Stanley Cole (Wainfleet) Ltd. v Sheridan

This appeal raises the short but interesting point identified by Mr Recorder Langstaff Q.C., the Chairman of the Employment Appeal Tribunal, when giving permission to appeal:-

Mrs Sheridan, the respondent to this appeal, was employed by the appellant, Stanley Cole (Wainfleet) Ltd., a manufacturing company, from 14^th August 1995 until she resigned, that resignation being treated as taking effect on 28^th July 2000. She made a complaint to the Employment Tribunal in Nottingham alleging that she had been unfairly constructively dismissed.

The tribunal found that on Friday, 14^th April 2000, she was one of four working in the Customer Services Department. She was approached by Mr Holyer, a recently promoted quality manager, about an order for one of her usual customers. There was a heated discussion. Mr Holyer raised his voice but was not abusive. Nonetheless Mrs Sheridan felt threatened, and felt so physically ill that she left the office. After an absence of about an hour and a half, part of which spread over her lunch break, she returned and spoke to her superior, a Mr Leigh. She was upset, in tears and emotional and Mr Leigh advised her to go home. She saw her doctor during the weekend and was certified unfit to work for two weeks due to stress. She remained away from work providing medical certificates to similar effect for the remainder of her employment.

On 27^th April she was seen at home by the personnel manager and gave her account of the events of the 14^th. On 17^th May Mr Leigh conducted a disciplinary inquiry and found that she had unreasonably left work without permission “thereby committing an act of gross misconduct which could result in summary dismissal”. She was given a final written warning for misconduct.

She appealed to the managing director, Mr Cole, and attended a meeting before him on 16^th June. He wrote to Mrs Sheridan on 21^st June upholding the final warning. She resigned a month later on 21^st July stating in her letter dated that day:

The hearing took place over two days. In its written decision promulgated on 15^th June 2001 the Employment Tribunal directed itself on the law as follows:-

It is not necessary for the purposes of this appeal to decide on the correctness of that direction, especially on the need for or perhaps relevance of acting promptly, or perhaps, more accurately, failing to act promptly.

On the facts, the tribunal concluded that the incident with Mr Holyer was relatively minor. They held:-

The tribunal did however add:-

The tribunal was satisfied that she was justified in treating her employment at an end by reason of the employer’s breach and that the dismissal in all the circumstances was unfair. Having found in her favour a remedy hearing was fixed for 13^th July. Simply for the sake of revealing the outcome of this case, I note that the Employment Tribunal eventually awarded her £3,500 and that comparatively modest sum is the amount at stake in this appeal.

Mrs Sheridan, with the help of the Citizens Advice Bureau, prepared a schedule of loss for the remedy hearing. This disclosed that she had commenced employment with Butlins and worked for them for fourteen weeks from 2^nd August to 7^th November 2000. This information set the appellant on a train of enquiry. On looking through the eighty-page bundle of documents which had been before the Employment Tribunal, Dr Cohen, a director of the company, paid closer attention to document 70 and 71. The first was a letter from Butlins dated 24^th July, a date after Mrs Sheridan’s letter of resignation. Butlins wrote:-

In response to further enquiries from the company Butlins supplied the following information:-

That led to the company applying on 25^th June 2001 for a review of its decision on grounds falling within Rule 13 of the Employment Tribunal’s Rules of Procedure as set out in schedule 1 to the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2001 which provide as follows:-

new evidence has become available since the conclusion of the hearing to which the decision relates provided that its existence could not have been reasonably known of or foreseen at the time of the hearing; or

the interests of justice require such a review.”

The new evidence which the company sought to introduce was the fact of Mrs Sheridan’s employment with Butlins and the information contained in Butlins’ letter of 4^th July. The company submitted in its written application:-

whether the applicant’s delay in resigning her employment with the respondent constituted a waiver of any repudiatory breach of contract.

what was the real reason for the applicant’s resignation?”

The company submitted:-

In its decision dated 1^st November 2001 the tribunal held as follows:-

Dealing with the interests of justice, the tribunal held:-

The company is aggrieved at the way in which that review hearing was conducted. Dr Cohen, who appeared before the tribunal on the company’s behalf as he appears before us, set out in an affidavit what happened as follows:-

The tribunal has accepted that paragraphs 1-6 inclusive of that affidavit are accurate but the chairman has written:-

Dr Cohen does not recollect that and, I hope without doing injustice to the tribunal, I approach this matter accepting for this purpose that no help was given to Dr Cohen as to the way in which tribunals have applied rule 13(1)(e).

The company appealed both the decision promulgated on 15^th June 2001 and the decision of 1^st November 2001. The first appeal, described as the merits appeal, raised issues as to the correct approach to determining a claim of constructive dismissal and as to whether the imposition of a final written warning may be capable of amounting to repudiatory conduct on the part of the employer. The second appeal raised issues of the correct approach by an Employment Tribunal to authorities and the test which it is appropriate to apply to an authority which the tribunal wishes to rely on in reaching its decision but which it has not invited the parties to address. There was, however, no appeal against the adverse findings made against the company on the rule 13(1)(d) ground.

In a decision promulgated on 25^th October 2002 the Employment Appeal Tribunal, presided over by Mr Recorder Langstaff Q.C., dismissed the merits appeal and there is rightly no further appeal to us.

The second appeal, the “review appeal”, was also dismissed. The tribunal concluded:-

In their view:-

Having approached the matter in that way, they rejected the appeal saying:-

To précis Dr Cohen’s submissions:-

The decision of the Employment Tribunal in refusing to remit was unjust because of the serious procedural irregularity and was a breach of his right to a fair hearing enshrined in Article 6 of the European Convention on Human Rights.

His primary case is that since the authorities followed by the Employment Tribunal “could be viewed as somewhat esoteric”, but were nonetheless central in the sense of their being “relevant, significant and material” to the decision, the failure to ensure that the parties had an opportunity to consider and make representations upon them rendered the hearing unfair.

That test of centrality derived from the judgment of His Hon. Judge Serota Q.C. in Albion Hotel (Freshwater) Ltd. v Maia E Silva [2002] IRLR 200. That test was not qualified by the need to show a “material injustice” as His Hon. Judge Peter Clark held in Nelson v Carillion Services Ltd., a decision of the Employment Appeal Tribunal promulgated on 28^th June 2002.

It is, therefore, wrong to consider whether his knowledge of the principles in Deria and Lindsay would have made a difference to the original decision. Furthermore, if this question does arise, it is only the original tribunal that is able to determine whether or not it would have made a difference to it.

If the appellate tribunal or appellate court is able to deal with that question, then it should hold that there was a good mitigating circumstance, namely the failure on the part of Mrs Sheridan to comply with the tribunal’s directions. Had she filed a witness statement and served a schedule of her loss as she should have done before the first hearing, he would have been able to raise in time the matters upon which he now wishes to rely.

Although the fact that he is not legally qualified is not a mitigating circumstance of itself, it is relevant to considering the reasonableness of the explanation he proffers for not adducing the evidence at the first hearing.

If material injustice is a necessary ingredient, the appellant has suffered it.

Mr Damien McCarthy, who now appears on her behalf, submits that the appellant has to establish a material injustice. It is, therefore, necessary for the appellate tribunal or court to consider what difference it would have made had he been aware of the authorities concerned. Lack of professional qualification or experience can never be a mitigating circumstance. The receipt of additional indications of Mrs Sheridan’s employment would not mitigate the fact that the point could reasonably have been taken on the material that was available at the time.

Not to be afforded a fair hearing would be an obviously serious procedural irregularity sufficient to allow the appeal. The real question is, however, whether what happened was seriously irregular and unfair.

It is not contended, and rightly so, that there is a serious irregularity simply because a judge (and for present purposes that includes the tribunal) cites in his or her judgment decided cases which had not been referred to in the course of the hearing. Judicial research would be stultified if that were so and if the parties had to be given the opportunity to address each and every case eventually set out in the judgment.

The test applied by His Hon Serota Q.C. in Albion was this:-

Dr Cohen sums up that test of relevance, significance and materiality as meaning that the authority must be central to the decision. In my judgment I can accept those epithets insofar as they convey the meaning that the authority must be shown to be central to the decision and not peripheral to it. It must play an influential part in shaping the judgment. If it is of little or no importance and serves only to underline, amplify or give greater emphasis to a point that was explicitly or implicitly addressed in the course of the hearing, then no complaint can be made. If the point of the authority was so clear that a party could not make any useful comment in explanation, then it matters not that the authority was not mentioned.

Thus it seems to me, the authority must alter or affect the way the issues have been addressed to a significant extent so that it truly can be said by a fair-minded observer that the case was decided in a way which could not have been anticipated by a party fixed with such knowledge of the law and procedure as it would be reasonable to attribute to him in all the circumstances.

There is, however, an important caveat. This is not intended to be an all-encompassing test. It is, in my judgment, impossible to lay down a rigid rule as to where the boundaries of procedural irregularity lie, or when the principles of natural justice are to apply, or what makes a hearing unfair. Everything depends on the subject matter and the facts and circumstances of each case.

I cannot accept Dr Cohen’s submission that the proper approach is limited to establishing the centrality of the decided authority to the decision in question. That is the first stage of the enquiry. As Judge Serota said, failure to give a party the chance to address the authority may, not must, amount to a breach of natural justice. The hearing will not have been unfair if it has caused no substantial prejudice to the party claiming to be aggrieved. It must, therefore, also be shown, as Judge Peter Clark held in Nelson, that a material injustice has resulted. In his view “Judge Serota was not stating a new proposition of law” in setting out the tribunal’s opinion in paragraph 35 of his judgment which I have cited above. In Nelson, it was clear from their reasoning that the tribunal considered that the authority of which the appellant was unaware was relevant because they cited it in their reasons. He held:-

Applying that approach, I ask first whether Deria was “central” to the tribunal’s decision. In Deria Bristow J. followed the judgment of Phillips J. in Flint v Eastern Electricity Board [1975] I.C.R. 395 where the question was whether, and if so in what circumstances, where what is now rule 13(1)(d) precluded a review on the ground that new evidence was available, a review based on the availability of fresh evidence might be open under rule 13(1)(e). It is important to note that the success of the application for a review depended upon that new evidence being admitted. So it does in the case before us. It was in those circumstances that the application of rule 13(1)(e) had to be considered “keeping an eye” on the terms of rule 13(1)(d). Phillips J. held at p.404:-

I can accept that at first blush the ground provided under (e) is a broad, freestanding ground not linked to the separate ground under (d) and that it is reasonable so to understand it. It may not be immediately apparent, as Bristow J. held in Deria at p.202, that:-

In my judgment this is a refinement and gloss upon the ordinary wide meaning of the words in (e) of such a kind that the tribunal ought to have directed Dr Cohen’s attention to it. There is force in his submission that the omission was all the more surprising in view of the fact that, on the facts we are assuming to be accurate, the tribunal had the report before them with the relevant passages already underlined. Dr Cohen’s submissions had been broadly based when a narrower focus was required in view of the fact that his case was essentially dependent upon the new facts being admitted in evidence.

The vital question, in my judgment, is whether it would have made any difference to the outcome if Dr Cohen had been armed with this authority. That is a question for this court to answer. It is not a matter we must refer back to the original tribunal.

Not having appealed against the decision refusing to remit on the grounds set out in rule 13(1)(d), Dr Cohen has to accept the findings made in that regard namely that it was clearly foreseeable given the existence of documents 70 and 71 that Mrs Sheridan was seeking employment at some point around the date of the receipt of the request for a reference on 28^th July 2000. He had, therefore, to establish some exceptional circumstance or some mitigating factor “to temper in [his] favour … the rigour of the terms of rule [13(1)(d)]”. Had he known that is how the court would approach rule 13(1)(e) he would have sought to mitigate his failure to spot the point hidden in the eighty page bundle of documents by drawing attention to Mrs Sheridan’s own failings to comply with the tribunal’s directions. Particular emphasis is laid in this connection upon the respondent’s failure to serve her schedule of loss until after the hearing before the Employment Tribunal. As the appellant’s skeleton puts it (paragraph 32(c):

If the facts could have been discovered with reasonable diligence, remission will be refused. If the evidence could have been obtained, it should have been obtained and it is no sufficient excuse to mitigate that consequence to assert that the facts would have been more easily revealed if Mrs Sheridan had complied with her obligations. The hearing proceeded despite Mrs Sheridan’s failure and it is too late to use that failure to excuse his own shortcomings.

Dr Cohen is driven, therefore, to add his lack of forensic skill to the mitigation he seeks to advance. That leads me to deal with Lindsay.

I am not persuaded that Lindsay was central to the decision. Drawing attention to it during the course of the argument would not have altered or affected the way in which this part of the case was being presented. It served to show that the argument being advanced by Dr Cohen was wrong. If he had been told that his forensic shortcomings were no excuse, nothing he could have said would have made any difference to that point and his position could never have been improved. A generous latitude of indulgence may be afforded litigants in person as part of the court’s or tribunal’s endeavour to maintain a level playing field for all litigants, but as Mummery J. held in Lindsay:-

The interests of justice do not demand that any shortcomings in a litigant in person’s presentation of his or her case should be overcome by affording the litigant the indulgence of the chance to do better second time round. I am satisfied that there was no serious procedural irregularity in referring to Lindsay without it having been disclosed to him and the hearing was not rendered unfair by the omission to refer to it during the course of the hearing.

I pay tribute to Dr Cohen’s presentation of his case. He presented his arguments skilfully and concisely backed by immaculately prepared documents. I regret that he labours under this sense of injustice. I am, nonetheless, satisfied that the unfortunate manner in which judgment was delivered does not amount to a serious irregularity or a denial of his right to a fair hearing. In my judgment this appeal should be dismissed.

I respectfully agree with my Lord’s analysis of the question set out in his §1 that was posed to this court by the EAT. As the appeal progressed, however, I came increasingly to doubt whether that question was necessary for decision in order to dispose of the appeal.

The Tribunal, in §3 of its Extended Reasons of 1 November 2001, made a finding, not challenged before us, that the schedule of loss and the letter from Butlins were not “new” evidence. That, as I understand it to be agreed, disposed of any ground of review under Regulation 13(1)(d). Further, granted that finding, and leaving entirely out of account any general principle to be deduced from Deria, it is difficult or impossible to see what other ground there could be for re-opening the original hearing under Regulation 13(1)(e). The only possible ground was that which is quoted in my Lord’s §15, Dr Cohen’s handicap in not being a professional advocate. It scarcely needed authority, in the shape of Lindsay or otherwise, to reject that contention. True it is, as Dr Cohen reminded us, that Tribunals permit, even perhaps encourage, lay representation; but that gives no more licence than where professional advocates are engaged to attempts to reargue the case if on reflection the representative thinks that it could have been better put.

That is particularly so where, as here, no specific error can be attributed to the nature of the advocacy. I appreciate that Dr Cohen says before us that, armed with the new evidence, he would have rigorously cross-examined Mrs Sheridan as to her credibility; but that overlooks the Tribunal’s finding that the “new” evidence did not add to what was already before the Tribunal and available to the cross-examiner, professional advocate or not.

The latter difficulty also affects Dr Cohen’s argument before us that the “mitigating circumstance” that caused the interests of justice to require a review was, not merely his general inability as an advocate to identify the significance of the material that was available at the trial, but also and in particular Mrs Sheridan’s failure in the late service of the schedule of loss. Had she kept the rules, Dr Cohen would have had the new documents at the trial, their significance would have immediately have impressed themselves upon him, and he would have used them as already indicated. It appears from § 2.2.3 of the Grounds before us that this point was indeed taken at the review hearing. The Tribunal did not refer to it, and were right not to do so. The significance of the documents was not as documents, but as to the state of affairs that they revealed. The Tribunal found that that was already known to the employers at the time of the hearing. I appreciate that Dr Cohen urges before us that the new information was different from and more significant than that which was apparent from his company’s own correspondence: but that is not what the Tribunal found. Granted that finding as to the employers’ knowledge, justice cannot possibly require a review because there was another means to the same knowledge that was kept from them.

In truth, the main point of this appeal, and indeed almost the whole content of the Grounds of Appeal, is the failure of the Chairman to put to the parties at the review hearing the two cases that he referred to in his ruling. That is said to have deprived the employers of their “absolute right” to a fair trial, in breach of article 6. If HHJ Serota QC intended, in §34 of his judgment in Albion Hotel, to say that any failure to refer parties to material authority rendered the proceedings necessarily unfair (and I very much doubt whether he did so intend), then I am unable to agree. It is central to the procedural provisions of article 6 that an assessment must be made of the fairness of the proceedings as a whole. One authority amonst many to that effect is Nielsen v Denmark (1988) 11 EHRR 175[52]. A procedural failure, even one such as the present, will not lead to the proceedings being quashed or set aside unless substantial unfairness has occurred. I am satisfied, as was the EAT, that the outcome would not have been different had the Chairman taken the course that Dr Cohen urges. That is not only because of the considerations relied on by the EAT, but also for the more fundamental reason set out above that, once the Tribunal had found as it did as to the “new” evidence, there was as a matter of fact, not just of law, no room for recourse to Regulation 13(1)(e).

It would of course have been a lot better had the Chairman told the advocates of the authorities that he intended to cite, if for no other reason than to avoid the subsequent extensive use of court time over a dispute in which some £3,000 is in issue. But his failure to do so cannot possibly justify the allowing of the appeal. It may also be noted that the only effect of such a decision would be remission of the case to a further enquiry in which, because of the unchallenged findings already made by the tribunal, the outcome would inevitably be the same.

I agree with both judgments.