Appeal No. EAT/718/94

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 5 October 1994

	Before

	HIS HONOUR JUDGE J HULL QC

	MR T C THOMAS CBE

	MS D WARWICK

DRINKWATER SABEY LIMITED	APPELLANTS

(1) DAVID JAMES BURNETT	RESPONDENTS
(2) KENT COUNTY COUNCIL

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR T LINDEN
(Of Counsel)
Layton
76 Bridge Road
Hampton Court
East Molesey
Surrey
KT8 9HF

For the First Respondent	MR I SCOTT
(Counsel)
Pattinson and Brewer
30 Great James Street
London
WC1N 3HA

For the Second Respondent	MR J BOWERS
	(Of Counsel)
	County Solicitor
	Legal Services
	Kent County
	County Hall
	Maidstone
	ME14 1XQ

	JUDGE HULL QC:   In this case Mr Burnett claims compensation for unfair dismissal.  He was employed by Kent County Council, from 2 April 1979, when his employment began, and eventually he was employed at Shawstead Road Tip in Chatham as a Plant Operator.  His is a man now approaching 40.  He lost his job when that part of the operation in which he was engaged at the Tip was put out to tender and the well-known firm of Drinkwater Sabey Ltd tendered successfully for the operation.  He was dismissed by Kent County Council on the occasion of the transfer of that operation on 22 August 1993 and he made a complaint on 16 November 1993 against the Council, of unfair dismissal.  The Council, when they put in their answer (at page 14) made an important submission or contention.  They say he was dismissed for redundancy and then they go on to say:

		"The reasons why the application is resisted are as follows.

			(1)	The part of the operation in which the applicant worked [and they refer to it - it was taken over they say by Drinkwater Sabey Ltd - so they ceased to carry on their operations at the Tip and they say] 

			(4)	If it is the applicant's case that the Transfer of Undertakings (Protection of Employment) Regulations 1981, SI 1981/1794 (TUPE), applied to the situation, and that the dismissal was unfair because it was in breach of regulation 8 of TUPE, then the County will contend as follows.

			(5)	The County's primary contention is that the Shawstead Road Tip was not run on any view as something in the nature of a commercial venture.  It is accordingly denied that there was a transfer within the meaning of TUPE.

			(6)	In any event, though, the proper respondent to an applicant for unfair dismissal brought under regulation 8 of TUPE is the transferee:  [and they refer to the well-known case of Litster  v  Forth Dry Dock & Engineering (1989) ICR 341 and they also refer to the Acquired Rights Directive 77/187/EEC:  they say the same results there]. 

	So to paraphrase; what they are saying in that Appearance is, first and foremost, that there was no unfair dismissal here, it was redundancy.  But if we are wrong about that, if anybody is liable you have got the wrong man.  You should have made a claim against Drinkwater Sabey Ltd.  

	So confronted by that Mr Burnett, who was represented by his Trade Union, thought about it or his representative at any rate did; it was of course too late by then for him to commence separate proceedings against Drinkwater Sabey.  He had used up almost the whole of the three months under section 67 of the Act of 1978 before he issued his application.  What he did do was to apply to the Industrial Tribunal to join Drinkwater Sabey as a Second Respondent.  That was granted on 10 January 1994, and therefore, more than four months after the dismissal, Drinkwater Sabey were notified by the Tribunal that that had been done and that they were now parties added to the application.  

	Drinkwater Sabey objected to being joined in that manner.  They wished to be, as I think they put it, "disjoined", and they applied to the Industrial Tribunal and a hearing was conducted on 10 June, when the Industrial Tribunal sat at Ashford under the chairmanship of Mr Davis with two Industrial Members and held a Preliminary Hearing on this point.

	Their extended reasons start at page 6 of our bundle.  They set out the facts, and they then went on to consider the relevant statutory and other provisions.  They said that Mr Linden applied for the second Respondent to be disjoined and dismissed from these proceedings.  They go on to say:  

		"5. .....  He says that the application to join the second respondent was made outside the time limit.  He submits that the Tribunal can only add a second respondent if it is satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading.  He submits the Tribunal has to exercise its powers in the same way as the High Court exercises its jurisdiction under RSC Order 20, Rule 5.  He submits that the Tribunal did not have the power to join the second respondent to the action".

	Then they refer to Section 67(2) of the Employment Protection (Consolidation) Act 1978 providing for a time limit and then they refer to Rule 17 of the Rules of Procedure for the Industrial Tribunal.  They read them:

		"17 (1)  A Tribunal may at any time, on the application of any person made by notice to the Secretary or of its own motion, direct any person against whom any relief is sought to be joined as a party, and give such consequential directions as it considers necessary".

and then they read on:

		"A Tribunal may likewise, on such application or of its own motion, order that any respondent named in the originating application or subsequently added, who appears to the Tribunal not to have been, or to have ceased to be, directly interested in the subject of the originating application, be dismissed from the proceedings".

	They say that there is an issue between the parties as to whether or not there was a relevant transfer under the Transfer of Undertakings Regulations 1981, but there is no dispute that for the purposes of that argument Drinkwater Sabey are a proper party to the proceedings. And they referred then to Cocking  v  Sandhurst (Stationers) Ltd [1974] ICR 650.  That is a case on which Mr Linden has founded his argument to us today as he did to the Industrial Tribunal.  They refer to Watts  v  Seven Kings Motor Company Ltd [1983] ICR 135, in which the Cocking case was followed and they refer to Order 20 Rule 5(3).  

	They purported to apply the rules in Cocking as they called them.  They said, among other things, that:

		"The unamended originating application was presented in the correct form"

It was presented within time and they go on to say:

		"12 (6)  In deciding whether or not to exercise our discretion we find that the mistake sought to have been corrected was a genuine mistake, it was not misleading or such as to cause reasonable doubt of the identity of the person to be claimed against.

		(7)  We have also to consider any hardship to any party.  In this connection the joinder of the second respondent was made some seven weeks outside the expiration of the three month time limit.  Mr Linden has conceded that this delay does not prejudice the second respondent in any way.  We find that since this matter does concern the Transfer of Undertakings Regulations, and since the applicant's claim may turn out to be against the second respondent, then we have no hesitation in finding that to deny the applicant the chance to bring his claim against the second respondent might cause him hardship".

	They referred to the case of Allen  v  Stirling District Council [1994] IRLR 208, and then they say:

		"14  Having listened to the submissions  we have no hesitation in finding that the second respondent was properly joined in these proceedings and notwithstanding the time limit contained in section 67(2) the second respondent is properly joined and should remain in these proceedings as the second respondent".

	If the matter was one of pure discretion, it may well be that it would be very hard to fault that reasoning.  The Industrial Tribunal addressed themselves to the submissions made to them.  They considered of course questions of hardship, delay and so forth.  They decided that it was proper that Drinkwater Sabey should remain as Respondent to the application and one would say, could anything be much more commonsensical than that.  The Applicant clearly was not acting in a devious or deliberately misleading way when he joined his employer as the only Respondent.  When he was alerted to the point, with reasonable expedition he applied to the Tribunal and secured that Drinkwater Sabey be made Respondent in addition and they, when they applied, were met with the arguments which I have referred to.

	However, it is from that decision that Drinkwater Sabey appeal, and they through Mr Linden have put in a most helpful skeleton argument, as indeed have the other counsel in the case.  The skeleton argument refers to the time limit in section 67, refers to Cocking  v  Sandhurst (Stationers) Ltd, Watts  v  Seven Kings Motor Company Ltd and then 
says this:

		"5.  Accordingly, the Tribunal only had discretion to correct the name of a party.  Moreover, it could only take this step if the First Respondent [Mr Burnett] had misnamed or misdescribed the party he intended to sue and not where, because of an error of law, he had mistakenly decided to sue the wrong party and correctly described them.

		6.  Accordingly, the mistake which the representatives of the First Respondent had made, although genuine, was not the type of mistake which the Tribunal had power to correct and it therefore erred in law in granting the original application. 

and then the argument refers to the fact that Drinkwater Sabey had no prior notice until the Tribunal notified them, that is to say a couple of months outside the time limit of three months, and the argument continues:

		".....the Tribunal ought to have reached the conclusion that the Appellant could not be, and never should have been, joined to the proceedings". 

and it refers then to Order 20 Rule 5(3) of the Rules of the Supreme Court.  

	So on that view of the matter the Tribunal had in effect no discretion whatever.  They were not being asked, as in Cocking  v  Sandhurst (Stationers) Ltd, to correct a matter of misnomer.  They were asked to add a party and to add a party after the relevant limitation period had expired, and so, says Mr Linden, in those circumstances they had no discretion to act in the way that they did and accordingly it is not a matter of discretion, it is an error of law which they made.  

	In Cocking  v  Sandhurst (Stationers) Ltd the Applicant was a Director of a subsidiary firm, but he was in fact employed by the principal firm of whose subsidiary he was Director, and he began his complaint against the subsidiary firm.  He then applied to substitute the principal firm, the Parent Company as it was called, for the subsidiary and of course the actual facts are very different.  There, it was a case of substitution and it was a case really of misnomer, there was no doubt whatever he had intended to claim against his employers and not against anybody else.  He was simply mistaken about the identity of his employers and they were in fact the Parent Company and not the subsidiary.  That is referred to by Mr Linden because he says the principles dealt with by the National Industrial Relations Court apply here.  At page 656, letters G and H, Sir John Donaldson, the President of the National Industrial Relations Court, said this:

		"In every case in which a tribunal is asked to amend a complaint by changing the basis of the claim or by adding or by substituting respondents they should proceed as follows.  (1)....

and then he refers to various matters to which the Tribunal referred in the present case, is the claim presented timeously, is it in the correct form?  Then the Industrial Relations Court turned to matters which are material here.  

		6.  "In deciding whether or not to exercise their discretion to allow an amendment which will add or substitute a new party, the tribunal should only do so if they are satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause reasonable doubt as to the identity of the person intending to claim or, as the case may be, to be claimed against.

		7.  In deciding whether or not to exercise their discretion to allow an amendment, the tribunal should in every case have regard to all the circumstances of the case.  In particular they should consider any injustice or hardship which may be caused to any of the parties, including those proposed to be added, if the proposed amendment were allowed or, as the case may be, refused". 

	So it is quite clear to us that parts at any rate of that do refer to the case of misnomer, it has been called.  The Industrial Relations Court there is looking at a case where this man had claimed against the subsidiary Company when there was no doubt at all that he was intending to claim against his employers.  That language cannot be applied literally or as if it were a statute to the facts of the present case.  If it did, clearly the result would be fatal to the Applicant because he started off against his former employers and the whole purpose of the amendment is to enable him to claim against a party who never had been his employers.  Mr Linden refers to Watts  v  Seven Kings Motor Co Ltd [1983] ICR 135.  That was another case of misnomer and it was decided by this Tribunal under the chairmanship of Browne-Wilkinson J. 	He refers to Cocking  v Sandhurst (Stationers) Ltd and then he refers to the Rules of Procedure. He says:

		"......which shows that, in relation to the misnomer or misjoinder of parties, the industrial tribunal should exercise its powers to amend under rule 14(1) of Schedule 1 to the Industrial Tribunals (Rules of Procedure) Regulations 1980 in exactly the same way as the High Court exercises its jurisdiction under R.S.C., Order 20, r.5.  In particular, there is no absolute bar to the joinder of a new party by amendment after any statutory period of limitation has expired". 

	And Mr Linden says, well there you have it.  The discretion is to be exercised in the same way under what is now Rule 17 as it would be exercised under Order 20, rule 5(3).  When one looks at Order 20, rule 5(3) one sees: 

		"(3) an amendment to correct the name of a party may be allowed under paragraph (2) notwithstanding that it is alleged that the effect of the amendment will be to substitute a new party if the court is satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause any reasonable doubt as to the identity of the person intending to sue or, as the case may be, intended to be sued.

	That rule is dealing only with the case of misnomer.  And of course it is important in those circumstances to see whether it is a genuine misnomer or whether in fact it is an attempt to mislead or not made in good faith or something of that sort.  But if there is no doubt about the true identity of the person who is to be sued and all that has happened is that they have been wrongly named then of course the court will, if the application is made reasonably and in good faith, normally be expected to correct it.  It may of course be said in any particular case that in fact it means altering the identity of the defendant, because there is a person of the name of the first defendant and there is another person with the name of the defendant proposed to be substituted.  Order 20 rule 5 says that even in such a case, if it is a genuine mistake the mere fact that the effect will be to substitute a new party will not necessarily prevent the court from making the order for substitution.

	However one looks at it, that is dealing with a case of misnomer and at most substituting a party by correcting the name when there is a bona fide mistake made as to name.

	And one asks oneself, in a case like the present where there is no question of misnomer, how can it be submitted that the Tribunal is to give effect to Order 20 rule 5 as a principle, following Cocking, when in fact in the High Court there would be no question of applying Order 20 rule 5?  If this application was made in the High Court, the High Court would have to apply the statute, Section 35 of the Limitation Act 1980, and then it would have to go to Order 15, rule 6 and having looked at that it would have to ask itself whether this fell within one of the very limited classes of case in which, notwithstanding that the limitation period has expired, nonetheless the party who would have the benefit of that period can be added as a defendant, not on the ground under Order 20, rule 5 that there has been a misnomer but on the quite different ground that it is one of those exceptional cases in which the new defendant can be added as a defendant; there being no question as I say about a misnomer or anything like that, it is simply that the plaintiff has discovered that he should have added a defendant earlier and now belatedly he tries to do so.

	Under Section 33 of the Act of 1980, there is power to extend time in a limited type of case - I will not go into that any further - and under Order 15, rule 6(5) it is provided that no person should be added or substituted as a party after the expiry of any relevant period of limitation unless, and one of the exceptions is: (a) the relevant period was current at the date when proceedings were commenced [that would of course be this case] and it is necessary for the determination of the action that the new party should be added or substituted.  What does it mean by "necessary for the determination of the action?".  Paragraph 6 specifies certain cases in which it shall be treated as necessary for the determination of the action that the new party should be added, for example if the new party is a necessary party to the action in that property is vested in him in law or in equity and the plaintiff's claim in respect of an equitable interest in that property is liable to be defeated unless the new party is joined.  

	It appears to be common ground here, and we certainly deal with the case on this basis, that if that is to be applied by analogy then, since the application was made out of time, there could be no question of allowing the addition of Drinkwater Sabey under that rule.

	So we ask ourselves whether that is to be applied.  There is a difficulty for Mr Linden there, because he has to accept that under the principle of such cases as Cocking the necessary amendment may be made notwithstanding that the three months' limit has expired.  But nonetheless, he says that those principles in Cocking were said by Sir John Donaldson, as he then was, to be principles which should be applied in every case in which it is proposed to add a party.

	That does appear to us, on its face, to be an astonishing submission based on the slender ground of dicta which are, in the nature of things, obiter in the Cocking case and the remark, illuminating indeed in the circumstances of the case of Watts, by Sir Nicholas Browne-Wilkinson, that in cases of substitution the discretion is to be exercised in exactly the same way as the High Court exercises its jurisdiction under Order 20, rule 5.

	What Mr Linden is saying, on that foundation, is that the Rules of the Supreme Court should be applied by analogy in circumstances such as the present; and just as the High Court could not add Drinkwater Sabey as a party, so here the Industrial Tribunal should not have done so.  And we therefore have to consider the merit of that submission.  

	It is pointed out to us that rule 17 of the Industrial Tribunals Rules states expressly that
addition or substitution may take place at any time, and Mr Linden's submissions amount to a very severe gloss on that:  saying that "at any time" means "at any time within three months of the dismissal or other cause of complaint to the Industrial Tribunal".  But it is submitted to us, and clearly correctly, that in Cocking  v  Sandhurst (Stationers) Ltd it was quite clear that mere expiry of the limitation period did not prevent the substitution where it was just to do so.  It was a matter of discretion.  

	It is submitted to us on behalf of Mr Burnett and on behalf of Kent County Council that this elaborate structure of logical argument which Mr Linden has addressed to us is entirely based on a misunderstanding, putting on the words of Sir John Donaldson in Cocking a stress which they simply will not bear, treating them as if they were the words of a statute to be applied literally to all circumstances in which substitution or addition is to take place.  Quite clearly, they are inapplicable to the case, unlike Cocking, where what is happening is that there is no question of mistake as to identity or anything of that sort; but the Applicant, having seen what the First Respondent says, says "I wish to add a Second Respondent".  

	If the matter rested there we should of course have to decide it as a question of principle, but it does not rest there.  In British Newspaper Printing Corporation  v  Kelly & Ors [1989] IRLR 222, the question was not, as here, whether a party may be added, but whether there may be an amendment to raise a ground of complaint which has not already been raised and Lord Donaldson, the Master of the Rolls, referred to the case of Cocking  v  Sandhurst (Stationers) Ltd.  He said:

		"They [The Tribunal] referred themselves to the case of Cocking  v  Sandhurst (Stationers) Ltd [1974] ICR 650, which seems to be treated as the leading case on this subject" 

	And he said:

		"The essence of that case is that:

			"in deciding whether or not to exercise their discretion to allow an amendment, the Tribunal should in every case have regard to all the circumstances of the case.  In particular they should consider any injustice or hardship which may be caused to any of the parties including those proposed to be added if the proposed amendment were allowed, or as the case may be, refused".

	And that is relied upon by Mr Scott and Mr Bowers for saying, well that really is the true ground of the Cocking decision, anything else relates to the particular facts of that case and the nature of the application being made in that case.

	Again, it does not rest there.  In the still more recent case of Gillick  v  BP Chemicals Ltd [1993] IRLR 437 this Employment Appeal Tribunal, sitting in Scotland under the presidency of Lord Coulsfield, had to deal with a case in which Ms Gillick had made an application in the first place against an agency which had contracted out her services to various divisions of BP Chemicals Ltd.  The Respondents were the Company which had done that and in their Notice of Appearance they disputed that there had been an employment relationship between themselves and Ms Gillick.  They said "you were employed by BP" and in due course the Industrial Tribunal, again well outside the limitation period, following a request by Ms Gillick, added BP Chemicals Ltd as Second Respondents to the application. The Employment Appeal Tribunal held:

		"The Industrial Tribunal had erred in dismissing the appellant employee's complaint of unfair dismissal and sex discrimination in so far as it was directed against BP Chemicals Ltd, on the ground that it was time-barred because the application to add them as second respondents had been made after the time limit for presenting the complaint had expired.

		There is no time limit which applies as such when it is proposed to add a new or substitute respondent to an originating application which has been lodged timeously.  The Industrial Tribunal should treat an application to amend the complaint by the addition of a new respondent as a question of discretion, having regard to all the circumstances, not as one to be settled by the application of the rules of time-bar.  This was in accordance with the approach established by the NIRC in Cocking  v  Sandhurst (Stationers) Ltd and another, which has been regarded as authoritative and followed in a number of other cases and was expressly affirmed by the Court of Appeal in British Newspapers Printing Corporation (North) Ltd  v  Kelly and Others.

		The approach set out in Cocking is not limited to cases in which the original and the new respondents are related as principal and subsidiary, or in some similar way.  The presence or absence of a connection between the respondents is relevant, if at all, as a matter to be taken into account by the Tribunal in the exercise of its discretion, rather than as a limitation on the circumstances in which the discretion can be exercised.  Nor was there any justification for refusing to accept Cocking as authoritative in the present case on the ground that its guidance was influenced by matters of practice in the English courts which differ from ordinary Scottish practice.      

and what is set out in the headnote is of course supported by what Lord Coulsfield on behalf of the Tribunal said in paragraphs 7 and 8 at page 440 of the Decision.  In other words that is a Decision which is completely contrary to Mr Linden's submission to us.  They say at the top of the second column on page 440:   

		"The question whether an amendment should or should not be allowed becomes, as the appellant submitted, one of the exercise of discretion in the whole circumstances of the case".  

	They then say:

		"This approach may, at least at first sight, appear strange by comparison with the practice of the Scottish civil courts".

	They go at the bottom of that paragraph:

		"The decision in Cocking has been regarded as giving the appropriate guidance for amendment of applications for a substantial period, and, even if that guidance has been influenced by matters of English practice which are foreign to Scotland, nevertheless we do not think that we would be justified in refusing to accept it as authoritative".

	In other words, in the view of this Tribunal sitting in Scotland, the Cocking case should be applied in this sense, that it applies to applications to add a party as well as to substitute a party, but the matter is one of discretion for the Tribunal and the Tribunal is not bound by the time limits and is permitted to add a party, notwithstanding that the time limit for an application against that party has expired.  

	Mr Linden is obliged to tell us that in his submission that decision is wrong.  But we should not depart from a Decision of our own Tribunal, certainly one given with such authority and after such careful consideration as the Scottish Employment Appeal Tribunal gave this, unless we were quite satisfied that there was a mistake and that it was indeed a wrong decision.

	We have of course considered that submission.  We are entirely satisfied that Mr Linden is mistaken in submitting to us that that decision is wrong and inconsistent with the Cocking  case and the authorities on which he relies.  It appears to us that it is fully consistent.  It appears to us that it would be a most extraordinary thing if the Industrial Tribunal, which is required of course to proceed in an informal manner and expeditiously, should be bound when applications are made to it involving the substitution or addition of parties, to take itself to the rules of the Supreme Court and consider carefully what is said in the Limitation Act 1980 (which does not apply but Mr Linden said it might well be applied by analogy); what is said in Order 15 rule 6; what is said in Sections 33 and 35 of the Act of 1980; what is said in Order 20, rule 5; and having carefully considered the practice of the Supreme Court and if necessary, I suppose, the practice of the County Court under the corresponding provisions, should then have to apply all that as criteria in exercising its discretion under Rule 17 of the Industrial Tribunals Rules.  It appears to us that what was said by Sir John Donaldson and Mr Justice Browne-Wilkinson, as they then were, in the cases to which we have referred, was not intended to have any such consequences.  They were merely saying that in the cases with which they were concerned it was appropriate to apply the discretion in the same way as it was applied in the High Court and there was certainly no clear authority, in those decisions, for the propositions now advanced by Mr Linden.  

	In those circumstances, we accept that we must follow Gillick  v  BP Chemicals.  We are very pleased to do so because we think that that decision is entirely consistent with our own understanding of the position.  It is a matter of discretion.  I have already sufficiently set out the facts which the Tribunal itself set out.  They treated it very properly as a matter of discretion and it appears to us that they cited all the matters which they should bear in mind in exercising their discretion.  It is a discretion given to them and not to us.  We can interfere with the discretion of the Tribunal only on very special grounds.  If they have plainly made an error of law, if they have declined to take into account something material which they should have considered or have, in some other way, misdirected themselves, it may be that we should feel able to exercise our own discretion to interfere.  But above all there is an overriding principle, it seems to us, which effects a discretionary Interlocutory Decision of the Tribunal.  The Industrial Tribunal are preparing to try the case on its merits.  The primary responsibility is on the Tribunal and not on us to say how they are to approach that task and what parties ought to be joined in order to enable them to arrive at a just result.  We can find nothing to criticise in the way in which this Tribunal exercised its discretion and in particular we can find no error of law.

	In those circumstances we are content to follow what is said in the Gillick case, to apply that case and to say that the Industrial Tribunal were well entitled to reach the decision that they did to join Drinkwater Sabey Limited as a Respondent to the application and the appeal has to be dismissed.