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Appeal No. UKEATS/0043/09/BI

EMPLOYMENT APPEAL TRIBUNAL
56 MELVILLE STREET, EDINBURGH, EH3 7HF

At the Tribunal
On 15 June 2010

Before
THE HONOURABLE MR JUSTICE UNDERHILL (PRESIDENT)
MISS S B AYRE FIPM
MR R THOMSON

CK HEATING LTD (APPELLANT)

DORO (RESPONDENT)

Transcript of Proceedings

JUDGMENT

APPEARANCES

For the Appellant MR ASIM KHAN Solicitor
Ramsay Employment Law
12 Carmondean Centre South
Livingston
West Lothian
EH54 8PT

For the Respondent MR JOHN DORO Representative

SUMMARY

PRACTICE AND PROCEDURE – Review

Tribunal announces its decision orally but before either a written Judgment or written Reasons are produced has second thoughts on one aspect and purports to "review" its decision on that aspect – Power of review eo nomine not available because written notice not given as required by rule 36.

Held: Tribunal entitled to exercise power of "recall" recognised in Hanks v Ace High Productions Ltd. [1978] ICR 1155: discussion of relevant principles.

THE HONOURABLE MR JUSTICE UNDERHILL (PRESIDENT)

1. Between 29 June and 1 July last year an Employment Tribunal sitting at Glasgow, chaired by Employment Judge Murphy, heard the Claimant's claim of unfair dismissal.  Evidence and submissions concluded late in the afternoon, but in order to accommodate the parties the Tribunal indicated that it would try to give a decision that day.  After a short retirement it returned and the Judge announced the unanimous decision of the Tribunal that the Claimant had been unfairly dismissed and that he should receive a compensatory award of £3,086, incorporating a 30% deduction for "contributory conduct" pursuant to s. 123 (6) of the Employment Rights Act 1996: nothing was said about the basic award.  Oral reasons were given, although as we understand it they were not of any great length.  The employers' solicitor, Mr Asim Khan, asked for written reasons to be provided, in accordance with rule 30 (3) (a) of the Employment Tribunal Rules of Procedure.

2. By rule 29 (1) of the Rules any such oral judgment must be "recorded in writing and signed by the employment judge".  Rule 29 (2) requires that "a copy of the judgment" – which, in the case of an oral judgment, must mean a copy of the written record signed in accordance with rule 29 (1) – must be "provided" to each of the parties.  In our experience that would normally be done within a day or two, but in the present case no written record was signed or provided to the parties until 29 July, i.e. four weeks later, when a combined Judgment and Reasons were sent to the parties.  We are not clear whether the omission to send a separate Judgment in the immediate aftermath of the hearing was an oversight or whether it was thought more sensible to wait until the Reasons were available: in the end, it does not matter for the purpose of this appeal.

3. In the interval between the issuing of the oral judgment and the provision of the written Judgment and Reasons the Tribunal had second thoughts, not about the decision that the Claimant had been unfairly dismissed but about some aspects of the remedy decision.  At paras. 147-150 of the Reasons it said this (we have silently corrected some typographical errors):

145. Before dealing with the detailed award we record the terms of the oral judgment delivered at the close of proceedings on 1 July 2008.  This judgment was in the following terms:

146. "It is the unanimous judgment of the tribunal that the claimant was unfairly dismissed by the respondents; that the claimant contributed to his dismissal to the extent of 30% and that the award to him be adjusted accordingly; that the respondents shall pay a monetary award of £3,086 to the claimant; there is no prescribed element;"

147. There was an arithmetical error in our calculation which requires to be corrected, so that it is necessary for us to review the said judgment.

148. More importantly, we omitted to award the claimant a basic award equal to four weeks' wages being £1,120, as required by section 120 (1A) of the 1996 Act.

149. We are also satisfied, on reflection, that it is at least arguable that the deduction from the award made to the claimant announced at the close of the hearing was misconceived.  Throughout the hearing, attention was focused upon whether an instruction to clean the yard was an instruction that the respondents could lawfully give.  Reference was made to the fact that on earlier occasions the claimant and others had, without protest, cleaned the yard, and, of course, the contract expressly provided that the respondents could not generally employ the claimant on labouring duties, the clear implication being that they could do so from time to time, and, in these circumstances, the tribunal had little difficulty in concluding that generally speaking it was within the power of the respondents to give the claimant an instruction to clean the yard, so that at first blush it appeared that the claimant was at fault in refusing to clean the yard.  Insufficient attention, perhaps, was paid to the possibility that the instruction to clean the yard was an element in a course of conduct that constituted a fundamental breach of contract on the part of the respondents in which case it is at least doubtful whether any deduction should be made in connection with the claimant's refusal to clean the yard.

150. In these circumstances, we are satisfied that the decision announced orally on 1st July should be reviewed, though not necessarily varied at this stage, because we wish to give the parties further opportunity to be heard in connection with these matters.

4. The point made at para. 149 needs a little elucidation.  The Claimant had been dismissed for refusing an instruction to sweep a yard.  The Tribunal's initial decision had been that he was at fault in that regard and so was liable for a reduction pursuant to s. 123 (6).  But its subsequent concern was that it had elsewhere found that prior to the incident in question the Appellant had acted towards the Claimant in a way which constituted a fundamental breach of the "duty of trust and confidence" and that the instruction itself might be part of that conduct: if that were so the Claimant might be said not to have been at fault in refusing to obey it.  If there was indeed such an inconsistency in its reasoning it could be said to have made an error of law.

5. At para. 151 the Tribunal set out the arithmetic of the award on the proposed corrected basis.  At para. 152 it said this:

We are conscious that this case has already lasted three days, that costs are no doubt substantial, and that further delay is not desirable (though the parties must take the major responsibility for the length of the proceedings).  In these circumstances, we are happy to proceed by way of written submissions, and ask parties to intimate within 14 days of the date of this judgement whether they wish to proceed in this manner.  If both parties do not reply within 14 days, the tribunal will proceed to fix a hearing.

6. Consistently with those passages in the Reasons, the formal Judgment read as follows:

It is the unanimous judgment of the tribunal that
(1) the claimant was unfairly dismissed by the respondents;
(2) that the oral decision announced at the close of proceedings on 1st July 2009 whereby the tribunal found that the claimant had contributed to the dismissal to the extent of 30% and that the award to him be reduced accordingly, and that the respondents should pay to the claimant a monetary award of £3,086 be reviewed.

It will be appreciated that element (2) in that Judgment isnot in fact a record of the judgment issued orally on 1 July 2009, in accordance with rule 29 (1): on the contrary, it is a record of a decision to "review" that judgment.

7. The Appellant – that is, the Respondent before the Employment Tribunal – appeals against element (2) in the Judgment promulgated on 29 July, and specifically against the decision to "review" the decision to make a deduction for "contributory conduct".  (There is no challenge to the decisions to review the arithmetical error referred to in para. 147 of the Reasons and the omission to include a basic award.)  Although the grounds of appeal are pleaded in various ways, the basic point is a simple one, namely that the Tribunal was bound to adhere to its original decision as announced orally.  As before the Employment Tribunal, the Appellant was represented by Mr Khan and the Claimant by his father, Mr John Doro.  We received further written submissions from Mr Khan following the hearing.

8. It is necessary to start by identifying the formal basis on which the Tribunal was acting in deciding to "review" its decision announced on 1 July.  The Reasons do not in fact address this question, and it may be that the Tribunal assumed that it enjoyed the necessary powers without consciously focusing on their source.  At first sight, the use of the terminology of "review" would suggest that it was acting under rules 34-36 of the Employment Tribunal Rules of Procedure.  The relevant provisions of those rules can be summarised as follows:

(1) Rule 34 (1) (a) provides that parties may apply to have "certain judgments and decisions" reviewed under rules 34-36.  The judgments and decisions in question include (at (b)) a judgment other than a default judgment.  The Tribunal's oral judgment of 1 July was a "judgment" for the purpose of rule 34 (1): it is clear from rule 28 (3) that a judgment "issue[d] … orally" is a judgment for the purpose of the Rules, notwithstanding the need for it to be subsequently "recorded" as provided for in rule 29 (1) (and indeed then registered in accordance with rule 32).

(2) Rule 34 (5) provides that a tribunal may "on its … own initiative review a decision made by it … on the grounds listed in paragraphs (3) or (4)".  We need not set out those grounds in full: the only ground potentially relevant to the present case is (e), namely that "the interests of justice require such a review".

(3) In the case of a review by the tribunal on its own initiative, rule 36 (2) provides that:

**(a) a notice must be sent to each of the parties explaining in summary the grounds upon which it is proposed to review the decision and giving them an opportunity to give reasons why there should be no review; and
(b) such notice must be sent before the expiry of 14 days from the date on which the original decision was sent to the parties.**

9. When the matter was sifted to a full hearing, Lady Smith identified an issue as to whether rule 36 (2) had been complied with, because no notice as required by sub-para. (a) had been sent to the parties.  Our initial reaction was that this difficulty could be overcome on the basis that the Reasons themselves constituted the necessary notice: para. 148 explained the basis on which the Tribunal had decided to carry out a review, and para. 152 gave the parties the opportunity to make written submissions.  It is true that any notice so constituted was sent more than 14 days after 1 July, but the time limit provided for by sub-para. (b) runs from when "the original decision is sent to the parties", which seemed to us (although the wording is not entirely apt) to refer to the provision of the written record of the judgment as required by rule 29 (2), which did not occur until 29 July (if then).  On reflection, however, we do not think that this will work.  On a fair reading of the relevant paragraphs, the Tribunal was not announcing a proposal to conduct a review, as contemplated by rule 36 (2) (a), but a decision.  That is clear both from the language of para. 150 and from the terms of element (2) of the Judgment itself.  Consistently with that, the submissions invited at para. 152 are not about whether there should be a review at all but only about whether it should be conducted without a hearing.  (It is true that, as the Tribunal itself emphasised at para. 150, the decision to conduct a review does not necessarily mean that the original decision would be altered, but that is not the point: rule 36 (2) imposes procedural preconditions on the holding of a review at all.)

10. We are thus driven to the conclusion that the Tribunal had no power to conduct a review under rules 34-36.  However, that is not necessarily the end of the matter.  It has been recognised ever since the decision of this Tribunal, Phillips J. presiding, in Hanks v Ace High Productions Ltd [1978] ICR 1155 that an employment tribunal has a power to "recall" a decision announced orally in the interval before it is formally signed.  That power was particularly important under the Rules as they stood until 1993 because they did not give tribunals the power to initiate a review of their own motion.  However, there is no reason to suppose that the introduction of such a power in the 1993 Rules affected the existence of the power of recall.  Indeed, we note that the editors of Harvey on Industrial Relations and Employment Law observe, presciently, at para. [PI] 995-1000, that the power of recall "could still be relevant where a tribunal, purporting to exercise a power of review, fails to comply with the procedural requirements under r. 36 (2)".  In the present case the power of recall was available because, as we have observed, no written Judgment was promulgated recording the oral judgment of 1 July, and the eventual Judgment promulgated on 29 July expressly did not confirm the oral judgment.

11. Since the Tribunal did not identify the power under which it was purporting to act we cannot know whether, notwithstanding the use of the language of "review", it had in mind the power of recall.  However, that is not essential.  If it had a power to do what, in substance, it did – that is, to re-open part of a decision announced orally – it does not matter if it used the wrong label, at any rate if the principles governing the exercise of the power are the same in either case. 

12. Mr Khan's primary submission before us was that, notwithstanding the decision in Hanks, the power of recall "does not exist".  He relied in support of that proposition on the decisions of this Tribunal (presided over by Sir Ralph Kilner Brown and Wood J. respectively) in Jowett v Earl of Bradford [1977] ICR 342 and Spring Grove Services Group plc v Hickinbottom [1990] ICR 111.  But Jowett pre-dated Hanks and was disapproved in it (see at p. 1158 C-D); and in Spring Grove there was no suggestion that the statement of principle in Hanks was wrong, only that the (limited) power of recall which it recognised should not have been exercised in the circumstances of that case (see in particular p. 115C).  In those circumstances we see no reason not to follow Hanks.  (For completeness, we should note that the Court of Appeal in Lamont v Fry's Metals Ltd. [1985] ICR 566 assumed the existence of the power without deciding it – see per Lawton LJ at p. 568 E-F.)

13. Mr Khan's fallback submission is more substantial.  Phillips J. in Hanks made clear that the power of recall should be used sparingly.  At pp. 1158-9, having held that the power existed, he said this:

... before finally leaving the case we would like to add one or two observations about the way in which the power ought to be exercised.

In the first place it is essential, if it is to be exercised, to inform the parties precisely and in detail what it is that the industrial tribunal requires to be done at the further hearing. That in this case was not originally done, but perhaps it has substantially been made good by the note of evidence. Secondly, in several appeals we have indicated that we hear a lot of appeals which are somewhat pointless in the sense that there is obviously an error or omission which could perfectly well have been remedied, either by a review, or by a recall of the decision before it was perfected, and where all we can do is to allow the appeal and remit the case, perhaps six months later, to be heard on the point. It is that class of case, where the error or omission is obvious and comes to light soon after the hearing and before the order is drawn up, which is suitable to be dealt with in this way, rather than by way of review. Putting the matter negatively, it would obviously be wrong to make use of the power, in effect to re-hear the case, or merely to hear further argument on matters of fact with the possibility of changing the mind of the tribunal on the facts, when already a clear decision has been reached upon them [our emphasis]. It is intended for the plain omission or the simple error which can be put right, and matters of that sort. In other words, in summary, the power exists. In should be used carefully, sparingly and not as a matter of course. It follows from what has already been said that this appeal must be dismissed.

Mr Khan said that what the Tribunal was proposing to do in this case fell squarely within the terms of the words which we have italicised.  He bolstered that submission by reference to other decisions in which the restricted nature of the power of recall was emphasised.  One of the cases to which he referred – Lamont (see above) – is not in fact of any assistance because the ratio is that the basis on which the tribunal sought to recall its decision was misconceived in law.  But it is correct that two other authorities – Arthur Guinness Son & Co (GB) Ltd. v Green [1989] ICR 241 and Spring Grove (above) - support the submission that the power of recall should be exercised sparingly.

14. In our judgment the ultimate question in deciding whether to exercise the power of recall is, as in the case of the power of review under rule 34 (3) (e) which has largely replaced it, whether the tribunal judges that it is necessary to do so in the interests of justice, and having regard – to the extent that this adds anything – to the over-riding objective.  It is, however, in no way inconsistent with a broad discretion of that kind that it should be exercised in accordance with recognised principles: see Newcastle upon Tyne City Council v Marsden [2010] ICR 743, at para. 17 (p. 753), referring to the judgment of Rimer LJ in Jurkowska v Hlmad Ltd. [2008] ICR 841.  The most obviously relevant principle for present purposes is the principle of finality: in general, parties should be entitled to treat the formal statement by a tribunal of its decision on an issue before it as final.  It is for that reason that Phillips J. in Hanks emphasised – rightly, as we respectfully agree – that the power of recall should be exercised sparingly and with caution.  But that is a general principle and not an absolute rule.  There may sometimes be cases where justice requires that a decision be revisited, whether by way of recall or review.  The decision whether that is so in any particular case will depend on the circumstances of that case, and observations or phrases used in other cases should not be treated as having the force of law (cf Marsden (above), at para. 16 (pp. 752-3)).  Thus we would not treat the italicised passage from the judgment of Phillips J. in Hanks as enunciating any universal rule.  In any event, its application to the present case is doubtful, since the problem which concerned the Tribunal was not "merely" about the primary facts but about the correctness of its legal reasoning.  (It also, for what it is worth, seems to us that Phillips J. had in mind a case where one of the parties was applying for the exercise of the power of recall, in order to try to change the tribunal's mind.)

15. Those being in our view the relevant principles, we cannot say that the Tribunal in the present case erred in law in taking the course that it did.  We would make the following points:

(1) The decision which it wished to reconsider was one which it had made under some time pressure, in order to accommodate the parties, and for which it had only given brief oral reasons: see para. 1 above.

(2) The decision to reconsider was made of its own motion.  This was not a case where the exercise of the power of recall/review was sought by one of the parties.  The position of a tribunal which, in the course of preparing written reasons, comes to the conclusion that a decision which it has announced orally is, or may very well be, wrong is a difficult one.  It would be a strong thing to say that it is obliged to promulgate and justify a decision which it has come conscientiously to believe is wrong, or even open to serious doubt: is it in such a case to give reasons which it believes to be unsound?  is it to say that it no longer believes that its decision can be justified, but that since it has announced it there is nothing it can do about it and that the party affected is left to its right of appeal (if any, since the issue in question might, albeit rarely, be one of pure fact)?  Of course the fact must be faced that any tribunal or court may have second thoughts at a stage when, having regard to the interests of finality, the interests of justice mean that it is simply too late to do anything about it.  But the point about the present case is that the process was not complete: the Tribunal was obliged still to give reasons for the decision whose correctness it now doubted.  (Indeed it had still not even produced a formal record of its judgment; but we do not place great weight on that point by itself.)  We note that in Hanks the facts were essentially similar to those of the present case, inasmuch as the chairman had announced a decision in the applicant's favour but had had second thoughts after reading one of the authorities more fully in the course of drafting the reasons; and that Phillips J. declined to interfere with the decision to recall the oral decision and require further submissions.

(3) The issue which the Tribunal wished to consider again did not require any further consideration of the primary facts, still less evidence, and was apt for resolution by way of written submissions.

(4) The procedure proposed by the Tribunal incorporated the substance of the protections applicable if the case had fallen within the review procedure under rules 34-36: both parties were told, in writing, of the potential change of mind and were given a proper opportunity to make submissions about it.

16. We accordingly see no error of law in the Tribunal's decision and dismiss the appeal.