Appeal No.	EAT/1101/98

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 24 May 1999

Before
THE HONOURABLE MR JUSTICE LINDSAY
MR P DAWSON OBE
MRS R A VICKERS

(1)	MR A LODHI 
(2)	MRS J P HARDAKER	APPELLANTS

UNITED BANK LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR R THACKER
(of Counsel)
Instructed By:
Messrs Lawford & Co
Solicitors
102-104 Sheen Road
Richmond
Surrey
TW9 1UF	
For the Respondent	MR T W SEWELL
(of Counsel)
Instructed By:
Messrs Saunders & Co
Solicitors
71 Kingsway
London WC2B 6ST	

	MR JUSTICE LINDSAY:	We have before us by way of a full hearing of the appeal, the appeals of Mr A.Lodhi and Mrs J.P. Hardaker in the matter Anjum, Lodhi, Hardaker, Rashid and Younas against United Bank Limited.  

	The Appellants Mr Lodhi and Mrs Hardaker have appeared today before us by Mr Thacker and the Respondent Bank by Mr Sewell.

	By a decision of a three-party Tribunal promulgated on 7 July 1998 the Industrial Tribunal at Manchester, under the chairmanship of Mr D.A. Leahy, reacting to its own motion to review its earlier substantive decision of 25 February 1998, as promulgated on 11 March 1998, upheld that earlier substantive decision so far as concerned, inter alia, the two Appellants before us, Mr Lodhi and Mrs Hardaker.

	The appeal before us is directed, and directed only, to that decision made on the Employment Tribunal's own motion to review the substantive decision, which, so far as it concerned the Appellants, had been that their respective claims for unfair dismissal were dismissed.  In Mrs Hardaker's case there was also a claim for breach of contract which was dismissed.  

	We must note that there is not before us an appeal against the substantive decision.  Any Notice of Appeal against that decision would now be well outside the 42 days prescribed by EAT Rule 3(2) but provision is made under EAT Rule 37 for extension of time and so it is not the case that any appeal against a substantive decision cannot now be heard.  But we emphasise that we are dealing only with an appeal against review and that, of course, leads one to look at the Rule which is concerned with review, namely Rule 11 of the Industrial Tribunals Constitution (Regulations) 1993:  “(i)  Subject to the provisions of this rule, a tribunal shall have power, on the application of a party or of its own motion, to review any decisions on the grounds that” - and then one has (a), (b), (c), (d) and “(e) the interests of justice require such a review”.  Sub-paragraph (3) says:

"A tribunal may only review a decision of its own motion if, within the period beginning with the date of the hearing and ending with the fourteenth day after the date on which the decision was sent to the parties, it has sent notice to each of the parties explaining in summary form the ground upon which and reasons why it is proposed to review the decision and giving them an opportunity to show cause why there should be no review."

Sub (7) says:

"On reviewing its decision a tribunal may confirm the decision, or vary or revoke the decision under the chairman's hand; and if it revokes the decision, the tribunal shall order a re-hearing before either the same or a differently constituted tribunal."

	With that reminder of the rules as to review, we turn to the chronological background to the matter, which is as follows:

	Mr Anjum, Mr Lodhi, Mrs Hardaker, Mr Rashid and Ms Younas worked for the United Bank Ltd, the Respondent, which I will call "the bank", at their Oldham branch.  The auditors of the bank thought that they had detected a substantial fraud.  There were disciplinary investigations and disciplinary enquiries and all five of those we have named were dismissed by the bank.

	On 6 June 1997 Mr Anjum presented his IT1 claiming unfair dismissal and breach of contract.  He was the most senior of the five who were dismissed and who became litigants.  On 17 June Mr Lodhi, one of the two Appellants before us, issued his IT1 claiming unfair dismissal.  On 21 July 1997 the bank answered Mr Anjum with its IT3 and asked that there should be a pre-hearing review (PHR) on the subject of whether a deposit should be required from Mr Anjum under Rule 7 (4) of the Rules.  As to that the Rule is as follows:

"If upon a pre-hearing review the tribunal considers that the contentions put forward by any party in relation to a matter required to be determined by a tribunal have no reasonable prospect of success, the tribunal may make an order against that party requiring the party to pay a deposit of an amount not exceeding £150 as a condition of being permitted to continue to take part in the proceedings relating to that matter."

	So that was what the bank was seeking.  On 31 July the bank answered Mr Lodhi's IT1.  On 18 August 1997 that (PHR) pre-hearing review took place in Mr Anjum's case before the Chairman alone.  For the moment we will not name that Chairman.  He held, and this is the decision which we will read in full, as follows:

"The decision on Pre Hearing Review is that the applicant [Mr Anjum] is not ordered to pay any deposit pursuant to the provision of Rule 7 Industrial Tribunals Rules of Procedure 1993.
SUMMARY OF REASONS
I have held a Pre Hearing Review at the respondent's request to consider whether or not, in the words of Rule 7, I can form the view that the contentions put forward by any party in relation to a matter required to be determined by a Tribunal have no reasonable prospect of success.  In particular the respondents have asked me to focus upon the applicant's case and I have heard submissions made by his counsel.  It is apparent to me both what the applicant's counsel have said and from the arguments advanced from the respondent that there are considerable issues to be tried here and that there are allegations of the conduct of the dismissal procedure by the respondent which on the face of it go beyond mere procedural defects in the way in which this matter was handled but, if established, to the satisfaction of the Tribunal are likely to amount to substantive unfairness.  In those circumstances, this being the case of complex fraud, there will be a great deal of factual issue not least on the issue of whether or not the applicant has contributed to his own dismissal.  In those circumstances there are triable issues here and the matter must proceed to a hearing.”

	The practice in the Manchester Tribunal apparently is that decisions on such issues as deposits at the pre-hearing review, once made, are put in a sealed envelope, not to be opened until the decision at the substantive hearing is eventually reached.  That, it seems, was the practice adopted in this matter.  That was 18 August.  On 9 September the substantive hearing began of Mr Lodhi's IT1.  Only one day had been allotted to it.  That proved manifestly insufficient and the case was adjourned part-heard.  

	On 17 September Mrs Hardaker and Mr Rashid lodged their IT1s for unfair dismissal and, in Mrs Hardaker's case, breach of contract, as we have mentioned.

	On 3 October 1997 the adjourned hearing of Mr Lodhi's IT1 recommenced but was aborted.  On 6 October Ms Younas lodged an IT1.

On 15 October the bank raised with the Employment Tribunal by letter the question of whether it would not be wise to combine all five cases under Rule 18.  Until that point no one, it seems, had commented on the relationship between the cases, nor drawn attention to the fact that the dismissals could be argued at any rate, all to have stemmed from the same allegations of fraud and involvement in fraud at the same bank.

	On 28 October the bank lodged its IT3 in Mrs Hardaker's, Mr Rashid's and Ms Younas' case.  On 30 October the Chairman alone, the same Chairman as who had ruled on the matter on 18 August, ruled that all five cases were to be combined.  The Chairman ordered that under Rule 18.  Rule 18 does not provide for a consolidation of the kind that one encounters in the High Court whereby, for example, a number of separate cases merge into being one case.  Under Rule 18 the position is that they are to be considered together.  The Rule provides at 18 (2):

"The tribunal shall only make an order under this rule if – 
(a)  each of the parties concerned has been given an opportunity at a hearing to show cause why such an order should not be made; or 
(b)  it has sent notice to all the parties concerned giving them an opportunity to show such cause."

	The combining was not unopposed but the result was:

"The decision of the Tribunal is that an Order is made under Rule 18 Industrial Tribunals Rules of Procedure 1993 that all five cases be combined for the purposes of hearing."

	There were no consequential directions.  We are bound to say it was in some respects a strange order.  Mr Lodhi's substantive case had already occupied more than a day of court time.  What was to be the status of the argument and evidence already given in the Lodhi case in relation to the future combined hearing?  For example, were the other four parties, so to speak, to be stuck with that evidence and argument without having, of course, being there at the earlier hearing of the Lodhi case, when the evidence was given and the argument advanced?  They would have had no chance to cross-examine on it, for example.  No answer seem to have been given to such questions, nor is there any indication that any such problem was foreseen or considered.  However, Rule 18 does not appear to prohibit a combining of the residuum of one case with the whole of as yet unheard cases, but the difficulties that are likely to arise, if any such order is made, do require careful attention.

	It may be, it is not entirely clear, that it was agreed at the Directions Hearing on 30 October 1997 that all five cases which were to be considered together should, moreover, be heard by the Chairman who had then been acting in the matter.  That is not clear and we do not rely upon it.  But, at all events, between 2 February and 25 February 1998 all five cases were considered together before the Employment Tribunal at Manchester with Mr Leahy as Chairman and Mr Byrne and Mr Field as members sitting with him.  It was a massive undertaking for an Employment Tribunal.  It appears there were over 190 pages of witness statements, 1180 pages of documentary evidence beyond that and 16 days of oral evidence.  On 11 March the decision was promulgated and it was, by Industrial Tribunal standards, a massive decision, some 55 pages of close typing, quite apart from the Schedules which were attached to it and it held as follows:

"The unanimous decision of the Tribunal is that:
"1.	Mr Hamid Anjum
Mr Anjum's claims of unfair dismissal and breach of contract are dismissed.

2.  Mr Abid Mahmood Lodhi
Mr Lodhi's claim of unfair dismissal is dismissed.

3.	Mrs Jennifer Hardaker
Mrs Hardaker's claims of unfair dismissal and breach of contract are dismissed.  The respondent's counterclaim against her is adjourned, to be dealt with on [and then there is a date and time appointed]. 
4.	Ms Ashia Younas
Ms Younas was fairly dismissed but her dismissal, without notice, was in breach of her contract and the issue of Remedy for that breach will be determined on [and again, a date and time is given].  Her claim of sex discrimination is dismissed.  Her claim under Part II Employment Rights Act 1996 is adjourned [and then again a date and time is appointed].  The respondent's counterclaim against her will be dealt with [and again a date].
5.	Mr Asher Rashid
Mr Rashid was unfairly dismissed.  He did not contribute to his dismissal.  His dismissal was also in breach of contract.  The counterclaim against him is dismissed.  The issue of remedy is adjourned and will be dealt with on 8 April 1998 at 10.00 a.m."

And each of those five headings is under a quite separate heading in heavy type.

	On 24 March Solicitors for Mr Anjum, Mr Lodhi and Mrs Hardaker (and it was one firm who were acting for all three and that one firm alone has acted for all three at the substantive hearing) requested a review of the decision of 11 March 1998.  They sought the review under the New Evidence provisions of Rule 11 (1) (d), which I have not read out, or under Rule 11 (1) (e), the interests of justice Rule, which I have read out.

	On 6 April 1998 there was an oral hearing before Mr Leahy of that request for a review and it was unsuccessful and there is no appeal against that failure.  However, by now, of course, the substantive proceedings in Mr Anjum's case had come to an end and accordingly the Chairman, Mr Leahy, opened the sealed envelope that referred to the hearing of 18 August.  It became apparent for the first time that Mr Leahy, the Chairman throughout the substantive hearing, had been the Chairman alone who, on 18 August, had heard and ruled upon the PHR in Mr Anjum's case where the bank had made an application for a deposit under Rule 7.

So one had a position that the Chairman who had conducted the PHR under Rule 7 and who had gone on to hear the later substantive case was one and the same.  That introduces us to Rule 7 (9).  That says:

"No member of a tribunal which has conducted a pre-hearing review shall be a member of the tribunal at the hearing of the originating application.”

The papers in Mr Anjum's case had not been marked to show that Mr Leahy could not hear the later substantive case.  No counsel or solicitors had pointed out his position in good time.  Mr Leahy had wholly forgotten by February 1998 that he had briefly dealt with the matter as a PHR in August 1997.  

	The Employment Tribunal on 6 April 1998, having encountered this position and recognising the possible difficulty, very properly first of all extended the time within which the Employment Tribunal could, of its own motion, launch a review:  see Rule 15(1).  Secondly, it indicated that it would hear an application for a review on its own motion under Rule 11(1)(e) on the grounds of interests of justice requiring it.  It then went on to hear argument on that review application from Mr Anjum's Counsel, from Counsel for Mr Lodhi and Mrs Hardaker, from another Counsel for Mr Rashid, and from Counsel for the bank.  Ms Younas was unrepresented.

	So far as concerns Mr Anjum's case, which is not on appeal to us, the decision was:

"This Tribunal accepts that the force of Rule 7(9) is undeniably to mean that Mr Leahy was disqualified from being a member of the Tribunal which heard Mr Anjum's case and so it seems to us inevitable that the decision reached in Mr Anjum's case must be revoked, and it is."

There is no appeal to that, at any rate, not that we know of.  The Tribunal then continued in their paragraph 9:

"What has tested the conscience of the Tribunal is the question of whether or not, by the same or similar token, the Tribunal is disqualified from hearing the other four cases and should, as a consequence, revoke the Decisions in the cases of Messrs Lodhi and Rashid and Mesdames Hardaker and Younas.  They were heard together under the provisions of Rule 18 of the 1993 Rules."

	They said this in their paragraph 10:

(i)	That this Chairman had genuinely wholly forgotten the Pre-hearing Review upon which he had sat in Mr Anjum's case in August and was as shocked as anybody to learn, on opening the sealed envelope on 6 April, that it was he who had presided over it.
(ii)	There has been no suggestion, though we appreciate that it might cause some discomfort to the respected advocates to have made one, of any partiality on the part of this Tribunal.
(iii)	 That this Tribunal has been at pains to consider individually all five case."

I think that last heading in particular needs to be emphasised.  

	The Tribunal discussed Rule 7(9) and they turned to the interests of justice.  What they say in their paragraph 12 is:

"We are concerned with a broader perception of what the interests of justice demand in the circumstances and we think that, given the timing of the discoveries in this matter and the communality of the representation virtually throughout in these cases, it is relevant to examine how this Tribunal went about its business and what view it took of the facts and [upon] what basis it took that view.  In coming to our conclusions we have taken into account all the representations made by counsel for the parties, both in writing and orally.  Those written arguments are annexed to these Reasons and we therefore do not rehearse them herein."

And they conclude, and this is their paragraph 13, their last paragraph:

"We are entirely confident that no bias, disadvantage or prejudice has resulted to Mr Lodhi, Mr Rashid, Mrs Hardaker and Ms Younas as a consequence of this Chairman's involvement in a Pre-hearing Review in August 1997 in Mr Anjum's case and we believe that the earlier Reasons show that we have carefully considered each case individually and show the evidence upon which we find the respondent to have been justified in respect of the dismissals of the applicants, save in the case of Mr Rashid whom we have found to be unfairly dismissed.  Thus we are not persuaded that the scope of Rule 7(9) should, on the basis of any argument of law or on the basis of the facts as we have applied them in this case and which need careful and detailed consideration, be extended so as to find that the integrity of this Tribunal in hearing the cases of Messrs Lodhi and Rashid and Mesdames Hardaker and Younas is impugned or compromised to any degree at all and in those circumstances we uphold our four decisions in those cases."

	It is at least arguable that the Employment Tribunal could not have reviewed the decision, in any event on that day, as the mandatory provisions of 11(3) as to notice to the parties were not, so far as we can see, complied with but, of course, it does not assist the Appellants to take that point and so we do not look into it any further.  The Appellants base their argument on the true intendment underlining Rule 7 (9).  On the construction of Rule 7(9) we would accept that Mr Leahy could not be a member of the Employment Tribunal at the hearing, meaning the substantive hearing of Mr Anjum's IT1 - but does the rule go beyond that?  It does not say words such as "nor shall he be a member of any tribunal which considers other IT1s at the same time" or anything on those lines.

Mr Thacker mounts an argument based chiefly, as we see it and as we have understood it, upon absurdity.  We have not, perhaps, fully grasped the argument but what it appears to be is this.  The absurdity that which is suggested arises as follows.  Mr Anjum's case is now to be re-heard.  He will wish to challenge facts as found by the Employment Tribunal in February 1998.  If he seeks to do so, then he will be met with an answer that he is not permitted to do so.  It would be absurd were he not to be allowed to able to argue afresh all the facts found in February 1998 but he would not be allowed to do so because that would be an abusive and collateral attack on the existing finding of an existing tribunal.  He will not be permitted to do so, says Mr Thacker:  see Hunter v Chief Constable of the West Midlands [1981] 3 WLR 906 House of Lords, Ashmore v British Coal Corporation [1990] 2 QB 338, House of Spring Gardens Ltd v Waite [1991] 1 QB 241, Bradford and Bingley Building Society case, unreported as yet, but heard on 11 March 1999 and the Bellmarsh case, unreported heard on 8 February 1999.

	It would be absurd, said Mr Thacker, if Mr Anjum would be denied an opportunity to challenge all facts found and that absurdity is avoided, he said, if one sets aside the decisions in the Hardaker and Lodhi cases, so that all matters can be heard afresh.  Rule 7(9) should be construed to allow the Hardaker and Lodhi cases to be set aside, thus avoiding that absurdity.  A construction which avoids absurdity is always to be preferred to one that does not.  I should have said that the Divine-Bortey v Brent London Borough Council 1998 ICR 886 in the Court of Appeal was also relied upon.  Mr Thacker does not deal with a possible alternative absurdity to the one he supposes, namely that it might be thought absurd that the Lodhi and Hardaker cases should be set aside notwithstanding that it might be said that their cases represented judgments fairly arrived at by an unbiased Tribunal after a long and expensive hearing and without any bias, prejudice or other material injustice being shown.  That, it might be thought, would be an alternative form of absurdity but, truly, whether or not Mr Anjum (were he at the second hearing of his Industrial Tribunal case or in the High Court, to assert facts contrary to those held in the hearing in February 1998) to be bound by those contrary facts on the ground that it would be abusive for him to challenge them is a matter for whatever second Tribunal or High Court judge hears that later case.

It cannot be a proper approach to our construction of the rules to assume that Mr Anjum will be so bound and then to argue that it would be absurd that he should be so bound and that one should therefore seek to avoid that absurdity.  If the absurdity of Mr Anjum's position were to be demonstrated to that second Tribunal or High Court judge, then might it not be, surely, that that second Tribunal or High Court judge would recognise the absurdity and enable Mr Anjum to argue as freely as he wishes?

	We are bound to say (although, perhaps, it is not for us) that as a matter of first impression, despite the authorities to which Mr Thacker has drawn our attention, we cannot see how it could possibly be abusive of Mr Anjum to litigate afresh that which the decision of the Employment Tribunal has carefully enabled him to do and we do not find any of the cases to which we have been referred to correspond to a case such as ours where the first Tribunal has gone to some lengths to set aside its own decision and has permitted the matter to be heard afresh.  Accordingly, we attach no weight at all to the argument based on supposed absurdity.  Of course, the fact that conflicting decisions are sometimes arrived at is undesirable but it is sometimes also inescapable.  

We should add that a decision that Mr Lodhi and Mrs Hardaker were not unfairly dismissed is not a decision inconsistent with the finding that Mr Anjum was unfairly dismissed or, indeed, that he was not.  They do not conflict as decisions.

We prefer the straightforward literal construction of Rule 7(9) as asserted by Mr Sewell, on the part of the bank, namely that the rule does not preclude a member who has heard a PHR in case (a) from being excluded from the substantive hearing of cases (b), (c) and (d), merely on the ground that he had heard the PHR in case (a) and that the cases were later combined.  It is, no doubt, desirable that that should not occur.  It is, no doubt, proper that steps should be taken to see that it does not occur.  Care should be taken in listing to take practical steps to ensure that, if combination is considered, that sort of point is also considered and reflected upon.  Here there was a minor irregularity in that the sealed envelope was not sufficiently marked to embargo Mr Leahy against hearing Mr Anjum's substantive case but if, perchance, some such error does occur, then the case is not necessarily to be upset, as we see it, because Rule 7(9) will not, in such a case, have been broken as to cases (b), (c) and (d).  Rather the position will be that the matter should then be considered in the light of the general justice of the case.  

	Looking, therefore, to the Employment Tribunal's judgment as to the interests of justice in this matter, a number of features appear.  First of all, the Employment Tribunal plainly had in mind, as the passage that we have cited showed, a broad but accurate picture of the requirement of the interests of justice.  Secondly, there was no suggestion of actual bias in Mr Leahy or prejudice on his part – meaning, quite literally, as the word suggests, that some form of judgment had been arrived at before the hearing.  There was no suggestion of actual bias or prejudice at all.  Indeed, if there had been, the Employment Tribunal would have hardly have been likely to have extended time for and then of its own motion to have suggested a review of its own substantive decision.  That is hardly the mark of a biased or prejudiced body.  Secondly, the result of the PHR in August could hardly indicate bias against the employees.  It held in favour of one of them, and against the argument of the bank, that the application, the Anjum IT1, was not one that had no reasonable prospect of success, but rather that there were triable issues in it.

	So far as concerns Mr Lodhi and Mrs Hardaker, there was not, in our view, even the least appearance of bias or prejudice in Mr Leahy.  How could a decision not to require a deposit from Mr Anjum signify any prejudice against Mr A Lodhi or Mrs Hardaker?  The Employment Tribunal in terms concluded, as we have read, that there was no bias, disadvantage or prejudice suffered by the Appellants and Mr Thacker, on behalf of the Appellants, has not been able to suggest any bias, disadvantage or prejudice that was consequent upon the breach of Rule 7(9) which he urges took place, other than the breach itself which, in any event, we do not find to have occurred.

	If this present appeal is unsuccessful then, subject to any appeal against the substantive decision, the result will be that, contrary to Rule 18 which combined all five cases, Anjum's case will not in the outturn ultimately be heard alongside those of Mr Lodhi and Mrs Hardaker and the others, but that, of itself, is not any form of material injustice to Mr Lodhi or Mrs Hardaker.  It has not denied Mr Lodhi and Mrs Hardaker the ability to attack Mr Anjum at the hearing, should they have wished to do that.  The forum, in February 1998, of course gave them the chance of cross-examining Mr Anjum if they wished.  It seems that they all appeared by one Counsel throughout the substantive hearing and it was therefore not a case in which one of the employees was attacking any other.  But, at any rate, they had the chance to do so had they so wished.  There had been no appeal against the order that combined all five.  Suppose, alternatively, that rather than wishing to attack Mr Anjum at the hearing, they had wished to have the benefit of being able to have him seen to be exculpating them at the same hearing.  Well, again, the combined forum that was arranged gave them that opportunity.  They had the advantage at the hearing between 2 and 25 February of having Mr Anjum appear to inculpate himself, which might have tended to exculpate them, and there is reference to that subject in the substantive decision at paragraph 100 under the separate heading “Mr Anjum” where the Tribunal said:

“He has, to do him credit, acknowledged that the responsibility for what took place lies with him and that is more than a token responsibility by virtue of the office which he held.”

	So they had the advantage of that if that had been what they had been seeking.  The Employment Tribunal had considered the substantive cases of the five separately, not in any wrapped up global way, but carefully putting different factors under different headings in relation to the separate individuals concerned.

	We also have to remember that the interests of justice require the position of the Respondent bank also to be consulted as well as the position of the Appellants.  The bank has the benefit of a judgment not seen to be flawed other than in this somewhat technical way which, even if it was right, would lead to a material disadvantage to the bank in the sense that it is extremely difficult for a Respondent employer (a fortiori, perhaps, a bank) to get an order for costs against individual Applicants.  The cost to the bank of another 25-day or 26-day hearing does not perhaps bear thinking about when looked at through the bank’s eyes.  One has to bear in mind the interests of justice to the bank as well as to the Appellants.

Here we have a case where no actual prejudice or bias is shown, no appearance of prejudice or bias is shown, nothing has been shown to us as having been taken into account, on the review, that should not have been taken into account; nothing is shown to us to have not been taken into account that should have been.  We are quite unable to see that this is a case where no Employment Tribunal, properly instructing itself, could have come to the conclusion to which this one came.  The Lodhi and Hardaker cases were heard by a Tribunal which was competent to hear their cases as separate cases and, as we have indicated, we have been unable to find no injustice in the conclusion to which the Tribunal came.

	Doing the best we can with the argument addressed to us, we are unable to come to any conclusion other than that we must dismiss the appeal.