Points of procedure

In the first of two features, we highlight the procedural minefields faced by HR professionals dealing with employment tribunals and the EAT.

Recent noteworthy decisions of the EAT and the Court of Appeal highlight important procedures on time limits, joinder, striking out, restricted reporting orders, compromise agreements and pre-hearing reviews. It is hoped that this selection of cases will be useful in drawing attention to the procedural minefields present in instituting and conducting proceedings before the employment tribunals and the EAT.

These decisions are largely based on the Rules of Procedure in Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 1993 ("the 1993 ET Rules") and the Employment Appeal Tribunal Rules 1993 ("the 1993 EAT Rules"). However, they are all still relevant under the revised rules of procedure, the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001 ("the 2001 ET Rules") and the Employment Appeals Tribunal (Amendment) Rules 2001, both of which came into effect on 16 July 2001 (see Employment Tribunals and the EAT).

TIME LIMITS

Section 111 of the Employment Rights Act 1996 ("the ERA") provides:

"(1)A complaint may be presented to an employment tribunal against an employer by any person that he was unfairly dismissed by the employer.

(2)Subject to subsection (3), an employment tribunal shall not consider a complaint under this section unless it is presented to the tribunal -

(a)before the end of the period of three months beginning with the effective date of termination, or

(b)within such further period as the tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of that period of three months."

Judicial notice could be taken of guaranteed next-day delivery

In Lancaster v DEK Printing Machines Ltd, the EAT held that an employment tribunal could take judicial notice of the fact that the Royal Mail special delivery service ought to involve an expectation of next-day delivery. Despite Christmas postal delays therefore, posting an originating application on 23 December 1998 should have resulted in delivery by noon on Christmas Eve. Therefore, the applicant's unfair dismissal complaint was not out of time when it arrived after this date.

The EAT disagreed with the tribunal that it was unrealistic to expect next-day delivery using this service when the Christmas period was notorious for postal delays. Evidence from the Royal Mail confirmed that delivery should have been effected by noon on 24 December 1998, and it had been unable to explain why the item had not been delivered until 4 January 1999 when the tribunal office had been open on Christmas Eve. The Royal Mail had shown an extremely apologetic attitude and had appeared to indicate that the failure to deliver this item in the normal way was something totally abnormal and unexpected.

Safer posting method should not work against applicant

Using a safer method of posting for an originating application, namely recorded delivery, should not work against the applicant's interest in a case where normal posting would not have done, the EAT held in Bradley v Leisure Promotions Ltd.

Mr Bradley was dismissed on 1 March 1999. The three-month limit for presentation of his unfair dismissal case expired on 31 May, a local holiday in Glasgow. On 28 May, a Friday, Mr Bradley signed an IT1 in his solicitor's office. This was sent by recorded postal delivery and was not accepted by the tribunal until 1 June. A tribunal held that it was out of time.

The EAT considered that, by using the recorded delivery process, the solicitor was taking steps to protect his client within the prescribed period. If he had simply posted the letter, it would presumably have been delivered, albeit not handled, before the time limit expired. The EAT considered it perverse to hold that a safer method of posting that required the recipient to acknowledge receipt of the document worked against the applicant's interest, whereas normal posting would not have done so.

Presenting applications under Scottish procedural rules

The EAT held in Melville v Brown Brothers Ltd that, because Scottish procedural rules allow tribunal applications to be presented only to the Central Office of the Employment Tribunals in Glasgow, an originating application submitted by fax to the Edinburgh office on the date of expiry and then forwarded by that office to, and received by, the Central Office on the following day, was presented out of time.

The tribunal had noted that, whereas the procedural rules in England made provision for presentation to take place at various regional offices, the Scottish rules did not allow for any other office to be substituted for the Central Office. Neither could lodging in the Edinburgh office be regarded as presentation, since that office had no actual or delegated power to receive applications in the sense of rendering receipt as a competent presentation.

Effect of continuing act of discrimination on time limits

In Tyagi v BBC World Service, the EAT applied the principle in Cast v Croydon College in holding that a complaint of race discrimination made a year after the complainant had been rejected by his employer for a new position was out of time. There was no continuing act of discrimination.

Section 68 of the Race Relations Act 1976 ("the RRA") provides that race discrimination complaints must be presented to a tribunal within three months. An expired application may nevertheless be considered if the tribunal considers it just and equitable to do so. By virtue of subsection (7), "any act extending over a period shall be treated as done at the end of that period". In Cast v Croydon College, the Court of Appeal held that a discriminatory act that extended over the period of an individual's employment was to be treated as having been done at the end of that individual's employment. A complainant could not rely on it continuing long after the employment had ended.

In between his being rejected for the new position and his presentation of the race discrimination complaint, Mr Tyagi had been dismissed from his employment. In respect of his race discrimination complaint, he sought to argue that the BBC had operated a discriminatory policy for several years, and that it had continued to be discriminatory against him even though he had not made another similar application for employment. He contended that this amounted to a continuing act of discrimination.

The EAT said that it was clear from s.4(1) of the RRA that an employer's policy might have a continuing discriminatory effect. However, a non-employee seeking to rely on s.4(1) would have to depend upon "the arrangements which are made for the purpose of determining who should have employment, the terms on which that employment is offered, or a refusal or omission to offer that employment. These were not continuing acts but one-off acts, the EAT said. If Mr Tyagi had continued to be an employee of the BBC throughout the relevant period, he might have been able to rely on s.4(2)(b) discrimination in the way the employer afforded him access to opportunities for promotion, transfer or training, but that was not the case.

Tribunal can consider justice of its own motion

The Court of Appeal held in Shand v Leicester County Council that a tribunal did not act unfairly in referring to s.68(6) of the RRA of its own motion and determining, without inviting submissions from the parties on the point, that it was not just and equitable to grant an extension of time.

The tribunal had determined that all of Mr Shand's allegations of racial discrimination were out of time except for an internal appeal against the outcome of grievance proceedings. Mr Shand had not applied for an extension of time under s.68(6) of the RRA. Of its own motion, the tribunal considered the issue of the justice and equity of extending time under that provision and decided against it. It then ruled on the question of the evidence to be adduced on the only issue left, namely whether the internal appeal itself had been discriminatory. Mr Shand's submission on appeal was that the tribunal should not have determined the issue of extension of time without first giving the parties an opportunity to address it, both by submissions and by evidence if necessary.

Taking the view that questions of procedural unfairness must be judged by reference to the particular circumstances, the Court of Appeal noted that in the present case:

(1)The question of the application of s.68 of the RRA to Mr Shand's complaints was plainly before the tribunal.

(2)Mr Shand had been represented by his union who demonstrated sufficient knowledge and experience of employment law at the employment tribunal.

(3)When the tribunal announced its decision, no complaint had been made that there had been no opportunity to address s.68(6) by submissions and/or by evidence.

Mr Shand's notice of appeal to both the EAT and the Court of Appeal had not raised any point as to procedural unfairness. Further permission to appeal to the Court of Appeal was not given by reference to any such period.

JOINDER

Rule 17 of the 1993 ET Rules (now rule 19(1) of the 2001 ET Rules) provides:

"(1)A tribunal may at any time, on the application of any person made by notice to the Secretary, or of its own motion, direct any person against whom any relief is sought to be joined as a party, and give such consequential directions as it considers necessary."

Only persons against whom relief is sought may be joined

The EAT held in Eemtrans and another v McMahon and another that the wording of rule 17 was perfectly clear and unambiguous in requiring that the only person who may be joined to proceedings is a person against whom any relief is sought, not a person against whom relief might be sought by a party who, in fact, did not wish to seek relief and therefore did not wish them to be joined to the proceedings.

The employer had argued before the EAT that the words "any person against whom any relief is sought" in rule 17 ought to be read as if there were added the words "or could be sought". In the circumstances of the particular case, this interpretation would have given the tribunal jurisdiction to join a third party on the basis that this was a party against whom the employee could have sought relief as an alternative target to the employer even though the employee herself did not wish to do so. According to the employer, the employee could have sought relief against the third party on the basis that she had been employed full time within a certain function, a significant proportion of which had been transferred to the third party.

Rejecting this and other submissions, the EAT went on to say that the mere fact that the employee might, out of an abundance of caution or in different circumstances, wish to extend her claim in the alternative against the third party, did not avail the employer if the employee, for her own good reason, did not wish to join the third party and therefore did not seek relief against it. The employee had chosen to seek relief only against the employer. If the employer was right in that liability did not lie with it but with the third party, then the employee had aimed her claims at the wrong party and would lose. Dismissing the appeal, the EAT said that the relief sought by the employer was relief from its liability to the employee and not relief against the third party.

STRIKING OUT

Rule 13 of the 1993 ET Rules (now rule 15 of the 2001 ET Rules) provides:

"(1)Subject to the provisions of these rules, a tribunal may regulate its own procedure.

(2) A tribunal may -

(d)subject to paragraph (3), at any stage of the proceedings, order to be struck out or amended any originating application or notice of appearance, or anything in such application or notice of appearance, on the grounds that it is scandalous, frivolous or vexatious;

(This is now rule 15(2)(c) of the 2001 ET Rules and the word "frivolous" is replaced with the word "misconceived".)

(e)subject to paragraph (3), at any stage of the proceedings, order to be struck out any originating application or notice of appearance on the grounds that the manner in which the proceedings have been conducted by or on behalf of the applicant or, as the case may be, respondent has been scandalous, frivolous or vexatious . . .

(This is now rule 15(2)(d) of the 2001 ET Rules and the word "frivolous" is replaced with the word "unreasonable".)

(2)Before making an order under sub-paragraph . . . (d), (e) . . . of paragraph (2) the tribunal shall send notice to the party against whom it is proposed that the order should be made giving him an opportunity to show cause why the order should not be made; but this paragraph shall not be taken to require the tribunal to send such notice to that party if the party has been given an opportunity to show cause orally why the order should not be made."

Misconduct of employer's representative

The EAT held in Harmony Healthcare plc v Drewery that an employment tribunal was entitled to strike out a notice of appearance on the basis of the misconduct of the respondent's representative (a "self-styled employment consultant") in assaulting the applicant's representative in the tribunal waiting room. The fact that this misconduct took place outside the tribunal hearing room did not mean that it did not take place in the conduct of the proceedings. Moreover, it could not be said that the employment consultant was on a "frolic of his own" and was not acting on behalf of the respondent or with the respondent's authority when he committed the assault.

In the EAT's view, the misconduct took place in the conduct of the proceedings within the meaning of rule 13(2)(e) because the matter in issue between the parties' representatives that had resulted in the assault was the demand for the return of the respondent's witness statements which were to be used at the hearing. Instead of attempting to snatch these back from the applicant's representative while she was in their waiting room, the employer's representative should have made an application to the tribunal either for their return or perhaps for an order for exchange of witness statements.

Moreover, the question was not whether the employer was vicariously liable for the acts of its representative in negligence, but whether, at the relevant time, the representative was acting on behalf of the employer in conducting those proceedings. In the EAT's view, he plainly was.

Failure to comply with appropriate procedural rule

In En'Wezoh v London Forum Hotel Ltd, the EAT held that a tribunal's failure to comply with rule 13(3) before purportedly striking out an unfair dismissal application under rule 13(2)(e) was the wrong approach.

The EAT said that it was a necessary pre-condition to exercising the power to strike out an application under rule 13(2)(e) that one or other of the two limbs of rule 13(3) be complied with. The EAT noted that the tribunal had failed to add a rule 13(3) notice to its correspondence with the applicant. Moreover, its reasoning did not show the careful analysis required by the question of whether conduct is scandalous, frivolous or vexatious. While the primary facts were to some extent established, it was clear to the EAT that no submissions on the issue were invited from the applicant who had not been given the opportunity to show cause why the claim should not be struck out under rule 13(2)(e).

Striking-out order disproportionate to offensive conduct

In De Keyser Ltd v Wilson, the EAT held that a tribunal erred in striking out an IT3 on the basis that the employer's conduct of its proceedings, in attempting to prejudice a medical expert against the applicant, was scandalous and amounted to a breach of the applicant's statutory right to privacy and family life. The EAT also provided guidelines on how expert evidence should be collected.

A tribunal of its own motion struck out an IT3 on the ground that the employer's conduct of the proceedings was scandalous and in breach of the Human Rights Act 1998 ("the HRA"). It also made a costs award against the employer. The employer had been represented by a firm of consultants that had been granted an order by the tribunal to appoint a medical expert to examine the applicant's allegation of stress-related illness attributable entirely to work and to prepare a neutral and impartial report for the tribunal. In preparing instructions for the doctor, the consultants had asked for material that the tribunal considered to be irrelevant and abusive, an attempt to prejudice the doctor to the disadvantage of the applicant and a breach of the right to respect for privacy and family life as enshrined in article 8 of the European Convention on Human Rights ("the ECHR") and the HRA.

The EAT disagreed with the tribunal's view, holding the striking-out order to be an entirely disproportionate response to the conduct in question. In the EAT's view, a medical examination was necessary because the applicant herself had instituted medical considerations by persisting with a complaint of work-related stress for which the employer was responsible and so she could expect to be required to submit herself for relevant and appropriate medical examination. There was nothing to stop the tribunal from preventing the examination by the expert to whom the offensive instruction had been sent and ensuring the later and correct instruction of some other doctor to examine the applicant. The tribunal had erred in describing the position as one "properly to be regarded as a subsequent investigation into private matters" and in taking this into account.

It had also erred in not taking into account matters it should have, by not asking itself whether a fair trial of the issues was still possible. This was not a case involving disobedience or failure to perform an order of court. The case law showed that it was of great importance, in relation to a decision to strike out the whole of a case where there had been no such disobedience, to enquire whether a fair trial was still possible. In the EAT's view, a fair trial was still possible on the basis that there had been no medical examination as yet, and other doctors could therefore be appropriately instructed.

The EAT also rejected the view that such an examination could be said to be an infringement of any human right under the HRA. The alleged right to privacy in this case might be said to be in opposition to, and needed to be qualified only so far as necessary by, the right of both parties to have a just trial of the issues. The EAT observed also that, unsurprisingly, rule 13(2)(e) of the 1993 ET Rules made no reference to a striking out for failure to comply with the HRA.

The EAT concluded that it should exercise its discretion not to strike out the IT3. It issued fresh directions which in effect gave the applicant 10 days to abandon all allegations of work-related stress for which the employer was responsible, failing which the employer was to be at liberty to instruct a medical expert to report on the matter on the basis that the instructions to the expert were to be drawn by the employer's representative and submitted for approval to the applicant's representative before being sent out to the chosen expert whose identity was also to be agreed between the parties.

EAT guidance

The EAT gave general guidance of on how expert evidence should be collected in employment tribunal cases, finding it necessary to do so because of the existence of "unqualified representatives" such as that used by the employer in Wilson. This guidance included:

The parties should first explore with the tribunal the likelihood of expert evidence being acceptable.

The preferred course is to have the joint instruction by the parties of a single expert.

The parties may agree to abide by the tribunal's indication as to the incidence of the joint expert's fees and expenses.

Even where a party chooses to appoint its own expert, a tribunal may attach increased weight to that expert's evidence if the terms of instruction are submitted to the other side for agreement or for comment before being finalised and sent to the expert.

A tribunal may fix a period for agreeing the joint expert's identity, the terms of the joint letter of instruction and the date for the submission of the joint expert's report.

A letter of instruction should specify in detail any particular questions the expert is to be invited to answer and all more general subjects which he or she is to be asked to address.

Instructions are to avoid partisanship and tendentiousness. If assumptions of fact are to be made by the expert, these are to be spelt out, taking care not to beg the very questions to be raised. The instructions should emphasise that the expert's principal and overriding duty is to the tribunal rather than to any party.

A tribunal may specify that a failure by the parties to agree on the identity of the joint expert or on the instructions by a specified date is to be referred to the tribunal, which may then assist the parties to settle the matter.

The tribunal may give formal directions in relation to the issues that an expert is or is not to address.

Where there is no joint expert, the tribunal should specify a timetable for disclosure or exchange of experts' reports and, as appropriate, for meetings, in the absence of agreement between the parties.

Any timetable may provide for the raising of supplementary questions with the expert or experts and for the disclosure or exchange of the answers in good time before the hearing.

Where there are separate experts, the tribunal should encourage arrangements for meetings between them on a without- prejudice basis with a view to resolving any conflict between them and, where possible, to their producing and disclosing a schedule of agreed issues and points of dispute between them.

A failure without good reason to follow these guidelines which causes another party or parties to suffer delay or expense may result in the tribunal giving consideration to whether there has been unreasonable cost within the meaning of rule 12(1) (as to costs) on that party's part.

Striking out on grounds of scandalous and vexatious conduct

The EAT held in London Borough of Southwark v Bennett that, without giving either party the opportunity to comment, a tribunal had not been entitled to discontinue a hearing on the ground that it could not fairly determine the application in the light of accusations of racism made against it by the applicant's representative. However, taking the view that the representative's conduct had been scandalous and/or vexatious, the EAT ordered that the application be struck out on those grounds.

In the EAT's view, the tribunal should first have considered the interests of both parties. This was already an old case in which complaints of race and sex discrimination going back to 1990 were under consideration. The tribunal was then 12 days into the hearing, which was anticipated to take 18 days. Discontinuance followed by a fresh hearing would result in substantial wasted costs and working time for the legally represented, publicly funded respondent and added stress and anxiety for the applicant. The tribunal should have informed the parties of its collective view of the accusations made against it and then required the representative to affirm or withdraw his accusations. If he continued to press his claim for racial bias, it would then be for the tribunal of its own motion or on the basis of an application by the respondent to consider using its powers to strike out under rule 13(2)(e) (there being no power in the tribunal to punish a party or a representative for contempt) and to give appropriate directions for that purpose. Alternatively, if he withdrew his remarks, it would then have been open to the tribunal to continue the hearing with or without an adjournment occasioned by the absence of the applicant.

The EAT concluded, however, that the representative, in making an unwarranted charge of racial bias, was thereby attempting to interfere with the due administration of justice and effectively succeeded, since the tribunal then rose to the bait and ordered discontinuance. Moreover, although the applicant had been absent, the EAT concluded that she should herself be fixed with her representative's conduct. Rule 13(2)(e) plainly envisaged that a case may be struck out where the conduct of proceedings on behalf of a party was scandalous or vexatious. It was also clear that she had wholeheartedly endorsed and ratified the remarks made by her representative. The EAT concluded that her application should be struck out under rule 13(2)(e) on the grounds that the proceedings were conducted by or on behalf of the applicant scandalously and/or vexatiously.

RESTRICTION OF VEXATIOUS PROCEEDINGS

Section 33 of the Employment Tribunals Act 1996 ("the ETA") states:

"(1)If, on an application made by the Attorney-General or the Lord Advocate under this section, the appeal tribunal is satisfied that a person has habitually and persistently and without any reasonable ground -

(a)instituted vexatious proceedings, whether in an employment tribunal or before the appeal tribunal, and whether against the same person or against different persons, or

(b)made vexatious applications in any proceedings, whether in an employment tribunal or before the appeal tribunal,

the appeal tribunal may, after hearing the person or giving him an opportunity of being heard, make a restriction of proceedings order.

(2)A 'restriction of proceedings order' is an order that -

(a)no proceedings shall without the leave of the appeal tribunal be instituted in any employment tribunal or before the appeal tribunal by the person against whom the order is made,

(b)any proceedings instituted by him in any employment tribunal or before the appeal tribunal before the making of the order shall not be continued by him without the leave of the appeal tribunal, and

(c)no application (other than one for leave under this section) is to be made by him in any proceedings in any employment tribunal or before the appeal tribunal without the leave of the appeal tribunal.

(3)A restriction of proceedings order may provide that it is to cease to have effect at the end of a specified period, but otherwise it remains in force indefinitely.

(4)Leave for the institution or continuance of, or for the making or an application in, any proceedings in an employment tribunal or before the appeal tribunal by a person who is the subject of a restriction of proceedings order shall not be given unless the appeal tribunal is satisfied -

(a)that the proceedings or application are not an abuse of the process of the tribunal in question, and

(b)that there are reasonable grounds for the proceedings or application.

(5)A copy of a restriction of proceedings order shall be published in the London Gazette and the Edinburgh Gazette."

Order applies where different respondents are sued

In Attorney-General v Wheen, the EAT held that it could make an order under these provisions against a person who had instituted 13 separate headings of proceedings against a number of respondents in the tribunals and EAT, all of which had failed, and which had, in relation to some of them, been marked with comments about their being frivolous or vexatious.

The EAT concluded from this that Mr Wheen was a person who had habitually and persistently and without reasonable ground instituted vexatious proceedings within the meaning of s.33 of the ETA. His case differed from that of other allegedly vexatious litigants in that Mr Wheen did not, in general, repeatedly sue the same respondent, nor did he obsessively return to the one event or the one series of events. Although bearing this in mind, the EAT said that the Act applied whether or not one saw the same respondent recurring (s.33(1)(a)), and there was no provision that it was only the same events that had to be relied upon.

In exercising its discretion, the EAT bore in mind that Mr Wheen had not launched wholly fresh proceedings for about a year, but since he had failed to attend the hearing, the EAT had no indication from him that he would not launch proceedings in the future.

Order is not a denial of the right to a fair hearing

Similarly, in Attorney-General v King, the EAT concluded that, by her conduct in persistently launching fresh proceedings relating back to her original dismissal and its alleged effects, leading to a complaint of sex discrimination in relation to her pension position, Ms King had sought to harass the various respondents to her applications and her conduct had been vexatious.

Ms King had also made 13 tribunal applications in all against three different respondents, each of which had either been withdrawn or struck out. Appeals to the EAT and applications thereafter for leave to appeal to the Court of Appeal had all been dismissed. Exercising its discretion in favour of granting the order, the EAT rejected her complaint that the Attorney-General's application, or that the making of a restriction of proceedings order, was or would be a denial of her right to a fair hearing under article 6 of the ECHR.

RESTRICTED REPORTING ORDERS

Rule 14 of the 1993 ET Rules (now rule 16(1) of the 2001 ET Rules) provides:

"(1)In any case which involves allegations of sexual misconduct the tribunal may at any time before promulgation of its decision in respect of an originating application, either on the application of a party made by notice to the secretary or of its own motion, make a restricted reporting order."

The EAT has a similar power granted to it under rule 23 of the 1993 EAT Rules, again restricted to cases of sexual misconduct.

RRO ordered to give transsexual anonymity

In Chief Constable of the West Yorkshire Police v A, the EAT held that there was no power under domestic legislation in employment tribunals or in itself to order restricted reporting orders ("RROs") in claims of sexual discrimination that did not involve allegations of "sexual misconduct". However, it had a power derived from European law to make an RRO on the facts of the instant case which involved a transsexual. This was because the principle of effectiveness required that an applicant should not be subject to procedural rules that rendered the exercise of rights conferred by European law virtually impossible or excessively difficult. Here, there was very strong and clear evidence that the applicant would be deterred from bringing her claim if she were not given anonymity, thus depriving her of an effective remedy.

An employment tribunal had ordered an RRO in a case in which A, a transsexual, claimed sex discrimination upon being rejected for employment with the West Yorkshire Police Force. The tribunal relied, first, on rule 13(1) of the 1993 ET Rules, which gives tribunals the right to regulate their own procedure; second, on the view that a failure to grant the RRO would deter A from seeking a remedy for sex discrimination; and third, on the view that as the respondent in the case was an "emanation of the state", A had directly enforceable rights under the Equal Treatment Directive.

Holding that the tribunal could not rely on rule 13(1) to make an RRO, the EAT nevertheless considered it unfortunate that tribunals hearing claims of sexual discrimination did not have a discretion, similar to that granted them by rule 14(1A) in cases of disability discrimination, to make an RRO where there was evidence of a "personal nature".

As well as dealing with the power of the tribunal to make an RRO in the first place, the EAT ruled on the question of the continued enforceability of an RRO in the period after a tribunal had delivered its decision on liability but had adjourned the hearing on remedies, and the decision on liability had been appealed to the EAT. It took the view that the tribunal's order did not cease to be effective once the tribunal had delivered its decision on liability, but remained in force pending the tribunal's hearing on remedies. The promulgation of a "liability only" decision did not constitute promulgation of the decision of the tribunal. It would negate the whole purpose of an RRO if the protection it provided ended on the liability decision being sent to the parties when a remedies hearing was necessary and awaited.

Krause v Commissioner of the Metropolitan Police Service involved another transsexual bringing a sex discrimination case against a Police Commissioner's refusal to accept her application for employment. The employment tribunal rejected her application for an RRO on the basis that it did not have jurisdiction as her case did not involve or appear to involve allegations of the commission of a sexual offence or allegations of sexual misconduct. In his notice of appearance (IT3), the Commissioner had said his refusal was based on information he had received from the Greater Manchester Police that, in 1991, Ms Krause (then living as a male) had been investigated in connection with violent assaults at a residential premises, and that Ms Krause had not been "cleared absolutely", but remained the prime suspect, albeit insufficient evidence was available to pursue charges.

The EAT took the view that, if the case was limited to the evidence only of violent assaults, then the tribunal had been right to refuse the order. However, Ms Krause had given evidence indicating that, from time to time from 1990 onwards, she had been involved in police investigations into matters subsequent to the one in 1991 which were of a sexual nature and that she had apparently been exonerated of any involvement in any of those offences. The IT3 had also referred to "other information" that had been provided by the Greater Manchester Police to the Commissioner, but the EAT refused to draw the inference that "other" referred to the other sexual offences in respect of which Ms Krause had been arrested.

However, on the basis that the decision in Chief Constable of West Yorkshire Police v A was right, the EAT in Ms Krause's cases took the view that, in so far as it was necessary to protect her assertion of her rights in the EAT, an RRO could be made. The EAT then adjourned the appeal and gave an order for directions requiring the Police Commissioner to file and serve full particulars of the further information referred to in his IT3. This would enable the EAT to determine whether the tribunal's decision was an error of law on the footing that it had been based on inadequate information and that this case did in fact involve allegations of a sexual offence or sexual misconduct so as to give rise to a domestic jurisdiction to make such an order.

COMPROMISE AGREEMENTS

Section 203 of the ERA provides:

"(1)Any provision in an agreement (whether a contract of employment or not) is void in so far as it purports -

(a)to exclude or limit the operation of any provision in this Act, or

(b)to preclude a person from bringing any proceedings under this Act before an [employment tribunal].

(2)Subsection 1 -

(f)does not apply to any agreement to refrain from instituting or continuing . . . any proceedings within s.18(1)(d) (proceedings under this Act where conciliation available) of [the Employment Tribunals Act 1996] if the conditions regulating compromise agreements under this Act are satisfied in relation to the agreement."

Only offending provision is void

In Sutherland v Network Appliance Ltd and another, the EAT held that it was not the case that any compromise agreement which included a requirement in contravention of s.203(1) of the ERA was totally void. At most, only the offending provision within the agreement was rendered void. Specifically, only that provision "in so far as it purports" so to exclude or preclude in contravention of s.203 was void.

Mr Sutherland lodged an IT1 containing both statutory and contractual claims. The alleged compromise agreement was stated to be "in full and final settlement of any claims you may have against the company arising out of your employment or its termination". The EAT said that these words impliedly meant that Mr Sutherland was unable, after accepting the compromise, to assert any statutory claims arising out of his employment or its termination. Any such claim offended the ERA and was void in so far as it related to statutory claims (s.203(1)(b)). However, there was no reason to sweep aside the whole contract on that account, the EAT said. To do so would be to ignore "in so far as" in s.203(1) and to read it as if it said simply "if".

The employment tribunal had declined jurisdiction to consider Mr Sutherland's contractual claims (which were all contractual claims made under s.3 of the ETA).

The EAT accepted that s.203(2)(f) of the ERA was not applicable to the contractual claims. It held that it would allow the agreement to take effect as to the contractual claims while denying it effect as to the statutory ones. The compromise agreement was therefore not made void in total by reason of its failure to comply with s.203. To the extent that it contained a compromise of contractual claims, it remained enforceable.

SETTLEMENTS

In BCCI SA v Ali and others, the House of Lords held that agreements entered into by redundant employees of BCCI accepting payments in full and final settlement of all or any claims that existed or might exist against BCCI did not bar subsequent claims by them for stigma damages, since such claims could not realistically have been anticipated as a possibility at the time when the agreements were entered into.

Mr Naaem was one of a number of employees of BCCI made redundant in 1990. He signed an ACAS COT3 form, which recorded that he agreed to the terms, including payment of a sum of money, "in full and final settlement of all or any claims whether under statute, common law or in equity of whatsoever nature that exist or may exist and, in particular, all or any claims, rights or applications of whatsoever nature that [he] has or may have or has made or could make in or to the industrial tribunal . . ."

After BCCI became insolvent in 1991 and after the House of Lords had upheld claims by some employees to "stigma" damages in Malik and another v BCCI SA, Mr Naaem and others sought to bring similar claims. However, the liquidators claimed that they were debarred from claiming stigma damages by the terms of the COT3 agreement.

The House of Lords took the view that, at the time of entering into the agreement, neither party could realistically have had a claim such as stigma damages in contemplation and so could not have intended to provide for the release of rights and the surrender of such claims. If that was indeed the case, they should have used language that left no room for doubt, and that might at least have alerted Mr Naaem to the true effect of what, on that hypothesis, he was agreeing to.

PRE-HEARING REVIEW

Under s.9 of the ETA:

"(1)Employment tribunal procedure regulations may include provision -

(a)for authorising the carrying out by an employment tribunal of a preliminary consideration of any proceedings before it (a pre-hearing review), and

(b)for enabling such powers to be exercised in connection with a pre-hearing review as may be prescribed by the regulations.

(2)Such regulations may in particular include provision -

(a)for authorising any tribunal carrying out a pre-hearing review under the regulations to make, in circumstances specified in the regulations, an order requiring a party to the proceedings in question, if he wishes to continue to participate in the proceedings, to pay a deposit of an amount not exceeding £150, and

(b)for prescribing -

(i)the manner in which the amount of any such deposit is to be determined in any particular case,

(ii)the consequences of non-payment of any such deposit, and

(iii)the circumstances in which any such deposit, or any part of it, may be refunded to the party who paid it or be paid over to another party to the proceedings."

Rule 7 of the 1993 (and 2001) ET Rules states:

"(1)A tribunal may at any time before the hearing of an originating application, on the application of a party made by notice to the secretary or of its own motion, conduct a pre-hearing review . . .

(4)If upon a pre-hearing review the tribunal considers that the contentions put forward by any party in relation to a matter required to be determined by a tribunal have no reasonable prospect of success, the tribunal may make an order against that party requiring the party to pay a deposit of an amount not exceeding £150 [increased to £500 by the 2001 ET Rules] as a condition of being permitted to continue to take part in the proceedings relating to that matter."

Tribunal can revisit PHR decision

In Maurice v Betterware (UK) Ltd, the EAT held that an employment tribunal could reconsider a PHR decision and that there was no limitation on the number of times this could be done. Although issue estoppel was not applicable to this situation, its principles were still relevant as the tribunal chair had to be satisfied that it was not being asked to revisit a rule 7 issue in order for a party to have a second or third bite at the same cherry, but that there had been a material change in facts or in the law. Therefore, the approach should be that at such a further hearing, a tribunal chair must consider the basis of the previous decision, as, without that, it was impossible to say that such a material change had occurred.

The tribunal in this case had consented to hold another PHR when it was pointed out to it that a recent Court of Appeal decision meant that its previous decision was wrong in law. Having found that there was no statutory or other limitation on the number of times a PHR may be held, the EAT found that there were good practical reasons why a second PHR could be useful. These included lengthy complicated cases where there had been a considerable time-lapse between the lodging of the application initially and the full hearing of that application, and where a deposit had been ordered under rule 7 and subsequently a change in circumstances occurred before the deposit had been paid, making it appropriate to reconsider the matter. Therefore, a tribunal has the power to revisit a matter whether there had been an order made under rule 7 or whether it had been decided to make no such order.

Issue estoppel was not applicable to this situation because when a tribunal exercised its power under rule 7(4) it was not truly deciding an issue between the parties, the EAT said. It was using its powers to control its own proceedings and to impose conditions on what seemed to be unmeritorious applications. It might therefore, as rule 7(1) stated, conduct such a PHR of its own motion. No initiating step was required of the other party, nor was there any need for the other party to appear to make representations in order for the tribunal to decide on a rule 7(4) order.

Nonetheless, the EAT did not find the principles underlying issue estoppel to be irrelevant. They could be of considerable assistance when deciding on the appropriate approach to be adopted by a tribunal chair faced with an application of this kind. The EAT was satisfied that the power to revisit a rule 7 issue was not a power to be used in order to have a second or third or further bite at the same cherry when there had been no material change in facts or in the law, nor was it a procedure to be used to enable a party to "chairman-shop". The power to revisit matters arising under rule 7 was only to be exercised if there was a material change in the factual circumstances or a relevant change in the law. It followed from this that if a chair was faced with an application by a party to revisit the issue arising under rule 7, the approach should be one of asking whether there had been a material change in the facts or the law and whether, as a consequence, a different outcome should now result. That meant that, at such a further hearing, a tribunal chair must consider the basis of the previous decision. Without that, it was impossible to say whether there was or had been a material change of the kind to which the EAT had referred.

In this case, the chair had declined to be informed about the previous PHR. That approach was mistaken, the EAT said. Furthermore, the respondent on that second occasion was not saying that there had been a material change in the facts or the law. It was simply putting forward the proposition that the decision in the Court of Appeal case made in a particularly forceful fashion the legal point that the respondent wished to advance. It followed that this was indeed a second bite being attempted at the same cherry. The EAT ruled that there should be no order under rule 7.

Wrong approach by tribunal

In Robinson and another v Swallowfield Consumer Products, the EAT held that a tribunal erred in law when it concluded that the employees' unfair dismissal complaint had no reasonable prospect of success because they were the only two employees who had been unable to accept workplace changes to which the majority had agreed.

The tribunal concluded that the employees' case had no reasonable prospect of success after considering the IT1 and IT3 and submissions made on behalf of the parties. The EAT held that this approach was wrong as it overlooked the balancing act to be performed by the tribunal when considering the application of s.98(4) of the ERA, namely, did the employer act reasonably in considering that the advantage to it of implementing the reorganisation outweighed any disadvantage which the employees might suffer as a result of the unilateral change to their terms and conditions of employment?

Case list

Attorney-General v King 18.5.00 PA 0074/00

Attorney-General v Wheen 18.4.00 EAT 1301/99

BCCI SA v Ali and others (The Times, 6.3.01)

Bradley v Leisure Promotions Ltd 13.6.00 EAT 55/00

Cast v Croydon College [1998] IRLR 318

Chief Constable of West Yorkshire Police v A [2000] IRLR 465

De Keyser Ltd v Wilson 1.3.01 EAT 1438/00

Eemtrans and another v McMahon and another 28.7.00 EAT 797/00

En'Wezoh v London Forum Hotel Ltd 6.4.00 EAT 1153/98

Harmony Healthcare plc v Drewery 25.7.00 EAT 866/00

Krause v Commissioner of the Metropolitan Police Service 10.8.01 EAT 960/01

Lancaster v DEK Printing Machines Ltd 12.5.00 EAT 623/99

London Borough of Southwark v Bennett 26.1.01

Maurice v Betterware (UK) Ltd 12.7.00 EAT 1030/99

Robinson and another v Swallowfield Consumer Products 29.3.00 EAT 695/99

Shand v Leicester County Council 26.1.00 Court of Appeal

Sutherland v Network Appliance Ltd 15.5.00 EAT 1391/99

Tyagi v BBC World Service 3.4.00 EAT 726/99