|For the Appellant
||MR I TRUSCOTT
(One of Her Majesty's Counsel)
MS L MARSH
City of Edinburgh Council
|For the First Respondents
For the Second Respondents
|MISS J MCNEILL
(One of Her Majesty's Counsel)
Messrs Stefan Cross Solicitors
Newcastle upon Tyne
MR R ALLEN
(One of Her Majesty's Counsel)
Messrs Thompsons Solicitors
285 Bath Street
Equal pay. Expenses of four days of preliminary hearing to determine s.1(6) issue awarded to claimants. Circumstances in which award set aside by Employment Appeal Tribunal.
THE HONOURABLE LADY SMITH
- This is an appeal by the employers of two groups of claimants against awards of Ł10,000 and Ł8,000 as expenses in respect of counsels' fees for attendance at four days of a pre-hearing review to consider the issue of whether or not the claimants and their comparators were in the "same employment". The pre-hearing review took place before the Employment Tribunal sitting in Edinburgh, Employment Judge, Mr K. J. McGowan.
- I proposed to continue referring to parties as "Cross claimants", "Thompsons claimants" and respondents.
- The claimants were and are employed by the respondents in various posts in premises including schools, social work premises and hostels. Their posts fall within the category known as Administrative, Professional, Technical and Clerical Services ("APT &C"). The respondents are a local authority which was formed on 1 April 1996 following local government reorganisation. It comprised an amalgamation of a proportion of the former Lothian Regional Council and the former Edinburgh District Council, all under a new local authority boundary.
- All employees transferred into the new unitary authority under the provisions of Sections 8 and 9 of the Local Government Etc (Scotland) Act 1994 and did so under in terms of their pre-existing contracts of employment and without any break in their continuity of employment.
- Other employees who transferred to the respondents under their pre-existing contracts of employment included manual workers. Manual workers' contracts of employment incorporated terms and conditions contained in a collective agreement known as the "Green Book".
- The APT &C employees' contracts of employment incorporated terms contained in a collective agreement known as the "Blue Book".
- The claimants presented forms ET1 to the Employment Tribunal in which they claimed that they did not receive the same pay as various comparators whose jobs were of equal value. The Cross claimants contended, as an alternative, that they did not receive equal pay to those employed on jobs rated as equivalent. In their forms ET1 the claimants listed, as comparators, various manual workers' job titles.
- In their forms ET3 the respondents denied that gender was the reason for any pay inequality, denied that any of the comparators mentioned by the claimant were engaged on like work or work rated as equivalent or work of equal value and stated that, in any event, a genuine material factor existed which objectively justified any pay inequality averred by the claimant. The respondents also called on the claimants to nominate one comparator post.
- A continued Stage 1 hearing (equal value claims) took place on 2 October 2007. At that hearing, Mr Truscott QC, on behalf of the respondents indicated that their position was that an issue arose under Section 1(6) of the Equal Pay Act 1970 and it was necessary to have a hearing to determine that issue before proceeding to any other hearing. It was also indicated on behalf of the respondents that progress was predicated upon the assumption that there would be named claimants and named comparators since the respondents needed to know both. As recorded at paragraph 9 of the Employment Judge's note of that hearing, the position was:
"9. In particular, the issue was that most, if not all, of the proposed comparators do not appear to be co-located. All the claimants are employed in different establishments from the comparators. This difference arose in virtually all of the claims. It fell to be addressed in advance of going down the Stage 1 route. The same point has arisen in at least one other local authority case involving Dumfries and Galloway Council. The hearing in that case is fixed for 10-12 December."
A pre-hearing review to determine the s.1(6) issue was fixed for 23–27 June and 25–29 August 2008.
- On behalf of the first set of claimants, Mr Cross indicated that he was not prepared to be bound by the forthcoming decision in the Dumfries and Galloway case. The Employment Judge noted:
"11. Ultimately, it was agreed that the appropriate steps were that (i) date stencils should be issued for a section 1(6) hearing (ii) the respondents will make available within fourteen days information about the establishment in which the comparators worked (including but not restricted to physical location) and (iii) the claimants will then respond by specifying the comparators they propose to rely on, again within fourteen days."
- It was envisaged that a case management discussion would thereafter be required.
- By letter dated 20 February 2008, Stefan Cross, Solicitor, on behalf of the first claimants wrote to the respondents' principal solicitor. In that letter he indicated that he was assuming that the only ground on which the respondents would be contesting the section 1(6) issue was that the claimants and comparators were employed at different physical locations. He continued:
"If this is wrong, please could you clarify whether you accept that at all relevant times or at any time during the six years immediately preceding presentation of the claims to the tribunal:
(a) the City Council observed broadly the same common terms and conditions of employment for the (non-manual worker) claimants and their (manual worker) comparators;
(b) the City Council observed broadly the same terms and conditions for the claimants' group and separately for the comparators' group and would have employed the comparator at the claimants' place of work on the common terms and conditions of his group;
(c) the 'single source' test set out in Lawrence v Regent Office Care was satisfied in relation to both claimants and comparators."
In that letter, Mr Cross also suggested a timetable for the exchange of information regarding claimants, comparator groups, names of comparators, productions, a statement of agreed facts and skeleton arguments.
- In response to a request from Stefan Cross for collective agreements, the respondents sent him the Blue Book, the Green Book and the "Red Book" which they explained was the result of what they referred to as a harmonisation agreement reached in 1999. Those agreements were sent on 27 February 2008. By letter dated 10 March 2008, the respondents' principal solicitor replied to Mr Cross's letter of 20 February. In his letter, he stated:
"You should note that in addition to the matter of location/establishment named claimants and comparators, it is also our intention to demonstrate that the terms and conditions of the named claimants and comparators were and are not (in the absence of full implementation of Red Book conditions which will proceed following implementation of the JES and changes to current terms and conditions) 'broadly similar' inter alia by reason of the fact that their terms of employment were negotiated by quite separate (i.e. different representation/TU makeup etc.) collective agreements which, in the key areas, have very different provisions."
He also indicated that the respondents considered that a hearing on the section 1(6) issue could not be contemplated unless they knew the name of each claimant and each comparator and where they worked.
- There was an email exchange between Stefan Cross and the respondents in March 2008. In an email of 20 March 2008, the respondents' principal solicitor stated:
"I would however remind you that the MW and APT&C terms as set out in the Green and Blue Books respectively (subject to specific local agreements) remain extant in this Council, and will continue to remain effective, until the JES is implemented. I assume your reference to the Red Book concerns part 2 'Key Scottish Provisions' which as you will be aware are essentially 'aspirational' in nature or statements of policy intent, and which pre-existed the Red Book Implementation Agreement in the respective books anyway."
- On 22 April 2008, the respondents' principal solicitor, by email, requested that the Employment Tribunal fix a case management discussion. A case management discussion took place on 14 May 2008. Thereafter, the Employment Judge issued a note to parties by email on 20 May 2008. That note included a section headed "Agreed Statement of Facts".
- Paragraphs 7 to 11 of that section were as follows:
"7. In my opinion, one of the reasons that case management difficulties can arise in these cases is the absence of anything resembling a set of pleadings. Accordingly, if issues such as the scope of the hearing (see above) arise, it is very difficult for the Tribunal to rule on such matters since there is no proper statement or record of what the claimants are offering to prove in fact nor which case(s) they seek to make in law.
8. Ms McNeill's opinion was that there was not likely to be a significant dispute on the facts and she undertook to commence the preparation of an agreed statement of facts. Like Mr Truscott, my view is that such statements are very helpful when they work, but often a significant amount of time and effort is expended in an attempt to prepare such statements in advance of hearings to little avail.
9. While I have no objection to parties working on such an agreed statement, I wonder whether in fact it might be of more utility if Ms McNeill were instead to set out a statement of those facts which she is offering to prove and an outline of the case(s) in law which she is seeking to make for each of the lead cases identified. (I am assuming that there would be a significant overlap among the lead cases).
10. Naturally, whoever is instructed for the Thompsons group of claimants should do likewise.
11. Mr Truscott (or whoever is now to be instructed for the respondent) can respond to that identifying which averments are admitted and which are disputed. This should enable parties relatively quickly to identify those areas where oral testimony going to be required."
The Employment Judge also stated that these were matters that required to be tackled as a matter of urgency.
- One of the other things mentioned at the case management discussion on 14 May was the need for production of all relevant contractual documentation relating to both the claimants and their comparators. The requirements of the Data Protection Act were considered to be such as to prevent disclosure by the respondents in the absence of an order from the Tribunal and it was left that counsel for the Cross claimants was going to draft and submit a request for an order for recovery of documents. By 29 May 2008, no such order had been served on the respondents and their principal solicitor emailed both sets of claimants' solicitors asking them to request such an order from the Tribunal in early course so that the relevant documentation could be produced for the forthcoming pre-hearing review on the section 1(6) issue.
- By 4 June 2008, the judgment of the Employment Tribunal in Glasgow in the "Dumfries and Galloway" case referred to above had been issued. In that judgment it had been determined that Blue Book and Green Book employees were in the "same employment" for the purposes of s.1(2) of the Equal Pay Act 1970, as interpreted in accordance with s.1(6) of that Act. Thompsons emailed the Employment Tribunal in Edinburgh (with copies to the other parties) indicating that they were aware there was a likelihood of an appeal in the Dumfries and Galloway case and suggesting that the forthcoming pre-hearing review in the present case be postponed. Agents for the Cross claimants opposed any adjournment of the pre-hearing review and added that they considered that the respondents had yet properly to set out their case on section 1(6). By email of 9 June 2008, the respondents' principal solicitor responded indicating that they considered that the Dumfries and Galloway case had not been correctly decided. Regarding the Cross claimants' criticism of them not having properly set out their case under section 1(6), the email stated:
"1. It is for the claimants to demonstrate that they and their comparators are in the same employment for the purposes of Section 1(6) of the Equal Pay Act. The onus is on them, see Amey Services Limited v Cardigan (2008) IRLR 279 at paras 10, 11 and 12."
The respondents' solicitor then outlined their case under reference to the claimants' comparators being based in different locations, to their being on different terms and conditions deriving from separate collective bargaining agreements, to it being unlikely that the comparators would ever undertake work at or in the same establishment as the claimants, to the need to take account of the larger number of occupational groups employed by different directorates of the Council and working in many different establishments, and to the possibility of the terms of local agreements being different as between Dumfries and Galloway and the respondents. He reiterated that it was not for the respondents to set out a defence to the claimants' case but for the claimants to give fair notice to the respondents of why they say they are in the same employment. He referred to the expectation that Ms McNeill QC would provide a statement of facts to see what could be agreed and that they had thought that would give them fair notice, but that had not been produced. In the circumstances he indicated that he considered it was incumbent on the claimants to set out their position on section 1(6) by way of amendment to their ET1, prior to the case commencing and the respondents would then seek by way of response to amend the ET3.
- By email 10 June 2008, the Employment Judge wrote to parties in terms which included:
"(2) However, it appears that despite parties having known since October last year that there was to be a section 1(6) PHR and having had additional time to prepare as a result of the enforced postponement of the February diet, parties are still nowhere near agreeing what the hearing is to be about in general, let alone specific, terms.
(3) The Employment Judge proposes to review the position in relation to the forthcoming hearings. Before doing so, he wishes to see, by return, the output from the directions set out in paragraph 7, 8, 9, 10 and 12 of the emails sent to parties on 20 May…"
- He copied those paragraphs into his email. It is, accordingly, evident that although not expressly stated as such the Employment Judge regarded what he had set out in those paragraphs of his 20 May email as directions. An exchange between the claimants' agents and the Tribunal then ensued which demonstrates the disadvantages of a case management system being conducted by email not least of which is the risk of judicial control being lost rather than reinforced. However, in a plain assertion of his authority the Employment Judge sent emails on 11 June in which he stated, inter alia:
"The starting point here is that it is for the claimants to plead their case. At the moment, the Tribunal has no idea whatsoever as to what the claimants in the lead cases are offering to establish as a matter of fact or law. Accordingly, it is impossible to discern where the 'four corners' of the lead cases are:
3. Although, generally speaking, there is no requirement for formal pleadings in this Tribunal, the fact that these are multiple claims does not mean that an even more relaxed attitude towards pleading cases can be adopted. If anything, the existence of multiple claims suggests that claims should be properly pled, so as to ensure clarity on all sides – to avoid precisely the situation which is developing here."
"Once the claimants have set out their cases in some form of sensible pleadings (at least as suggested above), the Tribunal can press the respondent to respond in kind. If the claimants do not do that, we will continue with arguments being pursued by the parties in correspondence i.e. external to the Tribunal process. The point is that if there are no pleadings to speak of it is more or less impossible for the Tribunal to make any ruling when disputes arise as to what a case is "about" or what issues are or are not to be determined."
"7. If parties do not wish to cooperate with this process, all questions of scope, relevancy, fair notice etc will simply have to be determined by reference to the ET1 and ET3 lodged in each of the lead cases."
"2. This group of cases was listed for a PHR on the Section 1(6) issue in late 2007. Accordingly, if any party had issues about what another party's position was on any aspect of the case, the time to raise it with the Tribunal was long before the CMD held last month."
"4. The requirement by this Tribunal that the claimants should set out their position in fact and law, on the lead cases is nothing to do with what the respondent is saying - but derives from the CMD when
a. It became clear that there were diametrically opposing views as to the scope of the factual dispute and no common ground as to the questions of law arising for determination.
b. Ms MacLeod (sic) offered (as I recall it) to prepare a draft statement of agreed facts and
c. The discussion about whether there should or should not be prior disclosure of skeleton arguments.
5. My email of 20 May … was an attempt to address these issues. Accordingly, the fact that there had been no prior comment on or criticism of the claimants pleadings is irrelevant."
"7. Put another way, my desire that parties should focus their respective positions in a coherent set of pleadings derives from my perception that it has become necessary to get back to some first principles here, since it has become apparent that parties are unable to focus the dispute themselves. Accordingly, in my opinion, it is essential that that focusing exercise takes place under the supervision of the Tribunal. The appropriate mechanism for that is for the parties to plead their cases. The ball is initially in the court of the claimants so far as that is concerned."
"10. It is true that there was no order for statements of facts. However, as already observed, my recollection is that Ms McNeill, QC offered to commence the drafting of this. I proceeded on the basis that I was entitled to take that offer at face value, rather than have to make an order in respect of it."
By emails dated 16 June 2008 both sets of claimants applied to amend their claims and attached the relevant amendment documents to their emails. Towards the close of business on Thursday 19 June, Ms McNeill, QC intimated a draft statement of agreed facts. By email of 20 June 2008 to the Employment Tribunal (copied to the claimant's agents) the principal solicitor for the respondents intimated that at the start of the hearing on Monday 23 June they would be objecting to the claimants' amendments being received on the grounds of timing and content, and that if the amendments were received they would seek a discharge of the hearing in order that they could be cured as to content and thereafter answered. In the event of such discharge, they would be seeking the expenses of the discharge. He also intimated that if the amendments were not received, the respondents' motion would be to dismiss the claims since the claimants would not be able to bring themselves within the provisions of section 1(6) of the Equal Pay Act on the basis of their then current pleadings.
Pre Hearing Review: 23-27 June 2008
- At the start of the hearing on 23 June, senior counsel for both claimants moved to amend their ET1s in terms of their amendments. The application was opposed on behalf of the respondents. The hearing on the claimants' opposed application to amend continued throughout the morning of 23 June. At about 2.15pm the Employment Judge gave his decision, which was to allow the claimants to amend their pleadings. The respondents thereafter sought an adjournment to enable them to consider and respond to the draft statement of agreed facts. They requested that the adjournment be until the morning of Wednesday 25 June. Their application was not opposed. It was granted. The Tribunal hearing convened on the morning of Wednesday 25 June. Senior counsel for the respondents sought a further adjournment as the respondents' response to the amendments had not been completed . The application was not opposed. It was granted.
- The Tribunal hearing convened again on Thursday 26 June. Evidence was led on behalf of the claimants. A claimants' witness was not available for the Friday. On the afternoon of Thursday 26 June, a note was passed to senior counsel for the respondents, indicating that the claimants intended to seek expenses for four "wasted" days. The application for expenses was heard on Friday 27 June.
- The claimants' amendments ran to 10 pages and 5 pages respectively. They set out the claimants' cases as to how and why they could satisfy the requirements of section 1(6) of the Equal Pay Act and demonstrate that they were in the "same employment" as their comparators. They also specified what was referred to as a "European Law" claim in addition to a domestic law claim. The respondents' response ran to some 19 pages and answered the cases specified in the amendments.
The Tribunal's Judgment
- The Employment Judge approached matters by posing two questions:
"96. In my view there are two key points which I must consider. Firstly, can it be said that the factual averments in the proposed amendments were ones of which the respondent had not previously had notice? Secondly, did the claimants' intention to run arguments based on the statements of the Red Book and mobility clauses prejudice the respondent?"
- At paragraph 125, the Employment Judge found that the adjournments were due to the fault of the respondents. He states:
"I am satisfied that the adjournments on the first and third days were brought about by the fault of the respondent. As such, these occasioned and (sic) unnecessary expense."
- As to the nature of that fault, the Employment Judge says nothing more about it at paragraph 125. In particular, he does not say what it is that the respondents did or failed to do that amounted to a failure to fulfil what could reasonably be regarded as their duty (as is implicit in the concept of fault). A clue to his rationale is perhaps available in the criticism of the respondents that appears earlier in his judgment, that they had not analysed information about jobs and work locations of the claimants and their proposed comparators in advance of having received the amendments. At paragraph 104 he states that he was left:
"With the impression that no steps had been taken towards analysing what was being put forward on behalf of the claimants with a view to agreeing what could be agreed."
He is also critical of the lateness of the claimants' amendments (although stated as referring to the Cross claimants the criticism in fact appears to extend to both sets of claimants). At paragraph 101 he states:
"In my view, it would have been better if the proposed amendment had been produced earlier than it was."
Looking at matters from the respondents' point of view, he took the view that the amendments did not give rise to any insurmountable difficulties in terms of preparation or prejudice (paragraph 118) and that the respondents were not put at such a disadvantage by the amendment that there was insufficient time to identify what could be agreed and prepare answers (paragraph 109) and he took the view that the averment in the amendments about the basic factual matters should not have caused the respondent any significant difficulty (paragraph 105). In so far as the amendments contained, for the first time, pleadings for the claimants to the effect that they were relying on the Red Book, the Employment Judge states, at paragraph 106:
"… the respondent knew by 11 June that this was going to be part of the Cross claimants' argument. In any event, I do not see how it can be said to pose a significant difficulty for the respondent in terms of preparational presentation as it appears to be the proposed antidote to what has emerged as a key point for the respondent, namely that the Blue and Green Books still regulate the position. Accordingly, there was inevitably going to have to be an exploration in evidence of the parties respective positions in any event. In my view it is also relevant that as matters stood, the claimants were meeting an unpled section 1(6) argument."
- In similar vein, at paragraph 92 the Employment Judge stated that he was unimpressed by arguments about where the onus of proof lies and about whose responsibility it is to plead their case first. In that paragraph he expresses the view that by identifying comparators the claimants were, in effect, asserting that they were both of the opposite sex and employed by the respondent at the same establishment. He continues:
"Where, as in this case, the respondent raises a defence saying 'your comparator is not valid because he was employed at a different establishment', there in my view it is for the respondent, in the first instance, to say why that should be so."
The Employment Judge also expresses the view that the essence of an equal pay case is not factually complicated.
- In respect that the main thrust of the expenses application was to the effect that there had been unreasonable conduct falling within the provisions of Rule 40(2) and (3) of the Employment Tribunal (Constitution and Procedure) Regulations 2004, the Employment Judge stated himself satisfied that there had not been unreasonable conduct on the part of the respondents, commenting, at paragraph 122 that:
"there remains the difficulty that in this type of the situation is more difficult for the Tribunal to identify the rights and wrongs of any given situation."
- The Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 provide:
"40(1) A tribunal or chairman may make a costs order when on the application of a party it has postponed the day or time fixed for or adjourned a Hearing or pre-hearing review. The costs order may be against or, as the case may require, in favour of that party as respects any costs incurred or any allowances paid as a result of the postponement or adjournment"
- It has, nonetheless, frequently been recognised that awards of expenses in the Employment Tribunal jurisdiction are the exception rather than the rule. In Gee v Shell UK Ltd  IRLI 82, Lord Justice Scott Baker commented, at paragraph 35:
"… the governing structure remains that of a cost-free user-friendly jurisdiction .."
- The Employment Tribunal and EAT statistics for Great Britain for the period 1 April 2008 to 31 March 2009 would appear to support that although it is fair to say that the statistics are generalised and show, for instance, no breakdown as to the particular rules under which awards of expenses have been made or the proportion of cases in which applications have been made.
- The Employment Tribunal's power to award costs was also considered quite recently in the case of Lodwick v Southwark London Borough Council  ICR 884 where Pill J commented:
"23 … costs remain exceptional (Gee v Shell UK Ltd 2003 IRLR 82) and the aim is compensation of the party which has incurred expense in winning the case, not punishment of the losing party (Davidson v John Calder (Publishers) Ltd [1985} ICR 143)"
"26 … to order costs in the Tribunal is an exceptional course of action and the reason for, and the basis of, an order should be specified clearly, especially when a sum as substantial as Ł4,000 is involved."
Although both Gee and Lodwick were cases concerning the power to award costs on grounds of misconduct (now Rule 40(2) and (3) of the 2004 Rules), the comments made regarding the exceptionality of awards of costs are general, as are those in Lodwick regarding the need clearly to specify the basis of the order, particularly if it is a substantial one. That approach would accord with the principles discussed in English v Emery Reimbold & Strick Ltd  IRLR 710 regarding the duty of a judge to produce a judgment that gives a clear explanation for his order because justice will not be done if it is not apparent to the parties why one has won and the other has lost.
- Also to the effect that the norm is that Employment Tribunals are a cost order free jurisdiction are comments made by Mummery LJ in McPherson v BNP Baribas  ICR 1398, at paragraph 25:
"… It has also for long been generally accepted that the costs regime in ordinary litigation does not fit the particular function and special procedures of Employment Tribunals."
- So far as the power of this Tribunal to interfere with an award of expenses made by an Employment Tribunal is concerned, it must, of course, be recognised that any such order is a discretionary one and there are limited circumstances in which such an exercise of discretion can be interfered with. Those circumstances are well known. They were summarised by Mummery LJ at paragraph 26 in the McPherson case:
"When a costs order made by an Employment Tribunal is appealed to the Employment Appeal Tribunal or to this court the prospects of success are substantially reduced by the restriction of the right of appeal to questions of law and by the respect properly paid by appellate courts to the exercise of discretion by lower courts and tribunals in accordance with legal principle and relevant consideration. Unless the discretion has been exercised contrary to principle, in disregard of the principle of relevance or is just plainly wrong, an appeal against a tribunal's costs order will fail."
Another way of expressing the same approach is that which was explained in Adams and Reiner v West Sussex County Council 1990 IRLR 215 (as referred to in Amey Services Ltd v Cardigan and Others  IRLR 279 and Amicus v City Building (Glasgow) LLP and Others  IRLR 253, namely that this Tribunal requires to examine whether the order was within the Employment Tribunal's powers, whether the discretion was exercised within guiding legal principles and whether the exercise of discretion can be attacked on the principles in Association Provincial Picture Houses Ltd v Wednesbury Corporation  1 KB 223.
- It is also relevant, for the purposes of this appeal, to bear in mind the requirements which the Equal Pay Act provisions place on a claimant so far as establishing a prima facia case is concerned. I would refer to my discussion of those matters in the Amey Services Ltd case including the importance of the identification by a claimant of a comparator or comparators who she asserts are in the same employment as her within the meaning of section 1(6) of the Act.
- On behalf of the respondents, Mr Truscott submitted that the Tribunal had erred in law. The Employment Judge had taken irrelevant factors into account, failed to take account of relevant factors, failed properly to explain his reasoning and reached a decision which was perverse.
- In particular, satisfying the provisions of section 1(6) was a question of jurisdiction; in the circumstances it was for the claimants to make factual averments as to how they were in the same employment as their specific comparators when those comparators were not employed in the same establishment or location. Mr Truscott submitted that the Tribunal had misdirected itself in proceeding on the basis that the cases were not factually complicated. The Tribunal had reached a perverse decision in finding that the respondents were at fault in circumstances where the amendments were intimated late; there had been no failure on the respondents' part to comply with any Tribunal direction and the first opportunity to raise concerns about the proposed amendments was the first day of the hearing. It was wrong, in Mr Truscott's submission, to approach matters on the basis that the respondents should have anticipated that the claimants would make a case based on the Red Book. It was perverse to award four days expenses where there were only two days of adjournment. The Tribunal failed to take account of relevant matters including submissions made on behalf of the respondents in seeking to resist the award of expenses and the fact that it was only on the third day of the hearing that all the claimants' comparators were identified. Mr Truscott submitted that there was evident complexity arising from the multiplicity of claimants and comparators; that involved a substantial burden of checking of records. Further, the respondents, at all times, had to deal with two sets of claimants each with a different perspective and each proceeding at a different pace in the run up to the hearing.
- Mr Truscott also submitted that the approach of the Employment Judge in his judgment, in particular as to onus of proof, did not accord with the stance that he had taken in advance of the hearing nor did he appreciate that the amendments raised not only the matter of reliance on the Red Book in support of their "same employment" arguments but an allegation that the respondents were at fault for having failed to implement its terms.
- The position of the Cross claimants, as stated by Miss McNeill, was that the appeal should be refused; the appellants had not made out a case for interfering with the Tribunal's exercise of its discretion, care had to be taken to distinguish between applications under Rule 40(1) and 40(2) and (3), the question of "same employment" was not a jurisdictional one, the respondents must have had an inkling by, the latest, March 2008, that the Red Book was being relied on by the claimants, the Red Book was referred to by the respondents in contracts of employment as from 1999, there was little factual dispute between the parties and the Employment Judge's reasoning could be deduced adequately from the judgment.
- Mr Allen, for the Thompson claimants adopted Miss McNeill's submissions and added that in his submission what must have lain behind the Employment Judge's approach was the application of the overriding objective (Rule 3 of the 2004 Regulations). He stressed that it was important to bear in mind the context which was that the Employment Judge had had oversight of the case management and knew what had been explored and explained in the course thereof. It was plain, he said, that the fact was that the respondents had not done anything to prepare prior to Monday 23 June.
Discussion and Decision
- Whilst fully accepting that the power to award expenses under Rule 40(1) arises in different circumstances from those in which it arises under Rule 40(2) and (3), it remains the case that awards of expenses are not the norm in the Employment Tribunal jurisdiction. That means that particular care must be taken by an Employment Judge to satisfy himself that it is appropriate to make an award and, furthermore, to explain clearly to parties why any such award is being made. Rule 40(1) empowers an Employment Judge to make such an award where a party has been successful in obtaining an adjournment of a pre-hearing review but there is no requirement to do so. The Employment Judge requires, in the exercise of his discretion, to act in a judicial manner and that involves taking account of the whole relevant facts and circumstances, leaving irrelevant factors out of account and reaching a decision which is understandable and within the bounds of those which a reasonable Tribunal could, in the circumstances, make.
- As to the circumstances in this case I have set out the email and correspondence exchanges that took place in the period leading up to the pre hearing review, at some length, in the "Background" section above because of the elucidation that that material provides as to what was passing between parties and, importantly, between the Employment Judge and parties in that period. Perhaps the most striking feature of this case is that a review of it shows that the Employment Judge expected the claimants to add specification to pleadings which he evidently considered to be inadequate and was critical of their failure to do so by a stage that he had expected that to be achieved. In particular:
- he considered that there were complexities that meant that more detailed pleading than was contained in the forms ET1 and ET3 was required with a view to achieving clarity in advance of the pre–hearing review on the S.1(6) issue;
- he considered that the claimants had not put on record what they were offering to prove in fact nor the cases that they sought to make in law;
- as at 20 May 2008 he was expecting counsel for the claimants to provide a written statement of the facts that they were offering to prove and an outline of the case in law which they sought to make under reference to them;
- he said that thereafter counsel for the respondents could respond, identifying what was admitted and what was disputed;
- as at 11 June 2008, he had no idea what the claimants were offering to establish as a matter of fact or law and even if the claimants had not yet had sight of all the contractual documentation that they wished to see, they and their advisers presumably knew the factual and legal basis of their claims, at least in broad terms. His emails evidence, by that stage, a marked degree of frustration and disapproval of on his part of the fact that the claimants had not done so;
- whilst the Tribunal could press the respondents to respond, it could not do that until the claimants had set out their cases "in some form of sensible pleadings". The ball was, as he put it, in the claimants' court;
- his requirement that the claimants should set out their position in fact and law had nothing to do with anything that the respondents were saying but derived from what had passed at the CMD on 14 May.
- Further, the correspondence between parties shows that the respondents made their position regarding the relevance to the s.1(6) issue of collective agreements clear in their letter to Stefan Cross of 10 March 2008, namely that different collective agreements applied as between the named claimants and comparators and that neither of those agreements was the Red Book. In respect that the Employment Judge stated in his judgment that the respondents knew by 11 June 2008 that the claimants were relying on the Red Book it bears noting that what happened on 11 June was not direct intimation to them of that but that they were copied in to a letter written by Stefan Cross to the Employment Tribunal on that date in which their intention to make such a case is, amongst other things referred to. Also, on that same day the views of the Employment Judge, which were trenchantly expressed to parties twice (in emails in both the morning and the afternoon) was that he had no idea what the claimants' case was and that he required them to make it plain in their pleadings before the respondents could be required to respond to it. That approach is appropriate since principles of fair notice involve not only that a party can be said to have knowledge of a state of affairs but that his opponent seeks to rely on them for the purposes of his case, as discussed in Ladbrokes Racing Ltd v Traynor UKEATS/0067/06. The means by which a claimant does so is by specification in the ET1 subject of course to the explanation that the claimant is not expected to plead all his evidence therein; an outline of the relevant facts is sufficient. It is thus not surprising, in all the circumstances, that the Employment Judge observed, at paragraph 101, that it "would have been better if the proposed amendment had been produced earlier than it was". The only surprise is that, given his earlier directions and frustration that he did not put it more strongly, at least to the extent of observing that the amendments should have been produced earlier.
- Also of note is that the amendments did not only indicate that the claimants would be relying on the Red Book but appeared to give notice of a new case that the claimants were intending to argue that the respondents were at fault in having failed to implement it . Further, the adjournments were required for and spent upon (a) attending to the respondents' response to the draft statement of agreed facts which the Cross claimants had, through their senior counsel, undertaken to prepare on 14 May but had not intimated to the respondents until late on Thursday 19 June and only then after having been reminded about it by the Employment Judge; and (b) to answer the amendments allowed on day one of the pre-hearing review, which amendments were added to by the Thompsons claimants on the Wednesday when notification of a further claimant was given, a notification which , because of the number of comparators specified involved the respondents in having to make multiple checks. . The Employment Judge did not suggest otherwise; indeed, he accepted, at paragraph 103, that the administrative task of checking all the information contained in the amendments, the schedules thereto and the draft statement of agreed facts "could be labour intensive given the number of claimants and number of comparators".
- Turning to the Employment Judge's reasoning, I would make the following comments. Firstly, whilst he has recorded, at some length, the submissions made on behalf of the respondents in opposition to the allowance of the amendments ( to which Mr Truscott referred in the course of the expenses hearing) he does not record the other submissions which he made specifically in opposition to the application for an award of expenses. Mr Truscott explained that he had made such submissions and it was not disputed that he had done so. I do not suggest that they required to be recorded ad longum but the failure to make any reference to them when he makes such detailed reference to the other submissions means that the Employment Judge does not provide any reassurance that he had regard to them when considering his decision. Secondly, he makes no reference to what had passed between him and parties in the period leading up to the pre–hearing review, as outlined above. Nor does his reasoning indicate any recollection of its nature and content which, as I have indicated, involved putting pressure on the claimants to make their cases clear in fact and law and to start the ball rolling by pleading them in their ET1s. This second matter is of particular importance. In these two respects, it can be said that the Employment Judge appears to have failed to take account of relevant material.
- Thirdly, there is some contradiction and at the very least tension between his approach during the period prior to the pre-hearing review and that adopted in his judgment. For instance, during the former he seemed to accept that the case involved complexities yet in the latter he refers to equal pay cases not, essentially, being complicated. During the former, he stressed the need for the claimants to set out their case in their pleadings before the respondents could be expected to respond, an approach which involves accepting that the respondents need to see what the claimants are saying before formulating their response, yet in the latter he is critical of the respondents for not having their preparation more or less complete in advance. During the former, he was critical of the claimants for not having attended to the drafting of a proposed statement of agreed facts, a document which required to be passed to the respondents for their consideration and revisal yet in the latter his criticisms of the respondents for lack of preparation evidently extends not only to the work of answering the amendments but the work of responding to that proposed statement. In short, during the former, his consistent message was that the ball was in the claimants' court and they required to get it moving but his approach in the latter is that the respondents should have realised that the ball was actually in their court. Yet it goes without saying that, absent a fundamental change of rule so as to allow there to be two balls in the game, the ball cannot reasonably be expected to be at both ends of the court at the same time.
- Fourthly, much of the reasoning in the judgment would be apt to a consideration of whether or not the claimants should be allowed to amend their cases. The questions he poses for himself:
"96. In my view there are two key points which I must consider. Firstly, can it be said that the factual averments in the proposed amendments were ones of which the respondent had not previously had notice? Secondly, did the claimants' intention to run arguments based on the status of the Red Book and mobility clauses prejudice the respondent?"
were questions that would have been expected in relation to the issue of whether or not the amendments should be allowed and whether or not to allow the adjournments that were sought. No doubt the Employment Judge would also have had the overriding objective in mind when considering applications which, if refused, might have compromised the ability of the Tribunal to achieve expeditious progress in these cases, although I would add that I am not convinced that it follows that he had it in mind when making the award of expenses. Whilst the Employment Judge's questions do not raise considerations that could be said to be irrelevant to the expenses issue, they do not cover the whole considerations that required to be taken into account and it needs to be remembered that it does not follow from a conclusion that it would be reasonable to allow an amendment that the other party should bear the expense occasioned by it or by associated matters such as, in this case, responding to the proposed statement of agreed facts. Nor does it follow that the party who successfully seeks an adjournment should necessarily suffer an award of expenses against him in respect of it. The applications to adjourn evidently flowed from the amendments and the proposed statement of agreed facts (which reflected the claimants' case as in their amendments) and it was necessary to examine the entirety of the cause of that. I am satisfied that the Employment Judge failed to do so. Had he done, he could not have concluded that the adjournments were caused by the sole fault of the respondents. Their need to attend to their pleadings and to the statement of agreed facts was certainly the proximate cause but the original cause was actually the claimants' failure to do as he had expected them to do at an earlier stage and to do soon enough for the pleadings and the statement to be finalised prior to 23 June. The Employment Judge had every reason to be annoyed that the case could not proceed on 23 June as planned, particularly since he had been doing his best to bring pressure to bear to see that the issues had been properly focussed through exchanges between parties before then. The whole facts and circumstances do, however, indicate that it was not fair to lay the blame wholly at the door of the respondents which is what, by stating that the adjournments were their fault, he did. I do not accept, as was suggested by Miss McNeill, that the Employment Judge gave eleven reasons for that. Rather, I accept, as was submitted by Mr Truscott, that it is not possible to identify what it was the respondents did or failed to do that it could reasonably be said they had a duty to do or refrain from doing that, in the Employment Judge's assessment caused the adjournments. They could not reasonably have been expected to have their answers drafted in advance of receipt of the amendments nor could they be expected to have revised a document that they did not have, particularly since their approach to it was bound to be influenced by the case pled in the amendments.
- Separately, I accept that the Employment Judge does not explain why he awarded four days expenses in circumstances where there were only two days wholly lost. Rule 40(1) is concerned with expenses arising from the adjournment and in this case the only reasonable view could be that that amounted to two days. A significant proportion of the first day was taken up with the hearing on the amendments and the only full "adjournment days" were the second and third days. There is, however, no requirement to apportion the award made since I consider the appeal is well founded in its entirety.
- I will, accordingly, uphold the appeal and pronounce an order revoking the award of expenses made by the Tribunal in its judgment.