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Case No: PTA/2000/5356/AI
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
THE EMPLOYMENT APPEAL TRIBUNAL
Royal Courts of Justice
Strand, London, WC2A 2LL
Friday 26th May , 2000
B e f o r e :
LORD JUSTICE PILL
LORD JUSTICE MUMMERY
and
LORD JUSTICE LAWS
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|
MR
RA CAPEK
|
Appellant
|
|
-
and -
|
|
|
LINCOLNSHIRE
COUNTY COUNCIL
|
Respondent
|
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(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 180 Fleet Street
London EC4A 2HD
Tel No: 0171 421 4040, Fax No: 0171 831 8838
Official Shorthand Writers to the Court)
- - - - - - - - - - - - - - - - - - - - -
Mr RA Capek - The Appellant in person
Mr N Dean (instructed by The Chief Solicitor, Lincolnshire County
Council for the Respondent)
- - - - - - - - - - - - - - - - - - - - -
Judgment
As Approved by the Court
Crown Copyright ©
LORD JUSTICE MUMMERY:
This is an appeal by the Lincolnshire County Council (the Council) from the
decision of the Employment Appeal Tribunal dated 17 December 1998, allowing in
part an appeal by Mr Capek. His principal appeal was from the ruling of the
Employment Tribunal that he had failed to show that the tribunal had
jurisdiction to entertain his claims against the Council for breach of his
contract of employment. The rest of his appeals were dismissed. The appeal
tribunal directed that his breach of contract claims be remitted to a fresh
tribunal for a hearing on their merits.
The critical point is whether the combined effect of Articles 3 and 7 of the
Industrial Tribunals (Extension of Jurisdiction) Order 1994 (SI 1994/1623) (the
1994 Order) is to confer on an employment tribunal jurisdiction to entertain a
complaint of breach of contract presented by an employee to a tribunal
before the effective date of termination of the contract giving rise to
the complaint. The tribunal held, in their extended reasons sent to the parties
on 10 October 1996, that there was no jurisdiction. The appeal tribunal
disagreed. Permission to appeal to this court was granted on 19 April 1999.
Background to the 1994 Order
The 1994 Order was made under section 131 of the Employment Protection
(Consolidation) Act 1978 and now has effect as if made under section 3 of the
Employment Tribunals Act 1996.
The 1994 Order followed on the decision of the House of Lords in Delaney
v. Staples [1992] 1 AC 687 in which it was held that the industrial
tribunal had no jurisdiction to adjudicate on a claim for payment in lieu of
notice, as such a payment was not within the definition of "wages" in the Wages
Act 1986 and the tribunal had no general jurisdiction over claims for breach of
a contract of employment. Lord Browne-Wilkinson said at p. 697H
"This conclusion produces an untidy and unsatisfactory result. On any
dismissal, the summary procedure of the industrial tribunal under the [1986]
Act will be exercisable in relation to unpaid wages (in the ordinary sense),
holiday pay, commission, maternity leave etc. but claims relating to the
failure to give proper notice will continue to be brought in the county court.
The employee is therefore forced either to bring two sets of proceedings or to
proceed wholly in the county court on a claim for damages. To be forced to
bring two sets of proceedings for small sums of money in relation to one
dismissal is wasteful of time and money. It brings the law into disrepute and
is not calculated to ensure that employees recover their full legal
entitlement when wrongfully dismissed. The position is capable of remedy by an
order under section 131 of the Employment Protection (Consolidation) Act 1978
which enables the minister to confer jurisdiction on industrial tribunals to
deal with claims for breach of contract. As the judgment of Lord Donaldson of
Lymington M.R. in the present case shows, the courts have been suggesting that
this power be exercised for nearly 20 years, so far without success......I
believe that all your Lordships are of the view that the present unsatisfactory
position calls for fresh consideration by the minister."
The unsatisfactory state of affairs described by Lord Browne-Wilkinson not
only affected claims under the 1986 Act. The same problem of dual proceedings
arose when a dismissal from employment giving rise to a claim for unfair
dismissal, which was within the exclusive jurisdiction of the tribunal, also
gave rise to a claim for wrongful dismissal, which could only be brought in the
county court or, in the case of larger claims, in the High Court, because the
tribunal had lacked general jurisdiction over breaches of contracts of
employment.
The 1994 Order was made to remedy this state of affairs. As Keene J said in
Sarker v. South Tees Acute Hospitals NHS Trust [1998] ICR 673 at 680
"...[the 1994] Order extending the jurisdiction of industrial tribunals is
intended to avoid the situation where an employee (or for that matter an
employer) is forced to use both a tribunal and a court of law to have all his
or her claims determined. In simple terms ,the purpose of the extension of
jurisdiction was to enable an industrial tribunal to deal with both a claim for
unfair dismissal (which we take as an obvious example) and a claim for damages
for breach of the same contract of employment. Two sets of proceedings are
thus avoided."
Terms of the 1994 Order
Article 3 provides that
"Proceedings may be brought before an industrial tribunal in respect of a claim
by an employee for the recovery of damages ....if
(a)......
(b)....
(c) the claim arises or is outstanding on the termination of the employee's
employment."
The tribunal thus has jurisdiction over claims for breach of contract in cases
where there is a termination of the employment.
Article 7 is concerned with time limits and prohibits the tribunal from
entertaining complaints in respect of certain contract claims. It provides
that
" An industrial tribunal shall not entertain a complaint in respect of an
employee's contract claim unless it is presented-
(a) within the period of three months beginning with the effective date of
termination of the contract giving rise to the claim, or
(b) where there is no effective date of termination, within the period of three
months beginning with the last day upon which the employee worked in the
employment which has terminated, or
(c) where the tribunal is satisfied that it was not reasonably practicable for
the complaint to be presented within whichever of those periods is applicable,
within such further period as the tribunal considers reasonable."
THE FACTS
From 1 January 1989 Mr Capek was employed as an Emergency Duty Social Worker.
After an incident at the end of April 1994 he was suspended. The Council's
disciplinary procedure was implemented. Following a disciplinary hearing on 10
October 1994 he was dismissed with e ffect from 2 January 1995. He appealed to
a panel of Councillors against the decision to dismiss him. That appeal was not
determined until July 1995. The effective date of termination of his
employment was altered to 7 July 1995.
In the meantime Mr Capek, who has acted in person throughout, presented three
applications to the employment tribunal on 9, 24 and 25 November 1994 making
complaints of unfair dismissal, of failure to provide written reasons for his
dismissal and of various breaches of contract by the Council in respect of
his employment.
The Council accepts that the tribunal had exclusive jurisdiction to determine
the unfair dismissal complaint presented between the giving of notice and the
effective date of termination of his employment. That situation was expressly
covered by section 67 (4) Employment Protection (Consolidation) Act 1978 since
re-enacted in section 111 (3) Employment Rights Act 1996. The Council contends,
however, that the tribunal has no jurisdiction to determine the breach of
contract complaints as they were not presented "within the period of three
months beginning with the effective date of termination of the contract giving
rise to the claim" : Article 7(a) of the 1994 Order. The complaints were
premature as they were presented before the effective date of termination and
not within the specified period beginning with that date. Such
claims could only be brought by Mr Capek in the County Court.
The complaints are of failure to pay full salary during his period of
suspension from 26 April 1994 including his notice period from 15 October 1994
(paragraph 3 in application of 25 November 1994) ; arrears of salary due in
respect of management failure to conduct proper re-grading evaluation or
assessment in December 1991 in accordance with agreed procedures and fair
principles and compensation for loss of earnings in the period from 1 October
1990 (paragraph 5(i) of application of 14 November 1994); arrears of telephone
allowances in the period from May 1990; and failure to pay "miscellaneous
expenses" in the period from 1 June 1994 to 30 September 1994. During the
hearing in this court Mr Capek accepted that the two last items are not
recoverable under the Wages Act provisions now contained in the Employment
Rights Act 1996.
His internal appeal was heard and his dismissal confirmed on 7 July 1995. It
was, however, agreed by the Council that Mr Capek should be re-engaged in an
alternative social work capacity.
Mr Capek pressed on with his complaints against the Council and, indeed,
presented further applications to the tribunal on 24 July 1995 and 18 June
1996.
The main issue on this appeal is whether the "contract claims" made in the
complaints presented in November 1994 are outside the jurisdiction conferred on
the employment tribunal by the 1994 Order on the ground that they were made
before, instead of within the three month period beginning with, 7 July
1995.
In argument Mr Dean, on behalf of the Council, agreed that the effect of his
construction of Article 7 was that, for example, a breach of contract complaint
presented by Mr Capek on 8 July 1995 would have been within the jurisdiction
of the tribunal, but that such a complaint presented by him on 6 July 1995
would not have been and it would have been necessary for him to start separate
proceedings in the county court. This is a jurisdictional point which the
tribunal had taken of its own motion. The point cannot be resolved by an
agreement between the parties to confer on the tribunal a jurisdiction which
it does not have.
The Decisions of the Employment Tribunal
Mr Capek's various complaints were heard by three different tribunals.
A. The tribunal's decision of 10 October 1996 dealt with the applications
made in November 1994, in July 1995 and in June 1996. It was held that his
dismissal was fair and that there was no unreasonable failure by the Council to
provide written reasons for his dismissal.
On the issue of jurisdiction under the 1994 Order the Tribunal rejected the
Council's submission that Mr Capek could not bring a claim for breach of
contract in the tribunal as he was still employed by the Council, although in a
different capacity.
The tribunal stated that
" Although there is reference to the fact that termination of employment is
required before the....tribunal has jurisdiction to consider such a claim, it
seems to us that that reference relates to termination of the employment under
the original contract. It seems to us that particularly the wording of Rule 7
of the Order which talks about "the effective date of termination of the
contract giving rise to the claim" is clearly showing that we as a tribunal
must look at the particular contract of employment and not at employment in a
general sense ."
There was no cross appeal to the appeal tribunal on that point. Indeed it went
out of its way to say that that ruling was correct in law.
The employment tribunal went on, however, to take the point of its own motion
that the claims for breach of contract were outside its jurisdiction
"...because they were brought in the period after the applicant had been given
notice of the termination of his employment, but before his employment
terminated."
It was held that under Article 7 the tribunal
"....does not have jurisdiction to consider a complaint brought before either
the effective date of termination or, if there is no effective date of
termination, the last day upon which the employee worked in the employment. In
this case there is no doubt that the applicant was given notice to terminate
his employment. He was not required to work his notice, but his employment
terminated at the end of the period of notice which, at the earliest, was 2
January 1995. Accordingly, those contract claims brought by his applications
presented in November 1994 were premature and we have no jurisdiction to
consider them."
The tribunal also rejected his application to extend time for the presentation
of the complaints on the grounds that it was reasonably practicable for him to
present them within the period specified in Article 7 (a) and that, in any
case, it only had power to extend the period to a later date and not to an
earlier date.
B. Soon after the tribunal decision in A. above Mr Capek presented a sixth
application to the tribunal (on 18 October 1996) repeating the contract claims
first made in the applications in November 1994 and rejected by the tribunal
on the ground of lack of jurisdiction. On 9 April 1997 the chairman of the
tribunal (Mr TR Capp) dismissed that application on the ground that it was out
of time and he refused to extend time on the ground that it was reasonably
practicable for Mr Capek to present those complaints in time.
C. There was a further decision of the tribunal on 2 June 1997. That concerned
a complaint presented by Mr Capek on 11 February 1997 in respect of alleged
unauthorised deductions from wages in the period beginning 7 July 1995. Those
complaints are not relevant to this appeal.
Mr Capek also made unsuccessful applications to the employment tribunal for
the review of all the above decisions against him.
The Decision of the Employment Appeal Tribunal
The appeal tribunal dismissed all Mr Capek's appeals from the three tribunal
decisions on all points save the contract jurisdiction issue arising under the
1994 Order.
It held that the employment tribunal did have jurisdiction under the 1994
0rder to entertain the breach of contract complaints presented in November
1994. The causes of action complained of arose prior to termination. There was
an effective termination of employment on 7 July 1995. That gave the tribunal
jurisdiction to consider the breach of contract claims which were outstanding
on that date. These complaints were outstanding at that date. The proceedings
were not premature. The tribunal had jurisdiction to hear and determine
them.
The Council appeals against that decision. Mr Capek cross appeals against the
dismissal of his appeal from the decision of Mr Capp and the failure of the
Appeal Tribunal to consider his Wages Act claims.
The Legal Position
In my judgment the legal position on the appeal and the cross appeal is as
follows.
1. Jurisdiction under 1994 Order.
The employment tribunal did not make an error of law in its decision on
jurisdiction under the 1994 Order. The tribunal was prohibited by Article 7(a)
of the 1994 Order from entertaining, in exercise of the contract jurisdiction
conferred by that Order, the complaints of breach of contract presented by Mr
Capek in November 1994.
I would have preferred to reach the contrary conclusion and I was initially
inclined to do so.
The appeal tribunal related the legislative history and compared this case
with the treatment of premature applications for unfair dismissal and
complaints under TUPE. The clear purpose of the extension of the Tribunal's
jurisdiction over contract claims was to reduce the need for duality of
proceedings in the courts and in the tribunals arising out of the same
dismissal. The effect of upholding the tribunal's construction of the 1994
Order is that in this case Mr Capek cannot claim for breach of contract in the
tribunal. His November 1994 applications were held to have been presented too
soon. An extension of time was refused. His October 1996 application founded on
the same contract claims was held to have been presented too late. An
extension of time was refused.
Subject to the provisions of the Limitation Act Mr Capek can only proceed in
the county court. That is not a satisfactory state of affairs. There is not the
shred of a suggestion that the Council was or could have been prejudiced by the
premature presentation of a complaint in a case such as this, in which a
decision to dismiss was taken and the employment was terminated .
Nevertheless I see no escape from the language of the 1994 Order. I agree with
the appeal tribunal that the contract claims were "outstanding on the
termination of [ Mr Capek's] employment" on 7 July 1995 within the meaning of
Article 3 (c). But Article 7 expressly prohibits the employment tribunal from
entertaining complaints which do not satisfy one of three sub-paragraphs.
As for (a) it is true that in some contexts the expression "within the period
of" a specified time is, as a matter of ordinary language, capable of meaning
"before the expiration of" the specified time. If, for example, a court ordered
A to supply to B a copy of a document within a period of 7 days beginning with
the date of the service of the order, A would have complied with the order if
he knew of the terms of it before it was served and immediately supplied the
copy of the document to B ahead of the service of the order on him.
In the context of the 1994 Order, however, there are clear indications that
if, as here, there is an effective date of termination, the jurisdiction of the
tribunal is confined to those cases in which the complaint is presented within
the period between two fixed points of time i.e. the start date (the effective
date of termination) and the end date (the end of the period of three months
beginning with the contract termination date). These complaints were not
presented within the period between those two points of time. They were
presented before the start date.
As Laws LJ pointed out in the course of argument, Article 8 (c) (i) of the
1994 Order, which relates to time limits on contract claims by employers, uses
the same expression "within the period of" as in Article 7 (a) and in a way
which plainly confines the jurisdiction of the tribunal to entertaining
contract claims by employers presented within the period after a stated date
(the day on which the employer received from the tribunal a copy of the
originating application in respect of a contract claim of the employee) and
before the end date (the end of the period of six weeks beginning with that
start date).
The use of the expression "within the period of" in the 1994 Order may be
contrasted with many sections in the Employment Rights Act 1996, re-enacting
the provisions of the Employment Protection (Consolidation) Act 1978, which set
time limits for the presenting of a complaint "before the end off" a specified
period beginning with a specified act or event: see sections 23, 34, 48, 51,
54, 57, 60, 63, 70 and 111 of the 1996 Act.
It is also significant that, as already indicated, the contract jurisdiction
only exists in cases where the employee's employment has been terminated. The
tribunal does not have jurisdiction to entertain complaints for breach of
contract which are alleged to have been committed during the currency of a
contract of employment if no termination of that employment occurs: see
Article 3 (c). That suggests that it was not contemplated that an employee
should be entitled to invoke this jurisdiction of the tribunal before his
employment was terminated.
The Employment Appeal Tribunal relied by way of analogy on the cases
concerning premature complaints under the TUPE Regulations: see BIFU v.
Barclays Bank plc [1987] ICR 495 and South Durham Health Authority
v. UNISON [1995] ICR 495. There is, however, no real
analogy, as there are significant differences in the language, context and
purpose of those Regulations. A complaint made before a transfer about the
consultation process is not premature, as the transfer is not itself an
ingredient of the cause of action relating to consultation. Further, it would
defeat the purpose of the consultation process if no complaint of lack of
consultation about the proposed transfer could be made before the transfer
had in fact taken place. For those reasons the Regulations set an end date, but
not a start date, for presenting a complaint.
In contrast Article 3 of the 1994 Order provides that a termination of
employment is necessary to trigger the jurisdiction of the tribunal. In those
circumstances it makes sense that the time prescribed for presenting a
complaint should begin with, but not before, the date of termination and that a
start date as well as an end date should be specified for presenting a
complaint.
Mr Capek's alternative contention, which was not determined by the appeal
tribunal, as it was in his favour on Article 7(a), was that he is entitled to
rely on Article 7(b). He submitted that, if he was wrong on Article 7(a), he
could succeed on Article 7 (b) because when he presented the complaints in
November 1994 there was no effective date of termination. That date was not
ascertained until 7 July 1995 when his internal appeal failed. So, he
submitted, the tribunal had jurisdiction: he had presented the complaint within
three months of the last day upon which he worked in the employment which has
terminated. Mr Capek says that he last worked in this employment in October
1994. The Council disputes this construction and also says that he last worked
in April 1994.
I would reject Mr Capek's construction of Article 7 (b). There was an
effective date of termination. It was found to be 7 July 1995. That was not
challenged by Mr Capek. So Article 7 (b) cannot apply.
I should add that, even if Article 7 (b) did apply, there is a factual
dispute, which was not resolved by the employment tribunal, as to what was the
last day on which he worked. Mr Capek said that it was 10 October 1994 when he
attended for the disciplinary hearing. The Council contend that it was when he
was suspended in April 1994.
2. Extension of Time.
There is no error of law in the refusal of Mr Capp to extend the time for
bringing the October 1996 proceedings. A chairman sitting without lay members
is entitled to hear and determine applications to extend time. On the evidence
Mr Capp was entitled to conclude that it was reasonably practicable for Mr
Capek to present his contract complaints in the three months beginning with the
7 July 1995 i.e. before the 6 October 1995. The question of exercising his
discretion to extend time did not therefore arise.
3. Wages Act Claims.
In his cross appeal Mr Capek takes the point that, if the Council succeeds
(as, in my view ,it does) on the 1994 Order issue, it is necessary to decide
what has so far not been considered, namely whether the contract claims fall
within the jurisdiction of the tribunal to determine disputes on unauthorised
deductions from wages now contained in Part II(ss 13-27) the Employment Rights
Act 1996 re-enacting the provisions of the Wages Act 1986 which were in force
at the relevant time.
A "deduction" from wages occurs when the worker is paid on any occasion less
by his employer than the total amount of wages "properly payable" by the
employer to the worker on that occasion: section 8 (3) Wages Act 1986, now
section 13(3) of the 1996 Act. The amount of the deficiency is treated as a
deduction made by the employer from the worker's wages on that occasion. A
worker may present a complaint to the tribunal that his employer has made a
deduction from his wages in contravention of section 1(1), now section 13(1) of
the 1996 Act. The resolution of the issue of what is "properly payable" may
involve a decision by the tribunal on the contractual rights and duties of the
parties to a contract of employment affecting entitlement to wages such as
entitlement to overtime or to regrading. Non-payment of wages properly payable
by the employer may be a breach of contract which the tribunal has jurisdiction
to entertain independently of the jurisdiction conferred by the 1994 Order.
Mr Capek contends that that is the essence of his remaining breach of
contract claims. He submits that the tribunal did not lack jurisdiction to
determine that claim simply because he labelled his complaints as "breaches of
contract" rather than "Unauthorised deduction of wages contrary to the Wages
Act." A failure to attach the correct label or all the correct labels to the
facts relied on in the originating application does not deprive the employment
tribunal of jurisdiction which it may have to determine a complaint.
In my judgment, this point was not adequately considered by the employment
tribunal. In the extended reasons of 10 October 1994 the tribunal rejected Mr
Capek's "fresh application" to add a Wages Act claim to his five existing
applications (see paragraph 1 of the extended reasons). But the possibility
that his existing breach of contract claims were in substance claims which the
tribunal had jurisdiction to entertain under the Wages Act was not considered.
Not surprisingly, in view of the way in which Mr Capek himself described his
claims, the tribunal treated his characterisation of all the relevant
complaints as related to breaches of contract, without considering whether the
breaches of contract were of a kind which involved unauthorised deductions from
wages which it had jurisdiction to entertain.
Having rejected jurisdiction under the 1994 Order, save in respect of an
unsuccessful claim for payment of an office allowance made in the application
presented in time on 24 July 1995, the tribunal ought to have considered
whether it had jurisdiction under the Wages Act. I do not criticise the
tribunal for not having done so. Mr Capek was conducting his case in person. He
was unable to give as much assistance to the tribunal as a legal representative
would probably have been able to give. The fact is, however, that this aspect
of the case has not been properly investigated. Mr Capek raised the point as
Ground No 2 in his appeal to the Employment Appeal Tribunal, but the appeal
tribunal was in his favour on the 1994 Order issue, so that this ground was
only dealt with briefly and was not as fully explored in argument as it would
have been if a contrary conclusion had been reached on the 1994 Order (see
pages 18 and 19 of the transcript which do not deal fully with this aspect of
the case). As I am of the view that the Council is correct on the 1994 Order,
it is now necessary for the employment tribunal to investigate the factual and
legal position as to alleged deductions from wages.
I would therefore give permission for and allow Mr Capek's cross appeal on
this point and remit this aspect of his claim for investigation and
consideration by the tribunal. As Mr Capek is acting in person it would assist
the court if Mr Dean, who appears on behalf of the Council, prepares a draft
order which includes a summary of the breach of contract claims which require
consideration by the tribunal as involving alleged deductions from wages,
without, of course, any admission on the part of the Council as to the merits
of the claims.
LORD JUSTICE LAWS - I agree.
LORD JUSTICE PILL - I also agree.
Order: Cross- Appeal of Mr Capek allowed, draft minute to be
prepared by Mr. Dean and submitted to the court for approval.
(Order does not form part of the approved judgment)
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