|For the Appellant
||MS SUZANNE McKIE
Messrs Thomas Graham
St Ina House
Cardiff CF14 4HY
|For the Respondent
||MS JANE MULCAHY
10 Bennetts Hill
MR JUSTICE CHARLES:
- The Appellant in this case is Premium Ice Cream Co Ltd (Premium). There are two appeals against two decisions of an Employment Tribunal sitting in Cardiff.
- The Respondent to both appeals (and the Applicant before the Employment Tribunal) is a Ms Parsons.
- The Extended Reasons for the two decisions that are the subject of the appeals were sent to the parties on respectively 2 December 1998 and 24 June 1999.
- The first Decision (the "Liability Decision") dealt with the substance of the Applicant's claims. The second decision dealt with applications for costs.
- By the Liability Decision the Employment Tribunal found as follows:
"The unanimous decision of the tribunal is that the respondents discriminated against the applicant on the ground of her sex contrary to Section 1(1)(a) and Section 6(2)(b) of the Sex Discrimination Act 1975 and are in breach of her contract of employment and/or made unauthorised deductions from her wages and/or are liable to pay her sums under the Industrial Tribunals Extension of Jurisdiction (England & Wales) Order 1994, the Employment Tribunals Act 1996 and/or the Employment Rights Act 1996. We award her £1,500 under the Sex Discrimination Act. We award her a further £13,559.79 in respect of the contractual allegations. We reject the claim for wrongful dismissal."
- That decision followed a hearing before a full Employment Tribunal which took place on 8 and 9 July 1998 and further on 26 to 30 October 1998 inclusive (ie over a period of seven days).
- By the second Decision (the "Costs Decision") the Chairman of the Employment Tribunal made an order in the following terms:
"I order that the respondent pays one sixth of the applicant's costs of these proceedings, to be assessed on the standard basis. With the consent of the parties I have decided this issue sitting alone and on written representations only."
- The Notice of Appeal in respect of the Liability Decision is dated 12 January 1999 and includes grounds under the following headings, namely:
(1) The Employment Tribunal exercised its discretion on wrong principles.
(2) The Tribunal failed to give reasons for a finding of fact or otherwise arrived at a conclusion of fact in the absence of evidence.
(3) The Tribunal errs in law if evidence which is put forward in defence of two separate claims is only considered in relation to one and not the other.
(4) The decision was perverse.
(5) Perceived bias by the Tribunal.
- Initially Premium, through their Solicitors, asked that the determination of costs be postponed until after the appeal against the Liability Decision was disposed of but later by a letter dated 31 March 1999 Premium's Solicitors expressly agreed to the issue of costs being decided by the Chairman sitting alone upon written representations only.
- Paragraph 3 of the Notice of Appeal in respect of the Costs Decision is in the following terms:
"The Appellant appeals against the Decision by reason of perversity and bias. Particulars of bias are set out below. In addition, the Appellant relies upon the matters set out in its Grounds of Appeal under reference EAT/225/99. The Applicant (sic) alleges perversity for the reasons that follow."
The grounds of appeal then go on to provide particulars.
- Before us Counsel instructed by Premium (who did not appear before the Employment Tribunal) put in a detailed and helpful skeleton argument which identifies the grounds of appeal and the arguments pursued on both the appeals.
- Counsel for the Applicant (the Respondent to the two appeals) (who also did not appear before the Employment Tribunal) also put in a helpful and full skeleton argument.
- In this judgment we are critical of the way in which this case was conducted. However we would like to make it clear that those criticisms do not cover the way in which Counsel presented their written and oral arguments to us. On the contrary, we are grateful to both Counsel for their written and oral submissions.
- The Applicant was employed by Premium from mid-September 1996 until mid-October 1997. The Employment Tribunal find that latterly she was employed as Premium's Sales Director. The Applicant had previously been employed by Premium's main rival, namely Tudor Dairies (Tudor). She had worked for Tudor for 14 years. When working for Tudor she worked her way up through that company rising to be Sales and Marketing Manager. The Applicant has a considerable knowledge of the ice cream trade which, as the Employment Tribunal naturally find, she took with her to Premium together with her knowledge of Tudor's customers and details of Tudor's business.
- The Employment Tribunal find that the Applicant was dismissed for gross misconduct. Following that dismissal she has again worked for Tudor. This (together with the nature of the allegations made in support of her claim of sex discrimination) has caused tension, hostility and suspicion between the parties.
- Sadly it is apparent from the documents that we have seen that a hostility between the Solicitors representing the parties has also developed. This seems to be continuing. In particular the Solicitor having conduct of the litigation on behalf of the firm acting for Premium has put in a large amount of material relating to the manner in which he conducted the case.
- Having regard to the nature of the issues in the case before the Employment Tribunal and this Tribunal we feel bound to record that neither of the firms of Solicitors involved can, in our judgment, take credit from the way in which the case and the appeal were prepared. Indeed, in our judgment, the standard of preparation fell some way short of the standard that the Employment Tribunal and we are entitled to expect of Solicitors acting in such proceedings. This is particularly the case in respect of discovery and the preparation of bundles.
- We shall return to the issues relating to discovery before the Employment Tribunal. Unfortunately, the lack of proper preparation continued during the course of the appeal, both before the first day of the hearing and over the adjournment.
- The documents provided to this Tribunal before the first day of the hearing did not contain a full bundle of the correspondence and notes of relevant telephone conversations relating to discovery prior to the hearing before the Employment Tribunal (and over the adjournment thereof). The documents before us include the written submissions and enclosures put before the Chairman in connection with the applications for costs. It follows that having regard to the content of that material the Chairman of the Employment Tribunal when considering costs had an equivalent problem to that which we faced. However it may be that he had other documents before him (eg the bundles that were before the Employment Tribunal on the substantive hearing). Further he may have been able to fill some gaps from his memory of the proceedings.
- At the end of the first day of the hearing of the appeals (when it had to be adjourned for a date to be fixed) we asked for clarification in particular as to what documents had been enclosed with the letter from Premium's Solicitors dated 7 July 1998 (the day before the hearing before the Employment Tribunal). We also asked for a full bundle of the correspondence and relevant telephone conversations relating to discovery. The first day of the hearing before us was 30 January 2001. The adjourned hearing took place on 23 May 2001 but prior to that adjourned hearing neither side complied with our request.
- Ms Norman (who is the Solicitor who conducted the case before the Employment Tribunal on behalf of the Applicant but who is no longer employed by the firm of Solicitors who still represent the Applicant) prepared an additional statement which is dated 8 May 2001. A copy of that statement was sent to this Tribunal on 16 May 2001. On the same day the Applicant's Solicitors informed Premium's Solicitors that they had sent that statement to this Tribunal. However, they did not send a copy of that statement to Premium's Solicitors, rather they invited them to exchange statements. Correspondence ensued in which to our minds surprisingly, it was suggested by Mr McTaggart (the solicitor acting for Premium) that he would provide additional information orally during the hearing.
- Later Mr McTaggart swore a further affidavit on 22 May 2001. That affidavit contains 57 paragraphs and has 27 exhibits (most of which are quite short). A copy of that affidavit and the exhibits thereto was faxed to this Tribunal on the morning of 22 May 2001 (ie the day before the adjourned hearing). It is plain to anyone who is experienced in litigation that this was far too late.
- Further neither side provided a complete bundle of correspondence and relevant telephone notes, or copies of the documents disclosed with the letter of 7 July 1998.
- At the hearing we were told by Counsel that the parties were agreed as to what those documents were and we were handed a bundle containing copies of those documents. No explanation was provided as to why that bundle had not been provided earlier.
- No documents were exhibited to Ms Norman's further statement or provided by the Applicant's Solicitors. At the adjourned hearing of these appeals we were told by Counsel for the Applicant that this was because she and her Solicitors had not been able to locate any further documents. This information is not included within Ms Norman's statement.
- Mr McTaggart's affidavit does exhibit some further documents. Some of those documents appear to be covered by legal professional privilege and some of them are "without prejudice".
- We assume, although this was not confirmed to us, that Mr McTaggart had obtained the permission of Premium to disclose the privileged material.
- It appears that the without prejudice material (or equivalent without prejudice material) had already been disclosed to the Chairman of the Employment Tribunal when he decided the issue of costs and, in any event, no objection was taken to its disclosure.
- Mr McTaggart's new affidavit sets out some of the history. Some of that account had already been put before us in statements and submissions. However some of it is new.
- Much of the affidavit is directed to Mr McTaggart's perception of the reasonableness of his own conduct and to justifying what he did. In this context it seems to us that there must have been more discussions than those that he mentions between him and his clients as to the preparation of the case and which are arguably relevant to the points he was seeking to make as to his conduct, and that of Premium, in preparing for and dealing with the case. The additional information provided by Mr McTaggart therefore raised a question as to whether there should be further disclosure of privileged material if, as was the case, Mr McTaggart (and thus Premium) were seeking to rely on some privileged material.
- Further in this new affidavit Mr McTaggart also raises some new allegations about Ms Norman and events in which she participated. The timing of this affidavit had the result that he did not give her an opportunity to consider it and deal with any such allegations before the adjourned hearing of the appeals.
- Further the new affidavit expands on a meeting between the Chairman Employment Tribunal and the two Solicitors representing the parties which took place before the beginning of the hearing at the Employment Tribunal on 8 July 1998. We will refer to this meeting as the "settlement discussion". We will return to it later.
- The introduction of such matters concerning the settlement discussion by Mr McTaggart introduced the following further questions, namely:
(a) whether Premium should be allowed to rely on such additional material on this appeal, and
(b) whether the Chairman and Ms Norman should be invited to comment thereon.
- Ms Norman was contacted over the lunch time adjournment and was able to give her first reaction to what Mr McTaggart said about the settlement discussion. Naturally the Chairman was not able to make any comment thereon in the time available.
- In short, over the adjournment of the hearing of the appeal the information we had specifically asked for was not provided in full and the further information that was presented was put in very late and, particularly in the case of Mr McTaggart's affidavit, introduced new difficulties.
- We made it clear during the hearing that we regarded the manner in which both sides, and in particular Mr McTaggart, had provided further information to this Tribunal to be most unsatisfactory.
- We considered adjourning the hearing due to the late and unsatisfactory provision of further material and the possible need to obtain the comments of the Chairman (and of Ms Norman) on points raised by Mr McTaggart. However, on the invitation of both parties to the appeal we decided to hear their submissions on the basis of the information presently before us and to decide in the light thereof whether further information or submissions were necessary. As appears below we have concluded that we can deal with both appeals without further information or argument.
The issues before the Employment Tribunal
- Shortly after the termination of the Applicant's employment with Premium in October 1997 there was some "without prejudice", and some open, correspondence between the Solicitors for the parties. There is a without prejudice letter dated 28 October 1997 in which the Applicant's Solicitors state that they calculate the sum due to their client under the contract to be £18,400. There is also what appears to be an open letter of 28 October 1997 from the Solicitors acting for the Applicant to Premium's Solicitors. This refers to earlier correspondence which we have not seen. It contains some details of the claim for commission in respect of sales to Sainsbury's, Eismann, Farm Food, Fullers, and Yarsley's. As to the claim in respect of Sainsbury's that letter contains the following assertions:
"Nonetheless, the 1% was on the basis of all new business and Sainsbury's Fiorella was entirely new business. … Sainsbury's announced in 1986 that they wished to put all the Fiorella business with one supplier. Various conversations took place with our client while she was at Tudor and then when she moved to your clients Sainsbury's were changing flavours, recipes, packaging, pack size and retail price and all of this was to be a new line for Sainsbury's. The presentation to Sainsbury's makes it entirely clear that this was 'new business' and this was the main reason for our client moving from (sic) to your clients. Your client's Mr Hodge attended the presentation which our client made to Sainsbury's along with a number of other people. The presentation was made by our client who compiled all the information and it is certainly the case is as seen in various documentation that your client's, Mr Hodge on many occasions acknowledge our client's efforts in securing this new business."
As to the other suppliers allegations are made that the Applicant introduced new business. That letter continues with claims in respect of pension, private family health cover, holiday entitlement, payment in lieu of notice and outstanding expenses. It also raises a claim of sex discrimination and asserted:
"Your clients (in particular Mr Hodge) are well aware of the discriminatory behaviour of Mr Mitchell and his 'problem with women' and his unwillingness to deal with women who are looking after children, and his general failure to give our client the appropriate respect that a Sales Director was due. If it is necessary for our client to go into detail, she has clear evidence and we anticipate Mr Mitchell will confirm that he has behaved in such a manner and that it will simply be a question of how much compensation our client is due."
- That letter is included in a supplemental bundle put in on behalf of the Applicant in support of her submissions on the Costs Application. We have not seen the full exchange of correspondence at this time but it is clear that issues were being raised in respect of the claim the Applicant made for commission on the basis that she had introduced new business.
- It is also to be noted, having regard to the events that followed, that in this early letter the Applicant is making her claim in respect of new business with Sainsbury's by reference to the "Fiorella business" and thus, as we understand it, by reference to flavour or type of ice cream.
- In her IT1 dated 9 December 1997 the Applicant made claims of sex discrimination and breach of contract. In paragraph 9.1 of the particulars of that claim she made the following assertion:
"During the course of my employment at the Premium Ice Company Limited, I was repeatedly discriminated against for being a woman, and in particular, for being a single mother."
Paragraph 9 then continues with a description of incidents relied on by the Applicant which primarily focus on her claim of sex discrimination but include some allegations about her responsibility for accounts with clients of Premium.
- As to the breach of contract claim in paragraph 7 the Applicant asserted that a term of her contract was that she should be paid "1% commissions on all new business, net of VAT". Paragraph 10 of the particulars of her claim was in the following terms:
"When I am successful in my claim I wish for compensation in respect of my sex discrimination claim and damages for breach of contract as follows:
(a) 1% commission on sales turnover back-dated from 16th September 1996, £11,273.95
(b) Pension contributions from September 1996 £1,500.
(c) Private family health cover from September 1996 £711.73
(d) 10 days outstanding holiday entitlement £1,153.85."
We pause at this stage to comment that as appears earlier the Applicant was awarded £12,020.16 in respect of commission, £298.61 in respect of health cover, £1,153.85 in respect of holiday entitlement and £87.17 in respect of other expenses.
- The IT1 does not expressly claim damages for summary dismissal but a claim for pay in lieu of notice was included in the letter of 28 October 1997 which we have referred to earlier. Such a claim was dealt with by the Employment Tribunal and was dismissed.
- In the IT3 Premium make the following assertion in paragraph 9.1 thereof:
"It is noted that the Applicant's claim for sex discrimination is framed in its entirety by reference to the fact that the Applicant was a single mother. Whilst the Respondent denies this in any event the Respondent will rely upon this statement in its application for a pre hearing assessment of the Applicant's claim in this regard. In her application the Applicant discloses no evidence of discrimination prescribed by the Sex Discrimination Act 1975. In the circumstances the Respondent will argue before the Industrial Tribunal that the Applicant has no reasonable prospect of succeeding with her claim."
Paragraph 9 of the IT3 then goes on to deal with the allegations made in paragraph 9 of the IT1.
- As to the breach of contract claim Premium raise allegations as to the conduct of the Applicant while she remained an employee of Premium. One of those allegations is that in breach of her contractual and fiduciary duty she attempted to procure that other employees of Premium took up positions with Tudor.
- Paragraph 10 of the IT3 is in the following terms:
"That the Applicant is entitled to the commission stated is denied. On production of reasonable proof of the matters contained in clause 10 the Respondent will make the necessary payments."
- On its face this paragraph in the IT3 is confusing because the Applicant's claim for commission is quantified in paragraph 10 of her IT1. However, we think that the last sentence of paragraph 10 of the IT3 should be read as being an assertion that "on production of reasonable proof of the other matters contained in clause 10 the Respondent will make the necessary payments", and thus in pleading terms as a denial of any entitlement to commission and a non-admission of the other matters coupled with an assertion that upon proof being provided payment would be made.
- We pause to comment that although we accept that as a matter of law Premium were entitled to take that stance it is not a constructive stance or one which accords with good practice. For example, in both pamphlets 2 and 3 of the series "understanding Industrial Tribunals" which are issued to respectively applicants and respondents it is said under the hearing "What happens about documents" that the parties should show each other relevant documents and that if the other party refuses to co-operate an order can be obtained, and under the heading "What should I do to prepare for the hearing" it is said that attempts should be made to agree who should provide documents to the Employment Tribunal. In this context Premium as the employer should have, and have had:
(a) documents relevant to the claim for commission, and
(b) documents relevant to the other contractual claims.
It seems to us that a constructive and proper approach for Premium to have taken would have been to check its records (both on paper and on computer) and to provide them voluntarily to the Applicant. It also seems to us that this approach would have assisted Premium in dealing with the problems it had relating to confidentiality by reason of the fact that the Applicant had returned to work for Tudor. This is because it could them have identified and if appropriate "blocked out" confidential information.
- We add that we are also of the view that a proper and constructive approach by the Applicant would have been for her to have provided such documents as she retained evidencing these claims to Premium.
- It appears from paragraph 6 of the Extended Reasons for the Liability Decision that Premium had a counterclaim. We have not identified a document containing such counterclaim but in any event, paragraph 6 records that it was not being proceeded with on the basis that Premium would be entitled to bring civil proceedings making such claim if so advised.
The claim of sex discrimination
- As foreshadowed by paragraph 9.1 of the IT3 Premium made a preliminary application on the basis that the claim of sex discrimination based on the fact that the Applicant was a single mother had no reasonable prospect of success. Premium was successful in that application and as a result the Applicant was ordered to pay the maximum deposit of £150. We have not been provided with a copy of that order and therefore do not know its precise terms. For example, we do not know whether it was in terms that the whole of her claim of sex discrimination would be struck out if the Applicant did not pay the deposit, or only that the part of it based on the fact that she was a single mother would be struck out. The Applicant paid the deposit of £150.
- Paragraph 6 of the Extended Reasons for the Liability Decision records that after lunch on the first day of the hearing the Applicant through her Solicitor conceded that she could not proceed on the basis of discrimination because of her marital status or because she was a single mother. It is apparent that she then continued with her claim of sex discrimination on the basis that she was a woman.
- To our minds it is clear that she was making an alternative claim on this basis by paragraph 9.1 of her IT1. In any event, no point has been taken that no such claim was pleaded or asserted by the Applicant or for that, or any other reason, the Employment Tribunal should not have dealt with her claim of sex discrimination on that basis.
- Paragraph 2 of the skeleton argument put in on behalf of Premium is in the following terms:
"Premium's appeal against the Substantive and the Costs Decisions are on two grounds: firstly that the Tribunal Chairman displayed an appearance of bias or lack of even-handedness towards Ms Parksons and consequently the decisions made in her favour are not reliable; secondly and, in any event, the decisions were perverse in that no reasonable Tribunal would have made the determinations this Tribunal did and/or the Tribunal made errors of law. In relation to the law on bias, or of the appearance or danger of bias reference is made to Locabail UK Ltd v Bayfield Properties Ltd  IRLR 96 (CA); R v Gough  AC 646 and Peter Simper & Co Ltd v Cooke  IRLR 19."
- In addition on the test to be applied in respect of the appearance of bias we were referred to the decision of the Court of Appeal in Re Medicaments & Related Classes of Goods (No.2) which is now reported in  1 WLR 700.
- That overview in paragraph 2 of the skeleton argument put in on behalf of Premium covers the grounds particularised in the two Notices of Appeal.
- It was (in our judgment correctly) not argued that the perversity alleged founded or equated to bias. In our judgment if it can be shown that a finding was not supported by any evidence or was outside the range of options open to an Employment Tribunal properly directing itself in law (and was thus perverse) this does not of itself demonstrate actual or apparent bias.
- A major part of the argument on the appeals was under the general description used in the skeleton argument of Counsel for Premium that the Tribunal Chairman displayed an appearance of bias, or lack of even-handedness.
- In particular the allegation that there was a lack of even-handedness is another way of alleging unfairness or procedural impropriety.
- Although Counsel did not expressly make an assertion that the Chairman of the Employment Tribunal was actually biased, parts of her submissions (and the points made in writing in the Notices of Appeal and the affidavits of Mr McTaggart) were in effect allegations of actual bias or allegations that came close thereto. In particular the submissions made both in opening the appeal and in reply that the judgment on costs demonstrated a lack of even-handedness and unfairness were to that effect. This is because an argument that the reasons in the Costs Decision show that the Chairman of the Employment Tribunal approached the case unfairly and with a lack of even-handedness (and thus bias) do not square easily with an acceptance that there was no actual bias and the only allegation being made is one of apparent bias. These arguments are not an argument of perversity save in the sense that it is being said that the Costs Decision is outside the range of permissible options open to the Chairman if he had approached the issue of costs on a fair and even-handed basis.
- The allegations of bias and unfairness are serious ones.
- In our judgment in large measure they are based upon Mr McTaggart's personal views as to what constitutes reasonable conduct of proceedings before an Employment Tribunal and his reactions to incidents that took place during the hearing.
- The incidents can be divided up as follows:
(a) the settlement discussion,
(b) the applications for discovery,
(c) the application made by Mr McTaggart on behalf of Premium at the beginning of the adjourned hearing that Premium had no case to answer in respect of the breach of contract claim,
(d) the reaction to the evidence of Mr Mitchell (the Finance Director of Premium) during cross-examination on the penultimate day of the hearing that information could be obtained from the computer records as to the sales to Sainsbury's by reference to flavour and thus by reference to product, and
(e) the attitude of the Chairman towards witnesses and his interruptions.
In particular points (b) to (d) are linked and necessitate an examination of the approach of the parties to discovery, how discovery was dealt with during the hearing and the general stance of Premium (through Mr McTaggart) towards the respective roles and functions of the parties and the Employment Tribunal.
- Before turning to deal with these points we shall refer to our underlying approach in law.
- Part of Premium's case is that the Employment Tribunal (through the Chairman) gave inappropriate assistance to the Applicant. In this context rule 9 of the Rules of Procedure contained in Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 1993 is relevant. That rule is in the following terms:
"9 Procedure at hearing
(1) The tribunal shall, so far as it appears to it appropriate, seek to avoid formality in its proceedings and shall not be bound by any enactment or rule of law relating to the admissibility of evidence in proceedings before the courts of law. The tribunal shall make such enquiries of persons appearing before it and witnesses as it considers appropriate and shall otherwise conduct the hearing in such manner as it considers most appropriate for the clarification of the issues before it and generally to the just handling of the proceedings."
- That rule expressly directs an Employment Tribunal to seek to avoid formality and to make enquiries and thus to take on (so far as it considers most appropriate) an inquisitorial role.
- An Employment Tribunal is however not an investigatory or inquisitorial tribunal because in general terms its function is to adjudicate on claims made by applicants who have to prove their cases. Further the authorities show that in a number of instances a respondent has the obligation of proving certain matters and there can be shifting onuses of proof. However rule 9 provides that within that adversarial process (ie the adjudication of claims made and defences advanced) the Employment Tribunal is to seek to avoid formality and has an inquisitorial or investigatory role.
- To support her argument Counsel for Premium referred us to Mensah v East Hertfordshire NHS Trust  IRLR 531 and Derby City Council v Marshall  IRLR 261.
- In his judgment in the Mensah case Peter Gibson LJ refers to the Marshall case (see paragraph 20). He also refers to the well known case of Kumchyk v Derby County Council  ICR 116 (see paragraph 19) and other more recent authorities concerning the raising of an issue on appeal that was not raised before an Employment Tribunal. The citation in the Mensah case from the Marshall case confirms the point we have already made that the function of an Employment Tribunal is to resolve a dispute between the parties (as to this see also Clark v Novacold Ltd  IRLR 318 at paragraph 79 of the judgment of Mummery LJ).
- For present purposes the Mensah and Marshall cases are primarily directed to the question whether or not an Employment Tribunal erred in law by failing to introduce a claim or defence, or an aspect thereof, when the parties did not raise the matter themselves. In our judgment those cases are not directed to the limits of the enquiries to be made by an Employment Tribunal under rule 9, or to the limits of the assistance to be given by an Employment Tribunal to a party whether either, or both, of the parties are represented. However we note that in paragraph 28 of his judgment in the Mensah case Peter Gibson LJ says:
"I would strongly encourage industrial tribunals to be as helpful as possible to litigants in formulating and presenting their cases. It is always good practice for industrial tribunals to clarify with the applicant (particularly if appearing in person or without professional representation) the precise matters raised in the IT1 which are to be pursued and to seek confirmation that any other so raised are no longer pursued. But it must be for the judgment of the particular industrial tribunal in the particular circumstances of the case before it whether of its own motion it should instigate any pleaded complaint which it is for the litigant to prove but which he is not setting out to prove."
- The complaints made on behalf of Premium do not relate to the introduction of a claim, or an aspect of a claim, or to the investigation of a complaint which the Applicant was not setting out to prove. Rather they relate to the participation of the Employment Tribunal (and in particular the Chairman) in the conduct of the hearing relating to the claims and defences being advanced by the parties.
- In our judgment the cases mentioned above are not of any particular assistance and the issue in respect of these aspects of the appeal are ones of procedural fairness and bias having regard to the function of an Employment Tribunal.
- We repeat that in our judgment the function of an Employment Tribunal is to determine issues between the parties but in doing so an Employment Tribunal is directed by rule 9 to seek to avoid formality and to make such enquiries for the clarification of the issues before it, and generally, as it considers most appropriate.
- The hearing before the Employment Tribunal took place before the Human Rights Act 1998 came into force. There was a limited discussion before us having regard to, in particular sections 6, 7 and 22 of the Human Rights Act 1998 whether we should apply the test under English law at the time of the hearing before the Employment Tribunal (ie the real danger or possibility test or whether we should apply that test with the modifications set out by the Court of Appeal in Re Medicaments & Related Classes of Goods (No.2)  1 WLR 700, which have regard to the position after the coming into force of the Human Rights Act. That approach is summarised and set out in paragraphs 83 to 86 of the judgment of the Master of the Rolls (Lord Phillips) in that case.
- In connection with this issue we were referred to a transcript of the recent decision of the Court of Appeal in Wilson v First County Trust Ltd (transcript 2 May 2001). However, the issue was not pursued before us by way of full argument. The reason for this was that, in our judgment correctly, Counsel for both sides accepted that this is a case in which the application of the two tests would lead to the same result, or that the distinctions between them are too subtle to make a difference. This is the position envisaged in paragraph 17 of the judgment of the Master of the Rolls (Lord Bingham) in the Locabail case which is referred to in paragraph 64 of the judgment of the Master of the Rolls (Lord Phillips) in the Medicaments case.
- In paragraph 64 of his judgment Lord Phillips identifies the, or a potential difference between the applications of the two tests, namely that the "real danger or possibility test" may lead the court to reach a conclusion as to the likelihood of bias which does not reflect the view that the informed observer would form on the same facts because the viewpoint of the judge may not be the same as that of members of the public.
- The first point we would make as to this is that in this Tribunal any such possibility is greatly ameliorated by its constitution and thus the presence of two lay members.
- Secondly, and although in this case we do examine the history of the proceedings, in particular in respect of the discovery of documents we are of the view that this does not introduce a risk of this Tribunal relying on special knowledge, or the minutiae of Tribunal procedure. Put another way, in our judgment the relevant circumstances relating to the function of the Employment Tribunal, the adversarial process and the obligations relating to discovery would all form part of the material circumstances known to a fair-minded and informed observer of the events complained of by Premium.
- Unsurprisingly, and perhaps inevitably, there is a difference of recollection between Mr McTaggart, Ms Norman and the Chairman on some of the matters which are relied on by Premium. We have not heard oral evidence and are not in a position to make findings on the balance of probabilities on the points where their recollections differ. The problem that this gives rise to is that in respect of some of the matters relied on there are unresolved differences of account as to what was said and done and therefore what would have been observed by a third party.
- In our judgment correctly neither side invited us to hear oral evidence and, in particular, cross examination of Mr McTaggart and Ms Norman as to their recollections. In dealing with some of the points raised by Premium we do so on the basis that Mr McTaggart's recollection is correct. In doing so we are not to be taken as making findings or rejecting what Ms Norman or the Chairman have said. We have taken this approach because if, as we have found, on that basis Premium fail the differences of recollection become irrelevant.
The integrity of those involved
- In correspondence Mr McTaggart has asserted that Ms Norman misled the Employment Tribunal. In contrast to that in two respects Mr McTaggart has stated that he feels that his honesty has been brought into question in respect of two matters.
- The first of those matters is one that is relied on in support of the argument of apparent bias. It is that when Mr Mitchell indicated on the penultimate day of the hearing that material relating to sales by flavour to Sainsbury's which had not been produced earlier was readily available the Chairman of the Employment Tribunal, and possibly one of its members questioned, Mr McTaggart's honesty.
- We naturally accept that Mr McTaggart places importance on his professional integrity and that it is upsetting for him (as it would be to others) if he feels that his integrity is being called into question. We also naturally accept that both Ms Norman and the Chairman also place importance on their professional integrity.
- We would like to make it completely clear that we do not call into question the professional integrity of any of those involved in the factual disputes as to what happened during the proceedings and thus (Mr McTaggart, Ms Norman and the Chairman). We proceed on the basis that all three of them are doing the best they can to accurately recall what happened and their reactions to those events.
- It follows that we accept that in respect of the matters that Mr McTaggart asserts that his reaction has been and is that his integrity was being called into question that reflects his belief and understanding. However having regard to the totality of the statements that are before us, we have concluded that it is clear that Mr McTaggart has over-reacted to what was said and done and his view that his honesty and professional integrity was being called into question is mistaken.
- We shall return to the first matter he relies on in this respect (referred to in paragraph 82 above) when dealing with the arguments on bias.
- Mr McTaggart's view on the second matter when he says his honesty was being brought into question only emerged in his most recent affidavit in which he states that Ms Norman intimated to him that he had fraudulently back-dated correspondence. We note that Ms Norman has not demonstrated a similar reaction to Mr McTaggart's counter-allegation in respect of the same correspondence that she misled the Employment Tribunal. The background to this assertion is that Mr McTaggart replied to a letter from Ms Norman dated 28 April 1998 on 1 May 1998 and Ms Norman says that she never received that letter. In paragraph 20 of his affidavit Mr McTaggart says this
"I also telephoned Ms Norman explaining that I had responded on 1 May. I in fact asked her to speak to Mr Hibbs (the partner who I understand had overall conduct of the matter) with a view to ascertaining whether or not the letter had gone to him rather than to Ms Norman. I recall that Ms Norman had said in a rather sarcastic manner and in a tone which I took as indicating that she did not believe I had sent the letter that if I had sent it through the DX it was 'extraordinary' that she should not have received it. I cannot deny that I was a little unhappy at the implication being made."
There is no correspondence following on from that specifically raising the point that Mr McTaggart felt that at this stage Ms Norman was questioning his integrity. However, at paragraphs 17 and 33 of his affidavit when commenting on the letter of 1 May 1998 he says:
"The Tribunal will note that there is a (later) assertion by the Respondents' Solicitors that my letter to them dated 1 May had been fabricated and back-dated."
"I had to say that I was becoming a little concerned at the manner in which the matter was proceeding. I did feel that Ms Parsons (sic) was not exhibiting the level of objectivity I would reasonably have expected. She had already intimidated that I had fraudulently back-dated correspondence."
The reference to Ms Parsons in the last citation should we think be read as a reference to Ms Norman.
- Ms Norman has not had the opportunity to comment on these assertions. It is however to be noted that their source is paragraph 20 of Mr McTaggart's and thus Mr McTaggart's view of Ms Norman's manner and tone. Mr McTaggart does not rely on any express statement by Ms Norman that she was asserting that he never wrote the letter and had produced a back-dated letter.
- In many walks of life it is not uncommon for a letter not to be received or for it to be mislaid by the recipient.
- In our view Mr McTaggart's assertion that Ms Norman was intimating that he had fraudulently back-dated correspondence is an unwarranted one and to our minds a surprising over-reaction to the matters he relies on in his affidavit. We repeat that Ms Norman has not demonstrated a similar reaction to the assertion made by Mr McTaggart in his letter of 3 July where he says this:
"He wrote to us on 28 April and we responded to you on 1 May. We have a copy of that letter on our file and the card copy has never been returned to us through the DX. In the circumstances we assume that it arrived at your office. You do yourselves no credit in misleading the Tribunal in this way."
When he wrote that letter Mr McTaggart was fully aware that Ms Norman had told him that she had not received the letter.
- In our judgment Ms Norman is correct not to have reacted to that letter as an allegation that she had acted dishonestly.
- It seems to us that having regard to the general manner in which the preliminary stages leading up to the hearing before the Employment Tribunal were conducted any well informed third party observer would regard the communications between the two Solicitors relating to this letter as part of the cut and thrust thereof and would not conclude that either Mr McTaggart or Miss Norman were calling into question the honesty or professional integrity of the other.
General background to the matters relied on by Premium to establish bias, a lack of even-handedness or unfairness.
- In giving this background we focus on issues relating to discovery and, in particular, discovery in respect of the claim for commission relating to sales to Sainsbury's. This was the largest claim for commission. It is also apparent that Sainsbury's were an important customer.
The issue in respect of the commission claim relating to Sainsbury's
- The starting point is that it was accepted that a term of the Applicant's contract was that she was entitled to 1% commissions on all new business net of VAT.
- The issue was therefore whether that contractual entitlement had been triggered. Plainly that issue could give rise to dispute as to (i) whether business was new, or (ii) whether the Applicant was responsible for obtaining the relevant orders and therefore initiating the sales.
- It is clear from the Extended Reasons that Premium's defence to the claims for commission raised both these questions. In particular in respect of Sainsbury's the Applicant was cross-examined on the basis that her assertion that the new product (called Fiorella) was not significantly different in flavour and packaging etc from the old product. However, the Employment Tribunal found that the product being sold at the relevant times under the name "Fiorella" was indeed "new" and in realistic terms a different product. The Employment Tribunal found that it was the creation of a new product, albeit that Sainsbury's adhered to their brand name "Fiorella". (see paragraph 21 of the Extended Reasons).
- In this context it is relevant to return to the open letter dated 28 October 1997 from the Applicant's Solicitors to Premium's Solicitors. That letter (with our emphasis) makes the assertion in respect of the claim for commission in respect of sales to Sainsbury's that "Sainsbury's Fiorella was entirely new business".
- This letter therefore makes it clear that the nature of the Applicant's claim was that:
(a) Sainsbury's Fiorella was entirely new business and
(b) she was entitled to commission on that new business on the basis that she was sufficiently responsible for its introduction.
Indeed we would go further and state that even in the absence of this letter anyone with knowledge of Premium's business would appreciate that the claim for commission in respect of sales to Sainsbury's related to the sale of Fiorella.
- In his evidence Mr McTaggart says that Mr Mitchell (the Finance Director of Premium) is experienced in respect of proceedings before an Employment Tribunal. We accept that but it seems to us that if one (i) ignores the expertise of both Mr McTaggart and Mr Mitchell in respect of Tribunal proceedings, and (ii) asks from a purely business or commercial standpoint what steps an employer would take when faced with a claim for commission in respect of new business which they did not accept, those steps would include the following:
(a) an examination of the company's records to identify the business conducted with the relevant customers over the relevant periods,
(b) an identification from that analysis of the products sold to those customers,
(c) an identification from the above as to whether the sale of particular products constituted new business, and
(d) an examination from the above of the participation of the claimant in obtaining such sales.
- In the case of the business between Premium and Sainsbury's any such analysis would lead inevitably to an identification of the sales of the product called "Fiorella" and an assessment of whether or not it was new business. This in turn would have led to a study of the records of this held on computer which on the penultimate day of the hearing Mr Mitchell stated existed.
- In terms of the obligation to give discovery in civil proceedings it seems to us that any reasonably competent solicitor would recognise that Premium's records, whether kept in books or on computer relating to the sale of particular products to the relevant customers, and thus the sale of Fiorella ice-cream to Sainsbury's, were centrally relevant and discoverable documents.
- Leaving aside issues of discovery and the prospect of proceedings in either the Courts or an Employment Tribunal it seems to us that, as a matter of normal commercial prudence, faced with the claims the Applicant was making Premium would wish to examine its relevant records so that it could give a properly informed answer to her claims.
- Again, simply adopting a prudent commercial approach it seems to us that if a settlement could not be reached a company in Premium's position would wish to extract relevant information from its record to enable them to fully and properly defend any claim that the Applicant might make in the Employment Tribunal (or elsewhere).
- It would be the relevant records that would focus cross examination in respect of the issues whether particular business was "new business" and if it was whether the Applicant was sufficiently responsible for its introduction to entitle her to commission. This is not simply a matter of quantification of a claim. It goes to entitlement. For example, it seems to us that it would have been commercially prudent for Premium to identify in respect of each customer the matters we have referred to above with a view to asserting in cross examination, and by way of submission, by reference to the relevant records that the products sold to each of those customers over the relevant period did not constitute new business – if (as it was) that was part of Premium's case. The records therefore would have needed to compare the position over the period of the Applicant's employment and a reasonable time before that employment commenced.
- In our judgment a fair-minded and reasonably well informed observer would appreciate that such records were relevant to the fair determination of the issues relating to commission.
- Further in our judgment such an observer would appreciate that an employer with a good defence would wish to produce such records in their own self interest and that if relevant records were not produced this would hamper an employment tribunal in determining the issue and could prejudice either or both parties. Additionally it seems to us that such an observer would not be at all surprised to find that such records were kept on computer.
- In our judgment all of this is simply a matter of common sense.
- Naturally we accept that there is no automatic obligation to make discovery in proceedings before an employment tribunal.
- However in our judgment this does not mean that parties should not extract relevant information from their records and disclose it. Indeed, as we have already mentioned, the pamphlets in the series "Understanding Industrial Tribunals" make it clear that the parties should extract and show each other relevant documents.
- part of the informality of proceedings before an Employment Tribunal is that there is not a procedure for automatic discovery by way of list or otherwise.
- The history of discovery is shown by the correspondence. This starts with a letter from Premium's Solicitors dated 15 January 1998 (and thus at the time that Premium's Notice of Appearance was sent to the Employment Tribunal). In that letter Premium's Solicitors state that Premium proposes counter-claiming for breaches of the Applicant's contractual and fiduciary obligation and continues by saying that when the matter of discovery and inspection falls to be considered Premium will be asking the Applicant to produce identified documents, namely (a) her appointment diary for 1997, (b) a copy of her letter of application for employment to Tudor and (c) a copy of her contract of employment with Tudor showing her commencement date. It is apparent that all of those documents are or are potentially relevant to the proposed counter-claim. The appointment diary for 1997 could also be relevant to the Applicant's claim for commission. By that letter Premium's Solicitors ask the Applicant's Solicitors to confirm that the identified documentation will be made available without the necessity of obtaining an order.
- That letter from Premium's Solicitors continues by referring to Premium's Notice of Appearance and saying that, provided the Applicant produces evidence of non-payment of benefits those payments would be made without delay.
- The Applicant's Solicitors respond by enclosing a copy of her offer of employment showing her entitlement to the benefits and stating that they believe that it was for Premium to produce evidence of payment of these benefits and if they are unable to do so they should make payment without delay.
- We find this a strange stance for both firms of Solicitors to adopt whether such stances are looked at from the perspective of their respective clients' best interests, or by reference to the proper preparation for proceedings before the Employment Tribunal. It seems to us that it would have been far more appropriate for both sides to identify the documents which they considered to be relevant and which were in their possession.
- Mr McTaggart asserts that his letter of 15 January 1998 shows a constructive approach towards discovery. Although we agree that it shows that he recognises the need for discovery and would wish to deal with it without an order we do not agree that this letter read in isolation, or together with the other correspondence and steps taken in respect of discovery, demonstrates that this was the case. The letter gives no indication that he and Premium are taking any steps to examine the records kept by Premium which would be relevant to the dispute and to disclose them on a voluntary basis. Rather the indication is that Premium's stance (through Mr McTaggart) was that it was for the Applicant to prove her case and to produce relevant documents and further or alternatively to make specific requests for documents from Premium.
- We accept that it can be said that as a matter of law Premium was entitled to take that stance. However, in our judgment it is not a constructive stance for an employer who has records relating to an employee's entitlements to benefit or claims for commission. It seems to us that the constructive (and appropriate) stance for such an employer is to examine their own records and provide the employee with details as to what the employer says the position is. This exercise should certainly be carried out a reasonable time before the hearing.
- The next stage is that by a letter of 28 April 1998 the Applicant's Solicitors make a request for documents by way of discovery and suggest that it would be useful for an agreed bundle of documents to be presented to the Employment Tribunal. The letter made a request for the following documents by way of discovery:
"1. Copy of our clients contract of employment/service agreements/statement of terms and conditions.
2. Sales ledgers for years 1996, 1997 and 1998.
3. Copies of all sales forecasts completed by the applicant throughout her period of employment.
4. Details as to the applicants annual leave taken throughout her employment.
5. Confirmation of each of the applicants clients, to whom these clients were allocated and the dates of allocation."
- Premium's Solicitors replied by the letter of 1 May 1998 which we have referred to earlier and which Ms Norman told them she had not received and had not seen. In that letter they do not comment as to an agreed bundle of documents and say this in respect of a request for discovery:
"As far as your request for discovery is concerned we respond as follows:
1 You have this, and in fact in the past have sent a copy to us.
2 We cannot concede to a request in such general terms. You will be aware that any request for discovery must only be to the extent sufficient to enable issues to be disposed of. Please specify any such issue which requires the Company's entire sales ledger for three years.
3 We will ask our client for copies though would have thought your client had retained this information.
4 This request does not constitute discovery pursuant to Order 14 of the County Court Rules 1981.
5 This is not a request for discovery. Even if it were, the reply to point numbered 1 above is repeated here. A request phrased with such generality is unacceptable. Please specify the issues to be disposed of as a result of access to this information."
- Mr McTaggart points out, and we accept, that a factor in Premium's thinking at this time was that the Applicant was working for Premium's main competitor and therefore Premium was anxious not to disclose information to her which would assist that competitor.
- That is understandable but it seems to us that the sensible commercial reaction to it would be for Premium to examine and extract from the company's records the information which Premium assert is relevant to the issues in the proceedings. When doing this Premium and its advisers could consider blocking out parts of the documents that would assist the competitor.
- Further it seems to us in circumstances where a solicitor acting for a party to proceedings before an Employment Tribunal takes the view that the requests for discovery made by the other side are inappropriate, and therefore that discovery cannot simply be dealt with by each side providing the other with the documents requested, proper preparation requires that that solicitor makes enquiry of his client as to the material in the client's possession that is relevant to the issues before the Employment Tribunal.
- By their letter of 11 June 1998 the Applicant's Solicitors modified their request in respect of the company's sales ledgers by limiting it to the accounts for Sainsbury's, Eismann, Farm Foods, Fullers and Yarsley's which were the customers in respect of whom she was claiming a commission payment was due, and assert that those ledgers were relevant to determine issues relating to her commission.
- The response was contained in a letter of 15 June 1998 and was in the following terms:
"We repeat, the documentation requested will not be supplied. Your client's employment lasted for approximately one year. The only issue relating to commission is whether during that period she was contractually entitled to the same."
- We confess we simply do not understand the reasoning that underlay that response. To our minds it is plain that the ledgers were, as the Applicant's Solicitors asserted, relevant to the issues relating to commission both as to liability and quantum. There was no dispute that the Applicant's contract included an entitlement to commission. The dispute was whether or not that contractual entitlement had been triggered.
- It seems to us that if Premium Solicitors or their Directors had given the matter any real thought they would have appreciated that documents recording sales to the relevant customers were relevant to the issues whether those sales were new business and whether they were initiated by the Applicant, and thus to her claim for commission. Indeed as appears later in this judgment (see for example paragraph 128) it is apparent that they did appreciate this.
- On 22 June 1998 the Applicant's Solicitors wrote to the Employment Tribunal seeking an order for discovery. We note that that letter states that they included the letter of 29 May from Premium's Solicitors which is the letter in which Premium's Solicitors assert that they had replied on 1 May 1998 to the request for discovery that was made by letter of 28 April 1998. In that letter the Applicant's Solicitors state:
"Company sales ledgers for accounts with Sainsbury's, Iceman, Farm Foods, Fuller's and Yarsley's for the periods 1996, 1997 and 1998. This request is relevant in that the Applicant is claiming commission for new business obtained with these companies, the Respondents are refusing to pay such commission as they state it is not new business. The ledgers are discoverable documents and the copies can be easily supplied."
- On the same day (i.e. 22 June 1998) Mr McTaggart has disclosed that he wrote to Mr Mitchell at Premium. That letter contains the following sentence:
"You also promised to let me have monthly breakdowns of sales during the whole of Ms Parson's employment together with all copies of sale forecasts produced by her."
- This is a clear indication that both Mr McTaggart and Mr Mitchell were indeed aware that material relating to sales and the breakdown of sales by reference to product (or some other convenient description) were relevant.
- Nonetheless, on 26 June 1998 Premium Solicitors wrote to the Employment Tribunal in respect of the request for production of sales ledgers in the following terms:
"The Applicant's employment ran from October 1996 to October 1997. In the circumstances it is entirely unnecessary to request production of entire sales ledgers for three years. The Applicant's Representatives suggest that the ledgers are discoverable documents and that documents can easily be supplied. With respect documents are only discoverable to the extent that they will assist the Tribunal in disposing of any particular issue. As we have repeated to the Applicant's Representative on many occasions we cannot see which issue is disposed of by reference to sales ledgers for three years."
- We have some difficulty in understanding this response given the recognition by the letter of 22 June 1998 that records relating to the monthly breakdown of sales were relevant. This recognises that records of sales are relevant and such records would be contained in sales ledgers. This stance adopted by Premium (through Mr McTaggart) is therefore an obstructive one. If Premium had wished to say that entire sales ledgers were inappropriate because the relevant information as to sales could be provided by another method they should have said so, rather than simply denying that sales ledgers were relevant. Further it seems to us to be clear that having regard to the issues there was a need for production of information relating to the period before the Applicant's employment to make a comparison and thereby see whether certain business was "new business" which could have been initiated by the Applicant.
- In that letter of 26 June 1998 Premium's Solicitors also point out that they had requested documentation from the Applicant and list it. This list has some overlap with the documents requested on 15 January 1998; but not a complete overlap. It is asserted that the documentation was necessary with a view to establishing questions of "mitigation etc" in connection with the claim for payment in lieu of notice.
- On 1 July 1998 the Employment Tribunal wrote to Premium's Solicitors with a copy to the Applicant's Solicitors. That letter contained the following paragraph:
"The Respondent and Applicant are requested to disclose earlier or bring to the Tribunal the documents specified in each party's correspondence or as many as reasonably possible so that absence of a reasonably requested document will not be the cause of an unnecessary postponement resulting in an order for costs being considered."
- On 3 July 1998 Premium's Solicitors wrote to the Applicant's Solicitors. That letter contained the following paragraph:
"As far as discovery generally is concerned our reasons for refusing are adequately set out in correspondence. We do not consider our refusals unreasonable. It is for your client to plead her case to the Tribunal on the basis of matters known to her. A general 'fishing expedition' with a view to the production of documentation which may or may not assist her, is with respect not acceptable and we have said as much. Any delay has been on your part in not obtaining an order if you considered our reasons for refusal untenable."
This paragraph is indicative of the attitude adopted by Premium (through Mr McTaggart). In our judgment the requests for sales ledgers and thus information as to sales cannot properly be described as a "fishing expedition". It seems to us that it is plain that information held by Premium on paper, or on computer, as to sales made during the period of the Applicant's employment (and we would add for a reasonable period before that employment) was clearly relevant and therefore that the request for sales ledgers was a perfectly proper one. Indeed, it is apparent from the internal communication which Mr McTaggart has seen fit to disclose that both he and Mr Mitchell were aware that information as to sales, and the breakdown of sales, was relevant.
- We accept that by this stage the correspondence may not give the full picture because it is clear that Mr McTaggart and Ms Norman were having discussions as to discovery. Mr McTaggart says in his latest affidavit that at this stage Premium were indicating that they were content to supply details of sales during the Respondent's employment and that the dispute between the two Solicitors was as to whether or not the information should be provided for a period of three years. This does not accord with the correspondence but we accept that by this stage Mr McTaggart was, as he says, offering to provide some information as to sales. This is further confirmation that the Applicant's Solicitors were not embarking upon a "fishing expedition" in their request for sales ledgers.
- In his latest affidavit Mr McTaggart says that on 6 July Ms Norman made a request for discovery of sales ledgers for ice-cream by reference to individual flavours. He goes on to say that he telephoned Mr Mitchell and asked him whether or not Premium kept such ledgers and he was told that they did not and that he therefore passed that information on to Ms Norman who expressed surprise at it. Mr McTaggart says that he also expressed such surprise because it seemed the most obvious piece of market research.
- Those mutual expressions of surprise were justified and we pause to comment that they should be remembered when the reaction to Mr Mitchell telling the Employment Tribunal on the penultimate day of the hearing of the existence of records by reference to flavours in the company's computer records falls to be considered
- We also pause to repeat that, given the way in which the claim in respect of sales to Sainsbury's was put in the letter of 28 October 1997 and the way in which that claim was defended before the Employment Tribunal, a moment's thought by both Mr Mitchell and Mr McTaggart would have demonstrated to them that information of sales by reference to flavour or product was relevant to central issues in the case.
- On 7 July 1998 Premium Solicitors wrote to the Applicant's Solicitors in the following terms:
"We now enclose copies of all relevant forecasts and ledgers.
Since speaking with Ms Norman yesterday afternoon we have challenged our client again over the existence of any form of ledger which has any additional information likely to confirm your client's entitlement to commissions generally. They confirm that there is not.
For the record, incidentally as requested, in open correspondence we confirm the commission claimed by your client for the sales to Safeway as set out in her letter dated the 14th of October 1997 is not in dispute. Payment in respect of this sum has now been made to your client direct with a cheque drawn on our firm's client account.
The payment to your client also included reimbursement of expenses agreed at £87.17 together with reimbursement of agreed private health cover benefits. As far as this latter payment is concerned, relevant information has been included in your client's P11D for the relevant tax year and no doubt her code will be adjusted accordingly in due course."
The last two paragraphs of that letter indicate that some research had been made by Premium into its records in respect of both the claims for commission and for benefits.
- It is also to be noted that the letter asserts that "all relevant forecasts and ledgers" have been sent and that there is no other "form of ledger which has any additional information".
- Leaving aside points as to whether information contained on a computer which can be easily accessed and printed out is a "form of ledger" this assertion made by Mr McTaggart on behalf of Premium on the basis of the instructions he had received was simply wrong.
- The ledgers enclosed with the letter of 7 July 1998 are printed (and have the appearance of a computer print-out but we accept this may not be the case) and refer to sales for the period from October 1995 to September 1996 and for October 1996 to October 1997 by reference to customers. They are monthly sales figures and contain no breakdown by reference to product.
- It seems to us, in particular in respect of the claim concerning Sainsbury's, that the absence of a breakdown by reference to product is a significant and obvious omission from the material disclosed for the purposes of the hearing. However we accept that Mr McTaggart was not aware that records by reference or product and/or flavour existed until on the penultimate day of the hearing Mr Mitchell told the Employment Tribunal of their existence.
- On the first day of the hearing Ms Norman on behalf of the Applicant made an application for discovery for disclosure of ledgers recording sales of ice-cream by individual flavours. In his latest affidavit (and this is in accordance with the recollection of others) Mr McTaggart says this in respect of that application:
"On the morning of the hearing the Respondent (to the appeal ie Ms Parsons) made a formal application for disclosure of ledgers recording sales of ice-creams by individual flavours. I again asked Mr Mitchell whether these ledgers existed. He indicated that they did not. I specifically recall the Chairman turning to Ms Norman and saying something to the effect that 'they say they don't have them. Do you have anything indicating that they do'. Ms Norman said no and in the circumstances the matter proceeded."
We pause to comment that this exchange should be remembered when the reaction to Mr Mitchell telling the Employment Tribunal on the penultimate day of the hearing of the existence of records by reference to flavours in the company's computer records falls to be considered.
- We also pause to record that we accept that at that stage (i.e. on the first day of the hearing) the Applicant was not making any further requests for discovery and some of the documents requested by Premium had not been disclosed by her. It is however to be noted that Premium did not then make a formal application for those documents on the basis that they should have been brought to the Employment Tribunal in pursuance of the Employment Tribunal's letter dated 1 July 1998, or otherwise Further, it has not been asserted that the non-production by the Applicant of those documents, or any other documents, was raised during the hearing by Premium or that any prejudice was, or might have been, caused to Premium by their non-production.
Bias, a lack of even-handedness or unfairness.
- We have stated earlier that the allegations are based on apparent and not on actual bias but some of the arguments come close to allegations of actual bias albeit that no such allegation was expressly made. We would like to make it clear that we have seen nothing that would indicate any actual bias by the Chairman (or the other Members of the Employment Tribunal). It follows that in our judgment Premium's representatives were right not to make any such allegations expressly and if Premium was going to rely on any such allegations that is what they would have to have done
- For the avoidance of any doubt we record that in our view there was no actual bias and the only issue is one of apparent bias.
The background and discovery generally
- We have set out the background in some detail.
- As appears therefrom for some time before the hearing the Applicant (through her Solicitors) was seeking discovery of ledgers. Further it is accepted by Premium that during the lead up to the hearing, and at the beginning of the hearing, the Applicant (through her Solicitors had asked for ledgers recording sales of ice cream by reference to flavour) and that Premium had asserted that there were no such ledgers.
- Information recording sales by flavour was of particular importance in respect of the claim for commission on sales to Sainsbury's and Mr McTaggart has made plain to us that this was the claim for commission that Premium was not prepared to concede for the purposes of settlement or otherwise.
- In his evidence, which was given on the penultimate day of the hearing and thus after (i) the applications for discovery on the first and third days of the hearing had been made, and (ii) Premium had made the application to dismiss the claims for commission on the basis that there was no case to answer, Mr Mitchell said that computer records containing records of sales by reference to flavour were available. They were produced and were relevant.
- It seems to us that a request for ledgers covering sales by reference to flavour would, or should, in the context of a request for discovery normally be regarded as covering records held on computer of such sales or from which such information could be obtained. No explanation has been given as to why the Applicant and the Employment Tribunal were not told earlier of the existence of the computer records mentioned by Mr Mitchell in his evidence, however we proceed on the basis that there was no attempt by Premium to mislead or to withhold relevant information and that this failure (and thus the failure to produce information relating to sales by reference to flavour earlier) arose from error and/or misunderstanding.
- However we record that on that basis it seems to us the reaction of both Premium and its Solicitors to (i) the failure to provide such information earlier, and (ii) the earlier assertions that no ledgers showing sales by flavour existed should have been ones of immediate and continuing acute embarrassment and abject apology rather than ones that seek to found allegations of apparent bias, lack of even-handedness and unfairness on the reaction of others (and the Chairman in particular) to the revelation very late in the day that relevant computer records existed whether that reaction is considered alone, or together, with their earlier approach to discovery whilst the Applicant was giving her evidence.
The matters relied on by Premium to establish bias, a lack of even-handedness or unfairness
- As mentioned in paragraph 63 above the incidents in respect of the main hearing can be divided up as follows: (a) the settlement discussion, (b) the applications for discovery, (c) the application made by Mr McTaggart on behalf of Premium at the beginning of the adjourned hearing that Premium had no case to answer in respect of the breach of contract claim, (d) the reaction to the evidence of Mr Mitchell (the Finance Director of Premium) during cross-examination on the penultimate day of the hearing that information could be obtained from the computer records as to the sales to Sainsbury's by reference to flavour and thus by reference to product, and (e) the attitude of the Chairman towards witnesses and his interruptions.
- We shall deal with these in turn. In doing so we will deal with items (b) and (d) together.
- Although we deal with them in turn we add that we have also had regard to them and the points made by reference to the Costs Decision cumulatively. The individual and cumulative consideration of the matters relied on has not caused us to conclude that Premium's appeal should be allowed.
- On both the individual and cumulative approach factors against Premium and which support the view that there was no apparent bias and the Employment Tribunal acted fairly are that (i) the Employment Tribunal decided some issues against the Applicant and some against Premium, and (ii) the main issues were ones of fact and the Employment Tribunal were unanimous but the main arguments are directed against the conduct of the Chairman.
- The settlement discussion.
(a) We would like to start by recording that in our judgment this discussion should never have taken place. It is always a sensitive issue as to what, if anything, a Tribunal should say about settlement and attempts to settle and any discussion on this subject should be approached with care. In our judgment the Chairman should not have had any such discussion with only the legal advisers of the parties present and thus in the absence of the lay Members and the parties.
(b) The problems in respect of this discussion have been compounded by the latest affidavit of Mr McTaggart and in particular paragraph 53 thereof in which he says he told the Chairman what Premium was prepared to do "for the purposes of settlement". In doing so Mr McTaggart says he told the Chairman what had been offered and what Premium were prepared to concede, which he says was "everything with the exception of the sex discrimination claim and also the claim for a commission payment for sales to Sainsbury's". We have seen no open offer to that effect and it therefore seems that surprisingly Mr McTaggart told the Chairman of "without prejudice" offers.
(c) In our judgment it would not be fair to allow, and we do not allow, Premium to rely on this very late introduction of further material to add a new ground of appeal that the Employment Tribunal erred in law by continuing to hear the case when the Chairman had been provided with information as to "without prejudice" discussions.
(d) In this context we add that (i) the immediate reaction of those present (i.e. the Chairman and the two legal representatives) was not that the Chairman had been provided with information he should not have been and which meant that he was not in a position to hear the case, and (ii) in argument before us Premium did not seek to add the ground referred to in (c) but sought to rely on the additional information in support of their general argument of apparent bias, lack of even-handedness and unfairness.
(e) We can see that the Chairman might at times have been frustrated or annoyed by the way in which Premium (through Mr McTaggart) conducted its defence, or parts of it, if he had remembered that to settle Premium was prepared to concede all the claims apart from the claim of sex discrimination and the commission claim relating to Sainsbury's (even though that was obviously the most important claim for commission). However it seems to us that having regard to the point made in (d)(i) and the point that the source of that reaction would have been Mr McTaggart's voluntary disclosure of information as to Premium's stance on settlement it would not be fair for us to allow Premium to rely on such reaction, or possible reaction, as a basis for establishing its arguments of apparent bias, lack of even-handedness and unfairness.
(f) The original points made on this appeal by reference to the settlement discussion related primarily to the language used by the Chairman during it relating to the wealth of the managing director of Premium and remarks to the effect that surely he was prepared to pay something to make the Applicant go away. It was said that such statements could reasonably be interpreted as showing that the Chairman had prejudged the issues, or was not in favour of allowing Premium to proceed to defend its position. We do not agree. In our judgment an informed and fair minded third party observer would have treated the remarks as ones prompted by an informal discussion between the Chairman and the representatives (which should never have been taking place) and ones by which the Chairman was seeking perhaps with some embarrassment and an attempt at humour to deal with the prospect of settlement.
(g) More generally, having regard both to those remarks and to the new information included in Mr McTaggart's affidavit we are of the view that although the informed and fair minded third party observer would have been of the view that the settlement discussion should not have been taking place, he, or she, would nonetheless at the time have concluded, and would still be of the view, that in the circumstances of this case the settlement discussion by itself, and by reference to its ongoing (or potential ongoing) effect, did not give rise to a real possibility, or a real danger (the two being the same), that the Employment Tribunal (or the Chairman) was biased (see In re Medicaments paragraph 85 of the judgment, and paragraphs 74 to 80 above).
- The application made by Mr McTaggart on behalf of Premium at the beginning of the adjourned hearing that Premium had no case to answer in respect of the breach of contract claim.
(a) In our judgment this application was doomed to failure and its rejection does not show any bias, lack of even-handedness or unfairness.
(b) At this stage there was limited disclosure by Premium of records of sales and its position as expressly stated to the Employment Tribunal was that it did not have ledgers recording sales by reference to flavour. However we accept that the merits of the application and what its rejection indicates should be assessed at the time it was made. As we understand it at that time (i.e. at the beginning of the adjourned hearing) Premium's position (through Mr McTaggart) was that the Applicant had not produced evidence (and in particular documents) to support her claims.
(c) But the Applicant would have been unlikely to hold relevant records, and in her statement and orally she had given evidence relating to her claims for commission (see for example paragraph 4 of her statement). In our judgment that statement and the Applicant's oral evidence, to similar effect, was sufficient to establish liability in respect of her claims if it was accepted. The letter before action of 28 October 1997 (referred to above which sets out the nature of the claims for commission) was also, as we understand it, before the Employment Tribunal.
(d) In our judgment it follows that the application of no case to answer was doomed to failure and should not have been made.
(e) Premium argue that statements made by the Chairman in refusing the application and in a meeting between the Chairman and the advocates found, or support, its arguments. We do not agree. The first statements relied on are that the Chairman in refusing the application said (i) that the Applicant had raised a prima facie case (as to which we agree and would say that she had given evidence on which the claim could be held to succeed), and (ii) that only time would tell if she had or would overcome the burden of proof. The second part of this reasoning could perhaps have better expressed but it seems to us to reflect the point that the Applicant was still to be cross examined. As we understand it the primary purpose of the meeting at which the second statement relied was made was to deal with points in respect of discovery. During it Premium assert that the Chairman said words to the effect that the evidence in support of the breach of contract claim was not totally non-existent but almost totally non-existent. There is some difference of recollection as to what was said but accepting Premium's assertions (based on Mr McTaggart's recollection) we are of the view that the remark should be treated as one referring to (or primarily referring to) documentary evidence. In that context (and indeed generally) that remark does not indicate bias or favouritism towards the Applicant. Rather it shows a recognition of the difficulties that the lack of supporting documents caused the Applicant, albeit that as we have said her oral evidence was sufficient to found the claims for commission if it was accepted after cross examination and a consideration of the evidence given on behalf of Premium.
- The applications for discovery, and the reaction to the evidence of Mr Mitchell (the Finance Director of Premium) during cross-examination on the penultimate day of the hearing that information could be obtained from the computer records as to the sales to Sainsbury's by reference to flavour and thus by reference to product,
(a) The complaint does not relate to the application made on the first day of the hearing but to the way in which discovery was dealt with after the refusal of the application of no case to answer.
(b) During cross examination the Applicant referred to documents held by Premium that were not before the Employment Tribunal. In our judgment this (and we would add the obvious point that Premium would be likely to have documents relevant to the commission claims) would prompt most Employment Tribunals to raise points on discovery. In the circumstances we see nothing that indicates bias, a lack of even-handedness or unfairness in the Chairman asking the solicitor appearing for the Applicant whether she wanted to make an application for discovery and/or inviting her to do so. Mr McTaggart's surprise at this demonstrates to our minds a misunderstanding of Rule 9 and the function of an Employment Tribunal, an adversarial stance to issues of discovery and a continuing failure to appreciate that a constructive, and to our minds appropriate, approach for Premium to have taken towards discovery would have been for it to volunteer a full bundle of relevant records which could be used by both sides as a basis for their questioning and submissions. We add that it seems to us that if Premium, and its solicitors, had taken this constructive approach rather than the one they adopted the relevant computer records might well have been disclosed much earlier.
(c) The issues that arose after the Applicant's solicitor made an application for further discovery on the third day (and thus after the invitation of the Chairman to do so) as to the identification, production and inspection of further documents held by Premium, and which resulted in the Applicant withdrawing her request for further discovery, are in our judgment a product of the poor preparation for the hearing by both sides.
(d) In our judgment the steps taken by the Employment Tribunal in respect of discovery at this stage do not found Premium's argument, rather they reflect a perfectly proper attempt by the Employment Tribunal to overcome the poor preparation by both sides.
(e) The poor preparation by the Applicant and her solicitors is demonstrated by the late disclosure of documents by the Applicant. Premium argue that because the Employment Tribunal did not suggest that Premium made an application for discovery, or enquire why the documents were not available earlier demonstrates bias, a lack of even-handedness or unfairness. On the assumption that the Employment Tribunal did not do so, we do not agree. The Employment Tribunal were understandably keen that relevant documents should be put before them and at the time they invited the Applicant to make the application for further discovery they were focusing on documents held by Premium which were being said by the Applicant to be relevant (and it was plain that Premium may well have records that were relevant and had not been disclosed). Further, in general terms the party with most relevant documents was likely to be Premium and it seems to us that this would naturally prompt enquiry of Premium as to whether there were such documents and thus the possibility of an application for discovery against Premium. In contrast (i) during the hearing Premium did not identify documents held by the Applicant that it said were relevant and albeit late the Applicant was introducing the additional documents, and (ii) Premium did not assert any prejudice by reason of late production of documents by the Applicant (see also paragraph 144 hereof).
(f) In our judgment, in particular given what had gone before, the Employment Tribunal were entitled to be angry and to express a high degree of frustration at Mr Mitchell's evidence that information as to sales by reference to flavour, and thus product, could be obtained from the computer records.
(g) We have already indicated what we consider the reaction of Premium and Mr McTaggart should have been, and be, to the very late disclosure by Premium of the fact that it had this information.
(h) In our judgment Mr McTaggart has overreacted by interpreting the comment made by the Chairman when looking at him that he was disappointed that "solicitors cannot deal with each other honestly" and the point that one of the lay Members looked at him when Mr Mitchell gave his evidence as an assertion, or implication, that he had acted dishonestly.
(i) In our judgment (and on the basis that Mr McTaggart's recollection is correct) the informed and fair minded third party observer would regard the reactions of the Chairman and Members of the Employment Tribunal to Mr Mitchell's evidence that information that had been sought on the first day of the hearing (and which was obviously relevant) was in fact available as understandable releases of anger and frustration and not as an indication either (i) that they were accusing Premium or Mr McTaggart of deliberately withholding relevant documents or any lack of honesty, or (ii) of bias, lack of even-handedness or unfairness.
- The attitude of the Chairman towards witnesses and his interruptions.
(a) We accept that it is difficult to gauge the effect of such matters from written descriptions of what happened. However and again accepting Mr McTaggart's account we are not persuaded that the points advanced by Premium in this respect (looked at alone, or together with the other matters relied on by it) indicate that this Employment Tribunal went outside the limits of what was permissible having regard to Rule 9, or generally.
- Premium also point to the Costs Decision as an indication that there was bias, lack of even-handedness and unfairness. There is an inter dependence, and an inevitable degree of cicularity, between the arguments that the Costs Decision is outside the range of a proper exercise of discretion and the arguments that it shows bias, lack of even-handedness and unfairness in respect of the Liability Decision, in that (i) those allegations are relied on to impugn or attack the Costs Decision, and (ii) the Costs Decision is also said to support those allegations.
- As appears below in our judgment the Costs Decision is within the band of decisions open to the Chairman. Accordingly in our judgment that decision and its reasoning do not as free standing points support the allegations of bias, lack of even-handedness or unfairness in respect thereof or in respect of the Liability Decision.
Conclusion on the allegations of bias, a lack of even-handedness or unfairness
- For the reasons we have given this ground of appeal fails in respect of both the Liability and Costs Decisions.
The appeal against the decision on sex discrimination
- It was argued by reference to Meek v City of Birmingham District Council  IRLR 250 that this decision was not properly explained and that the Employment Tribunal had failed to take into account, or consider, arguments put forward by Premium. We do not agree. We have to say that in our judgment this ground was in reality an attempt to seek to reargue the case on the facts.
- In argument (as is often the case there was an overlap) between points advanced by reference to the Meek point and those advanced by reference to perversity.
- The Employment Tribunal found that Premium was entitled to dismiss the Applicant on one ground, namely disloyally poaching an employee. In our judgment the Extended Reasons show that the Employment Tribunal had regard to this when considering the claim for sex discrimination (see paragraphs 12 - 9.4 and 12 - 9.19).
- It was argued that the Employment Tribunal do not adequately deal with other grounds advanced in respect of the Applicant's behaviour and competence when they are dealing with the claim for sex discrimination. We do not accept this. It is to our minds clear from the Liability Decision (see for example the beginning of paragraph 9) and the Costs Decision (paragraph 4) that the Employment Tribunal rejected the numerous allegations (listed in paragraph 9 of the Liability Decision) made in respect of both claims as to the Applicant's competence and ability which as is pointed out in paragraph 4 of the Costs Decision took up a lot of time. Paragraph 9 of the Liability Decision also makes it clear that the Employment Tribunal were aware that the allegations were relevant to both claims. These rejections are conclusions of fact and in our judgment the decisions of the Employment Tribunal not to explain them does not mean that they have not complied with Meek and the decisions referred to therein.
- In our judgment, in respect of the Meek point generally (and in particular Premium's argument referred to in the first sentence of the last paragraph hereof) it should also be remembered that the Employment Tribunal rejected possible findings of less favourable treatment (see paragraph 12 of the Extended Reasons for the Liability Decision).
- The Employment Tribunal state in paragraph 10 that they could not identify a man in the same position and it is argued that they should have provided a further explanation of why they concluded that a Mr Thayer was not a direct comparator. We do not agree and accept the point made on behalf of the Applicant that a distinction between her and Mr Thayer and their respective treatment is dealt with in the remainder of the sentence in paragraph 10 in which they make the finding that they could not identify a man in the same position. This distinction relates to the abrasive and humiliating treatment of the Applicant which the Employment Tribunal found to have existed and on which they based the quantification of damages (see paragraph 13 of the Extended Reasons for the Liability Decision). An example relates to the Sainsbury presentation (see the finding in paragraph 11 of the Extended Reasons for the Liability Decision) as to which the Employment Tribunal found Mr Hodge's reply to be an indication of the "little woman" frame of mind. In our judgment this and the other examples in paragraph 11 particularise the numerous examples referred to at the beginning of that paragraph relating to senior management and in particular Mr Mitchell.
- In our judgment when paragraphs 7 to 13 of the Extended Reasons are read as a whole they demonstrate that the Employment Tribunal took the correct approach in law to, and adequately explain to the parties why they won and lost, the claim of sex discrimination.
- Accordingly this ground of appeal fails.
The Costs Decision
- In our judgment paragraphs 1, 2 and 3 of the Extended Reasons for this decision make it plain that the Chairman applied the right test and the remaining paragraphs provide reasoning which demonstrates that the decision he made (namely that Premium should pay one sixth of the Applicant's costs) was within the range of decisions open to him applying the right test.
- In particular in our judgment the Chairman was entitled to reach the conclusions he did in paragraphs 8, 9 and 10 that aspects of Premium's defence and approach to the proceedings was unreasonable. Also in our judgment his conclusion that the unreasonable conduct so identified warranted the award he made was well within the range of decisions open to him on a proper exercise of his discretion.
- Accordingly the appeal against this decision fails.
- In our judgment the Employment Tribunal had evidence upon which they could reach both the Liability and Costs Decisions and neither of them are outside the range of decisions open to the Employment Tribunal applying the relevant tests, or approaches, at law. Accordingly this ground of appeal fails in respect of both decisions.
- The appeals against both the Liability Decision and the Costs Decision are dismissed.