This case had 2 aspects, one relating to a PH at which the Claimant's claims were considered and the other relating to the payment of a deposit. There was confusion as to whether the Claimant's breach of contract claim had been withdrawn - he said that it hadn't, which was backed up by the absence of a judgment evidencing that it had. He had also been given an extension to pay a deposit for his race discrimination claim, but because he was residing in Romania at the time, he found it difficult to comply with the rule that the deposit had to be paid by cheque or postal order. As a result the claim was struck out for non-payment of the deposit. The Claimant appealed both decisions.

The EAT allowed both appeals. In the absence of an ET issuing a Judgment pursuant to Rule 52 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 it cannot be inferred that a claim has been withdrawn. That being so the ET had erred in concluding there was no extant breach of contract claim before it and thus refusing to consider a proposed amendment on that basis. The ET had also failed to give adequate reasons for striking out the race discrimination claim. Both matters were remitted to the ET for reconsideration.

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Appeal No. UKEAT/0135/16/DA

UKEAT/0199/16/DA

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8AE

At the Tribunal

On 13 January 2017

Before

HIS HONOUR JUDGE HAND QC

(SITTING ALONE)

ARVUNESCU (APPELLANT)

**

**

QUICK RELEASE (AUTOMOTIVE) LTD (RESPONDENT)

Transcript of Proceedings

JUDGMENT

For the Appellant
MR NICHOLAS DE MARCO (of Counsel)
Bar Pro Bono Scheme

For the Respondent
MR RICHARD SANTY (Solicitor)
Mills & Reeve LLP
78-84 Colmore Row
Birmingham
B3 2AB

PRACTICE AND PROCEDURE - Striking-out/dismissal

In the absence of an Employment Tribunal issuing a Judgment pursuant to Rule 52 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 it cannot be inferred that a claim has been withdrawn. That being so the Employment Tribunal had erred in concluding there was no extant breach of contract claim before it and thus refusing to consider a proposed amendment on that basis. That matter was remitted to the Employment Tribunal for reconsideration.

Where a Claimant has expressly sought relief from sanction and given an explanation as to why he has been and would continue to be unable to effect payment in respect of a deposit Order by the method prescribed, although he continued to be willing and able to do so by any other method, it is an error of law for the Employment Tribunal to give as its reasons for striking the claim out for non-compliance as the failure to comply and the fact that one extension already having been given. When relief from sanction has been applied before a claim can be struck out, even in cases where the Order or direction makes provision for it to be struck out automatically, the Employment Tribunal must consider the application and give reasons for rejecting it, if that is the course to be followed. That had not happened in the instant case and, accordingly, there was an error of law and the matter was remitted to the Employment Tribunal to reconsider the decision.

Observed that it seems odd in modern times that only payment by a cheque or postal order is acceptable to HMCTS.

1. There are before me two conjoined appeals from two case management decisions made by the Employment Tribunal, sitting at Reading. The same parties are common to both. The Appellant, a native of Romania, was employed by the Respondent under a fixed-term contract. He was dismissed in June 2014, something like a month after the contract had commenced. It was due to continue until the end of the year. The Appellant brought proceedings in the Employment Tribunal complaining of unfair dismissal, breach of contract and race discrimination. The Respondent, which has been represented today by Mr Santy, a solicitor, appears to be an engineering company in the motor vehicle industry and possibly, since it has some sort of association with McLaren, in relation to specialist and high-speed vehicles. It has been suggested by Mr De Marco of counsel, who appears on behalf of the Appellant under the auspices of the Bar Pro Bono Unit, that there may have been a parallel, overlapping or collateral contract relating to other employment in Germany. That is not by any means clear from the papers, and it is a subject to which I shall return.

1. The Appellant's unfair dismissal claim had been struck out on 23 September 2014 by Employment Judge Lewis (see page 4 of the supplementary bundle). By then the Appellant had returned to, and was residing in, Romania. On 28 November 2014 Employment Judge George, sitting at Reading, gave directions after a Preliminary Hearing. It is clear from the terms of the case management summary (see pages 22 to 27 of the appeal bundle) that Employment Judge George confined those directions only to the race discrimination claim.

1. In the course of subsequent correspondence a solicitor or representative of the Respondent's solicitors, Mills & Reeve, wrote an email to the Appellant dated 27 January 2015 (see page 17 of the supplementary bundle). In the first paragraph she said:

"… I note that you are claiming damages for unfair dismissal including a basic award, however as we determined at the Preliminary Hearing on 28 November 2014 your case is proceeding in respect of race discrimination only. …"

1. That is as close as the documentary material comes to the suggestion subsequently made by Mr Santy that what must have happened on 28 November 2014 at the case management hearing before Employment Judge George was that the Appellant had withdrawn his breach of contract claim. In an email to the Employment Tribunal on 27 January 2015, the Appellant, in effect, did not accept that. At paragraph 1 of the email, dealing with the fact that it was being asserted by the Employment Tribunal his only existing claim was one of race discrimination, he said this:

"I have no idea how was this conclusion reached [sic], but must state I held such a doubt even since the Case Management discussions following the Preliminary Hearing on 28 November 2014. Consequently, the statement raised even more doubt, despite its intention to the contrary. During the PH, EJ George made a remark about another claim of other payments being owned [sic; original emphasis], which I thought at that point it was mislabelled, as the ET1 clearly stated my claim was Breach of Contract. In addition, no case management order was made regarding this so-called claim."

1. In that summary it is quite clear the Appellant was suggesting that he had an existing breach of contract claim, that it had not been properly dealt with at the Preliminary Hearing and that it had certainly not been dealt with by any case management Order. Mr Santy's submission was that at Preliminary Hearings Employment Judges, particularly when dealing with a self-represented party, are likely to discuss what claims are viable and what claims are not viable and that it may be agreed as a result of that discussion between the litigant and the Employment Tribunal that the claim is no longer proceeding but that, whilst understood by all, may not be recorded in the formal Order.

1. If that is anything like a current practice in Employment Tribunals, as Mr Santy was suggesting, although I very much doubt that it is, then it is to be deprecated. It is, in my view, entirely contrary to the provisions of Rules 51 and 52 of Schedule 1 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 ("the Rules"). By Rule 51, where a Claimant informs a Tribunal, whether in writing or in the course of a hearing, that a claim or a part of a claim is withdrawn, the claim comes to an end; so far, so good in relation to Mr Santy's submission. But, by Rule 52, when a claim has been withdrawn under Rule 51, there is a mandatory provision that the Employment Tribunal shall "issue" a Judgment dismissing it, and now (since the Rule came into force) by subparagraphs (a) and (b) the terms of that Judgment are to make clear what the nature of the withdrawal has been. A party can reserve the right, with the permission of the Employment Tribunal, to make a further complaint. Unless that is done, the withdrawal as recorded is final, and the litigation has come completely to an end. It is obvious from a consideration of Rules 51 and 52 that Employment Tribunals must record withdrawals formally by a Judgment. This plainly did not happen on 28 November 2014.

1. Mr De Marco submits that in the absence of any clear evidence as to what happened and in particular in the absence of a formal Judgment from the Employment Tribunal to the effect that the breach of contract claim had been withdrawn, it must still have been in existence. I accept that submission.

1. Also on 28 November Employment Judge George took the view that the race discrimination complaint made by the Appellant was lacking in substance to the extent that a deposit should be ordered. He clearly took account of the fact that the Claimant was of modest means. He says so expressly in his Judgment at paragraphs 15 and 16. For that reason, he ordered what he described as a modest deposit. The terms of his Order and Judgment, set out at pages 22 to 33 of the appeal bundle, make it clear that the deposit should be paid by one of two dates, whichever was the later. The alternatives, by analysis of the terms of the Order, appear to have been either 18 or 19 December 2014. At some point, it appears that Employment Judge George reconsidered that time limit and extended it until 3 February 2015. This is clear from other documents, but I cannot find either in the appeal bundle or the supplementary bundle any record of that having happened. It is not disputed, however, by the Respondent that was the case.

1. The notes that accompany a deposit Order are pro forma. In the instant case, the notes accompanying the deposit Order are to be found at pages 12 and 13 of the supplementary bundle. The pro forma helpfully provides a portion, marked with a symbol of a pair of scissors, that, having been completed, can be cut off and sent back to what is called the Financial Support Centre of Her Majesty's Courts and Tribunals Service ("FSCHMCTS"). The notes suggest that the payment has to be made either by cheque or postal order (see page 13). It might be thought that cannot be absolutely mandatory, but it is clear from subsequent communications that the Appellant offered to pay by a number of other methods, none of which appears to have been acceptable to FSCHMCTS. Without wishing to enter into any sort of controversy about the nature of the modern world, there being quite enough of that at the moment, it is obvious that the means of payment being confined to a cheque or postal order is restrictive and likely to be more restrictive to those who are not located in the United Kingdom. It seems odd that other methods of payment are not catered for, as I understand them to be in other parts of the Court structure, at least in England and Wales.

1. The race discrimination case was struck out by Employment Judge Gumbiti-Zimuto on 8 January 2015 (see page 5 of the supplementary bundle). He struck it out because the deposit had not been paid. The second part of his Order said that the remaining complaints would proceed. On 19 January 2015 the Appellant wrote to the Employment Tribunal, taking issue with the fact that he had received a communication on 8 January 2015 about the time limit for paying the deposit and also on the same date shortly afterwards had received the decision striking out the discrimination claim for failing to pay the deposit. His letter, which probably came by email, to the Employment Tribunal on 19 January is at pages 14 and 15. It goes into some detail as to the difficulties being encountered by the Appellant in relation to paying the deposit. By a letter of 21 January Employment Judge Gumbiti-Zimuto indicated in the usual way, by letter written on his behalf by the administration of the Employment Tribunal, that he proposed to reconsider his striking out of the race discrimination claim. His proposed grounds for doing so were that it should not have been struck out as the Appellant still had time to pay it. He invited the parties to give their views as to reconsideration (see page 6).

1. On 27 January, as I have already mentioned above at paragraph 4 of this Judgment, the Appellant wrote to the Employment Tribunal. In fact, the immediate cause of his writing was the letter from Employment Judge Gumbiti-Zimuto of 21 January indicating the reconsideration. In his letter the Appellant indicated not only what had happened on 28 November 2014 at the Preliminary Hearing before Employment Judge George but also that he wished to amend his ET1 in relation to the breach of contract claim. In that part of the letter he gave some further information about what had happened at the Preliminary Hearing. He said:

"… EJ George also instructed that debate on terms of contract would take place independently, as the PH was only meant to deal with the discrimination claim."

1. The Appellant went on to say that it was his view that the ET1 did not contain adequate detail, and he set out various matters, under numbered subparagraphs 2, 3 and 4, as to how he might wish to expand the claim. I do not find those points readily understandable. They are certainly not how Mr De Marco sketched out the breach of contract claim in his submissions. I mentioned this earlier in this Judgment at paragraph 1. He referred to an additional or collateral contract that the Appellant was to work in the United Kingdom as a prelude to and condition of subsequent employment in Germany. The rather elaborate analysis does not find any place in the existing pleadings or correspondence and, if it is to be the basis of the Appellant's case on breach of contract then amendments will be necessary. The last point made in this email letter of 27 January 2015 related to the difficulties that the Appellant was having in getting hold of a sterling cheque or a postal order. These he had already referred to, but they are reiterated in the last paragraph (see page 8 of the supplementary bundle).

1. The response from Employment Judge Gumbiti-Zimuto was swift and brief. On 28 January 2015 he wrote to the parties, again through the administration, saying as follows:

"The order made by Employment Judge George on 28 November 2014 records the only remaining claim as of race discrimination. This is the only claim the Tribunal is considering."

1. Somewhat optimistically, perhaps, on 30 January 2015 the Appellant applied to strike out the Respondent's ET3 form on the basis of alleged non-compliance with disclosure obligations (see pages 38 to 40 of the supplementary bundle). If this illustrates anything at all, it simply illustrates that the Appellant was still engaged with the Employment Tribunal procedure and still interested in the outcome. Then, probably on 2 February 2015, he wrote to FSCHMCTS about his difficulties in finding a way to pay the deposit (see pages 20 and 21 of the supplementary bundle). It is not clear whether that document ever reached the Employment Tribunal in Reading. If it has any significance, it is that it shows his repeated attempts to impress upon interested parties that he was having great difficulty in complying with the terms of the Order. On the same day he wrote to the Employment Tribunal in Reading seeking what he described as "relief from sanction / stay of execution". He was in effect telling the Employment Tribunal that he could not pay the money by 3 February 2015 because of the logistical difficulties, and he was asking that his claim should not be struck out and suggesting that a further extension of time should be given to him (see pages 22 to 24 of the supplementary bundle).

1. On 6 February 2015 the Employment Tribunal communicated to the parties the decision made by Employment Judge Gumbiti-Zimuto about the deposit. The direction that he had given is set out in the letter at page 25 of the supplementary bundle, and it reads:

"The claimant has already had an extension of time to pay the deposit. There has been sufficient time for the claimant to arrange for the payment of the deposit, further extension of time is not in the [interests] of justice."

The letter records that Employment Judge Gumbiti-Zimuto had considered the Appellant's emails of 30 January and two emails of 2 February and the Respondent's email of 30 January, by which the latter had submitted to the Employment Tribunal that the case ought to be struck out. That is what happened, on the same day. The Order is at page 1 of the appeal bundle.

1. Subsequently, the Appellant applied for permission to amend his ET1. This took the form of an email of 30 April, which is at pages 10 and 11 of the supplementary bundle. It is right to say that although it clearly states a desire to amend and indicates the nature of the amendment would involve no additional facts or additional claims, it does not itself set out clearly what the terms of the proposed amendment are. It does, however, refer back to the email of 27 January 2015, which, it is submitted by the Appellant in this email of 30 April, "provided a clear statement of a proposed amendment". It seems to me that whatever the Appellant thinks about the terms of the email of 27 January I repeat that I do not find it easy to understand what amendment is proposed either from the terms of the email of 30 April itself or by cross referencing it to his email of 27 January.

1. Employment Judge Gumbiti-Zimuto plainly looked at that and dealt with it on or before 5 May. On that date, a letter was written on his behalf by the Employment Tribunal indicating that the application of 30 April had been referred to the Judge, who had given the following direction: "The claimant's complaint has been struck out there is no extant claim to amend".

1. Mr De Marco takes two points, one in respect of each of these matters. So far as the deposit Order is concerned, he submits that although Employment Judge Gumbiti-Zimuto says that he has considered some of the material from the Appellant he gives no reasons whatsoever for striking out the claim. That seems to me to be factually correct. Mr Santy submits that the Judge must have taken into account all of the necessary material. That may or may not be the case, but he has not explained why he has reached the conclusion that the claim should be struck out for failure to pay the deposit Order notwithstanding the difficulties the Appellant said that he had in providing a cheque or postal order, given that he was trying to do so whilst residing in Romania, where access to either was impossible.

1. It is trite but nevertheless fundamental law that a party should know why he has won or why he has lost, or why a particular decision has been made and why representations that a particular order should not be made have been rejected. It seems to me in this case that the Appellant is left with only the information that the claim has been struck out because there has been one extension granted, because he has not paid the deposit Order and because it would not be in the interests of justice to grant any further extension.

1. In my judgment, that is not an adequate explanation of the reasoning that led Employment Judge Gumbiti-Zimuto to reach the conclusion that he did. I cannot accept Mr Santy's submission that this is a black and white matter. Like most case management decisions, even those made in an "unless" form, and even those that take place as a result of a formulation that provides for the sanction to take effect without further Order, such orders involve the exercise of judicial discretion. I can see in the Judgment of Employment Judge Gumbiti-Zimuto no balancing exercise analysing the competing prejudices to the parties and reasons for rejecting the explanation put forward by the Appellant. Accordingly, it seems to me that an error of law has arisen and the matter must be remitted. I will discuss the terms of the remission with the parties.

1. So far as the breach of contract appeal is concerned, I cannot accept Mr Santy's submission that this claim has been dismissed, for the reasons I have stated earlier in this Judgment. Nor do I think that it is part of my function to consider the merits of the breach of contract claim unless it is so obvious to me that the point has no substance and the appeal is therefore entirely academic. HHJ David Richardson touched on this in the Reasons that he gave for allowing the matter to proceed to a Full Hearing after there had been a preliminary hearing pursuant to Rule 3(10) of the Employment Appeal Tribunal Rules. He said in the first paragraph of those Reasons:

"… This application would not have been granted because the Claimant did not in fact include in his letter the terms of any amendment he wished the ET to make. …"

1. That is entirely correct, but it is not actually an observation about the substance or the merit of the breach of contract claim; it is an observation about procedural compliance. It is possible that the Employment Judge might have taken that view; equally, it is possible that the Judge might have observed that there were no Particulars given of the proposed amendment and required them to have been produced before a decision was made. None of that, as I have just observed, goes to the substance.

1. All that said, it is difficult to understand what the breach of contract claim is all about. I have come to the conclusion, however, that it is for the Employment Judge to decide whether or not there is any substance in the claim and not for me on the limited information that I have before me to reach the conclusion. I do not, I should say, find Mr De Marco's analysis of how the claim might be put either to be consistent with the way in which the claim was advanced in the email of 27 January, insofar as I understand it, nor to be entirely convincing as an analysis, but that is, it seems to me, not the same as being able to say that I should not allow an appeal in spite of an error of law because the appeal is about a matter that can have no substance whatsoever and although the appeal raises a procedural error the answer is clear and remission would not be proportionate. I accept the case has something of that flavour, but I cannot go that far.

1. Accordingly, I reject Mr Santy's submission that I should not interfere with this matter. On the contrary, it seems to me that for whatever reason the Employment Tribunal has simply failed to recognise that there is an existing claim for breach of contract and an application has been made in the context of that claim. Accordingly, I will allow the appeal on that point also, because it seems to me that approach was erroneous in law, and I will remit the matter to the Employment Tribunal.