unfair dismissal jurisdiction issue has to be allowed in the light of the change in the law which I have attempted above to summarize.  He submits, however, that I should, on the basis of the findings of fact reached by the Chairman, substitute for the Chairman’s decision my decision that Mr Cliffe still falls outside the jurisdiction of the Employment Tribunal.  He submits that the findings of fact are such that, even on the law as it now is, Mr Cliffe cannot succeed and that there is therefore no purpose in remitting the jurisdiction issue to the Tribunal for decision on the basis of the new law.  

18.	Mrs Cliffe on the other hand submits the precise contrary.  In her detailed Skeleton Argument she has set out a lengthy series of facts from the start of Mr Cliffe’s being sent on secondment by KSS to work in the USA to the end of his employment in December 2003, including in particular KSS’s informing him in April 2003 that his secondment was going to end and that he would have to come back to this country so as to put before me a cogent case that Mr Cliffe ought to be regarded as an expatriate worker of an English company, temporarily in the United States, who should only be regarded on the basis that he does fall within the scope of section 94(1).

19.	In Financial Times v Bishop the factual situation might be said to have been, at least superficially, similar to that in the present case; on Mrs Cliffe’s analysis of the facts it plainly was.  On the other hand on Mr Siddall’s analysis of the facts, Jackson v Ghost was closer to the facts of this case.  The House of Lords in Lawson v Serco, at paragraph 38, indicated that the Employment Appeal Tribunal in Financial Times v Bishop were correct to have remitted the case to the Tribunal on the basis that the findings of fact were inadequate to enable the EAT to make its own decision. 

20.	In this case I take the same view as was taken by the EAT in Financial Times v Bishop.  Although most of the relevant facts are the subject of findings in the lengthy section of the Chairman’s judgment where he set out his findings of fact, paragraphs 7 to 27 of his judgment, some facts do not appear to me to have been found or clearly found; Mr Siddall points to paragraph 8 of the judgment, in particular, (and I do not propose to go through all of the passages in the judgment to which he has drawn my attention), as indicating that the Chairman found that, in the USA, Mr Cliffe was working not for the English company, KSS, but for its American subsidiary, KSS Inc.   There are other sentences in subsequent paragraphs which may be thought to have the same effect.  On the other hand, when the Chairman was considering the facts he was considering them, of course, in the light of what he then understood to be the issues, namely, was Mr Cliffe an employee of KSS or KSS Inc and was his employment in Britain rather than considering the facts on the basis of the need to apply the new exposition of the law as set out by Lord Hoffman in the House of Lords.  

21.	There are other factual issues which have not been fully canvassed, which might be thought to be relevant and which might make a difference – for example precisely who paid Mr Cliffe?  There is a finding that payments were made into his UK bank account (although Mr Siddall says that that was wrong and that payments were made into his US bank account).  There has been no finding because it was not relevant at the time even to consider it, whether KSS Inc is a substantial body or whether it is, as Mrs Cliffe says, a mere shell.  

22.	In my judgment it would be quite wrong for me to seek now to substitute my decision on the basis of the law as it now is for the decision which was made by the Chairman.  The very fact that each side can argue that the facts prove the case conclusively one way or the other might be enough to tempt me to remit this case to the Tribunal; but I hope that I am not guilty of quite such superficial thinking.  I have looked at the findings of fact in detail; I have looked at the detailed facts as they have been put to me by Mrs Cliffe.  It is quite clear to me that not all of the facts which she seeks to rely upon have been the subject of decision; and I do not think it would be at all appropriate for me in the circumstances to substitute my own view.  

23.	Accordingly the question of whether the unfair dismissal claim brought by Mr Cliffe falls within the jurisdiction of the Tribunal must be remitted for decision by the Tribunal.  

The Remission
24.	That conclusion gives rise to the further question as to whether, as Mrs Cliffe asked me to do, I should remit to a different Tribunal Chairman or whether, as Mr Siddall asked me to do, I should remit to the same Chairman.  Mr Siddall rightly reminds me in his Skeleton Argument of the decision on the question as to whether the EAT should remit to the same or a different Tribunal, of the Employment Appeal Tribunal presided over by the then President, Burton J, in Sinclair Roche & Temperley v Heard [2004] IRLR 763.  
25.	In that case, at paragraph 46, the Employment Appeal Tribunal set out six criteria which should be considered when a decision has to be made on that question.  The first of those criteria is proportionality.  Although Mrs Cliffe, in her Skeleton Argument before me, asserts that Mr Cliffe has suffered seriously in health and has suffered serious injury to feelings as a result of his dismissal, she has understood my comment to her that no claim in respect of injury to health or feelings can be brought for unfair dismissal; and her claim on her husband's behalf must be one for compensation only, unless there is any possibility or reinstatement which appears to be highly unlikely - I am not even sure that it is asked for; and compensation is limited to the current maximum figure which is somewhere not far above £50,000.  Thus, although this may be a sizeable claim, it is certainly not a very large claim on any view.  Mr Robertson, the Chairman, has heard the facts over three days and made a number of findings of fact, many of them it should be said in Mr Cliffe’s favour, in a lengthy decision.  

26.	Secondly, the Employment Appeal Tribunal should consider the passage of time.  It is now 15 months since the hearing in front of Mr Robertson; as Burton P said in Sinclair Roche & Temperley v Heard that is quite a long time; but it is not so long, in light of the very detailed findings made by the Chairman, for it to be impossible for the Chairman, fairly and justly, now to recall with the aid of his notes what the evidence was and what the case was all about.  

27.	The next consideration is that of bias or partiality.  I have already set out that, in this case, Mr Cliffe did originally make allegations of bias or misconduct; but they are no longer extant and I doubt whether they were in any event any more than a vigorous presentation of this appeal, with an emphasis on the disappointment which Mr and Mrs Cliffe felt.   In any event those allegations came to an end, even before the point at which there was any reference to the Chairman for his comments, as a result of the ruling at the sift stage of HHJ McMullen QC.  
28.	The fourth criterion is whether the decision of the Tribunal was a totally flawed decision.  Plainly, it was not; there was no question of a totally flawed decision or of any mishandling of the issue.  The Chairman decided the issue on the law as it then was.  He is now going to be asked, if it is remitted to him, to decide the question on the law as it now is, which differs from the law as it then was.  

29.	The fifth criteria is whether it is right to give the Tribunal a second bite of the cherry.  What has happened in this case, as I have just explained, is that the cherry is now of a different nature or of a different shape; The Chairman, if the case is remitted to him, will be asked to make a first bite at a different form of cherry.

30.	Lastly, there is the question of the Tribunal’s professionalism.  The Employment Appeal Tribunal should ordinarily take the view that, in the absence of clear indications to the contrary, the Tribunal below is capable of a professional approach to dealing with a matter on remission; and I see no reason why I should part from that approach in this case.  

31.	For those reasons I have no doubt that the correct destination for a remission is the same Chairman, that is to say Mr Robertson; and I order that this issue is remitted to him.  

32.	The appeal is, therefore allowed and the issue of unfair dismissal jurisdiction is remitted to the same Chairman.

33.	However, it is quite plain from what Mrs Cliffe has said, and Mr Siddall agrees, that there are, or maybe issues of fact which may be relevant to the decision which the Chairman now has to make which have not been the subject of findings of fact or as to which the evidence before him may not have been as focused or as concentrated, in the light of the different test which then prevailed, as it may now need to be.  Issues as to whether there needs to be further evidence or whether further evidence should be permitted because one or other of the parties wishes to put in further evidence are issues which the Chairman will have to decide.  It is quite impossible for me to make any such decision, and I am not asked to do so.  

34.	I recommend that the first step which the Chairman may well want to take is to arrange a hearing for directions at which the format of a further hearing on the jurisdiction issue, including any question of further evidence, oral and/or documentary, and the format of submissions will be decided.  It may be that, before any such hearing, he will want to direct the parties to set out in documentary form precisely what further evidence it is they would want to put in, so that he will know in advance what issues are going to arise for his decision at that hearing; but that will be for him to consider; it is not for me to lay down what the correct procedure is that he should adopt.