Appeal Nos. UKEAT/0270/10/DA
UKEAT/0271/10/DA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 4 October 2011

Before
HIS HONOUR JUDGE McMULLEN QC
MRS C BAELZ
MR P SMITH

SOUTH EAST LEISURE GROUP LTD	APPELLANT

(1) MR Y E VACHOUMIS
(2) ZAFF BRIGHTON LTD (DEBARRED)	RESPONDENTS

Transcript of Proceedings

JUDGMENT

APPEARANCES

For the Appellant	MR MARCUS PILGERSTORFER
(of Counsel)
Instructed by:
Dean Wilson LLP Solicitors
96 Church Street
Brighton
BN1 1UJ
	
For the First Respondent	MS JOANNA HUGHES
(of Counsel)
Instructed by:
USDAW
Legal Services
188 Wilmslow Road
Manchester
M14 6LJ	
For the Second Respondent	Debarred	

SUMMARY

PRACTICE AND PROCEDURE
Case management
Right to be heard

The Employment Tribunal by oversight did not respond to the Appellant’s application for a review of its debarment for want of a timely ET3.  The Employment Judge did not follow the EAT’s direction to make a decision on the application prior to the full hearing.  The Appellant did not have a hearing.  It was conceded the Employment Judge would be bound to order a review.  As he had not done so, the appeal would be allowed and the Employment Tribunal directed to accept the ET3 and hold a full hearing.

HIS HONOUR JUDGE McMULLEN QC

1.	This case is about unfair dismissal and other matters, but essentially on appeal, it is about who is the correct employer.  We will refer to the parties as the Claimant and SEL.  The other relevant party is Zaff Brighton Limited.  Essentially the triangular relationship is between what is alleged to be a transferor SEL, and transferee, Zaff, and an employee of 35 years service of the combined operation at Aberdeen Steak Houses in Brighton.

Introduction
2.	This is an appeal by the Claimant in those proceedings against a reserved Judgment of an Employment Tribunal sitting at Brighton for a day, 2 February 2010, registered with Reasons on 23 February 2010.  The Claimant was represented by an official of his union, USDAW, SEL by its solicitor, Mr Wilson, and Zaff by its manager, Mrs Fuccio.

3.	The Tribunal decided that SEL unfairly dismissed the Claimant, failed to give relevant statutory written particulars, and failed to pay for untaken holiday.  SEL was ordered to pay a capped by statute figure for unfair dismissal of £63,000, and other payments totalling £73,320.

4.	SEL appealed.  The cases had a protracted adjectival history.  Cox J on the sift decided the matter should go to a preliminary hearing.  At that hearing, which I conducted on 16 November 2010 with Mr Harris and Mr Warman, we gave a direction that the case should be heard at a full hearing.  Amendments were allowed to the Notice of Appeal, but the matter should be stayed in the following terms:

“4.	This appeal be stayed, pending referral back to the Employment Judge under Employment Tribunals Act 1996 s35 to give a decision, if practicable within 14 days of the date of the sealed order, in response to the application for a Review made on the 26th day of January 2010 and is to give any further directions in light of this.”

5.	The Judge has answered the invitation on 23 March 2011.  The central issue was an outstanding application for a review of the decision made to debar the Respondent because it had not sent in a proper ET3.  That application in writing, properly made by solicitors, was never dealt with.  The Judge, in answer to our request, said this:

“It follows from the above that the request from SE Leisure for a review of the decision to reject its response was never dealt with by the tribunal.  Paragraph 4 of your order sealed on 17th November 2010 asks if further directions are to be given with regard to it.  I propose no further directions be given for the following reasons:
1.	The best result SE Leisure could have expected on their application for review of the decision to reject their ET3 was to have it overturned and be permitted to take part in the proceedings.
2.	The practical effect of the decision made by my tribunal on 2nd February 2010 was to overturn the exclusion decision and permit SE Leisure to participate in the proceedings by allowing their witness Mr Cootes to give evidence to support their contention they were not the Claimant’s employer.
3.	SE Leisure therefore has suffered no prejudice or disadvantage by reason of their request for review being overlooked.”

6.	The only construction of that is that there has never been a decision on the review, the first stage of which, in accordance with rule 35 of the 2004 Rules is a preliminary consideration by a Judge.  If it has no prospect of success there will be no review, but otherwise there will be a review provided the sub-rules (a) or (e) or both are met, that is “party was not aware of the proceedings” or the “interests of justice require”.

7.	At the preliminary hearing we had the advantage of a substantial skeleton written and oral argument from Mr Marcus Pilgerstorfer of counsel and concise written submissions by Ms Joanna Hughes, who today represents the Claimant.  On the basis of what we there heard and read, we ordered a full hearing.  It occurred to us that there was an unfair dismissal here somewhere, but there was unfairness in the way in which the matter had been dealt with as against SEL.

The facts
8.	Although Mr Wilson, solicitor, attended, he recognised that his scope for manoeuvre was constricted by rule 9, which means that he was not able to participate in the proceedings.  The Tribunal said this:

“4.	At today’s hearing the Claimant was represented by Mr Rey of USDAW.  The Claimant gave evidence and produced a bundle of documents.  Mr Wilson solicitor appeared on behalf of SE Leisure.  He accepted that his client’s rights in the proceedings were circumscribed by rule 9 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 and that he intended to keep a watching brief on their behalf.  He informed the tribunal that he had a witness Mr Edward Cootes who might be able to assist with identifying the employer of the Claimant and whilst recognising that he had no right to call Mr Cootes as a witness invited the tribunal to consider calling him under its powers provided by rules 10 and 14 of the 2004 Rules.
5.	The tribunal was concerned to establish the identity of the Claimant’s employer at time of dismissal.  The pleadings showed the Claimant believed his employer to be SE Leisure.  That company filed a response denying it was the employer but having regard to delay was not permitted to participate in the proceedings.  Mr Wilson for SE Leisure invited the tribunal to use its powers to receive evidence from Mr Cootes.  On the face of his prepared statement it appeared from his inside knowledge of the various companies he might be able to throw light on the issue.  The tribunal therefore concluded that in the interests of justice to both the Claimant, Zaff and SE Leisure Mr Cootes should give evidence and therefore the tribunal decided to exercise its power to permit him to do so.
6.	Mrs Fuccio appeared as representative for Zaff.  She claimed to have worked for that organisation and was the manageress of the Aberdeen Steakhouse being the premises at which the Claimant worked as head chef.  It was not disputed she was the Claimant’s line manager at time of dismissal.  She chose not to cross-examine the Claimant nor to give or call evidence on behalf of Zaff.”

9.	The curiosity is that Zaff, in its ET3, accepts that Zaff employed the Claimant, and dismissed him for dishonesty, having suspended him.  That is entirely consistent with the relationship of employment between Zaff and the Claimant.

10.	Because Ms Fuccio did not give evidence, the only material the Tribunal had was that ET3, one assumes.  On the other hand, Mr Cootes gave evidence. The Tribunal found his evidence unsatisfactory, to such an extent that notwithstanding his assertion of there being a TUPE transfer, 18 months prior to dismissal, SEL was constituted as the Claimant’s employer.  The sole defence of SEL in its draft ET3, which was not allowed to be heard, was that it was not the Claimant’s employer.

Discussion
11.	In her submissions to us today, Ms Hughes has very fairly recognised that the circumstances presented by Mr Wilson on paper to the Employment Tribunal for a review could lead to only one conclusion.  The Judge would be bound to order a review, because of the facts relating to why SEL had not put in its ET3.

12.	The logical conclusion, therefore, is that there should be a review. So we directed a decision be made on that application, but the Judge has not made it.  He could have made a decision that it had no reasonable prospects.  That seems unlikely in view of Ms Hughes’ acceptance that there was material here such as would fall within the rule.  Or he could have ordered a review where all this would have come out.

13.	What Ms Hughes however does argue, with some force, is that the Tribunal’s reasoning was that SEL could not have done any better than it did.  Mr Cootes was not a satisfactory witness.  The problem with that is one of fairness.  This was not a review.  It was not a hearing.  Mr Cootes was, as a matter of grace, heard, apparently on the direction of the Tribunal.  No evidence was available from SEL.  The Claimant was not cross-examined by Mr Wilson.  Zaff gave no evidence, Ms Fuccio providing none.  Mr Wilson was not able to open the case, perhaps an unusual indulgence in a Tribunal these days, but he was not able to make any submissions.  All of these are important safeguards in a hearing. The simple indulgence of the Tribunal in hearing Mr Cootes was no substitute for SEL’s full right to be heard and to conduct the case as it saw fit.  The answer to this case is found in those procedural shortcomings.

14.	It may well be that, since we have decided to remit the case, the same result is forthcoming, but at the moment that looks unlikely.  There would need to be some positive findings by the new Tribunal that when Zaff said it employed him and dismissed him, it never did, and all the time the Claimant was employed by SEL.  We do not say that that cannot be a conclusion, but it will be one which would have to be examined at a hearing.

15.	The logical next step would be for us to order that there be a review, but since we have directed the Judge to make a decision on the review, and he has not done so, we consider in fairness that there will now be an extension of time for SEL to validate its extant ET3, that the ET3 be accepted and that there be a hearing of which the Claimant, SEL and Zaff be given notice.  This case took a day and we see no reason to differ from that.

16.	We are very grateful to both counsel for the expeditious way in which they have handled what seems to us to be a straightforward and obvious point.