Employment Law Update - June 2008
10 Jun 2008Editors: James Pretsell
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EDITORIAL
This month sees the return of the Employment Law Update in a revised form. Gone are the compendious indices of reported cases and lists of legislation both relevant and, more frequently, esoteric. In its place comes a format designed to provide the reader with more detail about those cases and topics, which are encountered on a daily basis.
Each month we shall provide summaries of a select few cases from the higher courts, which we consider practitioners should know about. There will be fewer cases than previously but significantly more useful detail.
A further innovation is the monthly article. This will touch on a topic of practical or topical importance. This month’s article has been produced by David Roderick and deals with the issue of time limits in unfair dismissal cases. It is both useful revision for us all and touches on newer aspects such as the application of regulation 15(2) of the Dispute Resolution Regulations.
Turning to substantive matters, the Court of Appeal in the case of Towergate has provided yet more guidance on the interpretation of the Employment Act 2002 (Dispute Resolution) Regulations 2004. This case deals with the approach to be adopted to extensions of time under regulation 15(2). The case summary I provide below supplements the thorough treatment of this topic in David Roderick’s article. We can perhaps all agree with Keene LJ when he says that ‘the Regulations are not drafted with the clarity for which one would hope’. Although he does not go as far as describing the Regulations as ‘rebarbative’ (with apologies to bearded readers) which Underhill J memorably did in the case of HM Prison Service v Barua.
Guidance has also been given by the Court of Appeal as to the approach to the burden of proof in dismissal/whistleblowing claims and Elias P has decided that a successor cannot be used as a comparator in an equal pay claim. There have also been some recent decisions on TUPE 2006 which will be dealt with in an article to appear in next month’s update.
Your views on the new format are welcomed as are any suggestions for topics for treatment by way of an article. Please contact me at jpretsell@farrarsbuilding.co.uk.
James Pretsell
CASE LAW UPDATE
Towergate London Market Ltd v Ann Harris [2008] EWCA Civ 433 (CA, 30.4.08)
When deciding whether the normal time limit for presenting a complaint to a tribunal has been extended pursuant to regulation 15(2) of the Employment Act 2002 (Dispute Resolution) Regulations 2004, tribunals should avoid an unduly technical approach which focussed on whether a dismissal or disciplinary procedure was being followed. The touchstone of regulation 15(2) is the reasonable belief of the complainant that such a procedure was being followed
A majority of the Court of Appeal (Ward LJ dissenting) so held when refusing T’s appeal against a decision of the EAT (21.3.07, HHJ McMullen sitting alone).
Mrs Harris had been made redundant by Towergate. She learned after her dismissal for redundancy that she had been unfairly selected by her employer. She wrote a letter of complaint stating that she wished to raise a grievance in respect of her selection for redundancy. Her employer refused to deal with her grievance. Mrs Harris then presented a claim for unfair dismissal to the employment tribunal outside the normal time limit but within the extended period. Her claim was dismissed by the ET but reinstated on appeal by the EAT.
Regulation 15(2) states that:
The Court of Appeal held that although it would be apparent to an employment lawyer that in fact no dismissal or disciplinary procedure was being followed in respect of a grievance letter this was not the test laid down by Regulation 15(2). The emphasis on the question of the letter’s status as a letter of appeal or grievance was misplaced. The tribunal should ask itself (i) whether the (former) employee believed a dismissal or disciplinary procedure was being followed and (ii) whether there were reasonable grounds for such a belief. There was sufficient evidence before the EAT for it to answer both these questions in the affirmative.
Ryta Kuzel v Roche Products Ltd [2008] EWCA Civ 380 (CA, 17.04.08)
The Court of Appeal gave guidance as to the correct approach to the burden of proof in claims of dismissal for the making of a protected disclosure. Giving the judgment of the court, Mummery LJ stated that (i) it was for the employer to prove the reason for the dismissal and (ii) that that reason was a potentially fair one. If an employee advances an alternative and inadmissible reason for the dismissal (such as whistleblowing) then some evidence must be adduced in support of that alternative case, e.g. evidence of making protected disclosures. However an employee is not under any burden to prove that the dismissal was for that different reason. It is sufficient to challenge the employer’s evidence and advance some alternative evidence. The tribunal, having heard evidence from both sides, should then consider the evidence as a whole and decide what was the reason or principal reason for the dismissal on the basis that it was for the employer to show what the reason was.
In this case the tribunal had accepted neither the employer’s nor the employee’s reason for dismissal and had found a ‘third way’ as the reason for dismissal, namely the temper of the employee’s line manager. The Court of Appeal considered that this approach could not be criticised. Accordingly in a whistleblowing claim if a tribunal does not accept the reason put forward by the employer it does not follow that the whistleblowing claim is made out. A tribunal has to take a view based on the while of the evidence and it may legitimately conclude that neither of the reasons put forward b the parties is the real reason for dismissal.
Walton Centre for Neurology and Neuro Surgery NHS Trust v D Bewley (EAT, 23.05.08)
The EAT (Elias P sitting alone) has held that a woman in an equal pay claim cannot compare herself to a successor. In so doing Diocese of Hallam Trustee v Connaughton [1996] ICR 860 was held to have been decided per incuriam (indeed this was common ground between the parties) and was said to be an authority that could not be relied upon in any way.
In so deciding Elias P had regard to the view of the ECJ that concrete appraisal is the bedrock of the application of Article 141. Comparison with a successor did not in his view ‘provide the secure factual premise which enables the proper and precise extent of the past and necessarily hypothetical discrimination to be determined’. The exercise of comparing with a successor was considered too hypothetical by Elias P since the exercise reconstructs virtual rather than actual history: it asks how events would have progressed had things been otherwise. Since the ECJ has denied the use of hypothetical comparators in such claims, Elias P considered that rationale also precluded the use of a successor comparator.
ARTICLE
The Limitation of Unfair Dismissal Claims
1. This article highlights recent decisions relating to the current limitation regime for unfair dismissal claims. As with other systems governing the periods of time within which a court action must be commenced, the Employment Tribunal limitation rules contain an initial limitation period, which can then be extended by certain discretionary powers. The situations in which this discretion is commonly exercised in favour of a claimant will naturally develop over time, and certain principles of law that previously restricted the ability of claimants to successfully extend time have been altered by recent decisions.
2. Unfair dismissal claims have to be brought in time pursuant to the provisions of s.111 (2) of the Employment Rights Act 1996, "[…] 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". For easier immediate comprehension, this means, "in the rule of thumb language… three months less a day. Where it is not reasonably practicable to present a claim, then it must be presented in a reasonable period thereafter" (McMullen QC, HHJ Law and Ors v Peterborough City Council, UKEAT/0448/07/CEA, 5th December 2007 at paragraph 5).
3. There is of course a distinction between an extension of time for unfair dismissal claims (where the tribunal will be applying the tests of reasonable practicability and reasonableness) and an extension of time in, notably, unlawful discrimination and victimisation claims, where the tribunal may be willing to extend the time limit on the basis that it is just and equitable to do so in all the circumstances (s.75 Sex Discrimination Act 1976, for example). This article focuses on unfair dismissal case law developments, as this is where precedents of a more determinative character emerge.
4. Furthermore, pursuant to reg.15 of the Employment Act 2002 (Dispute Resolution) Regulations 2004 (SI 2004/752) ("the 2004 Regulations"), the normal time limits applicable to claims specified in schedules 3 and 4 of the Employment Act 2002 (which include both the unfair dismissal and the discrimination claims as distinguished above) are extended by three months to allow for compliance with the statutory procedures. This occurs when the employee has reasonable grounds for believing, when the primary time limit expired, that a dismissal or disciplinary procedure was being followed in respect of the matters that consisted or included the substance of the complaint to the tribunal (reg.15 (2) 2004 Regulations), or has submitted a grievance within the normal time limit for submitting a complaint to the tribunal (reg.15 (3) 2004 Regulations). (It is to be remembered, however, that the Employment Bill 2007 proposes the repeal of the current statutory dispute resolution format and that such a change is probably to be expected during 2009).
5. In the light of the above statutory scheme, the following questions naturally arise when considering the tribunal’s powers; (1) how strict is the interpretation of the "three months minus one day" limit in s.11 (2) (a) given that there is a residual discretion to extend time; (2) in what circumstances might a claimant establish that it was not reasonably practicable to have presented their claim in time, and (3) how long is a reasonable period thereafter in which to present a claim? All three of these considerations may be usefully illustrated by recent case law.
(1) A strict primary limit
6. It is well understood that the primary time limit is strict and that there is no margin of error even for those claims entered a few moments late. This has been emphasised recently in J.R. Beasley v National Grid Electricity Transmissions (UKEAT/0626/06/DM, 6th August 2007) and D. Miller v Community Links Trust Ltd (UKEAT/0486/07/JOJ, 29th October 2007), two cases that serve as a salutary reminder of two obvious points. A claim is only validly presented to the tribunal when it has been received, not when it is sent. Moreover, the electronic submission of an ET1 via the tribunal website is not an instantaneous process.
7. In Beasley, the claimant became aware of the deadline only one day before the actual deadline of the 6th May 2006. At 23:44 on the 6th May 2006 he sent the claim form to an incorrect address. This was returned at 23:45, and at 23:57 he sent a test message (not the actual claim form) to the correct address. Immediately following this he sent the claim form so that it arrived at 00:01:28 on the 7th May 2006 and so was 88 seconds out of time. On appeal, Silber J described the claimant as "not surprisingly and very understandably aggrieved that a delay of less than two minutes in presenting his claim means that the Employment Tribunal has no jurisdiction even though the respondent has not been prejudiced in any way by this very short delay" (paragraph 8 of the judgement).
8. Somewhat predictably, missing the deadline by an even smaller margin attracts no greater leniency. When submitting a claim online the tribunal website displays an unavoidable disclaimer aimed at claimants submitting claims on the last day of the time limit. In Miller the claimant’s representative pressed the submit button on the tribunal website to enter the ET1 at 23:59:59 on the last day before expiry of the time limit. The tribunal server received it at 00.00.08 the next day, thus being presented 9 seconds out of time. Stark though it may be, this was also upheld as being out of time.
9. If the relevant claim is not presented in time then a claimant is of course left in a position in which they must establish that it was not reasonably practicable to have presented the claim within those three months. In Beasley, the claimant was unsuccessful in his appeal that the tribunal had failed to consider the issue of reasonable practicability. In Miller it was argued that there were four grounds making it not reasonably practicable for the claim to have been presented; that the claimant’s representative had no notice of the tribunal website’s disclaimer; that he had an untreated medical condition; that he had a 30 wpm typing speed, and that, when the claim form was submitted, he had received an acknowledgement in time. The EAT found that the representative’s account on these submissions had been "examined, deconstructed and rejected" (McMullen QC, HHJ at paragraph 8).
(2) Not reasonably practicable for the claim to be presented
10. The meaning of the phrase "not reasonably practicable" is open to a significant spectrum of interpretation. After all, a plain English definition of practicable is simply along the lines of "able to be done". As a potentially time-barred claimant, one would wish the phrase to be interpreted synonymously with reasonable: that is to say that the statutory test would be satisfied just because it was reasonable not to have done what could have been done. On the other hand, a respondent would argue that the meaning of the phrase should be limited to that which is reasonably capable physically of being done. Unsurprisingly, the appellate courts have adopted neither of these two extremes. In Palmer & Saunders v Southend-on-Sea Borough Council (1984) 1 WLR 1129: (1984) 1 All ER 945, it was decided that "reasonably practicable" (under the equivalent legislative provision at that time) should be construed neither so widely as to mean simply reasonable nor so narrowly as to mean reasonably capable physically of being done. It was stated that the best approach was to ask whether it was reasonably feasible for the complaint to have been presented in time.
11. In Marks & Spencer v Williams Ryan [2005] IRLR 562 the Court of Appeal approved the principle that s.111 (2) should be given a liberal interpretation in favour of the employee. (Lord Phillips MR, at paragraph 20). Subsequently, in Beasley the critical determining factors in deciding whether it was "reasonably practicable" have been set out as "(a) the state of the claimant’s knowledge relating to the right to make a claim for unfair dismissal and the need to bring this claim for unfair dismissal within three months of the effective date of his dismissal; (b) the steps taken by the claimant to ensure that he did bring the claim within that period; and (c) any impediments which prevented the claimant from bringing the claim within this period." (Silber J, at paragraph 17).
12. It is evident that the question posed by the section is one of fact for the tribunal. It will investigate what was in fact the substantial cause of not presenting in time. Therefore any list of the relevant considerations cannot be exhaustive, but will clearly include inquiry as to the manner of dismissal, the application of any appeals procedure, any fault on the part of the complainant or their adviser, or any other typical impediments (for example, debilitating illness or industrial action).
13. The manner in which the statutory phrase is to be interpreted is established (what is reasonably feasible), and the focus of the inquiry in addressing this is apparent (what actually prevented presentation in time). Recent Court of Appeal and EAT decisions illustrate the likelihood of success of the three most common explanations a claimant might advance: the ignorance of the claimant, the fact that the claimant has received incorrect advice or the fact that there was an ongoing appeal process.
The claimant’s ignorance of a right
14. Ignorance of the right to bring a tribunal claim or the time limit within which to do so is not a sufficient excuse unless a claimant could not reasonably have been expected to be aware of those rights. In Marks & Spencer v Williams Ryan it was stated that when deciding whether it was reasonably practicable for an employee to make a complaint to a tribunal, regard should be had to what, if anything, the employee knew about the right to complain to the employment tribunal and of the time limit for making such a complaint. Crucially, ignorance of either right did not necessarily render it not reasonably practicable to bring a complaint in time. It is necessary to consider not merely what the employee knew, but what knowledge the employee should have had had he or she acted reasonably in all the circumstances (Lord Phillips MR, at paragraph 21).
15. The Court of Appeal then went on to commend the approach to this question adopted in Wall’s Meat Ltd v Khan [1979] ICR 52. A claimant is likely to plead that they were reasonably ignorant of either (a) the right to make a complaint of unfair dismissal at all, or (b) how to make it, or (c) that it was necessary to make it within a period of three months from the date of dismissal. There is no difference between these three reasons as, provided the ignorance was reasonable, each is able to satisfy the tribunal that it was not reasonably practicable. Importantly, however, there is a great deal of difference in practice in the ease or difficulty with which a finding that the relevant ignorance is reasonable may be made. Where a claimant is ignorant of the existence of the right at all, he is unlikely to be found to have been acting unreasonably in not making inquiries as to how, and within what period, he should exercise it. On the other hand, knowing of the right but not making an inquiry will make it difficult to satisfy a tribunal that the claimant behaved reasonably in relation to their ignorance (Brandon LJ, at page 61).
16. The proposition that ignorance of a right is not sufficient to establish that it was not reasonably practicable to present a claim was more recently dismissed in University of Wolverhampton v Elbeltagi (UKEAT/0167/07/RN, 13th July 2007). It was held that there was no principle of law that a claimant who did not know of a time limit, or who did not ask about a time limit, necessarily could not establish a case that it was not reasonably practicable for him to present his claim in time. He might have difficulties in such circumstances, but that was a matter for the tribunal to resolve (Burke QC, HHJ at paragraph 24).
17. However, in Carmarthen & Pumsaint Farmers Ltd v Evans (UKEAT/0426/07/RN, 12th October 2007) the employer’s appeal was upheld as the tribunal judgement did not reveal any inquiry as to the circumstances of the claimant’s ignorance, or why, if the claimant knew of the right of recourse, he had taken no steps to find out about its existence. In the absence of these reasons, Beatson J indicated what might suffice in that context. For instance, had there been some link between either the correspondence between the claimant and the employer, or the stance of the union in not alerting the claimant to the time limit, and the circumstances of why the claimant remained ignorant of his tribunal rights then such factors might have made ignorance reasonable (Beatson J, at paragraph 12).
Incorrect advice
18. A significant issue arises where the claimant endeavours to rely on the fault of an adviser as the factor making it not reasonably practicable to claim within the primary limitation period. Such a mistake used invariably to be pinned upon the claimant (Dedman v British Building & Engineering Appliances Ltd [1974] ICR 53). This principle remains straightforward if the adviser is a retained solicitor but is less so when the adviser is some other volunteer, such as the Citizens Advice Bureau.
19. In Marks & Spencer v Williams Ryan, the employer appealed against a decision of the EAT allowing the claimant (WR) to present her complaint of unfair dismissal four months after dismissal. WR, who had been a part-time sales assistant, was summarily dismissed on the grounds of gross misconduct. She claimed she had been unfairly dismissed and contacted the CAB who advised her to exhaust the internal appeals procedure but did not tell her of her right to make a complaint to the tribunal. WR exhausted the internal appeal procedure, which she lost, during which time the time limit to make a claim expired.
20. After consideration of the relevant authorities, Lord Phillips MR concluded, at paragraphs 31 – 34, that where a claimant retains a solicitor to act for him and then fails to meet the time limit because of the solicitor's negligence it is clear that the adviser's fault will defeat any attempt to argue that it was not reasonably practicable to make a timely complaint to an employment tribunal. However, having obtained misleading advice from a CAB cannot, as a matter of law, rule out the possibility of demonstrating that it was not reasonably practicable to make a timely application to an employment tribunal.
Misleading advice from the CAB was central to the recent decision in Royal Bank of Scotland plc v Theobald (UKEAT/0444/06/RN, 10th January 2007). The claimant had received the erroneous advice from the CAB that he was required to complete an internal appeal procedure before he could present his unfair dismissal claim. The internal appeal was unsuccessful and he received the appeal decision about two days before the expiry of the three-month time limit for presenting his claim. The tribunal did not actually receive his claim until 13 days after the expiry date. The tribunal held that it was not reasonably practical for the claim to have been presented within the time limit and that it was presented within a reasonable time thereafter. The appellant employer argued that the tribunal should have regarded the CAB as a skilled adviser and should have considered that, as the claimant had consulted a skilled adviser, it had been reasonably practicable to have presented the claim in time.
On appeal, Smith LJ distinguished the circumstances where a claimant simply obtains a piece of relevant advice from an adviser rather than putting the claim wholesale in the hands of that adviser. A claimant who had received erroneous advice from a skilled adviser but had retained for himself the responsibility of presenting his claim would be entitled to argue that it was not reasonably practicable for him to present his claim during any period that he was acting on that error. The claimant had sought advice from an appropriate body and there was nothing to suggest that he should have been put on notice that the advice was erroneous (Smith LJ, at paragraph 33).
23. Applying Theobald, it was decided in Octopus Jewellery Ltd v D.J. Stephenson (UKEAT/0148/07/JOJ, 7th June 2007) that the gravity of a mistake made by a skilled adviser had itself been materially affected by the actions of the employer. The claimant was dismissed owing to a shortfall in her achievements as a sales representative. On advice from a CAB she submitted an ET1 claim form that was two days out of time. The tribunal concluded that, in misunderstanding the effective date of her termination, both she and her advisor had made a genuine and reasonable mistake owing to the ambiguous language used by the employer in letters provided to the claimant. It was therefore open to the tribunal to conclude that there was no substantial fault on the part of the claimant or her advisor.
24. However, the apparent relaxation of the Dedman principle (that claimants are fixed with a mistake made by skilled advisers) by the decision in Theobald has been questioned. In D.R. Ashcroft v Haberdashers Aske’s Boys School (UKEAT/0151/07/CEA, 14th November 2007), Burton P indicated that distinguishing whether fault must lie with a claimant on the basis of the extent to which a skilled adviser had control over a claim ("the Theobald distinction") was "a difficult distinction which may not be possible to pursue in practice, and may not be founded on logic or good authority" (Para 14).
On going appeal process and reg.15, EA 2002 (DR) Regs 2004
25. It is unsurprising that the mistakes made by advisers – skilled or otherwise – have often concerned the pendency of an appeal process, particularly in the light of the current statutory dispute resolution scheme. It is still a true proposition that the existence of an ongoing appeal procedure is not of itself sufficient to indicate that it was not reasonably practicable to have brought a claim (Dedman, Palmer), however the purpose of the 2004 Regulations was to encourage claimants to exhaust internal procedures before resorting to a tribunal. In return, the right to claim unfair dismissal is safeguarded by an extension of the primary limitation period.
26. Royal Bank of Scotland v M Bevan (UKEAT/0440/07/LA, 26th November 2007) raised the "interesting point which lies at the intersection between established case law on the question when it is "reasonably practicable" to begin proceedings and a new statutory provision, in reg.15 of the Employment Act 2002 (Dispute Resolution) Regulations 2004, which allows for an extension of time to begin proceedings where an employee reasonably believes that statutory dismissal procedures are being followed" (Richardson HHJ, at paragraph 1). Mr Bevan was dismissed for gross misconduct and received notification that his appeal had been unsuccessful a mere five hours before the expiry of the normal three-month time limit. Up until that moment he reasonably believed that his dismissal procedure was still being followed and, relying on the extension of time in reg.15 of the 2004 Regulations, he had not submitted a claim. He had evidently ceased to hold that belief when the normal limit expired.
27. On appeal, the EAT held that an employee was not obliged to wait for the completion of an internal procedure before commencing tribunal proceedings. However, reg.15 of the 2004 Regulations extended the normal time limit for a further three months where the claimant held a reasonable belief that a dismissal procedure was being followed at the time of the expiry of the normal time limit. It was common ground that Mr Bevan had reasonably believed that a dismissal procedure was being followed. He had ceased to believe that fact just five hours before the expiry of the three-month time limit. Since he had ceased to hold that belief at the expiry of the time limit, time was not extended by virtue of reg.15(1) and reg.15(2) of the 2004 Regulations for a further three months. Mr Bevan was expecting that he would present his claim if and when he learned that the appeal was unsuccessful. His Honour Judge Richardson thought that was a perfectly reasonable stance for an employee to take for it was plainly envisaged by the 2004 Regulations that procedures should be able to take their course before proceedings were commenced. A tribunal was therefore entitled to conclude that if the employer suddenly and without warning completed the appeal procedure just before the expiry of the three-month period it was not reasonably practicable for the employee to commence proceedings in time.
(3) Reasonable further period
28. If it is established that it was not reasonably practicable to present a claim within time, then a claimant must still present the claim within a reasonable period. Some of the individual features in any given case will of course go to both limbs of the test; for example, if a claimant was reasonably ignorant of the right to claim at all, a reasonable time after the limitation period is likely to be longer.
29. In Bevan, the employer argued that the tribunal was wrong to have found that six days was a reasonable further period. However, it was held on appeal that the question of what further time was reasonable to bring a claim was very much a question of fact for the tribunal. There was no error of law in the tribunal's approach. This is as opposed to the EAT’s decision in Theobald, where the claimant had submitted his claim 13 days after the expiry of the time limit. The tribunal erred in law in failing to provide adequate reasons for the decision that the claim had been presented within a reasonable time after the expiry of the limit.
30. It is necessarily difficult to draw solid conclusions from previous case law on what is a reasonable period, in that this will depend on the impediment that initially causes the claim not to be presented in time. In Northumberland County Council and the Governing Body of Choppington First School v D. Thompson (UKEAT/0209/07/MAA, 14th September 2007) it was stated that both the tests of what was reasonably practicable and what was reasonable in s.111(2)(b) embraced, although in different ways, the same concept of reasonableness. The whole section should be given a liberal interpretation in favour of the employee. An employment tribunal considering and applying the words "within such period as the tribunal considers reasonable" should follow the approach on reasonable practicability, dealing with the reasonableness aspect, rather than the "practicable" aspect of that definition. That exercise entailed consideration of not merely what the employee knew, but also what knowledge the employee should have possessed had he acted reasonably in all the circumstances.
DAVID RODERICK