Gee v Shell (UK) Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Scott Baker,Lord Justice Sedley,Lord Justice Simon Brown |
| Judgment Date | 24 October 2002 |
| Neutral Citation | [2002] EWCA Civ 1479 |
| Docket Number | Case No: A1/2002/0180 |
| Court | Court of Appeal (Civil Division) |
| Date | 24 October 2002 |
[2002] EWCA Civ 1479
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
Lord Justice Simon Brown
(Vice-President of the Court of Appeal Civil Division)
Lord Justice Sedley and
Lord Justice Scott Baker
Case No: A1/2002/0180
Andrew Hochhauser Esq, QC (instructed by Messrs Mace & Jones) for the Appellant
J C T Kelly Esq, (Messrs Ferdinand Kelly) for the Respondent
This is an appeal by Shell UK Ltd ("Shell") with the permission of this Court from a decision of the Employment Appeal Tribunal presided over by Maurice Kay J. Mrs Gee had succeeded in her appeal to the Employment Appeal Tribunal on 16 January 2002. The Employment Appeal Tribunal sent her case back to be reheard by a differently constituted Employment Tribunal, initially for directions. The basis for this was that the original Tribunal had placed unfair pressure on Mrs Gee that had caused her to withdraw her claim.
The circumstances are somewhat unusual and in outline as follows. Mrs Gee operated a service station for Shell under what Shell contends was a franchise agreement. As with many other operators, Shell terminated its agreement with her with effect from 31 March 1999. This was, apparently, in advance of a number of statutory changes that were due to come in effect in the following months and might be beneficial to people in the shoes of Mrs Gee. These changes included:
• A maximum working week for workers;
• A minimum hourly wage for workers;
• A reduction in the qualifying period for unfair dismissal from two years to one;
• Increase in the maximum compensation for unfair dismissal from £12,000 to £50,000.
In 1993 Mrs Gee and her husband entered into an agreement with Shell to operate one of their service stations. There were six further agreements in relation to the same service station. For reasons that are not clear, between 1995 and 1997 the agreements named only her husband. But the final agreement dated 1 August 1998 was between Mrs Gee and Shell. It was terminated, as I have said, on 31 March 1999.
On 19 April 1999 Mrs Gee filed an application claiming unfair dismissal on the basis that she had been employed as a manageress of the service station since 1993. This gave rise to two preliminary issues:
i) Whether the relationship she had with Shell was one of employer/employee;
ii) If so, whether she had sufficient service to qualify for protection from unfair dismissal and thus bring her within the Employment Tribunal's jurisdiction.
The law went through a period of uncertainty as to the qualifying period. This was resolved by the decision of the House of Lords in R v Secretary of State for Employment ex parte Seymour Smith [2000] 1WLR 435 on 17 February 2000 that confirmed the two year qualification period specified by the statute.
On 8 March 2000 the parties attended the Employment Tribunal in Birmingham for a three day hearing. In the middle of the afternoon of the first day the Employment Tribunal dismissed the application of Mrs Gee on its withdrawal by her. Mrs Gee represented herself and three other service station operators, Mr Beck, Mr Boak and Mr Parekh. Shell was represented throughout by Mr Andrew Hochhauser Q.C. The case of Seymour Smith had been decided by the House of Lords three weeks before, but Mrs Gee was not aware of the implications of the decision before the hearing on 8 March 2000.
It was clear that she had to establish not only that her relationship with Shell was that of employer/employee but also that she had been employed continuously for two years. On the other issue, Mrs Gee faced a quite different hurdle. Another Shell service station operator, Miss Griffiths, had lost her unfair dismissal claim in Liverpool before an Employment Tribunal in July 1999. She had worked under a similar agreement to that of Mrs Gee. Miss Griffiths had also, in December 1999, failed to establish that she was a worker in relation to a claim for unauthorised deduction from wages.
Mrs Gee knew about Miss Griffiths case, indeed she had been at the hearing. Also, on 17 January 2000 Shell's Solicitors had written to Mrs Gee saying that in the light of Miss Griffiths's case she would be acting unreasonably if she did not withdraw her claim and advising her to take legal advice. Apparently she did indeed take legal advice but she continued with her claim.
When the parties arrived for the hearing Mr Hochhauser produced a skeleton argument. His case was that between 1995 and 1998 the contracts were between Mr Gee and Shell and not Mrs Gee and Shell. Therefore she could not establish two years continuous service. Secondly, the employment issue had been decided by the Griffiths decision, which involved a virtually identical contract. Although the Tribunal was not formally bound by the Griffiths decision it was an abuse of process for Mrs Gee to pursue the point.
What happened at the hearing can be gleaned in part from a letter from the Tribunal dated 25 May 2000 and in part from a note made by Shell's solicitor. Over a period of some two hours between 10.45 and 12.45 there was argument and discussion before the Tribunal. At 12.45 the Tribunal adjourned for 25 minutes. On reassembling the chairman rejected the abuse of process argument. He said this. I quote from the note:
"…the tribunal had considered carefully the submissions made. There were a number of issues, some of which had clearly been litigated before. Some, according to the applicants, either had not been litigated before or had not clearly been litigated.
With regard to three applicants, there was an issue about whether they had two years continuous employment. [I interpolate that the only issue in the Parekh case was whether he was an employee].
The Chairman said that many applicants with one year's service had had their claims stayed pending the decision on Seymour Smith. The outcome of that case was that the two year qualifying period was not discriminatory. Therefore, so far as these applicants were concerned, there was a two year qualifying period.
The tribunal considered that, in relation to Mrs Gee, Mr Beck and Mr Boak, there was considerable doubt as to whether they satisfied the two year requirement. Even on the best analysis of the position, there was considerable doubt.
This was without prejudice to the employment issue.
Even if the applicants were employees there was a considerable hurdle with regard to whether they had two years' service. The tribunal would not wish to deprive a party of the right to call evidence.
However, the applicants are at risk of a costs award if they persisted and the tribunal found they lacked two years' service."
The Chairman then suggested the three applicants should consider whether they wanted to continue in the light of Seymour Smith and the lack of clear evidence supporting their claim. If they went on they faced the risk of costs. If they could get Shell to agree no costs if they withdrew so be it. The Chairman said if the applicants wished to pursue their claims the Tribunal would consider the two years' service issue. If they could not satisfy the Tribunal they were at risk of costs.
The Chairman went on to say that there were two types of costs order – a summary order up to £500 and a taxed costs order. He gave a strong steer that the applicants were at real risk of a substantial costs order if they went on with the two year service point and failed. He then said that Mr Parekh did not face the same hurdle and in his case the issue was whether he was an employee. He added:
"However, the tribunal was making the same costs warning in the respect of Mr Parekh. If the tribunal found his application was continued frivolously, vexatiously or otherwise unreasonably, he would face the risk of an order for costs. "
The Court then adjourned until 2.30pm.
On return, Mrs Gee referred to a conversation she had had over the adjournment with Mr Hochhauser. She asked "whether a costs order would be based on the length of the service hearing". She felt she had a good case on this. The Chairman said that whatever costs Shell incurred would undoubtedly include the costs of that day and the Court would have to consider (1) whether a costs order should be made and (2) if so, on what basis. She faced the risk of a costs order not limited to £500. Mr Hochhauser made it clear that if the case went on and he succeeded he would be looking for Shell's costs to be taxed by the County Court. Mrs Gee was concerned that her house was at risk.
The other three applicants all withdrew their claims and there was a further adjournment before Mrs Gee likewise withdrew her claim, expressing bitterness that she was not able to put her case to the Tribunal.
It appears from the Chairman's letter that the Tribunal regarded the period of employment issue as an insurmountable problem on the facts regardless of any entitlement to try and persuade them that she was an employee. He said, and this is the one paragraph in his letter of 25 May 2000 that is highlighted in bold type:
"More importantly perhaps, it was clear that Mrs Gee's period of employment (if any) could only commence from 1 August 1998 when she signed an agreement with Shell. All previous agreements were between her husband and Shell. Her employment could not therefore have commenced until the 1 August 1998 at the earliest, if it did at all. It is agreed that it was terminated on 31 March 1999. The applicant was therefore in severe difficulties with regard to the qualifying period of service."
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