Medallion Holidays Ltd v Birch

JurisdictionUK Non-devolved
CourtEmployment Appeal Tribunal
[EMPLOYMENT APPEAL TRIBUNAL] MEDALLION HOLIDAYS LTD. v. BIRCH 1985 Feb. 14; May 3 Waite J., Mr. T. H. Jenkins and Mr. R. H. Phipps

Industrial Relations - Employment Appeal Tribunal - Appeal to - Interlocutory appeal - Order of industrial tribunal striking out notice of appearance for failure to comply with order for particulars - Whether appeal tribunal having general jurisdiction to review interlocutory decisions of industrial tribunal - Industrial Tribunals (Rules of Procedure) Regulations 1980 (S.I. 1980 No. 884), Sch. 1, r. 4(4)

The employee complained to an industrial tribunal that he had been unfairly dismissed. The employers by their notice of appearance gave as the reasons for the dismissal that he had mismanaged the employers' travel business, neglected customers' complaints, failed adequately to control and cost group holidays and that he had behaved in an unbusinesslike manner. The industrial tribunal granted the employee's application for an order for further and better particulars of the notice of appearance and discovery of certain documents. The employers complied partly but not fully with the orders and on a hearing for directions the chairman of the industrial tribunal gave notice in accordance with rule 4(4) of Schedule 1 to the Industrial Tribunals (Rules of Procedure) Regulations 1980,F1 that the notice of appearance would be struck out if the employers failed to comply fully by a specified date. The employers failed to comply and the employee's subsequent application to a different chairman to strike out the notice of appearance was granted.

On the employers' appeal: —

Held, dismissing the appeal, that the appeal tribunal had no general authority to review an industrial tribunal's exercise of discretion on interlocutory matters and set aside a decision on its merits, but could only interfere where there was a misdirection of law or the result was one which no reasonable tribunal could have reached; that, accordingly, since the chairman's order striking out the employers' notice of appearance was neither erroneous in law nor perverse, there were no grounds for varying the order on appeal (post. pp. 581D–E, 584A–D, 589C–E.

Bastick v. James Lane (Turf Accountants) Ltd. [1979] I.C.R. 778, E.A.T. applied.

Dean (Saif) v. Islamic Foundation [1983] I.C.R. 36, E.A.T. and C.A. and British Library v. Palyza [1984] I.C.R. 504, E.A.T. considered.

Per curiam. The first chairman of the industrial tribunal had no jurisdiction to give what amounted to an anticipatory notice to show cause under the proviso to rule 4(4) of Schedule 1 to the Industrial Tribunals (Rules of Procedure) Regulations 1980 at a moment when he had extended time for compliance with the order for particulars thereby necessarily absolving the employers of any possibility of being accurately described at that moment as a party “who has not complied with the requirement” for the purposes of the proviso (post, pp. 589G–590A).

The following cases are referred to in the judgment:

Bastick v. James Lane (Turf Accountants) Ltd. [1979] I.C.R. 778, E.A.T.

Beacard Property Management & Construction Co. Ltd. v. Day [1984] I.C.R. 837, E.A.T.

British Library v. Palyza [1984] I.C.R. 504, E.A.T.

Dean (Saif) v. Islamic Foundation [1983] I.C.R. 36, E.A.T. and C.A.

Nethermere (St. Neots) Ltd. v. Gardiner [1984] I.C.R. 612, C.A.

O'Kelly v. Trusthouse Forte Plc. [1983] I.C.R. 728; [1984] Q.B. 90; [1983] 3 W.L.R. 605; [1983] 3 All E.R. 456, C.A.

No additional cases were cited in argument.

Interlocutory Appeal from an order of a chairman of an industrial tribunal sitting at London.

The employers, Medallion Holidays Ltd., appealed from an order of the chairman of the industrial tribunal on 18 September 1984, striking out their notice of appearance to a complaint of unfair dismissal by the employee, Colin Birch, on the ground that it was misdirected in law and perverse.

The facts are stated in the judgment.

Ali Malek for the employers.

A. R. M. Cox, solicitor, for the employee.

Cur. adv. vult.

3 May. Waite J. read the following judgment of the appeal tribunal. This is an appeal by employers from an order by the chairman of an industrial tribunal striking out the entirety of the notice of appearance which they had lodged in opposition to unfair dismissal proceedings brought against them by the employee, their dismissed managing director. The effect of the order was to debar them altogether from defending the proceedings. It was made under rule 4 of Schedule 1 to the Industrial Tribunals (Rules of Procedure) Regulations 1980 which empowers a tribunal to require a party to furnish in writing further particulars of the grounds of claim or opposition (as the case may be) upon which he relies, and provides by sub-rule (4) that if such requirement is not complied with:

“a tribunal, before or at the hearing, may dismiss the originating application, or, as the case may be, strike out the whole or part of the notice of appearance, and, where appropriate, direct that a respondent shall be debarred from defending altogether: Provided that a tribunal shall not so dismiss or strike out or give such a direction unless it has sent notice to the party who has not complied with the requirement giving him an opportunity to show cause why such should not be done.”

The ground of striking-out was failure (which is admitted) by the employers to comply with a requirement issued by the industrial tribunal that they should furnish particulars of allegations representing a substantial part (though by no means the whole) of their grounds for dismissing the employee. The employers claim that the extreme penal consequences of such an order were out of all proportion to the gravity of their default and that a striking-out merely of the unparticularised allegations (leaving the remainder of the grounds of opposition still alive) would have been the maximum reasonable penalty. They contend, therefore, that the chairman's decision was misdirected in law and perverse in its result.

The employers also make an alternative and more fundamental claim. Even if the chairman's discretion was duly exercised in accordance with law, they contend, the appeal tribunal still has an inherent power to intervene. They argue (founding their submission on recent decisions of this appeal tribunal and of the Court of Appeal) that when industrial tribunal proceedings are still at an interlocutory stage — that is to say when matters of pleading and documentation are still under consideration and no evidence has yet been heard — the appeal tribunal has a general reviewing authority over the industrial tribunals' discretion on matters such as striking-out and discovery, entitling us to set aside on the merits the directions of the tribunal or its chairman merely upon the ground that we think that they could be improved upon, and quite without regard to any question of whether the direction under appeal was soundly based in law or not.

This alternative argument (that the appeal tribunal can be called upon to review the interlocutory decisions of tribunals on their merits whether or not such decisions have involved an error of law) is sufficiently fundamental to justify our dealing with it at the outset before we turn to the facts of the case. Indeed it will be essential to do so, because if the extent of our inquiry is limited by law to the single task of deciding whether the chairman's striking-out discretion has been properly exercised (irrespective of whether or not we would have taken the same view ourselves) that is bound to require a different approach to the facts from the one we would be required to adopt if, in the course of exercising the claimed review function, we were required to reach an independent view of our own as to how the striking out discretion should be exercised.

The appeal tribunal's jurisdiction, which is entirely statutory, derives from section 136 of the Employment Protection (Consolidation) Act 1978 which reads, so far as material:

“(1) An appeal shall lie to the appeal tribunal on a question of law arising from any decision of, or arising in any proceedings before, an industrial tribunal …”

The powers conferred on the appeal tribunal in the exercise of that jurisdiction are set out in Schedule 11 to the Act (introduced by section 135(6)) and include:

“21(1) For the purpose of disposing of an appeal the appeal tribunal may exercise any powers of the body … from whom the appeal was brought or may remit the case to that body …”

It will be convenient to refer to the powers introduced by this sub-paragraph of Schedule 11 as “the scheduled powers.”

When a tribunal has made a final decision (i.e., one which has resulted from an adjudication of a claim at a full hearing), the position in law is well settled. The limits of the appeal tribunal's jurisdiction to intervene under section 136 of the Act are established beyond any doubt by a series of decisions of the Court of Appeal culminating in O'Kelly v. Trusthouse Forte Plc. [1983] I.C.R. 728 and Nethermere (St. Neots) Ltd. v. Gardiner [1984] I.C.R. 612. We have no right to interfere unless persuaded either that the tribunal's verdict resulted from a self-direction erroneous in law or (if soundly based in law) that it represented a conclusion untenable by any reasonable tribunal. In cases where the appeal tribunal is so persuaded, and the appeal therefore has to be allowed, then the scheduled powers are available to give the appeal tribunal the necessary ancillary authority to make whatever orders or directions may be required...

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