Appeal No. UKEAT/0018/09/2T

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 11 May 2009

Before
HIS HONOUR JUDGE MCMULLEN QC
(SITTING ALONE)

MISS S C EAGLES	APPELLANT

RUGGED SYSTEMS LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MS CATHERINE ATKINSON
(of Counsel) 
(appearing via the Bar Pro Bono Unit)
	
For the Respondent	MR E WILLIAMS
(of Counsel)
Instructed by:
Messrs Penningtons Solicitors
Highfield 
Brighton Road
Godalming
Surrey GU7 1NS	

SUMMARY
Jurisdictional Points
Regulation 15 of the 2004 Regulations extends from three to six months the deadline under the Employment Rights Act 1996 s 111.  The Claimant relied on negotiations over a compromise agreement to invoke Regulation 15.  The Employment Judge wrongly focused on whether she had an internal appeal.  Towergate applied, Piscitelli distinguished.  In this case where the Claimant was raising money and substantive issues on unfair dismissal, she was entitled to rely on the negotiations legally funded by the Respondent over a compromise as a dismissal procedure.  A compromise under the Employment Rights Act 1996 s 203 is a (statutory) procedure about a dismissal designed to resolve a dispute without issuing a claim, within Shergold paragraph 26.  Remitted to same Employment Judge to determine.

HIS HONOUR JUDGE McMullen QC
1.	This case is about Employment Tribunal procedure in dealing with an out-of-time complaint of unfair dismissal.  I will refer to the parties as the Claimant and the Respondent.

Introduction
2.	It is an appeal by the Claimant in those proceedings against a judgement of regional Employment Judge Hildebrand (sitting alone) at a Pre-Hearing Review in London South on 27 August 2008.

3.	The Claimant represented herself but today has the advantage to be represented by Ms Catherine Atkinson, who gives her services for the Bar Pro Bono Unit.  The Respondent has been represented throughout by Mr Ed Williams of counsel.

4.	The Claimant claimed unfair dismissal.  The Respondent took substantial points and also a jurisdictional point: the claim was out of time.  The essential issue in the case was this:

“1.	… the Claimant accepts her complaint of unfair dismissal was presented outside three months from the effective date of termination.  The issues are whether the time may be extended on grounds that it was not reasonably practicable for it to be presented in time or alternatively was a 3 month extension available to the Claimant on grounds that she reasonably believed at the time the three month period expired that an appeal process was on-going.  This extension derives from Rule 15 of the Dispute Resolution Regulations 2004.”

5.	The judge decided that the claim did not attract the benefit of the extended period for presentation of a claim, provided for by Regulation 15(2) of the Employment Act 2002 Dispute (Resolution) Regulations 2004 now repealed.

6.	The Claimant appealed.  HHJ Burke QC and I gave various directions in this case, dismissing parts of the appeal but I directed, at a hearing under Rule 3(10), that part of the claim would go forward, it being the reference to Regulation 15, on the ground that the judge had not had his attention drawn to Towergate London Market Ltd v Harris [2008] IRLR 536, where the Court of Appeal, by a majority, upheld the judgment I gave on the application of Regulation 15(2).

The legislation
7.	The relevant legislation emerges from the 2002 Act Part 3, Dispute Resolution.  There is provision for statutory dispute resolution procedures; they are divided, in Schedules 2 and 3 into dismissal and disciplinary procedures and grievance procedures.

8.	The 2004 Regulations extend Section 111 of the Employment Rights Act 1996, making clear that a claim for unfair dismissal must be presented within three months of the relevant date.  Regulation 15 extends it in the following ways:
“15.   (2) The circumstances referred to in paragraph (1)(a) are that the employee presents a complaint to the tribunal after the expiry of the normal time limit for presenting the complaint but had reasonable grounds for believing, when that time limit expired, that a dismissal or disciplinary procedure, whether statutory or otherwise (including an appropriate procedure for the purposes of regulation 5(2)), was being followed in respect of matters that consisted of or included the substance of the tribunal complaint.”

9.	In Remploy Ltd v Shaw [2009] UKEAT/0452/08 I considered, on appeal, a number of aspects of the application of Regulation 15(2) holding that it applied once and once only so that if, on the expiry of the primary limitation period in Section 111, the Claimant had the requisite belief, an extension of three months would automatically be provided for.

The facts
10.	The Respondent is a business employing seven people, supplying computers.  The Claimant was employed as its office manager from 1 January 2000 until she was made redundant, without notice, at a meeting on 29 February 2008.  .

11.	The Claimant was provided with a letter on that date indicating various sums which would be payable to her, including the following passage written by the Managing Director, Mr Harrington:
“If you wish to appeal against this selection or if you would like to discuss any aspect of this case, please do not hesitate to contact me or Clive Hutchinson in my absence.”

12.	The Claimant wrote a letter on 29 February 2008 in which, as I analyse it, she raises six issues: The issues are: (1) car allowance, (2) proper notice, (3) Shares, (4) instalments for redundancy pay, (5) a compromise, (6) the possibility that her job did not actually disappear and she could claim unfair dismissal. She wrote
“Further to your letter and our meeting today, I have reviewed your offer of redundancy and I wish to mention the following:-
My current salary is £28,500 and all my payslips from the commencement of employment with RSL showed my income as one lump sum including the car allowance.  Then in November 2007 my payslips started to show my salary and car allowance itemised without any consultation or discussion.  I also know that you are not being consistent on this. 
I accept that I did in fact start work with RSL on 01 January 2000 according to my offer letter from John dated 06 September 1999.  This means that I am in fact entitled to 8 weeks notice.  I refer to the Rugged Systems Limited Standard Terms & Conditions of Employment section 15, paragraph 15.1.
I have also been reading the Advice Guide – Basic rights at work.  This explains that according to the law I can never receive less than the minimum, which in this case is 8 weeks no matter what my personal contract says. 
The last time I was given a share price was sometime last year, I have certainly not been informed of any changes since then.  I was not aware that there had been a change in their values either and my last Dividend Tax Vouchers dated 25 July 2006 show that they are classed as ‘A’ and ‘B’ shares. 
‘A’ Shares 50 @ £12.47 =      £623.50
‘B’ Shares 24 @ £249.40 = £5,985.60 
 The redundancy payments I am entitled to are set out below:
•	Statutory Redundancy Pay (11 weeks x £330 per week) 	= £3,630.00
•	Pay in lieu of notice (8 weeks salary) 			= £4,376.00
•	Outstanding holiday pay (10.5 days salary)	 		= £1,010.00
Total payment					   £9,016.00
Plus Shares 						   £6,609.10

TOTAL 							 £15,625.10

I am not very happy about receiving the redundancy pay in monthly instalments. 
I’ve already spoken to someone about signing your Deed of compromise but there really is no point as I couldn’t sign away my statutory rights even if I wanted to.  The deed would have no legal bearing.  Besides I really don’t think that £1,000.00 is any where near enough compensation.  However I might consider letting the matter rest if you were to pay back the money I lost during the last pay cuts £6, 860.58,
As my jobs as Office Manager, QA Manager, HR Manager and Finance Assistant are not actually disappearing I could well be able to claim unfair dismissal on top of all the redundancy pay.
I look forward to receiving further information and your comments on the above points.” 

13.	The Employment Judge did not resolve the dispute as to whether or not that letter was actually received by the Respondent, it being its case that it was not, but on 6 March 2008, Mr Hutchinson replied as follows:
“I have been double checking with our solicitor the calculation of the payment in lieu of notice part of your redundancy payment.  In determining the amount I did not realise I had to use the statutory minimum notice period rather than the period of notice stated in your contract of employment. 
The result has been that instead of paying you 4 weeks pay I should actually pay 8 weeks pay (one week for each completed year of service). 
I have therefore enclosed new statements of redundancy pay, one showing the payment due with the signing of a compromise agreement, and the other without a compromise agreement. 
My apologies for this error and I hope to hear from you soon with your decision on which offer you would like to accept. 
With regards to the shares, I will give you a breakdown of the split between A and B shares in the next couple of days.” 

14.	As I analyse that letter it deals with three of the points raised by the Claimant: (1) Notice; the Respondent concedes the Claimant’s point, (2) An offer as to a compromise, (3) An indication that there would be further communication in relation to shares.

15.	As a result of that letter, which was received by the Claimant, I am told that, by 10 March 2008, the matter had been put in the hands of solicitors for advice on the compromise agreement.  Talks went on, no agreement was reached.  On 20 May 2008, the Claimant logged onto the internet to the Employment Tribunals’ site, in order to draft a claim, and, at that time, saved it.  The judge found that she was aware that the time limit - 28 May 2008 - was rapidly approaching.  She was, at that time, in the hands of solicitors.  A claim was not presented to the Employment Tribunal until 19 June 2008.  It was therefore 22 days out of time.  She knew there was a time period during which she could present her claim.  Her case had been that if an appeal was ongoing she would get an extension.

16.	The terms of the compromise to be presented to the Claimant were finally agreed by her solicitor but she rejected them.  The Respondent had not moved in respect of certain aspects and the judge accepted that the Claimant knew that the employers had made up their mind as to her employment.

17.	On her claim that she was entitled to the Regulation 15 extension of three months, the judge said::

“20.	Finally, I turn to the question of the Claimant’s appeal.  There is a dispute on the Respondent’s side as to whether the Claimant’s letter of 29 February was ever sent to the Respondent.  One difficulty in relation to the letter is that the Claimant refers to the letter in her claim to the Employment Tribunal and refers to it as a letter of 29 February 2008.  However, the Claimant’s oral testimony to me today was that it was posted to the Respondent on 3 March 2008.  I am not clear how a letter posted on 3 March 2008 becomes a letter of 29 February, because 29 February is the date stated in the text of the letter.  The important issue is whether that letter can constitute an appeal.  It is not a letter which contains the word appeal.  It does not refer to the right of appeal given by the Respondent in the letter dismissing the Claimant and I do not consider for those reasons that it can be termed a letter stating an appeal procedure as far as the statutory dismissal procedure is concerned.
21.	That of course is only part of the issue.  If I am incorrect in that conclusion the Claimant has also to establish that she had reasonable grounds for considering that the procedure was on-going at the time when the three month time limit expires.  I find nothing in the Claimant’s evidence to suggest that she believed there was an on-going appeal procedure.  What was taking place in this case was a commercial negotiation on termination of employment about legal costs and share valuation with a view to the production of a compromise agreement.  That is a very different procedure from an appeal, and I do not consider that the extension available under Regulation 15 is therefore available to the Claimant in this case.”

18.	The judge expressed his sympathy with the Claimant, who did not have any professional training, noting that the provisions are complex and there were difficulties with the website at the time. He rejected her claim.

Submissions and conclusions
19.	I will deal with the submissions at the same time as I draw conclusions from them.

20.	The reference, by the judge, to the complex provisions is shared, at all levels, throughout the judiciary.  See, for example, Underhill P’s memorable condemnation of these Regulations as rebarbative, a gastronomic image reflected in his judgment in Cambridge and Peterborough Foundation NHS Trust v Crouchman [2009] UKEAT/0108/09 as a pig’s breakfast.

21.	The simple submission of the Claimant is that the judge’s attention was not drawn to Towergate. He would have decided differently had he not focused upon whether the Claimant was asserting an appeal process.  On behalf of the Respondent, it is contended that the existence of talks through to a compromise agreement cannot be described as a procedure within the meaning of Regulation 15(2).

22.	The correct approach to the construction of the Regulation is that given by Keene LJ in Towergate, with which Wilson LJ agreed, Ward LJ dissenting.  The complexity of the Regulations is exhibited by that divided bench, Ward LJ considering my construction as being plainly wrong, whereas Keene LJ held that the results of Ward LJ’s approach were absurd.  An Employment Judge can be forgiven if he or she therefore finds difficulty in these Regulations.

23.	The correct approach is not to ask whether the Claimant was asserting an appeal, for the language of Regulation 15 goes much wider.  Keene LJ said this:

“39.	…  There can be no doubt that that requires an employment tribunal to ask itself two questions: first, did the complainant have such a belief?  Secondly, were there reasonable grounds for that belief?  What is patently not the test is whether, as a matter of fact, such a procedure was being followed.”

24.	The letter construed in that case was in terms seeking to raise a grievance about the way in which the Claimant had been dealt with and it was held that the judge, at first instance, was incorrect to focus on whether there was an appeal procedure, since the words “or otherwise” go wider than simply an appeal.  An appeal is, of course, part of the process, under Schedule 2 to the 2002 Employment Act, but there are procedures wider than appeals.  Keene LJ noted, with approval, the approach of Burton P in Shergold v Fieldway Medical Centre [2006] ICR 304,  where he said this at paragraph 26:

“It is quite plain that the purpose of this legislation was to encourage conciliation, agreement, compromise and settlement, rather than the precipitate issue of proceedings.”

25.	That view is substantially reflected in the body of authorities which has grown up in the relatively short career of these Regulations; see particularly Canary Wharf Management Ltd v Edebi [2006] ICR 719 EAT.

26.	It is true that in paragraphs 20 and 21 of our case the judge focuses almost exclusively on appeal; indeed that is how he constructed the issue.  He can be forgiven for doing that because the Claimant herself referred to appeal.  But, with respect, that is not the correct approach.  It is not to ask whether there was an ongoing appeal, but to ask whether the Claimant had a belief that there was a procedure relating to her dismissal and had reasonable grounds for that.  

27.	Mr Williams argues that the judge has answered the statutory question, albeit unknowingly.  He says so in paragraph 21, when he deals with reasonable grounds for considering the procedure was ongoing.  I reject that contention because he is there considering the procedure as being the appeal and that is founded upon what the Claimant said in her evidence.  She did, however, say (and the notes have been produced of her examination) that she was addressing points that she thought were unfair and that were not correct in the Respondent’s written approach.  She contended that she did intend the letter to be an appeal.  She said she was not experienced in the ways of the law.  When she first wrote it, it was an appeal and, in her limited experience, she was so concerned.

28.	Without a decision by the judge as to whether or not the Claimant’s letter of 29 February 2008 was received, the purpose is to examine what was in the Claimant’s mind.  This letter, found to be written by the Claimant at that time, must represent her contemporaneous view.  As I have considered it above it is in six parts, in short she is raising challenges to the way in which she has been dealt with, she is aware of her rights, is threatening unfair dismissal proceedings, is challenging the sums and she invites the Respondent’s further comments and further information.  She does not directly answer the question in the letter by the Respondent of that date whether she would wish to appeal, but she is plainly answering the invitation to discuss certain aspects of the letter.  The response from the Respondent indicates that the compromise agreement is already in the hands of the Claimant.  It is referred to by the Claimant herself.  There is an adjustment to correct the figures for notice pay and, again, there is an indication that the Respondent will wish to hear from the Claimant in respect of the compromise. 

29.	The compromise agreement had to be regulated by Section 203 of the Employment Rights Act 1996.  That contains a highly prescriptive formula in which an agreement to forgo legal rights has to be cast. Legal advice has to be obtained and, in this case as in many others, the funding of the legal advice is in the hands of the Respondent.

30.	In my judgment, what was happening after 29 February, and certainly after 6 March, was a procedure.  It is not a procedure to avoid the dismissal or to reinstate the claimant, but it is a procedure in order to compromise unfair dismissal and other proceedings in the Employment Tribunal.

31.	I take the view that the Regulations, and the 2002 Act are there to resolve disputes.  A dispute about a dismissal can include disputes about compensation for it.  Confining myself to the facts of this case, the Respondent was anxious that there should be a compromise agreement, for it was prepared to pay more money into the Claimant’s compensation in exchange for a compromise agreement.  It was also prepared to pay legal costs to achieve that. In order to achieve finality of the dismissal process (viewed neutrally in this case) a compromise agreement was sought by the Respondent.  The Claimant was correct to seek legal advice, as she did from at least 10 March 2008, but terms could not be agreed.  If she was acting in the belief that a procedure was going on for resolving all the outstanding issues on her dismissal, and if she had that on reasonable grounds, she would be entitled to the extension under Regulation 15.

32.	I know that the judge was at pains to ask the Claimant (since she represented herself) a number of important questions, including that she knew she was out of time.  But that does not solve the statutory question in this case, which is whether she had a belief, formed on reasonable grounds, that a procedure was ongoing.  It did not have to be an appeal and inasmuch as this judgment is founded upon an appeal procedure, which I hold it was, then it overlooked the wider dimension connoted by the words “or otherwise”.

33.	On these facts, there was such a procedure.  As a matter of law, the offer by the Respondent of a written compromise, taking it away and showing it to a solicitor, the solicitor engaging in negotiations with the Respondent over a period of time, were all part of a procedure designed to avoid a dispute before the Employment Tribunal.  The purpose of the procedures is to avoid Tribunal proceedings, indeed to penalise those who appear at Employment Tribunals, whether as Claimants or Respondents, without having gone through the procedures applicable in their cases. The antithesis of the dispute resolution regime is a Tribunal case. A compromise agreement also avoids litigation.  As Burton P noted, cited from Keene LJ’s judgment, conciliation and compromise are part of it.  

34.	As I have indicated in my judgment in Remploy Ltd v Shaw UKEAT/0452/08 this does not go on forever.  It is entirely targeted at one particular period of time, in this case 28 May 2008.  If the Claimant believed that there was some process dealing with her dismissal ongoing, then she would be entitled to the extension.  That question has not been directly answered in this case and so it is right that it should be.

35.	The disposal of the case, were I to find in favour of the Claimant, is acknowledged, on both sides, to be remission to the same Employment Judge for this question to be determined.  I will do that.  I will set aside the judgment on the Pre-Hearing Review and direct remission to Employment Judge Hildebrand to determine the question in the light of this judgment.

36.	There obviously have been attempts to conciliate this through the compromise agreement, and I now direct ACAS conciliation.