Appeal No.	 EAT/918/00 & EAT/1146/00

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 26 January 2001

Before
MR RECORDER UNDERHILL QC
MS H PITCHER
MR N D WILLIS

MISS CAROLE JONES & MR MICHAEL PENNY 	APPELLANTS
t/a AUNTY CAROLE'S BOARDING KENNELS	

MR THOMAS EDWARD RICHARDS	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING – EX PARTE

Revised

	APPEARANCES

For the Appellants	MR SUTTON
(of Counsel)
Appearing under the Employment Law Appeal Advice Scheme	

	MR RECORDER UNDERHILL QC:	This appeal is concerned with an area of the law which is still novel and at least partly concerns some provisions on which, so far as we are aware, there is no authority. We have been particularly fortunate to have assistance from Mr Sutton of the ELAAS scheme.

1.	It is necessary to set out the background in a little detail. The appellant employers employed the respondent employee as a kennel hand at their kennels in Kent between 12th April 1999 and 22nd July 1999. He claims that he worked seven hours a day for seven days a week and was paid £50 per week. He believed that the appellants were in breach of their obligations under the National Minimum Wage Act 1998 and the National Minimum Wage Regulations 1999. He complained to the Inland Revenue who are the enforcement agency for the National Minimum Wage.

2.	On 19th October 1999 the Inland Revenue served an enforcement notice under section 19 of the 1998 Act. On 26th October 1999 in purported exercise of their powers under section 20 of the Act they presented an Originating Application to the Employment Tribunal on the employee’s behalf under section 23 of the Employment Rights Act 1996 claiming, by way of deductions, the difference between what the employee was in fact paid during the period of his employment and what he should have been paid under the Regulations. As was eventually conceded in the course of the hearing, the claim was out of time because it was presented more than three months after the effective date of termination which, as we have said, was 22nd July 1999. 

3.	By their grounds of resistance in the proceedings, the employers appealed to the tribunal against the enforcement notice. They were entitled to raise such an appeal under section 19(4)and (5) of the Act. They also counter-claimed for overpaid wages; that was a claim which the tribunal had no jurisdiction to deal with.

4.	We have had only a limited opportunity to consider the statutory provisions and it is unclear to us what the advantage was or would have been to the appellants of a successful appeal against the enforcement notice. We do not say that there was none; but once proceedings had been brought for the sums involved, it is a little unclear to see what could have been achieved. In any event, it appears to have been treated by all the parties as if the grounds of resistance constituted an effective appeal and raised an issue with which the tribunal had to deal.

5.	The claim was listed for hearing at the Employment Tribunal in Ashford on 4th April 2000. There had previously been a directions hearing on 21st January 2000.

6.	On 31st March 2000, which was the last working day before the case was due to come on, the employers applied for an adjournment on the ground that they had not seen the employee’s witness statements. That was refused. On (apparently) the same day they submitted a further application on a different ground, namely that they could not leave their place of work and were unable to obtain other staff because the local employment service refused to advertise their positions until compliance with the minimum wage was established. That application to postpone was also refused.

7.	On the day fixed for the hearing, 4th April 2000, a solicitor instructed by the employers attended, but they themselves did not. Their solicitor renewed the application for an adjournment, which was again refused. The hearing proceeded and was adjourned part heard to 19th April 2000. Again, at the commencement of that hearing, the employers’ solicitor applied for an adjournment, which was again refused, and they themselves did not attend.

8.	The result was that the tribunal had before it evidence from the employee and his witnesses, which they heard and on which there was the opportunity for cross-examination by the appellants’ solicitor, but they did not have any oral evidence from the appellants. They had a witness statement from one of them, Miss Jones, which they admitted as evidence but to which they could give only such weight as was appropriate in view of the fact that there had been no opportunity for cross-examination. 

9.	By a decision sent to the parties on 12th June 2000, the tribunal decided as follows:

“(1)	The Respondents’ application to postpone the hearing on 4 April 2000 is refused.
(2)	The Respondents’ application to postpone the hearing on 19 April 2000 is refused.”

Both the above were by way of confirmation of decisions already made. The decision continued:

“(3)	The Originating Application was presented outside the statutory time limit contained in section 23 of the Employment Rights Act 1996. It was not reasonably practicable for the complaint to be presented within the relevant period. The Applicant’s claim may proceed.
(4)	The Applicant has suffered unlawful deductions from his wages. The Respondents are ordered to pay to the Applicant the amount of such deductions, namely £1.088.01.
(5)	The Enforcement Notice is amended by deleting the figure of £1,153.95 and inserting the figure of £1,088.01.
(6)	The Respondents’ appeal against the Enforcement Notice dated 19 October 1999 is dismissed.
(7)	The Tribunal has no jurisdiction to consider the Respondents’ counterclaim.”

10.	The appellants’ grounds of appeal to this tribunal are diffuse and do not clearly identify which of the orders they wish to appeal against. We have done our best to analyse the points which they appear to wish to raise: we put them to Mr Sutton at the start of his submissions and he confirmed that they accorded with his understanding of the substantive points that lie behind the grounds of appeal and the skeleton argument. What they boil down to is that the appellants wish to challenge all the decisions of the tribunal except the seventh - that is to say that there is no jurisdiction to consider the counterclaim; and the fifth - that is to say that if the Enforcement Notice stands at all they are obviously content that it should be amended to refer to the lower figure, although, as we have noted, it is not clear what substantive difference that makes.

11.	The five points that we have identified we will take in turn. The first is a time point. The appellants challenge the decision of the tribunal to allow the proceedings notwithstanding that they were brought outside the three-month limit prescribed by section 23(4). The tribunal, as we have recited, held that it was not reasonably practicable for a complaint to be brought within that time limit. Their reason for that was that the two Inland Revenue compliance officers who had initially investigated the claim had been given incorrect information as to the employee’s estimated date of termination, which they believed to be either 27th July 1999 (the date which appeared on the Originating Application) or 29th July 1999 (which was a date subsequently given – see paragraph 19 of the reasons). It is not clear how that mistake arose but it must have originated either with the employee himself or with his mother or with the National Minimum Wage Helpline office which completed the form which was the basic information by which the complaint was brought to the attention of the Inland Revenue. 

12	We regard it as reasonably arguable that the employee could not rely on a mistake made either by himself or by his advisers or by the National Minimum Wage Helpline, whose precise status is unclear to us, as making it not reasonably practicable for his claim to be presented in time. It has been frequently emphasised that the question of reasonable practicability is one of fact for the tribunal, but there are necessary limits to that principle and we do not feel able without full argument and full consideration of the relevant authorities to say whether a mistake of the sort which appears to have happened in this case is capable of justifying the conclusion which the tribunal came to. There may or may not also be questions peculiar to the special role of the Inland Revenue in cases of this sort. We propose, therefore, to allow the appeal to proceed on that basis. We agree with Mr Sutton that it will be necessary for the tribunal to have before it the Chairman’s notes insofar as they relate to the time point and we direct that a request be made to the Chairman to provide those notes.

13.	We were also supplied by Mr Sutton with a copy of a letter written to the appellants by the Business Operations Division of the National Minimum Wage Department of the Inland Revenue dated 29th September 2000. This letter constitutes the Inland Revenue’s answer to a complaint made to them by the appellants about the way in which they had handled the matter generally. It is an extremely full document and it contains a number of what Mr Sutton, I think without overstatement, described as striking admissions by the Inland Revenue that they had in a number of specific respects mishandled their investigation including the service of the Enforcement Notice. It is unclear to us whether and if so to what extent the matters contained in that letter may be relevant on the question of reasonable practicability, and any application to rely on its contents will have to be made to the tribunal hearing the full appeal. We mention the matter now so that it is clear that we regard it as at least potentially arguable that the contents of that letter may be relevant to the matters which the appeal tribunal has to consider.

14.	We turn to the second ground of appeal, as we have sought to analyse them. This is a compendious ground. The appellants raise a multitude of criticisms of the factual conclusions made by the tribunal. It is impossible for us to discern from any of the matters that they have put forward any respect in which the tribunal’s findings were not open to it on the evidence which it heard; and insofar as the appellants’ complaint is that they should have heard such evidence, the fact that such evidence was not called is something which it is now too late for them to complain about. 

15.	The only specific point which Mr Sutton made to us was that there appeared to be a discrepancy between two of the findings of fact in the tribunal’s reasons, that is to say the findings at paragraph 24(2) and (3), but he failed to satisfy us that there was any such error or inconsistency which might lead to the conclusion that the tribunal had misdirected itself of reached a finding that was impossible on the evidence before it. We do not, therefore, believe that any arguable ground of appeal based upon the tribunal’s misunderstanding of the facts or its factual conclusions has been demonstrated.

16.	Thirdly, there is an appeal against the tribunal’s refusal of the appellants’ appeal against the Enforcement Notice. As we have already observed it is not entirely clear to us what the substantive value of that appeal was, but we are not in a position to say that it had no value and the matter was treated by the parties as being before the tribunal for decision. Two points are taken. First, there did not exist any sufficient material to justify the service of a notice. That is a paraphrase - the precise language of the Act is to be found section 19(6)(a):

“On an appeal under subsection (4) above, the employment tribunal shall dismiss the appeal unless it is established-
(a)	that, in the case of the worker or workers to whom the enforcement notice relates, the facts are such that an officer who was aware of them would have had no reason to serve any enforcement notice on the appellant …”

	As to that, it is clear from the findings of the tribunal that there can be no prospect of success, because the facts as found by the tribunal  - on the basis that those facts are not otherwise challengeable - mean that the tribunal could not possibly have held that if the officer was aware of the full facts he would not have served the notice. On the contrary, on the facts that the tribunal found the notice was justified. Secondly, the appellants rely on the fact that the Enforcement Notice was incorrect. It was indeed incorrect and the tribunal made an order to that effect. But that is not a ground for setting aside the Enforcement Notice. The position under subsection (8) of the Act is that where the tribunal finds the notice to have been incorrect it shall rectify it; and that, of course, is precisely what the tribunal did. 

17.	However, before we leave this point, we need to look again at the letter of 29th September 2000 to which we have referred before. Although, for the reasons we have given, the various admissions made by the Inland Revenue as to its poor practice in various respects during its investigation, do not go to the point under subsection (6)(a), they do possibly raise another ground which was not raised by the appellants nor, indeed, by Mr Sutton, but which does cause us some concern. At paragraph 6.7 the Inland Revenue say as follows:

“The letter that accompanied the EN [Enforcement Notice] said that you must comply with the EN by 27 October 1999 [six days to pay] or we would lodge an appeal to the Tribunal. However Pat Kelly lodged it on the 26 October 1999. This act was regrettable. Clearly we should have honoured the date on the EN.”

	We have noted that the power under section 20 for an officer to lodge proceedings on behalf of a worker only arises if an Enforcement Notice is not complied with. On the face of the Inland Revenue’s own admission, at the time that they put in the application the time specified in the Enforcement Notice had not expired. Therefore, on a literal reading of section 20, the Inland Revenue had no power to present the complaint at the date at which they did so. We think it frankly very unlikely that that technical point can affect the validity of the applicant’s claim. It would be a remarkable thing if the applicant was to lose his claim, the claim being after all brought in his name, merely because there was a technical problem about the powers of the officer to put it in on his behalf. However, we have not heard argument and it would be inappropriate to ask Mr Sutton to advance argument, as to what the answer to that point is. The point having arisen, it seems to us that it is a matter that ought to be considered by a full tribunal, particularly having regard to the fact that these are novel provisions on which no authority exists. Further, the Inland Revenue admit in the letter that the Enforcement Notice was served without a schedule. We have not seen the Enforcement Notice and it is not clear to us what the effect was of the schedule being omitted. But it is possible that that may itself be a further ground of invalidity for the Notice. Neither of those points were expressly raised, but we are minded to allow them to be raised on appeal, not because they necessarily have ultimately any merit or any substantive impact, but because we do not feel in a position today, with the limited assistance which, with the best will in the world, Mr Sutton is able to give us, to give a reasoned judgment as to their effect. We therefore will invite Mr Sutton to formulate grounds of appeal raising those two points.

18.	Returning to the points which are made by the appellants. The fourth is that they would wish, although their Notice of Appeal does not make this clear, to appeal against the refusal to postpone the hearing. There is in fact no appeal of any sort against the order of 31st March 2000 and it is strongly arguable that if that order were to stand an appeal against the further orders made on 4th and 19th April 2000 would be futile. But even ignoring that technical point, none of the materials before us show any ground for concluding or even arguably concluding that the tribunal acted outside the bounds of its reasonable discretion in refusing an adjournment. The reasons given at paragraphs 5 to 6 of the extended reasons are perfectly capable of supporting such a decision. Indeed, the appellants in their grounds of appeal acknowledge that the application was made very late. They say that that was their solicitors’ fault but, in these circumstances, that is not a matter on which we think they would be entitled to ally.

19.	Fifthly and finally, they wish to appeal against the decision on the review hearing. It does not appear to us that there would be any substantive benefit in allowing an appeal against the review hearing in addition to any appeal that might be permissible in relation to the substantive decision. Everything must stand or fall by what the tribunal ordered on the main occasion.

20.	In the result, we allow the appeal to proceed on the three points that we have identified, that is to say the time point and the two points relating to the Enforcement Notice identified in paragraph 17 above:

(1)	the question of the effect of the fact that the time specified by the Notice had not yet expired at the time that the proceedings were issued, and 
(2)	the fact that no schedule was attached. We would invite Mr Sutton, who we hope will be willing to undertake this task, to draft grounds of appeal raising those points in a proper form and we give leave for such grounds to be lodged by way of substitution for the existing grounds, within 14 days.